| Ping An Insurance (Group) Co. of China Ltd. - H Shares 02318.HK |
| Company Profile |
| Chairman | MA Mingzhe | |
| Share Issued (share) | 3,130M | |
| Par Currency | RMB | |
| Par Value | 1 | |
| Industry | Insurance | |
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| Corporate Profile | Business Summary:
The principal activities of the Group comprise the provision of a wide range of financial products and services with a focus on the three core businesses namely, insurance, banking and investment.
Performance for the year:
Net profit attributable to shareholders of the parent company recorded for 2012 was RMB20,050 million, representing a growth of 3.0% compared with 2011. As at December 31, 2012, total assets of the Company reached RMB2,844,266 million while equity attributable to shareholders of the parent company stood at RMB159,617 million, representing increases of 24.5% and 22.0%, respectively, compared with the end of 2011.
Business Review:
2012 was an extraordinary year. Against a slowing Chinese economy, the financial industry faced a number of negative factors including an anemic capital market, a rising non-performing loan ratio in the banking industry and weakened demand for life insurance. Facing the complex and changing environment in both the group’s international and domestic markets, the group proactively adapted the group’s strategies to tackle the challenges in the market head on. Thanks to the group’s well-established integrated financial strategy and the competitive edge accruing from the group’s platform, the group’s three pillars of business, namely insurance, banking and investment, continued to achieve healthy and stable growth despite the adverse conditions. With the integration of the Original Shenzhen Development Bank and the Original Ping An Bank successfully completed, the new Ping An Bank was formally launched and unveiled to customers with a brand new image. Operating under a unified Ping An brand reinforced the group’s capabilities to provide diversified financial services to the group’s customers while further honing the group’s overall competitiveness, buffering us against the cyclical ups and downs inherent in the financial industry.
This year, the group’s key indicators such as total assets, net assets and net profits recorded stable growth. As at December 31, 2012, the Company had total assets of RMB2,844,266 million, representing an increase of 24.5% compared with the end of last year. Equity attributable to shareholders of the parent company stood at RMB159,617 million, up 22.0%. Net profit attributable to shareholders of the parent company reached RMB20,050 million, marking an increase of 3.0%.
Looking back at the past year’s operations, the group achieved outstanding performance in the following aspects:
The group’s life insurance and property and casualty insurance maintained growth above the market average while service quality was continuously improved. The group’s annuity business maintained its leading position in the industry. Written premiums of life insurance reached RMB199,483 million, an increase of 6.5% compared with last year. Out of this, written premiums from the more profitable individual life insurance business reached RMB176,068 million, an increase of 10.0% over last year. The market share of Ping An Life rose by 0.5 percentage points to 12.9% from 2011. Through its consistent track record in service innovations such as the E-sales platform and the Mobile Integrated Terminal (MIT), Ping An was given the “Best Life Insurance Company of 2012” award. Leveraging its increasingly professionalized operations and advanced service standards, Ping An Property & Casualty achieved stable business growth and a recorded premium income of RMB98,786 million, while its accumulated premium growth reached 18.5%, which surpassed the market average level. Its market share increased by 0.5 percentage points to 17.9% from 2011. The three major performance indicators of the group’s annuity business – annuity payments received, assets entrusted, and assets under investment management – all maintained their lead in the annuity industry. The “Hiking the World – Vitality” health promotion program, the first of its kind in China originally launched by Ping An Health, has brought with it new opportunities for business growth.
The group’s Banking business completed the merger of the legal entities of Original Ping An Bank and Original Shenzhen Development Bank, as well as the name change and integration of their respective IT systems. The integration of the two banks was executed flawlessly leading up to its completion, while the business maintained stable growth. On July 27, 2012, the new bank after the merger formally changed its name to “Ping An Bank Co., Ltd”. As the name change and systems integration went smoothly, the integrated finances of the new Ping An Bank grew at an accelerated pace. In 2012, the banking business contributed RMB6,870 million in profits to the Group. Total assets of Ping An Bank reached RMB1.61 trillion, demonstrating the growing scale of the bank’s business and greater overall strength. Superior businesses such as credit card, automobile finance, trade finance and interbank lending stood out with their product features, giving them a lead over their peers. The group opened a new branch in Zhengzhou and completed the group’s planning for the new Xi’an branch, bringing the number of new business outlets for the year to 55 for a more comprehensive network coverage. The group’s capital adequacy ratio and core capital adequacy ratio were maintained at strong levels of 11.37% and 8.59%, respectively.
