Ping An Insurance (Group) Co., China’s second-largest insurer by market value, said first-quarter profit jumped as the nation’s economic recovery boosted demand and investment returns.
(Bloomberg) — Ping An Insurance (Group) Co., China’s second-largest insurer by market value, said first-quarter profit jumped as the nation’s economic recovery boosted demand and investment returns.
Net income climbed 49% to 38.4 billion yuan ($5.6 billion) in the three months ended March 31, from a restated 25.8 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Wednesday. The company revised financial results for the same period last year due to changes in accounting rules, it said.
Operating profit, which strips out one-time items and short-term investment volatility, fell 3.4%.
China’s economy grew at the fastest pace in a year during the quarter, after dismantling stringent Covid curbs that hampered insurance sales and depressed markets in the past three years. The industry’s combined premium income growth accelerated in the past three months, while the CSI 300 Index stock benchmark gained 4.6%, reversing steep declines last year.
New business value, which gauges the profitability of new life policies sold, rose 8.8%, Ping An said, reversing declines last year. The company said in March that it expected positive growth in the indicator for not just the first quarter but the entire year, after three years of reform at its life unit started to bear fruit.
The company reported 29.7 billion yuan in investment income, reversing a loss of 26.1 billion yuan. Net impairment losses on financial assets narrowed by 11% to 15.5 billion yuan.
Listed Chinese insurers this year started to adopt new accounting rules in line with global practices, known as IFRS 17, which bring broad changes to how they report financial results. Premiums are no longer immediately recorded as income but only recognized gradually over the course of the contracts. Insurance profit is separated from investment returns, providing more clarity on drivers of profitability.
Insurance revenue rose 2% to 133.1 billion yuan, according to the statement.
The government is trying to drive insurance companies to control risk and focus on their core business. The industry’s underwriting profit almost tripled from 2018 to 41 billion yuan last year, the highest in five years, the China Banking and Insurance Regulatory Commission said in April.
Ping An shares rose 0.2% to HK$51.55 in Hong Kong trading before the results. The stock is down 0.2% this year.
(Updates with operating profit and details throughout the story)
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