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Ping An's NBV up 45% YoY in the first half of 2023, interim cash dividend per share grows to RMB0.93By PRNEWSWIRE
Published : Aug. 29, 2023 - 20:20
HONG KONG and SHANGHAI, Aug. 29, 2023 /PRNewswire/ -- Ping An Insurance (Group) Company of China, Ltd. (hereafter "Ping An", the "Company" or the "Group", HKEX: 2318; SSE: 601318) today announced its 2023 interim results for the six month period ended 30 June 2023.
The external environment remained complex and China's economy was generally stable in the first half of 2023. However, market confidence still needed to be continuously boosted. Amid internal and external complexities and uncertainties, Ping An followed the spirit of the 20th National Congress of CPC and adhered to the original aspiration of being people-centered. Under the leadership of the Board of Directors and in response to the financial consumption needs of the new era, Ping An has integrated its services into insurance, investment and wealth management, healthcare and elderlycare services scenarios, boosting domestic demand and consumption while simultaneously serving hundreds of millions of consumers through its integrated finance one-stop service model. With the continuous advancement of life insurance reform and the construction of the healthcare ecosystem, Ping An deeply implemented the new concept of high-quality development. The Group continuously improved its capability and level of financial services for the real economy and the protection of people's livelihoods. Furthermore, Ping An strengthened technological support and digital empowerment, comprehensively managed risks, optimized portfolios, and increased cost-effectiveness to ensure the long-term sustainable and sound operation of the Company.
Overall operating results remain solid. Ping An delivered an 18.2% annualized operating ROE, with operating profit and net profit attributable to shareholders of the parent company reaching RMB81,957 million and RMB 69,841 million, respectively, in the first half of 2023. The Group's basic operating earnings per share reached RMB4.63 in the first half of 2023. Ping An attaches importance to shareholder returns, and interim cash dividend per share continued to grow to RMB0.93, up 1.1% year on year. Life insurance reform showed significant results. Thanks to the Group's unwavering life insurance reform and innovation in the past 3 years, as well as the stabilization and improvement in market demand, Life & Health NBV amounted to RMB25,960 million in the first half of 2023, up 45.0% on a like-for-like basis year on year. In the agent channel, productivity strongly improved with NBV per agent rising 94.3% year on year. Bancassurance channel NBV also increased sharply by 174.7% year on year on a like-for-like basis to RMB2,825 million in the first half of 2023, mainly benefiting from the deepening exclusive agency model with Ping An Bank. Ping An continuously developed its "integrated finance + healthcare" strategy. Retail customers exceeded 229 million as of June 30, 2023, and contracts per customer grew 0.7% from the beginning of the year to 2.99. Over 90.71 million retail customers held multiple contracts with different subsidiaries and 29.7% of the Group's new retail customers were acquired from its healthcare ecosystem as of June 30, 2023. Customers entitled to "insurance + service" benefits accounted for over 68% of Ping An Life's NBV in the first half of 2023.
Top business highlights in 1H2023
- Continuously growing cash dividends amid steady business results. The Group delivered an 18.2% annualized operating ROE, with operating profit attributable to shareholders of the parent company reaching RMB81,957 million in the first half of 2023. Ping An attaches importance to shareholder returns, and interim cash dividend per share continued to grow to RMB0.93, up 1.1% year on year.
- Ping An continuously develops its integrated finance model. Retail customers exceeded 229 million as of June 30, 2023, and contracts per customer grew 0.7% from the beginning of the year to 2.99. Retail business accounted for 83.4% of total operating profit attributable to shareholders of the parent company.
- NBV jumped year on year and life insurance reform showed results. Life & Health NBV amounted to RMB25,960 million in the first half of 2023. On a like-for-like basis, NBV grew 45.0% year on year in the first half of 2023, with NBV of the agent channel and the bancassurance channel increasing 43.0% and 174.7%, respectively, year on year.
