China Reinsurance (Group) Corporation (1508) Earnings Call Transcript & Summary

Hello friends from the media, good afternoon. Welcome to attend the 2020 annual performance announcement of China Reinsurance Group. I'm the moderator of today. The General -- Zhu, Xiaoyun, Secretary of the Board of China Re Group. Now I'd like to present to you all the management, high level executives attending today's meeting certain -- totally of China Re Group. Chief Actuary of China Re Group, Mr. Tian Meipan; Mr. Li Ming, Business Director of China Re Group. And Mr. Yuan Linjiang, the President of China Re [indiscernible]; and Vice President of China Continental Insurance, Mr. Lu Xiaowei; and Mr. Luo Ruohong, the Vice President of China Re Asset, today's meeting is going to be divided into 2 different sessions. For the first session, we are going to invite the executives to introduce the company's performance in the year 2020. And first, we'd like to give the floor to Mr. He Chunlei to give us the general introduction to the general performance and outlook into the future. Second, we are going to invite Mr. Li Ming, the Business Director of China Re Group to introduce you the performance in several different sectors. The second session is going to be the Q&A session. Our executives is going to tell to the media and investors and analysts about the performance. Now the floor is going to given to Mr. He Chunlei, Mr. He, the floor is yours.

Good afternoon friends from the media, analysts and investors, welcome to the 2020 annual announcement of China Re Group. First I'd like to introduce you the results that we have achieved in this year 2020. The year 2020 is a year which all condone facing the prevalence in internal and external market China Re Group has shown steady progress and strong resilience against COVID-19 impact. We registered a very steady growth in the premiums, and we have constant optimizing our business structure. The strategic results has also been speeding up while we have a better risk management. The first 1 that we have a steady growth in the premiums, we have a constant optimizations in the business structure and the year 2020, the group's written premiums of the group consolidated has been registered at RMB 139 million, that is to say that we have registered a CAGR of 16.8%, among which the core business in the year 2020 of the premiums was enriched by RMB 139 million, and we have achieved a recorded year-on-year growth of 20.9%. We also have registered a leading position in the P&C faculty and also the reinsurance lines. In the year 2020, we have been focusing on the several different highlights, while all of them has been registered in a quite rapid growth. The domestic P&C faculty in reinsurance has grown at a 38.5% year-on-year, while the domestic P&C Reinsurance emerging line had registered at 29%. The overseas P&C insurance has registered at 6.9% growth. The domestic R&H insurance protection-type has been registered at a 21.3% growth. Second, we think our investment has outperformed the market with a shrinking interest market and a turbulent capital market, our company have been optimizing the investment. So very good result. The total investment yield has been registered at 6.01%, that is 0.7 bps compared with last year. We believe the equity investment has also outperformed the market, the comprehensive return on the secondary issue equity surpassing CSI 300 while 117 bps and the comprehensive return on the secondary each year equity surplus in the Hang Seng Index by 116 bps. The net profit attributable to equity of the shareholders from the power company hence grew by 5.6%. While we have been operating in a very steady fast growth, we have registered a [ 5,700,000 ] growth. The good part is that we have a constant improvement in the risk management. In 2020, for the different entities, we have been registered a very excellent comprehensive solvencies, the China Re P&C has registered a growth of 231%. China Re Life, 229%. China Continental Insurance, 338%, while the group consolidated has registered 215%. We also enjoyed stable international ratings for the S&P Global Ratings, our financial strengths -- rating has been reified at A. And for the back financial strength ratings, we have also registered an A, that means excellent accurate. We have also tried a series of measures in the risk management. We have strengthened the risk investigations and mitigations. We have [ recently ] launched the China Re Catastrophe risk management. That is what we call the Cat platform that is a platform for non real-time risk management. The monitoring effect has been shortened from several days to several minutes after we have launched the platform. Our capacity to manage the international risk has been improved greatly after we launched the Cat platform, we have also established a negative [ rate ] towards the internal investment risk management, we have also toned the red lines for the key areas, and we are now going to avoid anybody to step on the red line. We have also strengthened penetrative management of the key risk. We have monitoring the risk explored for the critical disasters. For the 1, 3, 5 strategies of the China Re Group, we have also focusing on the platform technologies and internationalization. We have implemented several different strategies in our group. The first-line is about 5 platforms. And in -- our work in the platform have included the point 4 efforts. First, we have promoted [indiscernible] construction. We have promoted the establishment of China Belt and Rod Reinsurance Group and served as a Chairman company and management institutions, we signed a total of 20 -- 32 B&R corporations memorandums covering 136 countries and regions and providing approximately RMB 350 billion of risk protection for more than 800 projects. Second, we have also improved our catastrophe risk protection model. We have jointly released the China Earthquake Catastrophe Model 3.0 with China Earthquake Administration and signed up the user agreement with 17 insurance institutions. We have also completed the development of the China typhoon catastrophe model 2.0, we have roughly involved in the project in 16 programs in cities nationwide and more than 80% of which has achieved reinsurance. Third part, we have also promoted the emerging line platform, the reinsurance premiums, our open IDI business has amounted to RMB 401 million, representing a 12.2% growth. We continue to deepen the construction of IDI platforms in Shanghai basin and other places which achieve a cumulative premium of over RMB 4 billion and a total coverage of over around 100 million square meters. We have also accelerated the national replication of the promotions of a construction safety liability in 4 platforms and engineering quality and city manual -- management platforms. And fourthly, we have also addressing health care demands. China Re Life has laid the work, meaning vitalization of the critical [indiscernible] tables. We have strategically invested in the Meditrust Health. It is a medical innovative payment company. By doing this, we built a new model [indiscernible] or product will likely hold securities and participating in inclusive health insurance plans in over 20 cities and areas, we promoted the innovations in long-term health insurance first developed life-long health insurance cooperatively. China Re Continental reserves address the need of new illness, medical insurance and provided RMB 23.9 trillion of risk protection for 22 million people. That is our achievement in terms of the construction of a platform. Talk about what we have achieved in the technology. The year 2020, we have continued to implement the internal infrastructure constructions, the data asset development has registered a new level. We promoted the constructions that China Re P&C has fast business new platforms, and we handle 90% of the business and 80% of the data online. We have also accelerated the construction of China Re Life, these are cross-business platforms. And firstly, we created perfectly health platform and the online active automation was realized for the first time. The construction of China Re Continental Insurance data platform made steady growth and the data application is effective in areas such as customer insights, claim throughout the annual works from claims was prevented by RMB 500 million. At the same time, we have accelerating our speed to build external innovative platforms, while strengthening applications of new technologies. We have been working together with a China Continental Insurance by applying our block chain technologies to realize the real-time transition of we reinsurance block chain deals. And we have launched the first block chain security reinsurance system in L&H reinsurers. For the cross country data integration securities, computing platforms, it has been served as a bank insurance business of the clients for the cross-border sectors, we have used our platform to innovate to facilitate the business development. The review platform have to realize the commercial aspect to primary insurance companies, the medicine platform provided health management services for several insurance companies. We have built the first domestic online management platform, our new clear power plants. China Continent Super APP reached 2.2 million customers in the first year of its launch and a renewal rate of the power used also influence reached 61.4%. In the year 2020, we have fully launched the state of China -- China Re Digital 1.0. And in the coming year, we are also going to implement the China Re Digital 2.0. We talk about the platforms and we talk about the technology that we have applied. Now we are going to move to the third pillar for the China Re strategies. We have done the point 4 effort of work. So firstly, we try to improve our top level designs and also just sets the overseas management system and contract rate has improved the overseas, the enterprise development and plans and the establishment of the organizations and important decision-making platforms and systems. And secondly, we try to accelerate a global layout. China Re HK, Hong Kong made a good start achieving profitability in the first year in the Hong Kong accounting standard. And also we set up the China Re PC Malaysia branch, which was established and chose their insurance company Bermuda branch was established a Singapore branch obtained LH reinsurance license. Thirdly, we optimized the management of the Chaucer. China rate group focused on the management of strategy, capital, human resources and risk as well as the other fields, and China Reinsurance P&C was responsible for business planning, performance appraisals and the other daily operation matters. And according to the important principles of good management, we basically just go through very smoothly about the 2-year transition period. Firstly, we strengthened the domestic and overseas collaboration and business portfolio of the Beijing platform in Singapore branch was optimized to improve the capital efficiency and advantages of the Chaucer were leveraged to introduce cyber insurance and clean energy insurance and to upgrade the political violence insurance and tristate insurances. Also, we finished all of these different insurance upgrade the products upgrade and optimization. Then I would like to invite the China Reinsurance Group Corporation, this is Director Mr. Li Ming, to give us an introduction about the business analysis.

