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

Ladies and gentlemen, good afternoon. Welcome to the 2022 Annual Results Announcement of China Re. I'm the host for today, my name is Zhu Xiaoyun, Vice President and the Board Secretary of China Re. First, allow me to introduce the executives for attending today's results announcement. They are Mr. He Chunlei, Chairman of China Re. Mr. Qianzhi Zhuang, President of China Re; Mr. Tian Meipan, Chief Actuary of China Re; Mr. Renjiang Zhang, President of the China Re P&C; Mr. Li Xiaomin, VP of China Continent Insurance; Mr. Li Wei, President of China Re Asset. And for today's results announcements will be 2 agenda. First, executives will brief you the general picture as results announcement and Mr. He Chunlei will brief you the overlook and also the outlook for 2022 and '23 and Mr. Qianzhi Zhuang will go into details and then followed by Q&A session. The executives will answer some of your questions in your interest. [Operator Instructions] Now the floor is yours Mr. He.

Investor, analysts, friends from the media, good afternoon. Welcome to the 2022 annual results announcement of China Re. The year 2022 is a very challenging but also very important year for China Re. In the face of severe and complex internal and external situations, China Re maintained a strategic focus and fully serve the national strategy, deeply promoted business transformation and the comprehensively strengthened the recent promotion and the control. Therefore, new achievements were made in high-quality developments. And now I will brief you in 4 areas about our overall look of performance in 2022. First, we maintain a strategic focus to address multiple challenges with coordinated development and security. In the year 2022, we cooperated a gross written premium of the group reached RMB 169,764, a 4.3% year-on-year growth and maintain our market top 1 shares. And for our 5 years, a growth rate, surpassed 25%. That's a new record high after implementation of C-ROSS Phase 2. And we also maintained our top 1 in domestic reinsurance market. In terms of our key actions, our segments, we've also seen a rapid growth and also the optimization and business structure. The domestic P&C reinsurance non-multi business reached RMB 33,640 million in terms of gross written premiums, up by 24.9% year-on-year and overseas P&C reinsurance was RMB 19,621 million, up by 16.6% year-on-year. And for domestic L&H reinsurance protection type business was RMB 29,065 million up by 11.6% year-on-year and the P&C primary insurance non-motor business, was RMB 22,256 million, up by 7.4%. The year 2022, DA net profit belong to the company down by 6.86%. The reason behind that is because of geopolitical conflict as well as the macroeconomic pressures. The capital market has experienced a huge fluctuation. Therefore, some investment areas fall a decrease. Therefore, DA profit also a little bit down. In year 2022, we also focused on maintaining a insurance stability and also keeping the improvement in our business mix. In the case of the major losses, including Russian-Ukraine conflict, the hurricane in Australia, our underwriting profit was still achieved well significantly improved. On P&C reinsurance, COR is 98.11% down by 1.17 percentage points; and number four, L&H reinsurance short-term protection type business was 97.67% down by 0.18 percentage points, while the number for P&C primary insurance was 103.06%, down by 3.5 percentage points. In terms of the risk management, we have seen a stable performance. And also, we see DA adequate solvency and for the DA group that's 190%; and number four, China Re P&C, 190%; and China Re Live 208% and the China Continent [ 260.5% ] We also maintained our financial strength rating of A by [indiscernible] and the BEST and we were rated A by S&P Global Ratings with our financial condition remaining stable. We also showed our responsibilities in line with the DA national strategies. We also integrate our company's development into the greater picture of the nation and also tap into the new industries to explore a new driving force in 2022. For the key areas that we serve to the national strategy reached the RMB 4.2 billion and up by 20.3% and for Healthy China has covered the 120 million people, up by 18.9%. For small and medium enterprises, were RMB 1.48 million and 200% increase. But China Re AMC also strengthened its efforts in the agricultural section and the undertaking ratio increased from 30% to 36%. For all the domestic nuclear power plant and more than the RMB 1 trillion assets, we provide protection to all these power plants to make sure that the online security is well secured. We also serve the national health insurance plan, the Healthy China initiative and also more than 67 million people joined [indiscernible] insurance products and will also help more than the 89,000 the small and medium enterprises overcome the difficulties. And we also see the rate -- public offer the rates also play a key role in this regard that we applied a multiple channel of assets to help be a needed one. And third, we also rely on the digital economy and also digitalization. And in this regard, we developed a different platforms for the business and also diverse catastrophe model, and we also DA realized DA birth, DA China catastrophe insurance company and the company served for 5 years. And also, we've seen a 40% increase in profitability. For China's insurance industry, is the normal practice is the foreign developed catastrophe models. But for China Re, we focus a lot in developing the China's catastrophe model, therefore, we launched our first catastrophe model with independent intellectual property rights, that cover DA earthquake, typhoon and flood. Therefore, that creates the China Re brand that is covering 3 catastrophe models. So for these 3 models already rolled out to more than 30 insurance on the government institutes. We also further consolidated our technical foundation. We established a Digital Transformation Committee and to accelerate the implementation of a Digital China Re 2.0. We also developed our own platform to manage in an accurate manner of the catastrophe risk. We also upload a new standard system for insurance and covering the all the insurance companies. Therefore, we can better manage the catastrophe risk and more than 90% of underwriting from key business segments were operated online data quality and management. The preciseness has been significantly improved. And fourth, we also continued to deepen refined management with strengthening high quality development, and we strengthened our capability in risk management. We built up the further refining system in this regard, also built up 3 walls or gatekeepers to make sure that we can build a whole platform for us to look at the risk management that can help us to look at the risk domestically, overseas and also off the balance sheet, the risks, and we also look at the risks -- credit risks and also geopolitical risks. We will further improve the negative list management style. And second, we also further strengthened operational management. We strengthened our KPI management and making sure that the performance is linked to their economic income and make sure that all the companies and also the subsidiaries showed their responsibilities and created synergy among the different departments and the business units and worked together to make breakthroughs in difficult parts in their business operations. And third is we strengthened our capability in managing overseas business. And we gave a further leverage to the role of the International Business Operations Committee, and we also established the [indiscernible] Phase 2 business operation and also improved the international -- the asset management and was emerging fund management. After we acquired Chaucer for 4 years. So far, we have seen the stability in the business, operation and teams, especially in the recent years, we have seen multiple catastrophes happened. But still, if you look at the Chaucer's business is still up above the average and also saw return on economic capital reached to 12.9%. Now I give the floor to Mr. Zhuang to brief you each business analysis.

