Ping An Results: Profitable Growth & Life Sector Transformation

The news from Ping An is good as regards profits and growth, here are some extracts from their press release;

Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An“, the “Company” or the “Group”, HKEX: 2318; SSE: 601318) today announced its 2022 interim results for the six month period ended 30 June 2022.

2022 is a critical year for Ping An’s cultural reshaping, strategic upgrade, and reform and transformation. Ping An pressed firmly ahead with Ping An Life’s quality-oriented reform and transformation, continuously strengthened the advantages of integrated finance, and built the “managed care model”.

Ping An achieved an annualized operating ROE of 20.4% in the first half of 2022, with operating profit attributable to shareholders of the parent company rising 4.3% year on year to RMB85,340 million. Net Profit reached RMB71,676 million. Net profit attributable to shareholders of the parent company increased 3.9% year on year to RMB60,273 million. Ping An attaches importance to shareholder returns and will pay an interim dividend of RMB0.92 per share in cash, up 4.5% year on year.

Top business highlights in 1H2022:

1. Profit grew steadily, and cash dividends continued to rise. Ping An achieved an annualized operating ROE of 20.4% in the first half of 2022, with operating profit attributable to shareholders of the parent company rising 4.3% year on year to RMB85,340 million. Ping An attaches importance to shareholder returns and will pay an interim dividend of RMB0.92 per share in cash, up 4.5% year on year.
2. The integrated financial services model continued to progress steadily. Ping An’s retail customers exceeded 225 million and contracts per retail customer grew steadily by 1.4% year to date to 2.95 as of June 30, 2022. Written premium of the corporate channel achieved through cross-selling rose 7.0% year on year in the first half of 2022.
3. Reform and transformation of life insurance business is showing results continuously. Despite the impact of multiple factors including COVID-19, NBV per agent increased 26.9% year on year, and the 13-month persistency ratio of insurance policies improved by 4.1 pps year on year in the first half of 2022, driven by the quality-oriented transformation of the agent force. Operating profit of the life and health insurance business rose 17.4% year on year to RMB58,993 million in the first half of 2022.
4. Ping An Property & Casualty maintained stable business growth and healthy business quality. Premium income increased 10.1% year on year to RMB146,792 million and combined ratio was 97.3% in the first half of 2022.
5. Ping An Bank maintained stable, healthy business growth and asset quality. Revenue grew 8.7% year on year to RMB92,022 million and net profit rose 25.6% year on year to RMB22,088 million in the first half of 2022. Non-performing loan ratio remained unchanged year to date at 1.02%, and provision coverage ratio was 290.06% as of June 30, 2022, indicating adequate risk provisions.
6. Ping An continued to implement its healthcare ecosystem strategy by exploiting synergies with financial businesses. As of June 30, 2022, Ping An’s healthcare ecosystem had partnered with all top 100 hospitals and 3A hospitals as well as 208,000 pharmacies in China; Ping An Smart Healthcare cumulatively served 187 cities and over 55,000 medical institutions, and empowered over 1.42 million doctors. More than 64% of Ping An’s over 225 million retail customers used services from the healthcare ecosystem.
7. Ping An continued to strengthen its core technological capabilities and achieved results in empowering financial businesses with technologies. Ping An’s technology patent applications increased by 4,674 year to date to 43,094 as of June 30, 2022, more than most other international financial institutions’. In the first half of 2022, sales realized by AI service representatives increased 39% year on year; customer services provided by AI service representatives accounted for 83% of Ping An’s total customer service volume.
8. Ping An further advanced its green finance initiative to support the sustainable development of society. Ping An’s green investment and financing, and green banking business totaled RMB249,355 million and RMB161,735 million respectively as of June 30, 2022. Premium income of environmentally sustainable insurance products totaled RMB76,971 million in the first half of 2022. Moreover, Ping An continued to advance the “Ping An Rural Communities Support” and implemented the innovative project of “bringing insurance, finance, and healthcare to rural areas.” Ping An cumulatively provided RMB49,720 million for poverty alleviation and industrial revitalization as of June 30, 2022.
9. Brand value continued to increase. In 2022, Ping An ranked 25th in the Fortune Global 500 list (4th among global financial services companies), 4th in the Fortune China 500 list, and 17th in the Forbes Global 2000 list.

The Life & Health insurance business

Operating profit after tax of the life and health insurance business rose 17.4% year on year to RMB58,993 million in the first half of 2022. Ping An Life firmly advanced the quality-oriented transformation of the agent force.

Monthly income per agent rose 35.1% year on year to RMB7,957 and NBV per agent increased 26.9% year on year in the first half of 2022.

Motor

“Ping An Auto Owner,” the largest automotive service app in China, had over 159 million registered users, and over 99 million vehicles had been linked with the app as of June 30, 2022. Ping An P&C’s pioneering video-based auto insurance claim investigations take only five minutes on average. 92.9% of auto insurance claim payments were made within one hour in the first half of 2022.

Ping An Bank

Revenue and net profit for the first half of 2022 grew 8.7% and 25.6% year on year, respectively. Asset quality remained stable. Non-performing loan ratio remained unchanged year to date at 1.02%, and provision coverage ratio was 290.06% as of June 30, 2022, indicating adequate risk provisions. Ping An Bank maintained steady growth in retail business. Retail AUM rose 9.1% year to date to RMB3,472,148 million, and registered users of the “Ping An Pocket Bank” app reached 143.7985 million, up 6.6% year to date as of June 30, 2022.

Technology & Innovation

Ping An continued to focus on developing core technologies to build leading technological capabilities, which have been widely utilized to empower its main financial businesses and healthcare ecosystem. Ping An’s technology patent applications increased by 4,674 year to date to 43,094 as of June 30, 2022. The Group ranked first globally by the number of AI, fintech and digital healthcare patent applications.

Aiming to transform and upgrade the main businesses, Ping An utilized technology to enhance its financial business by promoting sales, increasing cost-effectiveness and controlling risks. Ping An empowered human service representatives with AI. The amount of services provided by AI service representatives reached approximately 1.25 billion times in the first half of 2022, representing 83% of Ping An’s total customer service volume. Sales realized by AI service representatives reached approximately RMB176.9 billion in the first half of 2022, accounting for 43.1% of the total sales volume of all service representatives.

Outlook

Looking ahead, Ma Mingzhe, Chairman of Ping An, said, substantial uncertainties will remain regarding COVID-19 as well as in the domestic and overseas environment in the second half of 2022.

Facing severe challenges, Ping An still has far to go in reform and innovation. Ping An is comprehensively reshaping and promoting the new value-oriented culture, taking “value maximization as the only criterion for performance appraisal”. “Expertise makes life simple” will always be Ping An’s cultural philosophy and brand commitment.

The new value-oriented culture will support the Group’s strategic upgrades and empower the business management, thus create steadily growing value for customers, employees, shareholders, and society. Ping An will adhere to the policy of “focusing on main businesses, optimizing portfolios, increasing cost-effectiveness, and ensuring compliance” in the second half of 2022 and continue to implement the technology-driven “integrated finance + healthcare” strategy.

By upgrading its financial and insurance businesses, Ping An will seize huge opportunities from the development of the healthcare ecosystem, and build its presence in “finance + elderlycare” and “finance + healthcare” industry ecosystems to serve the real economy, and lay a solid foundation for high-quality development in the new era.