Hello, everyone, it will be my turn to give an introduction about the business analysis. Firstly, it is about the P&C Reinsurance part. And the feature of that is that our premiums revenue just reached a new high. And in the year of the 2020, our domestic P&C reinsurance revenue is RMB 33.351 billion, increasing 64.1% and our premium just reached the newest high since they were established and launched in the market. And our CAGR just from the 2016 to 2020 is 11.2%. So after the implementation of our policy strategies and our -- from the 2016 to 2017 and our premium basically just have a very obvious decrease even though just under such a circumstances. And from the 2017 to so far, we just reached the new high that we have even more than the past. And then in terms of our domestic business, of our efficiency basically improved and the comprehensive rate just decreased 1.6% to the 99.78%. And then what is more, we see that the total -- the business structure has been improved dramatically. And also it is because of the great transformation of the PC market growth motivation into the non-vehicle the insurance. Our domestic premium [Audio Gap] higher growth rate, which is totally more than the direct insurance industry. And in terms of the non-vehicle insurance is grow very quickly in recent years, it actually does help us increase the reinsurance among the people. And except they agricultural the insurance, which -- with a rapid growth. Our domestic premium still just reached 12.4% growth, which is even just 4.4% higher than the PC direct insurance industry. I mean that this direction will be further promoted. And in terms of our business structure, it is constantly just optimized. In the year 2020, and as you can see here on the map, we basically just reached the 38.5% in terms of the speculative reinsurance premiums. In the emerging lines, we also just developed very quickly, which has been consolidated. The overseas projects insurance, environmental pollution insurance, huge disasters insurance and the construction projects quality potential default insurances as well as the other emerging business actually increased to 29% with the total revenue of the premium is around RMB 1.617 billion. And right now, we can see that our total premium growth is in a positive direction, except the pandemic influence. In the year of the 2021, even -- in the year of the 2020, including the Chaucer business, which has increased to 6.9% to the RMB 15.017 billion, and we always discontent our platform and our business in Singapore, and we reduced some of the bad performance insurance business and after the optimization of the Beijing platform and the Singapore platform, and we can see that the rate of P&C, the reinsurance business revenue actually decreased 10.5% to the RMB 3.968 billion, due to the pandemic overseas the P&C reinsurance business comprehensively increased 7.52% to the 108.72%, except the pandemic influence, basically, which decreased 4.5%, and our business just quality increased a little bit. And in terms of our Chaucer business, as you can see that in the year after 2020, we see the very great opportunities of the improvement of the regional fees of the premiums will improve our ability of getting the insurance and also the Chaucer business premium just increased to 14.9% to RMB 11 billion and due to the pandemic influence, the Chaucer business comprehensively rates basically increased to 4.44% to the 103.64%. We continue to optimize our business structure and accept to the influence of the pandemic, basically, our business quality improved. And then I'd like to give an introduction about the LH reinsurance. So the feature is that the premium revenue increased dramatically. And in the year of 2020 and the reinsurance premiums of the LH has increased dramatically, which reached around RMB 66.18 million and the year-on-year growth is 20% and the domestic protection-type business is more than RMB 20.688 million, and China Re Hong Kong just reached RMB 5.99 million, which is profitable in the start. And also in terms of our domestic business as well as in Hong Kong, we basically just increased a very competitive growth. And in terms of our business structure, we optimized it in the year of 2020, and we see the proportion of the protection-type business take up 37.6%, increasing 0.1%. Proportion of the financing reinsurance take up 40.6%, decreasing 18%. And we only see about our protection-type reinsurance premiums will also increase the rapid growth. And so as you can see here, in the year of 2020, and we just increased 21.3% to the RMB 20.688 billion . And from the 2017 to 2020, the CAGR reached around 42.7%, among which our -- the renewal, the insurance reached around the RMB 10.497 billion, increasing 5.2%. And in terms of our business quality, we try to improve it and from the 2017 to the 2020, the combined ratio of short-term protection-type reinsurance decreased into the 7.06%. And also, we gained around the RMB 440 million underwriting profit. What is more, we also continue to promote refined management, optimized dynamic business monitoring, deepened research and development risk control models, implemented fee adjustment mechanisms and prevent business risks. We innovate profitable business, leverage experience analysis and per product iteration and diversified platform corporation, et cetera. And what is more, we also tried to leverage advantages of product plus data plus industrial integration to consolidate the core competitiveness. In terms of the product plus, we developed a newly defined critical illness insurance and long-term medical insurance cooperatively to promote the innovation and inspiration of health insurance products. And introduced the inclusive reinsurance plan cooperatively covering more than 20 cities. We also just innovatively developed the Greater Bay area of cross-border medical insurance and Greater Bay Area exclusive critical illness insurance, enriching the original products. In the Data+, we participated in a revision of the new table and the compilation of the accident insurance frequency table, actively promoted data corporation, diversified corporation counterparts and further expanded data sources. We also just leveraged AI and OCR image recognition technology to enhance the ability to accurately depict the claim payments data, widely adopted data plus pricing and data plus risk control in business development and loss prevention reduction accelerated a scenario based application of data. In industrial integration, we carried out in industry research and achieved at the top level strategic design statistically partially invested in the Meditrust Health and explore the path of the grid health industrial integration. When explore the innovative payment to promote mutual benefits between commercial insurance and the pharmacy and to serve the people live group. And then it is about the primary PC insurance. In the year for the 2020, in terms of our primary premiums, we reached around RMB 47.751 billion, decreasing 1.4%. And the comprehensive ratio around the combined ratio is around 104.44%, increasing 4.55%. And at the same time, we see the claims rates around 51.84%, increasing 5.08%, and the rate of the fees is 42.6%, it's decreasing 0.53 percentage and the combined ratio increased because it is totally affected by the reform of the vehicle or car insurance as well as the pandemic. At the same time, we hope to lay the solid foundation for the future, high-quality development. In the year after 2020, we constantly just optimize the business structure with a continuous strength and risk control and affected by the auto insurance company has reform premiums in the 2020 have declined. And the proportion of the family used auto insurance has decreased to the 73%, [ VIC ] index is actively identifying and screening risks at the same time, the cost control was constantly strengthened and proportion of special vehicles and trucks insurance was limited. And this is -- the structure of auto insurance has been continuously optimized. The pace and the scale of the surety business was actively adjusted with the primary premiums declining year-on-year. And also the risk exposure was actively controlled. Bad debt ratio rose in the first half due to the COVID-19 steadily declined of the highest point in May. Basically, we just achieved the profit of the underwriting. So except the bad debt of -- as well as the other main vehicle insurance businesses, we're also trying our best to develop ourselves and also increased our -- the premium into the 7.3%. And next is about the asset management, we actively seize the market opportunities to achieve the sound investment performance and with this actively these opportunities the year after 2020, and again, a relatively good achievement of the investment. In the year of 2020, our revenue, our gains of the total investment is the RMB 17.122 billion, increasing 31.7%, and our total rate of the profits of investment is 6.01%, increasing 0.71%. And by 2020, the December 31, and our total investment of our group is RMB 307.957 billion, increasing 17.6%, compared with the end of the 2019, we insist on this -- the steady growth in the process and also have a balanced allocation. At the same time, the fixed revenue of investment take of 75%, and the equity and fund investment taken up 19.6%. In the year of 2020, we also see the fixed profit investment allocation opportunities, at the same time, dig out the equity investments as well as optimization to optimize our structures of investment in equity and gained very good returns. We also make full use of the fixed returns and just flexibly control the long-term strategy and increase our deposits in the bank and the local government debts and the policy financial debts, et cetera, we hope to strengthen our source of the revenue and income. And the equity investment, we'll continue to make for use of the advantages of insurance capital to just pay more attention to invest in those categories or the types with a long-term investment values and higher bonus and dividends. We continue to just make it as a very important deposit for our fund investment. So this is about the introduction of the businesses of our group in the different aspects. Thank you very much, and I would like to invite President, He Chunlei, to give us the future outlook [ as welcome ].

