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2021 Annual Report專 業 讓 保 險 更 保 險EMPOWER YOUR INSURANCE BY EXPERTISEMISSION Diversifying economic risks to ensure a better life for allCORPORATE CULTURE OF CHINA RE GROUPCORE VALUES Integrity Expertise Cooperation AspirationVISION Developing a world-class comprehensive reinsurance group with sustainable development capabilities and core competitivenessBUSINESS PHILOSOPHY Prudence and innovation for sound and prosperous growth2China Reinsurance (Group) Corporation2021 Annual ReportFinancial Highlights6Honours and Awards8Statement from the Chairman10Management Discussion and Analysis16Directors, Supervisors, Senior Management and Employees64Corporate Governance Report75Report of the Board of Directors103Report of the Board of Supervisors119Contents3China Reinsurance (Group) Corporation2021 Annual ReportEmbedded Value124Independent Auditors Report134Financial Statements and Notes142Definitions288Corporate Information292Financial HighlightsHonours and AwardsStatement from the Chairman6China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL HIGHLIGHTSTotal liabilitiesRMB 397,852 millionYear-on-year increase of 13.5%Total equityRMB 102,587 millionYear-on-year decrease of 0.3%Gross written premiumsRMB 162,732 millionYear-on-year increase of 0.7%Net profitRMB 6,390 millionYear-on-year increase of 7.9%Net profit attributable to equity shareholders of the parent companyRMB 6,363 millionYear-on-year increase of 11.4%Net assets per share attributable to equity shareholders of the parent companyRMB 2.19Year-on-year increase of 0.1rnings per shareRMB 0.15Year-on-year increase of 11.4%Weighted average return on equity6.84%Increase by 0.50 percentage pointsTotal assetsRMB 500,439 millionYear-on-year increase of 10.3%Unit: RMB7China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL HIGHLIGHTSHighlights of financial information of the Group for the past five accounting years are extracted as below:Unit: in RMB millions, except for percentages and unless otherwise stated20212020Change (%)201920182017Total assets500,439453,57710.3396,638340,907242,800Total liabilities397,852350,67613.5299,660253,653167,430Total equity102,587102,901(0.3)96,97887,25475,370Gross written premiums162,732161,5740.7144,973122,257105,336Net profit6,3905,9247.96,6453,8995,336Net profit attributable to equity shareholders of the parent company6,3635,71111.46,0493,7305,256Earnings per share (RMB)0.150.1311.40.140.090.12Net assets per share attributable to equity shareholders of the parent company (RMB)2.192.190.12.051.841.75Weighted average return on equity (%)16.846.34Increase by 0.50 percentage points7.324.907.22Note: 1. Weighted average return on equity = Net profit attributable to equity shareholders of the parent company balance of weighted average equity.8China Reinsurance (Group) Corporation2021 Annual ReportHONOURS AND AWARDS China Re GroupThe awarded unitTitle of the honours and awards receivedAwards organisationChina Re Group2021 Ark Award for Insurance Company with High-quality DevelopmentSecurities Times2021 Ark Award for Excellent Social Responsibility Insurance Company11th China Securities Golden Bauhinia Awards Best Investment Value Award for Listed Companies in the 14th Five Year PlanHong Kong Ta Kung Wen Wei Media Group11th China Securities Golden Bauhinia Awards Best Investor Relations Management Listed Company“Best Insurance Company in Serving Six Priorities and Stability in Six Areas for the Year” in the election of Chinese Financial Institutions Gold Medal List the Golden Dragon PrizeFinancial NewsVision Awards Gold Award, “Top 50 Chinese Reports”, “Top 80 Reports in Asia-Pacific Region”, and “Top 100 Reports Worldwide”League of American Communications ProfessionalsNational Worker Pioneer (China Re Group Targeted Poverty Alleviation Liaison Office)All China Federation of Trade UnionsAdvanced Group of Fight Against Extreme Poverty in Qinghai Province (Party and Mass Work Department/Poverty Alleviation Work Leading Team)Qinghai Provincial Committee of the Communist Party of China, the Peoples Government of Qinghai ProvinceChina Re P&C10th Finance Sector “Golden Intelligence Award” Outstanding Property Insurance Company AwardJRJ.com10th Finance Sector “Golden Intelligence Award” Outstanding Financial Service Innovation AwardFinancial Industry Services Contribution Award on Six Stabilities and Six SecuritiesStockstar Award China Re P&C9China Reinsurance (Group) Corporation2021 Annual ReportHONOURS AND AWARDS China Continent Insurance China Re LifeThe awarded unitTitle of the honours and awards receivedAwards organisationChina Re LifeFintech and Digital Transformation Innovation Achievement Award China Re Life Policy Digital PlatformChina Institute of Communications, Qiushi hosted by Dot LiveJin Ri Bao China Insurance White Elephant List Annual Technology Empowering, Classic ProjectNowadays InsuranceChina Continent Insurance2021 Ark Award for Excellent Social Responsibility Insurance CompanySecurities Times“2021 China Insurance Service Innovation Summit” Classic Case in China Insurance Service Innovation “Continent Radar” Intelligent Claim PlatformChina Banking and Insurance NewsChina Re AMC2021 Ark Award for the Gold Medal Insurance Investment TeamSecurities Times2021 Best Public Brand Award in Chinas Asset Management OrganisationsModern Bankers Press“Gold Asset” Annual Insurance and Asset Management Product Outstanding Award China Re Huadian Infrastructure Debt Investment PlanShanghai Securities NewsHuatai Insurance AgencyBeijing Integrity EnterpriseBeijing Enterprise Evaluation Association China Re AMC Huatai Insurance AgencySTATEMENT FROM THE CHAIRMAN10China Reinsurance (Group) Corporation2021 Annual Report2021 was a milestone year in the history of the Communist Party of China (CPC) and the country, and also a year for China Re Group to launch its strategy of “14th Five-Year” Plan. Over the past year, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we scientifically formulated the new “One-Four-Five” strategy, achieving steady growth in premium volume and a solid market position. Our market share of the reinsurance business ranked first domestically, while our global ranking rose from the seventh to the sixth, and for the first time, we ranked among the Fortune Global 500. The operating efficiency was steadily improved and the business structure was continuously optimised, achieving remarkable results in serving the national strategies with effective risk prevention and control, thereby realising a good start of the “14th Five-Year” Plan.In 2021, China Re Group realised a written premium of RMB162,732 million, representing a year-on-year increase of 0.7% and net profit attributable to equity shareholders of the parent company of RMB6,363 million, representing a year-on-year increase of 11.4%. The business structure was further optimised, with domestic emerging business of P&C reinsurance accounting for 7.8%, representing a year-on-year increase of 0.9 percentage points; overseas business of P&C reinsurance accounting for 32.4%, representing a year-on-year increase of 1.5 percentage points; domestic protection-type business of life and health reinsurance accounting for 37.6%, representing a year-on-year increase of 6.5 percentage points; the non-motor business in primary P&C insurance accounting for 48.0%, representing a year-on-year increase of 4.5 percentage points. The aggregated solvency adequacy ratios of all operating entities in the insurance segment remained above 200%. We were rated “A (Excellent)” by A.M. Best and were rated “A” by S&P Global Ratings for consecutive years.In 2021, China Re Group adhered to the spirit of drawing a blueprint to the end, fully inherited the strategic reasonable core of “One-Three-Five” and refined it as the strategy of “One-Four-Five” with “One Core, Four Pivots and Five Upgrades” as its main content. “One Core” highlights the reinsurance business as the core, strengthens the core competitiveness as a national reinsurance team and focuses on the main business of reinsurance to promote the comprehensive layout of industry chains, consolidate our domestic leading position, and enhance our global influence, so as to better serve the national strategies and national well-being. “Four Pivots” are to provide an innovative product solution that integrates reinsurance, technologies and services, and enhance the capabilities in leading the industry through “product innovation”; become a key participant, resource integrator and service synthesizer in insurance-related industry chains through “platform-driver”; speed up the transformation towards the model of intelligent operations, reinsurance as primary insurance and ecological platform through “technological empowerment”; and continue to enhance our global competitiveness, better protect Chinas overseas interests, and in turn benefit domestic innovative development through “global linkage”. “Five Upgrades” are to achieve comprehensive improvement in the five major aspects of value, data, ecosystem, talents and culture, sparing no efforts to develop a world-class comprehensive reinsurance group with sustainable development capability and core competitiveness.STATEMENT FROM THE CHAIRMAN11China Reinsurance (Group) Corporation2021 Annual ReportSTATEMENT FROM THE CHAIRMAN12China Reinsurance (Group) Corporation2021 Annual ReportIn 2021, China Re Group prioritised serving the national strategies, and the sum insured for P&C insurance in serving the relevant key national strategies amounted to nearly RMB20 trillion, representing a year-on-year increase of 28%. The market share of health protection reinsurance serving the Healthy China strategy exceeded 40%, with nearly 200 new innovative products winning over 20 awards. We assisted in the construction of the national governance system and the “dual carbon” objective, providing assistance to Henans flood and other disaster events in no time and deeply participating in the catastrophe pilot projects in 16 provinces, municipalities and regions across the country. China Re Group served as the leading or sole reinsurer in over 80% of such projects, and successfully issued the first catastrophe bond in Hong Kong market. The innovative IDI business “Shanghai Model” was promoted nationwide, with a total guaranteed GFA of nearly 0.14 billion square metres and a total insured amount of nearly RMB500.0 billion. We provided comprehensive protection for nearly RMB1 trillion-worth of assets and 24 thousand front-line personnel of all domestic nuclear power generating units in operation, and assisted nuclear power enterprises to reduce carbon emissions by 302 million tons. We served the Healthy China strategy and offered insurance coverage of over RMB30 trillion for critical illnesses and long-term care for the government and urban and rural residents. As a major domestic reinsurer, we supported more than 50 “Hui Min Bao” (惠民保) projects, covering approximately 50% of policyholders in China, and offered reinsurance protection for the quality and safety liability of 0.8 billion doses of the inactivated COVID-19 vaccines in China as well as RMB10.0 billion risk protection for vaccine export transportation. We assisted in the rural revitalization strategy by expanding the poverty eradication insurance from Xunhua County, Qinghai to 28 provinces across the country, and helped Xunhua County in Qinghai Province to further consolidate the results of poverty alleviation. China Re Group undertook the national policy-supported agricultural insurance retrocession business to vigorously expand the reinsurance business of commercial agricultural insurance with risk protection of RMB110.0 billion, and supported the expansion of pilot projects of the total cost and income insurance for main grains and crops, covering nearly 200 major grain-producing counties nationwide. We assisted in the “Belt and Road” construction, that China Re Group acted as the chair unit and management organisation of the “Belt and Road” Reinsurance Community of the PRC. In its first year of operation, the “Belt and Road” Reinsurance Community provided special risk protection for RMB16.1 billion-worth of assets of 19 overseas interest projects of China. We also led the establishment of the “Belt and Road” Political Violence Insurance Consortium of the Lloyds, building an international leading position in the field of political violence insurance for overseas interests of China.In 2021, China Re Group issued the “Digital China Re 2.0” strategy to accelerate digital transformation. We persisted on the development logic of “gathering resources, building platforms and creating ecosystems”, further portrayed the blueprint of digital development, and continued to increase investment in technology. The average annual growth rate of related expenses during the period of “14th Five-Year” Plan would be no less than 15%. Achieving positive outcomes in technological innovation, our iterated and developed China Earthquake Catastrophe Model 3.5 became the only scientific research project in Chinas insurance industry that was selected for the National “13th Five-Year” Plan Technological Achievement Exhibition. Throughout the year, 20 new invention patents were accepted. The overall online business rate reached 85%, which was significantly better than the industry average.In 2021, China Re Group continued to improve its international layout and expand its first-mover advantage in internationalisation. Our overseas institutions have expanded to 11 countries and regions, with international business written premiums accounting for 18.9% and overseas investment assets accounting for 25.9%. The overseas business of P&C reinsurance achieved underwriting profits in all aspects, realising stability in business, operation and team in the three years since the acquisition of Chaucer. Our operating performance constantly outperformed the overall level of the Lloyds market. With the “Belt and Road” business as the link, we strengthened the coordinated development of domestic and overseas businesses.STATEMENT FROM THE CHAIRMAN13China Reinsurance (Group) Corporation2021 Annual ReportLooking ahead, with the opportunities and challenges, Chinas macro-economic foundation is solid and positive, however, China falls far behind global average in terms of insurance density and depth, and the coverage of insurance products has yet to keep up with the actual needs of people. More stringent regulations create a favourable environment, that the insurance industry has entered a new development stage of supply optimisation, orderly competition and standardised operation. The functional positioning of insurance companies has changed from a pure risk-taker to a comprehensive risk manager, reshaping the trading model in a customer-oriented manner, supporting competitiveness with ecosystem construction, and seizing the blue ocean market with technological empowerment. At the same time, risks and challenges are increasing. The complex and severe global environment and the accelerating evolution of tremendous changes, coupled with the recurring COVID-19 pandemic, the volatile capital market and extreme climate changes causing frequent catastrophes, all these factors have led to a slowdown in premium growth and weakened profitability, posing great pressure on the transformation of Chinas insurance industry.In response to the market trend, China Re Group adheres to the principle of stability, focusing on the main responsibility and strengthening the main business to ensure a stable market position, steady growth in performance, and robust risk control. We strive to be in the lead in terms of product innovation and digital transformation, excel in ecological layout and track development, and improve efficiency through refined management and synergy. Leveraging the characteristics of our reinsurance main business and our advantages in comprehensive development, we fully cover major national strategies, with a focus on three key areas, namely agricultural insurance, Hui Min Bao and new energy vehicle insurance, in order to seize new development opportunities as we strengthen our services to national strategies. Attaching equal importance to increasing income and reducing expenditure, we secure the fundamentals of automobile insurance, boost the layout of non-automobile insurance, seize the opportunities in the health and aged-care market, steadily develop our international business, and actively expand third-party asset management, with a view to achieving constant improvement in efficiency as we enhance value creation. Focusing on innovative products developed in areas such as digital technology, green and low-carbon, health and aged-care, and inclusive livelihood, we consolidate our industry position as we bolster product innovation and technological empowerment through digital transformation and further cost reduction, efficiency improvement and revenue increase. In addition, the constant advancement of our capabilities in risk early warning, identification, prevention and mitigation ensures that risks are “clearly seen, accessible and manageable” to defend our bottom line of safety as we strengthen risk prevention and control.In conclusion, in 2022, China Re Group will strictly follow the general principle of “seeking progress while maintaining stability, enhancing value”, implement the operational approach of “stabilising growth, adjusting structure, controlling risks, improving efficiency”, and secure the fundamentals with new momentum for active adaptation to industry transformation while expediting the high-quality development of the Company in order to generate sustainable and stable investment returns for shareholders.Yuan LinjiangChairmanManagement Discussion and Analysis16China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISOVERVIEWThe Group is engaged in P&C reinsurance, life and health reinsurance, primary P&C insurance, asset management, insurance intermediary and other businesses. We operate our domestic and overseas P&C reinsurance business primarily through China Re P&C, Chaucer and Singapore Branch; our domestic and overseas life and health reinsurance business primarily through China Re Life, China Re HK and Singapore Branch; our domestic and overseas primary P&C insurance business primarily through China Continent Insurance and Chaucer. We utilise and manage our insurance funds in a centralised and professional manner primarily through China Re AMC; our insurance intermediary business primarily through Huatai Insurance Agency. In addition, the Group Company manages domestic and overseas P&C reinsurance business through China Re P&C, and manages life and health reinsurance business through China Re Life.17China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISKey Operating DataThe following table sets forth the key operating data of China Re Group for the reporting periods indicated:180,000150,000120,00090,00060,00030,00000.7%7.0%3.6%9.7%4.9%7.0%(RMB millions)162,73251,95469,37443,49616,27514,445161,57448,57366,95748,16717,12213,50020212020Gross written premiumsP&C reinsurance1Life and health reinsurance1Primary P&C insurance1Total investment income2Net investment income4Total investment yield (%)3Net investment yield (%)52020 6.012020 4.742021 5.172021 4.59Decrease by 0.84 percentage pointsDecrease by 0.15 percentage pointsNotes: 1. Gross written premiums for each business segment do not consider inter-segment eliminations, in which:the businesses of P&C reinsurance segment mainly include domestic P&C reinsurance business, overseas P&C reinsurance and Chaucer business, CNIP business and legacy P&C reinsurance business;the businesses of life and health reinsurance segment mainly include domestic life and health reinsurance business, overseas life and health reinsurance business and legacy life and health reinsurance business; andthe business of primary P&C insurance segment refers to the property and casualty insurance business operated by China Continent Insurance.2. Total investment income = Investment income share of profits of associates interest expenses on securities sold under agreements to repurchase.3. Total investment yield = Total investment income average of total investment assets as at the beginning and end of the period.4. Net investment income = Interest dividend rental income share of profits of associates.5. Net investment yield = Net investment income average of total investment assets as at the beginning and end of the period.18China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISIn 2021, China Re Group adhered to the general tone of “making progress while ensuring stability”, insisted on the operational policy of “stabilising growth, adjusting structure, controlling risk, and increasing profitability”. We continued to implement the new development concept, meet the new development requirements and construct the new development pattern, therefore achieving a good opening of high-quality development for the “14th Five-Year” Plan.Our core reinsurance business maintained its solid market position and we maintained the leading market share in both domestic P&C reinsurance market and life and health reinsurance market. We also maintained leading market share in domestic primary P&C insurance business.In 2021, we made steady progress in operation and management. First, the premium volume grew steadily. The Groups gross written premiums amounted to RMB162,732 million, representing a year-on-year increase of 0.7%; we achieved steady growth in domestic P&C reinsurance and life and health reinsurance businesses while maintained rapid growth in overseas business; in 2021, the Group was recognised as one of the “Top 500 Global Companies” by FORTUNE magazine. Second, the operation results improved steadily. The net profit amounted to RMB6,390 million, representing a year-on-year increase of 7.9%; the weighted average return on equity reached 6.84%, representing a year-on-year increase of 0.50 percentage points. Third, the structural adjustment advanced constantly. The Groups premium income from overseas businesses accounted for 18.9%, representing a year-on-year increase of 2.3 percentage points, among which, the P&C reinsurance overseas businesses accounted for 32.4%, representing a year-on-year increase of 1.5 percentage points; the protection-type business in life and health reinsurance business accounted for 37.6%, representing a year-on-year increase of 6.5 percentage points; the non-motor business in primary P&C insurance business accounted for 48.0%, representing a year-on-year increase of 4.5 percentage points. Fourth, the overall risk was under control. The risk management system continuously improved, the risk management and control measures steadily enhanced, and the solvency and international ratings remained stable. During the Reporting Period, we maintained our Financial Strength Rating of “A (Excellent)” by A.M. Best and were rated “A” by S&P Global Ratings, with our financial condition remaining stable.In 2021, the Groups total investment yield was 5.17% and the net investment yield was 4.59%, both representing a year-on-year decrease. Affected by the downturn of domestic and overseas equity markets, there was a year-on-year decrease in the investment income of equity and funds, thus a year-on-year decrease in the total investment income. As the scale of assets reached a year-on-year increase, the total investment yield resulted in a year-on-year decrease. Affected by the downturn in interest rates, the coupon rate for reinvestment at maturity decreased while the scale of assets increased year-on-year, resulting in a year-on-year decrease in the net investment yield. Core solvency adequacy ratio6005004003002001000(%) As at 31 December 2020 As at 31 December 2021 China Re Group Group Company China Re P&C China Re Life China Continent Insurance185189600599158169187195368338 As at 31 December 2020 As at 31 December 20216005004003002001000(%)Aggregated solvency adequacy ratio China Re Group Group Company China Re P&C China Re Life China Continent Insurance20921560059921423121522936833819China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISKey Financial IndicatorsThe following table sets forth the key financial indicators of China Re Group for the reporting periods indicated:180,000144,000108,00072,00036,0000(RMB millions)0.7%3.7%7.9.42,7327,5696,3906,363161,5747,2985,9245,711Gross written premiumsProfit before taxNet ProfitNet profit attributable to equity shareholders of the parent company20202021Earnings per share (RMB)Weighted average return on equity (%)10.000.030.060.090.120.1520206.342021 0.152021 6.8411.4%Increase by 0.50 percentage points20200.13Note: 1. Weighted average return on equity = Net profit attributable to equity shareholders of the parent company balance of weighted average equity.In 2021, net profit attributable to equity shareholders of the parent company of the Group amounted to RMB6,363 million, representing a year-on-year increase of 11.4%, which was mainly due to improvement of the underwriting profits of the overseas business as a result of the structure optimisation and rates increase of the overseas business.500,439397,852102,587453,577350,676102,901Total assetsTotal liabilitiesTotal equity20202021550,000440,000330,000220,000110,000010.3%0.3.5%(RMB millions)2020 2.192021 2.190.1%Net assets per share attributable to equity shareholders of the parent company (RMB)Note: Due to rounding adjustments, figures shown may not be arithmetic aggregation of the figures preceding them.20China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISP&C REINSURANCE BUSINESSThe business of P&C reinsurance segment mainly includes domestic P&C reinsurance business, overseas P&C reinsurance and Chaucer business, CNIP business and legacy P&C reinsurance business.In 2021, we endeavoured to strengthen our position as a leading domestic reinsurer. We continued to facilitate the establishment of platforms for domestic commercial insurance business and national policy-oriented business, strengthen the innovation-driven model and technological application, and accelerate the implementation of strategic initiatives. We continued to upgrade our customer service system, consistently strengthened the capability of our underwriting team, and enhanced our technical capabilities. We maintained stable development in emerging business sectors such as construction inherent defects insurance (IDI), short-term health insurance, Chinese interest abroad projects insurance, construction surety bond insurance, catastrophe insurance, intellectual property insurance and safety production liability umbrella excess of loss insurance, and thus our business structure continued to optimise.For overseas business, we continued to take high-quality development as the long-term development goal of our international business in optimising management mechanism and strengthening risk management and control. Our operating results improved significantly with an adjusted business portfolio. We deepened expansion in global market, strengthened team building, reinforced core channels, and improved service capabilities. We continued to promote the synergy between domestic and overseas businesses, which formed concerted forces to enhance domestic and overseas operating entities underwriting capacity, facilitate business development, optimise the risk portfolio and promote the Belt and Road related business development.In 2021, gross written premiums from our P&C reinsurance segment amounted to RMB51,954 million, representing a year-on-year increase of 7.0% and accounting for 31.5% of gross written premiums of the Group (before inter-segment eliminations). Net profit amounted to RMB2,669 million, representing a year-on-year increase of 47.9%, and the weighted average return on equity reached 9.76%. The combined ratio was 99.39%, representing a year-on-year decrease of 2.72 percentage points, of which the loss ratio was 65.68%, representing a year-on-year increase of 0.62 percentage points; the expense ratio was 33.71%, representing a year-on-year decrease of 3.34 percentage points. The decrease in the combined ratio was mainly due to the significantly improved underwriting performance of overseas business as a result of (i) high combined ratio of overseas business in the same period last year as affected by the pandemic; and (ii) optimised business structure and controlled business risks as we seized the opportunity of rising rates in overseas markets.21China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISBusiness AnalysisDomestic P&C Reinsurance BusinessDomestic P&C reinsurance business mentioned in this section refers to domestic P&C reinsurance business operated by China Re P&C. In 2021, reinsurance premium income from our domestic P&C reinsurance business amounted to RMB35,027 million, representing a year-on-year increase of 5.0%. The combined ratio was 99.95%, representing a year-on-year increase of 0.17 percentage points, which was mainly due to the impact of the comprehensive reform of motor insurance.The following table sets forth the loss ratio, expense ratio and combined ratio of our domestic P&C reinsurance business for the reporting periods indicated:For the year ended 31 December20212020ChangeLoss ratio (%)68.6263.22Increase by 5.40 percentage pointsExpense ratio (%)31.3336.56Decrease by 5.23 percentage pointsCombined ratio (%)99.9599.78Increase by 0.17 percentage pointsIn terms of types of reinsurance arrangement and forms of cession, our domestic P&C reinsurance business primarily consisted of treaty reinsurance and proportional reinsurance, which was generally in line with the business mix of the domestic P&C reinsurance market.In terms of business channels, by virtue of our good cooperation relationship with domestic clients, the majority of our domestic P&C reinsurance business was on primary basis.22China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISThe following table sets forth the reinsurance premium income from our domestic P&C reinsurance business by type of reinsurance arrangement for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberType of reinsurance arrangement20212020AmountPercentage (%)AmountPercentage (%)Treaty reinsurance32,82893.730,90992.7Facultative reinsurance12,1996.32,4427.3Total35,027100.033,351100.0Note: 1. Pursuant to the definition of facultative reinsurance business in the Provisions on the Administration of Reinsurance Business (Decree No.8 of the CBIRC in 2021), facultative obligatory reinsurance was no longer included in facultative reinsurance business in 2021. For better comparability, after excluding the written premiums of facultative obligatory reinsurance for the reporting periods indicated, the premium of facultative reinsurance business for 2021 amounted to RMB1,144 million, representing a year-on-year increase of 8.8% from comparable calibre.The following table sets forth the reinsurance premium income from our domestic P&C reinsurance business by form of cession for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberForm of cession20212020AmountPercentage (%)AmountPercentage (%)Proportional reinsurance34,67999.032,79898.3Non-proportional reinsurance3481.05531.7Total35,027100.033,351100.023China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISThe following table sets forth the reinsurance premium income from our domestic P&C reinsurance business by business channel for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberBusiness channel20212020AmountPercentage (%)AmountPercentage (%)Primary32,71393.431,16393.4Via broker2,3146.62,1886.6Total35,027100.033,351100.0Lines of BusinessAs the largest domestic specialised P&C reinsurance company in the PRC, we offer a wide variety of P&C reinsurance coverage catering to the business characteristics of the PRC market. Our lines of business cover a wide range of P&C insurance types in the PRC, mainly including motor, agriculture, commercial property, liability and engineering insurance. We actively captured the opportunities brought by the transformation and development of the market, vigorously developed non-motor reinsurance business. The gross written premiums of non-motor reinsurance business in our domestic P&C reinsurance business for 2021 amounted to RMB26,928 million, representing a year-on-year increase of 14.4%. Non-motor insurance business accounted for 76.9% of our overall gross written premiums, representing a year-on-year increase of 6.3 percentage points, further optimising the business structure. In particular, we achieved a rapid growth in emerging business sectors such as the construction inherent defects insurance (IDI), short-term health insurance, Chinese interest abroad projects insurance, construction surety bond insurance, catastrophe insurance, intellectual property insurance and safety production liability umbrella excess of loss insurance, with reinsurance premium income recorded at RMB2,096 million, representing a year-on-year increase of 29.6%, which further consolidated our development advantages in emerging business sectors.24China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISThe following table sets forth the reinsurance premium income from our domestic P&C reinsurance business by line of business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberLine of business20212020AmountPercentage (%)YoY Change (%)AmountPercentage (%)Motor8,09923.1(17.5)9,81429.4Agriculture8,06223.03.07,82523.5Commercial property6,78319.425.25,41816.2Liability4,92414.129.53,80311.4Engineering2,6907.727.12,1166.3Others14,46912.72.14,37513.2Total35,027100.05.033,351100.0Note: 1. Others include, among others, guarantee, cargo, marine hull, speciality and accident insurance.Motor reinsurance. In 2021, reinsurance premium income from motor insurance amounted to RMB8,099 million, representing a year-on-year decrease of 17.5%, mainly due to the decline in the premium volume of the motor insurance business as a result of the influence of the comprehensive reform of motor insurance in primary insurance market.Agriculture reinsurance. In 2021, reinsurance premium income from agriculture insurance amounted to RMB8,062 million, representing a year-on-year increase of 3.0%. We are actively exploring the dual development of developing commercial agriculture insurance and strengthening policy agriculture insurance, promoting innovation of our agricultural insurance products.Commercial property reinsurance. In 2021, reinsurance premium income from our commercial property insurance amounted to RMB6,783 million, representing a year-on-year increase of 25.2%, mainly due to the increase in premiums ceded to reinsurers of certain customers.Liability reinsurance. In 2021, reinsurance premium income from liability insurance amounted to RMB4,924 million, representing a year-on-year increase of 29.5%, mainly due to the fact that we actively captured opportunities in the liability insurance market and stepped up investment in research and development and efforts in promotion of new types of liability insurance products such as construction inherent defects insurance (IDI).Engineering reinsurance. In 2021, reinsurance premium income from engineering insurance business amounted to RMB2,690 million, representing a year-on-year increase of 27.1%, mainly due to the increase in premiums ceded to reinsurers of certain customers.25China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISClients and Client ServicesIn 2021, we continued to maintain good client relationships. We maintained stable cooperation relationships with major P&C insurance companies in the PRC and strengthened our relationships through business cooperation, exchange of technical know-how and client services. We continued to thoroughly adhere to our business philosophy of “customer-oriented & innovation-driven reinsurance” by focusing on clients needs and improving the establishment of a client service system. We actively explored and implemented innovative approaches to client services. As at the end of the Reporting Period, we maintained business relationships with 84 domestic P&C insurance companies, covering 96.6% of P&C insurance companies.Overseas P&C Reinsurance and Chaucer BusinessOverseas P&C reinsurance business in this section includes overseas P&C reinsurance business operated by China Re P&C and Singapore Branch, as well as the legacy business of China Re Syndicate 2088. Chaucer business described in this section refers to overseas P&C reinsurance and overseas primary P&C insurance business operated by the entities of Chaucer.In 2021, we seized the overall trend of rising rates to expand the scale of our businesses with prominent advantages and actively adjusted our business portfolio, which resulted in enhanced business quality and improved operating efficiency. Gross written premiums from our overseas P&C reinsurance and Chaucer business amounted to RMB16,824 million, representing a year-on-year increase of 12.0%. The combined ratio was 97.32%, representing a year-on-year decrease of 11.40 percentage points.The following table sets forth the loss ratio, expense ratio and combined ratio of our overseas P&C reinsurance business and Chaucer business for the reporting periods indicated:For the year ended 31 December20212020ChangeLoss ratio (%)58.4769.79Decrease by 11.32 percentage pointsExpense ratio (%)38.8538.93Decrease by 0.08 percentage pointsCombined ratio (%)97.32108.72Decrease by 11.40 percentage points26China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISOverseas P&C Reinsurance BusinessApart from Chaucer business, gross written premiums from our overseas P&C reinsurance business amounted to RMB3,487 million in 2021, representing a year-on-year decrease of 12.1%. The decrease in written premiums was mainly due to (i) our active adjustment of business structure and optimisation of business portfolio and (ii) the China Re Syndicate 2088 business completed reinsurance to close.The following table sets forth the loss ratio, expense ratio and combined ratio of our overseas P&C reinsurance business for the reporting periods indicated:For the year ended 31 December20212020ChangeLoss ratio (%)76.1787.06Decrease by 10.89 percentage pointsExpense ratio (%)28.5832.82Decrease by 4.24 percentage pointsCombined ratio (%)104.75119.88Decrease by 15.13 percentage pointsIn terms of types of business, treaty reinsurance continued to dominate our overseas P&C reinsurance business.The following table sets forth the gross written premiums from our overseas P&C reinsurance business by type of business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberType of business20212020AmountPercentage (%)AmountPercentage (%)Treaty reinsurance3,31395.03,56089.7Facultative reinsurance2096.02987.5Primary insurance(35)(1.0)1102.8Total3,487100.03,968100.0In terms of lines of business, our overseas P&C reinsurance business mainly provided coverage for non-marine, specialty and liability reinsurance. Business portfolio consisted mainly of short tail business.27China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISThe following table sets forth the gross written premiums from our overseas P&C reinsurance business by line of business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberLine of business20212020AmountPercentage (%)YoY change (%)AmountPercentage (%)Non-marine2,52572.4(6.9)2,71168.3Specialty44312.7(18.6)54413.7Liability1975.7(39.4)3258.2Others13229.2(17.0)3889.8Total3,487100.0(12.1)3,968100.0Note: 1. Others include, among others, whole account, motor, credit guarantee and agriculture reinsurance.In terms of business channels, we adhered to the principle of long-term cooperation and mutual benefit to establish a balanced and stable network of business channels. We continued to use brokers as our main source of business, focused on consolidating and strengthening cooperation with reputable international brokers, while exploring business opportunities with distinctive regional brokers. At the same time, we continuously strengthened our direct cooperation with quality clients and built up closer business connections.In terms of clients, we continuously developed quality clients based on our management philosophy of prioritising profitability while valuing service quality. We established long-term and stable business relationships with quality and core clients to target their profitable ceding business. We established comprehensive cooperation relationships with various internationally renowned major ceding companies and increased our efforts in developing quality regional clients by leveraging the geographical advantages of different international platforms which all contributed to significant results in expansion of quality client base.In terms of service ability, our quotation ability continued to improve, and our service quality received more client recognition. Leveraging our talents and technology advantages as well as years of experience in international business operations, we were able to better serve domestic clients in the PRC by providing more products and cooperation solutions for international reinsurance practise, and exert our advantages of the synergy between domestic and overseas business especially in promoting the Belt and Road related business development and in safeguarding the overseas interests of Chinese clients.28China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISChaucer BusinessIn 2021, the gross written premiums from Chaucer amounted to RMB13,337 million, representing a year-on-year increase of 20.7%. The combined ratio was 94.81%1, representing a year-on-year decrease of 8.83 percentage points, the return on economic capital2 (ROEC) was 14.8%. The primary reason for the decrease in combined ratio was that: by leveraging its own strengths, Chaucer seized the overall trend of rising rates by supplementing its capital and underwriting capabilities timely to expand its business, especially its businesses lines of property and specialty reinsurance, political violence insurance, marine insurance, primary P&C insurance and primary liability insurance, further expanding the scale of its advantageous businesses. At the same time, we made efforts to improve the policy terms and conditions, and took initiatives to adjust the underperforming businesses, hence our overall business quality has further been improved. Although affected by the catastrophic loss of the market in 2021, the effect was controllable and within expectation. The premium of contracts led by Chaucer accounted for approximately 52% of its overall gross written premiums. Chaucer is one of a limited number of Lloyds market entities that gained market recognition and support in respect of both of its underwriting and claims fronts.The following table sets forth the loss ratio, expense ratio and combined ratio of Chaucer business for the reporting periods indicated:For the year ended 31 December20212020ChangeLoss ratio (%)52.4861.91Decrease by 9.43 percentage pointsExpense ratio (%)42.3341.73Increase by 0.60 percentage pointsCombined ratio (%)94.81103.64Decrease by 8.83 percentage pointsNotes: 1. Under the UK GAAP, the combined ratio of Chaucer was 91.20%, which was different from that under the International Accounting Standards mainly due to the different treatment for exchange gains and losses as well as reserve discounting and risk margin.2. Return on economic capital = the net profit of Chaucers statement under the UK GAAP (Management Information)/economic capital.In terms of types of business and lines of business, Chaucer business consists of treaty reinsurance, facultative reinsurance and primary insurance. Of which treaty reinsurance business primarily provided coverage for property, specialty and casualty reinsurance worldwide; and facultative reinsurance and primary insurance businesses primarily provided coverage for marine, space and aviation, political risk/credit, political violence, energy, property and casualty insurance worldwide.29China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISThe following table sets forth the gross written premiums from Chaucer business by type of business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberType of business20212020AmountPercentage (%)AmountPercentage (%)Treaty reinsurance5,06538.03,44131.1Facultative reinsurance2,08815.72,62023.7Primary insurance6,18446.34,98845.2Total13,337100.011,049100.0The following table sets forth the gross written premiums from Chaucer business by line of business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberLine of business20212020AmountPercentage (%)YoY change (%)AmountPercentage (%)Casualty and political risk/credit insurance3,71127.817.83,14928.5Marine, energy, space and aviation, nuclear insurance2,87321.617.52,44622.1Property and political violence insurance2,41918.127.21,90117.2Others14,33432.522.03,55332.2Total13,337100.020.711,049100.0Note: 1. Others mainly refer to global treaty reinsurance business, including, among others, property treaty reinsurance, speciality treaty reinsurance and casualty treaty reinsurance.30China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISIn terms of business channels, the broker channel is the main source of business of Chaucer. We continued to consolidate our business relationships with major international brokers, develop further cooperation with regional brokers while actively expanding our underwriting agency channels. In addition, we further strengthened direct connection with our clients and sought to build closer business relationships.In terms of professional capability, we have a management team that has rich experience in insurance sector. The current senior management team has an average term in office of Chaucer for approximately 17 years, and has an entrepreneurial approach to business. We deliver customised risk solutions to the market with more than 110 experienced underwriters having distinctive capabilities across 45 specialty lines, including political risk and nuclear insurance, etc. We also have an outstanding claims team with over 100 years of claims handling experience in London market capable of dealing with the most complex claims, which effectively handles approximately 10,000 claims each year. In addition, we operate an Enterprise Risk Management Framework to ensure the commercially effective management of risks in the business. The Framework comprises five components: strategy, governance, appetite, assessment and reporting. Together, these components set out the risk management internal processes, controls and responsibilities in place throughout the organisation to achieve an effective risk culture.In terms of service platforms, with headquarters in London, and international branches for Europe, the Middle East and North Africa, Latin America and Asia, Chaucer protects clients worldwide. We provide our clients with a range of flexible business platforms to choose from. On one hand, membership of Lloyds allows Chaucer to take advantage of Lloyds strong rating and excellent brand reputation to provide risk coverage to our clients in over 200 countries and territories worldwide. Our underwriting capacity at Lloyds exceeded GBP1.1 billion, making us one of the leading platforms with substantial contract leadership capabilities in Lloyds market. In response to Brexit, Syndicates 1084 and 1176 under Chaucer carried out underwriting business through Lloyds Europe located in Brussels, Belgium in 2021. On the other hand, CIC provides company market platforms. CIC is also eligible to write excess and surplus lines business in the United States and provides Chaucer with continued access to the EU markets to offer customers more flexible options after Brexit. A branch of CIC established in Bermuda provides professional underwriting services to North American customers through professional reinsurance products such as property insurance, liability insurance and specialty insurance. In October 2021, S&P Global Ratings raised the long-term credit and financial rating of CIC from A- to A, fully reflecting the financial capability of CIC. Furthermore, the brand strength and global reputation of China Re Group have brought Chaucer many new business opportunities, including providing underwriting support to the Belt and Road related enterprises.In terms of product innovation, we increased investment in this aspect and endeavoured to leverage digital solution to provide innovative products while offering more intelligent and efficient underwriting capabilities. For example, developing and applying a next-generation underwriting platform for high-volume specialty products, and integration into business as usual of the first phase of Chaucers new cloud-based policy administration system in 2020.CNIP BusinessThe Group Company, together with China Re P&C and China Continent Insurance, underwrites global nuclear insurance business via CNIP. In 2021, our reinsurance premium income from business via the CNIP platform amounted to RMB131 million.31China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISFinancial AnalysisThe following table sets forth the selected key financial data of our P&C reinsurance segment for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 December20212020Change (%)Gross written premiums51,95448,5737.0Less: Premiums ceded to reinsurers and retrocessionaires(4,454)(4,268)4.4Net written premiums47,50144,3057.2Changes in unearned premium reserves(2,111)(1,423)48.3Net premiums earned45,39042,8825.9Reinsurance commission income5725415.7Investment income3,3003,621(8.9)Exchange gains/(losses), net21367217.9Other income14512615.1Total income49,62047,2385.0Claims and policyholders benefits(29,812)(27,897)6.9Handling charges and commissions(13,766)(14,735)(6.6)Finance costs(835)(604)38.2Other operating and administrative expenses(2,486)(2,101)18.3Total benefits, claims and expenses(46,899)(45,337)3.5Share of profits and losses of associates32916895.8Profit before tax3,0502,06847.5Income tax(380)(262)45.0Net profit2,6691,80547.9Note: Due to rounding adjustments, figures shown may not be arithmetic aggregation of the figures preceding them.32China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISGross Written PremiumsGross written premiums of our P&C reinsurance segment increased by 7.0% from RMB48,573 million in 2020 to RMB51,954 million in 2021, mainly because (i) domestic businesses seized market opportunities and adjusted business structures to achieve growth in the non-motor reinsurance business; (ii) the Chaucer business increased. Chaucer leveraged its own professional strength and seized the opportunity of the overall trend of rising rates, each primary line of business thus achieved growth.Premiums Ceded to Reinsurers and RetrocessionairesPremiums ceded to reinsurers and retrocessionaires for our P&C reinsurance segment increased by 4.4% from RMB4,268 million in 2020 to RMB4,454 million in 2021, mainly due to the adjustment in retrocession arrangements and the increase in retained premiums.Investment IncomeInvestment income from our P&C reinsurance segment decreased by 8.9% from RMB3,621 million in 2020 to RMB3,300 million in 2021. For details of analysis on changes of investment income, please refer to relevant contents in asset management business segment.Claims and Policyholders BenefitsClaims and policyholders benefits for our P&C reinsurance segment increased by 6.9% from RMB27,897 million in 2020 to RMB29,812 million in 2021, mainly due to the impact of the comprehensive reform of motor insurance and major risk events which led to the corresponding increase in claims and policyholders benefits.Handling Charges and CommissionsHandling charges and commissions for our P&C reinsurance segment decreased by 6.6% from RMB14,735 million in 2020 to RMB13,766 million in 2021, mainly due to the impact of changes in the conditions of the undertaking business.Share of Profits and Losses of AssociatesShare of profits and losses of associates for our P&C reinsurance segment increased by 95.8% from RMB168 million in 2020 to RMB329 million in 2021, mainly due to the increase in profits of associates in 2021.Net ProfitAs a result of improved underwriting profits and the foregoing reasons, net profit for our P&C reinsurance segment increased by 47.9% from RMB1,805 million in 2020 to RMB2,669 million in 2021.33China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISLIFE AND HEALTH REINSURANCE BUSINESSThe life and health reinsurance segment comprises the life and health reinsurance business operated by China Re Life, China Re HK and Singapore Branch, as well as the legacy life and health reinsurance business managed by the Group Company through China Re Life.In light of COVID-19 pandemic and other factors, the global economic recovery in 2021 was slow and uneven. The domestic economy faced the pressures of decreased demand supply shocks, and weakening expectations. Following the growth halt of the traditional agent channel business and transformation of insurance products, the domestic life insurance industry experienced sharply negative growth in new premiums, and the growth rate of health insurance premiums also experienced a slowdown. We actively overcame the adverse impact in the industry, took the initiative for innovation development and remained steady development of our core business. We continued to optimise our business structure, maintain stable growth of profitability through asset-liability synergy, and effectively managed risks on the whole. We strategically developed the protection-type reinsurance business, facilitated the supply-side structural reform of the industry with “Product ” and “Data ” strategies and effectively managed business risks. We were helped by China Association of Actuaries for the compilation project of the Table of Incidence Rate of Accidental Injury Experience in China Insurance Industry (2021) ( 中國保險業意外傷害經驗發生率表(2021) ), proactively participated in a number of local governments inclusive health insurance programmes, explored innovative insurance payment model for specialty drugs, and promoted the integration of health insurance products and health industry. We achieved diversified development in savings-type reinsurance business, strengthened coordinated innovation in domestic and overseas markets, and attached great importance to cost control and asset-liability management. We developed financial reinsurance business under the premise of compliance and improved management of existing business. We continued paying close attention to the compliance risk and credit risk of our counterparties. China Re HK has fully brought into play its advantages in the coordination of domestic and overseas markets to actively expand its foreign-currency savings-type business, providing reinsurance solutions with China Res characteristics for Hong Kong, Singapore, Japan and surrounding markets. We are in a solid competitive position in both the mainland and Hong Kong markets. In the mainland market, we have maintained the highest proportion of reinsurance contracts being entered into as leading reinsurer in all reinsurance contracts.In 2021, reinsurance premium income from our life and health reinsurance segment amounted to RMB69,374 million, representing a year-on-year increase of 3.6% and accounting for 42.1% of the Groups gross written premiums (before inter-segment eliminations). Net profit amounted to RMB2,710 million, representing a year-on-year increase of 3.7%, and weighted average return on equity reached 10.80%, of which reinsurance premium income from China Re Life (consolidated with China Re HK) amounted to RMB69,302 million, representing a year-on-year increase of 4.2%; total written premiums (“TWPs”) amounted to RMB74,486 million (including TWPs of RMB5,184 million from savings-type non-insurance business), representing a year-on-year increase of 6.0%.Considering the business significance and operational independence of China Re Life (consolidated with China Re HK), and given that the reinsurance premium income from China Re Life (consolidated with China Re HK) is the main part of the whole life and health reinsurance business segment, unless otherwise stated, references to our life and health reinsurance business in the business analysis in this section shall be the business of China Re Life (consolidated with China Re HK).34China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISBusiness AnalysisIn terms of business lines, the protection-type reinsurance business grew at a steady pace, the overseas business saw a stable growth as the Company prioritised the development of savings-type reinsurance business in low-cost overseas markets, and the financial reinsurance business recorded an increase compared to that of the previous year.The following table sets forth the reinsurance premium income from our life and health reinsurance business by business line for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberBusiness line20212020AmountPercentage (%)YoY change (%)AmountPercentage(%)Domestic protection-type reinsurance26,04237.625.920,68831.1Domestic savings-type reinsurance4,5146.5(62.3)11,98118.0Domestic financial reinsurance24,78235.811.122,31033.5Domestic in total55,33879.90.754,97982.6Overseas savings-type reinsurance13,75719.923.211,16316.8Other overseas business2070.3(44.9)3760.6Overseas in total13,96420.12111,53917.4Total69,302100.04.266,518100.0In addition, we continued developing savings-type non-insurance business on the precondition of ensuring our business margin. The following table sets forth the TWPs of the savings-type non-insurance business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberNon-insurance business20212020AmountPercentage (%)YoY change (%)AmountPercentage (%)Domestic savings-type non-insurance5,15499.439.53,69498.9Overseas savings-type non-insurance300.6(25.0)401.1Total5,184100.038.93,734100.035China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISDomestic Life and Health Reinsurance BusinessThe domestic life and health reinsurance business described in this section refers to the domestic life and health reinsurance business operated by China Re Life.In 2021, the reinsurance premium income from our domestic life and health reinsurance business amounted to RMB55,338 million, representing a year-on-year increase of 0.7%, which basically remained stable compared to the same period last year, and the TWPs amounted to RMB60,492 million (including TWPs of RMB5,154 million from savings-type non-insurance business), representing a year-on-year increase of 3.1%.In respect of the protection-type reinsurance business, we successfully made progress while maintaining stable growth amidst challenges. The industry has experienced a growth downturn with a lack of innovation and confidence. The sales of new critical illness insurance products remained weak due to a shortage of manpower in agent channels while the development of mid-end medical care market became sluggish due to an impact of Hui Min Bao (惠民保) business. After scientifically assessing the prospects of the industry, the Company proposed the overall strategy of “seeking progress while maintaining stable growth, strengthening stability based on progress”. With such strategy, we countered challenges through implementing polices in a precise manner, thereby achieving growth in both business scale and profitability. In 2021, our reinsurance premium income amounted to RMB26,042 million, representing a year-on-year increase of 25.9%. Of which, reinsurance premium income of RMB11,150 million was from the yearly renewable term reinsurance business1 and RMB4,870 million was from the mid-end medical care insurance business. We adhered to the following principles: (i) We remained efficiency-centric and continued to put our key clients and key businesses into high priority. We accurately grasped the major business opportunities and promoted the innovative YRT business plan, as well as secured profitable contracts with key clients. (ii) We cultivated potential markets by way of traditional innovation. We tapped into the market of new critical illness insurance while sticking to bottom-line thinking in the long-term medical insurance field. We committed to the development of long-term care insurance products and have successfully launched more than 10 products throughout the year. (iii) We carried out industrial integration and innovation, achieving strategic breakthrough in Hui Min Bao and various innovative payment methods. In respect of the “Hui Min Bao” business, we provided reinsurance solutions and quotations for 97 cities, and achieved reinsurance cooperation in 50 products, covering more than 50 million people. As the innovative payment methods thrived, we explored opportunities in the network model of head private hospitals in subdivided specialized fields, and developed insurance for online clinical medicine which covers dental, generic drugs and drugs for chronic diseases. With the combined effect of innovation-driven and risk control, we overcame the challenges in development of our protection-type reinsurance business. The combined ratio (excluding operating and administrative expenses) after retrocession of the short-term protection-type business was 97.85%, representing a steady rate, and the underwriting profits were RMB415 million.Note: 1. Yearly Renewable Term reinsurance business, i.e.YRT business, which is a kind of reinsurance arrangement entered into by ceding companies based on a certain proportion of net amount at risk at an annual rate.In respect of the savings-type reinsurance business, reinsurance premium income amounted to RMB4,514 million in 2021, representing a year-on-year decrease of 62.3%, and the TWPs amounted to RMB9,668 million (including TWPs of RMB5,154 million from savings-type non-insurance business), representing a year-on-year decrease of 38.3%. We proactively responded to adverse circumstances such as the downward pressure on interest rates and cost rigidity in the domestic market, and strictly controlled domestic business costs. We prioritised the development of low-cost overseas foreign currency business while the domestic business scale decreased significantly.In respect of the financial reinsurance business, reinsurance premium income amounted to RMB24,782 million in 2021, representing a year-on-year increase of 11.1%. We paid close attention to changes in the regulatory policies, strengthened business model innovation and optimization, intensified analyses of counterparty risk, improved capital optimisation and management, and enhanced the efficiency of capital usage.36China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISOverseas Life and Health Reinsurance BusinessThe overseas life and health reinsurance business described in this section represents the overseas life and health reinsurance business operated by China Re Life and China Re HK.In 2021, the reinsurance premium income from our overseas life and health reinsurance business amounted to RMB13,964 million, representing a year-on-year increase of 21.0%; and the TWPs amounted to RMB13,994 million (including TWPs of RMB30 million from savings-type non-insurance business), representing a year-on-year increase of 20.9%, of which the reinsurance premium income from China Re Life and China Re HK (after intra-group eliminations) amounted to RMB5,981 million and RMB7,983 million, respectively.In respect of the overseas savings-type reinsurance business, reinsurance premium income amounted to RMB13,757 million in 2021, representing a year-on-year increase of 23.2%; and the TWPs amounted to RMB13,787 million (including TWPs of RMB30 million from savings-type non-insurance business), representing a year-on-year increase of 23.1%. First, we set our business priorities based on absolute costs and selected preferred markets. Second, we sought low-cost business opportunities through innovative channels, such as entering Japan and other regions markets with low interest rates and expanding the scope of our clients into investment banks. Third, we took advantage of the dual-platform to innovate business models. We took multiple measures to achieve the scale growth of overseas savings-type business.In respect of other overseas business, reinsurance premium income amounted to RMB207 million in 2021, representing a year-on-year decrease of 44.9%.In terms of types of reinsurance arrangements and forms of cession, our life and health reinsurance business primarily consisted of treaty reinsurance and proportional reinsurance, respectively.The following table sets forth the reinsurance premium income from our life and health reinsurance business by type of reinsurance arrangement for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberType of reinsurance arrangement20212020AmountPercentage (%)AmountPercentage (%)Treaty reinsurance69,09499.766,41399.8Facultative reinsurance2080.31050.2Total69,302100.066,518100.037China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISThe following table sets forth the reinsurance premium income from our life and health reinsurance business by form of cession for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberForm of cession20212020AmountPercentage (%)AmountPercentage (%)Proportional reinsurance69,25799.966,46899.9Non-proportional