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Respectful investors and analysts, distinguished guests and ladies and gentlemen, good morning. Welcome to attend China Re 2023 Q1 Results Announcement. I am Liu Shukai, the Director of BoD of China Re Group. The representatives attending today is Mr. [ Lin Tao ] from the China Re Strategic and Planning Department; and Mr. [indiscernible], the Vice President of China Re L&H [indiscernible]; as well as the Mr. [ Lei Ji ], the Assistant Managers of the China Re Life P&Cs. And we are also going to see Mr. [indiscernible], who is the Assistant Manager of the China Re Continental Group. Today's meeting is going to be divided into 2 parts. The first part is going to be a result announcement for the first quarter of the 2023. And the second part, we are going to open the floor for questions. We are going to have adequate communications and explanations with all the investors and analysts. [Operator Instructions] So now I'm going to give the floor to Mr. [indiscernible] to introduce you.
Distinguished investors and analysts, I'm going to introduce you the results that we have in the first quarter of the year 2023. The first quarter of the year 2023 is actually following the first standard for the China Insurance Committee. That is to say, under the new accounting rules and then old accounting rules, there is a huge difference of the -- calculations. In the first quarter, the core capitals of the China Re Group is registered at RMB 77,070 million, and the net asset is RMB 62,078 million. And the insurance contract liability is RMB 40,144 million. The reason behind this rapid growth is because we have calculated all the different numbers inside of Mainland China, not included the Singapore region. In the first quarter, the insurance income is RMB 2,014 million, and the net profit is RMB 240 million, among which we are seeing a growth of over 40%. Another chart is that we are also seeing that the overseas business is also expanding their operations. The undertaking profit is also growing. For one part, the domestic business is increasing its operations. And for the second part, for the overseas business, we are also undertaking -- affecting by the cyclones in the New Zealand as well as the earthquake in Turkey, it is also affecting the performance in this region.
For China Re L&H referring to the headquarters of the China Re L&H, the insurance income at the first quarter is RMB 215 million. This is actually benefiting from the growing insurance in the domestic insurance. It is because of the rapid growth of the tourism sectors in China in the first quarter. So this is actually affecting the profit. And for the basic earnings per share, it is affected by the changes of the accounting rules. We have not disclosed it yet, but later, we are going to publish the information. The company is also going to be innovation-driven and focusing on the product.
We are also going to strengthen the surety product. In the first quarter, the insurance income of the surety product has been growing at double digits. We are also going to work on the inventory business by innovating in these sectors and also working on the creative sectors. The underwriting profit is going to grow. China Continental Insurance registered insurance income at RMB 15,133 million, benefiting from the rapid growth of the non-motor sectors. The net profit is RMB 58 million, while the combined investment yield is 1.01%. The company optimized their management structures as well as controlling the business qualities. The underwriting property is becoming improving based on the reinsurance business. The company's business performance fluctuated year-on-year.
Thank you so much. That is the results.
Thank you so much, Mr. [ Lu ] for your kind introduction. Now the floor is open for questions. [Operator Instructions] Now we are going to give the floor to the first investor. Thank you. The first investor is coming from the Refund Capital, Isabella.
I am Isabel coming from the Refund Capital. I have 2 questions for the executives. The first question is that what is the year-on-year performance in the investment returns? Is it related to the adjustment in the asset allocation strategy? The second question is about the international orders for the reinsurance policies. Is the Turkish earthquake bringing on large liability to the reinsurance policies?
Thank you so much for your questions. The first question is about the investment business. We are going to give the floor to Mr. [ Wang Shu Chi ] who is the Assistant to the Investment Performance. The second question is about the China Re P&C related parties. We are going to direct it to Mr. [indiscernible], who is from China Re P&C.
So let me answer the first question. In the year 2023, the Q1 has a better investment return compared with the year 2022. There is around 20% growth year-on-year compared with last year. And the question about the new accounting rules. After the implementation of the new accounting rules, there are some of the challenges in terms of investment policies. One part is, it is because of the modeling methods. And other part is because there is a downward trend in terms of the quality numbers, but with a better investment in the report and also speaking to the previous investment parties. We have made some of the adjustments to their product structures. First, we have speeded up the allocations in the fixed assets, and we are also expanding our asset strategy. While thinking about the relativities of the capital, we have included it into the capital structure. Second, we have also increased the asset allocation. We are also working on the full life cycles of these. We are also allocating more resources into the medium- and long-term assets. This is increasing the different level of the quality products. Thirdly, we have built strategic R&D strategies and increasing on the macro policies and as well as increasing the investment policies.
Thank you very much. This is my answer to the questions.
Second question is going to be answered by Mr. [indiscernible].
