Ping An Group
22 Mar 2017

Ping An Records 15.1% Net Profit Growth in Adverse Environment, Dividend Payout Surges

Individual Business Accounted for 65.4% of Total Profit 
Becoming Strong Driver of Organic Growth in Value

(Shanghai, Hong Kong, March 22, 2017) Ping An Insurance (Group) Company of China Ltd. (hereafter “Ping An”, the “Company” or the “Group”, HKEx: 2318; SSE: 601318) today announced its annual results for the year ended December 31, 2016.

In 2016, Ping An kept its growth pace ahead the market. Total income reached RMB774.488 billion, up 11.7% compared to the same period a year earlier; net profit amounted to RMB72.368 billion, up 11.0% year-on-year; net profit attributable to shareholders of the parent company rose by 15.1% year-on-year to RMB62.394 billion. The Company’s assets totaled about RMB5.58 trillion, up 17.0% from the beginning of the year. In addition, its solvency was adequate. In the face of volatility in international financial markets and the slowdown of the domestic financial industry, Ping An has adhered to its established business strategy and maintained its stable and healthy growth, with its individual integrated finance model reflecting greater value and stronger competitiveness.

There are three key indicators to evaluate the value and growth potential of retail business: customer base, the average number of contracts per customer, and the average profit per customer. In its 2016 Annual Report, Ping An disclosed for the first time the individual customer value under the integrated finance business model. As at the end of 2016, the number of individual customers of the Group had reached 131 million, up 20.1% over the beginning of 2016; the number of contracts per customer was 2.21; the profit per customer had increased from RMB289.07 to RMB311.51. As at the end of 2016, the number of life insurance sales agents had risen by 27.7% from the beginning of the year to over 1.10 million, further increasing the Company’s ability to capture new customers and the profit per customer, thereby providing a strong boost to the Company’s individual business. In 2016, net profit from the individual business totaled RMB40,829 million, up 29.5% year-on-year, accounting for 65.4% of the net profit attributable to shareholders of the parent company. The individual business has become a strong driver of the Group’s organic growth in value.

In 2016, the Group’s basic earnings per share stood at RMB3.50 (2015 RMB2.98). The Board of Directors has approved the distribution of a final cash dividend of RMB0.55 (tax inclusive) per share. Together with an interim cash dividend of RMB0.20 (tax inclusive) per share, the total cash dividend for the year reached RMB0.75 per share, up 41.5% compared with last year. The dividend growth rate clearly exceeding the profit growth rate reflects the fact that Ping An’s solvency and cash flow were strong. Since its initial public offering (IPO), the dividend per share has increased ten-fold and the CAGR reached 21.9%.

Ping An’s 2016 major business highlights are as follows:

  • Net profit attributable to shareholders of the parent company rose by 15.1% year-on-year in an adverse environment, CAGR over the past 13 years exceeding 28% ;
  • Dividend per share rose 41.5% year-on-year. Dividend per share increased ten-fold since its IPO; the rate of return on equity (ROE) reached 17.4%, and in nine of the 13 years since its listing, ROE was over 15%; 
  • The number of individual customers reached 131 million. On average, every customer signed 2.21 contracts with Ping An, with the Group’s profit per customer up from RMB289.07 to RMB311.51, showing that customer value is gradually emerging.
  • There were 346 million internet users, 43.4% higher than the number at the beginning of the year. The number of online service items per customer was 1.94.
  • New business value and embedded value of the life insurance business grew strongly, up 32.2% and 10.7% respectively. The number of life insurance sales agents rose by 27.7% from the beginning of the year to over 1.10 million. First-year written premium per agent was RMB7,821 per month, up 8.1% year-on-year. The level of productivity kept increasing.
  • Ping An Property & Casualty’s premium income climbed to RMB177,908 million, continuing to outperform the industry with a combined ratio of 95.9%.
  • The strategic deployment of the internet business is constantly improving: Lufax Holding formed the strategic landscape of “three exchanges (Lufax, CQFAE and QEX) + Puhui”. Ping An Good Doctor provided health management service to 130 million users, with the number of daily inquiries peaking at 440,000.
  • Ping An Bank pushed ahead with its retail strategy. It had 40.4732 million retail customers, up 27.4% from the beginning of the year.
  • The asset management business recorded stable growth with the income from the third-party asset management business hitting a new high.
  • The Company kept growing in scale, with the number of branches and outlets totaling over 5,000. The number of employees and agents exceeded 1.4 million; 1 out of every 1,000 Chinese works for at Ping An.
  2016 Year-on-year Growth 13-year CAGR
Net profit attributable to shareholders of the parent company RMB62,394 million 15.1% 28.4%
Group embedded value RMB637,703 million 15.6% 26.7%
Total assets RMB5,576,903 million 17.0% 28.9%
Equity attributable to shareholders of the parent company RMB383,449 million 14.7% 24.3%
Dividend per share RMB0.75 / share 41.5% 21.9%


Ping An’s strategy: “One Positioning, Two Focuses and Four Service Ecosystems”.

