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+2.8
+國平安保險公司
+GAN PURANCE COMPANY OF O
+1995
+October, 1995
+April, 1996
+Ping An acquired ICBC
+Pearl River Delta Financial
+Trust Joint Company,
+renaming it as "Ping
+An Trust Investment
+Company".
+1994
+1996
+Ping An achieved a
+breakthrough in the
+establishment of Ping An
+Securities Company, Ltd,
+a non-insurance business
+in the financial sector.
+Founding
+of the Group
+February 14, 2003
+Ping An Insurance (Group)
+Company of China, Ltd. was
+established, becoming a pilot
+company for integrated operations
+in China's financial industry.
+December, 2003
+2002
+the first financial institution
+in China to introduce
+foreign investors.
+Ping An brings on board
+Morgan Stanley and
+Goldman Sachs as its
+shareholders, becoming
+1994
+wRRENTENPINNS
+Foundation
+Foreign
+of Company investors
+May 27, 1988
+"Ping An Insurance Company"
+was established as the first
+shareholding insurance
+company in China.
+1988 1992
+June 4, 1992
+The Company was
+renamed as Ping An
+Insurance Company of
+China, becoming a national
+insurance company.
+Expanding
+Nationwide
+Ping An was given approval to
+acquire Fujian Asia Bank, which
+marked the start of its banking
+business.
+2003
+October 8, 2002
+HSBC Group took a stake
+most
+valuable
+global
+brands
+2014
+Global No. 1
+Listing of
+H Shares
+June 24, 2004
+Ping An Group was listed in
+Hong Kong as the largest IPO
+of that year, enhancing the
+Company's capital strength.
+2004
+2006
+2007
+Control
+of SDB
+July, 2011
+Ping An became the
+controlling shareholder
+of Shenzhen Development
+Bank, which was later
+merged with original Ping
+An Bank and renamed as
+Ping An Bank, establishing
+a nationwide banking
+business framework.
+2011
+March 1, 2007
+Ping An Group was listed on
+the Shanghai Stock Exchange,
+which was the world's largest
+IPO of an insurance company
+at that time.
+Listing of
+A Shares
+100
+RANCAN
+Top
+PINGANPA
+in Ping An, becoming its
+single largest shareholder.
+Stake acquired
+by HSBC
+2
+Annual Report 2015
+1994
+Ping An introduced the
+individual insurance sales
+system, as the pioneer of
+the individual insurance
+business in China.
+First life
+insurance policy
+十人股中国平安签约代
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+平安银行
+BRAND
+May 21, 2014
+NRERAR KEY
+STR +3x. N
+Total income
+Net profit
+10,119
+2,478
+4,026
+924
+2,758
+510
+2,897
+845
+Securities Business
+3,080
+963
+(3) The capital adequacy ratio as at and after December 31, 2013 was calculated under the "Capital Rules for Commercial Banks
+(Provisional)" enforced by the CBRC, while the capital adequacy ratios as at December 31, 2012 were calculated under the "Rules for
+Regulating the Capital Adequacy Requirement of Commercial Banks" and relevant regulations enforced by the CBRC.
+(4) In and after 2012, the figures of trust business include Ping An Trust and its subsidiaries which carry on the business of investment and
+asset management. In 2011, the figures of trust business are those of Ping An Trust.
+(5) Certain comparative figures have been reclassified or restated to conform to relevant period's presentation.
+i
+Introduction
+Ping An is dedicated to becoming a world-leading
+personal financial services provider. Backed by
+"Integrated Finance + Internet" and "Internet +
+Integrated Finance" structure, local expertise, best
+practices in corporate governance with international
+standards, and single-brand, multi-channel distribution
+network, we provide insurance, banking, investment
+and internet finance products and services to over 200
+million internet users and 100 million customers.
+(1) On August 4, 2015, the Company completed the conversion of the capital reserve into share capital in the proportion of 10 shares for
+every 10 shares held, and the latest total share capital is 18,280 million. The Company recalculated the weighted average number of
+ordinary shares in and before 2015. The basic earnings per share for the five reporting periods were recalculated accordingly.
+(2) The figures of banking business in and after 2012 came from Ping An Bank's annual reports. The figures of banking business in 2011
+included figures of Original SDB and Original Ping An Bank that were consolidated by the Group.
+196,217
+1,063
+1,484
+212,025
+ASSET MANAGEMENT BUSINESS
+Trust Business(4)
+Total income
+Net profit
+Assets held in trust
+8,784
+6,557
+4,732
+4,231
+2,407
+2,912
+2,212
+558,435
+399,849
+1,962
+290,320
+中国平安
+PING AN
+Ping An Insurance (Group) Company of China, Ltd.
+INSURANCE
+Ping An Puhui Finance
+PA Haofang
+Ping An Technology
+Ping An Doctor
+Ping An Pay and Wanlitong
+PA Haoche Ping An Financial Technology
+Ping An Financial Services
+Ping An continued to focus on the concept of "Technology-driven Finance". Under the "Internet + Integrated Finance" model, Ping An
+focused on users' daily needs in the areas of "health, food, housing, transportation and entertainment", and sought to widen the range.
+of financial and everyday lifestyle scenarios. It also worked on strengthening internet user operations, enhancing the user experience,
+and promoting a gradual migration of its internet users and customer base. This enabled Ping An to reach its goal of "One Customer,
+One Account, Multiple Services and Products" and become its customers' "wealth manager, health advisor and life companion".
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+1
+ABOUT US
+Ping An Milestones
+平安保险公
+※保险监督管理委员会>
+SEX L2 197
+关于中国平安保险股份有限公司
+分业经营改革的通知
+Lufax
+RESORT, ANORA
+INTERNET FINANCE AND OTHERS
+■ Ping An Financial Leasing
+Ping An Life
+■ Ping An Property & Casualty
+■Ping An Annuity
+Ping An Health
+■Ping An Hong Kong
+Insurance business is one of the
+core businesses of the Group. After
+developing for many years, the Group
+has transitioned from a company with
+sole property & casualty business to a
+group which has gradually established
+a complete business system with
+four major subsidiaries: Ping An Life,
+Ping An Property & Casualty, Ping
+An Annuity and Ping An Health as its
+core business, providing clients with
+a full range of insurance products and
+services.
+BANKING
+Ping An Bank
+The Company operates its banking
+business through Ping An Bank.
+Banking business is propelled by the
+four engines, namely "corporate, retail,
+interbank and investment banking",
+highlighting the four characteristics of
+"specialization, intensification, internet
+finance and integrated finance". It
+provides a full range of integrated
+finance services which include supply
+chain finance, investment bank,
+interbank business, micro loan business,
+personal consumer finance, credit card,
+auto financing and private bank.
+ASSET MANAGEMENT
+Ping An Trust
+Ping An Securities
+■Ping An Asset Management
+■ Ping An Overseas Holdings
+Ping An Asset Management
+(Hong Kong)
+■Ping An-UOB Fund
+Asset Management business is also
+one of the core businesses of the
+Company. Ping An Trust, Ping An
+Securities, Ping An Asset Management,
+Ping An Overseas Holdings, Ping An
+Asset Management (Hong Kong), Ping
+An-UOB Fund, and Ping An Financial
+Leasing together form the investment
+and asset management platform of the
+Company, providing customers with
+diversified investment products and
+services.
+320.66
+Ping An ranked first under the global
+insurance category in the Top 100
+Global Brands Study by Millward Brown,
+with a brand value of USD12.4 billion.
+2014
+2014
+2015
+Equity attributable to Shareholders of the Parent
+Company (in RMB million)
+182,709
+159,617
+130,867
+2013
+334,248
+2011
+2012
+2013
+2014
+2015
+Dividend per share(2) (in RMB)
+289,564
+2012
+2011
+54,203
+Basic EPS) (in RMB)
+1.78
+1.25
+1.27
+2011
+2.47
+2012
+2013
+2014
+2.98
+2015
+28,154
+19,475
+20,050
+39,279
+0.75
+0.65
+0.45
+0.40
+诚信·赔
+As at the end of 2015, the
+"E-service APP" of Ping
+An Life had more than 30
+million registered users. The
+"Appointment with Ping An -
+Walk for Health" events help
+users develop the habit of doing
+exercises; the "Asking Doctors"
+module offers comprehensive
+health management services
+including online consultation;
+the first online product "Million
+Travel Benefits" successfully
+achieved written premiums
+of more than RMB100 million
+in the first launching day.
+The "E-service APP" is a key
+component of the Group's
+integrated financial strategy,
+transforming the Ping An Life
+Insurance's business model from
+traditional mode to Online-To-
+Offline mode.
+On July 8, 2015, Ping An Property
+& Casualty launched the globally
+first "Telephone Direct Claiming
+Service" for auto insurance,
+which is designed to address
+customers' needs by offering
+superior three-step claim
+method, i.e. "phone claiming,
+upload pictures and receive
+compensation". Promising to
+provide "Prompt, Convenient
+and Free" services in 2009,
+Ping An Property & Casualty
+was continually upgrading its
+service standard by technology
+innovations for 6 consecutive
+years. In the year of 2015, over
+50% of the auto insurance claims
+were settled within half a day
+from reporting to claim payment.
+On August 7, 2015, Ping An
+Annuity introduced the "Good-
+Faith Claims" service to the
+market. Integrating technology
+development in the "Internet+
+era, Ping An Annuity applies
+credit data in the Group's
+personal insurance claims so as
+to resolve complaints on the
+"complicated and slow claim
+procedure", aiming for enhancing
+service quality and customer
+experience.
+In 2015, amid slower global growth, the
+Chinese economy entered to the "new
+normal" stage. Notwithstanding substantial
+breakthroughs achieved in reforms, the
+Chinese economy grappled with downward
+pressure. In the face of complex economic
+scenarios, Ping An continued to pursue its
+goal of becoming a "world-leading personal
+financial services provider". It focused on
+individual customers, continued to explore
+and upgrade its customer operation model,
+improved customer services and experience
+and promoted customer migration, so as
+to achieve the goal of "one customer, one
+account, multiple services and multiple
+products" ultimately. With the collaborative
+efforts of our colleagues, the Group reached
+new heights in terms of total assets,
+revenues and net profit. Our core finance.
+businesses recorded stable and healthy
+growth with industry-leading business
+quality. After several years of deployment
+and cultivation, our internet finance
+business yielded encouraging results,
+evidenced by an increasing market presence
+and sustained high growth in innovative
+areas.
+In 2015, we achieved significant growth
+for all key performance indicators. The
+Company's net profit attributable to
+shareholders of the parent company stood
+at RMB54,203 million, up by 38.0% compared
+with the previous year. As at December 31,
+2015, equity attributable to shareholders of
+the parent company was RMB334,248 million,
+up by 15.4% over the beginning of the year;
+total assets was about RMB4.77 trillion, up
+by 19.0% over the beginning of the year.
+The number of our individual customers
+was nearly 109 million, and internet user was
+about 242 million with outstanding effect of
+user and customer migration.
+Business Highlights
+In 2015, with increasing customer
+operation level, we delivered a remarkable
+performance in both core finance business
+and internet business:
+Ping An innovatively pursued a customer
+centric operation model, which saw a
+pronounced uptake in customer migration.
+We continued to uphold a "customer-
+oriented" philosophy and to offer our
+customers comprehensive financial
+services. We have also upgraded the
+traditional business model of "offering
+products first, then services", meanwhile,
+explored an innovative customer operation
+model focused on "Initiating Engagement
+with One Service, Extending the Scope to
+Multiple Services, then to Multiple Products"
+to encourage customers to get access to
+and fully understand Ping An's core finance
+businesses by offering many internet
+services and ultimately promote customer
+migration. After years of operations,
+Ping An's internet service platform has
+developed a large user base, which made
+us realize that Ping An's internet platform
+can be used to offer service experiences to
+users and customers. This works effectively
+as a mode of business development,
+which would efficiently promote users and
+customers migration. As at the end of 2015,
+the combined individual customer base of
+Ping An's core finance companies reached
+109 million, of which 57.12 million became
+internet users. We have gained over 30
+million new customers, with 5.75 million
+new customers from the migration of our
+internet users. Ping An's internet user base
+was about 242 million, up by 75.9% over the
+beginning of the year. The user base of the
+mobile internet service business reached
+107 million, pointing to a migration of more
+than 10 million users between our core
+finance companies and internet finance
+companies. With our strategy of Ping An 3.0
+Era, we will continue to improve the level of
+customer services and promote migration
+between users and customers, to build up
+our core competitiveness to differentiate
+ourselves, and to support business
+development.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+5.0
+PIN
+2015
+1
+2.
+2011
+2012
+2013
+2014
+2015
+(1) On August 4, 2015, the Company completed the conversion
+of the capital reserve into share capital in the proportion
+of 10 shares for every 10 shares held, and the latest total
+share capital is 18,280 million. The Company recalculated the
+weighted average number of ordinary shares in and before
+2015. The basic earnings per share for the five reporting
+periods were recalculated accordingly.
+(2) Dividend per share refers to cash dividend, it includes final
+dividend and interim dividend.
+(3) The 2015 final dividend of RMB0.35 per share will be proposed
+for approval at the annual general meeting. The 2015 final
+dividend is based on the latest share capital of 18,280 million
+shares.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 5
+ABOUT US
+6
+Chairman's Statement
+In 2015, China's reforms entered a "deep water zone" alongside the implementation
+of the "One Belt and One Road" initiative and the "Internet +" strategy. The strategic
+transformation of the economy gave rise to changes in the driving force of growth,
+paths to development and modes of competition. China is becoming the world's
+largest market with the most key innovative activities. Likewise, for a business to
+thrive, it must place utmost importance on having the strategy and tactics in place
+before achieving breakthroughs. Progress and development only come after sound
+preparations. In the past year, Ping An kept rapid and healthy growth in all its
+businesses, delivering record results. More importantly, our strategic layout over the
+past decade, and our business model innovations in recent years have come into
+fruition. In 2016, having evolved through its 1.0 Era (self-operated model) and 2.0 Era
+(open marketplace), Ping An will enter the 3.0 Era that features "open platform + open
+marketplace".
+1.
+3.
+2012
+2014
+2012
+Ping An acquired Shenzhen
+Commercial Bank, soon to be
+renamed as Ping An Bank.
+Ping An ranked 96th on
+"Fortune Global 500”, marking
+its debut in the top 100,
+and was top-ranked among
+non-state-owned Chinese
+enterprises. It also ranked
+No. 32 on "Forbes Global 2000".
+Global
+Top 100
+Ping An Insurance (Group) Company of China, Ltd. 3
+July, 2006
+ABOUT US
+Vision: To become a world-leading personal financial services
+provider.
+Focusing on the "big financial assets" and
+"big health care" industries, we insist on
+the two-pronged development approach of
+"Integrated Finance + Internet" and "Internet
++ Integrated Finance" centering around the
+four pillar sectors of insurance, banking,
+asset management and internet finance,
+to finally achieve the goal of "becoming a
+world-leading personal financial services
+provider".
+Users, customers, and migration: We have
+adopted a customer-centric approach to
+provide customers with comprehensive
+financial services. We have also promoted
+migration of users and customers proactively
+to achieve the goal of "one customer, one
+account, multiple services and products".
+Core finance business: The internet-
+based upgrading to our integrated finance
+operations enables us to provide one-stop
+financial services with enhanced service
+efficiency and customer experience.
+Internet finance business: Focus on
+the daily needs of users for "health,
+food, housing, transportation and
+entertainment", continue to improve
+online platforms, provide various services
+and products, embed financial business
+into online daily life services.
+Insurance Business
+Maintain the healthy and steady development of our property and casualty insurance and life insurance
+business while promoting their competitiveness and steady expansion in market share;
+Vision and Strategy
+concentrated operating platform in Asia.
+Shanghai, becoming the largest
+operations in Zhangjiang,
+2015
+2012
+Lufax was established,
+initiating the layout of
+Ping An's internet
+finance business.
+2015
+The accumulated
+online users of Ping An
+exceeded 200 million and
+APP users surpassed
+100 million.
+金有限公司
+高は有
+LU.com
+|陆金所
+FORTUNE
+500
+May, 2006
+Ping An's nationwide integrated
+operating center commenced
+Develop in top gear health insurance business and the pension asset management business with corporate
+annuity as the focal asset, while continue building the "Social Health Insurance One Account" platform to
+increase efficiency, cut costs, improve experience and enhance benefits of Social Health Insurance.
+Banking Business
+Accelerate developing steps by fully utilizing the Group's existing advantages of integrated resources
+such as customer base, products, channels and platforms to fulfill our strategic target of becoming the
+"Best Bank";
+Shape Ping An Bank into a core integrated financial service platform to provide customers with one-
+stop integrated financial services.
+339,193
+272,244
+693,220
+2011
+2012
+2013
+2014
+2015
+Total Assets (in RMB million)
+4,765,159
+4,005,911
+3,360,312
+2,844,266
+2,285,424
+2011
+421,221
+2013
+530,020
+Following the philosophy of "Technology-
+driven Finance", Ping An's pattern of
+"Internet + Integrated Finance" has gradually
+matured with diversifying application
+scenarios. With booming development
+of the internet finance business, our user
+experience was further improved.
+Asset Management Business
+•
+Strive to develop the superior investment capacity and establish a leading investment platform;
+Strengthen the asset-liability-management capability while building a solid and comprehensive risk
+control system;
+Improve and enhance the third-party asset management business by providing a full array of high
+quality investment products with the aim of becoming a leader in Chinese wealth management market.
+Internet Finance Business
+Holding the concept of "Technology-driven Finance" and the development approach of "Internet+
+Integrated Finance" and focusing on the daily needs of users for “health, food, housing, transportation and
+entertainment", we continue to improve online platforms, provide various services and products, embed
+financial business into online daily life services, to establish opened internet financial service platform.
+4
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Business Performance at a Glance
+Net profit attributable to shareholders of the
+parent company reached RMB54,203 million,
+up by 38.0% compared to last year. Total
+assets of the Group were about RMB4.77
+trillion with strengthening comprehensive
+competitiveness.
+Core finance businesses had an overall individual
+customer base of 109 million, of which new
+customers exceeded 30 million in 2015. The number
+of our internet users was about 242 million, up by
+75.9% over the beginning of the year.
+Written premiums of life insurance business
+amount nearly RMB300 billion. Premium
+income of property & casualty business
+surpassed RMB160 billion, and the business
+quality remained sound. The annuity business
+of Ping An Annuity maintained its leading
+position in the industry. Net investment yield
+of insurance funds increased steadily, while
+total investment yield reached a record high
+in recent years.
+Total Income (in RMB million)
+■ Ping An Bank facilitated innovation to pursue
+changes and smart operations, maintaining
+sound growth and achieving a net profit of
+RMB21,865 million, up by 10.4% over the last
+year.
+Ping An Securities saw its business
+performance hit a record high with strategies
+being advanced very effectively. It realized
+net profit of RMB2,478 million, up 168.2 % over
+the same period last year.
+Net Profit attributable to Shareholders of the
+Parent Company (in RMB million)
+182.32
+0.53
+200.90
+530,020
+693,220
+Total income
+GROUP
+2011
+2012
+421,221
+2013
+2015
+(in RMB million)
+Five-Year Summary
+Ping An Expertise makes life easier.
+While China's economy is under the "new normal”, we will
+continue to "Survive in Competition and Thrive through
+Innovation". Set on building Internet financial services platforms
+which are open, inclusive and integrated, we have started our
+voyage into the Ping An 3.0 Era!
+Aspiring to be a “world-leading personal financial services
+provider", Ping An focuses on the "big financial assets" and
+“big health care” industries and pursues a two-pronged
+development approach of "Integrated Finance + Internet" and
+"Internet + Integrated Finance". We further develop our Internet
+finance strategy while maintaining the rapid and healthy
+development of our core financial businesses. With an eye
+on customer needs for “health, food, housing, transportation
+and entertainment", we integrate our financial businesses
+with online everyday lifestyle services and drive migration,
+promoting the "One Customer, One Account, Multiple Services
+and Products” concept and ultimately becoming customers’
+"Wealth Manager, Health Advisor and Life Companion".
+2014
+339,193
+272,244
+Net profit
+1.78
+2.47
+2.98
+Basic earnings per share (in RMB)(1)
+19,475
+20,050
+28,154
+39,279
+54,203
+Net profit attributable to shareholders of the parent company
+22,582
+26,750
+36,014
+47,930
+65,178
+Towards our goals we forge ahead with an abiding faith:
+Expertise makes life easier.
+Has dawned.
+The Ping An 3.0 Era
+Underpinned by modern technologies.
+Shareholders' Profile
+111
+96
+Changes in the Share Capital and
+82
+CORPORATE GOVERNANCE
+Prospects on Future Development
+79
+Risk Management
+68
+Liquidity and Financial Resources
+65
+Embedded Value
+58
+Internet Finance
+Directors, Supervisors, Senior Management
+and Employees
+1.27
+Corporate Governance Report
+133 Report of the Supervisory Committee
+135
+Builds innovative open platforms
+Together with its peers,
+Ping An,
+Our professional health care management services
+Lead you to better health.
+At your fingertips,
+A better quality of life
+Our one-stop financial services par excellence
+Opening the gate to greater wealth.
+At your command,
+Investment and wealth management
+Ping An 3.0 Era: Securing
+your health and wealth
+中国平安 PING AN
+Readers should be cautioned that a variety of factors, many of which are beyond the Company's control, affect the performance,
+operations and results of the Company, and could cause actual results to differ materially from the expectations expressed in any of
+the Company's forward-looking statements. These factors include, but are not limited to, exchange rate fluctuations, market shares,
+competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market
+conditions and other risks and factors beyond our control. These and other factors should be considered carefully and readers should not
+place undue reliance on the Company's forward-looking statements. In addition, the Company undertakes no obligation to publicly update
+or revise any forward-looking statement that is contained in this report as a result of new information, future events or otherwise. None of
+the Company, or any of its employees or affiliates is responsible for, or is making, any representations concerning the future performance
+of the Company.
+To the extent any statements made in this report contains information that is not historical are essentially forward-looking. These
+forward-looking statements include but are not limited to projections, targets, estimates and business plans that the Company expects or
+anticipates will or may occur in the future. These forward-looking statements are subject to known and unknown risks and uncertainties
+that may be general or specific. Certain statements, such as those include the words or phrases "potential", "estimates", "expects",
+"anticipates", "objective", "intends", "plans", "believes", "will", "may", "should", and similar expressions or variations on such expressions
+may be considered forward-looking statements.
+Cautionary Statements Regarding Forward-Looking Statements
+Significant Events
+128 Report of the Board of Directors
+54
+1.25
+4,765,159
+Life Insurance Business
+INSURANCE BUSINESS
+Group solvency margin ratio (%)
+Embedded value
+166.7
+185.6
+Written premiums
+174.4
+235,627
+285,874
+329,653
+458,812
+552,853
+195.4
+4.0
+205.1
+Net profit
+299,814
+252,730
+15,689
+5.0
+201.06
+8.0
+Total investment yield (%)
+4.5
+4.7
+5.1
+5.3
+5.7
+Net investment yield (%)
+9,974
+6,457
+187,256
+199,483
+219,358
+12,219
+2.9
+5.1
+5.1
+7.8
+209,649
+239,705
+353,816
+413,571
+Total equity
+2,114,082
+2,634,617
+3,120,607
+3,652,095
+4,351,588
+Total liabilities
+2,285,424
+2,844,266
+3,360,312
+4,005,911
+171,342
+Total assets
+Equity attributable to shareholders of the parent company
+Investment portfolio of insurance funds
+289,564
+Total investment yield of insurance funds (%)
+4.5
+4.7
+5.1
+5.3
+5.8
+Net investment yield of insurance funds (%)
+867,301
+1,074,188
+1,230,367
+1,474,098
+1,731,619
+130,867
+159,617
+182,709
+334,248
+Asset Management Business
+18,992
+Banking Business
+Net interest spread (%)
+66,099
+53,046
+40,688
+33,036
+18,371
+Net profit
+21,865
+15,231
+13,512
+7,977
+2.63
+2.40
+2.14
+19,802
+Net interest income
+BANKING BUSINESS(2)
+166.1
+5.6
+5.4
+3.3
+3.9
+Combined ratio (%)
+95.6
+95.3
+97.3
+95.3
+93.5
+Solvency margin ratio - Ping An Property & Casualty (%)
+182.2
+164.5
+167.1
+178.4
+2.19
+2.33
+Net interest margin (%)
+Cost-to-income ratio (%)
+Total deposits
+720,780
+620,642
+Capital adequacy ratio (%) (3)
+10.94
+Non-performing loan ratio (%)
+10.86
+1.02
+9.90
+11.37
+11.51
+0.89
+0.95
+0.53
+44
+Provision coverage ratio (%)
+165.86
+847,289
+6.5
+1,024,734
+Total loans and advances
+2.77
+2.57
+2.31
+2.37
+2.51
+31.31
+36.33
+40.77
+39.41
+44.17
+1,733,921
+1,533,183
+1,217,002
+1,021,108
+850,845
+1,216,138
+Total investment yield (%)
+1.45
+4.8
+FINANCIAL STATEMENTS
+Corporate Social Responsibility
+Chairman's Statement
+Business Performance at a Glance
+11
+Honors and Awards
+144 Independent Auditor's Report
+10
+5
+Vision and Strategy
+4
+Ping An Milestones
+2
+Introduction
+6
+145 Consolidated Statement of Income
+146
+Consolidated Statement of Comprehensive
+Income
+20
+4.6
+Insurance Business
+38
+Users, Customers and Migration
+14
+284 Corporate Information
+12
+Definition
+281
+OTHER INFORMATION
+OUR PERFORMANCE
+150 Notes to Consolidated Financial Statements
+149
+147 Consolidated Statement of Financial Position
+148 Consolidated Statement of Changes in Equity
+Consolidated Statement of Cash Flows
+1
+Five-Year Summary
+12 Management Discussion and Analysis
+Overview
+ABOUT US
+Premium income
+163,955
+143,150
+115,674
+99,089
+83,708
+5.3
+Net profit
+12,522
+8,807
+4,648
+4,979
+Net investment yield (%)
+6.3
+i
+Property and Casualty Insurance Business
+156.1
+5,856
+171.9
+Contents
+190.6
+Insurance Banking Investment
+PING AN
+4.1
+Embedded value
+326,814
+Annual Report 2015
+203,038
+264,223
+219.9
+203.2
+Solvency margin ratio - Ping An Life (%)
+5.3
+144,400
+177,460
+Y
+100.00
+J.P. Morgan International Finance Limited
+J.P. Morgan Chase Bank Berhad
+600
+270,079,309
+Long position
+Short position
+Y
+100.00
+JPMorgan Chase & Co.
+JPMorgan Chase Bank, N.A.
+168,565,947
+21,922,039
+Long position
+Short position
+Y
+J.P. Morgan Whitefriars Inc.
+0
+J.P. Morgan Chase International Holdings
+J.P. Morgan Securities plc
+Long position
+Short position
+Y
+0.59
+J.P. Morgan Overseas Capital Corporation
+J.P. Morgan Capital Financing Limited
+J.P. Morgan Securities plc
+118,580,512
+65,648,893
+Long position
+Short position
+Y
+100.00
+99.41
+168,565,947
+21,922,039
+Name of controlled corporation
+2,512,986
+8,950,000
+100.00
+JPMorgan Distribution Services, Inc.
+JPMorgan Funds Management, Inc.
+9,428
+0
+5,459,500
+Long position
+Short position
+Y
+49.00
+JPMorgan Asset Management (UK) Limited
+China International Fund Management Co Ltd
+Number of
+shares
+Nature of
+interest
+(Y/N)
+Long position
+Short position
+% control
+interest
+Direct
+Shareholders' Profile
+Changes in the Share Capital and
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 89
+Annual Report 2015
+0
+32,140,400
+Long position
+Short position
+Y
+100.00
+JPMorgan Asset Management Holdings (UK) Limited
+JPMorgan Asset Management (UK) Limited
+Name of controlling shareholder
+Long position
+Short position
+J.P. Morgan GT Corporation
+100.00
+Y
+100.00
+JPMorgan Asset Management Holdings Inc
+J.P. Morgan Investment Management Inc.
+0
+4,720,500
+Long position
+Short position
+Y
+100.00
+JPMorgan Asset Management (Asia) Inc.
+JPMorgan Asset Management (Taiwan) Limited
+0
+Short position
+3,112,500
+Long position
+Short position
+Long position
+100.00
+JPMorgan Asset Management (Asia) Inc.
+JPMorgan Asset Management (Japan) Limited
+0
+69,774,000
+Long position
+Short position
+Y
+100.00
+JPMorgan Asset Management (Asia) Inc.
+JF Asset Management Limited
+0
+Y
+Short position
+762,000
+Y
+Y
+33,670,226
+JPMorgan Chase & Co.
+J.P. Morgan Equity Holdings, Inc.
+J.P. Morgan Trust Company of Delaware
+21,922,039
+168,565,947
+Long position
+Short position
+N
+100.00
+J.P. Morgan Chase (UK) Holdings Limited
+J.P. Morgan Chase International Holdings
+131,552,567
+Short position
+458,225,392
+Long position
+N
+1,625
+100.00
+J.P. Morgan International Inc.
+131,552,567
+Short position
+458,225,392
+Long position
+N
+100.00
+J.P. Morgan International Inc.
+Bank One International Holdings Corporation
+0
+1,000,000
+Long position
+Short position
+Y
+100.00
+JPMorgan Chase Bank, N.A.
+Long position
+N
+Short position
+9,428
+Long position
+Short position
+N
+100.00
+JPMorgan Chase & Co.
+J.P. Morgan Equity Holdings, Inc.
+458,225,392
+131,552,567
+Long position
+Short position
+N
+100.00
+JPMorgan Chase & Co.
+JPMorgan Chase Bank, N.A.
+0
+37,599,900
+Long position
+Short position
+N
+100.00
+JPMorgan Asset Management Holdings Inc
+JPMorgan Asset Management International Limited
+287,146,459
+87,570,932
+Long position
+Short position
+N
+100.00
+J.P. Morgan International Finance Limited
+J.P. Morgan Overseas Capital Corporation
+0
+37,599,900
+Long position
+Short position
+100.00
+0
+J.P. Morgan International Finance Limited
+Bank One International Holdings Corporation
+100.00
+through physically settled unlisted securities
+Long position
+through cash settled listed securities
+through physically settled listed securities
+59,187,676 H shares (Long position) and
+44,108,865 H shares (Short position)
+27,956,865 H shares (Long position) and
+21,539,828 H shares (Short position)
+477,000 H shares (Long position) and
+27,238,100 H shares (Short position)
+34,038,711 H shares (Long position) and
+16,964,517 H shares (Short position)
+The entire interests and short positions of JPMorgan Chase & Co. in the Company included a lending pool of 263,636,892 H shares
+(Long position). Besides, 121,660,252 H shares (Long position) and 109,851,310 H shares (Short position) were held through derivatives
+as follows:
+(4)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+90
+0
+JPMorgan Asset Management Holdings (UK) Limited JPMorgan Asset Management International Limited
+219,674
+N
+100.00
+JPMorgan Chase & Co.
+JPMorgan Distribution Services, Inc.
+0
+5,459,500
+Long position
+Short position
+N
+100.00
+JPMorgan Asset Management Holdings (UK) Limited
+JPMorgan Asset Management (UK) Limited
+458,225,392
+131,552,567
+Long position
+Short position
+N
+Long position
+Short position
+168,565,947
+21,922,039
+Short position
+Long position
+226,957
+94,409,358
+Long position
+Short position
+N
+100.00
+JPMorgan Chase & Co.
+J.P. Morgan Broker-Dealer Holdings Inc
+8,400
+Short position
+1,214,961
+Long position
+N
+100.00
+J.P. Morgan Broker-Dealer Holdings Inc
+J.P. Morgan Capital Holdings Limited
+J.P. Morgan Securities LLC
+Short position
+Long position
+N
+100.00
+J.P. Morgan Capital Financing Limited
+13,109,596
+Short position
+0
+Long position
+Y
+100.00
+J.P. Morgan International Finance Limited
+J.P. Morgan Structured Products B.V.
+0
+168,565,947
+21,922,039
+219,674
+J.P. Morgan Overseas Capital Corporation
+N
+N
+100.00
+J.P. Morgan Capital Holdings Limited
+J.P. Morgan Chase (UK) Holdings Limited
+0
+Short position
+78,369,000
+Long position
+N
+100.00
+JPMorgan Asset Management Holdings Inc
+JPMorgan Asset Management (Asia) Inc.
+149,639,126
+1,625
+Long position
+Short position
+27.27
+N
+JPMorgan Chase & Co.
+JPMorgan Asset Management Holdings Inc
+21,922,039
+Short position
+168,565,947
+Long position
+N
+72.73
+J.P. Morgan International Finance Limited
+J.P. Morgan Capital Holdings Limited
+21,922,039
+Short position
+168,565,947
+Long position
+100.00
+Y
+Shenzhen Investment Holdings Co., Ltd.
+JPMorgan Asset Management (Asia) Inc.
+Interest of controlled
+interest in shares
+0.04
+0.10
+Long position
+1.86
+4.58
+340,735,134 Long position
+7,602,203
+Person having a security
+Beneficial owner
+H
+Deutsche Bank Aktiengesellschaft
+6.70
+16.44
+Short position
+5.27
+12.93
+963,300,222
+1,224,395,172
+་ི
+Interest of controlled
+corporations
+(5)
+Total:
+corporations
+337
+4.37
+10.73
+Long position
+798,969,126
+Interest of controlled
+19,302,347 Long position
+0.26
+0.11
+corporations
+621,586,439
+Beneficial owner
+A
+Huaxia Life Insurance Co., Ltd.
+5.27
+8.89
+Long position
+962,719,102
+Beneficial owner
+A
+1.63
+4.01
+Short position
+298,853,336
+interest in shares
+(6)
+2.05
+5.03
+374,522,200
+(6)
+Total:
+0.00
+0.01
+Long position
+385,000
+Other
+0.04
+0.09
+6,497,516 Lending Pool
+Custodian
+Beneficial owner
+90
+0.90
+2.21
+1.48
+109,859,710
+Total:
+0.00
+0.00
+Short position
+2,225
+Investment Manager
+0.60
+1.48
+Short position
+109,857,485
+Beneficial owner
+4.40
+0.60
+10.81
+Total:
+1.44
+3.54
+Lending Pool
+263,636,892
+Custodian
+0.00
+0.00
+Long position
+2,200
+Trustee
+0.86
+2.10
+through cash settled unlisted securities
+805,016,340
+Long position
+UBS AG
+Beneficial owner
+Long position
+164,331,096
+Person having a security
+H
+UBS Group AG
+6.51
+15.97
+1,189,596,046 Short position
+(4)
+Beneficial owner
+5.11
+12.54
+933,925,121
+(4)
+H
+Total:
+1.36
+101,096,520 Long position
+(4)
+corporations
+Interest of controlled
+interest in shares
+0.90
+2.22
+Long position
+165,093,247
+Person having a security
+3.65
+8.97
+667,735,354 Long position
+0.55
+100.00
+5.74
+- Universal Insurance Products
+100.00
+Chia Tai Primrose Investment Limited
+King Beyond Global Limited
+76,858,634
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Ewealth Global Limited
+20,730,730
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Majestic Junilee Limited
+47,352,072
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Jubilee Success Holdings Limited
+505,772,634
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Bloom Fortune Group Limited
+261,581,728
+Long position
+Y
+Long position
+42,673,646
+(2)
+JF International Management Inc.
+8,400
+1,214,961
+Long position
+Short position
+Y
+100.00
+J.P. Morgan Securities LLC
+J.P. Morgan Clearing Corp
+93,194,397
+218,557
+Long position
+Short position
+Y
+100.00
+J.P. Morgan Broker-Dealer Holdings Inc
+shares
+Y
+Number of
+(Y/N)
+% control
+Name of controlling shareholder
+Name of controlled corporation
+J.P. Morgan Securities LLC
+interest
+Direct
+According to the disclosure form filed by JPMorgan Chase & Co. on December 11, 2015, the following interests in H shares were held
+by JPMorgan Chase & Co. through its controlled corporations, the details of which are as follows:
+JPMorgan Chase & Co. was deemed to be interested in a total of 805,016,340 H shares (Long position) and 109,859,710 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+(3)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+88
+Boom Dragon Limited and Long Growth Global Limited held 88,000,000 H shares (Long position) and 12,000,000 H shares (Long
+position) in the Company, respectively, which were wholly owned by King Ace International Limited, which was in turn wholly
+owned by Dhanin Chearavanont. In addition, King Ace International Limited and Dhanin Chearavanont were also deemed to be
+interested in 2,357,656,226 H shares (Long position) and 605,324,590 H shares (Short position) by virtue of section 317 of the SFO.
+The entire interests of CP Group Ltd. in the Company included 605,324,590 H shares (Short position) which were held through
+derivatives, the category of which was through physically settled unlisted securities. In addition, CP Group Ltd. was also deemed to
+be interested in 100,000,000 H shares (Long position) by virtue of section 317 of the SFO.
+Nature of
+interest
+100.00
+Chia Tai Primrose Investment Limited
+Business Fortune Holdings Limited
+N
+100.00
+CT Bright Group Company Limited (Formerly
+known as "Chia Tai Resources Holdings Limited")
+2,357,656,226
+Long position
+N
+100.00
+CPG Overseas Company Limited
+2,357,656,226
+Long position
+N
+100.00
+Chareon Pokphand Group Company Limited
+Nature of Number of
+interest
+shares
+Long position
+(Y/N)
+Name of controlling shareholder
+Direct
+interest
+Chia Tai Giant Far Limited
+CT Bright Group Company Limited (Formerly
+known as "Chia Tai Resources Holdings Limited")
+CPG Overseas Company Limited
+Name of controlled corporation
+According to the disclosure form filed by CP Group Ltd. on November 4, 2015, the following interests in H shares were held by CP
+Group Ltd. through its controlled corporations, the details of which are as follows:
+CP Group Ltd. was deemed to be interested in a total of 2,357,656,226 H shares (Long position) and 605,324,590 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+(1)
+Notes:
+Changes in the Share Capital and
+Shareholders' Profile
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 87
+Annual Report 2015
+% control
+3.40
+2,357,656,226
+Chia Tai Giant Far Limited
+789,001,992
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+All Gain Trading Limited
+605,324,590
+Short position
+605,324,590
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Easy Boom Developments Limited
+Chia Tai Primrose Holdings Limited
+2,349,296,026
+N
+100.00
+Chia Tai Primrose Holdings Limited
+Chia Tai Primrose Investment Limited
+2,349,296,026
+Long position
+N
+100.00
+Chia Tai Giant Far Limited
+Chia Tai Primrose Holdings Limited
+8,360,200
+Long position
+Y
+100.00
+Long position
+UBS AG was deemed to be interested in a total of 101,096,520 H shares (Long position) in the Company through a number of its
+direct wholly-owned subsidiaries.
+1,218,508 H shares (Long position) and
+24,289,004 H shares (Short position)
+Direct
+interest
+0
+1,352,962
+Long position
+Short position
+Y
+100.00
+Deutsche Asset Management Group Limited
+Deutsche Asset Management (UK) Limited
+0
+31,000
+Long position
+Short position
+Y
+100.00
+Deutsche Asset Management Group Limited
+Deutsche Asset Management (Korea)
+Company Limited
+0
+1,383,962
+Long position
+Short position
+N
+100.00
+DB UK PCAM Holdings Limited
+Deutsche Asset Management Group Limited
+0
+1,383,962
+Long position
+Short position
+N
+100.00
+Deutsche Bank Aktiengesellschaft
+DB UK PCAM Holdings Limited
+0
+Deutsche Bank Luxembourg S.A.
+Deutsche Bank Aktiengesellschaft
+100.00
+N
+11,115,115
+Long position
+Short position
+Y
+100.00
+DWS Holding & Service GmbH
+Deutsche Asset & Wealth Management
+Investment GmbH
+0
+11,115,115
+Long position
+Short position
+N
+99.38
+DB Finanz-Holding GmbH
+DWS Holding & Service GmbH
+0
+Short position
+11,115,115
+N
+100.00
+Deutsche Bank Aktiengesellschaft
+DB Finanz-Holding GmbH
+1,331,200
+0
+Long position
+Short position
+Y
+100.00
+Deutsche Bank Luxembourg S.A.
+Deutsche Asset & Wealth Management
+Investment S.A.
+0
+Short position
+1,331,200
+Long position
+Long position
+Short position
+3,979,782
+Long position
+Y
+through cash settled listed securities
+through physically settled listed securities
+443,457,733 H shares (Long position) and
+997,317,364 H shares (Short position)
+221,848,028 H shares (Long position) and
+148,987,778 H shares (Short position)
+Long position
+7,290,813 H shares (Long position) and
+19,003,500 H shares (Short position)
+Besides, 673,815,082 H shares (Long position) and 1,189,597,646 H shares (Short position) were held through derivatives as follows:
+0
+Short position
+412,000
+Long position
+Y
+100.00
+UBS Group AG
+through physically settled unlisted securities
+UBS Swiss Financial Advisers AG
+Short position
+25,272
+Long position
+Y
+100.00
+UBS Group AG
+UBS Bank (Canada)
+0
+Short position
+73,864
+Long position
+Y
+100.00
+UBS Group AG
+0
+0
+through cash settled unlisted securities
+Ping An Insurance (Group) Company of China, Ltd.
+100.00
+Deutsche Asia Pacific Holdings Pte Ltd
+Deutsche Asset Management (Asia) Limited
+0
+3,979,782
+Long position
+Short position
+N
+100.00
+DB Valoren S.à r.l.
+Deutsche Asia Pacific Holdings Pte Ltd
+0
+3,979,782
+Long position
+Short position
+N
+Annual Report 2015
+100.00
+shares
+(Y/N) Nature of interest
+% control
+Name of controlling shareholder
+DB Valoren S.à r.l.
+Name of controlled corporation
+Number of
+Direct
+interest
+According to the disclosure form filed by Deutsche Bank Aktiengesellschaft on August 27, 2015, the following interests in H shares
+were held by Deutsche Bank Aktiengesellschaft through its controlled corporations, the details of which are as follows:
+Deutsche Bank Aktiengesellschaft was deemed to be interested in a total of 19,302,347 H shares (Long position) in the Company by
+virtue of its control over several corporations.
+(6)
+Changes in the Share Capital and
+Shareholders' Profile
+CORPORATE GOVERNANCE
+93
+Deutsche Bank Aktiengesellschaft
+UBS Financial Services Inc.
+DB Capital Markets (Deutschland) GmbH
+100.00
+Male
+Executive Director, Executive Vice
+46
+Male
+Executive Director and President
+REN Huichuan
+YAO Jason Bo
+President
+2015.06-2018 election
+2015.06-2018 election
+63
+Male
+60
+Male
+Chairman and Chief Executive Officer
+Vice Chairman and Executive Vice
+MA Mingzhe
+SUN Jianyi
+Age appointment
+Sex
+Period of
+Name
+BASIC INFORMATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Positions
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 95
+Annual Report 2015
+Save as disclosed above, the Directors and Supervisors of the Company are not aware of any other person
+(other than the Directors, Supervisors and chief executive of the Company) having any interest or short
+position in the shares and underlying shares of the Company as at December 31, 2015 which would fall to be
+disclosed to the Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO or which
+were recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO.
+Percentage figures may not add up to the totals due to rounding.
+through cash settled unlisted securities
+through cash settled listed securities
+through physically settled listed securities
+45
+2015.06-2018 election
+2015.06-2018 election
+President, Chief Financial Officer and
+Chief Actuary
+LEE Yuansiong
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+96
+2015.06-2018 election
+2015.06-2018 election
+2016.01-2018 election
+51
+50
+Male
+Non-executive Director
+XIONG Peijin (1)
+Male
+Non-executive Director
+YANG Xiaoping
+51
+Male
+Non-executive Director
+44,149,360 H shares (Long position) and
+14,441,360 H shares (Short position)
+Soopakij CHEARAVANONT
+Female 53
+Non-executive Director
+LIN Lijun
+Resource Officer
+2015.06-2018 election
+Female 42
+Executive Director, Chief Human
+CAI Fangfang
+Business Officer
+President and Chief Insurance
+2015.06-2018 election
+50
+Male
+Executive Director, Executive Vice
+2015.06-2018 election
+274,401,976 H shares (Long position) and
+279,141,976 H shares (Short position)
+2,172,000 H shares (Long position) and
+5,270,000 H shares (Short position)
+(7)
+Name of controlled corporation
+Number of
+interest
+Direct
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+94
+0
+280,200
+Long position
+Short position
+N
+100.00
+Sal. Oppenheim jr. & Cie. AG & Co.
+Kommanditgesellschaft auf Aktien
+Sal. Oppenheim jr. & Cie. Luxembourg S.A.
+Name of controlling shareholder
+280,200
+0
+N
+100.00
+DB Capital Markets (Deutschland) GmbH
+Sal. Oppenheim jr. & Cie. AG & Co.
+Kommanditgesellschaft auf Aktien
+900,088
+0
+Long position
+Short position
+Y
+100.00
+DB Capital Markets (Deutschland) GmbH
+Deutsche Asset & Wealth Management
+International GmbH
+0
+1,180,288
+Long position
+Short position
+N
+Long position
+Short position
+Deutsche Bank Aktiengesellschaft
+% control
+shares
+The entire interests and short positions of Deutsche Bank Aktiengesellschaft in the Company included a lending pool of 6,497,516
+H shares (Long position). Besides, 320,723,336 H shares (Long position) and 298,853,336 H shares (Short position) were held through
+derivatives as follows:
+0
+312,000
+Long position
+Short position
+Y
+100.00
+Deutsche Holdings No. 4 Limited
+Abbey Life Assurance Company Limited
+0
+312,000
+Long position
+Short position
+N
+94.90
+Deutsche Finance No. 2 Limited
+(Y/N) Nature of interest
+Deutsche Holdings No. 4 Limited
+312,000
+Long position
+Short position
+N
+100.00
+Deutsche Bank Aktiengesellschaft
+Deutsche Finance No. 2 Limited
+0
+Short position
+280,200
+Long position
+Y
+100.00
+Sal. Oppenheim jr. & Cie. Luxembourg S.A.
+Oppenheim Asset Management Services S.à r.l.
+0
+0
+Short position
+841,009
+Annual Report 2015
+0
+Short position
+13,700
+Long position
+Y
+100.00
+UBS AG
+UBS Bank (Canada)
+34,814
+0
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Financial Services Inc.
+0
+29,000
+Long position
+Short position
+Y
+100.00
+UBS Global Asset Management (Deutschland) GmbH UBS AG
+0
+16,052,000
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Global Asset Management (UK) Ltd
+64,000
+0
+Ping An Insurance (Group) Company of China, Ltd. 91
+CORPORATE GOVERNANCE
+Changes in the Share Capital
+Shareholders' Profile
+and
+UBS O'Connor Limited
+622,000
+0
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Switzerland AG
+0
+12,000
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Global Asset Management Life Ltd
+Long position
+Short position
+0
+510,000
+Long position
+Y
+100.00
+UBS AG
+UBS Swiss Financial Advisers AG
+shares
+Number of
+Nature of
+interest
+(Y/N)
+% control
+Name of controlling shareholder
+Name of controlled corporation
+Direct
+interest
+Short position
+Y
+100.00
+UBS AG
+UBS AG
+UBS Global Asset Management (Australia) Ltd
+0
+2,503,000
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Global Asset Management (Americas) Inc.
+0
+22,604,966
+Long position
+Short position
+Y
+100.00
+100.00
+UBS AG
+0
+13,347,500
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Fund Management (Switzerland) AG
+shares
+Number of
+Nature of
+interest
+(Y/N)
+% control
+Name of controlling shareholder
+Name of controlled corporation
+UBS Fund Services (Luxembourg) S.A.
+UBS AG
+Y
+370,000
+UBS Global Asset Management Trust Company
+0
+26,022,000
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Global Asset Management (Singapore) Ltd
+0
+1,964,104
+Long position
+Short position
+Y
+100.00
+UBS AG
+Long position
+Short position
+UBS Global Asset Management (Japan) Ltd
+12,470,936
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Global Asset Management (Hong Kong) Limited
+0
+4,440,000
+Long position
+Short position
+Y
+100.00
+UBS AG
+UBS Global Asset Management (Canada) Inc.
+0
+0
+100.00
+Y
+Long position
+Short position
+UBS Asset Management (UK) Limited
+174,000
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management Trust Company
+0
+32,438,500
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Singapore) Ltd
+UBS Group AG
+shares
+% control
+Name of controlling shareholder
+Name of controlled corporation
+Number of
+interest
+Direct
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+92
+12,000
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+(Y/N) Nature of interest
+UBS Asset Management Life Limited
+100.00
+Long position
+Long position
+Y
+100.00
+UBS Group AG
+UBS Switzerland AG
+18,500
+Short position
+31,000
+Long position
+Y
+100.00
+UBS Group AG
+UBS O'Connor Limited
+0
+Y
+16,102,000
+Y
+100.00
+UBS Group AG
+UBS Fund Management (Switzerland) AG
+0
+27,420,300
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Fund Management (Luxembourg) S.A.
+0
+Short position
+21,701,500
+Long position
+Short position
+According to the disclosure form filed by UBS AG on July 30, 2015, the following interests in H shares were held by UBS AG through
+its controlled corporations, the details of which are as follows:
+0
+Long position
+Short position
+100.00
+UBS Group AG
+UBS Asset Management (Americas) Inc.
+678,783,911
+1,224,376,672
+Long position
+Short position
+Y
+100.00
+shares
+(Y/N) Nature of interest
+% control
+UBS Group AG
+Name of controlling shareholder
+UBS AG
+Name of controlled corporation
+Y
+Number of
+According to the disclosure form filed by UBS Group AG on December 21, 2015, the following interests in H shares were held by UBS
+Group AG through its controlled corporations, the details of which are as follows:
+UBS Group AG was deemed to be interested in a total of 798,969,126 H shares (Long position) and 1,224,395,172 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+through cash settled unlisted securities
+through physically settled unlisted securities
+through cash settled listed securities
+through physically settled listed securities
+450,524,751 H shares (Long position) and
+998,751,061 H shares (Short position)
+182,785,280 H shares (Long position) and
+51,911,643 H shares (Short position)
+1,252,878 H shares (Long position) and
+29,279,768 H shares (Short position)
+9,955,876 H shares (Long position) and
+9,967,000 H shares (Short position)
+Besides, 644,518,785 H shares (Long position) and 1,089,909,472 H shares (Short position) were held through derivatives as follows:
+(5)
+0
+36,500
+Direct
+interest
+2,225,604
+Long position
+Short position
+0
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Japan) Ltd
+0
+12,834,166
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Hong Kong) Ltd
+29,000
+0
+Long position
+Short position
+Y
+1,010,000
+100.00
+UBS Asset Management (Deutschland) GmbH
+0
+4,440,000
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Canada) Co.
+415,000
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Australia) Ltd
+UBS Group AG
+156,308,445
+JPMorgan Chase & Co.
+2.11
+Easy Boom Developments Limited
+4.32
+10.59
+789,001,992 Long position
+(1)
+Beneficial owner
+H
+All Gain Trading Limited
+in issue (%)
+H
+in issue (%)
+H/A shares
+Nature of
+interest
+Notes
+H/A Shares Capacity
+Name of substantial shareholder
+Percentage of
+Percentage of
+total number of
+Interests and short positions of other substantial shareholders
+Investment Manager
+total shares
+Beneficial owner
+Number of
+H/A Shares
+605,324,590
+605,324,590
+(1)
+5.17
+Long position
+385,068,803
+Beneficial owner
+JPMorgan Chase & Co.
+27
+2.77
+629
+6.79
+H
+(1)
+505,772,634 Long position
+8.13
+3.31
+Long position
+8.13
+Short position
+3.31
+Bloom Fortune Group Limited
+H
+Beneficial owner
+2015.06-2018 election
+46
+2015.06-2018 election
+Male
+Male
+39
+Retired Employee Representative
+Supervisor
+Male
+53
+2012.07-2015.06
+Male
+Female 36
+55
+2015.06-2018 election
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+Employee Representative Supervisor
+Retired Shareholder Representative
+Supervisor
+Positions
+2015.06-2018 election
+2012.07-2015.06
+PENG Zhijian
+ZHANG Wangjin
+PAN Zhongwu
+GAO Peng (4)
+LIN Li(4)
+SUN Jianping(4)
+ZHAO Fujun (4)
+Sex
+2015.06-effective date
+of resignation (3)
+Age appointment
+Chairman of Supervisory Committee
+Independent Supervisor
+Male
+68
+Male
+67
+(Independent Supervisor)
+Retired Employee Representative
+Supervisor
+Senior Vice President
+50
+Male
+Secretary of the Board
+JIN Shaoliang
+2008.10-
+50
+Male
+Chief Legal Officer, Company Secretary
+2007.04-
+60
+Male
+GU Liji
+2007.01-
+58
+Male
+Senior Vice President
+YAO Jun
+CHEN Kexiang
+CAO Shifan
+2012.07-2015.06
+TAN Sin Yin (5)
+Executive Vice President,
+Female 38
+2015.06-
+Chief Operation Officer and
+Male
+Chief Information Officer
+Senior Vice President,
+Female 59
+2011.01-
+Chief Internal Auditor,
+Compliance Officer and
+Person-in-charge of Auditing
+IP So Lan
+Name
+2015.06-2018 election
+2015.06-2016.01
+Directors, Supervisors, Senior
+Management and Employees
+SUN Dongdong
+WONG Oscar Sai Hung
+2015.06-2018 election
+68
+Male
+2015.06-2018 election
+73
+Male
+Independent Non-executive Director
+Independent Non-executive Director
+YIP Dicky Peter
+2016.01-2018 election
+2015.06-2018 election
+53
+Male
+Independent Non-executive Director
+WOO Ka Biu Jackson
+Stephen Thomas MELDRUM
+56
+Male
+From left to right
+Ms. CAI Fangfang
+Mr. YAO Jason Bo
+Ms. IP So Lan
+Mr. REN Huichuan
+Mr. CHEN Kexiang
+Mr. MA Mingzhe
+Mr. LEE Yuansiong
+Mr. SUN Jianyi
+Independent Non-executive Director
+Independent Non-executive Director
+Mr. CAO Shifan
+Name
+LIU Chong(1)
+Positions
+Sex
+Period of
+Age appointment
+Non-executive Director
+Ms. TAN Sin Yin
+Male
+60
+2015.06-2018 election
+51
+TANG Yunwei(2)
+Retired Independent Non-executive
+Director
+Male
+72
+2015.06-2016.01
+2012.06-2015.06
+Male
+LEE Carmelo Ka Sze (2)
+Male
+55
+2012.06-2015.06
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 97
+CORPORATE GOVERNANCE
+Retired Independent Non-executive
+Director
+Period of
+Resigned Non-executive Director
+2012.06-2015.06
+Male
+56
+2015.06-2018 election
+GE Ming(2)
+Independent Non-executive Director
+Male
+LU Hua(1)
+64
+Male
+53
+55
+LI Zhe (2)
+Retired Non-executive Director
+Female 46
+Resigned Vice Chairman, resigned
+Non-executive Director
+2012.02-
+FAN Mingchun (1)
+Chief Investment Officer
+Director, General
+Manager, Deputy
+Secretary of the
+Party Committee
+Vice President
+Position
+Business Fortune Holdings Limited
+Bloom Fortune Group Limited
+All Gain Trading Limited
+Business Fortune Holdings Limited
+Bloom Fortune Group Limited
+Shum Yip Group Limited
+All Gain Trading Limited
+Shenzhen Investment Holdings
+Co., Ltd.
+Name of corporate shareholder
+YANG Xiaoping
+Soopakij CHEARAVANONT
+LIU Chong
+XIONG Peijin
+Name
+POSITIONS HELD IN CORPORATE SHAREHOLDERS BY DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT
+CHAN Tak Yin, has been the Chief Investment Officer of the Company since August 2012 and the Chairman
+of Ping An Asset Management (Hong Kong) since January 2009. Mr. Chan is also a Non-executive Director
+of Yunnan Baiyao Group Co., Ltd. Mr. Chan joined Ping An in 2005 and was subsequently appointed as
+the Deputy Chief Investment Officer of the Company as well as the Chairman and CEO of Ping An Asset
+Management. Prior to this, he held the posts of fund manager, investment director, chief investment
+director and managing director in BNP Paribas Asset Management SAS, Barclays Investment Management
+Company, SHK Fund Management Limited and Standard Chartered Investment Management Company,
+respectively. Mr. Chan graduated from the University of Hong Kong with a Bachelor's Degree in Arts.
+See "Executive Directors" for working experiences, positions and part-time jobs of Mr. Ma Mingzhe, Mr. Sun
+Jianyi, Mr. Ren Huichuan, Mr. Yao Jason Bo and Mr. Lee Yuansiong.
+TAN Sin Yin, has been the Senior Vice President of the Company since June 2015 and has been
+re-designated as the Executive Vice President of the Company on January 12, 2016. Ms. Tan joined Ping
+An in January 2013, she has been the Chief Information Officer and the Chief Operation Officer of the
+Company since January 2013 and December 2013, respectively. She is also the Chairman and CEO of Ping An
+Technology and Vice Chairman of Ping An Financial Technology. Ms. Tan is currently a director of a number
+of controlled subsidiaries of the Company including Ping An Property & Casualty, Ping An Life, Ping
+An Annuity and Ping An Asset Management. Prior to this, she was a Vice Chairman and Global Director
+(Partner) of McKinsey & Company. Ms. Tan graduated from the Massachusetts Institute of Technology (MIT)
+with two Bachelor's degrees in Electrical Engineering and Economics and a Master's degree in Electrical
+Engineering and Computer Science.
+IP So Lan, has been the Senior Vice President of the Company since January 2011, and the Chief Internal
+Auditor, Person-in-charge of Auditing and Compliance Officer since March 2006, March 2008 and July 2010,
+respectively. Ms. Ip joined the Company in 2004 and was the Assistant to the President of Ping An Life from
+February 2004 to March 2006, the Assistant to the President of the Company from March 2006 to January
+2011. Ms. Ip has been the Non-executive Director of Ping An Bank since June 2010. Prior to this, Ms. Ip
+worked with AIA and Prudential Hong Kong etc.. She holds a Bachelor's Degree in Computing from the
+Polytechnic of Central London.
+CHEN Kexiang, has been the Senior Vice President of the Company since January 2007. Mr. Chen joined
+the Company in December 1992. From February 2003 to January 2007, Mr. Chen served as Assistant to the
+President of the Company. From June 2002 to May 2006, he served as General Secretary of the Board of
+the Company, and General Manager of the General Office from June 2002 to April 2007. From 1999 to 2002,
+Mr. Chen served as Senior Vice President and then President of Ping An Trust. From 1996 to 1999, Mr. Chen
+served as the Deputy Director and Director of the General Office of our Company. From 1995 to 1996, Mr.
+Chen served as the President of Ping An Building Management Company. From 1993 to 1995, he served as
+the Assistant Director and Deputy Director of the General office of the Parent Company. Mr. Chen has a
+Master's degree in Finance from Zhongnan University of Economics and Law (formerly known as Zhongnan
+University of Economics).
+CAO Shifan, has been the Senior Vice President of the Company since April 2007, and has been the
+Chairman of the Labour Union of the Company, Deputy Secretary of the Party Committee and Secretary
+of the Disciplinary Committee since May 2007 and June 2006, respectively. Mr. Cao joined the Company in
+November 1991. From March 2004 to April 2007, he was the Chairman of Ping An Property & Casualty. From
+December 2002 to April 2007, he served as the Chief Executive Officer of Ping An Property & Casualty. From
+December 2002 to June 2005, he was President of Ping An Property & Casualty. From April to December
+2002, he was Senior Vice President of Ping An Insurance Company of China. Ltd. Mr. Cao has a Master's
+degree in Economics from Zhongnan University of Economics and Law (previously Zhongnan University of
+Economics).
+Annual Report 2015
+Period of engagement
+May 2014-
+Ping An Insurance (Group) Company of China, Ltd.
+JIN Shaoliang, has been the Secretary of the Board of the Company since February 2012. Mr. Jin has been
+Director of the Board Office and Investor Relations Officer of the Company, respectively since March 2007
+and June 2004. Mr. Jin has successively held different positions of the Company since he joined Ping An in
+September 1992, including General Manager of Re-insurance Department, Director of the General Actuary
+Office and Assistant General Manager of Strategy Development Office. Mr. Jin has Master's degrees in
+Management of Commercial Enterprises and Marine Engineering, from Norwegian Institute of Technology.
+Chief Actuary
+See "Executive Directors" for the working experiences, positions and part-time jobs of Mr. Yao Jason Bo,
+the Chief Actuary of the Company.
+Company Secretary
+See "Senior Management" for the working experiences, positions and part-time jobs of Mr. Yao Jun, the
+Company Secretary of the Company.
+Chief Investment Officer
+YAO Jun, has been the Chief Legal Officer and Company Secretary since September 2003 and May 2008,
+respectively. He has been appointed as the general manager of the Legal Department of the Company
+since April 2007. Between October 2008 and February 2012, he was the Secretary of the Board of the
+Company and the Joint Secretary of the Company from June 2004 to May 2008. Mr. Yao is currently a
+director of a number of controlled subsidiaries of the Company including Ping An Property & Casualty,
+Ping An Life, Ping An Annuity and Ping An Health. Mr. Yao joined the Company in September 2003, before
+that, he was a partner of Commerce & Finance Law Offices. Mr. Yao is a fellow of FCIS and FCS. He holds
+a Master's degree in Civil and Commercial Law from Peking University and a Doctorate degree in Legal
+Sociology from Huazhong University of Science and Technology.
+April 2010-
+Chairman
+October 2012-
+2.
+3.
+4.
+6.
+The election of the new session of the Board of Directors was passed at the 2014 Annual General
+Meeting of the Company held on June 15, 2015. According to the resolution, the 10th session of the
+Board of Director was composed of 17 Directors. Ms. Li Zhe did not stand for re-election as a Director
+of the Company due to personal work arrangement, and Mr. Tang Yunwei and Mr. Lee Carmelo Ka Sze
+did not stand for re-election as Directors of the Company due to expiration of their terms of office
+of 6 years as Independent Non-executive Directors. The term of office of Ms. Li Zhe expired on June
+15, 2015. According to the resolution passed at the General Meeting, Mr. Ge Ming was elected as an
+Independent Non-executive Director of the 10th Session of the Board of Directors of the Company.
+The qualification of Mr. Ge Ming as a Director of the Company was obtained from CIRC on June 30,
+2015, on which day the appointment of Mr. Ge Ming and the resignation of Mr. Tang Yunwei and Mr.
+Lee Carmelo Ka Sze became effective.
+The election of the new session of the Supervisory Committee of the Company was passed at the
+2014 Annual General Meeting of the Company held on June 15, 2015. According to the resolution, the
+8th session of the Supervisory Committee was composed of 5 Supervisors. Mr. Lin Li, Mr. Sun Jianping
+and Mr. Zhao Fujun did not stand for re-election as Supervisors due to personal work arrangement.
+The term of office of Mr. Lin Li expired on June 15, 2015. According to the resolution passed at the
+employee representative meeting of the Company held on January 23, 2015, Mr. Gao Peng was elected
+as an Employee Representative Supervisor of the 8th session of the Supervisory Committee of the
+Company. The qualification of Mr. Gao Peng as a Supervisor of the Company was obtained from
+CIRC on June 30, 2015, on which day the appointment of Mr. Gao Peng and the resignation of Mr. Sun
+Jianping and Mr. Zhao Fujun became effective.
+1.
+The Supervisory Committee of the Company received a letter of resignation from Mr. Peng Zhijian
+on November 12, 2015. Mr. Peng Zhijian proposed to resign as a supervisor of the Company due to
+personal work arrangement. The resignation of Mr. Peng Zhijian as a supervisor shall be effective upon
+the approval of the qualification of the new supervisor (who is appointed to fill Mr. Peng's vacancy)
+from CIRC. Prior to that, Mr. Peng Zhijian shall continue to perform his duties as a supervisor in
+accordance with the laws, administrative regulations and the Articles of Association.
+As considered and approved at the 17th meeting of the 9th session of the Board of Directors held on
+March 19, 2015, Ms. Tan Sin Yin was appointed as the Senior Vice President of the Company. Ms. Tan
+Sin Yin was granted the qualifications to act as the Senior Vice President by CIRC on May 28, 2015
+and officially served as the Senior Vice President of the Company since June 1, 2015. She has been
+re-designated as the Executive Vice President of the Company since January 12, 2016.
+Mr. Chan Tak Yin no longer served as the Senior Management of the Company since July 10, 2015, his
+position of the Chief Investment Officer remains unchanged.
+106
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+CHAN Tak Yin (6)
+Due to personal work arrangement, Mr. Fan Mingchun and Mr. Lu Hua have tendered their resignations
+as Non-executive Directors of the Company. According to the resolution passed at the 2nd
+Extraordinary General Meeting of 2015 of the Company held on December 17, 2015, Mr. Xiong Peijin and
+Mr. Liu Chong were elected as Non-executive Directors of the Company in place of Mr. Fan Mingchun
+and Mr. Lu Hua, respectively. The qualifications of Mr. Xiong Peijin and Mr. Liu Chong as Directors of
+the Company were obtained from CIRC on January 8, 2016, on which day the appointment of Mr. Xiong
+Peijin and Mr. Liu Chong in place of Mr. Fan Mingchun and Mr, Lu Hua became effective.
+Senior Management
+APPOINTMENT OR REMOVAL OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT DURING THE
+REPORTING PERIOD
+CORPORATE GOVERNANCE
+Chairman
+October 2012-
+Chairman
+October 2012-
+President
+October 2012-
+Directors, Supervisors, Senior
+Management and Employees
+President
+President
+October 2012-
+Annual Report 2015
+For details of the other engagements information of Directors, Supervisors and Senior Management in non-
+shareholders outside the Group, please refer to "Major working experiences and part-time jobs of Directors,
+Supervisors, Senior Management and Key Personnel".
+Ping An Insurance (Group) Company of China, Ltd.
+105
+October 2012-
+GAO Peng, has been an Employee Representative Supervisor of the Company since June 2015, and
+is currently the General Manager of the Remuneration Planning and Management Department of the
+Company, and is also currently a Director of a number of controlled subsidiaries of the Company including
+Ping An Asset Management. Mr. Gao joined the Company in October 2000, and has served as the Deputy
+General Manager of the Talent Performance Management Department and the Deputy General Manager of
+the Employee Services Management Department of the Company successively. Mr. Gao holds a Bachelor's
+degree in Finance from Zhejiang University.
+5.
+104
+MAJOR WORKING EXPERIENCES AND PART-TIME JOBS OF DIRECTORS, SUPERVISORS, SENIOR
+MANAGEMENT AND KEY PERSONNEL
+Directors
+Executive Directors
+MA Mingzhe, founder of the Company. Mr. Ma founded Ping An Insurance Company in March 1988, and
+is the current Chairman and CEO of the Company. Since the establishment of the Company, Mr. Ma has
+served as President, Director and Chairman and CEO of the Company, and has been fully involved in the
+operation and management of the Company. Prior to founding the Company, Mr. Ma was the Deputy
+Manager of China Merchants Shekou Industrial Zone Social Insurance Company. Mr. Ma has a Doctorate
+degree in Money and Banking from Zhongnan University of Economics and Law (previously Zhongnan
+University of Economics).
+SUN Jianyi, has been an Executive Director of the Company since March 1995 and the Vice Chairman of
+the Board of Directors since October 2008. Mr. Sun has been serving as the Executive Vice President of the
+Company since October 1994, and is also the Chairman of the Board of Directors of Ping An Bank which is a
+subsidiary of the Company, a Non-executive Director of China Vanke Co., Ltd. and China Insurance Security
+Fund Co., Ltd., and an Independent Non-executive Director of Haichang Holdings Ltd.. Since joining the
+Company in July 1990, Mr. Sun has been the General Manager of the Management Department, Senior Vice
+President, Executive Vice President and Vice Chief Executive Officer. Prior to joining the Company, Mr. Sun
+was the Head of the Wuhan Branch of the PBOC, the Deputy General Manager of the Wuhan Branch Office
+of the People's Insurance Company of China and the General Manager of Wuhan Securities Company. Mr.
+Sun has a Diploma in Finance from Zhongnan University of Economics and Law (previously Zhongnan
+University of Economics).
+Ping An Insurance (Group) Company of China, Ltd.
+REN Huichuan, has been an Executive Director of the Company since July 2012, and is currently the
+President of the Company, the Director of a number of controlled subsidiaries of the Company including
+Ping An Property & Casualty, Ping An Life, Ping An Asset Management, Ping An Trust, and was appointed
+as the acting Chairman of Ping An Trust. Mr. Ren joined the Company in 1992, and served as the Senior Vice
+President of the Company between June 2010 and March 2011, Chief Insurance Business Officer between
+June 2010 and December 2010, the Chairman and CEO of Ping An Property & Casualty between April
+2007 and May 2011, and was appointed as an Employee Representative Supervisor of the Company from
+March 2009 to March 2010, and has been the Chairman and CEO of WanLiTong between February 2015 and
+December 2015. Before that, Mr. Ren had been the assistant to the President and Financial Director of the
+Company, the Assistant Director of the Development and Reform Centre, Senior Vice President of Ping
+An Property & Casualty and the Assistant Manager of the property & casualty insurance business of the
+Company. Mr. Ren holds an MBA degree from Peking University.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+99
+99
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+YAO Jason Bo, has been an Executive Director of the Company since June 2009, and is the Executive Vice
+President, Chief Financial Officer and Chief Actuary of the Company. Mr. Yao is the director of a number of
+controlled subsidiaries of the Company including Ping An Bank, Ping An Life, Ping An Property & Casualty,
+and Ping An Asset Management. Mr. Yao joined the Company in May 2001 and served as the Senior Vice
+President of the Company from October 2012 to January 2016. Prior to that, Mr. Yao has successively held
+different positions of the Company including the Deputy General Manager of the Product Centre, the
+Deputy Chief Actuary, the General Manager of the Corporate Planning Department, the Deputy Financial
+Officer and Financial Director of the Company. Prior to joining the Company, Mr. Yao served in Deloitte
+Touche Tohmatsu as a senior manager and consulting actuary. Mr. Yao is a Fellow of the Society of
+Actuaries (FSA), and holds an MBA degree from New York University.
+LEE Yuansiong, has been an Executive Director of the Company since June 2013, and is currently the
+Executive Vice President and Chief Insurance Business Officer of the Company, and the Director of Ping An
+Property & Casualty, Ping An Life, Ping An Annuity and Ping An Health, the subsidiaries of the Company.
+Mr. Lee joined the Company in 2004 and served as the Special Assistant to the Chairman of Ping An Life
+from February 2004 to March 2005, President of Ping An Life from March 2005 to January 2010 and Chairman
+of Ping An Life from January 2007 to February 2012. Prior to that, Mr. Lee was a Senior Vice President of
+Prudential Taiwan Branch and the General Manager of Citi-Prudential, etc.. Mr. Lee holds a Master's degree
+in Finance from The University of Cambridge.
+Annual Report 2015
+Mr. Chan Tak Yin has no longer served as the Senior Management of the Company since July 10, 2015, his position of the Chief
+Investment Officer remains unchanged.
+Male
+Directors, Supervisors, Senior
+Management and Employees
+55
+2012.08-2015.07
+(1)
+(2)
+98
+(3)
+(6)
+Due to personal work arrangement, Mr. Fan Mingchun and Mr. Lu Hua have tendered their resignations as Non-executive Directors
+of the Company. According to the resolution passed at the 2nd Extraordinary General Meeting of 2015 of the Company held on
+December 17, 2015, Mr. Xiong Peijin and Mr. Liu Chong were elected as Non-executive Directors of the Company in place of Mr. Fan
+Mingchun and Mr. Lu Hua, respectively. The qualifications of Mr. Xiong Peijin and Mr. Liu Chong as Directors of the Company were
+obtained from CIRC on January 8, 2016, on which day the appointment of Mr. Xiong Peijin and Mr. Liu Chong in place of Mr. Fan
+Mingchun and Mr, Lu Hua became effective.
+The election of the new session of the Board of Directors was passed at the 2014 Annual General Meeting of the Company held
+on June 15, 2015. According to the resolution, the 10th session of the Board of Director was composed of 17 Directors. Ms. Li Zhe
+did not stand for re-election as Director of the Company due to personal work arrangement, and Mr. Tang Yunwei and Mr. Lee
+Carmelo Ka Sze did not stand for re-election as Directors of the Company due to expiration of their terms of office of 6 years as
+Independent Non-executive Directors. The term of office of Ms. Li Zhe expired on June 15, 2015. According to the resolution passed
+at the General Meeting, Mr. Ge Ming was elected as an Independent Non-executive Director of the 10th Session of the Board of
+Directors of the Company. The qualification of Mr. Ge Ming as a Director of the Company was obtained from CIRC on June 30,
+2015, on which day the appointment of Mr. Ge Ming and the resignation of Mr. Tang Yunwei and Mr. Lee Carmelo Ka Sze became
+effective.
+The Supervisory Committee of the Company received a letter of resignation from Mr. Peng Zhijian on November 12, 2015. Mr. Peng
+Zhijian proposed to resign as a Supervisor of the Company due to personal work arrangement. The resignation of Mr. Peng Zhijian
+as a Supervisor shall be effective upon the approval of the qualification of the new Supervisor (who is appointed to fill Mr. Peng's
+vacancy) from CIRC. Prior to that, Mr. Peng Zhijian shall continue to perform his duties as a Supervisor in accordance with the
+laws, administrative regulations and the Articles of Association.
+The election of the new session of the Supervisory Committee of the Company was passed at the 2014 Annual General Meeting
+of the Company held on June 15, 2015. According to the resolution, the 8th session of the Supervisory Committee was composed
+of 5 Supervisors. Mr. Lin Li, Mr. Sun Jianping and Mr. Zhao Fujun did not stand for re-election as Supervisors due to personal
+work arrangement. The term of office of Mr. Lin Li expired on June 15, 2015. According to the resolution passed at the employees'
+representatives meeting of the Company held on January 23, 2015, Mr. Gao Peng was elected as an Employee Representative
+Supervisor of the 8th session of the Supervisory Committee of the Company. The qualification of Mr. Gao Peng as a Supervisor of
+the Company was obtained from CIRC on June 30, 2015, on which day the appointment of Mr. Gao Peng and the resignation of Mr.
+Sun Jianping and Mr. Zhao Fujun became effective.
+As considered and approved at the 17th meeting of the 9th session of the Board of Directors held on March 19, 2015, Ms. Tan Sin
+Yin was appointed as the Senior Vice President of the Company. Ms. Tan Sin Yin was granted the qualifications to act as the
+Senior Vice President by CIRC on May 28, 2015 and officially served as the Senior Vice President of the Company since June 1, 2015.
+She has been re-designated as the Executive Vice President of the Company since January 12, 2016.
+(5)
+CAI Fangfang, has been an Executive Director of the Company since July 2014, and is currently the Chief
+Human Resource Officer of the Company, the Executive Vice President of Ping An School of Financial
+Services, and the Director of a number of controlled subsidiaries of the Company including Ping An Bank,
+Ping An Life, Ping An Property & Casualty and Ping An Asset Management. Ms. Cai joined the Company in
+July 2007, and served as the Vice Chief Financial Officer and General Manager of the Corporate Planning
+Department of the Company from February 2012 to September 2013 and held the positions of Vice General
+Manager and General Manager of the Remuneration Planning and Management Department of the Human
+Resource Centre of the Company from October 2009 to February 2012. Prior to joining the Company, Ms. Cai
+served as the consulting director of Watson Wyatt Consultancy (Shanghai) Ltd. and the audit director on
+financial industry of British Standards Institution Management Systems Certification Co. Ltd., etc.. Ms. Cai
+holds a Master's degree in Accounting from The University of New South Wales.
+(4)
+LIN Lijun, has been a Non-executive Director of the Company since May 2003 and is currently the Vice
+Chairman of the Labour Union of the Company. Ms. Lin served as the Chairman and President of Linzhi New
+House Investment Development Co. Ltd. from 2000 to 2013. Ms. Lin previously served as the Deputy General
+Manager of the Human Resources Department of Ping An Property & Casualty from 1997 to 2000. Ms. Lin
+holds a Bachelor's degree in Chinese Language and Literature from South China Normal University.
+SUN Dongdong, has been an Independent Non-executive Director of the Company since June 2013, and
+currently serves as a professor of Law School in Peking University, the director of Peking University Health
+Law Research Centre and the Independent Non-executive Director of Zhejiang Dian Diagnostics Co., Ltd..
+Mr. Sun is also a deputy director of the Social Legal Work Committee of Chinese Peasants and Workers
+Democratic Party, standing director of Chinese Health Law Society and China Law Society Research Centre
+of the Law on the Protection of Consumer Rights and Interests, and an expert of the Health Insurance
+Experts Committee under Insurance Association of China and Chinese Medical Doctor Association. Mr. Sun
+graduated with a degree of Medical Science from Beijing Medical College (now known as Peking University
+Health Science Centre).
+GE Ming, has been an Independent Non-executive Director of the Company since June 2015, and is currently
+the Independent Director of Credit China Holdings Limited and Shanghai Zhenhua Heavy Industries Co.,
+Ltd., Executive Director of the Chinese Institute of Certified Public Accountants, a member of the Certified
+Public Accountants Testing Committee of the Ministry of Finance of PRC, a Deputy Director of the Industry
+Development Committee of the Beijing Institute of Certified Public Accountants and a member of the
+second session of the Listed Companies Mergers and Acquisitions Expert Consultation Committee of CSRC,
+etc.. Mr. Ge has served as Chairman of Ernst & Young Hua Ming, Partner and Chief Accountant of Ernst &
+Young Hua Ming LLP and the Independent Director of Shunfeng International Clean Energy Limited. Mr. Ge
+obtained his Master's Degree in Western Accounting from the Research Institute for Fiscal Science, Ministry
+of Finance of PRC. Mr. Ge obtained his certified accountant qualification in China in 1983 and has obtained
+the senior accountant qualification from the Ministry of Finance of PRC.
+102
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Supervisors
+WONG Oscar Sai Hung, has been an Independent Non-executive Director of the Company since June
+2013, currently serves as the Chairman of China Regenerative Medicine International Limited, and is also
+an Independent Non-executive Director of the Hong Kong Exchanges and Clearing Limited and JPMorgan
+Chinese Investment Trust plc (listed in London), a Non-executive Director of Credit China Holdings Limited
+(listed on HKEx) and a Director of One Asset Management Limited (registered in Thailand). Mr. Wong was
+a Director and Chief Executive Officer of ICBC (Asia) Investment Management Company Limited from
+September 2008 to December 2011, and was the Chairman of LW Asset Management Advisors Limited,
+an Independent Non-executive Director of ARN Investment SICAV (listed on the Luxembourg Stock
+Exchange), the Director and Chief Executive of BOCI-Prudential Asset Management Limited and Prudential
+Portfolio Managers Asia Limited, and the Non-executive Director of the ARN Asian Enterprise Fund Limited
+(formerly listed on the Irish Stock Exchange). Mr. Wong holds a Higher Diploma in Business Studies
+(Marketing) from Hong Kong Polytechnic (now known as The Hong Kong Polytechnic University).
+GU Liji, has been an Independent Supervisor and the Chairman of Supervisory Committee of the Company
+since June 2009, and is currently an Independent Director of Maxphotonics Co., Ltd., an Independent
+Director of Shenzhen Changhong Technology Co., Ltd., a Non-executive Director of Xiangtan Electric
+Manufacturing Group Co., Ltd (XEMC), an Independent Director of Bosera Asset Management Co., Limited
+and Professor of Graduate School at Shenzhen, Tsinghua University. Mr. Gu was a Director of ERGO China
+Life Insurance Co., Ltd. from May 2013 to August 2014, and was an Executive Director of China Merchants
+Technology Holdings Co., Ltd. and China Merchants Technology Investment Co., Ltd. (Shenzhen) from
+November 2008 to October 2010. Before retirement in October 2008, Mr. Gu had served as the Managing
+Director of China International Marine Containers Co., Ltd., the Chairman and President of China Merchants
+Shekou Port Services Co., Ltd., the Vice Chairman of the Company, a Director of China Merchants Bank
+and China Merchants Group Ltd., the Managing Director of China Merchants Shekou Industrial Zone Co.,
+Ltd., Hoi Tung Marine Machinery Suppliers Limited (Hong Kong) and China Merchants Technology Group,
+respectively, and the Chairman of China Merchants Technology Holdings Co., Ltd. Mr. Gu is also an expert
+on Applicable Electronics of Shenzhen Expert Association. Mr. Gu has obtained the Advanced Management
+Program AMP (151) certificate from Harvard Business School. Mr. Gu also holds a Master's degree in
+Engineering from Management Science Department of University of Science and Technology of China and a
+Bachelor's degree in Engineering from Tsinghua University.
+PAN Zhongwu, has been an Employee Representative Supervisor of the Company since July 2012, and is
+currently the Deputy Director of the Group Office of the Company. Mr. Pan joined the Group in July 1995
+and served in the Office of Comprehensive Management Department of Ping An Property & Casualty and
+the Group Office of the Company successively. Mr. Pan holds a Master's degree in Finance and Insurance
+from Wuhan University.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+CORPORATE GOVERNANCE
+Non-executive Directors
+103
+PENG Zhijian, has been an Independent Supervisor of the Company since June 2009. Mr. Peng served
+as an Independent Supervisor of China Merchants Bank Co., Ltd. from October 2011 to October 2014, an
+Independent Non-executive Director of Dong Guan Trust Co., Ltd. from December 2009 to December 2014
+and an Independent Non-executive Director of BOCOM International Holdings Company Limited from
+March 2009 to November 2011. Mr. Peng started his working career in 1969, and had consecutively served
+as the Deputy Governor, Governor and Party Committee Secretary of PBOC Guangxi Branch since June
+1988, had consecutively served as the Deputy Party Committee Secretary and Deputy Governor of PBOC
+Guangzhou Branch, the Governor of PBOC Shenzhen Central Branch, the Party Secretary and Governor
+of PBOC Wuhan Branch and the Head of the State Administration of Foreign Exchange Hubei Bureau, the
+Party Committee Secretary and Governor of Guangdong Regulatory Bureau of CBRC, etc. since November
+1998, and had served as the Executive Commissioner of People's Political Consultative Conference Standing
+Committee of Guangdong Province, and the Deputy Director of the Economic Committee for People's
+Political Consultative Conference of Guangdong Province from 2008 to 2012. Mr. Peng also served as an
+Executive Director of the Congress of the Chinese Monetary Society and the General Assembly of the
+Institute of Chinese Money. Mr. Peng graduated from a full-time course on Finance from Zhengzhou
+University and holds a Postgraduate degree in Financial Investment from Guangxi Normal University
+successively.
+YIP Dicky Peter, has been an Independent Non-executive Director of the Company since June 2013, and
+is currently the Independent Non-executive Director of Sun Hung Kai Properties Limited, South China
+Holdings Company Limited (formerly known as South China (China) Limited) and DSG International
+(Thailand) PLC, respectively. Mr. Yip joined The Hongkong and Shanghai Banking Corporation Limited
+("HSBC") in 1965, and served as a Chief Executive of China Business at HSBC's Area Office China from
+January 2003 to May 2005, a General Manager of HSBC from April 2005 to June 2012, and served as an
+Executive Vice President of Bank of Communications Co., Ltd. from May 2005 to June 2012. Mr. Yip also
+served as the Director of the Company and the Original Ping An Bank from November 2002 to May 2005.
+Besides, Mr. Yip had served in many consultative boards including the Aviation Advisory Board, Arts
+Development Council and the Urban Renewal Authority, and is currently an Honorary Member of Hong
+Kong Committee of UNICEF. Mr. Yip holds an MBA degree from University of Hong Kong. Mr. Yip is an
+elected associated member of Chartered Institute of Bankers, London, and has a Certified Financial Planner
+certificate issued by the Institute of Financial Planners of Hong Kong and a Certified Financial Management
+Planner certificate issued by Hong Kong Institute of Bankers.
