ZhongAn On-line P & C Insurance coverage Co., Ltd. (OTCPK:ZZHGF) Q2 2024 Earnings Convention Name August 27, 2024 5:00 AM ET
Firm Contributors
Jiang Xing – Common Supervisor and CEO
Li Gaofeng – CFO and CIO
Wang Min – Govt Vice Common Supervisor and Secretary of the Board
Wayne Xu – President, ZhongAn Worldwide
Convention Name Contributors
Rick Zhao – Morgan Stanley
Qingqing Mao – CICC
Michael Li – Financial institution of America Securities
Operator
[Foreign Language] to attend this 2024 Interim Consequence Name of ZhongAn On-line. I’m the Director of the Investor Relations and Capital Markets. My title is Lin.
To begin with, please enable me to introduce the administration, the Common Supervisor of ZhongAn and CEO, Jiang Xing; Mr. Gaofeng, the Chief Funding Officer and Chief Monetary Officer; the Vice Common Supervisor and Secretary of the Board, Mr. Wang Min; and likewise Wayne Xu, the President of Worldwide of ZhongAn.
Now please give the ground to Mr. Jiang Xing.
Jiang Xing
All proper. So good afternoon, pricey buyers and administration. I’m Jiang Xing, the Common Supervisor of ZhongAn On-line. I want to welcome all people to attend the 2024 interim outcomes convention of ZhongAn On-line. And likewise, I am appreciating your steady consideration and help to ZhongAn.
2024 is the start of a brand new decade of ZhongAn. And likewise within the latest launch, 2024, Fortune China 500 listing, ZhongAn rating has improved by 37 locations to 460 years and reflecting a abstract and recognition of our achievements over the previous decade. Going through the sophisticated macro exterior setting lately, we’re right here to the mission of empowering the finance enterprise with applied sciences and offering insurance coverage service with our caring hand and embrace the worth of the most effective efficiency of yesterday is a minimal requirement of in the present day.
We’re centered on listening to our customers’ suggestions, bettering consumer expertise and likewise staying true to our unique aspiration and driving the long-term sustainable growth of ZhongAn. Within the first half of 2024, we achieved a complete premium revenue of HKD 15.23 billion, a year-on-year improve of 5.4%.
And in phrases of the overall premium written, we maintained a market share of over 20% on this pension and P&C insurance coverage sector, holding the primary place. Underneath the brand new accounting normal, our insurance coverage service income within the first half of the 12 months reached HKD 1.588 billion, a year-on-year improve of 19%.
And likewise the mixed ratio for underwriting was 97.9%, sustaining a wholesome underwriting profitability. Additionally with a dedication to the long-term and confirmed operation. So our web belongings have continued to develop, and our solvency stays ample with a complete solvency adequacy ratio of 224 current on the finish of the primary half of the 12 months.
We had been additionally constant acquired problem credit standing of Baa1 from Moody’s and A minus from A.M. Greatest. And that is one of many strategic engines of ZhongAn, the expertise enterprise has been benefited from the continued digital transformation within the home and world monetary sector.
Within the first half of the 12 months, our expertise export income elevated by 55.5% year-on-year to HKD 4.24 billion, for the home expertise output income reaching HKD 319 million, a year-on-year progress fee of round 112.7%. And this progress fee was primarily pushed by the enlargement of recent shoppers within the monetary, retail and manufacturing sectors.
Along with consolidating our reinsurance trade consumer base. This has resulted in fast progress supporting the launch of a number of merchandise underneath the ZhongAn enterprise progress and infrastructure sequence. And likewise as a result of improve within the prototype income and enchancment in operational effectivity, the Know-how section diminished its loss by HKD 165 million within the first half of the 12 months evaluating to the identical interval final 12 months.
And now looking on the Hong Kong Digital Financial institution, ZA Financial institution efficiency. Sustaining a really robust progress momentum this 12 months, attaining a web revenue of HKD 255 million within the first half of the 12 months with a 12 months improve of 45.9% and the file progress on this specific revenue has led to the belief of scale results, bettering the associated fee to revenue ratio and likewise narrowed by HKD 99.1 million within the first half of the 12 months.
And likewise, now we have realized the general revenue attributable to the mum or dad firm of HKD 55 million. And likewise, that is the very crucial 12 months for our 14th, 5-year plan in response to the guiding operation and promotion of high-quality growth of inclusive finance issued by the Nationwide Monetary Supervision and Administration Fee, now we have remained dedicated to empowering with expertise, offering progressive, inclusive and various insurance coverage merchandise.
And likewise fulfilling the curiosity function as a buffer within the financial system and stabilizing society and likewise, we’re going to develop the small and diversified and handy inclusive insurance coverage merchandise tailor-made to the Web situations and enhancing the comfort and accessibility of insurance coverage providers.
