Huize Holding Ltd. ((HUIZ)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Huize Holding Ltd. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company showcased strong sequential growth in premiums and highlighted significant cost optimization through AI integration. While there were some setbacks, such as a year-over-year decline in first-year premiums and increased selling expenses, the overall outlook remains optimistic due to the company’s strategic advancements and international expansion efforts.
Strong Growth in Premiums
Huize reported impressive growth in its operating revenue, which exceeded RMB 280 million. The platform saw a 38% sequential increase in gross written premiums and a 31% rise in first-year premiums, reaching RMB 1.4 billion and RMB 730 million, respectively. Additionally, renewal premiums experienced a 46% sequential growth, amounting to approximately RMB 710 million.
AI Integration and Cost Optimization
The company has successfully integrated AI across its operations, leading to significant productivity improvements. This technological advancement resulted in a 29% sequential reduction in total operating expenses, showcasing Huize’s commitment to leveraging technology for operational efficiency.
Expansion of Customized Insurance Products
In response to the growing demand for wealth protection solutions, Huize launched several new customized insurance products, including Bliss No. 3 and Jin Man Yi Zu No.6. These offerings are part of the company’s strategy to cater to diverse customer needs and enhance its product portfolio.
International Expansion Efforts
Huize’s international brand, Poni Insurtech, demonstrated robust growth with a 29% increase in policy count and a 35% rise in gross written premiums year-over-year. The company is actively expanding into new markets, including Singapore, as part of its international growth strategy.
Decline in First-Year Premium (FYP)
Despite the overall positive performance, Huize experienced a 15% year-over-year decline in first-year premiums facilitated in the first quarter. This decrease is attributed to a high base effect from the previous year, presenting a challenge for the company to address moving forward.
Increased Selling Expenses
The earnings call also highlighted a 7% increase in selling expenses, despite the decline in first-year premiums. This rise is partly due to lower gross margins from the company’s international business segments, indicating an area for potential improvement.
Forward-Looking Guidance
Looking ahead, Huize remains optimistic about its financial growth despite challenging macroeconomic conditions. The company surpassed RMB 280 million in operating revenue, with significant increases in gross written premiums and first-year premiums. Huize expanded its user base to over 11 million and maintained high persistency ratios for long-term insurance. The company also emphasized its commitment to AI integration, reducing operating expenses and enhancing customer service through innovative AI-powered solutions.
In conclusion, Huize Holding Ltd.’s earnings call reflected a positive sentiment, driven by strong growth in premiums and successful cost optimization strategies. While challenges such as declining first-year premiums and increased selling expenses remain, the company’s strategic initiatives and international expansion efforts provide a promising outlook for the future.