Huize Holding Limited (“Huize” or the “Company“, NASDAQ: HUIZ), a leading independent online insurance product and service platform in China, is pleased to announce its unaudited financial results for the three months ended September 30, 2020 (the “third quarter of 2020” or the “Period“).
For the third quarter of 2020, the Company achieved double-digit year-over-year growth in both total Gross Written Premiums (“GWP“) and total operating revenue, hitting record quarterly highs. Total GWP facilitated on the Company’s platform increased by 41.2% year over year to RMB779.0 million, while total operating revenue increased by 22.9% year over year to RMB348.5 million, once again exceeding the high end of its previously announced guidance range. Net profit in the Period was RMB14.7 million (US$2.2 million) and Non-GAAP net profit was RMB20.4 million (US$3.0 million).
During the third quarter of 2020, Huize’s long-term life and health GWP accounted for 92.9% of total GWP, a ratio which has stayed above 90% for the past four consecutive quarters. At the same time, GWP for long-term health insurance increased by 47.1% year over year to RMB649 million. Such increases also prove that the strategy of developing long-term insurance products and services has become the most important driver of the strong growth in the Period. On the one hand, long-term insurance products generate recurring revenues via policy renewals. On the other hand, the long-term product focus enable Huize to form more longstanding relationships with clients and cultivate better client loyalty. Its persistency ratio for long-term life and health insurance in the 13th and 25th months of the policy remained stable at 94%, a relatively high level in the industry.
As a pioneering insurance e-commerce platform in China, the Company has accumulated a massive amount of multi-dimensional client data and transaction data over the past 14 years. By harnessing its superior data resources, Huize has been able to develop more comprehensive client portraits, employ more precise risk management practices, and deepen its understanding of client-specific insurance needs, product design mechanisms, and risk-adjusted pricing to provide clients with more valuable and customized insurance products. For example, Huize officially launched a critical illness insurance product referred to as the “Darwin 3”. Soon after its launch, this product became exceedingly popular.
Beyond financial and operational growth, Huize’s industry value and positioning also continued to gain recognition in the third quarter of 2020. In September, Huize was included in Hurun’s “China Digital Insurance Agencies 2020” list, wherein it was ranked fourth in terms of market performance and innovation capabilities. Moreover, in September, “Darwin 3” won the “Popular Health Insurance Product of 2020” award, marking the sixth time that the “Darwin” critical illness series of insurance products has won such an award in the industry.
Additionally, the Company has always valued strategy planning on technology innovation and digital transformation, the research and development expenses in the third quarter of 2020 increased by RMB3.4 million or 41.7%, to RMB11.5 million (US$1.7 million) from RMB8.1 million in the same period of 2019.
Mr. Cunjun Ma, Founder, Chairman and Chief Executive Officer of Huize, commented: “The solid financial results further demonstrating the viability of our business model and our strategic focus on developing first-rate digital capabilities in providing quality long-term insurance solutions to our users. Looking ahead, as many of the insurance clients we have served come from families in first and second tier cities with high customer lifetime value potential, we will be rolling out offline service centers in select first and second tier cities in order to better serve their differentiated demands for higher-quality products and premium insurance services. Over the next three years, we will take the opportunity to invest in a comprehensive strategic upgrade for the core Huize platform as we evolve into the post-COVID era where consumers demand further innovation in insurance products and digital transformation of the insurance purchase and service experience, by targeting to build an insurance product and service cloud platform incorporating core technologies such as cloud computing, big data analytics and artificial intelligence, to reach insurance clients in all scenarios and provide them with a fuller range of personalized insurance products and services throughout their entire life cycle more efficiently.”