Ping An Trust, the group’s personal wealth management business, grew at a steady pace while the group’s investment banking business of Ping An Securities, commanded a leading position in the market. On the back of the personal wealth management business’s steady growth, assets held in trust reached RMB212,025 million, up 8.1% compared to the end of 2011. The number of high net worth customers exceeded 18,000. By virtue of its solid business performance and outstanding services, Ping An Trust was named the “China Outstanding Trust Company” for the fourth consecutive time. In 2012, Ping An Securities successfully sponsored 14 IPOs and two refinancing projects as lead underwriter, and ranked third by the number of deals and underwriting revenue for IPO transactions. The group also sponsored 44 bond projects as lead underwriter, and handled more deals compared to last year. By changing its asset structure through constant reinforcement and applying innovative investment techniques, Ping An Asset Management augmented the core competitiveness of its investments, ensuring a better-than-market asset return ratio.
Cross-selling synergy has long been the group’s unique advantage in business development, which has been continuously strengthened during the year. The group raised the group’s service levels, further realizing the best customer experience of “multiple products, one-stop services”. In 2012, the Company made improvements to its cross-selling and remote selling management platforms to generate growing synergies. In 2012, 55.0% of the premium income of Ping An Property & Casualty’s automobile insurance was generated by cross-selling and telemarketing. For Ping An Bank, cross-selling and telemarketing contributed 53.6% of the new credit cards issued and cross-selling also accounted for 15.9% of new retail deposits. In 2012, the back office implemented measures such as operations sharing and increased automation to improve operations. As a result, average processing time per claim for life insurance and automobile insurance were 11.84 hours and 8.04 hours, respectively, which were facilitated by the continuous improvement in the group’s insurance claims service. Ping An Life has committed itself to fulfilling the practice of “Settlement within 72 hours for standard cases with full documentation” and achieved a 99.78% success rate. Ping An Property & Casualty was also the first in the industry to attempt to complete the entire insurance claim process within a specific timeframe, achieving a success rate of 93.48% in honoring its commitment to the practice of “Receiving settlement within 72 hours from the report for claims below RMB10,000”.
In 2012, the group continued to maintain a leading position in terms of brand value. The group’s comprehensive strength and efforts in corporate governance and corporate social responsibility have won us numerous accolades and awards at home and aboard from independent third parties such as rating agencies and the media.
Ranked 242nd in Fortune Global 500 and maintained top ranking among mainland Chinese companies in the non-SOE category.
Included in the Forbes Global 2000 for the eighth time, ranking 100th.
Included in the Financial Times Global 500, ranking 131st.
Ranked 78th in the Top 100 Most Valuable Global Brands by Millard Brown.
Named “Best Managed Insurer in Asia” by Euromoney for the fourth consecutive year; Winner of “Corporate Governance Asia Recognition Awards” for six consecutive years and named “Best Investor Relations by a Chinese Company” by Corporate Governance Asia.
Eight-time consecutive Winner of the “Best Corporate Citizen” award by the 21st Century Business Herald; six-time consecutive winner of the “Most Responsible Enterprise” award by China News Weekly; eleven-time consecutive winner of the “Most Respected Company” by The Economic Observer.
In 2012, the group continued to promote green finance, emphasizing the value of education for the public good and striving to become the role model for “corporate social responsibility” and “corporate citizenship” in China. In terms of environmental protection, the group have embedded corporate social responsibility in the group’s individual businesses such as insurance, banking and investment, through the group’s “Low Carbon 100” campaign run over the last two years. These efforts to lower the group’s carbon footprint have borne fruit: More than 10 million customers subscribed to the group’s paperless email service in 2012, placing us in a leading position in the finance and insurance sectors. The widespread adoption of the upgraded smart version of the group’s MIT platform further underscores the group’s lead in the THE CEO.T services platform, giving the group’s customers a one-stop shop for integrated financial services which is more convenient and effective, while being more flexible and environmentally friendly. The amount of paper saved from switching to high-efficiency services such as email, MIT platform, electronic policies, online policyholder services and electronic bills was approximately 890.6 tons. This was matched by steep falls in manpower needs and operational costs. This year, the group actively participated in Project Green Hope, establishing 10,000 acres of Ping An forest land in 10 provinces and regions in collaboration with the China Youth Development Foundation. On the education front, Ping An sponsored the construction of more than 100 Ping An Hope Primary Schools and over 17 Aspiration Centers housing multi-media classrooms. Over 2,000 volunteers participated in the group’s education initiative, helping nearly 30,000 students. Since the start of the group’s educational welfare projects, 8,134 students have enrolled in the Ping An Hope Primary Schools on a cumulative basis, receiving Ping An Hope Scholarships worth RMB4.533 million. More than RMB10 million has been awarded to 4,820 college students through the Endeavour Scheme Thesis Award and Future Entrepreneur Award. Charitable donations have exceeded RMB100 million.