Good day analysts, investors, friends from the media, good afternoon. Now I will brief you into details about our key business segments. In year 2022, we saw complicated situation in home and abroad as well as the pressure on our business mix. The P&C reinsurance, L&A insurance, P&C primary insurance as well as asset management maintained their strategic focus, and we work hard to overcome the difficulties and better leverage our resilience Therefore, we reached a high-quality development in our business. First, let's look at the P&C reinsurance. In year 2022, we paid an accurate analysis on the global market and also the still see a global catastrophe in a common manner and we have seen our top management and also a top position maintained. The key indicators also reached a record high over the past 5 years and [ 58,100 ] million registers. For DA domestic business, RMB 42,097 million, up by 20.2% and for the gross written premium for overseas business was RMB 19,621 million, up by 16.6%. The COR was 98.11%, down by 1.17 percentage points year-on-year. For domestic business, in year 2022, our reinsurance premiums also reached a new high by different lines. For motor, the premium is up by 4.4%. We have seen a stable increase. We also see opportunities offered by the agriculture industry and we have also explored a [indiscernible] business and active involvement in commercial business. Therefore, we could see that the increase happened in agricultural increment of 35.3%. For other non-motor and non-agricultural sectors, premiums up by 20.5% through the deep credit to the liability insurance and health insurance business to grow rapidly. For COR, it is 99.76%. You could see a stable performance in the domestic business. And we also further implement and see an improvement of the business, and we could see an emerging line reached the RMB 33,640 million, up by 24.9%, and the ADR also is quite high, 19.9% and the non-motor sector has grown from 55.1% to 79.9%. We have also consolidated a new growth factors. From my side, the new growth in point is the major power for our [indiscernible] that is national tragedy as well as expanding into the new areas. On the other hand, the new business that is the area, where we are going to promote the innovations in the product and where we are going to see the China Re effort in the details and in the platforms move. In the year 2022, the reinforced premiums on the emerging lines is registered RMB 2,822 million, up by 34.6%, is accounting for 8.4% up by 0.6 percentage points. The inherent deficient insurance, catastrophe insurance, intellectual property insurance, cybersecurity insurance has registered a really fast growth. In terms of the international business, starting from the year 2022, the global insurance market keeps rising. We have very big opportunities of the global growth and the premium has been growing quite rapidly in the year 2022, the total written premium has registered for RMB 19,622 million, up by 15.6%, over which the Chaucer has registered RMB 15,720 million, up by 17.9%. And the other areas is registered at RMB 3,901 million, up by 11.9%. We have also accelerated our business structures. Although affected by the Russian-Ukraine conflicts, the general underwriting has also improved. In the year 2022, the general overseas business in total has been registered at 19.03%, down by 30.29 percentage points, on which the total points has been down by 1.82 percentage points to 92.9%. The overseas business except Russia has been registered a downward trend of minus 7.4 percentage points to 97.35%. We have also enhanced our management and the innovations of around. We are using the ecosystem models to achieve our outstanding results. First, we have built a disaster management ecosystem. China Re participated in the 33 projects in 84 [indiscernible] across the country, reserving achievement sole reinsuring in more than 80% of the product. China Re joined by set of joint open laboratories with the China meteorological administration for the risk [indiscernible] insurance. Second, we have also built ecosystem in the agriculture and rural ecosystems. China Re supported a policy agriculture reinforced by increasing undertaking result to 36%. On the other hand, China Re innovated commercial agricultural insurance providing reinsurance support to promote high standard farmland insurance in 5 provinces and launched the first agriculture carbon zinc insurance that we have built huge ecosystem. China has huge reinsurance pool, provide risk coverage for RMB 19 billion of assets for 30 Chinese interest abroad projects. China Re developed China's first foreign country territory risk asset system from China's construction independently. Fourthly, we have also built a construction quality ecosystem. The leading advantage of IDI business has been further expanded by upgrading Shanghai mode and promoting national wide. The total areas improved by the IDI platform exceeded for 178 million square meters. We have also consolidated the market competition in the domestic IDI market. Fifthly, we have also built an entire elegant transportation ecosystem. China Re has promoted the integration, innovation and strategy between the insurance industry and new energy vehicle insurance by relating the first new age vehicle insurance pricing models in the industry. China Re launched the first commercialized new energy vehicle domestically, quality and safety liability reinsurance. Now I'm going to introduce you our performance in A1, A3 insurance. In the year 2022, the LH and HS has continued to optimize our structures and make -- have a very stable performance in terms of the premium. We also registered a very healthy operational. The reinsurance premiums, domestically is reaching RMB 66,303 million, among which the domestic business is accounting for RMB 53,717 billion, and overseas business is accounting for RMB 12,586 million. We are trying to figure out [indiscernible] in our business structures while the proportions of domestic production type businesses grew by 6.2 percentage point. Let's look at the performance of the surety product. In the year 2022, the insurance product has grew by a real structures, the proportions of the medical insurance has grew by 28%, up by 9.3 percentage points. In the traditional industries and also in the innovation trucks, we are working really hard. On the traditional success of the business, we have the opportunity to help insurance market. We are also keeping our leading roles in the market. In terms of the innovative markets, we are relying on the integrations of different industries and also creating the new innovations in the whole insurance sector. Among the consumption market, where it is going to be the new booming sector. In 2022, the insurance product has created a lot of value with its core competitiveness. The combined ratio is around 79.67%, down by 0.18 percentage points, while the underwriting profit has been growing by RMB 559 million, up by 37.1%, [indiscernible] include medical insurance and developed medical insurance. For the second part, we are also working on less protection and reduction for the existing business. We are facility with a special advantage to develop the quality product em powered by the data, we are actually working on the different industry integrations. In terms of the product development, we are trying to explore for the new development with creating the new competes and creating the new values. First, we have a really deep capacity to use the data and tested by the China Actuary Association, we can -- we came up with the industrial rate manufacturing sector and we are also working on the multiple mechanisms, transporting the - on each sector, with the P&C sector. We are also launching with a new risk models to build a series of the health insurance claims. And based on the artificial intelligence as well as data analyzing systems, we are trying to reiterate the whole systems that we are being selected that has excellent examples in the reinsurance industry. By using the artificial intelligence models, we are developing a new product through the innovations. This is also how we are going to combine the risk and making the formations for the risk management. Second, we are also trying to -- combining the industry with multipoint offers, we have combined working services into the product by aggregating resources with the integration parties. On the basis of the special drug business, China Re further promoted the innovation payment proportions and carried around innovation payment proportions of the new series and new devices and the sales of [indiscernible] commercial medical insurance. China Re expands the risk protection field of customer medical product via integrating medical resources and around the elderly insurance for the special disease by cooperating with health influence institutions. Thirdly, we are developing new products through innovation. China Re participated in the liability design of the mainstream critical areas product and guided the market directions of further optimizations. China Re launched a first consumption type personal disability insurance. Now we are going to move to the P&C primary insurance. In the year 2022, the primary insurance has registered active business transformation and a significant improvement in underwriting results. In the year 2022, the primary premiums of this sector has registered around -- for around RMB 46,093 million, among which the motor is for accounting for RMB 23,837 million, up by 6.3%. The non-motor registered a RMB 22,256 million, up by 7.4%. We have seen a real improvement. The combined ratio has been dropped by 3.5 percentage points to 103.03%. Business structure has been optimized and the business quarter on quarter cost control strengthened and the combined ratio was also decreasing. The past growing ratio. The primary premiums and the proportions of the non-motor in the past 5 years has grown by 10.1% growing from 35.7% to 48.3%. We are focusing on other different key motor lines and apart from the surety product. The other sectors is registered RMB 17,763 million, up by 60.1%. We are also trying to complementing the skills of the surety product that is how we are going to lower the risk. Across the year, the total premium is around RMB 8,455 million. For this year, we are controlling this in a manageable range. Finally, it is about the asset management sector. In the year 2022, we are developing a series of products [indiscernible] ourselves, and we made further improvements. The third-party asset management is growing quite rapidly and is [indiscernible] for RMB 100 billion. By the end of the year 2022, the total investment assets in our group is for around RMB 422,916 million. The total investment asset is registered as RMB 320,697 million, and third-party investment asset is registered at RMB 102,263 million up by 295.3% While better allocating the asset structures, we are trying to make sure the fixed income is going to be the cornerstones for our structures. And we believe that the total numbers of the fixed investment is going to be accounted for 93% and by the end of the year 2022, the fixed income is registered by 97%. We are also trying to optimize our investment structures, focusing on the long term, growing industries as well as the quality product by the end of the year 2022. Our equity investment has been compatible at irresistible momentum. It is migrating of the performance in the year 2022. Thank you, so much. Now I'm going to give back the floor to you, President, Zhuang Qianzhi, China Re Group.

