Ping An Insurance’s annual profits up 15%

Earnings meet analysts’ forecasts, reaching their highest level since 2003

Ping An Insurance’s annual profits up 15%

Insurance News

By Gabriel Olano

Ping An Insurance Group Co of China Ltd., the country’s second-largest insurer in terms of market value, announced on Wednesday its largest annual profit in over a decade, driven by strong sales.
The company met analysts’ forecasts, posting a 15% increase in annual net profits, the highest since 2003. In the year ended December 2016, the insurer had a net profit of RMB62.4 billion (US$9.06 billion), which is just around the estimate of RMB62.3 billion.
Excellent growth in the life insurance segment buoyed Ping An’s growth, despite government regulators imposing stricter rules to lessen risks from reckless insurers’ investments in stocks made using short-term funds.

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Life insurance premiums rose 25% to RMB373.78 billion (US$54.27 billion) while net investment yields for property and casualty insurance grew by 6.8% last year, exceeding its 6.3% growth rate in 2015.
The insurer’s “revenue sources are more diverse than other insurers,” Dayton Wang, an analyst at Guotai Junan International, told Reuters. “It’s not simply an insurance company, it’s a financial conglomerate built on insurance.”

However, the company is expected to run into headwinds this year, because of its Ping An Bank unit and a regulatory crackdown on off-balance-sheet instruments and lower core capital, according to a note from Daiwa Capital Markets.

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