On March 17, Ping An Insurance (Group) Company Of China Ltd(601318) announced the annual results of last year. The announcement shows that Ping An Insurance (Group) Company Of China Ltd(601318) achieved an operating profit of 147961 billion yuan attributable to the shareholders of the parent company in 2021, with a year-on-year increase of 6.1%, which is higher than that in 2020 (4.9%); Operating roe reached 18.9%; Net profit of 121802 billion yuan; The net profit attributable to the shareholders of the parent company was 101618 billion yuan, a year-on-year decrease of 29.0%, which was larger than that in 2020 (- 4.2%), which was another year of decline in the net profit attributable to the parent company after 2020.
In addition, Ping An distributed annual dividends to shareholders, with cash per share of 2.38 yuan, a year-on-year increase of 8.2%. In August last year, Ping An launched a new round of stock repurchase program. By the end of December 2021, it had repurchased about 77.77 million shares, totaling 3.9 billion yuan.
What do you think of Ping An’s achievements last year? To this end, first finance has sorted out six highlights.
1. Customer structure is changing
Ping An Insurance (Group) Company Of China Ltd(601318) , committed to becoming the world’s leading personal financial life service group, its personal customer operation is one of the most important indicators in the annual report. Last year, Ping An Group’s personal business operating profit increased by 5.7% year-on-year to 129996 billion yuan, accounting for 87.9% of the group’s operating profit attributable to the shareholders of the parent company.
By the end of last year, the number of individual customers of Ping An had exceeded 227 million, an increase of 4.1% over the beginning of the year; 32.4 million new customers were added throughout the year, of which 35.8% came from the group’s Internet users.
In terms of the composition of individual customers, it is worth noting that the spalling of life insurance customers occurred for the first time. By the end of last year, Ping An Life Insurance had 63.52 million customers, 1.77 million less than that in 2020.
Since 2017, the sluggish growth of life insurance customers has begun to appear. In that year, Ping An Life insurance customers increased by 14.7%, and then the growth rate gradually declined, increasing by 14.5% in 2018, 6.6% in 2019 and only 3.6% in 2020.
The bank’s customers are increasing significantly. Among them, the number of retail customers in 2021 increased by 9.93 million compared with that in 2020, and the number of credit card customers increased by 5.98 million, a total increase of 15.91 million, an increase higher than that in 2020. The overall scale is still considerable, which proves that the banking business is currently in an upward period.
Ping An divides individual customers into four layers according to the wealth structure, namely, the public, the middle class, the rich and the high net worth. The number of individual customers and the number of customer average contracts are also different in different wealth structures.
2. The composition of net profit attributable to parent company is changing
According to the annual report of Ping An Insurance (Group) Company Of China Ltd(601318) the first financial reporter sorted out the composition of the net profits of Ping An’s business segments attributable to the shareholders of the parent company in recent three years.
It can be seen from the chart that under the influence of life insurance reform and macro environment, Ping An’s life insurance business continues to be under pressure. As the pillar of Ping An’s performance, in the past, life insurance has been in Ping An’s net profit sector, accounting for 60-70%, which has now fallen to about 50%, and property insurance has recovered compared with 2020.
Banking business has become a success, accounting for an increasingly important part of Ping An’s total net profit.
The trust business fell sharply. Affected by the changes in the value of investment assets, the net profit of trust business decreased by 90.8% year-on-year. Last year, Ping An Trust continued to reduce the scale of financing trusts, and the handling fee and commission income decreased by 16.7% year-on-year.
It is worth mentioning the technology business. In 2020, the technology business was a highlight of Ping An’s financial report, and the attributable net profit increased significantly by 1.28 times. However, in 2021, the technology business lost 1.957 billion yuan, down 124.66% from 2020.
3. The agent refunded 400000 yuan a year
Last year was the most difficult year for the life insurance industry. With the addition of life insurance reform, it was even more difficult for Ping An.