+ZHANG Wangjin, has been a Shareholder Representative Supervisor of the Company since June
+2013, and is currently the Managing Director of CPG Overseas Company Limited (Hong Kong). Before
+joining CPG Overseas Company Limited (Hong Kong), Ms. Zhang worked in the Audit Department of
+PricewaterhouseCoopers CPA and the M&A and Restructuring Department of Deloitte & Touche Financial
+Advisory Services Limited. Ms. Zhang is a member of CPA Australia. Ms. Zhang holds a Bachelor's degree
+in Accounting from University of International Business and Economics and has obtained an EMBA degree
+from Guanghua School of Management of Peking University.
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+100
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+LIU Chong, has been a Non-executive Director of the Company since January 2016, and is currently the Vice
+President of Shum Yip Group Limited and Shum Yip Holdings Company Limited, the Vice President and
+Executive Director of Shenzhen Investment Limited. Prior to that, Mr. Liu served successively as a Deputy
+General Manager and Financial Controller of Shenzhen SDG Company Limited, a Director and Financial
+Controller of Shenzhen Petrochemical Group Co., Ltd., a Director and Financial Controller of Shenzhen
+Health Mineral Water Co., Ltd., a Director of Shenzhen Tellus (Group) Company Limited from June 2009 to
+June 2010, and was an Independent Director of Shenzhen Shenxin Taifeng Group Co., Ltd. from May 2009
+to February 2014. Mr. Liu holds a Bachelor's degree in Accounting from Jiangxi University of Finance and
+Economics and a senior accountant qualification.
+Independent Non-executive Directors
+XIONG Peijin, has been a Non-executive Director of the Company since January 2016, and is currently
+the Director, General Manager and Deputy Secretary of the Party Committee of Shenzhen Investment
+Holdings Co., Ltd., and he is also the Non-executive Director of Guotai Junan Securities Company Limited.
+Mr. Xiong had served as the Director, General Manager and Deputy Secretary of the Party Committee of
+Shenzhen Special Economic Zone Construction and Development Group Co., Ltd. from July 2011 to May
+2014 and the Director of Shenzhen Capital Group Co., Ltd. from June 2010 to September 2012. Prior to that,
+Mr. Xiong served as the General Economist and member of the Party Committee of Shenzhen Municipal
+People's Government State-owned Assets Supervision and Administration Commission, Financial Director
+of Shenzhen International Trust and Investment Co., Ltd., Chairman of the Supervisory Committee and
+Financial Director of Shenzhen Nanyou (Holdings) Co., Ltd., etc.. Mr. Xiong obtained a Master's degree of
+Administration Management from Sun Yat-sen University and an EMBA degree from Guanghua School of
+Management of Peking University. Mr. Xiong is a qualified senior accountant and has the qualification of
+certified public accountant in China.
+YANG Xiaoping, has been a Non-executive Director of the Company since June 2013, and is currently the
+Vice Chairman of the CP Group, an Executive Director and the Vice Chairman of C.P. Lotus Corporation,
+CEO of CT Bright Holdings Limited, a Non-executive Director of Tianjin Binhai Teda Logistics (Group)
+Corporation Limited and a Non-Executive Director of CITIC Limited. Previously, Mr. Yang acted as the
+Manager of Nichiyo Co., Ltd for China Division and the Chief Representative of Nichiyo Co., Ltd Beijing
+Office. Mr. Yang is also a member of The Twelfth National Committee of Chinese People's Political
+Consultative Conference, the Vice President of the Institute for China Rural Studies of Tsinghua University,
+a Director of China NGO Network for International Exchanges, the Vice President of Beijing Association of
+Enterprises with Foreign Investment and an adviser of Foreign Investment to Beijing Municipal Government.
+Mr. Yang holds a Bachelor's degree from Jiangxi Institute of Technology and has experience of studying in
+Japan.
+Stephen Thomas MELDRUM, has been an Independent Non-executive Director of the Company since
+July 2012. Mr. Meldrum has been an independent member of the insurance audit committee (an advisory
+committee) of HSBC Holdings plc from 2008 to March 2012. Mr. Meldrum was the Consultant to Chief
+Actuary of the Company from January 2007 to January 2009. Mr. Meldrum was the assistant to the President
+and Chief Actuary of the Company from February 2003 to January 2007. Mr. Meldrum served as the Chief
+Actuary of the Company from 1999 to 2003. Mr. Meldrum was an assistant to the President and the Director
+of International Strategies of Lincoln National, Fort Wayne USA from 1995 to 1998. Mr. Meldrum served
+as the Investment Director at Lincoln National (UK) plc. from 1986 to 1995. Mr. Meldrum served as the
+Appointed Actuary, Finance Director and Chairman of Mortgage Lender of ILI (UK), Cannon Assurance,
+Cannon Lincoln and Lincoln National (UK), respectively, from 1969 to 1986. Mr. Meldrum has a Master's
+degree in Computer Science from the University of London and a Master's degree in Mathematics from the
+University of Cambridge.
+Soopakij CHEARAVANONT, has been a Non-executive Director of the Company since June 2013. Mr.
+Chearavanont is the Executive Vice Chairman of the CP Group, and also has been an Executive Director
+and the Chairman of C.P. Lotus Corporation, an Executive Director and the Chairman of Chia Tai
+Enterprises International Limited, an Executive Director and Vice Chairman of C.P. Pokphand Co. Ltd. and
+the Chairman of CT Bright Holdings Limited. Mr. Chearavanont is also a Director of True Corporation Public
+Company Limited and CP ALL Public Company Limited (both listed in Thailand) and the Chairman of True
+Visions Public Company Limited based in Thailand. Mr. Chearavanont holds a Bachelor's degree in Science
+from the College of Business and Public Administration of New York University, USA.
+Annual Report 2015
+101
+WOO Ka Biu Jackson, has been an Independent Non-executive Director of the Company since July 2011,
+and is currently a Director of Kailey and Fong Fun Group of Companies, an Independent Non-executive
+Director of Henderson Land Development Company Limited and an Alternate Director to Sir Po-shing
+Woo as Non-executive Director of Sun Hung Kai Properties Limited. Mr. Woo is also the CEO of Challenge
+Capital Management Limited, Chairman (International) of Guantao Law Firm and a consultant of Messrs
+Guantao & Chow. Mr. Woo was a partner of Ashurst Hong Kong, a Director and co-Head of Investment
+Banking (Greater China) of N M Rothschild & Sons (Hong Kong) Limited, and also was an Alternate Director
+to Sir Po-shing Woo, a former Non-executive Director of Henderson Investment Limited and Henderson
+Land Development Company Limited. Prior to that, Mr. Woo was a partner in the corporate finance
+department of Woo, Kwan, Lee & Lo. In January 2008, Mr. Woo was awarded 2008 World Outstanding
+Chinese Award by the United World Chinese Association and Honorary Doctorate Degree from the
+University of West Alabama. Mr. Woo is also an Honorary Director of Tsinghua University, a China-
+appointed Attesting Officer appointed by the Ministry of Justice, PRC and a Practising Solicitor Member
+on the panel of the Solicitors' Disciplinary Tribunal in the Hong Kong Special Administrative Region. Mr.
+Woo holds a Master's degree in Jurisprudence from Oxford University and is qualified as a solicitor in Hong
+Kong, England and Wales and Australian Capital Territory.
+Ping An Insurance (Group) Company of China, Ltd.
+Corporate Governance Report
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+110
+CORPORATE GOVERNANCE
+Committed to providing the best training, Ping An Finance Training College has constantly devoted
+its resources in optimizing its training operating system and promoting talent development to
+facilitate business development with training by "turning knowledge into value”. The learning and
+management training platform, established by Ping An Finance Training College, joined hands with the
+training departments of the Group's subsidiaries (including branches and sub-branches) to fully cover
+implementation of training on managerial skills, occupational skills, professional skills and sales skills.
+Training is not only an important means for the company to build its culture and attract talent, but also an
+important way to improve our brand.
+The board of directors of the Company ("Board") is pleased to report to
+the shareholders on the corporate governance of the Company for the year
+ended December 31, 2015 ("Reporting Period").
+STAFF TRAINING PROGRAM
+Directors, Supervisors, Senior
+Management and Employees
+In 2015, the Group continued to optimize its face-to-face courses and online ones: Ping An Finance Training
+College offered a total of 400 face-to-face courses group-wide. 1,462 face-to-face training sessions were
+offered to 41,490 employees across the country and 34.96% of the senior managers were covered; 1,702
+online courses were delivered across the Group, including 124 newly developed ones. We kept advocating
+and facilitating company-wide learning, with each employee finishing 4.59 online courses on average.
+In 2015, Ping An Finance Training College kept promoting learning to all staff. Ping An won the Gold
+Medal for "Best Use of Mobile Learning" and the Bronze Medal for “Best Advance in Learning Technology
+Implementation" in the election of 2015 Brandon Hall Excellence Awards (the "Oscar" awards in the field of
+human resources) with its advanced design philosophies for the mobile learning APP ZhiNiao. Ping An is
+the first company in China to receive such awards. Meanwhile, as at the end of 2015, the ZhiNiao platform
+launched over 40,000 courses with the courseware earning more than 50 million views.
+Annual Report 2015
+During the Reporting Period, the Company has been engaged in ongoing efforts to carry out the
+corporate governance activities and improve its corporate governance structure in strict compliance with
+the Company Law of PRC and the Securities Law of PRC as well as the relevant laws and regulations
+promulgated by the regulatory authorities and principles set out in the Corporate Governance Code, with
+de facto conditions of the Company taken into account. The general meeting, the Board, the supervisory
+committee of the Company ("Supervisory Committee”) and senior management have been performing
+their duties and responsibilities conferred by the Articles of Association separately; the internal control
+system of the Company is complete and effective; the Company disclosed relevant information in a truthful,
+accurate and complete manner, with no report of breach of laws and regulations during the Reporting
+Period.
+During the Reporting Period, the corporate governance of the Company is described as follows:
+Shareholders and the General Meetings
+During the Reporting Period, the Company convened the 1st Extraordinary General Meeting of 2015, the
+2014 Annual General Meeting and the 2nd Extraordinary General Meeting of 2015 in Shenzhen in the form of
+both onsite voting and online voting on February 5, 2015, June 15, 2015 and December 17, 2015, respectively.
+The notice, convocation and procedures for convening and voting at the general meeting have complied
+with the requirements of the Company Law of PRC and the Articles of Association. The general meeting
+established and expanded effective channels for communication between the Company and the
+shareholders, and through listening to their opinions and advices, their information rights, participation
+rights and voting rights on the significant events of the Company can be ensured.
+The announcements regarding the resolutions of the above general meetings were published on Shanghai
+Securities News, China Securities Journal, Securities Times, Securities Daily and the website of SSE
+(www.sse.com.cn) on February 6, 2015, June 16, 2015, and December 18, 2015, respectively. The poll result
+announcements have also been published on the website of HKEX (www.hkexnews.hk) on the same date of
+the general meetings.
+Ping An Insurance (Group) Company of China, Ltd.
+111
+CORPORATE GOVERNANCE
+Corporate Governance Report
+109
+Attendance of Directors at the General Meetings
+Members
+During the Reporting Period, the Directors have been doing their best to participate in general meetings
+in person and have actively developed a balanced understanding of the views of shareholders. The
+attendance records of each Director at the general meetings are as follows:
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd.
+In accordance with the CSRC's Guidelines on Employee Stock Ownership Plans for Public Companies and
+as approved at the First Extraordinary General Meeting of 2015, the Company incepted and implemented
+the Key Employee Share Purchase Plan. This plan will strengthen the long-term value orientation and
+closely align key employees with interests of both the shareholders and the Company so as to ensure the
+focus on the sustainable growth of the Company's performance in the long term, drive improvement in the
+shareholder value and facilitate the sustainable development.
+Doctorate and master's degree 5.30
+Bachelor's degree 47.73
+0.00027
+0.00011
+Executive Directors
+(1)
+Mr. Lin Li, by virtue of his control over Shenzhen Liye Group Co., Ltd., a shareholder of the Company, was deemed to be interested
+in the shares of the Company held by Shenzhen Liye Group Co., Ltd..
+During the reporting period, there were no share options held by or restricted shares granted to the
+current Directors, Supervisors and Senior Management of the Company and those who resigned during the
+reporting period.
+Change in the number of shares, share options and restricted shares held in associated corporations of
+the Company
+As at December 31, 2015, there were no shares, share options held and restricted shares held in associated
+corporations of the Company by Directors, Supervisors and chief executive of the Company.
+Save as disclosed above, as at December 31, 2015, none of the Directors, Supervisors and chief executive
+held or was deemed to hold any interests or short positions in the shares, underlying shares or debentures
+of the Company or any of its associated corporations (as defined in the SFO), which are recorded in the
+register required to be kept under Section 352 of the SFO, or otherwise required to be notified by the
+Directors, Supervisors and chief executive to the Company and the HKEX pursuant to the Model Code, nor
+I have they been granted the right to acquire any interests in shares or debentures of the Company or any
+of its associated corporations.
+THE ASSESSMENT & EVALUATION AND REMUNERATION SYSTEMS OF THE COMPANY
+The purpose of the Company's remuneration policy is to attract, retain and motivate talented people so
+as to help achieve the operational objectives of the Company. The principle of the remuneration policy is
+to characterize a clear orientation, reflect differences, motivate performances, respond to the market and
+optimize cost. The remuneration package for the Company's employees is based on the following aspects:
+the salary shall be determined according to its post value; the remuneration shall be in line with the market
+conditions; the bonus shall be determined in light of performance and contributions shall be given priority.
+In addition to remuneration and bonuses, employees also enjoy certain welfare treatment. Meanwhile, the
+structure of remuneration packages of each subsidiary or business unit may not be the same since they
+vary in its operating features, the development stage and remuneration level in the market.
+108
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+The purpose and principle of the Company's remuneration policy are relatively long-term and stable while
+the specific strategies and structure of remuneration are to be adjusted and optimized according to the
+changes in the market and the development stage of the Group's business, etc. so as to help achieve the
+operational objectives of the Company.
+With regard to the remuneration of Directors, that of the Executive Directors is to be determined in
+accordance with their posts in the Company; Independent Non-executive Directors came from domestic
+and overseas, while the fees are to be paid in accordance with the standards approved in general meeting
+of the Company; Non-executive Directors nominated by shareholders will not receive remuneration.
+Remuneration of all the Directors shall be considered and proposed by the Remuneration Committee under
+the Board, and shall also be considered and approved at the shareholders' meeting.
+The Company sets forth a clear three-year rotation plan and annual accountability objectives for the senior
+management in accordance with the business plan, conducts severe accountability appraisals twice a year
+in light of the objectives achieved and evaluates the senior management on the basis of comprehensive
+feedback. Accountability results are closely linked to the long-term and short-term award and appointment
+and removal of cadres. The comprehensive evaluation results serve as an important reference in the
+promotion of cadres.
+NUMBER OF STAFF, PROFESSIONAL QUALIFICATION AND EDUCATION BACKGROUND
+As at December 31, 2015, the Company had a total of 275,011 active staff, of which 58,674 were management
+and administration personnel, representing 21.34%; 136,517 were sales personnel, representing 49.64%;
+32,036 were technician personnel, representing 11.65% and other personnel 47,784, representing 17.37%.
+Among all the staff, 14,585 hold doctorate or master's degree, representing 5.30%; 131,269 hold bachelor's
+degree, representing 47.73%; 101,938 attained college education, representing 37.07% and 27,219 with other
+qualification, representing 9.90%.
+By profession structure
+(%)
+By degree
+(%)
+Management and administration series 21.34
+Sales series 49.64
+Technician series 11.65
+Others 17.37
+College education 37.07
+Others 9.90
+MA Mingzhe (Chairman)
+YANG Xiaoping
+REN Huichuan
+LU Hua
+LI Zhe(1)
+March 8, 2012
+0/3
+0
+May 16, 2003
+0/3
+0
+June 17, 2013
+1/3
+33.3
+June 17, 2013
+Soopakij CHEARAVANONT
+1/3
+June 17, 2013
+0/3
+0
+June 9, 2009
+0/2
+0
+Independent Non-executive Directors
+WOO Ka Biu Jackson
+July 22, 2011
+3/3
+Convertion of the capital Long position
+reserve into share capital
+100
+33.3
+LIN Lijun
+FAN Mingchun
+Non-executive Directors
+YAO Jason Bo
+Date of
+appointment
+as Directors
+General Meetings
+attended in
+person/General
+Meetings required
+to attend (2)
+% of
+attendance
+in person (%)
+LEE Yuansiong
+CAI Fangfang
+March 21, 1988
+3/3
+100
+March 29, 1995
+2/3
+66.7
+July 17, 2012
+3/3
+100
+June 9, 2009
+3/3
+100
+June 17, 2013
+3/3
+100
+July 2, 2014
+3/3
+100
+SUN Jianyi
++10,000
+A
+10,000
+Percentage of Percentage of
+the end of
+the period
+Change
+Reason for
+the change
+Nature of
+interest
+total issued
+H/A shares (%)
+total issued
+shares (%)
+Ma Mingzhe
+Chairman, Chief Executive Officer Interest of his spouse
+H
+10,000
+Number of
+shares held at
+20,000
+Convertion of the capital Long position
+reserve into share capital
+0.00027
+0.00011
+Sun Jianyi
+Vice Chairman and
+Beneficial owner
+1,898,280
+3,796,560 +1,898,280
+Convertion of the capital Long position
+0.03505
+0.02077
+Executive Vice President
++10,000
+Number of
+shares held at
+H/A the beginning
+shares of the period
+Capacity
+Position
+Stephen Thomas MELDRUM
+CHANGES IN INFORMATION OF DIRECTORS AND SUPERVISORS
+1.
+2.
+3.
+4.
+5.
+6.
+7.
+Mr. Ren Huichuan, the Executive Director of the Company, has no longer served as the Chairman and
+CEO of Wanlitong from December 2015, and was appointed as the acting Chairman of Ping An Trust
+from November 2015.
+Ms. Cai Fangfang, the Executive Director of the Company, has been re-designated as the Chief Human
+Resource Officer of the Company (previously as the Vice Chief Human Resource Officer) since March
+2015.
+Mr. Yao Jason Bo and Mr. Lee Yuansiong, the Executive Directors of the Company, have been re-
+designated as the Executive Vice Presidents of the Company (previously the Senior Vice Presidents)
+since January 2016.
+Mr. Soopakij Chearavanont, the Non-executive Director of the Company, is the Chairman and
+Non-executive Director of Chia Tai Enterprises International Limited, the shares of which have been
+listed on the main board of HKEx in July 2015.
+Mr. Yang Xiaoping, the Non-executive Director of the Company, has served as a Non-Executive
+Director of CITIC Limited since August 2015.
+Mr. Yip Dicky Peter, the Independent Non-executive Director of the Company, no longer served as the
+Asia Pacific Chief Representative of the Institute of International Finance since July 2015.
+Mr. Gu Liji, the Chairman of Supervisory Committee, has served as a professor of Graduate School at
+Shenzhen, Tsinghua University since January 2016.
+PUNISHMENTS IMPOSED ON THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT BY
+SECURITIES REGULATORY AUTHORITIES IN THE LAST THREE YEARS
+The current Directors, Supervisors and senior management of the Company and those who resigned during
+the reporting period were not subject to any punishment by securities regulatory authorities over the past
+three years.
+CHANGES IN THE NUMBER OF SHARES, SHARE OPTIONS AND RESTRICTED SHARES HELD BY
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT IN THE COMPANY OR ASSOCIATED
+CORPORATIONS OF THE COMPANY DURING THE REPORTING PERIOD
+As at December 31, 2015, the interests of the current Directors, Supervisors and Senior Management of the
+Company and those who resigned during the reporting period in the shares of the Company which shall be
+disclosed pursuant to the “Standard No. 2 Concerning the Contents and Formats of Information Disclosed
+by Listed Companies - The Contents and Formats of Annual Report (Revised in 2015)" issued by CSRC;
+and the interests and short positions of the Directors, Supervisors and chief executive of the Company in
+the shares, underlying shares and debentures of the Company and its associated corporations (within the
+meaning of Part XV of the SFO) shall have been notified to the Company and HKEx pursuant to Divisions
+7 and 8 of Part XV of the SFO, including interests and short positions which the Directors, Supervisors
+or chief executive of the Company are taken as or deemed to have under such provisions of the SFO, or
+which are recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO
+or as otherwise required to be notified by the Directors, Supervisors and chief executive to the Company
+and HKEX pursuant to the Model Code, were as follows:
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+107
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+Change in the number of shares, share options and restricted shares held in the Company
+Name
+reserve into share capital
+20,000
+Ren Huichuan Executive Director and President
+A
+0.00012
+0.00007
+reserve into share capital
+Lin Li
+Retired Shareholder
+Zhao Fujun
+Representative Supervisor
+Retired Employee
+Representative Supervisor
+Interest of controlled
+corporation(¹)
+A
+43,518,830
+87,037,660 +43,518,830
+Convertion of the capital Long position
+Convertion of the capital Long position
+0.80347
+reserve into share capital
+Interest of his spouse
+A
+1,700
+3,400
++1,700
+Convertion of the capital Long position
+reserve into share capital
+0.00003
+0.00002
+Jin Shaoliang Secretary of the Board
+Beneficial owner
+H
+0.47613
++6,600
+13,200
+6,600
+100,000
+200,000 +100,000
+Conversion of the capital Long position
+0.00185
+0.00109
+reserve into share capital
+Yao Jason Bo Executive Director, Executive Vice Beneficial owner
+President, Chief Financial Officer
+and Chief Actuary
+H
+12,000
+24,000 +12,000
+Convertion of the capital Long position
+0.00032
+0.00013
+reserve into share capital
+Interest of his spouse
+H
+12,000
+44,000
++32,000
+Convertion of the capital Long position
+reserve into share capital,
+0.00059
+0.00024
+purchase
+Peng Zhijian
+Independent Supervisor
+Beneficial owner
+A
+Beneficial owner
+July 17, 2012
+Corporate Governance Report
+66.7
+0/7
+SUN Dongdong
+7/7
+100
+0/7
+GE Ming(1)
+4/4
+100
+0/4
+TANG Yunwei(1)
+3/3
+100
+100
+0/3
+3/3
+100
+0/3
+oo o O o O o O
+0
+0
+0
+0
+0
+(1)
+Details regarding retirement, resignation and appointment of the Directors during the Reporting Period are set out under the
+annotations of the "Attendance of Directors at the General Meeting" in this chapter.
+Annual Report 2015
+LEE Carmelo Ka Sze(1)
+7/7
+WONG Oscar Sai Hung
+0/7
+0/7
+YANG Xiaoping
+7/7
+100
+0/7
+LU Hua
+5/7
+71.4
+2/7
+28.6
+LI Zhe(1)
+3/3
+100
+0/3
+00060
+Independent Non-executive Directors
+WOO Ka Biu Jackson
+7/7
+100
+0/7
+Stephen Thomas MELDRUM
+7/7
+100
+0/7
+YIP Dicky Peter
+7/7
+100
+Ping An Insurance (Group) Company of China, Ltd.
+100
+115
+Corporate Governance Report
+100
+0/0
+0/0
+1/1
+100
+1/1
+100
+888
+0/1
+0/0
+0/0
+0/1
+1/1
+0/1
+0
+0
+0
+1/1
+100
+0/1
+0
+As approved at the 1st Meeting of the 10th Session of the Board, Mr. Yip Dicky Peter and Mr. Ge Ming were elected as members of
+the Strategy and Investment Committee in July 2015.
+2/3
+116
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+OIIOO
+MMM
+0
+0/1
+The Specialized Committees under the Board
+The Board has established four specialized committees, i.e. the Strategy and Investment Committee, the
+Audit and Risk Management Committee, the Remuneration Committee and the Nomination Committee. The
+details of the roles and functions and the composition of each of these specialized committees are set out
+below.
+Strategy and Investment Committee
+The primary duties of the Strategy and Investment Committee are to conduct research and make
+recommendations to the Board for their consideration in relation to major investments, property
+transactions, financing, major capital operations, asset management projects, production and operation.
+projects, etc. and also to promptly monitor and follow the tracks of the implementation of investment
+projects approved by the general meeting or the Board, and promptly notify all directors of its significant
+process or changes in process.
+As of December 31, 2015, the Strategy and Investment Committee comprised 5 Directors, which included 3
+Independent Non-executive Directors, and the ratio of Independent Non-executive Directors was 60%. The
+committee had one chairman, which was served by the Chairman of the Board and the chairman presided
+over the committee.
+In 2015, the Strategy and Investment Committee held 1 meeting, which was convened in accordance with
+the requirements of the Articles of Association and the Charter of the Strategy and Investment Committee.
+The 2015 Working Plan of the Company, the Company's 2014 Annual Plan Implementation Evaluation
+Report, and the Resolution on the Grant of A General Mandate to the Board to Issue Additional H Shares
+were considered and passed. The attendance records of each member of the Strategy and Investment
+Committee are as follows:
+Members
+Executive Director
+MA Mingzhe (Chairman)
+Independent Non-executive Directors
+WONG Oscar Sai Hung
+YIP Dicky Peter (1)
+GE Ming(1)
+TANG Yunwei (2)
+LEE Carmelo Ka Sze(2)
+Non-executive Director
+YANG Xiaoping
+(1)
+Meetings attended
+% of
+in person/Meetings
+required to attend
+Attendance in
+person (%)
+Meetings attended
+by proxy/Meetings
+required to attend
+% of
+Attendance by
+proxy (%)
+1/1
+100
+CORPORATE GOVERNANCE
+7/7
+Mr. Tang Yunwei and Mr. Lee Carmelo Ka Sze no longer served as the members of the Strategy and Investment Committee from
+June 2015.
+0/7
+In addition, the shareholder(s) individually or collectively holding 3% or more of the Company's issued and
+outstanding shares carrying voting rights may submit a written interim proposal to the convener 10 days
+before the date of the general meeting pursuant to Article 75 of the Articles of Association.
+For putting forward any enquiries as set out in Article 58(5) of the Articles of Association, shareholders may
+send their enquiries or requests in respect of their rights as mentioned above to the Company's IR Team or
+via email to IR@pingan.com.cn. Shareholders who want to examine the relevant information shall provide
+the Company with the written identification documents pursuant to Article 59 of the Articles of Association.
+The Company shall provide the relevant information after having verified the identity of the shareholder.
+Directors, Board and Specialized Committees under the Board
+Directors
+As at December 31, 2015, the Board consisted of 17 members, among whom there were 6 Executive
+Directors, 5 Non-executive Directors and 6 Independent Non-executive Directors, and the profile of
+each Director has been included in the section headed "Directors, Supervisors, Senior Management
+and Employees" of this Annual Report. The number of Directors and composition of the Board are in
+compliance with the regulatory requirements and provisions of the Articles of Association. As provided in
+the Articles of Association, Directors should be elected at the general meeting with a term of 3 years, and
+are eligible for re-election upon expiry of the term; however, the Independent Non-executive Directors
+should not hold office for more than 6 consecutive years.
+Continuous Professional Development of the Directors
+All Directors of the Company have received Service Manual for the Performance of Duties upon
+appointment, so as to ensure their understanding of the business and operations of the Group and their
+responsibilities and obligations under the Listing Rules and relevant regulatory requirements. The Service
+Manual for the Performance of Duties will be updated regularly.
+The Company also provided information such as updated statutory and regulatory regime and the business
+and market changes to all Directors to facilitate the performance of their responsibilities and obligations
+under the Listing Rules and relevant statutory requirements.
+During the Reporting Period, under the arrangement of the Company, all Directors of the Company actively
+participated in continuous professional development, by attending external training or seminars, attending
+in-house training or reading materials on various topics, to develop and refresh their knowledge and skills,
+which ensure that their contribution to the Board remains informed and relevant. The Directors have
+provided a record of training to the Company.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+113
+CORPORATE GOVERNANCE
+Extraordinary general meetings may be convened on written requisition of shareholder(s) individually or
+jointly holding 10% or more of the Company's issued and outstanding shares carrying voting rights pursuant
+to Article 72(3) of the Articles of Association. Such requisition shall state clearly the matters required to be
+considered and approved at the general meetings and must be signed by the requisitionists and submitted
+to the Board in written form. Shareholders should follow the requirements and procedures as set out in the
+Articles of Association for convening an extraordinary general meeting.
+As at December 31, 2015, all Directors of the Company attended the professional training with the topics
+covering "the State Council's Opinions about Accelerating the Development of Modern Insurance Industry",
+the "Liability Insurance for Directors, Supervisors and Officers of Ping An", corporate governance,
+regulations and the Company's business; in addition, Mr. Woo Ka Biu Jackson attended the professional
+training related to laws, regulations and finance, Mr. Stephen Thomas Meldrum, Mr. Wong Oscar Sai Hung
+and Mr. Sun Dongdong attended the professional training with the topics covering performance of duties
+as an Independent Non-executive Director.
+The Board is responsible for the management of the Company and accountable to the shareholders
+for their entrusted assets and resources. They represent and owe a duty to act in the interests of the
+shareholders as a whole. The Board recognises its responsibility to prepare the Company's financial
+statements. The principal responsibilities of the Board and the types of decisions to be made by the Board
+include, among others:
+formulating the Group's overall direction, objectives and strategies, business plans and investment
+proposals as well as monitoring and supervising the management's performance;
+formulating the Company's annual budgets, financial statements and monitoring the Company's
+performance;
+formulating the Company's profit distribution and loss recovery proposals;
+formulating plans for mergers or disposals and deciding on major investments, pledging of assets and
+other forms of security (in accordance with the approval of the general meetings);
+formulating proposals for the increase or decrease in the Company's registered capital and the
+issuance of corporate bonds or other securities, and listing plans;
+engaging or dismissing the senior management staff of the Company, and determining their
+remuneration and award and reprimand matters; and
+performing the corporate governance function, monitoring, evaluating and ensuring the effectiveness
+of the Company's internal control systems and compliance with relevant laws and regulations.
+On the other hand, responsibilities and functions and types of decisions delegated to the management
+include, among others:
+implementation of the Company's overall direction, objectives and strategies, business plans and
+investment proposals as determined by the Board from time to time; and
+the day-to-day management of the Company's business.
+114
+Board
+As one of the measures to safeguard shareholders' interests and rights, separate resolutions are
+proposed at general meetings on each substantial issue, including the election of individual directors, for
+shareholders' consideration and voting. All resolutions put forward at general meetings will be voted by
+poll and the poll results will be posted on the websites of HKEX, SSE and the Company after the relevant
+general meetings.
+Shareholders' Rights
+Ping An Insurance (Group) Company of China, Ltd.
+YIP Dicky Peter
+Soopakij CHEARAVANONT
+3/3
+100
+WONG Oscar Sai Hung
+June 17, 2013
+2/3
+66.7
+SUN Dongdong
+June 17, 2013
+3/3
+100
+GE Ming(1)
+June 30, 2015
+1/1
+100
+TANG Yunwei(1)
+LEE Carmelo Ka Sze(1)
+June 9, 2009
+June 9, 2009
+1/2
+1/2
+50
+50
+(1)
+The election of the new session of the Board was passed at the 2014 Annual General Meeting of the Company held on June 15, 2015.
+According to the resolution, the 10th session of the Board was composed of 17 Directors. Ms. Li Zhe did not stand for re-election
+as Director of the Company due to personal work arrangement, and Mr. Tang Yunwei and Mr. Lee Carmelo Ka Sze did not stand
+for re-election as Directors of the Company due to expiration of their terms of office of 6 years as Independent Non-executive
+Directors. The term of office of Ms. Li Zhe expired on June 15, 2015. According to the resolution passed at the general meeting, Mr.
+Ge Ming was elected as an Independent Non-executive Director of the 10th Session of the Board. The qualification of Mr. Ge Ming
+as a Director of the Company was obtained from CIRC on June 30, 2015, on which day the appointment of Mr. Ge Ming and the
+resignation of Mr. Tang Yunwei and Mr. Lee Carmelo Ka Sze became effective.
+Some Directors did not attend certain general meetings due to business reasons or being abroad.
+112
+Annual Report 2015
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+June 17, 2013
+During the Reporting Period, the Board held 7 meetings. All such meetings were convened in accordance
+with the Articles of Association, and were attended in person or by proxy or through electronic means of
+communication by all Directors entitled to be present. All the Directors have been doing their best to make
+right decisions on the basis of good knowledge of circumstances, and are committed to protecting the
+interests of the Company and its shareholders as a whole. The attendance records of each Director at the
+Board meetings are as follows:
+0/7
+0 0
+6/7
+85.7
+1/7
+14.3
+7/7
+100
+0/7
+0
+7/7
+100
+0/7
+0
+7/7
+100
+0/7
+0
+Non-executive Directors
+FAN Mingchun
+6/7
+85.7
+1/7
+14.3
+LIN Lijun
+100
+Attendance of Directors at the Board Meetings
+100
+7/7
+7/7
+100
+0/7
+Meetings
+Board
+Meetings
+attended
+attended
+in person/
+by proxy/
+Meetings
+% of
+attendance
+Meetings
+required to
+% of
+attendance
+required to
+Lee Yuansiong
+in person (%)
+attend
+by proxy (%)
+7/7
+Members
+Executive Directors
+MA Mingzhe (Chairman)
+SUN Jianyi
+REN Huichuan
+YAO Jason Bo
+attend
+Cai Fangfang
+As approved at the 1st Meeting of the 10th Session of the Board, Mr. Woo Ka Biu Jackson was elected as the member of the
+Nomination Committee in July 2015.
+% of
+Attendance
+by proxy (%)
+1/3
+0/1
+2/3
+0/3
+100
+3/3
+Mr. Lee Carmelo Ka Sze no longer served as the member of the Nomination Committee from June 2015.
+66.7
+0
+examining the Company's financial affairs; and
+o O o O
+0
+0
+33.3
+120
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Supervisors and the Supervisory Committee
+As of December 31, 2015, the Supervisory Committee consisted of 5 members, among which there were
+2 Independent Supervisors, 1 Shareholder Representative Supervisor and 2 Employee Representative
+Supervisors, and the profile of each Supervisor has been included in the section headed "Directors,
+Supervisors, Senior Management and Employees" of this Annual Report. The number of Supervisors and
+composition of the Supervisory Committee are in compliance with the regulatory requirements and the
+provisions of the Articles of Association.
+The primary functions and powers of the Supervisory Committee include, among others,
+verifying financial reports and other financial information which have been prepared by the Board and
+which are proposed to be presented at the general meetings;
+monitoring compliance of Directors, Chief Executive Officer and other members of senior management
+of the Company with applicable laws, administrative regulations and the Articles of Association.
+0
+100
+Attendance in
+person (%)
+0/2
+As of December 31, 2015, the Nomination Committee comprised 3 Independent Non-executive Directors and
+2 Executive Directors, and the ratio of Independent Non-executive Directors was 60% and it was chaired by
+an Independent Non-executive Director.
+The details of the duty performance of the Supervisory Committee are set out in the "Report of the
+Supervisory Committee".
+Members
+Independent Non-executive Directors
+SUN Dongdong (Chairman)
+WONG Oscar Sai Hung
+WOO Ka Biu Jackson (1)
+LEE Carmelo Ka Sze (2)
+Executive Directors
+MA Mingzhe
+REN Huichuan
+(1)
+1/1
+(2)
+% of
+in person/Meetings
+required to attend
+Meetings attended
+by proxy/Meetings
+required to attend
+3/3
+3/3
+2/2
+INWW
+100
+0/3
+100
+0/3
+100
+Meetings attended
+In 2015, the Nomination Committee held 3 meetings, which were all convened in accordance with the
+requirements of the Articles of Association and the Charter of the Nomination Committee. The meeting
+considered and recommended the director candidates of the 10th Session of the Board including the
+Chairman, the Vice Chairman and the senior management, recommended Ms. Tan Sin Yin as the Senior Vice
+President of the Company and recommended Mr. Liu Chong as the Non-executive Director in place of Mr.
+Lu Hua, and also reviewed the Review Report of the Structure of the Board in 2014. Besides the nomination
+of director and senior management candidates, the Nomination Committee also formed the Policy
+Concerning Diversity of Board Members after reviewing the structure, size and composition of the Board
+in accordance with the business activities, assets and management combinations of the Company, so as to
+ensure the Board members reach a balance in terms of skills, experience and diversified visions, to elevate
+the efficiency of the Board and maintain a high level of corporate governance. All appointments under the
+Board will continue to be made on a merit basis with due regard for the benefits of diversity of the Board
+members. Selection of candidates will be based on a range of diversity perspectives, including but not
+limited to gender, age, cultural and educational background, experience (professional or otherwise), skills
+and knowledge. The ultimate decision will be made upon the merits and contribution that the selected
+candidates will bring to the Board. The attendance records of each member of the Nomination Committee
+are as follows:
+Annual Report 2015
+The Company has established an Executive Committee, which is the highest execution authority under the
+Board. The primary duty of the Executive Committee is to review the Company's internal business reports,
+the Company's policies in relation to investment and profit distribution and the Company's management
+policies, development plans and resource allocation plans. The Executive Committee is also responsible
+for making management decisions in relation to matters such as the material development strategies,
+compliance risk control, capital allocation, synergy and brand management. In addition, the Executive
+Committee is also responsible for reviewing the business plans of the subsidiaries of the Company and
+evaluating the financial performance of the subsidiaries. The Company has also established 7 management
+committees under the Executive Committee, namely, the Investment Management Committee, the Budget
+Management Committee, the Investor Relations Management Committee, the Risk Management Committee,
+the Connected Transactions Management Committee, the Global Systemically Important Insurer Committee
+and the Informationalization Working Committee.
+The shareholding structure of the Company is diversified and there are no controlling shareholders or de
+facto controllers. As an integrated financial services group, the Company maintains full independence in
+terms of business, staff, assets, organization and finance under the supervision of CIRC. The Company is
+an independent legal person responsible for its own profits and losses, runs independent and complete
+business and is capable of independent business operation. During the Reporting Period, none of the
+controlling shareholders or other connected parties had occupied the Company's capital illegally.
+PricewaterhouseCoopers Zhong Tian LLP hereby made the special-purpose explanation for it; the Company
+has not given any undisclosed information to the controlling shareholder or de facto controller.
+ESTABLISHMENT AND PERFECTION OF THE INTERNAL CONTROL SYSTEM
+The Company has been committed to establishing internal controls in line with international standards
+and regulatory requirements, and improving internal controls in response to risks and environments.
+In its integrated finance framework and with its local advantages, the Company implements corporate
+governance in line with international standards, upholds the compliance philosophy of “Laws + 1", and
+constantly enhances its risk controls to ensure that the Group and its subsidiaries abide by laws and
+regulations in business activities, to keep single/accumulated residue risks at levels acceptable to the
+Company, and to promote sustainable growth of Insurance, Banking, Investment, Internet Finance, and the
+Group. In 2015, the Company continued “taking rules as the foundation, risks as the guidance, processes as
+the links, and internal control platforms as the tools" to continuously optimize the methodology for internal
+control assessment, strengthen the daily assessment of internal controls, improve the functionalities
+of platforms, and enhance the efficiency and effectiveness of internal control assessment. Moreover,
+the Company proactively integrated domestic and foreign regulatory standards, approaches, and tools
+for operational risk management to build an internal control and operational risk management system
+applicable to the whole Group.
+Regarding the management framework for internal controls, the Company has a robust and well-staffed
+internal control management system in place with well-defined roles and responsibilities in line with
+applicable laws and regulations as well as business and risk control requirements. The Board is responsible
+for establishment, improvement, and implementation of internal controls. The Audit and Risk Management
+Committee under the Board monitors and assesses the implementation of internal controls, coordinates
+audits of internal controls, and oversees other relevant work. The Supervisory Committee supervises the
+establishment and implementation of internal controls. The Risk Monitoring Committee (RMC) under the
+Group Executive Committee (the management) sets high-level risk management targets, basic policies and
+rules, monitors risk exposures and available capital, and supervises risk management of subsidiaries and
+business units. The Company has established robust internal control policies and procedures, and specified
+the internal control targets, framework, and procedures to provide guidelines for business activities
+and operations. The Company reviews and assesses its internal controls on a routine basis under an
+advanced methodology for internal control assessment, and assesses the effectiveness of internal controls
+in businesses and processes under a model where "Business and functions conduct self-assessment,
+Compliance promotes and supports such efforts, and Internal Audit and Supervision conduct audits and
+assessment independently". In this process, the Company built an internal control management platform
+to improve the efficiency and effectiveness of internal control assessment. The Company's compliance and
+internal control philosophies, systems, and operation procedures have been widely praised and recognized
+by regulators, peers, and the media.
+124
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Regarding internal control operations and internal control assessment, the Company continued to improve
+its governance structure, firewall management, CPT management, anti-money laundering management, and
+operational risk management. Moreover, the Company combines routine risk management with the work as
+one of G-SIIs. In line with the G-SII regulatory requirements, the C-ROSS requirements, and its integrated
+financial business requirements, the Company has conducted risk reviews and surveys, acted in response
+to the findings, and constantly enhanced its risk controls to prevent risks and risk contagion, lay a solid
+foundation for the integrated financial business, and safeguard the fast growth of innovative business. In
+2015, the Company continued to act in accordance with the Internal Control Guidelines for Enterprises and
+related guidelines, assessed its internal controls, and improved its internal control assessment methodology,
+risk assessment standards, assessment procedures, and internal control management platform. Moreover,
+the Company trained its employees to assess internal controls, held internal control contests, developed
+relevant online courses to facilitate learning on mobile devices, enhanced study of risk cases, implemented
+the compliance and internal control appraisal, and strengthened the routine operation model under which
+"everyone is involved in internal controls, everyone is responsible for compliance, and internal controls have
+been integrated in business and processes".
+Regarding improvement of internal controls and management of operational risks, based on the
+prevailing compliance management and internal control framework, the Company has integrated
+domestic and foreign regulatory standards, approaches, and tools for operational risk management,
+optimized the framework for operational risk management, improved the rules and procedures for
+operational risk management, enhanced cooperation and collaboration among departments, established
+a routine monitoring and reporting procedure for regular reporting of high-level operational risks to the
+management, developed rules and standards for operational risk management, and strengthened system
+platforms to increase the effectiveness and efficiency of operational risk management. In 2015, the Company
+built and improved a comprehensive management system for identification, evaluation, monitoring, control/
+mitigation, and reporting of operational risks. The Company constantly improved its policies, framework,
+processes, system, tools to enhance its operational risk management. The Company urged its subsidiaries
+to implement tools for operational risk management (e.g. self-assessment of risks and controls, key risk
+indicators, and reporting of losses due to operational risks). Based on routine risk monitoring and analysis
+as well as comprehensive management, the Company strengthened targeted risk controls through risk
+warnings, special inspections, and compliance reviews.
+In terms of the internal audit and supervision system, the Company has implemented an independent,
+vertical, and centralized approach to internal audits. The Company has developed and adopted innovative
+methods, improved the audit strategies, controlled the Internet finance risk, strengthened audit platform
+and tools, and further automated the system platform. The Company has established joint meetings
+mechanisms for crime prevention and management covering insurance, banking, and investment businesses
+units. The Company has improved its intra-group crime risk warning and emergency response procedures,
+which are in full play. The Company has strengthened its anti-money laundering, anti-embezzlement,
+and anti-fraud procedures to enhance risk prevention and monitoring. In 2015, the Company continued to
+enhance the risk-oriented internal audit and supervision mechanisms, effectively integrated its internal
+audit resources, adopted innovative audit approaches, and refocused its internal audits to effectively
+and efficiently control risk. In response to changes in external environments and internal strategies, the
+Company further transformed its internal audits, integrated audit advisory service with high-risk event
+identification, adopted innovative tools, enhanced risk monitoring and warning, built a dynamic risk
+prevention system, switched from post-transaction audits to total risk management, and strengthened
+internal controls to improve risk management and support the Company's development strategy. Moreover,
+the Company enhanced targeted risk controls and established an emergency response procedure to
+effectively prevent and mitigate risks and to support business growth.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+INDEPENDENCE OF THE COMPANY FROM THE CONTROLLING SHAREHOLDERS ON BUSINESS, STAFF,
+ASSETS, ORGANIZATION AND FINANCE
+125
+Corporate Governance Report
+In 2015, the Company maintained the effectiveness of internal controls relating to its financial reporting in
+all major aspects in accordance with the Internal Control Guidelines for Enterprises and relevant rules. The
+Internal Control Assessment Report for 2015 has been approved by the Board. The Company has engaged
+PricewaterhouseCoopers Zhong Tian LLP to audit the effectiveness of internal controls relating to its
+financial reporting as well as the effectiveness of internal controls relating to its non-financial reporting.
+PricewaterhouseCoopers Zhong Tian LLP has issued the Internal Control Audit Report.
+For details of the Company's internal control, please refer to the Internal Control Assessment Report of
+Ping An in 2015 and the Internal Control Audit Report on Ping An in 2015 released on the same date as this
+Statement on www.sse.com.cn.
+THE COMPANY'S RISK MANAGEMENT
+The Company has been taking risk management as an integral part of its day-to-day activities and
+operations. We take steady steps to build an enterprise risk management system that is aligned with the
+strategies and operations of the Company. We keep optimizing our risk management framework and
+standardizing our risk management procedures, adopt both qualitative and quantitative risk management
+methodologies to identify, evaluate and mitigate risks to facilitate an organic and sustainable development
+of the business.
+For details of the Company's risk management, please refer to the section of “Risk Management” in this
+annual report.
+OUR COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
+The Board is responsible for performing the corporate governance duties set out in the terms of reference
+in the Code Provision D.3.1 of the Corporate Governance Code.
+During the Reporting Period, the Board held Board meetings to review the Company's compliance with the
+Corporate Governance Code and the contents disclosed in the Corporate Governance Report.
+None of the Directors is aware of any information that would reasonably indicate that the Company did not
+meet the applicable Code Provisions set out in the Corporate Governance Code for any part of the period
+from January 1, 2015 to December 31, 2015 save as disclosed below.
+Corporate Governance Report
+126
+CORPORATE GOVERNANCE
+Corporate Governance Report
+CORPORATE GOVERNANCE
+123
+Information Disclosure and Investor Relations
+During the Reporting Period, the Company disclosed the relevant information in a truthful, accurate,
+complete, timely and effective manner in accordance with the laws and regulations and the Articles of
+Association, making sure that every shareholder had equal chance to obtain the information, and there was
+no breach of information disclosure regulations.
+During the Reporting Period, there were no such cases as material accounting mistakes, make-up of
+missing information or revision of profitability forecast.
+The Company adheres to the principles of compliance, objectiveness, consistency, timeliness, interactivity
+and fairness in providing services actively, passionately and efficiently to the institutional and individual
+investors home and abroad, aiming at improving acquaintance between the Company and its investors,
+enhancing corporate governance and realizing the corporate value of fairness of the Company.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+121
+CORPORATE GOVERNANCE
+Corporate Governance Report
+The Company maintains a website at www.pingan.com as a communication platform with shareholders
+and investors, where the Group's business developments and operations, financial information, corporate
+governance practices and other information are available for public access. Shareholders and investors may
+also write directly to the Company's IR Team or via email to IR@pingan.com.cn or PR@pingan.com.cn for
+any inquiries. Inquiries are dealt with in an appropriate manner.
+During the Reporting Period, the Company paid special attention to communication with the capital market
+in respect of its integrated financial strategy, cross-selling, conversion of Ping An Convertible Bonds, plan
+and development in all of its business segments. The Company provided illustration of its annual, interim
+and quarterly results by means of public presentation, video and telephone conferences, roadshows and
+online roadshows, etc.. The Company resorted to telephone conferences, non-deal roadshow, gathering
+of stock market analysts, Corporate Strategy Day, Corporate Open Day and so on, to actively promote
+itself in the market, so as to improve the understanding of capital market about the Company and its
+communication with the Company. While maintaining a good communication with the institutional
+investors, the Company also established sufficient channels for communication with medium and small
+investors, including but not limited to online roadshows, Approaching Ping An, the E-interaction of SSE,
+corporate website, e-mail and telephone calls, so as to provide better services to them and protect the
+rights and interests of the Shareholders.
+In 2015, the Company organized 2 onsite results releases, 2 telephone results releases, 1 Corporate Strategy
+Day, 1 Corporate Open Day, 1 gathering of stock market analysts, 22 roadshows at home and abroad and
+2 online roadshows, attended around 56 conferences of investment banks and securities brokers home
+and abroad, received around 130 visits of investors/analysts home and abroad, and processed around 420
+valid mails from investors and around 2,000 inquiry phone calls of investors. Moreover, the Company was
+committed to collecting capital market analysis reports and shareholders' information, and paid special
+attention to the investors' concerns and advices, aiming at further enhancing the management and
+operation of the Company as well as its corporate governance. The Company also took great efforts in
+improving its internal workflow and policy formulation so as to provide the investors with better service in
+a more efficient way.
+During the Reporting Period, Ping An was awarded the “Director of the Year Awards" by The Hong
+Kong Institute of Directors, the "Asian Excellence Recognition Award" and "Best IR Company (China)"
+by Corporate Governance Asia, “3A Greater China Awards - Platinum Awards" by The Asset, “Most
+Respected Chinese Companies by Investors 100 - Top 10" by China Association for Public Companies, "The
+Outstanding Boards of Directors of China Listed Companies" by 21st Century Media Co., Ltd. & 21st Century
+Business Herald and “Best IR in China region" by Institutional Investor (US) etc..
+Amendments Made to the Articles of Association
+During the Reporting Period, proposals were made to amend the Articles of Association of the Company
+in the 2014 Annual General Meeting and the 2nd Extraordinary General Meeting of 2015. The details of the
+proposed amendments are listed in the circulars dated April 17, 2015 and November 2, 2015 which were
+published on the website of the HKEX (www.hkexnews.hk), and the materials of the general meetings dated
+April 17, 2015 and October 31, 2015 which were published on the website of SSE (www.sse.com.cn).
+The proposed amendments to the Articles of Association of the Company are subject to the approval of
+relevant regulatory authorities.
+122
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+PERFORMANCE OF DUTIES BY INDEPENDENT NON-EXECUTIVE DIRECTORS
+The 10th Session of the Board consists of 6 Independent Non-executive Directors, which is in compliance
+with the requirements under the regulatory rules of the Company's listed jurisdictions that the number
+of Independent Non-executive Directors should be one third or more of the total number of members
+of the Board. All Independent Non-executive Directors of the Company possess extensive experience in
+various fields, such as finance and accounting, law, and actuary, which is crucial to the healthy growth of
+the Company. All Independent Non-executive Directors of the Company meet the specific independence
+guidelines as set out in the regulatory rules of the Company's listed jurisdictions, and have presented their
+annual confirmation on independence to the Company, therefore the Company continued to believe that
+they are independent. The Independent Non-executive Directors owe fiduciary duties to the Company and
+its shareholders, and are especially responsible for protecting the minority interests. They are playing a
+significant check-and-balance role in the decision-making of the Board and are a key link of the corporate
+governance of the Company.
+The Independent Non-executive Directors of the Company conscientiously performed their duties and
+responsibilities conferred by the Articles of Association, promptly learnt the important information of
+operation of the Company, paid high attention to the development of the Company and actively attended
+the meetings of the Board during the Reporting Period. After a due review on the external guarantees of
+the Company in 2014, the Independent Non-executive Directors of the Company believed that the Company
+had exerted stringent control on risks associated with external guarantees and the external guarantees
+were in compliance with relevant laws and regulations and the Articles of Association. The Independent
+Non-executive Directors have conscientiously considered and provided independent opinions to agree with
+the following resolutions that were considered by the Board during the Reporting Period: the 2014 Profit
+Distribution Proposal of the Company, Shareholders' Return Plan for the Next Three Years (2015-2017), the
+Proposal on Authorizing Executive Directors to Consider the Material Connected Transactions between
+Ping An Group and Its Controlling Subsidiaries, Proposal on Appointment of Ms. Tan Sin Yin as the Senior
+Vice President of the Company, the Resolution on Recommendation of Candidates of the 10th Session of
+the Board, the Proposal on Election of the Chairman and Vice Chairmen of the 10th Session of the Board,
+the Proposal on Appointment of Mr. Ma Mingzhe as the CEO of the Company, the Proposal on Appointment
+of Senior Management of the Company, the Proposal on Distribution of the 2015 Interim Dividend of
+the Company, the Proposal on Deliberating the Connected Transaction of Ping An Overseas Holdings
+to Transfer Shares of Puhui Limited to Lufax Holding, the Proposal on Recommendation of Candidates
+of Directors, the Proposal on Recommendation of Mr. Xiong Peijin as a Non-executive Director of the
+Company, as well as the adjustment of the accounting estimates involved in 2014 Annual Report and 2015
+Interim Report of the Company and the connected transaction regarding granting credit limit to Guosen
+Securities Companies Ltd. by Ping An Bank.
+Attendance of Independent Non-executive Directors at the Board Meetings and the General Meetings
+The details of the attendance of Independent Non-executive Directors at the Board meetings and the
+general meetings during the Reporting Period are listed in the "Attendance of Directors at the General
+Meetings" and the "Attendance of Directors at the Board Meetings" of this chapter, respectively.
+Objections of Independent Non-executive Directors on Relevant Matters of the Company
+During the Reporting Period, the Independent Non-executive Directors of the Company did not have any
+objection on the resolutions at the Board meetings and other matters that were not submitted to the Board
+meetings of the Company.
+Adoption of Independent Non-executive Directors' Recommendation on the Company
+During the Reporting Period, the Independent Non-executive Directors made some constructive advice
+and suggestions in respect of the shareholders and the Company as a whole, including but not limited to
+corporate governance, reform and development and operations; particularly, attention was paid to the
+legitimate interests of the minority shareholders in the decision-making process. All of their opinions and
+recommendation were adopted by the Company.
+Ping An Insurance (Group) Company of China, Ltd.
+The Executive Committee
+Ping An Insurance (Group) Company of China, Ltd. 119
+Total
+Annual Report 2015
+0/4
+4/4
+100
+0/4
+2/2
+100
+0/2
+2/2
+100
+0/2
+3/4
+75
+1/4
+оооооо
+25
+As approved at the 1st Meeting of the 10th Session of the Board, Mr. Ge Ming was elected as the chairman of the Audit and Risk
+Management Committee in July 2015.
+Mr. Tang Yunwei and Mr.Woo Ka Biu Jackson no longer served as the members of the Audit and Risk Management Committee from
+June 2015.
+Annual Report 2015
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd.
+117
+Corporate Governance Report
+Further, in order to enable the members of the Committee to better evaluate the financial reporting
+systems and internal control procedures of the Company, all the members met with the Company's external
+auditors separately twice during the year.
+The Audit and Risk Management Committee also considered and was satisfied with the performance,
+independence and objectiveness of the Company's auditors.
+According to the resolutions of the 2014 Annual General Meeting of the Company, the Company
+appointed PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers (hereinafter refer to
+"PricewaterhouseCoopers") as the auditors of the Company's financial statements under CAS and IFRS
+for the year 2015. During the Reporting Period, the remuneration to be paid to the Company's auditors
+PricewaterhouseCoopers is set out as follows:
+100
+4/4
+0/4
+100
+Annual Report 2015
+Audit and Risk Management Committee
+The primary duties of the Audit and Risk Management Committee are to review and supervise the
+Company's financial reporting process and conduct risk management. The Audit and Risk Management
+Committee is also responsible for reviewing any matters relating to the appointment or removal, and
+remuneration of the external auditors. In addition, the Audit and Risk Management Committee also
+examines the effectiveness of the Company's internal controls, which involves regular reviews of the
+internal controls of various corporate structures and business processes, and takes into account their
+respective potential risk and urgency, to ensure the effectiveness of the Company's business operations
+and the realization of its corporate objectives and strategies. The scope of such examinations and
+reviews includes finance, operations, regulatory compliance and risk management. The Audit and Risk
+Management Committee also reviews the Company's internal audit plan and submits relevant reports and
+recommendations to the Board on a regular basis.
+As of December 31, 2015, the Audit and Risk Management Committee comprised 4 Independent
+Non-executive Directors and 1 Non-executive Director, and the ratio of Independent Non-executive
+Directors was 80%. None of the members was involved in the day-to-day management of the Company.
+The Audit and Risk Management Committee was chaired by an Independent Non-executive Director who
+also possesses the appropriate professional qualifications or accounting or related financial management
+expertise.
+In 2015, the Audit and Risk Management Committee held 4 meetings. All these meetings were convened in
+accordance with the Articles of Association and the Charter of the Audit and Risk Management Committee.
+In particular, the Audit and Risk Management Committee reviewed the Company's annual financial
+statements for the year ended December 31, 2014, the first quarterly financial statements for the three
+months ended March 31, 2015, the interim financial results for the six months ended June 30, 2015 and the
+third quarterly financial statements for the nine months ended September 30, 2015. Furthermore, the Audit
+and Risk Management Committee convened the meeting to review the unaudited financial report for the
+year 2015 and agreed to deliver it to the auditor for auditing. The Audit and Risk Management Committee
+also reviewed the audited financial report for the year ended December 31, 2015 at the first meeting
+in 2016 and was satisfied with the basis of preparation, including the appropriateness of assumptions
+and accounting policies and standards adopted, and made recommendations to the Board for their
+consideration. The attendance records of the members of the Audit and Risk Management Committee are
+as follows:
+Members
+Independent Non-executive Directors
+GE Ming (Chairman)(1)
+Stephen Thomas MELDRUM
+YIP Dicky Peter
+SUN Dongdong
+Tang Yunwej (2)
+(in RMB million)
+WOO Ka Biu Jackson (2)
+YANG Xiaoping
+(1)
+(2)
+Meetings attended
+in person/Meetings
+required to attend
+% of
+Attendance in
+person (%)
+Meetings attended
+by proxy/Meetings
+required to attend
+% of
+Attendance by
+proxy (%)
+2/2
+100
+0/2
+4/4
+Non-executive Director
+Audit services for financial statements - audits, reviews and agreed upon procedures
+Audit services for internal control
+Other assurance services
+Non-assurance services
+100
+0/2
+2/2
+100
+0/2
+1/1
+0/1
+100
+0/1
+1/1
+100
+0/1
+2/2
+1/1
+0/1
+2/2
+100
+0
+O o O o O o
+0/2
+0
+(1) As approved at the 1st Meeting of the 10th Session of the Board, Mr. Sun Dongdong and Mr. Ge Ming were elected as the members
+of the Remuneration Committee in July 2015.
+(2) Mr. Tang Yunwei and Mr. Lee Carmelo Ka Sze no longer served as the members of the Remuneration Committee from June 2015.
+Nomination Committee
+The primary duties of the Nomination Committee are to review, advise and make recommendations to
+the Board regarding candidates to fill vacancies on the Board and senior management. Meetings of the
+Nomination Committee are held when necessary but at least once a year.
+The nomination of Directors is considered with reference to an individual's business acumen and
+undertakings, academic and professional achievements and qualifications, experience and independence,
+having regard to the Company's activities, assets and management portfolio. The Nomination Committee is
+delegated with the task of actively considering the needs of the Company at the Directors' level and senior
+management's level, studying the criteria and procedure for selecting directors and senior management,
+first considering and identifying appropriate candidates, then making recommendations to the Board and
+implementing any decisions and recommendations of the Board in the execution of appointments. The
+aim and principal objective of the Nomination Committee are to ensure that there remains a dedicated,
+professional and accountable Board to serve the Company and its shareholders.
+100
+CORPORATE GOVERNANCE
+Soopakij CHEARAVANONT
+TANG Yunwei (2)
+Fees payable
+51
+7
+8
+12
+78
+Remuneration Committee
+The primary duties of the Remuneration Committee is to determine, with delegated responsibility, the
+specific remuneration packages of the Company's Executive Directors and senior management, including
+benefits in kind, pension rights and compensation payments and making recommendations to the Board
+on the remuneration of Non-executive Directors. The Remuneration Committee also advises the Board
+in relation to establishing a formal and transparent procedure for developing remuneration policy in
+respect of these individuals, considering and approving remunerations based on performance and market
+conditions, with reference to the corporate goals and objectives set forth by the Board. In particular,
+the Remuneration Committee is delegated with the specific task of ensuring that no Director or any of
+his associates is involved in deciding his own remuneration. Where the remuneration of a member of the
+Remuneration Committee is to be considered, that member's remuneration should be determined by the
+other members of the Committee. Meetings of the Remuneration Committee are to be held at least twice a
+year.
+As of December 31, 2015, the Remuneration Committee comprised 4 Independent Non-executive Directors
+and 1 Non-executive Director, and the ratio of Independent Non-executive Directors was 80%. None of the
+members was involved in the day-to-day management of the Company. The Remuneration Committee was
+chaired by an Independent Non-executive Director.
+118
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Non-executive Director
+In 2015, the Remuneration Committee held 2 meetings, which were all convened in accordance with
+the requirements of the Articles of Association and the Charter of the Remuneration Committee. The
+Committee considered and approved the Proposal on Reviewing the Remuneration of the Company's
+Senior Management, the 2014 Remuneration Management Report of the Company, the Resolution on
+Specifying the Funding Source for the Senior Management's Participation in the Key Employee Share
+Purchase Scheme, and the Resolution on the Remuneration of Ms. Tan Sin Yin. In addition, the Committee
+also reviewed the Duty Performance Report of the Remuneration Committee of the Board in 2014, the
+Report on Settlement of 2014 Bonuses of the Company's Senior Management, the Report on Grant
+of Long-term Incentive of 2014 to the Company's Senior Management and the Report on Payment of
+Long-term Incentive of 2012 to the Company's Senior Management. Attendance of meetings by the
+members of the Remuneration Committee is set out below:
+in person/Meetings
+required to attend
+% of
+Attendance
+in person (%)
+Meetings attended
+by proxy/Meetings
+% of
+Attendance
+required to attend by proxy (%)
+Members
+Independent Non-executive Directors
+YIP Dicky Peter (Chairman)
+WOO Ka Biu Jackson
+SUN Dongdong (1)
+GE Ming (1)
+LEE Carmelo Ka Sze (2)
+Meetings attended
+Ping An Insurance (Group) Company of China, Ltd.
+100
+Details of remuneration of the Directors and Supervisors for the year ended December 31, 2015 are set out
+in note 52 to the consolidated financial statements.
+SHARE CAPITAL
+For equity investment, please refer to the section headed “Significant Events".
+EQUITY INVESTMENT DURING THE REPORTING PERIOD
+The non-raised fund of the Company mainly comes from its core insurance business. The Company
+has been strictly following the relevant requirements of CIRC on the application of insurance fund. All
+investment in relation to insurance fund was conducted in the normal course of operation.
+PARTICULARS ON INVESTMENT DURING THE REPORTING PERIOD
+An aggregate of 594,056,000 new H Shares have been successfully allotted and issued by the Company
+under general mandate on December 8, 2014 and the gross proceeds raised from the placing were
+HK$36,831,472,000. The proceeds raised from the placing were used to develop the main business and
+replenish the equity and working capital of the Company, and the use of the proceeds raised was
+consistent with the use that was passed by the meeting of the Board of Directors. As at December 31,
+2015, HK$10,220 million from the placing is kept in the fund-raising account, and the rest had been used as
+intended.
+USE OF PROCEEDS
+For management discussion and analysis, please refer to the section headed "Management Discussion and
+Analysis".
+MANAGEMENT DISCUSSION AND ANALYSIS
+As at December 31, 2015, the Company's reserves available for distribution totalled RMB34,070 million, the
+Company has proposed to distribute the 2015 final dividend of RMB0.35 (tax inclusive) per share in cash.
+After deducting the 2015 final dividend, the retained profits were carried forward to 2016. In addition, the
+Company's capital reserve and surplus reserve fund amounted to RMB137,235 million. The remaining reserve
+fund may be distributed by a future capitalization issue.
+DISTRIBUTABLE RESERVES
+Save as the 2015 final dividend which will be implemented upon approval at the 2015 Annual General Meeting, the profit distribution
+of other years has been completed.
+Cash dividend issued for each share based on the share capital during issuing. For 2015, it is the number after the conversion of
+capital reserve to share capital instead.
+(3)
+(2)
+Cash dividends include interim dividend and final dividend of the year.
+(1)
+18.3
+28,154
+The change in the share capital of the Company in 2015 and the share capital structure of the Company as
+at December 31, 2015 are set out in "Changes in the Share Capital and Shareholders' Profile".
+130
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+During 2015, the following person is considered to have interests in a business which competes or is likely
+to compete, directly or indirectly, with the business of the Group, as defined in the HKEx Listing Rules, as
+set out below:
+DIRECTORS' AND SUPERVISORS' INTERESTS IN A COMPETING BUSINESS
+At no time during 2015 were rights to acquire benefits by means of the acquisition of shares or debentures
+of the Company granted to any Directors, Supervisors or their respective spouse or minor children, nor
+were any such rights exercised by them, or was the Company, or any of its subsidiaries a party to any
+arrangement to enable the Directors or Supervisors to acquire such rights in any other body corporate.
+DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+No Directors or Supervisors or entity connected with the Directors or Supervisors had a material interest,
+directly or indirectly, in any transaction, arrangement or contract of significance to the business of the
+Group to which the Company or any of its subsidiaries was a party during 2015.
+DIRECTORS' AND SUPERVISORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF
+SIGNIFICANCE
+Significant Events
+5,145
+DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS AND REMUNERATION
+According to the resolutions of the 25th Meeting of the 7th Session of the Board of Directors and the 2nd
+Meeting of the 7th Session of the Supervisory Committee of the Company, the Company entered into
+service contracts with all Directors of the 10th Session of the Board of Directors and all Supervisors of
+the 8th Session of the Supervisory Committee in August 2015. Terms, duties, remuneration expenses and
+confidentiality duties of Directors and Supervisors, and commencement and termination of contracts
+were specified in the service contracts. As at December 31, 2015, no Directors or Supervisors had a service
+contract with the Company which was not terminable by the Company within one year without payment of
+compensation other than statutory compensation.
+PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY
+There are no provisions regarding pre-emptive rights under the Company Law of the PRC or the Articles of
+Association, which would oblige the Company to issue new shares to its existing shareholders in proportion
+to their existing shareholdings.
+PRE-EMPTIVE RIGHTS
+Details of movements in property and equipment and investment properties of the Group during 2015 are
+set out in notes 31 and 30 to the consolidated financial statements, respectively.
+PROPERTY AND EQUIPMENT AND INVESTMENT PROPERTIES
+Charitable donations made by the Company during 2015 totalled RMB76 million.
+CHARITABLE AND OTHER DONATIONS
+Details of movements in the reserves of the Company and the Group during 2015 are set out in note
+35 to the consolidated financial statements and in the "Consolidated Statement of Changes in Equity",
+respectively.
+RESERVES
+Save for the information disclosed under the paragraph headed "Ping An Convertible Bonds" as set out in
+"Changes in the Share Capital and Shareholders' Profile", neither the Company, nor any of its subsidiaries,
+had purchased, sold or redeemed any of the Company's listed shares during 2015.
+0.65
+16.7
+39,279
+The decision-making procedure and mechanism of the above profit distribution proposals were complete,
+and the dividend payout standard and proportion were clear. The above profit distribution proposals were
+in line with the Articles of Association and relevant deliberation procedures and had fully protected the
+legitimate interests of minority shareholders. The Independent Non-executive Directors of the Company
+have made independent opinion to agree with the profit distribution proposals. The implementation of the
+above-mentioned distribution proposals has been completed.
+The 2015 interim profit distribution proposal of the Company was considered and passed by the 2nd
+meeting of the 10th Session of the Board of Directors of the Company held on August 20, 2015, according
+to which the Company paid in cash the 2015 interim dividend of RMB0.18 (tax inclusive) per share, in a total
+amount of RMB3,290,443,453.80, based on its 18,280,241,410 shares in issue.
+The 2014 annual profit distribution proposal of the Company was considered and passed at the 2014 Annual
+General Meeting of the Company held on June 15, 2015, according to which the Company paid in cash the
+2014 final dividend of RMB0.50 (tax inclusive) per share, in a total amount of RMB4,570,060,352.50, based on
+its 9,140,120,705 shares in issue at that time. In addition, the Company also proposed to convert the capital
+reserve into share capital in the proportion of 10 shares for every 10 shares held. The total share capital
+increased due to the conversion was RMB9, 140, 120,705.
+Implementation of Profit Distribution Proposal
+Where adjustment to our profit distribution policy is required due to the applicable national laws and
+regulations and new rules promulgated by the CSRC regarding profit distribution policies of listed
+companies or significant changes in the external business environment and/or operating situations of
+the Company, it shall be done for the purpose of safeguarding the shareholders' interests and in strict
+compliance with the decision-making process. To this end, the Board of Directors of the Company
+shall work out an adjustment plan based on the operating situations of the Company and the relevant
+regulations of the CSRC, and then submit the same to the general meeting for consideration and approval.
+Implementation of the adjustment plan is conditional upon approval by shareholders (including their
+proxies) holding more than two-thirds of voting rights present at the general meeting.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+According to Article 213 of the Articles of Association, the Company shall attach importance to the
+reasonable investment returns of investors in terms of its profit distribution. The profit distribution policy
+of the Company shall maintain its continuity and stability. The accumulated profit to be distributed in
+cash for any three consecutive years shall not be less than 30% of the average annual distributable profit
+realized in the three years, provided that the annual distributable profits of the Company (namely profits
+after tax of the Company after covering the losses and making contributions to the revenue reserve) are
+positive in value and such distributions are in compliance with the prevailing laws and regulations and the
+requirements of regulatory authorities for solvency ratio. In determining the specific ratio of distribution
+of cash dividend, the Company shall take into account its profit, cash flow, solvency and operation and
+business development requirements. The Board of Directors of the Company shall be responsible for
+formulating and implementing a distribution plan according to the provisions of the Articles of Association.
+In preparing profit distribution plans, the Board of Directors of the Company shall listen and absorb
+views and advice from shareholders (in particular, the minority shareholders), independent directors
+and independent supervisors through various ways. Independent directors of the Company shall express
+their independent opinions on the profit distribution plans. When a specific cash dividends distribution
+plan is put forward for consideration at a general meeting, a variety of channels shall be provided for
+communication and opinion exchange with shareholders (in particular, the minority shareholders), whose
+opinions and demands shall be fully heard and prompt response shall be given to any issues the minority
+shareholders are concerned.
+Cash Dividend Policy
+ANNUAL RESULTS AND PROFIT DISTRIBUTION
+REPORTING PERIOD
+The Group believe that it is important to maintain good relationship with its customers to fulfil its
+long-term goals "to be a world-leading personal financial services provider". To achieve this goal and
+maintain the leading position in terms of brand value, the Group aims at delivering constantly high
+standards of quality in the financial service to its customers. During 2015, there was no material and
+significant dispute between the Group and its customers.
+RELATIONSHIP WITH CUSTOMERS
+None of the Directors of the Company or any of their associates or any shareholders (which, to the best
+knowledge of the Directors, own more than 5% of the Company's issued share capital) had any beneficial
+interest in the Group's five largest customers.
+In 2015 under review, operating income from the Group's five largest customers accounted for less than 1%
+of the total operating income for the year.
+MAJOR CUSTOMERS
+A summary of the published results, assets and liabilities of the Group for the last five years is set out in
+"Five-Year Summary".
+SUMMARY FINANCIAL INFORMATION
+The principal activities of the Company and its subsidiaries (the "Group") comprise the provision of a
+wide range of financial products and services with a focus on the businesses of insurance, banking, asset
+management and internet finance. There were no significant changes in the nature of the Group's principal
+activities during 2015.
+PRINCIPAL ACTIVITIES
+IMPLEMENTATION OF CASH DIVIDEND POLICY AND PROFIT DISTRIBUTION PROPOSAL DURING THE
+131
+The Group's results in 2015 are set out in the section titled "FINANCIAL STATEMENTS".
+The Company had distributed an interim dividend of RMB0.18 (tax inclusive) per share for 2015, which
+amounted to a total of RMB3,290,443,453.80. The Company proposes to pay in cash the 2015 final dividend of
+RMB0.35 (tax inclusive) per share, in a total amount of RMB6,398,084,493.50, based on its 18,280,241,410 shares
+in issue. The remaining profit will be carried forward to 2016. The retained profits are mainly for the purpose
+of endogenous capital accumulation, so as to maintain a reasonable solvency ratio as well as funding to
+subsidiaries so that they can maintain a reasonable solvency ratio or capital adequacy ratio.
+6,549
+0.75
+17.9
+54,203
+9,688
+0.53
+Ratio (%)
+Cash dividend issued
+for each share
+during the year
+(in RMB Yuan)
+Net profit
+attributable to
+shareholders of the
+parent company
+(in RMB million)
+As stated in the 2015 audited financial statements of the Group prepared under CAS, the net profit
+attributable to shareholders of the parent company was RMB54,203 million and net profit of the parent
+Company was RMB10,280 million. Pursuant to the Articles of Association and other relevant requirements,
+the Company shall make appropriation to the statutory surplus reserve fund based on 10% of the net profit
+of the Company as shown in the financial statements under CAS before determining the profit available for
+distribution to shareholders. Appropriation to the statutory surplus reserve fund may cease to apply if the
+balance of the statutory surplus reserve fund reached an amount equal to 50% of the registered capital of
+the Company. After making the above profit distribution and taking into account the retained profit carried
+forward from last year, according to the Articles of Association and other relevant requirements, the profit
+available for distribution to shareholders was RMB34,070 million.
+amount
+(including tax)
+(in RMB million)
+2013
+2015
+2014
+Particulars on dividend payouts of the Company over the past three years are set out as follows:
+Report of the Board of Directors
+CORPORATE GOVERNANCE
+129
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+The above proposal will be implemented upon approval at the 2015 Annual General Meeting. The profit
+distribution proposal is in line with the Articles of Association and relevant deliberation procedures and
+fully protects the legitimate interests of minority shareholders. The Independent Non-executive Directors of
+the Company have made independent opinion to agree with the profit distribution proposal.
+Cash dividend
+Report of the Board of Directors
+CORPORATE GOVERNANCE
+Mr. Lin Li, a former Shareholder Representative Supervisor of the Company, is the de facto controller
+of Shenzhen Liye Group Co., Ltd., whose subsidiary, Chinalin Security Company Limited, is engaged in
+stockbrokerage, securities investment consultancy, securities underwriting and sponsor and securities
+dealing. As its businesses overlapped with Ping An Securities, a subsidiary of the Company, that competes
+with the Company. Mr. Lin Li had retired as a Supervisor of the Company since June 2015. Save as disclosed,
+as far as the Directors are aware, none of the Directors and Supervisors had any competing interest in a
+business, which competes or is likely to compete, either directly or indirectly, with the Group's business.
+Annual Report 2015
+During the Reporting Period, certain members of the Supervisory Committee attended the Company's
+general meetings and meetings of the Board of Directors as non-voting participants and had no dissents.
+In September 2015, certain members of the Supervisory Committee conducted inspection and review in the
+branches of Ping An Life, Ping An Property & Casualty, Ping An Annuity and Ping An Securities in Shanxi.
+Opinions collected from the vast ground-level staffs were considered and constituted as the investigation
+report to the management of the Company. Meanwhile, feedback report by the senior management for
+settling relevant problems was addressed to all the Directors and Supervisors.
+(1) The election of the new session of the Supervisory Committee was passed at the 2014 Annual General Meeting of the Company held
+on June 15, 2015. According to the resolution, the 8th session of the Supervisory Committee was composed of 5 Supervisors. Mr. Lin
+Li, Mr. Sun Jianping and Mr. Zhao Fujun did not stand for re-election as Supervisors due to personal work arrangement. The term
+of office of Mr. Lin Li expired on June 15, 2015. According to the resolution passed at the employees' representatives meeting of the
+Company held on January 23, 2015, Mr. Gao Peng was elected as an Employee Representative Supervisor of the 8th session of the
+Supervisory Committee of the Company. The qualification of Mr. Gao Peng as a Supervisor of the Company was obtained from CIRC
+on June 30, 2015, on which day the appointment of Mr. Gao Peng and the resignation of Mr. Sun Jianping and Mr. Zhao Fujun became
+effective.
+100
+2/2
+July 17, 2012
+100
+2/2
+March 19, 2010
+SUN Jianping (1)
+ZHAO Fujun (1)
+100
+3/3
+June 30, 2015
+GAO Peng (1)
+100
+5/5
+July 17, 2012
+PAN Zhongwu
+Ping An Insurance (Group) Company of China, Ltd. 133
+Report of the Supervisory Committee
+INDEPENDENT OPINION ON THE RELEVANT ISSUES FROM THE SUPERVISORY COMMITTEE
+(1) Lawful Operation
+During the Reporting Period, the Company operated and managed its businesses in accordance with
+the laws and regulations. Its operational results were objective and true. There was greater development
+and improvement in the depth and scope of internal control management. The internal control system
+was complete, reasonable and effective. Its operational decision-making processes were lawful. The
+Directors and other senior management were cautious, serious and diligent in the business operations and
+management processes. They had never breached any laws, regulations, and the Articles of Association or
+harmed the interests of the shareholders.
+134
+March 15, 2016
+Shenzhen, PRC
+Chairman of the Supervisory Committee
+GU Liji
+By order of the Supervisory Committee
+In the coming year, the Supervisory Committee will further enhance its work principles and fully implement
+a scientific perspective for its development. It will continue to carry out its duties in accordance with the
+relevant provisions of the Company Law of PRC, the Articles of Association and the listing rules. It will
+adhere to the principles of diligence, fairness and honesty, and maximize its supervisory efforts with the
+aim of protecting the interests of the Company and its shareholders as a whole and commit to performing
+supervisory duties honestly and diligently, so as to achieve the best results in all respects.
+The Supervisory Committee acknowledges that the Board of Directors strictly carried out cash dividend
+policies and plans for shareholders returns, performed relevant decision-making procedures for cash
+dividend and disclosed cash dividend policies and its execution truly, accurately and completely.
+Implementation of Cash Dividend Policy
+50
+(7)
+(6) Implementation of the Resolutions Approved by the General Meetings
+The Supervisory Committee had heard and reviewed the Working Report on the Internal Control of the
+Company for the First Half of 2015 and 2015 Assessment Report on Internal Control, and considered the
+Company has set up a relatively complete, reasonable and effective internal control system.
+(5) Internal Control System
+The Supervisory Committee considered the connected transactions of the Company were fair and
+reasonable in the Reporting Period, and did not find any harm against the interests of the shareholders and
+the Company.
+(4) Connected Transactions
+An aggregate of 594,056,000 new H Shares have been successfully allotted and issued by the Company under
+general mandate on December 8, 2014 and the gross proceeds raised from the placing were HK$36,831,472,000.
+The proceeds raised from the placing were used to develop the main business and replenish the equity and
+working capital of the Company, and the use of the proceeds raised was consistent with the use that was
+passed by the meeting of the Board of Directors. As at December 31, 2015, HK$10.22 billion from the placing is
+kept in the fund-raising account, and the rest had been used as intended.
+(3) Use of Proceeds
+PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers have issued the standard
+unqualified auditor's reports in accordance with the PRC and international accounting principles.
+respectively for the Company's financial statements of 2015. The financial statements truly, fairly and
+accurately reflected the financial condition and results of operations of the Company.
+(2) Authenticity of the Financial Statement
+Certain members of the Supervisory Committee attended the meetings of the Board of Directors and the
+general meetings, and did not have any objection on the reports and proposals which were submitted
+to the general meetings by the Board of Directors. The Supervisory Committee has monitored the
+implementation of the resolutions approved by the general meetings and is of the opinion that the Board of
+Directors can duly implement the resolutions approved by the general meetings.
+1/2
+July 17, 2012
+100
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+132
+March 15, 2016
+Shenzhen, PRC
+Chairman and Chief Executive Officer
+Ma Mingzhe
+By order of the Board of Directors
+Based on the information that is publicly available to the Company and within the knowledge of the
+Directors as at the latest practicable date prior to the issue of this Annual Report, being March 15, 2016,
+at all times during the year ended December 31, 2015, not less than 20% of the issued share capital of the
+Company (being the minimum public float applicable to the shares of the Company) was held in public
+hands.
+Report of the Supervisory Committee
+SUFFICIENCY OF PUBLIC FLOAT
+AUDITORS
+None of the Directors of the Company is aware of any information that would reasonably indicate that the
+Company did not meet the applicable Code Provisions set out in the Corporate Governance Code for any
+part of the period from January 1, 2015 to December 31, 2015, except that Mr. Ma Mingzhe has occupied
+the positions of both the Chairman of the Board of Directors and Chief Executive Officer of the Company.
+Further details of the Company's arrangements and considered reasons for the Company's intention not
+to separate the roles of the Chairman of the Board of Directors and the Chief Executive Officer of the
+Company are set out under the section headed "Corporate Governance Report".
+COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE CONTAINED IN APPENDIX 14 TO THE HKEX
+LISTING RULES
+During 2015, the Group has complied with the relevant laws and regulations that have a significant impact
+on the operations of the Group.
+COMPLIANCE WITH LAWS AND REGULATIONS
+Details of the significant post balance sheet events of the Group are set out in note 58 to the financial
+statements.
+POST BALANCE SHEET EVENTS
+The Company has arranged for appropriate insurance cover for Directors' and officers' liabilities in respect
+of legal actions against its Directors and senior management arising out of corporate activities.
+PERMITTED INDEMNITY PROVISION
+According to the resolutions of the 2014 Annual General Meeting of the Company, the Company continued
+to appoint PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers as the auditors of the
+Company's financial statements under CAS and IFRS, and continued to appoint PricewaterhouseCoopers
+Zhong Tian LLP as the auditors of the Company for internal control in 2015.
+Report of the Board of Directors
+During the Reporting Period, the Supervisory Committee has duly carried out its supervisory duties in a
+stringent manner and adhered to the principles of fairness and honesty to effectively protect the rights and
+interests of the shareholders, the Company and its employees in accordance with the relevant provisions of
+the Company Law of PRC and the Articles of Association.
+During the Reporting Period, the Supervisory Committee held 5 meetings. All such meetings were
+convened in accordance with the Articles of Association, and were attended in person or by proxy or
+through electronic means of communication by all Supervisors entitled to be present. Details of members'
+attendance at meetings of the Supervisory Committee are set out as follows:
+5/5
+June 17, 2013
+ZHANG Wangjin
+LIN Li(¹)
+Employee Representative
+Supervisors
+Shareholder Representative
+Supervisors
+100
+5/5
+June 3, 2009
+100
+THE WORK OF THE SUPERVISORY COMMITTEE
+5/5
+GU Liji (Chairman)
+PENG Zhijian
+Independent Supervisors
+in person (%)
+% of
+attendance
+person/
+Meetings
+required to
+attend
+Date of
+Appointment
+Name
+Class of Supervisors
+Meetings
+attended in
+June 3, 2009
+28
+128
+CORPORATE GOVERNANCE
+On February 26, 2016, Ping An Bank received "The Approval on the Non-public Issuance of Preference
+Shares by Ping An Bank Co., Ltd." issued by CSRC, which approved the non-public issuance of not more
+than 200 million preference shares by Ping An Bank with a valid period of 6 months from the date of the
+approval.
+Material Non-equity Investment
+During the Reporting Period, there was no material non-equity investment that was required to be
+disclosed.
+Financial Instruments recorded at Fair Value
+Details of financial instruments recorded at fair value are set out in note 48 to the financial statements.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+135
+CORPORATE GOVERNANCE
+136
+36
+Significant Events
+Sale of Major Assets and Equities
+During the Reporting Period, there was no sale of major assets or equities that was required to be
+disclosed.
+Major Subsidiaries and Associates of the Company
+Details of major subsidiaries and associates of the Company are set out in note 5 and note 29 to the
+financial statements respectively.
+Structured Entities controlled by the Company
+Details of Structured Entities controlled by the Company are set out in note 5 to the financial statements.
+IMPLEMENTATION OF SHARE INCENTIVE SCHEME OF THE COMPANY AND ITS EFFECTS
+During the Reporting Period, the Company has not implemented any share incentive scheme.