Moving into the year of 2021. We are facing the new challenges. And definitely, we have new dynamics and also the new presence in the market. In terms of new challenges, let me summarize in a few words, under the effect of the COVID-19 pandemic, internally, we are facing a complex and world entire competitiveness. Please, the reform of receivers IFRS 9 and IFRS 17, therefore the monetary discrete regulatory treaty is going to be continued. And with the massive effect in the primary insurance market is getting obvious small open policies in reinsurance markets will be intensified. We could see that after the reform of the [indiscernible] definitely in the P&C market, the fast peers got the most premium and their competitiveness has been further enhanced. At the same time, we [indiscernible] catastrophe has tested our overseas business risk management capacity. This is the general challenges that we are facing in the year 2021. While facing the trend in 2021, we have the new dynamics and new motivations demonstrated by the strategic opportunities in the insurance industries. Definitely, my conclusion is laying into the 4 different fronts. The Chinese economy is improving in the long run, driving China to become the world's largest incremental insurance royalty. Second, the government's capacity to modernize has also stimulated rigorous amount for the liability insurance and also the catastrophe insurance. We have summarized it as a new group point on a blooming market with the acceleration of the aging population, the demand for health insurance and pension insurance in the middle class are also increasing. This is the largest opportunity facing in front of the insurance industry. The reinsurance will make great progress in selling the Belt and Road initiatives. For the new patterns, the fintech is going to spare reforms of business models. The applications of the fintech in the insurance is going to be widely applied in the insurance. It's has also been to transform the insurance industry, including the reinsurance industry, device insurance and P&C insurance to be further reinforced. Secondly, I believe the insurance industry is transforming toward the direction with diversified supply, orderly competition and continued good is ecological competition such as insurance of health management and technology as well as auto insurance have become the new important figure of the development. Taking the new challenges, with new motivations and new development patterns. China Re Group is going to continue. Our business strategy is to steady growth, optimize structure, control reach and improve profitability to fully report promote the China Re to return on high-quality development. In the year 2021, we are going to focus our work in the following 5 fronts. First, we are going to enhance our development in our major business in serving the national strategies. The major business, our China Re Group is focusing on the reinsurance and we are also going to promote the further and high-quality development of the reinsurance sectors. The second part of our work is going to strengthen the competitiveness of innovation and industrial structure upgrading. It's going to be represented by a series of the product and production innovation. While sitting on the high ground, we are able to enhance our capacities in the core areas. While we are seeing a lot of reporting being transformed, we are going to strengthen the quoting force of the business transformation in the regulatory transition. Fourthly, we are going to build a strong support for technology services in the digital revolution. As I have mentioned, we have talked about the China Re Digital 1.0 world, after 3 years of effort in the year 2018, 2019, and 2020 of the third institution evaluations, we have achieved a quite great result, but this is only the first step in the first half of this year, we are going to launch the China Re 2.0 digital 2.0 world. We are going to use this year and the coming 5 years to build a business infrastructure to strengthen the overall controls of the group in risk provision and the base front in the year 2021. We are going to steady the growth while progress. We are going to hang on to the business of the compliance, and we are going to study the growth, optimize the structure, controlling rate and improving profitability to the fully promotions of a high-quality development. This has concluded the January 2020 annual results announcement. Thank you very much.

Thank you very much, Mr. Zuo and Mr. Li, for you short introduction. Now the floor is open for questions.

[Operator Instructions]

Following to the institutions and your name before the questions. Now floor is going to begin to the first question. So we are going to give the question to Mr. Mao Qingqing from CICC.

I'm Mao Qingqing from the CICC. I have 2 questions for the high level executives of the China Re Group. The first 1 is about the second phase of C-ROSS. What is the progress of the C-ROSS and the second phase what will the impact of the C-ROSS in the second phase bring to the China Re Group. And also so for the P&C insurance, we have seen that a rapid growth in the P&C insurance, how about the underwriting qualities for this sector? What do you see of this in the future?

