Ping An Reports Steady YoY Growth of 6.1% in Operating Profit Attributable to Shareholders of the Parent Company in 2021
Attaching great importance to shareholder returns,annual cash dividend per share grew by8.2% year on year
HONG KONG and SHANGHAI,March 17,2022 -- Ping An Insurance (Group) Company of China,Ltd. (hereafter "Ping An of China," "Ping An," the "Company" or the "Group," HKEX: 2318; SSE: 601318) today announced its financial results for the year ended December 31,2021.
Despite the complex and difficult business environment and market challenges in 2021,Ping An adhered to the philosophy of "Expertise makes life simple" and continued to upgrade the Group's "integrated finance + healthcare" strategy. The Group accelerated the reform of the life insurance business and digital transformation of business management,to promote the high-quality transformation of sales agent teams and constantly improve the Company's portfolio of products and services. The Company enhanced its capability to serve the real economy and ensure social livelihood while continuing to achieve high-quality development. At the business model and ecosystem level,Ping An innovatively built its "integrated finance + HMO managed care" service system. The Group actively developed its "finance + eldercare" and "finance + healthcare" industry ecosystems. Ping An provided customers with professional "financial advisory,family doctor,and eldercare concierge" services,which gave them "worry-free,time-saving,and money-saving" financial and healthcare consumption experiences.
Thanks to the synergies and resilience of the integrated finance strategy,Ping An empowered its main financial businesses with technologies and ecosystems,which yielded good results. The Group's core competitiveness steadily strengthened. Ping An is proud to present to customers and shareholders steady heartwarming annual results. The Group maintained stable,healthy business performance in 2021. Ping An achieved an 18.9% operating ROE,with operating profit attributable to shareholders of the parent company rising 6.1% year on year to RMB147,961 million in 2021. Net profit was RMB121,802 million and net profit attributable to shareholders of the parent company decreased 29.0% year on year to RMB101,618 million. Ping An attaches importance to shareholder returns and will pay an annual dividend of RMB2.38 per share in cash,up 8.2% year on year,marking a continued increase in cash dividends. Subsequent to the announcement of the A Share Repurchase Plan in August 2021,Ping An repurchased approximately 77.77 million A shares,worth approximately RMB3.9 billion,as of December 31,2021.
Ten business highlights in 2021:
Profit and shareholders returns continued to increase. Ping An achieved an 18.9% operating ROE in 2021,961 million. Meanwhile,Ping An attaches importance to shareholder returns and the annual cash dividend per share grew 8.2% year on year to RMB2.38,marking a continued increase in cash dividends. Under the A Share Repurchase Plan approved on the 4th meeting of the 12th session of the Board held in August,2021,Ping An repurchased 77.77 million A shares,worth RMB3.9 billion.
Customer development improved and refined management achieved good results. Ping An's retail customers totaled over 227 million as of December 31,of whom 39.3% held multiple contracts with different subsidiaries. New financing scale achieved through corporate business cross-selling increased 26.9% year on year in 2021.
The life and health insurance business continued to advance its reform and transformation.Ping An Life advanced its reform to promote high-quality business development by implementing its two-pronged "channel + product" strategy. Ping An Life implemented tiered,refined management of sales agents. First-year premium (FYP) per agent grew more than 22% year on year in 2021,indicating effective growth in productivity per agent. Leveraging the Group's healthcare ecosystem,Ping An launched innovative products and services,including "insurance + health management," "insurance + high-end eldercare," and "insurance + home-based eldercare" to improve customer experience.
Property & casualty insurance maintained good business quality and continued to perform the role of "social stabilizer." Combined ratio improved by 1.1 pps year on year to 98.0% and underwriting profit grew 145.7% year on year to RMB5,136 million in 2021. Ping An P&C made every effort to mitigate the impact of the significant natural disasters by settling claims as rapidly as possible. Henan Province rainstorm claim payments exceeded RMB3.1 billion.
Ping An Bank maintained business growth and asset quality,and strengthened risk provisions. Net profit rose 25.6% year on year to RMB36,336 million in 2021. Non-performing loan ratio improved by 0.16 pps from the beginning of 2021 to 1.02%,and provision coverage ratio rose 87.02 pps from the beginning of 2021 to 288.42% as of December 31,2021.
