Huize (HUIZ) Q1 2025 Earnings Call Transcript

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SUMMARYHuize (HUIZ 1. 75%) achieved a sequential rise in premium volume for Q1 2025, marked by cost discipline, customer base expansion, and further integration of AI across cesses

Management reported international operations as a significant growth lever, outlining concrete advances in Vietnam and pending entry into Singapore

The company signaled a positive outlook for Q2 and Q3, citing an anticipated regulatory leveling of agency commissions that could benefit independent platforms, with increased agent migration and further duct breadth aiding scalability

Investment in prietary AI models and digital claim handling is enhancing efficiency and user experience, while the duct suite is recalibrated to meet rising demand for participating and savings-linked offerings amid muted legacy return environments

CFO Tam said, "the international, in terms of gross margins, is relatively lower than the domestic

And therefore, I think that will be reflected in what you noted in terms of the gross margin decline in the first quarter of 2025. "Tam stated, "If such a measure would be implemented in the second half of this year, we do expect that the so-called impact on our will be positive because what that means is that the playing field is leveled among the different channels, among bankers, brokers, and agencies, tied agencies. "The omnichannel model and third-party distribution are increasingly favored, with China compared to 30%-50% in mature Asian

Company digital transformation, including AI-powered marketing avatars and end-to-end automation, is now reducing duction time and cost for content and claims workflow, directly impacting expense trends

INDUSTRY GLOSSARYGross Written Premiums (GWP): The total premium (pre-reinsurance and cancellations) booked within the reporting period for all insurance contracts sold through the platform

First-Year Premiums (FYP): Premiums on newly underwritten policies recorded during the first year of coverage, typically used as a measure of new policy sales volume

Participating Insurance ducts: Insurance policies that vide policyholders with a of the insurer’s surplus or fits, usually in the form of dividends, subject to investment performance

Expense-to-Income Ratio: A measure of efficiency, calculated as total operating expenses divided by total operating revenue, expressed as a percentage

Leveraging years of insights into customers' needs, we stay ahead of market trends and are now working alongside leading insurers, continually expanding and refining our duct offerings

At the same time, we are accelerating the integration of AI across our operations, driving remarkable ductivity imvements, and further optimizing our cost to lay the solid foundation for long-term value creation

Huize Holding Limited remains committed to viding full life cycle insurance solutions for its high-value customers

As of March, we had strong partnerships with 43 insurance companies, continuing to develop and launch differentiated customized ducts with insurer partners

With declining yields on traditional bank deposits and wealth management ducts, demand for wealth tection solutions has intensified

In response, we partnered with Neutrolife to launch Please Note Free, the savings ducts driving to achieve sustainable returns for customers

Additionally, we expanded our portfolio of customized participating ducts, building on the full and the series co-launched with Afibacopco

We partnered with Cathay Ludiadre Life Insurance on Tmall, New June Number Six, participating in incremental whole life insurance ducts

This was ed by the launch of Xinhai Huishuan, a participating annuity duct we developed with Primerica Fossil Life Insurance

These customized ducts were designed to cater to the industry-wide demand shift from fixed returns to floating returns, further solidifying our leadership in China's participating insurance segment

In view of our global expansion strategy, we introduced Xiaotao T Global, a children's critical illness duct co-developed with Cigna and CMB Life Insurance that leverages their overseas resources to offer global client settlement and overseas medical support

The rapid advancement of generative AI and AI agents is transforming traditional enterprise workflows

Under our AI plus strategy, we continue to enhance both the user experience and operational efficiency

We have deployed the Huize AI agent development platform internally with the goal of independent AI ductivity

Leveraging open-source AI models, we have implemented private domain deployment of large language models to ensure data security and regulatory compliance

At the same time, we are actively moting the development of local AI agents to accelerate AI agent creation using visualization tools

This is driving the company-wide ductivity revolution with AI agents acting as a new generation of digital employees

Our customer-centric apach leverages innovative nologies to der personalized insurance service experiences

During the quarter, we launched an AI-powered smart portal on Huize's app offering 24/7 insurance agent support

We are also revolutionizing after-sales claims cessing through Xiaoma Claims AI agents, achieving end-to-end automation of claims recording, review, and payout

With AI now capable of handling all claims reporting, we are now working to extend this innovative feature to our apps and mini-grams

This innovation is expected to reduce cessing time on Xiaoma Flash Claim from one day to one hour upon full rollout

Our international brand, Pony and U, continue to der strong growth momentum, underscoring the vast potential of Southeast Asia

We recently partnered with Vitol Post, a leading logistics service vider in the region, to expand our distribution network further, growing our team of independent financial advisers and enhancing the reach and conversion capabilities of the G Cell platform

On the duct side, GlobalCare launched five-year and ten-year critical illness insurance ducts in collaboration with PBI Insurance, enriching our duct portfolio to better meet customers' diverse tection needs

Cognition continues to drive the transformation of the Vietnamese insurance market through innovation and marks a crucial milestone of our international expansion

Global macro and geopolitical conditions remain volatile, yet insurance demand in China and across Asia stays resilient with digital adoption accelerating

Drawing on deep customer insights and AI-driven duct innovation, and strong momentum in Vietnam and other Southeast Asian, Huize Holding Limited dered another quarter of solid growth and operating agility

Looking ahead, we will widen our range of savings and health ducts for high-value clients, embedding our self-hosted large language model platform across the service chain to lift efficiency and experience

Internationally, Pony Insur will tap into Singapore and other priority, keeping us on track for overseas revenue targets

Grounded in duct innovation, customer experience, and AI, we will continue to create win-win value for insurers and customers while dering sustainable long-term returns for holders

This concludes my prepared remarks for today

I will now turn the call to our CFO, Mr

Ron Tam, who will vide an overview of our key financial highlights for the first quarter

Ron Tam: Thank you, Mr

Good evening, everyone in Asia, and good morning to those in the US

Despite a challenging macroeconomic and geopolitical environment, we have dered yet another quarter of resilient performance

This resilient performance was driven by our efficient omnichannel distribution network, our focused efforts to continue to acquire high-quality customers from the market, and the deployment of advanced prietary AI solutions

Crucially, we have made significant gress in executing on our international expansion strategy, which is a key growth driver for long-term sustainable growth for the company

This reduction reflects decisive actions in continued workplace optimization and broad deployment of AI-driven automation, which has sharply reduced manual workloads and boosted efficiency throughout the flow

These results demonstrate the strength of our intelligent cost control framework in dering real cost savings and ductivity gains in the

A illustration of our AI-driven ductivity gains is the use of localized AI avatars in marketing

These avatars can replicate a human voice and appearance in under a minute, ducing highly engaging insurance content that is virtually indistinguishable from a presenter

Integrated with our content management platform, the system now automates script generation, editing, and distribution, creating a seamless end-to-end workflow

As a result, we are scaling our social media presence with richer, more compelling content, materially reducing duction time and cost

Our international growth engine, Pony Insur, dered yet another solid quarter and remains central to our long-term strategy

Building on the success of our prietary AI toolset in China, we are now looking to deploy these solutions across our overseas operations to line workflows and der a more personalized customer journey

Vietnam continues to vide a robust of of concept for our Southeast Asia playbook, and we are making steady gress towards entering Singapore this year

These initiatives will further.