Thank you very much to your question. I'm going to direct your questions, the Business Director, Mr. Li Ming, to answer your questions. It's [indiscernible] and Mr. Qingqing, I think we are going to add up on Mr. Li Ming's answer.

For the second phase of C-ROSS, the regulatory policies has not been published. That's the reason why we are not clear about the impact to our group and to the subsidiary companies. Based on the previous path and the feedback that we have got recently. I believe the second phase of C-ROSS has more scientific and strict requirement. It is going to be beneficial to the healthy development of our industry. And I believe we have adequate claims ratio, especially for the confront we are going to see a very distinct decline in trend. It has provided us a lot of business opportunities in the reinsurance sectors. We have take a close eye on the latest progress of the C-ROSS Phase 2. Mr. Xiaoyun and Mr. [ Linjiang ], do you have anything to be add up on my answer?

Nothing to be followed up. On the reinsurance, our strategy, there is a huge change in terms of the life influence. The first aspect is about the greater requirements for the actually registered capital. And I believe the future cost, only a part of the future revenue can be considered as a core part of the core business. And for the critical illness, critical disease insurance, it has going to be grew dramatically in the future. And we are also going to have a future requirement in terms of the assets. For one part, the market is becoming smaller and smaller. For another part, there is more and more risk factors. It also have a structure requirement to the lowest premium levels. And for the C-ROSS Phase 2, it has also came up with a clearer requirement for the compensation ratios. It includes the risk transfer, the risk mitigations and margin transfers. Generally speaking, for the second-generation of C-ROSS 2, number of the small companies or the large companies, it has impact for different types of companies. For number 2 companies, I believe the C-ROSS does not have a huge impact but from small companies, the C-ROSS do impact their performance. Some company is being a declining and shrinking adequate capital ratio. I believe for the China Re Life, we are seeing it as our opportunity as well as a challenge. Let me talk about the difficulties lying ahead of us. There are 2 types of challenges, first-line index. It has a higher requirement for the internal capital that we have hold. Since we are seeing more and more critical illness in insurance, and we are also going to see the larger increasing reactors. So hard was allocated the result is more effectively is a 1 challenge facing our question -- our company. The second part is about for the -- while we are serving the insurance companies, how do we develop for that is in line with the regulatory demand and the client demand even if I didn't know the word question. In terms of the opportunities, there is also several different challenges for 1 part, the C-ROSS Phase 2 is actually demanding a higher requirement for the reinsurance in the P&C sectors for those of the companies who don't have adequate capital investment. And I believe the introduction of the risk factor for the critical disease. It is also going to promote the healthy development of the critical illness in service. This rich regulatory requirements for the reinsurance means for those of the companies or business sectors who did not transfer the business or risk model is going to focus more on the important sector. For us, important sector is 1 of the demanding sectors. Generally speaking, C-ROSS reform. C-ROSS 2 is means of opportunity together with challenges. We are going to overcome the challenges and grab the opportunities. We overcome everything that the C-ROSS 2 has brought to us. Now the floor is going to be given to the second question.

So I am [ Li Young from Economic Daily ]. [ Li Young from Economic Daily ]. My question is that this year marks the opening year of the 45-year prime period. And in the 45-year plans, we have mentioned a lottery insurance, including the reinsurance and agricultural insurance. What are the strategies of the China Re Group in the calling 45-year plan period?

Thank you very much for your question. I'm going to answer your question. This year marks the beginning of the 40th year, 45-year period. Certainly on this new port for 1 part, when to summarize what we have achieved in the part. And for the other part, we need. For the 35-year period, we have summarized by ourselves that after 5 years development, China Re Group is creating the different disasters, including the catastrophes and also the COVID-19 pandemic. The market status has been strengthened, while our business performance has also been progressed quite rapidly. We are -- we used to be the ace of the reinsurance companies globally. And currently, we are the top centers of the reinsurance companies. So voice taking combined with the external factors and what is happening towards China Re Group, we think that in the coming 45-year period, that is to say 5 years within this year, it is going to be a period for the high-quality development of the China Re Group. Well in such a very critical period, the China Reinsurance Group will lie to its system strategies and constantly improved its awareness for the dangers. It needs to develop with innovation and just while maintaining our stock, we also try to further develop the blue see market and the new incremental market in order to get the new development. For the 45-year plans, the development China Reinsurance Group Corporation already made it very clear about 4 -- 3 guidelines in the 45-year plan. And the 4 necessary guidelines includes that. The firstly, we have to strengthen our awareness of providing services to the national strategies as well as the real economy. And secondly, we need to just make a highlight the advantages of the reinsurance. And certainly, we need to just set up the systematic concept and try to just strengthen and reinforce our main core competitiveness of our company. And fourthly, we need to control the risks very seriously. And trying our best to achieve the 0 dangerous and risks. So following up the 4 guidelines, I believe that for the China Reinsurance Group of Corporation, like to follow-up the 3 very important aspects to develop itself in the 45-year plan. The first aspect is that we insist on the reinsurance business -- main business here, we would like to make our business in the reinsurance part, more powerful and stronger. And also further strengthen our growth and function as the innovation leading and the platform of the market of the country. This is about our first part of our aspect. And the second part of our plan is that we'd like to focus on the platform since and technology as well as the globalization to be as our important core pillars to promote our high-quality development and innovation-driven development. Based on this globalization, since and technology and the platform, we have our own advantages and competitiveness in the platform aspects and the China Reinsurance Group Corporation will follow-up the Belt and Road initiative to provide even more comprehensive risk control and the guarantee for the overseas markets, customers strengthen and reinforce our providence of the infrastructure construction as well as the main channel for the risk control. On the 1 hand, we'd like to make full use of our role as the huge catastrophes controls in order to provide the technical support and build up the infrastructure construction in order to prevent the huge catastrophe. And secondly, we'd like to further accelerate our quality control of the reinsurance part. We'd like to work together with our client customers in order to help all the issues have the relatively better solutions for the risk prevention and control and make our contributions for the industrial development. In the science and technology aspects, the China Reinsurance Group Corporation would like to follow-up the digital China Reinsurance Corporation, 2.0 to build up our digital transformation pathway and the foundation. We constantly just improve our block chain technology and our data connection with the other aspects and platforms as well as the algorithm promotion in order to further promote ourselves and empower the development of the insurance industry. In terms of the globalization, we'd like to optimize our overseas mechanisms and the organizations layout as well as the allocation of the resources and assets in the world, improve our risk control and management. At the same time, we hope to further efficiently promote our overseas business, healthy and stable development. And thirdly, just like what I mentioned, the third part and aspect is that we'd like to have innovation of the products and the model innovation so that we can further improve the reinsurance group cooperation. Core competitiveness, we positively promote the infrastructure construction in the industry and comprehensively promote the insurance for the agriculture, for the metal pollution, for the catastrophes for the business medical, health, et cetera. And will actually just cover all the -- like the insurance needed by the country and the people to do more R&D. So in general, the 14 5-year plan will be very important plan for us. It is also very important in a period for our company to have a further development, but we'll continue to face with the new challenges, of course, and improve our motivation and dynamic mix in order to improve and build up a new development pattern comprehensively provide the services to the national strategy and the real economy as well as to help the industries to have the innovation transformation so that we can provide the China reinsurance group operation solution in order to build up the new development pattern for the world and for the China. This is about my answer. Thank you.