In the Chairman’s Statement, Dr. Peter Ma, Chairman and Chief Executive Officer of Ping An succinctly and clearly explained the Group’s strategies. He stated “In retrospect, over the past 30 years, Ping An has made steady progress year after year. ‘Outstanding teams and well-defined strategies’ are the key to our success. To put it simply, Ping An’s strategy can be summarized as ‘One Positioning, Two Focuses and Four Service Ecosystems’.”

In particular, “One Positioning” implies Ping An is strategically positioned as “a world-leading personal financial services provider”. Focusing on its vast target customer group in which the middle class predominates, Ping An actively explores the retail market, personal consumer market and personal financial service market. The personal retail business is relatively stable, as customer needs are hardly affected by business cycles and market fluctuations. “Two Focuses” means Ping An focuses on pan financial assets and pan health care. During the past decade, we have remained committed to this strategic focus, concentrating our resources on pan financial assets and pan health care, and have built differentiated platforms to increase our competitiveness.  In terms of “Four Service Ecosystems”, Ping An delivers financial services revolving around “health, food, housing, and transportation” to address market needs. By integrating daily life services seamlessly with financial services via application of internet technology and big data, Ping An has created new development models for modern finance, and provides customers with convenient, professional and differentiated financial services.

Regarding the value growth brought about by Ping An’s strategy, Dr. Peter Ma stated that, in assessing both the current value and growth potential of retail finance companies, three key indicators of notable concern are: customer base, the average number of contracts per customer, and the average profit per customer. As a personal financial services provider, Ping An’s value is reflected in the sustainable rapid growth in all these three indicators.

The report shows that, the numbers of users and customers sustained rapid growth in the past few years, more and more users of Ping An’s internet products have become our financial customers, the number of Ping An’s products held by both internet users and financial customers have continued to rise, and the profit per customer too has increased steadily. We have adhered to the integrated finance model of “one customer, multiple products, and one-stop service” for nearly two decades. For customers, this model makes services more convenient and more efficient, providing them with greater value. For the Company, by virtue of cross-selling among different products and services, we achieve better customer experience and lower costs of customer acquisition, management and development. At the same time, the customer retention rate, loyalty and satisfaction degrees improve alongside the competitive edge of the Company. The rapid growth of the three main indicators prove that Ping An’s growth model has begun to yield great results.

Rapid increases in numbers of individual customers and internet users of the Group, with steady growth of customer value

During the year, the number of individual customers of the Group grew rapidly, with 379 million people served by the Group in total. Following continuous enhancements to its channel management and improvements of its customer experience, the total number of individual customers reached 131 million as at the end of 2016, up 20.1% compared to the beginning of the year. In 2016, the number of new customers acquired was 38.42 million, up 25.0% year-on-year. The number of customers acquired via the agency channel through the “Jin Guan Jia” app was 4.25 million. The internet channel gradually took shape. In 2016, the number of new customers acquired via the internet channel was 8.57 million, representing 22.3% of all the new customers for the whole year. The internet channel has become a key driver of customer development.

As at the end of 2016, the number of internet users accumulated via various services reached 346 million, while that of app users reached 233 million. 69.05 million users migrated among internet platforms, up 31.0% year-on-year. On average, each internet user accessed 1.94 online services of Ping An, up 16.2% from the beginning of the year. User activity improved steadily. In 2016, the Company boasted 61.99 million monthly active users, up 42.3% year-on-year. Highly active users accounted for 19.1% for the year. User stickiness continued to improve.

In 2016, the customer value increased steadily. Profit per customer climbed to RMB311.51, up 7.8% year-on-year. Ping An continued to push customer migration among its core finance companies. In 2016, 31.50 million customers held multiple contracts from different subsidiaries, accounting 24.0% of all the customers. The number of contracts held by each customer on average rose by 8.9% from the beginning of the year to 2.21. During the year, cross-selling of the insurance business produced remarkable results. New premiums of Ping An Property & Casualty, Ping An Annuity and Ping An Health achieved via the agency channel jumped by 16.1% year-on-year to RMB34,394 million.

