Ladies and gentlemen, thank you for standing by and welcome to Huize Holding Limited Q4 and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a Q&A 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. I'd now like to hand the conference over to your speaker host today, Ms. Harriet Hu, Huize's Investor Relations Director. Please go ahead, Harriet.
Thank you, operator. Hello, everyone, and welcome to our earnings conference call for the Q4 and full year of 2021. 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. Minghan Xiao, and co-CFO, Mr. Ronald Tam. Mr.
Ma will start the call by providing an overview of the company's performance and operational highlights for the Q4 and the full year of 2021. Mr. Tam 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. Ma.
Hello, everyone, and thank you for joining Huize's Q4 and full year 2021 earnings conference call. China's insurance industry witnessed a number of changes in 2021. However, this brought about new opportunities and a year of reform for Huize. Despite the ongoing pandemic, further regulatory refinement and increasing uncertainties in the overall market and business environment, Huize has adhered to its user-centric strategy, high tech and digitalization philosophy, and online to offline integration, which led to another year of satisfactory results.
In 2021, total gross written premiums, or GWP, facilitated on our platform increased by 66.2% year-over-year to RMB 5 billion, while operating revenue increased by 84% year-over-year to RMB 2.25 billion, meeting the revenue guidance we provided for full year 2021. In the Q4 , total GWP facilitated on our platform increased by 90.2% year-over-year to RMB 1.99 billion. Operating revenue grew 1.5x year-over-year to RMB 980 million. GWP for long-term insurance products accounted for 97% of total GWP and continued to generate high-quality business for our insured partners. While growing rapidly, we were able to continue maintaining a high-quality user profile.
In the Q4 , roughly 67.1% of our long-term insurance customers were from higher tier cities with an average age of 35.3 years old. In terms of first year premium, the average ticket size of long-term insurance products increased from RMB 6,684 in the Q3 to RMB 9,593 in the Q4 . As of November, our persistency ratios for long-term life and health insurance in the 13th and 25th month have sustained at an industry high level of 94%. Now turning to our product.
从产品端来看，互联网人身险新规发布后，我们顺应市场的趋势，积极把握市场中需求端激增的储蓄险配置机会。四季度储蓄险产品贡献新单保费约十二亿元。针对新规后线上储蓄险产品供给端的变化，一方面我们着重与大中型的保险公司合作，一月已上线新规下的第一款互联网专属的增额终身寿产品。另一方面，我们也在不断地加速线下分支建设，推动线上线下产品和服务上的无缝对接。此外，为刺激保障类产品的市场需求，我们已于一月上线达尔文六号，这也是新规落地后我们推出的第一款重量级产品。除了延续达尔文系列的重疾险高性价比的特点，正在保留市场认可的实用保险责任基础上择优升级，有重疾、陪护、复原等创新保险责任。我们相信产品策略的调整和新产品的引入，不仅体现了我们对新环境的快速响应，也再次验证了我们在产品创新方面的经验与实力。
Now turning to our products. Following the announcement of the new regulations on internet personal insurance, we proactively expanded our savings product line to cope with the surging market demand. In the Q4 , our savings insurance product contributed to about RMB 1.2 billion of the first-year premium. In response to the change in the supply of online savings insurance products after the new regulations, we focused on co-developing such products with leading mid- to large-size insurer partners and launched the first internet-only incremental whole life product in January. At the same time, we have accelerated the offline expansion to facilitate the provision of online and offline products and services.
To stimulate demand for protection products, we launched Darwin number six in January, which was the first major critical illness insurance product we launched since the new regulations came into effect. In addition to the cost-effective feature of the Darwin series critical illness product, Darwin number six has upgraded the protection benefits such as the inclusion of coverage reinstatement benefits after the first claim of critical illness. We believe that the adjustments of our product strategy and the introduction of new products has not only demonstrated our quick response to the new operating environment, but also endorsed our experience and strength in product innovation.