Thank you, Mr. He, and let's welcome next to question. Thank you. Next question is from the Jenny Jiang, the Morgan Stanley, please.

So the actuary from the Morgan Stanley, I'm Jenny. I have the 2 questions. The first 1 is for. Mr. Luo, and we can see that in terms of the P&C insurance, we see there is a decrease deterioration of it. And we can see there's the classifications of it very obviously in this industry. And we've already taken the research about the company, and we see it as a very good development, but we still want to know, why do we have such a segmentation and classification, how can we try to feed with that? And the second 1 is about the industrial integration and business development. So how can we try to consider about this innovative business and the level we have seen a disclosure of the information. And I have seen that we have the insurance cost, which is around 97%. Whether we can use it to measure the profit gaining of all of this innovation business in the future? Or do we have any other like matters.

Thank you for your question. Well, for the first question, it is related to the China Continent Insurance as well as the insurance business. So would like to invite the Deputy President of the China Continent Insurance, Mr. Lu Xiaowei, to answer the question. Let's welcome.

So firstly, thank you for your question. Thank you for your concern and attention to the China Continent Insurance. Actually from the September 2020, China's insurance industry just implemented reform for their vehicle and cars insurance. Particularly, it just brought a huge influence to the China Continent Insurance as well as the whole insurance industry in the following 3 aspects. The first one is that it basically lead to the scale of the premium in the car insurance, which has been decreased dramatically. And this actually focused on the decrease of the insurance. And from the orders of this car and vehicle insurance, and we can see the premium actually decreased more than 20% compared with the same period of last year. This is about the first influence. The second influence is that about the claims for the car insurance also just increased because it basically just increased the claim rate from the 65% to the 75% for the car insurance. And this actually just decreased the profit, the margins of this insurance. The third point is that the Matthew effect will be more and more obvious. Some of the insurance companies relatively larger enough after this reform, basically will be in the difficulties in terms of getting the premium revenues and also it's -- just pricing abilities and the risk control abilities also will be more and more important for some SMEs, their leaving space will be narrowed and pressured. So this lead to the really decreasing ability of getting the revenue from the car and vehicle insurance. For China Continent Insurance, we tried our best and responded. On the one hand, we further improved our model within our company through the fixed model, and we tried to recognize the risks as well as the identification of the consumers. We constantly just improved and enriched our pricing elements in order to make the pricing more accurate as well as to just separate it with the risks more clearly. We also try to have the better understanding about the different regions as well as the control of the risks. We hope to have the differentiated setting of this pricing so -- as well as the risks so that different regions could have very good recognition for the risks of the car vehicle insurances and have set up the prices more reasonable. And in terms of the products, we also just make the 2 very important products including the ADAS, additional value insurance, et cetera. And also we have other communications and negotiations as well as the preparation work for the renewal of the insurance. And in terms of the science and technology, we try to use the electric -- or electronic measures to further improve our online business. Basically in Internet car vehicle insurance, China Continent Insurance basically takes a relatively larger proportion in terms of the claims we've got approved and to just improve the efficiency, and we try to just narrow the space for those wrong claims or the fake claims, et cetera. We try to reduce our cost, fixed cost. And particularly for the human resources cost, we would like to control it in order to ensure that our whole industry could have the better development and also ensure we have the competitiveness in the industry. Thank you. That's my answer.

In terms of the second question, we'd like to invite the China Reinsurance Group Corporation Lifelong -- Insurance to -- director to answer the question.

So in terms of this aspect of the classification and segmentation, yes, we have seen this very obvious in this industry. Right now, we can see the monopoly role of this insurance is still very practical. And so it means that in our lifestyle -- or lifetime, the insurance, we hope to have the integration with the reality. And just now our President already mentioned we just worked with the Medi health, and we tried to have the integration of the industry. This is a very important step we go through in this industrial integration. So we also have done several things to promote it. On the one hand, we tried to make -- expand our business and also -- both broadly and deeply. In terms of the deeply extension -- deep extension, we tried to increase the different categories of the insurance. For example, we have some of the insurance for the pharmaceuticals, the drugs for the treatment of the brain diseases, et cetera. And also, we developed very quickly in terms of the overseas, including like some medical equipment, medical facilities. We also tried to do some explorations for adding more new types and categories of the insurance. And in terms of making it broadly, we have the 2 aspects. On the one hand, we would like to expand our customers. In the past, we mainly just to see, but right now, just like our President mentioned in the presentation, we have the [indiscernible] insurance, and we try to bring this field into the [indiscernible] insurance to bring the benefits to the people's livelihood and what is more, in such a very special insurance product, so we also cooperate with the pharmaceutical companies and the platforms and pharmacies in order to just have a better coverage. And in terms of the broadly actions, we also just pay more attention to the extension services of the special use drugs like the MTT or the genetic testing, sequencing and the hospitals support, et cetera. And what is more in terms of the drugs, and we try to actually shift ourselves from the special use drugs into the necessary drugs, et cetera. For example, some of the people already got the frame of the heart, and they need to exceed the exclusion of the other disease drugs or effect, we also try to do something in like the specially treated or specially used drugs. What is more, we also hope to explore our integration with some medical integration, for example, like some payment models in some of the hospitals. We also work together with some of the insurance company's Internet hospitals or even the other -- the mouse and the hospitals were, et cetera. We also try to have the equity cooperation business as well as strategic cooperation of our business model. So basically, in general, in total, in the year of 2020, we have done a lot of explorations, and we go for the new steps. You also mentioned about the profit rate or the conditions of our returns of our profits, whether we can use the 97% COR to measure that. I think that to be honest, to be frank, at least, at the present, we think that the underwriting rate is even more than that number because at the present, a lot of the business -- for a lot of the business, will mainly just depend on the, like, the generation rate to cover the revenues. And at present, we see the generation rate is relatively good. And our profit in this aspect is relatively good. However, with the business development and the deepening of our business, for example, [indiscernible], which is the insurance for the people's livelihood, with further expansion, we believe that we can also cover for the chronic diseases and I believe that our company's profits not only come from the generation rate or the recurrence rate, but we still just believe that our profits, we not only can bring the benefits to the people, but also can bring the profits to our company, so we can have the industrial integration. We can just narrow and reduce the links in the intermediary process and improving our efficiency. On the one hand, we can provide the profit for our company. On the other hand, we can bring the benefits to the people. So at present, in this aspect, we're trying our best to move forward, like the premium insurance for the people's livelihood. This is one of the most important, like, the parts of our business for us. So in general, in the integration of the industries, I believe that with the business expansion and the breakthroughs, I think that we can get more and more profit, which will be very promising, not only right now, but also in the future.

