Ladies and gentlemen, thank you for standing by, and welcome to Huize Holding Limited second quarter 2023 earnings conference call. At this time, all participants on a listen-only mode. After the management's prepared remarks, we will have a question-and-answer session. Today's conference call is being recorded and a webcast replay will be available. Please visit Huize's IR website at ir.huize.com under the Events and Webcast section. I'd like to hand the conference over to your speaker host today, Ms. Harriet Hu, Huize's Director of Investor Relations . Please go ahead, Harriet.
Thank you, Amber. Hello, everyone, and welcome to our earnings conference call for the second quarter of 2022. Our financial and operating results were released earlier today and are currently available on both our IR website and the Newswire. Before we continue, I would like to refer you to the safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained in our earnings release and filings with the SEC. Joining us today are our Founder and CEO, Mr. Cunjun Ma, COO, Mr. Li Jiang, Co-CFO, Mr. Min Han Xiao, and Co-CFO, Mr. Rong Tan. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights for the second quarter of 2022. Mr.
Teng will then provide details on the financial results for the period before we open up the call for questions. I will now turn the call over to Mr. Cunjun Ma.
大家好，欢迎大家参加慧择二零二二年第二季度的业绩发布会。
Hello, everyone.
回顾二季
Thank you for joining Huize second quarter 2022 earnings conference call.
回顾二季度，尽管宏观环境不确定性持续，疫情的防控下，经济复苏缓慢，使得保险的需求端也承载了压力。但凭借多年我们积累的数字化经验，持续的产品创新和深耕用户价值的能力，即使在复杂多变的环境下，慧择人们应对挑战，引领保险行业的数字化转型步伐，夯实战略调整的成果，实现了稳健的增长，持续展现经营的强劲韧性。在二季度的期内，平台促成的总保费同比增长30.5%，达到人民币8.7亿元，总营收同比增长13.5%，达到人民币2.5亿元。
In the second quarter, Huize's business continued to demonstrate strong resilience despite softening insurance demand caused by ongoing economic uncertainty and disruptions caused by regional pandemic restrictions in China. Thanks to our solid digitalization and product innovation capabilities, as well as our in-depth focus on cultivating users lifetime value, we continued to drive industry digitalization and press on with executing on our strategic plan of building an omni-channel digital insurance service ecosystem, thereby achieving another quarter of remarkable growth. In the second quarter, total gross written premiums, or GWP, facilitated on our platform increased by 30.5% year-over-year to CNY 872 million, and our total operating revenue also increased by 30.5% year-over-year to CNY 248 million.
从保费的结构来看，我们瞄准市场需求，进一步推动对储蓄险的战略布局。二季度促成储蓄险新单保费约人民币2.8亿元，同比增幅达1.4倍，即143%，带动首年保费同比增长59.5%，至人民币4.8亿元。凸显全险种布局下业务高质量的增长。同时，长期险占总保费比例为91.7%，连续十一个季度高于90%，再次印证了，验证了慧择多年深耕长期险市场的优势和实力。在业绩高速增长的同时，我们开始保持高质量的用户画像。截至二季度末，平台累计投保用户达到了820万。在二季度投保长期险的用户中，二线及以上城市的客户占比达到了64.2%，平均年龄为33.3。以首年保费计算，长期险的件均约为人民币3,481元。储蓄险的件均大幅提升至约人民币4.4万元。二季度，长期险第十三个月的平均继续率高于91%，第二十五个月的平均继续率达到96%以上，继续保持行业较高水准。
In terms of product mix, in response to shifting consumer preferences and macroeconomic backdrop, we have strategically focused on promoting the distribution of savings insurance products. In the second quarter, the first year premiums or FYP of savings products facilitated on our platform amounted to CNY 282 million, up by 143% year-over-year. Correspondingly, our total FYP increased by 59.9% year-over-year to CNY 485 million, reflecting that our comprehensive product offerings have supported our high quality business growth. Meanwhile, we have maintained a strong competitive edge in distributing long-term insurance products. In the second quarter, the GWP contribution of our long-term insurance product was 91.7%, remaining above 90% for the eleventh consecutive quarter. We have also maintained a high quality cost while recording robust business growth.
As of June, our cumulative number of insurance clients reached 8.2 million. In the second quarter, about 64.2% of our long-term insurance customers were from higher tier cities with an average age of 33.3 years old. In terms of FYP, the average ticket size of long term insurance products and long-term savings products in the second quarter were approximately CNY 3,481 and CNY 44,000 respectively. Our average persistency ratios for long-term life and health insurance in the 13th and 25th month remained at industry high levels of 91% and 96% respectively. As of the end of the second quarter, we have cooperated with 100 insurance partners.