截止四季度末，我们与109家保险公司保持了合作关系。同时我们的线下布局继续深入。我们十二月与上海森浩保险代理有限公司签订了收购协议，收购其100%的股权。这个项目预计在三月我们完成交割。森浩保险代理的话，具备全国性保险中介机构牌照，目前已经获批在十一个省级地区设立经营网点。这对于完善慧择线上线下最后一公里的数字化生态布局具有重大的战略协同意义。一是加速构建线上线下融合的全场景、全产品，线上互联网专属加线下产品的用户服务能力，让慧择服务用户的场景不再局限于线上，而是既能满足用户线上产品的需求，也能为线下用户进行属地专业服务的高效匹配。二是充分利用慧择商品供应平台和数字化科技平台，对传统中介进行赋能，形成有效的规模效应，降低整个体系的运营成本。
At the end of the Q4 , we have cooperated with 109 insurance partners and have strengthened our offline presence. Last December, we entered into a definitive agreement to acquire 100% of the interest in Shanghai Senhao Insurance Agency Company Limited. The acquisition is expected to be completed in March this year. Senhao Insurance is a nationwide professional insurance agency company with business networks in 11 provincial areas in China. We believe the acquisition will reinforce our competitive edge in both online and offline service capabilities and generate strategic synergies within our new digitalized ecosystem. We believe this will accelerate the O2O integration, thereby strengthening our service capabilities for users through a full range of insurance products across all scenarios.
This will allow us to meet the needs of users through online insurance products, while simultaneously providing efficient offline professional services through our local branches. Moreover, through our platform, we have empowered the traditional intermediaries with digitalization and product supply, thereby creating scalability and reducing the operating costs of our ecosystem.
在多年深耕长期险市场的过程中，优质化、差异化服务是我们的核心竞争力之一。2021年，小马理赔协助服务用户累计的服务协助金额高达了5.7亿元，协助理赔案件达到了4.3万件，最大的单笔协助理赔款为200万元。通过系统升级，70%的用户目前已经可以实现影像键的快速理赔，进一步凸显了互联网保险服务的效率和势能。年内，我们凭借着服务记录可回溯，获得了行业一致肯定，荣获了2021年中国保险业创新颁奖。此外，我们发布了首份ESG报告，对公司ESG战略举措和成果进行了系统披露，也为用户和投资者全面了解慧择提供了新的视角。不断优化的功能和体验使我们能够持续吸引和转化新用户。截止2021年末，我们的投保客户数量增加至750万。
During these years of operating in the long term insurance market, our high quality and differentiated services remain one of our core competencies. In 2021, the total number of insurance claims cases assisted by our claim service reached 43,000, and the total claim settlement reached RMB 570 million. The highest claim settlement amount in a single case reached RMB 2 million. The upgraded online claim system enabled 70% of users to submit their insurance claims using photocopies, further highlighting the efficiency and potential of our online insurance services. During the year, our traceable customer service records was unanimously recognized by the industry, and we were awarded the 2021 China Insurance ARC Award. Moreover, we have published our first ESG report highlighting our strategic ESG initiatives and accomplishments while providing users and investors with a new perspective on Huize.
Our continued efforts on optimizing service capabilities and improving user experience has enabled us to attract more new users and increase user conversion rates. As of end 2021, our insurance clients have reached 7.5 million.
二零二一年，我们已经开始向保险公司等合作伙伴输出内部开发的数字化工具和技术能力，比如数字化的CRM系统、NLP的智能质检系统等，使我们的营收结构更为多元化。与此同时，我们正在建立全新业务线，目标是服务全国的独立代理人，抓住传统渠道改革及行业产销分离的机遇，通过慧择平台一站式的赋能线下代理人，帮助其完善产品矩阵的供应面、互联网获客能力、线上展业工具及服务体系等，推动互联网思维与保险业务深度融合的同时，也为慧择拓展新的增长曲线。
In 2021, we also began to explore the digital and technology capabilities that we have developed in-house, such as the digital CRM system and the NLP intelligent quality control system to insurance companies, thereby diversifying our revenue streams. At the same time, we are establishing a new business line targeting independent insurance agents. We will seize the opportunity brought forth by the reform in traditional channels, the separation of product development and distribution in the industry, and empower offline agents with a product matrix, online customer acquisition capabilities, and online business development tools and service systems through our platform. We believe this should help promote the digitalization of the insurance industry and generate a new growth driver for Huize. This concludes my prepared remarks for today. I will now turn the call over to our CFO,
Mr. Ronald Tam, he will provide an overview of our key financial highlights for the Q4 and full year 2021.
Thank you, Mr. Ma and Harriet Hu, and good evening, everyone. First of all, I would like to thank everyone on this call for your continued interest in following the company, in particular in light of the recent turbulent market conditions. For our friends in the Asian time zone, thanks so much for spending the Friday night with us here. To those of you who may currently be under quarantine in lockdown or semi-lockdown mode in Hong Kong or mainland China, please stay safe and healthy. For the purpose of this call, I would just like to quickly recap a few key highlights and takeaways from this quarter's operating and financial results. For the detailed financial line items, I would like to kindly refer you to look at our uploaded earnings release for more details.