+IMPLEMENTATION OF THE KEY EMPLOYEE SHARE PURCHASE PLAN OF THE COMPANY
+As considered at the 16th Meeting of the 9th Session of the Board of Directors held on October 28,
+2014 and approved at the First Extraordinary General Meeting of 2015 held on February 5, 2015, the Key
+Employee Share Purchase Plan of the Company (the "Plan") was officially implemented. The first phase of
+the Plan was duly implemented with target participants including 839 key personnel of the Company and
+its subsidiaries comprising the directors, employee representative supervisors and senior management of
+the Company. The sources of funding were comprised of legitimate salary and performance bonus of the
+employees. Upon establishment, China Merchants Securities Co., Ltd. was engaged to manage the current
+stock ownership plan. Share purchase was completed on March 26, 2015 through the secondary market.
+4,050,253 A shares of the Company were purchased in aggregate at a total consideration of RMB312,047,645
+(inclusive of expenses), accounting for 0.044% of the total issued share capital of the Company at that
+time. For details of the share purchase, please refer to the Announcement regarding the Completion of
+Share Purchase Under the 2015 Key Employee Share Purchase Plan dated March 27, 2015 and March 30, 2015
+published by the Company on the websites of HKEx and SSE, respectively.
+During the Reporting Period, there was no change in equity as a result of disposal by holders of the
+Plan. As China Merchants Securities Co., Ltd. was approved to set up a wholly owned asset management
+subsidiary, the manager of this Plan was changed into "China Merchants Securities Asset Management Co.
+Ltd." from China Merchants Securities Co., Ltd.
+Since implementation of this plan, the Company has seen sound operations, the shareholders, the Company
+and the employees have shared benefits and risks, providing powerful guarantee for further improving
+the Company's governance structure, establishing and improving the long-term incentive and restraint
+mechanisms to facilitate the long-term, sustainable and healthy development of the Company.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+On January 8, 2016, the Public Offering Review Committee of CSRC reviewed the application of Ping An
+Bank's non-public issuance of preference shares. According to the review results, the application of Ping
+An Bank's non-public issuance of preference shares has been approved.
+On November 20, 2015, as mentioned in the announcement of the Company, Ping An Bank had decided
+that the non-public issuance of preference shares would be issued in one single tranche, after considered
+its funding arrangement, the market circumstances for preference shares as well as other factors. Ping
+An Asset Management would subscribe for 58% new preference shares to be issued under the non-public
+issuance by Ping An Bank.
+Ping An Insurance (Group) Company of China, Ltd.
+On May 20, 2015, as mentioned in the announcement of the Company, the Company had already subscribed
+210,206,652 A shares issued by Ping An Bank under the non-public issuance at the issue price of RMB16.70
+per share. Upon completion of the subscription, the A shares of Ping An Bank held directly and indirectly
+by the Company represented approximately 58% of the issued shares of Ping An Bank as enlarged by the
+non-public issuance.
+On September 1, 2015, Ping An Bank received “The Approval on the Non-public Issuance of Preference
+Shares by Ping An Bank and the Amendment on its Articles of Association" issued by CBRC, which
+approved Ping An Bank to raise funds of not more than RMB20 billion through the non-public issuance of
+not more than 200 million preference shares by Ping An Bank.
+127
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+March 15, 2016
+Shenzhen, PRC
+Ma Mingzhe
+By order of the Board
+In August 2007, the Company adopted a code of conduct regarding securities transactions by Directors
+and Supervisors of the Company ("Code of Conduct"), which was amended in April 2014, on terms no less
+exacting than the required standard set out in the Model Code. Specific enquiry has been made to all
+Directors and Supervisors of the Company who have confirmed that they had complied with the required
+standard set out in the Model Code and the Code of Conduct for the period from January 1, 2015 to
+December 31, 2015.
+COMPLIANCE WITH THE MODEL CODE BY DIRECTORS AND SUPERVISORS OF THE COMPANY
+In light of the above, the Board is of the opinion that the Company's management structure is able to
+provide the Company with efficient management and, at the same time, protect the shareholders' rights to
+the greatest extent. Accordingly, the Company does not intend to separate the roles of the Chairman of
+the Board and the Chief Executive Officer at the moment.
+There is clear delineation in the responsibilities of the Board and the management set out in the
+Articles of Association.
+Chairman and Chief Executive Officer
+In the day-to-day operation of the Company, the Company has put in place an established
+management system and structure, and has established various roles and committees such as the
+General Manager, Executive Committee and other specialized committees. Decisions on all material
+matters will be subject to complete and stringent deliberation and decision-making procedures in
+order to ensure that the Chief Executive Officer can perform his duties diligently and effectively.
+On July 15, 2014, the 14th meeting of the 9th Session of the Board of Directors considered and approved
+the Resolution regarding the Subscription of Ping An Bank Non-public Share Issuance and the Resolution
+regarding the Subscription of Ping An Bank Non-public Preference Share Issuance by Ping An Asset
+Management. It was decided that the proprietary fund of the Company would be used for the subscription
+of ordinary shares issued under Ping An Bank's non-public issuance, and the subscription ratio would
+be 45%-50% of the ordinary shares issued under the non-public issuance of Ping An Bank. Ping An Asset
+Management, a subsidiary of the Company, will subscribe for the preference shares issued under Ping An
+Bank's non-public issuance through insurance funds under its management. The subscription ratio would
+be 50%-60% of the preference shares issued under the non-public issuance of Ping An Bank. The specific
+subscription ratio of preference shares is subject to the approval of relevant regulatory authorities.
+Since the establishment of the Company, the business and operating results have maintained a
+continuous, steady and fast growth, and the management model has been widely recognized in the
+industry. All along, the Chairman of the Board has assumed the role of the Chief Executive Officer
+of the Company and this model has proven to be reliable, efficient and successful, therefore the
+continuous adoption of this model will be beneficial to the future development of the Company.
+Material Equity Investment
+Ping An is an integrated financial services group, investment business is one of its core businesses. The
+investment portfolio of insurance funds represents a majority of the equity investment assets of the Group.
+The investment of insurance funds is subject to relevant laws and regulations. For details of the asset
+allocation of the investment portfolio, please refer to relevant sections in the "Management Discussion and
+Analysis".
+Subscription of Ping An Bank Non-public Share Issuance
+Chairman of the Board and the Chief Executive Officer of the Company
+GENERAL ANALYSIS OF EXTERNAL INVESTMENT
+The Code Provision A.2.1 of the Corporate Governance Code provides that the roles of the Chairman and
+Chief Executive Officer should be separate and should not be performed by the same individual. However,
+after considering the relevant principle of the Code Provision A.2.1 of the Corporate Governance Code and
+examining the management structure of the Company, the Board is of the view that:
+1. Since the Company introduced international strategic investors (The Goldman Sachs Group, Inc. and
+Morgan Stanley) in 1994, the Company has built up a Board structure of international standard. In
+terms of the composition of the Board, the Company has reached an international, diversified and
+professional level, and we have established a very structured and strict operation system and a set of
+meeting procedural rules. The Chairman, as a convener and chairperson of the Board meetings, does
+not have any special power different from that of other directors in the decision-making process.
+2.
+3.
+4.
+2.34
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 145
+2.98
+FINANCIAL STATEMENTS
+Profit for the year
+For the year ended 31 December 2015
+Share of other comprehensive income of associates and
+(in RMB million)
+Other comprehensive income
+Items that may be reclassified subsequently to profit or loss:
+Available-for-sale financial assets
+17
+Consolidated Statement of Comprehensive Income
+2.47
+equity holders of the parent:
+17
+RMB
+8,651
+47,930
+RMB
+65,178
+10,975
+39,279
+54,203
+Diluted
+· Basic
+Shadow accounting adjustments
+Earnings per share attributable to ordinary
+Non-controlling interests
+Owners of the parent
+2.98
+Exchange differences on translation of foreign operations
+9
+Note
+146
+78,704
+65,930
+9,114
+11,365
+69,590
+54,565
+Non-controlling interests
+· Owners of the parent
+Attributable to:
+78,704
+65,930
+Total comprehensive income for the year
+30,774
+752
+15
+Other comprehensive income for the year, net of tax
+2015
+2014
+65,178
+47,930
+2,486
+(1,467)
+50,359
+jointly controlled entities
+(9,434)
+41
+47,930
+(8)
+Income tax relating to components of other
+comprehensive income
+(206)
+(10,184)
+(70)
+65,178
+(135,155)
+(28,235)
+(228,326)
+(289,510)
+Claims and policyholders' benefits
+14,128
+15,143
+(242,454)
+(304,653)
+22
+12
+Less: Reinsurers' share and policyholders' benefits
+12
+Gross claims and policyholders' benefits
+530,020
+693,220
+Commission expenses on insurance operations
+Total income
+26,955
+11
+Other income
+(62)
+(281)
+controlled entities
+Share of profits and losses of associates and jointly
+71,538
+134,922
+25,643
+40,499
+9
+119,422
+132,131
+16,737
+(14,423)
+(50,644)
+Interest expenses on banking operations
+62,353
+93,413
+13
+14
+(467,667)
+(599,807)
+(12,299)
+(18,803)
+(6,974)
+(7,539)
+(102,565)
+Profit for the year
+Income tax
+Profit before tax
+Total expenses
+(34,941)
+Other expenses
+General and administrative expenses
+(191)
+256
+Foreign exchange (losses)/gains
+(14,614)
+(30,118)
+13, 23
+Loan loss provisions, net of reversals
+(3,567)
+9
+(64,527)
+(64,727)
+88
+Fees and commission expenses on non-insurance operations
+Finance costs
+(3,230)
+Attributable to:
+8060
+Total guarantee of the Company
+(including the guarantee in favor of its subsidiaries)
+Total guarantee
+Total guarantee in favor of its subsidiaries incurred during the Reporting Period
+Total guarantee balance in favor of its subsidiaries as at the end of the Reporting Period
+Guarantee of the Company and its subsidiaries in favor of its subsidiaries
+Total guarantee balance as at the end of the Reporting Period
+Total guarantee incurred during the Reporting Period
+External guarantee of the Company and its subsidiaries
+(excluding the guarantee in favor of its subsidiaries)
+(in RMB million)
+MATERIAL CONTRACTS AND THEIR PERFORMANCE
+Guarantee
+Significant Events
+38
+138
+CORPORATE GOVERNANCE
+137
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+In addition, certain related party transactions as disclosed in note 54 to the consolidated financial
+statements prepared under IFRS constituted connected transactions under the HKEx Listing Rules.
+However, these transactions were exempted from all the reporting, announcement and independent
+directors' approval requirements as set out in Chapter 14A of HKEX Listing Rules.
+Total guarantee as a percentage of the Company's net assets (%)
+Including: Direct or indirect guarantee for the companies with gearing ratio over 70%
+(as at December 31, 2015)
+Please refer to the related announcements published on the websites of SSE and HKEX, and in China
+Securities Journal, Shanghai Securities News, Securities Times and Securities Daily on August 21, 2015,
+August 29, 2015 and October 29, 2015 for detailed information.
+1,335
+6,229
+Annual Report 2015
+The Company has fulfilled its obligation to disclose information on external guarantee and
+unequivocally provided chartered accountants with all the details about the Company's external
+guarantee, in strict compliance with the relevant requirements under the SSE Listing Rules and the
+Articles of Association.
+The Company has strictly observed the approval procedures and internal control policies regarding
+external guarantee set out in the Articles of Association, and there existed no irregular external
+guarantee;
+During the Reporting Period, total guarantee provided by the Company and its subsidiaries amounted
+to RMB7,564 million. As at December 31, 2015, total guarantee balance was RMB41,143 million,
+representing approximately 12.3% of the Company's net asset. The sum did not exceed 50% of the net
+asset as stated in the consolidated financial statements of the latest fiscal year of the Company;
+4.
+3.
+2.
+1. During the Reporting Period, the Company did not provide any guarantee to its controlling
+shareholder and other connected parties which were less than 50% share-controlled by the Company,
+any non-legal entities or individuals;
+Independent Opinions of Independent Non-executive Directors on External Guarantee of the Company
+According to the relevant requirements of the Notice Concerning the Regulation on the Flow of Funds
+Between Listed Companies and Their Connected Parties and the Provision of Guarantees by Listed
+Companies to External Parties as well as the Notice regarding the Regulation of the Provision of
+External Guarantee by Listed Companies set out by CSRC, the Independent Non-executive Directors of
+the Company conducted a prudent review on the Company's external guarantee in 2015. Their specific
+illustrations and independent advice are set out as follows:
+(2) External guarantee balance and incurred of the Company and its subsidiaries are all induced by the external guarantee of its
+subsidiaries, there is no external guarantee for the Company.
+The data set out in the table above does not include those arise from financial guarantee businesses conducted by Ping An
+Bank (the controlling subsidiary) and other subsidiaries of the Company in strict compliance with the scope of operation
+approved by relevant regulatory authorities.
+Note: (1)
+The amount that the Company's total guarantee balance exceeded 50% of
+its net asset
+32,435
+12.3
+41,143
+39,808
+1,335
+The transaction between Ping An Overseas Holdings and Lufax Holding constituted a connected
+transaction of the Company as defined under the SSE Listing Rules, but would not be regarded as a
+connected transaction of the Company as defined under the HKEx Listing Rules.
+On August 21, 2015, as mentioned in the announcement of the Company, Ping An Overseas Holdings
+intended to transfer the 100% equities held by it in Gem Alliance Limited (hereinafter referred to as
+"Puhui Limited") to Lufax Holding (formerly known as Wincon Investment Company Limited, the ultimate
+controlling company of Lufax). Upon the consummation of the equity transfer, Lufax Holding should hold
+100% equities in Puhui Limited.
+Equities transaction between Ping An Overseas Holdings and Lufax Holding
+INTEGRITY CONDITIONS OF THE COMPANY
+Significant Events
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 141
+Annual Report 2015
+Because of the failure to handle investment planning issues prudently during his term as the Chairman
+of Ping An Asset Management, Mr. Chan Tak Yin, the Company's Chief Investment Officer, received the
+Decision on Administrative Punishment of the CIRC (Bao Jian Fa [2015] No.2) in February 2015, which gave
+him a warning and imposed a penalty of RMB10,000.
+During the Reporting Period, neither the Company nor the Directors, Supervisors, or senior management
+of the Company, were investigated by competent authorities, subject to coercive measures by judicial
+authorities or disciplinary authorities, transferred to judicial organs or held accountable for crimes,
+investigated, punished, barred from the market or disqualified by the CSRC, subject to major administrative
+punishments by environmental protection, safe production supervision, tax or other administrative
+authorities, or denounced by any stock exchanges.
+PUNISHMENTS AND RECTIFICATIONS
+Information of the Company's internal control auditors and the remuneration paid to auditors are set out in
+the sections entitled "Report of the Board of Directors" and "Corporate Governance Report".
+APPOINTMENT OF INTERNAL CONTROL AUDITOR
+Information of the Company's auditors and the remuneration paid to auditors are set out in the sections
+entitled "Report of the Board of Directors" and "Corporate Governance Report”.
+APPOINTMENT OF AUDITOR
+As at December 31, 2015, the above undertaking was still in the process of performance and there was no
+violation of the above undertaking.
+In relation to the subscription for 210,206,652 new shares of Ping An Bank through non-public issuance, the
+Company undertakes that it shall not transfer the shares within 36 months since the date of listing of the
+new shares (May 21, 2015). Such shares shall not be disposed of and transferred among its non-related
+parties during the lock-up period, nor transferred and disposed of among its related parties. In addition, no
+arrangement of any other disposal of interests shall be entered into with respect to such shares subject to
+lock-up period.
+Undertaking in Respect of the Subscription for 210,206,652 New Shares of Ping An Bank through
+Non-public Issuance
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+During the Reporting Period, the Company neither failed to abide by any effective judicial ruling, nor
+defaulted on any material debt.
+INCOME TAX WITHHOLDING
+Enterprise Income Tax Withholding of Overseas Non-Resident Enterprises
+Pursuant to the applicable provisions of the Enterprise Income Tax Law of the People's Republic of China
+which came into effect on January 1, 2008 and its implementing rules, the Company shall be obligated
+to withhold 10% enterprise income tax when it distributes 2015 final dividend to non-resident enterprise
+holders of H shares, including Hong Kong Securities Clearing Company Nominees Limited, as listed on the
+Company's register of members of H shares on Tuesday, July 12, 2016 (the "Record Date"); after the legal
+opinion is provided by the resident enterprise shareholders within the stipulated time frame and upon the
+Company's confirmation of such opinion with tax authorities, the Company will not withhold any enterprise
+income tax when it distributes 2015 final dividend to resident enterprise holders of H shares listed on the
+Company's register of members of H shares on the Record Date.
+As at December 31, 2015, Guosen Securities Co., Ltd. had used RMB0 of its credit limit; during the Reporting
+Period, Guosen Securities Co., Ltd. did not break its credit limit.
+Please refer to the related announcements published on the websites of SSE and HKEX, and in China
+Securities Journal, Shanghai Securities News, Securities Times and Securities Daily on July 1, 2015 for
+detailed information.
+The transaction between Ping An Bank and Guosen Securities Co., Ltd. constituted a connected transaction
+of the Company as defined under the SSE Listing Rules, but would not be regarded as a connected
+transaction of the Company as defined under the HKEx Listing Rules.
+On July 1, 2015, as mentioned in the announcement of the Company, the Resolution on Granting RMB6.5
+Billion Credit Limit to Guosen Securities Co., Ltd. was considered and approved by the 14th Meeting of
+the 9th session of the board of directors of Ping An Bank, according to which Ping An Bank would grant
+RMB6.5 billion credit limit to Guosen Securities Co., Ltd. with a term of 1 year.
+Granting credit limit to Guosen Securities Co., Ltd. by Ping An Bank
+MATERIAL CONNECTED TRANSACTIONS
+OTHER SIGNIFICANT EVENTS
+All investors are requested to read this part carefully. Shareholders are recommended to consult their
+taxation advisors regarding their holding and disposing of H shares of the Company for the PRC, Hong
+Kong and other tax effects involved.
+Ping An Insurance (Group) Company of China, Ltd.
+The Company will withhold the income tax for the southbound trading shareholders as required by the
+Notice on Tax Policies for Pilot Mechanism of Shanghai-Hong Kong Stock Connect Program (Cai Shui [2014]
+No. 81) on the basis of the Company's register of members of H shares on the Record Date.
+If individual holders appear on the Company's register of members of H shares, and who are citizens
+from the countries applying a tax rate of less than 10% under tax agreements, are not applicable to be
+withheld individual tax at the rate of 10% by the Company, the Company may handle applications on their
+behalf for preferential treatments as stipulated in relevant agreements pursuant to the Notice of the State
+Administration of Taxation on Issues about the Administrative Measures for Non-residents to Enjoy the
+Treatments of Tax Treaties (for Trial Implementation) (Guo Shui Fa [2009] No. 124). Qualified shareholders
+are required to submit to Computershare Hong Kong Investor Services Limited at or before 4:30 p.m. on
+Wednesday, July 6, 2016 a written authorization and relevant evidencing documents, which shall be handed
+on by the Company to the applicable tax authorities for approval, and then excess portion of the tax
+amounts withheld can be refunded.
+Pursuant to relative tax regulations, the Company shall generally be obligated to withhold individual income
+tax at the tax rate of 10% when it distributes 2015 final dividend to individual holders of H shares appear
+on the Company's register of members of H shares on the Record Date. However, if stated in the tax
+regulations and relevant tax agreements otherwise, the Company will withhold individual income tax based
+on the amount of the dividend at the relevant tax rate and in accordance with the procedures as stipulated.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+142
+Upon the confirmation of the Company after having made consultation with the relevant tax authorities,
+and pursuant to the applicable provisions of the Individual Income Tax Law of the People's Republic of
+China and its implementation regulations, the individual resident shareholders outside the PRC shall pay
+individual income tax upon their receipt of the distributed dividends and bonus in respect of the shares
+issued by domestic non-foreign investment enterprises in Hong Kong, which shall be withheld by obligors
+on behalf of such individual shareholders by law. Those individual resident shareholders outside the PRC
+may, however, enjoy relevant preferential treatments in accordance with the provisions of applicable tax
+agreements signed between the countries where they belong to by virtue of residential identification and
+the PRC as well as the tax arrangements made between the Mainland China and Hong Kong (Macau).
+Individual Income Tax Withholding of Overseas Individual Shareholders
+If any resident enterprise (as defined in the Enterprise Income Tax Law of the People's Republic of China)
+listed on the Company's register of members of H shares which is duly incorporated in the PRC or under
+the laws of a foreign country (or a region) but with a PRC-based de facto management body, does not
+desire the Company to withhold the said 10% enterprise income tax, it shall submit to Computershare Hong
+Kong Investor Services Limited at or before 4:30 p.m. on Wednesday, July 6, 2016 a legal opinion, issued by
+a PRC mainland qualified lawyer (inscribed with the seal of the applicable law firm), that verifies its resident
+enterprise status.
+The Company will withhold the enterprise income tax as well as the individual income tax for shareholders
+as required by law on the basis of the Company's register of members of H shares on the Record Date. The
+Company assumes no liability and will not deal with any dispute over income tax withholding triggered by
+failure to submit proof materials within the stipulated time frame, and holders of H shares of the Company
+shall either personally or appoint a representative to attend to the procedures in accordance with the
+applicable tax regulations and relevant provisions of the PRC.
+Annual Report 2015
+Entrustment, Underwriting, Lease, Asset under Management, Entrusted Loan and Other Material Contract
+No matters relating to entrustment, underwriting, lease, asset under management, entrusted loan or other
+material contracts of the Company were required to be disclosed during the Reporting Period.
+During the Reporting Period, the Company had no material litigations and arbitrations required to be
+disclosed.
+7
+2014
+2015
+Notes
+Gross written premiums
+(in RMB million)
+For the year ended 31 December 2015
+Consolidated Statement of Income
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+144
+Hong Kong, 15 March 2016
+Certified Public Accountants
+PricewaterhouseCoopers
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the
+Company and its subsidiaries as at 31 December 2015, and of their financial performance and cash flows for
+the year then ended in accordance with International Financial Reporting Standards and have been properly
+prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.
+OPINION
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
+audit opinion.
+386,012
+An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
+consolidated financial statements. The procedures selected depend on the auditor's judgment, including
+the assessment of the risks of material misstatement of the consolidated financial statements, whether
+due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
+to the entity's preparation of consolidated financial statements that give a true and fair view in order to
+design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
+an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the
+appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
+directors, as well as evaluating the overall presentation of the consolidated financial statements.
+326,423
+(25,208)
+10
+Fees and commission income from non-insurance operations
+Investment income
+Interest income from banking operations
+7,963
+9,148
+Reinsurance commission income
+288,779
+349,846
+Net earned premiums
+(12,984)
+(10,958)
+Change in unearned premium reserves
+301,763
+360,804
+7
+Net written premiums
+(24,660)
+Less: Premiums ceded to reinsurers
+We conducted our audit in accordance with Hong Kong Standards on Auditing issued by The Hong Kong
+Institute of Certified Public Accountant. Those standards require that we comply with ethical requirements
+and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
+statements are free from material misstatement.
+Our responsibility is to express an opinion on these consolidated financial statements based on our
+audit and to report our opinion solely to you, as a body, and for no other purpose. We do not assume
+responsibility towards or accept liability to any other person for the contents of this report.
+AUDITOR'S RESPONSIBILITY
+Undertaking in Respect of the Subscription for 1,323,384,991 New Shares of Ping An Bank through
+Non-public Issuance
+As at December 31, 2015, the above undertaking was still in the process of performance and there was no
+violation of the above undertaking.
+During the period of issuing Ping An Convertible Bonds by the Company, in terms of certain subsidiaries
+which are engaged in construction of private properties and community for the elderly, the Company
+undertakes that, nowadays and in the future, it will strictly comply with relevant regulations in relation to
+the insurance funds used in real estate investment and the principle that the insurance funds should only
+be applied to specific property without property speculations or sale in an inappropriate form. It will not
+develop or sell commercial housing by means of investment in annuity and private real estate.
+Undertaking in Respect of the Issuance of Ping An Convertible Bonds
+Significant Events
+CORPORATE GOVERNANCE
+139
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+As at December 31, 2015, the above undertakings were still in the process of performance and there was no
+violation of the above undertakings.
+(3) The Company undertakes that, after the completion of the major asset restructuring and during the
+period when the Company remains as the controlling shareholder of SDB, the Company shall maintain
+the independence of SDB and ensure that SDB is independent from the Company and the enterprises
+under its control in respect of personnel, assets, finance, organization and business.
+(2) The Company undertakes that, after the completion of the major asset restructuring with SDB and
+in respect of the transactions between the Company and the enterprises under its control and
+SDB which constitute the connected transactions of SDB, the Company and the enterprises under
+its control shall enter into transaction with SDB following the principle of "openness, fairness and
+justness" at fair and reasonable prices, and shall go through the decision-making process according
+to the requirements of the relevant laws and regulations and regulatory documents and perform their
+obligations of information disclosure as required by law. The Company undertakes that the Company
+and the enterprises under its control shall not procure any illegal interests or let SDB undertake any
+illicit obligations through the transactions with SDB.
+Undertakings in Respect of the Major Asset Restructuring with Shenzhen Development Bank
+(1) The Company undertakes that, after the completion of the major asset restructuring with SDB and
+during the period when the Company remains as the controlling shareholder of SDB, and in respect
+of the businesses or commercial opportunities similar to those of SDB that the Company and the
+enterprises under its control intend to carry out or have substantially obtained whereby the assets
+and businesses arising from such businesses or commercial opportunities may possibly form potential
+competition with those of SDB, the Company and the enterprises under its control shall not be
+engaged in the businesses identical or similar to those carried out by SDB, so as to avoid direct or
+indirect competition with the operations of SDB.
+As at December 31, 2015, the above undertakings had been fulfilled and there was no violation of the above
+undertakings.
+The Company received written notices from original Shenzhen New Horse Investment Development Co.,
+Ltd. (newly known as Linzhi New Horse Investment Development Co., Ltd.), original Shenzhen Jinao
+Industrial Development Co., Ltd. (newly known as Linzhi Jingao Industrial Development Co., Ltd.) and
+original Shenzhen Jiangnan Industrial Development Co., Ltd. (newly known as Gongbujiangda Jiangnan
+Industrial Development Co., Ltd.) on February 22, 2010. According to such written notices, Linzhi New
+Horse Investment Development Co., Ltd. and Linzhi Jingao Industrial Development Co., Ltd. will reduce
+their shareholdings in the Company by not more than 30% of the 389,592,366 A shares and the 331,117,788
+A shares, respectively per annum through the offer for sale in the secondary market as well as the block
+trading platform in the next five years. Out of the A shares held by Gongbujiangda Jiangnan Industrial
+Development Co., Ltd., the holding of 88,112,886 A shares will also be reduced in the next five years through
+the offer for sale in the secondary market as well as the block trading platform, by not more than 30% of
+the 88,112,886 A shares per annum.
+Shareholders' Undertaking
+No further significant events of the Company were required to be disclosed during the Reporting Period.
+In relation to the subscription for 1,323,384,991 new shares of Ping An Bank through non-public issuance, the
+Company undertakes that it shall not transfer the shares within 36 months since the date of listing of the
+new shares (January 9, 2014), excluding the transfer between the Company and its connected organizations
+(i.e. any parties directly or indirectly controlling the Company or under the direct or indirect control of the
+Company or under the control of the same controller as that of the Company) to the extent permitted by
+the applicable laws. Upon expiry of the above-mentioned term, the Company will be free to dispose of such
+newly-issued shares pursuant to the requirements of the CSRC and Shenzhen Stock Exchange.
+As at December 31, 2015, the above undertaking was still in the process of performance and there was no
+violation of the above undertaking.
+Undertaking in Respect of the Placing of New H Shares under General Mandate
+The Company has undertaken to its H shares placing agent that, except for (1) the issuance of the
+594,056,000 placing shares and save pursuant to (2) the issuance of shares or other securities (including
+rights or options) that are issued, offered or granted to employees (including Directors) of the Company or
+any of its subsidiaries or any associated company of the Company pursuant to any share option scheme of
+the Company; (3) bonus or scrip dividend or similar arrangements which provide for the allotment of shares
+in lieu of the whole or part of a dividend on shares in accordance with the Articles of Association; or (4)
+conversion of outstanding convertible bonds already issued by the Company, neither the Company nor any
+of its affiliates nor any person acting on its behalf will:
+The directors of the Company are responsible for the preparation of consolidated financial statements that
+give a true and fair view in accordance with International Financial Reporting Standards and the disclosure
+requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors
+determine is necessary to enable the preparation of consolidated financial statements that are free from
+material misstatement, whether due to fraud or error.
+DIRECTORS' RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+We have audited the consolidated financial statements of Ping An Insurance (Group) Company of China,
+Ltd. ('the Company') and its subsidiaries set out on pages 145 to 280, which comprise the consolidated
+statement of financial position as at 31 December 2015, and the consolidated statement of income, the
+consolidated statement of comprehensive income, the consolidated statement of changes in equity and
+the consolidated statement of cash flows for the year then ended, and a summary of significant accounting
+policies and other explanatory information.
+(incorporated in the People's Republic of China with limited liability)
+Ping An Insurance (Group) Company of China, Ltd.
+To the shareholders of
+Independent Auditor's Report
+CORPORATE GOVERNANCE
+MATERIAL LITIGATIONS AND ARBITRATIONS
+143
+Annual Report 2015
+140
+As at December 31, 2015, the above undertaking had been fulfilled and there was no violation of the above.
+undertaking.
+in any such case without the prior written consent of the H shares placing agent from November 30,
+2014 until the earlier of the date of termination of the placing agreement and the expiry of 180 days from
+December 8, 2014.
+(d) announce or otherwise make public an intention to do any of the foregoing,
+(c) enter into any transaction with the same economic effect as, or which is designed to, or which
+may reasonably be expected to result in, or agree to do, any of the foregoing, whether any such
+transaction of the kind described in (a), (b) or (c) above is to be settled by delivery of shares or other
+securities of the Company, in cash or otherwise; or
+(b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic
+consequences of the ownership of any shares or other securities of the Company;
+(a) issue, offer, sell, pledge, contract to sell or otherwise dispose of or grant options, issue warrants or
+offer rights entitling persons to subscribe or purchase any interest in any shares or other securities of
+the Company or any securities convertible into, exchangeable for or which carry rights to subscribe or
+purchase any shares or other securities of the Company or other instruments representing interests in
+any shares or other securities of the Company;
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+UNDERTAKINGS
+Capital
+reserves
+1,608,736
+370,899
+241,690
+8,272
+1,245,371
+4,311
+1,053,882
+24
+34,072
+30,740
+16,778
+14,983
+17,872
+15,587
+57,598
+1,911,871
+37,908
+42,673
+5,084
+4,577
+29
+26,858
+12,898
+30
+24,827
+17,170
+35,158
+28,341
+44,916
+43,032
+15,663
+48,903
+20
+313,728
+299,689
+31 December 2015
+31 December 2014
+Balances with the Central Bank and statutory deposits
+Derivative financial assets
+Fixed maturity investments
+Equity investments
+Loans and advances to customers
+Premium receivables
+Accounts receivable
+21
+25
+Reinsurers' share of insurance liabilities
+26
+Finance lease receivable
+Policyholder account assets in respect of insurance contracts
+Policyholder account assets in respect of investment contracts
+Investments in associates and jointly controlled entities
+Investment properties
+19
+398,485
+439,327
+18
+822222222222233273
+44
+12,354
+Equity
+Total assets
+Other assets
+Deferred tax assets
+Intangible assets
+31
+Property and equipment
+Equity and liabilities
+Notes
+162,001
+4,765,159
+119,236
+4,747
+99,672
+4,527
+Accounts payable
+40
+Income tax payable
+1,713,907
+4,735
+14,104
+2,770
+1,510,448
+2,721
+10,643
+Insurance payables
+82,485
+Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and
+part of the operation within that unit is disposed of, the goodwill associated with the operation disposed
+of is included in the carrying amount of the operation when determining the gain or loss on the disposal.
+Goodwill disposed in these circumstances is measured based on the relative value of the disposed
+operation and the portion of the cash-generating unit retained.
+(4) BASIS OF CONSOLIDATION
+39
+The consolidated financial statements comprise the financial statements of the Company and its
+subsidiaries as at 31 December 2015 and for the year then ended.
+Total comprehensive income within a subsidiary is still attributed to the non-controlling interest even if it
+results in a deficit balance.
+Annual Report 2015
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd.
+153
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(4) BASIS OF CONSOLIDATION (CONTINUED)
+A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
+transaction. If the Group loses control over a subsidiary, it:
+Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
+Derecognizes the carrying amount of any non-controlling interest;
+Derecognizes the cumulative translation differences recorded in equity;
+Recognizes the fair value of the consideration received;
+Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
+control, and continue to be consolidated until the date when such control ceases. The financial statements
+of the subsidiaries are prepared for the same reporting period as the parent company, using consistent
+accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from
+intra-group transactions and dividends, are eliminated on consolidation in full.
+Customer deposits and payables to brokerage customers
+22
+Derivative financial liabilities
+4,005,911
+Share capital
+34
+18,280
+8,892
+Reserves
+35
+180,630
+181,597
+Retained profits
+35
+135,338
+99,075
+Equity attributable to owners of the parent
+334,248
+289,564
+Non-controlling interests
+38
+Assets sold under agreements to repurchase
+456,153
+410,258
+8,506
+Other financial liabilities held for trading
+37
+124,816
+Due to banks and other financial institutions
+353,816
+413,571
+Total equity
+64,252
+79,323
+35
+Liabilities
+Recognizes the fair value of any investment retained;
+Cash and amounts due from banks and other financial
+institutions
+(in RMB million)
+to repurchase of insurance operations, net
+30,267
+(9,691)
+Proceeds from borrowed funds
+69,649
+37,792
+Repayment of borrowed funds
+Interest paid
+Dividends paid
+Others
+Net cash flows from financing activities
+(270,937)
+(45,764)
+(9,116)
+Increase/(Decrease) in assets sold under agreements
+(7,999)
+(6,195)
+(953)
+21,278
+204,976
+85,368
+Net increase in cash and cash equivalents
+Net foreign exchange differences
+Cash and cash equivalents at beginning of the year
+263,960
+244,877
+Cash and cash equivalents at end of the year
+50
+333,325
+263,960
+(9,040)
+66,766
+387,982
+Proceeds from bonds issued
+701
+772,755
+(1,062,364)
+Term deposits withdrawal/(placed), net
+42,286
+(8,713)
+Acquisition of non-controlling interests in subsidiaries
+(2,427)
+(1,226)
+Acquisition and disposal of subsidiaries, net
+(2,495)
+(1,212)
+Interest received
+115,053
+82,801
+Dividends received
+17,118
+4,371
+Rentals received
+339
+7,124
+Capital injected into subsidiaries by non-controlling interests
+28,842
+Proceeds from placing of new H shares
+Cash flows from financing activities
+66,862
+(236,889)
+(11,703)
+(14,154)
+1,231
+1,385
+Net cash flows used in investing activities
+Others
+(273,732)
+Assets
+18,739
+344
+Ping An Insurance (Group) Company of China, Ltd. 151
+FINANCIAL STATEMENTS
+152
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+Changes in accounting policies (continued)
+Annual improvements 2013 - The amendments include the following changes from the 2011-2013 cycle of the
+annual improvements project:
+IFRS 3, 'Business combinations' - It clarifies that IFRS 3 does not apply to the accounting for the
+formation of any joint arrangement under IFRS 11 in the financial statements of the joint arrangement.
+IFRS 13, 'Fair value measurement' - It clarifies that the portfolio exception in IFRS 13, which allows an
+entity to measure the fair value of a group of financial assets and financial liabilities on a net basis,
+applies to all contracts (including non-financial contracts) within the scope of IAS 39 or IFRS 9.
+IAS 40, 'Investment property' - Preparers also need to refer to the guidance in IFRS 3 to determine
+whether the acquisition of an investment property is a business combination.
+In addition, the requirements of Part 9 'Accounts and Audit' of the new Hong Kong Companies Ordinance
+(Cap. 622) come into operation during the financial year, as a result, there are changes to presentation and
+disclosures of certain information in the consolidated financial statements.
+The adoption of the above amendments/interpretations had no significant effect on the consolidated
+financial statements.
+Annual Report 2015
+Changes in accounting estimates
+(3) BUSINESS COMBINATIONS AND GOODWILL
+Business combinations that are not under common control are accounted for using the acquisition method.
+The cost of an acquisition is measured at the acquisition date fair value which is the sum of the acquisition
+date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owners of
+the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For each
+business combination, the Group elects whether to measure the non-controlling interests in the acquiree
+that are present ownership interests and entitle their holders to a proportionate share of net assets in the
+event of liquidation at fair value or at the proportionate share of the acquiree's identifiable net assets. All
+other components of non-controlling interests are measured at fair value. Acquisition-related costs are
+expensed as incurred.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(3) BUSINESS COMBINATIONS AND GOODWILL (CONTINUED)
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
+classification and designation in accordance with the contractual terms, economic circumstances and
+pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host
+contracts by the acquiree.
+If the business combination is achieved in stages, the previously held equity interest is remeasured at its
+acquisition date fair value and any resulting gain or loss is recognized in profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition
+date. Contingent consideration classified as an asset or a liability that is a financial instrument and within
+the scope of IAS 39 is measured at fair value with changes in fair value either recognized in profit or loss or
+as a change to other comprehensive income. If the contingent consideration is not within the scope of IAS
+39, it is measured in accordance with the appropriate IFRS. Contingent consideration that is classified as
+equity is not remeasured and subsequent settlement is accounted for within equity.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred,
+the amount recognized for non-controlling interests and any fair value of the Group's previously held equity
+interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the sum of this
+consideration and other items is lower than the fair value of the net assets acquired, the difference is, after
+reassessment, recognized in profit or loss as a gain on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill
+is tested for impairment annually or more frequently if events or changes in circumstances indicate that
+the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31
+December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the
+acquisition date, allocated to each of the Group's cash-generating units, or groups of cash-generating units,
+that are expected to benefit from the synergies of the combination, irrespective of whether other assets or
+liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of
+cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating
+unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognized. An
+impairment loss recognized for goodwill is not reversed in subsequent periods.
+Consolidated Statement of Financial Position
+As at 31 December 2015
+Material judgment is required in determining insurance contract liabilities and in choosing discount rates/
+investment return, mortality, morbidity, lapse rates, policy dividend, and expenses assumptions relating to
+long term life insurance contracts. Such assumptions should be determined based on current information
+available at the end of the reporting period. The Group has changed the above assumptions based on
+current information available as at 31 December 2015 (mainly increased the assumption of morbidity and
+decreased tax and liquidity premium and decreased the benchmarking yield curve for the measurement of
+insurance contract liabilities) and updated estimate for future cash flows, with the corresponding impact on
+insurance contract liabilities taken into the current year's statement of income. As a result of such changes
+in assumptions, long term life insurance policyholders' reserves were increased by RMB23,175 million as at 31
+December 2015 and the profit before tax for the year 2015 was decreased by RMB23,175 million.
+IAS 24, 'Related Party Disclosures' The reporting entity is not required to disclose the compensation
+paid by the management entity (as a related party) to the management entity's employee or directors,
+but it is required to disclose the amounts charged to the reporting entity by the management entity
+for services provided.
+IAS 16, 'Property, plant and equipment' and IAS 38, ‘intangible assets' Both standards are amended to
+clarify how the gross carrying amount and the accumulated depreciation are treated where an entity
+uses the revaluation model.
+-
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+149
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+1. CORPORATE INFORMATION
+Ping An Insurance (Group) Company of China, Ltd. (the 'Company') was registered in Shenzhen, the
+People's Republic of China (the 'PRC') on 21 March 1988. The business scope of the Company includes
+investing in financial and insurance enterprises, as well as supervising and managing various domestic and
+overseas businesses of subsidiaries, and controlled funds. The Company and its subsidiaries are collectively
+referred to as the Group. The Group mainly provides integrated financial products and services and is
+engaged in life insurance, property and casualty insurance, trust, securities, banking and other businesses.
+The registered office address of the Company is 15/F, 16/F, 17/F and 18/F, Galaxy Development Center, Fu
+Hua No.3 Road, Futian District, Shenzhen, Guangdong Province, China.
+These consolidated financial statements are presented in millions of Renminbi (‘RMB') unless otherwise
+stated.
+2.
+ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS ('IFRS')
+The Group has not applied the following new and revised standards, which have been issued but are not yet
+effective.
+IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial
+assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the
+guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9
+retains but simplifies the mixed measurement model and establishes three primary measurement categories
+for financial assets: amortized cost, fair value through OCI and fair value through P&L. The basis of
+classification depends on the entity's business model and the contractual cash flow characteristics of the
+financial asset. Investments in equity instruments are required to be measured at fair value through profit
+or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There
+is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39.
+For financial liabilities there were no changes to classification and measurement except for the recognition
+of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through
+profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge
+effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument
+and for the 'hedged ratio' to be the same as the one management actually use for risk management
+purposes. Contemporaneous documentation is still required but is different to that currently prepared under
+IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption
+is permitted. The group is yet to assess IFRS 9's full impact.
+IFRS 15, 'Revenue from contracts with customers' deals with revenue recognition and establishes principles
+for reporting useful information to users of financial statements about the nature, amount, timing and
+uncertainty of revenue and cash flows arising from an entity's contracts with customers. Revenue is
+recognized when a customer obtains control of a good or service and thus has the ability to direct the
+use and obtain the benefits from the good or service. The standard replaces IAS 18 'Revenue' and IAS 11
+'Construction contracts' and related interpretations. The standard is effective for annual periods beginning
+on or after 1 January 2018 and earlier application is permitted. The Group is assessing the impact of IFRS 15.
+There are no other IFRSS or IFRIC interpretations that are not yet effective that would be expected to have
+a material impact on the Group.
+150
+Annual Report 2015
+The standard is amended to require disclosure of the judgements made
+by management in aggregating operating segments and a reconciliation of segment assets to the
+entity's assets when segment assets are reported.
+-
+IFRS 8, 'Operating segments'
+Annual improvements 2012 - These amendments include the following changes from the 2010-2012 cycle of
+the annual improvements project:
+The amendment distinguishes between contributions that are linked to service only in the period
+in which they arise and those linked to service in more than one period. The amendment allows
+contributions that are linked to service, and do not vary with the length of employee service, to be
+deducted from the cost of benefits earned in the period that the service is provided. Contributions that
+are linked to service, and vary according to the length of employee service, must be spread over the
+service period using the same attribution method that is applied to the benefits.
+capital
+2,503
+Amendment to IAS 19 on contributions from employees or third parties to defined benefit plans
+Changes in accounting policies
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES
+The financial statements have been prepared in accordance with IFRS which comprise standards and
+interpretations approved by the IASB and IFRS Interpretations Committee (IFRS IC) applicable to
+companies reporting under IFRS. The financial statements have been prepared under the historical cost
+convention, except for available-for-sale financial assets, and financial assets and financial liabilities
+(including derivative instruments) at fair value through profit or loss, which have been measured at fair
+value and insurance contract liabilities, which have been measured primarily based on actuarial methods.
+The preparation of financial statements in conformity with IFRS requires the use of certain critical
+accounting estimates. It also requires management to exercise its judgment in the process of applying the
+Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where
+assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.
+To the extent that a topic is not covered explicitly by IFRS, the IFRS framework permits reference to
+another comprehensive body of accounting principles, and therefore the Group has chosen to refer to the
+accounting practices currently adopted by insurance companies reporting under Accounting Standards for
+Business Enterprises ('PRC Accounting Standards').
+(1) BASIS OF PREPARATION
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+Ping An Insurance (Group) Company of China, Ltd.
+The Group has adopted the following new/revised standards for the first time for the current year's financial
+statements.
+Recognizes any surplus or deficit in profit or loss; and
+ON 80
+(5) SUBSIDIARIES
+(in RMB million)
+1,670,438
+(2,084,647)
+Purchases of investments
+Proceeds from disposal of investments
+240
+and equipment, and intangible assets
+Proceeds from disposal of investment properties, property
+(13,530)
+(16,529)
+equipment, and intangible assets
+Purchases of investment properties, property and
+Cash flows from investing activities
+170,260
+135,618
+Share
+51
+2015
+Notes
+Net cash flows from operating activities
+(in RMB million)
+For the year ended 31 December 2015
+Consolidated Statement of Cash Flows
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+148
+(116)
+353,816
+64,252
+99,075
+152
+19,196
+2014
+Surplus
+Exchange
+differences
+Equity attributable to owners of the parent
+Share purchase scheme
+Shares held by consolidated
+assets management scheme
+Others
+As at 31 December 2015
+1,028
+(1,028)
+9,052
+(9,052)
+(1,257) (1,257)
+(1,193)
+(1,233)
+(2,426)
+18,280
+953
+(127)
+(13,392)
+-
+2,619
+Reclassifies the Group's share of components previously recognized in other comprehensive income to
+profit or loss or retained earnings, as appropriate.
+413,571
+79,323
+135,338
+86
+(13,392)
+2,779
+7,470
+160
+(127)
+6,989
+6,036
+28,248
+8,498
+143,798
+-
+154,779
+8,892
+As at 31 December 2014
+239,705
+56,996
+70,341
+111
+14,680
+6,982
+82,679
+7,916
+Dividend declared (Note 16)
+Appropriations to surplus reserves
+13,615
+382
+Conversion of convertible bonds
+28,248
+594
+Placing of new H shares
+30,270
+for the year
+reserve
+funds
+General
+reserves
+on translation
+of foreign
+operations
+Retained
+Non-
+controlling
+39,279
+profits
+Total
+equity
+As at 1 January 2014
+Profit for the year
+Other comprehensive income
+for the year
+Total comprehensive income
+interests
+non-controlling interests
+8,651
+30,270
+421
+428
+(105)
+(11)
+Others
+(7)
+non-controlling interests
+Contributions from
+(1,118)
+(1,103)
+(15)
+non-controlling interests
+Equity transactions with
+(1,078)
+(1,078)
+(4,516)
+4,516
+non-controlling interests
+41
+463
+30,774
+41
+39,279
+9,114
+47,930
+78,704
+13,997
+(5,541)
+(5,541)
+488
+(488)
+Appropriations to general reserves
+Dividend paid to
+28,842
+Contributions from
+For the year ended 31 December 2014
+non-controlling interests
+156
+Annual Report 2015
+65,660
+Insurance contract liabilities
+41
+1,419,958
+1,206,816
+Investment contract liabilities for policyholders
+42
+42,690
+38,330
+Policyholder dividend payable
+33,028
+28,673
+56
+Bonds payable
+264,413
+88,119
+Deferred tax liabilities
+44
+9,911
+6,160
+Other liabilities
+45
+223,830
+131,183
+Total liabilities
+Total equity and liabilities
+4,351,588
+4,765,159
+3,652,095
+43
+non-controlling interests
+(10) CASH AND CASH EQUIVALENTS
+For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are
+translated into RMB at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash
+flows of overseas subsidiaries which arise throughout the year are translated into RMB at the weighted
+average exchange rate for the year.
+A subsidiary is an entity (including structured entities) over which the Group has control. The Group
+controls an entity when the Group has power over an entity, is exposed to, or has rights to, variable returns
+from its involvement with the entity and has the ability to affect these returns through its power over
+the entity. The results of subsidiaries are included in the Company's statement of income to the extent of
+dividends received and receivable. The Company's investments in subsidiaries are stated at cost less any
+impairment losses.
+(6) STRUCTURED ENTITIES
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant
+factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks
+only, and the relevant activities are directed by means of contractual arrangements.
+The Group determines whether it is an agent or a principal in relation to those structured entities in which
+the Group acts as an asset manager. If an asset manager is agent, it acts primarily on behalf of others and
+so does not control the structured entity. It may be principal if it acts primarily for itself, and therefore
+controls the structured entity.
+The Group has determined that all of its trust products, debt investment plans, equity investment plans
+and asset funding plans, which are not controlled by the Group, are unconsolidated structured entities.
+Trust products, equity investment plans and asset funding plans are managed by affiliated or unaffiliated
+trust companies or asset managers and invest the funds raised in loans or equities of other companies.
+Debt investment plans are managed by affiliated or unaffiliated asset managers and its major investment
+objectives are infrastructure funding projects. Trust products, debt investment plans, equity investment
+plans and asset funding plans finance their operations by issuing beneficiary certificates which entitle the
+holders to agreed stake according to contractual terms in the respective trust products', debt investment
+plans', equity investment plans' and asset funding plans' income.
+The Group holds beneficiary certificates in its trust products, debt investment plans, equity investment
+plans and asset funding plans.
+154
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(7) ASSOCIATES
+An associate is an entity, not being a subsidiary or a jointly controlled entity, in which the Group has a long
+term interest of generally not less than 20% of the equity voting rights and over which it is in a position to
+exercise significant influence.
+The Group's investments in associates are stated in the consolidated statement of financial position at
+the Group's share of net assets under the equity method of accounting, less any impairment losses. The
+Group's share of post-acquisition profit or loss is recognized in the income statement, and its share of
+post-acquisition movements in other comprehensive income is recognized in other comprehensive income
+with a corresponding adjustment to the carrying amount of the investment. When the Group's share
+of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
+receivables, the Group does not recognize further losses, unless it has incurred legal or constructive
+obligations or made payments on behalf of the associate. Unrealized gains and losses resulting from
+transactions between the Group and its associates are eliminated to the extent of the Group's investments
+in the associates, except where unrealized losses provide evidence of an impairment of the asset
+transferred. Goodwill arising from the acquisition of associates is included in the carrying amount of the
+investment and is neither amortized nor individually tested for impairment.
+The financial statements of the associates are prepared for the same reporting period as the parent
+company. Where necessary, adjustments are made to bring the accounting policies in line with those of the
+Group.
+Upon application of the equity method, the Group determines whether it is necessary to recognize an
+additional impairment loss on the Group's investments in its associates. The Group determines at each
+reporting date whether there is any objective evidence that the investment in the associate is impaired. If
+this is the case, the Group calculates the amount of impairment as the difference between the recoverable
+amount of the associate and its carrying value and recognizes the amount in the statement of income.
+Upon loss of significant influence over the associate, the Group measures and recognizes any remaining
+investment at its fair value. Any differences between the carrying amount of the associate upon loss of
+significant influence and the fair value of the remaining investment are recognized in profit or loss.
+The results of associates are included in the Company's statement of income to the extent of dividends
+received and receivable. The Company's investments in associates are treated as non-current assets and are
+stated at cost less any impairment losses.
+The functional currency of most of overseas subsidiaries is the Hong Kong dollar. At the end of the
+reporting period, the assets and liabilities of these overseas subsidiaries are translated into the presentation
+currency of the Company at the exchange rates prevailing at the end of the reporting period and their
+statements of income are translated into RMB at the average exchange rate for the year. The resulting
+exchange differences are recognized in other comprehensive income and accumulated in the exchange
+differences on translation of foreign operations reserve. On disposal of a foreign operation, the component
+of other comprehensive income relating to that particular foreign operation is recognized in the statement
+of income.
+Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
+the exchange rates as at the dates of initial transactions. Non-monetary items measured at fair value in a
+foreign currency are translated using the exchange rates at the date when the fair value was determined.
+The gain or loss arising on translation of a non-monetary item measured at fair value is treated in line with
+the recognition of the gain or loss on change in fair value of the item (i.e., translation difference on the
+item whose fair value gain or loss is recognized in other comprehensive income or profit or loss is also
+recognized in other comprehensive income or profit or loss, respectively).
+Foreign currency transactions recorded by the entities in the Group are initially recorded using their
+respective functional currency rates prevailing at the dates of the transactions. Monetary assets and
+liabilities denominated in foreign currencies are translated at the functional currency rates of exchange
+ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items
+are recognized in the statement of income.
+These financial statements are presented in RMB, which is the Company's functional and presentation
+currency. Each entity in the Group determines its own functional currency and items included in the
+financial statements of each entity are measured using that functional currency.
+(9) FOREIGN CURRENCIES
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+4,005,911
+For the year ended 31 December 2015
+FINANCIAL STATEMENTS
+155
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+The Group has assessed the nature of its jointly controlled entities and determined them to be joint
+ventures. The Group has rights to the net assets of these jointly controlled entities. The Group's investments
+in its jointly controlled entities are accounted for using the equity method of accounting, less any
+impairment losses. Refer to Note 3. (7) for details of the equity method of accounting.
+(8) JOINTLY CONTROLLED ENTITIES
+Notes to Consolidated Financial Statements
+The financial statements on pages 145 to 280 were approved and authorized for issue by the Board of
+Directors on 15 March 2016 and were signed on its behalf.
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on
+hand, demand deposits, current accounts with the Central Bank and short term highly liquid investments
+including assets purchased under reverse repurchase agreements and others which are readily convertible
+into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short
+maturity of generally within three months when acquired.
+Annual Report 2015
+Retained
+controlling
+profits
+interests
+Total
+equity
+152
+99,075
+64,252
+353,816
+54,203
+10,975
+65,178
+(66)
+390
+Non-
+752
+54,203
+11,365
+65,930
+9,119
+Transfer of capital reserves to
+share capital
+9,140
+(9,140)
+Dividend declared (Note 16)
+(7,860)
+(7,860)
+Equity transactions with
+Appropriations to surplus reserves
+Appropriations to general reserves
+MA Mingzhe
+Director
+(66)
+on translation
+of foreign
+operations
+Dividend paid to
+248
+Capital
+Share
+capital
+As at 1 January 2015
+(in RMB million)
+Exchange
+differences
+Equity attributable to owners of the parent
+reserves
+For the year ended 31 December 2015
+Consolidated Statement of Changes in Equity
+FINANCIAL STATEMENTS
+147
+Ping An Insurance (Group) Company of China, Ltd.
+YAO Jason Bo
+Director
+8,871
+For the year ended 31 December 2015
+Surplus
+reserve
+funds
+SUN Jianyi
+Director
+reserves
+General
+Conversion of convertible bonds
+428
+for the year
+428
+for the year
+Total comprehensive income
+Ping An Insurance (Group) Company of China, Ltd.
+Profit for the year
+19,196
+7,470
+154,779
+8,892
+Other comprehensive income
+Sale of assets under repurchase agreements and purchase of assets under reverse repurchase agreements
+of bank and securities businesses are included in the operating activities of consolidated statement cash
+flows and sale of assets under repurchase agreements and purchase of assets under reverse repurchase
+agreements of insurance business are included in the financing and investing activities of consolidated
+statement of cash flows.
+The Group's precious metals represent gold and other precious metals. Precious metals that are not related
+to the Group's precious metals trading activities are initially measured at acquisition cost and subsequently
+measured at the lower of cost and net recoverable amount. Precious metals acquired by the Group for
+trading purposes are initially measured at fair value and subsequent changes in fair value are recorded in
+statement of income.
+(20) PRECIOUS METALS
+A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of
+the leased asset to the lessee. At the commencement of the lease term, the Group recognizes the minimum
+lease payments receivable by the Group, the initial direct costs and the unguaranteed residual value in the
+finance lease receivable. The difference between (a) the aggregate of the minimum lease payments and
+the unguaranteed residual value and (b) the aggregate of their present values is recognized as unearned
+finance income. Finance lease receivable net of unearned finance income which represents the Group's net
+investment in the finance lease is presented as finance lease receivables in the consolidated statement of
+financial position. Unearned finance income is allocated over the lease term based on a pattern reflecting a
+constant periodic return on the Group's net investment in the finance lease.
+(19) FINANCE LEASE RECEIVABLE AND UNEARNED FINANCE INCOME
+The Group enters into purchases of assets under reverse repurchase agreements. Assets purchased under
+such agreements are not recognized. The amounts advanced under these agreements are reflected as
+assets purchased under reverse repurchase agreements under fixed maturity investments in the statement
+of financial position as loans and receivables. The Group may not take physical possession of assets
+purchased under such agreements. In the event of default by the counterparty to repay the loan, the Group
+has the right to the underlying assets. The difference between the purchasing price and reselling price is
+recognized as interest income during the term of the agreement using the effective interest method.
+(18) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND ASSETS SOLD
+UNDER REPURCHASE AGREEMENTS
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+162
+Assets sold under repurchase agreements continue to be recognized but a liability is presented under
+'assets sold under agreements to repurchase' for the proceeds from selling such assets. The Group may be
+required to provide additional collateral based on the fair value of the underlying assets and such non-cash
+collateral assets continue to be carried on the statement of financial position at the end of the reporting
+period. The difference between the selling price and repurchasing price is recognized as interest expense
+during the term of the agreement using the effective interest method.
+(22) PROPERTY AND EQUIPMENT
+(18) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND ASSETS SOLD
+UNDER REPURCHASE AGREEMENTS (CONTINUED)
+(21) INVESTMENT PROPERTIES
+163
+Fully depreciated assets are retained in the financial statements until they are no longer in use and no
+further charge for depreciation is made in respect of these assets.
+Transfers to, or from, investment properties are made when, and only when, there is evidence of a change in
+use or the investment property is sold.
+Investment properties are interests in land and buildings that are held to earn rental income and/
+or for capital appreciation, rather than for use in the production or supply of goods or services or for
+administrative purposes.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+FINANCIAL STATEMENTS
+164
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(21) INVESTMENT PROPERTIES (CONTINUED)
+Investment properties are initially measured at cost, which is the fair value of the consideration given to
+acquire them, including transaction costs. Subsequently, all investment properties are stated at cost less
+accumulated depreciation and accumulated impairment losses.
+Depreciation is computed on a straight-line basis, after taking into account the estimated residual value (1%
+to 10% of original cost), over the estimated useful lives. The estimated useful lives of investment properties
+vary from 20 to 40 years.
+If the obligation of a financial liability has been fulfilled, cancelled or expired, the financial liability is
+derecognized. If the present financial liability is substituted by the same debtor with another liability
+differing in substance, or the terms of the present liability have been substantially modified, this
+substitution or modification is treated as derecognition of a present liability and recognition of a new
+liability with any arising difference recognized in the statement of income.
+The useful life and depreciation methods are reviewed periodically to ensure that the method and period of
+depreciation are consistent with the expected pattern of economic benefits from the individual investment
+properties.
+Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
+lower of the original carrying amount of the asset and the maximum amount of consideration that the
+Group could be required to repay.
+Impairments do not establish a new cost basis and, accordingly, to the extent an impairment loss has been
+previously recorded due to the significant or prolonged criteria described above, any subsequent losses,
+including any portion attributable to foreign currency changes, are also recognized in profit or loss until the
+asset is derecognized.
+(b) the Group has transferred the asset; and either: (a) the Group has transferred substantially all the risks
+and rewards of the asset; or (b) the Group has neither transferred nor retained substantially all the
+risks and rewards of the asset, but has transferred control of the asset.
+Property and equipment, other than construction in progress, are stated at cost less accumulated
+depreciation and any impairment losses. An item of property and equipment is derecognized upon disposal
+or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal
+or retirement recognized in the statement of income in the year the asset is derecognized is the difference
+between the net sales proceeds and the carrying amount of the relevant asset.
+(17) DERECOGNITION OF FINANCIAL INSTRUMENTS
+If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument
+that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset
+that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of
+loss is measured as the difference between the asset's carrying amount and the present value of estimated
+future cash flows discounted at the current market rate of return for a similar financial asset. Impairment
+losses on these assets are not reversed.
+Financial assets carried at cost
+(16) IMPAIRMENT OF FINANCIAL ASSETS (CONTINUED)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+161
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+After the Group recognizes an impairment loss of financial assets carried at amortized cost, if there is
+objective evidence that the financial assets' value restores and the restoration can be related objectively to
+an event occurring after the impairment was recognized, the previously recognized impairment loss shall
+be reversed and recognized in profit or loss. However, the reversal shall not result in a carrying amount of
+the financial asset that exceeds what the amortized cost would have been had the impairment not been
+recognized at the date the impairment was reversed.
+For a financial asset that is individually significant, the Group assesses the asset individually for impairment,
+and recognizes the amount of impairment in profit or loss. For a financial asset that is not individually
+significant, the Group assesses the asset individually for impairment or includes the asset in a group of
+financial assets with similar credit risk characteristics and collectively assesses them for impairment. If it
+is determined that no objective evidence of impairment exists for an individually assessed financial asset,
+whether the financial asset is individually significant or not, the financial asset is included in a group of
+financial assets with similar credit risk characteristics and collectively assessed for impairment. Financial
+assets for which an impairment loss is individually recognized are not included in the collective assessment
+for impairment.
+If financial assets carried at amortized cost are impaired, the carrying amount of the financial assets is
+reduced to the present value of estimated future cash flows (excluding future credit losses that have not
+been incurred) and the reduction is recognized as an impairment loss in the statement of income. The
+present value of estimated future cash flows shall be calculated with the financial asset's original effective
+interest rate and the related collateral value shall also be taken into account.
+Financial assets carried at amortized cost
+If after an impairment loss has been recognized on an available-for-sale debt instrument, and the fair
+value of the debt instrument increases in a subsequent period whereby the increase can be objectively
+related to an event occurring after the impairment losses were recognized, the impairment loss is reversed
+which is recognized in profit or loss. Impairment losses recognized for equity instruments classified as
+available-for-sale are not reversed through profit or loss.
+(15) OFFSETTING OF FINANCIAL INSTRUMENTS
+Financial assets and financial liabilities are offset and the net amount reported in the consolidated
+statement of financial position when there is a legally enforceable right to offset the recognized amounts
+and there is an intention to settle on a net basis or realize the assets and settle the liabilities simultaneously.
+The legally enforceable right must not be contingent on future events and must be enforceable in the
+normal course of business and in the event of default, insolvency or bankruptcy of the company or the
+counterparty.
+(16) IMPAIRMENT OF FINANCIAL ASSETS
+The Group assesses at the end of the reporting period the carrying amount of financial assets. If there is
+any objective evidence that a financial asset is impaired, the Group provides for such impairment losses.
+The objective evidence which indicates impairment of financial assets represents events actually occurring
+after initial recognition of financial assets which have an impact on the financial assets' estimated future
+cash flows, and the impact can be reliably measured.
+Available-for-sale financial assets
+As at the end of each reporting period, the Group evaluates each of the available-for-sale equity
+instruments to determine whether the investments are impaired. If objective evidence of impairment exists,
+the Group records an impairment loss in the statement of income equal to the difference between the
+cost of the instrument and the current fair value, adjusted for losses recorded in previous periods. Any
+unrealized gains or losses previously recognized in the available-for-sale financial assets reserve is removed
+and recognized in the statement of income as part of the calculation of impairment loss described above.
+When the Group has transferred its right to receive cash flows from an asset or has entered into a
+pass-through arrangement, it evaluates if and to what extent it has retained the risk and rewards of
+ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards
+of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group's
+continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The
+transferred asset and the associated liability are measured on a basis that reflects the rights and obligations
+that the Group has retained.
+Annual Report 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(16) IMPAIRMENT OF FINANCIAL ASSETS (CONTINUED)
+Available-for-sale financial assets (continued)
+For equity instruments, a significant or prolonged decline in the fair value of an equity instrument is
+objective evidence of impairment. In conducting an impairment analysis, the Group considers quantitative
+and qualitative evidence. More specifically, the Group collectively considers the magnitude of the decline
+in fair value relative to the cost, volatility, and the duration of the decline in evaluating whether a decline
+in fair value is significant. The Group considers the period and consistency of the decline in evaluating
+whether a decline in fair value is prolonged. The Group generally considers a decline of 50% or more as
+significant and a period of 12 months or longer is considered to be prolonged.
+The Group also considers qualitative evidence that includes, but is not necessarily limited to the following:
+Significant financial difficulty of the investee, including failure to comply with contractual obligations,
+financial restructuring, deterioration of going concern expectations;
+Adverse changes relative to the investee's technology, market, customer base, macroeconomic
+indicators relative to the business, significant legal or regulatory matters.
+Ping An Insurance (Group) Company of China, Ltd.
+The cost of an item of property and equipment comprises its purchase price and any directly attributable
+costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred
+after items of property and equipment have been put into operation, such as repairs and maintenance, is
+normally charged to the statement of income in the year in which it is incurred. In situations where it can
+be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits
+expected to be obtained from the use of an item of property and equipment, and where the cost of the
+item can be measured reliably, the expenditure is capitalized as an additional cost of that asset or as a
+replacement.
+A financial asset (or, when applicable a part of a financial asset or part of a group of similar financial assets)
+is derecognized when:
+Estimated residual values
+Net realizable value is the estimated selling price in the ordinary course of business less the estimated
+costs of completion and the estimated costs necessary to make the sale and related taxes. Estimates of net
+recoverable amount are based on the most reliable evidence available at the time the estimates are made,
+also taking into consideration the purpose for which the inventory is held and the influence after the end of
+the reporting period.
+At the end of the reporting period, inventory is measured at the lower of its cost and net realizable value. If
+the net realizable value is lower than cost, inventory impairment provisions are allotted.
+The actual cost of inventory is priced based on moving weighted average method.
+The Group's inventories comprise raw materials, product in progress, finished goods, other supplemental
+materials, etc. and lands purchased that have been set to be used to build properties for sale by real estate
+subsidiaries. Inventory is initially measured at cost which includes purchasing cost, processing cost and
+other costs which made the inventory to the present place and status.
+(26) INVENTORIES
+Foreclosed assets are initially recognized at fair value. The difference between the initial fair value and the
+sum of the related loan principal, interest receivable and impairment provision is taken into the statement
+of income. At the end of the reporting period, the foreclosed assets are measured at the lower of their
+carrying value and net recoverable amount. When the carrying value of the foreclosed assets is higher than
+the net recoverable amount, a provision for the decline in value of foreclosed assets is recognized in the
+statement of income in 'General and administrative expenses'.
+2 28 years
+20 40 years
+20 30 years
+40 50 years
+20 years
+Estimated useful lives
+(25) FORECLOSED ASSETS
+Software and others (including patents and know-how, customer relationships and
+contract rights, etc.)
+Trademarks
+Core deposits
+Prepaid land premiums
+Expressway operating rights
+For a financial asset reclassified from the available-for-sale category, the fair value at the date of
+reclassification becomes its new amortized cost and any previous gain or loss on that asset that has been
+recognized in equity is amortized to profit or loss over the remaining life of the investment using the
+effective interest rate (‘EIR'). Any difference between the new amortized cost and the expected cash flows
+is also amortized over the remaining life of the asset using the EIR. If the asset is subsequently determined
+to be impaired, then the amount recorded in equity is reclassified to the statement of income.
+(12) FINANCIAL LIABILITIES
+All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, minus
+directly attributable transaction costs.
+The Group's financial liabilities mainly include investment contracts without discretionary participation
+features ('DPF'), net asset value attributable to unit holders, trade and other payables, borrowings,
+insurance payables and derivative financial instruments.
+The subsequent measurement of financial liabilities depends on their classification as follows:
+Loans and borrowings
+Loans and borrowings include subordinated debts. After initial recognition, interest-bearing loans and
+borrowings are subsequently measured at amortized cost, using the effective interest rate method unless
+the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are
+recognized in the statement of income when the liabilities are derecognized as well as through the effective
+interest rate amortization process. Amortized cost is calculated by taking into account any discount or
+premium on acquisition and fees or costs that are an integral part of the effective interest rate.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Inventory impairment provisions should be accrued when the cost of individual inventory item is higher
+than its net realizable value.
+166
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and
+equipment to its residual value over its estimated useful life. The principal assumptions used for this
+purpose are as follows:
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(11) INVESTMENTS AND OTHER FINANCIAL ASSETS
+Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit
+or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets, as
+appropriate.
+The classification depends on the purpose for which the investments were acquired or originated. Financial
+assets are classified as at fair value through profit or loss where the Group's documented investment
+strategy is to manage financial investments on a fair value basis, because the related liabilities are also
+managed on this basis. The available-for-sale and held-to-maturity categories are used when the relevant
+liabilities (including shareholders' funds) are relatively passively managed and/or carried at amortized cost.
+All regular way purchases and sales of financial assets are recognized on the trade date, i.e., the date the
+Group commits to purchase or sell the asset. Regular way purchases or sales of financial assets require
+delivery of assets within the time frame generally established by regulation or convention in the market
+place.
+Financial instruments at fair value through profit or loss have two sub-categories namely financial
+instruments held for trading and those designated at fair value through profit or loss at inception. Financial
+instruments typically bought with the intention to sell in the near future are classified as held for trading. A
+financial instrument can only be designated at inception as at fair value through profit or loss and cannot
+be subsequently changed. For financial instruments designated at fair value through profit or loss, the
+following criteria must be met:
+the designation eliminates or significantly reduces the inconsistent treatment that would otherwise
+arise from measuring the assets or liabilities or recognizing the gains or losses on them on a different
+basis; or
+the assets and liabilities are part of a group of financial assets, financial liabilities or both which are
+managed and their performance evaluated on a fair value basis, in accordance with a documented risk
+management or investment strategy; or
+the financial asset contains an embedded derivative that needs to be separately recorded.
+These financial instruments are initially recorded at fair value. Subsequent to initial recognition, they
+are remeasured at fair value. Fair value adjustments and realized gains and losses are recognized in the
+statement of income.
+Financial assets at fair value through profit or loss include derivative financial instruments.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Held-to-maturity financial assets are non-derivative financial assets that comprise fixed or determinable
+payments and maturities of which the Group has the positive intention and ability to hold until maturity.
+Investments intended to be held for an undefined period are not included in this classification. These
+investments are initially recognized at cost, being the fair value of the consideration paid for the acquisition
+of the investment. All transaction costs directly attributable to the acquisition are also included in the cost
+of the investment. Subsequent to initial recognition, these investments are carried at amortized cost using
+the effective interest method and less any provision for impairment. The amortized cost is computed as the
+amount initially recognized minus principal repayments, plus or minus the cumulative amortization using
+the effective interest method of any difference between the initially recognized amount and the maturity
+amount. This calculation includes all fees and points paid or received between parties to the contract that
+are an integral part of the effective interest rate, transaction costs and all other premiums and discounts.
+Gains and losses are recognized in the statement of income when the investments are derecognized or
+impaired, as well as through the amortization process.
+Ping An Insurance (Group) Company of China, Ltd.
+157
+FINANCIAL STATEMENTS
+158
+58
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(11) INVESTMENTS AND OTHER FINANCIAL ASSETS (CONTINUED)
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
+not quoted in an active market. It includes policy loans. Loans and receivables acquired by the Group
+are initially recognized at cost, being the fair value of the consideration paid for the acquisition of the
+investment. All transaction costs directly attributable to the acquisition are also included in the cost
+of the investment. Subsequent to initial recognition, these investments are carried at amortized cost,
+using the effective interest method less any provision for impairment. Gains and losses are recognized
+in the statement of income when the investments are derecognized or impaired, as well as through the
+amortization process. Policy loans originated by the Group are carried at amortized cost.
+Available-for-sale financial investments include equity and debt securities. Equity investments classified
+as available-for-sale are those, which are neither classified as held for trading nor designated at fair
+value through profit or loss. Debt securities in this category are those that are intended to be held for an
+indefinite period of time and which may be sold in response to needs for liquidity or in response to changes
+in the market conditions.
+After initial recognition, available-for-sale financial assets are subsequently measured at fair value, with
+unrealized gains or losses recognized as other comprehensive income in the capital reserve until the asset
+is derecognized, at which time, the cumulative gain or loss is recognized in investment income, or until
+the investment is determined to be impaired, when the cumulative loss is recognized in the statement of
+income in investment income and removed from the capital reserve.
+Reclassification of financial assets with fixed or determinable payments and fixed maturity from available
+for sale to held-to-maturity is permitted when the Group has the ability and intention to hold the financial
+asset until maturity.
+Annual Report 2015
+(12) FINANCIAL LIABILITIES (CONTINUED)
+After allotting inventory impairment provisions, if the influencing factors of previous inventory impairment
+provisions have disappeared, and hence the net realizable value of the inventories are higher than their
+book values, the previous written down amount should be recovered and the reversed amount which is
+within the amount of original allotted inventory impairment provisions should be included in current profit
+and loss.
+Convertible bonds comprise of the liability and equity components. The liability component, representing
+the obligation to make fixed payments of principal and interest, is classified as liability and initially
+recognized at the fair value, calculated using the market interest rate of a similar liability that does not have
+an equity conversion option, and subsequently measured at amortized cost using the effective interest
+method. The equity component, representing an embedded option to convert the liability into common
+shares, is initially recognized in 'Others' under 'Reserves' as the difference between the proceeds received
+from the convertible bonds as a whole and the amount of the liability component. Any directly attributable
+transaction costs are allocated to the liability and equity components in proportion to the allocation of
+proceeds.
+(d) Trademarks
+Prepaid land premiums are prepaid under PRC law for fixed periods. Prepaid land premiums are initially
+stated at cost and subsequently amortized on the straight-line basis over the lease terms. All of the Group's
+prepaid land premiums are related to lands located in Mainland China.
+(c) Prepaid land premiums
+Expenditures on acquiring the expressway operating rights are capitalized as intangible assets and
+subsequently amortized on the straight-line basis over the contract terms.
+(b) Expressway operating rights
+Core deposits are accounts that a financial institution expects to maintain for an extended period of time
+due to ongoing business relationships. The intangible asset value associated with core deposits reflects
+the present value of additional cash flow resulted from the use of the deposits at a lower cost alternative
+source of funding in the future periods.
+(a) Core deposits
+Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
+cash-generating unit level. Such intangible assets are not amortized. The useful life of an intangible asset
+with an indefinite life is reviewed annually to determine whether the indefinite life assessment continues to
+be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for on
+a prospective basis.
+Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible
+assets acquired in a business combination is the fair value as at the date of acquisition. The useful lives
+of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
+subsequently amortized on the straight-line basis over the useful economic life and assessed for impairment
+whenever there is an indication that the intangible asset may be impaired. The amortization period and the
+amortization method for an intangible asset with a finite useful life are reviewed at least at each financial
+year end.
+(24) INTANGIBLE ASSETS (OTHER THAN GOODWILL)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2015
+Trademarks are initially stated at cost and subsequently amortized on the straight-line basis over the
+estimated useful lives.
+Ping An Insurance (Group) Company of China, Ltd.
+No provision for depreciation is made on construction in progress until such time the relevant assets are
+completed and ready for use.
+Construction in progress mainly represents costs incurred in the construction of building premises, as well
+as the cost of equipment pending installation, less any impairment losses.
+(23) CONSTRUCTION IN PROGRESS
+Fully depreciated assets are retained in the financial statements until they are no longer in use and no
+further charge for depreciation is made in respect of these assets.
+The useful lives and depreciation methods are reviewed periodically to ensure that the method and period
+of depreciation are consistent with the expected pattern of economic benefits from the items of property
+and equipment.
+510 years
+Over the shorter of economic
+useful lives and terms of the leases
+20 40 years
+315 years
+1% - 10%
+0% - 10%
+1% - 10%
+Equipment, furniture and fixtures
+Motor vehicles
+Buildings
+Convertible bonds
+Estimated useful lives
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 165
+Leasehold improvements
+Financial guarantee contracts
+FINANCIAL STATEMENTS
+Financial guarantee contracts issued by the Group are those contracts that require a payment to be made
+to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due
+in accordance with the terms of a debt instrument. The Group initially measures such contracts at fair value,
+being the premium received. This amount is recognized ratably over the period of the contract to fees and
+commission income. Subsequently, the liabilities are measured at the higher of the initial fair value less
+cumulative amortization recognized in the statement of income, and the fair value of the provision related
+to the Group's obligation under the contract.
+Apart from the above financial guarantee contracts issued by the Group's banking operations which are
+accounted for under IAS 39, the Group has also regarded certain contracts it issued with financial guarantee
+element as insurance contracts and has used the accounting method applicable to insurance contracts, and
+accordingly has elected to apply IFRS 4 to account for such contracts (Note 3. (29)).
+(13) DERIVATIVE FINANCIAL INSTRUMENTS
+The Group's derivative financial instruments mainly include interest rate swaps, options embedded in
+convertible bonds purchased by the Group, equity warrants, forward currency contracts and credit related
+derivatives. Derivative financial instruments are classified as held for trading unless they are designated as
+effective hedging instruments. All derivatives are carried as assets when the fair values are positive and as
+liabilities when the fair values are negative.
+Embedded derivatives are treated as separate derivatives and are recorded at fair value if their economic
+characteristics and risks are not closely related to those of the related host contract and the host contract
+is not itself recorded at fair value through profit or loss. Embedded derivatives that meet the definition of
+insurance contracts are treated and measured as insurance contracts.
+Derivative financial instruments held for trading are typically entered into with the intention to settle in
+the near future. These instruments are initially recorded at fair value. Subsequent to initial recognition,
+these instruments are remeasured at fair value. Fair value adjustments and realized gains and losses are
+recognized in the statement of income.
+Annual Report 2015
+159
+FINANCIAL STATEMENTS
+160
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+Ping An Insurance (Group) Company of China, Ltd.
+(14) FAIR VALUE OF FINANCIAL INSTRUMENTS
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2015
+On conversion of the bonds into shares, the amount transferred to 'Share capital' is calculated as the par
+value of the shares multiplied by the number of shares converted. The difference between the carrying
+value of the related component of the converted bonds and the amount transferred to 'Share capital' is
+recognized in 'Share premium' under 'Reserves'.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+The useful lives of intangible assets are set as below:
+(24) INTANGIBLE ASSETS (OTHER THAN GOODWILL) (CONTINUED)
+When equity investments have no quoted price in active market and their fair value cannot be reliably
+measured, such investments are stated at cost less any impairment losses.
+Notes to Consolidated Financial Statements
+The fair value of floating rate and overnight deposits with credit institutions is their carrying value. The
+carrying value is the cost of the deposit and accrued interest. The fair value of fixed interest bearing
+deposits is estimated using discounted cash flow techniques. Expected cash flows are discounted at current
+market rates for similar instruments at the end of the reporting period.
+For financial instruments where there is no active market, the fair value is determined by using valuation
+techniques. Such techniques include using recent arm's length transactions, reference to the current
+market value of another instrument which is substantially the same, discounted cash flow analysis and/
+or option pricing models. For discounted cash flow techniques, estimated future cash flows are based on
+management's best estimates and the discount rate used is a market related rate for similar instruments.
+Certain financial instruments, including derivative financial instruments, are valued using pricing models
+that consider, among other factors, contractual and market prices, correlation, time value of money, credit
+risk, yield curve volatility factors and/or prepayment rates of the underlying positions. The use of different
+pricing models and assumptions could produce materially different estimates of fair values.
+The fair value of financial instruments that are actively traded in organized financial markets is determined
+by reference to quoted market bid prices for assets and offer prices for liabilities, at the close of business
+at the end of the reporting period. If quoted market prices are not available, reference can also be made to
+broker or dealer price quotations.
+(a) the rights to receive cash flows from the asset have expired; or
+Premium receipts are recognized not as premium income, but rather as liabilities, presented as
+investment contract liabilities. For those non-life investment type policies without guaranteed
+benefits, the related contract liabilities are measured at fair value and the related transaction costs
+are recognized in the statement of income. For other investment contracts, the related liabilities are
+initially measured at fair value and subsequently measured at amortized cost. Commissions, net of
+receipts from initial charges that are meant to compensate such costs, are recognized as transaction
+costs in the initial amount of the liabilities.
+Annual Report 2015
+Charges including policy administration fees are recognized as other income during the period of
+service provided.
+(33) INVESTMENT CONTRACTS
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(32) DPF IN LONG TERM LIFE INSURANCE CONTRACTS AND INVESTMENT CONTRACTS
+Some of the Group's long term life insurance contracts and investment contracts contain a discretionary
+participating feature, which is a contractual right to receive additional benefits as a supplement to
+guaranteed benefits. These contracts are collectively called participating contracts. Under the current
+PRC insurance regulations, the Group is obligated to pay to the policyholders of participating contracts
+at least 70% of the distributable surplus in each period, which includes net investment spread arising from
+the assets supporting these contracts and mortality gains or losses on the pool of contracts to which the
+participating contract belongs. The amounts to be collectively allocated to the policyholders are referred
+to as the eligible surplus. The amount and timing of the subsequent distribution of the eligible surplus
+to individual policyholders of participating contracts is subject to future declarations by the Group. As
+long as the eligible surplus has not been declared and paid, it is included in the long term life insurance
+policyholders' reserves and investment contract reserves. To the extent that there is a subsequent
+change in the expected future eligible surplus due to realized and unrealized gains, which may be paid to
+policyholders of participating insurance contracts in the future under the policy terms, such a change in
+surplus is included in long term life insurance policyholders' reserves and investment contract reserves.
+At the end of each reporting period, liability adequacy tests are performed on the unearned premium
+reserves, claim reserves and long term life insurance policyholders' reserves. If the insurance contract
+liabilities re-calculated with the insurance actuarial methods exceeds their carrying amounts on date of
+the liability adequacy test, an additional provision is made for the respective insurance contract liabilities
+based on the difference and charged in the statement of income. Otherwise, no adjustment is made for the
+respective insurance contract liabilities.
+Liability adequacy test
+(31) INSURANCE CONTRACT LIABILITIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+A shadow accounting adjustment is applied to recognize the change in surplus in other comprehensive
+income to the extent that such change is derived from unrealized gains or losses on supporting assets
+recognized directly in other comprehensive income.
+171
+The deposit components separated from the above universal life insurance contracts are accounted for as
+follows:
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(34) INVESTMENT-LINKED BUSINESS
+The individual investment-linked contracts of the Group contain significant insurance risks and are classified
+as insurance contracts. These policies also contain both insurance components and deposit components.
+The deposit components are unbundled from these hybrid insurance contracts. The rest of the contracts
+are accounted for as insurance contracts. The group investment-linked contracts of the Group that do not
+contain significant insurance risks are classified as investment contracts.
+The assets and liabilities related to investment-linked contracts which are regarded as insurance contracts
+are presented as policyholder account assets and liabilities in respect of insurance contracts. The assets and
+liabilities related to investment-linked contracts which are regarded as investment contracts are presented
+as policyholder account assets and liabilities in respect of investment contracts. The assets and liabilities
+of each investment-linked fund are segregated from each other and from the rest of the Group's invested
+assets for record keeping purposes. As the investment risks of investment-linked contracts were fully borne
+by policyholders, the assets and liabilities related to investment-linked contracts were not included in the
+analysis of risk management in Note 47.
+The group investment-linked contracts and the deposit component unbundled from the above individual
+investment-linked insurance contracts are accounted for as follows:
+Premium receipts are recognized not as premium income, but rather as liabilities, presented in
+policyholder account liabilities. These liabilities are initially measured and subsequently carried at fair
+value. Commissions, net of receipts from initial charges that are meant to compensate such costs, are
+recognized as transaction costs in the statement of income.
+Charges including account management fees and surrender charges are calculated at a fixed amount
+or certain percentage of policy account liabilities. Account management fees are recognized as other
+income during the period of service provided and surrender charges are recognized as other income as
+incurred.
+Assets of investment-linked contracts are initially measured and subsequently carried at fair value,
+presented as policyholder account assets.
+(35) UNIVERSAL LIFE BUSINESS
+Ping An Insurance (Group) Company of China, Ltd.
+The universal life contracts of the Group contain significant insurance risks and are classified as insurance
+contracts. These policies also contain both insurance components and deposit components. The deposit
+components are separated from these hybrid insurance contracts. The rest of the contracts are accounted
+for as insurance contracts as described in Note 3. (31).
+FINANCIAL STATEMENTS
+Annual Report 2015
+When measuring insurance contract liabilities, the expected period of future net cash outflows is the entire
+insurance period. For insurance policies with a guaranteed renewal option, the expected period is extended
+to the date when the option to renew policy ceases if the probability that the policyholders may execute
+the option is high and the Group does not have the right to reprice the premium.
+The key assumptions used in the measurement of long term life insurance policyholders' reserves include
+insurance accident occurrence rates, lapse and surrender rates, expense assumptions, policy dividend
+assumptions, discount rate, etc. In deriving these assumptions, the Group uses information currently
+available as at the end of the reporting period. Changes in assumptions are recognized immediately in the
+statement of income.
+Non-guaranteed benefits under the insurance contracts arising from constructive obligations,
+including policyholder dividends, etc;
+Reasonable expenses necessary for policy administration and claims handling, including policy
+maintenance expenses, claim expenses, etc.
+Expected future cash inflows represent cash inflows arising from assuming liabilities under the
+insurance contracts, including premium income and other charges.
+A reasonable estimate of expected future net cash flows is determined based on information currently
+available as at the end of the reporting period.