reinsurance450.1500.1Total69,302100.066,518100.0In terms of lines of business, our life and health reinsurance business primarily consisted of life insurance, and the business structure remained generally stable.The following table sets forth the reinsurance premium income from our life and health reinsurance business by line of business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberLine of business20212020AmountPercentage (%)YoY change (%)AmountPercentage (%)Life44,37464.0(4.6)46,50469.9Health21,23130.720.917,55826.4Accident3,6975.350.52,4563.7Total69,302100.04.266,518100.038China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISFinancial AnalysisThe following table sets forth the selected key financial data of our life and health reinsurance segment for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 December20212020Change (%)Gross written premiums69,37466,9573.6Less: premiums ceded to retrocessionaires(8,157)(5,282)54.4Net written premiums61,21761,675(0.7)Changes in unearned premium reserves(1,421)(1,001)42.0Net premiums earned59,79660,674(1.4)Reinsurance commission income8161,280(36.3)Investment income7,0917,338(3.4)Exchange gains/(losses), net102232(56.0)Other income2,3472,831(17.1)Total income70,15272,355(3.0)Claims and policyholders benefits(60,145)(62,413)(3.6)Handling charges and commissions(4,833)(4,876)(0.9)Finance costs(641)(533)20.3Other operating and administrative expenses(2,339)(2,259)3.5Total benefits, claims and expenses(67,958)(70,081)(3.0)Share of profits and losses of associates1,1871,1136.6Profit before tax3,3813,387(0.2)Income tax(671)(774)(13.3)Net profit2,7102,6133.7Note: Due to rounding adjustments, figures shown may not be arithmetic aggregation of the figures preceding them.39China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISGross Written PremiumsGross written premiums for our life and health reinsurance segment increased by 3.6% from RMB66,957 million in 2020 to RMB69,374 million in 2021, mainly due to the increase of domestic protection-type reinsurance business.Premiums Ceded to RetrocessionairesPremiums ceded to retrocessionaires for our life and health reinsurance segment increased by 54.4% from RMB5,282 million in 2020 to RMB8,157 million in 2021, mainly due to the increase in premiums ceded to retrocessionaires from the savings-type reinsurance business.Investment IncomeInvestment income for our life and health reinsurance segment decreased by 3.4% from RMB7,338 million in 2020 to RMB7,091 million in 2021. For details of analysis on changes of investment income, please refer to relevant contents in the asset management business segment.Claims and Policyholders BenefitsClaims and policyholders benefits for our life and health reinsurance segment decreased by 3.6% from RMB62,413 million in 2020 to RMB60,145 million in 2021, mainly due to the impact of changes in reinsurance business structure.Handling Charges and CommissionsHandling charges and commissions for our life and health reinsurance segment decreased by 0.9% from RMB4,876 million in 2020 to RMB4,833 million in 2021, mainly due to the impact of changes in the reinsurance business structure.Share of Profits and Losses of AssociatesShare of profits and losses of associates for our life and health reinsurance segment increased by 6.6% from RMB1,113 million in 2020 to RMB1,187 million in 2021, mainly due to the increase in profits of associates in 2021.Net ProfitAs a result of the foregoing reasons, net profit for our life and health reinsurance segment increased by 3.7% from RMB2,613 million in 2020 to RMB2,710 million in 2021.40China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISPRIMARY P&C INSURANCE BUSINESSThe business of primary P&C insurance segment refers to the property and casualty insurance business operated by China Continent Insurance.In 2021, we adhered to upholding our vision, pursuant to which we scientifically decided strategic directions, strengthened our customer-driven strategy, promoted transformation of business models, and witnessed our business development moving positively forward. We actively responded to the comprehensive reform of motor insurance under the new normal, continued to deepen customer-oriented comprehensive operation, highly emphasised business structures optimisation, and led the development and transformation of motor insurance to an effective and fruitful outcome. We actively promoted the strategy of “Non-motor”, strengthened the quality management and control, and adjusted the business layout by focusing on key sectors to enhance the business growth of liability insurance, agricultural insurance and health insurance. We continued to optimise our business structure, making the proportion of premium from the non-motor insurance increased by 4.5 percentage points. Through cost control, compliance and risk control, technology empowerment and other measures, we persisted on strengthening fundamental structures, laying a solid foundation for our sustainable development.In 2021, insurance income from our primary P&C insurance segment amounted to RMB43,496 million, representing a year-on-year decrease of 9.7% and accounting for 26.4% of gross written premiums of the Group (before inter-segment eliminations), of which the primary premium income was RMB43,150 million, representing a year-on-year decrease of 9.6%. Net profit was RMB59 million, and weighted average return on equity reached 0.22%. The combined ratio was 106.64%, representing a year-on-year increase of 2.20 percentage points. Of such combined ratio, the loss ratio and expense ratio were 70.93% and 35.71% respectively, representing a year-on-year increase of 9.09 percentage points and a year-on-year decrease of 6.89 percentage points, respectively. The year-on-year increase in the combined ratio was mainly because, with the deepening of the comprehensive reform of motor insurance, our business structure optimisation and cost control were still ongoing, and the decrease of expense ratio was still lower than the increase of loss ratio.Based on primary premium income of P&C insurance companies in the domestic market in 2021 published by the CBIRC, we maintained leading market share in domestic primary P&C insurance business.41China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISBusiness AnalysisAnalysis by Line of BusinessThe following table sets forth primary premium income of our primary P&C insurance business by line of business for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberLine of business20212020AmountPercentage (%)YoY change (%) AmountPercentage (%)Motor insurance22,43252.0(16.8)26,95856.5Accident and short-term health insurance7,55317.55.97,13414.9Surety insurance5,42312.6(17.1)6,53813.7Liability insurance2,8716.718.52,4225.1Cargo insurance1,1802.7(17.3)1,4283.0Agriculture insurance1,0462.441.47401.5Others12,6456.14.52,5315.3Total43,150100.0(9.6)47,751100.0Note: 1. Others include, among others, commercial property, engineering, credit, marine hull, household property and specialty insurance.Motor Insurance. In 2021, primary premium income from our motor insurance amounted to RMB22,432 million, representing a year-on-year decrease of 16.8%. We strove to optimise our motor insurance business operation, guided by the principle of comprehensive operation of motor insurance, and took “motor X” business as the main line by adhering to the red line of our motor insurance policy costs. By optimising the risk pricing model, we improved our pricing risk screening capability to achieve precise resource allocation. We strengthened the quality control of our motor insurance business, increased the coverage ratio of our quality insurance products for household vehicles, and improved premium adequacy to optimise business structure and quality, promoting the healthy development of our motor insurance business.42China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISAccident and Short-term Health Insurance. In 2021, primary premium income from accident and short-term health insurance amounted to RMB7,553 million, representing a year-on-year increase of 5.9%, of which primary premium income from accident insurance amounted to RMB3,340 million, representing a year-on-year increase of 7.9%; primary premium income from short-term health insurance (critical illness insurance not included) amounted to RMB2,458 million, representing a year-on-year decrease of 7.0%, of which primary premium income from personal health insurance business derived from traditional channels amounted to RMB367 million, representing a year-on-year increase of 37.8%; primary premium income from critical illness insurance amounted to RMB1,755 million, representing a year-on-year increase of 25.8%. We continued to deepen the customer-oriented comprehensive operation, explored and expanded micro and small businesses needs for corporate accident insurance and individual customers needs for health insurance, and continued to optimise our business structure. Under strengthened risk management and control, we participated in various livelihood project businesses such as major illness medical insurance for urban and rural residents, nursing care insurance and Hui Min Bao, and explored the development of home accident insurance, accident insurance for the disabled and accident insurance of public welfare nature, so as to assume the function of insurance in serving the society actively.Surety Insurance. In 2021, primary premium income from surety insurance amounted to RMB5,423 million, representing a year-on-year decrease of 17.1%, and the cumulative bad debt rate was 6.98%, representing a decrease of 1.89 percentage points compared to that of the same period last year. We adjusted and transformed our surety insurance business to further improve our management efficiency. We carried out differentiated management by business segment, cancelled and merged the weaker segments and encouraged high-performing segments to aim for high-quality development. We optimised our mode of operation, actively promoted the construction of 5 customer service sub-centres, generating positive results in respect of integrating recovery resources and building professional recovery teams.Liability Insurance. In 2021, primary premium income from liability insurance amounted to RMB2,871 million, representing a year-on-year increase of 18.5%. We actively served the national strategies of “six stabilities” and “six securities”, and focused on the development of safe production liability insurance, construction inherent defects insurance, carrier liability insurance, government relief insurance and poverty eradication liability insurance and other business lines, thus maintaining a positive development trend for liability insurance business.Cargo Insurance. In 2021, primary premium income from cargo insurance amounted to RMB1,180 million, representing a year-on-year decrease of 17.3%. The decrease in business was mainly attributable to the decline in the scale of return freight insurance of online shopping, except for which other business lines maintained a steady development. In order to help enterprises that imported cold-chain foods lower risks and reduce operating pressure, we have developed the COVID-19-contaminated goods loss insurance, providing risk protection of over RMB7 billion for customers.Agricultural Insurance. In 2021, primary premium income from agricultural insurance amounted to RMB1,046 million, representing a year-on-year increase of 41.4%. We continued to improve the operating conditions of agricultural insurance business. Throughout the year, we added 17 new branches to the local insurance company directory that met the operating conditions for agricultural insurance business. We actively engaged in policy selection projects for agricultural insurance, continued to innovate and develop insurance products, and focused on exploring insurance for agricultural products with local characteristics, weather index insurance, price index insurance, “insurance futures”, income insurance and other innovative fields. 128 innovative products were developed and filed throughout the year.43China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISAnalysis by Business ChannelThe following table sets forth primary premium income from our primary P&C insurance business by business channel for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberBusiness channel20212020AmountPercentage (%)AmountPercentage (%)Insurance agents25,24458.529,30061.4Of which: Individual insurance agents15,40235.718,45738.7 Ancillary insurance agencies2,1304.93,0186.3 Professional insurance agencies7,71217.97,82516.4Direct sales13,97432.414,53330.4Insurance brokers3,9329.13,9188.2Total43,150100.047,751100.044China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISAnalysis by RegionThe following table sets forth primary premium income from our primary P&C insurance business by region for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberRegion20212020AmountPercentage (%)AmountPercentage (%)Shanghai7,61317.68,60818.0Zhejiang3,5448.24,1708.7Yunnan3,0927.23,4717.3Shandong2,5185.82,7305.7Inner Mongolia1,8114.22,0134.2Jiangxi1,7764.11,8033.8Henan1,4083.31,5923.3Guangdong1,3903.21,6523.5Sichuan1,3603.21,4713.1Shaanxi1,3183.11,1442.4Others17,32040.119,09740.0Total43,150100.047,751100.0Combined RatioThe following table sets forth the loss ratio, expense ratio and combined ratio of our primary P&C insurance business for the reporting periods indicated:For the year ended 31 December20212020Loss ratio (%)70.9361.84Expense ratio (%)135.7142.60Combined ratio (%)106.64104.44Note: 1. The calculation of the expense ratio takes into account the effect of government grants.45China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISFinancial AnalysisThe following table sets forth the selected key financial data of our primary P&C insurance segment for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 December20212020Change (%)Gross written premiums43,49648,167(9.7)Less: premiums ceded to reinsurers(4,456)(4,700)(5.2)Net written premiums39,04043,467(10.2)Changes in unearned premium reserves(184)(969)(81.0)Net premiums earned38,85642,498(8.6)Reinsurance commission income1,2271,617(24.1)Investment income2,8953,181(9.0)Exchange (losses)/gains, net(21)(135)(84.4)Other income137209(34.4)Total income43,09447,371(9.0)Claims and policyholders benefits(27,548)(26,350)4.5Handling charges and commissions(4,213)(6,071)(30.6)Finance costs(145)(198)(26.8)Other operating and administrative expenses(11,328)(14,146)(19.9)Total benefits, claims and expenses(43,234)(46,764)(7.5)Share of profits and losses of associates14712914.0Profit before tax7736(99.0)Income tax52(143)Net profit59593(90.1)Note: Due to rounding adjustments, figures shown may not be arithmetic aggregation of the figures preceding them.46China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISGross Written PremiumsGross written premiums for our primary P&C insurance segment decreased by 9.7% from RMB48,167 million in 2020 to RMB43,496 million in 2021, mainly due to the decrease in premium income of motor insurance and personal loan surety insurance.Premiums Ceded to ReinsurersPremiums ceded to reinsurers for our primary P&C insurance segment decreased by 5.2% from RMB4,700 million in 2020 to RMB4,456 million in 2021, mainly due to the decrease in gross written premiums, which led to a corresponding decrease in premiums ceded to reinsurers.Reinsurance Commission IncomeReinsurance commission income for our primary P&C insurance segment decreased by 24.1% from RMB1,617 million in 2020 to RMB1,227 million in 2021, mainly due to the decline of reinsurance commission income ratio as a result of the policies for comprehensive reform of motor insurance.Investment IncomeInvestment income for our primary P&C insurance segment decreased by 9.0% from RMB3,181 million in 2020 to RMB2,895 million in 2021. For details of analysis on changes of investment income, please refer to relevant contents in the asset management business segment.Claims and Policyholders BenefitsClaims and policyholders benefits for our primary P&C insurance segment increased by 4.5% from RMB26,350 million in 2020 to RMB27,548 million in 2021, mainly due to the increase of loss ratio for motor insurance as a result of the effective implementation of policies for comprehensive reform of motor insurance.Handling Charges and CommissionsHandling charges and commissions for our primary P&C insurance segment decreased by 30.6% from RMB6,071 million in 2020 to RMB4,213 million in 2021, mainly due to a significant decrease in handling charges and commissions as a result of continuous deepening of the comprehensive reform of motor insurance.Net profitAs a result of the foregoing reasons, net profit for our primary P&C insurance segment decreased by 90.1% from RMB593 million in 2020 to RMB59 million in 2021.47China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISASSET MANAGEMENT BUSINESSIn 2021, the domestic economy amidst recurring pandemic outbreaks, “houses are for living in, not for speculation” and dual-carbon policies faced weak consumption, lower investment in real estate construction and infrastructure, and economic growth that started strong but finished weakly. Throughout the year, the performance of A shares was bumpy but showed a clear style division. Drawdowns of the Hang Seng Index increased in the second half of the year, while the yield of the domestic bond market fluctuated downward.As at the end of the Reporting Period, the balance of assets under the management of the Group amounted to RMB346,980 million, of which the total investment assets balance of the Group was RMB321,113 million, representing an increase of 4.3% from the end of the previous year; the balance of investment assets under the management of China Re AMC was RMB285,704 million.48China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISInvestment PortfolioThe following table sets forth the portfolio of China Re Groups total investment assets as at the dates indicated:Unit: in RMB millions, except for percentagesInvestment assets31 December 202131 December 2020AmountPercentage (%) AmountPercentage (%)Cash and short-term time deposits23,0967.213,8724.5Fixed-income investments257,33880.1230,94875.0 Time deposits21,3666.719,9056.5 Bonds168,25552.4143,09146.5 Government bonds14,9484.711,4823.7 Financial bonds23,9507.519,2016.2 Enterprise (corporate) bonds116,04336.1104,76534.1 Subordinated bonds13,3144.17,6432.5 Investments classified as loans and receivables39,09712.241,23613.3 Other fixed-income investments128,6208.826,7168.7Equity and investment funds56,04317.560,44419.6 Investment funds226,2468.223,8147.7 Stocks26,6078.328,0249.1 Unlisted equity shares33,1901.08,6062.8Other investments32,62210.232,09610.4 Investment in associates26,1948.225,7588.4 Others46,4282.06,3382.0Less: Securities sold under agreements to repurchase(47,986)(15.0)(29,403)(9.5)Total investment assets321,113100.0307,957100.0Notes: 1. Primarily including financial assets held under resale agreements, statutory deposits and reinsurers share of policy loans and others.2. Including monetary funds and the senior tranche of structured index funds.3. Including assets management products, unlisted equity investments and equity investment schemes.4. Including investment properties, currency swaps, etc.49China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISIn terms of investment management, by adhering to the philosophy of value investment and long-term investment while insisting on the strategy of seeking progress in stability and balanced configuration, we continued to optimise our asset allocation structure. Domestic fixed income investments continued to play the role of a “ballast”, steadying the foundation of allocated income and capturing allocation patterns to substantially increase our bond allocation. We actively searched for high-quality non-standard and “non-standard alternative” products, accelerating our deployment of new categories such as public offering REITs and perpetual bond strategy funds to relieve portfolio stress. For overseas fixed income investments, we adopted short-term strategy in response to the adverse credit market environment. For equity investments, we strengthened our diversified management of style portfolio, focused on seising market opportunities while maintaining a stable operation and optimised the asset allocation structure. Meanwhile, we realised gains in a timely manner by grabbing opportunities arising from fluctuations in equity market. For alternative investments, we orderly retired developed projects while upheld the “PE direct investment” strategy for new projects, expanded cooperation scope of fund managers and extended our fund arrangements towards earlier stages.As at the end of the Reporting period, in terms of par value, the domestic assets entrusted by the Group Company, China Re P&C, China Re Life, China Continent Insurance and products from insurance asset managers for management with China Re AMC acting as the trustee in aggregate held city investment bonds accounting for 8.75% of investment assets under the management of China Re AMC, local state-owned enterprise bonds (including industrial and city investment enterprises) accounting for 21.80%, and held none capital supplementation bonds of city commercial banks/rural commercial banks. Currently, there is no bond default.As at the end of the Reporting Period, the domestic assets entrusted by the Group Company, China Re P&C, China Re Life and China Continent Insurance to China Re AMC for management in aggregate directly held non-standard assets1 which accounted for 13.60% of investment assets under the management of China Re AMC, of which those with an external rating of AA and above accounted for 85.65%. The top three industries in terms of positions held were real estate, transportation and public utilities, accounting for 37.50%, 22.95%, and 16.72%, respectively.Note: 1. Non-standard assets include five types of assets of the trust company collective fund trust plans, the infrastructure debt investment plans, the equity investment plans, the project asset support plans, and the real estate debt investment plans.In terms of risk management, we continued to strengthen our risk management on both asset and liability aspects and improve the matching of them. We strengthened the analysis and evaluation of allocation performance, and promoted the effective transmission of asset allocation strategies and risk appetite. We continued to improve our investment risk management mechanism, improved our risk assessment system, and strengthened risk scanning. We continued to improve our expertise in investment risk management, and optimised the comprehensive risk monitoring management indicator system to achieve visualisation of monitoring. We established a multi-layered and multi-dimensional risk reporting system to reflect the investment risk status in a timely and comprehensive manner. In order to effectively cope with the extreme risk condition, we measured the potential loss by scenario analysis, stress test and other methods, closely focused on the impact of market volatility on the investment income and the solvency of the entire Group. We strengthened the prevention and control of major risk and took instant response and action to the warning signals of credit risk rising in individual financial products, and the risk is generally controllable.50China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISDuring the Reporting Period, we have been actively responding to the external changes of the COVID-19 pandemic and the aggravation of capital market credit risks. We built corporate concentration limit indicators aligning with corporate credit internal rating in addition to industry and regional risk limits for credit products, enriching the annual credit limit index system and carrying out monitoring. In terms of rating and credit management, we conducted timely research on industry default cases, continuously optimised the corporate credit granting mechanism, and improved the rating model based on industry experience data and debt credit enhancement measure, making them more accurate in reflecting the changes of corporate credit risks and more effective in managing credit risk exposure.As at the end of the Reporting Period, our significant investments held mainly include China Re Bairong World Trade Center Real Estate Debt Investment Scheme, investments in associates, namely China Everbright Bank and Great Wall Asset, and investment in the real estate of the Shanghai Fuyuan Landmark Plaza Project.On 23 June 2016, China Re AMC initiated to establish China Re Bairong World Trade Center Real Estate Debt Investment Scheme with a term of 11 years. The subscription amount by China Re P&C, China Re Life and China Continent Insurance was RMB8,000 million in total. A principal of RMB1,540 million in total for such scheme was repaid on 27 June 2017, 27 June 2018, 27 June 2019, 30 July 2019 and 20 December 2019, respectively. Since 2020, China Re AMC has taken legal measures on behalf of the investment plan due to failure of the debt-servicing entity and the guarantor of the investment plan to make timely payments relating to the investment plan.Since 2009, China Re Group has purchased the shares that China Everbright Bank issued domestically and in Hong Kong. During the Reporting Period, China Everbright Bank actively promoted the development of wealth management bank, contributing to a stable expansion of business scale, a steady rise of profit level and a generally controllable risk status. Overall, its operation has been stable and improving. As at the end of the Reporting Period, China Re Group held approximately 4.29% equity interest in China Everbright Bank in aggregate. China Everbright Bank is expected to bring us long-term and stable investment returns in the future.In July 2018, China Re P&C and China Continent Insurance entered into the Share Subscription Agreements with China Great Wall Asset and held 3.64% and 2.86% of Great Wall Assets equity interest, respectively. In aggregate, China Re Group held 6.5% of Great Wall Assets equity interest. During the Reporting Period, Great Wall Asset focused on its main business, and continued to increase efforts on the acquisition and disposition of non-performing assets. Consequently, on account of its remarkable risk-dissolving capability, some of the risk defuse projects won applause from local government, business entities and all sectors of society, which enhanced the reputation of Great Wall Asset. In the future, Great Wall Asset will increase efforts on the acquisition of financial non-performing assets, while maintaining the work on the acquisition and substantial restructuring of the non-financial risky assets and endeavour to bring stable returns to shareholders. As of the end of the Reporting Period, the equity of Great Wall Asset in aggregate held by China Re Group remain unchanged.On 15 December 2018, China Continent Insurance entered into a sale and purchase agreement with Shanghai Fuyuan Binjiang Development Co. Ltd., to acquire a property with a total area of 36,006.28 square metres at an acquisition price of approximately RMB3,089 million, payable in cash. The property is Building No. 1 (the address is No. 6 Lane 38, Yuanshen Road) of the Shanghai Fuyuan Landmark Plaza Project located at the land plot Nos. 04-4 of Huangpu Riverbank Unit E10, Pudong New District, Shanghai, the PRC. China Continent Insurance has acquired title certificate for the project. As at the end of the Reporting Period, all of the transaction price of the project has been paid. Of which, 19,925.48 square metres is used for investment, while the remaining 16,080.80 square metres is a real estate for self-use purpose.51China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISInvestment PerformanceThe following table sets forth the relevant information on investment income of China Re Group for the reporting periods indicated:Unit: in RMB millions, except for percentagesFor the year ended 31 DecemberInvestment income20212020Cash and fixed-income investments8,2158,576 Interest income10,1819,544 Realised (losses)/gains(165)177 Unrealised losses(462)(154) Impairment losses(1,339)(991)Equity and investment funds6,0556,815 Dividend income1,7131,637 Realised gains4,5084,969 Unrealised(losses)/gains(102)509 Impairment losses(64)(300)Other investments2,7892,394 Total investment income from investment in associates2,2952,178 Other gains1494216Less: interest expenses on securities sold under agreements to repurchase(784)(663)Total investment income216,27517,122Total investment yield (%)25.176.01Net investment income314,44513,500Net investment yield (%)34.594.7452China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISNotes: 1. Including gains or losses from changes in fair value of derivative financial instruments, realised gains or losses from derivative financial instruments and rental income of investment properties.2. Total investment income = Investment income share of profit or loss of associates interest expenses on securities sold under agreements to repurchase;Total investment yield = Total investment income average of total investment assets as at the beginning and end of the period;Investment assets = Cash and short-term time deposits financial assets at fair value through profit or loss financial assets held under resale agreements time deposits available-for-sale financial assets held-to-maturity investments investments classified as loans and receivables reinsurers share of policy loans investments in associates statutory deposits derivative financial instruments investment properties financial liabilities at fair value through profit or loss securities sold under agreements to repurchase.3. Net investment income = Interest income dividend income rental income share of profit or loss of associates;Net investment yield = Net investment income average of total investment assets as at the beginning and end of the period.In 2021, the Groups total investment yield was 5.17% and the net investment yield was 4.59%, both representing a year-on-year decrease. Affected by the downturn of domestic and overseas equity markets, there was a year-on-year decrease in the investment income of equity and funds, and a year-on-year decrease in the total investment income, while the scale of assets reached a year-on-year increase, resulting in a year-on-year decrease in total investment yield; affected by the downturn in interest rates, the decreased coupon rate for reinvestment at maturity, and the year-on-year increase of the scale of assets, resulting in a year-on-year decrease in the net investment yield.53China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISINSURANCE INTERMEDIARY BUSINESSInsurance intermediary business refers to the insurance intermediary business operated by Huatai Insurance Agency and its subsidiary, Huatai Surveyors & Adjusters Company. In 2021, against a general environment of intensifying competition and tightening regulatory policies in the insurance intermediary market, we adhered to the general principle of making progress while ensuring stability and striving for innovation and transformation, and strove to boost the “Going Out” marketing, industrial layout and coordinated development, thereby achieving the rapid growth of business scale and steady improvement of operating efficiency.In 2021, revenue from insurance intermediary business amounted to RMB508 million, representing a year-on-year increase of 31.9%. Profit before tax amounted to RMB2.62 million, representing a year-on-year increase of 19.1%.54China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISSOLVENCYThe following table sets forth the relevant data of the Group, the Group Company and major reinsurance and insurance subsidiaries of the Group as at the dates indicated:Unit: in RMB millions, except for percentages31 December 202131 December2020Change (%)China Re GroupCore capital99,64594,8375.1Available capital112,643107,8344.5Minimum capital53,93050,1697.5Core solvency adequacy ratio (%)185189Decrease by 4 percentage pointsAggregated solvency adequacy ratio (%)209215Decrease by 6 percentage pointsGroup CompanyCore capital78,95079,402(0.6)Available capital78,95079,402(0.6)Minimum capital13,16313,248(0.6)Core solvency adequacy ratio (%)600599Increase by 1 percentage pointAggregated solvency adequacy ratio (%)600599Increase by 1 percentage pointChina Re P&CCore capital22,62721,8123.7Available capital30,62729,8112.7Minimum capital14,30412,90410.8Core solvency adequacy ratio (%)158169Decrease by 11 percentage pointsAggregated solvency adequacy ratio (%)214231Decrease by 17 percentage pointsChina Re LifeCore capital33,79028,63118.0Available capital38,78833,62915.3Minimum capital18,02814,66322.9Core solvency adequacy ratio (%)187195Decrease by 8 percentage pointsAggregated solvency adequacy ratio (%)215229Decrease by 14 percentage pointsChina Continent InsuranceCore capital25,22426,292(4.1)Available capital25,22426,292(4.1)Minimum capital6,8577,786(11.9)Core solvency adequacy ratio (%)368338Increase by 30 percentage pointsAggregated solvency adequacy ratio (%)368338Increase by 30 percentage points55China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISNotes: 1. Core solvency adequacy ratio = core capital minimum capital; Aggregated solvency adequacy ratio = available capital minimum capital.2. Due to rounding adjustments, figures shown may not be arithmetic aggregation of the figures preceding them.3. The data of the Group Company, China Re P&C, China Re Life and China Continent Insurance is the same as the data submitting to the CBIRC.As at the end of the Reporting Period, the Group, the Group Company and each of the reinsurance and insurance subsidiaries of the Group were all in compliance with the regulatory requirement regarding their respective solvency. Compared with the end of 2020, the consolidated solvency adequacy ratio of China Re Group decreased, mainly due to the overall increased business of China Re Group. In particular, the solvency adequacy ratio of the Group Company remained stable. The solvency adequacy ratios of China Re P&C and China Re Life decreased, mainly due to the increased business. The solvency adequacy ratio of China Continent Insurance increased, mainly due to the decrease in minimum capital as a result of change in business structure.According to the requirements of The Solvency Regulatory Rules (Nos. 1-17) for Insurance Companies ( 保險公司償付能力監管規則 （1-17號） ), the “Summary of Solvency Reports” as of the end of the fourth quarter of 2021 of the Group Company and its subsidiaries, namely China Re P&C, China Re Life and China Continent Insurance, will be disclosed on their official websites respectively and the website of Insurance Association of China in due course. Shareholders and investors are advised by the Board to pay attention to the following key operation indicators extracted from the Summary of Solvency Reports as of the end of the fourth quarter of 2021:Unit: in RMB millionsEntityIndicatorGroupCompanyChinaRe P&CChinaRe LifeContinent InsuranceAs at 31 December 2021Net assets60,92522,67421,23226,330For the year ended 31 December 2021Insurance income5,40839,92561,31943,496Net profit2,5862,1703,062392Notes: 1. As the consolidated scope is larger than these four companies and affected by offsetting factors when calculating the consolidated net profit of the Group, the consolidated net profit of the Group is not equal to the sum of net profits of these four companies.2. The relevant data as at 31 December 2021 in the Summary of Solvency Reports of the Group Company, China Re P&C, China Re Life and China Continent Insurance is the same as the data submitting to the CBIRC.For viewing of the Summary of Solvency Report for the fourth quarter of 2021, shareholders and potential investors can visit the official websites of the Company at http:/, China Re P&C at http:/, China Re Life at http:/ and China Continent Insurance at http:/www.ccic-, or the website of Insurance Association of China at http:/ for enquiries.56China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISEXCHANGE RATE FLUCTUATION RISKSubstantial amount of assets and liabilities of the Group are denominated in Renminbi, but certain assets and liabilities are denominated in Hong Kong dollars, US dollars, British pounds and other foreign currencies. The fluctuations of the value of Renminbi against such currencies expose us to foreign exchange risks. We control the adverse impacts of the fluctuations of exchange rates through enhancing management of the assets and liabilities matching in different currencies, keeping foreign exchange positions under control and using foreign currency derivatives appropriately. As at 31 December 2021, the Group held foreign currency derivatives of RMB436 million (31 December 2020: RMB74 million).DETAILS OF ASSETS CHARGED AND BANK BORROWINGSAs at 31 December 2021, bonds with a carrying value of RMB17,678 million (as at 31 December 2020: RMB 8,824 million) were pledged as collateral for the securities sold under agreements to repurchase resulting from debt repurchase transactions entered into by the Group in the interbank market.For debt repurchase transactions through the stock exchange, the Group is required to deposit certain exchange-traded bonds into a collateral pool with fair value converted at a standard rate pursuant to the stock exchanges regulation which should be no less than the balance of the related repurchase transactions during the repurchase period. As at 31 December 2021, the carrying value of securities deposited in the collateral pool was RMB49,593 million (as at 31 December 2020: RMB42,284 million). The collateral is restricted from trading during the period of the repurchase transaction. The Group can withdraw the exchange-traded bonds from the collateral pool in short time provided that the value of the bonds is no less than the balance of related repurchase transactions.As at 31 December 2021, the Group held a long-term borrowing of USD550 million with a coupon rate of 4.7%, and the term is 60 months.CONTINGENCIESAs at 31 December 2021, the Group had issued the following guarantees:(1) As at 31 December 2021, the Group Company provided maritime guarantee of RMB1,825 million (31 December 2020: RMB2,266 million) for domestic and overseas ship mutual insurance associations or overseas insurance institutions which provided 100% of counter guarantee for the aforesaid maritime guarantee.(2) As at 31 December 2021, the letter of credit provided by the Group Company to Lloyds to support China Re Syndicate 2088s underwriting business of GBP100 million has been withdrawn (31 December 2020: GBP100 million).(3) As at 31 December 2021, CRIH provided the letter of credit to Lloyds to support Syndicate 1084s and Syndicate 1176s underwriting business of GBP335 million totally (31 December 2020: GBP250 million).(4) Within the Reporting Period, CRIH entered into two Tier 1 securities lending arrangements for Funds at Lloyds with two financial institutions. The facilities amounted to GBP80 million and USD50 million (31 December 2020: GBP80 million and USD50 million) respectively.57China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISMAJOR EVENTSMaterial Connected TransactionsDuring the Reporting Period, the Group did not conduct any connected transaction that is subject to the reporting, announcement or independent shareholders approval requirements under Chapter 14A of the Hong Kong Listing Rules.In addition, the related-party transactions set out in Note 57 to the financial statements do not constitute the connected transactions under the Hong Kong Listing Rules. Therefore, they do not need to comply with the requirements of reporting, announcement or independent shareholders approval under Chapter 14A of the Hong Kong Listing Rules.Use of ProceedsThe Companys shares were listed and traded on the Main Board of the Hong Kong Stock Exchange on 26 October 2015. The total proceeds from the initial public offering (including the partial exercise of the over-allotment option as stated in the Prospectus) amounted to approximately HKD16,392 million. As of 31 December 2021, the invested proceeds from the initial public offering of the Company amounted to HKD16,392 million, of which:(1) HKD410 million was used for the payment of underwriting expenses of initial public offering;(2) HKD7,749 million was used for the capital increase of the subsidiaries and overseas entities of the Company;(3) HKD1,568 million was used to pay the consideration for acquisition of subsidiaries by the Company; and(4) HKD6,665 million was used for business operations, including investment, solvency, international rating support and other activities.As of the end of the Reporting Period, the proceeds from the Companys initial public offering were fully utilised.Undertakings of the Company and Controlling Shareholder Given or Effective during the Reporting PeriodDuring the Reporting Period, the Company and Central Huijin, the controlling shareholder, complied with the undertakings made by them as set out in the Prospectus. For details of the relevant undertakings, please refer to the sections headed “Substantial Shareholders” and “Share Capital” in the Prospectus.58China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISPROSPECTSMarket EnvironmentLooking ahead to 2022, the fundamentals of Chinas macroeconomy are solid and improving, and the new economy is booming with strong resilience. The insurance industry will continue to gain enormous space for development. As the accelerated transformation of the insurance industry from risk bearers to comprehensive risk managers becomes increasingly clear, the development requirements to reshape transaction models to be customer-oriented, support competitiveness through ecosystem building, and take pre-emptive opportunities in the incremental market with technology empowerment are becoming more prominent.For the primary P&C insurance market, in the post-pandemic era, the macro economy makes steady progress, while regulatory policies guide the insurance industry back to its root of protection, bringing new opportunities for growth regarding the transformation and development of the industry. The business structure is changing its focus rapidly from motor insurance to “Non-motor”. The essence of competition shifts from expense to customer-oriented professional skills, with an emphasis on the growth of quality and profitability. The non-motor insurance is expected to grow faster, while the comprehensive reform of motor insurance is deepening, and the growth rate of premiums will earn gradually increases. Digital technology has injected new momentum into the high-quality development of the insurance industry. It is expected that the industrys growth driver and focus will continue to shift faster to non-motor insurance. Further development of non-motor insurance business will remain to be driven by key factors such as policy support, financial subsidy and consumption upgrade. Agriculture insurance, liability insurance and health insurance will maintain rapid growth momentum.For the primary life and health insurance market, affected by recurring pandemic, pressure on economic growth, capital market fluctuations, agents manpower shortage and low productivity and other factors, we have seen the pressure of declining demand, slow transformation and lower expectation, resulting in a significant decrease in the growth of new premiums. On the other hand, the insurance industry remains in the period of strategic opportunities, with the establishment of multi-level healthcare protection system and third pillar pension insurance system being accelerated. Commercial insurance appears to be the important product in the vision of “Health China” and the strategies for an ageing population. The industry is speeding up the supply-side reform for products, channels and services, and strengthening the development of risk protection, wealth management, life and health services, aiming for the better integration of online and offline services.In respect of the P&C reinsurance market, after the comprehensive reform of motor insurance, primary insurance companies face a substantial increase in the pressure from underwriting profits while the reinsurance market is facing certain adjustments. Business opportunities and chances for innovation continue to arise from national strategies such as self-sufficiency in service technology, green development and regional synergistic development. Non-motor insurance such as agricultural insurance, liability insurance and health insurance will continue to grow rapidly. Product innovation supported by reinsurance drives continuous development of reinsurance business model. Reinsurance will make more contributions in supporting the real economy and modernisation of social governance. Its risk management and innovation capabilities will become increasingly important in market competition.59China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISFor the life and health reinsurance market, due to factors such as long-term low interest rates and pandemic claims, fluctuations in profits derived from international life and health reinsurance companies have increased. Relying on the younger demographic structure in the emerging markets in Southeast Asia, the overseas protection-type reinsurance market is worth looking forward to. The growth of domestic protection-type reinsurance business remained sluggish, and the demand for the development and iteration of the primary insurance market products increased. As a result, data, product and service innovation have become the keys to stand out in the competitive reinsurance market. Under the environment of low interest rates and with the implementations of IFRS 17 and the “C-ROSS” Phase II project, there were opportunities and challenges arising from savings-type and financial reinsurance business.In respect of the development of capital market and use of insurance capital, the overseas economy is still recovering, but the pandemic, inflationary spike and withdrawal of quantitative easing monetary policies may slow the recovery. Facing threefold pressure of “contracted demand, supply shocks and weaker expectations”, Chinese economy will put more focuses on “prioritising stability”. More flexible policies will be adopted to underpin macroeconomy, while the slowdown in the growth of macroeconomy caused by real estate sector and the credit risks that may arise therein remains important risk factors that require investors attention. The environment described above requires stronger ability to identify and make judgement on profitability and risks in insurance investments. The safe assets that have higher profit will be sought out in the investment segment while enhancing the ability to identify opportunities to invest in strategic emerging industries, and capture differentiated and structural opportunities to continuously strengthen professional capabilities.Outlook of China Re GroupChina Re Group will continue to adhere to the general tone of “making progress while ensuring stability and value creation”, unswervingly insist on “profitable development, market benchmarks, holding out the bottom line of risk compliance and digital transformation”, persist in the operational theory of “stabilising growth, adjusting structure, controlling risks and increasing profitability”, maintain “incremental thinking, innovative thinking, transformation thinking” to seise opportunities, ensure stable fundamentals while striving for new tracks, accelerate the transformation and upgrading of business structure, and continue to promote high quality development of China Re Group.60China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISIn respect of the P&C reinsurance business, we will continue to perform the function of a national reinsurance, more actively improve business layout under new development pattern, combine innovation momentum and transformation development, consolidate domestic and international markets, further increase our social value and business value, vigorously promote the “Digital China Re 2.0 Strategy” and accelerate establishment of the reinsurance eco-system. For domestic operations, we will focus on major national strategies, serve national economic and livelihood, promote domestic reinsurance business to strengthen internal circulation and, under the premise of controllable risk, continue to solidify our leading position in the domestic market, achieving high-quality development of our business. For overseas operations, we will grasp market cycles, adhere to the ideal of underwriting profits, continue to optimise our business portfolio and strengthen risk management. We will continue to promote technology empowerment, upgrade and commercial application of catastrophe models and application of blockchain technology in more business scenarios, provide more technical support for the innovation and development of the industry.For the life and health reinsurance business, we will adhere to the requirements under the “14th Five-Year” Plan, continue to focus on “seeking progress while maintaining growth, carrying out reform and innovation”, actively promote supply side reforms such as products and services by taking major development opportunities such as the health insurance development of the industry, industrial integration and digital transformation, carefully evaluate business development strategies in a low interest rate environment, and actively prepare for the implementations of IFRS 17 and the “C-ROSS” Phase II and continue to pay attention to industry policies and risk events. Focusing on “Data ” and “Product ”, we will vigorously expand business scale of the protection-type business, explore policy opportunities such as new critical illnesses, long-term medical care and inclusive medical care, innovate and upgrade product development and service integration, as well as continue to strengthen risk prevention and management to promote high-quality development of the protection-type business. We will strictly control operating cost, enhance the asset-liability matching and risk management of the savings-type business. Anchored in meeting our customers needs, strengthen counterparty risk management and existing business management, and develop the financial reinsurance business with innovative solutions under the principle of risk control. We will fully capitalise on “(domestic and overseas) dual-markets” and “(business and investment) dual-platforms” to achieve the collaborative development of business in domestic and overseas markets.61China Reinsurance (Group) Corporation2021 Annual ReportMANAGEMENT DISCUSSION AND ANALYSISFor the primary P&C insurance business, we will closely adhere to national strategies and the Companys development strategies under the “14th Five-Year Plan”. Accelerating transformation and upgrading, we aspire to achieve the high-quality development goals of “strengthening foundation, seeking progress in stability, strengthening compliance work and creating profits”. In respect of the motor insurance, preserving our integrity and innovation, we identify new energy vehicles as the main growth driver in the new vehicle market. To stress the motor insurances role as a ballast, we focus on cost control, quality optimisation and sustained growth, and ensure that our clients are the basis for developing motor insurance. By precisely identifying clients, enhancing pricing ability, and strengthening the closed-loop full lifecycle process management of motor insurance business, we are able to boost the overall growth rate of the motor insurance business. In respect of the non-motor insurance business, we are committed to promoting the practice of “Non-motor” strategy. Conforming to material national policies and emphasising the modernisation of the national governance system and governance capabilities, we continuously contribute to business sectors such as liability insurance, agriculture insurance and health insurance. We also facilitate the development and transformation of the “Motor Individual” accident insurance while promoting the “Non-motor Individual” business through developing traffic-type group accident insurance, government-sponsored group accident insurance and other businesses. We cling to the self-operating and diversified development strategy of health insurance to achieve cost optimisation, and strongly promote the personal health insurance business, as well as middle and high-end health insurance business. We adhere to the strategies of centralised risk control and business synergy, promoting the integration of credit insurance business management systems.In respect of the asset management business, we will consolidate, coordinate and firmly promote the implementation of the development strategy under the “14th Five-Year” Plan, using professionalism, marketisation and internationalism as our fulcrums to push for the realisation of strategic missions such as productisation transformation. We will continue to adhere to a steady and prudent investment concept and strengthen our judgement on the key factors such as the economic situation, market environment and interest rate trends, aiming to achieve more forward-looking and effective asset allocation. We will continue to double down on research, allocation, innovation and risk control and devote more resource to make up for shortcomings, eliminate weaknesses and strengthen our advantages. We will promote the development of marketisation and professionalisation with productisation, and make due efforts to develop third-party businesses. We will attach great importance to risk management and continue to increase our awareness of proactive risk management, cultivate a stable and prudent risk culture and continue to perfect our comprehensive risk management system.Directors, Supervisors, Senior Management and EmployeesCorporate Governance ReportReport of the Board of DirectorsReport of the Board of Supervisors64China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESDIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTDirectorsNameMonth and Year of BirthPositionDate of AppointmentYuan LinjiangDecember 1963Executive Director, ChairmanMay 2016He ChunleiApril 1965Executive DirectorFebruary 2017Vice ChairmanSeptember 2018Zhuang QianzhiJanuary 1972Executive DirectorAugust 2021Wen NingJuly 1962Non-executive DirectorMay 2019Wang XiaoyaNovember 1964Non-executive DirectorAugust 2019Liu XiaopengJuly 1975Non-executive DirectorNovember 2019Li BingquanJune 1972Non-executive DirectorJanuary 2022Hao YansuJuly 1958Independent Non-executive DirectorDecember 2014Li SanxiMarch 1964Independent Non-executive DirectorDecember 2014Mok Kam SheungDecember 1959Independent Non-executive DirectorAugust 2015Jiang BoDecember 1955Independent Non-executive DirectorDecember 2018Notes: 1. Mr. Ren Xiaobing ceased to serve as an executive Director since 25 February 2021.2. Ms. Lu Xiuli ceased to serve as a non-executive Director since 30 July 2021.3. For details of Directors positions in the specialised committees of the Board, please refer to the section headed “Corporate Governance Report” in this annual report.65China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESSupervisorsNameMonth and Year of BirthPositionDate of AppointmentXiong LianhuaAugust 1967Shareholder Representative Supervisor,Chairlady of the Board of SupervisorsJune 2021Zhu YongJune 1969Shareholder Representative SupervisorDecember 2014Zeng ChengJuly 1980Shareholder Representative SupervisorJuly 2018Qin YueguangOctober 1976Employee Representative SupervisorJune 2018Li JingyeFebruary 1972Employee Representative SupervisorJune 2018Senior ManagementNameMonth and Year of BirthPositionDate of AppointmentHe ChunleiApril 1965PresidentSeptember 2018Zhuang QianzhiJanuary 1972Vice President, Chief Risk OfficerApril 2021Zhu XiaoyunAugust 1975Vice PresidentNovember 2021Board SecretaryJune 2017Joint Company SecretaryApril 2017Lei JianmingJune 1979Assistant to the PresidentMarch 2022Tian MeipanOctober 1974Chief ActuaryDecember 2012Cao ShunmingAugust 1974Compliance ControllerMarch 2022Notes: 1. Mr. Ren Xiaobing ceased to serve as the Vice President, Compliance Controller and Chief Risk Officer since 25 February 2021.2. Ms. Liu Tianyang ceased to serve as the Audit Controller since 30 March 2021.3. Mr. Zhuang Qianzhi served as the Compliance Controller from 26 July 2021 to 15 March 2022.66China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESBIOGRAPHIES OF DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND JOINT COMPANY SECRETARIESDirectorsExecutive DirectorsMr. Yuan Linjiang (袁臨江), is an executive Director and the Chairman of the Company. He is an economist. Before joining the Company, Mr. Yuan had served as the vice president and chief risk officer of Beijing Branch, and the president of Chongqing Branch of China Everbright Bank Company Limited; a non-executive director of Agricultural Bank of China Limited; the deputy director of the general department (in charge of daily operation), the director of the integrated management department and the second banking institution management department of Central Huijin. He served as the general manager and senior managing director of CIC International (Hong Kong) Co., Ltd. Mr. Yuan joined the Company in March 2016. He has been an executive Director and the Chairman of the Company since May 2016. He is a director and the chairman of the board of directors of China Continent Insurance, a director and the chairman of the board of directors of China Re AMC and the chairman of CNIP. Mr. Yuan holds a masters degree in Business Administration.Mr. He Chunlei (和春雷), is an executive Director, the Vice Chairman and the President of the Company. Before joining the Company, Mr. He had served in the Economic Research Institute of the Academy of Social Sciences of Shaanxi Province, and the post doctoral programme of Economics of the Chinese Academy of Social Sciences. Mr. He had served as the deputy general manager of China Continent Insurance, the vice chairman of the board of directors and the general manager of China Re P&C, the chief executive officer of the international P&C reinsurance business of the Company, a director and the chairman of the board of directors of China Continent Insurance, a director of China Re AMC, the Vice President and the Executive Vice President of the Company (assuming the role of the President). Mr. He has been an executive Director of the Company since February 2017 and the Vice Chairman and the President of the Company since September 2018; he is also currently a director and the chairman of the board of directors of China Re P&C, a director and the chairman of the board of directors of China Re Life, a non-executive director of Shanghai Insurance Exchange Company Limited, and the chairman of “Belt and Road” Reinsurance Community of the PRC. Mr. He holds a doctoral degree in economics.Mr. Zhuang Qianzhi (莊乾志), is an executive Director, the Vice President, and the Chief Risk Officer of the Company. He is a senior economist. Before joining the Company, Mr. Zhuang served as a deputy general manager of the investment banking department of China Jianyin Investment Ltd., an executive director and vice president of the Southwest Securities Co., Ltd., the head of strategy development department, the head of the general office (party committee office), the head of the office of the board of directors, the head of office of the board of supervisors, the employee director and the general manager of risk management department of China Jianyin Investment Ltd., the chairman of the board of directors of Beijing Jiantou Kexin Technology Development Co., Ltd., the chairman of the board of directors of JIC Technology Investment Co., Ltd., and the assistant to the president of China Jianyin Investment Ltd. Mr. Zhuang has been the Vice President and the Chief Risk Officer of the Company since April 2021, the Compliance Controller of the Company since July 2021 and an executive Director of the Company since August 2021, and ceased to serve as the Compliance Controller of the Company since March 2022. Mr. Zhuang holds a doctoral degree in economics.67China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESNon-executive DirectorsMr. Wen Ning (溫寧), is a non-executive Director of the Company. He is a senior accountant and a university graduate. He had served as a senior staff member, a principal staff member, the deputy division director, the division director and the office director of the Shandong Regulatory Bureau of the Ministry of Finance, and a member of the party leadership group and the deputy director of the Anhui Regulatory Bureau of the Ministry of Finance. Mr. Wen has been a non-executive Director of the Company since May 2019.Ms. Wang Xiaoya (汪小亞), is a non-executive Director of the Company and a research fellow. Ms. Wang had served as a member of the Post-doctoral Academic Committee, and a post-doctoral co-mentor at the Research Institute of Finance of the Peoples Bank of China (“PBOC”); deputy chief and chief of the Macroeconomic Analysis Division of the Research Bureau, and deputy director of the Research Bureau of the PBOC (during which period she served as a secondment deputy mayor of Tongliao City in the Inner Mongolia Autonomous Region); and a non-executive director of Industrial and Commercial Bank of China Limited. Ms. Wang has been a non-executive director of Bank of China Limited since August 2017, and a non-executive Director of the Company since August 2019. She is currently a member of the Academic Committee of the China Institute for Rural Studies of Tsinghua University, an invited researcher of the National Institute of Financial Research of Tsinghua University, a doctoral supervisor of Southwestern University of Finance and Economics and an invited professor of the Graduate School of the Chinese Academy of Social Sciences. Ms. Wang holds a doctoral degree in macroeconomics.Mr. Liu Xiaopeng (劉曉鵬), is a non-executive Director of the Company and a senior economist. Mr. Liu served as the vice division chief of the department of financial assets management of State Grid Corporation of China; the general manager of the investment management department, the assistant to the general manager and the general manager of the department of development and planning of State Grid Yingda International Holdings Co., Ltd.; a member of the party leadership group, the deputy general manager and the secretary to the board of directors of China Power Finance Co., Ltd.; the deputy director general of the global energy interconnection office of State Grid Corporation of China and the Global Energy Interconnection Development and Cooperation Organisation; the director of the strategic operations of Gome Holdings Group Company Limited; an executive director and the CEO of Gome Finance Technology Co., Ltd. Mr. Liu serves as a non-executive director of Agricultural Bank of China Limited. Mr. Liu has been a non-executive Director of the Company since November 2019. Mr. Liu holds a doctoral degree in world economics.Mr. Li Bingquan (李丙泉), is a non-executive Director of the Company and a senior auditor. Mr. Li served as the cadre, deputy senior staff member, senior staff member and deputy director of general office of Jinan Resident Audit Office of the NAO; the head of the audit team of the general office of the board of supervisors/internal audit department, and the senior deputy manager and senior manager of the general office of the board of supervisors/internal audit department of China Investment Corporation. Mr. Li is currently a managing director of Central Huijin. Mr. Li has been a non-executive Director of the Company since January 2022. Mr. Li holds a masters degree in business administration.68China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESIndependent Non-executive DirectorsMr. Hao Yansu (郝演蘇), is an independent non-executive Director of the Company and a professor. Mr. Hao had served as the dean of the insurance department at Liaoning University, the dean of the insurance department of Central Institute of Finance and Economics, the managing director of Hong Kong Zhongqing Insurance and Risk Management Consulting Company, and the dean of the School of Insurance of Central University of Finance and Economics. Mr. Hao is currently the director of the Academic Committee of the School of Insurance of Central University of Finance and Economics, an independent director of An Hua Agricultural Property Insurance Company Ltd. and an independent director of Dinghe Property Insurance Co., Ltd. Mr. Hao has been an independent non-executive Director of the Company since December 2014. Mr. Hao holds a bachelors degree of economics in finance.Mr. Li Sanxi (李三喜), is an independent non-executive Director of the Company and a senior auditor. Mr. Li had served at the administrative affairs department and the audit research institute of the NAO and Beijing Zhong Tian Heng Certified Public Accountants. Mr. Li is currently the chairman of the board of directors of Beijing Zhong Tian Heng Management Consulting Co., Ltd. and the general manager of Beijing Zhong Tian Heng Da Engineering Consulting Company. Mr. Li has been an independent non-executive Director of the Company since December 2014. Mr. Li holds a bachelors degree of economics in accounting.Ms. Mok Kam Sheung (莫錦嫦), is an independent non-executive Director of the Company. Ms. Mok has over 25-year working experience of legal affairs. Ms. Mok is now a partner of CFN Lawyers. Ms. Mok has been an independent non-executive Director of the Company since August 2015, and she is currently an independent director of China Reinsurance (Hong Kong) Company Limited. Ms. Mok holds a Bachelor of Arts (honours) degree and a Common Professional Examination diploma in laws. She was also granted a certificate by the Law Society of England and Wales evidencing the passing of the Solicitors Final Examination. Ms. Mok is qualified to practise as a solicitor of the High Court of Hong Kong and the Supreme Court of England and Wales. She is also qualified as a China appointed attesting officer by the Ministry of Justice of the PRC.Ms. Jiang Bo (姜波), is an independent non-executive Director of the Company, a senior accountant and a senior economist. Ms. Jiang was appointed as the chief financial officer and the chairman of the labour union of China Everbright Group Limited, a managing director, the vice president, a party committee member and the chief audit officer of China Everbright Bank, a director of China Everbright Holdings Company Limited (Hong Kong), Sun Life Everbright Life Insurance Co., Ltd., Everbright Financial Holding Asset Management Co., Ltd. and Shenyin & Wanguo Securities Co. Ltd. Ms. Jiang is currently an independent director of China Shenhua Energy Company Limited and GuoDu Securities Co., Ltd. Ms. Jiang has been an independent non-executive Director of the Company since December 2018. Ms. Jiang holds a doctoral degree in economics.69China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESSupervisorsMs. Xiong Lianhua (熊蓮花), is the shareholder representative Supervisor and the Chairlady of the Board of Supervisors of the Company. Before joining the Company, Ms. Xiong served as a vice division director, a division director and an inspector of deputy-bureau-level of the PBOC. Ms. Xiong served as the designated director of the Comprehensive Management Department/Banking Institutions Department II, the Securities Institution Management Department/Insurance Institution Management Department and the Office of the Directly Managed Enterprises Leading Group/Equity Management Department II, and the joint chairlady of the Risk and Internal Control Committee of Central Huijin. Ms. Xiong has been appointed as the shareholder representative Supervisor and the Chairlady of the Board of Supervisors of the Company since June 2021. Ms. Xiong holds a masters degree in economics.Mr. Zhu Yong (朱永), is a shareholder representative Supervisor of the Company and a senior auditor. Mr. Zhu worked for the department of monetary audit of the NAO as the deputy divisional director. Mr. Zhu served as the general manager of the legal and audit department and the general manager of the human resources department of Tianjin Binhai Rural Commercial Bank, and the divisional director of China Export & Credit Insurance Corporation, the senior manager of the office of the board of supervisors/internal audit department and the leader of the working group of the board of supervisors of China Investment Corporation. Mr. Zhu serves as the non-executive director of Hengfeng Bank Co., Ltd. (assigned by Central Huijin). Mr. Zhu has been appointed as a shareholder representative Supervisor of the Company since December 2014. Mr. Zhu holds a doctoral degree in economics.Mr. Zeng Cheng (曾誠), is a shareholder representative Supervisor of the Company and a senior accountant. Mr. Zeng was the manager of the financial department of Central Huijin, and the senior deputy manager, senior manager and the leader of the tax group of the financial department of China Investment Corporation. Mr. Zeng is currently the leader of capital and treasury group of the financial department of China Investment Corporation. Mr. Zeng has been appointed as a shareholder representative Supervisor of the Company since July 2018. Mr. Zeng holds a doctoral degree in accounting and was qualified as a National High-end Accounting Talent, a Chartered Global Management Accountant (CGMA) and a Fellow of the Chartered Institute of Management Accountants (FCMA).Mr. Qin Yueguang (秦躍光), is an employee representative Supervisor of the Company and a certified public accountant (non-practising member) in the PRC. Prior to joining the Company, Mr. Qin had worked in Konka Group Co., Ltd., Ping An Insurance (Group) Company of China, Ltd., China Taiping Insurance Group Ltd. and New China Life Insurance Company Ltd. Mr. Qin was the deputy general manager (in charge of daily operation) and the general manager of the risk management department of the Company and a director of China Re Life. Mr. Qin is concurrently serving as the vice president of China Continent Insurance. Mr. Qin has been appointed as an employee representative Supervisor of the Company since June 2018. Mr. Qin holds a bachelors degree in accounting.Mr. Li Jingye (李靖野), is an employee representative Supervisor of the Company and a senior economist. Mr. Li worked in the Central Financial Work Committee, the former China Banking Regulatory Commission and CIRC, and as the supervisor at deputy division head level of PICC Holding Company and China Reinsurance (Group) Company appointed by the State Council. Mr. Li was the assistant to general manager and deputy general manager of audit department/office of the Board of Supervisors of the Company. Mr. Li serves as the general manager of the department/office, and is concurrently serving as the audit controller of China Re AMC. Mr. Li has been appointed as an employee representative Supervisor of the Company since June 2018. Mr. Li holds a doctoral degree in finance.70China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESSenior ManagementFor the biography of Mr. He Chunlei, please refer to the paragraphs headed “Executive Directors” above.For the biography of Mr. Zhuang Qianzhi, please refer to the paragraphs headed “Executive Directors” above.Ms. Zhu Xiaoyun (朱曉雲), is the Vice President, Board Secretary and a joint company secretary of the Company, and an economist. Ms. Zhu joined the Company in July 1998 and had served as the deputy head of the office of the Board, the deputy head and the head of the general office of the Company and the head of the general office (party committee office) of the Company. Ms. Zhu currently serves as the general manager of Human Resources Department of the Company. Ms. Zhu has been the joint company secretary of the Company since April 2017, the Board Secretary of the Company since June 2017 and the Vice President of the Company since November 2021. Ms. Zhu served as a director of Huatai Insurance Agency and Consultant Service Limited and China Banking and Insurance Media Company Ltd. (formerly known as China Insurance Media Company Ltd.). Ms. Zhu holds a masters degree in economics.Mr. Lei Jianming (雷建明), is the Assistant to the President of the Company. Prior to joining the Company, Mr. Lei served as the chief marketing officer and the general manager of the sales and marketing department of the Guangdong Branch, the assistant to the general manager and the deputy general manager of the Guangxi Branch, the deputy general manager (in charge of daily operation) and the general manager of the Guizhou Branch and the general manager of the Hunan Branch of New China Life Insurance Company Ltd. Mr. Lei has been the Assistant to the President of the Company since March 2022. Mr. Lei holds a masters degree in agricultural extension.Mr. Tian Meipan (田美攀), is the Chief Actuary of the Company. Prior to joining the Company, Mr. Tian served as a lecturer at the insurance department of Nankai University. Mr. Tian served at the commercial business division of the life insurance business department of the Company. Mr. Tian served as a controller of the risk management department, the deputy general manager and the chief actuary of China Re Life. Mr. Tian is now an executive director and the general manager of China Re Life, and he has been the Chief Actuary of the Company since December 2012. Mr. Tian holds a masters degree in finance. He has also obtained the qualification of actuary in North America and the PRC.Mr. Cao Shunming (曹順明), is the Compliance Controller and an associate researcher of the Company. Prior to joining the Company, Mr. Cao served in Peoples Insurance Company of China, PICC Asset Management Company Limited and PICC Property and Casualty Company Limited. Mr. Cao served as the deputy general manager of risk management and legal and compliance department, the deputy general manager of the internal control, compliance and legal affairs department and an employee representative Supervisor of the Company. Mr. Cao currently serves as the legal controller, the general manager of the internal control, compliance and legal affairs department, the general manager of the risk management department of the Company and the chairman of the supervisory committee of Huatai Insurance Agency and Consultant Service Limited. Mr. Cao has been the Compliance Controller of the Company since March 2022. Mr. Cao holds a doctoral degree in law and lawyer qualification in the PRC.71China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESJoint Company SecretariesFor the biography of Ms. Zhu Xiaoyun, please refer to the paragraphs headed “Senior Management” above.Ms. Ng Sau Mei (伍秀薇), has been appointed as a joint company secretary of the Company since April 2017. Ms. Ng is a director of the listing services department of TMF Hong Kong Limited. Ms. Ng has over 21 years of professional experience in the company secretarial field and is responsible for providing corporate secretarial and compliance services to listed company clients. Ms. Ng has extensive knowledge and experience in corporate governance and compliance matters for listed companies and currently serves as joint company secretary of several companies listed on the Main Board of the Hong Kong Stock Exchange, including Shandong Gold Mining Co., Ltd. and COSCO SHIPPING Development Co., Ltd., and is responsible for the corporate secretarial matters of several other companies listed on the Main Board of the Hong Kong Stock Exchange, including New China Life Insurance Company Ltd. and China Development Bank Financial Leasing Co., Ltd. Ms. Ng holds a masters degree in law, and is a Chartered Secretary, a Corporate Governance Professional and a Fellow of the Hong Kong Chartered Governance Institute (formerly known as the Hong Kong Institute of Chartered Secretaries) and the Chartered Governance Institute (formerly known as the Institute of Chartered Secretaries and Administrators) in the UK.72China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESCHANGES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT AND THEIR INFORMATIONChanges of Directors and Their InformationNameOriginal PositionPresent PositionChanges of BiographiesRen XiaobingExecutive DirectorNilSince 25 February 2021, Mr. Ren Xiaobing ceased to serve as an Executive Director.Lu XiuliNon-executive DirectorNilSince 30 July 2021, Ms. Lu Xiuli ceased to serve as a Non-executive Director.Zhuang QianzhiNilExecutive DirectorSince 16 August 2021, Mr. Zhuang Qianzhi has served as an Executive Director.Li BingquanNilNon-executive DirectorSince 10 January 2022, Mr. Li Bingquan has served as a Non-executive Director.For details of Mr. Ren Xiaobings cessation, please refer to the announcement of the Company dated 25 February 2021. For details of Ms. Lu Xiulis cessation, please refer to the announcement of the Company dated 30 July 2021. For details of Mr. Zhuang Qianzhis appointment, please refer to the announcements of the Company dated 26 April 2021, 25 June 2021 and 17 August 2021 and the circular of the Company dated 10 May 2021. For details of Mr. Li Bingquans appointment, please refer to the announcements of the Company dated 28 September 2021, 29 October 2021 and 11 January 2022 and the circular of the Company dated 5 October 2021.Save as disclosed above and in “Biographies of Directors, Supervisors, Senior Management and Joint Company Secretaries” under this section, as of the Latest Practicable Date, there was no other change of the Directors or their information required to be disclosed in accordance with Rule 13.51B(1) of the Hong Kong Listing Rules.Change of Supervisor and Her InformationNameOriginal PositionPresent PositionChange of BiographyXiong LianhuaNilShareholder Representative Supervisor, Chairlady of the Board of SupervisorsSince 4 June 2021, Ms. Xiong Lianhua has served as a Shareholder Representative Supervisor and the Chairlady of the Board of Supervisors.For details of Ms. Xiong Lianhuas appointment, please refer to the announcements of the Company dated 25 February 2021, 20 April 2021 and 4 June 2021 and the circular of the Company dated 2 March 2021.73China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESSave as disclosed above and in “Biographies of Directors, Supervisors, Senior Management and Joint Company Secretaries” under this section, as of the Latest Practicable Date, there was no other change of the Supervisors or their information required to be disclosed in accordance with Rule 13.51B(1) of the Hong Kong Listing Rules.Changes of Senior Management and Their InformationNameOriginal PositionPresent PositionChanges of BiographiesRen XiaobingVice President, Compliance Controller, Chief Risk OfficerNilSince 25 February 2021, Mr. Ren Xiaobing ceased to serve as the Vice President, the Compliance Controller and the Chief Risk Officer of the Company.Liu TianyangAudit ControllerNilSince 30 March 2021, Ms. Liu Tianyang ceased to serve as the Audit Controller of the Company.Zhuang QianzhiNilVice President, Chief Risk OfficerSince 16 April 2021, Mr. Zhuang Qianzhi has served as the Vice President of the Company; since 21 April 2021, he has served as the Chief Risk Officer of the Company;from 26 July 2021 to 15 March 2022, he served as the Compliance Controller of the Company.Zhu XiaoyunBoard Secretary, Joint Company SecretaryVice President, Board Secretary, Joint Company SecretarySince 26 November 2021, Ms. Zhu Xiaoyun has served as the Vice President of the Company.Lei JianmingNilAssistant to the PresidentSince 21 March 2022, Mr. Lei Jianming has served as the Assistant to the President of the Company.Cao ShunmingNilCompliance ControllerSince 15 March 2022, Mr. Cao Shunming has served as the Compliance Controller of the Company.Save as disclosed above and in “Biographies of Directors, Supervisors, Senior Management and Joint Company Secretaries” under this section, as of the Latest Practicable Date, there was no other change of the senior management of the Company or their information required to be disclosed in accordance with Rule 13.51B(1) of the Hong Kong Listing Rules.74China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEESEMPLOYEESAs of 31 December 2021, China Re Group had a total of 55,407 employees. The Groups staff remuneration comprises three components, namely basic salary, performance bonus and benefits and subsidies. We always uphold the guidance of “combining the market practice with the real situation of China Re”, follow the distribution concept of “giving priority to the front-line staff, the front office staff, the core backbones and the best-performing staff”, and have established a fair, competitive and motivating remuneration system. We have established an enterprise annuity plan and a supplementary medical insurance plan to provide employees with more comprehensive benefits, which plays an important role in attracting, motivating and retaining talents.The Group is devoted to realising a win-win situation between corporate development and employee improvement, and has fully implemented talent protection to train young employees, backbone talents, and core talents in a targeted manner, in which we have increased investment in talent cultivation, strengthened employee career planning management, cleared the obstacles on the career growth channels, and established a talent training system with our characteristics through multi-level training, internal rotation and exchange, and overseas training to create a high-quality, professional and international team of employees.CORPORATE GOVERNANCE REPORT75China Reinsurance (Group) Corporation2021 Annual ReportOVERVIEWThe Company has always been in compliance with relevant laws and regulations and regulatory requirements such as the PRC Company Law, the PRC Insurance Law, the Hong Kong Listing Rules, the Guiding Opinion on Regulating the Corporate Governance Structure of Insurance Companies (Provisional), earnestly performed the requirements of the Articles of Association, adhered to the principles of good corporate governance, strove for continuously enhancing the corporate governance standard to ensure the stable development of the Company and to enhance shareholders value.The Company has adopted the Corporate Governance Code as its corporate governance code since the Listing Date. During the Reporting Period, the Company has been in compliance with all applicable code provisions stipulated in the Corporate Governance Code and adopted recommended best practices under appropriate circumstances.The corporate governance structure chart of the Company is set out as below:Shareholders General MeetingStrategy andInvestment CommitteeRelated-Party TransactionsControl CommitteeAudit CommitteeRisk ManagementCommitteePresidents OfceBoard of DirectorsBoard of SupervisorsPerformance Supervision andInspection CommitteeNomination andRemuneration CommitteeFinancial Supervision andInspection CommitteeCORPORATE GOVERNANCE REPORT76China Reinsurance (Group) Corporation2021 Annual ReportSHAREHOLDERS GENERAL MEETINGShareholders general meeting is the organ of authority of the Company and shall exercise the following functions and powers in accordance with laws: (1) to decide on operational policies and investment plans of the Company; (2) to elect or replace the Directors and Supervisors who are not representatives of the employees, and to decide on matters relevant to remuneration of Directors and Supervisors; (3) to consider and approve the reports of the Board of Directors; (4) to consider and approve the reports of the Board of Supervisors; (5) to consider and approve annual financial budgets and final accounts of the Company; (6) to consider and approve proposals for profit distribution and recovery of losses of the Company; (7) to decide on increase or reduction of the registered capital of the Company; (8) to decide on the issuance of bonds, shares, warrants or other marketable securities and their listing of the Company; (9) to decide on merger, division, dissolution or liquidation of the Company and changes in the form of the Company; (10) to amend the Articles of Association and to formulate and amend the rules of procedures of the shareholders general meetings, the Board of Directors and the Board of Supervisors; (11) to decide on the acquisition of shares of the Company; (12) to decide on the appointment, dismissal or non-reappointment of accounting firms which provide regular statutory audit for financial statements of the Company; (13) to consider and approve matters related to the Companys establishment of legal entities, significant external investment, major acquisition of assets, major pledge and write-off of assets, major external donation and major asset mortgage (other than those authorised to be determined by the Board); (14) to consider and approve related-party transactions required to be considered and approved by the shareholders general meetings under laws, administrative regulations, regulatory requirements and requirements of the securities regulatory authorities or stock exchange at the place where the Companys shares are listed; (15) to consider and approve matters related to the change of use of the raised fund; (16) to consider and approve share incentive scheme; (17) to consider and approve any proposal raised by shareholders, individually or in aggregate, holding above 3% of the issued shares of the Company with voting rights; (18) to consider and approve plan on authorisation to the Board granted by the shareholders general meetings; and (19) to consider other matters that are to be determined at the shareholders general meetings as required by the PRC laws, administrative regulations, regulatory requirements and the Articles of Association.During the Reporting Period, the Company convened three shareholders general meetings and the resolutions considered and approved at the meetings included: To consider and approve the resolution on the election of Ms. Xiong Lianhua as a Supervisor for the Fourth Session of the Board of Supervisors of the Company; To consider and approve the resolution on matters regarding remuneration of relevant Directors and Supervisors of the Company for the Year 2019; To consider and approve the election of Mr. Zhuang Qianzhi as an executive Director of the Company; To consider and approve the Report of the Board of Directors for the Year 2020; To consider and approve the Report of the Board of Supervisors for the Year 2020; To consider and approve the Final Financial Accounts Report for the Year 2020;CORPORATE GOVERNANCE REPORT77China Reinsurance (Group) Corporation2021 Annual Report To consider and approve the Profit Distribution Plan for the Year 2020; To consider and approve the Investment Budget for Fixed Assets for the Year 2021; To consider and approve the Engagement of Statutory Financial Reporting Auditors and the Related Fees for the Year 2021; and To consider and approve the resolution on the Outline of the “Fourteenth Five-Year” Strategic Plan of China Re Group.Methods of Convening Extraordinary General Meetings and Proposing Resolutions by ShareholdersAccording to the Articles of Association, any shareholder(s), whether individually or in aggregate, holding more than 10% of the outstanding shares of the Company with voting rights may request in writing to convene an extraordinary general meeting and such shareholder(s) shall submit the subject(s) of the meeting and the full proposal(s) in writing to the Board. If the Board holds the view that the proposal(s) complies with the requirements under the PRC laws, administrative regulations, regulatory requirements and the Articles of Association, it shall issue a notice of shareholders general meeting within five days after the resolution of the Board.For details of the procedures for nominating candidates of Directors by shareholders, please refer to the website of the Company. Specific enquiries or suggestions by shareholders can be sent in writing to the Board at the Companys registered address or by e-mail to the Company. In addition, if the shareholders have any enquiries about their shareholdings and entitlement to dividend, they can contact Computershare Hong Kong Investor Services Limited, the H share registrar of the Company, the contact details of which are set out in the section headed “Corporate Information” of this annual report.When shareholders general meetings are held by the Company, shareholders individually or in aggregate holding more than 3% of the issued shares of the Company with voting rights have the right to make proposals in writing. The proposing shareholders may raise interim proposals and submit to the convenor of the shareholders general meeting 10 days prior to the date of the meeting, and matters in the interim proposals within the scope of functions and powers of the shareholders general meeting shall be included in such meetings agenda. The convenor of the shareholders general meeting shall give supplemental notice to the shareholders within two days upon receiving such interim proposals. The content of such interim proposals shall be within the scope of functions and powers of the shareholders general meetings, and shall contain specific subjects and concrete matters for approval.CORPORATE GOVERNANCE REPORT78China Reinsurance (Group) Corporation2021 Annual ReportBOARD OF DIRECTORSThe Board shall be responsible for the shareholders general meeting. It shall hold at least four regular meetings every year, and hold extraordinary meetings as required. Notice of regular meetings shall be given to all Directors and Supervisors at least 15 days before the date of the meeting (excluding the date of the meeting). Notice of extraordinary meetings shall be given to all Directors and Supervisors at least seven days before the date of the meeting (excluding the date of the meeting). In the event of an emergency matter, the convening of an extraordinary meeting is not subject to the aforementioned time limit of notification for the meeting, but reasonable notice shall be given.All Directors shall ensure that they carry out duties in good faith, in compliance with applicable laws and regulations, and in the interests of the Company and its shareholders during their terms of office.CompositionAs at the end of the Reporting Period, the Board comprised 10 Directors, consisting of three executive Directors, three non-executive Directors and four independent non-executive Directors.Directors serve a term of three years and may serve consecutive terms if re-elected. Details are as follows:NamePositionYuan LinjiangChairman, Executive DirectorHe ChunleiVice Chairman, Executive DirectorZhuang QianzhiExecutive DirectorWen NingNon-executive DirectorWang XiaoyaNon-executive DirectorLiu XiaopengNon-executive DirectorHao YansuIndependent Non-executive DirectorLi SanxiIndependent Non-executive DirectorMok Kam SheungIndependent Non-executive DirectorJiang BoIndependent Non-executive DirectorNotes: 1. Since 25 February 2021, Mr. Ren Xiaobing ceased to serve as an executive Director. 2. Since 30 July 2021, Ms. Lu Xiuli ceased to serve as a non-executive Director. 3. Since 16 August 2021, Mr. Zhuang Qianzhi has served as an executive Director. 4. Since 10 January 2022, Mr. Li Bingquan has served as a non-executive Director.During the Reporting Period, the Board had been at all times in compliance with Rules 3.10(1) and 3.10(2) of the Hong Kong Listing Rules which stipulate that an issuer must appoint at least three independent non-executive directors and at least one of the independent non-executive directors shall have appropriate professional qualifications or accounting or related financial management expertise, and with Rule 3.10A of the Hong Kong Listing Rules which specifies that an issuer must appoint independent non-executive directors representing at least one-third of the board.CORPORATE GOVERNANCE REPORT79China Reinsurance (Group) Corporation2021 Annual ReportAll Directors (including independent non-executive Directors) have brought a variety of valuable working experience and expertise to the Board, enabling the Board to effectively perform its functions. All Directors have agreed to disclose to the Company in a timely manner the number, nature, position, and duration of office at other listed companies or institutions and other major appointments in accordance with the requirements of the Corporate Governance Code.Corporate Governance FunctionsThe Company is committed to maintaining the highest level of corporate governance and the Board plays an important role to maintain sound corporate governance. The corporate governance functions of the Board and its specialised committees include developing and reviewing the Companys policies and practices on corporate governance and making recommendations to the Board; reviewing and monitoring the training and continuous professional development of Directors and senior management; reviewing and monitoring the Companys policies and practices on compliance with legal and regulatory requirements; developing, reviewing and monitoring the code of conduct and compliance manual (if any) applicable to employees and Directors; and reviewing the Companys compliance with the Corporate Governance Code and disclosure in the Corporate Governance Report.Duties and ResponsibilitiesThe Board shall be responsible for the shareholders general meeting, and its main responsibilities include, but not limited to: (1) convening shareholders general meetings and reporting its work to the shareholders general meeting; (2) implementing the resolutions of the shareholders general meetings; (3) determining the operation plans and investment proposals of the Company; (4) formulating the development strategies of the Company; (5) formulating the annual financial budget and final accounts of the Company; (6) formulating the profit distribution plan and loss recovery plan of the Company; (7) formulating proposals for increase or reduction of the registered capital or proposals for the issue of bonds, shares, warrants or other securities or the listing of the Company; (8) formulating plans for major acquisition of the Company, the acquisition of shares of the Company or merger, division, dissolution and changes of the form of the Company; (9) formulating proposals for any amendment to the Articles of Association; (10) formulating the procedural rules of the shareholders general meetings and the Board and the working rules for specialised committees under the Board; (11) formulating the basic management system of the Company; (12) deciding on the establishment of internal management departments, branches and subsidiaries of the Company; (13) regularly evaluating and improving the corporate governance of the Company; (14) appointing or removing senior management of the Company, and implementing reviews as well as determining remuneration and rewards and punishment arrangements with respect to such personnel; appointing or removing members of each specialised committee under the Board; (15) reviewing and deciding on evaluation plans for the results of operation of our major subsidiaries; (16) reviewing annual financial reports and major disclosure of information of the Company; (17) proposing to the shareholders general meeting on the appointment or removal of accounting firms which provide regular statutory audit on the financial statements of the Company; (18) considering and approving, or authorising the Related-Party Transactions Control Committee under the Board to approve related-party transactions, except for those which shall be considered and approved by the shareholders general meeting as required by laws; (19) considering and approving the Companys matters such as external investment, acquisition of assets, disposal and write-off of assets, external donations and asset mortgage, except for the matters regulated under the functions and powers attributable to the shareholders general meeting as stipulated in Article 69 of the Articles of Association; (20) listening to the report from the Companys President on the operation and management and inspecting the work of the President; (21) recruiting an external auditor to carry out the audit of the Directors and senior management of the Company; and (22) exercising such other functions and powers as granted by the PRC laws, administrative regulations, regulatory requirements or the Articles of Association and as empowered by the shareholders general meeting.CORPORATE GOVERNANCE REPORT80China Reinsurance (Group) Corporation2021 Annual ReportSummary of the Work UndertakenDuring the Reporting Period, the Directors attendance records of the shareholders general meetings were as follows:NameAttended in person/eligible to attendPercentage ofattendance in person (%)Yuan Linjiang3/3100He Chunlei3/3100Ren Xiaobing0/0Zhuang Qianzhi1/1100Lu Xiuli2/2100Wen Ning3/3100Wang Xiaoya3/3100Liu Xiaopeng3/3100Hao Yansu3/3100Li Sanxi3/3100Mok Kam Sheung3/3100Jiang Bo3/3100During the Reporting Period, the Directors attendance records of Board meetings were as follows:NameAttended in person/eligible to attendPercentage of attendance in person (%)Attended by proxy/eligible to attendPercentage of attendance by proxy (%)Yuan Linjiang7/71000/70He Chunlei7/71000/70Ren Xiaobing0/00/0Zhuang Qianzhi4/41000/40Lu Xiuli3/31000/30Wen Ning6/7861/714Wang Xiaoya7/71000/70Liu Xiaopeng7/71000/70Hao Yansu7/71000/70Li Sanxi7/71000/70Mok Kam Sheung7/71000/70Jiang Bo7/71000/70CORPORATE GOVERNANCE REPORT81China Reinsurance (Group) Corporation2021 Annual ReportDuring the Reporting Period, the Board held a total of seven meetings, at which 66 resolutions were considered and approved and 20 reports were received. The Directors have exercised their voting rights prudently and independently and put forward constructive opinions and suggestions which have effectively facilitated the efficient operation of corporate governance compliance and supported the commencement of the “Fourteenth Five-Year” strategy of the Company while driving the improvement of operation and management of the Company.DirectorsResponsibility with Respect to Financial StatementsThe management of the Company has provided the Board with necessary explanations and information enabling all Directors to consider the Companys consolidated financial statements which are submitted to the Board for approval. The Directors are responsible for the preparation of financial statements for every financial year and the interim period thereof which shall reflect a true and fair view of the business operations of the Company by implementing proper accounting policies in accordance with the International Financial Reporting Standards issued by the International Accounting Standards Board, and implementing the accounting regulations issued by the Ministry of Finance and the CBIRC subject to compliance with the International Financial Reporting Standards.The Board has confirmed that it is responsible for the preparation of the financial statements of the Company for the year ended 31 December 2021. The Company is not subject to any material uncertainties or circumstances which might cast significant doubt on the Companys ability to continue as a going concern.Securities TransactionsDuring the Reporting Period, in respect of dealings in securities by Directors and Supervisors, the Company had adopted the Model Code for Securities Transactions. Having made enquiries by the Company, all the Directors and Supervisors confirmed that they had complied with the standards set out in the Model Code for Securities Transactions during the Reporting Period.Training of DirectorsDuring the Reporting Period, all Directors (Mr. Yuan Linjiang, Mr. He Chunlei, Mr. Ren Xiaobing, Mr. Zhuang Qianzhi, Ms. Lu Xiuli, Mr. Wen Ning, Ms. Wang Xiaoya, Mr. Liu Xiaopeng, Mr. Hao Yansu, Mr. Li Sanxi, Ms. Mok Kam Sheung and Ms. Jiang Bo) were actively involved in continuous improvement in professional competence and participated in various kinds of training activities relating to corporate governance, the Hong Kong Listing Rules and risk management which were organised by the shareholders, regulatory authorities, industrial organisations and the Company, so as to develop and update their knowledge and skills and improve their performance ability, with the aim of making contributions to the Board with comprehensive information under appropriate circumstances.CORPORATE GOVERNANCE REPORT82China Reinsurance (Group) Corporation2021 Annual ReportChairman/PresidentDuring the Reporting Period, the Chairman and the President of the Company were performed by different persons, the Chairman of the Company was Mr. Yuan Linjiang, and the President of the Company was Mr. He Chunlei.The Chairman is responsible for providing leadership to the Board, ensuring that the Company has good corporate governance practices and procedures, and maintaining the effective operation of the functions of Board. If the Chairman is unable to perform his duties or does not perform his duties, the Vice Chairman shall perform the duties of the Chairman.The President is responsible for leading the operation and management of the Company, organising the implementation of Board resolutions, annual operation plans and investment proposals, formulating the internal management organisation plan and basic management system, and making recommendations to the Board regarding the appointment or dismissal of the Vice President of the Company and other senior management (other than the Audit Controller and the Board Secretary). Details of the duties and responsibilities of the Chairman and the President are set out in the Articles of Association.Term of Office of Non-executive DirectorsThe term of office of non-executive Directors (including independent non-executive Directors) is three years.Independence of Independent Non-executive DirectorsAll independent non-executive Directors have complied with the independence guidance requirements set out in Rule 3.13 of the Hong Kong Listing Rules, and have submitted their letters of confirmation regarding their independence to the Company. As such, the Company considers that all independent non-executive Directors are still independent.Nomination of DirectorsThe Nomination and Remuneration Committee of the Board first reviews the candidates of Directors in accordance with the requirements of laws, regulations, regulatory documents, regulatory requirements and the Articles of Association and then makes recommendations to the Board.Remuneration of DirectorsThe Board has established the Nomination and Remuneration Committee with written terms of reference. As at the end of the Reporting Period, the Nomination and Remuneration Committee consisted of one non-executive Director, being Mr. Wen Ning (vice chairman), and three independent non-executive Directors, being Mr. Hao Yansu (chairman), Mr. Li Sanxi and Ms. Mok Kam Sheung.Notes: 1. Since 30 July 2021, Ms. Lu Xiuli ceased to serve as a member of the Nomination and Remuneration Committee. 2. Since 10 January 2022, Mr. Li Bingquan has served as a member of the Nomination and Remuneration Committee.CORPORATE GOVERNANCE REPORT83China Reinsurance (Group) Corporation2021 Annual ReportThe Articles of Association provide that the remuneration of the Directors shall be determined by the shareholders general meetings of the Company from time to time. The remuneration of the independent non-executive Directors shall be proposed by the Board and reviewed and approved by the shareholders general meeting. The Articles of Association provide that the Company shall enter into written contracts with the Directors in respect of remuneration matters with prior approval by the shareholders general meeting. In 2021, except for independent non-executive Directors who received Directors fees from the Company, all other Directors did not receive any remuneration from the Company in the capacity of Directors. Executive Directors received remuneration in the capacity of head of Central Financial Enterprise. The remuneration packages of independent non-executive Directors are determined based on the Companys actual situations with reference to market benchmarks.Specialised Committees of the BoardThere are five specialised committees under the Board, namely the Strategy and Investment Committee, the Audit Committee, the Nomination and Remuneration Committee, the Risk Management Committee and the Related-Party Transactions Control Committee. Each committee provides opinions and suggestions to the Board with respect to matters within the scope of its responsibilities. The duties and operation process of each specialised committee are explicitly stipulated in their respective terms of reference.Strategy and Investment CommitteeCompositionAs at the end of the Reporting Period, the Strategy and Investment Committee comprised five Directors, including three executive Directors and two non-executive Directors.Chairman:Yuan Linjiang (executive Director)Members:He Chunlei (executive Director), Zhuang Qianzhi (executive Director), Wen Ning (non-executive Director), Wang Xiaoya (non-executive Director)Notes: 1. Since 25 February 2021, Mr. Ren Xiaobing ceased to serve as a member of the Strategy and Investment Committee. 2. Since 28 September 2021, Mr. Zhuang Qianzhi has served as a member of the Strategy and Investment Committee.Duties and ResponsibilitiesThe Strategy and Investment Committee is primarily responsible for studying the mid- to long-term development strategies and significant investment decisions of the Company and making recommendations.CORPORATE GOVERNANCE REPORT84China Reinsurance (Group) Corporation2021 Annual ReportThe primary duties include (but not limited to): (1) reviewing the Companys development strategies; (2) reviewing the Companys operation plans, annual financial budget and final accounts; (3) reviewing the goals of the Companys assets and liabilities management, asset allocation plans, and other investment asset management matters within the scope of authorisation by the Board; (4) reviewing the Companys major investment and fund raising plans, and matters such as investment, asset acquisition, asset disposal and write-off, external guarantee and external donation within the scope of mandates granted by the shareholders general meeting (except for those performed by the senior management as authorised by the Board); (5) reviewing the basic systems of strategy management and asset management; (6) reviewing the establishment of our internal management departments and branches, and the establishment plan of legal person institution; and (7) other matters as authorised by the Board.Summary of the Work UndertakenDuring the Reporting Period, the Strategy and Investment Committee held a total of five meetings and considered and approved 14 resolutions.Attendance records of the meetings were as follows:NameAttended in person/eligibleto attendPercentage of attendance inperson (%)Attended by proxy/eligibleto attendPercentage of attendance byproxy (%)Yuan Linjiang5/51000/50He Chunlei5/51000/50Ren Xiaobing0/00/0Zhuang Qianzhi3/31000/30Wen Ning5/51000/50Wang Xiaoya5/51000/50During the Reporting Period, the Strategy and Investment Committee thoroughly studied and discussed matters including the operation plans, budgets, report on the final accounts, profits distribution plan, “Fourteenth Five-Year” Strategic Plan, three-year rolling capital plan, the development plan of Digital China Re 2.0 of the Group, as well as the establishment of an international department and China Re Institute, proposed constructive suggestions, and played an important role in areas including the formulation and implementation of significant strategies of the Company.CORPORATE GOVERNANCE REPORT85China Reinsurance (Group) Corporation2021 Annual ReportAudit CommitteeCompositionAs at the end of the Reporting Period, the Audit Committee comprised five Directors, including three independent non-executive Directors and two non-executive Directors, with an independent non-executive Director serving as the chairman.Chairman:Li Sanxi (independent non-executive Director)Vice chairlady:Jiang Bo (independent non-executive Director)Members:Wen Ning (non-executive Director), Liu Xiaopeng (non-executive Director), Hao Yansu (independent non-executive Director)Duties and ResponsibilitiesThe Audit Committee examines the basic internal audit system and monitors its implementation, monitors and evaluates the internal audit and internal control of the Company, and makes recommendations on the appointment or change of external auditors and monitors their work. The primary duties include (but not limited to): (1) examining the basic internal audit system of the Company and monitoring its implementation, and inspecting, monitoring and evaluating the internal audit of the Company; (2) monitoring the implementation of the internal control and management system of the Company, inspecting and evaluating the compliance and effectiveness of material operating activities of the Company; reviewing the Corporate Governance Report and Compliance Report of the Company on a regular basis, and providing opinions and recommendations for improvement to the Board; (3) examining the Companys financial information and its disclosure, examining the Companys key financial system and its implementation, monitoring the financial status; monitoring the truthfulness of financial reports and the effectiveness of financial reporting procedures implemented by the management; (4) making recommendations on the appointment, re-appointment, replacement or removal of external auditors, monitoring the independence and objectivity, audit process and works of external auditors, coordinating the communication between the internal audit department and external auditors, examining reports issued by external auditors, and ensuring external auditors accountability to the Board and the Audit Committee; and (5) other matters as authorised by the Board.CORPORATE GOVERNANCE REPORT86China Reinsurance (Group) Corporation2021 Annual ReportSummary of the Work UndertakenDuring the Reporting Period, the Audit Committee held a total of five meetings, considered and approved nine resolutions, and received three reports.Attendance records of the meetings were as follows:NameAttended inperson/eligibleto attendPercentage of attendance inperson (%)Attended by proxy/eligibleto attendPercentage of attendance by proxy (%)Li Sanxi5/51000/50Jiang Bo5/51000/50Wen Ning5/51000/50Liu Xiaopeng5/51000/50Hao Yansu5/51000/50During the Reporting Period, the Audit Committee carefully performed its duties, considered and studied matters including the appointment of domestic and overseas annual auditors, the annual and interim results announcements and reports, work plan of internal audit, as well as the compliance and internal control assessment report, and provided the Board and the management with opinions and advice relating to finance, internal control and compliance in a timely manner, which kept enhancing the corporate governance level of the Company.CORPORATE GOVERNANCE REPORT87China Reinsurance (Group) Corporation2021 Annual ReportNomination and Remuneration CommitteeCompositionAs at the end of the Reporting Period, the Nomination and Remuneration Committee comprised four Directors, including three independent non-executive Directors and one non-executive Director.Chairman:Hao Yansu (independent non-executive Director)Vice chairman:Wen Ning (non-executive Director)Members:Li Sanxi (independent non-executive Director), Mok Kam Sheung (independent non-executive Director)Notes: 1. Since 30 July 2021, Ms. Lu Xiuli ceased to serve as a member of the Nomination and Remuneration Committee. 2. Since 10 January 2022, Mr. Li Bingquan has served as a member of the Nomination and Remuneration Committee.Duties and ResponsibilitiesThe Nomination and Remuneration Committee reports to the Board, reviews the human resources strategy and remuneration strategy of the Company, studies and makes recommendations to the Board on the selection procedures and criteria, candidates and remuneration packages for Directors and senior management.The primary duties include (but not limited to): (1) making recommendations to the Board regarding the selection procedures and criteria for Directors and senior management and the structure and composition of the Board; (2) reviewing the qualifications of Directors and senior management in accordance with the selection procedures and criteria, and making recommendations to the Board; (3) regularly (at least annually) evaluating the reasonableness of the Companys (including but not limited to the Boards) structure, size and composition (including the skills, knowledge and experience), and making recommendations to the Board on any proposed changes to the Board to complement the Companys corporate strategy; (4) making preliminary reviews on the candidates of Directors and senior management (including the Board Secretary) of the Company, and making recommendations to the Board; (5) nominating candidates for members of specialised committees (excluding this Committee) of the Board; (6) proposing the remuneration policy and proposals of Directors, Supervisors and senior management, and making recommendations to the Board; (7) considering salaries paid by comparable companies, time commitment and responsibilities required and terms of employment elsewhere in the Group; (8) examining and approving compensation payable to executive Directors and senior management due to their loss or termination of office or appointment; (9) examining and approving compensation arrangements relating to dismissal or removal of Directors due to misconduct; (10) ensuring that no Directors or any of his/her associates are involved in deciding his/her own remuneration; (11) considering the evaluation plans and remuneration packages of senior management of the Company, evaluating their performance and work, and submitting to the Board for approval; (12) examining the primary remuneration system, the evaluation plans for the results of operation of the Company and major subsidiaries, and making recommendations to the Board; and (13) other matters authorised by the Board.CORPORATE GOVERNANCE REPORT88China Reinsurance (Group) Corporation2021 Annual ReportSummary of the Work UndertakenDuring the Reporting Period, the Nomination and Remuneration Committee held a total of five meetings, and considered and approved 20 resolutions.Attendance records of the meetings were as follows:NameAttended inperson/eligibleto attendPercentage of attendance inperson (%)Attended by proxy/eligibleto attendPercentage of attendance by proxy (%)Hao Yansu5/51000/50Wen Ning5/51000/50Lu Xiuli3/31000/30Li Sanxi5/51000/50Mok Kam Sheung5/51000/50During the Reporting Period, the Nomination and Remuneration Committee discussed and studied matters including the settlement for gross salaries of China Re Group, the remuneration and nomination for Directors, Supervisors and senior management and renewal of liability insurance for Directors, Supervisors and senior management, which further pushed forward the improvement of the incentive and disciplinary system of the Company and continued to improve the effectiveness of the incentive system.According to the provisions of laws and regulations, normative documents, regulatory requirements and the Articles of Association, election of Director candidates shall first go through preliminary review by the Nomination and Remuneration Committee who shall then make nomination to the Board, and the Board shall propose the candidates to the shareholders general meeting of the Company for election by way of resolutions. Members of the Board shall finally be elected by the shareholders general meeting of the Company. The Nomination and Remuneration Committee mainly considers the education background, professional experience of the candidates and their capability to contribute to the Company as the selection and recommendation criteria, with taking into consideration the Board diversity policy.Pursuant to the Corporate Governance Code, the Board continued to implement the Board diversity policy. The Company is committed to maintaining the highest level of corporate governance and the diversity of Board members is an essential component of maintaining good corporate governance. The Company does not discriminate on the grounds of race, gender, disability, nationality, religious or philosophical belief, age, sexual orientation, family status or any other factors.CORPORATE GOVERNANCE REPORT89China Reinsurance (Group) Corporation2021 Annual ReportThe Board considers that the diversity in opinions and perspectives is beneficial to the Company and can be achieved through the consideration of factors in various aspects such as a diversity of skills, professional and industry experience, cultural and educational background, ethnicity, length of service, gender and age. Notwithstanding the above, the appointments of the members of the Board will always adhere to the principle of meritocracy, taking into account objective factors and considering the Companys business model and specific needs from time to time as well as the benefits of diversity to the Board. The members of the Board are from diverse educational and professional backgrounds and have extensive experience and expertise in the insurance and finance industry, risk management, financial state-owned assets regulation, financial auditing and legal fields; In addition, the Board comprises members of different genders. The Nomination and Remuneration Committee is of the opinion that the composition of the Board during the Reporting Period had been in compliance with the Board diversity policy.Executive Directors (3)Non-executive Directors (3)Independent Non-executive Directors (4)GenderMaleFemale73Terms of office of the Directors of the Company1-5 years6-10 years55Age group45-5556-6061 and above253Professional backgroundBusiness Management EconomicsInsurancePublicFinanceFinanceAccountingLaw1811112CORPORATE GOVERNANCE REPORT90China Reinsurance (Group) Corporation2021 Annual ReportRisk Management CommitteeCompositionAs at the end of the Reporting Period, the Risk Management Committee comprised four Directors, including two executive Directors, one non-executive Director and one independent non-executive Director.Chairlady:Jiang Bo (independent non-executive Director)Members:He Chunlei (executive Director), Zhuang Qianzhi (executive Director), Liu Xiaopeng (non-executive Director)Notes: 1. Since 25 February 2021, Mr. Ren Xiaobing ceased to serve as a member of the Risk Management Committee. 2. Since 30 July 2021, Ms. Lu Xiuli ceased to serve as the Vice chairlady of the Risk Management Committee. 3. Since 28 September 2021, Mr. Zhuang Qianzhi has served as a member of the Risk Management Committee. 4. Since 10 January 2022, Mr. Li Bingquan has served as a member of the Risk Management Committee.Duties and ResponsibilitiesThe Risk Management Committee is responsible for having a comprehensive understanding of various major risks and their management and supervising the effectiveness of the risk management system.The primary duties include (but not limited to): (1) reviewing the Companys risk strategies and risk management procedures, and monitoring and evaluating their implementation and effectiveness; (2) reviewing the Companys risk management policies and internal control systems, and monitoring and evaluating their implementation and effectiveness; monitoring and evaluating the subsidiaries risk management policies and internal control systems and their implementation and effectiveness. The reviewing matters of the Committee include but not limited to: (i) the changes, since the last annual review, in the nature and extent of significant risks, and the Companys overall ability to respond to changes in its business and the external environment; (ii) the scope and quality of managements ongoing monitoring of risks and the internal control systems; (iii) the extent and frequency of communication of monitoring results to the Board (or the committees under the Board) which enables it to assess the overall control of the Company and the effectiveness of its risk management; and (iv) significant control failures or weaknesses that have been identified during the period as well as the extent to which they have resulted in unforeseen outcomes or contingencies that have had, could have had, or may in the future have, a material impact on the Companys overall financial performance or condition; (3) reviewing, monitoring and evaluating the organisational structure, department-setting and duties, working procedures and effectiveness of risk management, and making recommendations as to improving the Companys risk management and control; (4) considering the overall objectives, risk appetite, risk tolerance and risk management policies in respect of the solvency risk management of the Company; (5) addressing major differences or issues regarding risk management system operation or risk management matters; (6) monitoring and evaluating the senior managements efforts on risk control in respect of market and operation; (7) monitoring the effectiveness of the Companys risk management system (including but not limited to ensuring the adequacy of resources, staff qualifications and experience, training programmes and budget in respect of the Companys accounting, internal audit and financial reporting); (8) comprehensively understanding various major risks the Company faced and their management, reviewing risk assessment report on a regular basis, considering the risk assessment in respect of material decision-making and the solutions for major risks, assessing the Companys overall risk profile and risk management on a regular basis, and ensuring the Companys disclosure in a statement about how it complies with the code provisions for risk management and internal control in its corporate governance report during the reporting period in accordance with the requirements of the Hong Kong Listing Rules; and (9) other matters as authorised by the Board.CORPORATE GOVERNANCE REPORT91China Reinsurance (Group) Corporation2021 Annual ReportSummary of the Work UndertakenDuring the Reporting Period, the Risk Management Committee held a total of four meetings, and considered and approved 13 resolutions.Attendance records of the meetings were as follows:NameAttended inperson/eligibleto attendPercentage of attendance inperson (%)Attended by proxy/eligibleto attendPercentage of attendance by proxy (%)Jiang Bo4/41000/40Lu Xiuli2/21000/20He Chunlei4/41000/40Ren Xiaobing0/00/0Zhuang Qianzhi1/11000/10Liu Xiaopeng4/41000/40During the Reporting Period, the Risk Management Committee studied the risk appetite, the interim and annual reports for risk oriented solvency, the internal control assessment report, the risk assessment report, the consolidated management and other matters of the Group, which facilitated the improvement of the Groups risk management system and continuously improved the Groups risk management capabilities.Related-Party Transactions Control CommitteeCompositionAs at the end of the Reporting Period, the Related-Party Transactions Control Committee comprised five Directors, including one non-executive Director and four independent non-executive Directors.Chairman:Hao Yansu (independent non-executive Director)Vice chairman:Liu Xiaopeng (non-executive Director)Members:Li Sanxi (independent non-executive Director), Mok Kam Sheung (independent non-executive Director), Jiang Bo (independent non-executive Director)CORPORATE GOVERNANCE REPORT92China Reinsurance (Group) Corporation2021 Annual ReportDuties and ResponsibilitiesThe primary duties of the Related-Party Transactions Control Committee include: (1) identifying the related parties of the Company, and the updates and maintenance of the informative archives of related parties which shall be updated at least once every half year; (2) performing a preliminary review of significant related-party transactions that shall be approved by the shareholders general meeting and the Board, and expressing written opinions on the compliance, fairness, necessity of significant related-party transactions and whether they are harmful to the interests of the Company and insurance consumers; (3) accepting filings of general related-party transactions; (4) considering and submitting a special report on the Companys overall related-party transactions for the year to the Board; (5) coordinating management of information disclosure for related-party transactions; and (6) other matters as authorised by the Board.Summary of the Work UndertakenDuring the Reporting Period, the Related-Party Transactions Control Committee held a total of five meetings, and considered and approved seven resolutions.Attendance records of the meetings were as follows:NameAttended inperson/eligibleto attendPercentage of attendance inperson (%)Attended by proxy/eligibleto attendPercentage of attendance by proxy (%)Hao Yansu5/51000/50Liu Xiaopeng5/51000/50Li Sanxi5/51000/50Mok Kam Sheung5/51000/50Jiang Bo5/51000/50During the Reporting Period, the Related-Party Transactions Control Committee considered significant related-party transactions, the report on the overall related-party transactions and the report on the evaluation of internal transactions of the Company, and updated the list of related parties and other matters, which ensured that the related-party transactions of the Group were in compliance with laws and regulations.CORPORATE GOVERNANCE REPORT93China Reinsurance (Group) Corporation2021 Annual ReportRisk Management and Internal ControlThe Company believes that good risk management and internal control play important roles in the operation of the Company. The Board is ultimately responsible for the risk management, internal control and compliance management of the Company and is committed to the establishment and constant improvement of effective risk management and internal control systems.Main Features of Risk Management and Internal Control SystemThe Board is responsible for guidance over the establishment of the overall risk management and internal control management system of the Company, conducting regular research and assessment on the soundness, reasonableness and effectiveness of risk management and internal control, considering and approving the organisational structure of risk management and internal control, and basic management systems of the Company, as well as considering and approving the annual risk assessment report and internal control assessment report of the Company.The Risk Management Committee is established under the Board to assist the Board in reviewing, monitoring and assessing material risk management matters of the Company such as risk strategies and risk management procedures, risk management policies and internal control system, risk management organisation methods and risk control performances. The Audit Committee is established under the Board to monitor the implementation of the Companys internal control and management system, and examine and assess the compliance and effectiveness of significant operational activities of the Company. The functional departments, including business, finance and investment departments of the Company are primarily responsible for the risk management and internal control system. The specialised departments, such as risk management and internal control and compliance departments, are responsible for the coordinated planning, organisation and implementation of risk management, internal control and compliance before and during the process. Risk assessment and internal control and compliance assessment work were carried out by the specialised departments on an annual basis. The internal audit department is responsible for monitoring and auditing the performance in risk management and internal control and compliance.CORPORATE GOVERNANCE REPORT94China Reinsurance (Group) Corporation2021 Annual ReportTechnologies and Implementation of Risk ManagementDuring the Reporting Period, the Company implemented the following measures to identify, evaluate and manage material risks: (1) The Company operated and managed risk appetite system. The Companys risk appetite system comprises risk appetite, risk tolerance and risk limits, which has been closely integrated with the business plan to play a role in guidance and constraints to business operations. Through the implementation of risk control plans and related indicators monitoring, reporting and dynamic management processes, the continuous functioning of risk appetite is assured. (2) The Company continued deepening the construction of the C-ROSS system. Since the official implementation of the C-ROSS system, the Company has carried out a number of works to deepen the construction of C-ROSS, including but not limited to the followings: (i) Solvency was regularly analysed and specific management measures were accordingly adopted, and the impact of major business activities over its solvency was assessed before conducting such business activities to ensure adequate solvency; (ii) The Company improved its risk management capability through promoting the sound establishment and effective implementation of the Companys various risk management policies, while establishing and optimising the risk management information system to protect the Companys business development; (iii) The Company actively participated in the study for the C-ROSS Phase II project to set the foundation for the implementation of related rules in the Company. (3) The Company regularly identified, monitored and analyzed all types of major risks. The Company used various risk indicators, economic scenario generator, catastrophe models, and economic capital models together with stress testing and scenario analysis and other tools, and adopted a method of combination of qualitative and quantitative to analyse risk profile, monitor and assess risks, and prepare reports and analysis for major risk events. The Company also managed the retained risks through risk control plan. When risk exposure broke through relevant requirements, internal procedures were triggered, and the Company managed risks beyond its risk tolerance through retrocession or reinsurance arrangement, etc. (4) The Company maintained its rating management system. The Company received ratings from S&P Global Ratings and A.M. Best, and applied rating methods and models in its daily operation and management. The Company sought to meet the requirements of such ratings while improving its operation management and risk management. Before conducting major business activities, the Company also fully assessed the impact of such activities over its ratings, so as to prevent and mitigate significant potential risks timely.CORPORATE GOVERNANCE REPORT95China Reinsurance (Group) Corporation2021 Annual ReportEstablishment and Sound Operation of Internal Control SystemDuring the Reporting Period, the Company implemented the following measures to continuously enhance internal management effectiveness: (1) The Company carried out internal control management activities in accordance with systems such as the management rules for internal control and through using internal control matrix, internal control management information system and other tools to perform routine follow-up evaluation in respect of major regulatory requirements, changes in internal policies as well as major decisions in operation or management to dynamically identify the changes of risk factors in internal control, and took responding measures in a timely manner. (2) The Company carried out internal control evaluation on a regular basis and arranged subsidiaries to carry out self-examination of internal control and compliance on key areas. For internal control weak areas identified, the Company facilitated timely rectification. (3) The Company dynamically adjusted and optimised the authorisation system, improved the important authorisation documents, and clearly identified the approval authority and decision-making process on all levels. (4) The Company continuously strengthened the establishment of rules and regulations, facilitated its subsidiaries to launch assessment on rules and regulations, and amended the Measures on the Administration of Rules and Regulations to further administer the systematic management of rules and regulations of the Group, and to enhance the scientific basis and implementation of rules and regulations. (5) The Company improved the assessment system for its subsidiaries internal control and compliance, and further strengthened the management of internal control and compliance. (6) The Company promoted the philosophy and knowledge of internal control through various methods such as internal and external trainings, advocacy of rules and daily face-to-face communication which enhanced the awareness of internal control among the employees. (7) The Company organised financial personnel, internal control management personnel and internal audit personnel to receive relevant professional trainings and provided sufficient training budget, so as to continuously improve the professional skills and comprehensive capability of these personnel.Procedures for Handling and Disclosing Inside Information and Internal Control MeasuresThe procedures and internal control measures for the identifying, handling, and disclosing inside information by the Company include: (1) formulating and implementing relevant supporting systems, including the Provisional Measures Governing Information Disclosure of China Reinsurance (Group) Corporation, by the Board, and gradually establishing comprehensive process of reporting, identifying, and disclosing inside information to ensure that the disclosure of inside information is on a timely basis and in compliance, (2) by means of training and advocating, fully informing relevant staffs, including members of the Board, the Board of Supervisors, and the management, of the obligations on information disclosure as stipulated under the Hong Kong Securities and Futures Commissions Guidelines on Disclosure of Inside Information and the Hong Kong Listing Rules, and (3) dispatching data to specific personnel on a need-to-know basis, putting emphasis on the prohibition of unauthorised use of confidential or inside information, and conducting the confidential work preceding the disclosure of insider information if necessary.CORPORATE GOVERNANCE REPORT96China Reinsurance (Group) Corporation2021 Annual ReportEvaluation of Effectiveness of Risk Management and Internal Control SystemAccording to the Guidelines on Risk Management of Insurance Companies (Bao Jian Fa 2007 No. 23) and the Guidelines for Supervision on Consolidation of Accounts of Insurance Groups (Bao Jian Fa 2014 No. 96), the Company comprehensively analysed and evaluated its risk management system for 2021. The evaluation involved various types of risks faced by the Company. The emphasis was on the evaluation of the implementation of risk management framework, management mechanisms of various types of risk and risk management process in all types of risk management. The evaluation found that the risk management system of the Company is well operated. The Board and the management approved of the effectiveness of the risk management system.In accordance with the Basic Standard for Enterprise Internal Control (Cai Kuai 2008 No. 7) and its related guidelines, Basic Rules for the Internal Control of Insurance Companies (Bao Jian Fa 2010 No. 69) and the requirements of the Hong Kong Listing Rules, in light of the actual situations of the Companys internal control system, the Company carried out internal control assessment for 2021, and reviewed the design and operational effectiveness of the internal control systems of the Company and its subsidiaries covering all important aspects including financial control, operational control and compliance control. The Company focused on major business matters, high-risk areas and the Companys capabilities in response to changes of internal and external environments through comprehensive use of individual interviews, walk-through tests, material reviews and special seminars, etc.The Board and the management have confirmed that control systems are sufficient and effective. Due to the limitations of the internal control and the technical means for internal control assessment, there might still be risks and deficiencies. The risk management framework of the Company does not seek to eliminate all risks but rather to identify, understand and manage them within acceptable limits, in order to support the sustainability of the business and creation of long-term value, and can only provide reasonable and not absolute assurance against material misrepresentation or loss. The Company will continue to optimise its internal control system and strive to assure legal compliance of operation, asset security as well as authenticity and completeness of the financial reports and related information to ensure the fulfilment of its strategic objectives.CORPORATE GOVERNANCE REPORT97China Reinsurance (Group) Corporation2021 Annual ReportBOARD OF SUPERVISORSDuring the Reporting Period, the Board of Supervisors adhered to the requirements of the PRC Company Law and the Articles of Association, earnestly performed its duties of supervision, enhanced the focus on significant events of the Company and the supervision over the performance of the respective duties by the Directors and senior management, carried out relevant financial supervision and inspection and made proposals with respect to the deepening of implementation of strategies and the prevention of investment risks to the management in order to effectively protect the interests of the Company, shareholders and employees.CompositionDuring the Reporting Period, the Board of Supervisors comprised five members, including:Supervisors:Xiong Lianhua (Chairlady), Zhu Yong (shareholder representative Supervisor), Zeng Cheng (shareholder representative Supervisor), Qin Yueguang (employee representative Supervisor), Li Jingye (employee representative Supervisor)Note: Ms. Xiong Lianhua has served as a Supervisor, the chairlady of the Board of Supervisors, and the chairlady of the Performance Supervision and Inspection Committee of the Board of Supervisors since 4 June 2021.Employee representative Supervisors are elected through elections at staff representative assembly, and non-employee representative Supervisors are elected through elections at the shareholders general meetings. The term of office of Supervisors is three years and Supervisors may serve consecutive terms if re-elected.CORPORATE GOVERNANCE REPORT98China Reinsurance (Group) Corporation2021 Annual ReportDuties and ResponsibilitiesThe Board of Supervisors shall be responsible to the shareholders general meeting, supervise the Companys financial position and compliance, as well as supervise performance of duties and responsibilities by the Directors and senior management and other relevant circumstances.The primary duties of the Board of Supervisors include (but not limited to): (1) reporting its work to the shareholders general meeting; (2) monitoring and examining the Companys financials; (3) supervising the conduct of the Directors and senior management in their performance of duties and proposing the removal of Directors and senior management who have contravened any of the PRC laws, administrative regulations, regulatory requirements, the Articles of Association or resolutions of the shareholders general meeting; (4) demanding rectification from Directors or any senior management when the acts of such persons are harmful to the Companys interest; (5) proposing to convene an extraordinary general meeting and convening and presiding over the shareholders general meeting when the Board fails to perform its duty of convening and presiding over the shareholders general meeting; (6) proposing resolutions at the shareholders general meeting; (7) representing the Company in negotiations with a Director and bringing an action against a Director or senior management pursuant to the PRC Company Law and the Articles of Association; (8) formulating the rules of procedure of the Board of Supervisors and the working rules of specialised committees under the Board of Supervisors; (9) reviewing financial information such as the financial reports, operation reports and profit distribution plans to be submitted by the Board to the shareholders general meeting; if there is any doubt, engaging certified public accountants and practicing auditors in the name of the Company to review such financial information; (10) nominating independent Directors; and (11) exercising other duties specified under the PRC laws, administrative regulations, regulatory requirements or the requirements of Articles of Association and authorised by shareholders general meetings.CORPORATE GOVERNANCE REPORT99China Reinsurance (Group) Corporation2021 Annual ReportSummary of the Work UndertakenDuring the Reporting Period, the Board of Supervisors held seven meetings in total, considered and studied 12 resolutions and received 17 reports; the Performance Supervision and Inspection Committee under the Board of Supervisors held six meetings; the Financial Supervision and Inspection Committee held one meeting.Attendance records of the meetings of the Board of Supervisors are as follows:NameAttended inperson/eligibleto attendPercentage of attendance inperson (%)Attended by proxy/eligibleto attendPercentage of attendance by proxy (%)Xiong Lianhua3/31000/30Zhu Yong7/71000/70Zeng Cheng7/71000/70Qin Yueguang7/71000/70Li Jingye7/71000/70Please refer to the section “Report of the Board of Supervisors” in this annual report for the work of the Board of Supervisors for the year 2021.CORPORATE GOVERNANCE REPORT100China Reinsurance (Group) Corporation2021 Annual ReportDUTIES AND RESPONSIBILITIES OF THE SENIOR MANAGEMENTAccording to the Articles of Association, senior management refers to the Companys President, Vice President, Chief Financial Officer, Board Secretary and other management staff confirmed by the Board. Senior management is responsible for the Companys operation and management, organisation and implementation of the Board resolutions, implementation of the operation and investment plan approved by the Board, preparation of plans for the establishment of the internal management structure and basic management system as well as formulation of special rules and regulations. The daily management, administration and operation of the Company are delegated to the senior management. The delegated functions and responsibilities are periodically reviewed by the Board. Approval has to be obtained from the Board prior to entering into any significant transactions by the management. During the Reporting Period, based on the development strategies of the Company, the senior management actively conducted various operation and management work and effectively implemented the operation plan and financial budget approved by the Board, leading to stable and healthy development of all business segments.JOINT COMPANY SECRETARIESMs. Zhu Xiaoyun, as a joint company secretary of the Company, is responsible for advising the Board on corporate governance matters and ensuring that the Boards policy and procedures, and the applicable laws, rules and regulations are followed. In order to uphold good corporate governance and ensure compliance with the Hong Kong Listing Rules and applicable Hong Kong laws, during the Reporting Period, the Company also engaged Ms. Ng Sau Mei, the director of the Listing Services of TMF Hong Kong Limited, as a joint company secretary of the Company to assist Ms. Zhu Xiaoyun to perform her duties as a joint company secretary of the Company. The primary contact person of Ms. Ng Sau Mei in the Company is Ms. Zhu Xiaoyun.During the Reporting Period, Ms. Zhu Xiaoyun and Ms. Ng Sau Mei had undertaken no less than 15 hours of relevant professional training respectively in compliance with Rule 3.29 of the Hong Kong Listing Rules.CORPORATE GOVERNANCE REPORT101China Reinsurance (Group) Corporation2021 Annual ReportAUDITORS FEESDuring the Reporting Period, the Company appointed PricewaterhouseCoopers ZhongTian LLP, PricewaterhouseCoopers and their organizational members to provide audit and non-audit services. The Group shall pay RMB9.60 million as the service fee for audit and review of financial statements, and the Company shall pay RMB1.4960 million as the auditors service fee for the business plan for the second phase project of the new insurance contracts standard of China Re Group and the implementation of DSP Project.ARTICLES OF ASSOCIATIONDuring the Reporting Period, there is no amendment to the Articles of Association made by the Company.DIVIDEND POLICYOn 21 July 2016, the Board of the Company considered and approved the Resolution on the Dividend Policy of China Reinsurance (Group) Corporation, agreeing that the Company will formulate the profit distribution plan of the Company in accordance with the statutory and regulatory requirements for insurance companies in the PRC imposed by regulatory authorities (including the statutory solvency requirements of the insurance regulatory authority in the PRC and statutory and regulatory restrictions on payment of dividends of the Company), interests and desires of the shareholders of the Company, the financial position (including operating results and cash flows) of the Group, the business development needs and plans of the Group for future development and other factors that the Company deems relevant. In consideration of the above factors and subject to the laws, regulations and regulatory requirements in effect at that time, the Company shall distribute dividends once a year and the profits distributed in form of cash shall be no less than 30% of the consolidated net profit attributable to the equity shareholders of the Company realised for the year. For details of the dividend policy of the Company, please refer to the Companys announcement dated 21 July 2016.CORPORATE GOVERNANCE REPORT102China Reinsurance (Group) Corporation2021 Annual ReportINVESTOR RELATIONSThe Company is committed to establishing and maintaining its good relationship with its investors, in strict compliance with the relevant provisions of full disclosure of information to investors, and enhancing communication with investors via different channels, actively and efficiently providing investors with services to enhance positive interaction and information exchanges between investors and the Company. With enhanced understanding and trust of the Company by investors and the open and transparent market image of the Company, the Company can spread its value actively to the market.In 2021, focusing on the Companys main business development, implementation results of strategies, dividend policy, ESG development and other issues of concern to the capital market, China Re Group held more than 50 various investor relation events including results communications, investor days and investor research etc. The number of participating investors and analysts increased from over 460 in 2016 to over 5,200 in 2021, representing a CAGR of over 60%. In 2021, the Company won two awards under China Securities Golden Bauhinia Award, namely “Best Investment Value Award for Listed Companies during the 14th Five-Year Period” and “Best Company of Investor Relations in Listed Companies”, “Best Company of Sustainable Development” awarded by Gelonghui, “Best Insurance Company for Responsible Investment of Golden Responsibility Award 2021” awarded by Sina Finance, “Vision Awards Gold Award” awarded by LACP and “Best Information Disclosure Accolade” awarded by Roadshow China, which demonstrated high recognition of the capital market over the Companys investment value and investor relations works.The Company has designated the Office of the Board as the investor relations department with contacts including telephone number and email address. Please refer to the “Investor Relations” section on the website of the Company ( ) for detailed contact information. The section is specially designed to provide regularly updated information of the Company.COMPLIANCE WITH SANCTIONS RELATED UNDERTAKINGSWe undertook to the Hong Kong Stock Exchange that we would not use the proceeds from the global offering, as well as any other funds raised through the Hong Kong Stock Exchange, to finance or facilitate, directly or indirectly, activities or business with, or for the benefit of, any sanctions targets. In addition, we have no present intention to undertake any future business that would cause the Group, the Hong Kong Stock Exchange, Hong Kong Securities Clearing Company Limited, HKSCC Nominees Limited or the shareholders to violate or become a target of sanctions laws of the PRC, the United States, the European Union, the United Nations or Hong Kong. If we believe that the transactions the Group entered into in the sanctioned countries would expose the Group or shareholders and investors to risks of being sanctioned, the Company will publish such announcements as appropriate and in accordance with the Hong Kong Listing Rules and the SFO (the “Sanctions Related Undertakings”). During the Reporting Period, we were in strict compliance with its sanctions risk management policy to prohibit the conducting of any business that may cause the Group and relevant stakeholders to be subject to sanctions, and arranged trainings on the sanctions risk management. The Directors have confirmed that we have complied with the Sanctions Related Undertakings and will continue to do so in future daily operation. In the view that the sanction policies may keep adjusting, we will adjust the scale of business in due course subject to the sanction laws in the PRC, the United States, the European Union, the United Nations or Hong Kong and the sanction risks of the Group and the stakeholders in order to achieve better returns for the shareholders and investors.REPORT OF THE BOARD OF DIRECTORS103China Reinsurance (Group) Corporation2021 Annual ReportThe Board presents its Report of the Board of Directors of the Company for the year ended 31 December 2021, together with the audited financial statements of the Group for the year ended 31 December 2021.BUSINESS REVIEWPrincipal BusinessWe are currently the only domestic reinsurance group in the PRC and mainly conduct P&C reinsurance, life and health reinsurance, primary P&C insurance and asset management businesses through our subsidiaries.Business Review and Analysis of Key Financial IndicatorsPlease refer to the section headed “Management Discussion and Analysis” in this annual report.Environmental Policies and Performance of the CompanyChina Re Group respects and values the legitimate interests of all employees, and strives to create a workplace with equity for employees. We advocate the concept of going green and environmental protection and attach great importance to enhancing employees awareness of energy-saving and environmental protection, and are committed to providing our employees with a safe and comfortable working environment. The Group accelerates the transformation to low-carbon operation by implementing “Digital China Re” Strategy and provides quantitative tools for climate risk and environment risk with the help of catastrophe models and catastrophe risk management technology. We have also made significant progress in aspects of business development promoted by new technologies such as cloud computing, blockchain, artificial intelligence, big data and green office as well as enhancement of client information security. We stick to the principles of openness, fairness, justness, honesty and effective procurement, and prefer to purchase energy-saving and environmentally-friendly products. In responding to climate changes, the consumption of water, electricity, coal, gas and other energy is reduced by strengthening the management of energy saving and consumption reduction in office areas. The Group encourages the use of videoconferences and teleconferences and the reduction of the usage of company vehicles and business trips in order to lower carbon emission and energy consumption arising from business travel. In addition, the Group has established a sound safety management system and organised safety supervision, inspection, promotion and training activities to enhance employees awareness of safety. We prohibit smoking at all workplaces and emphasise waste sorting and disposal to create a healthy and safe working environment. Please refer to the publication by the Company on the websites of the Hong Kong Stock Exchange and the Company for the 2021 Corporate Social Responsibility Report prepared in accordance with the requirements of Appendix 27 of the Hong Kong Listing Rules.REPORT OF THE BOARD OF DIRECTORS104China Reinsurance (Group) Corporation2021 Annual ReportCompliance with Relevant Laws and RegulationsAs a joint-stock limited company incorporated in the PRC whose H shares are listed on the Main Board of the Hong Kong Stock Exchange, the Company is subject to the regulation of the PRC Company Law, the PRC Insurance Law, as well as the Hong Kong Listing Rules, the SFO and other relevant domestic and overseas laws and regulations.The Company is subject to the following main regulatory requirements:The insurance regulatory authority and other government departments in the PRC may conduct on-site or off-site inspections or investigations on compliance with the PRC laws and regulations in respect of our state-owned asset management, financial condition and business operation, solvency margin, tax payment, foreign exchange management, and labour and social welfare from time to time.Under the Measures for the Supervision and Administration of Insurance Group Companies ( 保險集團公司監督管理辦法 ) and the Administrative Regulations for Insurance Companies ( 保險公司管理規定 ), the insurance regulatory authority in China conducts both on-site and off-site inspections on insurance institutions for supervision and management. The on-site inspections on insurance institutions by the insurance regulatory authority in China may focus on the corporate management level, administrative examination and approval, filing and reporting, reserves, solvency margin, use of funds, business operations and financial condition, transactions with insurance intermediaries, information system construction, appointments of directors, supervisors and senior management and other matters which the insurance regulatory authority in China considers material.Meanwhile, as a company listed on the Main Board of the Hong Kong Stock Exchange, the Company is therefore subject to the Hong Kong Listing Rules and shall comply with relevant rules under the SFO, including but not limited to the following obligations: maintaining a register of interests and short positions in shares and a register of interests and short positions in shares held by Directors, Supervisors and chief executive, disclosing inside information, etc.The Group has implemented internal controls to ensure compliance with such laws and regulations. As of the end of the Reporting Period, as far as we were aware, there was no legal and/or regulatory procedure or dispute which, in the opinion of the Directors, may have a material adverse effect on our business, financial condition, and operating results or prospects.REPORT OF THE BOARD OF DIRECTORS105China Reinsurance (Group) Corporation2021 Annual ReportPrincipal Risks and UncertaintiesOur business involves P&C reinsurance, life and health reinsurance, primary P&C insurance and asset management businesses, etc. Although we have good risk management and control capabilities and all along uphold the concept of sustainable and stable operation, there are still a number of risks and uncertainties involved in our business that are beyond our control. We believe the principal risks we may face in future include: insurance risk, market risk, credit risk, operational risk, strategic risk, reputation risk and liquidity risk. The future uncertainties include:1. As the global economic outlook faces challenges with a complicated international environment, the uncertainties in underwriting and investment businesses have increased;2. The COVID-19 pandemic continues to spread globally, increasing the uncertainty of business operation;3. The frequent occurrence of domestic and overseas catastrophic events in recent years have increased the uncertainty of business operation.Non-adjusting Post Balance Sheet Date EventsDetails are set out in Note 61 to the financial statements.Future Business Development of the GroupThe strategic objectives of the Group during the “Fourteenth Five-Year” period are seeking progress while maintaining stability, enhancing value, promoting high-quality development of China Re Group, and building a world-class comprehensive reinsurance group with sustainable development capabilities and core competitiveness in an all-round manner. Details as follows: One core, being adherence to reinsurance business as the core; four pivots: product innovation, platform-driven, technology empowerment, and global linkage; five upgrades: value, data, ecosystem, talent, and culture. The Group strives to provide its shareholders with long-term and competitive return.REPORT OF THE BOARD OF DIRECTORS106China Reinsurance (Group) Corporation2021 Annual ReportRESULTS AND PROFIT DISTRIBUTIONThe Groups profit for the year ended 31 December 2021 and the financial performance of the Group as at that date are set out on pages 142 to 287 in this annual report.Final DividendThe Board recommends the payment of a final dividend for the year ended 31 December 2021 of RMB0.045 per share (tax inclusive), totalling approximately RMB1,912 million (the “2021 Final Dividend”). The 2021 Final Dividend is subject to the approval of shareholders of the Company at the 2021 annual general meeting, and is expected to be paid to the shareholders on Thursday, 18 August 2022 whose names appear on the register of members of the Company as at Monday, 4 July 2022 and will be denominated and declared in Renminbi, while the dividend for H shares will be paid in Hong Kong dollars, which shall be calculated at the average central parity rate of Hong Kong dollars against Renminbi in the interbank foreign exchange market for the last five business days up to and including the date of the 2021 annual general meeting published by China Foreign Exchange Trade System as authorised by the PBOC.The above profit distribution scheme will not result in a lower indicator of the Companys relevant solvency adequacy ratio than the regulatory requirements.Withholding and Payment of Income Tax on the Dividends Paid to ShareholdersPursuant to the PRC Individual Income Tax Law ( 中華人民共和國個人所得稅法 ), the Implementation Regulations of the PRC Individual Income Tax Law ( 中華人民共和國個人所得稅法實施條例 ), the Notice of the State Administration of Taxation on the Issues Concerning the Levy and Administration of Individual Income Tax After the Repeal of Guo Shui Fa 1993 No. 045 (Guo Shui Han 2011 No. 348) ( 國家稅務總局關於國稅發1993045號文件廢止後有關個人所得稅徵管問題的通知 (國稅函2011348號) and other relevant laws, regulations and regulatory documents, the Company shall, as a withholding agent, withhold and pay individual income tax for the individual holders of H shares in respect of the 2021 Final Dividend to be distributed to them. However, the individual holders of H shares may be entitled to certain tax preferential treatments pursuant to the tax treaties between the PRC and the countries (regions) in which the individual holders of H shares are domiciled and the tax arrangements between mainland China and Hong Kong (Macau). In this regard, the Company will implement the following arrangements in relation to the withholding and payment of individual income tax on the dividends for the individual holders of H shares: For individual holders of H shares who are Hong Kong or Macau residents or whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of 10%, the Company will withhold and pay individual income tax at the rate of 10% on behalf of the individual holders of H shares in the distribution of the dividend. For individual holders of H shares whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of less than 10%, the Company will temporarily withhold and pay individual income tax at the rate of 10% on behalf of the individual holders of H shares in the distribution of the dividend.REPORT OF THE BOARD OF DIRECTORS107China Reinsurance (Group) Corporation2021 Annual Report For individual holders of H shares whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of more than 10% but less than 20%, the Company will withhold and pay individual income tax at the effective tax rate stipulated in the relevant tax treaty in the distribution of the dividend. For individual holders of H shares whose country (region) of domicile is a country (region) which has entered into a tax treaty with the PRC stipulating a tax rate of 20%, or a country (region) which has not entered into any tax treaties with the PRC, or under any other circumstances, the Company will withhold and pay individual income tax at the rate of 20% on behalf of the individual holders of H shares in the distribution of the dividend.If individual holders of H shares consider that the tax rate adopted by the Company for the withholding and payment of individual income tax on their behalf is not the same as the tax rate stipulated in any tax treaties between the PRC and the countries (regions) in which they are domiciled, please submit to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, a letter of entrustment and all application and relevant proving materials showing that they are residents of a country (region) which has entered into a tax treaty with the PRC. The Company will then submit the above documents to competent tax authorities which will proceed with the subsequent tax related treatments. If individual holders of H shares do not provide the Company with the relevant proving materials, they could go through the relevant procedures on their own or by attorney in accordance with the relevant provisions stipulated in the tax treaties. The Company assumes no responsibility and disclaims all liabilities whatsoever in relation to the tax status or tax treatment of the individual holders of H shares and for any claims arising from any delay in or inaccurate determination of the tax status or tax treatment of the individual holders of H shares or any disputes over the withholding mechanism or arrangements.For non-resident enterprise holders of H shares, the Company will withhold and pay enterprise income tax at the tax rate of 10% for such holders of H shares pursuant to the Notice of the State Administration of Taxation on the Issues Concerning the Withholding and Payment of the Enterprise Income Tax on the Dividends Paid by Chinese Resident Enterprises to H Share Holders Who Are Overseas Non-resident Enterprises (Guo Shui Han 2008 No. 897) (國家稅務總局 關於中國居民企業向境外H股非居民企業股東派發股息代扣代繳企業所得稅有關問題的通知 (國稅函2008897號).REPORT OF THE BOARD OF DIRECTORS108China Reinsurance (Group) Corporation2021 Annual ReportThe cash dividends for the investors of H shares of the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect will be paid in RMB. Pursuant to the relevant requirements under the Notice on the Tax Policies Related to the Pilot Program of the Shanghai-Hong Kong Stock Connect (Cai Shui 2014 No. 81) ( 關於滬港股票市場交易互聯互通機制試點有關稅收政策的通知 (財稅201481號) and the Notice on the Tax Policies Related to the Pilot Program of the Shenzhen-Hong Kong Stock Connect (Cai Shui 2016 No. 127) ( 關於深港股票市場交易互聯互通機制試點有關稅收政策的通知 (財稅2016127號), for dividends received by domestic individual investors from investing in H shares listed on the Hong Kong Stock Exchange through the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, the H share companies shall withhold and pay individual income tax at the rate of 20% on behalf of the investors. For dividends received by domestic securities investment funds from investing in shares listed on the Hong Kong Stock Exchange through the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, the tax payable shall be the same as individual investors. The H share companies will not withhold and pay the income tax of dividends received by domestic enterprise investors from investing in H share companies through the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, and those domestic enterprise investors shall declare and pay the relevant tax themselves.The record date and the date of distribution of cash dividends and other time arrangements for the investors of the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect will be the same as those for the holders of H shares.Should the holders of H shares have any doubt in relation to the aforesaid arrangements, they are recommended to consult their tax advisors for the relevant tax impact in mainland China, Hong Kong and other countries (regions) on the possession and disposal of the H shares.REPORT OF THE BOARD OF DIRECTORS109China Reinsurance (Group) Corporation2021 Annual ReportSHARE CAPITALDuring the Reporting Period, there was no change in the total share capital of the Company. At the end of the Reporting Period, the total share capital of the Company was 42,479,808,085 shares. Details are as follows:No.Name of shareholderClass of sharesNumber of sharesPercentage of totalshare capital (%)1Central Huijin Investment Ltd.Domestic shares30,397,852,35071.562HKSCC Nominees LimitedH shares6,665,506,53015.693Ministry of Finance of the PRCDomestic shares4,862,285,13111.454National Council for Social Security FundDomestic shares540,253,9041.275Other H shareholdersH shares13,910,1700.03Total42,479,808,085100Note: The information disclosed above was the information shown on the website of the Hong Kong Stock Exchange at www.hkexnews.hk. The shares of the Company held by HKSCC Nominees Limited are on behalf of its clients and do not include the shares held by other H shareholders.PUBLIC FLOATThe Company applied for and has been granted by the Hong Kong Stock Exchange a waiver at the time of listing regarding the lower percentage of public float. Based on the information that was publicly available to the Company as at the Latest Practicable Date and within the knowledge of the Directors, from the Listing Date to the Latest Practicable Date, the Companys public float was 15.72%, maintaining a sufficient public float as approved by the Hong Kong Stock Exchange and required under the Hong Kong Listing Rules. For details of the above waiver, please refer to the section headed “Waivers from Compliance with the Listing Rules Public Float” in the Prospectus.REPORT OF THE BOARD OF DIRECTORS110China Reinsurance (Group) Corporation2021 Annual ReportDISTRIBUTABLE RESERVESAs of the end of the Reporting Period, the retained profit of the Company available for distribution to its shareholders was RMB4,827 million. Details are set out in Note 60 to the financial statements.BUILDINGS, EQUIPMENT AND INVESTMENT PROPERTIESDuring the Reporting Period, changes in the buildings, equipment and investment properties of the Group are set out in Note 34 and Note 33 to the financial statements, respectively.On 15 December 2018, China Continent Insurance acquired a property. For details, please refer to the section headed “Management Discussion and Analysis”.Save as disclosed above, as at the end of the Reporting Period, the Group did not own any other properties for investment purposes or held for development and/or sale where one or more percentage ratios (as defined under Rule 14.07 of the Hong Kong Listing Rules) exceed 5%.RETIREMENT BENEFITSThe Group provides retirement benefits to employees, including enterprise annuity and defined benefit retirement plan. In 2021, the enterprise annuity contribution amounted to approximately RMB85.57 million and its defined benefit retirement plan contribution was approximately RMB6.34 million. Total annual enterprise annuity contribution shall be provided at a certain percentage of the total annual employee salaries, and defined benefit retirement plan contribution will be paid from the accrued defined benefit retirement liabilities of the Group. Provided that employees are dismissed or break laws or regulations, unvested enterprise annuity contributions will be transferred back to the Companys enterprise annuity. The amount of forfeited contributions used to reduce the existing level of contributions is not material. During the Reporting Period, the Group (excluding its overseas subsidiaries) has appointed Beijing Branch of Towers Watson Management Consulting (Shenzhen) Co., Ltd., a member of the China Association of Actuaries, as its domestic actuarial organization, the undersigned actuary is Wu Haichuan, a fellow member of the Society of Actuaries and a fellow member of the China Association of Actuaries; Chaucer has appointed Barnett Waddingham LLP as its actuarial organization, the undersigned actuary is Paul Houghton, an FIA. No plan assets have been created under the defined benefit plan by the Group (excluding its overseas subsidiaries). Therefore, there is no relevant information on the market value, level of funding, or material surplus or deficiency of the plan assets available for disclosure. According to the actuarial valuation, the market value of the assets under Chaucer defined benefit plan as at 31 December 2021 is RMB1,037,634 thousand (as at 31 December 2020: RMB1,003,999 thousand). The actuarial value of those assets accounts for 107.10% of the benefits provided to eligible employees. Details are set out in Notes 3(2)(f) and 48 to the financial statements.REPORT OF THE BOARD OF DIRECTORS111China Reinsurance (Group) Corporation2021 Annual ReportREMUNERATION OF SENIOR MANAGEMENT1During the Reporting Period, details of the remuneration of Directors and Supervisors are set out in Note 14 to the financial statements. The range of remuneration of non-director senior management in the Group is set out as follows:Range of remunerationNumber of individualsRMB0-RMB500,0001RMB500,001-RMB1,000,0000RMB1,000,001-RMB1,500,0000RMB1,500,001-RMB2,000,0000RMB2,000,001-RMB2,500,0001RMB2,500,001-RMB3,000,0000RMB3,000,001-RMB3,500,0000RMB3,500,001-RMB4,000,0001Note: 1. The remuneration standards for the Chairman, executive Directors, Chairman of the Board of Supervisors and senior management of the Company are determined in accordance with the relevant requirements of the Ministry of Finance and the Group Company. As of the Latest Practicable Date, the remuneration standards for the above personnel for 2021 had not been finally determined, and such remuneration data were estimated figures. The remuneration of senior management is determined based on their actual term of office.HIGHEST PAID INDIVIDUALSDetails of the remuneration of the five highest-paid individuals of the Group during the Reporting Period are set out in Note 15 to the financial statements. The amount of remuneration of the five highest paid individuals for 2021 is on a pre-tax basis. The five individuals are all employees of an overseas insurance agency Chaucer, which was acquired by the Group in 2018. Their remunerations have been determined in accordance with local market practices and governed by related internal systems.REPORT OF THE BOARD OF DIRECTORS112China Reinsurance (Group) Corporation2021 Annual ReportMAJOR CLIENTSThe information on the proportion from major clients of the insurance business of the Group during the Reporting Period is set out below:Percentage of insurance income of the Group (%)Largest insurance client5.67Top five insurance clients in total20.20Since the top five clients of the Group are financial and insurance institutions, shareholders of the Company, namely the Ministry of Finance and Central Huijin, hold interests in certain institutions. None of the Directors, their close associates or any other shareholder who, as far as the Directors are aware, holds 5% or more share capital of the Company has any interest in any of the above clients.RELATIONSHIP WITH CLIENTSThe Group is of the view that the benign relationship with clients is very important. During the Reporting Period, there was no material dispute between the Group and clients.RELATIONSHIP WITH EMPLOYEESThe Group has built a comprehensive training system as well as a scientific and reasonable remuneration incentive system. The Group has set up multiple channels for employees to develop themselves, attaches great importance to physical and mental health of employees and harmony of their families, so as to improve their happiness index.MAJOR SUBSIDIARIESAs at the end of the Reporting Period, the Company directly controlled eight major subsidiaries, namely China Re P&C, China Re Life, China Continent Insurance, China Re AMC, Huatai Insurance Agency, China Re UK, China Re Underwriting Agency Limited and China Re Hong Kong Company Limited. Details are set out in Note 31(1) to the financial statements.PREEMPTIVE RIGHTDuring the Reporting Period, the shareholders of the Company had no pre-emptive right pursuant to the relevant laws of the PRC and the Articles of Association.REPORT OF THE BOARD OF DIRECTORS113China Reinsurance (Group) Corporation2021 Annual ReportPURCHASE, SALE OR REDEMPTION OF LISTED SECURITIESDuring the Reporting Period, the Company or any of its subsidiaries had not purchased, sold or redeemed any of its listed securities.ISSUANCE OF DEBENTURESIn order to broaden the sources of foreign exchange funds and optimise asset allocation, China Re Group successfully issued notes with aggregate principal amounts of US$800 million and US$700 million (the “Notes”) through China Reinsurance Finance Corporation Limited, respectively on 9 March 2017 and 30 June 2017. The two tranches of Notes were consolidated into a single series. The interest rate was 3.375% per annum payable semi-annually on 9 March and 9 September each year. With Notes due on 9 March 2022 (EST), China Reinsurance Finance Corporation Limited has fully repaid the total amount of Notes and the accrued interest, and Notes have been cancelled accordingly.On 17 August 2018, China Re P&C successfully issued the capital supplementary bonds with a total principal amount of RMB4,000 million publicly in the National Interbank Bond Market. The capital supplementary bonds are ten-year fixed-rate bonds, with an annual coupon rate of 4.97% for the first five years, and China Re P&C has conditional redemption rights at the end of the fifth year. In the event that China Re P&C does not exercise the redemption rights, the annual coupon rate of the capital supplementary bonds will be 5.97% for the remaining five years.On 29 November 2018, China Re Life successfully issued the capital supplementary bonds with a total principal amount of RMB5,000 million publicly in the National Interbank Bond Market. The capital supplementary bonds are ten-year fixed-rate bonds, with an annual coupon rate of 4.80% for the first five years, and China Re Life has conditional redemption rights at the end of the fifth year. In the event that China Re Life does not exercise the redemption rights, the annual coupon rate of the capital supplementary bonds will be 5.80% for the remaining five years.On 8 December 2020, China Re P&C successfully issued the capital supplementary bonds with a total principal amount of RMB4,000 million publicly in the National Interbank Bond Market. The capital supplementary bonds are ten-year fixed-rate bonds, with an annual coupon rate of 4.40% for the first five years, and China Re P&C has conditional redemption rights at the end of the fifth year. In the event that China Re P&C does not exercise the redemption rights, the annual coupon rate of the capital supplementary bonds will be 5.40% for the remaining five years.The funds raised by the issuance of the capital supplementary bonds will be used to supplement the capital of China Re P&C and China Re Life in accordance with the applicable laws and regulatory approvals so as to improve their solvency, create conditions for the sound business development of China Re P&C and China Re Life business, and support the sustainable and steady development of their business.On 1 October 2021, the catastrophe bonds initiated by China Re P&C were successfully issued in Hong Kong, offering protection against risks from typhoons in China with proceeds of USD30 million. The issue of the catastrophe bonds is the first in Hong Kong and represents the concrete measures that the insurance industry serves the States strategy and supports constructions in the Guangdong-Hong Kong-Macao Greater Bay Area.REPORT OF THE BOARD OF DIRECTORS114China Reinsurance (Group) Corporation2021 Annual ReportCHARITABLE AND OTHER DONATIONSDuring the Reporting Period, the Group had charitable and other donations of approximately RMB15.7224 million in aggregate.DIRECTORSDuring the Reporting Period and as at the Latest Practicable Date, the Directors were as follows:Executive DirectorsMr. Yuan Linjiang (Chairman)Mr. He Chunlei (Vice Chairman)Mr. Zhuang Qianzhi (has served as an Executive Director since August 2021)Mr. Ren Xiaobing (ceased to serve as a Director since February 2021)Non-executive DirectorsMr. Wen NingMs. Wang XiaoyaMr. Liu XiaopengMr. Li Bingquan (has served as a Non-executive Director since January 2022)Ms. Lu Xiuli (ceased to serve as a Director since July 2021)Independent Non-executive DirectorsMr. Hao YansuMr. Li SanxiMs. Mok Kam SheungMs. Jiang BoREPORT OF THE BOARD OF DIRECTORS115China Reinsurance (Group) Corporation2021 Annual ReportSERVICE CONTRACTS OF DIRECTORS AND SUPERVISORSThe Company has entered into service contracts with the Directors and Supervisors. During the Reporting Period, none of the Directors or Supervisors entered into any service contract with the Company or its subsidiaries which could not be terminated within one year without payment of compensation other than statutory compensation.DIRECTORS AND SUPERVISORS INTERESTS IN TRANSACTION, ARRANGEMENT OR CONTRACTDuring the Reporting Period, none of the Directors, Supervisors or their connected entities had any material interest, either directly or indirectly, in any transaction, arrangement or contract of significance in relation to the Company, to which the Company or any of its subsidiaries was a party.PERMITTED INDEMNITYSubject to the relevant statutes, every Director shall be indemnified by the Company against all costs, charges, expenses, losses and liabilities which he/she may sustain or incur in or about the execution of his/her office or which may attach thereto. The Company has purchased insurance against the liabilities and costs associated with proceedings which may be against the Directors.DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVES INTERESTS IN SHARESAs at the end of the Reporting Period, none of the Directors, Supervisors or chief executive of the Company had any interests and/or short positions in the shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) upon the listing of H shares which are required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interest and/or short position taken or deemed to be held under the relevant provisions of the SFO), or are required to be notified to the Company and the Hong Kong Stock Exchange under the Model Code for Securities Transactions upon the listing of H shares, or are required to be recorded in the register required to be kept under Section 352 of the SFO.DIRECTORS RIGHTS TO ACQUIRE SHARES OR DEBENTURESDuring the Reporting Period, none of the Company or its subsidiaries had entered into any arrangements which enable the Directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other legal entities.REPORT OF THE BOARD OF DIRECTORS116China Reinsurance (Group) Corporation2021 Annual ReportDIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTS FINANCIAL, BUSINESS AND FAMILY RELATIONSHIPSDuring the Reporting Period, there were no relationships in respect of finance, business, or family among the Directors, Supervisors and senior management of the Company.DIRECTORS INTERESTS IN COMPETING BUSINESSDuring the Reporting Period, none of the Directors had engaged in or had any interest in any business which competes or is likely to compete with the businesses of the Group and which is required to be disclosed pursuant to the Hong Kong Listing Rules.SHARE INCENTIVE SCHEME FOR THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTDuring the Reporting Period, the Company had not formulated or implemented any share incentive scheme for the Directors, Supervisors and senior management.SUBSTANTIAL SHAREHOLDERS AND OTHER PERSONS INTERESTS OR SHORT POSITIONS IN SHARES OR UNDERLYING SHARES OF THE COMPANYAs at the end of the Reporting Period, to the best knowledge of the Directors, the following persons (other than the Directors, Supervisors or chief executive of the Company) had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company and the Hong Kong Stock Exchange pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, and were recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO, or were, either directly or indirectly, interested in 5% or more of the nominal value of any class of share capital.REPORT OF THE BOARD OF DIRECTORS117China Reinsurance (Group) Corporation2021 Annual ReportName of shareholdersNature of interest and capacityClassNumber of sharesApproximatepercentage ofinterests of theCompany (%)Approximatepercentage ofrelevant classof shares ofthe Company (%)Central Huijin Investment Ltd.Beneficial ownerDomestic share30,397,852,350(Long position)71.5684.91Ministry of Finance of the PRCBeneficial ownerDomestic share4,862,285,131(Long position)11.4513.58Choi Chiu Fai StanleyBeneficial ownerH share234,848,000(Long position)0.553.52Interest of controlled corporationH share104,776,000(Long position)0.251.57Great Wall Pan Asia International Investment Co., Ltd.Beneficial ownerH share431,050,000(Long position)1.016.45Notes: 1. The information disclosed above was the information shown on the website of the Hong Kong Stock Exchange at www.hkexnews.hk.2. According to Section 336 of the SFO, shareholders of the Company are required to file disclosure of interests forms when certain criteria are fulfilled. When the shareholdings of the shareholders in the Company change, it is not necessary for the shareholders to notify the Company and the Hong Kong Stock Exchange unless certain criteria are fulfilled. Therefore, the latest shareholdings of the shareholders in the Company may be different from the shareholdings filed with the Hong Kong Stock Exchange.3. Great Wall Pan Asia International Investment Co., Ltd. is the wholly-owned subsidiary of China Great Wall Asset Management Corporation in Hong Kong.4. Choi Chiu Fai Stanley is interested in the shares of the Company as a beneficial owner and through his controlled companies.Save as disclosed above, as at the end of the Reporting Period, so far as the Directors were aware, no other person (other than the Directors, Supervisors or chief executive of the Company) had any interest or short position in the shares or underlying shares of the Company which are required to be disclosed or recorded in the register of the Company to be kept under Section 336 of the SFO.REPORT OF THE BOARD OF DIRECTORS118China Reinsurance (Group) Corporation2021 Annual ReportADMINISTRATION AND MANAGEMENT CONTRACTSDuring the Reporting Period, the Company had not entered into any administration and management contracts with respect to the entire or principal business of the Company.AUDIT COMMITTEEThe Audit Committee of the Board has reviewed the audited financial statements of the Group for the year ended 31 December 2021.CORPORATE GOVERNANCEA report on the principal corporate governance practices adopted by the Company is set out in the section headed “Corporate Governance Report” in this annual report.AUDITORSOn 20 June 2016, PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers were appointed as the domestic and overseas auditors of the Group, respectively, and were appointed at the 2015 annual general meeting, the 2016 annual general meeting, the 2017 annual general meeting, the 2018 annual general meeting, the 2019 annual general meeting and the 2020 annual general meeting for six consecutive years with a term till the conclusion of the 2021 annual general meeting. The Group did not change its auditors in the past six years.The consolidated financial statements of the Group for the year ended 31 December 2021 were audited by PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers.By order of the BoardChina Reinsurance (Group) CorporationYuan LinjiangChairmanBeijing, the PRC28 March 2022REPORT OF THE BOARD OF SUPERVISORS119China Reinsurance (Group) Corporation2021 Annual ReportDuring the Reporting Period, all members of the Board of Supervisors had actively implemented the philosophy set in the annual working meeting of China Investment Corporation and China Re Group in accordance with the relevant requirements of the PRC Company Law, the Articles of Association and other laws and regulations, regulatory requirements, internal rules and regulations of the Company. We established requirements of the modern financial enterprise structure by pinpointing the working position, focusing on working priorities, optimising working mechanism, and diligently and pragmatically performing our duties. The Board of Supervisors actively protected the interests of shareholders and the Company and played an effective supervisory role of the Board of Supervisors to enhance the high-quality development of the Group.MEETINGS OF THE BOARD OF SUPERVISORS AND ITS SPECIALISED COMMITTEESDuring the Reporting Period, the Board of Supervisors held seven meetings, considered 12 proposals and received 17 reports; the Performance Supervision and Inspection Committee under the Board of Supervisors held seven meetings and considered seven proposals; the Financial Supervision and Inspection Committee under the Board of Supervisors held one meeting and considered two proposals. All Supervisors and members of the specialised committees attended all the meetings above.On 25 February 2021, the twelfth (extraordinary) meeting of the fourth session of the Board of Supervisors was convened, during which the Resolution on the Nomination of Ms. Xiong Lianhua as a Supervisor for the Fourth Session of the Board of Supervisors of China Reinsurance (Group) Corporation was considered and unanimously approved.On 29 March 2021, the thirteenth meeting of the fourth session of the Board of Supervisors was convened, during which five resolutions, including the Resolution on the Report of the Board of Supervisors of China Reinsurance (Group) Corporation for the Year 2020, were considered and unanimously approved, and four reports, including the Report on Operation of China Reinsurance (Group) Corporation for the Year 2020, were received.On 20 April 2021, the fourteenth (extraordinary) meeting of the fourth session of the Board of Supervisors was convened, during which two resolutions, including the Resolution on the Election of Ms. Xiong Lianhua as the Chairlady of the Fourth Session of the Board of Supervisors of China Reinsurance (Group) Corporation, were considered and unanimously approved.On 26 April 2021, the fifteenth (extraordinary) meeting of the fourth session of the Board of Supervisors was convened, during which two resolutions, including the Resolution on the Work Report of the Supervision and Inspection of Performance Remuneration and Business Expenses of the Board of Supervisors of China Reinsurance (Group) Corporation for the Year 2020, were considered and unanimously approved, and five reports, including the Performance Report of the Directors of China Reinsurance (Group) Corporation for the Year 2020, were received.On 28 July 2021, the sixteenth (extraordinary) meeting of the fourth session of the Board of Supervisors was convened, during which the Resolution on the Report of the Assessment of Duty Performance of Supervisors by the Board of Supervisors of China Reinsurance (Group) Corporation for the Year 2020 was considered and unanimously approved, and the Internal Audit Work Report by the Audit Department of the Group Company in the First Half of 2021 was received.REPORT OF THE BOARD OF SUPERVISORS120China Reinsurance (Group) Corporation2021 Annual ReportOn 30 August 2021, the seventeenth meeting of the fourth session of the Board of Supervisors was convened, during which five reports, including Interim Results Announcement and Interim Report of China Reinsurance (Group) Corporation for the Year 2021, were received.On 28 December 2021, the eighteenth (extraordinary) meeting of the fourth session of the Board of Supervisors was convened, during which the Resolution on the Assessment Report in relation to the Scientificity, Rationality and Robustness of the Development Strategies of the Company by the Board of Supervisors of China Re Group was considered and unanimously approved, and two reports, including the Report on Feedback and Implementation in relation to the Regulation and Evaluation of Corporate Governance by CBIRC for the Year 2020, were received.PERFORMANCE MONITORINGThrough attending three shareholders general meetings, and seven meetings of the Board in 2021, members of the Board of Supervisors continuously paid attention to the Groups overall operation and management and related results, closely monitored the financial and internal control risks of the Group and supervised the performance of duties by the Directors and senior management.In accordance with the requirements of the Articles of Association and in conjunction with the requirements of shareholders, the Board of Supervisors organised the assessment of duty performance for the year 2020 and issued an assessment opinion report. Under the requirement of the Measures for the Evaluation of the Performance of Directors and Supervisors of Banking and Insurance Institutions issued by CBIRC, the Board of Supervisors initiated the evaluation of the performance of Supervisors, further optimised the working mechanism for the evaluation of the performance of Directors, and increased sessions of interviews and symposiums with Directors. In accordance with the relevant working system requirements, the Board of Supervisors organised and completed the supervision and inspection on performance remuneration and business expenses for the year 2020 and issued the related working report. The Board of Supervisors was in the view that the Directors and the senior management were able to carry out their duties diligently in accordance with the Articles of Association, leading to better results of operation and management in 2021.FINANCIAL MONITORINGDuring the Reporting Period, the Board of Supervisors emphasised and put more efforts in financial supervision. The Board of Supervisors continued to carry out monitoring on the consolidated and segment financial conditions of the Group, paid attention to tendency issues and abnormal situations, carefully reviewed the annual final accounts report and proposals for profit attribution, and communicated with external auditors in respect of annual financial report audit and interim financial report review by successively organising three special communication meetings, reminding them of the key issues of auditing, and putting forward specified recommendation.STRATEGY MONITORINGDuring the Reporting Period, the Board of Supervisors enhanced strategy supervision, conducted the assessment over the performance of the “13th Five-Year” Strategic Plan and issued the supervision assessment report to the Board and the management. Also, the Board of Supervisors actively participated in the formation of the “14th Five-Year” Strategic Plan. It has offered advice and proposals from its point of view, and carried out assessment over the “14th Five-Year” Strategic Plain regarding the scientificity, rationality and robustness of the plan as well as issued an assessment report.REPORT OF THE BOARD OF SUPERVISORS121China Reinsurance (Group) Corporation2021 Annual ReportSUPERVISION WORKS ON INTERNAL RISK CONTROL AND OTHER AREASDuring the Reporting Period, the Board of Supervisors received reports on the meetings of the Board of Supervisors or held special communication meetings to understand the Groups work in risk management, internal control compliance, related-party transactions, internal audit and other areas. Based on the requirement of strengthening the review of China Investment Corporations work, the Board of Supervisors continued to inspect the Companys contribution to the national strategies, put efforts in achieving “six stabilities” and “six securities”, prevent and control financial risks, and realise the promotion of audit inspection and rectification. The Board of Supervisors also followed the Groups structural development in terms of risk management, internal control and compliance and central enhancement. Further, it strengthened the supervision of material risks including strategic risks, investment risks, solvency risks, new business risks, new institution risks as well as the treatment to aforesaid material risks conditions, and provided advice and proposals to relevant conditions.PERFORMANCE OF DUTIES BY THE SUPERVISORSDuring the Reporting Period, all Supervisors actively performed their supervisory duties, attended all meetings of the Board of Supervisors and its specialised committees, and prudently expressed their opinions and participated in the voting. Through attending the Shareholders general meetings and the meetings of the Board, the Supervisors carried out they supervisory duties. The Supervisors actively participated in the supervision and inspection work organised by the Board of Supervisors. The Supervisors emphasised self-development by fulfilling the philosophy introduced in the Forum of the Board of Supervisors of Directly Managed Enterprises of China Investment Corporation. The Supervisors strengthened the working guidance for boards of supervisors of subsidiaries of the Company, in order to facilitate and supervise resources integration. The Supervisors also actively participated in the internal and external training activities of the Company and continuously improved their performance ability and business level. The employee representative Supervisors participated in the employee representative assembly of the Company and presented annual reports on their works. The Board of Supervisors believes that all Supervisors performed their duties in accordance with the PRC Company Law, the Articles of Association and other laws and regulations, regulatory requirements, internal rules and regulations of the Company and have achieved fruitful results in all supervision works.By order of the Board of SupervisorsChina Reinsurance (Group) CorporationXiong LianhuaChairlady of the Board of SupervisorsBeijing, the PRC25 February 2022Embedded ValueIndependent Auditors ReportFinancial Statements and NotesEMBEDDED VALUE124China Reinsurance (Group) Corporation2021 Annual ReportTo the Directors of China Reinsurance (Group) CorporationDear Sirs,Independent Actuarial Consultants Report on Embedded Value of China Reinsurance (Group) CorporationChina Reinsurance (Group) Corporation (the “Group Company”, the “Company”) has retained Deloitte Consulting (Shanghai) Co., Ltd. Beijing Branch to quantify and report on embedded value of the Group Companys and its subsidiaries (“China Re Group”, the “Group”) life and health reinsurance business, covering the life and health reinsurance business of the Group Company and all businesses of China Life