ZhongAn Online Announces 2020 Annual Results

Company Turns Around to Net Profit Attributable to Owners of the Parent of RMB554 Million

Performance Driven by Health and Digital Lifestyle Ecosystem

Technology Export Revenues Surge 35.4%

HONG KONG,March 23,2021 --ZhongAn Online P & C Insurance Co.,Ltd. ("ZhongAn Online" or "ZhongAn" or the "Company",HKEx: 6060),a leading online InsureTech Company in China,today announced its audited annual results for the year ended December 31,2020 ("the reporting period").

In 2020,ZhongAn Online continued to meet the diverse needs of users,and create value throughout the industry by strengthening its proprietary platform and deepening the cooperation with its partners. In 2020,ZhongAn Online's total gross written premiums ("GWP") rose 14.2% year-on-year to RMB16,705.9 million. The strong performance propelled the Company to become the 9th biggest company in the entire industry,which is the first time that the Company has cracked the top 10,marking an extraordinary ascent in just seven short years since the Company was founded.

ZhongAn Online's operating metrics improved during the reporting period as it focused on high-quality growth and technology-empowered development to reduce costs and improve efficiencies. In 2020,the combined ratio improved by 10.8 percentage points to 102.5%,which helped to drive the Company's first profit since its listing. Net profit attributable to owners of the parent was RMB553.8 million,a substantial turnaround from a net loss of RMB454.1 million in 2019. In particular,the Company's online insurance business achieved a profit for the second consecutive year.

Strong growth in health ecosystem driven by rapid establishment of a closed-loop ecosystem

The outbreak of the COVID-19 pandemic at the start of 2020 significantly raised consumer awareness for health insurance protection and drove strong development in the market,far exceeding growth in other types of insurance. In addition,consumers became increasingly willing to shift their insurance purchases from offline to online,which provided substantial opportunities to accelerate the development and penetration of online insurance in China. ZhongAn Online has accumulated extensive experience in health insurance and has spent years developing related products that specifically focus on user needs. This allowed the Company to effectively take advantage of the market opportunities and achieve faster growth than the overall market.

In 2020,ZhongAn Online's health ecosystem provided insurance and medical services to approximately 23.90 million users and recorded RMB6,604.3 million in GWP,an increase of 37.4% year-on-year. The increase was attributable to the Company's continuous efforts to enhance insurance awareness among users,actively develop medical services to create a closed-loop ecosystem,and provide users with personalized and customized insurance products and services.

The pandemic not only stimulated the needs of users for health insurance,but also reinforced the need for medical services and health management. In 2020,ZhongAn Online strategically upgraded its health ecosystem. Leveraging its asset-light online business model,the Company fully integrated its insurance coverage with medical services and expanded from low-touch to high-touch health insurance offerings,with an aim to meet users' medical needs in different use cases and enhance both user experience and user engagement. For example,the Company launched "ZhongAn Medical Manager," a family doctor service that offers 24/7 access to online medical consultations with over 2,000 doctors,as well as online purchasing and doorstep delivery of medication,offering better services that address user needs.

As the Company continued to create a closed-loop health ecosystem,the revenue per user of individual health insurance products increased from RMB241 in 2017 to RMB453 in 2020,at a CAGR of 23.4%.

From product-centric to user-centric,ZhongAn enhanced brand awareness by seizing market opportunities and developing new products and services

In 2020,ZhongAn Online embraced the rapid development of new channels of consumer entertainment,including live broadcasting and short videos. By leveraging competitive advantages in online profiling and targeted marketing,the Company actively nurtured its corporate image,which helped to significantly enhance brand awareness among consumers. During the year,the Company's total number and growth rate of followers on Douyin and Kuaishou topped the industry,while its brand awareness on Douyin increased three-fold. The monthly active users of the ZhongAn App increased by 2.6 times year-on-year in the fourth quarter of 2020,maintaining its leading position in the industry.

The Company continued to enhance its capabilities in marketing,customer acquisition and services on its proprietary platform. GWP generated through the Company's proprietary platform significantly increased by 94.6% year-on-year to RMB2,168.1 million. Its contribution to the Company's total GWP increased to approximately 13% (2019: approximately 8%).

Innovative products drove rapid growth of digital lifestyle ecosystem,further penetrating the Internet lives of users

As users' online lives continued to diversify,ZhongAn Online launched a number of innovative "digital lifestyle" products in 2020,leveraging its strong capabilities in data analytics and user operations. The newly launched products have become new growth drivers for the Company,and enable it to better serve users and their modern digital lives. New products include phone screen crack insurance,which users can purchase by taking photo on their mobile devices and is built upon the Company's big data-based risk management capability; household property insurance,which targets families; and pet insurance,which caters to the burgeoning pet economy.

In 2020,revenue generated by innovative products contributed 16% of total revenue,which was up from just 4% in 2019,and boosted revenue of digital lifestyle ecosystem to RMB6,298.6 million,an increase of 25.2% year-over-year. The revenue per user increased from RMB7.8 in 2017 to RMB12.7 in 2020,representing a CAGR of 17.5%,which speaks to the Company's ability to successfully develop new and diversified products.

