Ping An Reports Steady Growth of 3.8% in Operating Profit Attributable to Shareholders of Parent Company in 9M 2022

HONG KONG and SHANGHAI, Oct. 26, 2022 /PRNewswire/ -- Ping An Insurance (Group) Company of China, Ltd. (hereafter "Ping An" or the "Group", HKEx:2318; SSE:601318) today announced its results for the nine months ended 30 September 2022.

Global capital markets remained volatile in a complex, challenging international environment in the third quarter of 2022. Domestic economic growth faced three headwinds, namely declining demand, supply chain disruption, and weakening confidence amid sporadic COVID-19 outbreaks. Household consumption recovery still faced many challenges, which continued to have an impact on Ping An's long-term protection insurance business. Facing challenges, Ping An pressed firmly ahead with Ping An Life's quality-oriented reform and transformation, continuously strengthened the advantages of integrated finance, and built the "managed care model", thereby providing customers with a "worry-free, time-saving, and money-saving" experience. Ping An delivered a 19.9% annualized operating ROE, with operating profit attributable to shareholders of the parent company rising 3.8% year on year to RMB123,288 million in the first nine months of 2022. Net profit attributable to shareholders of the parent company decreased 6.3% year on year to RMB76,463 million.

Top business highlights in 9M 2022

1. Operating profit maintained steady growth. Ping An achieved stable and healthy business results thanks to the "integrated finance + healthcare" strategy. The Group delivered a 19.9% annualized operating ROE, with operating profit attributable to shareholders of the parent company rising 3.8% year on year to RMB123,288 million in the first nine months of 2022.
   
   
2. The integrated financial services model continued to progress steadily. The Group's retail customers increased 2.6% in the period to nearly 228 million as of September 30, 2022. Contracts per customer grew 1.7% in the period to 2.96. As the Group's retail cross-selling continued to deepen, nearly 40% of retail customers held multiple contracts with different subsidiaries. Ping An Life continued to advance the "channel + product" reform and NBV per agent grew more than 22% year on year. Operating profit of the life and health insurance business rose 17.4% year on year to RMB86,486 million in the first nine months of 2022; Ping An P&C's premium income increased 11.4% year on year to RMB222,024 million in the first nine months of 2022. Combined ratio remained healthy at 97.9% in the first nine months of 2022; Ping An Bank's revenue grew 8.7% year on year to RMB138,265 million and net profit rose 25.8% year on year to RMB36,659 million in the first nine months of 2022. Non-performing loan ratio and provision coverage ratio was 1.03% and 290.27%, respectively, as of September 30, 2022, indicating adequate risk provisions. 
   
   
3. Ping An continued to develop a Chinese version of the "managed care model". In response to the "Healthy China" strategy, Ping An seamlessly combined differentiated healthcare services with its financial businesses, in which Ping An acts as a payer by building a world-leading healthcare ecosystem. The Group empowered its main financial businesses by providing one-stop "worry-free, time-saving, and money-saving" healthcare services for customers. Over 146 million retail customers of Ping An Group used services from the healthcare ecosystem as of September 30, 2022. Ping An Life provided approximately 16.44 million customers with "insurance + health management" services in the first nine months of 2022, with an overall service satisfaction rate of 99%.
   
   
4. Ping An continued to empower main financial businesses with technologies. The amount of services provided by AI service representatives exceeded 1.96 billion times in the first nine months of 2022, representing 82% of Ping An's total customer service volume. Sales realized by AI service representatives increased 46% year on year to approximately RMB274.7 billion in the first nine months of 2022. Ping An's technology patent applications increased by 6,544 in the period to 44,964 as of September 30, 2022, more than most other international financial institutions'.
   
   
5. Ping An fully supported development of the real economy. Using a combination of insurance funds, bank credit and asset management, and other financial resources, the Group invested over RMB5.9 trillion to support the real economy as of September 30, 2022. Ping An's green investment and financing, and green banking business totaled approximately RMB319.8 billion and RMB184.2 billion, respectively, as of September 30, 2022. With a "people-centered" approach to development, Ping An's insurance business has handled more than 558.6 million claims over the past ten years, since the 18th National Congress, with a claim amount of RMB1,506.8 billion. Through the "Ping An Rural Communities Support" program, Ping An cumulatively provided nearly RMB50,000 million for poverty alleviation and industrial revitalization as of September 30, 2022.