The primary half of the 12 months, we offer well being and unintended insurance coverage protection for over a million new residents and versatile staff together with the meals supply riders and couriers and rail, portray, drivers. Additionally, we launched over 100 unique merchandise overlaying multiple million people with quant sicknesses and likewise standardized the well being situations.
We additionally develop insurance coverage merchandise for teams, together with ladies and aged and creating a security web for them. And likewise moreover, addressing the ache factors of home micro and small enterprises on this operation, we supplied the multiline insurance coverage protection, together with property insurance coverage and legal responsibility insurance coverage for over 1.33 million micro and small enterprises, serving to to boost the chance resilience.
Within the first half of 2024, in our proprietary operated channels, now we have adjusted our advertising methods, specializing in the consumer operation within the non-public area and bettering the consumer expertise, laying a stable basis for the long-term consumer worth realization, and likewise across the 4 ecosystems, now we have additionally upgraded the providers of well being, household and pets, proceed to counterpoint our product matrix to offer customers and customers with handy, economical and complete manufacturing.
Within the first half of the 12 months, for all of the proprietary channels, 40% of the premium was contributed by the previous customers from 2019 and even older displaying the accompany of ZhongAn to our customers. Within the first half of 2024, the common variety of insurance policies held per consumer reached 1.6 in our proprietary channel and HKD 667 for the common premium per consumer and leveraging our self-developed information platform and the shopper center platform.
We have now achieved a real-time information sharing throughout all the ecosystem. And likewise, we’re servicing the entire life cycle of the customers. Within the first half of the 12 months, the overall premium proprietary channel was RMB 3.6 billion, and likewise with further insurance policies bought and by contributing to 31% of the overall premium and likewise the renewal fee elevated by 3.2 proportion factors and reaching 95% year-on-year. And subsequent, simply now I’ve launched the general state of affairs. And subsequent, I want to discuss to you concerning the progress of every enterprise section within the first half of the 12 months.
The primary is the well being ecosystem. Within the first half of 2024, now we have supplied the well being protection to roughly 12.39 million insured and with the overall premium reaching — order for capital reaching RMB 343 million.
And likewise by way of the inclusive finance or healthcare, now we have upgraded and iterated, the upgraded model of 1 million healthcare protection and likewise this elevated the accessibility of the insurance coverage service and expanded the protection to the preexisting situation individuals, people with quant sicknesses and particular occupational group. And likewise tapping into the market quantity. Additionally to handle the unmet wants all ache factors.
That is inclusive merchandise, together with to member. We’re overlaying over 100 unique merchandise within the first half of the 12 months, now we have the overall premium progress fee exceeded 2.7x. And likewise our outpatient emergent insurance coverage merchandise prolonged the service situations from the inpatient care to outpatient care, assembly customers the day by day high-frequency medical wants and likewise attaining fast progress. So this whole premium elevated so much. And the overall premium reached RMB 427 million with a year-on-year improve of 321%.
Other than that, our short-term crucial sickness product turned additionally the first alternative for ZhongAn customers to boost their protection, and this has achieved a really regular progress within the first half of the 12 months with the overall written premium is exceeding RMB 800 million. And likewise, we’re creating the medium to high-end medical insurance coverage merchandise.
And likewise this 12 months, now we have been additionally attempting to know the ache level of many customers and likewise, now we have additionally launched a number of the different large spectrum and big selection coated merchandise and assembly the individuals area of want of outpatient and emergent visits. And these merchandise had been welcomed by the general public, and we had a really spectacular premium progress. Subsequent, looking on the digital life ecosystem.
Within the first half of 2024, the overall premium reached RMB 7.47 billion, within the first half of 2024, primarily benefiting from the sustained profitability of the e-commerce trade and likewise the fast progress of progressive merchandise just like the pet insurance coverage, scenario-based accident insurance coverage and family insurance coverage, et cetera.
On this E-commerce section, we supplied the customers with the built-in answer overlaying all the e-commerce transaction chain, together with the return transport insurance coverage, high quality assurance, account safety and logistics safety. Within the first half of 2024, our E-commerce enterprise section captured the chance offered by the general prosperity of the e-commerce trade sustaining a fast written premium progress.
Within the Journey and Aviation enterprise section, we adopted a extra differentiated technique, strengthening the journey growth and product R&D in response to the gradual restoration of each affected person and outbound journey, whereas bettering the enterprise high quality.
When it comes to Innovation enterprise section, the pet insurance coverage achieved over 2.8x premium progress can be in whole 1.46 million new pet proprietor customers within the first half of the 12 months and likewise based mostly on in depth — additionally claims information evaluation, we up to date and iterated the unique 107 cowl ailments in our pet main sickness insurance coverage product, overlaying extra widespread ailments amongst pets, enhancing the product competitiveness and likewise releasing the product worth.
