Ping An Insurance announced its September 2021 results towards the end of October 2021. Ping An Insurance is affected by the tightening of wallets from local consumers and natural disasters including floods. We observed that the company is facing some headwinds while restructuring its business with technology.
Business Performance
The Group’s operating profit attributable to shareholders rose 9.2% year-on-year to RMB 118,737 million. Ping An Insurance has a 20.3% annualized operating ROE which is a drop of 0.6 PPS.
Retail customers increased 3.1% year to date to over 225 million as of 30th September 2021. 39% or 87.74 million held multiple contracts with different subsidiaries. Contracts per customer are 2.78. The Group acquired 25.25 million new retail customers in the first nine months of 2021. 34.6% of them were internet users from the Group’s member companies. Internet users refer to unique registered users with accounts on the internet services platforms of the Group’s member companies including technology companies and core financial companies.
The corporate customer base continued to grow steadily. Corporate premiums through cross-selling grew 8.3% year on year to RMB 13,857 million in the first none months of 2021. The new financing scale achieved through corporate business cross-selling increased 29.5% year on year to RMB532,492 million in the first nine months of 2021.
Ping An Life
Ping An Life refined the tiered management of its agent force and improved its team structure. Diamond Agents remains stable in the third quarter of 2021. NBV of Life and Health fell 17.8% year on year to RMB 35,237 million. This drop was due to the decline in the number of agents. The number of life insurance agents dropped to 706,208 in September 2021 from 1,023,836 in December 2020. New business growth declined, policy persistency ratio fluctuated. The operating profit decreased 2.3% year on year to RMB 73,684 million.
Ping An Life strengthens the tiered management of its agent force and digital empowerment. Ping An Life continued to improve the top-performer management framework, consolidate basic management, pool company resources to empower Diamond Agents. They will improve digitalized management to increase agent income and provide stability for ordinary agents. Ping An Life has a development program called “Talent+” to improve the quality of new agents.
Ping An Property & Casualty
Property & Casualty arm improved by 1.8 PPS year on year to 97.3% and operating profit grew 20.2% year on year to RMB 13,283 million in the first nine months of 2021. They settled Henan Province flood claims payment which is expected to exceed RMB 3.4 billion. Ping An Property & Casualty provides complimentary insurance for front-line rescue workers.
Ping An P&C made changes to auto insurance pricing which led to lower auto insurance premiums. They optimized its customer mix and improve risk screening. Premium income decreased 9.2% year on year to RMB 199,343 million in the first nine months of 2021. Operating profit improves 20.2% year on year to RMB13,283 million in the first nine months of 2021 from RMB 11,055 million in 2020.
Ping An P&C’s Ping An Auto Owner is the largest automotive service app in China, had over 144 million registered users, more than 92 million vehicles had been linked with the app. Monthly active users exceeded 34 million in September 2021.
Ping An Bank
Ping An Bank’s revenue grew 9.1% year on year to RMB 127,190 million and net profit rose 30.1% year on year to RMB 29,135 million in the first nine months of 2021. NPL ratio improved by 0.13 PPS year to date to 1.05% and provision coverage ratio improved by 66.95 PPS year to date to 268.35% as of September 2021.
Ping An Bank’s retail assets under management rose 16.3% year to date to RMB 3,052,432 million as of September 2021. Retail customers increased 8.5% year to date to approximately 116,204,500. Private banking grew by 18.2% year to date to approximately 67,700.
Ping An’s technology patent applications increased by 5,423, year to date to 36,835 as of September 2021. This is remarkable.
We note the net profit decreased by 20.8% from RMB103,041 million in 2020 to RMB 81,638 million in 2021. This was attributed to impairment provisions to investments related to China Fortune Land Development Co., Ltd (“China Fortune”) in first nine months of 2021.
Different Business Segments
The life and health business represents Ping An Life, Ping An Annuity, and Ping An Health. The Property and casualty insurance business is standalone. The banking business represents Ping An Bank. The trust business represents Ping An Trust and Ping An New Capital. The securities business is represented by Ping An Securities. Asset management business includes Ping An Asset Management, Ping An Financing Leasing, and Ping An Overseas Holdings. The technology business represents Autohome (2518.HK and NYSE: ATHM), Lufax Holding (NYSE: LU), OneConnect (NYSE:OCFT), Ping An Good Doctor ( 1833.HK), and Ping An HealthKonnect.
Technology Business
Lufax Holding is one of the leading technology-powered personal financial services platforms in China. Lufax is focusing on addressing providing loans among small and micro-business owners as well as salaried workers in China. There are two major businesses, retail credit facilitation and wealth management. Lufax cooperated with financial product providers and uses AI to match customers with products. Lufax provides diverse, customized offerings.
OneConnect is a technology-as-a-service platform for financial institutions. It provides four integrated products Digital Retail Banking, Digital Commercial Banking, Digital Insurance, and Gamma Platform which encompasses marketing, customer acquisition, risk management, operational management, operations, and fintech infrastructure.
Autohome is China’s leading online auto services platform, providing a smart auto ecosystem centering on data and technology. It is a constituent of the Hang Seng TECH Index and Hang Seng Composite Index in June 2021.
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