Ping An strategically upgraded its healthcare ecosystem and developed its industry ecosystems in the sector,which realized preliminary success. Ping An built a closed loop supply,demand and payment by exploring an innovative "HMO + family doctor + O2O" managed care model to provide customers with "worry-free,and money-saving" healthcare services. Ping An Health had a total of nearly 423 million registered users as of December 31,and its cumulative paying users increased rapidly to over 38 million in 2021. Ping An Smart Healthcare benefited approximately 1.32 million doctors at over 45,000 medical institutions in 187 cities as of December 31,2021. Going forward,Ping An will enhance its strategic presence in the healthcare industry by combining PKU Healthcare's excellent resources with Ping An's integrated finance and healthtech.
Technology businesses grew further. Ping An continued to explore innovative business models and accelerate business development. Total revenue of technology business rose 9.8% year on year to RMB99,272 million in 2021.
Ping An continued to strengthen its core technological capabilities.Ping An's technology patent applications increased by 7,008 from the beginning of 2021 to 38,420 as of December 31,more than most other international financial institutions. Ping An uses artificial intelligence to develop its financial businesses. Sales realized by AI service representatives increased 66% year on year to approximately RMB275.8 billion in 2021. AI service representatives covered 2,158 scenarios as of December 31,with customer service volume reaching approximately 2.07 billion times,accounting for 84% of Ping An's total customer service volume in 2021. The 30-day loan recovery rate of AI collection stood at 77% in 2021.
Ping An comprehensively advanced its green finance initiative and promoted sustainable development as a new engine of economic growth. Ping An's green investment and financing and green banking business totaled RMB224,580 million and RMB89,813 million,respectively,2021. Environmentally sustainable insurance premium income totaled RMB44,569 million in 2021. Moreover,Ping An cumulatively provided RMB41,850 million for poverty alleviation and industrial revitalization as of December 31,2021 by advancing the "Ping An Rural Communities Support" program. Ping An received the 11th "China Charity Award" and the 3rd "Capital Philanthropy Award" in recognition of this vital work.
Brand value continued to increase and maintained a leading position in the global financial industry.In 2021,Ping An moved up five places from the previous year to 16th in the Fortune Global 500 list (second among global financial services companies),rose from seventh to sixth in the Forbes Global 2000 list,and ranked 49th in the BrandZ™ Top 100 Most Valuable Global Brands list (first among global banks and insurers for the first time,and first among global insurance brands for the sixth consecutive year).
Customer development: With deepened integrated financial services strategy,retail business and corporate business continued to grow.
Ping An is dedicated to the development of retail and corporate customers under the Company's "people-centric" and "customer-oriented" philosophies and its integrated finance strategy.
With the development of integrated finance business model of "one customer,multiple products,and one-stop services" and "finance+ ecosystem," Ping An's retail customer development capability continued to improve. Retail operating profit increased 5.7% year on year to RMB129,996 million in 2021,accounting for 87.9% of its operating profit attributable to shareholders of the parent company. The Group had over 227 million retail customers as of December 31,up 4.1% from the beginning of 2021. Of the 32.40 million new retail customers acquired in 2021,35.8% came from the Group's internet user base.
As Ping An advanced its integrated financial business strategy,cross-selling continued to deepen. Nearly 33.01 million customer migrations occurred between the Group's core financial companies in 2021. 89.26 million or 39.3% of retail customers held multiple contracts with different subsidiaries as of December 31,2021. Contracts per customer grew 1.8% from the beginning of 2021 to 2.81.
Under a "1 + N" services model of the corporate business (one customer + N products),Ping An focused on tiered development of strategic customers,micro-,small and medium-sized enterprises,and financial institutions. Corporate business continued to grow. Written premium of the corporate channel achieved through cross-selling rose 19.9% year on year. New financing scale achieved through corporate business cross-selling expanded 26.9% year on year.
Integrated finance: Life & Health advanced reform and transformation. Property & Casualty maintained good business quality. The banking and asset management business increased steadily.