Since June, we have launched several customized products such as the medical insurance, Sheng'ai Wu You, the premium for the middle-aged and the elderly, as well as the inclusive annuity product co-developed with Sun Life Everbright Life to satisfy the high quality retirement needs of customers. This new product demonstrates our ability to extend our customized product line to a wide spectrum of insurance coverage scenarios. In the second quarter, GWP for co-developed products increased by 16.8 percentage points year-over-year. Moreover, we are pleased to share the cumulative FYP of Jinmai Yizu premium, a customized increasing whole life insurance product we launched in last July, has reached CNY 1.2 billion approximately, highlighting our ability to gain insight into users' needs and develop the most appropriate product for our users.
To satisfy the high quality insurance service needs of our customers, we upgraded our insurance claim assistance system in June by extending the Xiaoma Claim service to policyholders' immediate family members and including their non-Huize policy claims. In the first half, Huize assisted in a total of 34,000 insurance claim cases with a total claim settlement amount of CNY 320 million. The highest claim settlement amount in a single case reached CNY 2 million. Within these claims, we have assisted in handling 252 disputes with a total claim settlement amount of CNY 9.79 million. Meanwhile, following our disciplined cost control measures and the implementation of our group-wide organizational structure optimization, our operational efficiency continued to improve. In the second quarter, selling expenses and G&A expenses decreased by a further 16% sequentially.
Going forward, we will continue to reduce our fixed cost base to improve operational efficiency and achieve sustainable business development through resource integration and the optimization of staff productivity and workflow. To agents, we have expanded our offline business line with registered insurance agents covering Beijing, Shanghai, Sichuan, Guangdong, and Shenzhen. FYP facilitated by the 2A business reached CNY 56.6 million in the first six months of 2022. Moreover, we opened our first independent agent store in Shenzhen in the third quarter, striving to reach out to the residents of the region and provide them with a wide range of customized insurance services and empower our professional premium insurance agents. We will use this as a starting point to drive our integrated online and offline business model, and we'll extend the model to other regions after the operations are proven to be sustainable.
We believe that our 16 years of operational experience and industry-leading digitalization capabilities will enable us to offer our customers a full range of insurance products across all scenarios and empower the whole insurance industry value chain. Through our integrated online and offline business model, our technology services to our insurer partners and the provision of value-added insurance products and services in the areas of protection, medical, savings and retirement. We strive to enhance customer retention and repeat purchase rates and the lifetime value of our customers, thereby achieving diversified business development and sustainable long-term growth. This concludes my prepared remarks for today. I will now turn the call over to our CFO, Mr. Rong Tan, and he will provide an overview of our key financial highlights for the second quarter of 2022.
Thank you, Mr. Ma, and thank you, Harriet. Good evening, everyone. For the purpose of this earnings call, I would like to quickly recap a few key takeaways from the operational and financial results for the second quarter and for the detailed discussion of financial line items, I would like to refer you to our uploaded earnings release for full details. We are very pleased to report an encouraging set of operating and financial results for the second quarter of 2022. A quarter in which we delivered top- line growth coupled with improved operational efficiency and particularly set against a very challenging macro environment with continued nationwide COVID resurgence, leading to much weakened overall economic activity and depressed consumer confidence heightened income uncertainties.
In the second quarter, total GWP increased by a solid 30.5% year-over-year to CNY 872 million, which is mainly driven by the strong growth in first year premiums, or FYP, of 59.9% year-over-year to CNY 485 million. The strong recovery in FYP is a testament to the agility of Huize's business model to adapt to the changing regulatory and market environment and the successful execution on our product strategy to focus on the co-development and distribution of the increasing whole life insurance product category in 2022.
The highly successful product Jinmai Yizu series, which we co-developed with Hong Kong Life, has been one of our top- selling products on the platform during the quarter, and together with other co-developed products such as the Retirement Annuity product with Sun Life, as well as other savings products. The long-term savings insurance product category recorded a very strong FYP growth of 1.4x year-over-year. The recovery in our other important long-term health insurance category has also been strong during the second quarter as we launched new iterations of a highly successful Darwin Critical Care series, as well as a long-term medical insurance product named Yi Xiang Wu You with CPIC, with total FYP of long-term health insurance products growing by 83% quarter-over-quarter and 8% year-over-year. Touching quickly upon our renewal metrics.