Reinsurance Company Limited (“China Re Life”) and China Reinsurance (Hong Kong) Company Limited (“China Re HK”)(“the Covered Business”) as at 31 December 2021. The task is undertaken by Deloitte Actuarial and Insurance Solutions of Deloitte Consulting (Shanghai) Co., Ltd. Beijing Branch (“Deloitte Consulting”, “we”).The report summarises the scope of work carried out by Deloitte Consulting, basis of report, reliance and limitations, valuation methodologies and results.Scope of WorkThe scope of our work is summarised as follows： Quantifying embedded value of China Re Group as at 31 December 2021; Quantifying value of one years new business underwritten by the Group during the 12 months prior to 31 December 2021; Reviewing the assumptions used for embedded value and value of one years new business valuation as at 31 December 2021; Performing sensitivity tests of value of in-force business and value of one years new business under alternative assumptions; Performing movement analysis of embedded value from 31 December 2020 to 31 December 2021.EMBEDDED VALUE125China Reinsurance (Group) Corporation2021 Annual ReportBasis of Report, Reliance and LimitationThis report has been prepared by Deloitte Consulting solely for the information and use of China Reinsurance (Group) Corporation for the purpose set out in the introduction of this report, including the valuation and reporting under the requirements of “Guidance on Actuarial Practice: Valuation of Embedded Value for Life and Health Insurance” published by the China Association of Actuaries and industry practice for publicly listed companies in Hong Kong. Accordingly, we accept no responsibility or liability to any other party.In performing our work, we have relied upon the accuracy and completeness of the audited and unaudited data and information provided verbally and in writing by, or on behalf of, China Re Group for periods up to 31 December 2021.The calculation of embedded value is based on a range of assumptions on future operations and investment performance. Many of these assumptions cannot be controlled by China Re Group. They are affected by internal and external factors. Hence the actual experience may deviate from these assumptions.On behalf ofDeloitte Consulting (Shanghai) Co., Ltd. Beijing BranchEric LuYu JiangFIAA, FCAAFSA, FCAAEMBEDDED VALUE126China Reinsurance (Group) Corporation2021 Annual Report1. Definitions and Methodology1.1 DefinitionsA number of specific terminologies are used in this report. They are defined as follows: Embedded Value (“EV”): this is the sum of the adjusted net worth and value of in-force business less the cost of required capital as at the valuation date; Adjusted Net Worth (“ANW”): this is the fair value of assets attributable to shareholders in excess of liabilities of the Covered Business as at the valuation date; Value of In-force Business (“VIF”): this is the present value of future cash flows attributable to shareholders arising from the in-force business and the corresponding assets as at the valuation date. The assets contributing to the cash flows are those supporting the corresponding liabilities of in-force business; Cost of Required Capital (“CoC”): this is defined as the amount of capital required from shareholders at the valuation date and the present value of future movements of such capital (end of period value less start of period value), and the calculation should take into account the after-tax investment earnings on the assets backing such required capital; Value of One Years New Business (“1-year VNB”): this is equal to the present value as at the policy issue dates of the future cash flows attributable to shareholders from the business accepted during the 12 months prior to the valuation date and the corresponding assets. The assets contributing to the cash flows are those supporting the corresponding liabilities of the business accepted.EMBEDDED VALUE127China Reinsurance (Group) Corporation2021 Annual Report1.2 MethodologyBased on “Guidance on Actuarial Practice: Valuation of Embedded Value for Life and Health Insurance” issued by the China Association of Actuaries (“CAA”) in November 2016 and industry practice for publicly listed companies in Hong Kong, we determined the embedded value and the value of one years new business.In this report, embedded value of China Re Group is defined as the sum of adjusted net worth of the Group and VIF of the Covered Business after the cost of required capital.Since the Group does not hold 100% of all companies within it. ANW has excluded minority interests. As China Re Life and China Re HK are 100% owned by the Group, all of those VIF are included in the reported EV valuation results.The adjusted net worth at the valuation date is defined as the sum of below two items: Net asset value of China Re Group on a consolidated basis with allowance for the reserve difference between PRC GAAP basis and EV basis for the Covered Business; The asset value adjustments, which reflect the after-tax difference of market value and book value for certain relevant assets, together with the relevant adjustments to liabilities.Value of in-force business after the cost of required capital is the present value of future cash flows attributable to shareholders arising from the in-force business and the corresponding assets as at the valuation date, less the amount of capital required from shareholders at the valuation date and the present value of future movements of such capital (end of period value less start of period value). The calculation of cost of required capital should take into account the after-tax investment earnings on the assets backing such required capital.Value of one years new business after the cost of required capital is the present value as at the policy issue dates of the future cash flows attributable to shareholders from the business accepted during the 12 months prior to the valuation date and the corresponding assets, less the amount of capital supporting the corresponding new business required from shareholders at the policy issue date and the present value of future movements of such capital (end of period value less start of period value).EMBEDDED VALUE128China Reinsurance (Group) Corporation2021 Annual Report2. Results SummaryThe embedded value and value of one years new business results as at 31 December 2021 and the corresponding results as at prior valuation date are summarised as below:Table 2.1 EV as at 31 December 2021 and 31 December 2020Unit: in RMB millionsValuation Date31 Dec 202131 Dec 2020Embedded ValueAdjusted Net Worth103,50199,151Value of In-force Business before CoC12,13211,497Cost of Required Capital(4,636)(4,042)Value of In-force Business after CoC7,4967,455Embedded Value110,996106,606Of which：ANW of the life and health reinsurance business28,35425,752VIF after CoC of the life and health reinsurance business7,3317,254EV of the life and health reinsurance business35,68533,006Note 1: Figures may not add up due to rounding, and the same applies in the tables below.Note 2: Figures related to life and health reinsurance business only include business of China Re Life and China Re HK, which are the main part of whole life and health reinsurance business. The same applies in the tables below.Table 2.2 1-year VNB for the 12 months up to 31 December 2021 and 31 December 2020Unit: in RMB millionsValuation Date31 Dec 202131 Dec 2020Value of One Years New Business of the life and health reinsurance businessValue of One Years New Business before CoC3,4833,286Cost of Required Capital(1,189)(940)Value of One Years New Business after CoC2,2942,347EMBEDDED VALUE129China Reinsurance (Group) Corporation2021 Annual Report3. AssumptionsThe assumptions below are used for the valuation of embedded value and value of one years new business as at 31 December 2021.3.1 Risk Discount RateA 10.5% risk discount rate has been used to calculate the value of in-force business and value of one years new business.3.2 Investment Return RatesThe following table summarises the assumptions of investment return rates used to calculate the value of in-force business and value of one years new business as at 31 December 2021:Table 3.2.1 Assumption of investment return rates used for VIF and 1-year VNB valuation as at 31 December 20212022202320242025-20312032 Life and health reinsurance business of the Group Company and China Re LifeNon asset-driven business5.0%5.0%5.0%5.0%5.0%Asset-driven business Domestic Universal Life6.0%6.0%5.0%5.0%5.0%Asset-driven business Domestic Other6.0%6.0%6.0%6.0%5.0%Asset-driven business Overseas6.0%6.0%6.0%6.0%5.0%Life and health reinsurance business of China Re HK4.0%4.0%4.0%4.0%4.0%The assumptions shown above are determined with reference to the circumstances of current capital market, current and expected future asset allocations, and the investment returns of major asset classes.Asset-driven business refers to the reinsurance business underwritten by China Re Life with relatively high required returns, which is backed by a segregated asset portfolio already in place with higher investment returns.EMBEDDED VALUE130China Reinsurance (Group) Corporation2021 Annual Report3.3 Policyholder DividendPolicyholder dividend has been derived in accordance with the terms related to dividend accepted by the reinsurer as stipulated in the reinsurance contracts. The surplus of the participating business accepted is the sum of interest surplus and mortality surplus, and 70% of the corresponding surplus is assumed to be distributed to policyholders. The reinsurer is responsible for paying the amount of dividend according to the terms in the reinsurance contracts. Moreover, interest surplus is determined either based on the terms in the reinsurance contracts or the Groups assumptions for investment return rates.3.4 Mortality and MorbidityThe assumptions of mortality and morbidity rates are based on the recent experience of China Re Group and the overall experience of China life and health insurance market. Mortality and morbidity assumptions vary by product categories.3.5 Claim RatioThe claim ratio assumptions are only relevant to short-term reinsurance business and YRT reinsurance business, and are determined on a contract-by-contract basis according to the claim experience of recent years.3.6 Discontinuance RatesThe assumptions of discontinuance rates are determined based on the actual experience in recent years, current and future expectations, and the understanding of the overall China life and health insurance market. Discontinuance rate assumptions vary by product categories and premium payment types.3.7 ExpensesThe assumptions of expenses are determined based on recent experience, expense management and the expected future expense level of life and health reinsurance business. For per policy expense assumptions, the assumed annual inflation rate is 2%.The commission rates, sliding scale commission rates and profit commission rates for short-term reinsurance business and YRT reinsurance business are determined according to recent experience on a contract-by-contract basis.3.8 TaxCurrently, corporate income tax rates in the Chinese mainland market and the Hong Kong market are assumed to be 25% and 8.25% of taxable profit respectively. And some percentage of investment return is assumed to be tax free based on current experience and future expectation.EMBEDDED VALUE131China Reinsurance (Group) Corporation2021 Annual Report4. SensitivityWe have performed a series of sensitivity tests on alternative assumptions for value of in-force business and value of one years new business of the life and health reinsurance business of China Re Group as at 31 December 2021. For each test, only the referred assumption is changed, while the other assumptions are kept unchanged. Results of the sensitivity tests are shown as below:Table 4.1 Sensitivity test results of VIF and 1-year VNB as at 31 December 2021Unit: in RMB millionsScenariosVIF after CoC1-year VNB after CoCBase Scenario7,3312,294Risk discount rate increased by 100 basis points6,4002,108Risk discount rate decreased by 100 basis points8,4032,505Annual investment return rates increased by 50 basis points8,8002,516Annual investment return rates decreased by 50 basis points5,8512,071Mortality and morbidity rates increased by 10%7,2602,294Mortality and morbidity rates decreased by 10%7,3992,293Discontinuance rates increased by 10%7,2002,264Discontinuance rates decreased by 10%7,4682,327Expenses increased by 10%7,1712,233Expenses decreased by 10%7,4872,355Combined ratio of short-term reinsurance contracts increased by 1 percentage point on absolute basis7,1632,174Combined ratio of short-term reinsurance contracts decreased by 1 percentage point on absolute basis7,5682,377EMBEDDED VALUE132China Reinsurance (Group) Corporation2021 Annual Report5. Movement AnalysisThe table below shows the movement analysis of the EV of China Re Group for the period from 31 December 2020 to 31 December 2021.Table 5.1 Movement analysis of EV from 31 December 2020 to 31 December 2021Unit: in RMB millionsNo.ItemAmountDetails1EV of life and health reinsurance business as at 31 December 202033,006EV as at 2020 year end before model change2Model change368EV model improvement3Modified EV of life and health reinsurance business as at 31 December 202033,374EV as at 2020 year end after model change4Expected return on EV2,798Expected return on EV in the year of 20215Impact of new business2,735Impact of new business in the year of 20216Impact of market value adjustments and other adjustments114Changes from asset market value adjustments and other adjustments7Economic experience variances(1,462)Difference between actual investment income and expected investment income in the year of 20218Operating experience variances626Difference between actual operational experience and expected operational results in the year of 20219Change in assumptions(1,254)Adjustments to assumptions at 31 December 202110Others(215)11Capital injection and shareholder dividend payment(1,030)Capital injection to China Re Life and dividend paid to the Group Company by China Re Life12EV of life and health reinsurance business as at 31 December 202135,685EMBEDDED VALUE133China Reinsurance (Group) Corporation2021 Annual ReportNo.ItemAmountDetails13EV of other business of the Group as at 31 December 202073,60014Profit from other business in the year1,28415Impact of market value adjustments and other adjustments1,175Changes from asset market value adjustments and other adjustments16Others(36)17Capital injection and shareholder dividend payment(711)Capital injection to subsidiaries, dividend paid to the Group Company by subsidiaries and dividend paid to shareholders by China Re Group18EV of other business of the Group as at 31 December 202175,31119EV of the Group as at 31 December 2021110,996134China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTTo the Shareholders of China Reinsurance (Group) Corporation(incorporated in the Peoples Republic of China with limited liability)OpinionWhat we have auditedThe consolidated financial statements of China Reinsurance (Group) Corporation (the “Company”) and its subsidiaries (the “Group”), which are set out on pages 142 to 287, comprise: the consolidated statement of financial position as at 31 December 2021; the consolidated statement of profit or loss for the year then ended; the consolidated statement of comprehensive income for the year then ended; the consolidated statement of changes in equity for the year then ended; the consolidated statement of cash flows for the year then ended; and the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.Our opinionIn our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRSs”) and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Consolidated Financial Statements section of our report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.IndependenceWe are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code.Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.135China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTKey audit matters identified in our audit are summarised as follows: Significant insurance risk test reinsurance contracts Valuation of insurance contract liabilities long-term life and health reinsurance contract liabilities Valuation of insurance contract liabilities claim reserves Valuation of level 3 financial instrumentsKey Audit MatterHow our audit addressed the Key Audit MatterSignificant insurance risk test reinsurance contractsRefer to notes 2(26), 3(1)(a), 5 and 44 to the consolidated financial statements.The Group performed significant insurance risk test for its assumed reinsurance contracts to determine the classification of these contracts and the corresponding accounting treatment.When performing the quantitative test, the Group uses certain actuarial assumptions, such as loss ratio, mortality and morbidity rates, and the mean and standard deviation of the loss distribution. The Group determines such assumptions based on its historical experiences and estimation on future development trends for its insurance products.For the year ended 31 December 2021, the gross written premiums for reinsurance contracts that passed the testing of significant insurance risk was RMB113.44 billion, representing 69.2% of the Groups total income. On 31 December 2021, the contracts that did not pass the testing of significant insurance risk were recognised as investment contract liabilities and were measured at amortised cost of RMB20.79 billion, representing 5.2% of the Groups total liabilities as at year end.We focused on this area because the development of assumptions requires the use of significant management judgement.We, with the assistance of our own actuarial experts, performed the audit procedures listed below.We obtained an understanding of the Groups policies and procedures of significant insurance risk test by performing inquiries of management and inspection of supporting documentation.On a sample basis, we checked the appropriateness of the actuarial assumptions, including loss ratio, mortality and morbidity rates, and the mean and standard deviation of the loss distribution, applied by the management by comparing them to the Groups historical data.We also recalculated the Groups computation of the significant insurance risk test and checked the classification of the selected contracts according to the test result.Based on our audit procedures performed above, we found no material exception.136China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTKey Audit MatterHow our audit addressed the Key Audit MatterValuation of insurance contract liabilities long-term life and health reinsurance contract liabilitiesRefer to notes 3(2)(a) and 45 to the consolidated financial statements.As at 31 December 2021, the Group had significant long-term life and health reinsurance contract liabilities of RMB117.07 billion, representing 29.4% of the Groups total liabilities.The valuation of long-term life and health reinsurance contract liabilities is determined using complex models which were set up based on the terms of the Groups reinsurance contracts.The main actuarial assumptions adopted in the valuation models include discount rates, mortality and morbidity rates assumptions.The determination of assumptions used at the balance sheet date requires the use of management judgement and it involves significant uncertainty of future events and hence we focused our work in this area.We obtained an understanding of the managements internal control and assessment process of long-term life and health reinsurance contract liabilities and assessed the inherent risk of material misstatement by considering the degree of estimation uncertainty and level of other inherent risk factors, such as complexity, subjectivity, changes and susceptibility to management bias and fraud.We, with the assistance of our own actuarial experts, performed the audit procedures listed below.We evaluated the design and operating effectiveness of key internal controls over the calculation of long-term life and health reinsurance contract liabilities, including testing controls in place to determine the assumptions adopted over the calculation.We assessed the Groups methodology for calculating long-term life and health reinsurance contract liabilities against recognized actuarial practices.We assessed the reasonableness of key assumptions including discount rates, mortality and morbidity rates assumptions used in the valuation models by comparing them to the Groups historical experiences.On a sample basis, we assessed the appropriateness of actuarial models by independently modelling selected contracts.Based on our audit procedures performed, we found no material exception.137China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTKey Audit MatterHow our audit addressed the Key Audit MatterValuation of insurance contract liabilities claim reservesRefer to notes 3(2)(a) and 45 to the consolidated financial statements.As at 31 December 2021, the Group had significant claim reserves of RMB92.70 billion, representing 23.3% of the Groups total liabilities.The valuation of claim reserves is determined using complex models which were set up based on the terms of the Groups insurance contracts.The main assumption in measuring the claim reserves is developed using the Groups experience of historical claims, which can be used to project the trend of future claims and hence ultimate claim costs. Accordingly, management extrapolates the amount of paid and incurred losses, average costs per claim and claim number of primary insurance contracts, based on the observed development of earlier years to develop the expected loss ratios for estimating the claim reserves.The determination of the main assumption on future claims requires the use of management judgement and it involves significant uncertainty of future events and hence we focused our work in this area.We obtained an understanding of the managements internal control and assessment process of claim reserves and assessed the inherent risk of material misstatement by considering the degree of estimation uncertainty and level of other inherent risk factors, such as complexity, subjectivity, changes and susceptibility to management bias and fraud.We, with the assistance of our own actuarial experts, performed the audit procedures listed below.We evaluated the design and operating effectiveness of key internal controls over the calculation of claim reserves, including testing controls in place to determine the assumptions adopted over the calculation.For major lines of business, we assessed the reasonableness of the key assumptions, such as ultimate loss ratio and risk factor, which were used in the valuation models by comparing them to the Groups historical data.For the selected lines of business, we also compared the Groups computation of claim reserves with an estimated range of valuation result independently developed by us.We evaluated the overall reasonableness of the claim reserves by performing the comparison of the actual experiences to previously expected results and assessed the adequacy of the estimated liability as at year end.Based on our audit procedures performed, we found no material exception.138China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTKey Audit MatterHow our audit addressed the Key Audit MatterValuation of level 3 financial instrumentsRefer to note 3(2)(b) and 55 to the consolidated financial statements.The investments are classified as level 3 in the fair value hierarchy as their fair values are measured using valuation methodologies with significant unobservable inputs. The Group held material investments in level 3 financial instruments with a combined carrying value of RMB9.27 billion representing 1.9% of the Group total assets as at the balance sheet date.We focused on the valuation of these investments due to the significant managements judgements involved in the valuation methodologies with significant unobservable inputs, including the discount rate for credit risk, the discount for lack of marketability, and valuation multiples of comparable companies.We obtained an understanding of the managements internal control and assessment process of the valuation of level 3 financial instruments and assessed the inherent risk of material misstatement by considering the degree of estimation uncertainty and level of other inherent risk factors, such as complexity, subjectivity, changes and susceptibility to management bias and fraud.We, with the assistance of our own valuation experts, performed the audit procedures listed below.We evaluated the design and operating effectiveness of key internal controls over the valuation of level 3 financial instruments, including testing controls in place to determine the valuation methodologies and assumptions adopted over the valuation.We evaluated the managements valuation methodologies by comparing them to industry practice and commonly used valuation methodologies.We checked the appropriateness of the significant unobservable inputs, including the discount rate for credit risk, the discount for lack of marketability, and valuation multiples of comparable companies.Based on our audit procedures performed, we found no material exception.139China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTOther InformationThe directors of the Company are responsible for the other information. The other information comprises all of the information included in the annual report other than the consolidated financial statements and our auditors report thereon.Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.Responsibilities of Directors and the Audit Committee for the Consolidated Financial StatementsThe directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRSs and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.In preparing the consolidated financial statements, the directors are responsible for assessing the Groups ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.The Audit Committee is responsible for overseeing the Groups financial reporting process.Auditors Responsibilities for the Audit of the Consolidated Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. We report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.140China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTAs part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Groups internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Groups ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.141China Reinsurance (Group) Corporation2021 Annual ReportINDEPENDENT AUDITORS REPORTFrom the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.The engagement partner on the audit resulting in this independent auditors report is Yeung Sheung Yuen.PricewaterhouseCoopersCertified Public AccountantsHong Kong, 28 March 2022142China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF PROFIT OR LOSSFor the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Note20212020 Gross written premiums5162,731,563161,573,844Less: Premiums ceded to reinsurers and retrocessionaires5(14,974,700)(12,103,874) Net written premiums5147,756,863149,469,970Changes in unearned premium reserves6(3,716,921)(3,387,576)Net premiums earned144,039,942146,082,394Reinsurance commission income1,933,0902,664,943Investment income714,764,05015,688,533Exchange gains, net23,27898,062Other income83,213,2573,661,183Total income163,973,617168,195,115The accompanying notes on pages 151 to 287 form part of these financial statements.143China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Note20212020 Total income163,973,617168,195,115Claims and policyholders benefits9(117,504,269)(116,661,419) Claims incurred(73,259,898)(66,347,190) Life and health reinsurance death and other benefits paid(34,714,441)(25,836,951) Changes in long-term life and health reinsurance contract liabilities(9,529,930)(24,477,278)Handling charges and commissions10(22,120,576)(24,911,677)Finance costs11(2,051,817)(1,748,652)Other operating and administrative expenses12(17,022,747)(19,672,679)Total benefits, claims and expenses(158,699,409)(162,994,427)Share of profits of associates2,294,9292,097,055Profit before tax137,569,1377,297,743Income tax16(1,178,765)(1,373,909)Profit for the year6,390,3725,923,834Attributable to:Equity shareholders of the parent6,362,7775,710,531Non-controlling interests27,595213,303Profit for the year6,390,3725,923,834Earnings per share (in RMB)18 Basic0.150.13 Diluted0.150.13The accompanying notes on pages 151 to 287 form part of these financial statements.144China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Note20212020 Profit for the year6,390,3725,923,834Other comprehensive income for the year after taxItems that will not be reclassified to profit or loss:Remeasurement of defined benefit obligation4845,737(13,865)Items that may be reclassified subsequently to profit or loss:Share of other comprehensive income of associates, after tax(78,279)(59,178)Available-for-sale financial assets, after tax(4,775,147)2,775,586Exchange differences on translation of financial statements of foreign operations(147,152)(404,286)Other comprehensive income for the year after tax19(4,954,841)2,298,257Total comprehensive income for the year1,435,5318,222,091Attributable to:Equity shareholders of the parent1,744,1637,887,213Non-controlling interests(308,632)334,878Total comprehensive income for the year1,435,5318,222,091The accompanying notes on pages 151 to 287 form part of these financial statements.145China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Note31 December 202131 December 2020 Assets Cash and short-term time deposits2023,096,28613,872,362Financial assets at fair value through profit or loss2114,836,70511,177,435Derivative financial assets22436,422246,287Financial assets held under resale agreements233,465,9644,615,600Premiums receivable2416,132,22716,638,399Reinsurance debtors2549,686,42648,706,040Investment contracts receivable265,266,5707,112,873Reinsurers share of insurance contract liabilities4521,039,82719,724,423Reinsurers share of policy loans628,518563,501Time deposits2721,365,99619,904,638Available-for-sale financial assets28177,765,796163,649,766Held-to-maturity investments2937,376,95232,199,780Investments classified as loans and receivables3039,097,06841,236,325Statutory deposits3218,844,50218,044,502Investment properties336,257,9616,477,825Property and equipment344,027,3784,254,004Right-of-use assets351,250,3711,333,175Intangible assets362,249,9602,242,293Investments in associates3726,193,71425,758,482Goodwill381,597,2051,606,768Deferred tax assets393,445,5891,582,929Other assets4026,377,33712,629,665Total assets500,438,774453,577,072The accompanying notes on pages 151 to 287 form part of these financial statements.146China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)As at 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Note31 December 202131 December 2020 Liabilities and equity LiabilitiesShort-term borrowings41208,101Financial liabilities at fair value through profit or loss267,054214,579Derivative financial liabilities22172,014Securities sold under agreements to repurchase4247,985,58329,403,318Reinsurance payables4319,115,39316,284,145Income tax payable2,402,5621,696,458Policyholders deposits4,291,4164,719,779Investment contract liabilities4420,786,74323,990,655Insurance contract liabilities45257,959,374229,496,289Notes and bonds payable4622,556,05922,748,255Long-term borrowings473,499,0983,577,375Lease liabilities351,172,4661,253,917Deferred tax liabilities391,045,4921,291,583Other liabilities4816,770,54115,619,750Total liabilities397,851,781350,676,218EquityShare capital4942,479,80842,479,808Reserves5022,689,34426,072,298Retained profits5027,948,26924,476,359Total equity attributable to equity shareholders of the parent93,117,42193,028,465Non-controlling interests9,469,5729,872,389Total equity102,586,993102,900,854Total liabilities and equity500,438,774453,577,072Approved and authorized for issue by the Board of Directors on 28 March 2022.Yuan LinjiangHe ChunleiDirectorDirectorTian MeipanChief ActuaryThe accompanying notes on pages 151 to 287 form part of these financial statements.147China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Attributable to equity shareholders of the parent Reserves NoteShare capitalCapital reserveSurplus reserveGeneral risk reserveCatastrophic loss reserveDefined benefit obligation remeasurement reserveFair value reserveExchange reserveRetained profitsSubtotalNon-controlling interestsTotal equity As at 31 December 202042,479,80810,599,4482,548,4376,118,79074,5194097,122,982(392,287) 24,476,35993,028,4659,872,389 102,900,854Profit for the year6,362,7776,362,77727,5956,390,372Other comprehensive income1945,737(4,519,456)(144,895)(4,618,614)(336,227)(4,954,841) Total comprehensive income45,737(4,519,456)(144,895)6,362,7771,744,163(308,632)1,435,531 Appropriations to surplus reserve258,640(258,640)Appropriations to general risk reserve820,604(820,604)Appropriations to catastrophic loss reserve69,951(69,951)Distributions to shareholders of the parent(1,741,672)(1,741,672)(1,741,672)Dividend paid to non-controlling interests(94,185)(94,185)Others86,46586,46586,465 As at 31 December 202142,479,80810,685,9132,807,0776,939,394144,47046,1462,603,526(537,182) 27,948,26993,117,4219,469,572 102,586,993 The accompanying notes on pages 151 to 287 form part of these financial statements.148China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Attributable to equity shareholders of the parent Reserves NoteShare capitalCapital reserveSurplus reserveGeneral risk reserveCatastrophic loss reserveDefined benefit obligation remeasurement reserveFair value reserveExchange reserveRetained profitsSubtotalNon-controlling interestsTotal equityAs at 31 December 201942,479,80810,725,3762,288,0285,380,0249,96814,2744,532,4967,65221,698,66687,136,2929,841,69796,977,989Profit for the year5,710,5315,710,531213,3035,923,834Other comprehensive income19(13,865)2,590,486(399,939)2,176,682121,5752,298,257Total comprehensive income(13,865)2,590,486(399,939)5,710,5317,887,213334,8788,222,091Appropriations to surplus reserve260,409(260,409)Appropriations to general risk reserve738,766(738,766)Appropriations to catastrophic loss reserve64,551(64,551)Distributions to shareholders of the parent(1,869,112)(1,869,112)(1,869,112)Dividend paid to non-controlling interests(303,823)(303,823)Others(125,928)(125,928)(363)(126,291)As at 31 December 202042,479,80810,599,4482,548,4376,118,79074,5194097,122,982(392,287)24,476,35993,028,4659,872,389102,900,854The accompanying notes on pages 151 to 287 form part of these financial statements.149China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Note20212020 Operating activities Cash generated from operations52(a)11,230,69935,519,561Income tax paid(1,669,501)(2,278,364)Net cash flows generated from operating activities9,561,19833,241,197Investing activitiesInterests received8,432,5828,022,761Dividends received2,334,3922,276,542Purchases of property and equipment, investment properties and intangible assets(442,697)(897,409)Proceeds from disposals of property and equipment, investment properties and intangible assets27,50825,737Acquisition of subsidiary, net of cash and cash equivalent acquiredPurchases of investments(203,615,738)(209,292,244)Proceeds from disposals of investments177,694,154152,166,500Disposals of associates1,527,867Investments in associates(1,171,010)Net cash flows used in investing activities(15,569,799)(47,341,256)The accompanying notes on pages 151 to 287 form part of these financial statements.150China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESCONSOLIDATED STATEMENT OF CASH FLOWS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)Note20212020 Financing activities Changes in third party investors interests of consolidated structured entities, net300,66840,001Proceeds from notes and bonds payable4,000,000Proceeds from bank borrowings369,875Repayment of borrowings(200,163)(767,333)Interests paid(1,931,855)(1,573,080)Cash paid for lease liabilities(419,804)(469,216)Dividends paid to equity shareholders of the parent(1,741,672)(1,861,398)Dividends paid by subsidiaries to non-controlling interests(94,185)(303,823)Net proceeds from securities sold under agreements to repurchase18,098,5858,521,734Net cash flows generated from financing activities14,011,5747,956,760Net increase/(decrease) in cash and cash equivalents8,002,973(6,143,299)Cash and cash equivalents at the beginning of the year14,837,04921,267,582Effect of foreign exchange rate changes(636,191)(287,234)Cash and cash equivalents at the end of the year52(b)22,203,83114,837,049The accompanying notes on pages 151 to 287 form part of these financial statements.151China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)1 CORPORATE INFORMATIONThe predecessor of China Reinsurance (Group) Corporation (the “Company”), PICC Reinsurance Company Limited, was originated from The Peoples Insurance Company of China, which was established in October 1949. On 23 March 1999, pursuant to the approval of the State Council of the PRC and the former China Insurance Regulatory Commission (the “former CIRC”), PICC Reinsurance Company Limited was renamed to China Reinsurance Company. On 20 June 2003, with the approval of the former CIRC, China Reinsurance Company was renamed to China Reinsurance (Group) Company. On 9 October 2007, pursuant to the approval from relevant authorities, China Reinsurance (Group) Company was converted into a joint stock limited company and changed the company name to China Reinsurance (Group) Corporation.The Company completed its initial public offering of overseas-listed foreign shares (“H shares”) and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 26 October 2015.The Companys registered office is located at No. 11 Jinrong Avenue, Xicheng District, Beijing 100033, the PRC.The Company and its subsidiaries (the “Group”) are mainly engaged in property and casualty reinsurance, life and health reinsurance, primary property and casualty insurance, asset management and other businesses.2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES(1) Basis of preparationThe consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRSs”), which collective term includes International Accounting Standards and related interpretations, promulgated by the International Accounting Standards Board (“IASB”). These financial statements also comply with the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. A summary of the significant accounting policies adopted by the Group is set out below.For the purpose of preparing the consolidated financial statements, the Group has adopted all applicable new and revised IFRSs in issue which are relevant to the Group for the current years financial statements, except for any new standards or interpretations that are not yet effective for the year ended 31 December 2021 and accounting standards and amendments that are effective but temporary exemption is applied by the Group are set out in Note 2(4).152China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(2) Basis of measurementThe financial statements are presented in Renminbi (RMB), rounded to the nearest thousand, which is the functional currency of the Company, except when otherwise indicated.It has been prepared on the historical cost basis except for the following assets and liabilities as explained in the accounting policies set out below: financial instruments classified as available-for-sale, financial assets/liabilities at fair value through profit or loss and derivative instruments that have been measured at fair value (see Note 2(14) and Note 2(15). reinsurers share of insurance contract liabilities and insurance contract liabilities, which have been measured based on actuarial methods (see Note 2(27).(3) New accounting standards and amendments adopted by the Group for the first time for the financial year beginning on 1 January 2021Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16Interest Rate Benchmark (IBOR) Reform Phase 2In August 2020, the IASB issued IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments Interest Rate Benchmark Reform Phase 2. The amendments address issues not dealt with in the previous amendments which affect financial reporting when an existing interest rate benchmark is replaced with an alternative benchmark rate. The key reliefs provided by the Phase 2 amendments are as follows:Changes to contractual cash flows. When changing the basis for determining contractual cash flows for financial assets and liabilities (including lease liabilities), the reliefs have the effect that the changes that are required by an interest rate benchmark reform (that is, are necessary as a direct consequence of IBOR reform and are economically equivalent) will not result in an immediate gain or loss in the income statement.Hedge accounting. The hedge accounting reliefs will allow most IAS 39 or IFRS 9 hedge relationships that are directly affected by IBOR reform to continue. However, additional ineffectiveness might need to be recorded.The amendments are effective for annual periods beginning on or after 1 January 2021 and shall be applied retrospectively, but entities are not required to restate the comparative information.153China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(3) New accounting standards and amendments adopted by the Group for the first time for the financial year beginning on 1 January 2021 (continued)The Group had certain financial instruments based on the London Interbank Offered Rate (“LIBOR”) and the Europe Interbank Offered Rate (“EURIBOR”) as at 31 December 2021. If the interest rates of these financial instruments are replaced by alternative benchmark rates in a future period, the Group will apply this practical expedient upon the modification of these financial instruments when the “economically equivalent” criterion is met and expects that no significant modification gain or loss for the Group will arise as a result of applying the amendments to these changes.(4) Accounting standards and amendments that are effective but temporary exemption is applied by the GroupIFRS 9 Financial InstrumentsIn July 2014, the IASB issued the final version of IFRS 9, bringing together all phases of the financial instruments project to replace IAS 39 and all previous versions of IFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. Based on the current assessment, the Group expects that the adoption of IFRS 9 will have a significant impact on the Groups consolidated financial statements. The Group adopts the temporary exemption permitted in Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (“IFRS 4 Amendment”) to apply IAS 39 rather than IFRS 9, until the effective date of IFRS 17.Classification and measurement of financial assets and financial liabilitiesIFRS 9 requires that the Group classifies debt instruments based on the combined effect of application of business models (hold to collect contractual cash flows, hold to collect contractual cash flows and sell financial assets or other business models) and contractual cash flow characteristics (solely payments of principal and interest on the principal amount outstanding or not). Debt instruments not giving rise to cash flows that are solely payments of principal and interest on the principal amount outstanding would be measured at fair value through profit or loss. Other debt instruments giving rise to cash flows that are solely payments of principal and interest on the principal amount outstanding would be measured at amortised cost, fair value through other comprehensive income (“FVOCI”) or fair value through profit or loss (“FVTPL”), based on their respective business models.Equity instruments would generally be measured at fair value through profit or loss unless the Group elects to measure at FVOCI for certain equity investments not held for trading. This will result in unrealised gains and losses on equity instruments currently classified as available-for-sale securities being recorded in income going forward. Currently, these unrealised gains and losses are recognized in other comprehensive income(“OCI”), If the Group elects to record equity investments at FVOCI, gains and losses would be recognised in retained earnings when the instruments be disposed, except for the received dividends which do not represent a recovery of part of the investment cost.154China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(4) Accounting standards and amendments that are effective but temporary exemption is applied by the Group (continued)IFRS 9 Financial Instruments (continued)ImpairmentIFRS 9 replaces the “incurred loss” model with the “expected credit loss” model which is designed to include forward looking information. If the expected credit loss model was to be applied by the Group, the Group believed that the provision for the accumulated amount of impairment loss to be recognized by the Group would be generally increased as compared to the accumulated amount recognized under the previous “incurred loss” model.Hedge accountingThe Group concludes that the new hedge accounting model under IFRS 9 will have no significant impact on the Groups consolidated financial statements.IAS 28 Investments in Associates and Joint Ventures require an entity to apply uniform accounting policies when using the equity method. Nevertheless, for annual periods beginning before 1 January 2023, an entity is permitted, but not required, to retain the relevant accounting policies applied by the associate or joint venture as follows:(a) The entity applies IFRS 9 but the associate or joint venture applies the temporary exemption from IFRS 9; or(b) The entity applies the temporary exemption from IFRS 9 but the associate or joint venture applies IFRS 9.The Groups major associates, China Everbright Bank Company Limited (“CEB”), applied IFRS 9 from 1 January 2018. The Group decides not to adopt uniform accounting policies for associates in group level.155China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(5) New accounting standards and amendments that are not yet effective and have not been early adopted by the Group for the financial year beginning on 1 January 2021IFRS 17, Insurance ContractsIFRS 17 was published on 18 May 2017. IFRS 17 established principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It will replace IFRS 4, which currently permits a wide variety of practices. IFRS 17 requires a current measurement model, where estimates are remeasured in each reporting period. The measurement is based on the building blocks of discounted, probability-weighted cashflows, an explicit risk adjustment and a contractual service margin representing the unearned profit of the contract which is recognised as revenue over the coverage period.IFRS 17 (including amendments) is currently mandatorily effective for annual reporting periods beginning on or after 1 January 2023 and early adoption is permitted. The impact is expected to be significant and the Group is in the process of assessing the adoption impact of IFRS 17.Except for IFRS 17, there are no standards and amendments that are not yet effective that would be expected to have a significant impact on the consolidated financial statements of the Group.(6) Use of estimates and judgementsThe preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.Judgements made by management in the application of IFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 3.The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.156China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(6) Use of estimates and judgements (continued)Changes in accounting estimatesIn determining insurance contract liabilities, assumptions such as discount rate, mortality and morbidity, surrender rate, and expense assumptions are applied to long term life and health reinsurance contracts. Such assumptions should be determined based on current information available at the end of the reporting period. The Group changed the above assumptions based on current information available as at 31 December 2021 (mainly the risk free discount rate and morbidity rate) and updated estimate for future cash flows, with the corresponding impact on insurance contract liabilities taken into the current years statement of profit or loss. As a result of such changes in assumptions, long term life and health reinsurance contracts liabilities were increased by RMB1,141 million as at 31 December 2021 and the profit before tax for 2021 was decreased by RMB1,141 million.(7) Subsidiaries and non-controlling interestsSubsidiaries are entities controlled by the Group. The Group controls an entity where it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether the Group has power, only substantive rights (held by the Group and other parties) are considered.An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group balances, transactions and cash flows and any unrealised profits arising from intra-group transactions are eliminated in full in preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment.Non-controlling interests represent the equity in a subsidiary excluding structured entities not attributable directly or indirectly to the Company, and in respect of which the Group has not agreed any additional terms with the holders of those interests which would result in the Group as a whole having a contractual obligation in respect of those interests that meets the definition of a financial liability.Non-controlling interests are presented in the consolidated statements of financial position within equity, separately from equity attributable to the shareholders of the Company. Non-controlling interests in the results of the Group are presented on the face of the consolidated statement of profit or loss and the consolidated statements of comprehensive income as an allocation of the total profit or loss and total comprehensive income for the reporting period between non-controlling interests and the shareholders of the Company.157China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(7) Subsidiaries and non-controlling interests (continued)Changes in the Groups interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised.When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former subsidiary at the date when control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (see Note 2(14) or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture (see Note 2(9) if applicable).For each managed syndicate on which the Group participates, only the relevant proportion of the transactions, assets and liabilities of those Lloyds syndicates are reflected in the consolidated financial statements. As at 31 December 2021, the Group provided 100% of the capital for Syndicate 2088 and Syndicate 1084, and provided 57% of the capital for Syndicate 1176, and therefore relevant proportion of the transactions, assets and liabilities of those Lloyds syndicates have been included in the Groups financial statements.(8) Structured entitiesA structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only, and the relevant activities are directed by means of contractual arrangements. The Group determines whether it is an agent or a principal in relation to those structured entities in which the Group acts as an asset manager. If an asset manager is the agent, it acts primarily on behalf of others and so does not control the structured entity. It may be principal if it acts primarily for itself, and therefore controls the structured entity. In assessing whether the Group is acting as the principal, the Group considers factors such as scope of the asset managers decision-making authority; rights held by other parties; remuneration to which it is entitled; and exposure to variability of returns from its involvement with structured entities. The Group will make reassessment when the factors change.158China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(9) Associates and joint venturesAn associate is an entity in which the Group or the Company has significant influence, but not control or joint control, over its management, including participation in the financial and operating policy decisions.A joint venture is an arrangement whereby the Group or the Company and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the arrangement.An investment in an associate or a joint venture is accounted for in the consolidated financial statements under the equity method, unless it is classified as held for sale (or included in a disposal group that is classified as held for sale). Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Groups share of the acquisition-date fair values of the investees identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post acquisition change in the Groups share of the investees net assets and any impairment provisions relating to the investment (see Notes 2 (24)(b). Any excess over cost at acquisition-date, the Groups share of the post-acquisition post-tax results of the investees and any impairment losses for the year are recognised in the consolidated statements of profit or loss, whereas the Groups share of the post-acquisition post-tax items of the investees other comprehensive income is recognised in the consolidated statements of comprehensive income.Where the Groups share of losses exceeds its interest in the associate or the joint venture, the Groups interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the investee. For this purpose, the Groups interest is the carrying amount of the investment under the equity method together with the Groups long-term interests that in substance form part of the Groups net investment in the associate or the joint venture.Unrealised profits and losses resulting from transactions between the Group and its associates and joint ventures are eliminated to the extent of the Groups interest in the investee, except where unrealised losses provide evidence of an impairment of the asset transferred, in which case they are recognised immediately in profit or loss. Accounting policies of equity accounted investee have been changed where necessary to ensure consistency with the policies adopted by the Group, except for financial instruments for which the associates have applied IFRS 9, as permitted by the Amendments to IFRS 4.If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured. Instead, the investment continues to be accounted for under the equity method.159China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(9) Associates and joint ventures (continued)In all other cases, when the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former investee at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (see Note 2(14).(10) Business combinationThe acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the: fair values of the assets transferred liabilities incurred to the former owners of the acquired business equity interests issued by the Group fair value of any asset or liability resulting from a contingent consideration arrangement, and fair value of any pre-existing equity interest in the subsidiaryIdentifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of net assets in the event of liquidation at fair value or at the proportionate share of the acquirees identifiable net assets.Acquisition-related costs are expensed as incurred.160China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(11) GoodwillGoodwill represents the excess of(a) The aggregate of the fair value of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the Groups previously held equity interest in the acquiree; over(b) the net fair value of the acquirees identifiable assets and liabilities measured as at the acquisition date.When (b) is greater than (a), then this excess is recognised immediately in profit or loss as a gain on a bargain purchase.Goodwill is stated at cost less accumulated impairment provisions. Goodwill arising on a business combination is allocated to each cash-generating unit (“CGU”), or groups of CGUs, that is expected to benefit from the synergies of the combination and is tested annually for impairment (see Note 2(24)(b).On disposal of a CGU during the year, any attributable amount of purchased goodwill is included in the calculation of the profit or loss on disposal.(12) Cash and cash equivalentsCash and cash equivalents comprise cash and short-term time deposits, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition.(13) Translation of foreign currenciesForeign currency transactions are translated at the foreign exchange rates ruling at the transaction dates or at the rates that approximate the spot exchange rates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the end of the reporting period. Exchange gains and losses are recognised in profit or loss.Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated using the foreign exchange rates ruling at the dates the fair value was measured.161China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(13) Translation of foreign currencies (continued)The functional currencies of certain foreign operations are currencies other than the Renminbi. As at the end of the reporting period, the assets and liabilities of these entities are translated into Renminbi at the closing foreign exchange rates at the end of the reporting period and their income statements are translated into Renminbi at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. The resulting exchange differences are recognised in other comprehensive income and accumulated in equity in the exchange reserve.On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the profit or loss on disposal is recognised.(14) Investments in debt and equity instrumentsThe Groups policies for investments in debt and equity instruments, other than investments in subsidiaries, associates and joint ventures, are as follows:Investments in debt and equity instruments are initially stated at fair value, which is their transaction price unless it is determined that the fair value at initial recognition differs from the transaction price and that fair value is evidenced by a quoted price in an active market for an identical asset or based on a valuation technique that uses only data from observable markets. Cost includes transaction costs, except where indicated otherwise below. These investments are subsequently accounted for as follows, depending on their classification:Investments in securities held for trading and those designated at fair value through profit or loss are classified as financial assets at fair value through profit or loss. Any transaction costs are recognised in profit or loss as incurred. At the end of each reporting period the fair value is remeasured, with any resultant gain or loss being recognised in profit or loss. Dividends or interest earned on these investments are recognised in accordance with the policies set out in Note 2(30)(c) and Note 2(30)(b).Debt securities that the Group has the ability and intention to hold to maturity are classified as held-to-maturity securities. Held-to-maturity securities are stated at amortised cost less impairment losses (see Note 2(24)(a).Debt instruments classified as loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, debt instruments classified as loans and receivables are measured at amortised cost using the effective interest rate method, less any impairment losses (see Note 2(24)(a).162China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(14) Investments in debt and equity instruments (continued)Investments which do not fall into any of the above categories are classified as available-for-sale securities. At the end of each reporting period the fair value is remeasured, with any resultant gain or loss being recognised in other comprehensive income and accumulated separately in equity in the fair value reserve. Dividend income from equity securities and interest income from debt securities calculated using the effective interest rate method are recognised in profit or loss in accordance with the policies set out in Note 2(30)(c) and Note 2(30)(b). Foreign exchange gains and losses resulting from changes in the amortised cost of debt securities are also recognised in profit or loss.When the investments are derecognised or impaired (see Note 2(24)(a), the cumulative gain or loss recognised in equity is reclassified to profit or loss.Purchases and sales of financial assets are recognised on the trade date the date on which the Group commits to purchase or sell the asset.(15) Derivatives and hedging activitiesThe Group uses derivatives to hedge its exposure on risks. The Group adopts hedge accounting for derivatives designated as hedging instruments if the hedge is effective. Other derivatives are accounted for as trading financial assets or financial liabilities. Derivatives are recognised at fair value upon initial recognition. The positive fair value is recognised as assets while the negative fair value is recognised as liabilities. The gain or loss on re-measurement to fair value is recognised immediately in profit or loss.Hedge accounting recognises the offsetting effects on profit or loss of changes in the fair values of the hedging instrument and the hedged item. The Group records the relationship between the hedging instrument and the hedged item as well as its risk management objectives and the strategy of executing the hedging transaction at the beginning of the transaction. The Group assesses and documents whether the financial instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items attributable to the hedged risks both at hedge inception and on an ongoing basis. The Group discontinues prospectively hedge accounting when (a) the hedging instrument expires or is sold, terminated or exercised; (b) the hedge no longer meets the criteria for hedge accounting; or (c) the Group revokes the designation.(i) Fair value hedgeA fair value hedge seeks to offset risks of changes in the fair value of recognised asset or liability that will give rise to a gain or loss being recognised in profit or loss. The hedging instrument is measured at fair value, with fair value changes recognised in profit or loss. The carrying amount of the hedged item is adjusted by the amount of the changes in fair value of the hedging instrument attributable to the risk being hedged. This adjustment is recognised in profit or loss to offset the effect of the gain or loss on the hedging instrument.163China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(15) Derivatives and hedging activities (continued)(ii) Hedge effectiveness testingIn order to qualify for hedge accounting, the Group carries out prospective effectiveness testing to demonstrate at each balance sheet date that it expects the hedge to be highly effective at the inception of the hedge and throughout its life. Actual effectiveness (retrospective effectiveness) is also demonstrated on an ongoing basis.The documentation of each hedging relationship sets out how the effectiveness of the hedge is assessed. The method which the Group adopts for assessing hedge effectiveness will depend on its risk management strategy.For prospective effectiveness, the hedging instrument must be expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk during the period for which the hedge is designated. For actual effectiveness, the changes in fair value or cash flows must offset each other in the range of 80% to 125% for the hedge to be deemed effective.(16) Financial assets held under resale agreements and securities sold under agreements to repurchaseFinancial assets held under resale agreements are transactions where the Group acquires financial assets which will be resold at a predetermined price at a future date under resale agreements. Securities sold under agreements to repurchase are transactions where the Group sells financial assets which will be repurchased at a predetermined price at a future date under repurchase agreements.The cash advanced or received is recognised as amounts held under resale or sold under agreements to repurchase in the statements of financial position. Assets held under resale agreements are recorded in memorandum accounts as off-balance sheet items. Assets sold under agreements to repurchase continue to be recognised in the statements of financial position.The difference between the purchase and resale consideration, and that between the sale and repurchase consideration, is amortised over the period of the respective transaction using the effective interest rate method and is included in interest income and interest expenses, respectively.164China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(17) Reinsurance debtors and other receivablesReinsurance debtors represent receivables from reinsurance contracts.Reinsurance debtors and other receivables are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, less allowance for impairment of doubtful debts (see Note 2(24)(a), except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less allowance for impairment of doubtful debts.