Ping An Profit rises nearly 7% as market recovery underpins comeback

Ping An Insurance (Group) Co. said profit rose nearly 7 percent in the first half of the year after a stock market recovery helped boost investment returns at China’s second-largest insurer by market value.

Net income rose to 74.6 billion yuan ($10.5 billion) in the six months ended June 30 from 69.8 billion yuan a year earlier, the Shenzhen-based company said on Thursday in a statement to the Hong Kong stock exchange. This reversed a 4.3% drop in profit in the first quarter.

Operating profit, which the insurer says better reflects performance by stripping out short-term investment volatility and one-off items, fell 0.6 percent.

China’s CSI 300 index posted a 0.9 percent gain in the first half of the year after recovering from the early-year slump, underpinning the performance of insurer stock holdings. Ping An’s new business value benefited from improved life policy margins as bancassurance fees tightened and it sold more protection products, Bloomberg Intelligence said before the results were released.

“Overall operating results remained solid, demonstrating resilience,” Ping An said in a statement.

Investment income rose 65 percent to 65.8 billion yuan, according to the filing. Net impairment losses on financial assets fell 26% to 26.5 billion yuan.

New business value, which measures the profitability of new life policies sold, rose 11 percent in the first half of the year, slowing from a 21 percent gain in the first quarter. A three-year reform of the main living unit increased agent productivity.

All listed Chinese insurers likely saw an improvement in earnings in the first half of the year compared to the first quarter, Morgan Stanley analysts wrote in a July 25 report. They expect life insurers to report “solid” growth in the value of new business, helped by higher margin and agent productivity.

Ping An rose nearly 1 percent to $34.30 in Hong Kong trading ahead of the announcement. This reduced this year’s decline to 3%.

Copyright 2024 Bloomberg.

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