By Lawrence White
HONG KONG, March 13 Ping An, China's second
largest insurer by market value, posted an albeit lower than
expected 40.4 percent rise in annual earnings on Thursday, as
investment income surged on the back of a recovery in China's
Ping An Insurance Group Co of China Ltd
made a net profit of 28.15 billion yuan ($4.58
billion) in the year ended Dec. 31.
While the 40 percent rise was the highest increase in four
years, it was less than the 44 percent analysts had predicted,
according to Thomson Reuters data.
That reflected a tougher than expected operating environment
for Chinese insurers, with intensifying competition from
established rivals and new entrants in the business.
Chairman Peter Ma made special mention of how China's
traditional financial companies, including banks and insurers,
face a growing threat from internet companies such as Alibaba
and Tencent Holdings Ltd that have
encroached on their turf.
"New technology with mobile internet at its core is
advancing rapidly, sending shock waves to all traditional
industries including the finance sector," Ma said in statement
accompanying the results.
Ping An's life insurance division said new business, which
measures expected profits from new premiums and offers a better
gauge of performance than net profit, grew 14 percent in 2013.
Chinese insurers have found it tough to increase sales amid
intensifying competition and tighter bancassurance regulation.
While Ping An's life insurance division sold more premiums
overall, the number of policies sold via bancassurance fell 18
With large investment portfolios, China's insurers are
prone to big swings in reported profits. In 2011 and 2012,
annual earnings were dented by losses on their equity
Ping An's peers China Life Insurance Co Ltd, New
China Life Insurance Co Ltd and China Pacific
Insurance Group Co <601601.SS] have all expected higher profits
Ping An shares closed up 1 percent on the Hong Kong Stock
Exchange on Thursday, before the results were announced.