As of June 30 of 2024, our pet insurance coverage service community additional expanded to over 18,000 off-line pet hospitals and repair establishments and overlaying main cities nationwide. The pet insurance coverage service because the provider for providers offering over 930,000 providers within the first half of the 12 months, a year-on-year improve of 3x and one out of each three pet insurance coverage customers actively selecting to make use of our pet providers.
And along with the favored pet insurance coverage, through the reporting interval, we continued to carefully comply with the event development of recent consumption and really rapidly launched a number of progressive insurance coverage merchandise based mostly on the information evaluation and monitoring of the customers’ life along with the ecosystem companions. We’re exploring new situations within the meals supply sector, overlaying the ache factors such because the meals security and supply delays with associated product premiums growing by threefold.
So general talking, we’re just about selling the Wholesome China and the Health China, additionally specializing in these modern way of life teams, overlaying 10 completely different situations for train and sports activities and overlaying the unintended insurance coverage of tenants, using sports activities on winter and snow et cetera.
And now looking on the client finance ecosystem. Within the first half of the 12 months, dealing with difficult macroeconomic and industrial setting, we proactively and strategically diminished our enterprise scale. On the finish of the primary half of the 12 months, the stability of insured loans was RMB 23.1 billion, down by 15% evaluating with the identical interval final 12 months.
We operated prudently specializing in small dispersed and short-term Web client finance belongings with the borrower primarily being near-prime customers aged at 30 to 50 — 45, and the common mortgage quantity was HKD 7,500 with the common period of about 10 months, leveraging the massive information and different technological enablers. We carried out real-time threat management, strengthened put up mortgage monitoring and achieved a sustained underwriting profitability.
And final however not least, looking on the automotive ecosystem. We achieved the breakthroughs in scale, high quality and repair within the first half of the 12 months. We actively embrace the wave of recent vitality autos with the overall written premiums for the brand new vitality autos growing by 215% year-on-year and now accounting for over 10% for the overall auto insurance coverage premiums.
And by way of the shopper expertise, we upgraded our one-stop clever video declare service utilizing synthetic intelligence and different applied sciences. On the finish of July, the protection fee of ZhongAn’s video claims instances, which has turn out to be the primary traits of our firm, and now we have the declare instances reached 50%.
And with this expertise, we might full it the extent inspections in as quick as six minutes and decreasing the common inspection time by 85% in comparison with the off-line inspections. On the similar time, we enhanced the chance identification and alert specializing in underwriting non-public prices and achieved a mixed ratio for auto insurance coverage that outperformed the preliminary common within the first half of the 12 months. So subsequent, for the Know-how section, our ecosystem.
We will hand the decision over to Wang Min.
Wang Min
All proper. Thanks very a lot, Jiang for introduction.
And now please enable me to share with you the progress of Know-how section within the first half of the 12 months. We have now continued to spend money on cutting-edge applied sciences like synthetic intelligence and likewise reshaping the — each hyperlink of the insurance coverage worth chain by way of expertise. Internally, AI has improved the effectivity throughout numerous points from product advertising, threat management and to day by day operations.
So in client service, we launched a full AI-based humanoid interactive service, which elevated the effectivity of our customer support consultant by over 15% in medical insurance claims course of. We built-in the clever digicam service to boost the expertise of submitting supplies and discovering claims.
We additionally launched an AI-based claims Compass on-line customer support bot seemingly decreasing the necessity for human techniques. As well as, we established an clever information assortment platform and an clever evaluation platform, incorporate giant mannequin and a small mannequin materials classification integration options, and these improvements scale back the human labor and time prices, successfully bettering the evaluation effectivity and additional enhancing consumer expertise.
In expertise export facet, the ZhongAn Know-how Output enterprise, which depends on deep experience in insurance coverage expertise attaining section breakthroughs in regulatory expertise, information integration, and intelligence insurance coverage core techniques, middleman center workplace and insurance coverage digital advertising, sustaining fast progress for our enterprise.
Within the first half of 2024, the group’s whole expertise export income reached RMB 424 million, growing by 65% year-on-year. As of June 30 of 2024, now we have first serviced 892,000 shoppers and signed in whole six new shoppers from insurance coverage industries and likewise seven from new shoppers in banking, brokerage and fund insurance coverage from the industries, and likewise benefiting from the rising demand of home info expertise innovation and likewise promotion of Digital China initiative. In whole, now we have reached RMB 392 million for this Home Power Output section, growing by 171% year-on-year.