+Margins are considered and separately measured in determining insurance contract liabilities. Margins are
+released in the statement of income over the insurance coverage period using systematic and reasonable
+methods. Margins include risk margin and residual margin.
+Risk margin represents provision for the uncertainty associated with the future net cash flows. The
+Group determines risk margins of the long term life insurance policyholders' reserves using the
+scenario comparison method. The unfavorable scenarios are determined according to the uncertainty
+and impact of expected net cash outflows.
+At inception of an insurance contract, any 'day-one' gain is not recognized in the statement of income,
+but included in the insurance contract liabilities as a residual margin. The residual margin is calculated
+net of certain acquisition costs, mainly consisting of commission expenses on insurance operations. At
+inception of an insurance contract, any 'day-one' loss is recognized in the statement of income. Any
+residual margin is subsequently measured based on the assumptions of the years when the policies
+become effective, and will not be adjusted for future change in assumptions. For non-life insurance
+contracts, the Group amortizes the residual margin which is embedded in the unearned premium
+reserves on a time basis during the whole insurance coverage period and records it in profit or loss.
+For life insurance contracts, the Group amortizes the residual margin on the basis of the sums insured
+or the number of policies during the whole insurance coverage period.
+Annual Report 2015
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 169
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+170
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+When measuring insurance contract liabilities, the time value of money is considered. The related future
+cash flows are discounted when the impact of time value of money is significant. For short duration
+contracts whose duration is within one year, the cash flows are not discounted. The discount rates used in
+the measurement of time value of money is determined with reference to information currently available as
+at the end of the reporting period and is not locked.
+Unearned premium reserves
+The unearned premium reserves are provided for unexpired insurance obligations of property and casualty
+and short term life insurance contracts.
+Unearned premium reserves are measured using the unearned premium approach. At inception of the
+insurance contracts, unearned premium reserves are measured based on written premiums, with deductions
+made for commissions, business tax, insurance guarantee fund, regulatory charges and other incremental
+costs. Subsequent to initial recognition, unearned premium reserves are measured on a 1/365 basis.
+Claim reserves
+Claim reserves are insurance contract liabilities provided for insurance claims of the property and casualty
+and short term life insurance contracts. Claim reserves include incurred and reported reserves, incurred but
+not reported ('IBNR') reserves and claim expense reserves.
+Incurred and reported reserves are measured at amounts not higher than the sum insured of the insurance
+contracts, using the case-by-case estimate method and average claim per case method, based on a
+reasonable estimate of ultimate claim amounts as well as margins.
+IBNR are measured according to the nature and distribution of insurance risks, claims development,
+experience data, etc., using the chain ladder method, the Bornhuetter-Ferguson method, the loss ratio
+method and the average claim per case method, based on a reasonable estimate of ultimate claim amounts
+as well as margins.
+Claim expense reserves are measured based on a reasonable estimate of ultimate necessary claim expenses
+in the future by using the case-by-case estimate method and ratio allocation method as well as margins.
+Long term life insurance policyholders' reserves
+Long term life insurance policyholders' reserves are insurance contract liabilities provided for long term life
+and health insurance contracts.
+The Group determines risk margins of the long term life insurance policyholders' reserves using the scenario
+comparison method. The unfavorable scenarios are determined according to the uncertainty and impact of
+expected net cash outflows.
+(31) INSURANCE CONTRACT LIABILITIES (CONTINUED)
+Premium receipts are recognized not as premium income, but rather as liabilities, presented in
+policyholder contract deposits. These liabilities are initially measured at fair value and subsequently
+measured using a discounted cash flow model. Commissions, net of receipts from initial charges that
+are meant to compensate such costs, are recognized as transaction costs in the initial amount of the
+liabilities.
+(37) REVENUE RECOGNITION (CONTINUED)
+172
+The insurance contract liabilities of the Group include long term life insurance policyholders' reserves,
+unearned premium reserves and claim reserves.
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance
+risks are of similar nature as a measurement unit. Property and casualty and short term life insurance
+policies are grouped into certain measurement units by lines of business. For long term life insurance
+policies, the Group mainly considers the characteristics of the policies, including product type, gender, age,
+and durations of policies, when determining the measurement units.
+Insurance contract liabilities are measured based on a reasonable estimate of amount of payments when
+the Group fulfils the relevant obligations under the insurance contracts, which represents the difference
+between expected future cash outflows and inflows under such contracts, i.e., the expected future net cash
+outflows.
+Expected future cash outflows represent reasonable cash outflows which are necessary for the
+Group to fulfill the obligations under the insurance contracts (including benefits attributable to the
+policyholders), and mainly include:
+Guaranteed benefits under the insurance contracts, including claims, mortality benefits, disability
+benefits, morbidity benefits, survival benefits and maturity benefits;
+(c) Medical benefits
+The employees of the Group are entitled to participate in various government-sponsored housing funds.
+The Group contributes on a monthly basis to these funds based on certain percentages of the salaries of
+the employees. The Group's liability in respect of these funds is limited to the contributions payable in each
+period.
+(b) Housing benefits
+The employees of the Group are mainly covered by various defined contribution pension plans. The Group
+makes and accrues contributions on a monthly basis to the pension plans, which are mainly sponsored by
+the related government authorities that are responsible for the pension liability to retired employees. Under
+such plans, the Group has no other significant legal or constructive obligations for retirement benefits
+beyond the said contributions, which are expensed as incurred. Certain employees are also provided with
+group life insurance but the amounts involved are insignificant.
+(a) Pension obligations
+(41) EMPLOYEE BENEFITS
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(31) INSURANCE CONTRACT LIABILITIES
+For the year ended 31 December 2015
+Annual Report 2015
+176
+16
+The Company settles with the awardees under the share purchase scheme upon vesting.
+At the end of each reporting period, the Group revises its estimates of the number of awarded shares
+that are expected to vest based on the non-marketing performance and service conditions. It recognizes
+the impact of the revision to original estimates, if any, in the statement of income, with a corresponding
+adjustment to equity.
+The total amount to be expensed is determined by reference to the fair value of the shares granted, which
+includes the impact of market performance conditions (for example, an entity's share price) but excludes
+the impact of any service and non-market performance vesting conditions (for example, profitability, sales
+growth targets and remaining an employee of the entity over a specified time period) and includes the
+impact of any non-vesting conditions (for example, the requirement for employees to save or holding shares
+for a specified period of time). The Group also estimates the number of total shares expected to vest taking
+into consideration of service and non-market performance conditions. Total expense based on fair value of
+the shares granted and number of shares expected to vest is recognized over the vesting period.
+The Group operates an equity-settled, share-based compensation plan (share purchase scheme), under
+which the Group receives services from employees as consideration for equity instruments.
+Equity-settled share-based payment transactions
+(42) SHARE-BASED PAYMENT
+The Group makes monthly contributions for medical benefits to the local authorities in accordance with the
+relevant local regulations for the employees. The Group's liability in respect of employee medical benefits is
+limited to the contributions payable in each period.
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd.
+175
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(27) IMPAIRMENT OF NON-FINANCIAL ASSETS
+The Group assesses at each reporting date whether there is an indication that a non-financial asset other
+than deferred tax assets may be impaired. If any such indication exists, or when annual impairment testing
+for a non-financial asset is required, the Group makes an estimate of the asset's recoverable amount. A
+non-financial asset's recoverable amount is the higher of the asset's or cash-generating unit's fair value
+less costs to sell and its value in use and is determined for an individual asset, unless the asset does not
+generate cash inflows that are largely independent of those from other assets or groups of assets, in
+which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.
+Where the carrying amount of a non-financial asset exceeds its recoverable amount, the asset is considered
+impaired and is written down to its recoverable amount. In assessing value in use, the estimated future
+cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
+assessments of the time value of money and the risks specific to the asset. In determining fair value less
+costs to disposal, an appropriate valuation model is used. These calculations are corroborated by valuation
+multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
+For non-financial assets other than goodwill, an assessment is made at each reporting date as to whether
+there is any indication that previously recognized impairment losses may no longer exist or may have
+decreased. If such an indication exists, the Group makes an estimate of the recoverable amount. A
+previously recognized impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognized. If that is the case,
+the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
+exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
+been recognized for the asset in prior years. Such a reversal is recognized in the statement of income.
+Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances
+indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable
+amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. The
+recoverable amount is the higher of its fair value less costs to disposal and its value-in-use, determined
+on an individual asset (or cash-generating unit) basis, unless the individual asset (or cash-generating unit)
+does not generate cash flows that are largely independent from those of other assets or groups of assets
+(or groups of cash-generating units). Impairment losses recognized in relation to goodwill are not reversed
+for subsequent increases in its recoverable amount.
+Intangible assets with indefinite useful lives are tested for impairment annually at each year end either
+individually or at the cash-generating unit level, as appropriate.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+167
+FINANCIAL STATEMENTS
+168
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+According to the 'Administrative Regulations on the Insurance Guarantee Fund' (Baojianhuiling [2008] No.2),
+the Group calculates the insurance guarantee fund as follows:
+0.8% of the premium income for non-investment type property insurance, 0.08% of the consideration
+received for investment type property insurance with guaranteed return, and 0.05% of the consideration
+received for investment type property insurance without guaranteed return;
+0.15% of the consideration received for life insurance with guaranteed return, and 0.05% of the
+consideration received for life insurance without guaranteed return;
+0.8% of the premium income for short term health insurance, and 0.15% of the premium income for long
+term health insurance; and
+0.8% of the premium income for non-investment type accident insurance; 0.08% of the consideration
+received for investment type accident insurance with guaranteed return, and 0.05% of the consideration
+received for investment type accident insurance without guaranteed return.
+No additional provision is required when the accumulated insurance guarantee fund balances of Ping An
+Life Insurance Company of China, Ltd. ('Ping An Life'), Ping An Annuity Insurance Company of China, Ltd.
+('Ping An Annuity') and Ping An Health Insurance Company of China, Ltd. ('Ping An Health') reach 1% of
+their respective total assets. For Ping An Property & Casualty Insurance Company of China, Ltd. ('Ping An
+Property & Casualty'), no additional provision is required when the accumulated balance reaches 6% of its
+total assets. Insurance guarantee fund levy is charged to expenses as incurred.
+The revenue and premium income used in the calculation of the insurance guarantee fund is the amount
+agreed in the insurance policies.
+(29) INSURANCE CONTRACTS
+Insurance contracts are those contracts under which the Group has accepted significant insurance risk from
+the policyholders by agreeing to compensate the policyholders if a specified uncertain future event (the
+insured event) adversely affects the policyholders. Insurance contracts are classified as direct insurance
+contracts and reinsurance contracts. The significance of insurance risk as determined by the Group is mainly
+dependent on the magnitude of its potential effect.
+Some insurance contracts contain both an insurance component and a deposit component. The Group
+chooses to unbundle those components, if the insurance component and the deposit component are
+distinct and separately measurable. The unbundled insurance component is accounted for according to
+IFRS 4 and the unbundled deposit component is accounted for according to relevant accounting policies. If
+the insurance component and the deposit component are not distinct and separately measurable, the whole
+contract is accounted for as an insurance contract.
+(30) SIGNIFICANT INSURANCE RISK TESTING
+For other insurance contracts issued by the Group, tests are performed to determine if the contracts
+contain significant insurance risk, and contracts of similar nature are grouped together for this purpose.
+When performing the significant insurance risk test, the Group makes judgments in sequence as to whether
+the contract transfers insurance risk, whether the contract has commercial substance, and whether the
+transferred insurance risk is significant.
+(28) INSURANCE GUARANTEE FUND
+Fair value changes on available-for-sale financial assets related to the universal life insurance portfolio
+are recognized in other comprehensive income. Changes in the insurance liabilities for the universal life
+insurance portfolio is also recognized in other comprehensive income to the extent that such change
+is derived from fair value changes on available-for-sale financial assets related to the universal life
+insurance portfolio attributable to policyholders.
+Ping An Insurance (Group) Company of China, Ltd.
+Where the Group is the lessee, rentals payable under operating leases are charged to the statement of
+income on the straight-line basis over the lease terms. The aggregate benefit of incentives provided by the
+lessor is recognized as a reduction in rental expenses over the lease terms on the straight-line basis.
+(c) Interest income
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+173
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+Revenues from investment contracts issued by the Group are charged fees for policy administration,
+investment management, surrenders or other contract services. The fees may be for fixed amounts or vary
+with the amounts being managed, and will generally be charged as an adjustment to the policyholder's
+balance. The fees are recognized as revenue in the period in which they are due unless they relate to
+services to be provided in future periods which would be deferred and recognized as the service is
+provided. Initiation and other front-end fees are charged for certain investment contracts recorded at
+amortized cost and are recognized through an adjustment to the effective yield.
+(b) Income from investment contracts
+Reinsurance premiums are recognized as revenue in accordance with the terms stated in the reinsurance
+contracts. Accounting policies for reinsurance contracts are described in Note 3. (38).
+Premiums from long term life insurance contracts with installment or single payments are recognized
+as revenue when due. Premiums from property and casualty and short term life insurance contracts are
+recognized as revenue based on the amount of total premium stated in the contracts.
+Interest income for interest bearing financial instruments, is recognized in the statement of income using
+the effective interest rate method. When a financial asset is impaired, the Group reduces the carrying
+amount to its recoverable amount, being the estimated future cash flow discounted at the original effective
+interest rate of the instrument, and continues unwinding the discount as interest income.
+Premium income and reinsurance premium income is recognized when the insurance contracts are issued,
+related insurance risk is undertaken by the Group, it is probable that related economic benefits will flow to
+the Group and related income can be reliably measured.
+Revenue is recognized when it is probable that the economic benefits associated with the transaction will
+flow to the Group and the amount of the revenue can be measured reliably. The Group's main revenue is
+recognized on the following bases:
+(37) REVENUE RECOGNITION
+The amount recognized as a provision shall be the best estimate of the expenditure required to settle the
+present obligation at the end of the reporting period with the consideration of risks, uncertainties and the
+present value. Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the
+current best estimate.
+A reliable estimate can be made of the amount of the obligation.
+It is probable that an outflow of resources embodying economic benefits will be required to settle the
+obligation; and
+An entity has a present obligation as a result of a past event;
+Except for contingent considerations deriving from or contingent liabilities assumed in business
+combinations, contingent liabilities are recognized as provisions if the following conditions are met:
+A provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past
+event and it is probable that a future outflow of resources will be required to settle the obligation, provided
+that a reliable estimate can be made of the amount of the obligation. When the effect of discounting
+is material, the amount recognized is the present value at the end of the reporting period of the future
+expenditures expected to be required to settle the obligation.
+(36) PROVISIONS
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+(a) Gross premium
+Annual Report 2015
+(d) Fees and commission income of non-insurance operations
+Fee income earned from services that are provided over a certain period of time
+Where the Group is the lessor, assets leased by the Group under operating leases are included in investment
+properties and rentals receivable under such operating leases are credited to the statement of income on
+the straight-line basis over the lease terms.
+Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are
+accounted for as operating leases.
+(40) OPERATING LEASES
+Policyholder dividends represent dividends payable by the Group to policyholders in accordance with the
+terms of direct insurance contracts. The dividends are calculated and provided based on the dividend
+allocation method and the results of actuarial valuation.
+(39) POLICYHOLDER DIVIDENDS
+Upon receipt of the statement of the reinsurance business, the Group adjusts the reinsurance premium
+income and reinsurance expenses, and then recognizes the adjusted amounts through profit or loss
+according to the ceding company statements.
+During the period of recognizing reinsurance premium income, the Group determines reinsurance expenses
+according to the reinsurance contracts and recognizes the expenses through profit or loss. As for profit
+commission, the Group recognizes it as a reinsurance expense through profit or loss according to the
+reinsurance contracts when it is feasible to determine the amount of profit commission to be paid to the
+reinsurers.
+Inward reinsurance business
+As a cedent, the Group presents in the statement of financial position the assets arising from reinsurance
+contracts and the liabilities arising from insurance contracts separately instead of offsetting the assets
+and liabilities. The Group also presents in the statement of income the income derived from reinsurance
+contracts and the expenses incurred for insurance contracts separately instead of offsetting the income and
+expenses.
+Outward reinsurance arrangements do not relieve the Group from its obligations to policyholders. When
+recognizing premium income from insurance contracts, the Group calculates to determine the amount of
+premium ceded and reinsurers' share of expenses and recognize them through profit or loss according
+to reinsurance contracts. When calculating unearned premium reserves, claim reserves and long term
+life policyholders' reserves of insurance contracts, the Group estimates the reinsurance related cash
+flows according to the reinsurance contracts, considers the risk margin when determining the amount of
+insurance contract reserves to be recovered from reinsurers, and recognizes reinsurers' share of insurance
+contract liabilities. When insurance contract liabilities are reduced for actual payment of claims and claim
+expenses, reinsurers' share of insurance contract liabilities are reduced accordingly. In the meantime, the
+Group calculates to determine the amount of claim expenses to be recovered from the reinsurers according
+to the reinsurance contracts and recognizes the amount through profit or loss. When there is an early
+termination of an insurance contract, the Group calculates to determine the adjustment amount of premium
+ceded and reinsurers' share of expenses according to the reinsurance contracts and recognizes the amount
+through profit or loss, and the balance of reinsurers' share of insurance contract liabilities is reversed
+accordingly.
+Outward reinsurance business
+The Group undertakes inward and outward reinsurance in the normal course of operations. All of the
+reinsurance business of the Group has significant insurance risk transfer.
+The Group earns fees and commission income of non-insurance operations from a diverse range of services
+it provides to its customers. Fee income can be divided into the following main categories:
+(38) REINSURANCE
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+174
+Revenue from the sale of goods is recognized when the significant risks and rewards of ownership have
+been transferred to the buyer, provided that the Group maintains neither managerial involvement to the
+degree usually associated with ownership, nor effective control over the goods sold.
+(g) Sale of goods
+Expressway toll fee income is recognized upon the completion of services.
+(f) Expressway toll fee income
+Dividend income is recognized when the right to receive dividend payment is established.
+(e) Dividend income
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as
+the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are
+recognized on the completion of the underlying transaction. Fees or components of fees that are linked
+to a certain performance are recognized after fulfilling the corresponding criteria. These fees may include
+underwriting fees, corporate finance fees, brokerage fees. Loan syndication fees are recognized in the
+statement of income when the syndication has been completed and the Group retains no part of the loans
+for itself or retains part at the same effective interest rate as for the other participants.
+Fee income from providing transaction services
+Fees earned from the provision of services over a period of time are accrued over that period. These
+fees include investment fund administration fees, custodian fees, fiduciary fees, credit related fees, asset
+management fees, portfolio and other management fees, advisory fees, etc. However, loan commitment
+fees for loans that are likely to be drawn down are deferred (together with any incremental costs) and
+recognized as an adjustment to the effective interest rate on the loan.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Insurance policies that are not considered insurance contracts under IFRS 4 are classified as investment
+contracts. These policies do not contain significant insurance risk.
+Ping An Insurance (Group) Company of China, Ltd.
+700,000,000
+USD50,000
+100.00%
+99.51%
+Project investment,
+British Virgin Islands,
+Corporation
+Ansheng Investment Company Limited
+4,330,500,000
+100.00%
+99.88%
+Investment management,
+Shanghai
+Shanghai Pingpu Investment Co., Ltd. (v) Shanghai, Corporation
+100,000,000
+100.00%
+99.99%
+Consulting services,
+Shenzhen
+British Virgin Islands
+Shenzhen Ping An Financial Technology Shenzhen, Corporation
+Consulting Co., Ltd. (iii)
+Financial advisory
+92.35%
+400,000,000
+80.00%
+79.99%
+Property agency,
+Shanghai
+Shanghai, Corporation
+Shanghai Pingan Property E-commerce
+Co., Ltd. (iii)
+50,000,000
+Shenzhen, Corporation
+67.00%
+Currency brokerage,
+Shenzhen
+Shenzhen, Corporation
+Ping An Tradition International
+Money Broking Company Ltd.
+services, Shenzhen
+9,542,000,000
+100.00%
+7.64%
+66.92%
+Ping An Through Consultant Co., Ltd.
+1,300,000,000
+100.00%
+59.99%
+Sale of points, Shenzhen
+Shenzhen, Corporation
+Shenzhen Wanlitong Internet
+204,766,200
+100.00%
+99.99%
+60.00%
+IT and business process
+outsourcing services,
+Shenzhen
+Co., Ltd. (Previously Ping An
+Shenzhen, Corporation
+Shenzhen Ping An Financial Services
+Co., Ltd.)
+Treatment Internet Technology
+350,000,000
+70.00%
+Processing & Technology
+(Shenzhen) Co., Ltd.)
+Annual Report 2015
+200,000,000
+Shenzhen Ping An Commercial
+99.99%
+Real estate investment,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Ping An Real Estate
+Investment Co., Ltd.
+300,000,000
+100.00%
+96.82%
+Information Technology Co., Ltd.
+Futures brokerage,
+Shenzhen
+Ping An Futures Co., Ltd.
+396,000,000
+99.95%
+99.46%
+Real estate investment,
+Shenzhen
+Property Investment Co., Ltd. (iii)
+Shenzhen, Corporation
+Shenzhen, Corporation
+Ping An Insurance (Group) Company of China, Ltd.
+185
+FINANCIAL STATEMENTS
+99.51%
+Project investment,
+Jade Reach Investment Company Limited British Virgin Islands,
+British Virgin Islands
+USD50,000
+100.00%
+99.51%
+100.00%
+Project investment,
+Reach Success International
+Company Limited
+('Ping An Chuang Zhan')
+Sales & Service Co., Ltd
+50,000,000
+100.00%
+99.51%
+Insurance sale, Shenzhen
+British Virgin Islands,
+Corporation
+Shenzhen, Corporation
+USD50,000
+British Virgin Islands
+100.00%
+Commercial factoring,
+Shanghai
+Shanghai, Corporation
+Ping An Commercial Factoring
+Co., Ltd. (iii)
+500,000,000
+100.00%
+99.65%
+Corporation
+Investment management,
+Tongxiang
+Tongxiang Ping An Investment Co., Ltd.
+419,000,000
+100.00%
+99.51%
+Real estate investment,
+Shenyang
+Shenyang, Corporation
+Shenyang Shengping Investment
+Management Co., Ltd.
+Tongxiang, Corporation
+49.00%
+Ping An Chuang Zhan Insurance
+50,000,000
+60.63%
+Fund investment,
+Shenzhen
+Management Co., Ltd.
+Shenzhen, Corporation
+Pingan-UOB Wealthtone Asset
+Registered/
+authorized capital
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+100.00%
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+Principal activities and
+place of operation
+Place of incorporation
+and kind of legal entity
+Name
+(1) Particulars of the Group's principal subsidiaries as at 31 December 2015 are set out below: (continued)
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+insurance, Shenzhen
+30,000,000
+Shenzhen, Corporation
+100.00%
+99.99%
+Sale agency of
+Shenzhen, Corporation
+Ping An Insurance Sales Services
+Co., Ltd.
+5,248,870,000
+100.00%
+Ping An UOB Fund Management
+Company Limited
+99.51%
+Shenzhen, Corporation
+Shenzhen Ping An Financial Center
+Development Company Ltd. (iii)
+distribution, Shenzhen
+300,000,000
+60.70%
+60.63%
+Fund raising and
+Real estate development,
+Shenzhen
+Network technology,
+Shenzhen
+(Previously Pingan Health Medical
+Shenzhen, Corporation
+Ping An Property & Casualty Insurance
+Company of China, Ltd.
+33,800,000,000
+99.51%
+99.51%
+Life insurance, Shenzhen
+Shenzhen, Corporation
+Ping An Life Insurance Company
+of China, Ltd.
+Shenzhen, Corporation
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+Principal activities and
+place of operation
+Place of incorporation
+and kind of legal entity
+Name
+(1) Particulars of the Group's principal subsidiaries as at 31 December 2015 are set out below:
+Registered/
+authorized capital
+5. SCOPE OF CONSOLIDATION
+Property and casualty
+99.51%
+Ping An Securities Company, Ltd. (iii)
+('Ping An Securities')
+12,000,000,000
+99.88%
+99.88%
+Investment and trust,
+Shenzhen
+Shenzhen, Corporation
+China Ping An Trust Co., Ltd. (iii)
+99.51%
+14,308,676,139
+8.40%
+49.56%
+Banking, Shenzhen
+Shenzhen, Corporation
+Ping An Bank Co., Ltd. (ii) (iii)
+('Ping An Bank')
+insurance, Shenzhen
+21,000,000,000
+58.00%
+Shenzhen, Corporation
+For the year ended 31 December 2015
+FINANCIAL STATEMENTS
+The assumption of participating insurance accounts is affected by the above factors, and hence bears
+uncertainty. The future assumption of life and bancassurance participating insurance with a risk margin
+based on a dividend rate of 85%.
+The Group uses reasonable estimates, based on expected investment returns of participating insurance
+accounts, participating dividend policy, policyholders' reasonable expectations, etc. in deriving policy
+dividend assumptions.
+The expense assumptions include assumptions of acquisition costs and maintenance costs. The
+assumption of maintenance costs also has a risk margin.
+The Group uses reasonable estimates, based on an expense study and future development trends, in
+deriving expense assumptions. If the future expense level becomes sensitive to inflation, the Group will
+consider the inflation factor as well in determining expense assumptions.
+The assumptions of lapse rates are determined by reference to different pricing interest rates, product
+categories and sales channels separately. They are affected by factors such as future macro-economy
+and market competition, and hence subject to uncertainty.
+The Group uses reasonable estimates, based on actual experience and future development trends, in
+deriving lapse rate assumptions.
+(5) VALUATION OF INSURANCE CONTRACT LIABILITIES (CONTINUED)
+In the measurement of unearned premium reserves for the property and casualty insurance and short
+term life insurance business, the Group applies the cost of capital approach and the insurance industry
+guideline ranged from 3% to 6% to determine risk margins.
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+181
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+The assumptions of mortality and morbidity rates are affected by factors such as changes in lifestyles
+of national citizens, social development, and improvement of medical treatment, and hence subject to
+uncertainty.
+The assumption of morbidity rates is determined based on industrial benchmark morbidity rates or
+the Group's assumptions used in product pricing, experience data of morbidity rates, and estimates of
+current and future expectation as well as a risk margin.
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+The major assumptions needed in measuring claim reserves include the claim development factor and
+expected claim ratio, which can be used to forecast trends of future claims so as to estimate the ultimate
+claim expenses. The loss development factors and expected loss ratio of each measurement unit are based
+on the Group's historical claim development experiences and claims paid, with consideration of adjustments
+to company policies like underwriting policies, level of premium rates, claim management and the changing
+trends of external environments such as macroeconomic regulations, and legislation. In the measurement of
+claim reserves, the Group applies the cost of capital approach and insurance industry guideline ranged from
+2.5% to 5.5% to determine risk margins.
+182
+183
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+For further disclosure in respect of the maximum risk exposure of unconsolidated structured entities in
+which the Group has an interest, see Note 47. (8).
+(9) DETERMINATION OF CONTROL OVER THE STRUCTURED ENTITIES
+Management applies its judgment to determine whether the Group is acting as agent or principal in relation
+to the structured entities in which the Group acts as an asset manager. In assessing whether the Group
+is acting as principal, the Group considers factors such as scope of the asset manager's decision-making
+authority; rights held by other parties; remuneration to which it is entitled; and exposure to variability of
+returns from its involvement with structured entities. The Group will reassess it when the factors change.
+In 2015, the Group reviewed the carrying amount of deferred tax assets. Based on current information
+available and the tax planning strategies, the Group believed it is no longer probable that there will be
+eligible future taxable profit to allow the deferred tax assets to be utilized, resulting in the reversal of the
+deferred tax assets recognized in 2008 related to the impairment provision of the investment in Fortis (name
+has been subsequently changed to 'Ageas' now). It led to a decrease of deferred tax assets by RMB5,251
+million as at 31 December 2015, a decrease of net profit by RMB5,697 million and an increase of other
+comprehensive income by RMB446 million for the year ended 31 December 2015.
+Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
+when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted
+or substantively enacted by the end of the reporting period. Deferred income tax assets are recognized
+for all unused tax losses to the extent that it is probable that future taxable profit will be available against
+which the unused tax losses can be utilized. Significant management judgment is required to estimate
+the amount and timing of future taxable profit as well as the corresponding applicable tax rates so as
+to determine, together with the tax planning strategies, the amounts of deferred income tax assets and
+liabilities to be recognized.
+Material judgment is required in determining insurance contract liabilities and in choosing discount rates/
+investment return, mortality, morbidity, lapse rates, policy dividend, and expenses assumptions relating to
+long term life insurance contracts. Such assumptions should be determined based on current information
+available at the end of the reporting period. The Group has changed the above assumptions based on
+current information available as at 31 December 2015 with the corresponding impact on insurance contract
+liabilities taken into the current period's statement of income. The impact of such changes in assumptions is
+disclosed in Note 3. (2).
+(8) DEFERRED TAX ASSETS AND LIABILITIES
+(7) IMPAIRMENT LOSSES OF LOANS AND ADVANCES
+Using different valuation techniques and parameter assumptions may lead to significant differences of fair
+value estimations.
+When using valuation techniques to determine the fair value of financial instruments, the Group uses to
+the extent all practicable market parameters that market participants would consider in pricing, including
+risk-free rate, credit risk, foreign exchange rate, prices of commodity, share price and index, future volatility
+of financial instrument prices, risk of repayment in advance, etc. In addition, the management of the Group
+also estimates credit risk and market volatility for both parties of the transaction when references are
+lacking.
+(6) FAIR VALUE OF FINANCIAL INSTRUMENTS DETERMINED USING VALUATION TECHNIQUES
+Fair value, in the absence of an active market, is estimated by using valuation techniques, mainly include
+market approach and income approach, reference to the recent arm's length transactions, current market
+value of another instrument which is substantially the same, and by using the discounted cash flow analysis
+and/or option pricing models.
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+The Group reviews its loans and advances at each reporting date to assess whether an allowance for
+impairment should be recorded in the statement of income. In particular, judgment by management is
+required in the estimation of the amount and timing of future cash flows when determining the level of
+allowance required. Such estimates are based on assumptions about a number of factors and actual results
+may differ, resulting in future changes to the allowance.
+100.00%
+Security investment and
+brokerage, Shenzhen
+55.59%
+100.00%
+99.65%
+Investment management,
+Shenzhen
+Shenzhen, Corporation
+Ping An Real Estate Co., Ltd.
+4,000,000,000
+100.00%
+10,000,000,000
+99.88%
+Shenzhen, Corporation
+Shenzhen Ping An New Capital
+Investment Co., Ltd.
+100.00% HKD345,000,000
+100.00%
+Asset management,
+Hong Kong
+Hong Kong, Corporation
+Ping An of China Asset Management
+(Hong Kong) Company Limited (iii)
+Investment holding,
+Shenzhen
+9,300,000,000
+184
+Ping An Insurance (Group) Company of China, Ltd.
+Pingan Health Cloud Co., Ltd.
+204,763,800
+100.00%
+99.99%
+IT services, Shenzhen
+Ping An Technology (Shenzhen) Co., Ltd. Shenzhen, Corporation
+Registered/
+authorized capital
+(RMB unless
+otherwise stated)
+Annual Report 2015
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+Principal activities and
+place of operation
+and kind of legal entity
+Name
+Place of incorporation
+(1) Particulars of the Group's principal subsidiaries as at 31 December 2015 are set out below: (continued)
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+40.96%
+100.00%
+75.00%
+Ping An Health Insurance Company
+of China, Ltd.
+1,500,000,000
+100.00%
+1.33%
+98.67%
+Asset management,
+Shanghai
+Ping An Asset Management Co., Ltd. (iii) Shanghai, Corporation
+Shanghai, Corporation
+4,860,000,000
+13.82%
+86.11%
+Annuity insurance,
+Shanghai
+Shanghai, Corporation
+Ping An Annuity Insurance Company
+of China, Ltd. (iii)
+8,573,951,830
+96.62%
+100.00%
+25.00%
+Health insurance,
+Shanghai
+3.75%
+Financial leasing,
+Shanghai
+Shanghai, Corporation
+Ping An International Financial
+Leasing Co., Ltd. (iii)
+insurance, Hong Kong
+HKD490,000,000
+100.00%
+100.00%
+71.26%
+Hong Kong, Corporation Property and casualty
+('Ping An Overseas')
+100.00% HKD4,735,000,000
+100.00%
+Hong Kong, Corporation Investment holding,
+Hong Kong
+China Ping An Insurance Overseas
+(Holdings) Limited
+666,577,790
+75.01%
+China Ping An Insurance (Hong Kong)
+Company Limited
+The assumption of mortality rates is based on Group's prior experience data on mortality rates,
+estimates of current and future expectations, the understanding of the China insurance market as
+well as a risk margin. The assumption of mortality rates is presented as a percentage of 'China Life
+Insurance Mortality Table (2000-2003)', which is the industry standard for life insurance in China.
+The Group uses reasonable estimates, based on market and actual experience and expected future
+development trends, in deriving assumptions of mortality rates, morbidity rates, disability rates, etc.
+Taiyuan, Corporation
+Shanxi Changjin Expressway Co., Ltd.
+A party is considered to be related to the Group if:
+(a) the party is a person or a close member of that person's family and that person:
+(i)
+has control or joint control over the Group;
+(ii) has significant influence over the Group; or
+(iii) is a member of the key management personnel of the Group or of a parent of the Group;
+or
+(b) the party is an entity where any of the following conditions applies:
+(i) the entity and the Group are members of the same group;
+(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
+subsidiary of the other entity);
+(iii) the entity and the Group are joint ventures of the same third party;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
+an entity related to the Group;
+(vi) the entity is controlled or jointly controlled by a person identified in (a); and
+(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
+management personnel of the entity (or of a parent of the entity).
+178
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(47) SEGMENT REPORTING
+For management purposes, the Group is organized into operating segments based on the internal
+organization structure, management requirements and internal reporting. The reportable segments are
+determined and disclosed based on operating segments and the presentation is consistent with the
+information reported to the Board of Directors.
+Operating segments refer to the Group's component that satisfies the following conditions:
+(1) The component produces income and expenses in its daily operation;
+Interim cash dividends are simultaneously proposed and declared, because the Company's memorandum
+and articles of association grant the directors the authority to declare interim cash dividends. Consequently,
+interim dividends are recognized immediately as a liability when they are proposed and declared.
+(2) The management of the Company regularly assesses the operating results of its business units for the
+purpose of making decisions about resources allocations and performance assessment;
+When the final cash dividends proposed by the directors have been approved by the shareholders and
+declared, they are recognized as a liability.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2015
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(43) SHARES HELD BY CONSOLIDATED STRUCTURED ENTITIES
+The Group's subsidiaries consolidated certain third party assets management scheme. These assets
+management schemes invested in the insurance index shares. As such the Group indirectly hold the
+Company's shares. The employee share purchase scheme consolidated by the Group also hold the
+Company's shares. The consideration paid by the consolidated structured entities in purchasing the
+Company's shares from the market, including any directly attributable incremental cost, is debited to 'Share
+premium' under 'Reserves'. No gain or loss shall be recognized in profit or loss on the sale of those shares,
+the consideration received is credited to ‘Share premium' under 'Reserves'.
+(44) TAX
+Income tax comprises current and deferred tax. Income tax is recognized in the statement of income, or in
+other comprehensive income or in equity if it relates to items that are recognized in the same or a different
+period directly in other comprehensive income or in equity.
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to
+be recovered from or paid to the taxation authorities.
+Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting
+period between the tax bases of assets and liabilities and their carrying amounts for financial reporting
+purposes.
+Deferred tax liabilities are recognized for all taxable temporary differences, except:
+when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the
+accounting profit nor taxable profit or loss; and
+in respect of taxable temporary differences associated with investments in subsidiaries, associates
+and interests in jointly controlled entities, when the timing of the reversal of the temporary differences
+can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
+future.
+Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused
+tax credits and any unused tax losses, to the extent that it is probable that taxable profit will be available
+against which the deductible temporary differences, and the carry-forward of unused tax credits and
+unused tax losses can be utilized, except:
+when the deferred tax asset relating to the deductible temporary differences arises from the initial
+recognition of an asset or liability in a transaction that is not a business combination and, at the time
+of the transaction, affects neither the accounting profit nor taxable profit or loss; and
+in respect of deductible temporary differences associated with investments in subsidiaries, associates
+and interests in jointly controlled entities, deferred tax assets are only recognized to the extent that it
+is probable that the temporary differences will reverse in the foreseeable future and taxable profit will
+be available against which the temporary differences can be utilized.
+The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to
+the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
+the deferred tax asset to be utilized. Conversely, previously unrecognized deferred tax assets are reassessed
+by the end of each reporting period and are recognized to the extent that it is probable that sufficient
+taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
+Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
+when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
+enacted or substantively enacted at the end of the reporting period.
+Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
+current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and
+the same taxation authority.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+177
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+(45) DIVIDENDS
+(3) The Group is able to obtain the accounting information such as the financial position, operating results
+and cash flows of the component.
+(46) RELATED PARTIES
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES
+180
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+(5) VALUATION OF INSURANCE CONTRACT LIABILITIES (CONTINUED)
+At the end of the reporting period, the Group shall make an estimate of the assumptions used in the
+measurement of insurance contract liabilities. Such assumptions shall be determined based on information
+currently available at the end of the reporting period. To determine these assumptions, the Group selects
+proper risk margins according to both uncertainties and degree of impact of expected future cash outflows.
+The main assumptions used in the measurement of policyholders' reserves and unearned premium reserves
+are as follows:
+For long term life insurance contracts where the future insurance benefits are not affected by
+investment return of the underlying asset portfolio, the discount rate assumption is based on the
+benchmarking yield curve for the measurement of insurance contract liabilities published by China
+Central Depository and Clearing Co., Ltd., with consideration of the impact of the tax and liquidity
+premium. The current discount rate assumption for the measurement as at 31 December 2015 ranged
+from 3.55%-5.29% (31 December 2014: 3.95%-5.50%).
+For long term non-life insurance contracts where the future insurance benefits are not affected by
+investment return of the underlying asset portfolio, as the risk margin has no material impact on the
+reserve measurement, the discount rate assumption used is the benchmarking yield curve for the
+measurement of insurance contract liabilities published by China Central Depository and Clearing Co.,
+For long term life insurance contracts where the future insurance benefits are affected by investment
+return of the underlying asset portfolio, the discount rates are determined based on expected future
+investment returns of the asset portfolio backing those liabilities. The future investment returns
+assumption for the measurement as at 31 December 2015 ranged from 4.75%- 5.50% (31 December 2014:
+4.75%-5.50%).
+For short term insurance contracts liabilities whose duration is within one year, the future cash flows
+are not discounted.
+The discount rate and investment return assumptions are affected by the future macro-economy,
+capital market, investment channels of insurance funds, investment strategy, etc., and therefore subject
+to uncertainty.
+186
+504,000,000
+60.00%
+59.71%
+Expressway operation,
+Taiyuan
+Taiyuan, Corporation
+Shanxi Jinjiao Expressway Co., Ltd.
+750,000,000
+60.00%
+59.71%
+Two or more operating segments can be merged as one if they have similar characteristics and satisfy
+certain conditions.
+Expressway operation,
+Taiyuan
+At the end of the reporting period, when measuring the insurance contract liabilities, the Group needs to
+make a reasonable estimate of amounts of the payments which the Group is required to make in fulfilling
+the obligations under the insurance contracts, based on information currently available at the end of the
+reporting period.
+(5) VALUATION OF INSURANCE CONTRACT LIABILITIES
+Ltd.
+(4) IMPAIRMENT OF AVAILABLE-FOR-SALE EQUITY INVESTMENTS
+The Group makes estimates and judgments that affect the reported amounts of revenues, expenses,
+assets and liabilities and the disclosure of contingent liabilities in these financial statements. Estimates and
+judgments are continually assessed based on historical experience and other factors, including expectations
+of future events that are believed to be reasonable under the circumstances.
+The Group considers that impairment provision is needed for an available-for-sale equity investment when
+there is a significant or prolonged decline in fair value of that security below its cost. Management exercises
+judgment when determining conditions that are considered 'significant or prolonged'. Refer to Note 3. (16)
+for the factors which the Group considers when making such judgment.
+(1) CLASSIFICATION OF FINANCIAL ASSETS
+Management makes significant judgments on the classification of financial assets. Different classifications
+would affect the accounting treatment and the Group's financial position and operating results, as
+described in Note 3. (11).
+(2) CLASSIFICATION AND UNBUNDLING/SEPARATION OF INSURANCE CONTRACTS AND
+SIGNIFICANT INSURANCE RISK TESTS
+The Group makes significant judgments on whether a written policy contains both an insurance component
+and a deposit component and whether the insurance component and deposit component are distinct and
+separately measurable. Such judgment affects the unbundling/separation of insurance contracts.
+The Group makes significant judgments on whether the contract transfers insurance risk, whether transfer
+of insurance risk has commercial substance, and whether the transferred insurance risk is significant when
+performing significant insurance risk tests. Such judgment affects the classification of insurance contracts.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+179
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+In the process of applying the Group's accounting policies, management has made the following judgments
+and accounting estimation, which have the most significant effect on the amounts recognized in the
+financial statements.
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2015
+The Group makes significant judgments on whether a group of insurance contracts' insurance risks are
+of the same nature. Different measurement units would affect the measurement of insurance contract
+liabilities.
+The unbundling/separation and classification of insurance contracts would affect the Group's revenue
+recognition, liability measurement and financial statement presentation.
+When performing significant insurance risk testing, the Group would group all policies of the same product
+with similar risk characteristics into the same portfolio. The Group would then select representative policy
+samples from each policy portfolio to perform individual testing.
+When determining whether a reinsurance policy transfers significant insurance risks, judgment is made
+on a comprehensive understanding of the commercial substance of the reinsurance policy and other
+relevant contracts and agreements. If the reinsurance risk ratio of the reinsurance policy is greater than
+1%, the Group classifies it as a reinsurance contract. The reinsurance risk ratio of a reinsurance policy is
+derived from the present value of probability-weighted average net losses where the reinsurer incurs a net
+loss divided by expected premium income of the reinsurer. If a reinsurance policy obviously transfers a
+significant insurance risk, the Group directly classifies it as a reinsurance contract without calculating the
+reinsurance risk ratio.
+(3) MEASUREMENT UNIT FOR INSURANCE CONTRACTS
+Annuity policies where the longevity risk is transferred are classified as insurance contracts;
+If the insurance risk ratio of a non-annuity policy is equal or greater than 5% at one or more points in
+time during the policy coverage period, the Group classifies it as an insurance contract. The insurance
+risk ratio of a direct insurance policy is the percentage of the benefits to be paid when the insured
+event occurs divided by the amounts to be paid when the insured event does not occur minus 100%;
+When determining whether the policies transfer a significant insurance risk, the Group makes the following
+judgments for different policies:
+(2) CLASSIFICATION AND UNBUNDLING/SEPARATION OF INSURANCE CONTRACTS AND
+SIGNIFICANT INSURANCE RISK TESTS (CONTINUED)
+If a property and casualty insurance or a short term life insurance policy obviously meets the criteria
+for significant insurance risk transfer, the Group directly classifies it as an insurance contract.
+Total
+Account
+Migration Source
+Lufax
+Wanlitong
+Pay
+One
+Ping An Management
+Services
+Other
+internet
+finance
+companies
+Ping An Life
+116
+118
+298
+216
+842
+Ping An Property & Casualty
+65
+729
+498
+248
+Migration Terminal
+94
+Migration person-times of internet users from core finance companies to internet finance
+companies (in ten thousand) (Table 3)
+133
+314
+80
+104
+19
+6
+83
+736
+Other internet finance
+companies
+Total
+42
+50
+17
+32
+13
+3
+31
+188
+589
+518
+171
+277
+83
+25
+1,977
+81
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Annuity
+Other core finance companies
+29
+95
+78
+125
+26
+353
+Total
+246
+1,023
+1,018
+672
+333
+3,292
+(1)
+(2)
+Migration refers to an online user of a company becoming an online user of another company through registration.
+Migration person-times refers to the times of migration; for example, one user's migration to two platforms is counted as
+two person-times.
+Other internet finance companies refer to PA Haofang, Ping An Health Cloud, etc.; other core finance companies refer to
+Ping An Direct, etc.
+(3)
+(4)
+Internet users of core finance businesses refer to users of online service platforms of Ping An Life, Ping An Property &
+Casualty, Ping An Bank, and Ping An Securities, etc., as well as users of these companies' mobile APPS.
+Annual Report 2015
+311
+31
+1,621
+5
+11
+3
+6
+9
+9
+4
+31
+Ping An Bank
+36
+54
+92
+23
+82
+287
+Ping An Securities
+13
+17
+32
+46
+19
+127
+Ping An Trust
+6
+4
+5
+Management Services
+1,016
+436
+Ping An has both horizontal and vertical
+migration of users and customers. Horizontal
+migration consists of user migration between
+the internet service platforms of core finance
+companies and internet finance companies,
+and customer migration among core finance
+companies. Tables 2-3 and Table 8 below show
+the data of horizontal migration. Through
+vertical migration, customers of core finance
+companies become internet users, and internet
+users become customers of core finance
+companies. For the data of vertical migration,
+please see Tables 6-7 below.
+INTERNET USER SCALE
+Ping An's internet finance businesses have
+constantly diversified daily-life service
+scenarios, centering around customer demands
+for “health, food, housing, transportation
+and entertainment". Ping An's core finance
+businesses have proactively promoted
+innovation of business models, constantly
+improved online platforms, and embedded
+finance in online daily-life services. After many
+years of deployment and efforts, Ping An has
+realized strong development of its internet
+businesses and rapid growth in its online user
+base in 2015. As at December 31, 2015, Ping
+An's online user base had grown to nearly 242
+million users, up by 75.9% compared with the
+beginning of 2015; the user base of internet
+finance companies had grown to 183 million.
+The number of online users hold products from
+Ping An's core finance companies including
+Ping An Life, Ping An Property & Casualty, and
+Ping An Bank, reached 57.12 million, up by 49.8%
+over the beginning of the year.
+With the maturity of mobile internet technology
+and the development of industry, Ping An
+strengthened its business layout catering to
+mobile internet service. As at December 31,
+2015, Ping An APP users reached 107 million,
+accounted for 44.4% of total internet users,
+while total APP users of internet finance
+companies reached 71.68 million.
+User Scale (Table 1)
+Internet User Scale
+(in ten thousand)
+December 31, December 31,
+2015
+2014
+The Group
+Services: They refer to financial services and
+services concerning "health, food, housing,
+transportation and entertainment” provided by
+Ping An Group's core finance companies and
+internet finance companies.
+24,157
+Internet finance companies
+Core finance companies
+18,258
+9,141
+13,217
+7,721
+APP User Scale
+(in ten thousand)
+December 31, December 31,
+2015
+2014
+The Group
+13,734
+Products: They refer to personal financial
+products being sold by Ping An Group's core
+finance companies.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+Ping An had nearly 109 million individual customers; its customer base
+expanded by 30.78 million in 2015, of which online clients and APP clients
+reached 57.12 million and 29.71 million respectively.
+Ping An has achieved significant customer migration, 33.9% of new customers
+of subsidiaries were from customer migration.
+Placing individual customers as its core,
+Ping An aims to achieve “one customer, one
+account, multiple services and products",
+keeps exploring and upgrading its customer
+operation model to improve customer services
+and experience. As at December 31, 2015, the
+number of individual customers of Ping An
+Group was nearly 109 million, up by 21.5% over
+the beginning of the year. Moreover, Ping An
+has constantly diversified daily-life service
+scenarios centered around customer demands
+for health, food, housing, transportation and
+entertainment, and embedded finance in online
+daily-life services. The accumulated registered
+users of Ping An Group approached 242 million,
+of which 107 million were APP registered users,
+up by 75.9% and 443.8% over the beginning of
+the year respectively.
+In the past, Ping An made brilliant
+achievements with its traditional integrated
+finance model for customer operation by
+"offering products first, then services". It has
+won wide customer recognition with its broad
+and quality financial products. In 2015, as its
+platform of internet financial services matured,
+Ping An proactively explored an innovative
+customer operation model of "offering services
+first, then multiple services, and then multiple
+products" and found that the customer
+experience would be better, and efficiency
+of customer migration and transformation
+would be higher after customer migration
+from offline to online with offering of Ping
+An's many financial and life essential services.
+via the internet platforms. Furthermore, Ping
+An accumulated broad-based internet users
+through operations of its platforms of internet
+financial services, enabled the users to get
+access to and fully understand its core financial
+services by offering many internet services
+and ultimately attracted them to be Ping An's
+customers.
+MIGRATION MODEL OF USERS AND
+CUSTOMERS
+Users of
+core finance
+companies
+(132 million)
+Customers of
+core finance
+companies
+(109 million)
+32.92 million person times
+19.77 million person times
+5.75 million users
+Online customers
+57.12 million
+(Including 29.71 million
+APP users)
+Users of
+internet finance
+companies
+(183 million)
+31.46 million customers
+12.35 million person times
+Customers of
+core finance
+companies
+(109 million)
+Users: They refer to internet users registered
+with the internet service platforms (websites
+and APPS) of Ping An Group's core finance
+companies and internet finance companies.
+Customers: They refer to individuals that held
+valid financial products of Ping An Group's core
+finance companies.
+Online customers: They refer to Ping An
+Group's customers having an account with its
+internet service platforms.
+10,719
+1,971
+Internet finance companies
+Core finance companies
+7,168
+44
+12
+24
+16
+5
+28
+174
+Wanlitong
+90
+169
+27
+52
+18
+Ping An Pay
+101
+122
+35
+65
+17
+65
+81
+443
+91
+45
+One Account
+Lufax
+Trust companies
+5,224
+1,179
+Note: Overall internet users and APP users of the Group
+include users of internet finance companies and core
+finance companies, with the elimination of repeated
+users.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+15
+OUR PERFORMANCE
+16
+Management Discussion and Analysis
+Users, Customers and Migration
+MIGRATION OF INTERNET USERS
+Ping An has stuck to the philosophy of "Technology-driven Finance", improved its online service
+platforms, promoted migration of internet users, strengthened the stickiness of internet users,
+and provided more users with one-stop services in diversified financial and daily-life scenarios. In
+2015, the scales of migration of Ping An's internet users continued to grow. The table below shows
+the migration of Ping An's internet users between its core finance companies and internet finance
+companies in 2015.
+Migration person-times of internet users from internet finance companies to core finance
+companies (in ten thousand) (Table 2)
+Migration Terminal
+Ping An
+Ping An Property &
+Ping An
+Life
+Casualty
+Annuity
+Ping An
+Bank
+Ping An
+Securities
+Ping An
+Other core
+finance
+Total
+Ping An had nearly 242 million online users and 107 million APP users.
+Migration Source
+9
+22,120
+in green credit
+MB 40,149,
+500
+for families of
+Phone bills paid
+families
+300
+Reunited during the
+spring festival
+with our help
+✓ Volunteer teaching at Hope Primary Schools
+RMB 350
+million
+hydroelectric projects
+A total of
+technology-enabled services
+left-behind children in Yunnan,
+users
+Guizhou, Sichuan and other regions
+hours
+famous doctors at
+3A hospitals
+3,000
+external doctors
+40,000
+Ping An Doctor has
+partnered with
+Partners
+claim payment rate
+satisfaction
+Ping An Life
+overall customer auto insurance
+Ping An Property & Casualty
+26%
+to monitor customer experience.
+We introduced the Net Promotion Score (NPS)
+Customer experience
+million
+Wanlitong serves nearly
+million
+million
+54 million
+Views over
+52,000
+trillion
+courses
+million
+million
+4.77
+RMB 43,321
+RMB9,943
+Total assets nearly
+RMB
+with 2014
+compared
++20.6%
+Up by
+in person time
+45
+Registered users of our internet finance platforms
+Society and environment
+over
+"Yiwallet "APP
+users
+30 million
+over
+users
+18.31 mill
+Lufax
+users
+30 million
+in 2015 with
+"Ping An Doctor" APP
+Ping An Life "E-service" APP
+62,979 ton
+Carbon emissions reduced Invested in
+As at December 31, 2015:
+1 million
+merchants cooperating
+in loyalty points
+RMB 6.5
+In 2015, net profit attributable to shareholders
+of the parent company was RMB54,203 million,
+representing a growth of 38.0% compared
+with 2014. As at December 31, 2015, equity
+attributable to shareholders of the parent
+company stood at RMB334,248 million while
+total assets of the Company was about RMB4.77
+trillion, representing increases of 15.4% and
+19.0%, respectively, compared with the end of
+2014.
+CONSOLIDATED RESULTS
+(in RMB million)
+Total income
+2014
+2015
+693,220
+530,020
+Including: Premium
+income
+386,012
+326,423
+(599,807) (467,667)
+Profit before tax
+Net profit
+93,413
+62,353
+65,178
+47,930
+In terms of the internet finance business, the
+Group continued to focus on the concept
+of "Technology-driven Finance". On one
+hand, the Company upgraded the model of
+integrated finance through internet, migrated
+offline customers to online, expanded service
+scale and improved service efficiency and
+experience. Meanwhile, focused on the daily
+needs for "health, food, housing, transportation
+and entertainment", the Company continued
+to improve its online platforms, provided
+various services and products, embedded
+financial business into online daily life services,
+and gradually drived horizontal migration, to
+achieve "one customer, one account, multiple
+services and products", ultimately becoming
+customers' "wealth manager, health advisor
+and life companion". As at December, 31, 2015,
+Ping An's internet users amounted to about 242
+million, up by 75.9% over the beginning of the
+year, maintaining rapid growth.
+Total expenses
+Annual Report 2015
+Annual Report 2015
+ABOUT US
+financial institutions
+93.7% 99.2%
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+11
+ABOUT US
+Management Discussion and Analysis
+Overview
+Net profit attributable to shareholders of the parent company reached
+RMB54,203 million, up by 38.0% compared to last year.
+Insurance business recorded stable and healthy growth, with total
+investment yield of insurance funds reaching a new high in recent years;
+Banking business accelerated strategic transformation and business mode
+innovation, and maintained stable and healthy growth; Trust business
+insisted on optimizing business structure and maintained stable growth;
+Ping An Securities' performance reached a record high.
+With co-development and maturing of “Integrated Finance + Internet"
+and "Internet + Integrated Finance", the Company focused on "health,
+food, housing, transportation and entertainment” to promote fast growth
+of the internet finance business with sustained improvement in our user
+experience.
+With diversified distribution channels and the
+aligned brand, we offer a variety of financial
+products and services through the three core
+financial business pillars of insurance, banking
+and asset management incorporating Ping An
+Life, Ping An Property & Casualty, Ping An
+Annuity, Ping An Health, Ping An Bank, Ping
+An Trust, Ping An Securities, Ping An Asset
+Management and Ping An Asset Management
+(Hong Kong) as well as the internet finance
+operations represented by Lufax, Ping An Pay
+and Wanlitong, PA Haofang, Ping An Health
+Cloud and Ping An Financial Technology.
+In 2015, China's economic ran in the reasonable
+range with new progress achieved in its
+economic restructuring amid complicated and
+changeable economic conditions. Aiming to
+become a world-leading personal financial
+services provider, the Company focused
+on industries of “big financial assets" and
+"big health care" and achieved maturing co-
+development of "Integrated Finance + Internet"
+and "Internet + Integrated Finance".
+In terms of core finance business, life
+insurance business recorded written premiums
+of RMB299,814 million, with the number
+of insurance sales agents approaching
+870 thousand. The value of new business
+continued to grow. Property and casualty
+insurance business achieved premium income
+of RMB163,955 million with a combined ratio
+of 95.6%. The business quality remained
+sound. The annuity business of Ping An
+Annuity maintained its market leadership.
+Net investment yield on insurance funds
+increased stably while total investment yield
+hit a record high in recent years. Ping An Bank
+continued to press ahead with restructuring
+and business model innovation and gradually
+developed the operating characteristics of
+"Specialization, Intensification, Integrated
+Finance, and Internet Finance". The image of
+"a bank of difference" for Ping An Bank was
+strengthened step by step. Ping An Trust
+continued to optimize business structure,
+refined its risk control system and maintained
+steady business growth. Ping An Securities saw
+its business performance hit a record high with
+significant results in the Company's strategic
+transformation. Ping An Asset Management's
+performance of investment was sound with fast
+development in its third-party business.
+12
+Ping An Insurance (Group) Company of China, Ltd.
+Net profit attributable
+to shareholders of
+the parent company
+Management Discussion and Analysis
+Users, Customers and Migration
+54,203
+1,151
+Net profit
+65,178
+47,930
+(1) The figures of trust business include Ping An Trust and
+its subsidiaries which carry on the business of investment
+and asset management.
+(2) Other businesses mainly include headquarters and other
+subsidiaries conducting asset management business,
+internet finance business and other businesses.
+For the detailed analysis of operation results
+by business line, please see the corresponding
+chapter as follows.
+Ping An Insurance (Group) Company of China, Ltd.
+13
+OUR PERFORMANCE
+14
+500
+Lufax has partnered
+with over
+loyalty points
+distributed during 2015
+billion
+6,892
+Other businesses and
+offsetted items (2)
+924
+2,478
+39,279
+NET PROFIT BY BUSINESS SEGMENT
+(in RMB million)
+Banking
+Trust (1)
+2015
+2014
+Life insurance
+18,992
+Over
+15,689
+12,522
+8,807
+21,382
+19,147
+2,912
+2,212
+Securities
+Property and casualty
+insurance
+Remuneration
+Ping An Group's NPS:
+ZhiNiao Learning APP
+On September 22, 2015, Yiwallet
+and Ping An Credit Card jointly
+launched the Ping An Yiwallet
+Huayang Credit Card, a historical
+innovation on credit card with
+the attribute of "Internet+".
+With such innovative features
+of "self-defined credits",
+"earning while spending",
+"spent but still earning" and
+"more expense, more to earn",
+Huayang Card provides users
+with one-stop solutions for
+wealth management, spending,
+withdrawal and receipt,
+equipping Yiwallet with both
+deposit management and
+consumer finance features and
+enriching the scenes of online
+and offline consuming.
+and health management
+services offered by a group of
+experienced doctors. It aims
+to address the complaints
+of patients on "difficulties
+on consultation, making
+appointments and seeing a
+doctor" and on "very short time
+of consultation" with smooth,
+excellent Online-To-Offline
+health management experience.
+management product. Positioned
+as a "mobile doctor", the
+innovative mobile application
+provides users the access
+to real-time consultations
+APP, its first online health
+On April 21, 2015, Ping An
+introduced "Ping An Doctor"
+its open platform strategy 3.0
+and moved to the new web
+domain lu.com.
+China's largest online wealth
+management platform, launched
+In September 2015, Lufax,
+不一样的壹钱包
+9.
+8.
+7.
+9
+8
+WEXTORE
+Ping An Securities reached a record high
+平安好医生
+in operating performance and made
+strategy. In 2015, it achieved a net profit of
+■ Active investment users of Lufax
+reached 3.63 million, up by nearly.
+10 times over the beginning of the
+year.
+■The accumulated registered users
+of Lufax reached 18.31 million, up
+by 257.6% over the beginning of the
+year.
+Internet finance
+business
+One Account Management Services strives
+to become the largest open internet
+financial service platform in China, and
+it offers account management, wealth
+management, credit management, and
+lifestyle management services to users.
+As at the end of 2015, One Account
+Management Services had 100 million
+registered users with over 18 million
+monthly active users, and assets under
+management exceeded RMB1 trillion.
+Ping An Health Cloud is dedicated to
+developing a one-stop, whole-process, 020
+health care services platform. It has built
+the largest team of full-time online doctors
+in China and successfully established a B2C
+and O20 medicine supply network. In 2015,
+the "Ping An Doctor" APP offered services
+to over 30 million users, establishing itself
+as the No.1 portal for online health care in
+China.
+Ping An Haofang recorded rapid growth
+with clear planning for its real estate
+finance platform. In 2015, it established
+strategic partnerships with dozens of
+top 100 developers including Shimao,
+Yurun and Country Garden. New house
+transactions through its platform exceeded
+RMB150 billion. Ping An Haofang's online
+platform had over 7 million registered users
+and offered new house channels for 51
+cities.
+Specializing in financial payment
+processing and loyalty points services, Ping
+An Pay and Wanlitong fully leveraged to
+their advantages in transaction payments
+and loyalty points management. As at
+the end of 2015, "Yiwallet", Ping An's core
+payment product, had a user base of over
+45 million; users of loyalty points business
+platform exceeded 96 million; the overall
+trading volume of payment processing and
+loyalty points businesses during the year
+reached RMB1.59 trillion.
+Benefits
+The insurance, banking and asset
+management businesses leveraged the
+internet to upgrade their business models,
+where the advantages of offline traditional
+financial services and efficient online
+services complemented each other. Ping An
+Life's "E-Service" APP user base reached
+30 million and the first insurance product
+of the APP was widely popular among
+customers. Ping An Property & Casualty
+introduced the "Ping An Auto Owner" APP,
+which pools the most extensive quality
+services resources to offer car owners
+one-stop car-related consumption services.
+Ping An Bank achieved online sales of over
+RMB600 billion through the "Hang-E-Tong"
+platform, and the number of "Orange Bank"
+users reached 5 million. Ping An Trust
+launched the Ping An "Cai Fu Bao" APP, the
+first mobile service terminal in the industry.
+In 2015, the monthly activity rate of high net
+wealth client reached 51%, the substitution
+rate of online service for high net wealth
+client achieved 47%. As the first batch of
+securities firms allowed to pilot internet
+business, Ping An Securities was top-ranked
+on the Top 100 Internet+ Securities Firms
+2015 by China Internet Weekly.
+As at December 31, 2015, Ping An's internet
+user base was about 242 million, up by
+75.9% over the beginning of the year; with
+the number of mobile terminal APP users
+reaching 107 million, increased by 4.4 times
+over the beginning of the year.
+While delivering impressive results
+in core finance businesses, we also
+embraced opportunities presented by
+the internet to drive rapid growth in
+innovative businesses. Our internet
+finance companies continued to develop
+strategies and sustained rapid growth in
+terms of business scales.
+Ping An Asset Management's business
+grew steadily and delivered outstanding
+performance in its third-party business. It
+recorded a net profit of RMB2,362 million,
+up by 141.8% compared with 2014. At the
+end of 2015, its assets under management
+reached RMB1,966,611 million, of which the
+scale of its third-party asset management
+business achieved RMB245,722 million, up
+by 45.1 % over the beginning of the year. Its
+income from third-party asset management
+was RMB1,389 million, up by 91.3% over the
+previous year.
+performance on the internet transformation,
+attracting 2.93 million new customers during
+the year, placing it among top three in the
+market on this front. Ping An Securities
+ranked among top three in the industry in
+terms of both number of IPOs and number
+of bond underwritten as lead underwriter.
+The assets under management amounted
+to RMB237 billion, with remarkable
+breakthroughs in asset securitization.
+with the previous year. Its securities
+brokerage business achieved great
+RMB2,478 million, up by 168.2% compared
+significant progress in executing its
+一个更开放的陆金所
+7
+Chairman's Statement
+Annual Report 2015
+assets under management reached
+RMB1,966,611 million, up by 20.5% over
+the beginning of the year; the scale
+of its third-party asset management
+business achieved RMB245,722 million,
+up by 45.1% over the beginning of the
+year.
+■ Ping An Asset Management's
+■Trust business recorded trust product
+management fee income of RMB5,157
+million, up by 25.1% compared with 2014.
+■ Ping An Securities achieved a net
+profit of RMB2,478 million, up by 168.2%
+as compared with the previous year.
+■ For Ping An Securities, the number of
+IPO projects was 12, and the number of
+bonds underwritten as lead underwriter
+was 52. The number of new customers
+of brokerage business reached 2.93
+million.
+■Trust business generated a net profit
+of RMB2,912 million, up by 31.6% over
+last year.
+Asset management
+business
+■ Capital adequacy ratio was 10.94%, and
+tier 1 capital adequacy ratio was 9.03%.
+■Total deposits reached RMB1,733,921
+million, up by 13.1% over the beginning
+of the year. Total loans and advances to
+customers were RMB1,216,138 million, up
+by 18.7% over the beginning of the year.
+■ Cost-to-income ratio was 31.31%, down
+by 5.02 percentage points over 2014.
+■The loan loss provision ratio was 2.41%,
+up by 0.35 percentage points over the
+beginning of the year. Non-performing
+loan ratio and provision coverage ratio
+were 1.45% and 165.86%, respectively.
+Banking business
+casualty insurance business reached.
+RMB163,955 million, up by 14.5% over 2014.
+■The combined ratio of property and
+casualty insurance business was 95.6%.
+■The investment portfolio of insurance
+funds reached RMB1,731,619 million, with
+the net investment yield reaching 5.8% and
+the total investment yield reaching 7.8%.
+■ For Ping An Life, written premiums of
+telemarketing sales reached RMB12,994
+million, up by 39.0% over 2014.
+■Premium income of property and
+■The number of individual life insurance
+sales agents was nearly 870 thousand,
+up by 36.9% over the beginning of
+the year. First-year written premiums
+per agent per month amounted to
+RMB7,236, up by 15.9% over last year.
+■New business value of life insurance
+achieved RMB30,838 million, grow by
+40.4% over last year.
+■Written premiums from life insurance
+business reached RMB299,814 million, up
+by 18.6% over the previous year. Written
+premiums from new business of individual
+life insurance reached RMB80,456 million,
+up by 50.9% over last year.
+Insurance business
+Life insurance business achieved stable
+and health growth. Property and casualty
+insurance business maintained its excellent
+performance in both business growth and
+quality. Ping An Annuity continued to lead
+the industry in pension asset management
+business. The investment yield of insurance
+funds increased steadily.
+Life insurance business achieved rapid and
+healthy growth. In 2015, written premiums from
+life insurance reached RMB299,814 million, up by
+18.6% over the previous year. With enhanced
+operation management platforms for all channels
+and product structure, the value of new business
+continued to grow by 40.4% over last year. The
+number of sales agents reached nearly 870
+thousand with increasing productivity, translated
+into a premium growth of 50.9% in the new
+business of individual life insurance, which reached
+a record high in recent years. The telemarketing
+business sustained rapid growth, cementing its
+leadership in terms of market share.
+Property and casualty insurance business maintained
+its leading position in business growth and quality.
+In 2015, property and casualty insurance business
+recorded a premium income of RMB163,955 million,
+up by 14.5% over 2014, and combined ratio was 95.6%,
+consistently above industry level. Its automobile
+insurance business launched the world's first direct-
+claim call service to further enhance claims service
+quality and efficiency, with over 50% of the claims
+during the year settled within 0.5 day from reporting
+to claim payment.
+Ping An Annuity continued to grow in short-
+term insurance, ranking high in the industry
+in terms of market share. It kept extending
+its lead in the corporate annuity market, with
+assets entrusted and assets under investment
+management standing at RMB127,226 million
+and RMB135,480 million, respectively, which
+maintained leading position among the annuity
+insurance companies of China. In 2015, Ping An
+Annuity proactively participated in the building
+of a government-sponsored health insurance
+system, and established an industry-leading
+"Smart Social Health Insurance" management
+and service system to help the government
+provide managed medical service.
+8
+Ping An Insurance (Group) Company of China, Ltd. 7
+In 2015, Ping An Trust launched
+the Hongcheng Family, the
+first wealth management
+brand in China which targets
+at high-net-worth customers
+with investable amount of
+over RMB30 million. Being
+built on four core advantages
+- integrated finance, asset
+allocation, inheritance bespoke
+plans and "1+N" integrated
+service the brand leverages its
+advanced system, open product
+platform and comprehensive
+customer services to provide
+high-net-worth customers with
+full internet finance services
+covering the demands for
+traditional finance as well as
+the needs for "health, food,
+housing, transportation and
+entertainment".
+In March 2015, Ping An Securities
+hosted the 1st Forum of
+CEOs of Listed Companies in
+Shenzhen. Chairmen from over
+100 listed companies, experts
+and scholars from many fields
+attended the forum, discussing
+the corporate development
+strategies amid the "New
+Normal" era. The Chairman and
+CEO of the Group, Mr. Mingzhe
+Ma, addressed in the meeting,
+expressing Ping An's wishes for
+further cooperation and joint
+development with the attending
+companies.
+chain finance model and set
+the trend for smart movable
+property-pledged financing.
+The technology has been
+successfully applied to the
+automobile and steel industries.
+With good planning for its loT
+Smart Warehouse Network
+across the country, Ping An
+Bank has built partnerships
+with about 100 main ports, large
+warehouse companies, large iron
+and steel manufacturers, and
+main regional logistics parks.
+On June 29, 2015, Ping An Bank
+launched the service of Internet
+of Things (IoT) Smart Finance
+which, by endowing movable
+property with the attributes
+of immovable property, has
+transformed the supply-
+5
+■Total trading volume of Lufax
+achieved RMB1,525.3 billion during
+the year, up by over 5 times over
+last year.
+PINDAN SECURITIES
+6.
+5.
+4.
+Continuously enhancing its risk control system,
+Ping An Trust reported stable growth. Ping An
+Securities reached a record high in its operating
+results. Ping An Asset Management experienced
+rapid growth in its third-party business.
+Our trust business maintained stable growth. In
+2015, it generated a net profit of RMB2,912 million,
+up by 31.6% over last year. In 2015, management
+fees income of trust products reached RMB5,157
+million, up by 25.1% compared with 2014.
+Continuously enhancing its comprehensive risk
+controls system to guard against project risks,
+Ping An Trust redeemed all trust schemes upon
+scheduled maturity in 2015.
+In 2015, Ping An Bank reported a net profit
+of RMB21,865 million, up by 10.4% over 2014. It
+maintained double-digit growth in both deposits
+and loans, which continued to lead its peers.
+With improved operating efficiency, its cost-to-
+income ratio dropped by 5.02 percentage points
+compared with last year. Ping An Bank exercised
+strict risk controls on new business to ensure
+stable asset quality, with its non-performing
+loan ratio and provision coverage ratio standing
+at 1.45% and 165.86% respectively. Ping An Bank
+successfully issued non-public ordinary shares
+in the first half of the year to support and
+safeguard its business development.
+Overall, banking business maintained its
+robust growth.
+With the optimized investment structure, the
+flexible allocation of equity assets and early
+deployment of fixed-income assets in the
+declining interest rate environment, the total
+investment yield of our insurance funds reached
+a record high in recent years. In 2015, the net
+investment yield of our insurance funds stood
+at 5.8%, 0.5 percentage points higher over the
+previous year; the total investment yield of our
+insurance funds was 7.8%, up by 2.7 percentage
+points over last year.
+平安证件
+■Sales volume of wealth management
+store of Yiwallet exceeded RMB100
+billion, up by 423.4% over last year.
+Lufax continued to promote itself
+towards an open platform for all financial
+institutions, corporates and individuals,
+thus matching supply with demand through
+the internet and striving to enhance the
+public wealth. As at the end of 2015, Lufax
+had 18.31 million registered users, and
+maintained its industry lead with a trading
+volume of RMB1.53 trillion during the year.
+by Wanlitong were worth RMB6.5
+billion, up by 232.0% compared with
+the previous year.
+■21st Century Media Co., Ltd. & 21st Century
+Business Herald
+Director of the Year Awards
+■The Hong Kong Institute of Directors
+Platinum Awards
+-
+3A Greater China Awards
+■The Asset (HK)
+Best CFO (Investor Relations)
+Best IR Company (China)
+Asian Excellence Recognition Award
+Best CEO (Investor Relations)
+■ Corporate Governance Asia (HK)
+Best IR in China region
+CORPORATE GOVERNANCE
+■Institutional Investor (US)
+China's Most Innovative Company
+The Outstanding Boards of Directors of China
+Listed Companies
+SOHU Finance
+China Enterprise Directors Association and
+China Enterprise Confederation
+Ranked No.10 by past one year of profit
+growth
+Ranked No.27 by past three years of net
+profits
+The FA100 Index 2015
+■FinanceAsia (HK)
+Best Managed Company Asia - Insurance
+Sector
+■ Euromoney (UK)
+Ranked No. 63 in "FT Global 500", 109 ranks
+higher than that of 2014
+Ranked No. 32 in "Forbes Global 2000"
+Financial Times (UK)
+■ Forbes (US)
+Ranked No. 96 in "Fortune Global 500"
+■ Fortune (US)
+STRENGTH
+Ranked No. 20 in China Top 500 List
+In 2015, Ping An continued to maintain a leading position
+in terms of brand value. Our comprehensive strength and
+efforts in corporate governance and corporate social
+responsibility have won us numerous accolades and awards
+at home and abroad from independent third parties such as
+rating agencies and the media.
+■China's Associate for Public Company
+CORPORATE SOCIAL RESPONSIBILITY
+■ The Economic Observer and The Management
+Case Research Center of Peking University (MCCP)
+Most Respected Company
+Employees
+RMB2.98
+per share of
+Basic earnings
+Economic benefits
+We adhere to the philosophy of "Expertise Creates Value". While delivering value to our shareholders,
+customers and employees, we are also concerned about social well-being and always fulfill our social
+responsibility, creating a win-win situation with all stakeholders. With the assist of internet, finance was
+integrated with life to bolster customer experience, and to let our customers enjoy health management and
+wealth increment induced by integrated finance and internet. Over the past years, we have continued our
+commitment to education, environment protection, volunteer services and other worthy causes. In response
+to hot social issues, we leverage internet platforms to deliver the 3.0 Era of charity, and encourage our
+employees and customers as well as the general public to participate in charity events. Ping An has thus
+received numerous honors and awards in recognition of its social contributions, among which are the “Most
+Respected Company in China" for the 14th consecutive year and the "Most Responsible Enterprise" for the
+9th consecutive year.
+Cherishing the idea of social commitment, we are dedicated to fulfilling our
+duties to our shareholders, living up to the trust of our customers, benefiting our
+employees and contributing, with gratitude to society.
+Corporate Social Responsibility
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+10
+Hurun Brand List: Rank No. 5 on "The Most
+Valuable Chinese Private Enterprise Brand"
+Hurun Report
+Most Respected Chinese Companies by
+Investors 100 - Top 10
+China Great-wall Advertising Awards -
+Advertiser Awards
+Ranked No. 6 in "2015 Best China Brands",
+continuously holding a leading position as the
+No. 1 brand in China's insurance industry
+■Interbrand
+Ranked No. 68 in "BrandZ Top 100 Global Brands"
+Ranked No. 11 in "BrandZ Top 100 Chinese
+Brand" the No. 1 in China's insurance industry
+■Millward Brown, WPP
+Ranked No. 96 in "The Global Brand Value
+Ranking" the only nominee among the
+global insurance brands
+-
+■ Eurobrand
+BRAND
+Annual Conference of Sustainable
+Competitiveness of Chinese Enterprises –
+Best Community Relations Award
+■The Chinese Institute of Business
+Administration and Beijing Rongzhi Corporate
+Social Responsibility Institute
+Project Hope 2015 Outstanding Contribution
+Award
+■The total loyalty points issued
+■ World Economic & Environmental Conference
+International Carbon Value Award - Social
+Citizen Award
+■ China Advertising Association
+Honors and Awards
+■China Youth Development Foundation
+Shenzhen, China
+Chairman and Chief Executive Officer
+Finally, on behalf of the Board of Directors
+and Executive Committee of Group, I would
+like to extend our sincere gratitude to our
+customers, investors, partners and friends
+from all walks of life, as well as to our
+colleagues who have worked wholeheartedly
+to fulfill our strategic goals and ambitions.
+In sync with the State's strategy, we have
+entered the Ping An 3.0 Era to build "open
+platform + open marketplace". With a sense
+of mission and crisis as strong as before,
+we will continue to "thrive in competition
+and advance through innovation". Adhering
+to our goal of becoming a "world-leading
+personal financial services provider", we will
+focus on the "big financial assets" and "big
+health care" industries with the two-pronged
+model of "Integrated Finance + Internet"
+and "Internet + Integrated Finance". For
+our insurance, banking, asset management
+and internet finance businesses, we will
+forge ahead with the building of open
+internet financial services platforms. We
+are convinced that through our concerted
+efforts and team spirit, Ping An will deliver an
+exceptional 3.0 Era!
+March 15, 2016
+■"Ping An Doctor" APP's highest daily
+active users surpassed 1.3 million,
+with daily peak consultation quantity
+surpassing 120 thousand.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Prospects
+Looking ahead to 2016, the macroeconomic
+environment will remain complex and
+present both challenges and opportunities.
+The weak global economic recovery is
+unlikely to pick up pace in a major way.
+Notwithstanding the downward pressure
+exerted by structural and cyclical factors,
+the fundamentals and reforms continue to
+support the stable growth of the Chinese
+economy. With 2016 marking the start of
+China's 13th Five-Year Plan, the further
+development of the "Internet+" strategy will
+create greater synergies between the internet
+and traditional industries. This paves the way
+to future businesses becoming more "mobile-
+based, specialized, social networking-driven,
+and scenario-specific". Service and customer
+experience will be of vital importance to
+market competition.
+3,571
+2,113
+3,327
+1,462
+2,535
+14,218
+(3,558)
+2,372
+56
+35
+178
+(3,123) 134,922
+9,946
+596
+125
+302
+8
+40,499
+(3,558)
+2,600
+6,165
+5,331
+29,961
+79 132,131
+132,052
+9,148
+103,408
+474
+income
+7,703
+328,895 152,723
+Total income
+(18,543)
+12,033
+447
+91
+3
+14
+5,955
+other income
+Including: Inter-segment
+Ping An Insurance (Group) Company of China, Ltd.
+33,643
+462
+655
+1,240
+167
+Share of profits and losses
+of associates and
+jointly controlled entities
+(61)
+45
+45
+(3,123)
+100
+28
+(365)
+(281)
+Other income
+8,476
+855
+(28)
+1,445
+(433) (10,525)
+-
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+6. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2015 and for the year then ended is as follows:
+(in RMB million)
+Gross written premiums
+Less: Premiums ceded to reinsurers
+Change in unearned
+premium reserves
+Net earned premiums
+Reinsurance commission income
+Interest income from banking
+operations
+Fees and commission income
+from non-insurance operations
+Including: Inter-segment fees and
+commission income
+from non-insurance
+operations
+Investment income
+Including: Inter-segment investment
+Life insurance
+Property
+and casualty
+insurance
+Banking
+Trust
+Securities Corporate
+Others Eliminations
+165,796
+Ping An Insurance (Group) Company of China, Ltd. 191
+349,846
+Annual Report 2015
+0.04%
+215,627 134,219
+(10,958)
+(25,208)
+(5,997) (19,211)
+386,012
+222,057 163,955
+Total
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+6. SEGMENT REPORTING
+190
+Business activities of the Group are first segregated by product and type of service: insurance activities,
+banking activities, trust activities, securities activities and corporate activities. Due to differences in the
+nature of products, risks and capital allocation, insurance activities are further divided into life insurance
+and property and casualty insurance. The types of products and services from which reportable segments
+derive revenue are listed below:
+The life insurance segment offers a comprehensive range of life insurance products to individual and
+corporate customers, including term, whole-life, endowment, annuity, investment-linked, universal life
+and healthcare insurance;
+The property and casualty insurance segment offers a wide variety of insurance products to individual
+and corporate customers, including automobile insurance, non-automobile insurance and accident and
+health insurance;
+The banking segment undertakes loan and intermediary businesses with corporate customers and retail
+business as well as wealth management and credit card services with individual customers;
+The trust segment provides trust services and undertake investing activities;
+The securities segment undertakes brokerage, trading, investment banking and asset management
+services; and
+The corporate segment includes the management and support of the Group's business through its
+strategy, risk, treasury, finance, legal, human resources functions, etc. The corporate segment derives
+revenue from investing activities.
+Management monitors the operating results of the Group's business units separately for the purpose of
+making decisions with regard to resources allocation and performance assessment. Segment performance is
+assessed based on indicators such as net profit.
+Transfer prices between operating segments are on an arm's-length basis in a manner similar to
+transactions with third parties.
+More than 95% of the Group's revenue is derived from its operations in Mainland China. More than 95% of the
+Group's non-current assets are located in Mainland China.
+During 2015 and 2014, the Group's top five customers in respect of total income are as follows:
+(in RMB million)
+Total income from top five customers
+Percentage of total income
+2015
+2014
+265
+660
+0.12%
+8,784
+26,858
+1,952
+8,611
+326,300
+8,693
+1,000
+5,000
+74,686
+(14,032) 410,258
+Assets sold under agreements
+to repurchase
+69,089
+12,639 11,000
+1,080
+18,958
+4,782
+1,688
+119,236
+Customer deposits and payables
+to brokerage customers
+1,733,921
+33,217
+(53,231) 1,713,907
+institutions
+Accounts payable
+Due to banks and other financial
+282,328
+57,598
+Investments in associates and
+jointly controlled entities
+8,947
+521
+2,120
+47
+Others
+Segment assets
+141,613 64,056 126,044
+1,641,802 249,123 2,511,811
+6,338
+11,404
+874
+9,232
+14,580
+(231)
+management product
+57,744
+(19,663) 396,768
+36,672
+93,753
+43,773
+(94,103) 4,765,159
+57,598
+44
+4,735
+20,195
+70,198
+13,243
+148,263
+10,806 242,571
+-
+33,028
+264,413
+(20,083) 260,878
+(88,329) 4,351,588
+Other segment information:
+Capital expenditures
+9,960
+628
+3,698
+33
+274
+12
+6,240
+(283)
+20,562
+Depreciation and amortization
+1,607
+563
+1,550,308 194,386 2,351,453
+4,691
+Segment liabilities
+13,425
+Insurance payables
+62,904 20,564
+(983) 82,485
+Insurance contract liabilities
+1,281,095
+138,863
+1,419,958
+Investment contract liabilities
+for policyholders
+42,558
+132
+42,690
+Policyholder dividend payable
+33,028
+Bonds payable
+26,536
+8,073 212,963
+3,598
+Others
+26,487 14,115 67,225
+10,422
+1,024
+10,119
+Finance lease receivable
+9,754
+(573)
+(37,484)
+(1)
+340
+(642) 1,027
+(251)
+281
+(3,567)
+(30,118)
+256
+(3,577)
+(4,923)
+Other expenses
+(1,740)
+(11,300)
+(222)
+(595)
+(565)
+(221)
+(219)
+(184)
+(672)
+Total expenses
+(296,148) (136,764) (137,581)
+(4,764)
+(6,965)
+Profit before tax
+(40,538)
+Income tax
+58
+Foreign exchange (losses)/gains
+General and administrative expenses
+Finance costs
+50,096
+(25,145) 693,220
+Claims and policyholders' benefits
+(213,373) (76,137)
+-
+(289,510)
+Commission expenses on insurance
+operations
+(34,823) (19,704)
+3,883
+(50,644)
+Interest expenses on banking
+operations
+(66,698)
+1,971 (64,727)
+Fees and commission expenses
+on non-insurance operations
+Loan loss provisions, net of reversals
+(2,740)
+(29,867)
+(408)
+(804)
+151
+(35,063)
+16,778
+Profit for the year
+32,747 15,959 28,215 4,020
+(13,755) (3,437) (6,833) (1,108)
+21,382 2,912
+Fixed maturity investments
+Equity investments
+1,014,552
+4,201
+100,430
+270,720 40,307
+Loans and advances to customers
+17,307
+Accounts receivable
+287,595
+711,389
+729
+1,189,107
+6,624
+-
+4
+93 33,669
+16,339 7,217
+14,608
+40,414
+(3) 299,689
+(3,284) 1,911,871
+8,880
+42,141
+(15,434) 370,899
+34,869
+4,088 1,245,371
+400
+7,892
+18,992 12,522
+and statutory deposits
+11,382 41,416 10,179
+(714) (20,869) 8,013 (135,155)
+(319) (4,349)
+251 (7,539)
+(35) (16,548) 10,376 (18,803)
+(728) (42,378) 25,521 (599,807)
+3,154 1,224 7,718
+376 93,413
+(676) (157) (2,269)
+(28,235)
+2,478
+1,067
+5,449
+376
+65,178
+192
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+6. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2015 and for the year then ended is as follows (continued):
+(in RMB million)
+Cash and amounts due from banks
+and other financial institutions
+Balances with the Central Bank
+Life insurance
+Property
+and casualty
+insurance
+Banking
+Trust
+Securities
+Corporate
+Others Eliminations
+Total
+180,771
+40,129
+189,802
+25,224 (59,576) 439,327
+Investment in wealth
+100.00%
+99.51%
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+Proportion of
+votes (%) (i)
+Registered/
+authorized capital
+(RMB unless
+otherwise stated)
+Shining Port Limited
+Hong Kong, Corporation Real estate investment,
+99.51%
+Principal activities and
+place of operation
+100.00%
+Visual King Limited
+Hong Kong
+Hong Kong, Corporation Real estate investment,
+Hong Kong
+Pingan Panhai Capital Co., Ltd.