Overall, we're very pleased to close out the final quarter of 2021 with record highs in both total gross written premiums or GWP facilitated on our platform, as well as total operating revenues. For full year 2021, total GWP amounted to RMB 5 billion, representing strong growth of 66% year-over-year. First year premiums or FYP accounted for RMB 3.1 billion or 62% of the total GWP, which is up 99% year-over-year from 2020. Renewal premiums accounted for RMB 1.9 billion or 37.8% of total GWP, representing a year-over-year increase of 30.5% in 2021.
As we have expected during our Q3 results call, our strategic focus on savings insurance products since the beginning of the year, coupled with strong market demand for savings insurance products by consumers, was expected to provide strong momentum for growth in savings products and overall FYP in the Q4 . Our continued strong growth in savings product FYP that we have demonstrated in the result is a real reflection of a few very important aspects of our platform business and of our customer base. First, and most importantly, the quality of our existing customer base and the effective customer acquisition capabilities via our omni-channel distribution platform that we have built up over the years.
The two key metrics to highlight here again which demonstrate this are the average ticket size of the long-term insurance products that we have distributed, as well as the persistency ratios that we have delivered for the renewals of the policies. For average ticket size, this quarter we have further seen this number increasing from RMB 6,684 from the Q3 to RMB 9,593 in the Q4 .
As of November, our persistency ratios for long-term life and health insurance policy renewals in the 13th and 25th month have still remained at a very high level of 94% compared to industry averages. The consistently high persistency metrics that we have delivered also help deepen our engagement and relationship with our upstream insurance carrier partners, and that continues to reflect the high quality of our 7.5 million customer base that we have accumulated to date, and their long-term lifetime value potential that we can extract.
For the year 2022, one of our key strategic initiatives will be to focus on further deepening our engagement with existing high-value customers, by encouraging cross-selling and upselling opportunities, leveraging on the proprietary data insights that we have accumulated from the interactions these customers have with our platform over the lifecycle, as well as utilizing our expanded offline service coverage from a continued investment in this area. Our strong operating performance in the Q4 has driven a 1.5x increase in operating revenue to RMB 976 million for the quarter, and for us to close out the full year 2021 at RMB 2.25 billion, which represents an increase of 84% year-over-year and surpassing our full year guidance given in our last earnings call by 10%.
For the quarter, we have also achieved a net profit of RMB 19.8 billion. As we head into the year 2022 amid a backdrop of tightening industry regulations, challenging macroeconomic and capital market conditions, the next two quarters are expected to be a period of adaptation and transition for most players in the industry. At Huize, our first priority from a strategic financial management standpoint is to further drive improvement in our overall corporate cost structure and operating efficiencies. As we have reported in the last quarter, we are currently in the midst of implementing group-wide organizational structure optimization, and so far we have achieved a double-digit percentage improvement in our fixed cost base in the new year.
In addition, the board has also approved a share repurchase program, which we have announced also today, which is aligned with our commitment to return value to our shareholders and reflects the continued confidence that we have in Huize's long-term growth prospects. We believe that the current market conditions do provide us with an opportunity to strategically allocate capital to enhance shareholder value, while maintaining resources to fund our operations and continue business growth. This concludes our prepared remarks for today. We will now open up the call to Q&A. Thank you, operator.
Thank you. Ladies and gentlemen, we will now begin the Q&A session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. Please stand by while we compile the Q&A roster. Once again, ladies and gentlemen, it's star one for questions. Our first question comes from the line of Michelle Ma from Citi. Please ask your question.