I'm going to give you a briefing about the outlook of the China Re Group. Let's look at a market situation. China's reinsurance industry will remain a significant period of strategic alternative in all time in terms of the [indiscernible] modernization driven by this structural reforms and modified comprehensive outlays, China Re industry will remain significantly with our strategic opportunities for a long time. The internationally speaking, the developed economy is facing the downward trend, while the emerging economies, especially focusing on the content alongside the about to move means that we have more areas to corporate and deeper cooperation to make. The emerging economy is driving a new round of the globalized insurance and accelerating our global centers to move eastward. If we look into the Chinese performance, Chinese economies resilience flat more and it is about to improve in the future. In the past few years, we are going to resume the [indiscernible] for the Chinese insurers, by the year 2025 China's total economy is going to reach the same levels with developing -- developed countries. China's insurance industry is going to be at a very important growing threshold. Secondly, the supply side structural reform of the insurance industry continues to deepen. The property industry has a growing onset reform and bounced back with a lower support while for the L&H sectors grew further innovations and renovations is going to make your breakthrough. Therefore, you could see that it's moved from itself, driven the technology driven and from minimum quality to high-quality development model. And third, we highlighted the key word of digitalization. You could see that the penetration and empowerment of digitalization and give additional energy to the development of industry of insurance. You could see that we also leverage road ahead of digitalization to further explore the driving force also entering to the new market and we also to focus on the demand side of insurance industry that will help us to get more initiative from a single reinsurer supplier to a solution provider with multiple means. Therefore, the new model and a new means of development give a vast ocean of development for insurance industry. Third, demand side, the insurance industry is comprehensively upgrading increase regard, a, we're looking at the vast market of China. Right now, China is also moving towards the digitalization of -- also the high-quality development as well as giving a quite key road to rural revitalization in a small and medium enterprises investment. And also we see all of these breeding for the insurance companies to give a more insurance product to help them build up the resilience. And second, we're also looking at now a lot of the companies and also the countries are looking for the insurance mix especially in the safety is the food and medicine and also the catastrophe industries. These are ODA new market waiting for us to provide these services and products. First, in terms of due circularization, especially the need of DRI as earned in a prominent demand. Against the backdrop of the geopolitical risks on the right, we should further tap into the gap of the overseas Chinese reinsurance services. And fourth, people have growing needs for better life especially post COVID. The people would like to get access to education to health and therefore, we talk about that we will see a boom in terms of demand of health. And therefore, we could see that the common prosperity will also bring additional room for us for growth. And with over the past 4 decades of growth, so we could see we have gained a lot of progress in this regard. We're now becoming one of the key pillar to propel the countries moving forward. Still, we're looking at in terms of steps and what the insurance industry still in the middle range of the international industries. We're looking at a bit high of demand and supply side, we could see that there is undergoing an operating actions, therefore, for some time to come. CEA Industry still in a very important period of strategic opportunity for in fact new opportunities China Re will implement our 3 top strategy towards high-quality development. Our goal is by 2035, China Re will become a world-class comprehensive reinsurance group with distinctive Chinese characteristics, prominent strategic role will define professional advantages and an outstanding market position. In terms of three steps, so for the first step, we started from this year, year 2023, so that will be 2023 to 2024 that we are a ramp-up period. In this period, we will do the following: First of all, implement a CEA for this 5-year plan. So we will give the emphasize on serving a national strategy, the building of RDA muscles and strength. So we come up moving forward based on all the muscles we built up at this time period. So we will demonstrate our responsibility, focus on our advantages in main business and also grab policy opportunities to achieve a further development. So we can achieve a better and more stable development. And second, we emphasize on profit at top priority and coordinated development. We highlight profitability and make sure that we can see a prominent growth of underwriting with investments and also like to see the [indiscernible] international business create more synergies and also in a well-coordinated way. And third, we emphasize on fine management and laying a solid foundation. We will also recover our efforts to promote digital transformation and also implement precisely whole process management to enhance efficiency. For the second step, that will be from year 2025 to 2027, that will be our development breakthrough period. In this case, that will be the end of the 14, 5-year plan period and also the critical time to further promote the 15 5-year plan. So we will focus on innovation based on the stable development. First, under the [ AMOT ] will drive of underwriting investments as well as domestic and international businesses. We make sure that we'll achieve breakthroughs and the performance and achieve our 14 5-year plan targets to move toward our goal size for 15 5-year plan. And second, we'll fully promote a digital China Re strategy and a kick start at the second growth curve to achieve innovative breakthroughs and also focus on the supply side structural reform. Third, there will be a breakthrough in layout and also to achieve the upgrading of our business. So basically, we built a few wings of interact and catastrophe technology to improve the insurance industry chain and the global network in order to achieve layout breakthrough. The fourth, we will continue to enhance the vitality of mechanisms in terms of innovation, incentives and collaboration to create more momentum for us to build a lot of strength in terms of talent and also a risk management. Therefore, we will achieve breakthroughs in management. And third, by year 2035 that will be our catch up on the third plan period. By then, we rank [indiscernible] of the global players. So we both focus on the emphasize management and also our business supported by technology with a strong talent team and also activity is on top of the world. Therefore, we can become a world-class comprehensive reinsurance group. By year is 2035, that will be a final part for our first line that we started from this year. So we will focus on the general principle of seeking progress for maintaining stable and enhancing value to make sure our first step is a solid one, and will also further build up our core competitives and also to create a better investment return for our shareholders. To that end, first, we will comprehensively advance high-quality development. We will strengthen strategic guidance and improve the quality and efficiency of strategic deployment and employment. And we will adhere to a key principle of stabilizing growth, adjusting structures, controlling risk and increasing profitability and also focus on the prevention and control rates through the rates of bottom line and also focus on supply sector for reform and make sure that the both CapEx have increased the profitability and also the return on equity and also to make a good job in coordinating development unsecured. Second, we will comprehensively promote the our capabilities preserve the national strategy. So we will make the exact understanding of the internal logic observing the national strategy and achieving high quality development in line with each other and will serve the bigger picture of the country and also to tap into the new ocean market and also to create the promoter product innovation and to be a co-governor of system management a supporter of enterprise risk reduction and the guardian of people's term life expandable. Third, we will comprehensively promote digital transformation, and we will promote the unification standardization of basic data platforms co consolidate the foundation of digital transformation. And we will also promote intelligent operations to realize digital driven business development. So we will accelerate diversion from reinsurance to primary insurance and the conversion of platform into quality to lead innovation and transformation driven by digitalization. Fourth, we will also make development layout, so basically, under this, we will improve the main business chain and create a new development model with [indiscernible] of reinsurance plus, primary insurance plus, asset management plus brokerage and brings Insurtech plus catastrophe technology and we will also accelerate the construction of ecology or ecosystem to increase the strategic synergy and also to tap the overall value of a global network to improve the international operation and the management level. That's all for our general performance in year 2022. A big thank you to all investors, analysts and friends from the media for your long-term care and support to China Re. And now I give the floor to the host.

