Respectable investors and analysts, distinguished guests, ladies and gentlemen, good morning. Welcome to attend China Re 2023 Q1 result announcement. I am Liu Shukai, the Director of the BoD of China Re Group. The representatives attending today are Mr. [Liu Tao] from the China Re Strategic and Planning Department, and Mr. [Ye Zheng], the Vice President of China Re L&H Co, Ltd, as well as Mr. [Yin Qi], the Assistant Manager of the China Re Life P&C.
We are also going to see Mr. [Wang Shuqi], who is the Assistant Manager of the China Re Continent Group. Today's meeting is going to be divided into two parts. The first part is going to be a result announcement for the first quarter of 2023. The second part, we are going to open the floor for questions. We are going to have adequate communications and explanations with all the investors and analysts. If you have any questions, please press the star one button. Now I'm going to give the floor to Mr. [Liu] to introduce you-
Distinguished investors and analysts. I'm going to introduce you the results that we have in the first quarter of the year 2023. The first quarter of the year 2023 is actually following the strict standard of the China Insurance Committee. That is to say, under the new accounting rules and the old accounting rules, there is a huge difference of the method of calculation. In the first quarter, the whole capitals of the China Re Group is registered at RMB 77,017 million. The net asset is RMB 62,078 million. The insurance contract liability is RMB 40,144 million.
The reason behind this rapid growth is because we have calculated all the different numbers inside of mainland China, not including the Singapore regions. In the first quarter, the insurance income is RMB 2,014 million, and the net profit is RMB 240 million. Among which we are seeing a growth of over 40%. Another part is that we are also seeing that the overseas business is also expanding their operations. The undertaking profit is also growing. For one part, the domestic business is increasing its operations. For the second part, for the overseas business, we are also undertaking, affected by the cyclones in New Zealand as well as the earthquake in Turkey. It is also affecting the performance in this region. For China Re L&H, referring to the headquarters of the China Re L&H, the insurance income at the first quarter is RMB 215 million.
This is actually benefiting from the growing insurance in the domestic insurance. It is because of the rapid growth of the tourism sectors in China in the first quarter. This is actually affecting the on-time profits. For the basic earnings per share, it is affected by the changes of the accounting rules. We have not disclosed it yet, but later we are going to publish the information. The company is also going to be innovation-driven and focusing on the product. We are also going to strengthen the surety product. In the first quarter, the insurance income of the surety product has been growing at a double digit. We are also going to work on the elementary business by innovating these sectors and also working on the creative sectors. The underwriting profit is going to grow.
China Continent Insurance registered insurance income at RMB 15,133 million, benefiting from the rapid growth of the non-motor factors. The net profit is RMB 68 million, while the combined investment yield is 1.01%. The company optimized the management structures as well as controlling the business qualities. The underwriting profit is becoming improving based on the reinsurance business. The company's business performance fluctuated year-on-year. Thank you so much. That is the result.
Thank you so much, Mr. [Liu], for your kind introduction. Now the floor is open for questions. For the interest of time, please limit the questions within two. Also, please identify your affiliated institution as well as your name before the questions. Now we are going to give the floor to the first investor. Thank you. The first investor is coming from Reef Fund Capital, [Isabel Luo].
Thank you so much. I am [Isabel] coming from Reef Fund Capital. I have two questions for the executives. The first question is that what is the year-on-year performance in the investment returns? Is it related to the adjustment in the asset allocation strategy? The second question is about the international orders for the reinsurance policies. Is the Turkish earthquake bringing on large losses to the reinsurance policies? Thank you.
Thank you so much for your questions. The first question is about the investment business. We are going to give the floor to Mr. [Wang Shuqi], who is the assistant to the investment performance. The second question is about the China Re P&C related policies. We are going to direct it to Mr. [Qi], who is from China Re P&C.
Let me answer the first question. In the year 2023, the Q1 has a better investment return compared with the year 2022. There is around 20% growth year-on-year compared with last year. The question about the new accounting rules. After the implementations of the new accounting rules, there are some of the challenges in terms of investment policies. One part is because of the modeling methods. Another part is because there is a downward trend in terms of the policy members.
But with a better investment in the reforms and also sticking to the previous investment policies, we have made some of the adjustments to the product structures. First, we have speeded up the allocations in the fixed assets, and we are also expanding our asset strategies. While thinking about the relativities of the capitals, we have included it into the capital structures. Second, we have also increased the asset allocations ratio. We are also working on the whole life cycles of the bid.
We are also allocating more resources into the medium and the long-term assets. This is increasing the different levels of the credit products. Thirdly, we have built a strategic R&D strategies and increasing on the macro policies and as well as increasing the investment policies. Thank you very much. This is my answer to your questions.
