Ping An Insurance Profit Fall 2021

Ping An Insurance Group Co of China Ltd., the country’s largest insurer, reported its biggest annual profit fall since 2008 as the country’s property market soured, but said it expected such investment losses to ease in future.

Ping An said net profit fell 29% to 101.6 billion yuan ($16 billion) in 2021, down from 143.1 billion yuan the previous year, as it recorded impairment losses totaling 43.2 billion yuan linked to investments in troubled China Fortune Land Development.

Property - The insurance group has been shaken in recent quarters by growing concerns about its investments in the highly indebted property sector, which has been hit by a string of developer defaults, credit rating downgrades and slump in shares and bonds.

Ping An’s property investments, as of end December, stood at 216 billion yuan, or 5.5% of its total insurance investment assets.

Ping An said it had a total exposure of 54 billion yuan to China Fortune last year. Some analysts cautioned that the total property exposure of Ping An is much higher and still underestimated by the market.

Premium income - from life insurance fell 4.1% year-on-year to 490.3 billion yuan, while property and casualty insurance premium income fell 5.5% to 270 billion yuan.

Ping An said in a filing that, besides the pandemic, another factor for drop in premium income was a fall in the number of Ping An sales agents, which also resulted in new business value of life and health insurance falling 23.6% to 37.9 billion yuan. 

Its army of insurance agents, once the jewel in Ping An’s crown, is set to shrink further, putting more pressure on sales.