+Shenzhen, Corporation
+Asset management,
+Shenzhen
+HKD1
+Place of incorporation
+and kind of legal entity
+Name
+(1) Particulars of the Group's principal subsidiaries as at 31 December 2015 are set out below: (continued)
+100.00% GBP63,100,100
+One Lime Street Company Limited (iii)
+Hong Kong, Corporation Real estate investment,
+Hong Kong
+99.51%
+100.00% GBP55,600,830
+Talent Bronze Limited (iii)
+Hong Kong, Corporation Real estate investment,
+Hong Kong
+99.51%
+100.00%
+GBP133,000,000
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+187
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+99.51%
+99.51%
+100.00%
+96.55%
+Shanghai Jahwa (Group) Company Ltd.
+('Shanghai Jahwa')
+Shanghai, Corporation
+Production and sale of
+99.88%
+100.00%
+268,261,234
+consumer chemicals,
+Guangzhou
+Shanghai
+Industry, Shanghai
+29.86%
+29.90%
+674,032,111
+Shanghai Zean Investment
+Shanghai, Corporation
+Management Company Limited
+Shanghai Jahwa United Co., Ltd. (iii) (vi) Shanghai, Corporation
+Investment Co., Ltd.
+50,000,000
+100.00%
+100.00%
+1,000,000,000
+Shenzhen Pingke Information
+Consulting Co., Ltd.
+Shenzhen, Corporation
+Management consulting,
+Shenzhen
+100.00%
+100.00%
+1,600,000,000
+Beijing Jingping Shangdi Investment
+Co., Ltd.
+Beijing, Corporation
+Commercial real estate
+leasing, Beijing
+99.51%
+100.00%
+45,000,000
+Guangzhou Xinping Property
+Guangzhou, Corporation Property leasing,
+99.51%
+HKD1
+Hong Kong, Corporation Real estate investment,
+Hong Kong
+Anbon Delight Company Limited (iii)
+GBP160
+100.00%
+HKD200,000,000
+and brokerage,
+Hong Kong
+Ping An Wealth Management Co., Ltd.
+Shanghai, Corporation
+Consulting services,
+96.55%
+99.88%
+50,000,000
+Shanghai
+Ping An Financing (Tianjin) Guarantee
+Co., Ltd. (iii)
+Tianjin, Corporation
+Financing guarantee,
+Tianjin
+100.00%
+100.00%
+100.00%
+Hong Kong, Corporation Securities investment
+(Hong Kong) Company Limited
+Ping An of China Securities
+2,404
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Group's principal subsidiaries as at 31 December 2015 are set out below: (continued)
+Place of incorporation
+and kind of legal entity
+Principal activities and
+place of operation
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+Registered/
+authorized capital
+Proportion of
+votes (%) (i)
+(RMB unless
+otherwise stated)
+Shenzhen, Corporation
+Equity investment,
+Shenzhen
+96.55%
+100.00%
+600,000,000
+Name
+Ping An Caizhi Investment Management
+Company Limited
+1,250,000,000
+Shenzhen Pingan Real Estate Industrial
+Logistics Company Limited (iii)
+Shenzhen, Corporation
+Logistics, Shenzhen
+500,000,000
+Hangzhou Pingjiang Investment
+Co., Ltd. (iii)
+Hangzhou, Corporation
+Real estate development,
+Hangzhou
+99.51%
+100.00%
+1,600,000,000
+Beijing Jingxinlize Investment Co., Ltd.
+Beijing, Corporation
+Real estate investment,
+Beijing
+99.51%
+100.00%
+1,160,000,000
+Anbon Allied Investment Company
+Limited
+Hong Kong, Corporation Real estate investment,
+Hong Kong
+99.51%
+100.00%
+100.00%
+Asset management,
+Shanghai
+99.65%
+Hangzhou, Partnership
+99.65%
+100.00%
+2,000,000,000
+Beijing Shuangronghui Investment
+Co., Ltd.
+Beijing, Corporation
+Real estate investment,
+Beijing
+99.51%
+100.00%
+256,323,143
+Chengdu Ping An Property Investment
+Company Co., Ltd.
+Chengdu, Corporation
+Real estate investment,
+99.51%
+100.00%
+840,000,000
+Chengdu
+Hangzhou Pingan Pension Industry
+Equity Investment Partnership
+Enterprise (Limited Partnership)
+Investment management,
+Hangzhou
+99.51%
+100.00%
+4,810,000,000
+Paid-in capital
+Name
+Huabao East Aggregated Fund
+Trust Scheme
+Attributable
+equity interest
+98.85%
+(RMB)
+(2) As at 31 December 2015, the Company consolidated the following principal structured entities:
+Principal activities
+Investment in debts
+Shanghai Trust Changcheng
+59.71%
+10,000,000,000 Investment in debts.
+Aggregated Fund
+Management Scheme
+Ping An Asset Xinxiang No. 10
+Assets Management
+12,000,000,000
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+(i) The above disclosed equity holdings are the sum product of direct holdings and indirect holdings.
+(ii)
+In 2015, Ping An Bank's profit attributable to its non-controlling interest was RMB8,896 million (2014: RMB7,850 million), the dividend
+paid to its non-controlling interest was RMB815 million (2014: RMB625 million). As at 31 December 2015, Ping An Bank's equity
+attributable to its non-controlling interest was RMB67,351 million (2014: RMB53,404 million). Ping An Bank's summarised financial
+information is disclosed in 'Segment reporting' under the 'Banking' segment.
+(iii)
+The paid-in capital of these subsidiaries was increased in 2015.
+(iv)
+These entities were newly established or acquired in 2015.
+(v)
+(vi)
+In 2012, the parent of this company, Shenzhen Ping An New Capital Investment Co., Ltd. signed a forward contract transferring
+beneficial rights associated with part of the equity interests in this company to a third party when certain conditions are met in
+future, while retaining full rights of control, such as voting rights.
+Shanghai Jahwa has de facto control over this entity. The Group acquired Shanghai Jahwa in 2012 and consequently included
+Shanghai Jahwa United Co., Ltd. in the scope of consolidation.
+Other than the changes above, there are no significant changes to the scope of consolidation in 2015 as
+compared to 2014.
+The Company and its subsidiaries are subject to the PRC Company Law as well as various listing
+requirements, where applicable. Capital or asset transactions between the Company and its subsidiaries
+might be subject to regulatory requirements. Certain of the Company's subsidiaries are subject to
+regulatory capital requirements. As such, there are restrictions on the Group's ability to access or use the
+assets of these subsidiaries to settle the liabilities of the Group. Please refer to Note 47. (7) for detailed
+disclosure on the relevant regulatory capital requirements.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+189
+FINANCIAL STATEMENTS
+99.51%
+9,856,152,089
+Investment in wealth
+management product
+Shanghai Trust Huarong Aggregated
+Fund Management Scheme
+5,164,472,000
+Investment in debts.
+Ping An Asset Xinxiang No. 14
+99.51%
+5,001,000,000
+Assets Management Scheme
+Investment in wealth
+management product
+Jinyao Aggregated Fund Trust Scheme
+99.51%
+4,090,000,000
+Investment in beneficial
+right of equity
+Ping An Asset Xinxiang No. 11
+Assets Management Scheme
+99.51%
+3,050,198,071
+Investment in wealth
+management product
+Ping An Asset Xinxiang No. 1
+Assets Management Scheme
+99.51%
+Notes:
+Investment Project Single
+Fund Trust Scheme
+Investment in debts.
+99.51%
+9,500,000,000
+Investment in debts
+Ping An Asset Xinxiang No. 9
+Assets Management
+99.51%
+6,950,744,160
+Investment in wealth
+management product
+Ping An Asset Xinxiang No. 6
+99.51%
+6,662,446,409
+Investment in wealth
+Assets Management
+management product
+Liying No. 22 Aggregated Fund
+Trust Scheme
+83.58%
+5,000,000,000
+Ping An Kunyibo Expressway
+3,000,000,000
+100,000,000
+Investment platform,
+Shenzhen
+99.99%
+100.00%
+10,000,000
+188
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+Asset management,
+Shanghai
+(1) Particulars of the Group's principal subsidiaries as at 31 December 2015 are set out below: (continued)
+Place of incorporation
+Name
+and kind of legal entity
+Principal activities and
+place of operation
+ordinary shares
+directly held by
+the Group (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+Proportion of
+votes (%) (i)
+Proportion of
+Shanghai, Corporation
+Shanghai PingXin Asset Management
+Co., Ltd. (iv)
+1,815,000,000
+Shanghai Pingan Automobile
+E-commerce Co., Ltd. (iii)
+Shanghai, Corporation
+E-commerce, Shanghai
+94.73%
+94.74%
+63,330,000
+Shanghai Gezhouba Yangming
+Property Co., Ltd. (iv)
+Shanghai, Corporation
+Real estate investment,
+Shanghai
+99.51%
+100.00%
+20,000,000
+Shanghai Jinyao Investment
+Management Co., Ltd. (iv)
+Shanghai, Corporation
+Investment management,
+Shanghai
+98.36%
+98.84%
+Registered/
+authorized capital
+(RMB unless
+otherwise stated)
+Shenzhen Qianhai Credit Service Centre
+Co., Ltd. (iv)
+Shenzhen, Corporation
+Information services,
+Shenzhen
+Hong Kong
+Shenzhen Qianhai Inclusive
+Shenzhen, Corporation
+Private equity financing,
+54.14%
+55.00%
+100,000,000
+Crowdfunding & Trading Co., Ltd. (iv)
+Shenzhen
+Pingan Chuangke (Shenzhen) Investment Shenzhen, Corporation
+Management Co., Ltd. (iv)
+Investment management,
+Shenzhen
+99.83%
+100.00%
+100,000,000
+Lianxin (Shenzhen) Investment
+Shenzhen, Corporation
+Management Co., Ltd. (iv)
+USD505,000,000
+99.83%
+100.00%
+Hong Kong, Corporation Project investment,
+99.99%
+100.00%
+50,000,000
+Pingan Real Estate Capital Limited (iv)
+Hong Kong, Corporation Financing platform,
+99.65%
+100.00%
+USD100,000,000
+Hong Kong
+Gem Alliance Limited (iv)
+('Puhui Limited')
+Cayman Islands,
+Corporation
+Project investment,
+100.00%
+100.00%
+USD505,000,002
+Cayman Islands
+Harmonious Splendor Limited (iv)
+100.00%
+30
+Annual Report 2015
+12
+(in RMB million)
+Cash and amounts due from banks
+Property
+and casualty
+Life insurance
+insurance
+Banking
+Trust
+Securities
+Corporate
+Others Eliminations
+Total
+and other financial institutions
+202,377
+54,322
+116,969
+3,651
+19,191
+26,214
+16,441
+(40,680) 398,485
+Balances with the Central Bank
+The segment analysis as at 31 December 2014 and for the year then ended is as follows (continued):
+and statutory deposits
+6. SEGMENT REPORTING (CONTINUED)
+Annual Report 2015
+1,514
+311
+Income tax
+(3,590)
+(3,173)
+(6,191)
+(572)
+(240)
+(657)
+62,353
+(14,423)
+Profit for the year
+15,689
+8,807
+19,147
+2,212
+924
+(17)
+857
+311
+47,930
+194
+Ping An Insurance (Group) Company of China, Ltd.
+7,789
+3,800
+302,139
+9,925
+5,058
+14,983
+Finance lease receivable
+37,908
+37,908
+Investments in associates and
+jointly controlled entities
+7,230
+486
+2,467
+154
+3,160
+(599) 12,898
+Others
+120,870
+54,143
+96,330
+8,546
+11,730
+11,080
+Accounts receivable
+9,162 1,053,882
+18,147
+1,016,642
+3
+(3) 313,728
+Fixed maturity investments
+842,436
+70,429
+659,470
+135
+27,750
+17,182
+5,259
+(17)
+(13,925) 1,608,736
+191,705
+9,657
+488
+21,907
+3,207
+7,567
+12,092
+(4,933) 241,690
+Loans and advances to customers
+9,920
+Equity investments
+32,112
+1,164
+25,338
+2,065
+25,920
+(17,089) 530,020
+Claims and policyholders' benefits
+(165,154) (63,172)
+(228,326)
+Commission expenses on insurance
+operations
+(22,797) (15,450)
+3,306
+(34,941)
+Interest expenses on banking
+operations
+(66,345)
+1,818
+(64,527)
+Fees and commission expenses
+on non-insurance operations
+(2,328)
+Loan loss provisions, net of reversals
+(14,614)
+4,026
+(781)
+46
+6,557
+242,222 124,152
+596
+217
+626
+29
+12
+(70)
+(62)
+389
+78
+19,743
+(11,464) 16,737
+Including: Inter-segment
+other income
+4,410
+21
+1
+91
+369
+6,572
+(11,464)
+Total income
+142,167
+(212)
+(659)
+750
+49
+(6,974)
+Other expenses
+(9,407)
+(280)
+(411)
+(221)
+(46)
+(4)
+(7,913)
+5,983 (12,299)
+Total expenses
+(222,943) (112,172) (116,829)
+(3,773)
+(2,862)
+(2,082)
+(24,406)
+17,400 (467,667)
+Profit before tax
+19,279
+11,980
+(2,655)
+(1,489)
+(483)
+(647)
+(3,230)
+(46)
+(14,614)
+Foreign exchange (losses)/gains
+(49)
+(4)
+(388)
+96
+154
+(191)
+2,784
+General and administrative expenses
+(33,028)
+(32,743)
+(2,170) (2,121)
+(685)
+(13,287)
+5,494
+(102,565)
+Finance costs
+(1,511)
+(238)
+(24,025)
+(11,210) 323,601
+Segment assets
+1,382,327
+Short term life business gross written premiums
+16,731
+12,417
+Property and casualty business gross written premiums
+163,955
+143,150
+Gross written premiums
+386,012
+326,423
+(in RMB million)
+Gross written premiums
+Life insurance
+2015
+2014
+Individual life insurance
+Bancassurance
+Group life insurance
+195,445
+159,584
+12,919
+13,837
+170,856
+13,693
+205,326
+2014
+Ping An Insurance (Group) Company of China, Ltd. 195
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+7. GROSS AND NET WRITTEN PREMIUMS
+(in RMB million)
+2015
+2014
+Gross written premiums and premium deposits
+463,769
+395,880
+Less: Premium deposits of policies without significant insurance
+risk transfer
+(5,174)
+(4,784)
+Premium deposits separated out from universal life and
+investment-linked products
+(72,583)
+(64,673)
+Gross written premiums
+386,012
+326,423
+(in RMB million)
+2015
+Long term life business gross written premiums
+9,852
+222,057
+183,273
+13,813
+13,047
+9,775
+216,060
+178,653
+Property and casualty insurance
+Automobile insurance
+117,747
+96,176
+Non-automobile insurance
+22,928
+23,736
+Accident and health insurance
+4,069
+3,198
+144,744
+123,110
+Net written premiums
+360,804
+301,763
+196
+12,885
+155,065
+190,128
+2014
+Property and casualty insurance
+Automobile insurance
+131,117
+110,667
+Non-automobile insurance
+28,739
+29,257
+Accident and health insurance
+4,099
+3,226
+Annual Report 2015
+163,955
+386,012
+326,423
+Gross written premiums
+(in RMB million)
+Net of reinsurance premiums ceded
+Life insurance
+Individual life insurance
+Bancassurance
+Group life insurance
+2015
+143,150
+24,896
+619
+40
+Accounts payable
+1,533,183
+1,883
+14,899
+(37,634) 1,510,448
+838
+2,721
+Insurance payables
+50,627
+15,861
+(828)
+65,660
+Insurance contract liabilities
+1,091,033 115,783
+1,206,816
+Investment contract liabilities
+for policyholders
+38,106
+224
+38,330
+Policyholder dividend payable
+28,673
+to brokerage customers
+Customer deposits and payables
+99,672
+342
+192,351 2,202,449
+36,717
+61,878
+62,197
+130,180
+(62,188) 4,005,911
+Due to banks and other financial
+institutions
+5,589
+401,756
+28,673
+7,528
+7,170
+39,242
+(6,779) 456,153
+Assets sold under agreements
+to repurchase
+55,623
+1,200
+22,568
+2,730
+17,209
+1,647
+6,601
+Bonds payable
+5,663
+28
+98
+5
+1,663
+(74) 14,394
+Depreciation and amortization
+1,469
+507
+2,278
+27
+84
+9
+1,057
+(43)
+5,388
+Total other non-cash expenses
+charged to consolidated results
+8,841
+292
+15,011
+93
+4,355
+492
+7,827
+Capital expenditures
+41,750
+2,996
+9,131
+7,244
+88,119
+Others
+13,117
+11,999
+71,056
+14,427
+21,335
+14,929
+33,402
+(4,456) 155,503
+Segment liabilities
+1,304,103 150,730 2,072,196
+24,685
+51,680
+17,330
+81,068
+(49,697) 3,652,095
+Other segment information:
+1,029
+Other income
+(18,543) 26,955
+Corporate
+966
+Reinsurance commission income
+288,779
+109,610
+179,169
+Net earned premiums
+6,997
+(12,984)
+(13,499)
+515
+premium reserves
+Change in unearned
+(24,660)
+(20,041)
+.....
+(4,619)
+7,963
+operations
+6
+340
+operations
+from non-insurance
+commission income
+Including: Inter-segment fees and
+Interest income from banking
+from non-insurance operations
+2,214
+4,294
+19,772
+51 119,422
+119,371
+Fees and commission income
+2,631
+2,922
+Less: Premiums ceded to reinsurers
+143,150
+Annual Report 2015
+36,548
+1,363
+18
+34
+(5)
+Ping An Insurance (Group) Company of China, Ltd. 193
+30,485
+3,618
+charged to consolidated results
+Total other non-cash expenses
+5,962
+(22)
+1,290
+1,035
+326,423
+FINANCIAL STATEMENTS
+For the year ended 31 December 2015
+183,273
+Gross written premiums
+Total
+Eliminations
+Others
+Securities
+Notes to Consolidated Financial Statements
+Trust
+insurance
+Life insurance
+(in RMB million)
+Property
+and casualty
+The segment analysis as at 31 December 2014 and for the year then ended is as follows:
+6. SEGMENT REPORTING (CONTINUED)
+Banking
+(3,268)
+(3,268) 25,643
+55,486
+Investment income
+(24)
+28
+controlled entities
+associates and jointly
+(2,408)
+236
+3
+37
+35
+82
+Share of profits and losses of
+investment income
+Including: Inter-segment
+(2,408) 71,538
+3,616
+1,672
+1,783
+1,661
+2,779
+2,015
+6,949
+4,035
+Fees and commission income from non-insurance operations
+Brokerage fees
+2014
+2015
+(in RMB million)
+9. NET FEES AND COMMISSION INCOME FROM NON-INSURANCE
+OPERATIONS
+64,527
+54,895
+67,404
+64,727
+1,649
+1,385
+5,486
+The interest income accrued on impaired financial assets during the year 2015 amounted to RMB406 million
+(2014: RMB313 million).
+Ping An Property & Casualty
+3,634
+(in RMB million)
+244,744
+5,540
+6,221
+46,910
+49,238
+36,063
+Ping An Life
+1,936
+11,589
+299,689
+313,728
+In accordance with relevant regulations, subsidiary of bank operations is required to place mandatory
+reserve deposits with the People's Bank of China (the 'PBOC') for customer deposits in both RMB and
+foreign currencies. As at 31 December 2015, the mandatory deposits are calculated at 15% (31 December
+2014: 18%) of customer deposits denominated in RMB and 5% (31 December 2014: 5%) of customer deposits
+denominated in foreign currencies. Mandatory reserve deposits are not available for use by the Group in its
+day to day operations.
+Statutory deposit for insurance operations can only be utilized to settle liabilities during liquidation of
+insurance companies.
+Details of statutory deposits for insurance operations are as follows:
+12,093
+42,146
+Interest expenses on banking operations
+17,032
+231,512
+Ping An Health
+Ping An Chuang Zhan
+31 December 2015
+31 December 2014
+6,760
+6,760
+4,200
+3,800
+972
+872
+160
+157
+1
+12,093
+11,589
+Statutory deposits for insurance operations are placed with PRC banks in accordance with the PRC
+Insurance Law and relevant regulations based on not less than 20% of the registered capital for the
+insurance company subsidiaries and 5% of the registered capital for insurance sales agency subsidiaries
+within the Group, respectively.
+37
+63
+Net interest income from banking operations
+Subtotal
+Bonds payable
+Customer deposits
+26,778
+Due to financial institutions
+Ping An Annuity
+119,422
+132,131
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+206
+Due to the Central Bank
+250,965
+Surrenders
+31 December 2014
+45,841
+76,636
+137,369
+190,340
+4,168
+211,107
+4,125
+168,226
+31 December 2014
+31 December 2015
+Placements with banks and other financial institutions
+Due from banks and other financial institutions
+Term deposits
+Cash on hand
+(in RMB million)
+18. CASH AND AMOUNTS DUE FROM BANKS AND OTHER FINANCIAL
+INSTITUTIONS
+17,164
+2.34
+2.98
+18,189
+Profit used to determine diluted earnings per share
+54,214
+40,138
+Weighted average number of ordinary shares (million shares)
+Weighted average number of ordinary shares in issue
+Adjustments for:
+18,182
+15,924
+439,327
+Assumed conversion of convertible bonds
+Weighted average number of ordinary shares for diluted
+earnings per share
+Diluted earnings per share (in RMB)
+4
+1,240
+3
+· Assumed vesting of share purchase scheme
+237,052
+398,485
+(in RMB million)
+31 December 2015
+Other deposits with the Central Bank
+Statutory deposits for insurance operations
+Unrestricted deposits with the Central Bank
+banking operations-Foreign Currency
+- Statutory reserve deposits with the Central Bank for
+banking operations-RMB
+Statutory reserve deposits with the Central Bank for
+Statutory reserve deposits with the Central Bank for
+banking operations
+(in RMB million)
+19. BALANCES WITH THE CENTRAL BANK AND STATUTORY DEPOSITS
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 205
+Annual Report 2015
+As at 31 December 2015, cash and amounts due from overseas banks and other financial institutions
+amounted to RMB21,478 million (31 December 2014: RMB15,302 million).
+As at 31 December 2015, cash and amounts due from banks and other financial institutions of RMB672 million
+(31 December 2014: RMB233 million) were restricted from use.
+Placements with banks
+Placements with other financial institutions
+Gross
+Less: Provision for placements with banks and other financial
+institutions
+Net
+31 December 2015
+Details of placements with banks and other financial institutions are as follows:
+31 December 2014
+565
+43,708
+2,157
+76,660
+(24)
+76,636
+(24)
+45,841
+Underwriting commission income
+76,095
+859
+1,215
+473
+542
+Derivative financial instruments
+Carried at fair value through profit or loss
+Gain on disposal of bills
+Income from precious metal transactions
+307
+2,378
+534
+213
+49,100
+9,871
+(151)
+2,546
+Note: This refers to gains/(losses) from disposals of subsidiaries, associates and jointly controlled entities.
+(3) UNREALIZED GAINS
+(in RMB million)
+Fixed maturity investments
+-
+Carried at fair value through profit or loss
+Equity investments
+Carried at fair value through profit or loss
+Derivative financial instruments
+Carried at fair value through profit or loss
+(4) IMPAIRMENT LOSSES
+(in RMB million)
+Fixed maturity investments
+5,405
+-
+· Subsidiaries, associates and jointly controlled entities (Note)
+1,725
+90,512
+70,337
+198
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+10. INVESTMENT INCOME (CONTINUED)
+(2) REALIZED GAINS FROM DISPOSAL
+(in RMB million)
+Fixed maturity investments
+Available-for-sale
+· Carried at fair value through profit or loss
+- Loans and receivables
+2015
+2014
+1,245
+(285)
+585
+309
+582
+41
+Equity investments
+Available-for-sale
+36,339
+6,517
+Carried at fair value through profit or loss
+139
+· Held-to-maturity
+- Loan and receivables
+Equity investments
+Sales of goods of Shanghai Jahwa
+Management income from investment-linked products and
+income from investment contracts
+Expressway toll fee income
+Annuity management fee income
+Consulting income
+Finance lease income
+Income from financial guarantees
+Income from customer loyalty program
+Others
+12. CLAIMS AND POLICYHOLDERS' BENEFITS
+(1)
+2015
+2014
+5,854
+5,306
+1,407
+1,424
+1,126
+1,066
+602
+365
+1,368
+621
+3,750
+(in RMB million)
+11. OTHER INCOME
+For the year ended 31 December 2015
+Claims and claim adjustment expenses
+· Available-for-sale
+Total
+2015
+2014
+6
+283
+214
+464
+(95)
+(132)
+125
+615
+(3,383)
+2015
+(1,425)
+(1)
+(2,315)
+(350)
+(1,075)
+(8,934)
+(4,815)
+(9,285)
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 199
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+2014
+2,357
+(3,069)
+1,487
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+10. INVESTMENT INCOME
+(in RMB million)
+Net investment income
+Realized gains from disposal
+Unrealized gains
+Impairment losses
+Total investment income
+Investment income from listed investments
+Investment income from unlisted investments
+Total investment income
+(1) NET INVESTMENT INCOME
+(in RMB million)
+Interest income from non-banking operations on fixed maturity
+investments
+Bonds and debt schemes
+- Held-to-maturity
+- Available-for-sale
+-
+Carried at fair value through profit or loss
+-
+- Loans and receivables
+Term deposits
+- Loans and receivables
+FINANCIAL STATEMENTS
+Current accounts
+197
+Annual Report 2015
+Trust service fees income
+4,794
+3,503
+Fees and commission income from the banking business
+Others
+29,763
+19,770
+692
+512
+Subtotal
+40,499
+25,643
+Fees and commission expenses on non-insurance operations
+Brokerage fees paid
+742
+164
+Fees and commission expenses on the banking business
+Others
+2,730
+2,320
+95
+746
+Subtotal
+3,567
+3,230
+Net fees and commission income from non-insurance operations
+36,932
+22,413
+Ping An Insurance (Group) Company of China, Ltd.
+2015
+90,512
+49,100
+727
+1,073
+Carried at fair value through profit or loss
+39
+44
+- Loans and receivables
+7,900
+4,485
+Dividend income on equity investments
+Securities investment funds
+Available-for-sale
+11,996
+3,026
+-
+Carried at fair value through profit or loss
+1,356
+980
+Equity securities and other equity investments
+Available-for-sale
+-
+- Carried at fair value through profit or loss
+5,827
+5,397
+172
+94
+Operating lease income from investment properties
+Interest expenses on assets sold under agreements to
+repurchase and placements from banks and other
+financial institutions
+- Available-for-sale
+Others
+797
+475
+2014
+70,337
+9,871
+125
+(4,815)
+615
+(9,285)
+134,922
+71,538
+52,225
+35,938
+82,697
+35,600
+1,411
+134,922
+2015
+2014
+28,469
+7,399
+317
+15,310
+27,818
+6,060
+202
+10,809
+11,785
+11,846
+- Loans and receivables
+71,538
+11
+45,865
+39,279
+7,780
+720
+1,184
+1,015
+3,884
+Provision for doubtful debts, net
+Provision for loans, net
+2015
+54,261
+2014
+41,598
+23,517
+16,977
+1,128
+740
+2,922
+2,533
+1,912
+1,932
+3,863
+658
+26,955
+2015
+(372)
+6,156
+Property and casualty insurance claims
+73,569
+(10,398)
+63,171
+242,454
+(14,128)
+228,326
+13. PROFIT BEFORE TAX
+(1) PROFIT BEFORE TAX IS ARRIVED AT AFTER CHARGING/(CREDITING) THE FOLLOWING
+ITEMS:
+(in RMB million)
+Employee costs (Note 13. (2))
+Interest expenses on policyholder contract deposits and
+investment contract reserves
+Depreciation of investment properties
+Depreciation of property and equipment
+Amortization of intangible assets
+(in RMB million)
+16,737
+310
+30,118
+14,614
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+14. INCOME TAX
+(in RMB million)
+2015
+2014
+Current income tax
+Charge for the year
+28,578
+21,962
+- Adjustments in respect of current income tax of previous years
+Deferred income tax
+(215)
+(407)
+(128)
+(7,132)
+28,235
+14,423
+Certain subsidiaries enjoy tax preferential treatments. These subsidiaries are not material to the Group.
+Except for those subsidiaries enjoying tax preferential treatments, the applicable corporate income tax rate
+for 2015 for the Group was 25%.
+Ping An Insurance (Group) Company of China, Ltd. 201
+Annual Report 2015
+41,598
+54,261
+2,998
+1,967
+58
+53
+Cost of sales of Shanghai Jahwa
+Auditors' remuneration - annual audit, half-year review
+and quarterly agreed-upon procedures
+(2) EMPLOYEE COSTS
+(in RMB million)
+6,528
+2015
+Wages, salaries and bonuses
+43,321
+32,071
+Retirement benefits, social security contributions and
+welfare benefits
+9,943
+8,382
+Others
+997
+1,145
+2014
+Short term life insurance claims
+158,999
+(3,358)
+304,653
+(15,143)
+289,510
+2014
+(in RMB million)
+Gross
+Reinsurers' share
+Net
+Claims and claim adjustment expenses
+88,721
+(13,950)
+74,771
+Surrenders
+10,188
+10,188
+Annuities
+5,587
+5,587
+Maturities and survival benefits
+21,387
+21,387
+Interest credited to policyholder contract deposits
+125,842
+Gross
+Reinsurers' share
+Net
+107,675
+(15,022)
+92,653
+16,578
+16,578
+Annuities
+17,405
+5,882
+Maturities and survival benefits
+18,713
+18,713
+Policyholder dividends
+8,455
+8,455
+Increase in policyholders' reserves
+125,963
+(121)
+5,882
+Reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax
+rate of 25% (2014: 25%) is as follows:
+17,405
+5,871
+208,149
+(302)
+207,847
+9,407
+(3,880)
+5,527
+87,097
+(10,961)
+76,136
+304,653
+(15,143)
+289,510
+2014
+(in RMB million)
+Gross
+Reinsurers' share
+Net
+Long term life insurance contract benefits
+Interest expense on convertible bonds (net of tax)
+Net
+Reinsurers' share
+Gross
+2015
+5,871
+Increase in policyholders' reserves
+99,365
+(178)
+99,187
+Interest credited to policyholder contract deposits
+15,317
+15,317
+242,454
+Policyholder dividends
+(14,128)
+200
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+12. CLAIMS AND POLICYHOLDERS' BENEFITS (CONTINUED)
+(2)
+(in RMB million)
+Long term life insurance contract benefits
+Short term life insurance claims
+Property and casualty insurance claims
+228,326
+(in RMB million)
+162,357
+2014
+2014
+Weighted average number of ordinary shares in issue (million shares)
+Issued ordinary shares as at 1 January
+17,784
+Weighted average number of new issued H shares
+15,832
+74
+Weighted average number of shares from conversion
+of convertible bonds
+Weighted average number of shares held by the
+492
+18
+share purchase scheme
+(3)
+Weighted average number of shares held by the
+consolidated assets management scheme (i)
+(91)
+Weighted average number of ordinary shares in issue
+18,182
+8. NET INTEREST INCOME OF BANKING OPERATIONS
+(in RMB million)
+2015
+2015
+2.47
+39,279
+15,924
+2015
+2014
+4,570
+3,562
+2015 interim dividend - RMB0.18 (2014: RMB0.25) per ordinary share
+3,290
+1,979
+On 19 March 2015, the Board of Directors of the Company approved the Resolution of the Profit Appropriation Plan
+for 2014, agreeing to declare a final cash dividend of RMB0.50 per share based on the total shares of 9,140,120,705.
+The amount of the cash dividend for 2014 was RMB4,570 million accordingly. It also agreed to convert capital
+reserves to share capital, in a proportion of 10 shares for every 10 shares held. On 15 June 2015, the above profit
+appropriation plan was approved by the shareholders of the Company at the annual general meeting.
+On 4 August 2015, the conversion of capital reserve into share capital was completed and the total number
+of shares of the Company altered to 18,280,241,410 shares. On 20 August 2015, the Board of Directors of the
+Company approved the Resolution of the Profit Appropriation Plan for Interim Dividend of 2015, agreeing to
+declare an interim cash dividend of RMB0.18 per share for 2015. The amount of the interim cash dividend for
+2015 was RMB3,290 million.
+On 15 March 2016, the Board of Directors of the Company approved the Resolution of the Profit
+Appropriation Plan for 2015, agreeing to declare a final cash dividend of RMB0.35 per share for 2015. It was
+not recognized as a liability as at 31 December 2015.
+17. EARNINGS PER SHARE
+(1) BASIC
+Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the
+weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased
+by the Group.
+The Company completed the conversion of capital reserves to share capital in a proportion of 10 shares
+for every 10 shares held during this year. The basic and diluted earnings per share figures for the current
+year and for prior year have been presented on the basis of the new number of shares according to 'IAS
+33-Earnings per Share'.
+2015
+2014
+Profit attributable to owners of the parent (in RMB million)
+Weighted average number of ordinary shares in issue (million shares)
+Basic earnings per share (in RMB)
+54,203
+18,182
+2.98
+2014
+Due from the Central Bank
+Due from financial institutions
+23,179
+Interest income from unlisted investments
+103,860
+96,243
+Subtotal
+15,924
+(i) As at 31 December 2015, 417 million (31 December 2014: Nil) shares were held by the consolidated assets management scheme.
+204
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+17. EARNINGS PER SHARE (CONTINUED)
+(2) DILUTED
+Diluted earnings per share was computed by dividing the adjusted profit attributable to the equity holders
+of the Company based on assuming conversion of all dilutive potential shares for the year by the adjusted
+weighted average number of ordinary shares in issue The shares granted by the Company under the share
+purchase scheme (Note 36) and convertible bonds have potential dilutive effect on the earnings per share.
+Earnings (in RMB million)
+2015
+2014
+Profit attributable to owners of the parent
+54,203
+2015
+28,271
+Interest income from listed investments
+119,422
+132,131
+Loans and advances to customers
+Corporate loans and advances to customers
+Individual loans and advances to customers
+Discounted bills
+Bonds
+Others
+Subtotal
+4,206
+3,885
+12,658
+In respect of current year:
+20,417
+37,492
+41,436
+33,599
+413
+308
+28,303
+23,218
+462
+503
+44,653
+2014 final dividend - RMB0.50 (2013: RMB0.45) per ordinary share
+Interest income from banking operations
+(in RMB million)
+Items that may be reclassified subsequently to profit or loss:
+2015
+Before tax
+Tax impact
+After tax
+Share of other comprehensive income of associates and
+jointly controlled entities
+9
+9
+Available-for-sale financial assets:
+Changes in fair value
+37,605
+(9,476)
+28,129
+Reclassification adjustments for losses included in the
+statement of income
+- (Gains)/losses on disposal
+(36,146)
+8,618
+(27,528)
+- Impairment losses
+15. OTHER COMPREHENSIVE INCOME
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+202
+Profit before tax
+In respect of previous year:
+93,413
+62,353
+Tax at the applicable tax rate of 25% (2014: 25%)
+Expenses not deductible for tax
+23,353
+15,588
+6,447
+3,063
+1,027
+Income not subject to tax
+(3,821)
+Adjustments in respect of current income tax of previous years
+The reversal of the deferred tax assets related to the impairment
+provision of the investment in Fortis (Note 4. (8))
+(215)
+(407)
+5,697
+Income tax per consolidated statement of income
+28,235
+14,423
+The Group's tax position is subject to assessment and inspection of the tax authorities before finalization.
+(7,047)
+Shadow accounting adjustments
+(in RMB million)
+(2,215)
+2,359
+Reclassification adjustments for losses included in the
+statement of income
+- Impairment losses
+(5,369)
+8,859
+1,343
+Shadow accounting adjustments
+(9,434)
+(4,026)
+6,644
+(7,075)
+Exchange differences on translation of foreign operations
+41
+35,198
+41
+(10,184)
+30,774
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 203
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+(1,467)
+For the year ended 31 December 2015
+16. DIVIDENDS
+40,958
+(11,671)
+- (Gains)/losses on disposal
+(206)
+777
+(565)
+Exchange differences on translation of foreign operations
+(70)
+(70)
+958
+46,869
+752
+2014
+(in RMB million)
+Before tax
+Tax impact
+After tax
+Items that may be reclassified subsequently to profit or loss:
+Share of other comprehensive income of associates and
+jointly controlled entities
+(8)
+(8)
+Available-for-sale financial assets:
+Changes in fair value
+(250)
+902
+220,403
+Fair value
+515
+1,922
+566
+246,874
+250,902
+Nominal amount
+261,539
+Fair value
+Discounted bills
+Liabilities
+Assets
+31 December 2014
+4,527
+697,677
+8,272
+1,037,565
+1,882
+213
+130
+Nominal amount
+29,117
+Loans
+10,318
+Individual customers
+114
+Corporate customers
+(in RMB million)
+(1) ANALYZED BY CORPORATE AND INDIVIDUAL
+23. LOANS AND ADVANCES TO CUSTOMERS
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 209
+1,873
+Annual Report 2015
+2,770
+519,131
+4,311
+8
+400
+510,779
+1
+10,357
+314
+None of the above derivatives has been designated as a hedging instrument.
+1,061
+31 December 2014
+21,074
+Stock index option
+Gold derivative instruments
+Currency forwards and swaps
+Interest rate swaps
+(in RMB million)
+22. DERIVATIVE FINANCIAL INSTRUMENTS
+Note: Unlisted equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market price
+quotation
+46,852
+35,948
+83,516
+Others
+46,852
+481
+554
+2,291
+13,137
+4,064
+40,016
+3,884
+Operating loans
+101,889
+119,464
+(in RMB million)
+Interest rate swaps
+Currency forwards and swaps
+1,204
+55,728
+4,118
+83,993
+1,676
+314,230
+2,711
+367,786
+1,434
+327,589
+1,324
+563,651
+Fair value
+Fair value Nominal amount
+Nominal amount
+Liabilities
+Assets
+31 December 2015
+Stock index swaps
+Stock index option
+Gold derivative instruments
+5
+Credit cards
+(4) AGING ANALYSIS OF PAST DUE LOANS
+Vehicle loans
+Gross
+Individual customers
+Subtotal of corporate customers
+12,413
+13,665
+Discounted bills
+664,509
+816,301
+Subtotal of loans
+829,966
+44,130
+Others
+43,578
+63,107
+Construction
+65,768
+86,715
+Service, technology, culture and sanitary industries
+118,668
+158,709
+59,603
+676,922
+445,023
+398,315
+31 December 2015
+31 December 2014
+236,412
+389,653
+31 December 2015
+Gross
+Discounted bills
+Subtotal
+Secured by monetary assets
+Secured by mortgages
+Secured by collateral
+Guaranteed
+Unsecured
+(in RMB million)
+(3) ANALYZED BY TYPE OF COLLATERAL HELD OR OTHER CREDIT ENHANCEMENTS
+23. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+210
+1,075,237
+1,274,989
+Real estate
+Property mortgages
+152,319
+Commercial
+55,365
+45,967
+114,445
+149,633
+116,896
+107,429
+664,509
+12,413
+13,665
+816,301
+78,635
+31 December 2014
+Extraction (heavy industry)
+Agriculture, husbandry and fishery
+Corporate customers
+(in RMB million)
+(2) ANALYZED BY INDUSTRY
+Net
+Less: Loan loss provisions
+Gross
+Others
+31 December 2015
+65,495
+63,359
+46,114
+35,076
+32,037
+Transportation, storage and communication
+15,294
+23,839
+Energy
+142,895
+161,075
+Manufacturing (light industry)
+41,520
+65,779
+5,261
+14,248
+31 December 2014
+31 December 2015
+1,053,882
+1,245,371
+(21,355)
+(29,618)
+1,075,237
+1,274,989
+151,189
+Listed
+Unlisted
+522
+Held-for-trading
+(71)
+(313)
+(406)
+(406)
+(13)
+3,501
+As at 31 December
+Others
+(84)
+loans and advances
+728
+375
+353
+2,384
+595
+1,789
+Interest accrued on impaired
+off previously
+(2)
+29,618
+Less: Provision for doubtful receivables
+Premium receivables
+(in RMB million)
+24. PREMIUM RECEIVABLES
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+26,117
+212
+As at 31 December 2015, none of the discounted bills (31 December 2014: RMB194 million) was pledged as
+assets sold under agreements to repurchase.
+21,355
+(11)
+(313)
+19,135
+2,220
+As at 31 December 2015, discounted bills with a carrying amount of RMB3,001 million (31 December 2014:
+RMB2,709 million) were pledged for amounts due to the Central Bank.
+Recovery of loans written
+(9,101)
+(3,681)
+19,135
+2,220
+As at 1 January
+Total
+assessed
+Collectively
+21,355
+Individually
+assessed
+assessed
+Collectively
+Individually
+assessed
+197,177
+142,050
+37,886
+Total
+13,476
+15,409
+Acquisition of subsidiaries
+(5,420)
+(23,749)
+(9,123)
+(14,626)
+the year
+Write-off and transfer during
+14,614
+8,974
+29
+29
+5,640
+30,118
+15,581
+14,537
+Charge for the year
+-
+Premium receivables, net
+Life insurance
+Property and casualty insurance
+Premium receivables, net
+(986)
+15,690
+17,764
+3,429
+6,536
+12,261
+(707)
+11,228
+31 December 2015
+31,302
+34,918
+273
+530
+547
+31 December 2014
+16,778
+14,983
+31 December 2015
+(in RMB million)
+27. FINANCE LEASE RECEIVABLE
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 213
+Annual Report 2015
+15,587
+17,872
+7,036
+1,557
+1,788
+8,945
+6,994
+7,139
+31 December 2014
+916
+52,092
+30,482
+31 December 2014
+30,740
+34,072
+24,125
+27,000
+6,615
+7,072
+The credit terms of premium receivables granted are generally from one to six months, and non-interest
+bearing.
+30,740
+(562)
+(846)
+31,302
+31 December 2014
+34,918
+31 December 2015
+34,072
+An aging analysis of premium receivables is as follows:
+(in RMB million)
+Within 3 months
+31 December 2015
+Reinsurers' share of policyholders' reserves
+Reinsurers' share of claim reserves
+Reinsurers' share of unearned premium reserves
+(in RMB million)
+26. REINSURERS' SHARE OF INSURANCE LIABILITIES
+Net
+Less: Provision for accounts receivable
+Gross
+Others
+Receivables under factoring
+(in RMB million)
+25. ACCOUNTS RECEIVABLE
+Over 1 year
+Over 3 months but within 1 year
+33,472
+31 December 2015
+182,607
+167,142
+Within 3 months
+31 December 2014
+Guaranteed
+Unsecured
+(in RMB million)
+58,874
+3 months to 1 year
+1,025
+21,742
+23,496
+7,780
+130
+2,732
+2,189
+12,611
+2,729
+1 to 3 years
+Total
+6,931
+6,227
+Secured by mortgages
+Secured by collateral
+9,782
+12
+More than 3 years
+1,940
+3,240
+10,047
+2
+727
+4,384
+4,934
+4,590
+Secured by monetary assets
+18,107
+766
+1 to 3 years
+Within 3 months 3 months to 1 year
+(in RMB million)
+31 December 2015
+13,665
+1,274,989
+1,261,324
+More than 3 years
+12,413
+1,075,237
+164,408
+183,215
+387,504
+452,044
+204,988
+305,924
+1,062,824
+Total
+Unsecured
+Guaranteed
+4,510
+5,332
+7,499
+Secured by mortgages
+Secured by collateral
+16,636
+104
+3,734
+6,681
+6,117
+16,351
+25
+1,635
+7,540
+7,151
+6,014
+126
+19,298
+Secured by monetary assets
+4.15%
+44,630
+4.57%
+58,235
+20.73%
+222,845
+1,274,989
+18.49%
+10.78%
+115,895
+14.00%
+178,514
+34.17%
+367,411
+235,771
+100.00%
+1,075,237
+100.00%
+267,945
+952,032
+31 December 2014
+1,162,024
+31 December 2015
+Assets purchased under reverse repurchase agreements
+Wealth management products
+Policy loans
+Debt schemes and trust schemes (Note 1)
+Asset management schemes
+Bonds
+(in RMB million)
+20. FIXED MATURITY INVESTMENTS
+(in RMB million)
+2014
+2015
+31.47%
+251,023
+401,249
+324,456
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 211
+Annual Report 2015
+Past due loans refer to the loans with either principal or interest being past due by one day or more.
+46,171
+For the year ended 31 December 2015
+140
+18,575
+16,885
+7,044
+1,890
+2,670
+2,484
+10,571
+23. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+(5) ANALYZED BY REGION
+(in RMB million)
+31.47%
+401,220
+%
+Amount
+%
+Amount
+31 December 2014
+31 December 2015
+(6) LOAN LOSS PROVISION
+Gross
+Offshore business
+Northern China
+Western China
+Southern China
+Eastern China
+30.17%
+31 December 2014
+Finance lease receivable, net of unearned finance income
+Less: Provision for impairment losses
+58,623
+Ping An Insurance (Group) Company of China, Ltd. 207
+Annual Report 2015
+During 2013, the Group's subsidiary Ping An Bank reclassified bonds with a fair value of RMB91,675
+million from available-for-sale financial investments to held-to-maturity financial assets reflecting its
+positive intention and ability to hold them until maturity. As at 31 December 2015, the carrying amount
+of these bonds was RMB77,356 million (31 December 2014: RMB88,294 million) while the corresponding fair
+value was RMB79,130 million (31 December 2014: RMB87,850 million). If these bonds were not reclassified,
+unrealized gains of RMB2,218 million (31 December 2014: RMB4,428 million) would have been recognized
+in the available-for-sale financial assets reserves for the year ended 31 December 2015. During 2015, other
+comprehensive income in the amount of RMB724 million (31 December 2014: RMB791 million) recognized
+prior to the reclassification was reversed.
+Note: Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded.
+952,032
+1,162,024
+FINANCIAL STATEMENTS
+840,670
+111,362
+139,500
+952,032
+1,162,024
+320,216
+378,278
+1,022,524
+442,059
+Notes to Consolidated Financial Statements
+20. FIXED MATURITY INVESTMENTS (CONTINUED)
+Equity securities
+Security investment funds
+(in RMB million)
+21. EQUITY INVESTMENTS
+Net
+Less: Provision for impairment losses
+For the year ended 31 December 2015
+Gross
+Finance lease receivable
+Bills
+Bonds
+Trust beneficial right
+(in RMB million)
+(2) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS
+Others
+451,675
+189,757
+31 December 2014
+(in RMB million)
+Loans and receivables
+Carried at fair value through profit or loss
+Available-for-sale, at fair value
+Held-to-maturity
+(in RMB million)
+Government bonds
+(1) BONDS
+1,608,736
+71,892
+36,737
+1,911,871
+216
+Expressway operation
+49.94%
+Note 1: Trusts schemes represent entrusted loans granted by consolidated trust schemes and investments in unconsolidated trust schemes
+that are classified as loans and receivables.
+Central Bank bills
+Finance bonds
+Corporate bonds
+331,078
+993
+31 December 2015
+952,032
+1,162,024
+7,575
+26,488
+30,834
+26,549
+130,126
+192,318
+783,497
+916,669
+31 December 2014
+31 December 2015
+Listed
+Unlisted
+Other equity investments
+31 December 2015
+31 December 2014
+35,334
+Unlisted
+Listed
+141,507
+2,624
+31 December 2015
+Available-for-sale, at fair value
+Held for trading
+(in RMB million)
+208
+(2) EQUITY SECURITIES
+107,304
+43,038
+93,792
+9,058
+13,512
+52,096
+52,096
+Annual Report 2015
+31 December 2014
+141,812
+930
+Carried at fair value through profit or loss
+Available-for-sale, at cost
+Available-for-sale, at fair value
+(in RMB million)
+(3) OTHER EQUITY INVESTMENTS
+21. EQUITY INVESTMENTS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+142,742
+144,131
+233
+397
+142,509
+143,734
+142,742
+144,131
+107,304
+1,600,000,000
+16,679
+35,417
+197,177
+142,050
+197,205
+(28)
+(7)
+142,057
+5,748
+31 December 2015
+323
+211
+50,807
+14,248
+15,625
+87,107
+124,702
+5,157
+107,304
+31 December 2014
+52,096
+31 December 2014
+Unlisted
+Listed
+76,766
+31 December 2015
+Held for trading
+Available-for-sale, at fair value
+(in RMB million)
+(1) SECURITY INVESTMENT FUNDS
+241,690
+370,899
+46,852
+119,464
+142,742
+144,131
+30,538
+The PRC
+Kunyu Highway
+Jointly controlled entities
+Name of the invested entity
+(in RMB million)
+The Group's investments in the principal associates and jointly controlled entities as at year end are as
+follows:
+29. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+Associates
+214
+5,084
+127
+138
+252
+171
+1,988
+4,577
+31 December 2015
+31 December 2014
+Veolia Water (Kunming) Investment Co., Ltd. ('Veolia Kunming')
+Ping An Pay Intelligence Technology Co., Ltd. ('Ping An Pay')
+6,300
+6,300
+Beijing-Shanghai High-speed Railway Equity Investment Scheme
+('Beijing-Shanghai Railway')
+781
+702
+104
+112
+271
+234
+Shanxi Taichang Expressway Co., Ltd. ('Shanxi Taichang')
+Veolia Water (Liuzhou) Investment Co., Ltd. ('Veolia Liuzhou')
+Veolia Water (Yellow River) Investment Co., Ltd.
+('Veolia Yellow River')
+220
+240
+1,984
+522
+1,292
+Other assets
+9,194
+5,205
+27,622
+32,831
+5,761
+Fixed maturity investments, at fair value
+Cash and amounts due from banks and other financial institutions
+Equity investments
+8,464
+31 December 2014
+(1) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE CONTRACTS
+(in RMB million)
+28. POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE/
+INVESTMENT CONTRACTS
+(576)
+37,908
+57,598
+(1,025)
+38,484
+31 December 2015
+Fixed maturity investments, at amortized cost
+559
+721
+Fixed maturity investments, at amortized cost
+Fixed maturity investments, at fair value
+Equity investments
+918
+1,135
+31 December 2014
+31 December 2015
+Cash and amounts due from banks and other financial institutions
+(in RMB million)
+(2) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INVESTMENT CONTRACTS
+42,673
+48,903
+661
+558
+Other assets
+1,656
+Designated at fair value through profit or loss
+Lufax Holding Ltd (Previously Wincon
+Nanjing Mingwan Property Development Co, Ltd.
+Veolia Liuzhou
+48.76%
+USD189,421,568
+Hong Kong
+Veolia Yellow River
+Water plant operation
+Hong Kong
+23.88%
+Hong Kong
+Veolia Kunming
+Principal activities
+Percentage
+of voting
+rights
+Paid-in capital
+(RMB unless
+otherwise stated)
+Place of
+incorporation
+USD91,875,208
+USD32,124,448
+44.78%
+Water plant operation
+Water plant operation
+Smart card development and sales
+49.99%
+1,361,899,520
+The PRC
+Ping An Pay
+Railway investment
+39.18%
+16,000,000,000
+The PRC
+Beijing-Shanghai Railway
+Expressway operation
+29.85%
+2,600,190,000
+The PRC
+Shanxi Taichang
+Name of the invested entity
+Associates
+Investment Company Limited)
+The Group's investments in the principal associates and jointly controlled entities as at year end are as
+follows (continued):
+For the year ended 31 December 2015
+23,875
+2,223
+9,768
+796
+526
+Jointly controlled entities
+10,908
+Subtotal
+Step Fancy Investments Limited
+Foshan Huatai Property Development Co, Ltd
+Guangzhou Jinglun Property Development Co, Ltd
+932
+1,715
+487
+2,028
+Others
+Kun Yu Highway Development Co., Ltd. ('Kunyu Highway')
+1,714
+1,682
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 215
+Annual Report 2015
+12,898
+26,858
+Investment in associates and jointly controlled entities
+1,990
+2,983
+Subtotal
+308
+693
+576
+Others
+Wuhan DAJT Property Development Co, Ltd.
+29. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+(CONTINUED)
+1,933
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+463
+Total comprehensive
+income for the year
+37,315
+(7,041)
+(4)
+41
+39,279
+9,114
+78,704
+Placing of new H shares
+28,248
+29. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+(CONTINUED)
+28,248
+convertible bonds
+15,875
+(2,260)
+13,615
+Dividend declared
+(Note 16)
+(5,541)
+(5,541)
+Appropriations to
+surplus reserves
+Appropriations to
+general reserves
+Conversion of
+Dividend paid to non-
+The summary financial information of Group's principal associates and jointly controlled entities as at year
+end are as follows:
+31 December 2015
+1,263
+(32)
+(28)
+4
+1,028
+Veolia Yellow River
+35
+187
+1,540
+40
+53
+122
+(in RMB million)
+1,265
+Associates
+Net
+profit for
+the year
+Operating
+income for
+the year
+31 December 2014
+Total
+liabilities as
+at year end
+Total assets
+as at year
+end
+Net
+profit for
+the year
+Operating
+income for
+the year
+Total
+liabilities as
+at year end
+at year end
+Name of the invested entity
+Total
+assets as
+Veolia Kunming
+2
+controlling interests
+(488)
+In accordance with the relevant regulations, the net profit after tax of the Company for profit distribution
+is deemed to be the lower of (i) the retained profits determined in accordance with PRC Accounting
+Standards and (ii) the retained profits determined in accordance with IFRSS.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 225
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+36. SHARE PURCHASE SCHEME
+Movement of reserves relating to the Scheme is as follows:
+For the year ended 31 December 2015
+(in RMB million)
+As at 1 January
+Purchased (i)
+In accordance with the relevant regulations, general reserves should be set aside to cover catastrophic or
+other losses as incurred by companies operating in the insurance, banking, trust, securities, futures and fund
+businesses. The Group's respective entities engaged in such businesses would need to make appropriations
+for such reserves based on their respective year-end profit or risk assets, as determined in accordance with
+PRC Accounting Standards, and based on the applicable PRC financial regulations, in their annual financial
+statements. Such reserves are not available for dividend distribution or transfer to share capital.
+Share-based compensation expenses (ii)
+Cost of shares
+held for share
+purchase scheme
+Value of
+employee services
+Total
+(312)
+(312)
+(312)
+185
+185
+185
+(127)
+(i)
+(ii)
+As at 31 December
+488
+344,924
+99,075
+4,516
+(4,516)
+(1,078)
+(1,078)
+Equity transactions
+with non-controlling
+interests
+(15)
+(1,103)
+(1,118)
+Contributions from non-
+controlling interests
+64,252
+(7)
+421
+Others
+As at 31 December 2014
+127,969
+31,798
+(6,107)
+(11)
+1,119
+(105)
+(116)
+7,470
+19,196
+152
+428
+4
+(131)
+Veolia Liuzhou
+Disposals
+(99)
+Disposals of subsidiaries
+(160)
+(77)
+Transfer to property and equipment, net
+740
+Charge for the year
+24
+157
+Acquisition of subsidiaries
+2,664
+3,160
+As at 1 January
+Accumulated depreciation
+20,331
+29,099
+As at 31 December
+(986)
+Disposals
+(602)
+Disposals of subsidiaries
+(602)
+(781)
+Transfer from property and equipment, net
+(108)
+As at 31 December
+4,269
+3,160
+As at 31 December 2015, investment properties with a carrying amount of RMB11,289 million (31 December
+2014: RMB5,697 million) were pledged as collateral for long term borrowings with a carrying amount of
+RMB5,692 million (31 December 2014: RMB3,231 million).
+The rental income arising from investment properties for the year 2015 amounted to RMB1,487 million (2014:
+RMB1,411 million), which is included in net investment income.
+The fair values of the investment properties as at 31 December 2015 were estimated by the Group, based on
+valuation performed by independent valuers. It falls under level 3 in the fair value hierarchy.
+32,851
+18,262
+17,170
+46,094
+17,170
+24,827
+1
+3
+(2)
+105
+- 22 2
+1
+-|||-
+Fair value as at 31 December
+As at 1 January
+As at 31 December
+Net book value
+As at 31 December
+Transfer out, net
+Charge for the year
+Acquisition of subsidiaries
+As at 1 January
+Impairment losses
+1
+Transfer from construction in progress
+581
+7,169
+2,172
+(52)
+556
+6,651
+7,403
+Ping An Pay
+16,000
+16,000
+Beijing-Shanghai Railway
+228
+890
+4,407
+1,564
+7,341
+676
+3,894
+6,742
+Shanxi Taichang
+12
+14
+3
+338
+11
+16
+7
+287
+140
+In 2015, the Company has adopted an employee share purchase scheme (the 'Scheme') for the key employees (including executive
+Directors and senior management) of the Company and its subsidiaries. During the period from 20 March 2015 to 26 March 2015,
+4,050,253 ordinary A shares were purchased from the market. The weighted average price of shares purchased was RMB77.02 per
+share price (before the conversion of capital reserves to share capital). The above mentioned Shares shall be vested and awarded to
+the key employees approved for participation in the Scheme, subject to the achievement of certain performance targets.
+617
+Jointly controlled entities
+Additions
+411
+2,877
+Acquisition of subsidiaries
+20,927
+20,331
+2014
+2015
+As at 1 January
+Cost
+(in RMB million)
+30. INVESTMENT PROPERTIES
+(346)
+For the year ended 31 December 2015
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 217
+Annual Report 2015
+433
+628
+215
+2,801
+400
+593
+148
+2,939
+Kunyu Highway
+Notes to Consolidated Financial Statements
+The share-based compensation expense of the Scheme and the total value of employee services during the year ended 31 December
+2015 was RMB185 million and RMB185 million respectively.
+37. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+(in RMB million)
+35,387
+34,983
+26,546
+7,993
+7,549
+3,334
+1,622
+6,820
+2,713
+63,780
+45,254
+99
+112
+4,154
+2,506
+1,742
+4,539
+163,623
+126,228
+Less: Loss provisions
+Interest receivables
+(30)
+Other receivables
+(822)
+(593)
+40,718
+31 December 2014
+31 December 2015
+Others
+4,942
+13,197
+2,025
+1,968
+43,896
+As at 31 December 2015, all the expressway operating rights of the Group were pledged as collateral for
+long term borrowings amounting to RMB3,987 million (31 December 2014: RMB4,239 million).
+As at 31 December 2015, prepaid land premiums with a carrying amount of RMB1,178 million were pledged as
+collateral for long term borrowings amounting to RMB340 million. As at 31 December 2014, no prepaid land
+premiums were pledged as collateral for long term borrowings.
+As at 31 December 2015, prepaid land premium with a carrying amount of RMB55 million (31 December 2014:
+RMB57 million) were still in progress of applying for title certificates.
+222
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+32. INTANGIBLE ASSETS (CONTINUED)
+Due from reinsurers
+GOODWILL IMPAIRMENT
+The primary valuation technique used is cash flow projections based on business plans approved by
+management covering a three to five year period and a risk adjusted discount rate. Cash flows beyond that
+period have been extrapolated using a steady growth rate and terminal value. Discount rates used by the
+Group in 2015 range from 9% to 14% (2014: 9% to 14%) and growth rates, where applicable, range from 3% to
+34% (2014: 3% to 34%).
+The results of cash flow projections exceed the carried amount of each related cash-generating unit or
+group of units. However, subsequent impairment tests may be based upon different assumptions and future
+cash flow projections, which may result in an impairment of these assets in the foreseeable future.
+33. OTHER ASSETS
+(in RMB million)
+Interest receivables
+Other receivables
+Due from reinsurers
+Foreclosed assets
+Prepayments
+Precious metals held for trading
+Dividend receivable
+Inventories
+As at 31 December 2015, goodwill amounting to RMB8,761 million (31 December 2014: RMB8,761 million) is
+derived from acquisition of the former Shenzhen Development Bank. Goodwill amounting to RMB2,502
+million (31 December 2014: RMB2,502 million) is derived from acquisition of Shanghai Jahwa and its
+subsidiaries.
+(16)
+(29)
+Foreclosed assets
+-
+3,724
+7,448
+Total
+8,892
+248
+9,140
+18,280
+(1)
+(2)
+During the period from 1 January 2015 to 9 January 2015, certain convertible bonds were converted to 248 million ordinary A shares,
+and resulting in an increase of share capital by RMB248 million and share premium by RMB8,876 million. The newly issued capital was
+verified by PricewaterhouseCoopers Zhong Tian LLP in capital verification report PwC ZT YZ (2015) No. 142.
+On 4 August 2015, according to the Profit Appropriation Plan for Final Dividend of 2014, the transfer from 'Share premium' under
+'Reserves' to share capital in a proportion of 10 shares for every 10 shares held was completed. The newly issued share capital was
+verified by PricewaterhouseCoopers Zhong Tian LLP in capital verification report PwC ZT YZ(2015) No. 997.
+3,724
+35. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+Available-
+for-sale
+on
+(in RMB million)
+Share investment
+premium
+reserve
+Shadow
+accounting
+adjustments
+Others
+Surplus
+reserve
+funds
+General
+reserves
+translation
+of foreign
+operations
+Retained
+profits
+Exchange
+differences
+9,973
+H shares, par value
+RMB1 per share
+5,416
+10,832
+(271)
+(238)
+Prepayments
+Inventories
+Others
+(428)
+(428)
+(18)
+(13)
+(37)
+(111)
+162,001
+124,816
+Annual Report 2015
+Overseas listed
+Ping An Insurance (Group) Company of China, Ltd. 223
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+34. SHARE CAPITAL
+(million shares)
+1 January 2015
+Domestic listed
+A shares, par value
+RMB1 per share
+Conversion of convertible bonds (1)
+5,168
+248
+Transfer from 'Share premium' under 'Reserves' (2)
+31 December 2015
+FINANCIAL STATEMENTS
+11,791
+As at 1 January 2014
+43,032
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+32. INTANGIBLE ASSETS (CONTINUED)
+2014
+Goodwill
+Expressway
+operating
+rights
+Prepaid land
+premiums
+Core deposits
+Trademarks
+Software
+and others
+Ping An Insurance (Group) Company of China, Ltd. 221
+Total
+Cost
+As at 1 January 2014
+11,791
+11,232
+5,475
+15,082
+2,155
+4,036
+49,771
+Acquisitions of subsidiaries
+188
+188
+(in RMB million)
+Additions
+Annual Report 2015
+2,074
+Deposits from other banks and financial institutions
+Due to the Central Bank
+Short term borrowings
+Long term borrowings
+31 December 2015
+31 December 2014
+312,207
+395,863
+3,051
+2,754
+42,610
+20,901
+43,032
+52,390
+410,258
+456,153
+Refer to Notes 23, 30 and 32 for the assets pledged as collateral to support the above borrowings.
+226
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+As at 1 January 2015
+12,037
+9,487
+5,023
+12,443
+1,968
+36,635
+The Group was still in the process of applying for title certificates for certain investment properties with a
+carrying amount of RMB1,815 million as at 31 December 2015 (31 December 2014: RMB1,802 million).
+246
+533
+2
+486
+54
+754
+57
+581
+1,932
+(4)
+(4)
+(6)
+(5)
+(11)
+2
+1,745
+2,639
+187
+2,642
+7,794
+Net book value
+As at 31 December 2014
+12,037
+9,487
+5,023
+12,443
+1,968
+2,074
+581
+229
+5,875
+130
+1,008
+Disposals of subsidiaries
+(16)
+(16)
+Disposals
+(100)
+(25)
+(125)
+As at 31 December 2014
+12,037
+11,232
+5,604
+2,068
+15,082
+4,716
+50,826
+Accumulated amortization
+As at 1 January 2014
+Acquisitions of subsidiaries
+Charge for the year
+Disposals of subsidiaries
+Disposals
+As at 31 December 2014
+1,259
+533
+1,885
+2,155
+218
+1,128
+Ping An Insurance (Group) Company of China, Ltd.
+3,174
+245
+3,393
+679
+2,231
+(6)
+(1)
+(5)
+(30)
+(30)
+-
+1,912
+563
+58
+754
+51
+486
+52
+52
+7,794
+2,642
+187
+2,639
+581
+1,745
+9,722
+Net book value
+As at 31 December 2015
+12,460
+income for the year
+Other comprehensive
+65,178
+10,975
+54,203
+-
+Profit for the year
+344,924
+64,252
+99,075
+152
+19,196
+As at 31 December 2015
+7,470
+(6,107)
+31,798
+127,969
+As at 1 January 2015
+Total
+Non-
+controlling
+interests
+44,916
+1,917
+2,197
+11,689
+7,652
+9,001
+1,119
+Disposals
+Disposals of subsidiaries
+Charge for the year
+Acquisitions of subsidiaries
+11,232
+12,037
+As at 1 January 2015
+Cost
+Total
+Software
+and others
+Trademarks
+Core
+deposits
+premiums
+rights
+Prepaid land
+5,604
+411
+operating
+(in RMB million)
+2015
+Expressway
+32. INTANGIBLE ASSETS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+41
+220
+The Group was still in the process of applying for title certificates for its buildings with a carrying amount
+of RMB398 million as at 31 December 2015 (31 December 2014: RMB550 million).
+18,873
+2,598
+753
+Goodwill
+Total comprehensive
+15,082
+4,716
+Acquisitions of subsidiaries
+As at 1 January 2015
+Accumulated amortization
+54,638
+5,091
+2,442
+15,082
+8,331
+11,232
+12,460
+As at 31 December 2015
+(68)
+2,155
+(2)
+Disposals
+(162)
+(162)
+Disposals of subsidiaries
+Annual Report 2015
+539
+2,382
+423
+Additions
+698
+287
+50,826
+(66)
+income for the year
+Conversion of
+convertible bonds
+General
+reserve
+Surplus
+Shadow
+accounting
+adjustments
+on
+Available-
+for-sale
+investment
+reserve
+premium
+(in RMB million)
+Share
+Exchange
+differences
+35. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+(CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+translation
+of foreign
+Annual Report 2015
+395,291
+79,323
+135,338
+86
+28,248
+8,498
+2,150
+(6,659)
+32,768
+115,539
+As at 31 December 2015
+2,779
+224
+160
+Non-
+funds
+(4)
+(7,041)
+37,315
+income for the year
+Other comprehensive
+47,930
+8,651
+39,279
+Profit for the year
+231,789
+56,996
+70,341
+Others
+111
+6,982
+3,394
+934
+(5,517)
+83,868
+As at 1 January 2014
+Total
+interests
+controlling
+Retained
+profits
+operations
+reserves
+14,680
+3,295
+2,619
+(13,392)
+11,365
+54,203
+(66)
+10
+10
+752
+390
+(66)
+(552)
+970
+10
+(552)
+65,930
+970
+Equity transactions with
+controlling interests
+Dividend paid to non-
+general reserves
+Appropriations to
+surplus reserves
+Appropriations to
+(Note 16)
+Dividend declared
+(9,140)
+Transfer to share capital
+10,342
+non-controlling
+Others
+(1,471)
+(1,193)
+(13,392)
+scheme
+management
+(127)
+6,989
+6,036
+(2,426)
+(1,233)
+(1,257)
+(1,257)
+(9,052)
+9,052
+interests
+(1,028)
+(7,860)
+(9,140)
+8,871
+1,028
+consolidated assets
+(127)
+Shares held by
+30,774
+Share purchase scheme
+953
+controlling interests
+Contributions from non-
+(7,860)
+10,195
+3,344
+11,424
+(121)
+(702)
+(25)
+(352)
+Disposals
+(18)
+(18)
+Disposals of subsidiaries
+28,341
+77
+Transfer from investment properties, net
+2,922
+206
+1,220
+658
+838
+Charge for the year
+8
+1
+7
+Acquisitions of subsidiaries
+13,360
+796
+5,233
+4,371
+(1,200)
+As at 31 December 2015
+3,446
+5,063
+35,158
+10,508
+1,268
+4,541
+15,974
+2,867
+83
+83
+(14)
+2
+95
+83
+2,960
+(14)
+95
+As at 1 January 2015
+As at 31 December 2015
+Net book value
+As at 31 December 2015
+Disposals of subsidiaries
+Transfer from investment properties, net
+As at 1 January 2015
+Impairment losses
+15,149
+882
+5,758
+2
+As at 1 January 2015
+Accumulated depreciation
+50,390
+2,089
+175
+1,759
+Additions
+28
+41,796
+11,424
+5
+1
+22
+Acquisitions of subsidiaries
+1,419
+9,022
+869
+15,038
+As at 1 January 2015
+Total
+Construction
+in progress
+Motor
+vehicles
+furniture
+and fixtures
+Buildings
+2015
+Equipment,
+Leasehold
+improvements
+Cost
+(in RMB million)
+31. PROPERTY AND EQUIPMENT
+4,893
+1,933
+5,554
+Transfer of construction in progress
+10,508
+2,150
+10,299
+21,120
+6,313
+As at 31 December 2015
+(2,285)
+(842)
+(139)
+(882)
+(60)
+(362)
+10,446
+Disposals
+(33)
+Disposals of subsidiaries
+676
+(105)
+781
+properties, net
+Transfer from/(to) investment
+(238)
+(5,528)
+48
+5,219
+23
+(33)
+10,572
+77
+623
+(26)
+Disposals of subsidiaries
+160
+160
+Transfer from investment properties, net
+2,533
+62
+162
+1,084
+517
+770
+Charge for the year
+23
+3
+20
+Acquisitions of subsidiaries
+11,845
+715
+15
+4,761
+3,807
+2,562
+As at 1 January 2014
+41,796
+11,424
+(26)
+Disposals
+(392)
+(113)
+623
+3,789
+10,572
+1,933
+2,032
+As at 1 January 2014
+As at 31 December 2014
+Net book value
+95
+(3)
+98
+95
+(3)
+1,419
+98
+Disposals
+As at 1 January 2014
+Impairment losses
+13,360
+3,789
+5,233
+4,371
+2,960
+As at 31 December 2014
+(1,175)
+(81)
+(589)
+As at 31 December 2014
+9,022
+796
+4,893
+56
+Acquisitions of subsidiaries
+30,816
+2,598
+1,468
+8,056
+14,100
+4,594
+As at 1 January 2014
+Cost
+Total
+Construction
+in progress
+23
+Motor
+vehicles
+Buildings
+Leasehold
+improvements
+(in RMB million)
+31. PROPERTY AND EQUIPMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 219
+Annual Report 2015
+28,341
+11,424
+15,038
+Equipment,
+furniture
+and fixtures
+79
+2014
+960
+Accumulated depreciation
+Additions
+As at 31 December 2014
+(2,371)
+(155)
+(280)
+(680)
+(985)
+Disposals
+(102)
+(102)
+Disposals of subsidiaries
+602
+(271)
+943
+(341)
+210
+231
+9,670
+12,772
+1,701
+268
+Transfer of construction in progress
+56
+24
+(348)
+Transfer from/(to) investment properties, net
+-
+Individual customers
+1,496,104
+1,681,093
+2,702
+Payables to brokerage customers
+6,788
+31,460
+37,189
+42,477
+Fiscal deposits
+30,422
+Time deposits from the government
+Corporate customers
+334,691
+321,045
+Remittance payables and outward remittance
+27,471
+31 December 2015
+5,343
+Annual Report 2015
+Guarantee deposits
+228
+2,721
+1,883
+838
+4,735
+4,735
+31 December 2014
+-
+Others
+Payables under factoring
+(in RMB million)
+40. ACCOUNTS PAYABLE
+1,510,448
+1,713,907
+14,344
+32,814
+1,393
+12,951
+112,707
+2,730
+- Individual customers
+For bonds repurchase transactions through stock exchange, the Group is required to deposit certain
+exchange traded bonds into a collateral pool and the fair value converted at a standard rate pursuant to
+stock exchange's regulation which should be no less than the balance of related repurchase transaction.
+As at 31 December 2015, the amount of bonds deposited in the collateral pool was RMB98,392 million
+(31 December 2014: RMB90,485 million). The collateral is restricted from trading during the period of the
+repurchase transaction. The Group can withdraw the exchange-traded bonds from the collateral pool
+without delay provided that the value of certain bonds is no less than the balance of related repurchase
+transactions.
+As at 31 December 2015, none of bills (31 December 2014: RMB327 million) was pledged as collateral for
+financial assets sold under agreements to repurchase resulted from repurchase transactions entered into
+by the Group in the inter-bank market. The collateral is restricted from trading during the period of the
+repurchase transaction.
+As at 31 December 2015, bonds with a par value of RMB75,880 million (31 December 2014: RMB56,364
+million) were pledged as collateral for financial assets sold under agreements to repurchase resulted from
+repurchase transactions entered into by the Group in the inter-bank market. The collateral is restricted from
+trading during the period of the repurchase transaction.
+As at 31 December 2015, beneficial right in equities with a carrying amount of RMB1,080 million (31 December
+2014: RMB2,730 million) were pledged as assets sold under agreements to repurchase.
+99,672
+119,236
+1,080
+200
+96,742
+118,156
+31 December 2014
+31 December 2015
+Beneficial right in equities
+Discounted bills
+(in RMB million)
+Bonds
+38. ASSETS SOLD UNDER AGREEMENTS TO REPURCHASE
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+113,423
+Ping An Insurance (Group) Company of China, Ltd. 227
+Notes to Consolidated Financial Statements
+593,270
+623,797
+116,806
+140,760
+280,925
+388,735
+31 December 2014
+31 December 2015
+- Corporate customers
+Term deposits
+- Individual customers
+- Corporate customers
+Current and savings accounts
+Customer deposits
+(in RMB million)
+39. CUSTOMER DEPOSITS AND PAYABLES TO BROKERAGE CUSTOMERS
+For the year ended 31 December 2015
+FINANCIAL STATEMENTS
+41. INSURANCE CONTRACT LIABILITIES
+As at 31 December 2015, bonds classified as held-to-maturity with a carrying amount of RMB31,311 million
+(31 December 2014: RMB36,268 million), and bonds classified as loans and receivables with a carrying
+amount of RMB3,179 million (31 December 2014: Nil) were pledged as collateral for time deposits from the
+government.
+Policyholders' reserves
+None
+10 years
+End of the
+9,000
+2014
+Fixed
+6.80%
+9,000
+9,000
+fifth year
+Ping An Bank
+Interbank deposits None
+3 to 6
+None
+months
+Ping An International
+Financial Co., Ltd
+Private Equity
+notes
+None
+3 years
+None
+The Company
+21,900
+2015
+Tier-2 Capital
+bonds
+Ping An Bank
+fifth year
+6,000
+Next 5 years: 8.70%
+(If not redeemed)
+Ping An Bank
+Hybrid capital
+None
+15 years
+End of the
+3,650 2011
+Fixed
+7.50%
+debt instrument
+Discounted None
+tenth year
+3,650
+Ping An Bank
+Tier-2 Capital
+bonds
+None
+10 years
+End of the
+6,000
+2014
+Fixed
+6.50%
+6,000
+3,650
+192,848
+21,636
+45
+None
+300
+300
+2015
+Fixed
+7.20%
+300
+234
+Annual Report 2015
+9,131
+2,998
+365 days
+2,996
+43. BONDS PAYABLE (CONTINUED)
+Issuer
+Early
+31
+31
+Туре
+Guarantee
+type
+redemption
+Par
+Issued
+Interest
+Ping An Insurance (Group) Company of China, Ltd.
+1,464
+Income certificate None
+6.50%
+445
+2014
+Fixed
+4.40%
+Convertible
+bonds
+None
+6 years
+Note 3
+26,000 2013
+Step-up
+First year: 0.80%
+Ping An Securities
+Second year: 1.00%
+45
+445
+357
+Fourth year: 1.80%
+Fifth year: 2.20%
+Sixth year: 2.60%
+Ping An Securities
+Subordinated bonds None
+2 years None
+3,000 2014
+Fixed
+Third year: 1.20%
+1,465
+First 10 years: 5.70%
+Fixed
+212
+2012
+Fixed
+First 5 years: 5.00%
+9,285
+9,191
+Next 5 years: 7.00%
+(If not redeemed)
+Ping An Life
+Subordinated
+bonds
+None
+fifth year
+10 years
+4,000 2011
+Fixed
+First 5 years: 5.70%
+4,156
+4,112
+Next 5 years: 7.70%
+(If not redeemed)
+Ping An Life
+Subordinated
+bonds
+None
+10 years
+End of the
+End of the
+fifth year
+8,000 2014
+9,000
+10 years
+3,000
+2012
+Fixed
+First 5 years: 4.65%
+3,080
+3,050
+fifth year
+Next 5 years: 6.65%
+(If not redeemed)
+Ping An Property &
+Casualty
+Capital
+End of the
+None
+supplement
+bonds
+End of the
+fifth year
+5,000 2015
+Fixed
+First 5 years: 4.79%
+4,993
+Next 5 years: 5.79%
+(If not redeemed)
+Ping An Life
+Subordinated
+bonds
+None
+10 years
+Coupon rate
+Fixed
+First 5 years: 5.90%
+Next 5 years: 7.90%
+(If not redeemed)
+(in RMB
+million)
+Ping An Life
+Capital
+None
+10 years
+supplement
+bonds
+End of the
+fifth year
+5,000
+2015
+Fixed
+December
+2014
+First 5 years: 3.90%
+Next 5 years: 4.90%
+(If not redeemed)
+Ping An Bank
+Hybrid capital
+None
+15 years
+End of the
+1,500 2009
+debt instrument
+tenth year
+600
+4,989
+fifth year
+December
+2015
+type
+8,106
+8,032
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 233
+848
+748
+748
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+43. BONDS PAYABLE (CONTINUED)
+(in RMB million)
+Early
+31
+Issuer
+Туре
+Guarantee
+type
+Maturity
+redemption
+option
+Par
+Issued
+Interest
+value
+year
+31
+Maturity
+option
+value
+1,832
+902
+6,993
+(27,972)
+Impairment loss provisions
+12,118
+5
+(2,174)
+(12)
+9,937
+(39,748)
+4,259
+Others
+641
+36
+6,655
+(26,620)
+22,852
+5
+323
+296
+14
+23,490
+(93,960)
+5,978
+(in RMB million)
+liabilities
+524
+Acquisitions
+1 January of subsidiaries
+Charged to
+profit or loss
+Charged to
+equity
+Other
+changes
+As at
+31 December
+13
+24
+31 December 2014
+Insurance contract
+12,354
+(6,160)
+Temporary
+difference
+as at
+31 December
+(1)
+36
+(144)
+investments
+484
+(606)
+(9)
+(131)
+6,194
+As at
+Fair value adjustments
+on financial assets and
+liabilities carried at fair
+value through profit or
+loss
+As at
+1 January
+Impairment loss provisions
+8,515
+7
+3,597
+(1)
+12,118
+(48,472)
+Others
+3,894
+251
+1,876
+(17,036)
+(43)
+(23,912)
+14,992
+258
+7,155
+326
+121
+22,852
+(91,408)
+236
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+5,978
+Fair value adjustments
+4,259
+2,060
+2014
+Acquisitions
+of subsidiaries
+Charged to
+profit or loss
+Charged to
+equity
+Other
+changes
+As at
+31 December
+157
+(144)
+Temporary
+difference
+as at
+31 December
+170
+13
+on available-for-sale
+investments
+2,223
+(1,734)
+(5)
+484
+(1,936)
+Insurance contract
+liabilities
+203
+1,826
+(52)
+End of the
+15,663
+(9,911)
+5,752
+2015
+Private equity
+notes
+None
+1 year
+None
+200
+915
+20
+2015
+Fixed
+5.10%
+200
+Financial Leasing Co., Ltd
+Ping An International
+Private equity
+notes
+None
+1 year
+None
+1,000
+2015
+Fixed
+4.55%
+1,000
+Ping An International
+Financial Leasing Co., Ltd
+Financial Leasing Co., Ltd
+Private equity
+notes
+Ping An International
+7.00%
+year
+type
+(per annum)
+December
+2015
+December
+2014
+(in RMB
+million)
+200 2015
+Fixed
+7.20%
+100
+200
+Income certificate None
+388 days
+None
+Ping An Securities
+Income certificate None
+407 days
+None
+100
+100
+2015
+Fixed
+Ping An Securities
+31 December 2015
+None
+None
+Total
+Note 1:
+The bonds are guaranteed by China Ping An Overseas, which is the holding company of Value Success International Limited.
+Note 2:
+The bonds are guaranteed by Ping An Real Estate Capital Limited (Previously: Ping An Real Estate (Hong Kong) Company Limited).
+Note 3:
+Pursuant to the approval by relevant PRC authorities, on 22 November 2013, the Company issued A-share convertible bonds with a total
+principal amount of RMB26 billion. The convertible bonds have a maturity term of six years from 22 November 2013 to 22 November 2019
+and bear a fixed interest rate of 0.80% for the first year, with an annual increase to 2.60% through the remaining term. The amount of
+interest related to the convertible bonds paid by the Company was RMB4 million for the year ended 31 December 2015 (2014: RMB208
+million).
+For the 30 consecutive trading days during the period from November 11, 2014 to December 22, 2014, the closing price of the Company's
+A shares is not less than 130% of the conversion price of the convertible bonds in 15 trading days from December 2, 2014 to December
+22, 2014, the conditional redemption clause of the convertible bonds was triggered for the first time. By a resolution of all the executive
+directors of the Company, the Company exercised its right of early redemption of the convertible bonds, and redeemed all the outstanding
+convertible bonds held by holders who were registered on the redemption record date (January 9, 2015).
+Convertible bonds with a principal amount of RMB10,221 million (2014: RMB15,745 million) were converted into 247,950,813 ordinary A shares
+(2014: 381,971,800 shares) during the year ended 31 December 2015 (Note 34).
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 235
+88,119
+FINANCIAL STATEMENTS
+For the year ended 31 December 2015
+44. DEFERRED TAX ASSETS AND LIABILITIES
+(in RMB million)
+Deferred tax assets.
+Deferred tax liabilities
+Net
+The deferred tax assets are analyzed as follows:
+(in RMB million)
+Fair value adjustments
+on financial assets and
+liabilities carried at fair
+value through profit or
+loss
+Fair value adjustments
+on available-for-sale
+Notes to Consolidated Financial Statements
+1 year
+264,413
+4.85%
+1,200
+2015
+Fixed
+4.40%
+1,200
+Ping An International
+Financial Leasing Co., Ltd
+Private equity
+notes
+None
+1 year
+None
+990
+2,600
+Fixed
+4.30%
+2,600
+Fuqing Investment
+Management Limited
+Offshore RMB
+bonds
+Guaranteed
+(Note 2)
+3 years
+None
+1,000
+2015
+Fixed
+2015
+10 years
+Coupon rate
+(per annum)
+Subordinated
+bonds
+As at 31 December
+372,759
+319,395
+230
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+41. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+(2) SHORT TERM LIFE INSURANCE CONTRACTS
+(in RMB million)
+Unearned premium reserves
+Claim reserves
+31 December 2015
+31 December 2014
+3,872
+1,970
+4,075
+2,657
+7,947
+4,627
+The unearned premium reserves of short term life insurance are analyzed as follows:
+2015
+2014
+Reinsurers'
+(8,974)
+(10,325)
+Policy administration fees and guaranteed fees deducted
+None
+620,448
+208,794
+173,798
+(63,807)
+(52,344)
+(18,305)
+(18,569)
+466
+1,005
+851,486
+724,338
+(in RMB million)
+2015
+As at 1 January
+Policyholder principal increased
+Accretion of investment income
+319,395
+276,044
+73,120
+64,746
+23,562
+20,598
+Liabilities released for benefits paid
+(32,993)
+2014
+Gross
+share
+Net
+(119)
+1,851
+The claim reserves of short term life insurance are analyzed as follows:
+2015
+2014
+Reinsurers'
+(in RMB million)
+Gross
+share
+Net
+Gross
+1,970
+Reinsurers'
+share
+As at 1 January
+2,657
+(148)
+2,509
+2,039
+(53)
+1,986
+Claims incurred during the year
+9,245
+(3,816)
+5,429
+Net
+724,338
+3,539
+3,872
+Gross
+Reinsurers'
+share
+Net
+As at 1 January
+1,970
+(119)
+1,851
+2,596
+(230)
+2,366
+Premiums written during the year
+(333)
+17,973
+12,099
+14,657
+(4,611)
+Premiums earned during the year
+(16,071)
+5,660
+(10,411)
+(15,283)
+4,722
+10,046
+(10,561)
+As at 31 December
+(5,874)
+2014
+2015
+1,086,406
+Insurance
+contract liabilities
+1,086,406
+4,627
+115,783
+1,206,816
+Estimated net cash flows within 12 months from the end of the reporting period.