In addition, the Board of Directors held a meeting on 26 October, 2022 and resolved to appoint Ms. Zhang Zhichun ("Ms. Zhang") as the chief financial officer (Financial Director) of the Group. The appointment shall become effective upon the China Banking and Insurance Regulatory Commission's approval. Mr. Yao Jason Bo will cease to be the chief financial officer (Financial Director) of the Group and will continue to serve as the Executive Director, Co-Chief Executive Officer and Executive Vice President of the Group. According to the announcement, Ms. Zhang joined Ping An in 1998 and served as head of finance, planning, and investment for Ping An Group and Ping An Property & Casualty (Ping An P&C). She has excellent financial, planning and actuarial expertise, as well as extensive experience in business and management.

Ping An Life continued to strengthen its reform and transformation. Ping An P&C, Ping An Bank, and the asset management business maintained stable growth.

Reform of life insurance business is advancing and showing results steadily. China's life insurance sector faced many internal and external challenges due to domestic sporadic COVID-19 outbreaks and complex, changing economic circumstances in the first nine months of 2022. Despite the challenges, Ping An Life continued to advance the "channel + product" reform under the value-oriented philosophy, promoting the high-quality development of multiple channels and developing specialized products and services. Operating profit of the life and health insurance business rose 17.4% year on year to RMB86,486 million in the first nine months of 2022. NBV of Life & Health fell 26.6% year on year to RMB25,848 million in the first nine months of 2022. If the NBV for the first nine months of 2021 were restated using the assumptions and method employed at the end of 2021, the NBV of L&H for the first nine months of 2022 would decline 18.9% year on year. Business quality continued to improve, with 13-month persistency ratio of insurance policies up year on year.

In respect of channels, Ping An Life refined the tiered management of its agent force to optimize the team structure. The proportion of agents with a college education background and above rose by 4.0 pps year on year as of September 30, 2022. Team productivity continued to rise as NBV per agent grew more than 22% year on year. Ping An Life implemented "Talent+" to upgrade and tighten agent recruitment, aiming to gradually raise the proportion of high-quality new agents through high-quality existing ones. The proportion of "Talent +" new agents increased by 10.3 pps year on year in the first nine months of 2022. First year premium per Diamond Agent was 4.8 times the average of all agents in the first nine months of 2022. Ping An Life is steadily advancing the reform of digital business outlets, and will gradually roll out the reform nationwide in late 2022. Ping An Life deepened its cooperation with Ping An Bank which is developing a team of high-quality Private Wealth Advisers for bancassurance business. More than 1,000 Private Wealth Advisers have been recruited, over 90% of whom have a bachelor's degree. Continuing to improve the bancassurance product suite to meet customer demands, Ping An Life launched "Yu Xiang Nian Nian," a whole life insurance product featuring a growing sum assured, in the third quarter of 2022. This product has proved popular with customers. Ping An Life successfully piloted Community Grid in 25 cities and built a team of over 4,000 high-quality specialists as of September 30, 2022. The 13-month persistency ratio of "orphan policies" in pilot cities improved by over 17 pps year on year. In addition, Ping An Life continued to explore an innovative model leveraging insurance consumption scenarios in lower-tier markets.

In respect of products, Ping An Life increased the supply of competitive products to unlock customer demands under the philosophy of "developing heartwarming insurance." Moreover, Ping An Life created differentiation advantages with three core services, namely "insurance + health management," "insurance + home-based elderlycare," and "insurance + high-end elderlycare," by leveraging the Group's healthcare ecosystem. In respect of "insurance + health management," Ping An Life had served approximately 16.44 million customers in the first nine months of 2022, with an overall service satisfaction rate of 99%. In respect of "insurance + home-based elderlycare," Ping An integrates internal and external service providers to offer one-stop, home-based elderlycare solutions through its AI concierges, life concierges and doctor concierges, making the elderly comfortable and their children worry-free. Ping An's home-based elderlycare services had covered 32 cities across China as of September 30, 2022. In respect of "insurance + high-end elderlycare," Ping An provides solutions under the principle of "prime life, exclusive services, and respectful care" to meet the growing high-quality elderlycare demand in China and develop the high-quality elderlycare market. Ping An held a groundbreaking ceremony to start the construction of its first "Yi Nian Cheng" community in Shekou on July 25, 2022.

