Financial Performance - New business profit increased by 45% to $3.125 billion, with a 47% increase when excluding interest and other economic changes[2]. - Adjusted operating profit rose by 8% to $2.893 billion[2]. - The group's adjusted IFRS operating profit for 2023 is $2.893 billion, an 8% increase from 2022, while the IFRS after-tax profit for 2023 is $1.712 billion, compared to a loss of $1.005 billion in 2022[16]. - The total dividend for 2023 is $0.2047 per share, a 9% increase from $0.1878 per share in 2022[16]. - The total embedded value as of December 31, 2023, was $45.3 billion, up from $42.2 billion as of December 31, 2022, equivalent to $16.43 per share[34]. - The group's European embedded value operating profit increased by 17% to $4.546 billion, primarily due to higher new business profits from insurance operations and increased profits from its asset management business[34]. - The total annual premium equivalent sales increased to $5.88 billion in 2023, a 34% increase from $4.39 billion in 2022[52]. - The operating profit from insurance business grew to $4.90 billion, driven by a 45% increase in new business profit to $3.13 billion, despite a 24% decrease in profit from existing business[52]. Business Strategy and Growth - The company has focused on enhancing customer experience and technology-driven distribution channels as part of its new strategy[2]. - The company aims for a compound annual growth rate of 15% to 20% in new business profit by 2027, compared to 2022 levels[13]. - The company has established a new purpose and strategy for the next five years, focusing on customer, distribution, and health strategy areas[12]. - The company aims to achieve a customer net promoter score in the top quartile across ten business units by 2027, with a target customer retention rate of 90%-95%[17]. - The company plans to enhance customer experience through personalized offerings and technology-driven solutions, aiming to improve customer retention and acquisition[18]. - The company is transforming its organizational model to enhance team skills and capabilities, prioritizing value creation when deploying capital across markets[30]. - The company is committed to product innovation to provide a wide range of personalized financial solutions, addressing wealth accumulation, protection, transfer, and retirement needs[29]. Market Performance - The company operates in 14 Asian life insurance markets, ranking in the top three in 10 of these markets[12]. - Hong Kong is a major growth driver, accounting for 45% of new business profit, with new business profit and annual premium equivalent sales increasing over threefold compared to last year[16]. - The company’s agent channel generated new business profit of $2.096 billion, reflecting a 75% increase, driven by a 67% growth in annual premium equivalent sales[15]. - The bank insurance new business profit decreased by 8% to $793 million, primarily due to challenging market conditions in mainland China and Vietnam[15]. - The annual premium equivalent sales from health and protection products through bank insurance partners grew by 26%, accounting for over 7% of total annual premium equivalent sales in 2023, up from 6% in 2022[21]. Investment and Capital Management - The company plans to invest approximately $1 billion in core capabilities, focusing on customer, distribution, health, and technology sectors[56]. - The estimated surplus of group regulatory capital over specified capital requirements was $19 billion, with a coverage ratio of 197%[62]. - The group plans to invest $1 billion in new business development, focusing on customer, distribution, health protection, and technology capabilities[36]. - The company aims to manage effective embedded value to ensure gradual conversion into free surplus, with expectations of over $9 billion being allocated to free surplus by the end of 2027[56]. - The group’s free surplus increased by 3% to $1.395 billion, with a year-end free surplus of $12.455 billion compared to $12.229 billion at the beginning of the year[58]. Risk Management - The group has established a governance framework to clarify risk responsibilities and align with risk policies and standards for risk identification, measurement, assessment, management, control, monitoring, and reporting[103]. - The group risk framework is overseen by the Board and includes a three-line model for risk management, with the first line managing risks, the second line providing independent oversight, and the third line conducting internal audits[104]. - The company has established an emerging risk identification framework to prepare for anticipated financial and non-financial risks, particularly in sustainability and climate-related areas[107]. - The group actively avoids intolerable risks and implements systems, processes, and controls to manage risks effectively[111]. - The liquidity risk management plan includes regular assessments of liquidity coverage ratios under both baseline and stressed scenarios[117]. Regulatory and Compliance - The company is monitoring regulatory developments across jurisdictions to ensure compliance and manage associated risks effectively[166]. - The Hong Kong Insurance Authority serves as the group's regulatory body, emphasizing a principle-based and outcome-oriented approach to supervision[162]. - The group has been designated as an internationally active insurance group by the Hong Kong Insurance Authority, requiring compliance with insurance capital standards[163]. - The International Financial Reporting Standard 17 (IFRS 17) came into effect on January 1, 2023, requiring fundamental changes in the accounting treatment, presentation, and disclosure of insurance contracts[167]. - The company faces operational risks that may negatively impact customer outcomes and its reputation, potentially leading to regulatory penalties and compliance risks[169]. Technology and Innovation - The company has established an advanced platform to store key operational data, enabling the deployment of advanced data analytics and AI, which reduced product inquiry time from over 4 minutes to under 30 seconds in a market test[26]. - The company is establishing an AI lab to foster innovation and attract external talent, aiming to integrate data analytics and AI into its organizational culture[26]. - The company is focused on enhancing its business in Malaysia through agent recruitment, increasing customer penetration with banking partners, and actively managing its medical investment portfolio[82]. - The company is enhancing its digital services and technology capabilities to create more convenient products for customers, which also introduces new regulatory and reputational risks[145]. - The company has implemented various defense measures, including AI-based endpoint security software and continuous security monitoring[125]. Challenges and Risks - The company faces significant non-financial risks due to its complex business activities and ongoing transformation efforts[123]. - The company is navigating a rapidly changing demographic landscape and intense competition, which affects its product sales and profitability[149]. - The financial services market is highly competitive, influenced by pricing, financial strength, regulatory compliance, and brand recognition, among other factors[149]. - The company faces challenges in attracting and retaining skilled employees, which could limit its growth potential and strategic implementation[149]. - The company may face increased compliance complexity and risks due to varying regulations across jurisdictions, affecting operational resilience[136].
保诚(02378) - 2023 - 年度业绩