Ping An Insurance (Group), China’s largest insurer by market capitalisation, reported a better-than-expected full-year result on Wednesday, even as the Covid-19 pandemic took a toll on its business.
Its net profit for 2020 fell by 4.2 per cent to 143.1 billion yuan (US$22.1 billion), better than the 131.5 billion yuan forecast by analysts polled by Bloomberg.
“The year 2020 was extraordinary as we were challenged by Covid-19,” Peter Ma Mingzhe, the company’s chairman, said in a results announcement to the Hong Kong stock exchange.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
Ping An – as well as other insurers – was adversely affected by social distancing measures introduced to contain the coronavirus pandemic, as they kept its more than a million agents from meeting clients and selling policies. It also benefited from a one-time tax rule change the previous year.
The value of its new business, an important indicator of performance, dropped 34.7 per cent to 49.6 billion yuan (US$7.6 billion). But its revenue rose 3.8 per cent to 1.3 trillion yuan (US$201 billion). Its earning per share also rose, climbing 5.5 per cent to 7.89 yuan, while its dividend rose 7.3 per cent to 2.2 yuan per share.
Its operating profit, a better reflection of the company’s performance as it removes one-off items, rose 4.9 per cent to 139.5 billion yuan last year, the company said.
An increase in online sales helped the company mitigate some of the challenges posed by the pandemic. It said 598 million customers used its online platforms to buy insurance, wealth management and health care products last year, an increase of 16 per cent from a year earlier.
“At Ping An, we went all out in three fields, namely financial services, technology and community support, to prevent and contain Covid-19, as well as to help resume work and production,” Ma said. The company must also abide by regulatory changes in the insurance and fintech sectors in the future.
Ping An and rival China Pacific Insurance performed well in property insurance, but recorded declines in their life premium incomes, said Kenny Ng Lai-yin, a securities strategist at Everbright Sun Hung Kai.
“It is expected that the downturn in the industry will gradually go away. This year, life insurance will benefit from the epidemic coming under further control, while property insurance will mainly benefit from a sales rebound in the mainland auto market,” he said.
Ping An’s shares fell 1.6 per cent to HK$89.8 in Hong Kong on Wednesday, before its earnings were announced.
More from South China Morning Post: