Ping An, China’s largest insurer, is exploring ways to expand in Hong Kong and Greater Bay Area, co-CEO says

“Greater Bay Area, including Hong Kong, is going to be the centre of wealth creation,” said Michael Guo Xiaotao, 52, who was appointed co-CEO in January, replacing Jessica Tan Sin-yin, who retired. “It is the focus area for future growth, especially in the financial services industry.

“After the Covid-19 restrictions were removed, we saw a strong flow of mainland Chinese visitors coming to Hong Kong to buy life insurance products and policies. We definitely took note of that trend and are exploring different ways of capturing these opportunities.”

Guo did not provide any details about Ping An’s expansion plans for Hong Kong, but said the insurer will “examine the feasibility of all different options”.

Chinese insurance giant Ping An’s profit falls to 5-year low

“Any major business decision will have to weigh potential outputs and potential investment costs,” he said. “We have to look at different scenarios to see what is the best way forward to capturing growth opportunities in the Greater Bay Area and in Hong Kong.”

Mainland visitors spent HK$59 billion (US$7.6 billion) on insurance policies in Hong Kong last year, representing about 33 per cent of all industry sales, according to data compiled by the Insurance Authority. This tally topped sales of HK$43.4 billion in 2019 and HK$47.6 billion in 2018.

Mainland spending boosted the Hong Kong units of AIA Group, Prudential and Manulife, all of which have reported strong profit growth for 2023 in the past two weeks.

China’s Ping An Bank names 41 mainland developers in funding support list

In contrast, Ping An said on Thursday that its net profit fell 23 per cent year on year to 85.67 billion yuan (US$11.9 billion), its lowest earnings in five years, according to revised data provided by the insurer based on new accounting standards.

The weak performance sent Ping An shares down by almost 8 per cent at one point on Friday, before narrowing to a 6 per cent loss and closing at HK$33.4.

Guo, however, remains positive about Ping An’s growth in the next few years, because its core business, including its insurance and healthcare businesses, was solid. Ping An was set back by losses in its asset-management business and decline of profitability in its technology business.

Ping An denies reports it will take over Country Garden and assume its debts

“We have 2.3 million customers,” Guo said. “More than half of them are aged 30 to 45 – their golden age for growth of wealth.

“Our new business sales value rose 36 per cent last year. The investment market was tough last year, but we are a life insurance company so we should not focus too much on short-term market volatility, but more on achieving long-term investment returns.”

Affluent clients, those with 500,000 yuan in investment assets, are the fastest growing segment for Ping An, thanks to its 300,000 sales agents, he added.

Ping An Insurance sees medical, healthcare as growth engine in next decade

Guo joined Ping An in September 2019 as executive vice-president of Ping An Property & Casualty Insurance Company of China, and as chief human resources officer for the group. Before joining the insurer, he was a partner at Boston Consulting Group.

He has a bachelor’s degree in Information and Control Engineering from Xi’an Jiaotong University and an MBA from the University of New South Wales in Australia.

Guo said Ping An will continue to invest in technology to cut down costs and enhance efficiency. Over the past three years, it has invested 10 billion yuan in technology and digitalisation, which has helped save 10 billion yuan in costs every year.

The adoption of technology and digitalisation has also sped up the claims process, from several weeks previously to only several minutes now, while more than 85 per cent of customers’ questions are answered by robots.

“Technology is a key enabler of our business, driving sales, improving efficiency, reducing costs and reducing our risk,” Guo said.