- Ping An Property and Casualty ("Ping An P&C") boosted insurance revenue steadily and maintained good business quality. Insurance revenue grew 7.8% year on year to RMB155,899 million in the first half of 2023. Overall underwriting combined ratio remained healthy at 98.0% due to strengthened business management and risk screening.
- Ping An Bank achieved double-digit growth in net profit and maintained solid overall asset quality. Net profit grew 14.9% year on year to RMB25,387 million in the first half of 2023. Non-performing loan ratio declined by 0.02 pps from the beginning of the year to 1.03% and provision coverage ratio rose by 1.23 pps from the beginning of the year to 291.51% as of June 30, 2023.
- Ping An continued to implement its healthcare ecosystem strategy to empower its core financial businesses. Through integration of providers, Ping An partnered with all top 100 hospitals and 3A hospitals, and had nearly 4,000 in-house doctors and over 50,000 contracted external doctors in China as of June 30, 2023. Ping An partnered with approximately 226,000 pharmacies in China as of June 30, 2023, up by nearly 2,000 from the beginning of the year. Customers entitled to "Insurance + service" benefits accounted for over 68% of Ping An Life's NBV in the first half of 2023.
- Ping An supported the real economy and advanced green finance initiatives. Ping An cumulatively invested over RMB8.27 trillion as of June 30, 2023 to support the real economy. Green investment of insurance funds and green loan balance totaled RMB140,929 million and RMB134,926 million, respectively, as of June 30, 2023. Green insurance premium income amounted to RMB17,735 million in the first half of 2023.
- Ping An maintained its leadership in brand value. In 2023, Ping An ranked 33rd in the Fortune Global 500 list (1st among global insurers again and 5th among global financial services companies), 9th in the Fortune China 500 list, 16th in the Forbes Global 2000 list, and 1st in the Brand Finance Insurance 100 list in relation to global insurance brand value for the 7th consecutive year.
Unique advantages under the integrated finance model continually drove the core financial businesses
Focusing on the development of retail customers under a customer-centric philosophy, Ping An steadily optimized its integrated finance strategy. Ping An's retail operating profit was RMB68,355 million in the first half of 2023, accounting for 83.4% of its operating profit attributable to shareholders of the parent company. 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. Ping An's retail customers exceeded 229 million as of June 30, 2023, up 1.2% from the beginning of the year. Contracts per retail customer grew to 2.99, up 0.7% from the beginning of the year. Over 90.71 million retail customers held multiple contracts with different subsidiaries.
The retail finance market in China has long-term high growth potential with the strong growth rate of the wealth management market and the huge growth potential of the retail insurance market. Ping An provided customers with insurance, banking, investment, elderlycare and healthcare services leveraging the advantages of Ping An's full suite of financial business licenses. Ping An offered customers with heartwarming products and services based on in-depth, comprehensive customer insights. The Group built a robust ecosystem-based service capability and strong technology platform capabilities to promote customer migrations within the Group. Customer acquisition cost of integrated finance channels is lower than that of external channels. Approximately 12.04 million customer migrations occurred within the Group in the first half of 2023. Integrated finance continued to make contributions to the Company's insurance businesses and Ping An Bank's retail business in the first half of 2023. The wealthier the customers are, the more contracts they hold. Middle-class and above customers accounted for more than 75.7% of the Group's total retail customers as of June 30, 2023. High-net-worth individuals held 21.44 contracts per customer as of June 30, 2023. Customers holding multiple contracts show greater stickiness. 26% of our customers held four or more contracts within the Group as of June 30, 2023, and their churn rate was only 0.91%.
Ping An Life advanced the "4 channels + 3 products" strategy and the reform showed significant results. Ping An Life achieved steady business development thanks to comprehensive advancement in channels, improved business quality, and diverse products and services launched. China's macro economy resumed an upward trend in the first half of 2023 as market demand recovered gradually. Life & Health NBV amounted to RMB25,960 million in the first half of 2023. On a like-for-like basis, NBV grew 45.0% year on year in the first half of 2023. Business quality continued to improve. Ping An Life recorded a material improvement in its persistency ratios with the 13-month persistency ratio rising 2.1 pps year on year and 25-month persistency ratio rising 7.0 pps year on year in the first half of 2023.
