Ping An, China’s second
largest life insurer, romped home in the first half of 2011,
reporting a net profit of CNY12.998bn ($2bn), up 32.7% compared
with the first of 2010.
In the process, Ping An
thoroughly trounced its larger rival China Life, which limped in
with its net profit in the first half of 2011 down 21.8% to
China Life’s result was
significantly lower than the average of CNY17.6bn forecast by
analysts polled by Dow Jones.
Providing the biggest boost
to Ping An’s results was its banking interests which increased
their net profit contribution by 117%, from CNY1.1bn in the first
half of 2010 to CNY2.4bn.
Ping An’s banking interests,
which comprise a 52.4% stake in the recently merged Ping An Bank
and Shenzhen Development Bank, represent a key element in its
strategy to transform itself from an insurer into an integrated
financial services company.
The bank merger was completed
in July this year and followed Ping An’s acquisition of control of
Shenzhen Development Bank in a share swap involving the insurer’s
90.75% stake in Ping An Bank and its payment of an additional
CNY2.69bn in cash. The total deal was valued at
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Ping An’s insurance
operations also performed well in the first half of 2011,
increasing their net profit by 23.9% to CNY9.46bn.
operations increased their net profit contribution by 1.3% to
CNY1.16bn. Adding further asset management scope, Ping An has just
become the first insurer granted permission to invest in property
and private equity.
Ping An also outperformed
China Life convincingly in terms of life insurance premium income
growth in the first half of 2011.
Specifically, Ping An
reported a 20.9% increase in life premium income to CNY112.83bn
while China Life reported a far lower 6.5% increase in premium
income to CNY187.1bn.
In the first half of 2011, the China Insurance Regulatory
Commission reported that total insurance premium income increased
by 13% to CNY805.66bn. General insurance provided the biggest
boost, rising 16.9% to CNY235.96bn while life premium income came
in 11.5% higher at CNY569.7bn.