The Life & Health insurance business advanced reform and transformation to pursue high-quality development. In 2021,Life & Health achieved a 32.3% operating ROE with operating profit rising 3.6% year on year to RMB97,075 million. Ping An Life continued to advance the "channel + product" reform. Ping An Life advanced high-quality transformation of the agent team and improved team structure by building a team of "high-competence,high-performing,and high-quality" agents. The agent channel's NBV per agent amounted to RMB39,031 and FYP per agent grew more than 22% year on year in 2021. The team of Diamond Agents remained stable,with per-capita NBV increasing by over 20%. Ping An Life promoted three innovative channels,including strengthening cooperation with Ping An Bank,Community Grid and the lower-tier channel. In respect of products,Ping An Life created differentiated market advantages with "insurance + health management," and "insurance + home-based eldercare" products by leveraging the Group's healthcare ecosystem. Ping An Life provided customers with full-lifecycle medical and eldercare services through the above products. By doing so,Ping An Life drove customer acquisition and improved customer retention,bringing customers prime life and respectful eldercare services. Nearly 30% of new life insurance customers were sourced from the Group's healthcare services. NBV of Life & Health dropped 23.6% year on year to RMB37,898 million in 2021,affected by the impact of COVID-19,domestic and global economic situations,and decreased agents during the reform. Without considering the impact of changes in assumptions,NBV of Life & Health dropped 18.6% year on year.
Ping An Property & Casualty maintained good business quality and premium income of auto insurance resumed growth. Overall combined ratio improved by 1.1 pps year on year to 98.0% in 2021 as Ping An P&C further optimized its customer mix and enhanced risk screening. Underwriting profit grew 145.7% year on year to RMB 5,136 million. Premium income of auto insurance business achieved a year-on-year increase of 8.7% in the fourth quarter of 2021. "Ping An Auto Owner," the largest automotive service app in China,achieved over 150 million registered users as of December 31,2021. Over 95 million vehicles have been linked to the app. Monthly active users exceeded 37 million in December 2021. 92.2% of Ping An P&C's family auto insurance claims were processed via "One-click Claims Services" in 2021.
Ping An Bank furthered its strategic transformation and maintained stable business growth. Revenue grew 10.3% year on year to RMB169,383 million in 2021. Net profit rose 25.6% year on year to RMB36,336million. Ping An Bank kept asset quality stable and strengthened risk provisions. Non-performing loan ratio fell 0.16 pps from the beginning of 2021 to 1.02% and provision coverage ratio rose 87.02 pps from the beginning of 2021 to 288.42% as of December 31,2021. In the year,Ping An Bank continued to make breakthroughs in retail banking,and further implemented the "five-in-one" new banking model of an "open bank,AI bank,remote bank,offline bank,and comprehensive bank." Retail banking revenue and net profit grew 8.4% and 17.3% year on year,respectively. Retail AUM rose 21.3% from the beginning of 2021 to RMB 3,182.634 billion as of December 31,2021.
The Company's investment portfolio of insurance funds grew 4.7% from the beginning of 2021 to nearly RMB3.92 trillion as of December 31,2021. The net investment yield was 4.6%,and the total investment yield was 4.0% under volatile capital markets,falling interest rates,and increasing impairment provisions. From 2012 to 2021,the average net investment yield and the average total investment yield on the Company's investment portfolio of insurance funds for the past ten years were both 5.3%,above the 5% EV long-run investment return assumption,maintaining a leading position in the industry. In 2021,operating profits of the securities business and other asset management business maintained steady growth.
Innovative business: Technology businesses grew further. Ping An strategically upgraded its healthcare ecosystem and explored the "HMO + family doctor + O2O" managed care model.
In 2021,Ping An further advanced "finance + technology" and promoted "finance + ecosystems," and continued to explore innovative business models. The total revenue of the technology business increased 9.8% year on year to RMB99,272 million. Operating profit attributable to shareholders of the parent company rose 19.5%year on year to RMB7,948 million.
Ping An continued to invest in R&Dto strengthen its core technological capabilities. Ping An's technology patent applications increased by 7,008from the beginning of 2021 to 38,more than most other international financial institutions'. The Group moved up from the third place to the first in the global ranking list by the number of AI patent applications. Ping An also ranked first globally by the number of fintech and digital healthcare patent applications.
