Ping An Insurance surprises market with profit report from growth in life and general insurance

Ping An Insurance (Group), China’s largest insurer by market value, reported better-than-expected first-half results as the company wrote more new policies, offsetting weaker profits from asset management and technology-related investments.

The company said net profit rose 6.8 percent to 74.62 billion yuan ($10.5 billion) in the six months to June 30, its best half-year performance in four years, according to a stock exchange filing on Thursday. Analysts had expected a 12 percent decline to 61.7 billion yuan.

The value of new business in Ping An’s life and health insurance businesses, a key indicator of future growth, rose 11 percent to 22.32 billion yuan from a year earlier, it said.

“China’s economy was generally stable, made steady progress, and continued to recover in the first half of 2024 despite short-term challenges,” Chairman Peter Ma Mingzhe said in the filing. “We serve the real economy by developing core financial businesses and pursue high-quality development by promoting digital transformation, thus maintaining solid, resilient performance.”

Ping An’s property and casualty insurance business posted a 7.2 percent jump in net profit to 9.95 billion yuan, while its banking arm earned 1.9 percent more to 25.88 billion yuan, mitigating a 14.7 percent drop in net profit from asset management and a 61.2 percent drop in profit from technology businesses.

The Shenzhen-based insurer has proposed maintaining an interim dividend of 0.93 yuan per share, according to the documents.

China’s attempt to rejuvenate its economy by easing policy is benefiting Ping An Insurance and its peers. Demand for higher yields on investment-linked insurance policies accelerated after the central bank cut interest rates in the first half of the year, hurting interest income from deposits.

Ping An has also seen rental income from investment properties rise over the past two years, while reducing its exposure to struggling developers following a drastic reduction in its equity stake in troubled China Fortune Land Development.

Ping An said it has established partnerships with all 100 major hospitals in mainland cities, hired about 50,000 in-house doctors and signed contracts with outside doctors as part of its expansion into the healthcare market.

The stock closed 0.9 percent higher at HK$34.30 in Hong Kong on Thursday ahead of an interim report. It is down 0.6 percent this year, compared with a 5 percent gain in the Hang Seng index.

“Ping An’s core businesses are expected to maintain steady growth in the second half of the year,” said Kenny Ng Lai-yin, a strategist at Everbright Securities International. “The downward trend in interest rates in mainland China may have some impact on investment performance.”