(18) Policyholders deposits, investment contract liabilities, reinsurance and other payablesObligations under contracts that do not transfer significant insurance risk are accounted for as investment contracts. Reinsurance payables are primarily premiums, benefits and claims payable for outward reinsurance contracts. Policyholders deposits are the payments received in advance by the Group which represent amounts, including interest, collected from contracts not yet effective as renewal payment as at the end of the reporting period.Policyholders deposits, investment contract liabilities, reinsurance and other payables are initially recognised at fair value, and are subsequently stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost.(19) Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the assets and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.(20) Investment propertiesThe Groups investment properties are buildings held to earn rental income, rather than for the supply of services or for administrative purposes.An investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at cost less accumulated depreciation and any impairment losses.Depreciation is computed on the straight-line basis over the estimated useful life. The estimated useful life of investment properties is 15 to 35 years.The residual value, the useful life and the depreciation method are reviewed at least at end of the reporting period to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from the investment properties.165China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(20) Investment properties (continued)An investment property is derecognised when either it has been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the income statement in the period of retirement or disposal. A transfer to, or from, an investment property is made when, and only when, there is evidence of a change in use.(21) Property and equipmentProperty and equipment, other than construction in progress, are stated at cost less accumulated depreciation and impairment losses (see Note 2(24)(b). The cost of an item of property and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after items of property and equipment have been put into operation, such as repairs and maintenance, is normally charged to the statement of profit or loss in the period in which it is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of property and equipment, and where the cost of the item can be measured reliably, the expenditure is capitalised as an additional cost of that asset or as a replacement.Gains or losses arising from the retirement or disposal of an item of property and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognised in profit or loss on the date of retirement or disposal.Depreciation is calculated to write off the cost or valuation of items of property and equipment, less their estimated residual value, if any, using the straight-line method over their estimated useful lives as follows:Buildings15 35 yearsMachinery and equipment3 11 yearsMotor vehicles5 8 yearsOffice and electronic equipment3 8 yearsLeasehold improvementshorter of lease terms and useful lifeWhere parts of an item of property and equipment have different useful lives, the cost or valuation of the item is allocated on a reasonable basis between the parts and each part is depreciated separately. Both the useful life of an asset and its residual value, if any, are reviewed annually.Construction in progress represents costs of construction of buildings and other items of property as well as costs of equipment under installation. Construction in progress is stated at cost less any impairment losses (see Note 2(24)(b), and is not depreciated, and is reclassified to the appropriate category of property and equipment when completed and ready for use.166China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(22) Intangible assets (other than goodwill)Intangible assets are mainly the value of business acquired, Syndicate capacity, distribution channel, purchased software and etc.(a) Value of business acquired (“VOBA”)Insurance contract liabilities for insurance business arising from business combination are recognised at the carrying amount. The difference between its carrying value and fair value, calculated as the present value of future profits arising from the enforceable insurance business at the acquisition date, is recorded as VOBA. The calculation of discounted future profits is based on the estimation at the acquisition date using the actuarial assumptions, as well as the cost of capital at the acquisition date and a risk-adjusted discount rate.VOBA is recognised as an intangible asset on the consolidated statements of financial position, and amortised over the remaining contract periods of the acquired policies.During the liability adequacy test, the recoverability of VOBA is reviewed based on the actual experience of enforceable business and the updated key assumptions. VOBA is derecognised when underlying insurance contracts are terminated or commuted.(b) Syndicate capacitySyndicate capacity is arising from business combination，recognised as an intangible asset on the consolidated statements of financial position. Syndicate capacity represents the capacity of Lloyds Syndicates allowing the Company to write insurance business in the Lloyds market globally and to realise profits from that business. The continuing value of the underwriting capacity is reviewed for impairment annually by reference to the expected future profit streams to be earned from the syndicate, with any impairment in value being charged to the statement of profit or loss. It is deemed to have indefinite useful lives and are therefore not subject to amortization and is stated at cost less any impairment loss (see Note 2(24)(b).(c) Distribution channelDistribution channel is arising from business combination, recognised as an intangible asset on the consolidated statements of financial position. Distribution channel represents a network of retail and wholesale brokers worldwide, including specialty and regional brokerages, which allow the Group to form closer relationships with clients and aids business retention. Distribution channel is initially recognised at fair value at the acquisition date and is subsequently measured at cost less accumulated amortisation and impairment provision. It is amortised on a straight-line basis over their estimated useful lives from 10 to 15 years.(d) SoftwarePurchased software is stated at cost less accumulated amortisation (where the estimated useful life is finite) and impairment losses (see Note 2(24)(b). Software are finite life assets and amortised on a straight-line basis over the assets estimated useful lives from 3 to 10 years.167China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(23) Share capitalOrdinary sharesIncremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.(24) Impairment of assets(a) Impairment of financial assetsThe carrying amounts of financial assets other than those at fair value through profit or loss are reviewed by the Group at the end of the reporting period to determine whether there is objective evidence of impairment. If any such evidence exists, impairment losses are provided. Objective evidence of impairment in the financial asset represents events that occur after the initial recognition of the financial assets and have impact on the estimated future cash flows of the asset, which can be estimated reliably.Objective evidence that a financial asset is impaired includes, but not limited to: significant financial difficulty of the borrower or issuer; a breach of contract by the borrower, such as a default or delinquency in interest or principal payments; it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; disappearance of an active market for financial assets because of financial difficulties of the issuer; significant changes in the technological, market, economic or legal environment that have an adverse effect on the borrower; and a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost, including:(i) the market price of the equity securities was more than 50% below their cost at the reporting date; or(ii) the market price of the equity securities which were held for less than one year was more than 20% below their cost for a period of at least six months at the reporting date; or(iii) the market price of the equity securities was below their cost for a period of more than one year (including one year) at the reporting date.168China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(24) Impairment of assets (continued)(a) Impairment of financial assets (continued)Investments classified as held-to-maturity and loans and receivables, reinsurance debtors and other receivablesThe impairment loss is calculated based on the excess of its carrying amount over the present value of the estimated future cash flows (exclusive of future credit losses that have not been incurred) discounted at the original effective interest rate. All impairment losses are recognised in profit or loss.If, in a subsequent period the amount of an impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the impairment loss is reversed through profit or loss. The reversal shall not result in a carrying amount of the financial asset that exceeds the amortised cost at the date of the reversal had the impairment not been recognised.Available-for-sale financial assetsImpairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost net of any principal repayment and amortisation and the current fair value, less any impairment loss recognised previously in profit or loss. Changes in cumulative impairment losses attributable to application of the effective interest method are reflected as a component of interest income.If, in a subsequent period, the fair value of an impaired available-for-sale debt investments increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity investment is recognised in other comprehensive income.For investments in equity instruments measured at cost, the amount of any impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset and recognised in profit or loss. Any impairment loss in respect of available-for-sale equity investments carried at cost should not be reversed.169China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(24) Impairment of assets (continued)(b) Impairment of non-financial assetsInternal and external sources of information are reviewed at the end of each reporting period to identify indications that the following assets may be impaired or, an impairment loss previously recognised no longer exists or may have decreased: property and equipment; right-of-use assets; investment properties; intangible assets; investments in subsidiaries and associates; and goodwill.If any such indication exists, the assets recoverable amount is estimated. In addition, for goodwill, intangible assets that are not yet available for use and intangible assets that have indefinite useful lives, the recoverable amount is estimated annually whether or not there is any indication of impairment.The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Subject to an operating segment ceiling test, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.170China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(25) Insurance contractsInsurance contracts are those contracts under which the Group accepts significant insurance risk from the policyholder by agreeing to compensate the policyholder or other beneficiary if a specified uncertain future event (“the insured event”) adversely affects the policyholder or other beneficiary. Insurance risk is risk other than financial risk that is transferred from the holder of a contract to the issuer. Financial risk is the risk of a possible future change in one or more of a specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party of the contract.The Groups insurance contracts comprise primary insurance contracts and reinsurance contracts.(26) Testing the significance of insurance riskFor contracts that contain both insurance risks and non-insurance risks, and where insurance risks and non-insurance risks can be distinguished and measured separately, the insurance risks and non-insurance risks should be unbundled. Insurance risk components should be treated as insurance contracts while other risk components should be treated as non-insurance contracts. When the insurance risk components and other risk components cannot be distinguished, or could be distinguished but not be measured separately, the entire contract should be treated as an insurance contract if the insurance risk is significant, otherwise it should be treated as a non-insurance contract.For contracts issued by the Group which require testing the significance of insurance risk, it should be performed at the initial recognition of such contracts.For reinsurance contracts, the Group uses the contract (or facultative insurance policy) as a basic unit for the risk significance test. Tests can be combined for small business contracts or facultative insurance policies. If it is specified in the terms of a contract that its payment responsibility changes according to another contracts claim amount, those contracts should be combined for risk significance test. For primary property and casualty insurance contracts, the Group uses the product as a risk significance test unit. If the test results show that insurance accident specified in the contract may result in significant additional benefits paid by the Group, the contract is recognised as a significant risk contract, except for those with no commercial substance. The additional benefits above-mentioned refer to the amount the Group pays when an accident occurs in excess of the amount the Group pays when an accident does not occur. A contract has no commercial substance if it has no identifiable impacts on either the Group or its counter-partys economic interests.The Groups other contracts that do not meet the definition of an insurance contract (“investment contract”) should be recognised and measured according to relevant accounting policies for financial assets or liabilities.The assumptions used for testing the significance of insurance risk mainly include loss ratio, mortality and morbidity, loss distribution, etc. The Group determines such assumptions based on historical experiences and the estimation on future development trends so as to reflect the Groups product characteristics and actual claim payments.171China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(27) Insurance contract liabilitiesThe Groups insurance contract liabilities include unearned premium reserves, claim reserves and long-term life and health insurance contract reserves. The Group measures the insurance contract reserves at the end of the reporting period.When the Group calculates the insurance contract reserves, it combines the insurance contracts with homogeneous insurance risks as one measuring unit.The Group calculates the insurance contract reserves based on the future expected net cash flows arising from insurance contracts with consideration of the time value of money. Future cash inflows mainly include future insurance premium, future salvage and subrogation on incurred claims. Future cash outflows mainly include claims paid to the insurants, surrender payments, and expenses, etc. The reinsurance contracts also take the adjustable commission and profit commission into consideration. If the effect of time value of money is significant, the Group will discount the relative future cash flows. The Group determines the discount rate based on the available information at the end of the reporting period.Margins are considered and separately measured in determining insurance contract liabilities. Margins are released in the consolidated statement of profit or loss over the insurance coverage period using systematic and reasonable methods. Margins include risk margin and residual margin. Risk margin represents provision for the uncertainty and the degree of impact associated with the future net cash flows. The Group determines risk margins of the long-term life insurance policyholders reserves using the scenario comparison method. At inception of an insurance contract, any day-one gain is not recognized in the consolidated statement of profit or loss, but included in the insurance contract liabilities as a residual margin. At inception of an insurance contract, any day-one loss is recognized in the consolidated statement of profit or loss. The Group amortizes the residual margin on the basis of sum insured or cash value of policies during the whole insurance coverage period, and will not be adjusted for future change in assumptions.The Group evaluates the cash flows of insurance contracts and related reinsurance contracts separately. Meanwhile, the Group calculates the corresponding reserves that shall be recovered from the reinsurer and retrocessionaire and recognises the corresponding insurance reserve receivable as an asset.172China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(27) Insurance contract liabilities (continued)Unearned premium reservesThe Group adopts the higher of the following as the unearned premium reserves for property and casualty, accident and short-term life and health insurance contracts:(i) The result of applying 1/8 method, 1/24 method, 1/365 method or risk distribution method on the difference between written premiums and acquisition costs.(ii) The discounted net future cash outflows including claim payments for unexpired risks, maintenance expenses, loss adjustment expenses, and corresponding risk margin. Risk margin is determined using the 75% percentile approach, with reference to the relevant industry benchmarks.The acquisition costs of the Groups reinsurance contracts primarily include reinsurance commissions, and insurance supervision fees, etc. The acquisition costs of the Groups primary insurance contracts primarily include handling charges and commission expenses, taxes and surcharges, statutory insurance fund contributions, insurance supervision fees, and commissions paid to employees working as sales representatives.The Group calculates the expected future net cash outflows over the entire insurance period to measure the unearned premium reserves.Claim reservesClaim reserves refer to the provision for incurred events of property and casualty, accident and short-term life and health insurance contracts insured by the Group as primary insurer or reinsurer, including case reserves, incurred but not reported (“IBNR”) reserves and loss adjustment expense reserves.Case reserves represent the reserves for incurred insurance accidents, which have been reported to the Group but not yet settled. As primary insurer, the Group adopts case-by-case loss estimating method and average cost per claim method to measure case reserves, based on the reasonable estimate of the ultimate settlement amount, with consideration of risk margin. In regard to reinsurance contracts, the Group measures case reserves based on the information provided by cedants.IBNR reserves represent the reserves for incurred insurance events that have not been reported to the Group. Based on the nature and distribution of insurance risk, the pattern of historical claim development, and the latest available claim data, the Group adopts commonly accepted actuarial reserving methods such as the chain ladder methods, average cost per claim method, frequency-severity method, Bornhuetter-Ferguson method and expected loss ratio method to measure IBNR reserves, with consideration of the time value of money and risk margin.Loss adjustment expense reserves represent reserves for claims related expenses such as settlement fees, legal cost, claim-surveying cost and claim handling staffs salary, on insurance accidents. The Group mainly uses the ratio allocation method to measure loss adjustment expense reserves.173China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(27) Insurance contract liabilities (continued)Life and health insurance contract reservesThe Group measures long-term life and health insurance contract reserves on the basis of the best estimates of future payments that will be required to fulfil the contractual obligations. These payments refer to the expected net future cash outflows for the insurance contracts, which is the difference between the expected future cash outflows and the expected future cash inflows. The expected future cash outflows are cash outflows incurred to fulfil contractual obligations, consisting of: (i) the guaranteed benefits based on contractual terms, including death claims, disability claims, medical benefits, survival benefits, maturity benefits, etc.; (ii) the non-guaranteed benefits, including policyholder dividends, etc.; and (iii) expenses incurred to manage insurance contracts or to process claims, including loss adjustment expenses, etc. The expected future cash inflows include cash inflows arising from the undertaking of insurance obligations, including premium and other fees.Margin comprising risk margin and residual margin has been taken into consideration while computing the reserve of life and health insurance contracts. Risk margin is the reserve accrued to compensate for the uncertain amount and timing of future cash flows. Residual margin is the margin for not recognising day-one gain and will be amortised over the life of the contracts. The subsequent measurement of residual margin is independent of the reserve related to best estimate of future discounted cash flows and risk margin. The assumption changes have no effect on the subsequent measurement of residual margin.The Group determines the assumptions for measuring the unexpired liability reserves on the basis of latest information obtained on the balance sheet date.For the insurance contracts of which the future returns are not affected by the investment yields of the corresponding investment portfolios, the Group determines the discount rate for computing the unexpired liability reserves on the basis of market interest with equivalent duration and equivalent risk to liability cash outflows. For the insurance contracts of which future returns are affected by the investment yields of corresponding investment portfolios, the Group determines the discount rate for computing the unexpired liability reserves on the basis of expected future investment returns rate of the corresponding investment portfolios.Based on the historical experience and trend of future development, the Group determines the reasonable estimates as the assumptions, such as mortality rate, morbidity rate, lapse rate and expenses. For future expense which is sensitive to inflation, the Group considers the factors of inflation and the effects of the Groups expense controls to determine the expenses assumptions.For insurance contracts with renewal rights, if the policyholder is likely to execute the renewal right without adjusting the premium rates, the Group takes the whole insurance period as the expected future net cash outflow period while measuring the reserves.174China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(27) Insurance contract liabilities (continued)Liability adequacy testThe Group performs liability adequacy tests for unearned premium reserves and reserves for long-term life and health insurance on the balance sheet date. If the result of adequacy test exceeds the carrying amount of the reserves, the carrying amounts of the reserves shall be increased to the adequacy test result. For insurance policies acquired from business combination, the VOBA should be written off first and the deficiencies in excess of VOBA should be treated as additional reserves. And if the related reserve is adequate, no adjustment is made.(28) ReinsuranceCedes reinsurance arrangements do not relieve the Group from its obligations to policyholders. When recognizing income from insurance contracts, the Group determines the amount of premium ceded and reinsurance commission income and recognize them through profit or loss according to reinsurance contracts. As for profit commission, the Group recognizes it as a reinsurance commission income through profit or loss according to the reinsurance contracts when it is feasible to determine the amount of profit commission to be received from the reinsurers. When calculating unearned premium reserves, claim reserves and long-term life and health insurance contracts reserves of insurance contracts, the Group estimates the reinsurance related cash flows according to the reinsurance contracts, considers the risk margin when determining the amount of insurance contract reserves to be recovered from reinsurers, and recognizes insurance reserve receivable. When insurance contract liabilities are reduced for actual payment of claims and claim expenses, insurance reserve receivable are reduced accordingly. In the meantime, the Group determines the amount of claim expenses to be recovered from the reinsurers according to the reinsurance contracts and recognizes the amount through profit or loss. When there is an early termination of an insurance contract, the Group determines the adjustment amount of premium ceded and reinsurance commission income according to the reinsurance contracts and recognizes the amount through profit or loss, and the balance of insurance reserve receivable is reversed accordingly.The Group cedes insurance/reinsurance in the normal course of business for the purpose of limiting its net loss potential through the diversification of its risks. Assets, liabilities, income and expenses arising from ceded insurance/reinsurance contracts are presented or disclosed separately from the assets, liabilities, income and expenses arising from the related insurance contracts because the reinsurance arrangements do not relieve the Group from its direct obligations to its policyholders.175China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(29) Notes and bonds payableNotes and bonds payable are initially recognised at fair value, net of transaction costs incurred. Notes and bonds payable are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the expected periods of the notes and bonds using the effective interest method.(30) Revenue recognitionThe Groups main revenue is recognized on the following bases:(a) Gross written premiumsGross written premiums in respect of primary property and casualty insurance contracts are recognised as revenue when the amount is determined, which is generally when the risk commences.Gross written premiums in respect of reinsurance contracts reflect business written during the reporting period. Premiums written include an estimate for written premiums receivable of the current period and adjustments to estimates of premiums written in previous years at period end.(b) Interest incomeInterest income for interest bearing financial instruments, is recognized in the consolidated statement of profit or loss using the effective interest rate method for financial assets that are not classified as FVTPL and using the coupon rate for financial assets that are classified as FVTPL.(c) Dividend IncomeDividend income is recognised when the right to receive dividend payment is established.(d) Other operating incomeOther operating income mainly investment contract business income. The operating income of an investment contract is recognized when the relevant economic benefits are likely to flow in and can be measured reliably in accordance with the accounting rules applicable to the relevant business.176China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(31) Employee benefits(a) Short term employee benefits and defined contribution plansSalaries, annual bonuses, paid annual leave, contributions to defined contribution plans and the cost of non-monetary benefits are accrued in the period in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values.A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees.(b) Defined benefit retirement plan obligationThe Group operates several defined benefit retirement plans.The liability or asset recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.The Group measures the obligations under defined benefit pension plans using unbiased and mutually compatible actuarial assumptions to estimate related demographic variables and financial variables, and discounts obligations under the defined benefit retirement plans to determine the present value of the defined benefit liability.The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost recognised in the consolidated statement of profit or loss.Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in the consolidated statement of comprehensive income. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the consolidated statement of profit or loss.177China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(32) LeasesFrom 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: fixed payments (including in-substance fixed payments), less any lease incentives receivable, variable lease payment that are based on an index or a rate, amounts expected to be payable by the lessee under residual value guarantees, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessees incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.Right-of-use assets are measured at cost comprising the following: the amount of the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease incentives received, any initial direct costs, and restoration costs.178China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(32) Leases (continued)Right-of-use assets are generally depreciated over the shorter of the assets useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying assets useful life.Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise mainly in office and electronic equipment and small items of office furniture.(33) Income taxIncome tax comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to items recognised in other comprehensive income or directly in equity, in which case the relevant amounts of tax are recognised in other comprehensive income or directly in equity, respectively.Current tax is the expected tax payable on the taxable income for the reporting period, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years.Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits.Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, are recognised. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit can be utilised.179China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(33) Income tax (continued)The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences arising from goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit (provided they are not part of a business combination), and temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Group controls the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future.The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are not discounted.The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.Additional income taxes that arise from the distribution of dividends are recognised when the liability to pay the related dividends is recognised.Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met: in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either: the same taxable entity; or different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realise the current tax assets and settle the current tax liabilities on a net basis or realise and settle simultaneously.180China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(34) Provisions and contingent liabilitiesProvisions are recognised for other liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.(35) DividendsWhen the final cash dividends proposed by the directors have been approved by the shareholders and declared, they are recognised as a liability.(36) Related parties(a) A person, or a close member of that persons family, is related to the Group if that person:(i) has control or joint control over the Group;(ii) has significant influence over the Group; or(iii) is a member of the key management personnel of the Group or the Groups parent.(b) An entity is related to the Group if any of the following conditions applies:(i) The entity and the Group are members of the same group;(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);(iii) Both entities are joint ventures of the same third party;181China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)(36) Related parties (continued)(b) An entity is related to the Group if any of the following conditions applies: (continued)(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity;(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group;(vi) The entity is controlled or jointly controlled by a person identified in (a);(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); or(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the Groups parent.Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.(37) Segment reportingOperating segments, and the amounts of each segment item reported in the financial statements, are identified from the financial statements provided regularly to the Groups most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Groups various lines of business and geographical locations.Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material may be aggregated if they share a majority of these criteria.182China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)3 ACCOUNTING JUDGEMENT AND ESTIMATES(1) Critical accounting judgements in applying the Groups accounting policiesIn the process of applying the Groups accounting policies, management has made the following critical accounting judgements:(a) Significant insurance risk testThe Group performs significant insurance risk test at the time when a contract is recognised, and makes necessary review at the end of the reporting period.The Group determines whether the reinsurance contracts transfer significant risk using the following methods and thresholds:(i) Property and casualty reinsurance contractsThe Group considers property and casualty reinsurance policies with expected reinsurer deficit (“ERD”) larger than 1% as reinsurance contracts. When calculating ERD of reinsurance policies, the Group selects appropriate loss distribution, based on its own historical claim experience and stochastic simulation method.(ii) Life and health reinsurance contractsWhen signing a reinsurance contract (or a facultative policy), the Group determines whether it transfers significant insurance risk based on qualitative assessment or quantitative analysis. In the case that a contract transfers significant insurance risk, it will be determined as a reinsurance contract; otherwise it will be determined as non reinsurance contract.When the Group performs significant risk test, for life and health reinsurance business, it considers whether the reinsurance contracts are reasonably self-evidenced. Contracts that are reasonably self-evident are determined as reinsurance contracts. Such conditions include: i) the business having apparent characteristics of transferring insurance risks, namely the ceding company transfers the primary insurance risk of primary insurance business to reinsurer; and ii) no apparent loss participation clauses such as loss compensation, loss distribution pro rata, etc. in place. Businesses that are considered reasonably self-evident need to be reviewed every year to ensure the reasonableness of these conditions. The Group uses scenario testing methods for significant risk test for those contracts not reasonably self-evidenced.(b) Impairment of available-for-sale equity financial instrumentsThe Group determines that available-for-sale equity financial instruments are impaired when there has been a significant or prolonged decline in the fair value below cost. The determination of what is significant or prolonged requires management judgement. When making such judgement, the Group considers the length of the period over which the fair value is lower than cost and the magnitude of the decline in fair value.183China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)3 ACCOUNTING JUDGEMENT AND ESTIMATES (continued)(1) Critical accounting judgements in applying the Groups accounting policies (continued)(c) Significant influence when less than 20% of voting power is heldThe Group determines whether it can exercise influence over an investee when it holds, directly or indirectly through subsidiaries, less than 20% of the voting power of the investee, but one or more of the following indicators are present: representation on the board of directors or equivalent governing body of the investee; participation in policy-making processes, including participation in decisions about dividends or other distributions; material transactions between the investor and the investee; interchange of managerial personnel; or provision of essential technical information.An investee as accounted for as an associate if it is concluded that the Group exercises significant influence over that investee; otherwise, it is accounted for as a financial asset. The reasons for existence of significant influence over some investees, even though the voting power held by the Group is less than 20%, are disclosed in Note 37 to the financial statements.(d) Determination of control over the structured entitiesTo determine whether the Group controls the structured entities of which the Group acts as an asset manager, management applies judgment based on all relevant fact and circumstance to determine whether the Group is acting as the principal or agent for the structured entities. If the Group is acting as the principal, it has control over the structured entities. In assessing whether the Group is acting as the principal, the Group considers factors such as scope of the asset managers decision-making authority, rights held by other parties, remuneration to which it is entitled, and exposure to variable returns results from its additional involvement with structured entities. The Group will perform reassessment once the fact and circumstance changes leading to changes in above factors.184China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)3 ACCOUNTING JUDGEMENT AND ESTIMATES (continued)(2) Estimation uncertaintyThe key assumptions concerning the future and other key sources of estimation uncertainty at the end of reporting period are detailed below, which will have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial years.(a) Insurance contract liabilities(i) Property and casualty reinsurance contract reserves Risk marginAccording to the “Notice for insurance companies on the implementation of Interpretation No. 2 to Accounting Standards for Business Enterprises” (NO. 6 2010), issued by the former CIRC, the ratio of final risk margin applied to the unbiased estimate of the present value of future cash flows should generally fall between 2.5% to 15.0%.When measuring reserves for property and casualty reinsurance contracts, the risk margin has been calculated using the 75% percentile approach with reference to industry benchmarks. Discount ratesWhen determining the reserves, the Group discounts relevant future cash flows if the impact of time value of money is significant. Level of impact depends on the “duration” of insurance liability. If the duration of insurance liability is longer than one year, the time value of money is significant and should be included when determining the reserves; otherwise, it is not compulsory for determining the reserves. For reinsurance contracts underwritten by the Syndicates, Lloyds underwriter and Chaucer Insurance Company Designated Activity Company, the Group determines the assumption of discount rate according to the risk-free yield curve published by “European Insurance and Occupational Pensions Authority”, the assumption of discount rates for the Lloyds Syndicates used as at 31 December 2021 is 0.7% to 1.4% (31 December 2020: 1.5% to 1.9%).For the other reinsurance contracts, the Group determines the assumption of discount rate according to the “Yield Curve of Insurance Contract Reserves” published by , without considering liquidity risk premium, tax effect, credit risk premium and so on, the assumption of discount rates for the Groups other reinsurance business used as at 31 December 2021 is 2.4% to 2.9% (31 December 2020: 2.6% to 2.9%).185China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)3 ACCOUNTING JUDGEMENT AND ESTIMATES (continued)(2) Estimation uncertainty (continued)(a) Insurance contract liabilities (continued)(ii) Life and health reinsurance contract reservesLife and health reinsurance contract reserves are determined by the reasonable estimation of future benefit, expense, premium as well as the risk margin. Assumptions adopted when making reasonable estimations such as mortality rate, morbidity rate, lapse rate, discount rate and loss adjustment expenses are determined by the Groups historical experience and reasonable future expectation. The risk margin reflects the uncertainty of insurance liability brought by the cash flows uncertainty of future benefit, expense and premium. Discount ratesFor contracts wherein profit in the future is not impacted by the corresponding asset portfolio investment return, the Group uses the “Yield Curve of Insurance Contract Reserves” published by and also considers the liquidity risk, taxation premium and counter-cyclical factors when determining the time value of money.The discount rates used as at 31 December 2021 are 3.0% to 6.9% (31 December 2020: 3.2% to 6.3%). The probability of insurance eventThe Group determines the probability of insurance event according to historical experience and the expectation in the future. For mortality and morbidity assumptions, the Group refers to “China Life Insurance Mortality Table” issued by the former CIRC and “ China Life Insurance Morbidity Table” issued by China Banking and Insurance Regulatory Commission in addition to its historical experience. For other assumptions, the Group would mainly refer to its historical experience, the pricing assumption or the industry benchmarks. Expense and other assumptionsThe Group determines the expense assumption according to its historical experience and the future expectation. The Group would also consider inflation metrics to determine the expense assumption if the assumption is sensitive to inflationary pressures.The lapse rate and other assumptions for reserving are determined using the Groups reliable historical experience, current situations and future expectations.186China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)3 ACCOUNTING JUDGEMENT AND ESTIMATES (continued)(2) Estimation uncertainty (continued)(a) Insurance contract liabilities (continued)(iii) Primary property and casualty insurance contract reserves Risk marginAccording to the “Notice for insurance companies on the implementation of Interpretation No. 2 to Accounting Standards for Business Enterprises” (NO. 6 2010), issued by the former CIRC, the ratio of final risk margin applied to the unbiased estimate of the present value of future cash flows should generally fall between 2.5% to 15.0%.The risk margin has been calculated using the 75% percentile approach by the Group, with reference to industry benchmarks. Discount ratesFor insurance contracts underwritten by the Lloyds Syndicates and Chaucer Insurance Company Designated Activity Company, the Group determines the time value of money according to the risk-free yield curve published by “ European Insurance and Occupational Pensions Authority”, the assumption of discount rates for the Lloyds Syndicates used as at 31 December 2021 is 0.7% to 1.4% (31 December 2020: 1.5% to 1.9%).For the other insurance contracts, the Group adopts the “Yield Curve of Insurance Contract Reserves” issued by when determining the time value of money, without considering liquidity risk premium, tax effect, credit risk premium and so on, the assumption of discount rates for the Groups other insurance business used as at 31 December 2021 is 2.2% to 2.4% (31 December 2020: 2.8% to 3.0%).(b) Fair value of financial instrumentsThe Group invests primarily in debt investments, equity investments, time deposits, financial assets held under resale agreements and so on. The Groups significant accounting estimates and judgements regarding investments are related to the recognition of impairment of financial assets and the determination of the fair value. In assessing the impairment, the Group has considered various factors (see Note 2(24)(a). The fair values of quoted investments are based on current bid prices. The fair value is the price at which two knowing parties transact willingly in a fair trade rather than under on compulsion or in liquidation.187China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)3 ACCOUNTING JUDGEMENT AND ESTIMATES (continued)(2) Estimation uncertainty (continued)(b) Fair value of financial instruments (continued)The Group estimates the fair value of financial instruments using the following methods and assumptions: Debt investments, notes and bonds payable and long-term borrowing: usually, fair market value is determined on the basis of its recent quoted market price. If there is no recent quoted market price for reference, fair value is determined by the observed recent transaction price, or comparable investments recent market price. If the market for a financial asset is not active, the Group establishes fair value by using valuation techniques. Equity investments: its fair market value is determined on the basis of its recent quoted market price. If there is no recent quoted market price, for the equity investments whose fair value cannot be measured reliably, they can be determined by using valuation techniques. Derivatives: its fair market value is determined on the basis of its recent quoted market price. If there is no recent quoted market price, for the derivatives whose fair value cannot be measured reliably, they can be determined by using valuation techniques. Time deposits, investments classified as financial assets held under resale agreements, securities sold under agreements to repurchase, short-term borrowing: the book value on the consolidated statements of financial position approximates to fair value.(c) Pipeline premiumWritten premiums include pipeline premiums which represent future premiums receivable on in-force underlying insurance contracts. Pipeline premium estimates are typically based on the information provided by the cedant as well as the historical premium development pattern.(d) Impairment of goodwill and intangible assets with infinite useful lifeThe Group performs goodwill and intangible assets with infinite useful life impairment test annually. The recoverable amount of an asset group or a set of asset groups including goodwill and intangible assets with infinite useful life is the higher of its fair value less costs to disposal and its value-in-use, and the principal assumptions used are set out in Note 36 and Note 38 to the financial statements.(e) Deferred tax assetsDeferred tax assets are recognised for unused tax losses and temporary deductible differences to the extent that it is probable that taxable profit will be available against which the used tax losses and temporary deductible differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the estimated timing and level of future taxable profits as well as the applicable tax rates.188China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)3 ACCOUNTING JUDGEMENT AND ESTIMATES (continued)(2) Estimation uncertainty (continued)(e) Deferred tax assets (continued)There are some uncertainties on the estimation of future taxable profit as it involves a number of estimations for future transactions, including whether the actuarial assumptions and experience are consistent, the performance of future investment market, as well as the impacts of any changes in corporate tax law.(f) Retirement benefit liabilitiesThe Group measured certain employee retirement benefits using projected unit credit method, when these benefit plans met the definition of defined benefit plans as set out in Note 2(31)(b). Carrying value of these liabilities and the principal assumptions used in measuring these liabilities are set out in Note 48 to the financial statements.(g) Impairment of held-to-maturity investments, investments classified as loans and receivables, reinsurance debtors and other receivablesWhen there is objective evidence that there is impairment in above investments and receivables, the Group assesses the degree of risk and collectability of each item. The Group needs to recognise an impairment loss in the statement of profit or loss if the present value of expected future cash flows is less than the carrying amount of these assets. The Group mainly considers the financial situation and credit rating of the debtors and changes in the capital market.Other than impairment for individual receivables, the Group also collectively assesses impairment for receivables. Such collective assessment is carried out for a group of receivables with similar credit risk characteristics. The degree of impairment depends on the timing and amount of future cash flows.(h) Impairment of non-current assets other than financial assetsThe Group makes judgement on whether there is an indication that non-current assets other than financial assets may be impaired as at the end of the reporting period. When any such indication exists, the Group performs impairment testing for the asset or a group of assets and makes estimate of the recoverable amount. Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The Group determines the recoverable amount according to the higher of the fair value less costs of disposal and the present value of expected future cash flows. Fair value less costs of disposals is determined with reference to the prices in sales agreements or observable market prices of similar assets in fair transactions. When using the present value of estimated future cash flows, management must use the estimated future cash flows of the asset or a group of assets, and select the appropriate discount rate to determine the present value of the future cash flows.189China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)4 SEGMENT INFORMATIONThe Groups operating segments are presented in a manner consistent with the internal management reporting provided to the management for deciding how to allocate resources and for assessing performance.For management purposes, the Group is organised into business units based on their products and services and has the following operating and reportable segments: The property and casualty reinsurance segment, operated by the Company and subsidiaries of the Company China Property and Casualty Reinsurance Company Ltd. (“China Re P&C “), etc. offers a wide variety of reinsurance products for various property and casualty insurance, such as motor, property, agricultural and liability insurance, etc., and also includes the business operated by China Re UK Limited (“China Re UK”) and Chaucer. Chaucer mainly includes China Re International Holdings Limited (“CRIH”), Chaucer Insurance Company Designated Activity Company (“CIC”) and China Re Australia HoldCo Pty Ltd (“CRAH”). The life and health reinsurance segment, operated by the Company and its subsidiary Company China Life Reinsurance Company Ltd. (“China Re Life”), offers a wide range of reinsurance products, such as life, health and accident insurance, etc. The primary property and casualty insurance segment, operated by the subsidiary of the Company China Continent Property and Casualty Insurance Company Ltd. (“China Continent Insurance”), offers a wide variety of insurance products and other businesses including motor, property and liability insurance, etc. The asset management segment, operated by the subsidiary of the Company, China Re Asset Management Company Ltd., (“China Re AMC”), offers asset management services and manages assets and liabilities related to notes issued in overseas. Other segments and activities primarily consist of the headquarters that manages and supports the business development of the Group with its strategy, risk management, actuary, finance, legal and human resource functions; the insurance agency business and other businesses provided by the Group.Management monitors the results of the Groups operating segments separately to make decisions about resources allocation and performance assessment. Segment performance is evaluated based on segment profit/(loss).More than 70% of the Groups revenue is derived from its operations in Mainland China.Inter-segment sales are transacted according to terms and conditions negotiated by the relevant parties within the Group.190China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)4 SEGMENT INFORMATION (continued)2021 Property and casualty reinsuranceLife and health reinsurancePrimary property and casualty insuranceAsset managementOthersEliminationTotal Gross written premiums51,954,49969,373,70443,496,148(2,092,788)162,731,563Less: Premiums ceded to reinsurers and retrocessionaires(4,453,854)(8,156,646)(4,456,152)2,091,952(14,974,700)Net written premiums47,500,64561,217,05839,039,996(836)147,756,863Changes in unearned premium reserves(2,110,926)(1,421,046)(184,099)(850)(3,716,921)Net premiums earned45,389,71959,796,01238,855,897(1,686)144,039,942Reinsurance commission income572,025816,1511,227,384(682,470)1,933,090Investment income (Note)3,300,3727,091,2762,895,0811,328,9412,018,261(1,869,881)14,764,050Exchange gains/(losses), net212,655101,724(21,438)(218,784)(10,737)(40,142)23,278Other income145,0982,347,112136,555834,687625,983(876,178)3,213,257Total income49,619,86970,152,27543,093,4791,944,8442,633,507(3,470,357)163,973,617 External income47,820,59969,926,20944,390,0531,176,719660,037163,973,617 Inter-segment income1,799,270226,066(1,296,574)768,1251,973,470(3,470,357)Claims and policyholders benefits(29,812,068)(60,144,634)(27,547,644)77(117,504,269) Claims incurred(29,812,068)(15,900,263)(27,547,644)77(73,259,898) Life and health reinsurance death and other benefits paid(34,714,441)(34,714,441) Changes in long-term life and health reinsurance contract liabilities(9,529,930)(9,529,930)Handling charges and commissions(13,765,729)(4,832,780)(4,213,341)691,274(22,120,576)Finance costs(835,367)(640,972)(144,873)(353,121)(77,484)(2,051,817)Other operating and administrative expenses(2,485,943)(2,339,215)(11,328,419)(469,324)(1,302,162)902,316(17,022,747)Total benefits, claims and expenses(46,899,107)(67,957,601)(43,234,277)(822,445)(1,379,646)1,593,667(158,699,409)Share of profits of associates329,0041,186,831147,71510,772927,937(307,330)2,294,929Profit before tax3,049,7663,381,5056,9171,133,1712,181,798(2,184,020)7,569,137Income tax(380,390)(671,486)51,888(133,148)(45,629)(1,178,765)Profit for the year2,669,3762,710,01958,8051,000,0232,136,169(2,184,020)6,390,372Note: Investment income of the others segment in 2021 includes dividends from subsidiaries of RMB1,855 million.191China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)4 SEGMENT INFORMATION (continued)2020 Property and casualty reinsuranceLife and health reinsurancePrimary property and casualty insuranceAsset managementOthersEliminationTotal Gross written premiums48,572,81866,957,33048,166,559(2,122,863)161,573,844Less: Premiums ceded to reinsurers and retrocessionaires(4,267,978)(5,282,454)(4,699,701)2,146,259(12,103,874)Net written premiums44,304,84061,674,87643,466,85823,396149,469,970Changes in unearned premium reserves(1,422,516)(1,000,964)(968,663)4,567(3,387,576)Net premiums earned42,882,32460,673,91242,498,19527,963146,082,394Reinsurance commission income541,3011,280,2751,617,052(773,685)2,664,943Investment income (Note)3,620,6997,337,5663,181,2181,171,8622,243,811(1,866,623)15,688,533Exchange gains/(losses), net66,921231,889(134,504)41,770(83,143)(24,871)98,062Other income126,3932,830,972208,770585,398497,601(587,951)3,661,183Total income47,237,63872,354,61447,370,7311,799,0302,658,269(3,225,167)168,195,115 External income45,440,29972,218,37048,520,1231,308,959707,364168,195,115 Inter-segment income1,797,339136,244(1,149,392)490,0711,950,905(3,225,167)Claims and policyholders benefits(27,897,238)(62,413,290)(26,349,588)(1,303)(116,661,419) Claims incurred(27,897,238)(12,099,061)(26,349,588)(1,303)(66,347,190) Life and health reinsurance death and other benefits paid(25,836,951)(25,836,951) Changes in long-term life and health reinsurance contract liabilities(24,477,278)(24,477,278)Handling charges and commissions(14,735,086)(4,875,821)(6,071,452)770,682(24,911,677)Finance costs(604,195)(532,608)(197,735)(378,415)(35,699)(1,748,652)Other operating and administrative expenses(2,100,936)(2,259,540)(14,145,568)(528,805)(1,246,175)608,345(19,672,679)Total benefits, claims and expenses(45,337,455)(70,081,259)(46,764,343)(907,220)(1,281,874)1,377,724(162,994,427)Share of profits of associates167,5591,113,446129,40411,191897,379(221,924)2,097,055Profit before tax2,067,7423,386,801735,792903,0012,273,774(2,069,367)7,297,743Income tax(262,266)(773,829)(142,668)(119,215)(75,931)(1,373,909)Profit for the year1,805,4762,612,972593,124783,7862,197,843(2,069,367)5,923,834Note: Investment income of the others segment in 2020 includes dividends from subsidiaries of RMB1,835 million.192China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)4 SEGMENT INFORMATION (continued)2021 Property andcasualtyreinsuranceLife andhealthreinsurancePrimaryproperty andcasualty insuranceAssetmanagementOthersEliminationTotal Segment assets135,201,966241,542,77683,828,57214,624,07564,427,227(39,185,842)500,438,774Segment liabilities(106,719,076)(217,032,837)(57,642,425)(10,654,085)(11,167,804)5,364,446(397,851,781) Other segment informationCapital expenditures(68,798)(27,532)(311,022)(9,526)(42,974)(459,852)Depreciation and amortisation(169,262)(122,332)(823,189)(15,989)(107,274)(1,238,046)Interest income2,483,6595,510,4291,546,923145,475505,993(11,583)10,180,896Financial assets impairment loss charges(323,627)(721,500)(229,064)(3,089)(125,540)(1,402,820)Other impairment loss charges(12,448)(259,305)(16,153)(2,820)(290,726) 2020Property andcasualtyreinsuranceLife andhealthreinsurancePrimaryproperty andcasualty insuranceAssetmanagementOthersEliminationTotalSegment assets120,713,757211,301,49484,660,94315,360,92861,600,295(40,060,345)453,577,072Segment liabilities(94,514,804)(185,648,425)(57,361,882)(11,081,346)(9,251,868)7,182,107(350,676,218)Other segment informationCapital expenditures(25,689)(30,699)(579,733)(4,400)(32,955)(673,476)Depreciation and amortisation(161,016)(122,927)(813,047)(18,548)(100,978)(1,216,516)Interest income2,318,4334,763,4631,724,364150,569601,571(14,634)9,543,766Financial assets impairment loss charges(261,456)(784,758)(146,036)(98,119)(1,290,369)Impairment loss charges in associates(269,387)(269,387)Other impairment loss charges(52,560)(264,518)(31,184)(680)(348,942)193China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)5 GROSS AND NET WRITTEN PREMIUMS(a) Gross written premiums20212020 Long-term life and health reinsurance43,224,29345,965,104Short-term life and health reinsurance25,904,02420,864,594Property and casualty reinsurance44,313,96741,898,087Primary property and casualty insurance49,289,27952,846,059Total162,731,563161,573,844(b) Premiums ceded to reinsurers and retrocessionaires20212020 Long-term life and health reinsurance2,962,505552,631Short-term life and health reinsurance5,184,7374,729,823Property and casualty reinsurance2,217,8752,623,981Primary property and casualty insurance4,609,5834,197,439Total14,974,70012,103,874(c) Net written premiums20212020 Net written premiums147,756,863149,469,9706 CHANGES IN UNEARNED PREMIUM RESERVES20212020 Short-term life and health reinsurance1,445,787989,745Property and casualty reinsurance1,803,8631,220,036Primary property and casualty insurance467,2711,177,795Total3,716,9213,387,576194China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)7 INVESTMENT INCOME20212020 Interest, dividend and rental income (a)12,149,69811,403,166Realised gains (b)4,377,1695,287,410Unrealised (losses)/gains (c)(359,997)207,111Negative goodwill arising from investments in associates350,602Impairment losses on financial assets (d)(1,402,820)(1,290,369)Impairment losses on investments in associates(269,387)Total14,764,05015,688,533(a) Interest, dividend and rental income20212020 Interest income Current and time deposits1,667,4501,490,869Fixed maturity investment Held-to-maturity investment1,761,8341,732,220 Available-for-sale financial assets4,720,8563,834,102 Financial assets at fair value through profit or loss113,52982,814 Investments classified as loans and receivables1,832,8312,323,908Financial assets held under resale agreements78,42772,564Reinsurers share of policy loans5,9697,289Subtotal10,180,8969,543,766Dividend incomeEquity securities Available-for-sale financial assets1,652,5501,523,448 Financial assets at fair value through profit or loss60,947112,789Subtotal1,713,4971,636,237Rental income from investment properties255,305223,163Total12,149,69811,403,166195China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)7 INVESTMENT INCOME (continued)(a) Interest, dividend and rental income (continued)An analysis of the dividend income from listed and unlisted securities is as follows:20212020 Dividend income Listed securities606,336563,457Unlisted securities1,107,1611,072,780Total1,713,4971,636,237(b) Realised gains20212020 Fixed maturity investment Available-for-sale financial assets(68,113)144,633 Financial assets at fair value through profit or loss(96,566)32,558Equity securities Available-for-sale financial assets4,868,1404,437,809 Financial assets at fair value through profit or loss495,480606,290 Investments in associates (i)(855,543)(74,910)Derivative financial instruments33,771141,030Total4,377,1695,287,410(i) On 27 December 2021, the Group no longer had significant influence on China Development Bank Financial Leasing Co., Ltd. The issue reduced Groups profit before tax by RMB856 million.196China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)7 INVESTMENT INCOME (continued)(c) Unrealised (losses)/gains20212020 Financial assets at fair value through profit or loss(512,060)315,861Financial liabilities at fair value through profit or loss(52,475)(214,579)Derivative financial assets(8,438)107,523Derivative financial liabilities212,976(1,694)Total(359,997)207,111(d) Impairment losses on financial assets20212020 Fixed maturity investment Investments classified as loans and receivables(1,125,401)(990,638) Available-for-sale financial assets(213,803)Equity securities Available-for-sale financial assets(63,616)(299,731)Total(1,402,820)(1,290,369)197China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)8 OTHER INCOME20212020 Fee income from investment contracts and insurance related business2,844,9633,195,021Commission income arising from the tax collection of motor vehicles and vessels78,42462,334Management fee income77,576130,375Sale of goods1,659102,573Others210,635170,880Total3,213,2573,661,1839 CLAIMS AND POLICYHOLDERS BENEFITS2021 GrossCededNet Claims incurred80,914,982(7,655,084)73,259,898 Short-term life and health reinsurance20,180,451(4,401,695)15,778,756 Property and casualty reinsurance27,710,444(860,068)26,850,376 Primary property and casualty insurance33,024,087(2,393,321)30,630,766Life and health reinsurance death and other benefits paid35,971,961(1,257,520)34,714,441Changes in long-term life and health reinsurance contract liabilities11,391,865(1,861,935)9,529,930Total128,278,808(10,774,539)117,504,269198China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)9 CLAIMS AND POLICYHOLDERS BENEFITS (continued)2020GrossCededNetClaims incurred74,437,032(8,089,842)66,347,190 Short-term life and health reinsurance15,552,845(3,514,942)12,037,903 Property and casualty reinsurance26,864,149(987,139)25,877,010 Primary property and casualty insurance32,020,038(3,587,761)28,432,277Life and health reinsurance death and other benefits paid26,691,160(854,209)25,836,951Changes in long-term life and health reinsurance contract liabilities24,270,947206,33124,477,278Total125,399,139(8,737,720)116,661,41910 HANDLING CHARGES AND COMMISSIONS20212020 Long-term life and health reinsurance717,762822,396Short-term life and health reinsurance4,012,3594,015,613Property and casualty reinsurance11,462,87712,865,224Primary property and casualty insurance5,927,5787,208,444Total22,120,57624,911,677199China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)11 FINANCE COSTS20212020 Interest expenses Securities sold under agreements to repurchase783,627663,176Notes and bonds payable965,047825,075Long-term borrowings262,523209,394Short-term borrowings3,7769,404Lease liabilities36,84441,603Total2,051,8171,748,65212 OTHER OPERATING AND ADMINISTRATIVE EXPENSES20212020 Employee costs5,868,9975,505,262Advertising and promotion expenses1,810,6023,649,569Outsourcing costs2,692,5503,509,056Official and travel expenses735,6231,042,424Interest expenses of policyholders deposits and investment contracts1,078,0791,182,111Rental expenses (note)151,668153,311Depreciation and amortisation1,110,5271,018,588Insurance guarantee fund310,122343,125Taxes and surcharges520,045557,960Impairment losses charges290,726348,942Cost of sales of goods61289,879Traffic accident rescue expense99,872109,842Bank settlement fee135,289113,360Asset management fee112,225420,649Others2,105,8101,628,601Total17,022,74719,672,679Note: The current rental expenses are accounted for short-term leases and low-value leases.200China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)13 PROFIT BEFORE TAXProfit before tax is recognised at after charging the following items:20212020 Employee costs (including directors and supervisors emoluments) (a) (note)6,968,5566,538,741Depreciation of property and equipment (note)363,645316,000Depreciation of investment properties (note)219,864255,398Amortisation of intangible assets (note)247,277193,721Depreciation of right-of-use assets (note)407,260451,397Rental expenses (note)151,668153,311Auditors remuneration9,60010,545Impairment losses on available-for-sale financial assets277,419299,731Impairment losses on investments classified as loans and receivables1,125,401990,638Impairment losses on premiums receivable161,847203,666Impairment losses of reinsurance debtors12,44843,371Impairment losses in associates269,387Impairment losses on other assets116,431101,905Note: Certain employee costs, depreciation, amortization and rental expenses are recorded as loss adjustment expenses and are not included in other operating and administrative expenses.