Ping An P&C maintained good business quality with steady growth in its written premium. Ping An P&C's premium income increased 11.4% year on year to RMB222,024 million in the first nine months of 2022. Combined ratio remained healthy at 97.9% in the first nine months of 2022 due to robust business management and risk screening. Ping An P&C proactively applies technologies to data-driven online operations and services. "Ping An Auto Owner," the largest automotive service app in China, had over 166 million registered users as of September 30, 2022, with over 100 million vehicles linked to the app. Ping An P&C's pioneering video-based auto insurance claim investigations take only 5 minutes on average. Through various online claims services, 93.2% of auto insurance claim payments were made within one hour in the first nine months of 2022.

Ping An Bank maintained stable business growth and asset quality. Revenue grew 8.7% year on year to RMB138,265 million and net profit rose 25.8% year on year to RMB36,659 million in the first nine months of 2022. Ping An Bank's net interest margin in the first nine months of 2022 was 2.77%, down by 0.04 pps year on year. Non-performing loan ratio rose slightly by 0.01 pps in the period to 1.03%, and provision coverage ratio was 290.27% as of September 30, 2022, indicating adequate risk provisions. Ping An Bank further advanced its retail business transformation, provided professional financial services to a wide range of customer segments through technology, promoted consumption and boosted financial inclusion. Ping An Bank continued to enhance corporate banking business by focusing on strategic industries such as manufacturing, SRDI (specialized, refined, differentiated, innovative) enterprises, and new infrastructure, starting with the industrial chain and supply chain, and injecting financial resources efficiently into the operation of real economy. Ping An Bank's retail assets under management ("AUM") rose 11.0% in the period to RMB3,532,560 million as of September 30, 2022. Retail customers increased 5.1% in the period to approximately 124,211,500, among which wealth management customers increased 12.2% in the period to approximately 1,234,100. The number of corporate customers increased by 16.1% in the period to approximately 592,800 as of September 30, 2022 and the balance of corporate loans grew 12.5% in the period to RMB1,297,461 million as of September 30, 2022.

The Company continued to improve the asset-liability matching of insurance funds. Investment income on the Group's investment portfolio of insurance funds was under pressure due to volatile capital markets in the first nine months of 2022. The annualized net investment yield was 4.2%, and the annualized total investment yield was 2.7%. Ping An is committed to creating stable investment income across macroeconomic cycles and meeting liability needs under a liability-driven approach, taking solvency as a core metric. The Group's insurance fund investment portfolio grew 9.6% in the period to over RMB4.29 trillion as of September 30, 2022.

Ping An enhanced healthcare ecosystem rapidly and built healthcare as a new driver of value growth

Ping An continued to implement its healthcare ecosystem strategy. Acting as a payer, Ping An launched an innovative Chinese version of the "managed care model" to integrate market providers specializing in medical, health management, and elderlycare services. Ping An offers one-stop "worry-free, time-saving, and money-saving" services covering health, chronic disease, disease and elderlycare management via its world-leading healthcare ecosystem.

In respect of payers, Ping An advanced the research and development of relevant products by effectively integrating insurance and healthcare services. The cumulative number of paying retail users approached 100 million as of September 30, 2022. Moreover, Ping An constantly improved employee health management service programs for corporate customers, covering over 20 million employees of over 47,000 corporate customers in the first nine months of 2022. The Group achieved over RMB110 billion in health insurance premium income in the first nine months of 2022.