Thank you very much for the executive to brief us the general picture. Now the floor is open for Q&A session. And please make sure that you only can ask no more than 2 questions and also before raising questions, please let us know your name and the company you belong to. Now the floor is open. [Operator Instructions]

My name is [indiscernible] from Economic Daily. My question is that in your announcement you talked about your 3 top strategies. My question is what is your key focus or a top priority for now? And what will you do next?

Thank you for your question. So let me take your question. We are now on the path of the Chinese modernization. We believe that we are in a very important strategic opportunity for development. Therefore, in year 2023, January, we had a big conference and made it very clear that by 2035, we will make China Re as a world-class comprehensive reinsurance group. So we have quite a brief concepts for this, which means distinctive Chinese characteristics, forming a strategic growth, well-defined professional advantages and outstanding market position. We have these kind of the 4 big [indiscernible] of these top goals. And under that, we laid out a 3 period of action pan. So for year 2023 to 2024, that will be our first step. So during these 2 years, we talk about that will be our ramp-up period. So based on our new development goals, the top priority for us is to make our first step solid. So we will see much of our development on patients and to build muscle for us to grow faster in the future. So what do we need to do first, we focus on high-quality development and pursue progress while ensuring stability and enhancing value and we will emphasize on the profitability in a well-coordinated way to develop our business and make sure our underwriting with profit, our investment is very stable and also to further improve our profitability and also return on equity, and we also will increase the efficiency of management and we will further strengthen the role of the [indiscernible] quarter in Beijing and to further make it only capability to manage the whole company in a very professional manner, and we will also coordinate high-quality development and security. So that's our first point. And the second set, work on the agenda will be to better serve the national strategy. On one hand, China Re should actively integrate itself into the national strategies in order to explore a new development area and a blue ocean, especially ruralization, BRI, Healthy China, green and low-carbon development, ODs are the key areas in terms of national strategies with core investment in this regards, and we'll also strengthen our efforts in the research and development in order to find out [indiscernible] and difficulties in national development. And we also make sure that we will be the first mover in this regard. So we can get our first policy in new areas and launch our new products and services. On the other hand, we are going to promote product innovation, improve the capacity and the ability to better serve the national goals. First, we are going to implement a smart management, actively promote the agriculture and major insurance and exploring into the catastrophe insurance area. Second, we are going to be the supporters for the risk reduction in the company. We are going to focus on the first branch new material promoters, and we are also going to expose into the intellectual property rights as well as the Internet security interest. Thirdly, we are going to be the [indiscernible] of the people developing. We are also going to be working on the product innovation. We are also going to export into multiple payment methods, enhancing the cooperation with the medical insurance sector. This is the second point I must make. Thirdly, we are also going to accelerating digitalization of the China Re Group. We are also going to further improve the digital transformation of the China Re Group building a basic digital platform and finalize this platform. We are also going to promote a smart technology applications as well as the reinsurance in transformation into the insurance, better serve these customers in the future currently, we are applying for a China Re digital technology climate. Moving to the future China Re digital technology is going to become the industrial driver and the competitive innovators in the industry. We are going to build multiple platforms with the reinsurance, insurance, technology services. And while we are going to develop on the 2 wins with the China Re digital information technologies and also the China Re catastrophe, we are going to transform the China Re Internet group with the digital game. Fourthly, we are also going to increase catastrophe model build core competitiveness. We are going to promote the iterations of the catastrophe model and we are also going to iterate the China earthquake models, we evaluate the earthquake model and upgrade the evaluation mechanisms for the earthquake model. With the iterations we are also going to come up with the China platform model to buffer and serve the [indiscernible] as well as TV industry as they are the new and disasters. We're also going to reiterate the China flood model, trying to make sure that the insurance model of the flood event can be calculated in a very stable manner. We are also going to create a regional-based catastrophe models. By teaming up with the solution, we are going to better and more effectively support and serve the high quality, high-level development of the Chinese economy. We are also going to work with the government, with the industry, and we see probably for the period. By accelerating the commercialization of the 3 catastrophe models, we are going to further enhance the core competitiveness of the China Re Group safely, the major work that we are going to comprehensively working into the globalization process. We are going to promote the internationalization process while coordinating the global landscape for the developed economies as well as the countries are development initiative, we are going to be serious of the deeper in research and creating a value construction plans to make sure that all these plans are going to be translated into the reality as we are moving into the future. We are going to create a coordinating mechanism. And by building this coordinating mechanism, we are going to try to explore the new technologies. And based on the overseas institutions momentum and reallocate we are going to have a differentiated management field and coordinate the opportunities over the dramatically enhancing the coordination mechanism between China Re and from the complementary business models to the complementaries and the business capacity and we are going to [indiscernible] move from the [indiscernible] to the nature of the business. Basically, we are going to enhance the talent cooperations as well as the training for the commerce. We are also going to make sure that all the forward-looking talent cultivation is going to be the part of our -- of the [indiscernible] resources work. Our 3-year cultivation plan for our staff, and we are going to coordinate the talent cultivation as well as e-commerce. We are going to select the talent at a different level, especially we are going to enhance the route driven as well as in part driven while selecting these of the products who have a strong clinical brand who are willing to see the risk and who are willing to answer to the questions from the public. So those are the people. We are going to improve these talents into the frontline and [indiscernible] the guidelines into the business landscape by enhancing the training of all the staff during the major items. And during the special work, we are going to enhance in the 20s, and we are going to study on the point to build a world class company and we are going to bring the peers for the multinational reinsurance company and by accelerating this outstanding plan, we are going to continuously build an international highlights for the reinforce talent. That is my answer to your question. Thank you.

Now the floor is open for the next question. The next question is [indiscernible]

Thank you so much. I am [indiscernible] the analyst from CIC. I have 2 questions regarding ERP. The first question is that we find that under the second [indiscernible] systems, the company's claim capacity has improved. Are there any potential for the company due to the fundraising. The second is part that the flood strategy in the company is developing really rapidly. My question is that for the end type medical product, what is the current situation? How is the company's view for these sectors of the business?

