Ping An Maintains Resilient Performance in 9M 2023
Operating Profit Attributable to Shareholders of the Parent Company Reaches RMB112,482 Million, Life & Health NBV Sharply Increases by 40.9% YoY
Net Assets Attributable to Shareholders of the Parent Company Exceeds RMB900 Billion
HONG KONG and SHANGHAI, Oct. 27, 2023 /PRNewswire/ -- Ping An Insurance (Group) Company of China, Ltd. (hereafter "Ping An", the "Company" or the "Group", HKEX: 2318 / 82318; SSE: 601318) today announced its results for the nine months ended September 30, 2023.
In the first nine months of 2023, China's economy continued to rebound and improve with household consumption picking up steadily. However, global capital markets remained volatile in a complex international environment. It takes time for the domestic economy to pick up and improve, and the foundation for recovery needs to be further consolidated. Facing difficulties and challenges, Ping An focused on core financial businesses and strengthened the insurance protection function to serve the real economy. Following the technology-driven "integrated finance + healthcare" strategy, Ping An remained customer needs-oriented, continuously consolidated its integrated finance advantages, upgraded its digital capabilities, and pursued high-quality development.
Ping An maintained resilient overall business performance with solid fundamentals and stable core financial businesses in the first nine months of 2023. The Group delivered a 16.7% annualized operating ROE, with operating profit attributable to shareholders of the parent company reaching RMB112,482 million and net profit attributable to shareholders of the parent company reaching RMB87,575 million, in the first nine months of 2023. Net assets attributable to shareholders of the parent company grew steadily by 3.9% from the beginning of the year to RMB 903.1 billion as of 30 September 2023. Retail customers approached 230 million and contracts per retail customer reached 2.99 as of September 30, 2023. Life & Health new business value ("NBV") amounted to RMB33,574 million in the first nine months of 2023, up 40.9% year on year on a like-for-like basis. Ping An continuously advanced its healthcare and eldercare service strategy. Customers entitled to "+ service" benefits accounted for approximately 68% of Ping An Life's NBV in the first nine months of 2023.
NBV sharply increased by 40.9% YoY; Ping An Life achieved steady business development
Ping An Life unswervingly implemented the "4 channels + 3 products" strategy[1]. China's macroeconomy recovered as market demand picked up gradually in the first nine months of 2023. Ping An Life achieved steady business development thanks to comprehensive advancement in channels, improved business quality, and diverse products and services launched. Operating profit of Ping An Life amounted to RMB84,911 million. Life & Health NBV amounted to RMB33,574 million in the first nine months of 2023, up 40.9% year on year on a like-for-like basis.
Channels development under the value proposition of high-quality development. In the agent channel, Ping An Life improved the team structure and per capita productivity of the agent channel by refining the tiered management of high-productivity agents. As a result, productivity climbed sharply with NBV per agent rising 94.4% year on year in the first nine months of 2023. Innovative channels, including bancassurance and Community Grid, accounted for 15.8% of Ping An Life's NBV in the first nine months of 2023. Ping An Life strengthened the coordination and integration of the bancassurance channel with Ping An Bank, and continuously expanded partnership with external banks. Ping An Life continuously promotes Community Grid and has built a team of over 11,000 highly competent specialists as of September 30, 2023 which is gradually maturing.
Upgrade of the insurance product portfolio driven by customer demands. Ping An Life improved "insurance + service" products by leveraging the Group's healthcare ecosystem and built differential advantages by enhancing its three core services, namely healthcare, home-based elderlycare and high-end elderlycare. In respect of healthcare, Ping An Life served over 19 million customers in the first nine months of 2023, up over 10% year on year. Ping An's home-based elderlycare services covered 54 cities across China and over 70,000 customers qualified for the home-based elderlycare services as of September 30, 2023, of which over 50% activated the services. In respect of high-end elderlycare, a "Ping An Zhen Yi Nian" experience center opened in Sanya, Hainan Province in July 2023, and the groundbreaking ceremony of "Guangzhou Yi Nian Cheng" was held in August 2023.
The integrated financial services model continued to progress steadily; Ping An P&C and Ping An Bank maintained steady development.
Ping An continuously promoted its integrated finance model to enhance retail customer development. Ping An's integrated finance strategy is focused on the development of retail customers under a customer-centric philosophy to strengthen cross-selling among customer segments. In retail business, Ping An leverages its ecosystems to build a brand of heartwarming financial services by providing "worry-free, time-saving, and money-saving" one-stop integrated finance solutions. Retail customers increased 1.5% from the beginning of the year to nearly 230 million and contracts per retail customer reached 2.99 as of September 30, 2023. Retail customers and contracts per retail customer have increased 15.9% and 12.0% respectively since December 31, 2019.
Ping An P&C maintained stable business growth. Insurance revenue grew 6.8% year on year to RMB235,538 million in the first nine months of 2023, with operating profit attributable to shareholders of the parent company reaching RMB9,965 million. Overall underwriting combined ratio (COR) rose by 1.6 pps year on year to 99.3% in the first nine months of 2023, including an industry-leading 97.4% auto insurance underwriting COR. Auto and non-auto insurance claim cost increased due to disastrous typhoons and rainstorms. Moreover, auto insurance customers' travel needs recovered, and guarantee insurance business was impacted by changes in the market environment. As a result, overall cost fluctuated. The accumulated registered users of the "Ping An Auto Owner" app exceeded 194 million as of September 30, 2023 as Ping An P&C continued to provide auto owners with excellent services.