+31 December 2015
+851,486
+31 December 2014
+724,338
+372,759
+319,395
+1,419,958
+48,903
+86,482
+74,124
+60,328
+46,286
+1,419,958
+1,206,816
+31 December 2015
+Reinsurers' share
+(1,788)
+(429)
+Net
+1,271,360
+42,673
+(15,655)
+138,863
+contract liabilities
+Policyholder contract deposits
+Policyholder account liabilities in respect of insurance contracts
+Unearned premium reserves
+Claim reserves
+Total
+(in RMB million)
+Long term life insurance contracts.
+Short term life insurance contracts
+Property and casualty insurance contracts
+(in RMB million)
+Long term life insurance contracts
+1,273,148
+7,947
+Short term life insurance contracts
+(in RMB million)
+Current portion*
+Long term life
+Short term life
+Property and casualty
+Non-current portion
+Long term life
+Short term life
+Property and casualty
+Total
+Insurance
+Property and casualty insurance contracts
+6,632
+7,518
+123,208
+1,402,086
+(1) LONG TERM LIFE INSURANCE CONTRACTS
+(in RMB million)
+Policyholders' reserves
+Policyholder contract deposits
+Policyholder account liabilities in respect of insurance contracts
+The policyholders' reserves are analyzed as follows:
+(in RMB million)
+As at 1 January
+Increase during the year
+Decrease during the year
+O Claims and benefits paid
+- Surrender
+41. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+Others
+The policyholder contract deposits are analyzed as follows:
+(in RMB million)
+31 December 2015
+31 December 2014
+851,486
+372,759
+48,903
+1,273,148
+724,338
+319,395
+42,673
+As at 31 December
+(17,872)
+For the year ended 31 December 2015
+FINANCIAL STATEMENTS
+31 December 2014
+Reinsurers' share
+Net
+1,084,849
+(1,557)
+(267)
+(13,763)
+(15,587)
+4,360
+102,020
+1,191,229
+31 December 2015
+31 December 2014
+(32,899)
+7,502
+85,469
+Notes to Consolidated Financial Statements
+(31,096)
+71,664
+1,306,047
+1,117,502
+445
+(817)
+53,394
+44,119
+1,419,958
+1,206,816
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 229
+5,444
+(3,544)
+(33,019)
+Claims paid during the year
+type
+Coupon rate
+(per annum)
+December
+2015
+December
+2014
+(in RMB
+million)
+1,500 2013
+Fixed
+4.00%
+1,499
+year
+1,497
+Offshore RMB
+Guaranteed
+3 years
+None
+International Limited
+bonds
+(Note 1)
+Value Success
+International Limited
+Offshore RMB
+bonds
+Guaranteed
+Value Success
+5 years
+value
+Maturity
+(82)
+(88)
+Others
+(174)
+471
+As at 31 December
+42,690
+38,330
+As at 31 December 2014 and 2015, all reinsurance contracts of the Group transferred significant insurance
+risk.
+232
+option
+Annual Report 2015
+43. BONDS PAYABLE
+Early
+31
+31
+Guarantee
+redemption
+Par
+Issued Interest
+Issuer
+Туре
+type
+Ping An Insurance (Group) Company of China, Ltd.
+(12,646)
+None
+2013
+Value Success
+International Limited
+Offshore SGD
+bonds
+Guaranteed
+(Note 1)
+5.5 years
+None
+1,779 2014
+Fixed
+4.13%
+Ping An Property &
+Casualty
+Subordinated
+bonds
+99
+None
+End of the
+fifth year
+2,500
+2010
+Fixed
+First 5 years: 4.65%
+Next 5 years: 6.65%
+(If not redeemed)
+1,619
+1,704
+2,613
+Ping An Property &
+Casualty
+10 years
+2,100
+3,088
+Fixed
+Fixed
+4.75%
+2,093
+2,090
+(Note 1)
+Value Success
+International Limited
+Offshore RMB
+bonds
+Guaranteed
+5 years
+None
+4.15%
+750
+Fixed
+4.95%
+748
+(Note 1)
+Value Success
+International Limited
+Offshore RMB
+bonds
+Guaranteed
+(Note 1)
+3 years
+None
+850 2014
+2014
+(7,521)
+849
+2,800
+Gross
+share
+Net
+Gross
+Reinsurers'
+share
+Net
+As at 1 January
+Premiums written during the year
+Premiums earned during the year
+As at 31 December
+72,154
+163,955
+(153,499)
+82,610
+(6,875) 65,279
+(12,248) 151,707
+12,317 (141,182)
+(6,806) 75,804
+(in RMB million)
+58,392
+143,150
+(129,388)
+72,154
+51,782
+123,109
+(109,612)
+65,279
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 231
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+41. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+(3) PROPERTY AND CASUALTY INSURANCE CONTRACTS (CONTINUED)
+The claim reserves of property and casualty insurance are analyzed as follows:
+(6,610)
+(20,041)
+19,776
+(6,875)
+2015
+Reinsurers'
+2015
+2,658
+(7,827)
+3,868
+(3,959)
+(6,014)
+3,449
+(2,565)
+As at 31 December
+4,075
+(96)
+3,979
+2014
+2,657
+(3) PROPERTY AND CASUALTY INSURANCE CONTRACTS
+(in RMB million)
+Unearned premium reserves
+Claim reserves
+31 December 2015
+31 December 2014
+82,610
+56,253
+72,154
+43,629
+138,863
+115,783
+The unearned premium reserves of property and casualty insurance are analyzed as follows:
+(148)
+2014
+2,509
+(in RMB million)
+36,741
+42. INVESTMENT CONTRACT LIABILITIES FOR POLICYHOLDERS
+(in RMB million)
+31 December 2015
+31 December 2014
+Policyholder account liabilities in respect of investment contracts
+Investment contract reserves
+5,084
+37,606
+4,577
+33,753
+42,690
+38,330
+(6,888)
+The investment contract liabilities are analyzed as follows:
+2015
+2014
+As at 1 January
+38,353
+Policyholder principal increased
+Accretion of investment income
+Liabilities released for benefits paid
+Policy administration fees and guaranteed fees deducted
+9,337
+Reinsurers'
+9,582
+(in RMB million)
+43,629
+38,330
+(8,849)
+share
+47,404
+Gross
+Net
+Gross
+Reinsurers'
+share
+As at 1 January
+43,629
+(6,888)
+Claims incurred during the year
+87,097
+Claims paid during the year
+(74,473)
+Net
+(10,332)
+56,253
+9,009
+63,130
+(56,015)
+73,462
+(65,024)
+29,626
+As at 31 December
+35,191
+36,741
+76,181
+(65,518)
+(10,916)
+8,955
+(5,565)
+34,072
+Accounts receivable
+-
+39
+877
+33,156
+Premium receivables
+10,065
+349
+3,816
+5,791
+370,899
+1,911,871
+17,944
+12,270
+100,021
+1,127,289
+15,838
+Loans and advances to customers
+1,245,371
+940
+Other assets
+16,778
+4,476,417
+14,672
+339,074
+82,940
+44
+3,234
+45,270
+182,091
+4,234,384
+-
+1,551
+57,598
+57,598
+Finance lease receivable
+17,872
+284
+968
+16,620
+Reinsurers' share of insurance liabilities
+78,111
+Equity investments
+RMB
+3,490
+USD
+(RMB
+equivalent)
+31 December 2015
+The main monetary assets and liabilities of the Group (excluding balances of investment-linked contracts)
+and non-monetary assets and liabilities measured at fair value are analyzed as follows by currency:
+(a) Foreign currency risk (Continued)
+(2) MARKET RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 245
+Annual Report 2015
+(1,950)
+(1,020)
+(2,285)
+(788)
+(129)
+Liabilities
+HKD
+(RMB
+equivalent)
+Others
+RMB
+(RMB
+equivalent)
+1,907,051
+Fixed maturity investments
+299,689
+236
+8,600
+290,853
+statutory deposits
+Balances with the Central Bank and
+981
+439,327
+10,282
+55,579
+368,794
+Cash and amounts due from banks and
+other financial institutions
+Assets
+(in RMB millions)
+total
+equivalent
+4,672
+Due to banks and other financial
+institutions
+1,568
+13,850
+21,540
+4,198,286
+3,915
+23,730
+201,504
+(19,413)
+3,969,137
+99,070
+23
+1,855
+95,624
+Other liabilities
+264,413
+6,808
+257,605
+Bonds payable
+33,028
+1
+10,757
+12,884
+Net position of foreign currency
+Notional amount of foreign exchange
+derivative financial instruments
+6
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+246
+579,283
+719
+864
+54,821
+13
+522,879
+45,685
+4,231
+21,554
+19,900
+32,801
+(6,526)
+14
+39,313
+Off-balance sheet credit commitments
+392,258
+33,014
+42,690
+10,139
+183,191
+1,516,884
+brokerage customers
+Customer deposits and payables to
+119,236
+650
+118,586
+repurchase
+Assets sold under agreements to
+8,506
+8,506
+trading
+Other financial liabilities held for
+410,258
+179
+3,971
+3,693
+1,713,907
+Accounts payable
+Insurance payables
+1
+7
+42,682
+policyholders
+Investment contract liabilities for
+1,419,958
+16
+559
+Policyholder dividend payable
+2,002
+Insurance contract liabilities
+82,485
+2
+35
+585
+4,735
+1
+4,734
+81,863
+1,417,381
+(212)
+31 December 2014
+-5%
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 239
+Annual Report 2015
+The above table showed main fiduciary activities of the Group. Where the Group acts in a fiduciary
+capacity, such as nominee, trustee or agent, assets held for fiduciary activities together with related
+undertakings to return such assets to customers, are recorded off-balance sheet, as risks and gains of such
+assets are assumed by customers. All of the above are off-balance sheet items.
+1,067,104
+47. RISK AND CAPITAL MANAGEMENT
+1,826,190
+501,890
+258,842
+407,545
+171,190
+246,913
+89,280
+127,251
+165,189
+(1) INSURANCE RISK
+Insurance risk refers to the risk that actual indemnity might exceed expected indemnity due to the
+frequency and severity of insurance accidents, as well as the possibility that insurance surrender rates are
+being underestimated. The principal risk the Group faces under such contracts is that the actual claims and
+benefit payments exceed the carrying amount of insurance liabilities. This could occur due to any of the
+following factors:
+Occurrence risk - the possibility that the number of insured events will differ from those expected.
+Assumptions and sensitivities
+(1) INSURANCE RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+240
+The Group's concentration of insurance risk is reflected by its major lines of business as analyzed by
+insurance contract liabilities in Note 41.
+The Group runs its insurance business primarily within the PRC. Hence the geographical insurance risk is
+concentrated primarily within the PRC.
+Concentration of insurance risks
+The Group limits its exposure to losses from insurance operations mainly through participation in
+reinsurance arrangements. More detailed discussion on reinsurance is disclosed in Note 47. (1) (c).
+Insurance risk is also affected by the policyholders' rights to terminate the contract, pay reduced premiums,
+refuse to pay premiums or exercise annuity conversion option, etc. Thus, the resultant insurance risk is
+subject to policyholders' behavior and decisions.
+There would be no significant mitigating terms and conditions that reduce the insured risk accepted for
+contracts with fixed and guaranteed benefits and fixed future premiums. However, for contracts with
+discretionary participation features, the participating nature of these contracts results in a significant
+portion of the insurance risk being shared with the insured party.
+These risks currently do not vary significantly in relation to the location of the risk insured by the Group
+whilst undue concentration by amounts could have an impact on the severity of benefit payments on a
+portfolio basis.
+The insurance business of the Group mainly comprises long term life insurance contracts, property
+and casualty and short term life insurance contracts. For contracts where death is the insured risk, the
+significant factors that could increase the overall frequency of claims are epidemics, widespread changes
+in lifestyles and natural disasters, resulting in earlier or more claims than expected. For contracts where
+survival is the insured risk, the most significant factor is continuing improvement in medical science and
+social conditions that would increase longevity. For property and casualty insurance contracts, claims are
+often affected by natural disasters, calamities, terrorist attacks, etc.
+The variability of risks is improved by diversification of risk of loss to a large portfolio of insurance contracts
+as a more diversified portfolio is less likely to be affected across the board by change in any subset of the
+portfolio. The variability of risks is also improved by careful selection and implementation of underwriting
+strategies and guidelines.
+Development risk - the possibility that changes may occur in the amount of an insurer's obligation at
+the end of the contract period.
+Severity risk - the possibility that the cost of the events will differ from those expected.
+382,603
+(a) Long term life insurance contracts
+31 December 2014
+31 December 2015
+13,913
+54,124
+31 December 2014
+124,038
+31 December 2015
+Assets under corporate annuity schemes
+Assets under asset management schemes
+Entrusted loans of banking operation
+Entrusted investments of banking operation
+Assets under trust schemes
+8,594
+(in RMB million)
+Others
+Deferred income
+Accruals
+Insurance guarantee fund
+Contingency provision
+Receipts in advance
+Other tax payable
+46. FIDUCIARY ACTIVITIES
+26,990
+17,013
+25,352
+131,183
+223,830
+9,164
+15,031
+2,058
+4,173
+3,150
+3,847
+620
+654
+383
+664
+5,029
+2,704
+4,980
+6,464
+26,068
+542,591
+Interest payable
+Assumptions
+Sensitivities
+1,247
+1,247
+(1,247)
+(1,250)
++10bps
+Impact on equity
+before tax
+Increase/
+(decrease)
+(decrease)
+-10bps
+Impact on profit
+before tax
+Increase/
+Impact on net
+policyholders'
+(decrease)
+Increase/
+reserves
+Impact on gross
+policyholders'
+Change in
+assumptions
+Morbidity/mortality rates
+reserves
+Increase/
+(decrease)
+3,015
+3,009
+(3,009)
+Maintenance expense rates
+(4,712)
+(4,712)
+4,712
+4,697
++10%
+Policy lapse rates
+(8,573)
+(8,573)
+8,573
+9,142
+period -10%
+payment
+During annuity
+payment
+period +10%,
+Before annuity
+(3,009)
+Discount rate/investment return
+Discount rate/investment return
+Significant judgment is required in determining insurance contract reserves and in choosing discount rates/
+investment return, mortality, morbidity, lapse rates, policy dividend, expenses assumptions relating to long
+term life insurance contracts.
+(in RMB million)
+(5,758)
+(1,761)
+(6,502)
++10bps
+-10bps
+before tax
+Increase/
+(decrease)
+Impact on equity
+Impact on profit
+before tax
+Increase/
+(decrease)
+reserves
+Increase/
+(decrease)
+Impact on net
+policyholders'
+(6,492)
+31 December 2015
+Impact on gross
+policyholders'
+Change in
+assumptions
+a 5% increase in maintenance expense rates.
+a 10% increase in policy lapse rates; and
+a 10% increase in morbidity rates, mortality of life insurance policies and annuity policies before the
+payment period, and a 10% decrease in mortality of annuity policies in the payment period;
+discount rate/investment return assumption increased by 10 basis points every year;
+discount rate/investment return assumption decreased by 10 basis points every year;
+The Group has measured the impact on long term life insurance contract liabilities using sensitivity analysis,
+of varying independently certain assumptions under reasonable and possible circumstances. The following
+changes in assumptions have been considered:
+(21)
+6,492
+6,492
+6,757
+(10,614)
+(10,614)
+(5,758)
+(1,761)
+10,614
+5,758
+1,761
+11,217
+5,742
+1,761
++5%
++10%
+payment
+period -10%
+Maintenance expense rates
+Policy lapse rates
+payment
+period +10%,
+During annuity
+Before annuity
+Morbidity/mortality rates
+Discount rate/investment return
+Discount rate/investment return
+(in RMB million)
+(6,747)
+(6,747)
+6,747
+31 December 2014
+Salaries and welfare payable
+management products
+Payable to holders of trust schemes and banking wealth
+(195)
+(423)
+(16,658)
+13,548
+(3,387)
+42
+(329)
+(502)
+(423)
+Others
+11,689
+(2,920)
+189
+(3,109)
+deposits
+Intangible assets-core
+(2,677)
+40
+(17,738)
+70,961
+31 December
+as at
+As at
+31 December
+Temporary
+difference
+(10)
+(3)
+Other
+changes
+equity
+Charged to
+Charged to
+profit or loss
+2014
+of subsidiaries
+Acquisitions
+1 January
+As at
+Fair value adjustments
+on financial assets and
+liabilities carried at fair
+value through profit or
+loss
+(in RMB million)
+45,452
+(13)
+(11,363)
+(502)
+22,852
+23,490
+12,709
+10,143
+6,500
+16,990
+31 December 2015
+2015
+As at
+Fair value adjustments
+on financial assets and
+liabilities carried at fair
+The deferred tax liabilities are analyzed as follows:
+Deferred tax asset to be recovered after more than 12 months
+Deferred tax asset to be recovered within 12 months
+Deferred tax assets:
+(in RMB million)
+The deferred tax assets are analyzed as follows: (continued)
+44. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+(in RMB million)
+Acquisitions
+1 January of subsidiaries
+Charged to
+profit or loss
+(10,859)
+investments
+on available-for-sale
+Fair value adjustments
+272
+(68)
+(55)
+(13)
+value through profit or
+loss
+31 December
+as at
+Temporary
+difference
+31 December
+As at
+Other
+changes
+equity
+Charged to
+(2)
+52
+2
+Fair value adjustments
+2020
+2019
+2018
+2017
+2016
+2015
+(in RMB million)
+31 December 2015
+The following table shows unrecognized tax losses based on its expected expiry date:
+(16,658)
+(16,443)
+(215)
+(17,738)
+(17,339)
+(399)
+31 December 2014
+As at 31 December 2015, unrecognized tax losses of the Group were RMB915 million (31 December 2014:
+RMB1,106 million).
+31 December 2014
+-
+74
+Other payables
+(in RMB million)
+45. OTHER LIABILITIES
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+238
+1,106
+915
+358
+356
+133
+272
+148
+198
+149
+206
+127
+31 December 2015
+Deferred tax liability to be recovered after within 12 months
+Deferred tax liability to be recovered more than 12 months
+Deferred tax liabilities:
+(in RMB million)
+(3,109)
+189
+(3,298)
+deposits
+Intangible assets-core
+299
+(33)
+(266)
+liabilities
+Insurance contract
+43,436
+(10,859)
+13
+(10,809)
+(63)
+investments
+on available-for-sale
+12,443
++5%
+Others
+(169)
+The deferred tax liabilities are analyzed as follows: (continued)
+44. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 237
+Annual Report 2015
+66,639
+(16,658)
+(93)
+(10,565)
+(23)
+(5,977)
+10,708
+(2,677)
+(106)
+(55)
+(2,347)
+1,683
+reserves
+Increase/
+(decrease)
+(1,683)
+26,911
+(23,730)
+3,181
+Subtotal
+(5,205)
+(6,363)
+(4,804)
+(4,050)
+(3,308)
+Prior year adjustments,
+Cumulative claims paid
+6,574
+4,804
+4,050
+3,308
+Estimated cumulative claims
+3,308
+Four years later
+8,175
+unallocated loss adjustment
+expenses and risk margin
+798
+31 December 2015
+Impact on net
+claim reserves
+Increase/
+(decrease)
+Increase/
+(decrease)
+Change in
+assumptions
+Impact on gross
+claim reserves
+Annual Report 2015
+244
+1,683
+Property and casualty insurance
+Average claim costs
+(in RMB million)
+Short term life insurance
+Property and casualty insurance
+Average claim costs
+(in RMB million)
+To illustrate the sensitivities of ultimate claims costs, for example, a respective percentage change in the
+average claim costs alone results in a similar percentage change in claim reserves:
+Outstanding claim reserves
+3,979
+4,050
+Impact on profit Impact on equity
+3,299
+4,804
+2011
+(in RMB million)
+Reproduced below is an exhibit that shows the development of net claim reserves of short term life
+insurance by the accident year:
+(b) Property and casualty and short term life insurance contracts (continued)
+Sensitivities (continued)
+Assumptions and sensitivities (continued)
+(1) INSURANCE RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+2012
+For the year ended 31 December 2015
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 243
+Annual Report 2015
+4,075
+801
+Outstanding claim reserves
+expenses and risk margin
+Notes to Consolidated Financial Statements
+2013
+2014
+2015
+4,050
+3,300
+Two years later
+6,574
+4,862
+4,042
+3,286
+One year later
+8,175
+6,367
+4,717
+4,181
+3,495
+As at end of current year
+claims paid:
+Estimated cumulative
+Total
+Three years later
+before tax
+Increase/
+(decrease)
+before tax
+Increase/
+(decrease)
++5%
+Other currencies
+1,289
+579
+1,078
+149
++5%
+21
+HKD
+before tax
+Increase/
+(decrease)
+in equity
+in profit
+before tax
+Increase/
+(decrease)
+31 December 2014
+447
+995
+532
+212
+(6)
+129
+Other currencies
+(1,289)
+(579)
+(1,078)
+(149)
+-5%
+HKD
+(532)
+(447)
+(995)
+(618)
+-5%
+USD
+1,950
+1,020
+2,285
+788
+618
++5%
+USD
+Increase/
+(decrease)
+in equity
+before tax
++5%
+before tax
+Increase/
+(decrease)
+Impact on equity
+(decrease)
+Increase/
+before tax
+Impact on profit
+31 December 2014
+Impact on net
+claim reserves
+Increase/
+(decrease)
+Increase/
+(decrease)
+Change in
+assumptions
+Impact on gross
+claim reserves
+(199)
+(2,363)
+(2,363)
+(199)
+2,363
+199
+2,813
+204
++5%
++5%
++5%
+unallocated loss adjustment
+2,181
+133
+(1,831)
+(125)
+in profit
+before tax
+Change in
+variables
+(in RMB million)
+31 December 2015
+Increase/
+(decrease)
+The analysis below is performed for reasonably possible movements in key variables with all other variables
+held constant, showing the pre-tax impact on profit and equity (due to changes in fair value of foreign
+currency denominated non-monetary assets and liabilities measured at fair value, as well as monetary
+assets and liabilities). The correlation of variables will have a significant effect on determining the ultimate
+impact on market risk, but to demonstrate the impact due to changes in variables, variables had to be
+changed on an individual basis.
+Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates.
+Fluctuations in exchange rates between the RMB and other currencies in which the Group conducts
+business may affect its financial position and results of operations. The foreign currency risk facing the
+Group mainly comes from movements in the USD/RMB and HKD/RMB exchange rates. The Group seeks to
+limit its exposure to foreign currency risk by minimizing its net foreign currency position.
+(a) Foreign currency risk
+Market risk is the risk of changes in fair value of financial instruments and future cash flows from fluctuation
+of market prices, which includes three types of risks from volatility of foreign exchange rates (foreign
+currency risk), market interest rates (interest rate risk) and market prices (price risk).
+(2) MARKET RISK
+Even though the Group may have reinsurance arrangements, it is not relieved of its direct obligations to its
+policyholders and thus a credit exposure exists with respect to reinsurance ceded, to the extent that any
+reinsurer is unable to meet its obligations assumed under such reinsurance agreements.
+The Group limits its exposure to losses from insurance operations mainly through participation in
+reinsurance arrangements. The majority of the business ceded is placed on the quota share basis and
+the surplus basis with retention limits varying by product lines. Amounts recoverable from reinsurers are
+estimated in a manner consistent with the assumptions used for ascertaining the underlying policy benefits
+and are presented in the statement of financial position as reinsurers' share of insurance liabilities and due
+from reinsurers.
+(c) Reinsurance
+Assumptions and sensitivities (continued)
+(1) INSURANCE RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+(1,831)
+(125)
+1,831
+125
+Prior year adjustments,
+Short term life insurance
+Subtotal
+Prior year adjustments,
+51,621
+Subtotal
+302,269
+(250,648)
+83,767
+(51,091)
+69,292
+(58,299)
+60,425
+(56,108)
+unallocated loss adjustment
+(49,181)
+Cumulative claims paid
+51,467
+37,318
+Estimated cumulative claims
+37,318
+Four years later
+51,467
+(35,969)
+expenses, discount and
+risk margin
+Outstanding claim reserves
+(in RMB million)
+Total
+2015
+2014
+2013
+2012
+2011
+Reproduced below is an exhibit that shows the development of net claim reserves of property and casualty
+insurance by the accident year:
+(b) Property and casualty and short term life insurance contracts (continued)
+Sensitivities (continued)
+Assumptions and sensitivities (continued)
+(1) INSURANCE RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+56,253
+4,632
+Annual Report 2015
+242
+37,475
+Estimated cumulative
+Three years later
+51,727
+Reproduced below is an exhibit that shows the development of gross claim reserves of property and
+casualty insurance by the accident year:
+The property and casualty and short term life insurance claim reserves are sensitive to the above key
+assumptions. The sensitivity of certain variables including legislative change, uncertainty in the estimation
+process, etc., is not possible to quantify. Furthermore, because of delays that arise between the occurrence
+of a claim and its subsequent notification and eventual settlement, the outstanding claim reserves are not
+known with certainty at the end of the reporting period.
+Sensitivities
+Other key assumptions include delays in settlement, etc.
+The principal assumption underlying the estimates includes assumptions in respect of average claim
+costs, claims handling costs, claims inflation factors and claim numbers for each accident year which are
+determined based on the Group's past claim experiences. Judgment is used to assess the extent to which
+external factors such as judicial decisions and government legislation affect the estimates.
+Assumptions
+(b) Property and casualty and short term life insurance contracts
+(in RMB million)
+27,842
+(24,568)
+3,274
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 241
+Annual Report 2015
+(1,683)
+(1) INSURANCE RISK (CONTINUED)
+2011
+2012
+2013
+37,780
+Two years later
+83,767
+69,852
+69,292
+60,876
+51,966
+38,360
+One year later
+60,361
+51,312
+38,655
+As at end of current year
+claims paid:
+Estimated cumulative
+Total
+2015
+2014
+60,425
+claims paid:
+Assumptions and sensitivities (continued)
+34,486
+3,547
+One year later
+8,415
+6,732
+4,877
+4,301
+3,739
+4,173
+As at end of current year
+Estimated cumulative
+Total
+2015
+2014
+2013
+2012
+2011
+claims paid:
+5,066
+6,786
+Two years later
+8,415
+(5,352)
+As at end of current year
+6,786
+(6,575)
+4,917
+(4,917)
+(4,182)
+Cumulative claims paid
+4,182
+3,542
+Estimated cumulative claims
+3,542
+Four years later
+4,182
+3,534
+Three years later
+4,917
+4,182
+3,534
+(in RMB million)
+47,404
+(3,542)
+Reproduced below is an exhibit that shows the development of gross claim reserves of short term life
+insurance by the accident year:
+Four years later
+45,193
+32,984
+Three years later
+52,747
+45,469
+33,363
+Two years later
+59,479
+53,124
+45,702
+33,912
+52,810
+72,724
+59,864
+4,251
+45,307
+32,802
+Estimated cumulative claims
+One year later
+45,193
+Outstanding claim reserves
+32,802
+expenses, discount and
+Prior year adjustments,
+43,153
+Subtotal
+262,945
+(219,792)
+(45,147)
+unallocated loss adjustment
+(49,179)
+52,747
+59,479
+(50,239)
+72,724
+risk margin
+(31,910)
+(43,317)
+Cumulative claims paid
+1
+37,875
+1,403,267
+7,549
+417
+147
+439
+199
+64
+6,963
+1,564
+1,158
+349
+392
+176
+31,302
+27,579
+27
+31 December 2014
+31 December 2015
+Annual Report 2015
+Loans and advances to customers
+(in RMB million)
+The carrying amount of loans and advances that would otherwise be past due or impaired and whose terms
+have been renegotiated is as follows:
+Of the aggregate amount of corporate loans and advances individually determined to be impaired, the fair
+value of collateral that the Group held as at 31 December 2015 was RMB4,212 million (31 December 2014:
+RMB3,606 million).
+Of the aggregate amount of gross past due but not impaired loans and advances to customers, the fair
+value of collateral that the Group held as at 31 December 2015 was RMB33,427 million (31 December 2014:
+RMB36,517 million).
+13,094 1,462,185
+45,824
+9,318
+8,927
+38,484
+576
+33
+5
+28,580
+8,722
+5,715
+32
+112,408
+---- 59
+Gross total
+Finance lease receivable
+Due from reinsurers
+Premium receivables
+Personal loans
+Corporate loans
+Including:
+customers
+Loans and advances to
+197,173
+12,509
+repurchase agreements
+197,205
+398,315
+1,020,327
+27,027
+6,438
+340
+2,696
+3,402
+386,162
+676,922
+5,001
+37,756
+26,687
+6,026
+5,043
+634,165
+1,075,237
+10,716
+44,194
+8,445
+8,305
+-
+FINANCIAL STATEMENTS
+353,370
+11,752
+5,614
+6,333
+22,006
+868,737
+222,514
+6,001
+Other assets
+Finance lease receivable
+2,698
+949
+453,655 414,918
+10,458
+9,119
+Accounts receivable
+30,310
+customers
+Loans and advances to
+380,952
+2,603,707
+334,940
+Premium receivables
+140,400
+1,392,653
+45
+Assets purchased under reverse
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+256
+858,379 1,477,428 1,307,133 575,627 5,309,818
+44,418
+1,633
+69,127
+45,002
+17,792
+14,778
+17,467
+5,575
+5,329
+34,072
+-
+348
+301,127
+466,295
+-
+years
+1 to 5
+3 to 12
+months
+3 months
+on demand
+Less than
+Repayable
+31 December 2015
+The table below summarizes the remaining contractual maturity profile of the financial assets and liabilities
+of the Group (excluding balances of investment-linked contracts) based on undiscounted contractual cash
+flows/expected cash flows and remaining contractual maturity profile of derivative cash flows and credit
+commitment.
+The Group is exposed to liquidity risk on insurance policies that permit surrender, withdrawal or other forms
+of early termination. The Group seeks to manage its liquidity risk by matching to the extent possible the
+duration of its investment assets with the duration of its insurance policies and to ensure that the Group
+is able to meet its payment obligations and fund its lending and investment operations on a timely basis.
+The banking business of the Group is exposed to potential liquidity risk. The Group monitors the sourcing
+and usage of funds, deposit to loan ratio, and quick ratio on a daily basis. Moreover, when adopting various
+liquidity risk management measurement benchmarks, the Group will compare the expected results against
+the ones derived from stress tests, critically assess the potential impact to the future liquidity risk, and
+formulate remedial actions according to specific situations. The Group seeks to mitigate the liquidity risk of
+the banking business by optimizing the assets and liabilities structure, maintaining stable deposits, etc.
+Liquidity risk is the risk of not having access to sufficient funds or being unable to liquidate a position in a
+timely manner at a reasonable price to meet the Group's obligations as they become due.
+(4) LIQUIDITY RISK
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+Over 5
+years
+Ping An Insurance (Group) Company of China, Ltd. 255
+Undated
+(in RMB million)
+240,687
+9,658
+826,180 1,166,340
+22,546
+2,812
+265,504
+4,025
+47,034
+936
+20,220 325,463
+13,480
+5,613
+Equity investments
+Fixed maturity investments
+142,797
+84,026
+129,783
+109,689
+and statutory deposits
+Balances with the Central Bank
+banks and other financial
+institutions
+Cash and amounts due from
+Total
+112,349
+banks and other financial
+Total
+3-4 years (including 4 years)
+140,340
+2,067
+20,740
+66,739
+50,794
+2-3 years (including 3 years)
+122,301
+2,094
+24,057
+40,025
+56,125
+9,675
+1-2 years (including 2 years)
+11,352
+22,078
+22,436
+99,366
+3 months to 1 year (including 1 year)
+182,667
+10,209
+9,403
+14,442
+148,613
+(including 3 months)
+Less than 3 months
+155,232
+75,196
+11,620
+744
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+250
+1,762,418
+39,681
+223,875
+916,669
+582,193
+202,271
+10,027
+33,558
+58,342
+100,344
+Floating interest rate
+732,426
+1,800
+85,802
+568,978
+75,846
+More than 5 years
+129,946
+1,388
+16,617
+70,511
+41,430
+4-5 years (including 5 years)
+97,235
+Fixed interest rate
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Total
+value through
+1-2 years (including 2 years)
+3 months to 1 year (including 1 year)
+Less than 3 months (including 3 months)
+Fixed interest rate
+(in RMB million)
+The following table sets out the Group's term deposits (excluding balances of investment-linked contracts)
+by maturity:
+(c) Interest rate risk (Continued)
+(2) MARKET RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+2-3 years (including 3 years)
+Ping An Insurance (Group) Company of China, Ltd. 249
+(4,016)
+(4,016)
+(3,439)
+(3,439)
+points
+-50 basis
+Loans and advances to customers
+(109)
+(109)
+(83)
+(83)
+points
+Annual Report 2015
+31 December 2015
+31 December 2014
+5,685
+Available-
+for-sale
+Carried at fair
+31 December 2015
+Held-to-
+maturity
+Loans and
+receivables
+(in RMB million)
+The following table sets out the Group's bonds, debt schemes and banking wealth management products
+(excluding balances of investment-linked contracts) by maturity:
+211,107
+168,226
+20,340
+16,180
+2,000
+Floating interest rate
+More than 5 years
+18,770
+18,542
+4-5 years (including 5 years)
+17,084
+18,770
+3-4 years (including 4 years)
+62,494
+17,084
+28,531
+63,760
+57,442
+28,205
+4,446
+profit or loss
+-50 basis
+(2) MARKET RISK (CONTINUED)
+(in RMB million)
+Top five commercial banks
+PBOC
+(in RMB million)
+The following table sets forth aggregated amounts due from banks and other financial institutions placed
+with the PBOC and major commercial banks in the PRC held by the Group. The following analysis excludes
+balances of investment-linked contracts.
+Credit quality of amounts due from banks and other financial institutions
+The limit of policy loans are based on the cash value of valid insurance policy, with an appropriate discount,
+and the validity period of policy loan is in the validity period of insurance policy. The credit risk associated
+with policy loans will not cause a material impact on the Group's consolidated financial statements as at 31
+December 2015 and 31 December 2014.
+The Group will evaluate the credit rating of the reinsurance companies before signing the reinsurance
+contracts, and choose the reinsurance companies with higher credit rating to reduce the credit risk.
+Credit risk of insurance business
+As to debt investments, the Group grades the existing investments according to internal credit rating
+policies and processes, chooses high credit quality counterparties and establishes strict access standards.
+The Group's debt securities investment mainly includes domestic government bonds, Central Bank bills,
+financial institution bonds, corporate bonds and debt investment plans. As at 31 December 2015, 99.73% (31
+December 2014: 99.92%) of the financial institution bonds held by the Group either had a credit rating of A
+or above, or were issued by national commercial banks. As at 31 December 2015, 98.18% (31 December 2014:
+97.65%) of the corporate bonds and short term corporate financing bonds held by the Group had a credit
+rating of AA and A-1 or above. The bond credit ratings are assigned by qualified appraisal institutions
+in the PRC. As at 31 December 2015, 90.36% (31 December 2014: 96.17%) of the debt investment plans are
+guaranteed by third parties or collateralized.
+Credit risk of investment business
+(3) CREDIT RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Bank of China Limited
+For the year ended 31 December 2015
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 251
+Annual Report 2015
+The bank segment of the Group sub-divides credit asset risks into 10 categories based on the five-tier loan
+classification system promulgated by the China Banking Regulatory Commission ('CBRC'), and applies
+different management policies to the loans in accordance with their respective loan categories. With the
+implementation of the New Capital Accord, the banking business will gradually establish a more scientific
+rating system in accordance with industry and regulatory requirements.
+Risks arising from financial guarantees and loan commitments are similar to those associated with loans and
+advances. Transactions of financial guarantees and loan commitments are, therefore, subject to the same
+portfolio management and the same requirements for application and collateral as loans and advances to
+customers.
+The bank segment of the Group has formulated a complete set of credit management processes and
+internal control mechanisms, so as to carry out whole process management of credit business. Credit
+management procedures for its corporate and retail loans comprise the processes of credit origination,
+credit review, credit approval, disbursement, post-disbursement monitoring and collection.
+Credit risk of banking business
+Credit risks refer to the risk of losses incurred by the inabilities of debtors or counterparties to fulfill their
+contractual obligations or by the adverse changes in their credit conditions. The Group is exposed to
+credit risks primarily associated with its deposit arrangements with commercial banks, loans and advances
+to customers, investments in bonds, reinsurance arrangements with reinsurers, policy loans, securities
+financing and direct loans, financial guarantees, loan commitments, etc. The Group uses a variety of
+controls to identify, measure, monitor and report credit risk.
+(3) CREDIT RISK
+Interest rates on floating rate term deposits and floating rate bonds are repriced at intervals of less than
+one year. Interest rates on fixed rate term deposits and fixed rate bonds are fixed before maturity.
+1,390,965
+32,396
+Notes to Consolidated Financial Statements
+China Merchants Bank Co., Ltd.
+Bank of Communications Co., Ltd.
+Agricultural Bank of China Limited
+(in RMB million)
+Credit quality of amounts due from banks and other financial institutions (Continued)
+(3) CREDIT RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+739,016
+192,553
+14,156
+16,059
+16,421
+17,517
+20,614
+Annual Report 2015
+252
+China CITIC Bank Corporation Limited
+China Minsheng Banking Corp. Ltd.
+Others
+China Construction Bank Corporation
+20,982
+26,222
+31,345
+39,656
+55,896
+287,595
+31 December 2015
+Industrial Bank Co., Ltd.
+China Bohai Bank Co., Ltd.
+Other major banks and financial institutions
+Industrial and Commercial Bank of China Limited
+145,856
+(c) Interest rate risk (Continued)
+783,497
+155,943
+16,669
+35,494
+31,739
+1-2 years (including 2 years)
+155,788
+10,399
+21,908
+31,343
+92,138
+3 months to 1 year (including 1 year)
+138,054
+6,421
+1,859
+8,689
+109,270
+(including 3 months)
+Less than 3 months
+Fixed interest rate
+Total
+profit or loss
+value through
+Available-
+for-sale
+Carried at fair
+31 December 2014
+Held-to-
+maturity
+Loans and
+receivables
+13,674
+85,761
+2-3 years (including 3 years)
+21,974
+1,662
+2,044
+63,724
+88,513
+Floating interest rate
+595,260
+3,010
+49,412
+474,864
+67,974
+More than 5 years
+104,918
+4,100
+14,471
+75,217
+11,130
+4-5 years (including 5 years)
+68,649
+370
+11,042
+50,759
+6,478
+3-4 years (including 4 years)
+86,592
+4,575
+21,621
+38,422
+429,216
+Floating rate term deposits
+(205)
+(205)
+99,672
+221
+99,451
+repurchase
+Assets sold under agreements to
+4,747
+4,747
+trading
+Other financial liabilities held for
+456,153
+1,908
+18
+Customer deposits and payables to
+6,318
+institutions
+Due to banks and other financial
+Liabilities
+3,784,737
+6,293
+39,481
+147,365
+3,591,598
+68,998
+14
+398
+3,900
+447,909
+brokerage customers
+172,383
+17,573
+Bonds payable
+28,673
+1
+10
+28,662
+Policyholder dividend payable
+38,330
+6
+38,324
+policyholders
+Investment contract liabilities for
+2,721
+65,660
+1,206,816
+15
+461
+2,001
+1,204,339
+Insurance contract liabilities
+2
+33
+493
+65,132
+Insurance payables
+3
+2,718
+Accounts payable
+1,510,448
+2,393
+64,686
+88,119
+Other assets
+37,908
+1,607,342
+Fixed maturity investments
+313,728
+491
+6,690
+306,547
+statutory deposits
+Balances with the Central Bank and
+398,485
+2,037
+18,668
+31,847
+635
+345,933
+RMB
+equivalent
+total
+equivalent)
+Others
+(RMB
+HKD
+(RMB
+equivalent)
+USD
+(RMB
+equivalent)
+RMB
+31 December 2014
+Assets
+(in RMB millions)
+(a) Foreign currency risk (Continued)
+(2) MARKET RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Cash and amounts due from banks and
+other financial institutions
+388
+371
+1,608,736
+Finance lease receivable
+15,587
+251
+1,385
+13,951
+Reinsurers' share of insurance liabilities
+14,983
+3
+14,980
+Accounts receivable
+30,740
+32
+774
+29,934
+Premium receivables
+1,053,882
+1,165
+5,069
+100,763
+946,885
+Loans and advances to customers
+241,690
+2,706
+14,184
+1,368
+223,432
+Equity investments
+37,908
+-
+88,119
+Other liabilities
+Change in
+interest rate
+Floating rate term deposits
+Floating interest rate bonds
+(in RMB million)
+The following sensitivity analysis is based on the assumption that the floating rate bonds, floating rate term
+deposits and loans and advances have a static structure of interest rate risk. The analysis only measured
+interest rate changes within one year, reflecting the impact on interest income and interest expenses from
+the re-pricing of financial assets and liabilities within a year with the following assumptions: firstly, the
+interest rate of the floating rate bonds, floating rate term deposits/loans and advances is re-priced after
+the end of the reporting period; secondly, the yield curve moved in parallel with the changes in the interest
+rate; and thirdly, there are no other changes in the portfolio of financial assets and liabilities. Regarding the
+above assumptions, the pre-tax impact on the Group's profit and equity as a result of actual increases or
+decreases in interest rates may differ from that of the following sensitivity analysis.
+(2,722)
+(81)
+2,722
+81
+Increase/
+(decrease)
+in equity
+before tax
+before tax
+in profit
+31 December 2015
+Increase/
+(decrease)
+in profit
+before tax
+31 December 2014
+Increase/
+(decrease)
+(149)
+5,528
+149
+-50 basis
+points
++50 basis
+points
+Bonds carried at fair value through
+profit or loss and available-for-sale
+Bonds carried at fair value through
+profit or loss and available-for-sale
+Increase/
+(decrease)
+in equity
+before tax
+Increase/
+(decrease)
+in profit
+before tax
+31 December 2015
+Change in
+interest rate
+(in RMB million)
+The analysis below is performed for reasonably possible movements in interest rate with all other variables
+held constant, for the following financial instruments, showing the pre-tax impact on the Group's profit
+(fair value change on held for trading bonds) and equity (fair value change on held for trading bonds and
+available-for-sale bonds).
+The Group's interest rate risk policy requires it to manage interest rate risk by maintaining an appropriate
+mix of fixed and variable rate instruments. The policy also requires it to manage the maturities of interest
+bearing financial assets and interest bearing financial liabilities. Interest on floating rate instruments is
+repriced at intervals of less than one year. Interest on fixed interest rate instruments is priced at inception
+of the financial instruments and is fixed until maturity.
+(5,528)
+Increase/
+(decrease)
+in equity
+before tax
+31 December 2014
+Increase/
+(decrease)
+(56)
+(56)
+points
+-50 basis
+Floating interest rate bonds.
+4,016
+4,016
+3,439
+3,439
+points
++50 basis
+Loans and advances to customers
+109
+109
+83
+83
+points
++50 basis
+205
+205
+56
+56
+points
++50 basis
+before tax
+Increase/
+(decrease)
+in equity
+in profit
+before tax
+(c) Interest rate risk (Continued)
+(2) MARKET RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+41,989
+493,145
+Off-balance sheet credit commitments
+38,999
+2,572
+25,770
+10,657
+53,390
+676
+5,407
+47,307
+(14,391)
+1,896
+20,363
+(36,650)
+Notional amount of foreign exchange
+derivative financial instruments
+Net position of foreign currency
+3,534,258
+4,397
+19,118
+184,015
+3,326,728
+32,919
+78
+1,033
+2,580
+29,228
+2,266
+PBOC
+392
+Annual Report 2015
+Annual Report 2015
+248
+Floating rate instruments expose the Group to cash flow interest rate risk, whereas fixed rate instruments
+expose the Group to fair value interest risk.
+Interest rate risk is the risk that the value/future cash flows of a financial instrument will fluctuate because
+of changes in market interest rates.
+(c) Interest rate risk
+The Group expects that current listed stocks and equity investments funds will not lose more than
+RMB18,421 million due to market price movements in a 10-trading-day holding period on 99% of occasions.
+10,705
+18,421
+31 December 2014
+31 December 2015
+Listed stocks and security investment funds
+(in RMB million)
+The analysis below is the estimated impact for listed stocks and security investment funds with 10-day
+reasonable market fluctuation in using the VaR module in the normal market.
+In practice, the actual trading results will differ from the VaR calculation and, in particular, the calculation
+does not provide a meaningful indication of profits and losses in stressed market conditions.
+The use of VaR has limitations because it is based on historical correlations and volatilities in market prices
+and assumes that future price movements will follow a statistical distribution. Due to the fact that VaR
+relies heavily on historical data to provide information and may not clearly predict future changes and
+modifications of the risk factors, the probability of large market moves may be underestimated if changes
+in risk factors fail to align with the normal distribution assumption. The VaR may also be under or over
+estimated due to the assumption placed on risk factors and the relationship between such factors for
+specific instruments. Even though positions may change throughout the day, the VaR only represents the
+risk of the portfolios at the close of each business day, and it does not account for any losses that may
+occur beyond the 99% confidence interval.
+The Group uses a 10-day market price value-at-risk ('VaR') technique to estimate its risk exposure for
+listed equity securities and equity investments funds. The Group adopts 10-day as the holding period on
+the assumption that not all the investments can be sold in one day. Moreover, the VaR calculation is made
+based on normal market conditions and a 99% confidence interval.
+The Group managed price risks by diversification of investments, setting limits for investments in different
+securities, etc.
+The above investments are exposed to price risk because of changes in market prices, where changes are
+caused by factors specific to the individual financial instruments or their issuers, or factors affecting all
+similar financial instruments traded in the market.
+The Group's price risk exposure relates to financial assets and liabilities whose values will fluctuate as a
+result of changes in market prices (other than those arising from interest rate risk or foreign currency risk),
+which mainly include listed equity securities and security investment funds classified as available-for-sale
+financial assets and financial assets at fair value through profit or loss.
+(b) Price risk
+(2) MARKET RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+247
+Ping An Insurance (Group) Company of China, Ltd.
+537,792
+other financial institutions
+1,318,099
+for policy loans, cash value of policies;
+due from and
+-
+institutions
+Cash and amounts due from
+(in RMB million)
+Aging analysis of financial assets
+placements with banks and
+It is the Group's policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to
+reduce or repay the outstanding balance. In general, the Group does not occupy repossessed properties for
+business use.
+Collateral and other credit enhancements (Continued)
+(3) CREDIT RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Management monitors the market value of the collateral, requests additional collateral when needed and
+performs an impairment valuation when applicable.
+Ping An Insurance (Group) Company of China, Ltd. 253
+Past due but not impaired
+and not
+impaired
+10 142,057
+142,047
+repurchase agreements
+Assets purchased under reverse
+185,491
+60
+Not due
+185,431
+Total
+Impaired
+Total past
+due but not
+impaired
+Overdue
+More than
+90 days
+Overdue
+31 to
+90 days
+Overdue
+Less than
+30 days
+other financial institutions
+Annual Report 2015
+for retail lending, residential properties mortgages.
+for commercial lending, charges over real estate properties, inventories, equity investments and trade
+receivables, etc.; and
+31 December 2014
+Others
+Industrial Bank Co., Ltd.
+Shanghai Pudong Development Bank Co., Ltd.
+Agricultural Bank of China Ltd.
+Industrial and Commercial Bank of China Limited
+302,139
+China Minsheng Banking Corp. Ltd.
+Bank of China Limited
+China CITIC Bank Corporation Limited
+China Everbright Bank Co., Ltd.
+China Merchants Bank Co., Ltd.
+Bank of Communications Co., Ltd.
+Top five commercial banks
+Other major banks and financial institutions
+38,096
+30,306
+28,737
+for reverse repurchase transactions, bills, loans and negotiable securities;
+The amount and type of collateral required depends on an assessment of the credit risk of the counterparty.
+Guidelines are implemented regarding the acceptability of types of collateral and the valuation parameters.
+The main types of collateral obtained are as follows:
+Collateral and other credit enhancements
+Please refer to Note 23. (2) and (5) for an analysis of concentration of loans and advances by industry and
+geographical region.
+For on-balance sheet assets, the exposures are based on net carrying amounts as reported in the financial
+statements, The Group also assumes credit risk due to credit commitments. The details are disclosed in
+Note 55. (3).
+Credit exposure
+712,213
+152,872
+18,270
+20,466
+21,805
+21,933
+23,912
+26,688
+26,989
+Loans and advances to
+customers
+31 December 2015
+11,339
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+254
+22,047 1,704,071
+49,495
+24,007
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+12,566
+1,632,529
+Gross total
+58,623
+1,025
+-
+-
+12,922
+1,209,240
+Aging analysis of financial assets (Continued)
+(in RMB million)
+Impaired
+Total past
+due but not
+impaired
+Overdue
+More than
+90 days
+Overdue
+31 to 90
+days
+Overdue
+Less than
+30 days
+and not
+impaired
+Not due
+Past due but not impaired
+31 December 2014
+placements with banks and
+due from and
+-
+institutions
+banks and other financial
+Cash and amounts due from
+57,598
+Finance lease receivable
+(3) CREDIT RISK (CONTINUED)
+138
+359
+36,625
+23,179
+6,849
+5,156
+4,742
+Personal loans
+6,597
+784,989
+Corporate loans
+Including:
+18,867 1,274,989
+46,882
+23,538
+12,005
+7,993
+10,257
+8,352
+10,515
+424,251
+6,858
+81
+191
+725
+Due from reinsurers
+34,918
+829,966
+1,616
+1,947
+388
+370
+858
+31,355
+Premium receivables
+445,023
+997
+54,449
+114,575
+27,486
+4,253
+14,503
+12,342
+15,442
+Other liabilities
+20,298
+14,743
+28,673
+28,673
+Policyholder dividend payable
+51,022
+30,586
+1,440
+21,449
+Bonds payable
+714,340
+-
+562,202
+Cash inflow
+for policyholders
+-
+26
+59
+(35)
+2
+instruments settled on
+a gross basis
+Derivative financial
+a net basis
+instruments settled on
+Derivative financial
+Derivative cash flows
+2,461,338
+100,158
+70,569
+19,175
+379,383
+705,255
+Investment contract liabilities
+exposure
+4
+2,827
+97,150
+Customer deposits and
+Other financial liabilities held
+to repurchase
+Assets sold under agreements
+15,123
+51,071
+89,973
+258,225
+55,806
+financial institutions
+Due to banks and other
+for trading
+4,518,202
+485,601
+Cash outflow
+3,408
+1,435
+470,198
+99,977
+976
+6,366
+33,862
+Insurance payables
+2,887
+932
+879
+836
+41,208
+240
+1,577,386
+265,972
+428,068
+302,090
+581,256
+customers
+payables to brokerage
+4,843
+Accounts payable
+Credit commitments
+31 December 2014
+280,694 231,077
+(273,326) (208,911)
+7,368
+22,166
+238,520 265,608
+182.2%
+21,656
+39,464
+219.9%
+48,771
+107,231
+203.2%
+60,981
+123,912
+205.1%
+180,381
+369,995
+195.4%
+219,061
+428,040
+Solvency
+margin ratio
+capital
+30,243
+Minimum
+regulatory
+18,385
+The Group's solvency ratio is calculated based on the relevant regulations promulgated by the CIRC, which
+is an indicator of the overall solvency position of a financial conglomerate.
+(8) GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+260
+The following table shows the total assets of the various types of unconsolidated structured entities and
+the amount of direct investments made by the Group in these unconsolidated structured entities. The
+table also shows the Group's maximum exposure to the unconsolidated structured entities representing
+the Group's maximum possible risk exposure that could occur as a result of the Group's arrangements with
+structured entities. The maximum exposure is contingent in nature and approximates the sum of direct
+investments made by the Group.
+(8) GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES
+The Group uses structured entities in the normal course of business for a number of purposes, for example,
+structured transactions for customers, to provide finance to public and private sector infrastructure
+projects, and to generate fees from managing assets on behalf of third-party investors. These structured
+entities are financed through the issue of notes or units to investors. Refer to Note 4. (9) for the Group's
+consolidation consideration related to structured entities.
+10.86%
+8.64%
+8.64%
+9.03%
+9.03%
+10.94%
+1,123,788
+31 December 2015
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+Core Tier 1 capital adequacy ratio
+The Company's core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio and capital adequacy ratio
+are shown below:
+The banking business measures the capital adequacy ratio in accordance with the 'Capital Rules for
+Commercial Banks (Provisional)' issued by the CBRC in June 2012. According to the requirements, Risk
+weighted assets for credit risk is measured by Standardised Approach, Risk weighted assets for market risk
+is measured by Standardised Approach, Risk weighted assets for operation risk is measured by the Basic
+Indicator Approach.
+164.5%
+Regulatory
+capital held
+Solvency
+margin ratio
+Minimum
+regulatory
+capital
+(5) MISMATCHING RISK OF ASSETS AND LIABILITIES
+The assets and liabilities related to investment-linked contracts which are regarded as insurance contracts
+are presented as policyholder account assets and liabilities in respect of insurance contracts. The assets and
+liabilities related to investment-linked contracts which are regarded as investment contracts are presented
+as policyholder account assets and liabilities in respect of investment contracts. The assets and liabilities
+of each investment-linked fund are segregated from each other and from the rest of the Group's invested
+assets for record keeping purposes. As the investment risks of investment-linked contracts were fully borne
+by policyholders, the assets and liabilities related to investment-linked contracts were not included in the
+analysis of risk management. Investment-linked contracts are repayable on demand. The Group manages
+liquidity risk related to the investment-linked contracts by investing mainly in assets with high liquidity, as
+disclosed in Note 28.
+Management expects the credit commitments will not be entirely used during the commitment period.
+(4) LIQUIDITY RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+258
+591,182
+16,482
+62,910
+30,128
+46
+548
+516,155
+(486,027)
+373
+(327)
+4,011
+(3,463)
+The objective of the Group's asset and liability management is to match assets with liabilities on the basis
+of both the duration and interest rate. In the current regulatory and market environment, however, the
+Group is unable to invest in sufficient assets with long enough duration to match that of its life insurance
+and investment contract liabilities. When the current regulatory and market environment permits, however,
+the Group will lengthen the duration of its assets by matching the new liabilities of lower guarantee rates,
+while narrowing the gap of existing liabilities of higher guarantee rates.
+(6) OPERATIONAL RISK
+Operational risk is the risk of loss resulting from inadequate or failure of proper internal controls on
+business processes, employees and systems or from uncontrollable external events. The Group is exposed
+to many types of operational risks in the conduct of its business from inadequate or failure to obtain
+proper authorizations, supporting documentation and ensuring operational and informational security
+procedures as well as from fraud or errors by employees. The Group attempts to manage operational risk
+by establishing clear policies and requiring well documented business processes to ensure that transactions
+are properly authorized, supported and recorded.
+(7) CAPITAL MANAGEMENT
+Regulatory
+capital held
+31 December 2014
+31 December 2015
+Ping An Property & Casualty
+Ping An Life
+The Group
+(in RMB million)
+The table below summarizes the minimum regulatory capital for the Group and its major insurance
+subsidiaries and the regulatory capital held against each of them.
+7,662
+(7) CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 259
+Annual Report 2015
+The Group complied with the externally imposed capital requirements as at 31 December 2015 and no
+changes were made to its capital base, objectives, policies and processes from 2014.
+The Group manages its capital requirements by assessing shortfalls, if any, between the reported and
+the required capital levels on a regular basis. Adjustments to current capital levels are made in light of
+changes in economic conditions and risk characteristics of the Group's activities. In order to maintain or
+adjust the capital structure, the Group may adjust the amount of dividends paid, return capital to ordinary
+shareholders or issue capital securities.
+The Group's capital requirements are primarily dependent on the scale and the type of business that it
+undertakes, as well as the industry and geographic location in which it operates. The primary objectives
+of the Group's capital management are to ensure that the Group complies with externally imposed capital
+requirements and to maintain healthy capital ratios in order to support its business and to maximize
+shareholders' value.
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+1,235,221
+Notes to Consolidated Financial Statements
+670,440
+27,467
+14,905
+491,522 446,040
+106,434 99,253
+26,403 96,022
+843,528 848,696 781,345
+11,721
+Other liabilities
+Bonds payable
+33,028
+-
+33,028
+Policyholder dividend payable
+545,839
+33,787 142,737 367,790
+1,525
+for policyholders
+Investment contract liabilities
+4,737
+48,161
+3
+40
+412
+59,214
+1,770,649
+292,368
+149,051
+469
+(364)
+10,136
+(9,870)
+266
+38,999 287,317 141,921
+(37,281) (286,116) (140,638)
+1,718
+1,201
+1,283
+4,473 243,925 300,488
+127
+1
+(53)
+Credit commitments
+Cash outflow
+Cash inflow
+instruments settled on
+a gross basis
+Derivative financial
+a net basis
+instruments settled on
+Derivative financial
+Derivative cash flows
+3,411,131
+-
+-
+-
+2,599
+474,080
+16,437
+56,259
+76,594
+152,168
+137,824
+Due to banks and other
+financial institutions
+Total
+Undated
+Over 5
+years
+1 to 5
+years
+31 December 2015
+3 to 12
+months
+Less than
+3 months
+Repayable
+on demand
+(in RMB million)
+(4) LIQUIDITY RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+-
+250,151
+439,282
+to repurchase
+428,955
+3,502
+2,850
+44,896
+Insurance payables
+1,195
+Accounts payable
+614,864
+customers
+payables to brokerage
+Customer deposits and
+--- 8,596
+- 119,420
+1,108
+7,488
+for trading
+Other financial liabilities held
+49
+119,371
+Assets sold under agreements
+105
+-
+58,664
+9,719
+8,758
+10,088
+2,143
+Premium receivables.
+327,586
+419,266
+313,924
+7,850
+customers
+Loans and advances to
+315,403
+2,182,554
+250,071
+205,684
+978,897
+1,605
+279,780
+11,393
+675,185
+12,867
+18,503
+139,525
+32
+1,729
+259,605
+1,208,151
+Accounts receivable
+173,871
+33,611
+3,799
+9,597
+15,444
+4,771
+maximum
+44,051
+17,496
+23,142
+3,413
+Finance lease receivable
+15,607
+3,154
+8,392
+3,559
+502
+30,740
+261,059
+1,336
+10,076
+Equity investments
+31 December 2014
+Cash and amounts due from
+(in RMB million)
+(4) LIQUIDITY RISK (CONTINUED)
+47. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2015
+As at 31 December 2015 the size of unconsolidated structured entities and the Group's funding and
+maximum exposure are shown below:
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 257
+Annual Report 2015
+637,526
+-
+4,573
+(474,269)
+478,842
+75
+29,976
+Repayable
+on demand
+Less than
+3 months
+3 to 12
+months
+1 to 5
+years
+7,808
+Fixed maturity investments
+140
+22,361
+Bank and statutory deposits
+Balances with the Central
+438,014
+137
+829,281
+3,729
+80,289
+61,477
+118,360
+institutions
+banks and other financial
+Total
+Undated
+Over 5
+years
+174,022
+31 December 2015
+Other assets
+Group's
+26,488
+7,575
+26,488
+7,575
+Debt schemes
+518,968
+349,749
+519,806
+349,489
+Policy loans
+52,092
+37,886
+Bonds
+52,092
+Assets purchased under reverse
+repurchase agreements
+142,050
+197,177
+142,050
+197,177
+Wealth management products
+36,737
+71,892
+36,737
+71,892
+Premium receivables
+37,886
+34,072
+1,054,228
+1,053,882
+Derivative financial assets
+8,272
+4,311
+8,272
+4,311
+Held-to-maturity
+Bonds
+916,669
+783,497
+980,742
+789,332
+Loans and receivables
+1,245,732
+Cash and amounts due from banks and
+439,327
+398,485
+439,327
+398,485
+Balances with the Central Bank and
+statutory deposits
+299,689
+313,728
+299,689
+313,728
+Loans and advances to customers
+1,245,371
+other financial institutions
+30,740
+34,072
+30,740
+Other financial liabilities held for trading
+8,506
+456,153
+99,672
+4,747
+410,258
+119,236
+8,506
+456,153
+99,672
+4,747
+Customer deposits and payables to
+brokerage customers
+1,713,907
+1,510,448
+1,713,907
+1,510,448
+119,236
+Accounts payable
+2,721
+4,735
+2,721
+Insurance payables
+48,161
+41,208
+48,161
+41,208
+Investment contract liabilities
+for policyholders
+Policyholder dividend payable
+Bonds payable
+4,735
+Assets sold under agreements to repurchase
+410,258
+Due to banks and other financial institutions
+Accounts receivable
+16,778
+14,983
+16,778
+14,983
+Finance lease receivable
+57,598
+37,908
+57,598
+37,908
+Other assets
+82,940
+68,998
+82,940
+68,998
+Total financial assets
+4,462,933
+3,769,397
+4,528,205
+3,775,318
+Financial liabilities
+Derivative financial liabilities
+4,527
+2,770
+4,527
+2,770
+Other financial liabilities
+2,772
+Other liabilities
+13,691
+13,691
+(in RMB million)
+Securitization
+Size
+Carrying
+amount
+Group's
+maximum
+exposure
+29,222
+79
+79
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties
+Wealth management products
+managed by affiliated entities
+1,047,645
+Unconsolidated structured entities
+143,118
+Note 1
+201,176
+201,176
+187,649
+503
+503
+Wealth management products
+managed by third parties
+Note 1
+65,283
+65,283
+Interest held by Group
+Investment income
+and service fee
+Investment income
+and service fee
+Investment income
+143,118
+Investment income
+and service fee
+Investment income
+31 December 2014
+419,839
+7,218
+196
+196
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties
+Wealth management products
+managed by affiliated entities.
+913,189
+140,637
+140,637
+Note 1
+260,359
+260,359
+Interest held by Group
+Investment income
+and service fee
+Investment income
+and service fee
+Investment income
+587,221
+419,839
+599
+Wealth management products
+Note 1
+18,048
+18,048
+Investment income
+and service fee
+Investment income
+managed by third parties
+Others
+12,096
+Service fee
+Total
+1,519,724
+599
+Others
+Total
+36,376
+1,300,892
+141,507
+141,812
+141,507
+141,812
+Others
+101,889
+40,016
+101,889
+40,016
+Carried at fair value through profit or loss
+Bonds
+26,549
+Stocks
+30,834
+30,834
+Funds
+30,538
+16,679
+30,538
+16,679
+Stocks
+2,624
+930
+2,624
+930
+Others
+26,549
+35,417
+76,766
+35,417
+Service fee
+410,159
+Unconsolidated structured entities
+FINANCIAL STATEMENTS
+Note 1: These assets management products and wealth management products are sponsored by third party financial institutions and the
+information related to size of these structured entities were not publicly available.
+The Group's interest in unconsolidated structured entities are recorded as other equity investments under
+equity investments and trust schemes, asset management schemes, debt schemes, wealth management
+products under fixed maturity investments and trust beneficial right of loans and receivables purchased
+under trust schemes under assets purchased under reverse repurchase agreements.
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+The Group's financial instruments mainly consist of cash and amounts due from banks and other financial
+institutions, term deposits, bonds, funds, stocks, loans, borrowings, deposits from other banks and financial
+institutions, customer deposits and payables to brokerage customers, etc. The Group holds various other
+financial assets and liabilities which directly arose from insurance operations, such as premium receivables,
+reinsurers' share of insurance liabilities, annuity and other insurance payables.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 261
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS
+The following table sets out the carrying values and fair values of the Group's major financial instruments
+by classification:
+(in RMB million)
+Financial assets
+Available-for-sale
+Bonds
+Carrying values
+Fair values
+31 December 2015 31 December 2014 31 December 2015 31 December 2014
+Funds
+192,318
+76,766
+130,126
+192,318
+130,126
+2,772
+Total financial liabilities
+410,159
+33,753
+Derivative financial assets
+Interest rate swaps
+Currency forwards and swaps
+Others
+31 December 2014
+Level 1
+Level 2
+Level 3
+Total fair value
+1,996
+28,838
+16,427
+Other equity investments
+252
+920
+10
+930
+885
+1,440
+447
+Carrying
+amount
+20,228
+30,540
+447
+51,215
+515
+30,834
+16,679
+1,922
+Equity securities
+Bonds
+Interest rate swaps
+Currency forwards and swaps
+Others
+1,434
+1,676
+1,434
+1,676
+1,417
+1,417
+4,527
+4,527
+Other financial liabilities held for trading
+Total financial liabilities
+8,506
+Security investment funds
+8,506
+4,527
+13,033
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 265
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments recorded at fair value by level of the fair value
+hierarchy (continued):
+(in RMB million)
+Financial assets
+Carried at fair value through profit or loss
+8,506
+1,874
+4,311
+515
+Financial liabilities
+Derivative financial liabilities
+Interest rate swaps
+Currency forwards and swaps
+Others
+566
+566
+1,882
+1,882
+322
+322
+2,770
+Total financial assets
+2,770
+4,747
+4,747
+4,747
+2,770
+7,517
+266
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Size
+Securitization
+(in RMB million)
+37,606
+Other financial liabilities held for trading
+Total financial liabilities
+402,897
+15,717
+178,770
+1,922
+1,874
+4,311
+Available-for-sale financial assets
+Bonds
+31,757
+98,369
+130,126
+Security investment funds
+33,762
+1,655
+35,417
+Equity securities
+122,613
+18,885
+314
+141,812
+Other equity investments
+50
+25,010
+14,956
+40,016
+188,182
+143,919
+15,270
+347,371
+208,410
+Derivative financial liabilities
+Financial liabilities
+2,772
+594,154
+Ping An Insurance (Group) Company of China, Ltd. 263
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY
+The Group uses the following hierarchy for determining and disclosing the fair values of financial
+instruments by valuation techniques:
+Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. A market is regarded
+as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry
+group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring
+market transactions on an arm's length basis. The primary quoted market price used for financial assets
+held by the Groups is the current bid price. Financial instruments included in Level 1 comprise primarily
+equity investments, fund investments and bond investments traded on stock exchanges and open-ended
+mutual funds;
+Level 2: other valuation techniques for which all inputs which have a significant effect on the recorded
+fair value are observable, either directly or indirectly. These valuation techniques maximize the use of
+observable market data where it is available and rely as little as possible on entity specific estimates;
+Level 3: valuation techniques which use any inputs which have a significant effect on the recorded fair value
+that are not based on observable market data.
+The level of fair value calculation is determined by the lowest level input with material significant in the
+overall calculation. As such, the significance of the input should be considered from an overall perspective
+in the calculation of fair value.
+Valuation methods for Level 2 and Level 3 financial instruments
+Annual Report 2015
+For Level 2 financial instruments, valuations are generally obtained from third party pricing services
+for identical or comparable assets, or through the use of valuation methodologies using observable
+market inputs, or recent quoted market prices. Valuation service providers typically gather, analyze and
+interpret information related to market transactions and other key valuation model inputs from multiple
+sources, and through the use of widely accepted internal valuation models, provide a theoretical quote
+on various securities. Debt securities are classified as Level 2 when they are valued at recent quoted price
+from Chinese interbank market or from valuation service providers. The fair value of debt investments
+denominated in RMB is determined based upon the valuation results by the China Central Depository &
+Clearing Co., Ltd. All significant inputs are observable in the market.
+264
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments recorded at fair value by level of the fair value
+hierarchy:
+(in RMB million)
+Financial assets
+Carried at fair value through profit or loss
+Bonds
+Security investment funds
+Equity securities
+Other equity investments
+For Level 3 financial instruments, prices are determined using valuation methodologies such as discounted
+cash flow models and other similar techniques. Determinations to classify fair value measures within Level 3
+of the valuation hierarchy are generally based on the significance of the unobservable factors to the overall
+fair value measurement, and valuation methodologies such as discounted cash flow models and other
+similar techniques.
+The fair value of fixed rate financial assets and liabilities carried at amortized cost is estimated by
+comparing market interest rates when they were first recognized with current market rates for similar
+financial instruments. The estimated fair value of fixed interest bearing deposits is based on discounted
+cash flows using prevailing money market interest rates for financial products with similar credit risk and
+maturity. For quoted debts issued the fair values are determined based on quoted market prices. For those
+debts issued where quoted market prices are not available, a discounted cash flow model is used based on
+a current interest rate yield curve appropriate for the remaining term to maturity and credit spreads.
+Fixed rate financial instruments
+For financial assets and financial liabilities that have a short term maturity (less than three months), it is
+assumed that the carrying amounts approximate to their fair values. This assumption is also applied to
+term deposits, and savings accounts without a specific maturity. For other variable rate instruments, an
+adjustment is also made to reflect the change in the market rate since the instrument was first recognized.
+Floating rate loans and advances to customers of the Group are repriced within one year, and the interest
+rates are adjusted according to the statutory interest rate announced by the PBOC. Thus, the carrying
+amounts approximate to their fair values.
+37,606
+Total financial assets
+33,753
+33,028
+28,673
+33,028
+28,673
+264,413
+88,119
+267,288
+90,594
+166,855
+92,588
+166,855
+92,588
+2,811,232
+2,360,852
+2,363,327
+The assets and liabilities of the investment-linked business are not included in the above financial assets
+and liabilities.
+262
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED)
+Fair value of financial assets and liabilities not carried at fair value
+The following describes the methodologies and assumptions used to determine fair values for those
+financial instruments which are not recorded at fair value in the financial statements, i.e., held-to-maturity
+and loans and receivables.
+Financial assets and liabilities for which fair value approximates to carrying value
+31 December 2015
+Level 1
+2,814,107
+Level 3
+8,272
+Available-for-sale financial assets
+Bonds
+36,083
+156,235
+192,318
+Security investment funds
+68,507
+8,252
+7
+76,766
+Equity securities
+4,237
+132,243
+141,507
+Other equity investments
+74,212
+101,889
+236,833
+201,428
+74,219
+512,480
+271,345
+Level 2
+75,164
+247,645
+9,264
+2,711
+27,677
+8,239
+25,730
+819
+Total fair value
+1,324
+26,549
+30,479
+59
+2,475
+149
+2,624
+706
+12,099
+886
+13,691
+30,538
+37,978
+33
+34,479
+4,204
+2,711
+1,324
+33
+Currency forwards and swaps
+Derivative financial assets
+73,402
+945
+Interest rate swaps
+Others
+Notes to Consolidated Financial Statements
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+52. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(i)
+For the year ended 31 December 2015
+(ii)
+34,699
+Annual Report 2015
+22,825
+404
+124
+148
+15,838
+Other non-monetary benefits include share purchase scheme, in 2015, the Company has adopted an employee share purchase
+scheme for the key employees of the Company and its subsidiaries. The shares purchased in 2015 will start to vest in 2016, and thus
+there was no other non-monetay benefits in 2015.
+15,836
+2,349
+Ping An Insurance (Group) Company of China, Ltd. 273
+Discretionary bonuses are determined on the achievement of targeted profit of the Company, the personal performance and
+approved by the compensation committee of the board of directors.
+53. FIVE HIGHEST PAID INDIVIDUALS
+(iv)
+10
+4,087
+11
+2014
+2015
+Salaries and other short term employee benefits after tax
+Individual income tax
+(in RMB million)
+Details of emoluments of the remaining highest paid individuals are as follows:
+The five individuals whose emoluments were the highest in the Group include 3 (2014: 3) key management
+members whose emoluments were reflected in the analysis presented in Note 52.
+KU Man resigned as Director on 2 July 2014, took over by CAI Fangfang.
+(ix)
+(viii) During the year, PENG Zhijian waived emoluments of RMB250 thousand.
+(vii) The long-term benefits attributed to year 2011 for SUN Jianyi, REN Huichuan, YAO Jason Bo, LEE Yuansiong, CAI Fangfang, LIN Lijun,
+SUN Jianping, ZHAO Fujun and PAN Zhongwu were paid in 2014 as the required payment conditions had been fulfilled. The amount
+after tax paid to SUN Jianyi, REN Huichuan, YAO Jason Bo, LEE Yuansiong, CAI Fangfang, LIN Lijun, SUN Jianping, ZHAO Fujun and
+PAN Zhongwu were RMB4,059 thousand, RMB4,059 thousand, RMB811.8 thousand, RMB595.3 thousand, RMB459.5 thousand, RMB147.4
+thousand, RMB600.1 thousand, RMB479.2 thousand and RMB221.2 thousand respectively and was disclosed in the Announcement
+regarding the Resolutions of the Board of Directors of the Company dated 19 August 2014.
+LIN Li retired as Supervisor on 15 June 2015; SUN Jianping and ZHAO Fujun retired as Supervisors on 30 June 2015; GAO Peng were
+appointed as Supervisor on 30 June 2015.
+LI Zhe retired as Director on 15 June 2015; TANG Yunwei and LEE Carmelo Ka Sze retired as Directors on 30 June 2015; GE Ming were
+appointed as Director on 30 June 2015.
+The long-term benefits attributed to year 2012 for SUN Jianyi, REN Huichuan, YAO Jason Bo, LEE Yuansiong, LIN Lijun, SUN Jianping,
+ZHAO Fujun and PAN Zhongwu were paid in 2015 as the required payment conditions had been fulfilled. The amount after tax
+paid to SUN Jianyi, REN Huichuan, YAO Jason Bo, LEE Yuansiong, LIN Lijun, SUN Jianping, ZHAO Fujun and PAN Zhongwu were
+RMB3,753.8 thousand, RMB3,753.8 thousand, RMB750.8 thousand, RMB550.6 thousand, RMB130.1 thousand, RMB553.3 thousand, RMB212.8
+thousand, RMB59 thousand respectively and was disclosed in the Announcement regarding the Resolutions of the Board of Directors
+of the Company dated 20 August 2015.
+MA Mingzhe is the Chief Executive Officer of the Company.
+(vi)
+(v)
+(iii)
+6,841
+Total
+46
+1,829
+1,291
+Subtotal
+PAN Zhongwu (vii)
+ZHAO Fujun (vi) (vii)
+SUN Jianping (vi) (vii)
+ZHANG Wangjin
+LIN Li (vi)
+23
+6
+52
+258
+29
+PENG Zhijian
+258
+GU Liji
+Supervisors
+8
+29
+18
+52
+3,213
+67
+3,428
+2,854
+287
+205
+798
+51
+19
+23
+204
+501
+1,643
+2,543
+56
+9
+21
+1,395
+1,062
+2,181
+159
+8
+55. COMMITMENTS
+RMB4,500,001 - RMB5,000,000
+31 December 2015
+Authorized, but not contracted for
+Contracted, but not provided for
+(in RMB million)
+The Group had the following capital commitments relating to property development projects and
+investments:
+(1) CAPITAL COMMITMENTS
+18,738
+For the year ended 31 December 2015
+31 December 2014
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 275
+195
+208
+Annual Report 2015
+Customer deposits and payables to brokerage customers
+Other liabilities
+CP Group
+31 December 2014
+276
+9,794
+9,863
+3,364
+13,158
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+16,967
+19,624
+3,013
+2,731
+9,736
+4,218
+5,004
+11,889
+31 December 2014
+31 December 2015
+More than 5 years
+1 to 5 years
+Within 1 year
+(in RMB million)
+The Group leases office premises and staff quarters under various rental agreements. Future minimum lease
+payments under non-cancellable operating leases are as follows:
+(2) OPERATING LEASE COMMITMENTS
+17,318
+7,455
+31 December 2015
+The number of non-key management personnel whose emoluments after tax fell within the following bands
+is as follows:
+(in RMB million)
+30
+Relationship with the Company
+Charoen Pokphand Group Co., Ltd. (the 'CP Group')
+Shenzhen Investment Holdings Co. Ltd.
+Name of related parties
+(1) THE COMPANY'S RELATED PARTIES WHERE SIGNIFICANT INFLUENCE EXISTS INCLUDE
+CERTAIN SHAREHOLDERS SET OUT BELOW:
+54. SIGNIFICANT RELATED PARTY TRANSACTIONS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+274
+Parent of shareholders
+Shareholder
+Under PRC tax regulations, individual income tax is calculated at progressive rates with a cap of 45%. The
+effective income tax rates of the five highest paid individuals in the Group were approximately 41.75% - 43.15%
+(2014: 42.55% - 44.55%) for 2014 and the average effective tax rate was approximately 42.44% (2014: 43.45%).
+1
+1
+1
+2014
+2015
+RMB5,000,001
+RMB5,500,001 - RMB6,000,000
+RMB5,500,000
+-
+1
+As at 31 December 2015, CP Group held 9.59% equity interests in the Company and was the largest
+shareholder of the Company.
+(2) THE SUMMARY OF SIGNIFICANT RELATED PARTY TRANSACTIONS IS AS FOLLOWS:
+2015
+30
+2
+3
+2
+5
+Rental income from
+Claims expenses to
+1
+4
+808
+306
+Premiums income from
+CP Group
+Rental income from
+Services expenses to
+Goods purchased from
+Newheight Shanghai
+(in RMB million)
+2014
+(3) THE SUMMARY OF BALANCES OF THE GROUP WITH RELATED PARTIES IS AS FOLLOWS:
+27,858
+YAO Jason Bo (vii)
+78
+Ping An Insurance (Group) Company of China, Ltd.
+20,631
+31,499
+404
+155
+13,339
+15,213
+2,223
+52. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+1,423
+-
+137
+48
+63
+628
+2,002
+258
+346
+3,136
+703
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+Certain of the comparative information of directors' emoluments for the year ended 31 December 2014
+previously disclosed in accordance with the predecessor Companies Ordinance have been restated in order
+to comply with the new scope and requirements by the Hong Kong Companies Ordinance (Cap.622).
+18
+19
+income tax
+Total
+Individual
+undertaking
+paid or
+receivable
+in respect
+of director's
+other services
+in connection
+with the
+management
+of the affairs
+of the
+company or
+its subsidiary
+Remunerations
+paid or
+receivable in
+respect of
+accepting
+office as
+director
+For the year ended 31 December 2014 (Restated)
+Emoluments
+Other
+employee
+benefits
+Housing
+allowance
+Discretionary
+bonuses (ii)
+Salaries
+Fees
+2014
+Directors
+(in RMB thousand)
+Employer's
+contribution
+to a
+retirement
+benefit
+scheme
+28
+12
+14
+62
+258
+19,208
+28,363
+31
+149
+65
+305
+52
+62
+65
+305
+65
+305
+65
+305
+31
+149
+298
+645
+12
+10
+282
+367
+-
+403
+900
+53
+22
+26
+346
+453
+267
+581
+29
+4
+11
+537
+355
+694
+27
+59
+4
+18
+21263222
+290
+60
+290
+290
+WOO Ka Biu Jackson
+290
+Ka Sze (vi)
+LEE Carmelo
+60
+62
+298
+TANG Yunwei (vi)
+LU Hua
+YANG Xiaoping
+CHEARAVANONT
+Soopakij
+LI Zhe (vi)
+13
+298
+Stephen Thomas
+Meldrum
+298
+81
+12,410
+12,982
+2,062
+Subtotal
+60
+290
+290
+SUN Dongdong
+62
+298
+298
+WONG Oscar Sai Hung
+62
+298
+298
+YIP Dicky Peter
+62
+298
+10
+245
+3
+2221123 1
+166
+692
+52
+675
+1,121
+3,806
+5,140
+3,653
+MA Mingzhe (iii)
+4,953
+542
+2,496
+3,605
+2,509
+3,498
+4,655
+6,245
+59
+350
+2,831
+3,314
+SUN Jianyi (vii)
+136
+462
+LIN Lijun (vii)
+FAN Mingchun
+495
+580
+CAI Fangfang (vii) (ix)
+2,604
+2,510
+LEE Yuansiong (vii)
+2,533
+2,394
+536
+KU Man (ix)
+1,664
+1,841
+REN Huichuan (vii)
+1,664
+1,828
+3
+165
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments not recorded at fair value but for which fair
+value is disclosed by level of the fair value hierarchy:
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Other transferred financial assets that do not qualify for derecognition mainly include debt securities
+held by counterparties as collateral under repurchase agreements. The counterparties are allowed to sell
+or repledge those securities sold under repurchase agreements in the absence of default by the Group,
+but has an obligation to return the securities at the maturity of the contract. If the securities increase or
+decrease in value, the Group may in certain circumstances require or be required to provide additional
+collateral. The Group has determined that it retains substantially all the risks and rewards of these securities
+and therefore has not derecognized them.
+The following table analyses the carrying amount of the abovementioned financial assets transferred to
+third parties that did not qualify for derecognition and their associated financial liabilities:
+(in RMB million)
+Repurchase transactions
+Assets securitization
+50. CASH AND CASH EQUIVALENTS
+31 December 2015
+31 December 2014
+Carrying
+Carrying
+Carrying
+amount assets
+amount
+associated
+liabilities
+Carrying
+amount assets
+amount
+associated
+liabilities
+4,653
+2,209
+5,287
+2,209
+6,105
+12,865
+6,877
+12,865
+(in RMB million)
+Cash and amounts due from banks and other financial institutions
+Cash on hand
+31 December 2015
+31 December 2014
+Term deposits
+The Group's subsidiaries Ping An Bank and Ping An Securities entered into loan securitization transactions.
+The Group has determined that it retains substantially all the risks and rewards of certain securitised loans
+and therefore has not derecognized them.
+4,125
+1,415
+Transferred financial assets that do not qualify for derecognition include securitized loans and debt
+securities held by counterparties as collateral under repurchase agreement.
+49. TRANSFERRED FINANCIAL ASSETS
+Total
+Carried at fair value through profit or loss
+Available-for-sale
+5
+477
+118
+123
+-
+477
+482
+118
+600
+2014
+(in RMB million)
+Realized gains
+Unrealized gains
+Total
+Carried at fair value through profit or loss
+131
+131
+131
+131
+Transfers
+During the year 2015, there were no significant transfers between Level 1 and Level 2 fair value
+measurements. Transfer into or out of level 3 is due to change of input value for part of financial
+instruments and valuation performed on part of equity investments previously stated at cost.
+268
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+The Group enters into transactions in the normal course of business by which it transfers recognized
+financial assets to third parties or to structured entities. In some cases where these transfers may give
+rise to full or partial derecognition of the financial assets concerned. In other cases where the transferred
+financial assets do not qualify for derecognition as the Group has retained substantially all the risks and
+rewards of these financial assets, the Group continued to recognize the transferred financial assets.
+Unrealized gains
+4,168
+Due from banks and other financial institutions
+Amortization of intangible assets
+2015
+2014
+93,413
+62,353
+4,050
+3,273
+1,912
+1,932
+Losses on disposal of investment properties, property and
+equipment, intangible assets and settled assets
+14
+134
+Investment income
+(167,634)
+(103,364)
+Fair value gains on investments at fair value through profit or loss
+Fair value losses on available-for-sale equity investments
+(125)
+(615)
+(transfer from equity)
+1,027
+8,859
+Finance costs
+Foreign exchange losses
+7,539
+6,974
+Depreciation
+2,010
+Adjustments for:
+(in RMB million)
+102,217
+92,610
+Placements with banks and other financial institutions
+73,966
+44,898
+Balances with the Central Bank
+46,910
+49,238
+Bonds
+3,223
+4,668
+Assets purchased under reverse repurchase agreements
+101,469
+66,368
+Total
+333,325
+263,960
+The carrying amounts disclosed above approximate their fair values at year end.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 269
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+51. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+Reconciliation of profit before tax to net cash flows from operating activities:
+Profit before tax
+Realized gains
+(in RMB million)
+2015
+Financial liabilities
+Bonds payable
+Total financial liabilities
+267,288
+267,288
+Level 1
+31 December 2014
+Level 2
+Level 3
+Total fair value
+41,385
+41,385
+746,747
+1,200
+789,332
+746,747
+1,200
+789,332
+90,594
+90,594
+90,594
+90,594
+Financial assets and liabilities for which fair value approximates carry value are not included in the above
+disclosure of financial instruments not recorded at fair value but for which fair value is disclosed by level of
+the fair value hierarchy.