Second question is going to be answered by Mr. [Qi].
Let's talk about our international business sectors. In the first quarter of the year 2023, the performance of these sectors improved dramatically. There is a large business opportunity in the reinsurance sectors. The premium has increased by 16.6% in the international market, demonstrating the same trend within international markets. Affected by the Turkish earthquake, the cycle continue in New Zealand and among other different catastrophes around the world. The operating business result is better year-on-year.
For the Turkish earthquake, it is actually the biggest earthquake since 1999. There is over 40,000 participants. There is over 40,000 people lose their lives during the Turkish earthquake. The losses is actually tertiary. It is actually the secondary risk. Currently, our international business is operating very stably. The total numbers of the international business is around $42 million. That is my answer to your question.
Thank you so much, Mr. [Qi], for your kind answer. Now we are going to invite the next analyst to ask their questions. The next question is coming from [Charlie], please.
We are seeing that the CRRBC recently published a policy about the P&C-related insurance. The question is directing to the life insurance. What kind of impact will these policies from CRRBC is going to affect in this performance of the China Re? The second question is about the reform in the motor sector. My question is that, what is the company's expectations in the motor insurance sector, and how will you see the development of the motor insurance develop in the year 2023?
Thank you so much for your question. The first question is about the life reinsurance. We are going to give the floor to Mr. [Liu Qi], who is the Assistant Manager of the China Re Life and China Re L&H. For the second question, we are going to give the floor to Mr. [Zhu].
Thank you very much for your question. Let me answer the first question. The CRRBC recently published a policy about the responsibility development of the life-related insurance. Actually, the notice itself from the government is actually affecting our business very actively. First, because this notice actually allocates the market to have expectations of the performance in the insurance sector. Later on, it is also going to have a further impact into the disabled insurance as well as the disease-related insurance.
Second, we have accumulated a lot of data about the long-term care, and we have relevant advantages. So with the development in these sectors, we can facilitate the supply-side reform in our industry. Thirdly, China Re Life has a long-term history in these business sectors. I believe this is also very helpful in our life reinsurance sectors and also the long-term reinsurance sectors. This is also going to become a new growth point for our business. Thank you.
Now we are going to give the floor to Mr. [Lu] from the China Continent Insurance to answer the question.
Thank you so much for your question. Recently, the CRRBC has released the pricing ratios of the motor sector insurance from 0.5 - 1.35 to a larger range. So according to our knowledge that this policy is going to come into effect on the 28th of this month. So with the extensions of this range, it is going to be very beneficial to our performance in these sectors. There is not going to be a lot of huge fluctuations in terms of market performance after our analysis, but we cannot exclude the possibility that there might be changes in the operations according to our previous experience. If the number has been touching down the downward threshold of 0.65, then actually the real impact is very small. We are also working on the price increase in this sector.
The actual impact is very small, but actually for the implementation, China Continental is going to keep a close eye on the changes in the market. We are also going to release the information according to the requirement of the market. We are also going to optimize our range of the selection of the basic business models. We are also going to stick to the principles that we are going to optimize the structures and development, the strategies, optimize their business allocations. Thank you so much. That is my answer to your question.
Thank you so much, Mr. [Lu]. Now we are going to give the floor to the next investor.
Thank you. In the recent few times, I could see that our group has kept a lot of close contact with the investors. Here I'd like to report with two the market concerns to the investors and analysts. The first question is about the total performance of the group. Currently, we are implementing the new accounting rules of Accounting 227. The investors are curious about the IFRS 17's implementation. What is going to be the impact?
Because this is a really representative question, I am going to direct this question to Mr. [Liu Tao] to answer the question. Thank you.
After the effect of the new accounting rules, there is a huge change into the financial statement sheet, as well as other different reporting methods. According to the current plans of the China Re Group, our data system is keyed into operating, and we are going to finish the reform in the new accounting rules at the end of August 2023.
The impact of the new accounting rules means that there are so many specific features. The biggest impact is that the new accounting rules require all the insurance companies to separate their asset investment sectors from the main business. For those of the companies who cannot separate these sectors, they are going to follow the accounting rules. That is to say, there is going to be a downward trend in terms of the net profit for the majority of the insurance companies. This is also very helpful in terms of the asset management. At the same time, the insurance company is also going to follow the new financial rules. With the implementation of the new financial rules and financial tools, the fluctuations in the coming term is also going to be included.