With its vast customer base, Ping An continued to enhance its big data analytic technologies and customer data mining so that its understanding of customers continually improved. 70.6% of the Group’s customers were in East China, South China and North China, regions that are economically developed. Customers were mainly young, having an average age of only 38.1, 5.3 years lower than the social average. 39.2% of them graduated from junior colleges or higher-level institutions. It was also found that the wealthier they were, the more Ping An contracts they held, and the greater their value. In 2016, the Group had 81.79 million customers of middle class or higher wealth status, 62.4% of the total. On average, each HNW held 10.63 contracts, much more than affluent customers. Through long-term customer development, Ping An has built ties of recognition and mutual trust with customers. The longer a customer had been with Ping An, the more contracts he/she would hold. For example, customers of five years or longer held 2.46 contracts on average, 59.7% higher than those customers who had been with Ping An for a year or less.

Core Finance Businesses: new business value of life insurance business surged by 32.2%; retail banking business grew steadily; revenue from third-party asset management hit record high

In 2016, the insurance business recorded RMB34,681 million in net profit attributable to shareholders of the parent company, accounting for 55.6% of the Group’s net profit. As at the end of 2016, the number of life insurance sales agents rose by 27.7% from the beginning of the year to over 1.10 million, hitting a new high. Agent productivity steadily increased, with the first year written premium per agent per month growing by 8.1% year-on-year to RMB7,821; the telemarketing channel continued to grow rapidly with written premiums increasing by 29.8% year-on-year to RMB16,868 million, ranking first by market share in the industry. In the internet channel, Ping An Life takes advantage of the “Jin Guan Jia” app and the Group’s online resources to pursue an O2O business model, precisely targeting customer demand, and maintaining a comprehensive, diversified product mix. The internet channel achieved RMB5,325 million in written premiums in 2016. Thanks to the joint development of different channels such as sales agents, bancassurance, telemarketing and the internet, the life insurance business realized RMB50,805 million in new business value, up 32.2% year-on-year. Ping An Life realized RMB24,444 million in net profit, and RMB355,274 million in written premium, up 25.3% year-on-year.

Ping An Property & Casualty outpaced its major peers in China by customer satisfaction, and reinforced its competitive strength as China’s “No. 1 brand” of auto insurance and property and casualty insurance. In 2016, Ping An Property & Casualty recorded premium income of RMB177,908 million, up 8.7% over the previous year. The premium income of auto insurance grew by 13.4% year-on-year to RMB148,501 million; cross-selling, telemarketing and online channels generated premiums of RMB81,725 million, up 8.3% year-on-year. It maintained sound profitability with a combined ratio of 95.9%. As at December 31, 2016, over 17.74 million customers had linked their auto use with the “Ping An Auto Owner” app, which ranked first in the auto aftermarket by the number of monthly active users.

As at December 31, 2016, Ping An Annuity had a total of RMB440,094 million in assets under management (AUM) including entrusted corporate annuities, corporate annuities under investment management, basic pension funds and other AUM, maintaining the leadership among domestic specialized pension insurance companies. During the year, its short-term and long-term insurance business scales grew to RMB15,684 million and RMB9,134 million respectively, with leading market shares in the industry.

In 2016, the net investment yield of our investment portfolio of insurance funds rose by 23.9% year-on-year, thanks to the growth in yields of fixed-income investments and dividend of equity investments. The net investment yield climbed by 0.2 percentage point to 6.0%, as the Company improved asset allocation by forward-looking investment in high-quality fixed-income assets and preferred shares and dynamic management of equity investments.

Ping An Bank maintained stable profitability by recording a net profit of RMB22,599 million and revenue of RMB107,715 million in 2016. Its business scale grew steadily, while deposits, and loans and advances increased by 10.8% and 21.4% respectively from the beginning of the year. Ping An Bank deepened the reform of its retail business unit, and sped up to forge smart retail bank with the features of Ping An. As at the end of the reporting period, Ping An Bank boasted 40.4732 million retail customers, up 27.4% from the beginning of the year. The total number of credit card holders was 22.74 million, rising by 29.8% from the beginning of the year. The transaction volume of credit cards grew by 38.9% year-on-year to RMB1,121,100 million. Due to business growth, Ping An Bank’s retail business generated a net profit after tax of RMB9,315 million, a 147.2% jump year-on-year.

