Huize Posts Record GWPs in First Half, Forecasts 40% Revenue Growth

Providing a tailored experience for first-time insurance buyers, Huize expands online and offline in China's high-growth potential insurtech market.
Sep. 13, 2021 17:24
Huize Posts Record GWPs in First Half, Forecasts 40% Revenue Growth

(CapitalWatch, Sept. 9, New York) Huize Holding Ltd. (Nasdaq: HUIZ), a leading insurtech platform in China, achieved record highs in both gross written premiums (GWPs) and operating revenue growth in the first half-year.

The company released its latest financials on Thursday, showing $319.1 million in GWPs for the six months through June, a 72.7% year-over-year increase. First-year premiums accounted for nearly 58% of the total GWPs. Operating revenue in the first half has nearly doubled to $147.7 million, according to the report.

Huize said it served 7.2 million insurance clients during the first half-year in cooperation with 88 insurers, including 54 life and health insurance providers and 34 property and casualty insurance agencies.

Cunjun Ma, the founder and CEO of Huize, said he was please with the results. "We have continued to leverage our data insights and AI technologies to co-develop highly desirable products with our insurer partners and create longer-term engagements with our customers," Ma said in the statement today.

In the second quarter, Huize said it facilitated $103.5 million in GWPs, a 12.1% jump year-over-year. Operating revenue declined 7% from the same time a year ago to $33.9 million. Net loss in the second quarter widened to $12 million.

Among recent developments, Huize noted its recent partnership with Sun Life Everbright Life Insurance Co. to jointly launch a customized retirement annuity insurance product for wealth accumulation and lifetime pension benefits.

Earlier this month, Huize celebrated its offline expansion with the acquisition of Hubei Shengs Life & General Insurance Agency Co. Ltd. – a regional insurance agency group providing life and health insurance products. Operating since 2011, Shengs Life & General counts over 20 sales outlets in Hubei, Guangdong, and Sichuan provinces.

Following the completion of the transaction, Shengs Life & General will be accounted for as a consolidated subsidiary of Huize. The deal, expected to close by the year-end, marks Huize's advance in online-to-offline integration and an open platform strategy.

Huize positions itself as a tech-driven company targeting the younger generation and connecting early insurance users with insurance providers in a tailored experience. Today, Ma highlighted the opportunity in China's growing insurance market among the new generation of consumers. "China's insurance industry is still in an emerging and rapidly growing stage, and we believe that many more will become first-time buyers of life and health insurance in future decades," Ma said.

He continued, "The industry is facing great challenges and opportunities. Given the average age of our insurance clients of 33 years old and over 95% persistency rates, Huize is well-positioned to capture the opportunity and poised to see continued growth in our business for years to come."

The stock in Huize traded at $2.64 a share by midday Thursday, presenting a cheap opportunity to buy into the promising sector of life insurance. Increasing household income, surging urbanization, and the population's awareness of its aging prospects and sophisticated asset management are some of the factors propelling China's emerging insurance market, as McKinsey & Co. said in a report of the market trends. For Huize, that lays out a clear path for long-term growth.

Year-to-date, shares in Huize have slid significantly amid the heightened market volatility and investor uncertainties over China's regulatory environment, impact from Covid-19, and the Sino-American tensions. Earlier this year, HUIZ stock jumped as high as $13.85 and dropped as low as $2.15 per share, showing strong potential for recovery.  

In mid-August, Huize announced a six-month $5 million share buyback by its top managers, including CEO Ma, in a show of confidence. The repurchased shares will be placed under a half-year lock-up period.

In 2021, Ma said Huize expects to generate revenue of 1.7 billion yuan ($263 million), representing a 40% improvement from 2020.



CapitalWatch Disclaimer

All information contained herein as well as on the CapitalWatch website is obtained from sources believed to be reliable but not guaranteed to be accurate or all-inclusive. All material is for informational purposes only, is only the opinion of CapitalWatch and should not be construed as an offer or solicitation to buy or sell securities. The information includes certain forward-looking statements, which may be affected by unforeseen circumstances and/or certain risks. This report is not without bias. CapitalWatch received remuneration for this report. Please consult an investment professional before investing in anything viewed within.



Topics:
insurance