After the implementations of the new financial tools, the investment return is going to be fluctuated according to the market performance. In order to deal with the challenges of the new accounting rules and new financial requirements, China Re Group has planned in the multiple sectors. In terms of underwriting, we are trying to optimize our product structures and speed up the surety products and works on the quality controls, and also increasing the profit contributions in this sector. In terms of investment, we are optimizing the investment results and consolidating the basic investment return. We are also speeding up the institution results, works on the groups of the public markets. In terms of the team management, we also want to strengthen the mechanisms and let the domestic and international business sectors play their roles. This is some of the answers to the investors' concerns.
Thank you so much, Mr. [Liu], for your kind introduction. Now we are going to give the floor to the next analyst.
Borrowing this opportunity, I would like to continue our communications with the market and also its highlight. One of the major representatives is about the life reinsurance. One part is about the inventories of the life reinsurance. For this sector, the capital markets are so clear that in the first quarter of the China Re Group, the deposit business and the China Re Group is growing quite rapidly, creating a lot of fluctuations in the performance of the China Life Reinsurance. That's the reason why the investors and analysts are starting to care about the whole year's performance. The second question is about the short-term product. The market also noticed that in the previous years, the short-term product has answered the market concerns. What is going to be the profit as we are moving into the future? How will we improve the business sector?
For these two questions, we are going to direct the floor to Mr. [Lin] from China Life Reinsurance. China Re Life Reinsurance.
I'm going to give you a brief introduction about our underwriting policies in the year 2023. The deposit product is one of our key focus. We are going to manage the long-term cycles of our business. We are also going to work on the risk management and risk control. The deposit business is safe to the interest gap and controlling the cost in this sector. In the domestic market, we have grasped the chances in the market and replicate our previous experience and promote the long-term sectors. In terms of the overseas markets, we are working on the domestic and international markets.
This is the development progress. The second part is about the short-term product. How do we improve the interest? How do we improve the combined investment yield? We are going to talk about the inventories and also increments. To improve the performance of the inventories, we are going to optimizing structures, adopting the new methods, maintaining and increasing the good quality inventory product, and keeps it on the range term after term in order to address the potential risk and provide a package solution. The second part is about the innovative business. It is going to be an innovation-driven incremental policy, working on the policies and also the business sectors. We are also going to work on the risk threshold, grab the resources, and working on the multiple innovations facilitate the rapid development of the incremental business.
Thank you so much, Mr. [Lin], for your kind answer. One of the highlights from the market is the life insurance sector. Investors noted that we have disclosed the number from the China Continent Insurance. The premium has been growing quite rapidly in the motor sectors and non-motor sectors. With the rapid development of the business, starting from the year 2023, the combined investment ratios, what kind of expectations of the combined investment yield for China Continent Insurance? Can you give us a briefing in this sector?
In the first quarter of China Continent Insurance, the core solvency in the first quarter is RMB 21 billion and RMB 79 million. Let me give you explanations to the rapid growth. First, we optimized the business structures and increasing the profits. We are also working on the business sectors. We have also working on the optimization sector.
We have also strengthened the management of the effective phase, improving the performance and increasing the cost. With all of this effort in terms of controlling the cost and lower down the cost as well as increasing the profits. If we are looking into the performance of this year, after the C-ROSS reform, we believe the impact of the C-ROSS reform is going to be eased this year. The pressures from the C-ROSS reform is also going to be offset by the reform in this combined investment yield sectors. We are going to achieve a better performance in these solvency adequacy ratios.
Thank you so much, Mr. [Lu], for your kind introduction. For the interest of time, we are going to talk about the final questions. It is about the China Re P&C. The investors are really curious about the rising phase in the international markets. What is going to be the expectations for the domestic markets? The second part is about the agriculture reinsurance. You might notice that in the first quarter we are keeping a very rapid growth. What kind of planning are we going to make? We are going to give the floor to Mr. [Yin Qi] from China Re P&C to introduce us this question.
Thank you so much for your kind answer to this question. Domestically, let's talk about the trend in the year 2023. I would say that there is a very rapid increase in the international markets. But it does not represent a very rapid increase in the domestic market. Actually, the ratio is lower down than the performance in the insurance in the international market. For the planning development, there are two areas. For one part, we are going to consolidate our cooperation partnership.
For one, we are also going to optimize the budget calculation method. And for the other part, we are going to work on the reinsurance business sectors. With the development of the business sectors, there is a rapid growth. The company is going to work on the agro-related reinsurance projects, increasing the profits and the stabilities of the sectors. We are going to work on the high standard, trying to make sure that there is going to be a breakthrough in the agro-related sectors.
Thank you so much, Mr. [Qi], for your kind introduction. For the interest of time, now we are going to wrap up the first quarter's result announcement in the year 2023. Thank you very much for your yearly support. For the investors and analysts, if you have any other questions or if you want to know more information, please contact us. We conclude this result announcement. Thank you so much for your attention.