(a) Employee costs (including directors and supervisors emoluments)20212020 Salaries, allowances and performance related bonuses6,461,2636,346,830Defined contribution plan502,690183,403Defined benefit retirement plan4,6038,508Total6,968,5566,538,741201China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)14 DIRECTORS AND SUPERVISORS REMUNERATIONThe total compensation package for these directors, and supervisors for the year ended 31 December 2021 has not yet been finalised in accordance with regulations of the relevant PRC authorities. The amount of the compensation not provided for is not expected to have a significant impact on the Groups 2021 consolidated financial statements. The final compensation will be disclosed when determined.2021 FeesSalariesDiscretionary BonusesAllowances and benefits in kindEmployers contribution to a retirement benefit schemeRemunerations paid or receivable in respect of accepting office as director /supervisorEmoluments paid or receivable in respect of directors other services in connection with the management of the affairs of the company or its subsidiary undertakingTotal Executive directorsMr. Yuan Linjiang35433410192881Mr. He Chunlei35433410190879Mr. Zhuang Qianzhi (i)2922879181751Non-executive directorsMs. Lu Xiuli (ii)Mr. Wen NingMs. Wang XiaoyaMr. Liu XiaopengMr. Li Bingquan (iii)Independent non-executive directorsMr. Hao Yansu250250Mr. Li Sanxi250250Ms. Mok Kam Sheung250250Ms. Jiang Bo250250SupervisorsMs. Xiong Lianhua (iv)35433410192881Mr. Zhu YongMr. Zeng ChengMr. Qin YueguangMr. Li JingyeTotal1,0001,3541,2893943554,392202China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)14 DIRECTORS AND SUPERVISORS REMUNERATION (continued)(i) Mr. Zhuang Qianzhi has been an executive director of the Company since 16 August 2021.(ii) Ms. Lu Xiuli ceased to be a non-executive director of the Company with effect from 30 July 2021.(iii) Mr. Li Bingquan has been a non-executive director from 10 January 2022.(iv) Ms. Xiong Lianhua has been a shareholder representative supervisor and chairman of the board of supervisors from June 4, 2021.2020FeesSalariesDiscretionary BonusesAllowances and benefits in kindEmployers contribution to a retirement benefit schemeRemunerations paid or receivable in respect of accepting office as director/supervisorEmoluments paid or receivable in respect of directors other services in connection with the management of the affairs of the company or its subsidiary undertakingTotalExecutive directorsMr. Yuan Linjiang35477798491,278Mr. He Chunlei35476596481,263Mr. Ren Xiaobing (i)31973296491,196Non-executive directorsMs. Lu XiuliMr. Wen NingMs. Wang XiaoyaMr. Liu XiaopengIndependent non-executive directorsMr. Hao Yansu250250Mr. Li Sanxi250250Ms. Mok Kam Sheung250250Ms. Jiang Bo250250SupervisorsMr. Zhang Hong (ii)247247Mr. Zhu YongMr. Zeng ChengMr. Qin YueguangMr. Li JingyeTotal1,0001,0272,5212901464,984203China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)14 DIRECTORS AND SUPERVISORS REMUNERATION (continued)(i) Mr. Ren Xiaobing ceased to serve as an executive Director of the Company on February 25, 2021.(ii) Mr. Zhang Hong ceased to serve as the Chairman of the Board of Supervisors and Supervisor of the Company on 13 July 2020.The compensation amounts disclosed above for these directors and supervisors for the year ended 31 December 2020 were restated based on the finalised amounts determined during 2021.15 FIVE INDIVIDUALS WITH HIGHEST EMOLUMENTS20212020 Salaries, allowances and benefits in kind13,49813,568Discretionary bonuses57,73425,508Employers contribution to a retirement benefit scheme1,8271,792Total73,05940,868None of the five individuals with the highest emoluments are directors or supervisors. The number of these individuals whose remuneration fell within the following bands is as follows:20212020 RMB5,500,001 to RMB6,000,0002RMB6,500,001 to RMB7,000,0002RMB7,500,001 to RMB8,000,000RMB8,000,001 to RMB8,500,000RMB9,000,001 to RMB9,500,0001RMB10,000,001 to RMB15,500,0003RMB15,500,001 to RMB16,000,0001RMB25,000,001 to RMB30,000,0001Total55The above emoluments are pre tax. In 2021, the five individuals with the highest emoluments are employed by the overseas insurance subsidiary Chaucer.204China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)16 INCOME TAX20212020 Current income tax Charge for the year2,556,6732,819,360Adjustments in respect of prior years(10,519)11,350Deferred income tax(1,367,389)(1,456,801)Total1,178,7651,373,909Reconciliation between income tax expense and accounting profit at applicable tax rates:20212020 Profit before tax7,569,1377,297,743Tax at the applicable tax rate of 25%1,892,2841,824,436The effect of different tax rates of other countries and regions (i)(52,948)(6,687)Tax effect of non-deductible expenses117,20681,924Tax effect of non-taxable income(835,300)(597,696)Unused tax losses for which no deferred tax asset has been recognised64,51515,776Previously unrecognised tax losses used to reduce deferred tax expense(15,046)(1,621)Adjustments for prior years(10,519)11,350Withheld income tax on dividends received from associates18,57346,427Income tax1,178,7651,373,909(i) The income tax rate applied to the Company and its subsidiaries in Mainland China is 25% for the year ended 31 December 2021 (the year ended 31 December 2020: 25%). Taxation for overseas subsidiaries and branches is charged at the appropriate current rates of taxation ruling in the relevant jurisdictions.205China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)17 DIVIDENDS20212020 In respect of previous year:2020 final dividend (declared in 2021): RMB0.041 per ordinary share1,741,6722019 final dividend (declared in 2020): RMB0.044 per ordinary share 1,869,11218 EARNINGS PER SHAREThe calculation of basic earnings per share is based on the net profit attributable to ordinary equity shareholders of the parent and the weighted average number of ordinary shares in issue.20212020 Net profit attributable to the equity shareholders of the parent6,362,7775,710,531Weighted average number of ordinary shares (in thousands)42,479,80842,479,808Basic and diluted earnings per share (in RMB)0.150.13There were no potential diluted ordinary shares in issue during the year ended 31 December 2021 (31 December 2020: Nil), so the diluted earnings per share were the same as the basic earnings per share.206China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)19 OTHER COMPREHENSIVE INCOME FOR THE YEAR AFTER TAX20212020 Items that may not be reclassified subsequently to profit or loss Remeasurement of defined benefit liability78,656(18,070)Income tax(32,919)4,205Sub-total45,737(13,865)Items that may be reclassified subsequently to profit or lossShare of other comprehensive income of associates(23,552)(79,501)Income tax(54,727)20,323Sub-total(78,279)(59,178)Gains arising from changes in fair value of available-for-sale financial assets(1,042,224)7,692,623Less: Reclassification adjustments for amounts transferred to profit or loss Gains on disposal(4,800,027)(4,582,442) Impairment losses277,419299,731Income tax789,685(634,326)Sub-total(4,775,147)2,775,586Exchange differences on translation of financial statements of overseas subsidiaries(147,152)(404,286)Total(4,954,841)2,298,257Attributable to:Equity shareholders of the Company(4,618,614)2,176,682Non-controlling interests(336,227)121,575Total(4,954,841)2,298,257207China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)20 CASH AND SHORTTERM TIME DEPOSITS31 December202131 December2020 Cash at banks and on hand16,874,6248,747,666Time deposits with original maturity of no more than three months2,247,5651,591,006Other monetary deposits3,974,0973,533,690Total23,096,28613,872,362As at 31 December 2021, cash and short-term time deposits of RMB4,358,419 thousand (31 December 2020: RMB3,650,913 thousand) were restricted from use, which are mainly trading deposits and securities settlement deposits.208China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)21 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS31 December 202131 December 2020 Listed Fixed maturity investment Financial bonds264,62818,634Corporate bonds5,148,3804,107,100Equity securitiesInvestment funds3,251,7281,577,701Stocks2,251,141543,871Sub-total10,915,8776,247,306UnlistedFixed maturity investmentGovernment bonds40,392Financial bonds183,441Corporate bonds42,960Equity securitiesInvestment funds1,926,3421,336,562Structured notes (note)1,272,7503,593,567Products from insurance asset managers454,943Sub-total3,920,8284,930,129Total14,836,70511,177,435Note: The structured notes are issued by closed-end funds of which the underlying assets are offshore dollar debt.209China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)22 DERIVATIVE FINANCIAL INSTRUMENTSDerivative financial instruments are mainly for the Group to hedge in the foreign exchange market. The Group actively manage foreign exchange risk through hedging with external counterparties and ensure that the net risk taken by the Group is within the acceptable risk level. Derivative financial instruments, except for those designated as effective hedging instruments are classified as held for trading purposes. Financial derivatives classified as held for trading purposes include derivatives used for trading purposes as well as used for risk management purposes but does not meet the hedging accounting applicable requirements.The contract notional amount and fair value of derivative financial instruments is as follows. The contract notional amount of derivative financial instruments is only the basis of comparing fair value of assets or liabilities recognised in balance sheet. It does not reflect the future cash flow or present fair value, therefore cannot reflect the risk faced by the Group. Hedging instruments are derivative financial instruments meeting the hedge accounting applicable requirements. Non hedging instruments are those that do not meet the hedge accounting applicable requirements.31 December 2021 Nominal amountAssetsLiabilities Currency swap5,723,753436,422Index Futures396,882Total6,120,635436,42231 December 2020Nominal amountAssetsLiabilitiesFair value hedge Currency swap(a)4,629,330246,287(172,014)Index Futures94,665Treasury Futures8,994Total4,732,989246,287(172,014)210China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)22 DERIVATIVE FINANCIAL INSTRUMENTS (continued)(a) Derivatives designated as hedging instrumentsFair value hedgeFair value hedge is adopted to hedge the risk that a financial instruments fair value will fluctuate because of changes in foreign exchange rates by using foreign currency forward contracts. Hedged item include equity investments classified as available-for-sale financial assets.Net profit/(loss) derived from fair value hedge is as follows:20212020 Hedging Instruments(426,551)Hedged item426,55123 FINANCIAL ASSETS HELD UNDER RESALE AGREEMENTSFinancial assets held under resale agreements of the Group contain only securities held under resale agreements, with details as follows:31 December 202131 December 2020 Securities bonds traded in Stock exchange3,465,9643,145,600Inter-bank market1,470,000Total3,465,9644,615,600211China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)24 PREMIUMS RECEIVABLE31 December 202131 December 2020 Premiums receivable16,844,10517,188,332Less: impairment provision(711,878)(549,933)Premiums receivable, net16,132,22716,638,399(a) Aging analysis31 December 202131 December 2020 Within 3 months (inclusive)15,486,43016,016,4013 months to 1 year (inclusive)741,930689,1581 to 2 years (inclusive)267,547227,353Over 2 years348,198255,420Total16,844,10517,188,332Less: impairment provision(711,878)(549,933)Net16,132,22716,638,399(b) Impairment provision of premiums receivable20212020 At the beginning of the year549,933346,371Net charge for the period161,847203,666Exchange difference98(104)At the end of the year711,878549,933212China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)25 REINSURANCE DEBTORS31 December 202131 December 2020 Reinsurance debtors49,867,58348,876,562Less: impairment provision(181,157)(170,522)Reinsurance debtors, net49,686,42648,706,040(a) Aging analysis31 December 202131 December 2020 Within 3 months (inclusive)44,815,28342,095,2523 months to 1 year (inclusive)3,472,1105,075,8161 to 2 years (inclusive)732,721861,480Over 2 years847,469844,014Total49,867,58348,876,562Less: impairment provision(181,157)(170,522)Net49,686,42648,706,040(b) Impairment provision of reinsurance debtors20212020 At the beginning of the year170,522131,478Charge for the year17,14043,371Reversal for the year(4,692)Exchange difference(1,813)(4,327)At the end of the year181,157170,522213China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)26 INVESTMENT CONTRACTS RECEIVABLE31 December 202131 December 2020 Investment contracts receivable5,266,5707,112,873Less: impairment provisionInvestment contracts receivable, net5,266,5707,112,873Within 3 months (inclusive)5,266,5707,112,873Total5,266,5707,112,873Less: impairment provisionNet5,266,5707,112,873Investment contracts receivable represents receivable from cedants arising from reinsurance contracts which do not meet the definition of an insurance contract.27 TIME DEPOSITS31 December 202131 December 2020 Within 3 months (inclusive)3,372,0581,165,8713 months to 1 year (inclusive)293,9389,729,9461 to 2 years (inclusive)3,000,000308,8212 to 3 years (inclusive)6,000,0003,000,0003 to 4 years (inclusive)5,700,0004 to 5 years (inclusive)3,000,0005,700,000Total21,365,99619,904,638214China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)28 AVAILABLEFORSALE FINANCIAL ASSETS31 December 202131 December 2020 Listed Fixed maturity investmentGovernment bonds4,746,7554,430,371Financial bonds2,034,24351,131Corporate bonds66,450,64550,987,706Subordinated bonds1,484,254Assets backed securities162,996318,987Equity securitiesInvestment funds1,175,3621,190,723Stocks24,355,54527,480,170Perpetual bonds4,395,5382,052,304Sub-total104,805,33886,511,392UnlistedFixed maturity investmentGovernment bonds7,024,3256,140,130Financial bonds16,041,04817,656,331Corporate bonds24,274,58127,024,540Subordinated bonds3,142,934474,898Other fixed maturity investment1,122,5141,121,746Equity securitiesInvestment funds18,619,60016,114,444Unlisted equity investments936,4646,626,624Equity investment plans412,660462,770Products from insurance asset managers1,386,3321,516,891Sub-total72,960,45877,138,374Total177,765,796163,649,766Including: Impairment provision(707,052)(588,225)215China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)29 HELDTOMATURITY INVESTMENTS31 December 202131 December 2020 Listed Government bonds3,034,596729,583Financial bonds868,605Corporate bonds9,524,61010,180,263Subordinated bonds1,719,856Sub-total15,147,66710,909,846UnlistedGovernment bonds102,415181,824Financial bonds4,557,8701,474,725Corporate bonds10,602,25212,465,626Subordinated bonds6,966,7487,167,759Sub-total22,229,28521,289,934Total37,376,95232,199,780As at 31 December 2021, there was no impairment incurred on held-to-maturity investments (31 December 2020: Same).30 INVESTMENTS CLASSIFIED AS LOANS AND RECEIVABLES31 December 202131 December 2020 Debt investment plans14,100,00010,489,999Trust schemes10,327,34411,966,252Asset backed plans1,175,0001,645,000Loans15,737,15618,252,105Less: impairment provision(2,242,432)(1,117,031)Total39,097,06841,236,325216China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)31 SCOPE OF CONSOLIDATION(1) Particulars of the Companys primary subsidiaries as at 31 December 2021 are as follows:NamePlace of Incorporation/registrationRegistered share capitalor paid-in capitalPercentage of equity attributable to the CompanyPrincipal activities/place of operationDirectIndirectChina Re P&CBeijingRegistered share capital of RMB11,482,250,000100.00%Property and casualty reinsurance, ChinaChina Re LifeBeijingRegistered share capital of RMB8,170,000,000100.00%Life and health reinsurance, ChinaChina Continent InsuranceShanghaiRegistered share capital of RMB15,115,918,98664.30%Primary property and casualty insurance, ChinaChina Re AMCBeijingRegistered share capital of RMB1,500,000,00070.00&.43%Management of insurance investments, ChinaHuatai Insurance Agency and Consultant Service Limited (“Huatai Insurance Agency”)BeijingRegistered share capital of RMB50,000,00052.50%Insurance brokerage, risk evaluation and management, ChinaChina Re UK LimitedLondonPaid-in capital of GBP95,300,000100.00%Property and casualty reinsurance, UKChina Re Underwriting Agency LimitedLondonPaid-in capital of GBP18,000,000100.00%Underwriting agency, UKChina Re Hong Kong Company LimitedHong KongPaid-in capital of USD350,000,000100.00%Investment Holding, HKChina Re Asset Management (Hong Kong) Company LimitedHong KongPaid-in capital of HKD100,000,00096.43%Investment management, HKChina Continent Insurance E-commerce Co.LtdNingboRegistered share capital of RMB1,200,000,00064.30%E-commerce, China217China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)NamePlace of Incorporation/registrationRegistered share capitalor paid-in capitalPercentage of equity attributable to the CompanyPrincipal activities/place of operationDirectIndirectChina Continent Insurance Agent Co. LtdShanghaiRegistered share capital of RMB150,000,00064.30%Insurance brokerage, ChinaChina Re Catastrophe Risk Management Company LtdChongqingRegistered share capital of RMB100,000,00070.00%Risk advisory, management consulting, ChinaChina Re International Company LimitedLondonPaid-in capital of USD320,000,000100.00%Investment Holding, UKCRIHLondonPaid-in capital of USD475,919,560100.00%Investment Holding, UKChaucer Holdings LimitedLondonPaid-in capital of GBP139,296,892100.00%Property and casualty reinsurance, Primary property and casualty insurance, UKChina Reinsurance (Hong Kong) Company LimitedHong KongPaid-in capital of HKD4,000,000,000100.00%Life and annuity reinsurance, HKCICDublinPaid-in capital of USD1,000,001100.00%Specialty insurance, IrelandCRAHSydneyPaid-in capital of AUD16,574,495100.00%Insurance agent, broker services, AustraliaChina Reinsurance Finance Corporation LimitedBritish Virgin IslandsPaid-in capital of HKD60,000,00096.43%Bond Issue and Investment, HKNote: As at 31 December 2021, all the Companys primary subsidiaries registered in mainland China are companies with limited liabilities.31 SCOPE OF CONSOLIDATION (continued)(1) Particulars of the Companys primary subsidiaries as at 31 December 2021 are as follows: (continued)218China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)31 SCOPE OF CONSOLIDATION (continued)(2) As at 31 December 2021, the Company consolidated the following structured entities:NamePaid-in capitalAttributable equity interestPrincipal activitiesChina Re Zhongzai Alternative Equity FundRMB1,256,253,865100.00%Investment in private equityChina Re Ruiqi Asset Management ProductRMB335,869,169100.00%Investment in debt/debt investment planChina Re Ruiqi 2nd Asset Management ProductRMB7,200,750100.00%Investment in debtChina Re Ruiqi 3rd Asset Management ProductRMB1,006,987,380100.00%Investment in debt/equityChina Re Ruiqi 6th Asset Management ProductRMB676,946,385100.00%Investment in debt/equityChina Re Ruiqi 7th Asset Management ProductRMB453,000,025100.00%Investment in debt/equityChina Re Ruiqi 9th Asset Management ProductRMB463,000,025100.00%Investment in debt/equityChina Re Ruiqi 10th Asset Management ProductRMB516,624,53852.30%Investment in debt/equityChina Re Ruiqi 11th Asset Management ProductRMB483,000,025100.00%Investment in debt/equityChina Re Ruiqi 12th Asset Management ProductRMB483,000,025100.00%Investment in debt/equityChina Re Value Growth Asset Management ProductRMB330,000,250100.00%Investment in equityChina Re Healthy Life Asset Management ProductRMB330,000,250100.00%Investment in equityChina Re Hong Kong Stock Connect ProgramRMB330,000,250100.00%Investment in equityChina Re Industry Prosperity and Hedge Asset Management ProductRMB330,000,250100.00%Investment in equityChina Re Bairong Shimao Mall Debt Investment PlansRMB7,460,000,00091.11%Investment in loansChina Re Subway Sixteen Equity Investment PlansRMB7,000,000,00065.00%Investment in loans219China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)NamePaid-in capitalAttributable equity interestPrincipal activitiesChina Re Fangzheng Hangzhou Real Estate Debt Investment PlansRMB500,000,000100.00%Investment in loansHuaxin Trust Haorui No. 36 Hongdao Trust Investment PlansRMB184,444,775100.00%Investment in loansHuaxin Trust Haorui No. 36 Xining Trust Investment PlansRMB190,393,028100.00%Investment in loansHuaxin Trust Haorui No. 36 Tongtian Trust Investment PlansRMB192,825,779100.00%Investment in loansHuaxin Trust Haorui No. 36 Guangde Trust Investment PlansRMB209,492,648100.00%Investment in loansChina Re FOF Active configuration 1st Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re FOF Flexible configuration 1st Asset Management ProductRMB1,500,025100.00%Investment in debt/equityChina Re Ruicheng 1st Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re Ruicheng 2nd Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re Ruicheng 3rd Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re Ruicheng 4th Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re Ruicheng 5th Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re Ruicheng 6th Asset Management ProductRMB203,000,050100.00%Investment in debt/equityChina Re Ruicheng 7th Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re Ruicheng 8th Asset Management ProductRMB3,000,050100.00%Investment in debt/equityChina Re Ruicheng 9th Asset Management ProductRMB10,500,050100.00%Investment in debt/equityChina Re Ruicheng 10th Asset Management ProductRMB10,500,050100.00%Investment in debt/equity31 SCOPE OF CONSOLIDATION (continued)(2) As at 31 December 2021, the Company consolidated the following structured entities (continued):220China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)NamePaid-in capitalAttributable equity interestPrincipal activitiesChina Re Wengying 1st Asset Management ProductRMB100,500,030100.00%Investment in debt/equityChina Re Peace of mind income 1st Asset Management ProductRMB300,005100.00%Investment in debtChina Re Peace of mind income 2nd Asset Management ProductRMB300,005100.00%Investment in debtChina Re Peace of mind income 3rd Asset Management ProductRMB300,005100.00%Investment in debtChina Re Solid harvest more measurement slightly 1st Asset Management ProductRMB300,005100.00%Investment in debtChina Re Solid harvest more measurement slightly 2nd Asset Management ProductRMB300,005100.00%Investment in debtChina Re Ruitong 1st Asset Management ProductRMB217,507,13187.84%Investment in debt/equity32 STATUTORY DEPOSITSIn accordance with relevant provision of Insurance Law of the PRC, the Company, China Re P&C, China Re Life and China Continent Insurance should place certain portion of its issued capital as restricted statutory deposits, respectively.Details of the Groups statutory deposits are as follows:31 December 202131 December 2020 The Company9,521,3189,521,318China Re P&C2,400,0002,400,000China Re Life3,900,0003,100,000China Continent Insurance3,023,1843,023,184Total18,844,50218,044,50231 SCOPE OF CONSOLIDATION (continued)(2) As at 31 December 2021, the Company consolidated the following structured entities (continued):221China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)33 INVESTMENT PROPERTIESBuildingsCostBalance at 1 January 20208,059,627Additions during the year108,802Transfers to Property and Equipment(1,304,473)Balance at 31 December 20206,863,956Additions during the year Balance at 31 December 20216,863,956 Less: Accumulated depreciationBalance at 1 January 2020(167,856)Charge for the year(255,398)Transfers to Property and Equipment37,123Balance at 31 December 2020(386,131)Charge for the year(219,864) Balance at 31 December 2021(605,995) Carrying amountBalance at 31 December 20216,257,961 Balance at 31 December 20206,477,825The fair values of the investment properties were estimated by the Group, based on valuation performed by JLL (Beijing) Real Estate Appraisal & Consultancy Co., Ltd., independent valuer. It falls under level 3 in the fair value hierarchy. As at 31 December 2021, the fair value of investment properties was RMB7,591 million (31 December 2020: RMB7,591 million).222China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)34 PROPERTY AND EQUIPMENTBuildingsMachinery and equipmentMotor vehiclesOffice and electronic equipmentConstruction In progressLeasehold improvementTotalCostBalance at 1 January 20203,013,65496,558310,662912,391197,031452,9254,983,221Additions during the year7,57023,651176,13439,21559,472306,042Transfers from investment properties1,267,3501,267,350Transfers upon completion9,2985,3334,896(19,527)Disposals during the year(7,550)(26,449)(50,350)(264)(84,613)Balance at 31 December 20203,022,952101,911307,8641,043,0711,484,069512,1336,472,000Additions during the year2414,15313,18390,70622,31934,875165,477Transfers upon completion1,489,7306286,862(1,497,220)Disposals during the year(7,735)(21,704)(53,166)(82,605) Balance at 31 December 20214,512,92398,957299,3431,087,4739,168547,0086,554,872 Less: Accumulated depreciationBalance at 1 January 2020(824,370)(62,387)(208,548)(573,145)(307,377)(1,975,827)Charge for the year(100,112)(9,292)(28,961)(110,194)(67,441)(316,000)Written back on disposals5,49124,73243,60873,831Balance at 31 December 2020(924,482)(66,188)(212,777)(639,731)(374,818)(2,217,996)Charge for the year(139,103)(9,706)(26,354)(122,376)(66,106)(363,645)Written back on disposals7,42220,66026,06554,147 Balance at 31 December 2021(1,063,585)(68,472)(218,471)(736,042)(440,924)(2,527,494) Carrying amountBalance at 31 December 20213,449,33830,48580,872351,4319,168106,0844,027,378 Balance at 31 December 20202,098,47035,72395,087403,3401,484,069137,3154,254,004As at 31 December 2021, the Group was in the process of completing the ownership documentation of certain buildings with a net carrying value of RMB31 million (31 December 2020 RMB75 million). The management are of the opinion that the Group is entitled to legally and effectively occupy or use the above-mentioned buildings.223China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)35 LEASES(i) Amounts recognised in the balance sheetThe balance sheet shows the following amounts relating to leases:31 December 202131 December 2020 Right-of-use assets Buildings1,230,4601,326,507Equipment1,716543Vehicles2,361861Others15,8345,264Total1,250,3711,333,175Lease liabilities1,172,4661,253,917(ii) Amounts recognised in the statement of profit or lossThe statement of profit or loss shows the following amounts relating to leases:20212020 Depreciation charge of right-of-use assets Buildings403,587448,715Equipment365219Vehicles595904Others2,7131,559Total407,260451,397 Interest expense on lease liabilities36,84441,603Expense relating to leases of low-value assets and short-term leases applied the simplified approach151,668153,311Total cash outflow for lease578,317597,920224China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)36 INTANGIBLE ASSETSVOBASyndicate capacityDistribution channelTrademarkSoftwareTotalCostBalance at 1 January 2020567,669949,674624,2733,4881,110,8903,255,994Additions during the year and exchanges differences(9,549)(61,436)(51,478)10,867293,637182,041Disposals during the year(13,814)(13,814)Balance at 31 December 2020558,120888,238572,79514,3551,390,7133,424,221Additions during the year and exchanges differences(3,157)(20,311)(13,098)(328)294,375257,481Disposals during the year(2,537)(2,537)Balance at 31 December 2021554,963867,927559,69714,0271,682,5513,679,165Less: Accumulated amortisationBalance at 1 January 2020(483,600)(46,903)(262)(458,118)(988,883)Charge for the year(15,119)(40,003)(1,280)(137,319)(193,721)Disposals for the year676676Balance at 31 December 2020(498,719)(86,906)(1,542)(594,761)(1,181,928)Charge for the year(15,876)(40,472)(825)(190,104)(247,277)Disposals for the yearBalance at 31 December 2021(514,595)(127,378)(2,367)(784,865)(1,429,205)Carrying amountBalance at 31 December 202140,368867,927432,31911,660897,6862,249,960Balance at 31 December 202059,401888,238485,88912,813795,9522,242,293225China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)36 INTANGIBLE ASSETS (continued)The Group performs impairment assessment over Syndicate capacity on an annual basis. Syndicate capacity was recognised from the business combination of CRIH along with the goodwill which are recognised as the same cash-generating units (CGUs). The recoverable amount of CGUs was determined based on the value-in-use (VIU) method. This CGU did not need to charge the impairment provision. Key assumptions used in the impairment assessment include:20212020 Risk adjusted discount rate10.0%9.5%Sustainable growth rate2.0%2.07 INVESTMENTS IN ASSOCIATES31 December 202131 December 2020 Carrying amount Listed shares18,784,16018,533,201 Unlisted shares7,409,5547,225,281Total26,193,71425,758,482(a) Particulars of the Groups major associate is as follows:Name of associatePlace of incorporation and businessRegistered capital (in RMB millions)Principal activitiesChina Everbright Bank Company Limited (“CEB”)China54,032Commercial bankingProportion of ownership interestGroups effective interestHeld by the CompanyHeld by a subsidiary31 December 20214.29%1.46%2.831 December 20204.29%1.46%2.836China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)37 INVESTMENTS IN ASSOCIATES (continued)(a) Particulars of the Groups major associate is as follows: (continued)The Group has significant influence over CEB through a group representative being a director of CEB. with the power to participate in the financial and operating policy decisions of CEB. As such, the interest in this associate is accounted for using the equity method. Whereby the investment is initially recognised at cost and adjusted change in the Groups share of CEBs net assets. An impairment test is required if there is any indication of impairment.As at 31 December 2021, the market value of the Groups investment in CEB was RMB5,674 million (31 December 2020: RMB6,382 million).As 31 December 2021, the fair value of the Groups investment in CEB was below the carrying amount. As a result, the Group performed an impairment test on the carrying amount, which confirmed that there was no impairment at 31 December 2021 as the recoverable amount as determined by a VIU calculation was higher than the carrying value.As At 31 December 2021 (RMB in millions) VIUCarrying valueFair value CEB17,46915,9865,674The impairment test was performed by comparing the recoverable amount of CEB, determined by a VIU calculation, with its carrying amount. The VIU calculation uses discounted cash flow projections based on managements best estimates of future earnings available to ordinary shareholders prepared in accordance with IAS 36. Significant management judgement is required in arriving at the best estimate.Management used a number of assumptions in our VIU calculation:20212020 Discount rate11.0.0%Sustainable growth rate2.0%2.8pital adequacy ratio11.5.57China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)37 INVESTMENTS IN ASSOCIATES (continued)(a) Particulars of the Groups major associate is as follows (continued):The following table sets out the key financial statements of the Groups major associate adjusted for fair value adjustments at the time of acquisition and the differences in adopting accounting policies of the Group.CEB(in RMB millions)20212020 Gross amounts of the associate Operating income152,751142,700Profit before tax52,93945,497Net profit (i)43,40637,824Other comprehensive income (i)1,759(1,344)Total comprehensive income (i)45,16536,480Total assets5,902,0035,368,110Total liabilities5,417,6374,913,112Net assets (ii)372,145343,106Non-controlling interests1,8781,549Reconciled to the Groups interests in the associateGross amounts of net assets of the associate (ii)372,145343,106Groups effective interest4.29%4.29%Groups share of net assets of the associate15,98614,741Carrying amount in the financial statements15,98614,741Dividends received from the associate for the year487496(i) Amount attributable to shareholders of the associate.(ii) Amount attributable to preferred shareholders of the associate and goodwill are not included.228China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)37 INVESTMENTS IN ASSOCIATES (continued)(b) Particulars of other associates accounted for using the equity method are summarised as follows:20212020 Aggregate carrying amount of investments10,207,40711,017,953Aggregate amount of share of: Net profit647,811417,577 Other comprehensive income(106,912)(19,964) Change in capital reserve86,465(654)Total627,364396,95938 GOODWILL31 December 202131 December 2020 Cost China Re P&C650,529650,529 China Re Life463,630463,630 China Continent Insurance74,37974,379 CRIH386,903395,957 CRAH18,68219,119 CIC3,0823,154Total1,597,2051,606,768Less: impairment provisionCarrying amount1,597,2051,606,768229China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)38 GOODWILL (continued)When assessing the impairment of goodwill, the main valuation techniques used to determine the recoverable amount of the groups of assets (or groups of cash-generating units) is the VIU method and fair value less cost of disposal. The Group uses VIU method to conduct goodwill impairment test for China Re P&C, China Continent Insurance, CRIH and CIC. The Group uses fair value less cost of disposal to conduct goodwill impairment test for China Re Life. Expected future cash flows use in the VIU method are based on their Groups five years business plans, and cash flows beyond five years are extrapolated using a steady growth rate and terminal value. Key assumptions used include:20212020 Risk adjusted discount rate10.0%-11.0%9.5%-11.0%Investment yield4.5%-6.0%4.5%-6.0%Sustainable growth rate2.0%2.0%-2.59 DEFERRED TAX ASSETS AND LIABILITIES(a) Deferred tax assets and liabilities31 December 202131 December 2020 Deferred tax assets3,445,5891,582,929Deferred tax liabilities(1,045,492)(1,291,583)230China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)39 DEFERRED TAX ASSETS AND LIABILITIES (continued)(b) Movements of deferred tax assets and deferred tax liabilities2021 Balance at 31 December 2020Credited/(charged) to profit or lossCredited/(charged) to reservesBalance at 31 December 2021 Available-for-sale financial assets(1,915,513)789,685(1,125,828)Financial assets at fair value through profit or loss(29,397)79,26849,871Impairment provisions622,100278,962901,062Reserves3,473,4551,159,1094,632,564Investment in associates(2,296,859)(174,058)(54,727)(2,525,644)Payables to employees308,565194,519(32,919)470,165Others128,995(170,411)39,323(2,093)Total291,3461,367,389741,3622,400,0972020Balance at 31 December 2019Credited/(charged) to profit or lossCredited/(charged) to reservesBalance at 31 December 2020Available-for-sale financial assets(1,281,187)(634,326)(1,915,513)Financial assets at fair value through profit or loss(86,278)56,881(29,397)Impairment provisions325,667296,433622,100Reserves2,252,5931,220,8623,473,455Investment in associates(2,067,705)(291,235)62,081(2,296,859)Payables to employees293,98910,3714,205308,565Others16,916163,489(51,410)128,995Total(546,005)1,456,801(619,450)291,346231China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)39 DEFERRED TAX ASSETS AND LIABILITIES (continued)(b) Movements of deferred tax assets and deferred tax liabilities (continued)The estimated schedule of recoverability of deferred tax assets and liabilities is shown as follows:31 December 202131 December 2020 To be recovered within 12 months (inclusive)2,690,5621,313,531To be recovered after more than 12 months(290,465)(1,022,185)Total2,400,097291,34640 OTHER ASSETS31 December 202131 December 2020 Deposits retained by other parties16,899,9943,123,302Interest receivables4,783,1394,270,168Claims prepaid1,196,762897,983Overseas deposits1,184,5601,008,651Subscription prepayment for securities and securities clearance receivable439,7911,109,313Tax prepaid435,892606,441Investment contract assets288,935457,092Receivables from co-insurers157,079106,961Handling charges prepaid106,953103,292Defined benefit plan assets68,763Deferred expenses53,14367,861Prepayment7,986161,919Others984,271829,265Total26,607,26812,742,248Less: impairment provision(229,931)(112,583)Net26,377,33712,629,665232China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)41 SHORTTERM BORROWINGS31 December 202131 December 2020 Short-term borrowings208,101Total208,10142 SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE31 December 202131 December 2020 Securities sold under agreements to repurchase Stock exchange32,138,03121,625,415 Inter-bank market15,847,5527,777,903Total47,985,58329,403,318As at 31 December 2021, bonds with a carrying value of RMB17,678 million (as at 31 December 2020: RMB8,824 million) were pledged as collateral for financial assets sold under agreements to repurchase resulting from repurchase transactions entered into by the Group in the interbank market.For debt repurchase transactions through the stock exchange, the Group is required to deposit certain exchange-traded bonds into a collateral pool with fair value converted at a standard rate pursuant to the stock exchanges regulation which should be no less than the balance of the related repurchase transaction. As at 31 December 2021, the carrying value of securities deposited in the collateral pool was RMB49,593 million (as at 31 December 2020: RMB42,284 million). The collateral is restricted from trading during the period of the repurchase transaction. The Group can withdraw the exchange-traded bonds from the collateral pool in short time provided that the value of the bonds is no less than the balance of related repurchase transactions.233China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)43 REINSURANCE PAYABLES31 December 202131 December 2020 Reinsurance payables19,115,39316,284,145(a) Aging analysis31 December 202131 December 2020 Within 3 months (inclusive)15,013,22210,060,3083 months to 1 year (inclusive)2,526,2114,479,5741 to 2 years (inclusive)764,119950,405Over 2 years811,841793,858Total19,115,39316,284,14544 INVESTMENT CONTRACT LIABILITIES20212020 At the beginning of the year23,990,65522,066,813Additions22,265,08024,101,208Payments, surrenders, recaptures(24,250,801)(20,221,748)Fees deducted(1,718,520)(2,431,448)Interest credited544,009569,699Exchange difference(43,680)(93,869)At the end of the year20,786,74323,990,655234China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)45 INSURANCE CONTRACT LIABILITIES31 December 2021 InsurancecontractliabilitiesReinsurersshareNet Long-term life and health reinsurance contracts (a)117,073,533(3,235,136)113,838,397Short-term life and health reinsurance contracts (b) Claim reserves20,433,834(3,695,247)16,738,587 Unearned premium reserves7,472,161(422,889)7,049,272Property and casualty reinsurance contracts (c) Claim reserves45,890,574(5,656,609)40,233,965 Unearned premium reserves14,312,264(734,638)13,577,626Primary property and casualty insurance contracts (d) Claim reserves26,377,221(5,429,923)20,947,298 Unearned premium reserves26,399,787(1,865,385)24,534,402Total insurance contract liabilities257,959,374(21,039,827)236,919,54731 December 2020InsurancecontractliabilitiesReinsurersshareNet Long-term life and health reinsurance contracts (a)106,270,972(1,423,146)104,847,826Short-term life and health reinsurance contracts (b) Claim reserves13,671,962(5,084,886)8,587,076 Unearned premium reserves6,035,586(386,104)5,649,482Property and casualty reinsurance contracts (c) Claim reserves42,300,749(5,330,864)36,969,885 Unearned premium reserves12,556,598(806,701)11,749,897Primary property and casualty insurance contracts (d) Claim reserves22,778,760(5,133,395)17,645,365 Unearned premium reserves25,881,662(1,559,327)24,322,335Total insurance contract liabilities229,496,289(19,724,423)209,771,866235China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)45 INSURANCE CONTRACT LIABILITIES (continued)(a) Long-term life and health reinsurance contractsInsurance contract liabilitiesReinsurers shareNetAt 1 January 202083,199,299(1,629,477)81,569,822Additions49,619,452(1,182,476)48,436,976Payments(3,745,618)851,917(2,893,701)Surrenders(22,945,542)2,292(22,943,250)Others143,381534,598677,979At 31 December 2020106,270,972(1,423,146)104,847,826Additions46,787,282(3,026,614)43,760,668Payments(3,078,149)687,410(2,390,739)Surrenders(32,893,812)570,110(32,323,702)Others(12,760)(42,896)(55,656) At 31 December 2021117,073,533(3,235,136)113,838,397 (b) Short-term life and health reinsurance contracts(i) Claim reservesInsurance contract liabilitiesReinsurers shareNetAt 1 January 202010,494,164(4,437,254)6,056,910Claims incurred15,552,845(3,514,942)12,037,903Claims paid(12,375,047)2,867,310(9,507,737)At 31 December 202013,671,962(5,084,886)8,587,076Claims incurred20,180,451(4,401,695)15,778,756Claims paid(13,418,579)5,791,334(7,627,245) At 31 December 202120,433,834(3,695,247)16,738,587 236China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)45 INSURANCE CONTRACT LIABILITIES (continued)(b) Short-term life and health reinsurance contracts (continued)(ii) Unearned premium reservesInsurance contract liabilitiesReinsurers shareNetAt 1 January 20205,005,912(369,763)4,636,149Premiums written20,864,594(4,729,823)16,134,771Premiums earned(19,834,920)4,713,482(15,121,438)At 31 December 20206,035,586(386,104)5,649,482Premiums written25,904,024(5,184,737)20,719,287Premiums earned(24,467,449)5,147,952(19,319,497) At 31 December 20217,472,161(422,889)7,049,272 (c) Property and casualty reinsurance contracts(i) Claim reservesInsurance contract liabilitiesReinsurers shareNetAt 1 January 202037,139,884(5,075,507)32,064,377Claims incurred26,864,149(987,139)25,877,010Claims paid(21,703,284)731,782(20,971,502)At 31 December 202042,300,749(5,330,864)36,969,885Claims incurred27,710,444(860,068)26,850,376Claims paid(24,120,619)534,323(23,586,296) At 31 December 202145,890,574(5,656,609)40,233,965 237China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)45 INSURANCE CONTRACT LIABILITIES (continued)(c) Property and casualty reinsurance contracts (continued)(ii) Unearned premium reservesInsurance contract liabilitiesReinsurers shareNetAt 1 January 202011,614,965(808,629)10,806,336Premiums written41,898,087(2,623,981)39,274,106Premiums earned(40,956,454)2,625,909(38,330,545)At 31 December 202012,556,598(806,701)11,749,897Premiums written44,313,967(2,217,875)42,096,092Premiums earned(42,558,301)2,289,938(40,268,363) At 31 December 202114,312,264(734,638)13,577,626 (d) Primary property and casualty insurance contracts(i) Claim reservesInsurance contract liabilitiesReinsurers shareNetAt 1 January 202019,714,635(4,481,176)15,233,459Claims incurred32,020,038(3,587,761)28,432,277Claims paid(28,955,913)2,935,542(26,020,371)At 31 December 202022,778,760(5,133,395)17,645,365Claims incurred33,024,087(2,393,321)30,630,766Claims paid(29,425,626)2,096,793(27,328,833) At 31 December 202126,377,221(5,429,923)20,947,298 238China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)45 INSURANCE CONTRACT LIABILITIES (continued)(d) Primary property and casualty insurance contracts (continued)(ii) Unearned premium reservesInsurance contract liabilitiesReinsurers shareNetAt 1 January 202024,468,209(1,371,797)23,096,412Premiums written52,846,059(4,197,439)48,648,620Premiums earned(51,432,606)4,009,909(47,422,697)At 31 December 202025,881,662(1,559,327)24,322,335Premiums written49,289,279(4,609,583)44,679,696Premiums earned(48,771,154)4,303,525(44,467,629) At 31 December 202126,399,787(1,865,385)24,534,402 239China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)46 NOTES AND BONDS PAYABLE31 December 202131 December 2020 Bonds payable12,997,93112,996,801Notes payable9,558,1289,751,454Total22,556,05922,748,255The following table indicates the balances of notes and corporate bonds issued by the Group:IssuerTypePar valueCoupon rateIssued yearMaturityChina Reinsurance Finance Corporation LimitedNotes800(in USD million)3.375 172022China Reinsurance Finance Corporation LimitedNotes700(in USD million)3.375 172022China Re P&CCapital Supplementary bonds4,000(in RMB million)First 5 years: 4.97%Next 5 years: 5.97%(if not redeemed)20182028China Re LifeCapital Supplementary bonds5,000(in RMB million)First 5 years: 4.80%Next 5 years: 5.80%(if not redeemed)20182028China Re P&CCapital Supplementary bonds4,000(in RMB million)First 5 years: 4.40%Next 5 years: 5.40%(if not redeemed)20202030240China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)47 LONGTERM BORROWINGS31 December 202131 December 2020 Bank loans3,499,0983,577,375Total3,499,0983,577,375As at 31 December 2021, the Group holds a long-term borrowing of USD550 million (31 December 2020: USD550 million) with a coupon rate of 4.7%, final maturity date is 28 December 2023.48 OTHER LIABILITIES31 December 202131 December 2020 Payable to third party investors of consolidated structured entities3,496,2794,225,474Salaries and welfare payable2,483,4722,069,717Investment contracts payable2,191,281909,133Premiums received in advance1,694,5321,736,791Unallocated cash1,126,627778,051Deposits from cedants1,037,4051,003,354Handling charges and commissions payable679,265689,168Property and equipment payables528,619489,509Taxes payable332,296396,601Securities clearance payable324,27043,219Withholding vehicle and vessel use tax300,163301,904Claims payable189,627437,549Defined benefit obligation (1)151,692181,404Insurance guarantee fund payable53,03085,798Others2,181,9832,272,078Total16,770,54115,619,750241China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)48 OTHER LIABILITIES (continued)(1) Defined benefit pension plan obligationThe amount of defined benefit retirement plan obligation and its changes recognised in the financial statements are as follows:20212020 Opening balance181,404164,301Cost of defined benefit retirement plans included in current profit or loss Interest cost5,3249,230Exchanges differences(721)(722)Remeasurement effects recognised in other comprehensive income Actuarial (gains)/losses(78,656)13,865Benefits paid by the plans(24,422)(5,270)Closing balance82,929181,404Chaucer defined benefit pension retirement plan on December 31, 2021 is a surplus, which is listed in other assets of the Groups financial statements. For details, please refer to Note 40.China defined benefit retirement planThe Group offers the following two defined benefit retirement plans as post employment benefit to its retired and early retired staff:(i) pension benefits for retired staff and pension benefits for early retired staff after they actually retire; and(ii) medical allowances.Significant actuarial assumptions utilised by the Group when estimating the present value of the obligation of China defined benefit retirement plan are as follows (presented in weighted average):20212020 Discount rate3.00%3.50%Mortality rateNote (i)Note (i)Expected average life8888Annual growth rate of pension benefits4%4%Annual growth rate of medical allowances7%7%(i) The mortality rate used in 2021 is determined based on the China Life Insurance Mortality Table-CL5/CL6 (2010 2013) issued by the former CIRC in 2016 (2020: same).242China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)48 OTHER LIABILITIES (continued)(1) Defined benefit pension plan obligation (continued)China defined benefit retirement plan (continued)No plan assets have been created under China defined benefit retirement plan, therefore there is no relevant information on the market value, level of funding, or material surplus or deficiency of the plan assets available for disclosure.Chaucer defined benefit pension retirement planChaucer provides defined benefit pension retirement benefits to certain of its employees. The defined benefit pension retirement benefits provides employees with a fixed benefit based on the employees length of service and the final retirement salary. The trustee holds and controls the funds of the defined benefit pension retirement benefits. As of 31 December 2001, the defined benefit pension plan was closed to new members and starting from 31 December 2016, and the plan stopped accruing for future salary increases.Weighted-average assumptions used to determine Chaucer defined benefit pension retirement obligations are as follows:20212020 Discount rate1.90%1.55%Rate of salary increases (ii)N/AN/ARate of 5% Retail Price Index (“RPI”) pension increases 3.20%2.85%Rate of 2.5% RPI pension increases2.15%2.00%Rate of 5% Consumer Price Index (“CPI”) pension increases2.70%2.30%RPI Inflation3.35%2.90%CPI Inflation2.75%2.30%(ii) Following the closure of Chaucer defined benefit pension retirement on 31 December 2016, a salary increase is no longer required.The amounts of Chaucer defined benefit pension retirement obligations recognised in the balance sheet are as follows:20212020 Present value of defined benefit obligations968,8711,037,838Fair value of scheme assets(1,037,634)(1,003,999)Scheme (surplus)/deficit(68,763)33,839243China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)48 OTHER LIABILITIES (continued)(1) Defined benefit pension plan obligation (continued)Chaucer defined benefit pension retirement plan (continued)According to the actuarial valuation, the market value of the assets under Chaucer defined benefit pension retirement plan as at 31 December 2021 is RMB1,037,634 thousand (as at 31 December 2020: RMB1,003,999 thousand), the actuarial value of those assets accounts for 107.10% of the benefits provided to eligible employees.49 SHARE CAPITAL31 December 202131 December 2020 Issued and fully paid ordinary shares of RMB1 each Domestic shares35,800,39135,800,391H shares6,679,4176,679,417Total42,479,80842,479,808The Company completed its initial public offering of overseas-listed foreign shares and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 26 October 2015. In this offering, the Company issued 6,072 million H shares in total (including over-allotment of 302 million H shares) with a nominal value of RMB1.00 per share each and an issuance price of HKD2.70 per share. This public offering had raised a total amount of RMB13,443 million. As at 31 December 2021, a total of RMB7,002 million was recorded in share premiums after deducting the share capital of RMB6,072 million and the stock issuance fee.Pursuant to the relevant PRC regulations “The interim regulation of the State Council on Transfers of State-owned Shares” (Guo Fa (2001) No.22) and the related regulatory approvals, 607,219,700 domestic shares held by the state-owned shareholders were converted into H shares during the initial public offering of the Company.On 27 April 2018, the Ministry of Finance, a shareholder of the Company, transferred 10% of its equity interest in the Company (i.e. 540,253,904 domestic shares) to the National Council for Social Security Fund (“NSSF”) on a one-off basis (the “Transfer”), and completed the registration of the equity change. After the Transfer, the Ministry of Finance holds 4,862,285,131 domestic shares of the Company, representing 11.45% of the total share capital of the Company; NSSF holds 540,253,904 domestic shares of the Company, representing 1.27% of the total share capital of the Company.244China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)50 RESERVES AND RETAINED PROFITSThe amounts of the Groups reserves and the movements therein for the reporting period are presented in the consolidated statements of changes in equity.(a) Capital reservePursuant to the approval from the Ministry of Finance, the Company recognised assets appraisal surplus from restructuring as capital reserve.(b) Surplus reservePursuant to the Company Law of the PRC, the Company is required to appropriate 10% of its net profit to the statutory surplus reserve until the balance reaches 50% of its registered capital. Subject to the approval of the shareholders, the statutory reserve may be used to offset accumulated losses, or converted into capital of the Company.(c) General risk reserveIn accordance with the relevant regulations, the general risk reserve should be set aside to cover catastrophic or other losses as incurred by companies operating in the insurance business. The Groups respective entities (China Re P&C, China Re Life, China Continent Insurance) would need to make appropriations to such reserve based on their respective profit or year-end risk assets as determined based on applicable financial regulations in the PRC, in their annual financial statements. This reserve is not available for profit distribution or transfer to capital.(d) Catastrophic loss reserveAccording to the relevant regulations of the PRC, which became effective from 1 January 2014, China Re P&C and China Continent Insurance are required to make appropriations to a reserve when the agricultural insurance records underwriting profits. This reserve cannot be used for dividend distribution, but can be utilised when there are catastrophic losses. The reserve can be transferred to general risk reserve if the Group ceases writing agricultural insurance business.According to the relevant regulations of the Notice of the Measure on the Publication Administration of Nuclear Catastrophic Liability Reserve by the CBIRC, the Ministry of Finance, the Ministry of Ecology and Environment (Yin Bao Jian Fa 2020 No. 47) ( 銀保監會財政部生態環境部關於印發核保險巨災責任準備金管理辦法的通知 (銀保監發 2020 47 號), the Group are required to make appropriations to a nuclear catastrophic reserve based on 75% of nuclear insurance business underwriting profits (if the annual net profit is less than 75% of the underwriting profit of nuclear insurance business, it will be fully accrued) when the comprehensive cost rate of the annual nuclear insurance business is less than 100% after legal appropriation of statutory reserve and general (risk) reserve. The nuclear catastrophic reserve cannot be used for dividend distribution or capital increase.(e) Retained profitsAs at 31 December 2021, the consolidated retained profits attributable to equity shareholders of the Company included an appropriation of RMB4,137 million to surplus reserve made by subsidiaries (31 December 2020: RMB3,574 million).245China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)51 INTERESTS HELD IN UNCONSOLIDATED STRUCTURED ENTITIES(a) Interests held in structured entities managed by third-party institutionsThe Group invests in certain structured entities managed by third-party institutions. Such structured entities mainly include investment funds, asset backed securities, structured notes, equity investment plan, debt investment plan, and trust schemes. The Group does not consolidate these structured entities. These structured entities are financed through the contracts. Third-party institutions raise funds via issuing investment products to investors.The carrying value of interests held by the Group in structured entities managed by third-party institutions through direct investments of the Group is set out below:31 December 2021 Available-for-salefinancial assetsInvestmentsclassified asloans andreceivablesFinancialassets at fairvalue throughprofit or loss Investment funds18,666,4824,324,078Structured notes1,272,750Debt investment plans5,59513,250,000Trust schemes10,327,344Equity investment plans412,660Assets backed securities162,996Assets backed plans212,4551,175,000Products from insurance asset managers666,587Other fixed maturity investment804,462 Total20,931,23724,752,3445,596,828 246China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)51 INTERESTS HELD IN UNCONSOLIDATED STRUCTURED ENTITIES (continued)(a) Interests held in structured entities managed by third-party institutions (continued)31 December 2020Available-for-salefinancial assetsInvestmentsclassified asloans andreceivablesFinancialassets at fairvalue throughprofit or lossInvestment funds16,039,6062,914,263Structured notes3,593,567Debt investment plans9,640,000Trust schemes11,966,252Equity investment plans462,770Assets backed securities318,987Assets backed plans1,645,000Products from insurance asset managers1,516,891Other fixed maturity investment1,021,746Total19,360,00023,251,2526,507,830Note: The structured entities are sponsored by third party financial institutions and the information related to size of these structured entities were not publicity available.The maximum loss exposures of the interests held in structured entities managed by third-party institutions are their carrying amounts at the end of the reporting period.(b) Interests held in the unconsolidated structured entities managed by the GroupUnconsolidated structured entities managed by the Group mainly include the asset management products and third-party entrusted asset management business products sponsored by the Group. The nature and purpose of these structured entities is to generate asset management fees by providing management services for investors. The structured entities raise funds via issuing investment products to investors. As at 31 December 2021, the balances of asset management products managed by the Group but unconsolidated in the financial statements amounted to RMB2,835 million (31 December 2020: RMB891 million), among which RMB992 million was held by the Group (31 December 2020: Nil). The balance of debt investment plan managed by the Group but unconsolidated in the financial statements amounted to RMB4,000 million (31 December 2020: RMB2,400 million), among which RMB950 million was held by the Group (31 December 2020: RMB950 million). The asset management fee income from the unconsolidated structured entities managed by the Group is RMB4.3 million (31 December 2020: RMB8.9 million).247China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)52 NOTE TO CONSOLIDATED STATEMENT OF CASH FLOWS(a) Reconciliation of profit before tax to cash generated from operations:20212020 Profit before tax7,569,1377,297,743Adjustments for:Investment income(14,764,050)(15,688,533)Exchange losses, net(23,278)(98,062)Finance costs2,051,8171,748,652Share of profits of associates(2,294,929)(2,097,055)Impairment provisions charges290,726618,329Depreciation of property and equipment363,645316,000Depreciation of right-of-use assets407,260451,397Depreciation of investment property219,864255,398Amortisation of intangible assets231,401178,602Losses on disposal of property and equipment and intangible assets, net2,7261,141Increase in insurance contract liabilities29,944,57340,646,095(Decrease)/Increase in investment contract liabilities and policyholders deposits(3,632,275)3,803,647Increase in reinsurers share of insurance contract liabilities(1,364,910)(1,429,068)Decrease/(Increase) in premiums receivable506,172(1,882,436)(Increase)/Decrease in reinsurance debtors(980,386)7,233,525Decrease/(Increase) in investment contracts receivable1,846,303(3,679,622)Increase/(Decrease) in reinsurance payables2,831,248(1,662,999)Increase in other assets(14,086,586)(116,061)Increase/(Decrease) in other liabilities2,112,241(377,132)Cash generated from operations11,230,69935,519,561248China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)52 NOTE TO CONSOLIDATED STATEMENT OF CASH FLOWS (continued)(b) Analysis of balances of cash and cash equivalents:20212020 Cash and short-term time deposits23,096,28613,872,362Add: Financial assets held under resale agreements with original maturity of no more than three months3,465,9644,615,600Less: Restricted cash at banks(4,358,419)(3,650,913)Cash and cash equivalents at end of the year22,203,83114,837,049(c) Net Debt ReconciliationThis section sets out an analysis of net debt and movements in net debt for the current year.BorrowingsNotes and bonds payableSecurities sold under agreements to repurchaseLeasesTotal Balance as at 1 January 2021(3,785,476)(22,748,255)(29,403,318)(1,253,917)(57,190,966)Cash flows200,163(18,098,585)419,804(17,478,618)Acquisition-leases(301,509)(301,509)Foreign exchange adjustments86,215223,795310,010Other non-cash movements(31,599)(483,680)(36,844)(552,123) Balance as at 31 December 2021(3,499,098)(22,556,059)(47,985,583)(1,172,466)(75,213,206) 249China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)53 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9According to IFRS 4 Amendments, the Company made the assessment based on the Groups financial position of 31 December 2015, concluding that the carrying amount of the Groups liabilities arising from contracts, which includes any deposit components and embedded derivatives unbundled from insurance contracts was greater than 90 percent of its all liabilities. There had been no significant change in the activities of the Group since then that requires reassessment. Therefore, the Groups activities are predominantly connected with insurance, meeting the criteria to apply temporary exemption from IFRS 9.(a) The table below presents the fair value of the following groups of financial assets(i) under IFRS 9 as at 31 December 2021 and fair value changes for the 12 months ended 31 December 2021:Fair value as at 31 December 2021Fair valuechanges for the12 months ended2021 Held for trading financial assets14,836,705(512,060)Financial assets that are managed and whose performance are evaluated on a fair value basisOther financial assets Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principle and interest on the principal amount outstanding (“SPPI”)190,427,8102,107,411 Financial assets with contractual terms that do not give rise on SPPI(ii)69,547,013(8,454,650)Total274,811,528(6,859,299)Fair value as at 31 December 2020Fair valuechanges for the12 months ended2020Held for trading financial assets11,177,435315,861Financial assets that are managed and whose performance are evaluated on a fair value basisOther financial assets Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principle and interest on the principal amount outstanding (“SPPI”)173,415,630(645,451) Financial assets with contractual terms that do not give rise on SPPI (ii)66,002,4185,083,705Total250,595,4834,754,115(i) Only including financial assets at fair value through profit or loss, investments classified at loans and receivables, available-for-sale financial assets and held-to-maturity financial assets.(ii) It mainly includes stocks, investment funds, unlisted equity investment and products from insurance asset managers.250China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)53 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued)(b) The table below presents the credit risk exposure (iii) for aforementioned financial assets with contractual terms that give rise on SPPI:As at 31 December 2021As at 31 December 2020Carrying amount (iv)Carrying amount (iv) DomesticRating not required (v)17,637,32516,978,186AAA118,269,944102,975,557AA8,091,70311,730,329A207,015300,000BBB58,5402,039,318BB or below8,972,0307,960,000Non-rating1,201,887159,034Subtotal154,438,444142,142,424OverseasAAA5,217,9204,653,621AA1,921,6201,880,246A9,939,8405,849,188BBB9,787,7529,458,393BB or below6,233,7491,231,542Non-rating86,536455,818Subtotal33,187,41723,528,808Total187,625,861165,671,232251China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)53 DISCLOSURES ABOUT THE TEMPORARY EXEMPTION FROM IFRS 9 (continued)(c) The table below presents the financial assets that are not considered to have low credit risk on the reporting date:As at 31 December 2021As at 31 December 2020 Carrying amount (iv)Fair valueCarrying amount (iv)Fair valueDomestic7,960,0005,688,0007,960,0006,842,968Overseas13,960,90313,960,903426,023426,023Total21,920,90319,648,9038,386,0237,268,991(iii) Credit risk ratings for domestic assets are provided by domestic qualified external rating agencies; if no domestic qualified external rating agency could provide credit risk ratings, the Companys internal rating is used; if there is no internal rating, it is classified as non-rating. Credit risk ratings for overseas assets are provided by overseas qualified external rating agencies.(iv) For financial assets measured at amortised cost, carrying amount before adjusting impairment allowance is disclosed here.