Ping An continued to deepen its use of leading technological capabilities in its main financial businesses to promote sales,improve efficiency and control risks. The AI service representatives covered 2,and served customers approximately 2.07 billion times,accounting for 84% of Ping An's total customer service volume in 2021. Sales realized by AI service representatives was approximately RMB 275.8 billion,accounting for 29.3% of the total sales volume of all service representatives in 2021.
Ping An upgraded the healthcare ecosystem strategy to build "a Chinese version of UnitedHealth." The Group built a closed loop of supply,demand and payment by developing an innovative managed care model centering on "HMO + family doctor + O2O" to provide customers with worry-free,and money-saving healthcare services. Synergies between Ping An's healthcare ecosystem and main financial businesses are emerging. Nearly 63% of Ping An's over 227 million retail customers used services from the healthcare ecosystem. These customers held 3.3 contracts and RMB40,000 in AUM per capita respectively,1.6 times and 3.0 times those held by customers who did not use these services respectively. Ping An Smart Healthcare benefited approximately 1.32 million doctors and 10.48 million chronic-disease patients at 45,2021. With more than 40,000 in-house doctors and contracted external doctors,Ping An partnered with over 10,000 hospitals (including 99% of 3A hospitals and all the top 100 hospitals),about 96,000 healthcare management institutions and 202,000 pharmacies as of December 31,2021.
Ping An Health (HKEX: 01833.HK) is an integral part of Ping An's healthcare ecosystem. Starting with members' dedicated family doctors,Ping An Health covers five healthcare scenarios including health,sub-health,disease,chronic disease,and eldercare management. Capitalizing on its online-to-offline (O2O) service network,Ping An Health has developed an online-merge-offline "medical + healthcare" services platform. Ping An Health had a total of nearly 423 million registered users as of December 31,2021. The number of cumulative paying users exceeded 38 million in 2021. Revenue rose to RMB7,334 million in 2021.
Lufax Holding (NYSE: LU) is committed to serving small and micro-businesses. It furthered strategic transformation and maintained stable business growth. Revenue increased by 18.8% year on year to RMB61,835 million and net profit rose by 36.0% year on year to RMB16,804 million. The balance of retail credit facilitated increased 21.3% from the beginning of 2021 and the ratio of loans more than 30 days overdue was 2.2% as of December 31,2021.
OneConnect (NYSE: OCFT) facilitated the digital transformation of the financial services ecosystem and operating performance continued to improve.Revenue grew 24.8% year on year to RMB4,132 million in 2021. Premium customers increased by 202 year on year to 796,including 212 premium plus customers,up by 44 year on year.
Autohome (NYSE: ATHM; HKEX: 02518.HK) announced its "ecosystem strategy" and built its new business portfolio. Revenue and net profit reached RMB7,237million and RMB2,582 million,respectively. As automakers' and auto dealers' demand for online marketing services increased driven by changing marketing approaches and advancing digitization,Autohome's revenue from the online marketplace and other businesses grew 11.6% year on year in 2021,accounting for 30.9% of its total revenue. Autohome completed its secondary listing on HKEX in March 2021,and was included in the Hang Seng Composite Index in early June 2021.
Ping An actively fulfilled social responsibilities to support the sustainable development of society in 2021. The Group cumulatively invested more than RMB5.9 trillion to serve the real economy as of December 31,2021. Ping An comprehensively advanced its green finance initiative. The green investment and financing and green banking business totaled RMB224,813 million respectively as of December 31,Ping An devoted itself to rural revitalization. The Group cumulatively provided RMB41,2021 by advancing the "Ping An Rural Communities Support."
Looking ahead,Ma Mingzhe,Chairman of Ping An Group,said,Ping An will adhere to its original aspiration of "being people-centric and contributing to national rejuvenation." The Company will continue to promote its strategic vision of "becoming a world-leading integrated financial and healthcare services provider." Ping An will comprehensively strengthen high-quality business development centering on life insurance reform and digital empowerment. We will promote the new value-oriented culture and enhance our core competitiveness. Moreover,we will actively fulfill corporate social responsibilities,and create steadily growing value for customers,shareholders and society. We will make unremitting efforts to realize people's aspiration for a better life and forge ahead for the great rejuvenation of the Chinese nation!