And on one hand, our merchandise such because the property insurance coverage core system, clever advertising and information intelligence have signed by many home insurance coverage trade claims. Additionally, from the opposite hand, now we have the continued enlargement of our boundaries extending to monetary industries such because the brokerage and banking, and additional cowl to the advertising infrastructure operations and different merchandise, they’re additionally serving to shoppers to realize the fast enterprise progress and accelerating their digital transformation.
It’s value mentioning that by way of the enterprise product sequence, now we have productive end-to-end and self-developed IFRS 17 system answer, which is appropriate with a number of home chips, servers and database techniques and has signed by 15 main home insurance coverage firms overlaying each life and property trade, and the contract quantity has grown quickly. Sooner or later, we are going to proceed leveraging the expertise, energy and functionality of ZhongAn can proceed to assemble the digital financial system and Digital China.
Now I hand the decision over to Wayne to speak to us about growth of ZhongAn Worldwide.
Wayne Xu
Thanks very a lot, Wang Min and now I will be answerable for telling you one thing concerning the worldwide enterprise.
And likewise now now we have realized this expertise export enterprise of worldwide by ZA Tech established in 2018, now we have established our expertise and options based mostly on Graphene and Fusion and Graphene with a well known insurance coverage like AIA, Generali, Prudential and Zurich.
Additionally, now we have companions with the digital platforms like Carro and PayPay, persevering with constructing the — and likewise increasing the embedded insurance coverage companies. Over the six years, now we have expanded into 12 international locations and areas globally, and established workplaces in 16 in different international locations and areas, together with Tokyo, Thailand, Germany, Denmark, France and Eire.
In Might of this 12 months, we innovatively launched the agricultural drone injury insurance coverage manufacturing answer with DJI in Thailand, leveraging our in depth abroad collaboration community and stable insurance coverage expertise capabilities to rapidly help the DJI’s associated initiatives in Thailand.
In March, ZA Tect accomplished a USD 35 million Collection A financing, attracting world famend institutional buyers and formally referred as Peak3, with a brand new model dealing with the world. The corporate will speed up enlargement in additional areas and pace up its format in AI and large information, driving the worldwide insurance coverage trade’s digital transformation in the direction of intelligence. And likewise by way of enterprise information, through the reporting interval, now we have reached RMB 132 billion for the expertise export income.
And likewise, now we have reached RMB 127 million for our annual subscription income ARR, with a loss considerably narrowing. In relation to the abroad expertise export enterprise in Hong Kong, our digital financial institution, ZA Financial institution continues to advance its imaginative and prescient of constructing one-stop digital monetary service platform in Hong Kong, offering wealthy, handy and inclusive monetary providers to retail customers and small and medium-sized enterprises.
The primary half of the 12 months, the ZA Financial institution’s revenue was superb. And likewise in whole, now we have realized the overall asset of just about HKD 20 billion, evaluating with the top of 2023, 43.2% had been elevated. The stability of the deposit, HKD 16.8 billion, growing by 43.1% versus the top of 2023, due to the curiosity hike cycle and enriched the mortgage merchandise, the online unfold has been improved to 2.21% from 1.87%, and likewise the online revenue was HKD 252 million, growing by 45.9%.
Noninterest revenue accounting for 18.4%, on the similar time, our fund enterprise additionally noticed a considerable progress this 12 months. By the top of the mid of this 12 months, we had in whole the reserve over stability of RMB 2.3 billion, growing by 23x additionally the helpful on the U.S.
inventory buying and selling service, additional enhancing the monetary product metrics for serving the shoppers. So whereas we’re growing our effectivity and likewise, you possibly can see that our general price has considerably diminished within the first half of this 12 months, this determine was 119% in contrast with the identical interval, it was lowered by 80 proportion factors.
And likewise the financial institution loss, definitely narrowed. Internet loss was HKD 190 million, and now we have been bettering by 71.7 proportion factors. So trying forward, we are going to proceed to improve our consumer expertise and creating extra worth for customers’ future digital monetary expertise.
We are going to improve and help the event of monetary expertise in Hong Kong, constructing a monetary middle with world monetary affect, selling monetary inclusion and likewise drive high quality progress at ZA Financial institution, and we’re assured in attaining profitability.
Now let’s invite Gaofeng to share with you the monetary efficiency within the first half of the 12 months.
Li Gaofeng
All proper. Thanks very a lot to administration on your evaluation of the previous.
And now I will be accountable to introducing the monetary efficiency and funding state of affairs. First half of the 12 months, ZhongAn achieved the monetary service income of RMB 15.08 billion, a year-on-year improve of 19% by ecosystem, well being ecosystem staying true to our mission of offering insurance coverage with the expertise and carrying forward. We proceed to counterpoint our medical insurance merchandise to cowl extra individuals and meet the customers’ wants.
