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Ping An Reports 17.4% Increase In 9M Net Income; Underlying Growth 41.1%

Insurance Industry Company Results and Financials News: Ping An Insurance (Group) Company of China, Ltd. (hereafter "Ping An" or the "Group", HKEx: 2318; SSE: 601318) has announced its 2017 interim results for the nine months ended September 30 2017.

Dr. Peter Ma, Chairman and Chief Executive Officer of Ping An, said, "China's economy will be on an upward trajectory in 2017. The 19th National Congress of the Communist Party of China has ushered a new era for China's socialism with Chinese characteristics, indicating that the financial industry's directions and goals to serve the real economy and preventing risks. Ping An will strive to build a new growth engine driven by 'finance + technology'. Ping An is fully committed to serving the real economy, contributing to the rejuvenation of the country, and to give back to the society and investors who showed us their support over the years."

Major highlights in first nine months:

  • Profit increased significantly. Net profit attributable to shareholders of the parent company rose by 17.4% year on year (up 41.1% year on year if the RMB9,497 million profit from Puhui's restructuring for the first half of 2016 is excluded).
  • The number of customers and users grew rapidly. Number of individual customers increased 22.5% year on year to 153 million, and the number of internet users increased 27.4% year on year to 430 million. Ping An's internet users are 2.81x its customer base.
  • Life and health new business value rose 35.5% year on year, exceeding the new business value generated in 2016. Strong new business value growth was aided by a 27.9% year on year rise in number of agents (now 1.434 million) and a 9.9% rise in agent productivity over the comparable period.
  • Ping An Property & Casualty's premium rose 23.6% year on year, while maintaining a better-than-industry combined ratio of 96.1%.
  • Ping An Bank's transformation into a smart retail bank saw significant results, Ping An Bank's retail business revenue accounted for 42.1% of revenue (9M2016: 29.7%) and 65.3% of profit (9M2016: 34.4%). The assets of retail consumers exceeded RMB1 trillion.
  • Ping An continued to advance the innovation and application of its technologies. The number of patent applications filed by Ping An rose by 707 to 2,165 in the third quarter. Most of the patents were related to big data, artificial intelligence, cloud and other fields.

Core Finance Business:

Life and health new business value grew 35.5% to RMB53,738 million in first nine months. During the period, Ping An Life achieved a net profit of RMB35,682 million, up 55.3% year on year. Ping An Life grew its number of agents by 27.9% year on year to 1.434 million, while at the same time driving a 9.9% increase in agent productivity to RMB9,702 first year premium per agent. In addition, Ping An Life launched a batch of compliant upgraded products in October and will switch to these new ones in the fourth quarter and focus on promotion of long-term protection products, which will lay a solid foundation for business development in 2018.

Ping An Property & Casualty recorded premium income of RMB157,507 million, an increase of 23.6% year-on-year. With good business quality, Ping An Property & Casualty maintained a better than industry combined ratio of 96.1%. Among which, the service of "510 City Superfast Onsite Investigation" has been launched in 334 cities, 85% of the cases were handled within 10 minutes, which greatly enhanced customer satisfaction.

For the first nine months of 2017, Ping An optimized its asset allocation. As at September 30 2017, Ping An's portfolio of insurance funds reached RMB2.30 trillion, up 16.9% from the beginning of the year. In the first three quarters of 2017, the portfolio of insurance funds achieved an annualized net investment yield of 5.5% and an annualized total investment yield of 5.4%. 

Ping An Bank's retail business grew substantially, realizing sound business development and benefits of the strategic transformation. During the period, Ping An Bank's retail business revenue reached RMB33,599 million, up 38.0% year on year and accounting for 42.1% of total income (9M2016: 29.7%). Retail net profit came in at RMB12,506 million, up 94.2% year on year and accounting for 65.3% of total net profit (9M2016: 34.4%). Assets under management (AUM) exceeded RMB1 trillion, an increase of 28.1% to RMB1,02trillion.

Fintech Business:

Lufax Holding, a leading online asset transaction platform in China, maintained rapid growth across its businesses. In the third quarter of 2017, AUM of the wealth management business grew steadily by 21.8% year on year to RMB476,225 million. For consumer finance business, the balance of loans under management grew rapidly by 141.1% year on year to RMB269,193 million. Institution business remained robust with trading volume close to RMB4.2 trillion for the first nine months of 2017, up 29.4% year on year. As of September 30 2017, total registered users of Lufax reached 32.36 million, up 26.9% year on year.

Finance One Connect stepped up efforts to establish ecosystem for serving financial institutions. As of September 302017, it had partnered with 446 banks and 1,782 non-bank financial and quasi-financial institutions. Interbank trading volume was RMB6.64 trillion, with over 644 million credit enquiries. At the same time, Finance One Connect has built the "Smart Insurance Cloud" for the insurance industry and has signed letters of intent for cooperation with 11 companies.

Ping An Good Doctor dedicates itself to building the largest one-stop healthcare ecosystem in China. As of September 30 2017, Ping An Good Doctor provided services to over 170 million users with monthly active users peaking at over 20 million and daily queries peaking at 462,000.

Ping An Social Health Insurance Company has built presence in over 70% of cities across China, covering 800 million people. In over 250 cities of more than 20 provinces, Ping An Social Health Insurance Company provides expense control, actuarial work, social health insurance accounts, medical resources management, and application of electronic health records.

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