I think it's a very promising business sector. And we are going to continue to conduct the effort in this front. For the first question, you have mentioned the China Re P&C future development and its development quality. I think this is also a question that everybody is concerned. I'm going to invite the President of the China Re P&C to answer your questions. Mr. Zhang, Renjiang, the floor is yours.

I really want to thank the -- your interest in the P&C sector. As you have mentioned, the P&C sector in the coming few years -- has been developed quite rapidly in the recent few years. And within the few years, I believe the growth has been registered at 38.5%. The compounded growth rate of the past 5 years has been registered as 46.8%. That is a very rapid growth, from the business structures, all the different proportions for the different types of insurance, I believe the float insurance, IDIs and also health insurance and engineering product insurance is accounted for a large share of the market. In the recent few years, we have invested a lot of resources for the future development. Moving forward, for one part, we are going to keep our tradition in the traditional sector -- keep our momentum in the traditional sectors while we are going to apply some of the new efforts in the emerging sectors and new types of insurance, I believe, in the future. Our P&C sector is going to keep a very rapid momentum. You have also asked about the quality. From the IDI business sector, the risk is quite unique. For the different types of insurance, they are posed through the different types of risk. The categories of the different risks is also quite huge. So under the control of this sector, we have [Audio Gap] different sectors. That is, you see for the different types of the sector, we have equipped or deployed different professional teams with a very strong background knowledge. They have a really good professional knowledge, and they also have a very good risk control management capacity. From the performance of the last few years, we could see the business sector is also grow quite rapidly. We are going to work in this sector, and we are going to hoping to achieve better results.

Thank you very much, Mr. Zhang. Now the floor is open for the next question.

So the next question is coming from Mr. [indiscernible].

I have 2 questions. The first question is about globalization, as 2 of the VPs have mentioned. So the second -- the question is about the procurement to Chaucer. You have finished the procurement of Chaucer in the year 2019 and this year it is also marks the second year for your procurement of Chaucer. What is the actual result after you have secured Chaucer? And what do you position Chaucer as in the -- generally on the China Re Group? And the recent -- the second question is that what is your investment strategies in the year 2021? How do you evaluate difference in approach?

Thank you very much for the question. The first question -- I'm going to answer the first question. It is about the procurement, the merger and acquisitions of Chaucer and also its strategic importance and also how did Chaucer develop. After 2 years of the acquisition, we have focusing on the principles of our [indiscernible], and we have stabilized the business structures and also stabilized the different company debts, and we have achieved the following 3 results. The first front is that while we are serving the [indiscernible], we have provided a lot of supporting structure for the Chinese company. Chaucer has a subsidiary in Singapore, Chaucer Singapore [Audio Gap] up the critical adversary insurance. China Reinsurance is transforming [indiscernible] together with political violence insurance. That is to say the Singapore subsidiary of Chaucer has set it up the political violence insurance, while the China Re P&C is working under the same framework together with this political violence insurance, providing the risk guarantee for this project. For the second part, China Re Group is using Chaucer as a platform and working together with its group in the talent and in the technologies. And we have improved the underwriting capacity and also the pricing capacities in the different fronts of the Chaucer. We have launched exchanges and communications with Chaucer on a regular basis, and we are pioneering into the new business front. We have introduced the Internet of security insurance and also the import insurance. And we have came up with a series of the insurance plans, and we have finished the upgrading of the political violence insurance and also the terrorism in risk, and we have also exchanged with Chaucer in terms of the 20 plans. Thirdly, we are trying to optimize our overseas reinsurance to improve the overseas impact. So the entire China Re Group has used Chaucer as a platform to consolidate and improve the leading positions in the Lloyd's market. And second, using the platform of Chaucer, we have also integrated the non-Lloyd's market because Chaucer as well as entity has the license of underwriting in the United States. So they are going to collaborate. We are also able to collaborate with other different European continental countries, even at the -- even if the break -- after the breaking. That is to say it's also very beneficial to our American business from the future development. Based on the different conclusions that we have drawn during the 13th 5-year plan, our definition or our position to Chaucer is that Chaucer is going to be the pioneer for the China Re Group to explore into the international market. For one part, we are going to let Chaucer fully play their role. And while we are controlling all terms of the risk, based on the internal principles, we are also going to improve Chaucer's ability and help China Re Group to achieve a value growth. Second, we are also going to strengthen the communications in the talent and in the international deployment. We are going to enhance the communications and also the coordination effort for Chaucer and also for the different platforms within China Re to better serve The Belt and Route Initiation for the further strategic interactions and for future development. That is my answer of Chaucer. For the question in terms of investments, I'm going to tie the question to Mr. Luo Ruohong, the VP of China Re Assets, to answer your questions.

Thank you very much for your concern of the investments performance registered in the year 2020. For the performance in the year 2021, we are going to adopt a stable but not aggressive strategy in terms of the asset deployment. We are also going to tackle with the volumes growth, and we are also going to deploy the different resources according to the right strategies in the market. In terms of the safety investments, we are also going to work as the cornerstones to stabilize the [ top organizations ] and the market in terms of the credit input to better control the risk, and then we are going to reanalyzing the structure, and we are also going to focusing on the core assets, which had the best performance. We are going to keep our patience in terms of our general investment and keep the resilience. For the opinion in terms of the equity market that we hold this year, we are optimistic about the long-term investments. In terms of the strategies, we are going to deploy our resources according to the different blocks and different positions, and we are also going to keep our eye on the high-performance sectors. And in terms of the selections for the different stocks, we are going to deploy into the different fronts for the industries. And in terms of different industries, we are going to be focusing on the high side, high end manufacturing industries. And this is going to be the strong growth. We are going to use the cool assets and to deploy the better stocks. Thank you.

Thank you for Mr. Ruohong Luo for your answer. And next question.

Next question is from the Huatai, Li Jian.

I'm from the Huatai Security, I'm Li Jian. There are 2 questions. The number one is about the health reinsurance. After the changes of the definition of the serious illness insurance, do we see any changes in the market, for example, the pricing of the insurances, any other changes? As the reinsurance stuff or the practitioners, do we see any good opportunities in the health insurance market? And the second one is about the pandemic, the so-called global losses of the pandemic. We've seen that in the year for 2020, and we have seen a lot of the losses in the claims. So from our estimation, when will this type of the losses is stopped? Will that be stopped to the certain time of 2021 or even in 2022, what is our estimation for that?

Thank you for your question. The first question is about the health insurance as well as serious illness insurance. Would like to invite Mr. Tian Meipan, the General Manager and Director of the China Reinsurance Corporation Life Insurance.