We additionally launched a brand new providing in our well being product matrix. And likewise, now we have the RMB 4.876 billion reached by way of the insurance coverage service income year-on-year improve of twenty-two.7%. Digital life ecosystem with the continued prosperity of the e-commerce trade, and now we have fast progress of our progressive merchandise just like the pet insurance coverage, et cetera.
The insurance coverage service income was RMB 7.07 billion within the first half of the 12 months, a year-on-year improve of 24.2%. Client finance ecosystem, principally the stress from the unsure macroeconomic setting and industrial challenges, we adopted a extra prudent working fashions and actively scale down the enterprise.
Within the first half of the 12 months, our client finance cycle system insurance coverage service income was RMB 2.8 billion, and a year-on-year lower of 1.7%. Automotive ecosystem, we concentrate on underwriting in non-public automobile sector and likewise proceed to embrace the way in which from new vitality car.
And in whole, the insurance coverage service income reached RMB 863 million year-on-year improve of 24.2%. Within the first half of the 12 months and the actual underwriting, general mixed ratio within the first half of 12 months was 97.9%, marking the fourth consecutive 12 months for underwriting profitability. Mixed ratio was 60.7%, mixed expense ratio, 37.2%.
The mixed underwriting ratio elevated by 2.1 proportion factors in contrast with the identical interval final 12 months, and likewise with the expense ratio bettering by 1.5 proportion factors. Breaking down by ecosystem. The well being ecosystem, now we have a mixed ratio within the first half of the 12 months was 95.7%, up 3.2 proportion factors and likewise the general loss ratio remained secure at 38.1%, whereas the mixed expense ratio rose to by 3.1 proportion factors, and likewise primarily resulting from elevated funding, back-end service infrastructure to boost consumer expertise for insurance coverage functions and claims.
Digital life ecosystem, the mixed ratio remained secure at 99.9%, with general efficiency in line with final 12 months. The mixed loss ratio was 71.7%, up 3.3 proportion factors from the identical interval final 12 months, whereas the mixed expense ratio decreased by 3.2 proportion factors to twenty-eight.3%.
The change in price construction was primarily as a result of adjustments in product metrics, and likewise dealing with the macro financial system and likewise the challenges, the buyer finance ecosystem had the mixed ratio of 99.1%, up 8.4 factors year-on-year. And as a result of 13 proportion factors improve in loss ratio to 73.8%.
Nevertheless, because the second half of final 12 months, now we have actively scaled down the buyer finance enterprise and tighten the chance controls, and resulting in an enchancment in loss ratio in contrast with the second half of final 12 months. The standard of our on-line belongings and numerous indicators have been bettering quarter-by-quarter. The expense ratio decreased by 4.6 proportion factors as a result of decrease client acquisition prices and now we have centered extra on service current customers in keeping with the 12 months’s macroeconomic and industrial cycle.
This specific expense ratio was 25.3%. Automotive ecosystems mixed ratio improved by 3.1 proportion factors to year-on-year to 94.2%. Mixed loss ratio elevated by 7.6 proportion factors to 66.7% year-on-year, primarily as a result of elevated journey within the first half of the 12 months, and likewise the general form of mixed expense ratio decreased by 10.7 proportion factors to 27.5%.
Additionally, on the funding facet, we proceed to undertake the fastened revenue plus capital allocation technique. Throughout the reporting interval, the overall make investments strategies of ZhongAn home insurance coverage funds amounted to roughly RMB 27.69 billion, of which fastened revenue investments totaled RMB 28.4 billion, accounting for 75.4%, primarily consisting the bonds and bond funds.
Benefited from the robust efficiency of home bond market within the first half of the 12 months, we achieved comparatively secure returns with the overall funding revenue from home curiosity funds reaching RMB 620 million and likewise, we had annualized whole funding yield and web funding yield through the reporting interval of three.3% and a pair of.3% roughly — respectively, remaining secure.
And likewise within the abstract with the service income progress this 12 months, we’re attaining steady underwriting profitability to purchase down sure exterior setting. It’s value mentioning that each expertise and likewise the banking ecosystem considerably diminished their losses within the first half of the 12 months.
Additionally they benefited from the continued digital transformation of the home and world monetary industries, resulting in a fast progress in expertise output income with the elevated proportion of prototized income and the discharge the administration efficiencies. The applied sciences section losses slim considerably.
Additionally ZA Financial institution’s curiosity incomes asset scale and web curiosity margin develop drove fast web revenue progress and enhance the operational effectivity and the size results additional optimized indicators, resembling ZA Financial institution’s price to revenue ratio and displaying the additionally clear path to profitability for ZA Financial institution. The corporate’s capital stays at adequate degree, complete solvency adequacy ratio of 24% as of June 30, 2024.