Thank you so much for your question. There are 2 questions. So I'm going to interpret the first question to you. The second question is going to be [indiscernible] actually it can make sense. Thank you so much for your preference. The claims management is lying at a pool as the reinsurance company. For the [indiscernible], Second generation of the [indiscernible] and its impact for the reinsurance company. I think my understanding to this question can be interpreted as the following answer. Actually for important roles in the favors reform, it has came up with the year before the next year. That's the reason why in the previous year's result announcement we have explained it a lot for the CRO reform, it requires the reinsurance companies to focus on our major business sectors and stick to the high-quality development. We should also address the default in the asset, default in the data and the also default in the other sectors and the default reform is being officially launched in the year 2022, some of the companies have asked for 3 years' transition period. Actually, before the implementation of a new requirement, we have conducted a very detailed calculation. So when the quarter came into effect, the high quarters of the China Re as well as our subsidiaries has also came -- calculated for several runs. So the general feedback is that we are very confident. There is going to be some of the decrease in the claim ratios, but I think the claim ratio is within the range that we can undertake. The second question is about how do we -- what is our take of the zero platform as well as the changes in the data. The transform have the basic principles that is to see it is going to provide the capital to filter through the risk management system. It requires all the participants in the industry is going to be upholding the long term principles. China Re is a Hong Kong listed company. We are sticking to the long-term management as well as proper management. These long-term management mean that for the transport, it is going to be our future direction. For the China Re's long-term management. It is also beneficial and very advantageous. There is going to be multiple reform. Definitely, they are some of the analyzing reform. And also from the investment and also asset allocation, we are going to be focusing more on asset allocations as well as the major business sectors trying to allocate more assets in the fixed assets as well as the interest as well as other efforts. Thirdly, it is also going to impact the performance in the reinsurance sectors. At the beginning of this year, the CBRs also mentioned about is distribution for the insurance sectors, we have a requirement for the reduction of the rate in the insurance sector. China Re is 1 of the major explorators in these sectors means that we are going to conduct in the same area. We are going to promote the insurance companies. They used to be creating their undertaking capacity as well as pure capacity and we are going to move from that sector into a better allocation of the risk. China Re as the national players in these sectors, we have a mature solvency capacity, we also have a long-term accumulated advantage in these sectors. We are confident that we are going to have the insurance companies to deal with operating of the structures. And fourthly, as I mentioned before, for the CBR, these requirements last year, we are applying for this transitional policies and we are also going to make the full of the 3-year transitional plans and we are trying to improve our digital capacities to better deal with the wave of reform and internally in we are going to have a special team focusing on this transitional period. 1 year has been passed, what is going to be our management team offers 3 years, as per the information that you have mentioned about the capital solvency ratio and in our [indiscernible], the improvement of the solvency ratio means that we have a variety of tools to insure, we have the also asset management as well as the optimization of our structures. We also have the other abilities to improve our basic structures. And also, there is going to be the interest of the capital investment. Currently, we are coming with 3 years capital requirements, and we are going to implement all kinds of ways, which is possible. And with further information for fundraising, we are going to publicize according to the requirement. I think after the pandemic, [indiscernible] back to the normal and I believe our solvency ratio is going to pick up by value. Thank you. For the healthcare services, the quarter itself is -- have a lot of room to develop in the market. After our research in the year 2018 to the first question, I'm going to talk about that for the health care product performance in the total spectrum of the China Re. I think that is performing very good and the needs of along at least [indiscernible] are 2 assets. The first reason is we manage it in a dynamic manner. For example, in terms of underwriting, and we keep change in accord with the condition in terms of the conditions and rates of the underwriting to make sure that it can be a sustainable development. And so we have a new requirement on the RT business. So also to reveal OD policies and also to change the conditions as well as rating rates? And second, we're also looking at the YRT, the high rate of RAT also will help us to control DA loss ratio. We talk about that in terms of increase of DA -- so we could see that, that will help us to control the fluctuation in the loss ratio. And we also will iterate these products or launch new products. The good thing for this is to increase the YRT. So we will see a more DA policyholders coming into our scope. So based on these advantages, so far DA performance of the medical sector, it's in line with our expectations with good performance. In terms of that, the market of medical insurance with the scope of more than RMB 1 million, we believe that's a huge potential. So for us, it is kind of the -- with a sufficient market stock. So for the reason, right now we have quite a huge of stock, right now, it's more than the 70 million to 80 million people in this market. Looking at -- right now, we have required a higher ratio of policies except people above 60 years old and exclude the baby people not to be a qualified to get the policy right now, we're looking at the penetration rate of the micro insurers quite high. And we're also looking at the competitive and new products availability. We're looking at it for different reasons. Actually, they launched their own [indiscernible]. So for these, we could see a quite prominent impact of [indiscernible] or the micro insurance inclusive insurance plan, so coming to year 2023, a new business increase or new business growth actually, the ratio is quite low. We're also looking at this not from a insurance perspective, but we're also looking at it from long term. So we talk about if we consider this as a long-term business. First, we believe that a more [ retinal ] not to fulfill, but characters have a long-term business and also retain our business strategies. In terms of long-term profitability, we believe that for the RMB 8 million medical insurance, there's still room for profitability, but it's quite difficult to get premiums from this sector. For the separate reasons, one, it's a market with quite a high number of the stock. So for us, we also should make sure that we have a bottom line thinking. So in terms of condition in terms of the rate of the underwriting, we will make DA adjustment based on the actual condition make sure that the policy is in line with our implementation of our company's business. and the strategy. And we also talk about integrated industry and with the innovative payment, we can increase the efficiency of payment. So for this market, first, we could see more illness bodies. So for a person who got ill, who got sick will not die immediately. So there's still get the insurance. And as we talk about people going -- getting older and older, then we have seen a higher number of people either get into the hospital where it got access to medical services, so talking about our underlining profit that will be based on our lower the loss ratio were no DA insurance risk. So for these markets, actually, nothing could happen in the above-mentioned area. So one of the key ways to innovate payment. So we need to have an innovative way to make profit. Previously, our loss ratio was quite high, which means we did not make profits. We maybe have a high payment ratio, but to lower the loss ratio, then that could be a way for us to make additional profit. So we emphasize the efficiency on the payment so that can help us to maintain the room for profitability. And third, we talk about the iteration of products. The first help us to increase the YRT and also to defer the increase of loss ratio and second and so can attract new policyholders. So the RDA business mix or business structure can be maintained and the financial indicators can operate in a reasonable manner. And also rely on DA integration of the industry. So we talk about we develop products that meet DA clients' needs then based on the integrated industry plus services model, and we can provide DA good combination to the market and to control the loss ratio. So that's my answer to the question.

Thank you Mr. Zhuang and Mr. Tian. The next question, please.

Thank you very much. Good afternoon. My name is [ Joanne ] from Financial Times. Let's now executives introduce about DA good progress made in retransformation, could you please elaborate more at how the result of digitalization of China Re and how that helps to underpin the value creation of the company and what the result of these initiatives? And what's your plan going forward?