In 2012, the group committed ourselves to improving the group’s corporate governance practice in strict compliance with relevant laws and regulations, with due consideration given to the group’s operating conditions. The general meeting, the Board of Directors, the Supervisory Committee and the senior management of the Company operated independently and performed their respective rights and obligations in accordance with the Articles of Association of the Company. The Board actively contributed in various aspects, including strategic planning, investment decision, risk management, internal control and compliance, corporate social responsibility as well as talent recruitment and appointment. In recognition of the group’s outstanding corporate governance, the group received numerous awards including the “Best Corporate Governance Disclosure Awards – Gold Award in H-Share Companies and Other Mainland Enterprises Category” by the Hong Kong Institute of Certified Public Accountants, the “2012 Asia Excellence Award” by Corporate Governance Asia magazine, the “Best Managed Asia Company 2012” award by Finance Asia, as well as the “2012 Best Board of Listed Companies in China” issued by renowned Chinese wealth management media Money Week.
In 2012, the group committed ourselves to improving the group’s corporate governance practice in strict compliance with relevant laws and regulations, with due consideration given to the group’s operating conditions. The general meeting, the Board of Directors, the Supervisory Committee and the senior management of the Company operated independently and performed their respective rights and obligations in accordance with the Articles of Association of the Company. The Board actively contributed in various aspects, including strategic planning, investment decision, risk management, internal control and compliance, corporate social responsibility as well as talent recruitment and appointment. In recognition of the group’s outstanding corporate governance, the group received numerous awards including the “Best Corporate Governance Disclosure Awards – Gold Award in H-Share Companies and Other Mainland Enterprises Category” by the Hong Kong Institute of Certified Public Accountants, the “2012 Asia Excellence Award” by Corporate Governance Asia magazine, the “Best Managed Asia Company 2012” award by Finance Asia, as well as the “2012 Best Board of Listed Companies in China” issued by renowned Chinese wealth management media Money Week.
Prospects:
While there is still a sense of trepidation when the group look to the future, the group remain confident of what is to come. With the advent of urbanization and the rise of national income in China, there is huge potential for the growth of mass consumption. The personal consumption market is expected to maintain its rapid growth in the long run, which will stimulate consumption demand for personal financial services and promote the sustainable development of the society and economy. It also lays a solid foundation for the in-depth execution of the group’s integrated financial strategy and the group’s healthy growth in the future. At the same time, modern technology as represented by mobile internet, large data and cloud computing is developing rapidly, merging forms and permeating into traditional industries. Not only does this give rise to a brand new lifestyle and consumer experience for every individual, it also reshapes the eco-systems of various industries as well as the organization and operations of modern corporations. New business opportunities and business models also spring forth, with some changes even subversive and revolutionary in nature. This introduces new competition to the financial industry and prompts the gradual improvement or even the complete restructuring of traditional finance’s operational model. The intensifying competition focused on the customer experience will have far-reaching influence on the competitive landscape and rules of competition in traditional financial markets. The Ping An team and THE CEO do not fear challenges, and dare to innovate and explore. The group will fully capitalize on growth opportunities in the group’s times, and ensure that while the group’s traditional businesses enjoy “in line with market growth while leading in quality”, the group will explore the tight integration of modern technology with traditional finance, create the momentum to stay ahead of the market, and promote innovative development in China’s financial industry.
In the year ahead, Ping An will celebrate its 25th anniversary. The group believe that with the support of all shareholders and the leadership of the Board of Directors, the group can leverage the strength of the group’s organization, culture and talent to keep the group’s finger on the contemporary pulse, and exemplify the group’s “Expertise Makes Life Simple” philosophy in providing a simple, efficient, and convenient onestop financial services experience for customers. This will bring us healthy and sustainable growth compatible with the group’s values, and enable us to gradually become the leading personal financial services group in China, offering the best customer experience, as well as to create value for the group’s shareholders, customers, employees and society through stable and continuous growth. |
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