Ping An rules out major overseas acquisitions

Group to focus on domestic market but will still pursue international healthcare and fintech deals, says founder

Ping An rules out major overseas acquisitions

Insurance News

By Gabriel Olano

Ping An, one of China’s four largest insurers, has said that it is not looking to make a big overseas acquisition in the near future. Instead, it will focus on its home market.

The insurance group, which has a market capitalisation exceeding US$170 billion, has been involved in rumours regarding international blockbuster deals, a report by the Financial Times said. These include Prudential’s Asian life insurance arm, possibly worth over US$48.3 billion, as well as the general insurance business of the Commonwealth Bank of Australia.

“As of now, we don’t have aspirations to make acquisitions overseas,” Ping An founder Peter Ma was quoted as saying by FT. “The Chinese market has the best growth prospects.”

Indeed, Ping An’s growth prospects in China are poised for strong growth. According to analysts from Macquarie, profits from Ping An’s main insurance and banking businesses are expected to grow by 64% between 2017 and 2020.

Its net profit for the first nine months of 2018 rose by 20% year-on-year to RMB79.4 billion (US$11.5 billion). The value of new business for its life and health insurance segment grew by 3.2% for the same time period.

“Ping An is the pre-eminent insurance franchise in China and continues to extend its advantage,” according to a recent note by Macquarie.

However, Ma’s statement doesn’t mean that Ping An won’t be making overseas forays. Ping An has made heavy investments in technology in China, and it looks to apply some of these tech developments in neighbouring markets.

“We want to go into Asia Pacific with our healthcare and financial technology, which helps to improve efficiency and control risks,” Ma said. “We’re interested in partnerships with other companies.”

Ping An and its affiliates are focusing on healthcare, having embarked on joint ventures with pharmaceutical firms in Japan and Singapore. It is also reportedly planning to expand into Southeast Asia.

“It took us 10 years to develop our healthcare technology,” Ma said. “It is core technology for us. We hope our disease prevention system can be exported around the world.”

Ma also believes that Ping An can do more in increasing its global profile.

“The international recognition of Ping An is still lacking because we haven’t done enough to promote ourselves,” he said.

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