Thank you for your questions. Please allow me to invite Mr. Zhuang to answer your question. Thank you.

Digital economy actually is to speed is really surprised us the China Re has a great importance. And the innovation and the technological development because we own now technology empower us. Back to 2017, China Re launched our 3 years plan of a digital. The information technology development. And also we have RDA China Re digitalization, 1.0 is developed based on the schedule, and then we also launched our 2.0 strategy in this regard. And the follow on the gathering resources of building the platforms as well as ecosystem so we make sure that our digitalization or the call operation inside the company as well as a smart platform economy and the ecosystem. So that will be a 5-year plan. So we could see a digitalization or the digital transformation, a new round of technology have given us a great support in terms of value creation. From my understanding, that could be summarized in the following 3 areas. First, we talk about the digital empowerment. You could see that the platform is built in our industry. So we gather the resources from the different sectors and to create a good services as well as create the ecosystem with the help of Internet. And in my brief introduction, we also mentioned that no matter if the reinsurance company or the primary insurance. Actually, you always could see the technology presence in the business development. Here, I would like to add on Slide 4 China Re actually is a long-term [ SNIP ] entity and also the paramount of the China [indiscernible]. So as the chairperson we take the lead to develop a nuclear reinsurance business as well as CEA balance road development. So for power plant, for a nuclear power plant, back in 2018, we already developed the core platform, so we could see the negotiation, the underwriting, claim, policy processing and to enhance the business on this platform. And for the BRI business, we also have the platform available in this regard. So for DA quoting policy processing and the underwriting team claim who can be done on this platform in 2016, the IDI business, also build up a platform, right now, 40% of the market share belongs to China Re. So for DA or direct reinsurance company or DA project where China Re acting as the chair person, we could always see a technology platform and ecosystem built out in different sectors. And second, technology or digitalization also help us to manage our business and the company in a more precise manner. And back then that we have rolled out from 2019 to the end of last year, we rolled out based on the plan. The [ DI-17 ] and also to develop DA whole system. So by the end of DA last year, right now, the whole process is already finished. That's the IFRS 17. So you could see it from DA primary insurance, reinsurance, home and domestic that can be done online. And for the integrated business to processing platform right now also reach the advanced level around the world. And also starting from 2019 we also faced on the blockchain build up, DA trading platform between reinsurance and primary insurance right now many companies already upgraded to the blockchain, and they can cultivate data and also utilize data to further boost their development and also help us to boost development of reinsurance and primary insurance business. Also the digitalization also gives us a great support in dealing with risks. We talk about the China Re, catastrophe company to a certain degree at the core of the core of our industry and our company right now, we talk about we already coming to the China earthquake catastrophe model at 3.5 and typhoon at 2.4 and the China flood catastrophe model that 1.0 model, so far, more than 30 insurance and government institutions have used our models. The data platforms where we talk about models, not only support needs or business as a reinsurance, but also help to support the government in terms of risk management. And for our self-management we have our craft, we are also coming to 3.0 at the day 1 request is for DA cumulative evaluation of catastrophe right now for across the 3.0 that covered reinsurance and DA primary insurance, the pricing and risk management that also unified the traditional engine pricing manner. So we could see that with OD asset development of the different models that help to the integrate the value of ourselves and also the underpaying development of the governance of the country and also development of other industries. So in the past 6 to 7 years of experience, we can tell you that the digitalization or the utilization of the information technology is very conducive to further boost the development of our industry. Going forward, for DA Board as well as the group also technically important to further promote development of the digitalization. As you know that we have our 3 steps strategy and one of it. So we will steadfastly promote digitalization. So we talk about that. We will have that digitalization or insure type DNA in our company. So right now, we are working on the systematic building up. So let me share with you in the following 5 areas. First, on the process of digitalization promotion, we focus on DA design, so we would like to say first, we have the overarching DA framework, so that will be a well-defined manner and then we can roll out into details. Second, we are going to promote the digitalization management. We have built digitalization transformation. And the manager is the upper percent and -- we have also built a coordinated utilization framework, trying to avoid distribution of the information. And fourthly, in digital transformation, we have emphasized that the domestic and international needs to be on the same process. And safely as we are enhancing the R&D in all kinds of research, we are trying to optimize the steps that we are going to take in as we are moving to the next step. As we are moving to the future, the topology and roadmap is going to be completed for the further digitalization, I believe China Re group with these types of digitalization is going to enhance our core competitiveness. Thank you.

Thank you so much, President Zhuang, for your kind introduction. Now the floor is open for next question. Thank you. The next question is coming from HSBC, Michelle, please.

I'm Michelle coming from CITIC. So I have 2 questions. The first 1 is that as our executive has mentioned about the digitalization process of China Re and also our IT system has been online. So under the new insurance contract rules, so the profit and other core factors, are there any fluctuations. Can you share it with us. This is my first question. The second question is we can say that starting from last year. This is -- that was a year for the frequent appearance of the natural disasters and also profit impacted by the Russia Ukraine conflict. The performance is still very good, especially for the charges performance. There is some of the downward trend, actuary apart from those. The overseas reinsurance pattern has registered an improvement in the combined ratio. So what kind of measures is taken to address this risk? What is the reason behind it? As we are moving into year 2023, what is going to be the overseas development? And are there any outlook for their perfect in the 2023?

Thank you so much for your question. The first question is to the President of China Re Group, Mr. Zhuang. The second question goes to the General Manager of China Re, Renjiang.

I have mentioned that for China Re Group the contract requirements as we allowed us to prepare for the 3 years. We have to do some of the consultation work, and we also came up with ecosystem. At the end of the last year, the IT system came online. We plan on October this year we are going to revise the data. And actually, after the auditors audit, we are going to publish on the first time this year. At the same time, you have also mentioned about the information requirements. For the impact of to integrate for the revenues and also the for the corporate, we have done some of the in-depth research. After the new contracts came into it. In terms of confirmation by the income, it becomes the liability accountabilities, there are so much revised. The general plan is going to lag the insurance industry back to the normal and create more transparencies in the insurance. Now my understanding to the actual processes that after so many calculations, the rules is going to divide the insurance contract as well as the investments, and there are other noninsurance service sectors which has been included in the insurance. And there are other noninsurance factors, which we can get -- at the same time, for those which cannot be separated these investments cost, the premium is not going to be included in the service space after the new accounting rule, the total income is going to see a significant downward trends for those companies who have deployed their major business in the LMA structure, there this downward trend is going to be more distinct. But our understanding is that the changes in the accounting rules is just impacting the way we account the market performance. It does not change the nature of our business. The second point I want to make is that from the national regulators perspective, there are asset allocation, and they have deployed the new financial tools where we have a funding the public interest deployment. So with the new public value deployment, the changes in this is not going to be included in this term, is going to impact in the current term. So as an insurance company or reinsurance company, capital operations in this period, is going to see -- in this period, there is going to be some of the fluctuations in terms of performance. The changes in the insurance sector means that there are some of fluctuations in the premium, but there are also some changes in the return. But generally speaking the impact of the interest is now going to be very high. First, this impact on the income is also going to be different. Different types of the company, we're also going to see the different performance for this P&C insurance company is now going to be under a very high impact. That is our -- we have done some of the calculations which have supported my conclusion. How do we deal with it? From the past 3 years profits, we are actively doing some of the preparation. For 1 part, we are going to enhance the business structure because the changes in accounting rules means that from the monitoring perspective, we hope that the insurance industry and reinsurance industry could come back to the original goal, could be serving as a safety cornerstone for the whole society. So there is a lot of changes in the results. The surety product is growing quite rapidly, surety product is also providing a cornerstone for all the other factors. In the asset part in the asset allocation part, we are also going to allocate some of the stock and other fixed income, which have stabilized the performance. These are some of the areas that we have taken to deal with the company. We have done a lot of research, and we are also continuously build the management between assets and auto liability trying to make sure that we have the 2 platforms domestic and overseas. We also have the 2 business structures, domestic and abroad, and we are going to get in touch with the market more rapidly.