谢谢。马总好，Ron好，我是花旗的Michelle。我们四季度的业绩很强啊，就是先恭喜一下管理层，然后呢，其实我现在有两个问题吧，就是第一个问题是关于那个，我们四季度业绩啊，我们看到就是我们的这个保费的一个增长是在90%，然后我们的一个收入的增长是在1.5倍，那，看上去是我们的take rate上来了嘛，它这样子一个上升的原因是，这个product mix，就是我们的一个四季度销售的一个产品的，这个mix，就是组合和去年比是发生了变化呢，还是说我们同一类型的产品，比如说储蓄险，因为要下价了，所以就是公司更愿意给佣金，就是是怎么样的一个情况，以及我们能不能给那个我们的那个产品的一个组合，一个具体的一个细分，就是四季度的一个，新销售的这个FYP里面的这个，首年保单的一个细分，就是关于四季度的，一个product mix和一个，它的一个take rate的一个问题。然后第二个问题呢，其实是想请教一下，就咱们，就是开始新的互联网销售，新规，人身险的一个销售新规，然后我们看到呢，就是我们的产品，就是，新旧模式是有一个非常大的切换啊，就我们合作的保险公司现在也是比较大型的一些保险公司。然后呢，就是，也也——刚才Ron也说啊，接下来这个两个quarter也是，这个行业一个转型的一个两个季度吧。就是我想请教一下，咱们现在在这个，过渡里，这个，就是体验是怎么样的，就是咱们的这个产品的，策略也好，咱们合作的保险公司的策略也好，我们现在就是在这个，现在这个转型过渡期，我们，发生了最大的变化是什么样的，就是我们，我们，发生了什么样的改变去来适应这个监管的一个变化，就是想要了解一下这个监管的变化对于我们的一个业务模式，我们的一个产品策略最大的一个改变，目前为止看到，发生的是怎么样的一个情况，就主要这两个问题。然后我就简单地翻译一下，就是，
My first question is about the product mix for the first-year premium written in the Q4 last year. We noticed the take rate f or premium actually increased as the operating revenue growth outpaced GWP written in the Q4 last year. What is the reason behind? The second question is about the radical regulatory environment changes. What's our new product strategy and what's the difference between you know the old model of cooperating with medium-sized insurance company versus currently we need to collaborate with more top-tier insurance companies. What's the major difference and the difficulties we face here? Thank you.
Okay. Hey, Michelle. It's Ron here. Thank you so much for joining us and for the two questions. Maybe quick answers to both questions from me. First question really relating to the take rate of the Q4 and how the product mix is looking in the Q4 for the FYP. I think the overall take rate that you have seen, which has increased, is really a function of the fact that the mix of the GWP in the Q4 has a much larger contribution from FYP. Around 71.3% of the Q4 GWP is coming from first year premium policies and 28.7% from renewals. In terms of the FYP product mix, I can give you some more detailed breakdown here. Roughly 63% is coming from long-term life.
Long-term life mainly the incremental savings product that we are distributing from Hong Kong Life. Around 21.6% is coming from annuities. 10% coming from long-term health products, which is critical illness. The rest of it is really from the short-term products. I think overall the take rate has improved, mainly as a result of the increased proportion of contribution from FYP in the overall gross written premiums number. That's the answer to the first question.
For the second question with respect to the new operating environment after January first, I think on the product strategy perspective, I think we'll be quite clear to tell the market that we will be seeing significant, I guess, changes on the online side as it relates to the online savings product segments, which has obviously been a key driver for growth for the 2021 year, and also as we expect in the new year. I think this has a combination of few factors at play, and most importantly, I think it's really a result, a function of the market demand for insurance products in the savings or investment linked product, continued weakness in the protection products as we have seen across the board in the industry.
In the new year, this year, I think we will still be placing significant focus on driving the savings product segments online and offline. In online space, as you see, as we have told the audience in opening remarks, we have already put online the first internet online savings product with a qualified insurance company partner. That was in January. Actually, we have also introduced an online critical illness product, our number six, as we mentioned in the opening remarks as well. We have a full suite of products that is in our pipeline, close to 30 products, which we'll be looking to release in this year. I think we are on a very good track here.
As to the offline space, again, I think a lot of the mid-size or smaller size insurance companies that we have been working with, which may not qualify under the new rules on the online side will be able to offer offline products. I think that's why we are now accelerating our online, offline integration business model. We also have disclosed just now, again in December that we acquired 100% interest in the Senhao Insurance, which will provide us with offline coverage in 11 provincial areas. This will really speed up our online, offline touch points and the ability to service customers in the offline context.
I think that is really the major changes that we're seeing with respect to the so-called regulations coming into force in the new year. I think that we will continue to drive the momentum in this space. Hopefully we'll have more material updates in next earnings call for us to share with everyone. Thank you.
Right. Thank you. Our next question comes from the line of Mindy Gao from CLSA. Please ask your question.
Uh,
I got two questions. The first one is regarding the Senhao Insurance that you agreed to acquire Senhao Insurance in last December. What will be your business plan for this company, and what is your plan for online and offline integration plan in the future? The second question is regarding the technology export. You have mentioned previously that you have begun to export your technology to other insurance companies, and this will generate new revenue streams. I just wonder, could you please give us an update on this business and its related revenue, as well as its outlook in the future? Thank you.
Okay. Thanks, Lindy. It's Ron again here. So two questions. The first question on the O2O integration and the Senhao acquisition and our business plan with respect to that. I think I also touch upon that quickly just now in the response to Michelle's question. I think the key focus areas here is that one thing we've always been trying to complement our service capabilities in the offline context. So far that's now up to pretty much the beginning of last year. I think over the first 15 years of the company's development, we have been solely focused on the online distribution, the online service capabilities to our customer set. I think starting from last year, we've a combination of few things.