We want to thank buyers and analysts and the capital marketplace for their help and companionship alongside the way in which. Trying forward and a fancy and ever-changing world financial setting. We are going to proceed to uphold the mission. And likewise, we are going to refine our inside operations and stay consumer centric and specializing in in housing consumer expertise for everybody.
Thanks. Now we’ll have the Q&A.
Query-and-Reply Session
Operator
[Operator Instructions] And now the primary query is from Rick Zhao from Morgan Stanley.
Rick Zhao
All proper. thanks very a lot for giving me the chance. I’m analyst Zhao Rick from Morgan Stanley. I’ve two questions. The primary one is on the funding facet. We have now seen that within the first half of the 12 months, the general form of income decreased just a little bit. So what had been the explanations? And likewise, how that we’re going to face this specific form of setting. And likewise, we’re going to additional allocate the sources and what’s the expectation?
The second query is that by way of the medical insurance. So for example, the income of the premium truly decreased, however nonetheless the service income elevated. So what are the explanations of getting this specific form of a distinction? And likewise, might you assist us to know the most important breakdown by completely different insurance coverage varieties? Thanks very a lot.
Jiang Xing
Thanks very a lot for the query. Let me reply the query concerning the medical insurance and Gaofeng will reply the remainder. So within the medical insurance sector this 12 months, we have had the overall premium exceeded trillion. So it’s actually promising sooner or later. We will see extra product innovation alternatives.
Simply now within the enterprise evaluation, I’ve already shared that for the technique of growth, we nonetheless are constructing across the month and likewise for medical insurance, now we have a number of merchandise. The primary one is represented by private clinic coverage and a million medical insurance protection product.
That is nonetheless our main merchandise and likewise all the way in which to date, we have been incorporating every kind of various value-added providers, and likewise serving to to counterpoint the important drug listing and to ensure that this greater product is unstable. And likewise by way of the networking hospitals, now we have additionally had a breakthrough. Now in whole, we’re increasing that from public options to personal hospitals as properly.
And by way of inclusion — an inclusive finance, the Zhong Min Bao because the product is definitely positioned because the million-claim medical insurance to the mass public, so we’re overlaying the three varieties of individuals that can not be coated by reimbursement, the tremendous previous and likewise the quant sickness sufferers.
The sufferers with preexisting situations. So this delivered the product, lowered down the edge of underwriting and improve the higher restrict on the age and no well being announcement and likewise a number of the occupational limits. So that is extra inclusive and likewise extra relevant. Additionally, now we have been including a number of the nonstandardized service just like the well being checkups and small drug field, et cetera.
So whereas we’re upgrading this, the overall written premium elevated so much. So we hope that Zhong Min Bao goes to turn out to be the following breakthrough edge. And likewise, we’re speaking concerning the outpatient and service provider medical insurance protection and likewise a number of the short-term pet proprietor’s insurance coverage. The actual contribution has been growing as now we have already talked about that we had a really large potential on this space. And final, not least, I want to say that initially, we had been creating a number of the worth for cash medical insurance merchandise.
However now we’re specializing in medium to high-end wholesome insurance coverage sector. Leveraging the Web channel, we’re promoting the insurance coverage insurance policies to these prosperous customers. So for example, the kid model of medium to high-end well being entrants that now we have promoted and overlaying a number of ache factors of the mother and father and overlaying extra situations. As an illustration, the form of want of getting outpatient therapies by many of the youngsters. And likewise sooner or later, we’ll cowl extra group of inhabitants.
And Gaofeng, please reply the query concerning the funding.
Li Gaofeng
Thanks very a lot. So I believe that in whole, now we have an excellent association of the investments. General talking, by way of the funding, it’s just about based mostly on the fastened revenue belongings. By finish of June, the general form of asset of the funding is 37.7 billion, 75% of fastened revenue funding, the flat versus final 12 months. 55% of our bonds and bond funds, this was additionally flat versus final 12 months.
I am on the bonds that we invested 99.2% of them are having the ranking of AA and with the decrease rates of interest with reference to fastened revenue asset, we’re going to drastically regulate the period and likewise enhancing our yield. Additionally, now we have centered so much on the adjustments by the top of June, we had 6.4% of our funding of shares vitality funds.
And likewise, in whole, we do have a number of the adjustment of our allocation and the portfolio methods. And likewise, we’re going to improve and improve the general yield and attempt to scale back the volatility. So the excellent funding yield can be increased.
Sooner or later, whereas we’re controlling the sure scale, we’re going to additionally focus extra on the allocation to these segments with a better dividend and likewise to be in keeping with the long-term financial growth mindset of Chinese language authorities.
Rick Zhao
Thanks.
Jiang Xing
Thanks very a lot. Let’s have the following query.