Ping An Bank maintained stable and healthy business performance. Net profit grew 8.1% year on year to RMB39,635 million in the first nine months of 2023. Non-performing loan ratio declined by 0.01 pps from the beginning of the year to 1.04% and provision coverage ratio was 282.62% as of September 30, 2023, indicating adequate risk provisions. Ping An Bank continued to increase support for the real economy. Loans to areas including inclusive finance, manufacturing, agriculture, and green finance grew healthily as Ping An Bank improved its business portfolio. Ping An Bank furthered transformation in retail banking. Ping An Bank's retail assets under management ("AUM") rose 11.5% from the beginning of the year to RMB3,998,848 million as of September 30, 2023. Ping An Bank had approximately 124,823,700 retail customers as of September 30, 2023, including approximately 1,369,300 wealth management customers, up 8.2% from the beginning of the year.
Capital markets continued to fluctuate in the first nine months of 2023. Ping An pursues long-term returns across business cycles via value investing. The Company's insurance funds investment portfolio achieved an annualized comprehensive investment yield of 3.7% and an annualized net investment yield of 4.0% in the first nine months of 2023. The Company's insurance funds investment portfolio grew 7.1% from the beginning of the year to nearly RMB4.64 trillion as of September 30, 2023.
Business volumes declined and asset valuations changed due to the impact of the macroeconomic environment in the first nine months of 2023. Moreover, capital markets were volatile and market investment demand was weak. As a result, profit of asset management business declined. Ping An's AUM exceeded RMB6 trillion as of September 30, 2023. The Company primarily conducts its asset management business through companies including Ping An Securities, Ping An Trust, Ping An Financial Leasing, and Ping An Asset Management.
Ping An continuously advanced its healthcare ecosystem development to build differential advantages.
Ping An's healthcare ecosystem empowered core financial businesses through differentiated "Product + Service" offerings. Nearly 64% of Ping An's nearly 230 million retail customers used services from the healthcare ecosystem as of September 30, 2023. They held approximately 3.42 contracts and RMB56,100 in AUM per capita, 1.6 times and 3.4 times those held by non-users of these services respectively.
In terms of payers, Ping An made significant progress in both corporate and retail customer development by effectively integrating insurance with healthcare and elderlycare services. The healthcare ecosystem of the Group had over 45,000 paying corporate clients in the first nine months of 2023. Ping An Health had over 44 million paying users over the past 12 months. Ping An achieved over RMB110 billion in health insurance premium income in the first nine months of 2023. Customers entitled to service benefits in the healthcare ecosystem accounted for approximately 68% of Ping An Life's NBV in the first nine months of 2023.
In terms of providers, Ping An integrated premium healthcare resources to improve services. Ping An acquired PKU Healthcare Group and integrated its excellent resources into Ping An's existing healthcare ecosystem. These resources include six 3A/tier-3 hospitals (with 4,000 beds), 13 specialty medical institutions and so on, among which Peking University International Hospital is a flagship hospital. Ping An had 17 health management centers as of September 30, 2023. By integrating providers, Ping An partnered with 100% of top 100 hospitals and 3A hospitals, and accumulated nearly 4,000 in-house doctors and nearly 50,000 contracted external doctors in China as of September 30, 2023. Ping An partnered with approximately 228,000 pharmacies as of September 30, 2023, up by nearly 4,000 from the beginning of the year.
Ping An continuously builds leading technological capabilities, which have been widely utilized to empower its core financial businesses. Ping An has a first-class technology team of over 3,200 scientists as of September 30, 2023. The Group's patent applications led most international financial institutions, totaling 50,815. Technology benefits are reflected in higher sales, better business efficiency, and stronger risk management. The volume of services provided by Ping An's AI service representatives reached about 1.7 billion times in the first nine months of 2023, representing 82% of Ping An's total customer service volume. Sales realized by AI service representatives accounted for 45% of the total sales volume of all service representatives. AI helped to collect 42% of overdue loans. The Company engages in technology business mainly through subsidiaries, associates and joint ventures, including Autohome, Ping An Health, OneConnect, and Lufax Holding, providing diverse products and services to ecosystem users, with significant synergies. Net profit of technology business declined year on year as its revenue was under pressure in the first nine months of 2023.
Ping An further advanced green finance initiatives, and fulfilled comprehensive corporate social responsibilities. Green insurance premium income amounted to RMB26,276 million in the first nine months of 2023. Ping An has cumulatively provided RMB103,241 million for rural industrial vitalization since the launch of "Ping An Rural Communities Support," and received the 12th "China Charity Award" in September 2023.
In a complex and fast-changing market environment, the financial services industry was generally impacted to some extent in the first nine months of 2023. But the positive long-term fundamentals of the industry will remain unchanged. The Company will adhere to high-quality development with Chinese characteristics, keep its business resilience under the leadership of the Board of Directors, build its strengths, and make progress while maintaining stability. Ping An will maintain its strategic focus on core financial businesses and continue advancing its technology-driven "integrated finance + healthcare" strategy. The Company will continuously improve operations and management, advance comprehensive digital transformation, and increase cost-effectiveness. Ping An will keep the continuity and stability of its profit distribution policy, and maintain value investing and long-term returns for shareholders.
[1] 4 channels include agent channel, bancassurance channel, Community Grid channel, and lower-tier channel, and 3 products include insurance + healthcare, insurance + home-based elderlycare, and insurance + high-end elderlycare. |
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SOURCE Ping An Insurance (Group) Company of China, Ltd.