(v) It mainly includes governments bonds and policy financial bonds.252China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT(1) Insurance riskAn insurance policys risk lies in uncertainty of insured events and the corresponding paid loss. From the perspective of fundamental nature of each policy, the above risk occurs randomly, and the actual paid amount will differ from the estimated data based on statistical methods for each period. For those policy portfolios using probability theory for pricing and reserve estimation, the main risk the Group faces is that the actual payment exceeds the carrying amount of insurance liability, which will occur when the actual loss occurrence or severity exceeds expected values. Such risk is likely to occur in the following situations:Occurrence risk the possibility that the number of insured events will differ from that expected;Severity risk the possibility that the cost of the events will differ from that expected; orDevelopment risk the possibility that changes may occur in the amount of an insurers obligation at the end of the contract period.Experience shows that the larger the insurance contracts portfolio of the same nature, the smaller the variability of expected results. In addition, a more diversified portfolio is less likely to be impacted by any sub-portfolios change. The Group has already established insurance underwriting strategy to diversify underwriting risks, and has maintained a sufficient number of policies for different types of insurance risk. Therefore uncertainty of expected results will be reduced.For the Groups property and casualty insurance and reinsurance contracts, claims are often affected by natural disasters, catastrophes, terrorist attacks and other factors. For the Groups health and accident reinsurance contracts, infectious diseases, huge lifestyle changes, natural disasters and accidents are all important factors that may increase the loss ratio, which may lead to earlier or more claims than expected. For the Groups life reinsurance contracts, the most important factor is that continuous improvement of medical standards and social conditions help to extend life expectancy. Furthermore, policyholders terminating contracts, reducing and refusing to pay premiums also impact insurance risk, which means that insurance risk is affected by policyholders behaviours and decisions.253China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)According to the risk characters, the Groups different departments and subsidiaries manage corresponding insurance risk by determining insurance products underwriting standards and strategy, and prescribing counterparty risk limits, reinsurance arrangements and claim processing. The Groups assumed insurance liability also incorporates international business underwritten by the former PICC (Group) Company, including asbestos, pollution, health hazard and other potential long-tail risks. Due to such high level of inherent uncertainty in the above business, consisting of relevant payment instability and insurance liabilitys cognisant uncertainty, the Group cannot completely rule out such significant loss possibilities such as if other reinsurance companies underwrite this kind of business. The Group reduces the uncertainty posted by such business through contacting with ceding companies actively and seeking to settle the liability.The Groups insurance business mainly comes from Mainland China. The Groups concentration of insurance risk is reflected by its major lines of business as analysed by insurance and reinsurance premium income in Note 5.(a) Primary property and casualty insurance, property and casualty reinsurance and short-term life and health reinsurance businessWhen measuring insurance contract reserves, the risk margin has been considered and measured at the 75% percentile approach by the Group. The risk margin for claim reserves falls between 2.5% and 15%, while the risk margin for unearned premium reserves falls between 3.0% and 15%. If the Groups calculated risk margin falls above/below the chosen interval, the Group chooses the upper/lower limit as the risk margin.When determining the reserves, the Group discounts relevant future cash flows if the impact of time value of money is significant. Impact significance depends on the “duration” of insurance liability. If the duration of insurance liability is longer than one year, the time value of money is significant and should be included when determining the reserves; otherwise, it is not compulsory for determining the reserves.Sensitivity analysisChanges of factors such as the claim amounts of various property and casualty, short-term life and health insurance and reinsurance business may impact the changes of assumptions for outstanding claim reserve, thereby impacting the synchronized changes in outstanding claim estimates. If all other variables remain unchanged, a 1% increase in average claim cost will result in a decrease in profit before tax by RMB1,024 million for the years ended 31 December 2021 (31 December 2020: RMB995 million).Several variables sensitivity cannot be quantified, such as legal changes, uncertainty of loss estimation and so on. In addition, time delay exists among claims occurrence, reporting and closing.254China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)(a) Primary property and casualty insurance, property and casualty reinsurance and short-term life and health reinsurance business (continued)Claim development tablesAccording to the characteristics of property and casualty, short-term life and health insurance and reinsurance business, the claim development information is disclosed based on accident year for primary insurance and underwriting year for reinsurance respectively:(i) Primary insurance contracts (*)Gross201620172018201920202021Total Cumulated loss estimateYear ending100,438,54218,384,15320,563,46023,133,38227,370,71029,763,8091 year later100,092,33218,033,39120,566,21522,708,77526,281,3952 years later99,937,23818,090,87020,631,34222,713,1893 years later99,947,90618,099,31320,680,8174 years later99,933,66018,131,3815 years later99,996,558Estimated cumulated claims99,996,55818,131,38120,680,81722,713,18926,281,39529,763,809217,567,149Less: Cumulated claims paid99,821,93618,000,32720,336,25521,842,20923,037,51518,008,293201,046,535Add: Ad justments in prior periods and unallocated loss adjustment expense (“ULAE”), discount and risk margin1,251,420Estimated unpaid claims17,772,034255China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)(a) Primary property and casualty insurance, property and casualty reinsurance and short-term life and health reinsurance business (continued)Claim development tables (continued)(i) Primary insurance contracts (*) (continued)Net201620172018201920202021Total Cumulated loss estimateYear ending84,115,72216,901,71318,902,40621,097,35824,606,09127,037,3341 year later83,911,61416,646,40918,879,21720,916,98023,766,7072 years later83,808,67716,683,07218,930,55420,835,3963 years later83,797,96716,698,57918,956,2314 years later83,811,63616,723,8615 years later83,827,796Estimated cumulated claims83,827,79616,723,86118,956,23120,835,39623,766,70727,037,334191,147,325Less: Cumulated claims paid83,712,13816,622,27118,711,33820,155,42921,234,78116,678,746177,114,703Add: Ad justments in prior periods and ULAE, discount and risk margin1,087,547Estimated unpaid claims 15,120,169Less: Es timated unpaid claims assumed by China Re Group (504,918)Gross estimated unpaid claims 15,625,087(*) Primary insurance contracts presented include the assumed reinsurance business undertaken by China Continent Insurance.256China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)(a) Primary property and casualty insurance, property and casualty reinsurance and short-term life and health reinsurance business (continued)Claim development tables (continued)(ii) Reinsurance contractsGross201620172018201920202021Total Cumulated loss estimateYear ending285,732,69722,248,63827,710,67033,626,60037,049,75943,611,1221 year later283,363,93424,700,48131,534,41837,251,26442,822,1782 years later281,621,63223,940,97231,792,52835,694,5253 years later280,679,53122,971,52831,587,4144 years later279,255,78422,591,8775 years later270,725,045Estimated cumulated claims270,725,04522,591,87731,587,41435,694,52542,822,17843,611,122447,032,161Less: Cumulated claims paid268,071,52821,140,82426,982,01227,907,34427,370,4184,931,302376,403,428Unearned claims4,25020,15356,904112,985390,16017,540,40618,124,858Add: Risk margin, discount and ULAE140,754(2,148)(56,494)635,0261,128,9261,739,3623,585,426Estimated unpaid claims2,790,0211,428,7524,492,0048,309,22216,190,52622,878,77656,089,301Less: Es timated unpaid claims assumed by China Continent Insurance1,270,931Gross estimated unpaid claims54,818,370257China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)(a) Primary property and casualty insurance, property and casualty reinsurance and short-term life and health reinsurance business (continued)Claim development tables (continued)(ii) Reinsurance contracts (continued)Net201620172018201920202021Total Cumulated loss estimateYear ending268,274,03620,443,55524,658,10529,946,65833,749,77740,284,8441 year later265,995,29222,437,13528,406,38933,443,42338,191,3392 years later264,650,77721,735,69328,035,44431,713,621 3 years later263,696,91120,926,10428,169,021 4 years later262,374,62520,646,888 5 years later261,402,564 Estimated cumulated claims261,402,56420,646,88828,169,02131,713,62138,191,33940,284,844420,408,277Less: Cumulated claims paid257,806,92419,316,26724,045,69924,427,08723,316,6093,541,545352,454,131Unearned claims4,15120,07353,83992,489405,35917,067,77717,643,688Add: Risk margin, discount and ULAE(1,079,878)28,781155,701421,765821,2091,142,9161,490,494Estimated unpaid claims2,511,6111,339,3294,225,1847,615,81015,290,58020,818,43851,800,952Less: Es timated unpaid claims assumed by China Continent Insurance 1,187,988Gross estimated unpaid claims 50,612,964258China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)(a) Primary property and casualty insurance, property and casualty reinsurance and short-term life and health reinsurance business (continued)Claim development tables (continued)(iii) CRIH and CIC BusinessGross201620172018201920202021Total Cumulated loss estimateYear ending3,714,7203,299,4113,333,5533,734,5421 year later6,512,3316,183,7345,481,1195,600,5522 years later17,128,2247,186,7915,980,4455,236,3313 years later15,924,3116,795,4815,586,1534 years later17,945,7956,333,5475 years later17,793,110Estimated cumulated claims17,793,1106,333,5475,586,1535,236,3315,600,5523,734,54244,284,235Less: Cumulated claims paid13,876,1604,484,0303,279,8612,483,4511,398,582525,68326,047,767Add: Risk margin, discount and ULAE1,874,757 Estimated unpaid claims20,111,225259China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)(a) Primary property and casualty insurance, property and casualty reinsurance and short-term life and health reinsurance business (continued)Claim development tables (continued)(iii) CRIH and CIC Business (continued)Net201620172018201920202021Total Cumulated loss estimateYear ending1,830,4641,805,9352,374,1792,349,4871 year later3,103,3313,271,1733,311,9863,956,5652 years later12,432,3143,577,1653,181,6603,244,5483 years later11,704,9933,427,2413,055,6034 years later12,968,1793,277,4385 years later12,844,437Estimated cumulated claims12,844,4373,277,4383,055,6033,244,5483,956,5652,349,48728,728,078Less: Cumulated claims paid10,794,1042,309,5311,888,0301,727,9071,074,094398,04118,191,707Add: Risk margin, discount and ULAE1,145,428Estimated unpaid claims11,681,799Note: The Company completed its acquisition of CRIH, a specialist underwriting group that operates through Lloyds on 28 December 2018. The Company completed the acquisition of CIC on 14 February 2019. These amounts reflected statistics of CRIH and CIC.260China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(1) Insurance risk (continued)(b) Assumptions and sensitivity analysis for life and health insurance contractsMajor assumptionsLife and health insurance contract reserve is determined by the Groups reasonable estimate of future payments, premiums and related expenses, as well as considering risk margin. Mortality rates, morbidity rates, lapse rates, discount rates and expense assumptions adopted in reasonable estimation are determined by latest experience study, current and future expectations. Uncertainty of liabilities arisen from the uncertainty of future cash flows including future claim payments, premium and related expenses, etc. are reflected through risk margin.Residual margin related to life and health insurance contract reserve is amortised during the expected benefit period using assumptions as at policy inception.Sensitivity analysisSignificant assumptions involved in reserve calculation include mortality rates, morbidity rates, lapse rates, and discount rate, etc.Changes in assumptionsImpact on profit before tax20212020 Mortality/morbidity 10%(244,935)(241,692)Mortality/morbidity-10%1,923249,034Lapse rate 10(,53431,421Lapse rate-10%(18,700)(4,556)Discount rate 50bp1,432,8331,608,660Discount rate-50bp(1,531,847)(1,729,965) 261China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk(a) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation.The Group evaluates its credit risks in investments by both qualitative and quantitative analysis, including studying the relevant industry, enterprise management, financial factors, company prospects, as well as the use of internal credit models. The Group mitigates credit risk by using a variety of methods including impositions of aggregate counterparty exposure limits and increasing the diversification of fixed income investment portfolios. The Group is exposed to credit risks primarily associated with commercial banks, investment in bonds, premiums receivable and reinsurance arrangements. Majority of the Groups financial assets are debt investments which include government bonds, financial bonds, corporate bonds, subordinated bonds, debt investment plan, trust schemes and wealth management products with high credit ratings and time deposits in state-owned commercial banks, etc. As at 31 December 2021, 100% (31 December 2020: 100%) of the financial institution bonds held by the Group either had a credit rating of A or above, or were issued by national commercial banks. As at 31 December 2021, 73% (31 December 2020: 84%) of the corporate bonds and short term corporate financing bonds held by the Group had a credit rating of AA and A-1 or above. The credit rating of domestic and foreign debt investment is provided by qualified external rating agencies at home and abroad; if there is no qualified external rating agency providing credit rating, the Groups internal rating is used. There is no public market rating for the government bonds and policy financial bonds with high credit quality, and the Group did not require rating for these assets. As at 31 December 2021, 55% (31 December 2020: 62%) of the debt investment plan were guaranteed by third parties or collateralized, 70% (31 December 2020: 72%) of the trust schemes were guaranteed by third parties and 100% (31 December 2020: 100%) of the asset backed securities are guaranteed by third parties. As at 31 December 2021, there was material breach for few debt investments held by the group. The total book balance for the debt investments were RMB7,960 million. The Group had taken legal measures to preserve and recover the assets of the debt investments and the collateral. The Group performed impairment test about the debt investments based on the accounting standards, and recorded provision for impairment loss of RMB2,242 million in Note 30.(i) Credit risk exposureThe Groups maximum exposure to credit risk is the carrying amount of the financial assets in the consolidated statement of financial position. The maximum exposure to credit risk in respect of the financial guarantees of the Group as at 31 December 2021 is disclosed in Note 58.262China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(a) Credit risk (continued)(ii) Aging analysis of financial assets2021Not dueFinancial assets not due but impairedFinancial assetsdue but not impairedFinancialassets dueand impairedTotalwithin 1 yearafter 1 year Cash and short-term time deposits23,096,28623,096,286Financial assets at fair value through profit or loss fixed maturity5,679,8015,679,801Financial assets held under resale agreements3,465,9643,465,964Premiums receivable14,537,0091,509,10486,114711,87816,844,105Reinsurance debtors45,490,2522,173,530884,5121,319,28949,867,583Investment contracts receivable5,266,5705,266,570Reinsurers share of Policy loans628,518628,518Time deposits21,365,99621,365,996Available-for-sale fixed maturity investments125,965,868518,427126,484,295Held-to-maturity investments37,376,95237,376,952Investments classified as loans and receivables33,379,5007,960,00041,339,500Statutory deposits18,844,50218,844,502Other financial assets24,503,151303,38124,806,532Sub-total359,600,369518,4273,682,634970,62610,294,548375,066,604Less: impairment provisions(216,897)(3,365,398)(3,582,295)Total359,600,369301,5303,682,634970,6266,929,150371,484,309263China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(a) Credit risk (continued)(ii) Aging analysis of financial assets (continued)2020Not dueFinancial assets not due but impairedFinancial assetsdue but not impairedFinancialassets dueand impairedTotalwithin 1 yearafter 1 yearCash and short-term time deposits13,872,36213,872,362Financial assets at fair value through profit or loss fixed maturity4,125,7344,125,734Financial assets held under resale agreements4,615,6004,615,600Premiums receivable15,254,1061,264,873119,420549,93317,188,332Reinsurance debtors43,409,9312,943,641971,8051,551,18548,876,562Investment contracts receivable7,112,8737,112,873Reinsurers share of Policy loans563,501563,501Time deposits19,904,63819,904,638Available-for-sale fixed maturity investments108,165,84439,996108,205,840Held-to-maturity investments32,199,78032,199,780Investments classified as loans and receivables34,393,3567,960,00042,353,356Statutory deposits18,044,50218,044,502Other financial assets10,402,215384,5145,440112,58310,904,752Sub-total312,064,44239,9964,593,0281,096,66510,173,701327,967,832Less: impairment provisions(21,460)(1,950,069)(1,971,529)Total312,064,44218,5364,593,0281,096,6658,223,632325,996,303264China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(b) Market riskMarket risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates (interest rate risk), foreign exchange rates (currency risk), and market prices (price risk).The Group adopts various measures managing market risk, including sensitive analysis, Value-at-Risk (“VaR”), stress testing, scenario analysis and other quantitative models to analyse market risks; mitigating market risk through a diversified investment portfolio; setting acceptable risk tolerance level according to development goals; and tracking the risk control results dynamically to maintain market risk exposure within acceptable level.(i) Interest rate riskThe Groups interest rate risk arises primarily from fixed maturity financial instruments mainly including cash and short-term time deposits, financial assets at fair value through profit or loss and available-for-sale financial assets. Generally financial instruments at fixed rates and at floating rates expose the Group to fair value interest rate risk and cash flow interest rate risk, respectively.Fair value interest rate riskThe sensitivity analysis below indicates the instantaneous change in the Groups profit before tax and equity that would arise assuming that the change in interest rates had occurred at the end of the reporting period and had been applied to re-measure those financial instruments held by the Group which expose the Group to fair value interest rate risk at the end of the reporting period.Interest rate changeImpact on equity20212020 Financial assets at fair value through profit or loss 50bp(61,756)(43,698)Financial assets at fair value through profit or loss-50bp63,45544,892Available-for-sale financial assets 50bp(1,648,065)(1,682,485)Available-for-sale financial assets-50bp1,700,3801,717,224265China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(b) Market risk (continued)(i) Interest rate risk (continued)Fair value interest rate risk (continued)Interest rate changeImpact on profit before tax20212020 Financial assets at fair value through profit or loss 50bp(61,756)(43,698)Financial assets at fair value through profit or loss-50bp63,45544,892Available-for-sale financial assets 50bpAvailable-for-sale financial assets-50bpCash flow interest rate riskIn respect of the exposure to cash flow interest rate risk arising from floating rate non-derivative instruments held by the Group at the end of the reporting period, the impact on the Groups profit before tax and equity is estimated as an annualised impact on interest expense or income of such a change in interest rates. The analysis is performed on the same basis for each reporting date.Interest rate changeImpact on profit before tax/equity20212020 Floating interest rate debt securities 50bp4111,049Floating interest rate debt securities-50bp(411)(1,049)Floating interest rate debt investment plan 50bp1,5001,500Floating interest rate debt investment plan-50bp(1,500)(1,500)Floating interest rate deposits 50bp84,24439,155Floating interest rate deposits-50bp(84,244)(39,155)(ii) Currency riskFluctuations in exchange rates between the RMB and other currencies in which the Group conducts business may affect its financial position and results of operations. The foreign currency risk facing the Group mainly comes from movements in the USD/RMB, HKD/RMB, GBP/RMB and other currency to RMB exchange rates.The following table summarises the Groups financial instruments, insurance contract liabilities and reinsurers share of insurance contract liabilities etc. by major currency at the end of the reporting period, expressed in the RMB equivalent.266China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(b) Market risk (continued)(ii) Currency risk (continued)2021 RMBUSDHKDGBPEUROthersTotal Cash and short-term time deposits9,234,6449,499,630765,042617,6842,632,564346,72223,096,286Financial assets at fair value through profit or loss10,258,2293,625,051953,42514,836,705Derivative financial assets24,086412,336436,422Financial assets held under resale agreements3,465,9643,465,964Premiums receivable14,059,4491,251,3087,502366,698191,202256,06816,132,227Reinsurance debtors40,669,8595,490,481210,669832,363582,6691,900,38549,686,426Investment contracts receivable5,149,44345,11072,0175,266,570Reinsurers share of insurance contract liabilities6,838,38610,591,3011,1061,663,205258,5761,687,25321,039,827Reinsurers share of policy loans628,518628,518Time deposits17,715,2001,739,54579,1791,832,07221,365,996Available-for-sale financial assets124,141,51546,183,7714,816,9521,026,291264,1261,333,141177,765,796Held-to-maturity investments37,376,95237,376,952Investments classified as loans and receivables38,319,912777,15639,097,068Statutory deposits18,844,50218,844,502Other financial assets20,962,4131,094,939224,872352,364122,4151,819,59824,576,601Total347,689,07280,710,6286,979,5684,937,7845,883,6247,415,184453,615,860Transaction financial liabilities267,054267,054Securities sold under agreements to repurchase39,619,3438,366,24047,985,583Reinsurance payables13,766,3293,538,28262,7281,077,191282,821388,04219,115,393Income tax payable2,374,3283,35818,4131,0315,4322,402,562Policyholders deposits1,490,265574,2252,226,9264,291,416Investment contract liabilities19,174,457366,9001,245,38620,786,743Insurance contract liabilities188,939,43245,600,86010,150,8862,599,3292,728,0067,940,861257,959,374Notes and bonds payable12,997,9319,558,12822,556,059Long-term borrowings3,499,0983,499,098Lease liabilities909,38859818,622225,08118,7771,172,466Other financial liabilities12,031,8811,177,027193,824521,956178,768972,55315,076,009Total291,570,40872,684,71613,916,7854,424,5883,189,5959,325,665395,111,757267China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(b) Market risk (continued)(ii) Currency risk (continued)2020RMBUSDHKDGBPEUROthersTotalCash and short-term time deposits7,083,3954,150,9411,314,562322,992549,619450,85313,872,362Financial assets at fair value through profit or loss4,957,3485,341,303878,78411,177,435Derivative financial assets246,287246,287Financial assets held under resale agreements4,615,6004,615,600Premiums receivable14,224,2691,377,27511,663336,227218,531470,43416,638,399Reinsurance debtors39,854,9336,178,26581,300242,397423,6091,925,53648,706,040Investment contracts receivable7,112,8737,112,873Reinsurers share of insurance contract liabilities8,577,5497,279,1224,368636,796507,7182,718,87019,724,423Reinsurers share of policy loans563,501563,501Time deposits18,259,8461,381,640182,25080,90219,904,638Available-for-sale financial assets119,330,13230,615,9295,511,475983,0595,987,2921,221,879163,649,766Held-to-maturity investments32,199,78032,199,780Investments classified as loans and receivables39,993,7051,242,62041,236,325Statutory deposits18,044,50218,044,502Other financial assets8,708,314352,589111,817333,070117,3261,169,05310,792,169Total323,525,74758,165,9718,096,2192,935,4437,804,0957,956,625408,484,100Short-term borrowings29,990178,111208,101Transaction financial liabilities214,579214,579Derivative financial liability172,014172,014Securities sold under agreements to repurchase24,934,4704,468,84829,403,318Reinsurance payables11,934,6202,458,88942,650241,425491,7391,114,82216,284,145Income tax payable1,591,43111,29393,7341,696,458Policyholders deposits3,075,400845,209799,1704,719,779Investment contract liabilities22,513,096204,3531,273,20623,990,655Insurance contract liabilities175,952,47034,192,7547,249,9093,589,2741,582,2676,929,615229,496,289Notes and bonds payable12,996,8019,751,45422,748,255Long-term borrowings3,577,3753,577,375Lease liabilities1,045,467511,235186,75545019,9591,253,917Other financial liabilities11,498,247791,128353,427427,181197,938615,03813,882,959Total265,786,57156,473,3689,813,3314,622,7462,272,3948,679,434347,647,844268China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(b) Market risk (continued)(ii) Currency risk (continued)Sensitivity analysisThe analysis below is performed for reasonable possible movements in key variables with all other variables held constant, showing the impact on profit before tax and equity of monetary assets and liabilities. The correlation of variables will have a significant effect in determining the ultimate impact on market risk, but to demonstrate the impact due to changes in variables, variables have to be changed on an individual basis. It should be noted that movements in these variables are non-linear.Changes in exchange rateImpact on profit before taxImpact on equityCurrency2021202020212020 USD 562,539(90,918)362,539(90,918)USD-5%(362,539)90,918(362,539)90,918HKD 5%(587,708)(361,429)(587,708)(361,429)HKD-5X7,708361,429587,708361,429GBP 5%,660(84,365)25,660(84,365)GBP-5%(25,660)84,365(25,660)84,365EUR 54,701(11,201)134,701(11,201)EUR-5%(134,701)11,201(134,701)11,201 (iii) Price riskPrice risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.The Groups price risk exposure mainly relates to the stock and fund investments whose values will fluctuate as a result of changes in market prices.The Group uses VaR to measure the expected loss in respect of equity price risk for stock and fund investments measured at fair value. The Group monitors the daily value fluctuation risk over a portent period of 1 day for going concern basis. Moreover, VaR is measured over a holding period of 250 trading days at a confidence level of 95% assumed under normal market condition.269China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(b) Market risk (continued)(iii) Price risk (continued)Under normal market conditions, the impact on net equity of 1-day potential loss of equity investments such as stocks and investment funds is estimated using the VaR technique as follows (presented in negative value):20212020 Financial assets at fair value through profit or loss Equity shares(69,354)(14,685)Investment funds(15,139)(6,923)Sub-total(84,493)(21,608)Available-for-sale financial assetsEquity shares(466,335)(803,304)Investment funds(87,786)(106,192)Sub-total(554,121)(909,496)Total(638,614)(931,104)(c) Liquidity riskLiquidity risk is the risk that the Group fails to obtain sufficient capital to pay off its matured liabilities. During normal operating activities, the Group reduces liquidity risk through matching the maturity date of investment assets with that of financial liabilities and insurance liabilities.The Groups relevant departments and the asset management company are responsible for managing and monitoring daily liquidity risks, including analysis of liquidity ratio, establishment of short-term and long-term investment strategy and setting up of a liquidity warning system to ensure liquidity safety.The tables below summarise the remaining contractual maturity profile of the financial assets and financial liabilities, the expected timing of insurance contract liabilities and reinsurers share of insurance contract liabilities of the Group based on undiscounted cash flows.270China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(c) Liquidity risk (continued)31 December 2021 Within 1year orundatedMore than1 year butless than2 yearsMore than2 years butless than5 yearsMore than5 yearsTotalCarryingamount Assets:Cash and short-term time deposits23,096,28623,096,28623,096,286Debt securities carried at fair value through profit or loss865,3301,141,1964,230,358307,4306,544,3145,679,801Equity securities carried at fair value through profit or loss9,156,9049,156,9049,156,904Derivative financial assets436,422436,422436,422Financial assets held under resale agreements3,467,9153,467,9153,465,964Premiums receivable9,708,9934,499,2671,910,35913,60816,132,22716,132,227Reinsurance debtors48,884,704508,179253,71639,82749,686,42649,686,426Investment contracts receivable5,266,5705,266,5705,266,570Reinsurers share of insurance contract liabilities10,400,8433,366,9145,685,9131,388,34420,842,01421,039,827Reinsurers share of policy loans628,518628,518628,518Time deposits3,956,5973,437,17115,975,65123,369,41921,365,996Available-for-sale fixed maturity investments18,028,63215,649,68558,761,92276,571,974169,012,213126,484,295Available-for-sale equity securities51,281,50151,281,50151,281,501Held-to-maturity investments6,250,2615,548,5778,459,98129,124,72849,383,54737,376,952Investments classified as loans and receivables13,266,1065,909,01114,524,16319,308,73553,008,01539,097,068Statutory deposits3,460,51613,447,3413,237,13320,144,99018,844,502Other financial assets(1,575,040)1,923,815(10,046,913)216,173,837206,475,69924,576,601Total206,581,05855,431,156102,992,283342,928,483707,932,980453,615,860Liabilities:Financial assets at fair value through profit or loss267,054267,054267,054Securities sold under agreements to repurchase48,094,35148,094,35147,985,583Reinsurance payables18,142,775395,443433,034144,14119,115,39319,115,393Income tax payable2,402,5622,402,5622,402,562Policyholders deposits3,875,230118,036298,1504,291,4164,291,416Investment contract liabilities(54,854,956)1,710,03116,576,326260,291,381223,722,78220,786,743Insurance contract liabilities102,852,78134,084,61578,699,187107,090,209322,726,792257,959,374Notes and bonds payable10,217,430614,8002,154,40014,921,60027,908,23022,556,059Long-term borrowings262,5233,507,1603,769,6833,499,098Lease liabilities446,727345,907332,075151,1661,275,8751,172,466Other financial liabilities16,033,227178,783529,7483,989,00120,730,75915,076,009Total147,739,70440,954,77599,022,920386,587,498674,304,897395,111,757271China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(c) Liquidity risk (continued)31 December 2020Within 1year orundatedMore than1 year butless than2 yearsMore than2 years butless than5 yearsMore than5 yearsTotalCarryingamountAssets:Cash and short-term time deposits13,872,49513,872,49513,872,362Debt securities carried at fair value through profit or loss617,964223,7043,545,91692,9604,480,5444,125,734Equity securities carried at fair value through profit or loss7,051,7017,051,7017,051,701Derivative financial assets246,287246,287246,287Financial assets held under resale agreements4,617,1864,617,1864,615,600Premiums receivable9,772,0034,925,0391,935,8155,54216,638,39916,638,399Reinsurance debtors48,087,737490,91668,79358,59448,706,04048,706,040Investment contracts receivable7,112,8737,112,8737,112,873Reinsurers share of insurance contract liabilities2,968,4975,019,4294,552,05121,559,33734,099,31419,724,423Reinsurers share of policy loans563,501563,501563,501Time deposits11,378,284551,2369,496,55121,426,07119,904,638Available-for-sale fixed maturity investments14,193,60520,309,66748,389,60658,700,222141,593,100108,205,840Available-for-sale equity securities55,443,92955,443,92955,443,926Held-to-maturity investments4,904,5937,158,5829,656,55720,435,94242,155,67432,199,780Investments classified as loans and receivables14,127,9614,378,89720,738,66714,598,36053,843,88541,236,325Statutory deposits716,2033,264,51915,998,94019,979,66218,044,502Other financial assets9,854,935(9,921,658)3,205,991100,383,408103,522,67610,792,169Total205,529,75436,400,331117,588,887215,834,365575,353,337408,484,100Liabilities:Short-term borrowings208,101208,101208,101Derivative financial liabilities172,014172,014172,014Financial assets at fair value through profit or loss214,579214,579214,579Securities sold under agreements to repurchase29,415,39729,415,39729,403,318Reinsurance payables15,097,224784,437316,02386,46116,284,14516,284,145Income tax payable1,696,4581,696,4581,696,458Policyholders deposits4,542,794176,9854,719,7794,719,779Investment contract liabilities(14,402,587)(21,117,796)32,801,819144,402,916141,684,35223,990,655Insurance contract liabilities81,201,29844,757,57378,914,78065,261,925270,135,576229,496,289Notes and bonds payable820,71710,567,3122,024,40015,666,40029,078,82922,748,255Long-term borrowings171,610171,6103,758,8964,102,1163,577,375Lease liabilities469,762296,876398,795189,9731,355,4061,253,917Other financial liabilities15,032,231256,1891,269,4434,176,36020,734,22313,882,959Total134,639,59835,893,186119,484,156229,784,035519,800,975347,647,844272China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)54 RISK MANAGEMENT (continued)(2) Financial risk (continued)(c) Liquidity risk (continued)The amounts set forth in the tables above for financial assets, borrowings, notes and bonds payable, securities sold under agreements to repurchase, and benefits claims and surrenders payable are undiscounted contractual cash flows. The amounts for insurance and investment contracts in each column are the undiscounted cash flows representing expected future benefit payments taking into consideration of future premiums payments or deposits from policyholders. The results of above estimates are affected by a number of assumptions. The estimate is subject to assumptions related to mortality, morbidity, lapse rates, loss ratio, expenses and other assumptions. Actual experience may differ from estimates. The excess cash inflow from matured financial assets will be reinvested to cover any future liquidity exposures.55 FAIR VALUE MEASUREMENT(1) Financial assets and liabilities measured at fair valueFair value hierarchyThe following tables present the fair value of the Groups financial instruments measured at 31 December 2021 on a recurring basis, categorised into the three-level fair value hierarchy. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows: Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available. Level 3 valuations: Fair value measured using significant unobservable inputs.273China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)55 FAIR VALUE MEASUREMENT (continued)(1) Financial assets and liabilities measured at fair value (continued)Fair value hierarchy (continued)Fair value at31 December 2021Fair value measurements as at31 December 2021 categorised into Level 1Level 2Level 3 AssetsFinancial assets at fair value through profit or loss Fixed maturity investment5,679,8011,838,4273,841,374 Equity securities9,156,9046,912,2921,586,923657,689Available-for-sale financial assets Fixed maturity investment126,484,29512,359,235113,002,5471,122,513 Equity securities51,281,50137,688,0986,272,1407,321,263Derivative financial assets436,422436,422Total Assets193,038,92358,798,052124,702,9849,537,887LiabilitiesFinancial liabilities at fair value through profit or loss(267,054)(267,054)Derivative financial liabilitiesTotal Liabilities(267,054)(267,054)274China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)55 FAIR VALUE MEASUREMENT (continued)(1) Financial assets and liabilities measured at fair value (continued)Fair value hierarchy (continued)Fair value at31 December 2020Fair value measurements as at31 December 2020 categorised intoLevel 1Level 2Level 3AssetsFinancial assets at fair value through profit or loss Fixed maturity investment4,125,7343,594,064531,670 Equity securities7,051,7012,756,7513,593,567701,383Available-for-sale financial assets Fixed maturity investment108,205,840830,088106,254,0051,121,747 Equity securities55,443,92639,939,7443,043,66012,460,522Derivative financial assets246,287246,287Total Assets175,073,48847,120,647113,422,90214,529,939Liabilities Financial liabilities at fair value through profit or loss(214,579)(214,579)Derivative financial liabilities(172,014)(172,014)Total Liabilities(386,593)(386,593)275China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)55 FAIR VALUE MEASUREMENT (continued)(1) Financial assets and liabilities measured at fair value (continued)Reconciliation of movements in Level 3 financial instruments measured at fair value.Financial assets at fair value through profit or lossAvailable-for-sale financial assetsDerivative financial assetsDerivative financial liabilitiesFinancial liabilities at fair value through profit or loss 1 January 2021701,383 13,582,269246,287(172,014)(214,579)Additions1,827,95024,087Disposals(66,547) (7,485,450)Transfer to Level 3Transfer out from Level 3Gains/(losses) through profit or loss1,070(4,845)166,048172,014(52,475)Gains/(losses) through other comprehensive income21,783523,85231 December 2021657,6898,443,776436,422(267,054)Financial assets at fair value through profit or lossAvailable-for-sale financial assetsDerivative financial assetsDerivative financial liabilitiesFinancial liabilities at fair value throughprofit or loss 1 January 2020784,493 12,628,871411,129Additions2,427,772Disposals(34,120) (1,248,719)Transfer to Level 3243,129Transfer out from Level 3(1,390,260)Gains/(losses) through profit or loss(48,990)448,636(164,842)(172,014)(214,579)Gains/(losses) through other comprehensive income472,840 31 December 2020701,383 13,582,269246,287(172,014)(214,579) 276China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)55 FAIR VALUE MEASUREMENT (continued)(1) Financial assets and liabilities measured at fair value (continued)Valuation techniques and inputs used in Level 2 fair value measurementsAs at 31 December 2021, most of the prices of debt securities obtained from the valuation service providers are issued by the Chinese government and state-owned organisations. These valuation service providers utilise a discounted cash flow valuation model using observable market parameters, mainly interest rate, to determine a fair value.During the year ended 31 December 2021, the Group did not transfer securities from Level 1 to Level 2 (During the year ended 31 December 2020: Nil) and did not transfer securities from Level 2 to Level 1 (During the year ended 31 December 2020: 375 million).During the year ended 31 December 2021, the Group did not transfer securities from Level 2 to Level 3 (During the year ended 31 December 2020: Nil) and did not transfer securities from Level 3 to Level 2 (During the year ended 31 December 2020: RMB511 million).Valuation techniques and inputs used in Level 3 fair value measurementsAs at 31 December 2021 and 2020, significant unobservable inputs such as discount rate and discounts for lack of marketability were used in the valuation of primarily assets and liabilities at fair value classified as Level 3.The table below presents information about the significant unobservable inputs used for primary assets and liabilities at fair value classified as Level 3 as at 31 December 2021 and 31 December 2020:277China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)55 FAIR VALUE MEASUREMENT (continued)(1) Financial assets and liabilities measured at fair value (continued)Valuation techniques and inputs used in Level 3 fair value measurements (continued)Fair ValueValuation techniquesSignificant unobservable inputsRangeRelationships between fair value and unobservable inputsEquity securities31 December 2021: 1,072,65231 December 2020: 925,360Discounted cash flow methodDiscount rate31 December 2021: 4.43%-4.651 December 2020: 2.99%-4.91%The higher of discount rate, the lower the fair value31 December 2021: 1,206,58031 December 2020: 126,320Comparable companies approachDiscounts for lack of marketability31 December 2021: 4%-351 December 2020: 14%-35%The higher of discounts for lack of marketability, the lower the fair value31 December 2021: 5,569,22031 December 2020: 11,135,093Net asset value methodNet asset31 December 2021: N/A31 December 2020: N/AN/ADebt securities31 December 2021: 1,122,51331 December 2020: 809,883Discounted cash flow methodDiscount rate31 December 2021: 2.01%-4.511 December 2020: 5.03%The higher of discount rate, the lower the fair valueDerivative financial instruments31 December 2021: 436,42231 December 2020: 74,273Discounted cash flow methodDiscount rate31 December 2021: (0.59%)-0.191 December 2020: (0.55%)-0.24%The higher of discount rate, the lower the fair value278China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)55 FAIR VALUE MEASUREMENT (continued)(2) Fair value of financial assets and liabilities carried at other than fair valueThe carrying amounts of the Groups financial instruments carried at amortised cost are not materially different from their fair values as at 31 December 2021 except for the following financial instruments, for which their carrying amounts and fair value and the level of fair value hierarchy are disclosed below:31 December 202131 December 2021 The fair value hierarchyCarrying amountFair valueLevel 1Level 2Level 3AssetsHeld-to-maturity financial assets37,376,95239,347,13839,347,138Investment classified as loans and receivables39,097,06840,578,95240,578,952LiabilitiesLong-term borrowings3,499,0983,671,0873,671,087Notes and bonds payable22,556,05922,908,11222,908,11231 December 202031 December 2020The fair value hierarchyCarrying amountFair valueLevel 1Level 2Level 3AssetsHeld-to-maturity financial assets32,199,78033,666,79133,666,791Investment classified as loans and receivables41,236,32542,101,49142,101,491LiabilitiesLong-term borrowings3,577,3753,864,6943,864,694Notes and bonds payable22,748,25523,222,90123,222,901The fair value of the held-to-maturity investments, notes and bonds payable classified as Level 2 is determined and analysed on the basis of the observable net valuation price of China Central Depository & Clearing Co., Ltd. (CCDC), China Securities Depository and Clearing Corporation Limited (CSDC), and Bloomberg Terminal.The fair value of long-term loans classified as level 3 should be measured as the discounted present value of the future cash flow in accordance with the interest rates on the market with comparable credit ratings and providing almost the same cash flow under the same conditions.The fair value of investments classified as loans and receivables as level 3 is determined using recognized pricing models, including the analysis of discounted cash flows based on unobservable discount rates, which reflects the relevant credit risk.279China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)56 CAPITAL MANAGEMENTThe Groups primary objectives when managing capital are to safeguard the Groups ability to continue as a going concern, to focus on the balance between risk and profit, to ensure that the Group meets the external capital requirements and maintains a sound solvency margin ratio to support its business development and maximise profit for shareholders, by pricing products and services commensurately with the level of risk and by accessing to finance at a reasonable cost.The Group regularly reviews and manages its capital structure to achieve the most ideal capital structure and maximum returns to the shareholders. Factors taken into consideration include future capital requirement, capital efficiency, actual and expected profitability, expected cash flows and expected capital expenditure of the Group. The Group makes adjustments to the capital structure in light of changes in economic conditions.The Group has formally implemented China Risk Oriented Solvency System since 1 January 2016 by reference to the Notice on the Formal Implementation of China Risk Oriented Solvency System by CIRC. The Group adjusted the objective, policy and process of capital management. As at 31 December 2021, the solvency information of the Group and the Company is as follows:(in RMB millions, except for percentages)31 December 2021Actual capitalMinimum capitalCore solvency adequacy ratioAggregated solvency adequacy ratioThe Group112,64353,930185 9%The Company78,95013,1636000%(in RMB millions, except for percentages)31 December 2020Actual capitalMinimum capitalCore solvencyadequacy ratioAggregatedsolvencyadequacy ratioThe Group107,83450,169189!5%The Company79,40213,248599Y9(0China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)57 SIGNIFICANT RELATEDPARTY RELATIONSHIPS AND TRANSACTIONS(1) Ultimate parentThe immediate parent of the Company is Central Huijin Investment Ltd., which parent company is China Investment Corporation. The ultimate parent of the Company is the Ministry of Finance of the PRC.(2) Significant related partiesName of significant related partyRelationship with the CompanyChina Everbright BankAssociate(3) Transactions with related parties except for key management personnel(a) Significant related-party transactions between the Group and CEB is as follows:20212020 Interest income73,77673,802Premium income7591,164Claims payments789,3841,230,904Fees and commissions110231During the year ended 31 December 2021, the Group received the dividends from China Everbright Bank of RMB487,175 thousand (the year ended 2020, RMB496,455 thousand).(b) The balances of significant related-party transactions between the Group and CEB is as follows:31 December 202131 December 2020 Cash and short-term time deposits153,611194,619Statutory deposits437,187437,187Time deposits45,285Interest receivables29,77456,775Debt investments999,216999,146281China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)57 SIGNIFICANT RELATEDPARTY RELATIONSHIPS AND TRANSACTIONS (continued)(3) Transactions with related parties except for key management personnel (continued)(c) The balances of significant related-party transactions between the Group and China Investment Corporation is as follows:20212020 Investment income783,427On 2 September 2021, China Reinsurance Finance Corporation Limited (“China Re Finance”), a subsidiary of the Company, entered into a sale and purchase agreement with China Investment Corporation. Pursuant to the agreement, China Re Finance agreed to aggregately dispose of its 10% ownership of the Logicor Group to the aforementioned acquirors (the “Disposal”) for a cash consideration of EUR 718 million. The Group realise a book gain of approximately RMB783 million from the Disposal.The Group enters into transactions with China Investment Corporation and companies under it in the ordinary course of business under normal commercial terms.(4) Key management personnel remuneration:20212020 Salaries, allowances and benefits in kind5,4654,748Discretionary bonuses5,9547,111Employers contribution to a retirement benefit scheme881499Total12,30012,358The total compensation package for the Companys key management personnel for the year ended 31 December 2021 has not yet been finalised in accordance with regulations of the relevant PRC authorities, and will be disclosed when determined. The compensation amounts disclosed above for the Companys key management personnel for the year ended 31 December 2020 were restated based on the finalised amounts determined during 2020.282China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)57 SIGNIFICANT RELATEDPARTY RELATIONSHIPS AND TRANSACTIONS (continued)(5) Transactions with state-owned entities in the PRCThe Company is a state-owned enterprise which is subject to the control of the State Council of the PRC government. The Group operates in an economic environment predominated by enterprises directly or indirectly owned and/or controlled by the government through its authorities, affiliates or other organisations (collectively the “state-owned entities”). The Groups key business is primary insurance and reinsurance related business and therefore the business transactions with other state-owned entities are primarily related to insurance, reinsurance and investment activities, including but not limited to insurance, reinsurance, provision of asset management or other services, and the sale, purchase, and redemption of bonds or equity instruments.Management considers that transactions with state-owned entities are activities conducted in the ordinary course of business, and that the dealings of the Group have not been significantly or unduly affected by the fact that the Group and those state-owned entities are ultimately controlled or owned by the PRC government. The Group has also established pricing policies for products and services and such pricing policies do not depend on whether or not the customers are state-owned entities.Due to the complex ownership structure, the PRC government may hold indirect interests in many companies. Some of these interests may, in themselves or when combined with other indirect interests, be controlling interests which may not be known to the Group.As at the 31 December 2021, most of bank deposits of the Group were with state-owned banks, and the issuers of corporate bonds and subordinated bonds held by the Group were mainly state-owned enterprises (31 December 2020: same). For the year ended 31 December 2021, a large portion of its reinsurance business of the Group was with state-owned insurance companies (the year ended 31 December 2020: same).283China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)58 CONTINGENCIESOwing to the nature of the insurance business, the Group is involved in the making of estimates for contingencies and legal proceedings in the ordinary course of business. The adverse effects of these contingencies and legal proceedings mainly involve claims on the Groups insurance contracts and reinsurance contracts. The Group has considered possible losses caused by such litigations when measuring insurance contract liabilities. At 31 December 2021, certain subsidiaries of the Group were involved in such legal proceedings, and the amounts for specific legal claims may be significant and the cases are being investigated by relevant authorities. While the outcomes of such contingencies and legal proceedings cannot be determined at present, based on the current available information, the Group believes that they did not have a material adverse impact on the financial position as at 31 December 2021 and operating results of the Group for the twelve months ended 31 December 2021.As at 31 December 2021, the Group has issued the following guarantees:(1) As at 31 December 2021, the Company provided maritime guarantee of RMB1,825 million (31 December 2020: RMB2,266 million) for domestic and overseas ship mutual insurance associations or overseas insurance institutions which provided 100% of counter guarantee for the aforesaid maritime guarantee.(2) As at 31 December 2021, the letter of credit provided by the Company to Lloyds for China Re Syndicate 2088 has been revoked (31 December 2020: GBP 100 million). As at 31 December 2021, CRIH provided letter of credit to Lloyds to support Syndicate 1084s and Syndicate 1176s underwriting business of GBP 335 million totally (31 December 2020: GBP 250 million).(3) CRIH has entered into two Tier 1 securities lending arrangement for Funds at Lloyds with two financial institutions. The facilities total GBP 80 million and USD50 million (31 December 2020: GBP80 million and USD50 million).59 COMMITMENTSCapital commitments31 December 202131 December 2020 Contracted for Intangible assets commitments42,21017,507 Property and equipment commitments6,32026,161 Investment commitments582,226660,836Total630,756704,504284China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)60 COMPANYLEVEL STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY(1) Company-level statement of financial position31 December 202131 December 2020 Assets Cash and short-term time deposits946,5721,328,139Financial assets at fair value through profit or loss343,946652,128Financial assets held under resale agreements90,00067,000Reinsurance debtors4,366,9524,767,843Reinsurers share of unearned premium reserves202,378255,470Reinsurers share of outstanding claim reserves887,986552,444Reinsurers share of life insurance reserves2,926,698316,620Time deposits1,063,373474,231Available-for-sale financial assets12,287,59711,000,891Held-to-maturity investments1,844,597928,650Reinsurers share of policy loans44,52143,178Long-term equity investments42,368,30342,198,946Statutory deposits9,521,3189,521,318Investment properties929,178967,926Fixed assets326,696345,602Right-of-use assets21,55817,083Intangible assets46,20829,517Deferred tax assets58,02268,948Other assets2,161,6043,783,964Total assets80,437,50777,319,898285China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)60 COMPANYLEVEL STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY (continued)(1) Company-level statement of financial position (continued)31 December 202131 December 2020 Liabilities and equity LiabilitiesSecurities sold under agreements to repurchase2,191,616639,336Reinsurance payables1,577,004691,512Employee benefits payable422,926403,380Taxes payable332,625396,694Policyholders deposits and investments1,586,1163,355,512Unearned premium reserves725,5161,668,486Outstanding claim reserves4,772,4514,670,999Life insurance reserves3,284,6911,462,876Long-term health insurance reserves2,282,1432,181,515Lease liabilities19,73416,374Deferred tax liabilities833,5471,005,090Other liabilities1,483,829824,140Total liabilities19,512,19817,315,914EquityShare capital42,479,80842,479,808Capital reserves7,004,6437,004,643Other comprehensive income822,920746,321Surplus reserve2,833,4102,574,770General risk reserve2,833,4102,574,770Catastrophic loss reserve124,08959,863Retained earnings4,827,0294,563,809Total equity60,925,30960,003,984Total liabilities and equity80,437,50777,319,898The company-level statement of financial position was approved by the Board of Directors on 28 March 2022 and was signed on its behalf.Yuan LinjiangHe ChunleiDirectorDirectorTian MeipanChief Actuary286China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)60 COMPANYLEVEL STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY (continued)(2) Company-level statement of changes in equity SharecapitalCapitalreserveOthercomprehensiveincomeSurplusreserveGeneral riskreserveCatastrophic loss reserveRetainedearningsTotal equity Balance at 31 December 202042,479,8087,004,643746,3212,574,7702,574,77059,8634,563,80960,003,9841. Total comprehensive incomeNet profit2,586,3982,586,398Other comprehensive income76,59976,5992. Appropriation of profitsDistributions to shareholders(1,741,672)(1,741,672)Appropriations to surplus reserve258,640(258,640)Appropriation for general risk reserve258,640(258,640)Appropriation for Catastrophic loss reserve64,226(64,226)3. OthersBalance at 31 December 202142,479,8087,004,643822,9202,833,4102,833,410124,0894,827,02960,925,309 SharecapitalCapitalreserveOthercomprehensiveincomeSurplusreserveGeneral riskreserveCatastrophic loss reserveRetainedearningsTotal equity Balance at 31 December 201942,479,8087,047,275767,0452,314,3612,314,3614,409,50559,332,3551. Total comprehensive incomeNet profit2,604,0972,604,097Other comprehensive income(20,724)(20,724)2. Appropriation of profitsDistributions to shareholders(1,869,112)(1,869,112)Appropriations to surplus reserve260,409(260,409)Appropriation for general risk reserve260,409(260,409)Appropriation for Catastrophic loss reserve59,863(59,863)3. Others(42,632)(42,632) Balance at 31 December 202042,479,8087,004,643746,3212,574,7702,574,77059,8634,563,80960,003,984 287China Reinsurance (Group) Corporation2021 Annual ReportFINANCIAL STATEMENTS AND NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 December 2021(Expressed in thousands of Renminbi, unless otherwise stated)60 COMPANYLEVEL STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CHANGES IN EQUITY (continued)(2) Company-level statement of changes in equity (continued)For the year ended 31 December 2021 and 31 December 2020, the statement of financial position and statement of changes in equity of the Company disclosed in this note are prepared in accordance with Peoples Republic of China Generally Accepted Accounting Principles (“PRC GAAP”), the primary accounting standard for the Company to determine the amount of retained earnings available for distribution. In the preparation of these, the Companys investment in subsidiaries which are included in long-term equity investments are stated at cost less any impairment losses. The results of subsidiaries are included in the Companys income statement to the extent of dividends received and receivable. Investments in associates are accounted for using equity method, unless classified as held for sale (or included in a disposal group that is classified as held for sale). Other than those set out in this note, there is no material difference in recognition and measurement between PRC GAAP and the significant accounting policies as disclosed in note 2.61 NONADJUSTING POST BALANCE SHEET DATE EVENTSDividendsOn 28 March 2022, the Board of Directors of the Company proposed a final dividend of RMB0.045 per ordinary share (tax inclusive) and is subject to the approval of shareholders of the Company at the 2021 annual general meeting.62 APPROVAL OF THE FINANCIAL STATEMENTSThe financial statements were approved and authorised for issue by the Board of Directors on 28 March 2022.DEFINITIONS288China Reinsurance (Group) Corporation2021 Annual Report“Articles of Association”the articles of association of our Company as adopted at our shareholders meeting held on 26 June 2015, 24 October 2017, 28 June 2018 and approved by the insurance regulatory authority in the PRC on 9 July 2015, 2 March 2016 and 16 January 2019“Board of Directors” or “Board”the board of directors of our Company“Board of Supervisors”the board of supervisors of our Company“C-ROSS”China Risk Oriented Solvency System, which is Chinas second generation insurance solvency regulation system“CBIRC”China Banking and Insurance Regulatory Commission (中國銀行保險監督管理委員會)“Central Huijin”Central Huijin Investment Ltd.“Chaucer”the collective name of China Re International Holdings Limited, Chaucer Insurance Company Designated Activity Company and China Re Australia HoldCo Pty Ltd“China Continent Insurance”China Continent Property & Casualty Insurance Company Ltd. (中國大地財產保險股份有限公司), a subsidiary of the Company incorporated in the PRC on 15 October 2003. The Company holds 64.3% of its shares“China Everbright Bank”China Everbright Bank Co., Ltd. (中國光大銀行股份有限公司), a joint stock limited liability company incorporated in the PRC“China Re AMC”China Re Asset Management Company Ltd. (中再資產管理股份有限公司), a subsidiary of the Company incorporated in the PRC on 18 February 2005. The Company holds 70% of its shares, and China Re P&C, China Re Life and China Continent Insurance hold 10% of its shares respectively“China Re HK”China Reinsurance (Hong Kong) Company Limited (中國再保險(香港)股份有限公司), a subsidiary of China Re Life licensed and incorporated by Hong Kong Insurance Authority on 16 December 2019DEFINITIONS289China Reinsurance (Group) Corporation2021 Annual Report“China Re Life”China Life Reinsurance Company Ltd. (中國人壽再保險有限責任公司), a wholly-owned subsidiary of the Company incorporated in the PRC on 16 December 2003“China Re P&C”China Property and Casualty Reinsurance Company Ltd. (中國財產再保險有限責任公司), a wholly-owned subsidiary of the Company incorporated in the PRC on 15 December 2003“China Re Syndicate 2088”the syndicate established at Lloyds in December 2011 by the Company through China Re UK“China Re UK”China Re UK Limited, a wholly-owned subsidiary of the Company incorporated in England and Wales on 28 September 2011“CIC”Chaucer Insurance Company Designated Activity Company, a company registered in the Republic of Ireland“CNIP”China Nuclear Insurance Pool. CNIP was established in 1999 and the Group Company has been the management institution and chairman company of CNIP from its establishment date to November 2016. Starting from November 2016, the management institution of CNIP changed from the Group Company to China Re P&C“Company” or “Group Company”China Reinsurance (Group) Corporation (中國再保險(集團)股份有限公司)“Corporate Governance Code”the Corporate Governance Code set out in Appendix 14 of the Hong Kong Listing Rules“CRAH”China Re Australia HoldCo Pty Ltd, a company registered in Australia, the former name of which is Hanover Australia HoldCo Pty Ltd“CRIH”China Re International Holdings Limited, a company registered in England and Wales, the former name of which is The Hanover Insurance International Holdings Limited“Director(s)”the director(s) of the CompanyDEFINITIONS290China Reinsurance (Group) Corporation2021 Annual Report“Great Wall Asset”China Great Wall Asset Management Co., Ltd. (中國長城資產管理股份有限公司), a joint stock limited liability company incorporated in the PRC“Group”, “China Re Group” or “we”our Company and its subsidiaries (except where the context requires otherwise)“Hong Kong Listing Rules”the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited“Hong Kong Stock Exchange”The Stock Exchange of Hong Kong Limited“Huatai Insurance Agency”Huatai Insurance Agency and Consultant Service Limited (華泰保險經紀有限公司), a subsidiary of the Company incorporated in the PRC on 1 March 1993. The Company holds 52.5% of its shares“Latest Practicable Date”19 April 2022, being the latest practicable date for the inclusion of certain information in this report prior to its publication“Listing Date”26 October 2015, being the date on which the H shares of the Company became listed on the Hong Kong Stock Exchange“Lloyds”The Society of Lloyds, a global leading specialised P&C and liability insurance market“Ministry of Finance”the Ministry of Finance of the PRC (中華人民共和國財政部)“Model Code for Securities Transactions”the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Hong Kong Listing Rules“NAO”the National Audit Office of the PRC (中華人民共和國審計署)“PRC Company Law”the Company Law of the PRC ( 中華人民共和國公司法 ), as enacted by the Standing Committee of the Eighth National Peoples Congress of the PRC on 29 December 1993 and effective on 1 July 1994, as amended, supplemented or otherwise modified from time to time“PRC Insurance Law”the Insurance Law of the PRC ( 中華人民共和國保險法 ), as enacted by the Standing Committee of the Eighth National Peoples Congress of the PRC on 30 June 1995 and effective on 1 October 1995, as amended, supplemented or otherwise modified from time to timeDEFINITIONS291China Reinsurance (Group) Corporation2021 Annual Report“Prospectus”the prospectus of the Company dated 13 October 2015“Reporting Period”since 1 January 2021 until 31 December 2021“RMB” or “Renminbi”Renminbi, the lawful currency of the PRC“SFO”the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)“Supervisor(s)”the supervisor(s) of the CompanyCORPORATE INFORMATION292China Reinsurance (Group) Corporation2021 Annual ReportREGISTERED NAMESLegal Chinese name:中國再保險 （集團） 股份有限公司Chinese abbreviation:中再集團Legal English name:China Reinsurance (Group) CorporationEnglish abbreviation:China ReREGISTERED OFFICE AND HEADQUARTERSNo. 11 Jinrong Avenue, Xicheng District, Beijing, the PRC (Postal code: 100033)PRINCIPAL PLACE OF BUSINESS IN HONG KONGRoom 1618, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong KongPLACE OF LISTING OF SHARESThe Stock Exchange of Hong Kong LimitedCLASS OF SHARESH sharesSTOCK NAMEChina ReSTOCK CODE1508H SHARE REGISTRARComputershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queens Road East, Wanchai, Hong KongWEBSITEhttp:/INVESTOR RELATIONS DEPARTMENTOffice of the Board of DirectorsTelephone: (8610) 66576880Email: IRLEGAL REPRESENTATIVEMr. Yuan LinjiangSECRETARY TO THE BOARDMs. Zhu XiaoyunAUTHORISED REPRESENTATIVESMr. He ChunleiMs. Ng Sau MeiJOINT COMPANY SECRETARIESMs. Zhu XiaoyunMs. Ng Sau MeiAUDITORSDomestic auditor:PricewaterhouseCoopers Zhong Tian LLPOverseas auditor:PricewaterhouseCoopers(Certified Public Accountants and Registered PIE Auditor)ACTUARIAL CONSULTANTDeloitte Consulting (Shanghai) Co., Ltd. Beijing BranchHONG KONG LEGAL ADVISERClifford ChanceUNIFIED SOCIAL CREDIT CODE9110000010002371XD
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