So in terms of the definition of the serious illness, basically, there are some new changes in the reform, which made the conclusion for the following features. And firstly, we feel that, to be honest, in the past, the serious illness basically is totally in the different concepts of the different people. While in the new concept or definition of the serious illness, I think that is more standardized and is really very comprehensive in all the definitions. The responsibilities turned out to be more complicated. For example, in terms of the diversified responsibilities, we can see that basically all of these products include the light symptoms or even the serious symptoms. In the past, we have the serious and the light symptoms, but right now we have different categories. And then secondly, in terms of the different categories of the diseases and illness, there are more and more that -- there are more than 40 to 50 the light disease or even more than 100 categories for the serious illnesses. And also in terms of the multi times claims, both for the light symptoms or light illness, twice for the light ones and also for the serious ones, there will be so many different times or even for the super serious units. For example, like the different claims for the cancer, for 2 years, 3 years. And also, for example, some of the companies, some of the products have the features that before 60 years old and the volume of insurance will be 50% increased or even 100% increased from this perspective. And this is a great feature that the responsibilities turned out to be more diversified and the product content also is in reach and diversified. Sometimes, we just see -- we couldn't even judge or we couldn't just go through the fall. And the other change is about the diversification of the functions right now. In the serious illnesses, there are also, for example, the long-term cares or even a lot of the services added to the serious illnesses, for example, like the multi aspects, diagnosis, et cetera. And what is more, we [Audio Gap] of this product. Some of the company even just developed a very simple product and just consider they added insurance and to put it embedded in it. And some of the company have a very strong ability or the power of the selling, they try to follow this step. And this is for the different purposes or demand of the different groups of the people and consumers. In terms of the prices, in total, in general, the serious illnesses prices is a little bit increasing, but in a very slight increasing. Probably just only 1 -- like only several percentages increase. So in terms of these products to the consumers, compared with the past, they're still like attractive for the consumers. And just now you mentioned about the business opportunities, what type of opportunities will we have in the future? I think there are several aspects. With the complexity of the products and the diversification, for the insurance companies and also the reinsurance companies, they have a higher requirement in terms of data. They also have quite higher requirements in terms of medical terms and medical information and they also have the higher requirement for the risk awareness and for the [ rate of acting ] companies. They really want to share this part for such a complicated product, no matter in the international market or -- and even in Hong Kong's market, it is not as complicated as we have in the main market. And for the majority of the [ rate of acting ] companies, they don't want to do these sectors of the business. For one part, they do see the huge risk. So how do we do with that. The insurance company is going to use a high payout over term and that's the reason why while the reach of insurance companies from the basic plan support of support, we are going to give more support. In the -- there is also a large trunk of the business where the reinsurance company is willing to support. And over more than 30% of the business or 50% of the business is going to be redirected. So I think we do see certain demand in the market, but for the catastrophes, how do we deal with this demand. We believe in certain different fronts, we do have the advantages over other different companies. We have a very good product development capacities. And for the diverse companies, in terms of the product design, we are using the risk monitoring, for example, the different types of disease, the definitions of the insurance and also the limitations on the premiums and also for the reinsurance and no matter for different grouping of the chronic disease and also the critical disease. In terms of the product design, we have started the risk management and based on our advantages in terms of the data, we have improved the precedence for the pricing no matter for the 28 different critical disease or for the research and the agent cooperation or the research into the future client for the critical disease, we have -- we are working on this front. For the different definitions -- for the different types, we also have different experiences, and we do capable to be precise in the following front and I believe on the third front, since the product is very complicated, we are using the probability because the current requirement is probably very high. Under these conditions, our company has really working in this type of business models. We do have leading advantages in these different price. While we are trying to develop several different product models, we do project with the opportunity, I think the current performance is quite good. That concludes my answer.

For the second question you asked about the COVID-19 pandemic and its impact on the China Reinsurance, we are going to direct the question to Mr. Zhang, Renjiang, the President of China Re P&C.

For the impact of COVID-19, this is actually a hot spot issue that we have sort of caught the eyes for everybody. COVID-19 pandemic do pose a lot of claims for the global insurance market. The rating of different institutions have came up with the numbers that is to the tune of around USD 100 billion. The total impact on the China Reinsurance, in terms of its loses, our domestic loss is not that huge, but it has also brought us a lot of growing opportunities because for losses, domestically speaking, when the loss occurred in terms of the catastrophe, reinsurance and also for the complement of the spot event insurance, we do not have a lot of product in the market. But after that, the prevention and control measures of COVID-19, in China Re, whether we resume the work and production and manufacturing, all the different insurance companies have came up with a new product. And also for the China Re, we have came up with 16 different supporting products towards the COVID-19 prevention control campaign, and we have also supported different companies. The great loss is coming from our international business, including our Beijing International Business sectors and all the overseas institutions. The impact of COVID-19 has registered a loss of around USD 205 million. That is a huge loss for our company. For such a huge loss, because COVID-19 was happened at the end of the year 2019 and the beginning of 2020, the policies that it has asserted is focusing on the policies that we have underwritten in the year 2019. We have actually summarized all the different policies. And we have also guaranteed and deposit some of the insurance with some of the policy we have found. And I believe that for the policies that we have underwritten in the year 2020, we have excluded that responsibilities. Especially for the Lloyd's, we have came up with a standard term to exclude the impact of the COVID-19 pandemic. We have followed the COVID-19 pandemic. We have followed this term. So the time or the scale that you have mentioned is relatively small in the China Re Group compared with other different groups. The impact on our country is -- can be guaranteed based on the previous reserve front, the total loss is comprehensively under control. While the COVID-19 pandemic is still quite rampant in the international market, I believe the losses it created is not going to be as severe as the premiums that in the -- of the policies that we have underwritten in the year 2019, the risk is totally under control.

Thank you very much, Mr. Zhang and Mr. Tian. Now the floor is directed to the next question.

So the next question is from [indiscernible].

Can you give us the digital reform and its result? Can give us the introduction of the digital reform and its result?