Technology exports achieved solid growth supported by comprehensive product mix

The pandemic in 2020 also drove insurance companies around the world to accelerate their digital transformation to meet user needs. Meanwhile,regulatory authorities also promoted the digital transformation of the insurance industry,opening up a new chapter for InsureTech.

In 2020,revenue from ZhongAn Online's technology exports was RMB365.1 million,representing a year-on-year increase of 35.4%. As of December 31,2020,the Company served a total of 75 clients,a net increase of 39 from last year. In 2020,approximately 75% of the Company's existing customers purchased additional modules or upgraded their existing modules,reflecting the long-term value of the Company's products for its customers.

In early 2021,ZhongAn Online signed a cooperation agreement with Taiping General Insurance,a leading insurance company in China,to help build a new system for its accident and health insurance business. In 2020,the Company's "business growth series" products served over 10 clients,including Taiping Life,AIA Life Insurance,Manulife-Sinochem,HSBC Life Insurance and ABC Life,helping them establish a full-stack online insurance marketing platform and form a closed-loop smart marketing solution. The Company reacted quickly to new regulations for internet insurance by developing a visual backtracking solution for online insurance companies. The Company acquired 42 contracted customers for the new tool,of which 34 were new customers.

In 2020,the Company's technology export business developed rapidly in overseas markets. Following the cooperation with Sompo,ZhongAn Online expanded its presence in Japan and started serving other leading property and life insurance companies,as well as online insurance platforms. In 2020,ZhongAn Online became AIA Group's regional technology partner and will help AIA accelerate digitalization,acquire new customers,and meet the insurance needs for its customers by offering innovative insurance products and connecting to business partners.

GrabInsure,the joint venture between ZhongAn Online and Grab,expanded the Company's exposure to Indonesia. ZhongAn Online's InsureTech solutions have generated over 70 million policies within the Grab ecosystem. The Company has also set up a joint venture with OVO,a leading e-wallet platform in Indonesia,to provide ZhongAn Online's proprietary InsureTech solutions and applications so that local insurance companies can launch easy-to-use and safe products,all with an aim to facilitate inclusive finance in the Indonesian market.

Virtual Bank ZA Bank and Digital Insurer ZA Insure created greater value for users

As the first virtual bank in Hong Kong,ZA Bank enjoys a clear first-mover advantage in Hong Kong's virtual banking industry. As of December 31,ZA Bank has served over 220,000 users,accumulated a total of more than HK$6.0 billion in deposits and offered personal loans of HK$650 million to meet users' financial demands,making it a leading player in the industry. User experience is always the priority of the Company,which in turn drives brand awareness and user recognition. In 2020,ZA Bank launched a strategic cooperation with Visa,the global payment company,to present the ZA Card,which is Hong Kong's first Visa card with personalized numbers.

Through its 24/7 online platform,ZA Insure is able to provide simple,convenient and seamless experience and affordable insurance products. At present,ZA Insure has launched four insurance products catering to respective user needs,namely ZA Life Protection,ZA Cancer Protection,ZA Heart Attack & Stroke Protection and ZA Accident Protection,providing users with protection for term life insurance,cancer,cardiovascular disease and accidents. In 2020,the newly-acquired underwritten insurance policies of ZA Insure increased by 35% month-on-month.

As the only technology company in Hong Kong with both a virtual banking license and a digital-only insurer license,the Company,together with ZA Bank and ZA Insure,will create synergies,and jointly create greater value for customers' future digital wealth management experience by sharing technical strengths and cost advantages.

Outlook

ZhongAn Online will continue to adhere to its two-winged strategy of "Insurance + Technology". By upholding the principle of "growth with quality",the Company will strengthen its brand awareness,create long-term value for customers through its ecosystem-oriented insurance protection services and proprietary platforms,and at the same time,incorporate technology development and innovation across the whole insurance value chain and continuously optimize underwriting efficiency and the user experience. In addition,the Company will commercialize its insurance technology strengths in the domestic and overseas markets,and empower all upstream and downstream market players across the insurance industry value chain. This will enable ZhongAn Online to become the best partner for digital transformation and upgrading of the global insurance industry.

About ZhongAn Online P&C Insurance Co.,Ltd (HKEx: 6060)

ZhongAn Online P&C Insurance Co.,Ltd. ("ZA Online" or "the Company") is a leading online-only InsureTech company in China. Founded in October 2013,the Company adopts an ecosystem-oriented approach and focuses on customers' lives on the Internet,meeting customers' diversified protection needs and creating value for them through ecosystem partners and its proprietary platform. ZA Online seamlessly integrates technology across its insurance business,and now exports its technology to help other companies accelerate their growth. On 28 September 2017,ZA Online became the first Fintech company listed on the HKEx (Ticker: 6060) and since 2018,the Company started expanding its Fintech and InsureTech solutions to various international markets.