+Reconciliation of movements in Level 3 financial instruments measured at fair value is as follows:
+(in RMB million)
+At 1 January
+Additions
+Disposals
+Total financial assets
+Transfers into Level 3
+Bonds
+Financial assets
+(in RMB million)
+Financial assets
+Held-to-maturity
+Bonds
+31 December 2015
+Level 1
+Level 2
+Level 3
+Total fair value
+49,308
+929,734
+1,700
+980,742
+49,308
+929,734
+1,700
+980,742
+Financial liabilities
+Bonds payable
+990
+266,298
+Total financial liabilities
+990
+266,298
+(in RMB million)
+Held-to-maturity
+Transfers out of Level 3
+Total gains in income
+At 31 December
+Transfers out of Level 3
+Total gains in income
+Total gains in other comprehensive income
+At 31 December
+financial assets
+Fixed maturity investments
+Available-for-sale
+financial assets
+Equity investments
+2015
+2014
+2015
+2014
+11
+15,270
+59,243
+3,272
+11,066
+(7,201)
+10,717
+842
+(4,899)
+477
+612
+90
+74,219
+15,270
+The gains of level 3 financial instruments included in the statement of income for the year are presented as
+follows:
+Transfers into Level 3
+Disposals
+Additions
+At 1 January
+Carried at fair value
+through profit or loss
+Fixed maturity investments
+2015
+Carried at fair value
+through profit or loss
+Equity investments
+2014
+2015
+447
+1,439
+(1,111)
+2014
+151
+300
+(256)
+(135)
+123
+131
+945
+447
+Ping An Insurance (Group) Company of China, Ltd. 267
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+48. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+Reconciliation of movements in Level 3 financial instruments measured at fair value is as follows: (Continued)
+Available-for-sale
+(in RMB million)
+47
+191
+Total financial assets
+658
+-
+3,454
+2,554
+62
+3,569
+2,541
+YAO Jason Bo (iv)
+2,395
+2,532
+4
+27
+4,958
+3,653
+LEE Yuansiong (iv)
+2,510
+2,604
+4
+27
+5,145
+3,806
+CAI Fangfang
+1,434
+1,251
+22
+27
+4,242
+43
+5,748
+262
+paid or
+receivable
+in respect
+of director's
+other services
+in connection
+with the
+management
+of the affairs
+of the
+company
+accepting
+or its
+office as
+director
+subsidiary
+Individual
+undertaking
+Total
+income tax
+MA Mingzhe (iii)
+2,831
+2,807
+26
+SUN Jianyi (iv)
+1,782
+1,664
+2
+REN Huichuan (iv)
+1,795
+1,664
+26
+62
+2,777
+1,815
+FAN Mingchun
+'
+Subtotal
+1,965
+13,211
+12,711
+102
+107
+267
+Supervisors
+GU Liji
+258
+PENG Zhijian (viii)
+LIN Li (vi)
+ZHANG Wangjin
+SUN Jianping (iv) (vi)
+ZHAO Fujun (iv) (vi)
+PAN Zhongwu (iv)
+GAO Peng (vi)
+Subtotal
+Total
+272
+Annual Report 2015
+149
+31
+Provision for doubtful debts and others, net
+149
+GE Ming (v)
+305
+SUN Dongdong
+LIN Lijun (iv)
+LI Zhe (v)
+Soopakij
+CHEARAVANONT
+464
+189
+26
+22
+46
+747
+182
+YANG Xiaoping
+in respect of
+LU Hua
+149
+LEE Carmelo Ka Sze (v)
+149
+WOO Ka Biu Jackson
+305
+Stephen Thomas
+Meldrum
+305
+YIP Dicky Peter
+305
+WONG Oscar Sai Hung
+298
+TANG Yunwei (v)
+paid or
+receivable
+Annual Report 2015
+Emoluments
+Decrease in assets purchased under reverse repurchase
+agreements of the banking and securities business
+44,330
+54,972
+Increase in other assets
+(41,055)
+(61,234)
+Decrease in amounts due to banks and other financial institutions
+(83,359)
+(76,802)
+Increase in customer deposits and payables to brokerage customers
+184,989
+314,632
+Increase in insurance payables
+16,825
+11,301
+Increase in insurance contract liabilities
+151,160
+121,495
+Increase in investment contract liabilities for policyholders
+57,217
+42,852
+Increase in policyholder dividend payable
+4,355
+3,441
+Decrease in assets sold under agreements to repurchase
+(206,726)
+of the banking and securities business
+(199,752)
+(1,699)
+310
+Remunerations
+Loan loss provisions, net of reversals
+30,118
+14,614
+Operating loss before working capital changes
+(5,339)
+Changes in operating assets and liabilities:
+Increase in balances with the Central Bank and statutory deposits
+12,215
+(53,361)
+Increase in amounts due from banks and other financial institutions
+(40,624)
+(7,497)
+Increase in premium receivables
+(3,616)
+(6,765)
+Increase in accounts receivable
+(2,074)
+(7,682)
+Increase in inventories
+(1,643)
+(729)
+Increase in reinsurers' share of insurance liabilities
+(2,221)
+Increase in loans and advances to customers
+(8,739)
+(29,284)
+Increase in other liabilities
+36
+2014
+19
+13
+The long-term benefits attributed to year 2012 for key management personnel other than directors and
+supervisors were paid in 2015 as the required payment conditions had been fulfilled. The amount paid after
+tax was RMB2,675.0 thousand and was disclosed in the Announcement regarding the Resolutions of the
+Board of Directors of the Company dated 20 August 2015.
+The long-term benefits attributed to year 2011 for key management personnel other than directors and
+supervisors were paid in 2014 as the required payment conditions had been fulfilled. The amount paid after
+tax was RMB2, 153.3 thousand and was disclosed in the Announcement regarding the Resolutions of the
+Board of Directors of the Company dated 19 August 2014.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 271
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+52. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+The remuneration of every director and supervisor is set out below:
+For the year ended 31 December 2015:
+(in RMB thousand)
+Directors
+2015
+Fees
+Salaries
+Employer's
+contribution
+to a
+retirement
+benefit
+Housing
+allowance
+Other
+employee
+benefits
+scheme
+(10,368)
+54
+24
+17
+Discretionary
+bonuses (ii)
+Salaries and other short term employee benefits after tax
+Individual income tax
+2015
+75,179
+Cash generated from operations
+Net cash flows from operating activities
+158,966
+185,670
+(23,348)
+(15,410)
+135,618
+170,260
+270
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Income tax paid
+(1) KEY MANAGEMENT PERSONNEL COMPRISE THE COMPANY'S DIRECTORS, SUPERVISORS,
+AND SENIOR OFFICERS AS DEFINED IN THE COMPANY'S ARTICLES OF ASSOCIATION
+The summary of compensation of key management personnel for the year is as follows:
+(in RMB million)
+52. COMPENSATION OF KEY MANAGEMENT PERSONNEL
+(2) COMPENSATION OF KEY MANAGEMENT PERSONNEL OTHER THAN DIRECTORS AND
+SUPERVISORS IS AS FOLLOWS:
+Part of compensation of key management personnel is subject to deferred payment requirement for a
+period of 3 years in accordance with the 'Guidance of insurance company's compensation management'
+issued by CIRC. Unpaid balances subject to deferred payment requirement were included in the total
+compensation payable to the key management personnel.
+The estimated amount of total compensation has been provided in the Group's 2015 financial statements.
+The total compensation for certain key management personnel has not yet been finalized in accordance
+with relevant policies. The remaining compensation will be disclosed in a separate announcement when
+approved.
+38
+100,242
+55
+Salaries and other short term employee benefits after tax
+Individual income tax
+2014
+2015
+(in RMB million)
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+60. BALANCE SHEET AND RESERVE MOVEMENT OF THE HOLDING COMPANY
+(CONTINUED)
+(2) RESERVE MOVEMENT OF THE HOLDING COMPANY:
+Conversion of convertible bonds
+(in RMB million)
+As at 1 January 2015
+Profit for the year
+Other comprehensive income
+Transfer of capital reserves to
+share capital
+(9,140)
+Dividend declared
+Share
+premium
+reserve
+127,535
+Others
+profits
+Surplus
+reserve
+fund
+General
+reserve
+Ping An Insurance (Group) Company of China, Ltd. 279
+Retained
+Available-
+for-sale
+investment
+17,331
+Director
+136,969
+34,070
+32,678
+191,390
+178,539
+5,000
+7,170
+4,782
+42
+-
+Annual Report 2015
+9,131
+195,870
+981
+10,805
+202,195
+The balance sheet of the Company was approved by the Board of Directors on 15 March 2016 and was
+signed on its behalf.
+MA Mingzhe
+Director
+SUN Jianyi
+Director
+YAO Jason Bo
+1,030
+Total
+533
+1,472
+34,070
+173,110
+As at 1 January 2014
+83,412
+(137)
+3,731
+6,982
+395
+Profit for the year
+31,493
+7,214
+125,876
+7,214
+Other comprehensive income
+234
+1
+235
+Placing of new H shares
+28,248
+28,248
+Conversion of convertible bonds
+15,875
+139,040
+(2,260)
+395
+8,498
+877
+128,737
+7,470
+395
+32,678
+10,280
+169,647
+10,280
+436
+10,342
+(1,471)
+436
+8,871
+(9,140)
+97
+(7,860)
+Appropriations to surplus
+reserves
+1,028
+(1,028)
+Share purchase scheme
+185
+185
+Others
+691
+691
+As at 31 December 2015
+(7,860)
+8,892
+The employees of the Group are entitled to participate in and make contributions to various government
+sponsored funds for housing purposes. The Group contributes on a monthly basis to these funds based
+on certain percentages of the salaries of the employees. The Group's liability in respect of these funds is
+limited to the contributions payable in each period.
+Total equity and liabilities
+The Group leases its investment properties under various rental agreements. Future minimum lease
+receivables under non-cancellable operating leases are as follows:
+(in RMB million)
+Within 1 year
+1-5 years
+More than 5 years
+31 December 2015
+31 December 2014
+1,038
+1,061
+2,694
+2,448
+2,147
+3,314
+5,879
+6,823
+Ping An Insurance (Group) Company of China, Ltd. 277
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2015
+56. EMPLOYEE BENEFITS
+(1) PENSION
+The employees of the Group are mainly covered by various defined contribution pension plans. The Group
+makes and accrues contributions on a monthly basis to the pension plans, which are mainly sponsored by
+relevant government authorities that are responsible for the pension liability to retired employees. Under
+such plans, the Group has no other significant legal or constructive obligations for retirement benefits
+beyond the said contributions, which are expensed as incurred. Certain employees are also provided with
+group life insurance but the amounts involved are insignificant.
+(2) HOUSING BENEFITS
+OPERATING LEASE RENTAL RECEIVABLES
+13,615
+(4)
+232,909
+(3) CREDIT COMMITMENTS
+(in RMB million)
+Bank acceptances
+31 December 2015
+31 December 2014
+400,736
+381,650
+Guarantees issued
+104,655
+86,131
+Letters of credit issued
+73,892
+70,011
+Subtotal
+579,283
+537,792
+Unused limit of credit cards and irrevocable loan commitments
+Total
+58,243
+53,390
+637,526
+591,182
+Credit risk weighted amounts of credit commitments
+226,879
+As at 31 December 2015, apart from the above irrevocable credit commitments, revocable loan commitments
+granted by the Group amounted to RMB2,204.2 billion (31 December 2014: RMB2,087.1 billion). Since these
+commitments are revocable under certain conditions or would be automatically revoked should the
+creditworthiness of the borrower deteriorates, the total commitment amount does not necessarily represent
+future cash requirements. Credit commitments disclosed in the table above do not include the financial
+guarantee contracts treated as insurance by the Group.
+18,280
+(3) MEDICAL BENEFITS
+(4) SHARE PURCHASE SCHEME
+31 December 2014
+10,179
+14,608
+26,214
+17,182
+8,926
+7,613
+167,836
+142,367
+23
+23
+623
+2,471
+202,195
+195,870
+Reserves
+Retained profits
+Total equity
+Liabilities
+Due to banks and other financial institutions
+Assets sold under agreements to repurchase
+Income tax payable
+Bonds payable
+Other liabilities
+Total liabilities
+31 December 2015
+The Group makes monthly contributions for medical benefits to the local authorities in accordance with
+relevant local regulations for the employees. The Group's liability in respect of employee medical benefits is
+limited to the contributions payable in each period.
+Share capital
+Equity and liabilities
+The Group has adopted an employee share purchase scheme for the key employees of the Company and its
+subsidiaries. Refer to Note 36 for more details.
+57. CONTINGENT LIABILITIES
+Owing to the nature of the insurance, bank and other financial services business, the Group is involved in
+contingencies and legal proceedings in the ordinary course of business, including, but not limited to, being
+the plaintiff or the defendant in litigation and arbitration. Legal proceedings mostly involve claims on the
+Group's insurance policies and other claims. Provision has been made for probable losses to the Group,
+including those claims where management can reasonably estimate the outcome of the lawsuits taking into
+account any legal advice.
+No provision has been made for pending assessments, lawsuits or possible violations of contracts when
+the outcome cannot be reasonably estimated or management believes the probability is low or remote. For
+pending lawsuits, management also believes that any resulting liabilities will not have a material adverse
+effect on the financial position or operating results of the Group or any of its subsidiaries.
+58. EVENTS AFTER THE REPORTING PERIOD
+On 15 March 2016, the Board of Directors of the Company approved the Resolution of the Profit
+Appropriation Plan for 2015, and declared a final cash dividend in the amount of RMB0.35 per share as
+disclosed in Note 16.
+Except for the items listed above, the Group does not have significant events after the reporting period.
+need to disclose.
+59. COMPARATIVE FIGURES
+Certain comparative figures have been reclassified or restated to conform to the current year's presentation.
+278
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+60. BALANCE SHEET AND RESERVE MOVEMENT OF THE HOLDING COMPANY
+(1) BALANCE SHEET OF THE HOLDING COMPANY:
+(in RMB million)
+Assets
+Cash and amounts due from banks and other financial institutions
+Fixed maturity investments
+Investments in subsidiaries and associates
+Equity investments
+Property and equipment
+Other assets
+Total assets
+Equity
+Dividend declared
+Ping An Caizhi Investment Management Company Limited, a
+subsidiary of Ping An Securities
+(5,541)
+Stock short name of the Company (Chinese/English)
+中國平安
+Ping An of China
+LEGAL REPRESENTATIVE
+MA Mingzhe
+TYPE OF SECURITY AND LISTING PLACE
+A share The Shanghai Stock Exchange
+H share The Stock Exchange of Hong Kong Limited
+SECURITY NAME AND STOCK CODE
+A share Ping An of China
+601318
+H share
+Ping An of China
+2318
+AUTHORIZED REPRESENTATIVES
+SUN Jianyi
+YAO Jun
+SECRETARY OF THE BOARD OF DIRECTORS
+JIN Shaoliang
+COMPANY SECRETARY
+YAO Jun
+REPRESENTATIVE OF SECURITIES AFFAIRS
+LIU Cheng
+TELEPHONE
+Ping An Insurance (Group) Company of China, Ltd.
++86 400 8866 338
+Full name of the Company (Chinese/English)
+中國平安保險(集團)股份有限公司
+Corporate Information
+Corporate Governance Code
+China Securities Regulatory Commission
+China Insurance Regulatory Commission
+China Banking Regulatory Commission
+The People's Bank of China
+The Stock Exchange of Hong Kong Limited
+The Shanghai Stock Exchange
+Charoen Pokphand Group
+Charoen Pokphand Group Company Limited, the flagship company
+of CP Group, through which CP Group controlled its diversified
+business
+the Rules Governing the Listing of Securities on The Stock Exchange
+of Hong Kong Limited
+the Rules Governing the Listing of Stocks on Shanghai Stock
+Exchange
+the Corporate Governance Code as contained in Appendix 14 to
+the HKEX Listing Rules, formerly known as the Code on Corporate
+Governance Practices
+SFO
+Model Code
+Articles of Association
+Ping An Convertible Bonds
+the Securities and Futures Ordinance (Chapter 571 of the Laws of
+Hong Kong)
+the Model Code for Securities Transactions by Directors of Listed
+Companies as contained in Appendix 10 to the HKEx Listing Rules
+the Articles of Association of Ping An Insurance (Group) Company
+of China, Ltd.
+the RMB26 billion A Share convertible corporate bonds (including
+subordinated terms) issued by the Company on November 22, 2013,
+and had been delisted from SSE since January 15, 2015
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 283
+OTHER INFORMATION
+REGISTERED NAMES
+SSE Listing Rules
+FAX
+E-MAIL
+International auditor
+PricewaterhouseCoopers
+22/F Prince's Building,
+Central, Hong Kong
+LEGAL ADVISORS
+DLA Piper Hong Kong
+17th Floor, Edinburgh Tower, The Landmark,
+No. 15 Queen's Road,
+Central, Hong Kong
+H SHARE REGISTRAR
+Computershare Hong Kong Investor Services
+Limited
+17M Floor, Hopewell Centre,
+183 Queen's Road East,
+Wanchai, Hong Kong
+AMERICAN DEPOSITARY SHARES REGISTRAR
+The Bank of New York Mellon
+284
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+PING AN
+Annual Report 2015
+This report is printed on environmental friendly paper
+manufactured from elemental chlorine-free pulp and acid free.
+The peony flower in full bloom
+symbolizes Ping An's core
+finance business while the
+peony bud symbolizes Ping
+An's internet finance business.
+Driven by these two growing
+businesses, Ping An is thriving
+and prospering. The peony
+flowers share the same root
+and mutually reinforce each
+other, representing Ping An's
+dual-focus on "Integrated
+Finance Internet" and
+"Internet + Integrated Finance"
+in its strategic goals and plans,
+heralding a new Era 3.0 for Ping
+An.
+The cover of the 2015 Annual
+Report features two peony
+flowers in the traditional
+Chinese ink-and-wash style,
+to symbolize Ping An's
+development strategy of
+integrating its core finance
+business with its internet
+finance business. Traditionally,
+the peony represents luck and
+prosperity as well as people's
+hope and vision for a brighter
+future, perfectly matching
+Ping An's commitment to
+creating maximum value for its
+customers.
+55. COMMITMENTS (CONTINUED)
+CHEN Anqiang
++86 755 8243 1029
+Name of Certified Public Accountants
+Charles Chow
+PricewaterhouseCoopers Zhong Tian LLP
+11/F, PricewaterhouseCoopers Center,
+IR@pingan.com.cn
+PR@pingan.com.cn
+REGISTERED ADDRESS/PLACE OF BUSINESS
+Offices at 15, 16, 17, 18 Floors,
+Galaxy Development Center,
+Fu Hua No. 3 Road,
+Futian District,
+Shenzhen, Guang Dong Province, PRC
+POSTAL CODE
+518048
+COMPANY WEBSITE
+www.pingan.com
+DESIGNATED NEWSPAPERS FOR INFORMATION
+DISCLOSURE OF A SHARE
+China Securities Journal, Shanghai Securities News,
+Securities Times and Securities Daily
+WEBSITES FOR THE PUBLICATION OF THE
+REGULAR REPORT OF THE COMPANY
+www.sse.com.cn
+www.hkexnews.hk
+REGULAR REPORTS AVAILABLE FOR INSPECTION
+Board Office of the Company
+CONSULTING ACTUARIES
+PricewaterhouseCoopers Consultants (Shenzhen)
+Limited
+AUDITORS AND PLACE OF BUSINESS
+Domestic auditor
+2 Corporate Avenue, 202 Hu Bin Road,
+Huangpu District, Shanghai, PRC
+(5,541)
+HKEx Listing Rules
+CP Group
+Ping An Securities
+Ping An Asset Management
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Life Insurance Company of China, Ltd., a subsidiary of the
+Company
+Ping An Property & Casualty Insurance Company of China, Ltd., a
+subsidiary of the Company
+Ping An Health Insurance Company of China, Ltd., a subsidiary of the
+Company
+Ping An Annuity Insurance Company of China, Ltd., a subsidiary of
+the Company
+China Ping An Trust Co., Ltd., a subsidiary of the Company
+Ping An Securities Company, Ltd., a subsidiary of Ping An Trust
+Ping An Asset Management Co., Ltd., a subsidiary of the Company
+Ping An Bank
+SDB, Original SDB
+Original Ping An Bank
+Ping An Overseas Holdings
+Ping An Financial Leasing
+Ping An Hong Kong
+Ping An Asset Management (Hong
+Kong)
+Ping An Futures
+Ping An Caizhi
+Ping An Pioneer Capital
+Ping An Bank Co., Ltd., a subsidiary of the Company
+The original Shenzhen Development Bank Co., Ltd., an associate of
+the Company since May 2010, became a subsidiary of the Company
+in July 2011. On July 27, 2012, its name was changed to "Ping An Bank
+Co., Ltd."
+The original Ping An Bank Co., Ltd., became a subsidiary of SDB in
+July 2011, before that, it was a subsidiary of the Company. It was
+deregistered on June 12, 2012 due to absorption merger by SDB
+Ping An Trust
+China Ping An Insurance Overseas (Holdings) Limited, a subsidiary
+of the Company
+Ping An Annuity
+Ping An Property & Casualty
+Appropriations to surplus
+reserves
+488
+(488)
+As at 31 December 2014
+127,535
+97
+1,472
+7,470
+395
+32,678
+169,647
+According to the Company's articles of association, the Company shall set aside 10% of its net profit
+determined in its statutory financial statements, prepared in accordance with PRC Accounting Standards,
+to a statutory surplus reserve fund. The Company can cease such profit appropriation to this fund if its
+balance reaches 50% of the Company's registered share capital. The Company may also make appropriations
+from its net profit to the discretionary surplus reserve fund provided the appropriation is approved by a
+resolution of the shareholders. These reserves cannot be used for purposes other than those for which they
+are created. Profits are used to offset prior year losses before allocations to such reserves.
+Subject to resolutions passed in shareholders' meetings, the statutory surplus reserve fund, discretionary
+surplus reserve fund and capital reserve can be transferred to share capital. The balance of the statutory
+surplus reserve fund after transfers to share capital shall not be less than 25% of the registered capital.
+In accordance with the relevant regulations, general reserves should be set aside to cover catastrophic or
+other losses as incurred by companies operating in the insurance, banking, trust, securities, futures and fund
+businesses. The Group's respective entities engaged in such businesses would need to make appropriations
+for such reserves based on their respective year-end profit or risk assets, as determined in accordance with
+PRC Accounting Standards, and based on the applicable PRC financial regulations, in their annual financial
+statements. Such reserves are not available for profit distribution or transfer to capital.
+In accordance with the relevant regulations, the net profit after tax of the Company for profit distribution
+is deemed to be the lower of (i) the retained profits determined in accordance with PRC Accounting
+Standards and (ii) the retained profits determined in accordance with IFRSS.
+280
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Definition
+In this report, unless the context otherwise indicated, the following expressions shall have the following
+meanings:
+Ping An, Company, the Company,
+Group, the Group, Ping An Group
+Ping An Life
+Ping An Health
+CP Group Ltd.
+Ping An Financial Leasing Limited, a subsidiary of the Company
+Ping An of China Asset Management (Hong Kong) Company Limited,
+a subsidiary of Ping An Overseas Holdings
+Shenzhen Ping An Financial Services Co., Ltd., original Ping An
+Processing & Technology (Shenzhen) Co., Ltd., a subsidiary of Ping
+An Financial Technology
+Ping An Direct Consulting Co., Ltd., a subsidiary of Ping An Financial
+Technology
+Ping An-UOB Fund Management Company Limited, a subsidiary of
+Ping An Trust
+Lufax Holding Company Limited, an associate of the Company
+Shanghai Lujiazui International Financial Assets Commodity
+Exchange Co., Ltd., a subsidiary of Lufax Holding
+Ping An Pay Intelligence Technology Co., Ltd., an associate of Ping
+An Financial Technology
+Shenzhen Wanlitong Internet & Information Technology Co., Ltd., a
+subsidiary of Ping An Financial Technology
+Ping An Haofang (Shanghai) E-commerce Co., Ltd., a subsidiary of
+Ping An Financial Technology
+Ping An Health Cloud Co., Ltd., a subsidiary of Ping An Financial
+Technology
+The Accounting Standards for Business Enterprises and the other
+relevant regulations issued by the Ministry of Finance of PRC
+The "No. 2 Interpretation of Accounting Standards for Business
+Enterprises" (Cai Kuai [2008] No. 11) issued by the Ministry of Finance
+International Financial Reporting Standards issued by International
+Accounting Standards Board
+All premiums received from the policies underwritten by the
+Company, which is prior to the significant insurance risk testing and
+unbundling of hybrid risk contracts
+282
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+CSRC
+CIRC
+CBRC
+Ministry of Finance
+PBOC
+HKEX
+SSE
+Shenzhen Ping An Financial Technology Consulting Co., Ltd., a
+subsidiary of the Company
+China Ping An Insurance (Hong Kong) Company Limited, a subsidiary
+of Ping An Overseas Holdings
+Ping An Technology (Shenzhen) Co., Ltd., a subsidiary of Ping An
+Financial Technology
+Ping An of China Securities (Hong Kong) Company Limited, a
+subsidiary of Ping An Securities
+Ping An Futures Co., Ltd., a subsidiary of Ping An Securities
+Ping An Pioneer Capital Co., Ltd., a subsidiary of Ping An Securities
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 281
+OTHER INFORMATION
+Definition
+Ping An Securities (Hong Kong)
+Ping An New Capital
+Ping An Technology
+Ping An Financial Technology
+Ping An Financial Services
+Ping An Direct
+Ping An-UOB Fund
+Lufax Holding
+Lufax
+Ping An Pay
+Wanlitong
+PA Haofang
+Ping An Health Cloud
+CAS
+No. 2 Interpretation
+IFRS
+Written Premiums
+Shenzhen Ping An New Capital Investment Co., Ltd., a subsidiary of
+Ping An Trust
+Ministry of Finance of the People's Republic of China
+Annual Report 2015
+Of the total premium income generated by all
+life insurance companies in 2015, Ping An Life
+captured a market share of 13.1%, as calculated
+in accordance with the PRC life insurance
+industry data published by the CIRC. In terms
+of premium income, Ping An Life is the second
+largest life insurance company in China.
+Management Discussion and Analysis
+Insurance Business
+Ping An Annuity recorded a net profit of
+RMB645 million in 2015, up by 30.3% over the
+previous year. The long-term and short-term
+insurance business scale reached RMB8,435
+million and RMB13,193 million, respectively,
+whose market share maintained leading
+positions in the industry. Corporate annuity
+entrusted payments reached RMB33,386 million,
+corporate annuity invested payments amounted
+to RMB26,582 million, and other entrusted
+management business payments amounted to
+RMB98,085 million. As at December 31, 2015, the
+assets under management of Ping An Annuity
+amounted to RMB312,844 million in total; of
+which corporate annuity entrusted assets,
+corporate annuity assets under investment
+management and other entrusted management
+assets were RMB127,226 million, RMB135,480
+and RMB50,138, respectively, reinforcing the
+Company's leading position among professional
+annuity companies in China. Ping An Annuity
+insisted on its annuity investment concept of
+"Growth through Stability, Success through
+Persistency". In 2015, the investment yield of
+corporate annuity reached approximately 10.4%.
+In 2015, Ping An Annuity proactively
+participated in the building of a government-
+sponsored health insurance system, developed
+a "Social Health Insurance One Account"
+platform enabling both consulting and
+processing, and established an industry-leading
+"Smart Social Health Insurance" management
+and service system to help cut costs, enhance
+benefits, and improve services of social health
+insurance. The pilot model of "Smart Social
+Health Insurance" was fruitful in cities such
+as Xiamen; a breakthrough was made in the
+critical illness insurance project in Shenzhen.
+Ping An Health
+In 2015, Ping An Health made sound progress
+in its business development, premium income
+reached RMB523 million, up by 25.4% over last
+year. Through product innovation, experience
+upgrading and operations quality improvement,
+Ping An Health was strengthening its leading
+role in medium and high-end medical insurance,
+with increasing influence in the industry. In
+terms of product innovation, it developed
+many new health management services, and
+continuously enhanced the integration of health
+insurance and health management, to create
+unique competitive advantage. In terms of
+product experience upgrading, Ping An Health
+increased E level of customer services, and
+expanded the on-site service team, to improve
+customers' medical treatment experience and
+establish a brand of operational services. In
+terms of operations quality improvement, Ping
+An Health created a multi-dimensional cost
+control framework covering the whole process
+to improve the quality of operations.
+Financial Analysis
+OUR PERFORMANCE
+Other than those specified, the financial data in
+this section include that of Ping An Life, Ping
+An Annuity and Ping An Health.
+Written premiums
+Less: Written premiums
+on products not
+passing significant
+insurance risk testing
+Less: Premium deposits
+for universal life
+products and
+investment-linked
+products
+Premium income
+Total income
+2015
+2014
+Results of operation
+(in RMB million)
+Ping An Insurance (Group) Company of China, Ltd. 23
+Ping An Annuity was set up in 2004 and is the
+first professional annuity company in China.
+Its business scope includes pension insurance,
+health insurance, accident insurance, annuity,
+asset management products for pension and
+entrusted pension management, with business
+outlets throughout the country. Ping An
+Annuity strives to become the leading pension
+asset management company and leading
+medical insurance and social benefits services
+provider in China. It is shifting from solely
+operating the annuity business to annuity-
+based asset management businesses, and
+switching from traditional corporate group
+insurance business to medical health insurance
+business, mainly government health insurance.
+Ping An Annuity is also undergoing an
+operational shift, extending its focus on group
+customers, comprising mainly corporate clients,
+to governments and their individual customers.
+As at December 31, 2015, Ping An Annuity had a
+registered capital of RMB4,860 million.
+Ping An Annuity
+(Participating)(2)
+outlets
+13,179
+Pinganfu whole life Individual agents,
+insurance
+bancassurance
+outlets
+12,210
+8,626
+Xinli Endowment
+(Participating)
+Individual agents,
+bancassurance
+outlets
+11,618
+2,609
+Individual agents,
+bancassurance
+outlets
+8,969
+Zunyuerensheng
+Endowment
+(Participating)(2)
+(1) Calculated in accordance with the method set by the
+CIRC.
+(2) The sales of Jinyurensheng Endowment and
+Zunyuerensheng Endowment had been suspended. The
+premium income of these products came from renewal
+business.
+299,814
+bancassurance
+252,730
+(4,784)
+Finance costs
+(1,740)
+(1,511)
+Other expenses
+(11,300)
+(9,407)
+Total expenses
+(296,148)
+(222,943)
+(24,025)
+Income tax
+(3,590)
+Net profit
+18,992
+15,689
+General and administrative
+24
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Jointly affected by the factors including rapid
+business growth and substantial increase in
+investment income, life insurance business
+recorded a net profit of RMB18,992 million in
+2015, representing an increase of 21.1% from
+RMB15,689 million in 2014.
+(13,755)
+(35,063)
+expenses
+(49)
+(72,583)
+(64,673)
+222,057
+183,273
+Net earned premiums
+Investment income
+Other income
+215,627
+179,169
+103,408
+55,486
+9,860
+7,567
+328,895
+242,222
+Claims and policyholders'
+benefits
+Commission expenses of
+insurance operations
+(213,373)
+(165,154)
+(34,823)
+(22,797)
+Foreign exchange
+gains/(losses)
+151
+(5,174)
+Endowment
+Individual agents,
+Jinyurensheng
+Including: policy holders
+41,233
+37,355
+Group insurance
+1.9
+5.0
+Corporate
+1,288
+1,127
+44.5
+Bancassurance
+3.6
+Total
+69,935
+63,235
+31.1
+30.4
+Distribution network
+Note: Figures may not match totals due to rounding.
+Ping An Life
+3.0
+43.5
+Individual life
+62,108
+Individual life
+Group insurance
+30,174
+417
+20,800
+863
+Summary of operating data
+Bancassurance
+246
+303
+December 31, December 31,
+2015
+2014
+Total
+30,838
+21,966
+Number of customers
+Profit margin of new
+(in thousands)
+business (%)
+Individual
+68,647
+Ping An Life, through its nationwide service
+network of 41 branches, including six
+telemarketing centers, and over 3,000 business
+outlets, provides individual customers and
+institutional clients with life insurance products.
+As at December 31, 2015, Ping An Life had
+a registered capital of RMB33.8 billion, net
+assets of RMB105,521 million and total assets of
+RMB1,632,254 million.
+Number of individual
+life insurance sales
+agents
+869,895
+635,551
+22
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Life constantly adheres to the
+principles of customer-centric management,
+continuing to enhance the “simple, convenient,
+friendly and safe” customer experience.
+Leveraging Internet technologies and
+innovations, Ping An Life launched its online
+and offline service channels, by integrating
+its channels with highly accessible services
+for customers. In 2015, Ping An Life pioneered
+the world's leading concept of "Smart Store"
+for building its own financial stores. Featuring
+private-feeling layouts with a premier customer
+experience, the stores provide friendly services
+and apply face-recognition technologies to
+facilitate efficient policy processing. Further,
+Ping An Life upgraded its basic services for
+policies and promoted the efficiency of claim
+settlement, taking a leading position in the
+industry in terms of the turnaround time
+for end-to-end claim services. Ping An Life
+continued to provide services with care and
+love for customers. Pioneering "Priority Claims
+for Serious Illnesses and Pre-claim Services for
+Special Cases", it has provided customers with
+pre-claim and advance claims for payments of
+exceeding RMB59 million from its launching at
+the beginning of 2015 to the end of the year.
+By continuing to enhance its operating service
+platform, Ping An Life strove to provide precise
+services to customers and actively fulfilled
+its service commitment. With the focus on
+operational flexibility, Ping An Life continued
+to improve service quality and customer
+satisfaction. It was also the first company in the
+industry to launch health management services,
+upon which a high-frequency and interactive
+value-added service system was built to enable
+functions such as family doctor consultations,
+health news, health assessment and health tips
+to conduct various health-related activities
+on an ongoing basis and offer all customers
+"one-to-one" family doctor services and 24/7
+free consultation services. From the launching
+in April, 2014 to the end of 2015, Ping An
+Life provided 14.24 million individuals with
+interactive services for a total of 107 million
+times.
+In the future, Ping An Life will continue to
+utilize internet technologies and strengthen
+service innovation and reforms to develop an
+industry-leading customer experience.
+Annual Report 2015
+Business information of insurance products
+In 2015, among all the insurance products
+offered by Ping An Life, the five highest
+premium income products were Zunyurensheng
+Endowment, Jinyurensheng Endowment,
+Pinganfu whole life insurance, Xinli Endowment
+and Zunyuerensheng Endowment, which
+accounted for 28.7% of the premium income of
+Ping An Life in 2015.
+(in RMB million)
+Zunyurensheng
+Standard
+premiums
+Sales channel
+Premium
+income
+of new
+business(1)
+Individual agents,
+Endowment
+bancassurance
+(Participating)
+outlets
+13,754
+5,179
+-
+Written premiums and premium income
+The following is the breakdown of written
+premiums and premium income for our life
+insurance business by distribution channels:
+Ping An Life also continued to improve the
+quality and efficiency of business development
+through new technologies. Leveraging its
+broad customer transaction and behavior
+statistics, Ping An Life took advantage of big
+data analysis to gauge customer demand, by
+carrying out precise marketing campaigns
+to increase customer interactions for further
+purchases. In 2015, over 2.4 million existing
+customers continued to purchase insurance,
+up by nearly 50% over the previous year.
+Integrated with the "Internet+" concept,
+Ping An Life took great efforts in fabricating
+an ecosystem of “health, food, housing,
+transportation and entertainment" for its
+customers through Ping An Life's "E-service
+APP", to realize the complementary advantages
+in its off-line agents and the online channel,
+and enable a win-win situation with a
+transformation towards the mobile and online
+020 business model. As at December 31, 2015,
+"E-service APP" had a user base of over 30
+million with a monthly activity rate of 33%. The
+accumulated participants in the campaign for
+"Appointment with Ping An Walk for Health"
+has reached 25 million.
+Ping An Life placed customer-focused
+operations at its core. In particular, it focused
+on teamwork as the foundation, benevolence as
+the root, customer experience and innovation
+as the driving forces. It promoted the
+synergistic development of multiple channels
+such as individual sales agents, bancassurance
+outlets, telemarketing and internet marketing,
+striving to achieve the sustained, healthy and
+stable growth of its embedded value and
+scale. The individual life insurance business
+strengthened its agencies' team management
+and built a solid foundation with increase in
+the scale and productivity of the sales force.
+The number of individual life insurance agents
+rose by 36.9% to nearly 870 thousand. There
+were steady increases in the productivity per
+capita: first-year written premiums per agent
+per month amounted to RMB7,236 and new
+individual life insurance policies per agent
+per month reached 1.2. The income of agent
+reached RMB5,124 per agent per month, rose
+by 9.4% over last year. In response to market
+competition, the bancassurance business
+actively enhanced the internal and external
+channel development and optimized the
+business structure. Further, building on the
+balanced development of existing channels,
+Ping An Life strove to develop new channels
+such as telemarketing and internet marketing.
+In 2015, written premiums of telemarketing sales
+reached RMB12,994 million, up by 39.0% over last
+year. It continued to maintain a high growth
+rate, which enabled Ping An Life to maintain
+the first position in the telemarket. Ping An
+Life also saw rapid development in internet
+marketing and written premium of internet
+sales achieved RMB2,547 million.
+Number of group sales
+representatives
+Bancassurance outlets
+4,380
+70,258
+3,913
+68,455
+2015
+2014
+Agent productivity
+First-year written
+premiums per agent
+per month (in RMB)
+New individual life
+insurance policies
+per agent per month
+Persistency ratio (%)
+13-month
+25-month
+7,236
+6,244
+1.2
+1.1
+90.9
+90.9
+86.4
+87.4
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 21
+OUR PERFORMANCE
+Management Discussion and Analysis
+Insurance Business
+Our life insurance products are primarily
+distributed through a network that includes a
+sales force of about 870 thousand individual life
+insurance sales agents, 4,380 group insurance
+sales representatives, and over 70 thousand
+commercial bank outlets that have made
+bancassurance arrangements with Ping An Life.
+In 2015, Ping An Life continued to enrich its
+products, stepped up sales promotion of
+product portfolio with protection functions
+and continued to improve its new business
+value. It upgraded its flagship protection
+products of "Ping An Fu" and "Hu Shen Fu",
+and optimized the products of its universal
+insurance by leveraging the policies for the
+reform of universal insurance premium rates
+to expand the coverage of insurance against
+critical diseases and benefits for customers.
+In addition, Ping An Life actively explored
+business models for O2O products and
+launched protection products with precise
+orientation through the "E-service APP" to
+satisfy the increasingly sophisticated demands
+for insurance.
+Written premiums
+2015
+2014
+term health
+4,856
+3,781
+Annuity
+3,792
+2,532
+Annuity
+867
+1,127
+13,734
+Investment-linked
+2,407
+Investment-linked
+218
+35
+Total written premiums
+for life insurance
+Total first-year
+business
+299,814
+2,331
+20,377
+term health
+Accident and short-
+2015
+2014
+Participating
+27,728
+20,489
+Long-term health
+16,881
+10,743
+Traditional life
+34,168
+22,108
+Universal life
+15,328
+9,884
+Long-term health
+29,066
+20,030
+Traditional life
+14,578
+7,249
+Accident and short-
+252,730
+written premiums
+for individual life
+insurance business
+2015
+2014
+49,704
+40,041
+19,241
+17,649
+18,131
+14,784
+Jiangsu
+17,592
+15,643
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+252,730
+299,814
+business
+Total written premiums
+for life insurance
+102,475
+121,638
+Subtotal
+14,358
+Shandong
+(in RMB million)
+Guangdong
+Beijing
+The following is the breakdown of written
+premiums for our life business by region:
+80,456
+53,308
+Written premiums for life insurance business
+by product type
+(%)
+2015 (2014)
+First-year written premiums for individual life
+insurance business by product type
+(%)
+2015 (2014)
+Participating 41.5 (45.8)
+● Universal life 28.5 (30.1)
+Traditional life 11.4 (8.8)
+• Long-term health 9.7 (7.9)
+Accident and short-term health 6.8 (5.4)
+Annuity 1.3 (1.0)
+Investment-linked 0.8 (1.0)
+Participating 34.5 (38.4)
+• Long-term health 21.0 (20.2)
+●
+Universal life 19.0 (18.5)
+Traditional life 18.1 (13.6)
+Accident and short-term health 6.0 (7.1)
+Annuity 1.1 (2.1)
+Investment-linked 0.3 (0.1)
+The Company constantly drove the sales of
+insurance products with protection function
+and high coverage features to optimize its
+product structure. The proportion of products
+with protection function continued to rise.
+(in RMB million)
+(in RMB million)
+The following is the breakdown of first-
+year written premiums for our individual life
+insurance business by product type:
+Participating
+First-year regular
+premiums
+1,613
+1,525 1,598
+1,516
+First-year single
+premiums
+6,080
+6,858 6,130
+6,922
+New business
+Short-term
+health premiums
+3
+3
+4
+4
+Total new business
+7,696
+8,386
+Renewal business
+accident and
+Bancassurance
+2,231 3,189
+3,192
+53,308 68,548 46,829
+172,056 126,897 112,755
+159,584
+225,364 195,445
+Premium income
+2015
+2014
+(in RMB million)
+Individual life
+New business
+First-year regular
+premiums
+76,233
+50,372 65,072 43,469
+First-year single
+premiums
+2,072
+705
+287
+168
+Short-term
+accident and
+health premiums
+2,151
+Total new business
+Renewal business
+80,456
+188,651
+Total individual life
+269,107
+5,259
+7,732
+5,465 5,187
+8,442
+5,395
+Total bancassurance 12,955
+13,673
+20
+9,829
+23
+Total group insurance
+Total
+17,752
+299,814
+13,515 13,693
+9,852
+252,730 222,057 183,273
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 25
+OUR PERFORMANCE
+26
+Management Discussion and Analysis
+Insurance Business
+2015
+2014
+124,513
+115,753
+85,567
+76,166
+The following is the breakdown of written
+premiums for our life insurance business by
+product type:
+(in RMB million)
+13,439
+76
+Universal life
+17,706
+46
+9,220
+13,851 12,919
+13,837
+Group insurance
+New business
+First-year regular
+premiums
+18
+77
+First-year single
+premiums
+4,101
+4,102
+134
+609
+Short-term
+accident and
+Individual Life Insurance. Written premiums for
+our individual life insurance business increased
+by 19.4% to RMB269,107 million in 2015 from
+RMB225,364 million in 2014. Among this, there
+was a 50.9% increase in written premiums of
+new business to RMB80,456 million in 2015 from
+RMB53,308 million in 2014, mainly due to the
+optimization of product structure, the increase
+in the number of individual life insurance sales
+agents and the rise in productivity per capita.
+The persistency ratios maintained at high levels.
+As a result, the renewal written premiums for
+our individual life insurance business increased
+by 9.6% to RMB188,651 million in 2015 from
+RMB172,056 million in 2014.
+Bancassurance. Written premiums for our
+bancassurance business decreased by 6.5% to
+RMB12,955 million in 2015 from RMB13,851 million
+in 2014. In response to the market environment,
+Ping An Life adhered to the core of value
+and enhanced the business structure of its
+bancassurance business by gradually increasing
+the proportion of high-value regular premium
+products.
+Group Insurance. Written premiums for our
+group insurance business increased by 31.4% to
+RMB17,752 million in 2015 from RMB13,515 million
+in 2014. This increase was primarily because the
+Company strengthened product innovation and
+focused on the development of multiple sales
+channels. The Company continued to reinforce
+direct selling and cross-selling, while launching
+internet sales channel. Written premiums for
+our group short-term accident and health
+insurance increased by 46.7% to RMB13,587
+million in 2015 from RMB9,260 million in 2014.
+health premiums 13,587
+9,260 13,539
+Total new business
+Renewal business
+16,970
+Liaoning
+173,995
+13.7
+4
+27
+20
+16
+7
+13
+1
+134
+23
+4
+9
+22
+2
+94
+One Account
+Management Services
+7
+14
+#4
+44
+4
+5
+13
+323
+Terminal
+Wanlitong
+Ping An Pay
+Source of users
+Ping An
+Life
+Ping An
+Property &
+Casualty
+Retail
+Banking
+Business
+Credit
+Card
+Business
+Other core
+Ping An
+Securities
+Ping An-
+UOB Fund
+finance
+Companies
+Total
+Lufax
+3
+5
+12
+87
+22
+28
+7
+Internet users that became new customers of core finance companies (in ten thousand)
+(Table 6)
+3
+81
+68
+60
+5
+575
+(1) Customers who purchased multiple financial products are counted more than once. The figures do not add up to the total
+due to the elimination of repeated customers.
+Customers of core finance companies that became new internet users (in ten thousand)
+(Table 7)
+Terminal
+One
+Account
+Source of users
+86
+Lufax
+Pay
+Ping An Management
+Services
+Other
+internet
+finance
+companies
+Core
+finance
+companies
+Total
+Ping An Life
+105
+232
+373
+Wanlitong
+98
+148
+218
+Other internet finance
+companies
+6
+6
+17
+22
+Core finance companies
+63
+152
+47
+40
+24
+3
+5
+49
+53
+19
+2
+313
+Total
+95
+16
+Management Discussion and Analysis
+Users, Customers and Migration
+OUR PERFORMANCE
+17
+435
+41
+10,858
+8,935
+(1) Customers who purchased multiple financial products are counted more than once. The figures do not add up to the total
+due to the elimination of repeated customers.
+(2) The number of customers at the end of the reporting period is not equal to the sum of the number of customers at the
+beginning of the reporting period and new customers in reporting period, due to customer loss.
+(3) The number of customers of insurance companies is counted based on the number of valid policy holders.
+Individual Customer Structure (in ten thousand) (Table 5)
+Number of
+customers at
+the end of
+399
+2015
+Customers who are
+also internet users
+Number Proportion(%)
+Customers who are
+also APP users
+Number
+Proportion(%)
+Ping An Life
+4,123
+1,201
+29.1
+Customers who held
+other core finance
+companies' products
+Number Proportion (%)
+582
+456
+811
+INDIVIDUAL CUSTOMER BASE
+Ping An has been leveraging core technologies including the mobile internet, cloud computing,
+and big data to further identify customer demand and improve customer experience. As at
+December 31, 2015, the number of individual customers who held Ping An's financial products of
+core finance companies was nearly 109 million, up by 21.5% from the beginning of 2015, of which
+APP users reached 29.71 million. In 2015, the number of Ping An's new customers reached 30.78
+million, up by 57.8% over the last year.
+Individual Customer Base (in ten thousand) (Table 4)
+Customers at the beginning of the reporting period
+New customers in the reporting period (¹)
+Including: Ping An Life
+Ping An Property & Casualty
+Retail Banking Business
+Credit Card Business
+Other Businesses
+Customers at the end of the reporting period (2)
+2015
+2014
+8,935
+7,903
+3,078
+1,951
+615
+401
+1,728
+1,347
+2,170
+52.6
+1,057
+25.6
+Other Businesses
+844
+320
+37.9
+616
+73.0
+577
+68.4
+Total
+10,858
+2,078
+19.1
+5,712
+52.6
+2,971
+27.4
+(1) Customers who purchased multiple financial products are counted more than once. The figures do not add up to the total
+due to the elimination of repeated customers.
+(2) The number of customers of insurance companies was counted based on the number of valid policy holders.
+As Ping An's "Internet + Integrated Finance" model has been mature, the achievements of internet
+finance strategy initially emerged with massive internet users and customers transforming to
+each other. More and more users become customers of its core finance companies by purchasing
+financial products. In 2015, 5.75 million internet users of Ping An became new customers of its core
+finance companies, occupied 18.7% of total new customers in this year. Meanwhile, 31.46 million
+customers of core finance companies became online customers by registering on our internet
+service platforms, accounting for 30.2% of total new internet users in this year.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+48.4
+326
+874
+1,474
+Ping An Property &
+Casualty
+3,737
+942
+25.2
+1,930
+51.6
+814
+21.8
+Retail Banking Business
+3,145
+1,220
+38.8
+1,729
+55.0
+1,178
+37.5
+Credit Card Business
+1,805
+1,194
+66.1
+81.7
+294
+968
+1,267
+Business
+contribution
+percentage (%)
+Premium income
+24,951
+15.2
+20,369
+14.2
+Short-term group insurance business of
+Ping An Annuity
+Premium income
+Amount
+4,597
+3,674
+42.9
+Ping An Health
+Premium income
+64
+12.2
+57
+13.7
+Going forward, with the government further implementing "Internet +” strategy, traditional
+industries will be integrated with the internet more closely. Ping An will enter in an era of "Ping
+An 3.0", constantly diversify its financial and daily-life service scenarios under the "Internet +
+Integrated Finance" development model, enhance user management on online platforms, improve
+customer experience, and promote migration of internet users and customers to achieve the goal
+of "one customer, one account, multiple services and products" and become customers' "wealth
+manager, health advisor, and Life Companion".
+43.6
+Amount percentage (%)
+Business
+contribution
+2014
+Other Businesses
+5
+9
+6
+5
+1
+26
+Total
+135
+394
+258
+237
+211
+1,235
+(1) Customer migration refers to that the client of one company buys the financial product of another company and becomes
+the client of this company. It is counted by the number of migration person times of customer.
+(2) Other Businesses include Ping An Securities, Ping An Trust and other subsidiaries which carry on core finance business.
+While promoting customer migration, Ping An has leveraged the big data technology to explore
+the potential demand of customers and boost cross-selling. In 2015, Ping An achieved significant
+results in insurance cross-selling, the premium income of Ping An Property & Casualty, Ping An
+Annuity and Ping An Health through individual life insurance agents reached nearly RMB30 billion.
+The table below shows Ping An's results in cross-selling of retail integrated finance business for
+2015.
+New business acquired via cross-selling (Table 9)
+(in RMB million)
+Ping An Property & Casualty
+2015
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+19
+OUR PERFORMANCE
+Total premium income
+222,057
+183,273
+(1) Written premiums of life insurance business refer to all
+premiums received from the policies underwritten by the
+Company, which is prior to the significant insurance risk
+testing and separating of hybrid contracts.
+(2) Premium income of life insurance business refers to
+premiums calculated according to the "Circular on the
+Printing and Issuing of the Regulations regarding the
+Accounting Treatment of Insurance Contracts" (Cai Kuai
+[2009] No.15), which is after the significant insurance risk
+testing and separating of hybrid contracts.
+In 2015, the central government carried out
+in-depth reforms which have entered into
+a crucial phase with new achievements in
+economic restructuring. The economy grew
+within a reasonable range, but still challenged
+by the downward risk. With continuing reform
+and innovation in the life insurance industry,
+the marketization of life insurance premium
+rates and the implementation of preferential
+tax policies for commercial health insurance
+I have provided sustained and stable momentum
+for development of life insurance industry.
+Total premium of life insurance industry kept
+growing fast.
+Based on the principles of risk prevention and
+compliance, the Company steadily developed
+individual life business with high profitability,
+diversified its product lines and optimized the
+product structure. It advocated the protection
+function of insurance, promoted the sales
+of products with protection function, and
+focused on building up a scalable and efficient
+sales network. As a result, it achieved steady
+and valuable business growth and its market
+competitiveness increased.
+20
+20
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+In 2015, Ping An Life achieved written premiums
+of RMB299,814 million, up by 18.6% over last
+year; written premiums of individual life
+insurance business hit RMB269,107 million, up
+by 19.4% over the previous year, of which the
+written premiums of new business realized
+RMB80,456 million, up by 50.9% over the same
+period last year. The one-year new business
+value for life insurance business grew by 40.4%
+from the previous year with the value and
+profit margin of new business by business
+segment as follows:
+Value of New Business
+2015
+2014
+The premium income and the market share of
+Ping An Life are as follows:
+Premium income
+(in RMB million)
+Market share (%) (1)
+2015
+2014
+208,448
+13.1
+173,995
+8,861
+417
+128
+208,448
+13,086
+523
+Ping An Annuity
+Management Discussion and Analysis
+Insurance Business
+Life insurance business generated RMB299,814 million in written premiums,
+with the number of insurance sales agents reaching 870 thousand, while
+the value of new business continued to rise.
+Premium income from property and casualty insurance business exceeded
+RMB160 billion, while the combined ratio remained at a sound level.
+Corporate annuity assets under management of Ping An Annuity exceeded
+RMB300 billion, maintaining leading position.
+LIFE INSURANCE BUSINESS
+Business Overview
+We conduct our life insurance business through
+Ping An Life, Ping An Annuity and Ping An
+Health.
+The written premiums and the premium income
+of our life insurance business are as follows:
+2015
+2014
+(in RMB million)
+Written premiums (1)
+Ping An Life
+Ping An Annuity
+Ping An Health
+283,495
+15,703
+616
+241,009
+11,134
+587
+Total written premiums
+299,814
+252,730
+Premium income (2)
+Ping An Life
+Ping An Health
+(1) Calculated in accordance with the PRC insurance industry
+data published by the CIRC.
+11
+47
+25
+39
+52
+69
+65
+174
+190
+Ping An-UOB Fund
+41
+Ping An Securities
+33
+40
+48
+40
+38
+Other core finance
+companies
+Total
+8
+13
+16
+997
+711
+421
+Ping An Property &
+Casualty
+79
+464
+418
+355
+230
+1,018
+1,318
+Retail Banking Business
+132
+302
+346
+436
+427
+834
+1,060
+Credit Card Business
+78
+357
+337
+374
+26
+13
+11
+40
+Total
+Ping An Life
+235
+139
+111
+110
+595
+Ping An Property & Casualty
+61
+62
+65
+36
+224
+Retail Banking Business
+50
+103
+56
+53
+262
+Credit Card Business
+19
+Other
+Businesses
+51
+Business
+Retail
+Banking
+Business
+52
+289
+937
+987
+1,034
+861
+2,349
+3,146
+(1) As users who registered in multiple internet service platforms are counted more than once. The figures do not add up to
+the total due to the elimination of repeated users.
+18
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+CUSTOMERS MIGRATION
+Ping An continued to innovate and provide various integrated financial products and services to
+promote customer migration among its core finance companies. In 2015, the number of migration
+person times of customers was approximately 12.35 million, and 33.9% of new customers of
+subsidiaries were from customer migration.
+Customer migration person-times among core finance businesses (in ten thousand) (Table 8)
+Migration Terminal
+Ping An
+Migration Source
+Ping An
+Life
+Property &
+Casualty
+Credit Card
+163,955
+143,150
+2014
+58
+gains/(losses)
+(%)
+Foreign currency
+Premium income by product type
+(15,450)
+(19,704)
+operations
+of insurance
+(4)
+Written premiums by region
+(%)
+Guangdong 16.6 (15.8)
+Beijing 6.4 (7.0)
+● Shandong 6.0 (5.8)
+Jiangsu 5.9 (6.2)
+•
+Liaoning 5.7 (5.7)
+Others 59.4 (59.5)
+Total investment income
+(in RMB million)
+2015
+2015 (2014)
+2014
+2015 (2014)
+administrative
+(136,764)
+Total expenses
+(280)
+(221)
+Other expenses
+(238)
+(222)
+Finance costs
+Non-automobile 17.5 (20.4)
+Accident and health 2.5 (2.3)
+General and
+(153)
+expenses
+and administrative
+Automobile 80.0 (77.3)
+•
+related general
+Including: investment-
+(33,028)
+(40,538)
+expenses
+(292)
+Net investment
+income (1)
+73,587
+(1) Net investment income includes interest income from
+bonds and deposits, dividend income from equity
+investments, and operating lease income from investment
+properties, etc.
+(2) Net realized and unrealized gains include realized gains
+from security investments and profit or loss through fair
+value change.
+Claims
+2015
+2014
+16,578
+10,188
+16,516
+11,599
+Surrenders
+Annuities
+5,587
+Maturities and survival
+benefits
+Policyholder dividends.
+Interest credited to
+policyholder contract
+deposits
+18,713
+17,405
+8,455
+5,871
+21,387
+15,317
+Net increase in
+5,882
+(in RMB million)
+5.0
+8.0
+58,346
+Net realized and
+unrealized gains (2)
+33,200
+Impairment losses
+(3,542)
+5,521
+(8,822)
+Total investment
+income
+Net investment
+yield (%) (3)
+Total investment
+yield (%) (3)
+103,245
+55,045
+5.7
+5.3
+Net investment income for our life insurance
+business increased by 26.1% to RMB73,587
+million in 2015 from RMB58,346 million in 2014.
+Net investment yield rose to 5.7% in 2015
+from 5.3% in 2014. The main reason was that
+the Company optimized the allocation of
+investment portfolio, enlarged the scale of
+fixed income asset with high yield, and equity
+asset was dynamically allocated with increasing
+dividend yield of equity investment.
+In 2015, with the fluctuation in stock market, the
+Company grabbed opportunity to lock in gains,
+net realized and unrealized investment gains
+significantly increased from RMB5,521 million
+in 2014 to RMB33,200 million in 2015. Meanwhile,
+impairment losses of insurance funds portfolio
+were substantially decreased from RMB8,822
+million in 2014 to RMB3,542 million in 2015.
+Due to the combination of the above factors,
+total investment income for life insurance
+business increased by 87.6% to RMB103,245
+million in 2015 from RMB55,045 million in 2014,
+and total investment yield was substantially
+increased to 8.0% from 5.0%.
+Claims and policyholders' benefits
+(112,172)
+policyholders'
+Income tax
+(3,173)
+2014
+2015
+(in RMB million)
+Commission expenses of insurance operations
+As a result, total investment income of property
+and casualty insurance business increased by
+43.1% from RMB6,948 million in 2014 to RMB9,946
+million in 2015, and its total investment yield
+increased to 6.5% in 2015 from 5.6% in 2014.
+Benefitting from the excellent performance
+of the capital market in the first half of 2015,
+property and casualty insurance business
+grabbed opportunity to lock in gains, and
+significantly grew the net realized and
+unrealized gains from RMB384 million in 2014 to
+RMB1,022 million in 2015.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+32
+Automobile insurance
+Net investment income for our property and
+casualty insurance business increased by 46.6%
+to RMB9,631 million in 2015 from RMB6,569
+million in 2014, mainly due to the growth of
+the dividend income from equity investment.
+Net investment yield increased to 6.3% in 2015
+from 5.3% in 2014. The main reason was that
+equity asset was dynamically allocated with
+the optimization of the allocation of investment
+portfolio and the dividend yield of equity
+investment rose.
+(2) Net realized and unrealized gains include realized gains
+from security investments and profit or loss through fair
+value change.
+(1) Net investment income includes interest income from
+bonds and deposits, dividend income from equity
+investments, and operating lease income from investment
+properties, etc.
+5.6
+6.5
+5.3
+6.3
+6,948
+9,946
+Total investment
+yield (%) (3)
+(3) Net foreign currency gains or losses on investment assets
+denominated in foreign currencies are excluded in the
+calculation of the above yields. Average investment
+assets used as the denominator are computed based on
+the Modified Dietz method in principle.
+Net investment
+yield (%) (3)
+14,423
+Non-automobile
+66,494
+Automobile insurance
+2014
+2015
+(in RMB million)
+Claims expenses
+10.8
+12.0
+as a percentage of
+premium income (%)
+10,673
+15,450
+597
+766
+Commission expenses
+expenses
+Total commission
+Accident and health
+insurance
+4,180
+4,515
+insurance
+19,704
+Total investment
+income
+(5)
+(707)
+Zhejiang
+25,840
+11,561
+10,079
+Sichuan
+Jiangsu
+2014
+2015
+Guangdong
+(in RMB million)
+The following is the breakdown of premium
+income for our property and casualty insurance
+business by region:
+9,785
+Accident and health insurance. The business of
+accident and health insurance achieved stable
+growth. Its premium income was RMB4,099
+million in 2015, representing an increase of 27.1%
+from RMB3,226 million in 2014.
+Automobile insurance. Premium income was
+RMB131,117 million in 2015, representing an
+increase of 18.5% from RMB110,667 million in
+2014. The main reason is that, leveraging on
+the favourable market environment, Ping An
+Property & Casualty strengthened the business
+development, achieving stable growth in
+premium income of automobile insurance
+from the cross-selling, telemarketing, internet
+marketing and car dealer channels.
+Insurance Business
+Management Discussion and Analysis
+OUR PERFORMANCE
+Ping An Insurance (Group) Company of China, Ltd. 31
+Annual Report 2015
+8,807
+12,522
+Net profit
+Non-automobile insurance. Premium income
+was RMB28,739 million in 2015, representing a
+decrease of 1.8% from RMB29,257 million in 2014.
+Of this amount, premium income of guarantee
+insurance was down by 11.5% to RMB13,532
+million in 2015 from RMB15,299 million in 2014.
+It was primarily because the original products
+were phased out following the adjustment to
+the product structure. The premium income
+from corporate property and casualty insurance
+dropped by 3.9% from RMB5, 153 million in 2014
+to RMB4,952 million in 2015, primarily due to
+lower premium rates amid intensive market
+competition and slower growth common to
+the corporate property and casualty insurance
+industry as a whole. Premium income of
+liability insurance was RMB4,178 million in
+2015, representing an increase of 29.8% from
+RMB3,219 million in 2014, while premium income
+of engineering insurance was RMB1,728 million
+in 2015, representing an increase of 8.8% from
+RMB1,588 million in 2014.
+22,607
+10,714
+8,800
+8,500
+Shanghai
+9,561
+384
+1,022
+Net realized and
+unrealized gains (2)
+Impairment losses
+6,569
+9,631
+2014
+2015
+Net investment
+income (1)
+Total investment income
+(in RMB million)
+• Zhejiang 6.0 (5.9)
+Shanghai 5.8 (5.8)
+Others 59.2 (58.9)
+Guangdong 15.8 (15.8)
+Jiangsu 7.1 (7.5)
+Sichuan 6.1 (6.1)
+2015 (2014)
+(%)
+Premium income by region
+143,150
+163,955
+Total premium income
+58,984
+66,826
+Subtotal
+8,363
+(3,437)
+55,179
+reserves
+125,842
+213,373
+Corporate property and casualty
+insurance
+10,790,912
+4,889
+2,454
+303
+5,699
+Liability insurance
+10,235,589
+20,385
+4,120
+389
+3,517
+Accident insurance
+166,428,096
+3,417
+723
+782
+2,462
+30
+1,585
+50
+3,198
+13,532
+Business information of insurance products
+Ping An Property & Casualty distributes its
+products mainly through its network of 41
+branches and over 2,200 sub-branches across
+the country. Main distribution channels include
+in-house sales representatives, sales agents,
+insurance brokers, telemarketing, internet
+marketing and cross-selling.
+Reinsurance arrangement
+In 2015, Ping An Property & Casualty recorded.
+RMB19,120 million in outward reinsurance
+premiums, of which RMB13,334 million and
+RMB5,758 million stemmed from the automobile
+and non-automobile insurance businesses,
+respectively. The accident and health insurance
+division contributed RMB28 million. Ping An
+Property & Casualty's gross inward reinsurance
+premiums reached RMB47 million, mainly from
+the non-automobile insurance business.
+In 2015, Ping An Property & Casualty remained
+actively engaged in reinsurance arrangements
+which strengthened its underwriting
+capabilities, diversified its operational risks
+and ensured its long-term healthy and steady
+growth. It has endeavored to widen the scope
+of collaboration by stepping up efforts to work
+with reinsurers to expand reinsurance channels.
+Ping An Property & Casualty has gained strong
+support from the world's major reinsurance
+markets including Europe, the United States,
+Bermuda and Asia and so on. Currently, it has
+established extensive and close partnerships
+with nearly 100 reinsurance companies and
+reinsurance brokers worldwide. Its major
+reinsurance partners include China Property &
+Casualty Reinsurance Company Ltd., Swiss Re,
+Munich Re and Hannover Re Group.
+In 2015, among all the commercial insurance products offered by Ping An Property & Casualty, the
+five highest premium income products are automobile insurance, guarantee insurance, corporate
+property and casualty insurance, liability insurance and accident insurance, which accounted for
+95.9% of the premium income of Ping An Property & Casualty in 2015.
+Balance of
+(in RMB million)
+Insured
+amount
+3,325
+Premium
+income
+profit
+Automobile insurance
+25,520,449
+130,984
+63,302
+1,321
+96,236
+Guarantee insurance
+119,883
+Claim Underwriting policyholders'
+expenses
+reserves
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Financial Analysis
+110,667
+Other income
+855
+596
+Non-automobile
+Total income
+152,723
+124,152
+insurance
+131,117
+28,739
+Accident and health
+insurance
+4,099
+3,226
+Claim expenses
+(76,137)
+(63,172)
+Commission expenses
+Total premium income
+29,257
+Automobile insurance
+6,949
+9,946
+The financial data in this section include that of
+Ping An Property & Casualty together with Ping
+An Hong Kong, except special indication.
+Results of operation
+(in RMB million)
+Premium income
+2015
+163,955
+2014
+143,150
+Our property and casualty insurance business
+kept its stable growth. As it maintained
+business quality and seized opportunities on
+the capital market, its net profit increased by
+42.2% from RMB8,807 million in 2014 to RMB12,522
+million in 2015.
+Premium income
+In 2015, all three principal lines of our property
+and casualty insurance business recorded
+steady growth.
+Net earned premiums
+134,219
+109,610
+Reinsurance
+commission income
+7,703
+6,997
+(in RMB million)
+2015
+Investment income
+(2) The number of insurance agents includes individual
+agents, professional agents and ancillary agents.
+Total
+(1) The number of individual customers was reprocessed
+according to the unified standard, and the data in 2014
+was recalculated accordingly.
+74,543
+34,823
+22,797
+Commission expenses of insurance operations
+which were mainly paid to our sales agents
+increased by 52.8% to RMB34,823 million in
+2015 from RMB22,797 million in 2014. This
+was primarily attributable to the increase in
+insurance business.
+General and administrative expenses
+General and administrative expenses increased
+by 45.9% to RMB35,063 million in 2015 from
+RMB24,025 million in 2014, which was mainly
+because of insurance business growth and the
+increase of operating costs, such as labour
+costs and office expenses.
+Finance costs
+Finance costs increased by 15.2% from RMB1,511
+million in 2014 to RMB1,740 million in 2015, which
+was primarily attributable to the increase
+of interest expense due to the issuance of
+subordinated bonds.
+Income tax
+Income tax increased by 283.1% from RMB3,590
+million in 2014 to RMB13,755 million in 2015,
+primarily due to an increase in taxable profit
+and the change of deferred tax assets.
+28
+Total
+Annual Report 2015
+PROPERTY AND CASUALTY INSURANCE
+BUSINESS
+Business Overview
+The Company conducts property and casualty
+insurance business mainly through Ping An
+Property & Casualty. Ping An Hong Kong also
+offers this insurance service in the Hong Kong
+market. As at December 31, 2015, Ping An
+Property & Casualty had a registered capital of
+RMB21 billion, net assets of RMB58,251 million
+and total assets of RMB252,068 million.
+Market share
+The premium income and market share of Ping
+An Property & Casualty are as follows:
+Premium income
+2015
+2014
+(in RMB million)
+Market share (%) (1)
+Ping An Insurance (Group) Company of China, Ltd.
+163,641
+19.4
+15,093
+Life insurance and
+others
+99,187
+165,154
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 27
+OUR PERFORMANCE
+Management Discussion and Analysis
+Insurance Business
+Payments for surrenders were increased
+by 62.7% to RMB16,578 million in 2015 from
+RMB10,188 million in 2014. This was primarily due
+to the rise in payments for surrenders of high
+cash value products and certain participating
+products, in view of the market environment
+and larger business scale.
+Payments for claims rose by 42.4% to RMB16,516
+million in 2015 from RMB11,599 million in 2014.
+This was primarily due to the continuous
+growth in our accident and health insurance
+business.
+Payments for policyholder dividends increased
+by 44.0% to RMB8,455 million in 2015 from
+RMB5,871 million in 2014. This was primarily
+attributable to the growth of the scale of
+participating insurance and the higher dividend
+yield of participating insurance policies
+compared with last year.
+21,625
+Payments for interest credited to policyholder
+contract deposits significantly increased
+by 39.6% to RMB21,387 million in 2015 from
+RMB15,317 million in 2014. This was primarily due
+to the increase in interest payments resulting
+from the growth of universal life products and
+investment income.
+Commission expenses of insurance operations
+(in RMB million)
+2015
+2014
+Health insurance
+10,005
+5,442
+Accident insurance
+3,193
+2,262
+Net increase in policyholders' reserves
+increased by 26.9% to RMB125,842 million in 2015
+from RMB99,187 million in 2014. This was mainly
+due to a combination of factors such as growth
+of business scale, restructuring of business
+and changes in assumptions of the yield curve
+for the measurement of insurance contract
+liabilities.
+142,857
+18.9
+(1) Calculated in accordance with the PRC insurance industry
+data published by the CIRC.
+In 2015, the property and casualty insurance
+market maintained stable growth. Automobile
+insurance is still the mainstay of property
+and casualty insurance. The promulgation of
+the new "Ten National Rules" and "the Belt
+and Road" initiative reaped further policy
+benefits. The implementation of the reforms
+of commercial auto insurance premium rates
+and the "China Risk Oriented Solvency System
+(C-ROSS)" further boosted market vitality and
+facilitated the development of the industry as a
+whole.
+Loss ratio
+Summary of operating data
+Number of customers
+(in thousands)
+Individual(¹)
+Corporate
+December 31, December 31,
+2015
+2014
+37,367
+2,284
+Expense ratio
+30,546
+1,782
+32,328
+Total
+Distribution network
+Number of direct sales
+representatives
+7,538
+7,589
+Number of insurance
+agents (2)
+39,651
+2015
+2014
+2013
+Ping An Property & Casualty has long adhered
+to a customer-centric model, while outpacing
+its major peers in China in terms of auto
+insurance customer satisfaction, reinforcing its
+competitive strengths as the "No. 1 Brand" of
+auto insurance in China. As its business grew
+steadily, Ping An Property & Casualty has long
+adopted "Providing Customers with the Best
+Experience" as its service philosophy, taking a
+bold approach towards innovation and reform.
+Apart from screening big data for customer
+needs, Ping An Property & Casualty was the
+industry pioneer behind a series of measures
+including real-time payment of compensation,
+easy claim settlement without survey, claim
+service via WeChat as well as direct claim
+settlement over the phone. It also fully
+implemented the "online+offline" claim service
+model.
+Ping An Property & Casualty further
+implemented its internet business strategy.
+Centered on "online customer migration, big
+data application and better experience with
+technology", it stepped up efforts to combine
+its automobile insurance and credit insurance
+with the internet. It launched the "Ping An
+Auto Owner" APP Platform, which integrates
+abundant quality resources in the ecosystem
+of auto use and provides one-stop living and
+consumption services related to "automobile
+insurance, auto-related services and life with
+autos". With credit insurance business in
+the form of "insurance + funds", it provides
+individuals with one-stop consumer finance
+services.
+In 2015, Ping An Property & Casualty recorded
+RMB163,641 million in premium income, up by
+14.5% over the previous year. Premium income
+for cross-selling, telemarketing and internet
+reached RMB75,465 million, up by 21.6% over
+the previous year. Premium income from
+car dealers reached RMB33,892 million, up by
+15.9% over the previous year. According to
+China's insurance industry statistics published
+by the CIRC, the premium income of Ping An
+Property & Casualty accounted for 19.4% of
+total premium income of Chinese property
+and casualty insurance companies. Ping An
+Property & Casualty is the second-largest
+property insurance company in China by
+premium income.
+Combined Ratio
+In 2015, the property and casualty insurance
+market in China maintained good form while
+competition intensified. Ping An Property
+& Casualty persisted with innovative
+developments, utilized new technologies
+and big data to further enhance its industry-
+leading capabilities of risk filtering and cost
+optimization, kept improving the efficiency
+of resource use and thus maintained sound
+profitability. The combined ratio was 95.6%.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 29
+OUR PERFORMANCE
+Management Discussion and Analysis
+Insurance Business
+Combined ratio
+(%)
+97.3
+95.3
+95.6
+36.9
+37.6
+38.9
+60.4
+57.7
+56.7
+49,616
+Non-automobile
+(3) Net foreign currency gains/losses on investment assets
+denominated in foreign currencies are excluded in the
+calculation of the above yields. Average investment
+assets used as the denominator are calculated based on
+the Modified Dietz method in principle.
+8,058
+100.0
+1,474,098
+100.0
+By purpose
+Carried at fair value through profit or loss
+Available-for-sale
+Held-to-maturity
+Loans and receivables
+Others
+Total investments
+1,731,619
+33,129
+19,022
+1.3
+440,032
+25.4
+307,613
+20.9
+647,568
+37.4
+574,193
+38.9
+1.9
+576,996
+Total investments
+71,431
+43,732
+2.5
+11,840
+0.8
+Wealth management products (1)
+24,338
+1.4
+16,860
+1.1
+Other equity investments (3)
+4.8
+19,692
+14,563
+1.0
+Investment properties
+25,350
+1.5
+20,301
+1.4
+Cash, cash equivalents and others
+80,103
+4.6
+1.1
+Preference shares
+33.3
+36.9
+Ping An Life
+December 31, 2015
+December 31, 2014
+123,912
+60,981
+107,231
+48,771
+Ping An Property & Casualty
+December 31, 2015
+39,464
+21,656
+December 31, 2014
+30,243
+Minimum capital
+18,385
+(Regulatory requirement>=100%)
+203.2%
+219.9%
+182.2%
+164.5%
+36
+36
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+insurance
+Solvency margin ratio
+544,358
+Actual capital
+According to the "Administrative Provisions on the Solvency of Insurance Companies" ("China
+Solvency I"), the solvency margin ratios for Ping An Life and Ping An Property & Casualty are as
+follows:
+33,894
+2.0
+28,912
+2.0
+1,731,619
+100.0
+1,474,098
+100.0
+(1) Wealth management products include trust schemes of trust companies, wealth management products of commercial
+banks, etc.
+(2) Other fixed income investments include assets purchased under agreements to resell, policy loans, statutory deposits for
+insurance operations, etc.
+(in RMB million)
+Annual Report 2015
+OUR PERFORMANCE
+Management Discussion and Analysis
+Insurance Business
+Investment portfolio
+(%)
+December 31, 2015 (December 31, 2014)
+◆ Fixed income investments 77.7 (79.7)
+⚫ Equity investments 16.2 (14.1)
+Cash, cash equivalents and others 4.6 (4.8)
+Investment properties 1.5 (1.4)
+While allocating the asset of insurance funds,
+a range of factors including such as laws,
+regulations, actuary, finance and market have
+been taken into account with the requirements
+of profitability, safety and liquidity to select
+the asset allocation manner with the best
+risk-adjusted return. In 2015, with increasing
+fluctuation in capital market in China, our
+insurance funds generated steady investment
+income under the comprehensive asset
+allocation and investment risk management
+system. While risks were under control, the
+Company continued to actively promote its
+investment in financial products, preference
+shares and overseas assets, to further
+diversify the investment portfolio of insurance
+funds and increase the stability of returns.
+Regarding risk management of insurance
+funds investment, the Company actively
+implemented special risk management projects
+adhering to the rules set up by the China
+Risk Oriented Solvency System ("C-ROSS"),
+the five-category asset classification and the
+internal audit for the utilization of insurance
+fund, thus further improved the quantitative
+risk management system of market risks and
+credit risks, and enhanced the timeliness and
+effectiveness of risk precaution and monitoring
+for insurance funds investment. At the same
+time, the Company established an investment
+risk management system that covers all
+assets across the Group and promoted the
+establishment of standardized internal credit
+rating instruments. In addition to optimizing
+the credit rating systems and counterparty
+management systems, the Company
+strengthened risk management procedures
+before, during and after investment to ensure
+the risk of insurance funds investment fell
+within the Company's tolerance range, as well
+as to safeguard the safety and profitability of
+insurance funds.
+SOLVENCY MARGIN
+An insurance company is required to have a level of capital to commensurate with its risk level
+and business scale to ensure the adequacy of solvency.
+Ping An Insurance (Group) Company of China, Ltd. 35
+0.4
+(3) Other equity investments include equity investments of infrastructure projects and non-listed equity investments, etc.
+1.2
+Net investment
+income (1)
+2015
+2014
+84,740
+66,652
+Net realized and
+unrealized gains (2)
+Impairment losses
+34,278
+5,905
+(4,268)
+(8,828)
+(in RMB million)
+Total investment
+income
+Total investment
+yield (%) (3)
+114,750
+63,729
+5.8
+5.3
+7.8
+5.1
+(1) Net investment income includes interest income from
+deposits and bonds, dividend income from equity
+investments, and operating lease income from investment
+properties, etc.
+(2) Net realized and unrealized gains include realized gains
+from security investments and profit or loss through fair
+value change.
+(3) Net foreign currency gains/losses on investment assets
+denominated in foreign currencies are excluded in the
+calculation of the above yields. Average investment
+assets used as the denominator are computed based on
+Modified Dietz method in principle.
+Net investment
+yield (%) (3)
+Net investment income increased by 27.1% to
+RMB84,740 million in 2015 from RMB66,652 million
+in 2014, while net investment yield increased
+to 5.8% in 2015 from 5.3% in 2014. The main
+reason was that the Company optimized the
+allocation of investment portfolio, increased
+the investment in the fixed income assets with
+higher yield, and dynamically adjusted the
+allocation of equity assets with the increasing
+dividend yield of equity investment.
+Investment Income
+Insurance business is the core business of the
+Group. The insurance funds is formed by the
+funds from the Company and its subsidiaries
+engaged in the insurance business which is
+available for investment. The investment of
+insurance funds is subject to relevant laws
+and regulations. The investment portfolio of
+insurance funds represents a majority of the
+investment assets of the Group. This section
+analyses the investment portfolio of insurance
+funds.
+6,762
+5,122
+Accident and health
+insurance
+1,585
+1,231
+Total claims expenses
+76,137
+63,172
+Claims attributable to automobile insurance
+business increased by 20.5% to RMB66,494
+million in 2015 from RMB55,179 million in 2014.
+This was primarily due to the growth in
+automobile insurance business.
+In 2015, the world economy on the whole was
+still weak and differentiated with emerging
+economies experiencing slow growth, while the
+Chinese economy entered the "new normal"
+stage. Judging from performance of the
+financial market, the size of issuance in the
+bond market in China expanded significantly
+with obvious decrease in issuance interest
+rates; the bond indexes continued to rise with
+flattening yield curves of treasuries. Stocks in
+China displayed great volatilities. The Company
+conducted in-depth research on investment
+opportunities under the "new normal” stage,
+stayed vigilant against market risk, optimized
+the asset allocation structure and seized
+investment opportunities in A share stock
+market. Further, we raised the investment of
+fixed income assets with higher returns under
+the premise of controlling contained credit risk,
+and achieved significant investment income
+during the year.
+Claims attributable to non-automobile
+insurance business increased by 19.2% to
+RMB8,058 million in 2015 from RMB6,762 million
+in 2014. This was primarily due to the growth in
+claims expenses caused by natural disasters.
+Commission expenses of our property and
+casualty insurance business increased by 27.5%
+to RMB19,704 million in 2015 from RMB15,450
+million in 2014. Commission expenses as a
+percentage of premium income was 12.0% in
+2015, higher than the 10.8% in 2014. This was
+primarily due to the increase in premium
+income and more intensive market competition.
+General and administrative expenses
+General and administrative expenses increased
+by 22.7% to RMB40,538 million in 2015 from
+RMB33,028 million in 2014, which was primarily
+due to the business growth, and the increase of
+labour cost and inputs in customer services.
+Income tax
+Income tax was RMB3,437 million in 2015, 8.3%
+higher than the amount of RMB3,173 million in
+2014, which was mainly due to an increase in
+the taxable profits.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 33
+OUR PERFORMANCE
+Management Discussion and Analysis
+Insurance Business
+FUNDS
+Claims attributable to accident and health.
+insurance business increased by 28.8% to
+RMB1,585 million in 2015 from RMB1,231 million.
+in 2014. This was primarily due to the growth in
+accident and health insurance business.
+In 2015, with the volatility in equity market, the
+Company grabbed opportunity to lock in gains.
+Net realized and unrealized investment gains
+significantly increased from RMB5,905 million
+in 2014 to RMB34,278 million in 2015. Meanwhile,
+impairment losses of insurance funds portfolio
+were substantially decreased from RMB8,822
+million in 2014 to RMB4,268 million in 2015.
+INVESTMENT PORTFOLIO OF INSURANCE
+2014.
+Wealth management products (1)
+117,970
+6.8
+80,412
+5.5
+Other fixed income investments (2)
+68,931
+4.0
+49,633
+3.3
+Stocks
+124,254
+7.2
+128,841
+8.8
+Equity funds
+48,275
+2.8
+29,929
+2.0
+As a result, total investment income for
+investment portfolio of insurance funds
+increased by 80.1% to RMB114,750 million in
+2015 from RMB63,729 million in 2014, and total
+investment yield increased to 7.8% from 5.1% in
+Bond funds
+20,067
+8.0
+117,683
+Equity investments
+136,414
+Ping An Insurance (Group) Company of China, Ltd.
+7.9
+Investment Portfolio
+(in RMB million)
+By category
+Fixed income investments
+Term deposits
+December 31, 2014
+% Carrying value
+%
+193,248
+December 31, 2015
+Carrying value
+Annual Report 2015
+235,760
+16.0
+Bond investments
+829,245
+47.9
+691,723
+34
+11.1
+Debt scheme investments
+46.9
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+44
+As for private wealth management business,
+Ping An Trust took full advantage of its
+traditional strengths of channels and teams
+and created the "Wealth+" service brand by
+integrating the concepts of internet finance
+to provide clients with customized online and
+offline services through multiple channels.
+Ping An Trust was the first company to launch
+a mobile APP named "Ping An Caifubao" for
+serving clients. In 2015, for high net worth client,
+the monthly average activity reached 51%, and
+the online service replacement rate reached
+47%. The number of high net worth clients grew
+steadily. As at December 31, 2015, active high
+net worth clients amounted to 37 thousand,
+up by 24.3% over the beginning of 2015. In
+terms of private equity investment banking
+achieve this goal, it has established four major
+core business segments, namely “private wealth
+management business (retail)", "private equity
+investment banking and institutional asset
+management business (corporate)", "interbank
+business (interbank)" and "private equity
+investment business (PE)". Leveraging on the
+brand new risk management system and the
+robust back office for operational services, Ping
+An Trust provided full-cycle, full-process and
+all-round financial solutions to personal clients,
+corporate clients and interbank clients.
+Ping An Trust insisted on optimizing the business structure, continued to
+control project risks and maintained stable and healthy business growth.
+Ping An Securities saw its business performance hit a record high with
+strategies being advanced effectively.
+Since 2015, the trust industry has seen slowdown
+in growth of assets under management and
+an urgent need for transformation of the
+traditional trust business model as the Chinese
+economy adjusted to the "new normal" with
+strains from intensifying competition, the
+tightening of regulations as well as policies and
+diminishing institutional dividends, etc.
+The company offers investment and financial
+services through Ping An Trust to high net-
+worth individual clients, institutional clients,
+interbank clients and other subsidiaries of the
+Company. As at December 31, 2015, Ping An
+Trust had RMB12 billion in registered capital,
+RMB22,775 million in net assets, and RMB29,253
+million in total assets.
+and institutional asset management business,
+Ping An Trust pursued innovation and kept
+promoting cooperation with quality clients.