Renewal premiums increased by 6.1% year-over-year to CNY 387 million, with our 13th and 25th month persistency ratios remained at high levels, 91% and 96% respectively, and which continues to demonstrate a high quality user profile on our platform, which provide much confidence for our upstream insurer partners during this very difficult macro environment. During the quarter, we have fully replenished our online insurance product supply chain with a full suite of products spanning the entire spectrum of permanent whole life products, health, medical, annuity, savings, and P&C categories. With the GWP contribution of our long-term insurance products remaining about 90% and the GWP contribution of our customized products also increasing by 16.8 percentage points year-over-year in the second quarter.
Meanwhile, our sophisticated product innovation and customer acquisition capabilities have helped strengthen our engagement with our insurer partners and empowered us to maximize the lifetime value potential of our users. With the effective customer acquisition capabilities provided by our omni-channel distribution platform, our customer base has reached 8.2 million as of the end of the third quarter. In addition, the average ticket size, FYP, of our long term savings product category further increased to CNY 44,000 in the second quarter of 2022. Along with the strong growth in FYP, our total operating revenue increased by 13.5% year-over-year to CNY 248 million in the second quarter. As we have mentioned in the previous earnings call for the first quarter, we continue to place an emphasis on optimizing our overall corporate cost structure and operating efficiencies.
With the further implementation of a group-wide organizational structure optimization program, our selling expenses and G&A expenses decreased by 16% sequentially to CNY 94 million in the second quarter. For the second quarter, we have recorded a net loss of CNY 39 million, which narrowed by 55% as compared to Q2 of 2021, which reflects both our top- line growth this quarter, as well as the improved operational efficiency as a result of our continuing cost reduction program. As of the end of the second quarter, our combined balance of cash and cash equivalents was CNY 444 million, demonstrating our ample liquidity and solid balance sheet position to withstand the continued challenging macroeconomic environment and providing capital at the same time for future business growth.
We've continued to repurchase shares from the open market under our existing share repurchase program, and as of the end of the June quarter, we have repurchased an aggregate of approximately 357,000 ADSs. Going forward, we'll continue to execute on the group-wide optimization program in Q3 and Q4, aiming to further bring down our fixed cost base and improve our operating leverage upon the business and macroeconomic recovery. Based on our preliminary assessment of our current market conditions, we expect to achieve quarterly profitability in the second half this year.
As Mr. Ma mentioned in his opening remarks, we will continue to build and scale an omni-channel digital insurance service ecosystem that integrates A, agents; B, businesses; and C; customers over the next three years, which would place us firmly in the top tier of insurance intermediaries in China, becoming a partner of choice for our upstream insurance partners as we move into an age of insurance distribution for new generation consumers, which demands innovative solutions on the product side as well as a seamless digital user experience. We believe these underlying secular growth trends for the industry remain intact and provide much growth potential for professional and digitally native platform like Quasar, and provide us with tremendous opportunities to strategically allocate capital to create shareholder value and sustain a high quality long-term business growth.
With that, this concludes our prepared remarks for today, and we'll now open up the call to Q&A. Thank you, operator.
Thank you. We will now begin the question and answer session. To ask a question, you will need to press star one one on your telephone. Please stand by while we compile the question and answer roster. Once again, it's star one one for questions. Our first question comes from the line of Yu Yu Zhang from CICC. Please ask your question, Yu Yu.
Okay, thanks for the questions. It's Rong here. Let me address these three questions today. I'll just take them down. The first question regarding the development of our offline business. I guess we have also mentioned in the opening remarks that we have been seeing very strong growth momentum in our 2A2C model, which is the independent agents model that we have kick-started in the first quarter of this year.
I think that this also has to do with the ability for us to connect to offline product supply, as well as our existing online product supply matrix, which is really helps our independent agents to serve their customer base in a very effective, efficient manner, connecting them to the online and offline product supply, as well as leveraging on our digital tools to serve the end customers efficiently and effectively, especially during this period where COVID resurgence and regional pandemic resurgences have still been restricting the traditional offline agency model. I think that is really one key highlight that we have just mentioned in the opening remarks, that the 2 A2 C model has seen very strong progress.
We have connected to independent agents that's covering the major tier one and tier two regions in China, including Beijing, Shanghai, Guangdong, Shenzhen, and Sichuan. We also shared in the opening remarks that the FYP that has been facilitated by the 2A business model has already reached almost CNY 60 million in the first six months of this year. I think we do target to see this number going to about CNY 100 million by the year end. For the second question, I think that the take rates and commission rates for the various products on the platform, I think that essentially the FYP commissions for online products is capped at 60%.