Now I'm going to answer the questions about our international business. Thank you so much for your concern about the international business of China Re. As you have mentioned, starting from the year 2022, the international business of China Re has been growing quite rapidly. This rapid growth backdrop means that we have overcome the difficulties posed by Russia-Ukraine conflict and also the natural disasters. And starting from last year, we have achieved a quite good performance. By the end of the last year, we have actually achieved revenue rapid growth. And we have conducted this following structures we have grown the trend in the market, and then they promoted the underwriting fees. Second, we optimized the contract requirements changing the compliance ratio changing the -- Thirdly, we also optimized the structure for some of the as performing insurance type, we have allocated more resources while we are also reducing the performance in some of the nonprofitable sectors. And fourthly, we have offered lowered down the cost in several different sectors. I -- you have also mentioned that some of the business is that we lowered down the premium cost, other institutions lower down the management cost. And for the full COR, the performance has been kept in a downward trend. And for the fourth measure -- that the fifth measure, that we have been undertaking, we are also working on the general responsibility accumulations by using the above-mentioned measures. Although there are some of the backdrops that we have last year, but it does not affect the whole business performance. I think the total performance improved quite dramatically in the year 2023. We are going to speak to the principles of high-quality developments. We are also going to grab on the circulatory performance, improve the performance against the risk focusing on the overseas development trend, and we are also going to grow the opportunities in the market, trying to optimizing the contract requirement making sure the risks can be controlled. At the end of this year, in the international business sector, we are going to achieve a better results.

Thank you so much, Mr. Zhuang and Mr. Renjiang for your kind questions. Now the floor is open for the next investor. Now the floor is open for the next question. Please wait for a few seconds. Are there any questions online?

Can you hear me?

Yes.

I am [indiscernible] from Security Times. Can I have my question? My first question is about asset management. The China Re's asset management has registered over 300% year-on-year. What is the reason behind it? So what is the executive opining on the third-party asset management? The second question is about the best about the aging population in China, aging population is something that we're really concerned about. Are there any measures that we could undertake to deal with the aging society?

So thank you so much for your question. We are going to direct the first question to Mr. Li Wei of China Re Assets. Now the second question is going to be directed to Mr. Tian Meipan, General Manager of China Re Actuary.

Thank you for your question. For reinsurance, it's the intricate DNA, but that's on the stable investment we talk about the long-term stability, actually, it's our goal. Therefore, we always stick to the long-term perspective and stable investment. In terms of managing DA long-term allocation of assets and also the asset investment of the DA platform, we have accumulated a lot of rich experience in these regards in the recent years. We also established our capability with DA third-party, DA product allocation and DA layout. We also have the launched a series of a China Re branded private tax and also we're looking at a [indiscernible] DA public rates plus the DA fixed income and also DA hedging, DA macro and also DA share market and also our strategy to looking at the high dividend stock ODs received a good feedback from the market. It's not only reflected in the high numbers, but also reflected on our service quality provided to our clients. We focus on the clients, DA need, we actually designed DA designated directives to different clients. In the past 2 years, we also explored the profitability with DA banking institute, a financial institute. And this also help us to gain a quite wide recognition of DA financial industry. And we talk about insurance product or reinsurance product actually can better support the need of DA stable development and also stable investment as well as DA upgrading transformation industry. And right now, CBRC also launched new policies for the reinsurance contacting the reinsurers and also the investors, so we're kind of looking into DA publicly offered rate and we would like to participate in the investor construction projects so that kind of provide the innovators on RD platform and on our change to make some innovative contribution. And we see if people while the appetite shifted. So for our multi-pillar supported the elderly care, was more consolidated that need us to invest more the products also fitting in our strategy, going forward, increase our investment capabilities as well as the system buildings, so we can continue to consolidate our strength in this regard and also based on the admin business of China Re to further enrich our products, the strategy of investment as well as operations. So we'll come upper side, our distinct features and also the precise management will provide a multiple and rich product plus services to our clients. Thank you.

In terms of the elderly care system, what kind of the layout we have for China Re. Our consideration is that in year 2022, we talked about the elderly care that it covered health, wealth management and also the longevity. In year 2022, in these 3 areas we made some efforts in these areas. As the insurance, we iterated some DA profit. We will not have the DA high rating as the market. In terms of longevity, we're also looking at the risk in the longevity area, actually, with the people with a long lifetime, a longevity insurance or reinsurance, it's a new topic around the world. We're looking at the commercial ones actually did not quite offer the products under the umbrella of longevity. So with the limited product available in the market, we actually made more efforts to explore the possibility of a longevity risk insurance. We talk about this could be the top risk item. So that's the time develop the mature and we should put ourselves ahead of time to deal with changes in the aging population. Right now we did a lot of job in the health insurance sector. First, in terms of products. Second of the integration industries. In terms of products, in year 2022, we actually made a lot of efforts in this regard as introduced by the Chairman. We talk about DA longer care, the DA Illness and also the DA random, DA hospital needed the insurance that make the constant iteration and also for disability and also the long-term care insurance for long-term care, we take up the market share of 64%, and we also developed the long-term disability insurance products. In terms of innovative line or emerging lines, we talk about [indiscernible], we talk about the [indiscernible] advanced insurance. We talk about outpatient insurance. We talk about dental insurance and for [indiscernible], that's for DA access and DA [ courier boy ] and for DA new urban resident that can get their benefits under [indiscernible]. So we could see that for people before they have difficulty to get access to insurance right now. We also provided the support to them. for the ex-service person for DA migrant workers. So that's for the product part. In terms of the integration of industry, we have done the following. First, we reached our cooperation method. Before the [ Apathy ] Corporation, we invested in the multi-truck that's a payment company and also in the year 2022, we also explored more available ways. We work with the healthy companies and more with the pharmaceuticals and the medical institutions that we build up the strategic partnership, so that you can see we have the more partners in our scope. In terms of innovative payments, we talk about we work with the pharmaceutical companies, we work with the medical insurance, medical institutions that -- so we utilize the innovative payment to improve and enhance our efficiency of the payment. So that also enable us to launch more products. In terms of health management, we also launched the DA for the ugly people, a large proportion of people with chronic diseases that have high blood difficulties and also the different DA situation for them, they need that the basic of the health care for the [indiscernible] as well. So we focus on a chronical disease management that make sure they're not really delay the hospital services. For the high blood pressure person, it's not easy for them to take the pure medicine to cure them disease that they need that the treatment or the therapy to further cure their high blood disease. So we talk about that if we can have a chronic disease insurance or other products to make sure that people can cure their disease at a very early stage. So that's our layout strategy in the health sector.