One thing is the regulatory changes. Two, I think with respect to our own internal business plan to improve and deepen the engagement with our existing customers to drive repeat purchases, to drive retention, and to increase lifetime values. We do have the need to have extensive offline coverage, so that we can service these customers and particularly the higher value customers that we can extract from our user database internally to cross-sell and upsell, as we have also mentioned in the opening remarks. With a bolt-on acquisition like Senhao, I think that really accelerates our efforts here rather than building it out organically.
It does seem quite time-consuming for us to go into each province on our own with respect to the regulatory admin timetable, et cetera, et cetera. That's the first point here. The second point is that with respect to regulatory new environment, I think offline products will become increasingly important for us to distribute as well. We are beginning to distribute this year, starting with you know, our own internal customer consultants sales force.
Now with the Senhao bolt-on acquisition that will also enable us to provide the cloud platform that we have already has quite a mature supply chain with respect to the insurance product that we are cooperating with over a hundred insurance companies and particularly the customized product that we have been distributing on a very successful basis. These products can be channeled into the offline agency force that is connected to the Senhao network. Therefore, we can really streamline the online to offline integration through this way.
I think the third point that we can also look forward to is the so-called independent agent framework that is now being put in place by the CBIRC. I think this is a very interesting and attractive opportunity for a comprehensive one-stop-shop digital insurance platform by ourselves, whereby the independent agents can be plugged into our ecosystem and therefore leveraging on our online cloud system. They can also provide, you know, front-end services, product comparisons, you know, intelligent proposals to the customers through our SaaS tools.
They can utilize our intelligent underwriting systems, our post-policy claim assistant services that will really enable them to provide, you know, bespoke and you know a very fully digitalized insurance service experience for their offline customers. I think all these are the things that we are looking to drive through this bolt-on acquisition into the key ecosystem that we have already built in place over the years. Hopefully that answers the question, Lindy. Thank you.
Yes, very clear. Thank you.
Thank you. Our next question comes from Zixuan Wang from CICC. Please ask your question.
First, congrats to the impressive results of our management in Q4. I have two questions. The first one is about Senhao. Will our company continue to hire more agents or grow our business to more provinces? Next question is about profit margin. We see the margin has improved in Q4. I'd like to know whether this level is sustainable since we changed more product suppliers to large companies and there is still costs related to offline outlets.
Overall, will the margin in 2022 to be improved or deteriorated compared with the 2021 level? Thanks.
Great. Thank you so much. Two questions. The first question, with respect to the offline business and whether we will be looking to expand our coverage. I think the answer clearly is yes. I think right now we will probably be happy to start with the first batch of locations that we have already put in place through this acquisition. I think that this has already covered, I would say, most of the key insurance heavy or the top ranking areas for our target markets. I think there would still be a few areas where we can also look to expand into.
I think we would do it on a measured basis. As we go along further down this track, I think we will be looking to expand further. But we'll be happy with the initial kind of coverage of network that we have already got in place through this acquisition. Secondly, on the profitability of the company, I think yes, in Q4 we have turned a profit, albeit a marginal profitability in the Q4 . As we have also mentioned in the opening remarks, we do expect the next two quarters, Q1 and Q2, to be extremely challenging from the operating perspective. Not only are we adjusting to the new regulatory regime and new business models and also from macroeconomic standpoint, extremely challenging.
I think most of you in Shenzhen are still placed under lockdown. In Shanghai, I think it's semi lockdown and in across the country, pockets of the population are also in kind of lockdown mode. I think that the consumer confidence has reached a very low level, particularly due to the quite massive layoffs that we have been seeing in different industries. I think definitely has a very significant impact on the willingness to consume, I think, the non-discretionary financial products. Within the financial products, I guess insurance products are the least or the most discretionary of all. We do see next two quarters to be challenging.
I think we have not given an official guidance, and I think we'll just leave it at that for now. We would be also in the opening remarks. We are continuing our program of cost reduction throughout the corporate structure. I think that this is something of a priority in the first half of this year. We will be further driving cost control, driving down our fixed cost base. I think we have already achieved a double-digit percentage figure in the Q1 to date. I think we will continue to drive further cost reductions in the Q2 . Thank you.
All right. Thank you. We have reached the end of the question and answer session. I'll turn the call back to Ms. Harriet Hu, Investor Relations Director, for closing remarks.
Thank you, operator. In closing, on behalf of the Huize's management team, I 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 for joining us today, and have a nice weekend.
Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you.