60% for the health products, the long-term health products, that we, for example, the Baoan series, will be, you know, first year commissions will be 60%. For the lifetime value for the product, we are looking at around 110% LTV commissions. Most of the backend commissions is being paid for the second year of the renewal. Essentially for long-term health products, we're getting 110% LTV commissions. For the savings products, we are pretty much getting around 60% as well for the first year. For the long-term lifetime value, we're getting another 10%-15% in year two to year five.
That will be the take rates for the various products right now. For the third question regarding the strategy with respect to the second half of the year, given the continued weakness in the market and softening customer demand, et cetera. I think what we're seeing right now in the market is that the demand for protection- type products is expected to be continued to be very weak. To counter this weakness, I think we have launched new innovative products in the market in the marketplace. For example, the Yi Xiang Wu You product, which we have cooperated with CPIC, as well as the new version of Baoan Critical Care.
I think we are also seeing recovery in the product segment, which is because of the fact that the products are now catering to the new consumer preferences during the weakness in the economy. I think the major focus on a product perspective will still be on the savings product segment for the next 12 months. We do see continued demand in the third quarter, especially for the increasing whole life product that we have been showing much success in the market, the Jinmai Yizu product. We are still seeing a pretty strong growth momentum in Q3 sequentially in this particular product.
I think that we'll continue to drive scale growth in savings products for the next 12 months through new iterations of product launches, also leveraging on a successful product IP which we have developed already in the market. With regards to customer acquisition, I think that we are getting more and more precise on our channel, you know, in terms of our investment on the traffic channels. We will be leveraging more and more on the SEO and SEM of our existing product IPs to drive, you know, our 2 C customer acquisitions on the new customer front.
We're also showing a much more concerted effort internally to drive the existing customer sales on upselling, also referrals by existing customers, so that overall, we can further improve our growth margins from the Q2 level. I guess another thing that we would like to continue to drive in Q3 and Q4, which we have alluded to in the opening remarks, is the continued cost reduction. We would want to target another 10%-15% additional reduction in the fixed cost base in the labor cost base by end of the year, as well as further G&A expense control. I think overall that will be the second half kind of company strategy on the multiple fronts.
Thanks.
Do you have any further question, Yu Yu?
No, thanks. Very clear.
Thank you very much. Our next question comes from the line of Amy Chen from Citi. Please ask your question, Amy.
Hi. Thank you, management, for giving me the chance to ask questions. The first question would be also on the commission rate and take rates for our newly launched whole life products when compared to critical illness products. The second one would be, I remember on our first quarter result call, management mentioned that we expect to achieve quarterly profits in the third quarter and the fourth quarter. Do we still maintain that guidance, or do we have any new guidance for the second half of the year? Thank you.
Thank you, Amy. Thanks for joining the call, and your continued support for us. I think the two questions on the first one take rates for the various products. I think pretty much you're looking at around 60% or so for the savings products that we are now selling on the platform. I think you also need to consider the difference in the commission rates for the different durations of the savings products. Because some customers might be going for a 10-year payment, some will be going for a 15-year, 20-year payment. The difference in duration will also lead to a difference in the commission rates.
I think what we see on a blended basis, we're looking around close to 60% for the savings product. If you compare that with the online health insurance product, which essentially is also capped at 60%, you know, there is a pretty small difference between the two with respect to the first-year premium commissions. But for the lifetime value commissions, then there'll be a difference there, because as I just answered to the earlier question before, the savings product, the
For some of the increasing whole life products that we're selling, the LTV commissions for the second to fifth year probably will be another 10%-15% commission. Versus for a long-term health product like a critical illness, we'll be getting, you know, 110% lifetime value total. That will be around 50% in the year two to year five. That will be a difference in take rates with respect to the two products specifically. For the second question regarding the guidance for second half, I think we do maintain and we do target the second half quarterly profitability guidance.
I think that would require us to continue to implement a cost optimization program. Also, obviously, we very much rely on a continued macro recovery so that consumer demand and, you know, the consumer confidence for consumption is recovered so that, you know, insurance products being the most discretionary of all financial products, demand for such would also be improved and recovered. I think we do maintain our guidance, and we do target a very, you know, we strive our best to meet these targets in the second half of the year. Thanks, Amy.
Thank you very much. That's very clear.
There are no further questions at this time. I'd now like to hand the conference back to Ms. Harriet Hu for closing remarks.
Thank you, operator. In closing, on behalf of Huize's management team, we would like to thank you for your participation in today's call. If you require any further information, please feel free to reach out to us. Thank you all for joining us today. This concludes the call.
Thank you.
Thank you.
This concludes our conference call for today. Thank you for participating. You may now disconnect.