Ping An Trust steadily implemented its strategic plan, and achieved safe, steady and healthy growth. As at December 31, 2016, Ping An Trust recorded assets held in trust of RMB677,221 million, up 21.3% from the end of 2015. In 2016, as a result of market volatility and declined brokerage volumes, the securities industry suffered a decrease of 49.6% in net profit compared with a year earlier. Ping An Securities continued to pursue its strategic transformation and build its differentiation advantages, outperforming the industry with a year-on-year decrease of 10.6% in net profit. Its rating given by the CSRC was raised three notches back to A in 2016. During the year, Ping An Asset Management realized net profits of RMB2,221 million. As at December 31, 2016, the AUM amounted to RMB2,259,435 million, up 14.9% from the end of 2015. Of these, third-party AUM had reached RMB280,035 million, up 14.0% compared with the end of 2015. Third-party asset management fees income was RMB2,054 million, up 47.9% from a year earlier, hitting a record high.

Internet Finance Business: Lufax Holding formed the “three exchanges (Lufax, CQFAE and QEX) + Puhui” landscape; Ping An Good Doctor’s valuation hit USD3 billion.

In terms of the internet finance business, the Group made continuous efforts to deepen the internet finance strategy, explore new internet business models and build open internet platforms. In 2016, Lufax Holding completed restructuring with Puhui Financial and CQFAE, and hence the landscape of “three exchanges (Lufax, CQFAE and QEX) + Puhui” took shape, boasting a comprehensive business coverage in wealth management, institutional trading of financial assets, and consumer finance. In 2016, Lufax Holding completed its B-round financing of USD1.2 billion, which brought its valuation to USD18.5 billion. As at December 31, 2016, the number of registered users of Lufax totaled 28.38 million, representing an increase of 55.0% compared with the end of 2015. The number of active investor users soared by 103.9% from the end of 2015 to 7.4 million. In 2016, the number of new investors grew by 33.3% year-on-year to 4.45 million. Assets traded on Lufax maintained rapid growth. The trading volume of retail channels surged by 137.5% year-on-year to RMB1,535,163 million. End-of-period retail AUM jumped by 74.7% from the end of 2015 to RMB438,379 million, continuing to lead the industry. Among retail channels, the app for mobiles contributed over 82% of all retail transactions. Lufax has become a convenient wealth management platform preferred by internet users.

Ping An Good Doctor completed A-round financing of USD500 million, and its valuation hit USD3,000 million. As at the end of 2016, Ping An Good Doctor had built a medical team of about 1,000 members. More than 60,000 contracted external doctors provide follow-up advice. Registration with about 2,300 hospitals is available on the app, which has also been in cooperation with over 700 checkup institutions in 150 plus cities nationwide. It has provided health management services to 130 million users, with the number of monthly active users exceeding 26.25 million and the peak number of daily inquiries hitting 440,000.

Finance One Account, committed to providing comprehensive services to individuals and institutions, stepped up efforts to develop an open platform in the ecosystem for serving financial institutions. As at the end of 2016, the Finance One Account platform had 185 million users, up 78.0% from the beginning of the year, in which the number of monthly active users soared by 62.7% year-on-year and exceeded 30 million. Financial products saw migration of 7.59 million person times, jumping 792.9% year-on-year. It cooperated with 258 banks and 1,135 non-banking financial and quasi-financial institutions. The interbank trading volume exceeded RMB1 trillion. With over 360 million credit inquiries, its credit reference system has become an effective supplement to the PBoC’s Credit Reference Center.

Wanjia Healthcare, engaged in improving grassroots medical institutions’ operating and management capabilities, aims to be China’s No.1 platform integrating a chain of healthcare services. It leads the industry with 16,575 clinics available on its platform. Wanjia Healthcare pushed ahead with the development and launch of its cloud clinic system.

Aiming to become China’s largest open platform for managed care services, Ping An Healthcare Management Co., Ltd. has developed the City One Account platform. As at the end of 2016, the platform covered about 60% of cities and a population of 500 million nationwide. It provides 200 plus cities in over 20 provinces with comprehensive services of social healthcare insurance (SHI) services, cost control, social security account management and health records.

At the end of 2016, E-wallet had 76,812,000 registered users, in which the number of monthly active users exceeded 6.5 million, and the number of annual active users hit 20.6825 million. The total transaction volume grew by 75.9% year-on-year to RMB2,803,913 million, in which the app generated RMB2,082,876 million, up 95.7% from 2015.

Dr. Peter Ma said, “In 2017, complexities will remain in the global economy, with on-going downward pressure on China’s economy. Thus, it is a key task for China to stabilize economic growth. Because of fast-developing new technologies enabled by the internet, nearly all traditional industries including finance will face tremendous changes. Against this backdrop, Ping An will insist on diversified development, center on integrated financial services for ‘one customer, multiple products and one-stop services’, and make unremitting efforts to become a world-leading personal financial services provider. By providing more and more customers with simple and optimum services, the Company aims to prove that ‘expertise makes life easier’.”

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