Operator
Subsequent query comes from Mao Qingqing from CICC, please.
Qingqing Mao
Thanks for this chance. I’m Mao Qingqing from CICC. I’ve two questions. The primary one is expounded to the expansion alternative of insurance coverage merchandise. So how can we truly outline the long run progress alternatives aside from million healthcare. And likewise the refund insurance coverage, what are the opposite potential areas that we’ll see the expansion?
And my second query is concerning the credit score insurance coverage. So now we have been examined many instances of the trustability of credit score insurance coverage, however nonetheless, the setting is sort of hectic in the direction of this enterprise. So how do you intend the credit score insurance coverage to be able to preserve the profitability, and whether or not you are assured in sustaining the profitability?
Li Gaofeng
All proper. Thanks very a lot, Mao Qingqing on your questions. Let me reply the primary query. In ZhongAn, we all the time raised the idea of progress by high quality. So to be able to perceive whether or not that is rising or not, now we have three factors.
The primary one is that whether or not the long run market scale is sufficient, and potential is sufficient. And second, we’ll contemplate that whether or not there are a number of the untapping demand of shoppers and likewise, we will fulfill the mission of offering the insurance coverage product with a warming and caring arms.
And lastly, we’ll contemplate the standard of the long-term enterprise growth. And simply now you had been speaking about a number of specialty insurance coverage merchandise that now we have developed, and they’re in keeping with these three factors, as I discussed. For these a number of the enterprise segments that I already talked to you about and sooner or later, we’ll concentrate on initially, the auto insurance coverage.
The entire premium progress was just about increased than the commercial common and the profitability ratio was additionally growing. And likewise in Chinese language PMC, the auto insurance coverage is the most important one, and penetration, after all, of the incident auto insurance coverage is sort of low. So for ZhongAn, the auto insurance coverage whole premium scale was rising very quick. However nonetheless, we’re — our market share remains to be fairly low.
So this 12 months, on the service facet, now we have been doing a number of the excessive techs and attempting to distinguish ourselves from — for example, by the top of July, we had been creating the video-based declare service and have just a little little bit of breakthrough.
On the present stage, we will have round 50% of the claims which can be down over line or on the road. And looking out sooner or later, we’ll seize the chance of mixing Web expertise with auto insurance coverage and hopefully, that the overall premium can be additional elevated. And the second alternative is the digital way of life ecosystem.
And on high of the e-commerce and journey enterprise, now we have been increasing the progressive merchandise to different areas just like the pet insurance coverage. And now we have increasingly progressive merchandise, taking the pet insurance coverage as instance.
We have now upgraded the fundamental protection-based exponential insurance coverage and likewise emphasizing on crucial sickness insurance coverage for pets. It is a very fast mitigation of the lacking demand. And likewise this 12 months, we hope, and now we have been hoped that by leveraging our personal expertise benefit, we’re in a position to, for example, do extra improvements due to a greater pricing and likewise higher design of the merchandise. And round the entire China, we have had nearly 100 million pets and pet homeowners, however now the penetration remains to be fairly low. Final not least, we’re speaking concerning the well being ecosystem.
As an illustration, as anyone is aware of concerning the private clinic coverage and million healthcare coverage round this specific space, we do extra improvements across the service provision and likewise the stratification of the affected person or the shopper clusters. And we have been selling the merchandise like Zhong Min Bao and likewise a number of the different merchandise just like the outpatient, the service provider insurance coverage and the pet proprietor’s insurance coverage et cetera, which now we have simply to share the colours upon. Thanks for this query. And now Jiang Xing, you possibly can reply the query referring to the buyer finance.
Jiang Xing
Proper. Thanks very a lot on your query. contemplating the stress of the macro setting and the adjustment of this insurance policies trade and from final 12 months onwards, now we have been shrinking this whole premium on this space of credit score insurance coverage. After which I see that by way of this specific underwriting stability and likewise the overall underwriting scale. These two had been decreasing considerably from the disclosed information, you possibly can see that with such a big stress from the surface.
Within the first half of the 12 months, we had been worthwhile on the ecosystem of client finance. So on a regular basis, since all the time, we had been fairly cautious in fascinated about our mindset and mixed with the chance management mannequin that’s empowered by the expertise. This 12 months, we focus extra on the underwriting renewal mixed with completely different platforms with the customers.
So you possibly can see that the mixed ratio of the primary half of this 12 months was growing versus similar interval final 12 months, in case you are evaluating with the second half of final 12 months was bettering. So general talking, the — within the second quarter of the primary half, additionally, we had an excellent quarter-by-quarter enchancment.
And likewise on the similar time, we’re optimizing all of the parameters of the customers. So within the second half of the 12 months, we’ll preserve as prudent angle and likewise proceed present the service to these absent prospects that now we have already coated and likewise preserve a really stringent threat management normal.
