Insurance

Ping An Reports YoY Growth of 8.9% in Operating Profit Attributable to Shareholders of the Parent Company in Q1 2021

Ping An Insurance (Group) Company of China, Ltd. has announced its first quarter financial results for the three months ended 31 March 2021.

In the first three months of 2021, China achieved strong results in the prevention and containment of the Covid-19 epidemic. Amid steady headline domestic economic recovery, Ping An's traditional offline business development gradually resumed. However, demand for long-term protection business remained depressed as the underlying domestic economic recovery was not as strong, with domestic discretionary demand still recovering, Ping An said in a press release.

Ping An adopted various forward-looking measures, including strengthening risk management, advancing reforms, and promoting digitization to lay a solid foundation for future sustainable growth. In the first three months of 2021, net profit attributable to shareholders of the parent company increased by 4.5% year on year to RMB27,223 million and operating profit attributable to shareholders of the parent company grew by 8.9% year on year to RMB39,120 million. Basic operating earnings per share rose by 8.9% year on year to RMB2.21 and the annualized operating ROE was 20.0%. Ping An's retail customers increased by 1.0% year to date to over 220 million as of March 31, 2021. There were 84.57 million retail customers holding multiple contracts with different subsidiaries, an increase to 38.3% of the total. New financing scale achieved through corporate business cross-selling expanded by 84.9% year on year in the first three months of 2021.

Ping An accelerated the implementation of its healthcare ecosystem strategy. Ping An's smart healthcare business serves regulators and medical institutions with solutions for public health management, medical institution regulation, AI assistant "AskBob" medical stations, clinical decision support, medical image recognition, and chronic disease management. As of March 31, 2021, Ping An's smart healthcare business had empowered over 37,000 medical institutions and benefited about 750,000 doctors in 161 cities. Ping An cooperated closely with local Healthcare Security Administrations, and won seven new bids in the first three months of 2021 to construct provincial-level social health insurance (SHI) platforms.

In addition, the "2021 Long-term Service Plan" and the "2021 Key Employee Share Purchase Scheme" were approved at the 2nd meeting of the 12th session of the Board held on April 22, 2021. A total of 90,960 employees have voluntarily participated in the "2021 Long-term Service Plan", the funds of which totalled RMB4.18 billion, representing the amount of remuneration payable to employees. A total of 1,754 key personnel have voluntarily participated in the "2021 Key Employee Share Purchase Scheme", the funds of which totalled RMB670.30 million, representing the amount recognized income and performance-based bonus of the scheme holders.

Ping An proactively promoted annuity products to satisfy consumer demands. In addition, the Company improved its protection product portfolio by developing "heartwarming" "products + services" packages for healthy business development. In the first three months of 2021, the NBV of Life & Health grew by 15.4% year on year to RMB 18,980 million. Operating profit rose steadily by 4.2% year on year to RMB25,580 million. Moreover, Ping An Life's reform has entered its comprehensive rollout and execution stage. In respect of "channel 1+4", Ping An Life advanced its digital channel reform, focusing on four key projects, namely digital business outlets, activity management, digital agent recruitment, and smart training. Ping An Life fully tapped sales channels, including sales agents, bancassurance, telemarketing and the internet, and dynamically revised the basic management procedure for sales agents. In respect of "product 1+4", Ping An Life provides one-stop customer-centric healthcare services under the "product + service" strategy. Ping An Life is committed to providing "heartwarming insurance" through four major services, namely health management, chronic disease management, critical illness management, and eldercare management.

The Company continued to improve the asset allocation of its investment portfolio of insurance funds and the management of asset-liability matching. The Company's investment portfolio of insurance funds grew by 1.1% year to date to RMB3.78 trillion as of March 31, 2021. The investment portfolio of insurance funds achieved an annualized net investment yield of 3.5% and an annualized total investment yield of 3.1% in the first three months of 2021.

Ping An Bank maintained stable business operations and improved asset quality. In the first three months of 2021, revenue increased by 10.2% year on year to RMB41,788 million, and net profit grew by 18.5% year on year to RMB10,132 million. As of March 31, 2021, Ping An Bank's retail assets under management (AUM) rose by 6.8% year to date to RMB2,802,610 million and retail customers increased by 3.0% year to date to 110.4 million. The non-performing loan ratio improved by 0.08 pps year to date to 1.10% as of March 31, 2021, while the provision coverage ratio increased by 43.76 pps to 245.16%. In the first three months of 2021, the average cost of deposits was 2.06%, down 0.36 pps year on year. The average daily balance of retail demand deposits increased by 18.5% year on year and the average daily balance of corporate demand deposits grew by 26.5% year on year, reflecting the continued cost optimization of deposits.

Ma Mingzhe, Chairman, Ping An, said: “The year 2021 marks the 100th anniversary of the Communist Party of China and the beginning of China's 14th Five-Year Plan. It is also a particularly important year in China's modernization drive, having successfully emerged as a moderately prosperous society, across a spectrum of measures. The Company will uphold the compliance philosophy of 'Regulations + 1' and further improve operations in compliance with applicable laws and regulations. Moreover, the Company will pursue steady progress by continuously advancing the Group 'finance + technology' and 'finance + ecosystem' transformation strategies, as its contribution to assist the further modernization of China. The Company will adhere to the philosophy of 'expertise makes life easier, technology makes financial services 'heartwarming', and healthcare makes life better.' The Company will develop 'heartwarming' products and services under the policy of 'deepening reform, pursuing sustainable growth, and planning for the future', by leveraging FinTech and the healthcare ecosystem. In this way, the Company will create value for shareholders and customers, and contribute to social development.”

More information on the report can be found HERE.