Let's talk about our international business sectors in the first quarter of the year 2023. The performance of these sectors improved dramatically. There is a lot of business opportunities in the reinsurance sectors. The premium has increased by 16.6% in the international market, demonstrating the same trend rising international market. Affected by the Turkish earthquake, the cyclone in New Zealand and among other different catastrophes around the world, the operating business was [indiscernible] year-on-year. For the Turkish earthquake, it is actually the biggest earthquake since 1999, there is over 40,000 participants -- there's over 40,000 people lost their lives during the Turkish earthquake. The loss is actually tertiary -- is actually the secondary risk. Currently, our international business is operating very stably. The total numbers of the international business is around USD 42 million. That is my answer to your question.
Thank you so much, Mr. [indiscernible]. Now we are going to invite the next investor -- next analyst to ask the question. The next question is coming from [ Cherry ] please.
We are saying that the CRRBC recently published a policy about the P&C related insurance. So the question is directing to the life insurance. What kind of impact with these policies from CRRBC is going to affect in this performance of the China Re? The second question is about the reform in the motor sector. My question is that what is the company's expectations in the motor insurance sector? And how will you see the development of the motor insurance develop in the year 2023?
Thank you so much for your question. The first question is about the life reinsurance. We are going to give the floor to Mr. [indiscernible], who is the Assistant Manager of the China Re Life and [indiscernible] China Re L&H. For the second question, we are going to give the floor to Mr. Lu.
Thank you very much for your question. Let me answer the first question. The CRRBC recently published a policy about the development of the life-related insurance actually is noticed itself from the government is actually affecting our business very actively, first, because please notice actually adequate the market to have expectations of the performance in the insurance sector. And later on, it is also going to have a further impact into the disabled insurance as well as the disease-related insurance. Second, we have accumulated a lot of status about the long-term payers, and we have the relevant advantages. So with the development in these sectors, we can facilitate the supply side reform in our industry. Thirdly, China Re has -- China Re Life has a long-term history in these business sectors. I believe this is also very helpful in our life insurance -- Life Reinsurance sectors and also the long-term reinsurance sectors. This is also going to become a new growth point for our business. Thank you.
Now we are going to give the floor to Mr. Lu from the China Continental Insurance to answer the question.
Thank you so much for your questions. Recently, the CRRBC has released the pricing ratios of the motor sector insurance from 0.5 to 1.35 to a broader larger range. So according to our knowledge that these policies is going to come into effect at the 28th of this month. So with the expansion of this range, it is going to be very beneficial to our performance in this sector. There is not going to be a lot of huge fluctuations in terms of market performance as per our analysts, but we cannot exclude the possibility that there might be changes in the operations according to our previous experience. If the numbers has been pressing down the downward threshold of 0.65, actually real impact is very small. We are also working on the price increase in this sector. The actual impact is very small, but actually for the implementation, China Continental is going to keep a close eye on the changes in the market. And also, we are going to release the information according to the requirement of the market. And we are also going to optimize our ways of selecting of the basic business model. We are also going to stick to the principles that we are going to optimize the structure and development, the strategy. Optimize the business allocation.
Thank you so much. That is my answer to your question.
Thank you so much, Mr. Lu. Now we are going to give the floor to the next investor.
In the recent few times, I could see that our group has kept a lot of close contact with the investors. So here, I'd like to report with who the market conference to the investors and analysts. The first question is about the total performance of the group. Currently, we are implementing the new accounting rules of accounting 27. The investors hears about the R17 implementation. So what is going to be the impact?
Because this is really representative question, I am going to direct this question to the Mr. Liu Xia to answer the question.
After the effect of the new accounting rules, there is a huge change into the financial statement sheet as well as other different reporting matters. According to the current plan of the China Re Group, our system, business system is keyed into operating, and we are going to finish the reform in these new accounting rules at the end of the August 2023. So the impact of the new accounting rules means that there are so many specific features. The basic impact is that the new accounting rules requires all the insurance companies to separate their asset investment sectors from the main business. For those of the companies who cannot separate those factors, they are going to follow the accounting rules. So that is to say there is going to be a downward trend in terms of the net profit for the majority of the insurance companies. This is also very helpful in terms of the asset management.
At the same time, the insurance company is also going to follow the new financial rules. So with the implementation of the new financial rules and financial tools, the fluctuations in the current insurance is also going to be included. After the implementation of the new financial tools, the investment return is going to be fluctuated according to the market performance. In order to view with the challenges of the new accounting rules and new financial requirements, China Re Group has signed in the multiple sectors. In terms of underwriting, we are trying to optimize our product structures and speed up the insurance product and work on the quality control and also increasing the profit contributions in this sector. In terms of investment, we are optimizing the investment results and consolidate the basic investment returns.