Ping An Life realized comprehensive advancement in channels. Ping An Life facilitated the high-quality transformation of the agent channel. The agent channel's NBV grew 43.0% on a like-for-like basis year on year to RMB21,303 million in the first half of 2023. Productivity strongly improved with NBV per agent rising 94.3% year on year. The proportion of "Talent +" new agents increased by 25 pps year on year in the first half of 2023. Ping An Life has achieved a jump in value growth by furthering the strategic transformation of the bancassurance channel, boosting the channel's NBV by 174.7% year on year on a like-for-like basis to RMB2,825 million in the first half of 2023. Ping An Life furthered the exclusive agency model with Ping An Bank, and helped Ping An Bank build a team of over 2,000 professional Private Wealth Advisers. Ping An Life has successfully rolled out Community Grid in 51 cities and 13-month policy persistency ratio of "retained customers" improved by 5.7 pps year on year. In respect of the lower-tier channel, Ping An Life continuously promoted sales via the lower-tier channel in seven provinces in the first half of 2023. By upgrading its insurance product portfolio, Ping An Life penetrates wealth management and pension insurance markets by focusing on wealth management, pension savings and health protection. Leveraging the Group's healthcare ecosystem, Ping An Life improved its three core services, namely healthcare, home-based elderlycare and high-end elderlycare, aiming to build differential advantages under the "insurance + service" framework. Ping An Life served over 16 million customers through health management in the first half of 2023. Nearly 70% of newly enrolled customers used health management services. Ping An's home-based elderlycare services covered 47 cities across China as of June 30, 2023. Over 60,000 customers have qualified for the home-based elderlycare services. Ping An has unveiled high-end elderlycare projects in four cities, namely Shenzhen, Guangzhou, Shanghai and Foshan as of June 30, 2023.
Ping An P&C maintained stable business growth and good business quality. Ping An P&C grew its insurance revenue by 7.8% year on year to RMB155,899 million in the first half of 2023 and delivered a 98.0% overall underwriting combined ratio ("underwriting COR") which included a 97.1% auto insurance underwriting COR. Ping An P&C actively refined operations and overall operations were in steady and healthy good order. Vehicles insured by Ping An P&C increased 5.4% year on year, and auto insurance premium income rose 6.1% year on year to RMB101,348 million in the first half of 2023. Registered users of the "Ping An Auto Owner" app, the largest automotive service app in China, exceeded 186 million as of June 30, 2023, with over 125 million vehicles linked to the app. Ping An P&C scored 94.52 in the Auto Insurance Service Quality Index evaluation by China Banking and Insurance Information Technology Management Co., Ltd., ranking among the top players in the property and casualty insurance industry.
Ping An Bank maintained stable, healthy business performance and solid overall asset quality. Ping An Bank's revenue totaled RMB88,610 million in the first half of 2023. Net profit grew 14.9% year on year to RMB25,387 million, and annualized weighted average ROE rose by 0.45 pps year on year to 12.65% in the first half of 2023. Thanks to continuously strengthened risk management, non-performing loan ratio dropped 0.02 pps from the beginning of the year to 1.03%, and provision coverage ratio increased by 1.23 pps from the beginning of the year to 291.51% as of June 30, 2023. Ping An Bank achieved steady growth in retail business. Retail assets under management (AUM) rose 7.7% from the beginning of the year to RMB3,864,024 million, and retail deposit balance grew 10.9% from the beginning of the year to RMB1,147,481 million as of June 30, 2023. As Ping An Bank continued to strengthen omni-channel customer acquisition and full-scenario business development, "Ping An Pocket Bank" app's registered users increased 4.6% from the beginning of the year to 159,925 thousand as of June 30, 2023.
The Company's insurance funds investment portfolio grew 6.5% from the beginning of the year to nearly RMB4.62 trillion as of June 30, 2023. The Company's insurance funds investment portfolio achieved an annualized comprehensive investment yield of 4.1% in the first half of 2023, up by 0.7 pps year on year. The Company continued to optimize asset-liability matching and tactical allocation, and effectively managed investment risks by strengthening risk review, refining risk limits, and tightening concentration risk management and post-investment management.