Thank you very much. Due to the interest of time one last question, please.

Thank you very much. My name is [indiscernible] Securities. I have 2 questions. One is [indiscernible] had a quite dramatic changes. So what lies behind to achieve these good results, so going forward towards the COR, if CEA China confident the insurance company trending downward trend. Another is question for investment. I would like to know for year 2023. And what's your view on the changes in the macro environment of investment and what's your plan for the company for further investment. We could see that there are a lot of DA situation, the turmoil happened in overseas market. So what's your take on these turmoils any impact to the company's business?

Thank you for your question. To your first question, please allow me to invite Mr. Li Xiaomin to answer your questions. For your second question, I will invite Mr. Li Wei from China Re AMC to answer your question.

COR is a very core issue for company for year 2022 based on the management of COR, we benchmark to the market, and we also narrowed the gap with the market benchmark. And we also followed the general principle of maintaining progress and maintaining stability and enhancing value. The overall COR improved by 3.58 percentage points. We have done the following to achieve the goal, good performance. First, we optimized our business mix and focus on quality. First, we focus on non-motor strategy to improve the business proportion of non-motor lines. And the second, we also to initiatively deal with lower performance lines of business therefore, not to help us increase the proportion of the quality business. And third, also focus on the cost management and we're also looking at DA further room into down DA loss ratio. And for the same line, the loss ratio dropped compared to the same period last year and also DA fixed income cost management to use the resources smartly. And third, we also present RDA performance asset to make sure that the efficiency-driven operation. So we have the some tips in the place and make sure that everyone knows that DA the business with a negative number cannot get their incentives. And we also stick to the bottom line thinking, make sure that operations should be stable and safe as well. And we also assess on DA risk management penetration in the key areas to make sure that we provide and diffuse the major risk. For year 2023, we'll continue to consolidate our gain in the high quality development. And also, we focus on the controlling the DA risks as well as the seeking progress while maintaining stability improving the structure of the business where we have done the following. First, we will help the clients to do a better job and second, build up a better operational management. Third, The we will build out the know-how of risk management. Four, we will also improve our capability of innovation development. And fifth and we will also control DA cost management to make sure that we over stick to high-quality development with efficient cost.

And I will answer your question about investment. First, I'd like to oversea the turmoils or take on that. For reinsurance, by nature, it has to deal with the overseas factors. So at a very early days, China Re, already had its global allocation of assets Therefore, we have, again, acquired rich experience in the risk management and asset allocation management overseas. So far, in terms of ODs SAB were the troublesome banking system. Right now, we not have any DA interaction with these banks. So very limited impact to China Re. And also, we talk about this is actually the individual case. It's not for the whole industry. We also agree with that, but we also keep a very close eye on OD situation unfolded. For example, for DA situation in the United Kingdom in terms of the insurance. And also, we talk about for the banking system, that's also the wrong allocation or the wrong machine of the assets, we talk about that also need to do the good job in terms of matching DA insurance and also the pattern of investment and we should focus on investment on long-term perspective as well as DA value to make sure that we can reach the balance and the equation. So for the effect because they keep having the rate. The first [indiscernible] increase in the ratio has also creating a global turbulence, which is becoming the new normal, 1 part, we need to be strategic confidence, and we should have stick to our principles. On the other hand, we should also have a clear understanding of the use of the reason why such a trouble [indiscernible] these tablets coming from, and we should also have [indiscernible] the risk model. And we should also have a review of the risk management as well as the asset management, trying to make sure that all the tables can be controlled amidst the uncertainty. Using long-term investments to penetrate through the uncertainties in the market. So this year, in 2023, for the institutional investors like the insurers. This is related to this long-term for the insurance market for our long term needs and for our absolute attitude as well as our pursuit for the profit. We should try to group these cycles in order to avoid the potential risk with the potential. From the medium and long term, our country has a lot of indigenous growing drivers, and we are a very dynamic economy with multiple sectors, especially the policy relating to COVID-19 cost affected by Russia-Ukraine conflict with a stronger economic policies I believe that with the incremental policies adding up on the previous process with the acceleration of the state of the economic recovery, the confidence of the market is going to be strengthened. So from the current market data after the spring festival, the economy is growing at a faster pace compared with 2023. We estimate the performance in the year 2023 is going to be better than 2022. We are going to stick to the long-term principles. In the asset allocation, we are going to be more balanced and also more reasonable. And for the regions and the areas that we market and we are going to enhance our risk management, coordinate the returns as well as the liquidity. In terms of the fixed asset management, although the short-term interest increase is going to create a lot of panic in the diabetes aspect for the reinsurance industry. But for the longer term, domestically, we are seeing a downward trend. We need to enhance the forward-looking research. We should also grab this window of opportunity for the interest and we also should be focusing on the high-frequency premium securities and also, we are going to provide the risk asset management in order to enhance the innovations in the fixed income, for example, the asset [indiscernible] and also the REIT. For the traditional sales income, we are also going to allocate some of the high interest rate projects in order to expand our mortgage performance in reaching the investment portfolio as well as managing the different reinvestment returns. We are going to make sure that relativity is going to be a part of the asset allocation we should also allocate more assets in the equity side. There are some of the turbulence in the market that for a long time we are still optimistic about the performance model in the market. We are going to speak to these long-term products, we are also going to be focusing on the strategic asset allocation side. Margination is accelerating the green and the low carbon economy, we are going to grab this opportunity and have a very good return in terms of investment. We are also going to adopt the different features for the investment, trying to register a superb investment return using the equity as a part of the investment trying to optimizing our equity environment. That concludes my introduction.

Thank you so much, Mr. Li and also Mr. Xiaomin. For the interest of the time, the Q&A session concludes here.

China Re Group has been [indiscernible] market talking from the year 2015. We get the support from the investors, analysts and also the friends from the media. On behalf of the executives, I'd like to thank all the friends for your long-term support. China Re Group has attaches great importance to the capital market. The optimization of these markets means that we are going to have more opportunities to discuss with the global [indiscernible]. We are going to coordinate with our different colleagues and investors, domestic, Hong Kong and also across the world. We are asking for feedback of the capital markets using the effort in the industry. We are going to multiply policy developments of the Chinese Re Group and create a better return for the shareholders.

Dear distinguished guests, here we conclude the China Re's 2022 Performance Announcement. Thank you so much for attending today. If you have any other questions or any further information, please contact our IR team. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]