In respect of providers: Online, Ping An Health provides healthcare services through its dedicated family doctors to guide customers through end-to-end services (from consultation, diagnosis, treatment to other services) in Ping An's "online, in-store, and home-delivered" service network, realizing 24/7 seconds-level management. Currently, Ping An has a team of nearly 4,000 in-house doctors. Offline, Ping An invests in service capabilities through general hospitals, checkup centers, and imaging centers. Through participation in the restructuring of Founder Group, Ping An enhanced its presence in the healthcare industry by integrating PKU Healthcare's excellent resources into Ping An's existing healthcare ecosystem. These resources include five general hospitals and six specialty medical institutions. In addition to hospitals, Ping An also had 14 health management centers as of September 30, 2022. Ping An integrates excellent resources in China and abroad to provide "online, in-store, and home-delivered" services online and offline, covering five scenarios, namely health, sub-health, disease, chronic disease, and elderlycare management. Ping An had over 50,000 in-house doctors and contracted external doctors, and had partnered with over 10,000 hospitals in China as of September 30, 2022. Moreover, Ping An had partnered with over 1,000 overseas medical institutions in 16 countries across the world as of September 30, 2022.

Ping An Health is an integral part of the Group's "managed care model." With the abundant healthcare management experience and databases over the years, as well as the advanced management platforms and technologies, Ping An Health mobilizes vast full-scenario service resources to reach large numbers of retail users and corporate clients. Leveraging family doctor services and O2O service networks, Ping An Health developed an online-merge-offline healthcare service platform catering to the management of health, sub-health, disease, chronic disease, and elderlycare. Ping An Health is committed to providing users with specialized, comprehensive, high-quality and one-stop health management services.

Ping An continued to strengthen its core technological capabilities to empower its main financial businesses. Ping An's technology patent applications increased by 6,544 in the period to 44,964 as of September 30, 2022, more than most other international financial institutions'. Of the technology patent applications, nearly 94% were for inventions, and 9,333 were made under the Patent Cooperation Treaty (PCT) and abroad. In the first nine months of 2022, the amount of services provided by AI service representatives exceeded 1.96 billion times, accounting for 82% of Ping An's total customer service volume; sales realized by AI service representatives increased 46% year on year to approximately RMB274.7 billion.

Lufax Holding is one of the leading technology-empowered personal financial services platforms in China. In retail credit facilitation, Lufax Holding efficiently connects borrowers with financial resources providers, including banks, trust companies and insurers, on its "Aggregate Model" retail lending platform to provide small and micro-business owners with quick, convenient lending services. In wealth management, Lufax Holding cooperates with financial product providers and builds a technology-powered smart business framework, using AI to match customers with products and providing middle-class and affluent investors with diverse customized offerings.

OneConnect is a technology-as-a-service provider for financial institutions. It provides clients with "full stack" integrated products, including Digital Banking, Digital Insurance, and Gamma Platform, which offers fintech infrastructure services. OneConnect facilitates the digital transformation of the financial services ecosystem, and provides governments, regulators and enterprises with technological services relating to trade, supply chains, data security, risk management and so on.

Autohome, China's leading online auto services platform, is dedicated to developing a smart auto ecosystem centering on data and technology. In the ecosystem, Autohome provides auto consumers with diverse products and services across the entire auto lifecycle. Autohome continuously upgrades its "ecosystem strategy," and provides comprehensive services for consumers, automakers and various players in the auto ecosystem.

Ping An further advanced its green finance initiative to support the real economy. Ping An cumulatively invested over RMB5.9 trillion to support the real economy as of September 30, 2022. Such investments covered major infrastructure projects, including energy, transportation and water conservancy, safeguarding national strategies including the "Belt and Road" and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area. Ping An's green investment and financing, and green banking business totaled approximately RMB319.8 billion and RMB184.2 billion respectively as of September 30, 2022. Premium income of environmentally sustainable insurance products totaled approximately RMB110.5 billion in the first nine months of 2022.

The Chinese economy generally stabilized and recovered in the first nine months of 2022 due to strengthened macroeconomic policies. Looking ahead, China's economic fundamentals will remain positive in the long run, with strong potential and favorable conditions for the development of financial and healthcare industries. Ping An said, the Group will study and implement the guiding principles of the 20th National Congress of the Communist Party of China, uphold China's new development philosophy at the new development stage, keep in mind its mission to give back to society and serve the nation. Remaining "people-centered," Ping An pursues development by serving the real economy, continuously improving the quality and efficiency of services for the real economy. Under the technology-driven "integrated finance + healthcare" strategy, Ping An continuously explores innovations for financial inclusion, and makes every effort to maintain economic and financial security. By doing so, Ping An vigorously pursues high-quality development and contributes to the great rejuvenation of the Chinese nation.

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