We are also speeding up the institution results works on the group of the public markets. In terms of payment management, we also want to strengthen the mechanism and lastly the domestic and international business sectors play their rules. So this is some of the answers to the investors complaints.
Thank you so much, Mr. Lu, for your kind introduction. Now we are going to give the floor to the next analyst.
Following this opportunity, I would like to continue our communications with the market and also its highlight. One of the major opportunities is about the Life Reinsurance. One part is about the inventories of the Life Reinsurance. For these sectors, the capital markets prepares in the first quarter of the China Re Group. The reported business in the China Re Group is growing quite rapidly, creating a lot of fluctuations in the performance of the China Life Reinsurance. That's the reason why the investors and analysts is starting to care about the full year's performance. The second question is about the surety product. The market also noticed that in the previous years the short-term surety product has answered the market concerns. So what is going to be the profit as we are moving into the future? How will we improve the business sector?
So for these 2 questions, we are going to direct the floor to Mr. Li from China Life Reinsurance -- China Re Life Reinsurance.
So I'm going to give you a brief introduction about our underwriting policies in the year 2023. The deposit product is one of our key focus. We are going to manage the long-term cycles of our business. We are also going to work on the risk management and risk control. The deposit business is safe to interest gap and controlling the cost in these sectors. In the domestic market, we have grasped the chances in the market and replicated our previous experience and promoted the long-term factors. And in terms of the overseas market, we are working on the domestic and international markets. This is the development phase. And the second part is for the surety product. How do we improve the interest? How do we improve the combined investment yield? We are going to talk about the inventories and also improvements. To improve the performance of the inventories, we are going to optimize the structure, adopting the new methods, maintaining and increasing the good quality inventory product and keeps it on the ring, term after term in order to address the potential risk and provide solutions -- a package solutions.
And the second part is about the innovative business. It is going to be innovative-driven incremental policies, working on the policies and also the business sectors. We are also going to work on the risk threshold [indiscernible] and working on the multiple innovation facility through rapid development of the incremental business.
Thank you so much Mr. Li for you kind answer. One of the highlights from the market is the life insurance sector. Investors noticed that we have disclosed the number from the China Continental Insurance. The premium has been growing quite rapidly in the motor sector and non-motor sectors. So with the rapid development of the business, starting from the year 2023, the combined investment ratios was kind of an expectation of the combined investment yield for China Continental Insurance. Can you give us a briefing in this sector?
In the first quarter of China Continental Insurance, the co-solvencies in the first quarter is RMB 21.079 billion. Let me give you explanations to the rapid growth. First, we optimized the business structures and increasing the profits. We are also working on the business sector. We are also working on the optimization sectors. We have also strengthened the management of the effective phase improving the performance and increasing the cost. So with a lot of this effort in terms of controlling the cost and the lower down the cost as well as increasing the profit. If we are looking into the performance of this year, after the C-ROSS reform, we believe the impact of the C-ROSS reform is going to be eased this year.
The pressures from the C-ROSS reform is also going to be offset by the reform in this combined investment yield sectors, we are going to achieve a better performance and this solvency adequate ratios.
Thank you so much, Mr. Lu, for your kind introduction. For the interest of time, we are going to talk about the final questions. It is about the China Re P&C. The investors are really curious about rising fees in the international markets. So what is going to be the expectations for the domestic market? The second part is about the agricultural reinsurance. So you might notice that in the first quarter, we are keeping a very rapid growth. So what kind of planning are we going to make? So we are going to give the floor to Mr. [indiscernible] from China Re P&C to introduce us these questions.
Thank you so much for your kind answer to this question. Domestically, let's talk about the trend in the year 2023. I would say that there is a very rapid increase in the international markets, but representing the -- it does not represent a very rapid increase in the domestic market. Actually, the ratio is lower down than the performance in the insurance in the international market. For the planning development, there are 2 areas. For one part, we are going to consolidate our corporation partnership. So one, we are also going to optimize the budget calculation method. And for the other part, we are going to work on the reinsurance within sectors with the development of the business sectors. There is a rapid growth. The company is going to work on the aqua-related reinsurance products, increasing the purpose and stabilities of the sectors. We are going to work on the high standard, trying to make sure that there is going to be a breakthrough in the aqua-related sectors.
Thank you so much, Mr. [indiscernible] for your kind introduction. For the interest of time, now we are going to wrap up the first quarter's result announcement in the year 2023. Thank you very much for your yearly support for the investors and analysts. If you have any other questions or if you want know more information, please contact us.
We conclude this result announcement. Thank you so much for your attention. [Statements in English on this transcript were spoken by an interpreter present on the live call.]