AIFU Inc.

Fanhua reported full-year 2023 total insurance premiums of RMB16.4 billion, up 28.7% year over year, and first-year premiums of RMB3.8 billion, up 30.3% year over year. Operating income was RMB195.8 million, up 16.1% year over year, and net income attributable to shareholders was RMB280.4 million, up 179.7% year over year. In management’s discussion, the company also cited RMB16.1 billion of total life insurance premium, up 30% year over year, and said operating expense ratio improved from 29.4% to 25.7%. For 2024, management said it could not give precise annual targets because the timing and scope of the fee-consistency rule remain uncertain, but it expects short-term industry disruption alongside opportunities for its open-platform model.

Yinan Hu framed 2023 as a difficult year for China life insurance because of pricing-rate changes and bancassurance fee-consistency requirements, but said Fanhua still delivered stable growth. He emphasized the company’s strategy of professionalization, specialization, digitalization, and open platforms, and said these capabilities should make Fanhua a key beneficiary of industry consolidation. His tone was confident and forward-looking, with repeated references to internationalization, family services, and M&A as the next phase of growth.

The financial discussion focused on how Fanhua outperformed a weak industry backdrop. Ben Lin cited RMB16.1 billion of total life insurance premium, up 30% year over year, and net income attributable to shareholders of about RMB280 million, up almost 180%; he also said operating expense ratio improved from 29.4% to 25.7%. He pointed to strong digital efficiency, with agents who frequently used the system generating 1.6x higher productivity, and said the company ended with over RMB1.4 billion in net cash, which gives it capacity for accretive M&A.

Analysts asked for more detail on the expected impact of the reported-fee/actual-fee consistency rule and commission caps, and management said the rule is likely to be implemented around April, though timing is not confirmed. Liu Lichong said commission rates for similar products could fall by 30% to 40%, which would hurt independent brokers, but he argued the change should accelerate industry consolidation and benefit Fanhua’s platform model. On overseas expansion, management said Hong Kong is already live, with two JVs, 13 staff in the brokerage team, contracts signed with 10 insurers, and invitations to expand into Macau and Singapore; Hu added that the White Group partnership is meant to improve capital-raising and M&A capability, not change Fanhua’s strategic direction.