Thank you for holding, and thank you for standing by for Fanhua's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. After the lines have been placed all lines have been placed on mute to prevent background noise. After the management's prepared remarks, there will be a question and answer session. 3 hours after the conference is finished.
Please visit Fanhua's IR website at ir.fanhuaholdings.com under the at the Events and Webcast section. Today's conference is being recorded. If you have any objections, you may disconnect at this time. Would now like to turn the meeting over to your host for today's conference, Ms. Oasis Qiu, Fundrise Investor Relations Manager.
Good morning. Welcome to our Q1 2021 earnings conference call. The earnings results were released earlier today and are available on our IR website as well as on newswire. Before we continue, note that the discussion today will contain forward looking statements made under the Safe Harbor provisions of the U. S.
Private Securities Litigation Reform Act of 1995. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause our actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but not limited to, those outlined in our filings with the SEC, including our registration statements and Form 20 F. We do not undertake any obligation to update this forward looking information except as required under applicable law. Joining us today are our Chief Executive Officer, Mr.
Chenlin Wang Chief Financial Officer, Mr. Peng Ge and Board Secretary, Li Bin Li. Mr. Wang will provide a review of our financial and operational highlights in the Q1 of 2021. There will be a Q and A session after the prepared remarks.
Now I will turn the call over to Mr. Wang. For the Q1 of 2021, we once again deactivate the solid results. For the Q1 of 2021, we facilitate RMB 3,100,000,000 total gross premiums, up 27.9% year over year, of which 1st quarter the 1st year premiums grew by 57% year over year to RMB 892.7 million. Business quality remained strong with 13 months persistency ratio at over 91%.
As a result of stellar growth in life insurance business, our net revenues reached RMB1.1 billion, representing a growth of 51.5% year over year and operating income reached RMB144,400,000, up 133.8 percent from a year ago. Net income attributable to shareholders were RMB138.4 million, up 2 20% year over year. Remains gloomy as it undergoes deep reform and transformation, which pose those challenges and opportunities. There has been a fundamental change in customer demand in the past 6 years since the life insurance pricing liberation with the rapid growth in the number of sales agents in China and the emergence of the Internet channel, penetration rate of health insurance products in China have been relatively high. The popularity of government backed medical insurance in recent years has also absorbed a large portion of demand for health insurance products and eroded upside potential for commercial long term health insurance in China.
On the other hand, there we still see huge potential in the market segment of investment and savings type insurance products. China's middle class population now stands at RMB400 1,000,000 As investment and savings insurance products constitute an indispensable component in middle class family asset allocation, with the continued expansion of the middle class population, there will be explosive demand for this type of insurance products. The biggest opportunity lies in how one can stimulate and meet this implicit demand. Secondly, there has been fundamental change to insurance agent organization. The traditional organization in pyramid structure can no longer meet customers' evolving demand, which leads to sharp contraction in traditional insurance sales organization and shortage of qualified talent in recent years.
The professionalization of insurance sales organization has become an imperative.
Digital
Digital aspect of business operation, from customer demand insights to targeted marketing, customer experience optimization, operating efficiency improvements and operating cost savings. Thirdly, with Shanghai's professionalization, digitalization and open platform strategy, we're well positioned to capture market opportunities. We're making steady progress in rolling out our various strategic initiatives Firstly, professionalization strategy. As of today, we have approved the establishment of 9 Yintong branches. Yintong, which is literally translated as cloud Industry, is the high end brand that we established specifically for our professional lead branches.
We expect 2 of these branches will be ready for operation by July. Our digital marketing center has so far recruited around 100 service representatives, which will be dedicated to providing intelligent services to our customers and facilitating entire marketing transactions. In addition, we started to roll out Fanhua Enterprise WeChat application and launched Fanhua Rose Digital Assistant application on a trial basis in Hebei Province, which we believe will provide more efficient way for our agents to engage with their prospective customers. Thirdly, our open platform strategy, leveraging on our well proven advantages in technology and bargaining power with insurance companies, we will continue to open our platform to all qualified market participants. As of date, we have established partnership with 16 channel partners As we are in the process of facilitating system connection and testing business process, approximately RMB 1,500,000 facilitated through this channel partners in the Q1.
Fourthly, for the outlook in the Q2 and 2021. For the Q2 of 2021, amid persistent headwinds and a difficult year on year comparison due to 2020 Q2 post COVID-nineteen boost, China's life insurance industry is widely expected to experience negative growth in new business. Against this backdrop, we expect our total GWP facilitated to be approximately RMB 2,600,000,000, representing a year over year growth of 6.7%. After considering incremental expenditures required for implementing the new strategy, we expect our operating income will be no less than RMB50 1,000,000. For the second half of twenty twenty one, we will continue to step up investment in executing on our new strategy, while ensuring the achievement of no less than RMB300 1,000,000 operating income for the full year of 2021.
This concludes my presentation. Now the floor will open for your questions.
Thank you. And your first question today comes from the line of Qingyin Mao from CICC. Please go ahead.
Thanks for management. Financial management. First of all, congrats for the exciting results. We have seen some negative effects caused by the reach of critical unit definition among peers. How about Fanhua?
When do you think this effect would fade away? The transition from the old critical illness definition firmware from the old one to the new one is a big event for the industry overall and also have caused a huge impact. And before the suspension of the old critical illness products in February 1, there has been strong sales in critical illness products in January. It has been a particular characteristic in the Chinese life insurance market, which is that every time before the suspension of a product, there will be a strong sales followed by a slowdown for a period of time. So this time has no exception.
And in addition to that, we believe that the penetration rate for critical illness products is relatively high in China. As of date, there is there has been 300,000,000 outstanding fiscal illness policies in China. Apart from that, recently the government has rolled out some short term medical insurance products, which is more affordable. And this type of product has also become quite popular among consumers, which in certain ways also absorb some of the demand for critical and use products. In order to for the critical illness products to fully recover, I think it will require a lot of innovation and customization of products in order to boost customer demand and create opportunities for upper selling.
But we believe that critical illness may not be the main driver for the growth of the life insurance industry for the longer term. We believe that product innovation
and customization
will be the main trend in the future. In April, actually, we cooperated with E. ON to customize customize a product, critical illness products, which is called Abe number 1. And as of today, we have sold RMB 20,000,000 in terms of the new first year premiums, which is much higher than the total premiums sold by Synatay in the same period according to our visit to Synatay recently. For the longer term, no matter for Fanhua or the overall insurance in the Midway market, in order to attempt rapid growth, it's important to focus on savings and investment type of products.
And this is also the key part that we will focus on in terms of building up our offline sales capability and digital capability. Right now there are 400,000,000 middle class population in China and this population has strong demand potential demand for savings type of product. So it's our job to stimulate this impressive demand. Thank you.
I see it seems that we have no further questions on the line today. I would now like to hand the call back to management closing remarks.
Thank you for participating in today's call. If there are any further questions, please feel free to contact us. Thank you.
Ladies and gentlemen, that does conclude our conference for today. We thank you all for your participation. You may now disconnect.