Developing healthcare as a new driver of value growth
Currently, the healthcare industry in China has huge growth potential and elderlycare services are in high demand at all levels. Ping An launched an innovative Chinese "managed care model" with its over ten years of operational and management experience in insurance and healthcare industries. Leveraging its online, in-store and home-delivery service capabilities and wide coverage of hundreds of healthcare and elderlycare service resources, Ping An seamlessly combined its online/offline healthcare ecosystem with financial businesses in which Ping An acts as a payer to create a unique business model.
Ping An's healthcare ecosystem continuously empowers its core financial businesses. 29.7% of the Group's new retail customers were acquired from its healthcare ecosystem and customers entitled to service benefits in the healthcare ecosystem accounted for over 68% of Ping An Life's NBV in the first half of 2023. More than 64% of Ping An's over 229 million retail customers had used services from the healthcare ecosystem as of June 30, 2023. They held approximately 3.43 contracts and RMB55,800 in AUM per capita, 1.6 times and 3.2 times those held by non-users of these services respectively.
As a payer, Ping An made significant progress in both retail and corporate customer development by effectively integrating insurance with healthcare and elderlycare services. Ping An's healthcare ecosystem achieved over 33,000 paying corporate clients in the first half of 2023. Ping An Health reached over 45 million paying users over the past 12 months. Ping An achieved over RMB70 billion in health insurance premium income in the first half of 2023. Over 16 million customers of Ping An Life used services from the healthcare ecosystem in the first half of 2023. Notably, nearly 70% of Ping An Life's newly-enrolled customers used the healthcare services in the first half of 2023. As a provider, Ping An had a team of nearly 4,000 in-house doctors and over 50,000 contracted external doctors in China as of June 30, 2023. Ping An had six proprietary 3A/tier-3 hospitals, and partnered with over 10,000 hospitals (including all top 100 hospitals and 3A hospitals), over 100,000 healthcare management institutions and approximately 226,000 pharmacies in China as of June 30, 2023. Ping An enhanced its presence in the healthcare industry by acquiring PKU Healthcare Group and integrating its excellent resources into Ping An's existing healthcare ecosystem. These resources include six 3A/tier-3 hospitals, specialty medical institutions and so on, among which Peking University International Hospital is a flagship hospital.
Ping An empowers its core financial businesses with innovative technologies to improve quality and efficiency. With 49,429 patent applications in total, the Group ranked first globally by the number of both fintech and healthcare patent applications as of June 30, 2023. The digital marketing platform helped agents reach out to customers over 110 million times, and renewal premiums collected via self-service under smart guidance grew 13% year on year to RMB173.4 billion in the first half of 2023. The volume of services provided by AI service representatives reached about 990 million times, accounting for 81% of Ping An's total customer service volume in the first half of 2023. Claims loss reduction via smart risk identification reached RMB6 billion, up 33% year on year. Net profit of the technology business segment amounted to RMB2,308 million in the first half of 2023. While Lufax Holding's net profit decreased year on year, business results at Autohome, Ping An Health and OneConnect improved.
In the second half of 2023, China's macro economy will continue to move forward despite the new challenges such as insufficient domestic demand and pressure on exports. Ping An will continue adhering to the business policy of "focusing on core businesses, increasing cost-effectiveness, optimizing portfolios, and improving policies and procedures" in the second half of 2023. Under the technology-driven "integrated finance + healthcare" strategy, Ping An will remain people-centered and customer needs-oriented, continue to seek synergies from integrated finance by advancing the development and comprehensive digital transformation of healthcare and elderlycare. The Group will improve the quality and efficiency of serving the real economy by boosting domestic demand and consumption. The Group will promote the inner strength potential of core finance, insurance, and healthcare businesses, promote high-quality development, and continuously create solid and sustainable value for customers, employees, shareholders and society.
 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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