It can be seen that the new business value of Ping An Life Insurance and health insurance business fell by 23.6% year-on-year last year. Among them, the value of new business of agent channel decreased by 27.6%; The average monthly number of agents fell by 24.5%. However, we can still see some positive signals after the reform.
For example, although the agent income (yuan / per capita per month) is still declining (- 0.6%), the degree of decline has been significantly narrower than that in 2020 (- 8.2%). Among them, the income of life insurance agents (yuan / per capita per month) also increased slightly by 0.5%, compared with – 16% in the same period in 2020.
The number of personal life insurance sales agents narrowed from 1 million in 2020 to Shanghai Pudong Development Bank Co.Ltd(600000) , and 400000 agents were dismissed a year.
As the highlight of life insurance reform, Ping An Life Insurance implements the layered and refined management of the agent team, promotes the continuous optimization of the team structure, and promotes the “spindle” optimization of the team structure in combination with digital empowerment. In 2021, the per capita first year premium of Ping An Life insurance agent channel increased by more than 22% year-on-year, and the per capita production capacity was effectively improved.
4. Where is the loss of science and technology business
Technology business is a business segment that Ping An has been striving to build for many years. In 2020, technology business was a highlight of Ping An’s financial report, but in 2021, technology business lost 1.957 billion yuan. So where did it lose?
Ping An disclosed the performance of four listed companies in the science and technology sector. The financial report showed that in 2021, the total revenue of science and technology business reached 99.272 billion yuan, a year-on-year increase of 9.8%.
Among them, lufax holdings achieved an operating income of 61.835 billion yuan, a year-on-year increase of 18.8%; The net profit was 16.804 billion yuan, a year-on-year increase of 36.0%; Auto Home achieved an operating revenue of 7.237 billion yuan, a year-on-year decrease of 16.4%, and a net profit of 2.582 billion yuan, a year-on-year decrease of 28.7%.
Financial one account achieved an operating revenue of 4.132 billion yuan, a year-on-year increase of 24.8%, and a net profit of 1.282 billion yuan, a year-on-year decrease of 5.3%; Ping An Health achieved an operating revenue of 7.334 billion yuan, a year-on-year increase of 6.8%, and a net profit of 1.538 billion yuan. The range of loss has expanded, down 62.2% from 2020.
5. The investment of insurance funds remained stable
As of December 31, 2021, the scale of Ping An insurance fund portfolio was nearly 3.92 trillion yuan, an increase of 4.7% over the beginning of the year. Affected by the fluctuation of capital market, the decline of market interest rate and the increase of impairment provision, in 2021, the net investment rate of return was 4.6% and the total investment rate of return was 4.0%.
From 2012 to 2021, the 10-year average return on net investment was 5.3%, and the 10-year average return on total investment was 5.3%, both higher than the embedded value long-term return on investment assumption (5%).
6. Create a new engine of value growth with medical health
Last year, Ping An continued to deepen the medical and health ecological strategy, which is also one of the most important strategies of Ping An since last year. Ping An medical health ecological strategy is also expected to be closely combined with the main financial industry and play a significant synergy value of the main industry.
Under this strategy, Ping An is committed to exploring the group managed medical model with “HMO + family doctor + o2o” as the core.
The financial report shows that the synergy between Ping An medical and health ecosystem and the main financial industry is gradually emerging. Nearly 3.3 times of AUM customers and over 3.3 times of AUM customers in ecosphere provided medical services at the same time, respectively.
By the end of December 2021, Ping An smart medical had served 187 cities and more than 45000 medical institutions; Ping An’s own doctor team has more than 40000 contracted doctors, more than 10000 cooperative hospitals, 96000 cooperative health management institutions and 202000 cooperative pharmacies.
In the financial report, Ping An said that in the future, it will further deepen the strategic layout of the medical and health industry by closely combining the high-quality resources under Peking University Medical with Ping An’s comprehensive finance and medical technology.