Thank you very much for your question. For the China Re Digital 1.0, after 3 years of the hard effort and the implementation in the China Re Group, we have achieved quite good results. I want to use 4 statements to answer your question. The first line is that after we have implemented the China Re Digital 1.0, we are going to be focusing our strategies to be in line with the national strategies. With such an opening platform, I'm going to be focusing on the 2 different aspects. The first line that China Re has incubated a platform that has focused on the catastrophes. This is what we call the Catastrophe Management Company. After the company was formed in the year 2018, it has achieved quite good results. As I have mentioned, the disaster digital -- for the disaster of the Earthquake 3.0 platform model, it is going to be launched. And in the first half of this year, we are going to see the 2.0 of the catastrophe monitoring model being released. And we have also came up with the insurance of the construction quality insurance. And that is also a very fruitful result. The second part is for the China Re Digital 1.0 work, with the implementations of all the different work and efforts, we are using the technologies to empower the insurance industry, and we have really achieved quite good results. I'm going to give you an introduction to 2 different scenarios. The first scenario is that we are using Blockchain technologies to optimize the reinsurance and the insurance treatment and the reinsurance and insurance dealing market. I believe that we have a very clear understanding of the dealing market. It is showing a growing impact in terms of the lowering down of a phase, and we are also focusing on the continuing effort of the Smart Intelligent platform for the intelligent platform, it is serving the 13 different insurance companies. Through these 2 scenario-based applications, we have improved the reinsurance ability, and we believe that we are tasting our own food. For the third part, we are making the structure better to have better management in terms of the data and with the middle bench structure reform. It includes 2 different aspects. First part is the business [Audio Gap] middle bench. And the second part is about the data middle bench. I believe that it passed us with the streamlining of the business models, and we have also managed data on that front. The second point is that after years' efforts, we constructed the international catastrophe management platform. We always just mentioned about the CREST system. This system actually could effectively help us achieve the business in the international arena, particularly about the real-time monitoring of the business in the international arena. It could actually improve the efficiency reaching even the seconds monitoring or even minutes monitoring. This is really a very good outcome on the result. So in the -- this is our new achievement in the 1.0 platform. And also, we just finished our group corporation's IT systematic reform and improvement. All the digital transformation, if -- without the support of the, our organization couldn't be sustained. So we -- our company already see this feature. We tried to just reform and change the department into the information technology center and also brought a lot of the very advanced talent and equipment and built up a very good and improved system in order to restructure -- reconstruct our IT system. The 2.0 version will be launched in May this year. Basically, it is based on the digital China Reinsurance Group Corporation 1.0 version, and it has been improved based on that. We insisted on the scenario-oriented and the customer-centered, the intelligence at the core and a coordinated development process. We also focused on the scientific and technological methods to drive its development. We have the 3 important targets. The first one is about the intelligentization of this internal management. Second one is about the reinsurance of our business. And the third one is about the ecological development of the platform. And last one is to build up the data center to the business structure in order to ensure that we can further promote the business model's transformation as well as the digitalization transformation and innovation. In this process, we specifically increased the internal intelligentization. The core issue of this is to constantly enhance the China Reinsurance Group Corporation's digitalization and the foundation in the industry as well as the improvement of the business service. We hope to further improve our intelligentization, our ability in this aspect, constantly play our role of the digital asset. And secondly, we tried to just rapidly promote the reinsurance development of our business. We hope to build up the 2 import in the network. And the first one is about the Blockchain network. And the second one is to further promote the safe algorithm of the Internet. And through building of these 2 networks, we can constantly improve the infrastructure construction of the digitalization of the industry. Secondly, certainly, we hope to further promote ecological platform, which means that we hope to build up the ecological network of the platform in order to achieve the sustainable growth of the business. And it includes the IDI-centered construction platform, platform ecology, and the serious catastrophe platform, et cetera. So we try to promote all the platforms to move forward. And the fourth one is that we would like to further deepen the reform of the digitalization in order to set up the system for the insurance and a guarantee of our system. We basically tried to follow up our roots and the process in order to further promote it. Thank you very much. Thank you for your question. This is my answer.

Thank you for Mr. He for excellent answer. Due to time limit, we can only just invite the last speaker to ask the question.

The last question is from -- is [indiscernible] from the [ Tongyang Securities ].

I have one question, which is about the PC business. Just now our leaders mentioned about the car vehicle insurance. I also want to know that everyone right now is trying their best to develop the non-vehicle insurance business. So in terms of this non-vehicle insurance, what is the conditions of that compared with the car insurance? And so in the future, in the non-vehicle insurance business, what type of advantages do we have in the future? Because the non-vehicle insurance business basically is a little bit different from the vehicle ones. So what type of the changes or the expansions we're going to do to reform it?

Thank you for your question. In terms of this question, I would like to invite the China Continent Insurance Deputy President, Lu Xiaowei, to answer the question.

Thank you for your question. So just like what you mentioned, in the whole insurance industry and the changes, the reforms of the car vehicle insurance, a lot of people shifted their focus into the non-vehicle insurance and also tried to grab and assist opportunities and resources of this non-vehicle insurance effects. And 2 to 3 years ago, we just put forward our -- the credit insurance and the non-vehicle insurance. We made some of the integrated deployment for this non-vehicle insurance. It is actually affected by the natural disasters with more fluctuations compared with the car or vehicle insurance in the year of 2020. With the influence of the flooding in the Yangtze River Delta as well as the drought influence in the Northern China, the non-vehicle insurance had been just affected seriously. However, some of the innovative non-vehicle insurance have a relatively good profitability. In the next 14th 5-year plan process, we will try to make the non-vehicle, non-car insurance as well as the health insurance better and stronger as well as to develop our credit insurance. China Continent Insurance is a state-owned enterprise. We would like to follow up the national strategy and try to make -- integrate our business development into the national revitalization of the rural areas as well as the other national strategies in order to achieve the target setup by the country and also to be integrated into the livelihood insurance as well as the guarantee of the people. The China Continent Insurance after so many years development of a non-vehicle or car insurance business have a very strong basis and a foundation right now, the proportion of that already taken up 45% of the total. So in the IDI and the production responsibility insurance or the responsibility insurances for the environmental protection solution, et cetera, will give relatively very clear kind of stable growth. And in terms of the agricultural insurance, we've basically got around the 30 provinces' qualifications. In the future, our qualifications and the scale of the agricultural insurances will be further expanded. China Continent Insurance have a lot of the advantages in the different insurance orders today, the vehicles, and also where they -- we have the cooperation with and the support of our subsidiaries and our headquarters. At the same time, we have a very good ability of the paying back. And right now, we have the 348%, and we still just keep relatively higher level of the payback ability. And this also helps us to make us bigger and stronger, and it lays a solid foundation for that. And in terms of the channel, recent -- the structure optimization, we just established the securities, the government insurance department in order to promote our services in the governmental insurance. And what is more, we also just make full use of the car or vehicle insurance to just bring the traffic or the flow into our company. It could just bring more and more people and customers into that. We have -- we set up like the car plus the x, which includes like the car plus health, car plus the business, et cetera. And basically, we have very good results of this model. What is more, through the online channel -- through the online business department, we also tried to be based on the Internet ecology. And also, we gained very good results in the model. In the future, we would like to further explore the government safety responsibilities insurances into the process -- into the insurance for the individual ones. So no matter in the team insurances or individual insurances as well as the government insurances, we're trying our best to get the better results in the business performance. Thank you very much.

Thank you for Mr. Lu for your speech for answering. And due to time limits, the 2020 China Reinsurance Group Corporation annual results announcement is finished. Thank you all the actuators and the medias as well as the friends for your great support for us. If you still have any other questions, you want to know more information, please contact [indiscernible], public relationship communications company. That's all about today's meeting. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]