Qingqing Mao
All proper. Just about for my reply. Thanks.
Operator
Thanks for the query. And now let’s have Michael Li from Financial institution of America Securities. Sorry, the voice is sort of low.
Michael Li
So within the first half of the 12 months, we had an excellent development. So now now we have within the cycle of curiosity reducing. So on this greater cycle, one of many methods was to deal with this cycle? What’s the expectation? Second query is concerning the Know-how section. We had an excellent progress. So are you able to discuss to us about this extra? What’s the plan sooner or later?
Wayne Xu
All proper. Thanks very a lot, Michael, for this query. It is a superb query. So let me repeat your query. So that you requested that for the curiosity reducing, what is the affect to ZhongAn, ZV Financial institution and whether or not that is an impactful, proper?
So to be sincere with you, that is just about impactful. And likewise for various enterprise segments, now we have a unique affect. And likewise the general form of affect can be completely different. And — however for ZV Financial institution, that is just about lively. So initially, by way of the online unfold, which goes to be additional squeezed.
So evaluating with the normal trade on the present stage, now we have a low proportion of CASA towards the deposit. So general talking, we’re going to have a a lot faster capital price discount than the normal banks. And likewise on the asset facet, we’ll see extra demand of getting loans and likewise, we’ll deliver extra income.
On the financial institution facet, the bond held can improve additionally its value and improve within the funding yield. Additionally for the non-net curiosity revenue, the shares and fairness that now we have invested are going to be positively impacted due to a extra lively capital market. So these are all one thing that now we have noticed. Second query is concerning the expertise export. And now let’s give the ground to Wang Min to reply this query.
Wang Min
All proper. Thanks very a lot, Michael, on your query. So initially, the expertise section elevated quickly within the first half of the 12 months. And likewise, we had additionally a extra sturdy progress for the home expertise export enterprise, benefiting by the extra insurance policies to benefiting the Digital China and likewise institution of digitized financial system.
We have now a really large confidence over the long-term progress of the expertise export enterprise, so I actually perceive that you just pay just a little consideration to expertise section, not solely progress, but in addition, you are anticipating to see the development of profitability.
Within the first half of the 12 months, be it the expertise export in China and likewise abroad, we have been shortening the losses so much. So on one hand, we’re growing the share contributed by the excessive gross margin merchandise.
And likewise, as for AIGC and different new applied sciences, we’re actively making use of them, serving to us to really improve the effectivity by way of product R&D. And naturally, that we’re enhancing our inside administration functionality and effectivity and decrease down the associated fee because of this. So whereas we’re growing our income scale, it’s serving to us to handle our price very efficiently and thus, bettering our profitability additional. Thanks.
Operator
Thanks very a lot. Now let’s have the ultimate query. [indiscernible]?
Unidentified Analyst
I’m [Alice] from Citi Securities. Thanks very a lot. I’ve two questions. The primary one is that we will see that the overall premium progress was slowed down within the first half of the 12 months, what had been the explanations? What concerning the steering. And likewise what’s the like placement technique on the channels? And the second is concerning the U.S. bonds. And we do not forget that we’ll do the U. S. debt and the way that you will pay that debt?
Wayne Xu
All proper. Thanks very a lot for the query. So you possibly can see that the slowdown of the expansion of the overall premium within the first half of the 12 months. And the primary purpose was that the buyer finance enterprise was shrinking actively based mostly on the macro and exterior setting. And likewise, we had a strategic adjustment of the consumer acquisition on the medical insurance space.
We need to get acquired the brand new prospects in a extra economical method. So based mostly on these two causes, the general gross written premium decreased, or progress fee decreased. However waiting for the second half and likewise the long run, we’ll nonetheless be user-centric and concentrate on the elevation of the consumer expertise. Hopefully, that we’ll have a sustainable growth. And Gaofeng, please reply the query concerning the financing and likewise the greenback bond.
Li Gaofeng
All proper. Thanks for this query. In 2020, now we have issued USD 1 billion of high-level debt bond in abroad and in 2022, we repurchased USD 49.9 million of the bond in whole. And likewise by way of the period, now we have USD 590 million bond goes to be due subsequent 12 months, July, and $360 million bond can be due by March of 2026. At present stage, our money move is sort of secure.
Solvency ratio fairly adequate, and we’re actively very for the payback, and naturally, contemplating the exterior setting, we’re additionally going to additionally take into consideration the potential for doing financing — refinancing.
Operator
All proper. Thanks very a lot. Attributable to time restrict, now we have to finish this convention name. Thanks very a lot on your participation and help to ZhongAn On-line. Thanks, and you might disconnect now.