+Bearing in mind the target of serving the real
+economy, Ping An Trust saw comprehensive
+and sound development in areas of real estate,
+infrastructure, investment banking, etc., and
+offered services to quality enterprises in China
+in the form of equities, debt plans, mezzanine
+financing, funds, etc. In terms of interbank
+business, Ping An Trust launched a platform
+called "Private Fund V+" to attract more
+quality private placement funds to issue their
+products through the platform in a bid to pool
+wisdom across the industry, integrate high
+quality resources and share dividends from
+the pan asset management era with clients. As
+at December 31, 2015, the platform partnered
+with over 100 private placement funds with
+scale exceeding RMB40 billion. In terms of
+private equity investment business, Ping An
+Trust adhered to its client-centric principle
+and aimed to build a "Ping An PE Ecosystem".
+With careful selection of sunrise industries and
+quality enterprise, Ping An Trust completed
+many star projects and issued the first phase
+of a groundbreaking healthcare fund in total
+of RMB3.7 billion. In addition, Ping An Trust
+also established an active managed QFLP fund
+for overseas fund raising and co-managed
+the fund as the "overseas institutional asset
+manager" with offshore fund manager for the
+first time. The QFLP fund has total assets under
+management of USD0.5 billion.
+Management Discussion and Analysis
+Asset Management Business
+Ping An Asset Management achieved sound business growth with
+excellent performance in its third-party business.
+With the pressure from heightening
+competition in the pan asset management
+field and lackluster momentum for sustainable
+development, Ping An Trust prepared well for
+possible future downturns, repositioning itself
+amid market changes, while pressing ahead
+with the business transformation in a new
+economic cycle and the competition landscape
+to overtake rivals in a new round of market
+competition. Ping An Trust dedicated to be "the
+largest and leading trust company in China". To
+TRUST BUSINESS
+66,074
+Assets Held in Trust
+December 31,
+December 31,
+(in RMB million)
+2015
+2014
+Investment category
+Capital market investments
+Private equity investments
+Other investments(1)
+63,685
+33,184
+27,565
+Subtotal
+OUR PERFORMANCE
+33,403
+72,540
+Ping An Trust kept advancing the business
+transformation and maintained steady growth.
+In 2015, trust business saw management fee
+income of RMB5,157 million for trust products,
+up by 25.1% over the previous year, and net
+profits of RMB2,912 million, up by 31.6% over the
+previous year.
+Ping An Insurance (Group) Company of China, Ltd. 43
+Headquarter
+As at December 31, 2015, capital adequacy ratio
+of Ping An Bank was 10.94%, with both tier 1
+capital adequacy ratio and core tier 1 capital
+adequacy ratio of 9.03%, all of which were in
+compliance with the regulatory requirements.
+0.48
+Core tier 1 capital
+171,798
+North
+222,427
+0.79
+184,213
+0.57
+adequacy
+211,022
+3.34
+153,870
+2.59
+ratio (%) (regulatory
+requirement>=7.5%)
+9.03
+8.64
+Total
+1,216,138
+1.45 1,024,734
+1.02
+Tier 1 capital adequacy
+ratio (%) (regulatory
+requirement>=8.5%)
+9.03
+8.64
+In 2015, affected by macro-economy, some
+enterprises experienced difficulties in
+operations, shortage of funds and insolvency.
+The non-performing and special mention
+loans of Ping An Bank increased. As at the
+end of 2015, the carrying amount of non-
+performing loans was RMB17,645 million; the
+non-performing loan ratio was 1.45%, and the
+provision coverage ratio was 165.86%. Ping An
+Bank has actively adopted a series of measures
+to manage existing loan, and increased
+provision and loan disposing. Loan loss
+provision ratio was 2.41%, up by 0.35 percentage
+points over the beginning of the year.
+Meanwhile, it strictly controlled incremental
+business to resist the worse of asset quality
+and maintained stable asset quality.
+Capital adequacy
+ratio (%) (regulatory
+requirement>=10.5%)
+10.94
+10.86
+(1) Capital requirement regarding credit risk, market risk
+and operation risk was measured in weighted method,
+standard method and basic index method, respectively.
+Annual Report 2015
+124,653
+37.0%
+46,611
+(In RMB million)
+2015
+2014
+2015
+Total assets held
+in trust
+December 31
+2014
+16,303,620
+13,979,910
+558,435
+399,849
+The percentage
+of trust assets
+under investment
+category
+33.7%
+30.8%
+31.2%
+The percentage
+of trust assets
+under financing
+category
+24.3%
+33.7%
+29.0%
+43.9%
+The percentage
+of trust assets
+under
+123,455
+December 31
+December 31
+December 31
+Ping An Trust
+54,120
+Infrastructure industry
+financing
+29,370
+28,666
+Corporate loans
+67,008
+43,985
+Pledged and other financing (2)
+19,087
+48,730
+Subtotal
+162,076
+175,501
+Financing category
+Real estate industry
+financing
+Administrative category (3)
+99,695
+Total
+558,435
+399,849
+(1) Other investments refer to investments other than the
+above, including structured equity investment, family
+trust, and other investment businesses.
+(2) Pledge financing is generally backed by stocks,
+beneficiary rights of trust schemes, accounts receivable,
+etc.; other financing refer to financing trust backed by
+assets other than the above, including acquired credit
+card assets, rents receivable, and other debts.
+(3) An administrative trust refers to a trust scheme under
+which a trust company, acting as the trustee, provides
+the beneficiary with administrative and executive services
+for specified purposes.
+As at 31 December 2015, assets held in trust
+of Ping An Trust reached RMB558,435 million,
+up by 39.7% over the end of 2014. As the real
+economy went downward and the market risks
+increased, Ping An Trust further adjusted its
+business structure. The scale of administrative
+trusts and investment trusts increased, while
+the scale of financing trusts decreased. The
+scale of financing trusts was RMB162,076 million,
+down by 7.6% over the beginning of the year,
+among which, the scale of trust asset within the
+real estate financing category was RMB46,611
+million, down by 13.9% over the beginning of
+the year.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 45
+OUR PERFORMANCE
+Management Discussion and Analysis
+Asset Management Business
+Business Structure
+Trust Industry
+224,561
+1.62
+Total loans and advances of Ping An Bank
+increased by 18.7% to RMB1,216,138 million as at
+December 31, 2015 from 1,024,734 million as at
+December 31, 2014.
+West
+December 31, December 31,
+2015
+2014
+1,148,011
+977,284
+50,482
+36,949
+7,945
+4,374
+2,141
+2,146
+7,559
+3,981
+Doubtful
+Loss
+LOANS AND ADVANCES
+Total loans and
+advances
+1,216,138
+1,024,734
+(in RMB million)
+December 31, December 31,
+2015
+2014
+Total non-performing
+loans
+17,645
+10,501
+Corporate loans
+774,996
+Retail loans
+293,402
+639,739
+282,096
+Special mention
+Sub-standard
+Pass
+(in RMB million)
+LOAN QUALITY
+Ping An Insurance (Group) Company of China, Ltd. 41
+OUR PERFORMANCE
+Management Discussion and Analysis
+Banking Business
+DEPOSITS
+(in RMB million)
+Loans and advances
+December 31, 2015 (December 31, 2014)
+December 31, December 31,
+(%)
+2015
+2014
+Corporate deposits
+1,453,590
+Non-performing loan
+ratio (%)
+1,280,430
+280,331
+252,753
+Total deposits
+1,733,921
+1,533,183
+Deposits
+(%)
+December 31, 2015 (December 31, 2014)
+Corporate loans 63.7 (62.4)
+Retail loans 24.1 (27.5)
+Accounts receivable on
+credit cards 12.2 (10.1)
+●Corporate deposits 83.8 (83.5)
+Retail deposits 16.2 (16.5)
+The total deposits increased by 13.1% to
+RMB1,733,921 million as at December 31, 2015
+from RMB1,533,183 million as at December 31,
+2014. Both types of deposits maintained a stable
+growth.
+administrative
+Retail deposits
+171,371
+1.45
+Accounts receivable on
+loan ratio
+loan ratio
+Net core tier 1 capital
+Net tier 1 capital
+150,070
+119,241
+150,070
+119,241
+(in RMB million)
+Balances
+(%)
+Balances
+(%)
+Net capital
+181,805
+149,951
+East
+364,616
+1.15
+312,713
+1.10
+Total risk weighted
+South
+246,702
+0.76
+250,483
+0.58
+assets
+1,661,747
+1,380,432
+performing
+performing
+Non-
+Non-
+Impairment provision.
+credit cards
+147,740
+102,899
+balance
+(29,266)
+(21,097)
+Loan loss provision
+Total loans and
+ratio (%)
+2.41
+2.06
+advances
+1,216,138
+1.02
+1,024,734
+ratio (%)
+165.86
+200.90
+42
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Loan quality by region
+December 31, 2015
+CAPITAL ADEQUACY RATIO
+December 31, December 31,
+December 31, 2014
+(in RMB million)
+2015
+2014
+Provision coverage
+category
+236.9%
+32.6%
+fair value change
+Foreign exchange losses
+107
+(10)
+Others
+372
+446
+(573)
+(388)
+Income from other
+Total interest income
+131,649
+119,202
+businesses
+161
+213
+Interest expenses
+Total operating income
+96,163
+73,407
+Due to the PBOC
+(63)
+(37)
+Due to financial
+institutions
+Business tax and
+(17,238)
+(26,911)
+surcharges
+(6,671)
+23,179
+(5,482)
+28,271
+Profit or loss through
+This section is the analysis about the operating
+result of Ping An Bank. The data came from its
+annual report 2015.
+NET INTEREST INCOME
+(in RMB million)
+2015
+2014
+Interest income
+(in RMB million)
+2015
+2014
+Due from the PBOC
+Due from financial
+4,206
+3,885
+Net interest income
+66,099
+53,046
+institutions
+12,660
+20,422
+Net fees and
+Loans and advances
+commission income
+26,445
+17,378
+to customers
+86,140
+71,270
+Investment income
+3,924
+3,168
+Interest income from
+securities investment
+Customer deposits
+(42,763)
+(37,551)
+1,963,857
+Net profit
+21,865
+19,802
+Net interest
+spread (%) (1)
+2.63
+2.40
+The profitability of Ping An Bank maintained
+stable, with a net profit of RMB21,865 million in
+2015, up by 10.4% as compared with last year.
+Net interest
+margin (%) (2)
+2.77
+2.57
+40
+Annual Report 2015
+(1) Net interest spread (NIS) refers to the difference
+between the average yield of interest-earning assets and
+the average cost rate of interest-bearing liabilities.
+(2) Net interest margin (NIM) refers to net interest income/
+average balance of interest-earning assets.
+Ping An Insurance (Group) Company of China, Ltd.
+Net interest income increased by 24.6% to
+RMB66,099 million in 2015 from RMB53,046
+million in 2014, mainly due to the effect of an
+expanded scale of interest-earning assets and
+the increase of net interest spread.
+Both net interest spread and net interest
+margin increased as compared with last year,
+due to the continuous efforts in adjustment
+of the structure of asset and liability and
+risk pricing management and the increasing
+efficiency of resource utilization.
+NET FEES AND COMMISSION INCOME
+(in RMB million)
+2015
+Benefitting from the significantly increased
+net non-interest income arising from the rapid
+growth of investment banking and custody
+business, as well as the excellent performance
+of the agency and settlement business, credit
+card business, wealth management and gold
+leasing, net fees and commission income rose
+by 52.2% to RMB26,445 million in 2015 from
+RMB17,378 million in 2014.
+GENERAL AND ADMINISTRATIVE EXPENSES
+(in RMB million)
+2015
+2014
+General and
+administrative
+2014
+Annual Report 2015
+2,276,493
+liabilities
+of interest-bearing
+Average balance
+General and administrative
+Bonds payable
+(5,486)
+(1,657)
+expenses
+(30,112)
+(26,668)
+Total interest expenses
+(65,550)
+(66,156)
+Asset impairment losses
+(30,485)
+(15,011)
+Net interest income
+Banking Business
+66,099
+Total operating
+expenses
+(67,268)
+(47,161)
+Average balance of
+interest-earning
+assets
+Net non-operating
+2,387,864
+2,064,595
+income and expenses
+Income tax
+(49)
+(6,981)
+(52)
+(6,392)
+53,046
+38.7%
+Management Discussion and Analysis
+Ping An Insurance (Group) Company of China, Ltd. 39
+2014
+2015
+Fees and commission
+INCOME TAX
+19,706
+29,185
+commission income
+Asset impairment losses increased greatly from
+RMB15,011 million in 2014 to RMB30,485 million
+in 2015, mainly due to the increase in loan loss
+provision of Ping An Bank.
+ASSET IMPAIRMENT LOSSES
+General and administrative expenses increased
+by 12.9% to RMB30,112 million in 2015 from
+RMB26,668 million in 2014, which was mainly
+due to the expansion of outlets and business,
+as well as continued investment in the
+optimization of management. Cost-to-income
+ratio decreased by 5.02 percentage points to
+31.31% in 2015.
+(1) Cost-to-income ratio refers to general and administrative
+expenses divided by operating income.
+Total fees and
+203
+1,130
+1,521
+Others
+164
+fees income
+Account management
+1,405
+2,939
+income
+Asset custodian fees
+3,730
+5,250
+income
+Consultancy fees
+1,967
+3,421
+fees income
+expenses
+Wealth management
+Agency expenses
+(417)
+40.2%
+24.9%
+Service Operations Management
+Ping An Trust continued to increase the
+investment in its operations and services
+system, kept optimizing the internal control
+mechanism for operational risk and promoted
+operational service innovation with effective
+results.
+In terms of operational risk control, Ping An
+Trust kept improving its internal control to
+intensify the business management awareness
+with establishing the mechanism of veto
+power over major errors. Meanwhile, Ping An
+Trust intensified its control over substantial
+risks, moral hazards as well as management of
+operational risks and put in place the practices
+of double review over account opening
+and contract signing, double processing of
+key operations and separation of sensitive
+information. Meanwhile, Ping An Trust also
+refined manuals of various managerial policies,
+established its operational risk monitoring
+system, complaint tracking mechanism and
+emergency response mechanism.
+In terms of service channel innovation, Ping
+An Trust established the bespoke operations
+manager service mechanism and 626300 hotline
+service support, improved the mechanism of
+services specific for new products, released
+the operational SLA service commitments,
+increased the service connotation, improved
+the express channel mechanism and enhanced
+client experience on an ongoing basis.
+In terms of IT infrastructure building, Ping
+An Trust established IT platforms of internet,
+sales, products, investment & financing, risk
+management, operations and finance, data, etc.
+with the focus on strengthening the risk control
+and digital operations platforms to provide
+efficient support for business development with
+robust IT platforms.
+Risk Management
+In 2015, adhering to its risk management
+principle of "risks creating value and winning
+with market-leading risk control", Ping An Trust
+established a risk management framework
+marked by “full participation, full-process
+control and full coverage of business" by
+combining the expertise of trust business and
+the refined risk control system of commercial
+banks.
+In terms of risk control, Ping An Trust.
+had a set of strict criteria on selecting
+projects. By developing risk strategies for
+various businesses, Ping An Trust specified
+requirements including counterparty selection,
+investment size, credit ratings, region selection,
+collaterals and risk controls. Before investing
+a project, double due diligence, independent
+approval and independent decisions should be
+made. During the investment period, double
+verification and centralized review are required,
+and procedures such as stamp collection,
+underwriting, contract signing, collateral
+registration and certificate collection should
+46
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+26,445
+commission income
+Net fees and
+(2,328)
+(2,740)
+commission expenses
+Total fees and
+(1) Effective tax rate refers to income tax divided by profit
+before tax.
+(1,765)
+(146)
+(232)
+Others
+(2,156)
+expenses
+Bank card fees
+24.40
+24.20
+Effective tax rate (%) (1)
+(352)
+6,780
+9,207
+income
+Comprehensive
+solvency margin
+ratio
+219.7%
+269.5%
+Note: Core solvency margin ratio =core capital/minimum
+capital; comprehensive solvency margin ratio = actual
+expenses
+capital/minimum capital.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 37
+OUR PERFORMANCE
+38
+Management Discussion and Analysis
+Banking Business
+Ping An Bank maintained steady growth in business scale with stable
+profitability.
+Ping An Bank has significantly optimized its business structure, improved
+its operating efficiency, and maintained stable asset quality.
+Ping An Bank has further expanded its branch network with adding 250
+outlets in the year.
+The Company engages in banking business
+through Ping An Bank, which is a national
+joint-stock commercial bank headquartered in
+Shenzhen, and is listed on the Shenzhen Stock
+Exchange (stock code: 000001). As at December
+31, 2015, Ping An Bank had about RMB2.51
+trillion in total assets, RMB161.5 billion in net
+assets, and RMB14,309 million in registered
+capital. Ping An Bank provides corporate, retail,
+and government clients with multiple financial
+services through 997 outlets across the country.
+In 2015, amid slow recovery of the world
+economy and mixed growth of major
+economies, the United States initiated an
+interest rate hike cycle in hesitation. China
+entered to a "new normal" stage with structural
+adjustments and stable growth. In 2015, the
+PBOC maintained its prudent monetary policy
+stance, reduced interest rates and required
+reserve rates five times, and completed interest
+rate liberalization, which further squeezed
+interest rate spreads. Meanwhile, the formal
+implementation of deposit insurance system,
+the increasing heating of internet finance, and
+the liberation of private banks brought huge
+challenges to the banking industry.
+Amid the slowdown of external economy and
+structural adjustments in China, Ping An Bank
+maintained steady growth through proactive
+innovation and smart operations under a
+robust differentiation strategy, and achieved
+excellent results in profit growth, quality
+control, business development, and strategic
+transformation.
+Ping An Bank realized RMB21,865 million in net
+profit for 2015, up by 10.4% over the previous
+year. As at December 31, 2015, Ping An Bank's
+total deposits had grown to RMB1,733,921
+million, up by 13.1% compared with the
+beginning of the year, with a leading growth
+in the market, laying a solid foundation for
+business development. Ping An Bank's total
+loans and advances had grown to RMB1,216,138
+million, up by 18.7% compared with the
+beginning of the year.
+Ping An Bank has significantly optimized
+its business structure, and constantly
+improved its operating efficiency. Ping An
+proactively tackled interest rate liberalization,
+flexibly adjusted its asset and liability
+management policy to optimize its asset and
+liability structure, and promoted innovative
+intermediary services, which significantly
+optimized its business structure, and constantly
+improved its operating efficiency. In 2015, the
+average cost ratio of interest-bearing liabilities
+decreased by 0.49 percentage points, and the
+proportion of credit assets increased by 1.65
+percentage points in comparison with the
+previous year, among which the proportion of
+high-yield Xin Yi Dai unsecured personal loans,
+auto loan, credit card loans, and Dai Dai Ping
+An micro-business loans increased steadily.
+The net non-interest income reached RMB30,064
+million, the percentage accounted for the
+revenue increased to 31.3% from 27.7% last year.
+The net interest spread and the net interest
+margin in 2015 were 2.63% and 2.77%, up by 0.23
+and 0.20 percentage points over the previous
+year, respectively. In 2015, with improved
+efficiency, the cost-to-income ratio was 31.31%,
+down by 5.02 percentage points in comparison
+with the previous year. The decrease was
+leading the industry.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Bank has accelerated financial
+innovation to build a unique presence
+in internet finance. In 2015, Ping An Bank
+has reaped a good harvest in the layout
+of internet finance. As at the end of 2015,
+Ping An Bank's fast-growing "Orange-e-
+platform" had 1.63 million registered users,
+and handled over RMB21 billion online loan
+in 2015. "Hang-E-Tong", an online interbank
+platform, has connected tens of thousands
+of banking outlets across China, with online
+transaction volume exceeding RMB600 billion.
+"Orange Bank" strives to become "a bank of
+the young" with providing "simple, delightful,
+and profitable" online financial service and
+it has served over 5 million customers. Ping
+An Bank has first launched movable property
+products of Internet of Things finance, which
+endowed commodity in transaction with the
+characteristics of finance, to promote the
+revolution of supply chain finance.
+Ping An Bank has enhanced risk control to
+tackle challenges in the market. Ping An Bank
+has tackled various challenges proactively, and
+implemented comprehensive risk management
+to ensure prudent business operation while
+serving the real economy. Due to the macro-
+economic slowdown, some trade companies,
+low-end manufacturers, and private small/
+medium-sized enterprises in some areas have
+become vulnerable to risks with the emerging
+of financing difficulties and business challenges,
+causing the non-performing loan ratio to
+climb. As at the end of 2015, Ping An Bank's
+non-performing loan ratio was 1.45%, and the
+provision coverage ratio was 165.86%. Ping
+An Bank had adopted a series of measures to
+prevent and avoid various risks induced by
+existing loans and strengthen its effects to
+dissolve and dispose of non-performing assets.
+In 2015, Ping An Bank achieved significant
+results in debt recovery by recovering
+RMB5,947 million in non-performing assets,
+and increased its provisions and write-offs to
+maintain a relatively stable asset quality with
+a loan loss provision ratio of 2.41%, up by 0.35
+percentage points from the beginning of 2015.
+Moreover, Ping An Bank constantly optimized
+the credit structure, strictly controlled the
+risks from its incremental businesses, improved
+its risk tolerance and risk limit management
+system, built a comprehensive liquidity risk
+management model, and kept all market risks
+under strict control to ensure prudent business
+development.
+Ping An Bank has replenished its capital,
+expanded its branch network, and upgraded
+its brand image. In the first half of 2015, Ping
+An Bank privately placed RMB10 billion worth
+of common stocks to replenish its capital
+and support its business growth. Its capital
+adequacy ratio and Tier-1 capital adequacy
+ratio reached 10.94% and 9.03% as at the end
+of 2015. Ping An Bank continued expanding
+its branch network to accelerate extension
+development. As at December 31, 2015, Ping An
+Bank had 54 branches and 997 outlets.
+RESULTS OF OPERATION
+Pursuant to the accounting standards, the
+identifiable assets and liabilities acquired
+upon the merger with Original SDB were to
+be recognised and measured at fair value on
+the date of merger. As a result, the figures
+of Original SDB in the consolidated financial
+statements of the Group were the results of
+further calculation on the basis of the fair
+value of its assets and liabilities on the date
+of merger. Therefore, there were differences
+between the data of the segment operating
+results of the Group's banking business in the
+financial statements and those of the operating
+results of Ping An Bank as disclosed in its
+annual report.
+Annual Report 2015
+206.8%
+margin ratio
+Core solvency
+24,498
+Bank card fees
+2,947
+4,747
+Agency commissions
+1,544
+1,936
+income
+Settlement fees
+income
+Fees and commission
+36.33
+31.31
+Cost-to-income ratio (1)
+26,668
+OUR PERFORMANCE
+30,112
+The CIRC issued the China Risk Oriented
+Solvency System ("C-ROSS", i.e. Solvency II) in
+February 2015. The insurance industry entered
+the C-ROSS transition period. A risk-oriented
+supervision regime was established under the
+Solvency II to measure the risks of insurance
+undertakings scientifically and comprehensively,
+and calculate a capital requirement that aligns
+with the specific risks with the insurance
+undertaking's risk profiles. Based on the trial
+operations during the transition period and
+as approved by the State Council, the CIRC
+decided to enforce "the Solvency Regulatory
+Rules (No. 1-17) for Insurance Companies" from
+January 1, 2016.
+The solvency margin ratios of Ping An Life and
+Ping An Property & Casualty under Solvency II
+are as follows:
+(in RMB million)
+December 31, 2015
+Ping An
+Property &
+Ping An Life
+Casualty
+Core capital
+Actual capital
+418,366
+58,029
+444,366
+66,029
+Minimum capital
+202,289
+As at December 31, 2015, the solvency margin
+ratios of Ping An Life and Ping An Property
+& Casualty under Solvency I were both
+above the regulatory requirements. Ping An
+Life's solvency margin ratio reduced by 16.7
+percentage points over the end of 2014, which
+Iwas mainly due to dividend distribution and
+business development. The solvency margin
+ratio of Ping An Property & Casualty increased
+by 17.7 percentage points over the end of 2014,
+which was mainly due to the issuance of RMB5
+billion capital supplement bond.
+17,378
+34
+Annual Report 2015
+(in RMB million)
+Results of Operation
+Going forward, Ping An Securities will invest
+more effort into strengthening its balance sheet
+by various means of financing, fully explore the
+potential of teams and mechanisms, develop
+competitive advantages to differentiate itself
+based on three regions (East, South, and
+North) and five focuses (Brokerage, Investment
+Banking, Marketing, Trading, and Investment).
+Ping An Securities will carry out strategic
+transformation towards an "online securities
+broker and wealth manager" and a "modern
+investment bank”, establish an “institutional,
+corporate, and private banking service system",
+develop an "alternative investment sector",
+target a "global financial market", and kick
+off an "Account App Strategy" and a new
+"5+1" Initiative in response to challenges such
+as brokerage fee competition in brokerage
+business, a looming registration system reform
+for IPOs, and excess liquidity due to declining
+interest rates. Ping An Securities has hired
+top-notch talent from China's Internet industry
+and securities exchanges as well as Wall
+Street to build an excellent cross-platform
+system of teams, and improved performance
+management, IT systems, and operating
+processes to ensure successful upgrading and
+implementation of strategies.
+Ping An Securities insists on the baseline of
+risk control and compliance management, has
+established a robust risk control platform and
+a risk budgeting system in place, constantly
+enhances the building of its middle office, and
+has developed a prudential risk platform and
+culture. With more prudential margin lending
+and proprietary trading strategies, Ping An
+Securities weathered the market volatility
+in 2015. Ping An Securities expanded its net
+assets by 131.0% at the end of 2015, ranking
+15th among peers, up by 9 notches over the
+beginning of 2015, due to the over RMB10 billion
+of capital injected by shareholders in the first
+half of 2015 and its retained earnings. Moreover,
+Ping An Securities has kicked off several debt
+financing plans to expand its balance sheet
+strength and promote growth.
+among peers by the number of IPOs and
+bond issuances for which it acted as lead
+underwriter. 22 branches were established and
+made fast-growing contributions to business.
+As a result of proactively cooperation between
+headquarters business units and branches, the
+number of projects in reserve soared. Ping
+An Securities achieved strong results in bond
+trading, with a rate of return of over 25%. It
+beat most peers by interbank bond delivery
+volume and interest rate swap volume. Ping
+An Securities made breakthroughs in both the
+size and the innovation of asset management
+business. The assets under management grew
+above RMB237 billion. The size of investment
+advisory business for small/medium-sized
+banks soared above RMB100 billion, up by
+223.7% over the beginning of 2015. Ping An
+Securities innovatively completed the first
+asset securitization for margin trading and
+securities lending business in the industry, and
+the accumulated scale reached RMB3.5 billion.
+Ping An Securities made significant progress in
+preparing for new business. Ping An Securities
+has hired some renowned Wall Street traders
+of bonds and derivatives to prepare for bond
+market making and interest rate swap business
+and an initial trading system has been built
+and started to be tested. Moreover, Ping An
+Securities has tried to create an initial business
+model for industry development funds, and
+expects to boost the business rapidly.
+Management Discussion and Analysis
+Asset Management Business
+OUR PERFORMANCE
+Ping An Insurance (Group) Company of China, Ltd. 49
+Annual Report 2015
+Ping An Securities effectively transformed
+towards an online securities broker. In 2015,
+Ping An Securities acquired 2.93 million
+new customers, double the original total,
+ranking 3rd by new customer market share
+and 8th by customer base among peers,
+up 13 notches from the beginning of 2015.
+The Internet became a major channel for
+customer acquisition as over 90% of the new
+customers opened accounts via the APP. Ping
+An Securities has established its image as an
+leading online securities firm, significantly
+boosted its market recognition, and ranked
+1st on the China Internet Weekly magazine's
+list of Top 100 Internet+ Securities Firms 2015.
+The effect of Ping An Securities' investment
+banking business model transformation was
+emerging. Ping An Securities ranked 3rd
+In response to the fast-evolving market,
+Ping An Securities focused on its strategic
+transformation under its "5+1" initiatives.
+It achieved remarkable results as it made
+headway with the “internet brokerage
+business", "investment banking business 1+N",
+"operations of the corporate banking business",
+"establishment of competitive advantages of
+the interbank business", "development of the
+trading and financial derivative business" and
+"implementation roadmap of the Account APP
+Strategy”. Its net profit hit a new high with
+its business growth and stability leading the
+market and its rankings in the market rose
+sharply. Ping An Securities realized RMB2,478
+million in net profit for 2015, up by 168.2% over
+the previous year, beating peers in growth
+rate. With a more balanced and robust mix of
+brokerage, fixed-income, and equity businesses,
+Ping An Securities saw lower volatility in its
+performance than its peers when stocks fell in
+the third quarter of 2015.
+Chinese stock market saw high volatility in 2015.
+A-shares market soared from early 2015, with
+the CSI 300 hitting a seven-year high in June.
+But then Chinese stocks crashed and fell for
+following three months, down 45.1% from the
+top. In response to sharp changes in trends,
+regulators acted to stabilize the market through
+a series of policies which included suspending
+IPOs, restricting major shareholders' selling,
+and restricting stock index futures trades. The
+market gradually stabilized from September,
+and at the end of 2015 the CSI 300 was up by
+5.6% compared with the beginning of 2015,
+with an annual amplitude of 68.7%. The primary
+market of stocks saw a year-on-year growth
+rate of 72.3% in funds raised, and the daily
+average trading volume of the secondary
+market exceeded RMB1 trillion, up by 246.2%
+compared with the previous year. Compared
+with the volatile stock market, the bond market
+was generally bullish in 2015: the primary
+market of bonds saw a year-on-year growth
+rate of 66.9% in funds raised and the secondary
+market saw a year-on-year increase of 4.5%
+in the China Bond Full Price Index. As interest
+rates and exchange rates were liberalized, the
+bond market making and interest rate swap
+markets will grow rapidly.
+The Company provides securities brokerage,
+futures brokerage, investment banking, asset
+management, and financial advisory services
+through Ping An Securities and its subsidiaries,
+which are Ping An Futures, Ping An Bright
+Fortune, Ping An Securities (Hong Kong), and
+Ping An Pioneer Capital. As at December 31,
+2015, Ping An Securities had RMB8,574 million
+in registered capital, RMB23,555 million in net
+assets, and RMB93,753 million in total assets.
+SECURITIES BUSINESS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+48
+Other income for 2015 was RMB1,340 million, up
+by 122.6% from RMB602 million for 2014, mainly
+due to the increase of the income from financial
+advisory services.
+Other income
+Investment income of trust business for 2015
+was RMB2,113 million, increased by 27.2% from
+RMB1,661 million for last year, which was mainly
+due to the withdrawal from equity projects and
+the growth of the profit distribution from trust
+product.
+Investment income
+Fees and commission income for 2015 was
+RMB5,331 million, representing an increase of
+24.1% from RMB4,294 million in 2014. This was
+primarily due to the good performance in
+investment and thus a substantial increase in
+floating management fees income in 2015.
+Note: The above figures are presented at segment level
+of trust business, including Ping An Trust and its
+subsidiaries which carry on investment and asset
+management business.
+2,212
+2,912
+Net profit
+2015
+2014
+Fees and commission income
+Investment income
+Other income
+6,165
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+50
+50
+924
+2,478
+Net profit
+(240)
+(676)
+Income tax
+(2,862)
+(6,965)
+(2,167)
+Ping An Insurance (Group) Company of China, Ltd.
+(5,596)
+(483)
+(565)
+(212)
+(804)
+Fees and commission
+expenses
+Finance costs
+Total operating income
+4,026
+10,119
+29
+627
+1,783
+3,327
+2,214
+General, administrative
+and other expenses
+Total operating expenses
+During 2015, net profit from our securities
+business increased by 168.2% to RMB2,478
+million from last year, which was mainly
+attributable to the large growth in net fees
+and commission income resulting from the
+significantly increased transaction volume in
+stock market, the growth of margin trading
+and securities lending business, as well as the
+growth of investment income.
+(1,108)
+(3,773)
+Total fees and commission
+income
+Management fees income
+of trust products
+Income from intermediate
+business
+Fees and Commission Income
+(in RMB million)
+Trust business realized a net profit of RMB2,912
+million, up by 31.6% from RMB2,212 million in
+2014, mainly due to the increase in net fees and
+commission income, investment income and
+income from investment advisory business as
+compared with 2014.
+Results of Operation
+In 2015, Ping An Trust won authoritative awards
+within the industry due to its resounding
+results, outstanding performance and good
+reputation. It won the "Annual Outstanding
+Trust Company Award" for the sixth
+consecutive year and the "Annual Best Family
+Trust Scheme" awarded by Securities Times.
+It also won the “2015 Best Comprehensive
+Strength Trust Company Award" of the China
+Asset Management Gold Shell Awards elected
+by the 21st Century Business Herald and the
+"Annual Best Trust Company Award" of the
+"China Financial Institutions Gold Medal List
+• Gold Dragon Awards" awarded by Financial
+Times.
+Management Discussion and Analysis
+Asset Management Business
+OUR PERFORMANCE
+Ping An Insurance (Group) Company of China, Ltd. 47
+Annual Report 2015
+74.2%
+80.9%
+170.6%
+228.9%
+14,587
+18,428
+2014
+2015
+December 31,
+December 31,
+Net capital/sum of
+risk assets of various
+businesses (regulatory
+requirement >=100%)
+Net capital/net asset
+(regulatory requirement
+>=40%)
+Net capital (in RMB million)
+(regulatory requirement
+>=200)
+As at December 31, 2015, the net capital of Ping.
+An Trust was RMB18,428 million, far exceeding
+the regulatory requirement of RMB200 million.
+The ratio of net capital to the sum of risk assets
+of various businesses was 228.9%, higher than
+the regulatory requirement of 100%. Net capital
+to net asset ratio was 80.9%, which complied
+with regulatory requirement.
+Furthermore, in accordance with "Guidelines
+on Risk Supervision for Trust Companies"
+issued by China Banking Regulatory
+Commission (CBRC), Ping An Trust established
+a risk prevention and control accountability
+system and developed a Recovery and
+Resolution Plan which includes the "mechanism
+for shareholder liquidity support and capital
+replenishing", "rules on deferment of incentive
+payment for senior management", the
+"mechanism on limiting dividend distribution
+and bonus claw back", the "business division
+and recovery mechanism" and the "entity
+disposal mechanism". Based on strict risk
+management and prudent operations, Ping
+An Trust redeemed all the trust schemes at
+maturity as scheduled in the year of 2015.
+Regarding risk disposal, Ping An Trust set
+up a dedicated team for management and
+recovery of non-performing assets. It also
+set up dedicated project teams to follow up
+projects with potential risks and appointed
+dedicated staff to track the financial conditions
+of counterparties and report the risk profile
+to the management on a regular basis till the
+complete removal of the risks.
+In terms of risk/return matching, Ping An Trust
+introduced quantitative management tools
+with a stress on the risk and return trade-
+off. Ping An Trust continued to press ahead
+with development of the credit rating model,
+developed debt rating model for trust business,
+and established risk asset classification
+methodologies based on the estimated losses
+calculated according to the credit ratings
+and debt ratings. It also gradually promoted
+the utilization of credit rating and debt
+rating in entry authorization, post-investment
+management, and risk capital measurement
+to reflect the true value of assets and balance
+risks and returns.
+be jointly completed by the frontline staff
+and the approving officers with centralized
+management of loan offering review. After
+investing a project, Ping An Trust set up a
+dedicated asset management team and appoint
+directors, financial staff and engineering staff
+to monitor the project progress and the sales
+progress via shareholder meetings and board
+meetings to warn against project starts and
+sales risks. There are punitive stipulations and
+advance payment stipulations on suspension,
+deferment of a project and late new launch of
+sales in transaction contract to increase the
+safeguards for trust schemes and minimize the
+project risks.
+2015
+2014
+5,157
+4,123
+(4,764)
+Total operating expenses
+(2,992)
+(4,356)
+other expenses
+General, administrative and
+(781)
+(408)
+expenses
+Fees and commission
+6,557
+8,784
+Total operating income
+Income tax
+1,661
+602
+Other income
+2,113
+Investment income
+4,294
+5,331
+Fees and commission income
+2014
+2015
+(in RMB million)
+4,294
+5,331
+171
+174
+1,340
+Net Fees and Commission Income
+(in RMB million)
+(572)
+2014
+1,831
+368
+2014
+December 31, December 31,
+2015
+Active investors
+Investors
+Registered users
+(in ten thousand)
+The Number of Users
+Lufax had 3.63 million active investors, up by
+nearly 10 times over the beginning of the year.
+With transaction activities on Lufax soaring,
+Lufax had achieved RMB1,814.6 billion in total
+transaction volume from its establishment to
+the end of 2015, including RMB733.9 billion in
+retail transaction volume and RMB1,080.7 billion
+in institutional transaction volume. In 2015,
+Lufax achieved RMB1,525,272 million in total
+trading volume, up by over 5 times compared
+with the previous year. It achieved RMB646,492
+million in retail transaction volume, up by
+nearly 7 times compared with the previous
+year, including RMB52.4 billion in primary and
+secondary transaction volume of P2P business,
+up by over 2 times compared with the previous
+year. Lufax achieved RMB878,780 million in
+institutional transaction volume, up by over
+4 times compared with the previous year,
+maintaining its leading position in the industry.
+Besides, as mobile transactions accounted for
+over 67% of retail transactions in 2015, Lufax has
+become a convenient platform for online users
+to manage wealth online.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+54
+As at the end of 2015, Lufax had 18.31 million
+registered users, up by 257.6% compared with
+the beginning of the year, as the first internet
+financial transaction information service
+platform to have over 10 million users. Lufax
+is committed to providing one-stop financial
+services for Chinese retail and institutional
+investors, which retail investors can invest
+conveniently in a wide range of investment
+products on Lufax's online platform, and have
+access to personalized services based on data
+technology. Lufax proactively diversifies its
+product mix to satisfy the emerging Chinese
+middle class's diversifying demand for wealth
+management. From 2015, Lufax launched new
+products such as "Ling Huo Bao", "Bian Xian
+Tong", "Fu Ying Zeng Zhang", and mutual
+funds to attract more investor segments and
+boost the investor base, which grew by 3.33
+million new investors in 2015, up by over 9 times
+over the previous year. As at the end of 2015,
+growth, provide liquidity, and it also meets
+customer demands for various financial services
+through its financial transaction information
+service platform. Lufax is transforming into
+an open financial transaction information
+service platform, and seeking cross-group,
+cross-region, cross-sector, and cross-border
+business opportunities and transaction
+channels.
+Lufax is committed to meeting investment and
+financing demands with advanced internet
+technologies and philosophies as well as
+building the best internet financial transaction
+information service platform in China. Lufax
+has integrated online and offline channels to
+serve all financial institutions, corporate clients,
+and retail customers, matching supply with
+demand through internet to facilitate wealth
+LUFAX
+Ping An has stuck to the philosophy of
+"Technology-driven Finance", constantly
+diversified its financial and daily-life service
+scenarios centering around customer demands
+for "health, food, housing, transportation and
+entertainment", and pursued innovation of
+its internet finance business models to serve
+customers as their "wealth manager, health
+advisor and life companion". While the core
+finance companies embrace the internet,
+internet finance companies have achieved fast
+growth in various innovative businesses after
+years of deployment and development.
+The "One Account Management Services" platform has acquired over 100
+million users and over RMB1 trillion in assets under management.
+Ping An Health cloud has established the largest network of full-time online
+doctors in China and “Ping An Doctor” APP has become China's No.1 portal
+for online health care.
+Lufax has become the largest internet financial transaction information
+service platform.
+Management Discussion and Analysis
+Internet Finance
+OUR PERFORMANCE
+Ping An Insurance (Group) Company of China, Ltd. 53
+Annual Report 2015
+At the end of 2015, Ping An Financial Leasing
+had RMB9.3 billion in registered capital,
+ranking the fourth in the industry; and it has
+accumulated total assets of over RMB70 billion
+while maintaining a high level of asset quality,
+ranking among the top places in foreign-funded
+financial leasing companies.
+In 2015, Ping An Financial Leasing opened
+China's first medical image center; meanwhile,
+Ping An Leasing built a team of experts with
+international backgrounds, penetrated the
+aircraft leasing market with leading capabilities,
+and built a platform for its offshore business.
+35
+The Company conducts financial leasing
+business through Ping An Financial Leasing.
+Ping An Financial Leasing was founded in
+September 2012. It has engaged in health care,
+manufacturing and processing, infrastructure,
+government financing, education and
+culture as well as institutional financing,
+and has been exploring new industries and
+businesses. Leveraging on the Group's solid
+capital strength, outstanding brand influence,
+synergies of the full financial licenses and the
+integrated financial services platform, Ping An
+Financial Leasing strove to become a world-
+leading light capital leasing company, providing
+its clients with flexible and diversified financial
+products and comprehensive value-added
+services.
+363
+(in RMB million)
+2015
+56
+Ping An Health Cloud is committed to building
+a one-stop whole-process O20 platform for
+health care services, and providing customers
+with seamless services covering online
+consultation, online medicine purchase, and
+offline medical services through its "Ping An
+Doctor APP" and offline service network. In
+2015, "Ping An Doctor APP" provided services
+for over 30 million users, with the peak daily
+active users of over 1.3 million and a peak
+daily consultations of more than 120 thousand,
+becoming the No.1 portal for online health
+care in China. In 2015, Ping An Health Cloud
+accelerated implementation of its doctor
+network and medicine network strategies. It
+has built a preliminary three-tier network of
+PING AN HEALTH CLOUD
+to build a C2C house leasing platform. Going
+forward, Ping An Haofang will develop an O20
+finance platform for second-hand house while
+boosting the new house and house leasing
+businesses.
+PA Haofang has made full use of Ping An
+Group's advantage of integrated finance to
+build an O2O real estate finance platform. As
+at the end of 2015, Ping An Haofang's official
+website has over 7 million registered users;
+on the website, there are various portals such
+as New Houses, Second-hand Houses, House
+Leasing, Overseas Houses, Haofang Finance,
+and Haofang Crowdfunding. The portal of New
+Houses has covered 51 cities including all the
+tier-1 and tier-2 cities in China. In new house
+business, Ping An Haofang has signed strategic
+cooperation contracts with nearly 50% of
+China's top 100 developers, and achieved over
+RMB150 billion in sales volume of new house
+through PA Haofang' platform for 2015. In house
+leasing business, Ping An Haofang successfully
+launched the "An An Zu" APP in November
+PA HAOFANG
+Loyalty point business is committed to building
+the largest general loyalty point platform in
+the industry. It has further improved customer
+experience, provided corporate clients with
+loyalty marketing and value-added services,
+and established China's first loyalty point union
+in 2014, which has over 100 renowned corporate
+members now. As at the end of 2015, the loyalty
+point platform had over 96 million registered
+users, covering nearly 1 million online and
+offline merchants cooperating in loyalty points
+consumption. The total loyalty points issued
+in 2015 were worth RMB6.5 billion, up by 232.0%
+compared with the previous year, including
+RMB418 million worth of loyalty points issued
+to customers outside the Group; the annual
+transaction volume reached RMB21.2 billion,
+up by 395.0% compared with the previous year;
+transactions conducted on mobile devices
+accounted for 43.5% of the total volume.
+industry-leading payment processing
+capabilities, and provides the Group's internet
+finance business with a core payment platform.
+In 2015, various payments processed were
+worth over RMB1.57 trillion in total. "Yiwallet"
+APP had over 45 million registered users at the
+end of 2015, up by 391.4% compared with the
+beginning of the year, with a monthly average
+activity rate of 15.3% and an annual activity rate
+of 24.2%. Monetary funds and bill/bond-backed
+wealth management products launched on
+Yiwallet were welcomed by customers, with a
+sales volume of over RMB100 billion for 2015, up
+by 423.4% compared to the last year. Yiwallet
+launched China's first “internet +” credit card,
+integrated online and offline cards and wallets,
+and significantly improved user experience
+and brand reputation, indicating that the
+internet finance mode of payment business has
+achieved preliminary results.
+Payment-processing business has
+Internet Finance
+Management Discussion and Analysis
+OUR PERFORMANCE
+Ping An Insurance (Group) Company of China, Ltd. 55
+PING AN PAY AND WANLITONG
+Ping An Pay has been integrated with
+Wanlitong to create strong strategic synergies
+as they have similar customer bases and
+complementary business models. The
+integration has strengthened the combined
+payment service capability, enhanced the
+money-saving functionality of the Yiwallet APP,
+and improved the user experience and value
+of loyalty points. Since the integration, the two
+business lines of the Company have grown
+in synergy rapidly. In 2015, total transaction
+volume of the payment-processing business
+and the loyalty point business reached RMB1.59
+trillion, up by over 5.9 times over the previous
+year.
+Ping An Puhui Financial business is one of
+China's largest personal consumption finance
+and micro-enterprise finance service providers.
+Relying on its profound experience and
+robust risk management capability in personal
+consumption finance and micro-enterprise
+finance service, Ping An Puhui Financial aims to
+match customers' capital supply with demand
+through its strong offline distribution and
+management network. In 2015, Ping An Puhui
+Financial granted RMB48.3 billion in new loans,
+up by 160% over the previous year, and the
+number of its offline lending and service outlets
+grew to 552. Since it started its consumer credit
+business, Ping An Puhui Financial has granted
+RMB99 billion in loans to 1.24 million borrowers.
+PING AN PUHUI FINANCIAL
+251,211
+1,525,272
+Total
+82,764
+168,447
+878,780
+Institutional
+646,492
+Retail
+2014
+2015
+Transaction Volume
+FINANCIAL LEASING BUSINESS
+512
+Performance of funds under the Ping An-
+UOB Fund was remarkable with several funds
+ranking the forefront of the market in 2015.
+As at December 31, 2015, research report from
+Haitong Securities showed Ping An-UOB fixed-
+income funds were ranked No. 4 among 80
+companies in terms of absolute returns in the
+past year, and the equity funds ranked No.
+13 among 70 companies in terms of absolute
+returns in recent three years. Ping An-UOB
+Fund maintained fast growth in assets under
+management in 2015. As at December 31, 2015,
+the scale of its publicly-offered funds reached
+RMB38.5 billion, up by 205% over the beginning
+of the year. The subsidiary also saw significant
+improvement in market position with its
+segregate account business ranking No. 2 in the
+industry. Ping An-UOB Fund won "the Growth
+Fund Management Company" in the 12th
+income
+Net fees and commission
+(212)
+(804)
+expenses
+Total fees and commission
+(37)
+(50)
+Others
+(175)
+(754)
+Brokerage fees expenses
+Fees and commission expenses
+5,361
+2,214
+income
+Total fees and commission
+356
+915
+Others
+473
+1,215
+income
+Underwriting commission
+1,385
+4,035
+election of "Gold Fund" awards in China.
+Fees and commission income
+6,165
+2,002
+Brokerage fees income
+Going forward, Ping An Asset Management
+(Hong Kong) will further explore overseas
+capital market, optimize the tactical decision-
+making processes, refine the risk control
+measures and stabilize returns. Meanwhile,
+Ping An Asset Management (Hong Kong)
+will also closely monitor the change in laws,
+policies and global economy, continuously
+deepen its understanding of policies and
+industry development trends, further leverage
+its advantages as a cross-border platform,
+improve its competitiveness in investment,
+and strive to build a professional overseas
+investment brand for Ping An Group.
+In 2015, our brokerage fees income increased by
+191.3% to RMB4,035 million from last year, mainly
+due to the increasing transaction volume in the
+secondary market of A shares, the growth of
+brokerage business under the internet strategic
+transformation and the rapid development of
+margin trading and securities lending business.
+FUND MANAGEMENT BUSINESS
+Ping An-UOB Fund mainly engages in raising
+and sales of securities investment funds,
+assets management business and offering of
+professional investment products and related
+services to retail and institutional investors. As
+at December 31, 2015, Ping An - UOB Fund has
+a registered capital of RMB300 million.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+2
+52
+Ping An Asset Management (Hong Kong)
+operates the overseas investment management
+business of the Company. Apart from managing
+overseas investment for insurance funds
+under the Group, it also provides third-party
+investment management and investment
+advisory services as well as a range of overseas
+investment products to institutions and
+individual clients in China and abroad. Having
+built a global investment platform with strong
+capabilities in overseas investment research
+and portfolio management, the investment
+team of Ping An Asset Management (Hong
+Kong) is responsible for global macroeconomic
+research, equity investment in Hong Kong and
+the overseas market as well as investment
+in fixed income and preferred stocks in the
+overseas market. In 2015, Ping An Asset
+Management (Hong Kong) developed its
+investment advisory business for institutional
+clients in mainland China and Hong Kong, and
+built extensive overseas client relationships
+through the business. As at December 31,
+2015, assets under management of Ping An
+Asset Management (Hong Kong) amounted to
+HKD42,066 million.
+December 31,
+2015
+1,966,611
+1,631,952
+1,275,288
+Assets under investment management
+(in RMB million)
+In future, Ping An Asset Management will
+continue to actively expand its third-party
+asset management business while serving
+the insurance funds, improve its investment
+capabilities, enhance its risk management,
+provide investors with more comprehensive
+investment management services and create
+Ping An's brand in investment.
+December 31, December 31,
+2013
+2014
+Amid market volatilities, Ping An Asset
+Management leveraged its expertise in
+investment, seized opportunities in the
+markets and strove to improve investment
+returns with risks effectively controlled. Ping
+An Asset Management kept exploring and
+innovating its third-party asset management
+business, diversifying its products, improving
+the establishment of products lines and
+enhancing its level of product management and
+marketing. As a result, the scale and profits saw
+constant growth. Ping An Asset Management
+has set up a complete set of risk management
+and investment platform which is capable of
+effectively supporting investment research,
+improving investment efficiency, controlling
+investment risks to ensure improvement in
+the investment performance and business
+development.
+Underwriting commission income increased
+by 156.9% to RMB1,215 million in 2015 over the
+previous year, which was mainly attributable to
+the growth of underwriting income generated
+from IPO and refinancing projects under the
+active IPO market in the first half of the year,
+and the steady increase of underwriting income
+generated from bond issuance business.
+In 2015, Ping An Asset Management realized net
+profits of RMB2,362 million, up by 141.8% over
+the previous year. Assets under management at
+the end of the year amounted to RMB1,966,611
+million, up by 20.5% over last year; among
+which, the scale of its third-party asset
+management business reached RMB245,722
+million, up by 45.1% over last year. Its third-
+party asset management business fees income
+was RMB1,389 million, up by 91.3% over the
+previous year.
+Investment income increased by 86.6% to
+RMB3,327 million in 2015 from RMB1,783 million
+in 2014, mainly due to the increase of the
+dividends of funds and interest income from
+bonds and margin trading and securities
+lending. Meanwhile, in respond to market,
+Ping An Securities stepped up its investment
+in bonds and adjusted the scale of margin
+trading and securities lending business and
+the investment in stock and funds, locking the
+investment yield in advance.
+INVESTMENT MANAGEMENT BUSINESS
+The Company provides investment
+management services primarily through two
+subsidiaries of the Group, Ping An Asset
+Management and Ping An Asset Management
+(Hong Kong).
+Ping An Asset Management is responsible for
+domestic investment management business.
+It is entrusted to manage the insurance funds
+of the Group as well as the investment assets
+of other subsidiaries under the Group. It also
+provides investment products and third-party
+asset management services to other investors
+through various channels. As at December 31,
+2015, Ping An Asset Management had RMB1.5
+billion in registered capital.
+Investment income
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 51
+OUR PERFORMANCE
+Management Discussion and Analysis
+Asset Management Business
+In 2015, China's economic growth continued to
+slow, the total supply and demand shrank, while
+the devaluation of the renminbi brought greater
+pressure on capital outflows and the downward
+trend in the economy was still continuing. The
+domestic stock market saw great volatilities in
+2015. Driven by the economic transformation
+and the innovation-orientated policies, the
+increase of the growth stocks significantly
+outpaced the value stocks. The Shanghai
+Composite Index saw an annual increase of
+9.4%; the CSI 300 saw an annual increase of 5.6%,
+while the ChiNext Index rose by 84.4%. With
+the economic stimulus such as monetary policy
+easing and PBOC's reduction in reserve and
+interest rates, bonds saw a bull market in 2015.
+5.0%
+By FYP
+1.9%
+44.7%
+44.0%
+44.5%
+2015
+2014
+2014
+2015
+By ANP
+43.5%
+3.0%
+Change (%)
+3.0%
+3.6%
+10.9%
+13.7%
+31.1%
+30.4%
+36.4%
+37.6%
+Note: ANP (Annualised new premium) is calculated as the sum of 100 per cent of annualised first year premiums and 10 per cent of single
+premiums.
+Embedded Value Movement
+The table below shows how the embedded value changed to RMB552,853 million as at December 31, 2015.
+Total
+(in RMB million)
+2015
+8.9%
+Bancassurance
+8,139
+The profit margin of one year's new business by segment was:
+Description
+2014
+2015
+Value of one year's new business
+2014 Change (%)
+69,347
+46,731
+48.4
+30,174
+20,800
+45.1
+21,625
+17,090
+26.5
+Individual
+Group
+417
+(51.6)
+8,382
+(2.9)
+246
+303
+(18.8)
+99,110
+72,203
+37.3
+30,838
+21,966
+40.4
+Note: Figures may not match totals due to rounding.
+863
+Embedded value of life insurance business
+as at December 31, 2015 (in RMB)
+264,223
+500 Capital injection to Ping An Annuity by the
+Company was RMB500 million
+(6,828) The impact of dividends paid to
+shareholders by Ping An Life
+326,814
+194,589
+33,070
+(9,206)
+Market value adjustment and other variances
+Adjusted net asset value of other business
+as at December 31, 2015 before capital
+changes
+Shareholder dividends
+Dividends received from subsidiaries
+Capital injection
+Capital investment
+Shareholder dividends paid by the Company
+218,453
+2015 Description
+(1,958) The impact of dividends paid to
+shareholders by Ping An Asset Management
+was RMB960 million; The impact of dividends
+paid to shareholders by Ping An Bank was
+RMB998 million
+9,119
+Dividends paid to the Company by Ping An
+Life was RMB6,828 million; Dividends paid to
+the Company by Ping An Asset Management
+was RMB960 million; Dividends paid to the
+Company by Ping An Bank was RMB998
+million
+The increase in net assets from the
+conversion of A Share Convertible Bonds
+was RMB9,119 million
+(500) Capital investment to Ping An Annuity was
+RMB500 million
+(7,861) Dividends paid to shareholders by the
+Company
+Adjusted net asset value of other business
+as at December 31, 2015
+226,040
+Embedded value as at December 31, 2015
+552,853
+Embedded value per share
+30.24
+2015
+8,786
+as at December 31, 2014
+Net Profit of other business
+Embedded value of life insurance business
+as at December 31, 2015
+Expected return on year-start embedded value
+24,628
+Value of one year's new business
+31,058
+Assumptions and model changes
+Market value adjustment
+Investment return variance
+Experience variances
+Other
+Embedded value of life insurance business
+before capital changes
+Annual Report 2015
+The contribution came from new business
+sold during 2015 and discounted at earned
+rate/11.0%
+(246) Assumptions change, such as the morbidity
+rates, decreased embedded value
+Adjusted net asset value of other business
+as at December 31, 2014
+756
+11,599
+Actual investment return calculated on the
+basis of comprehensive income in 2015 was
+higher than the assumed return
+825
+Actual experience in 2015 was better than
+the assumptions
+298
+333,142
+Embedded value of life insurance business.
+before impact of capital change increased
+by 26.1%
+Ping An Insurance (Group) Company of China, Ltd. 61
+OUR PERFORMANCE
+Embedded Value
+(in RMB million)
+Capital injection
+Shareholder dividends
+The change in market value adjustment of
+relevant investments
+FYP used to calculate value of
+new business
+Embedded Value
+Bancassurance
+Peng Jin, Actuary
+March 15, 2016
+Ping An Insurance (Group) Company of China, Ltd.
+EMBEDDED VALUE REPORT OF PING AN INSURANCE (GROUP) COMPANY OF CHINA, LTD. 2015
+In order to provide investors with an additional tool to understand our economic value and business
+performance results, the Company has disclosed information regarding embedded value in this section.
+The embedded value represents the shareholders' adjusted net asset value plus the value of the Company's
+in-force life insurance business adjusted for the cost of regulatory solvency margin deployed to support
+this business. The embedded value excludes the value of future new business sales.
+In accordance with the related provisions of the Rules for the Compilation of Information Disclosures by
+the Companies Offering Securities to the Public (No. 4) - Special Provisions on Information Disclosures by
+Insurance Companies, the Company has engaged PricewaterhouseCoopers Consultants (Shenzhen) Limited
+to review the reasonableness of the methodology, the assumptions and the calculation results of the
+Company's embedded value as at December 31, 2015.
+The calculation of embedded value relies on a number of assumptions with respect to future experience.
+As a result, future experience may vary from that assumed in the calculation, and these variations may
+be material. The market value of the Company is measured by the value of the Company's shares on
+any particular day. In valuing the Company's shares, investors take into account a variety of information
+available to them and their own investment criteria. Therefore, these calculated values should not be
+construed as a direct reflection of the actual market value.
+On May 15, 2012, the Ministry of Finance and the State Administration of Taxation issued the "Notice on
+Corporate Income Tax Deduction of Reserves for Insurance Companies" (Cai Shui [2012] No. 45). Based on
+this notice, during the preparation of 2015 embedded value report, the contract liabilities of life insurance
+business related to distributable profit were measured according to the assessment standards of the
+liabilities pursuant to the current solvency regulations, but those related to the income tax were measured
+according to "Regulations regarding the Accounting Treatment of Insurance Contracts" (Cai Kuai [2009]
+No. 15).
+Components of Economic Value
+(in RMB million)
+Risk discount rate
+Adjusted net asset value
+Including: Adjusted net asset value of life insurance business
+Value of in-force insurance business written prior to June 1999
+Value of in-force insurance business written since June 1999
+Cost of holding the required solvency margin
+Embedded value
+Including: Embedded value of life insurance business
+Annual Report 2015
+(in RMB million)
+Value of one year's new business
+Cost of holding the required solvency margin
+Value of one year's new business after cost of solvency
+December 31,
+December 31,
+2015
+2014
+Earned Rate/
+Earned Rate/
+11.0%
+11.0%
+327,926
+284,418
+Risk discount rate
+101,887
+58
+We also confirm that the EV results disclosed in the Embedded Value chapter in the 2015 annual report is
+consistent with the results we reviewed.
+Note: Figures may not match totals due to rounding.
+internal doctors, external doctors, and famous
+doctors, in which nearly 900 internal doctors
+employed by Ping An Health Cloud provide
+free online consultation 24 hours, 40 thousand
+external contracted doctors provide further and
+follow-up consultation, and over 3 thousand
+contracted famous doctors at 3A hospitals
+provide phone-based consultation and extra
+appointments. Its B2C medicine supply network
+has already covered the whole country, and
+020 medicine supply network has covered
+tier-1 cities such as Shanghai, Beijing, and
+Shenzhen, while it delivers medicines within
+two hours.
+ONE ACCOUNT MANAGEMENT SERVICES
+Ping An Financial Technology is committed
+to build One Account Management Services
+into the largest open internet financial service
+platform in China. As at December 31, 2015,
+One Account Management Services had 100
+million users, over 18 million monthly active
+users, and over RMB1 trillion in assets under
+management. One Account Management
+Services offers four major value propositions:
+account management, wealth management,
+credit management, and lifestyle management.
+In terms of account management, One Account
+Management Services has integrated nine
+categories of financial and lifestyle accounts
+that cover over 80% of financial users and 60%
+of the users have 1.9 accounts on average. In
+terms of wealth management, One Account
+Management Services provides users with
+three wealth management approaches, i.e.
+self-service, smart service, and advisory
+service, serving over 10 million users per
+month on the wealth management platform.
+In terms of credit management, One Account
+Management Services has partnered with
+Qianhai Credit Reference Center to promote
+the use of personal credit data in various
+scenarios. Since the partnership began half a
+year ago, One Account Management Services.
+and Qianhai Credit Reference Center have
+started cooperation with over 400 financial
+and daily-life service institutions, and
+facilitated over 40 million credit queries. In
+terms of lifestyle management, One Account
+Management Services has integrated various
+offerings from Ping An Group's subsidiaries
+covering autos, housing, and other daily-life
+services to provide users with comprehensive,
+specialized, convenient, and excellent
+experience.
+Going forward, Ping An will continue to build a
+more powerful open internet finance platform
+to provide various financial and daily-life
+services covering "health, food, housing,
+transportation and entertainment" under the
+"Internet Integrated Finance" development
+model.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 57
+OUR PERFORMANCE
+As at December 31, 2015, the embedded value of the
+Company was RMB552,853 million, and the value of one
+year's new business of life insurance sold during 2015 was
+RMB30,838 million.
+INDEPENDENT ACTUARIES REVIEW OPINION REPORT ON THE EMBEDDED VALUE DISCLOSURES
+To the directors of
+Ping An Insurance (Group) Company of China, Ltd.
+We have reviewed the Embedded Value of Ping An Insurance (Group) Company of China, Ltd. (“The
+Company") as at December 31, 2015 ("the EV results”). The EV results include embedded value, value of
+one year's new business after cost of solvency ("VNB"), valuation methodology and assumptions, first
+year premium of new business, profit margin of new business, embedded value movement, free surplus
+movement of life insurance business and sensitivity analysis.
+The Company prepared the embedded value and VNB results in accordance with the "Guidelines
+on Embedded Value Reporting of Life Insurance Companies" issued by China Insurance Regulatory
+Commission in September, 2005 (the "Guidelines"). Our responsibility, as independent actuaries, is to
+perform certain review procedures set out in our letter of engagement and, based on these procedures,
+conclude whether the embedded value methodology and assumptions are consistent with the Guidelines
+and available market information.
+PricewaterhouseCoopers Consultants (Shenzhen) Limited
+We have reviewed the methodology and assumptions used in preparing the EV results, including:
+•
+Review the embedded value of the Company as at December 31, 2015;
+Review the value and profit margin of new business during 2015;
+Review the sensitivity analysis of the value of in-force business and VNB of the Company;
+•
+Review the embedded value movement analysis, and
+•
+Review the free surplus movement analysis of life insurance business.
+Our review procedures included, but were not limited to, considering whether the methodology and
+assumptions are consistent with the Guidelines and available market information, validating actuarial
+models on the basis of sample policies, inspecting related documentation. In forming our conclusion, we
+have relied on the audited and unaudited data and information provided by the Company.
+The preparation of embedded value and VNB results requires assumptions and projections about future
+economic and financial situations, many of which are outside the control of the Company. Therefore, actual
+experience may differ from these assumptions and projections.
+Opinion:
+Based on our review procedures, we have concluded that the methodology and assumptions used in
+preparing the EV results are in compliance with the Guidelines and consistent with available market
+information;
+The EV results, in all material aspects, are consistent with the methodology and assumptions stated in
+the Embedded Value chapter in the 2015 annual report.
+•
+Total
+89,829
+(7,342)
+5.
+6.
+Risk discount rate
+The discount rate for the in-force life insurance business in each future year has been assumed to
+be the non-investment-linked fund's earned rate or 11.0%. The earned rate is the investment return
+adjusted for tax paid. This specific discount rate approach for the in-force business is to avoid
+understating the effect of losses arising from those high-interest-rate-guaranteed products we sold
+prior to June 1999. A level of 11.0% has been assumed in each future year for the calculation of one
+year's new business value.
+Investment returns
+Future investment returns have been assumed to be 4.75% in the next year and to increase by
+0.25% every year to 5.5% and stay at 5.5% thereafter for the non-investment-linked fund. For the
+investment-linked fund, future investment returns have been assumed to be slightly higher than the
+above non-investment-linked fund investment returns assumption. These returns have been derived
+by consideration of the current capital market condition, the Company's current and expected future
+asset allocations and associated investment returns for a range of major asset classes.
+Taxation
+A 25% average income tax rate has been assumed. The percentage of investment returns that can be
+exempted from income tax has been assumed to be 12% in the next year and to increase by 3% every
+year to 18% and stay at 18% thereafter. In addition, a 5.5% business tax rate has been applied to the
+gross written premiums of the accident insurance business and partial annuity business.
+Mortality
+The experience mortality rates have been based on 65% and 65% of China Life (2000-2003) table for
+male and female respectively for non annuitants. For annuitants, the experience mortality rates since
+the grant period have been based on 60% and 50% of China Life Annuity (2000-2003) table for male and
+female respectively.
+Morbidity
+Morbidity assumptions have been based on the industry morbidity table or the Company's own pricing
+table. The loss ratios have been assumed to be in the range of 15% and 100% for short-term accident
+and health insurance business.
+Discontinuances
+4.
+Policy discontinuance rates have been based on the Company's recent experience studies. The
+discontinuance rates are dependent on the pricing interest rate and the product type.
+Expenses
+8.
+Expenses assumptions have been based on the Company's most recent expenses investigation.
+Expenses assumptions are mainly separated into acquisition expenses and maintenance expenses
+assumptions. The unit maintenance expenses were assumed to increase at 2% per annum.
+Policyholder dividends
+Policyholder dividends have been based on 75% of the interest and mortality surplus for individual life
+and bancassurance participating business. For group life participating business, dividends have been
+based on 80% of interest surplus only.
+60
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Value of New Business
+The new business volumes measured by first year premium and value of one year's new business by
+segment was:
+(in RMB million)
+Individual
+Group
+7.
+(6,570)
+3.
+1.
+272,915
+215,626
+(41,419)
+(33,890)
+552,853
+458,812
+326,814
+264,223
+December 31,
+December 31,
+2015
+2014
+11.0%
+2.
+11.0%
+25,190
+(5,281)
+(3,224)
+30,838
+21,966
+Note: Figures may not match totals due to rounding.
+The adjusted net asset value of life insurance business was based on the unaudited shareholders' net asset
+value of the relevant life insurance business of the Company as measured on the PRC statutory basis. This
+unaudited shareholders' net asset value was calculated based on the audited shareholders' net asset value
+in accordance with CAS by adjusting the relevant differences, such as reserves. The adjusted net asset
+value of other business was based on the audited shareholders' net asset value of the relevant business of
+the Company in accordance with CAS. The relevant life insurance business includes business conducted
+through Ping An Life, Ping An Annuity and Ping An Health. The values placed on certain assets have been
+adjusted to the market value.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 59
+OUR PERFORMANCE
+Embedded Value
+Key Assumptions
+The assumptions used in the embedded value calculation in 2015 have been made on a "going concern"
+basis, assuming continuation of the economic and legal environment currently prevailing in China. The
+statutory reserving basis and solvency margin requirement were assumed in the calculation. Certain
+portfolio assumptions were based on the Company's own recent experience as well as considering
+the more general China market and other life insurance markets' experience. The principal bases and
+assumptions used in the calculation are described below:
+36,120
+62
+Expected growth of embedded value
+occurred in 2015
+Ping An Insurance (Group) Company of China, Ltd.
+The Company manages its liquidity and
+financial resources from the perspective of the
+Group as a whole. The Budget Management
+Committee, Risk Management Execution
+Committee, and Investment Management
+Committee under the Group Executive
+Committee are overseeing these essentials at
+group level. In addition, as the Group's liquidity
+management execution unit, the Treasury
+Division is responsible for the management of
+cash, liquidity, funding and capital and so forth.
+The liquidity management of the Group
+comprises capital planning and cash flow
+management. The Group has put in place
+a comprehensive capital management and
+decision-making mechanism. As part of this
+process, the Group's subsidiaries put forward
+their capital requirements based on their own
+business development needs. The parent
+company then submits its recommendations
+on the overall capital planning for the
+Group, based on the overall situation of its
+subsidiaries' business development. The Group
+Executive Committee then determines a final
+capital planning scheme based on the strategic
+planning of the entire group before allocating
+capital accordingly.
+All operations, investment and financing
+activities should follow the requirements of
+liquidity management. Ping An Group and its
+insurance subsidiaries implement separate
+management on their operating cash inflow
+and outflow. Through the pooling of cash
+inflow and outflow, allocation and deployment
+of funds are centralized. The Company and
+its subsidiaries are therefore able to monitor
+cash flow status in a timely manner. In 2015,
+the Group maintained net cash inflows in its
+operating cash flows.
+CAPITAL STRUCTURE
+The Group's long-term capital stability stems
+from the profit continuously generated by
+its various businesses. Further, the Group
+ensured capital adequacy by using capital
+market and debt market tools, issuing equity
+securities, subordinated debts, hybrid capital
+bonds and tier-2 capital bonds to raise capital.
+Adjustments were made to surplus capital
+through dividend distribution.
+As at December 31, 2015, equity attributable
+to shareholders of the parent company was
+RMB334,248 million, up by 15.4% over the
+end of 2014. The parent company's capital
+structure mainly comprised contributions from
+shareholders, proceeds from issuance of H
+shares and A shares.
+Liquidity refers to the availability of cash
+assets or cash supply to meet the financial
+requirements of the Company whenever
+needed. The aim of the Group's liquidity
+management is to meet the liquidity
+requirements of operations, investment
+and financing activities of the Group while
+continuously refining its financial resources
+allocation and capital structure to maximise
+shareholder return.
+The conversion period of Ping An Convertible
+Bonds issued by the Company on November
+23, 2013 commenced on May 23, 2014. Until
+January, 2015, there were 629,922,613 A shares
+issued as a result of conversion from Ping An
+Convertible Bonds. The Ping An Convertible
+Bonds ceased to be traded or converted on
+January 12, 2015. Starting from January 15, 2015,
+the Ping An Convertible Bonds was delisted
+from the Shanghai Stock Exchange. On August
+4, 2015, the conversion of capital reserve into
+share capital was completed, and the parent
+company's share capital was increased by
+RMB9,140 million shares. As at December 31,
+2015, the total share capital of the Company
+was increased to RMB18,280 million.
+Ping An Insurance (Group) Company of China, Ltd. 65
+OUR PERFORMANCE
+Liquidity and Financial Resources
+The following table indicates the balances of
+subordinated debts, hybrid capital bonds and
+tier-2 capital bonds issued by the Group and
+main subsidiaries at the end of 2015 (par value):
+(in RMB million)
+Ping An Property
+Subordinated
+Annual Report 2015
+debts (¹)
+GENERAL PRINCIPLES
+The Company manages its liquidity and financial resources
+from the perspective of the Group as a whole.
+27,403
+230,026
+31,980
+229,433
+32,219
+226,937
+31,177
+As at December 31, 2015, the solvency of the Group was
+adequate.
+217,220
+204,056
+28,198
+Note: Risk discount rates were earned rate/11.0% and 11.0% for in-force business and new business, respectively.
+64
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Liquidity and Financial Resources
+30,129
+Hybrid capital Tier-2 capital
+bonds
+bonds
+& Casualty
+8,000
+The Group and its subsidiaries have built
+liquidity reserves and maintains stable,
+convenient, and diversified source of financing
+to ensure that they have adequate liquidity
+to tackle possible impacts from adverse
+situations; moreover, the Group and its major
+subsidiaries have developed robust liquidity
+contingency plans for handling any significant
+liquidity events. The Group has set up internal
+firewalls to prevent intra-group contagion of
+the liquidity risk.
+CASH FLOW ANALYSIS
+(in RMB million)
+Net cash flows from
+operating activities
+Net cash flows from
+investing activities
+Net cash flows from
+financing activities
+2015
+2014
+135,618
+(273,732)
+Under the Group's principles and guidelines for
+liquidity risk management, the subsidiaries have
+developed their own liquidity risk appetites,
+risk indicators, and risk limits according to the
+applicable regulations, industry practices, and
+features of their business activities. The Group
+and its subsidiaries have established robust
+liquidity risk information systems and liquidity
+monitoring and reporting procedures for
+adequate identification, accurate measurement,
+continuous monitoring, and effective control of
+the liquidity risk in various business activities.
+The Group and its subsidiaries regularly
+evaluate liquid assets and maturing debts,
+conduct stress tests of cash flows, and carry
+out forward-looking analysis to identify the
+potential liquidity risk and take measures to
+control liquidity gaps.
+(236,889)
+85,368
+Net cash inflows from operating activities was
+decreased by 20.3% to RMB135,618 million in 2015
+from RMB170,260 million in 2014. This was mainly
+caused by the structural adjustment of deposit
+and loan business of Ping An Bank.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+66
+Net cash outflows from investing activities
+increased by 15.6% to RMB273,732 million in 2015
+from RMB236,889 million in 2014. This was mainly
+due to the expansion of investment scale
+caused by business development.
+204,976
+processes for better identification, evaluation,
+and management of the liquidity risk at the
+group and subsidiary levels.
+In accordance with domestic and international
+regulatory requirements such as those for
+the Global Systemically Important Insurers
+(G-SIIs) and those under C-ROSS, the Group
+has developed and regularly updated the
+Liquidity Risk Management Plan of Ping An
+Insurance (Group) Company of China, Ltd.
+(LRMP), and established a robust liquidity risk
+management framework covering risk appetites
+and limits, risk strategies, risk monitoring, stress
+testing, emergency management, appraisal
+and accountability. Ping An has constantly
+improved its management procedures and
+Liquidity risk refers to the risk of the Company
+being unable to obtain sufficient cash in time,
+or being unable to obtain sufficient cash in time
+at a reasonable cost, to repay debts or fulfil
+other payment obligations that have become
+due.
+Ping An Life
+26,000
+Ping An Bank
+5,150
+15,000
+Ping An Securities
+3,000
+(1) Including subordinated bonds and capital supplement
+bonds.
+AVAILABLE CAPITAL OF THE PARENT
+COMPANY
+The available capital of the parent company
+includes bonds, equity securities, bank deposits
+and cash equivalents that the parent company
+holds. It can be invested into subsidiaries or
+used in daily operations. As at December 31,
+2015, the parent company's available capital
+was RMB27,291 million, decrease by RMB22,500
+million than the beginning of this year. The
+capital is primarily used to invest in the equity
+of subsidiaries and to distribute dividends to
+shareholders.
+(in RMB million)
+Available capital
+December 31, December 31,
+2015
+27,291
+LIQUIDITY RISK MANAGEMENT
+2014
+49,791
+200,727
+34,273
+170,260
+29,787
+38,781
+Note: Figures may not match totals due to rounding.
+Sensitivity Analysis
+The Company has investigated the effect, on the value of in-force business and the value of one year's
+new business, of certain independently varying assumptions regarding future experience. Specifically, the
+following changes in assumptions have been considered:
+•
+•
+Risk discount rate
+756
+Assumptions and model used in 2014 valuation
+Investment return decreased by 50 basis points every year
+A 10% reduction in mortality and morbidity rates
+A 10% reduction in policy discontinuance rates
+A 10% reduction in maintenance expenses
+A 5% increase in the policyholders' dividend payout ratio
+Solvency margin at 150% of the regulatory level
+Annual Report 2015
+Investment return increased by 50 basis points every year
+Ping An Insurance (Group) Company of China, Ltd.
+(6,828) The impact of dividends paid to
+shareholders by Ping An Life
+The stable growth of in-force business and
+increase in the investment return led to
+increase in free surplus
+(in RMB million)
+The following table shows the change in free surplus of life insurance business:
+Regardless of the impact of shareholder dividends and capital injection, free surplus increased by RMB5,631
+million within the year. Total free surplus decreased by RMB697 million to RMB38,781 million as at December
+31, 2015.
+The free surplus of the Company's life insurance business as at December 31, 2015 represented the excess
+of adjusted net assets of life insurance business over the regulatory solvency margin.
+Free Surplus Movement of Life Insurance Business
+248,732
+Free surplus of life insurance business
+as at December 31, 2014
+Capital injection to Ping An Annuity by the
+Company was RMB500 million
+2015 Description
+39,174
+Free surplus used to support new business
+Capital injection
+(34,299)
+Shareholder dividends
+The impact of market value adjustment
+Free surplus of life insurance business
+as at December 31, 2015
+500
+39,477
+63
+Free surplus generated from in-force business
+Embedded Value
+31,058
+Assumptions (in RMB million)
+Central case
+Assumptions and model used in 2014 valuation
+Investment return increased by 50bps every year
+Investment return decreased by 50bps every year
+10% reduction in mortality and morbidity rates
+10% reduction in policy discontinuance rates
+222,559
+10% reduction in maintenance expense
+5% increase in the policyholders' dividend payout ratio
+Solvency margin at 150% of the regulatory level
+30,838
+224,927
+year's new business
+in-force business
+OUR PERFORMANCE
+28,583
+30,838
+Value of
+Value of one year's new business
+(in RMB million)
+33,271
+Value of in-force business
+Earned
+Rate/10.5%
+235,220
+Risk Discount Rate
+Earned
+Rate/11.0% Rate/11.5%
+Earned
+Value of one
+224,927
+215,255
+11.0%
+225,008
+Earned
+10.5%
+11.0%
+11.5% Rate/11.0%
+The Audit and Risk
+Management
+Committee formed by
+the Board is responsible
+for reviewing overall
+risk management
+objectives, fundamental
+polices and operating
+procedures
+The RMEC carries out
+specific risk
+management
+responsibilities within
+its authority to ensure
+the risks of the
+Company is within a
+tolerable range
+The different
+departments of the
+Group carry out their
+specific duties
+according to the risk
+management duties
+which they have
+undertaken
+The Board of Directors is the highest decision-
+making authority for the Company's risk
+management and takes responsibility for the
+effectiveness of the overall risk management
+function. The Audit and Risk Management
+Committee under the Board of Directors is
+responsible for having a thorough understanding
+of the major risks and the Group's management
+situation; monitoring the effectiveness of
+the risk management system; and making
+recommendations to the Board of Directors
+after deliberations on the following matters:
+Risk Management Department,
+Internal Control Compliance
+Department, Finance
+Department, Investment
+Management Department,
+Branding Department of
+subsidiaries, etc.
+Overall objectives of risk management,
+risk appetites and tolerance, and risk
+management policies and procedures;
+The organizational structure and
+responsibilities of risk management;
+Risk assessments for major strategic and
+policy decisions, mitigating plans and
+solutions for significant risks;
+Annual risk assessment reports.
+The different
+departments of
+subsidiaries carry out
+their specific duties
+according to the risk
+management duties
+which they have
+undertaken
+RISK MANAGEMENT FRAMEWORK
+Chief Risk Officer,
+Chief Financial Officer,
+Chief Investment Officer,
+Chief Auditing Officer
+and Brand Director of
+subsidiaries
+Risk Management
+Executive
+Committee of the
+Group
+Audit and Risk
+Management
+Committee of the
+Group
+Chief Investment
+Officer and Brand
+Director of the Group
+Chief Financial Officer,
+Chief Auditing Officer,
+Group Executive
+Committee
+Board of Directors
+risk respectively, forming a
+comprehensive line of
+defense against risk
+The leaders of the different
+functionalities of the Group
+are responsible for capital
+and liquidity, insurance,
+market, credit, compliance,
+operational and reputational
+risk respectively, forming a
+comprehensive line of
+defense against risk
+The Group Executive
+Committee leads all
+aspects of the Group's
+risk management work
+and has formed the
+RMEC
+overall risk management
+function
+Board of directors is the
+highest decision-making
+authority for risk
+management and is
+responsible for the
+effectiveness of the
+The Group Executive Committee leads all
+aspects of the Group's risk management.
+Formed by the Group Executive Committee, the
+Group Risk Management Executive Committee's
+(RMEC) main responsibilities include: all
+aspects of the Group's risk management,
+developing overall objectives, risk appetites
+and tolerance, basic policies and operating
+procedures for risk management; monitoring
+the Company's risk exposure and level of
+available capital; overseeing the establishment
+of risk management organization in subsidiaries
+and monitoring their performance; supervising
+the implementation of the risk management
+system in each subsidiary or business line, and
+promoting a culture of comprehensive risk
+management within the Group.
+The Group actively complied with the PRC Company Law and the relevant laws, regulations and
+regulatory requirements, as well as the Articles of Association of Ping An Insurance (Group)
+Company of China, Ltd. and relevant corporate risk governance requirements. We have in place
+a comprehensive risk governance framework which holds the Board of Directors ultimately
+accountable, and which is directly upheld by the management. Supported closely by various
+committees and relevant departments, the framework covers risk management across all of the
+Group's subsidiaries and business units.
+Group Finance &
+Planning Center, Internal
+Control Centre, Office
+of the Chief Investment
+Officer, Group Branding
+Department, etc.
+The leaders of the different
+functionalities of subsidiaries.
+are responsible for capital
+and liquidity, insurance,
+market, credit, compliance,
+operational and reputational
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd. 69
+Sensitivity analysis on long term life insurance
+contracts
+Impact on gross
+policyholders'
+reserves
+(after reinsurance)
+increase/(decrease)
+(6,492)
+December 31, 2015
+(in RMB million)
+Change in
+Assumptions
+Discount rate/
+Investment return
++10bps
+Discount rate/
+Investment return
+-10bps
+6,747
+Ping An Insurance (Group) Company of China, Ltd.
+Morbidity/mortality
+rates*
+The Group assesses and monitors insurance
+risks faced by our insurance business with
+sensitivity analysis and stress testing etc.. We
+evaluate the impacts of actuarial assumptions,
+such as discount rate, investment yield,
+mortality rate, morbidity rate, lapse rate and
+expense rate, on our insurance liability reserve,
+solvency and profit.
+Annual Report 2015
+The insurance risk refers to the risks of adverse
+deviations between the actual experiences and
+the expectations (insurance assumptions), such
+as mortality rates, morbidity rates, loss ratios,
+expense rate, and lapse rates, which may cause
+losses to the Group.
+The Group manages risks of its subsidiaries
+through integrated management and
+improved risk measurement. By improving
+the risk management platform for the
+Group, the efficiency of consolidated risk
+management has been enhanced.
+OUR PERFORMANCE
+70
+Risk Management
+The General Manager of the Group acts as
+the supervisor of the Group's RMEC, while the
+Group's Chief Financial Officer, Chief Auditing
+Officer, Chief Investment Officer and Brand
+Director act as the deputy supervisors. They
+are in charge of risks in strategic capital and
+liquidity, insurance, market, credit, compliance,
+operations and reputation respectively. The
+committee members include the executive
+officer of the insurance business, the executive
+officer of the banking business, the executive
+officer of the innovative business and the head
+of legal function.
+In 2015, the Group followed domestic and
+foreign regulatory trends such as G-SIIs, the
+New Basel Capital Accord and C-ROSS. It
+continued to strengthen its comprehensive risk
+management system, and upgraded the risk
+management structure and risk management
+policies of the Group and its subsidiaries. It
+also strengthened its risk appetite system,
+implemented a risk preference framework,
+developed risk management guidelines,
+standardized risk management requirements,
+reviewed business progress, and optimized
+capital utilization, to strike a balance between
+business development and risk management.
+The Group implemented risk management
+responsibilities and continued to step up
+risk monitoring and reporting mechanisms.
+Through the Risk Dashboard, the Group and
+its subsidiaries have identified, classified
+and evaluated risks in a systematic manner,
+ensuring that all the risks are effectively
+communicated and managed on a timely basis.
+To meet regulatory requirements and
+support the Company's strategy and business
+development in a healthy and effective
+manner, the Group implemented a top-down
+performance measurement system that takes
+into account risk and compliance management.
+The evaluation criteria for personnel, entities
+and procedures were developed through the
+principle of "accountability at every level with
+evaluation at each stage”. The Group aims
+to promote a risk culture and to enhance
+risk awareness; this is achieved by linking
+risk indicators to performance evaluation of
+major subsidiaries, hence embedding risk
+considerations in business decisions and daily
+management.
+As the risk management system becomes more
+sophisticated, a risk culture has permeated
+the Group's ranks, from the Board of Directors
+to senior management and from committees
+to employees. This culture has facilitated an
+effective and efficient approach that is both
+top-down and bottom-up, which lays a solid
+foundation for the effective integration of risk
+management into the Group's daily operations.
+This in turn helps to protect shareholder
+equity, improves capital efficiency, supports
+management decisions and ultimately creates
+value for the Group.
+MAJOR MEASURES OF RISK MANAGEMENT
+The Group continues to strengthen its
+comprehensive risk management system,
+improve its organizational structure, formulate
+risk management policy and guidelines,
+standardize procedures for risk management
+and implement risk management responsibility.
+The Group adopts qualitative and quantitative
+approaches to risk management to identify,
+evaluate and mitigate risks, so as to effectively
+defend against systematic risks associated
+with integrated finance, as well as to enhance
+the overall risk management capabilities for
+the balanced development of core finance and
+internet finance businesses.
+The Group has established an optimal
+risk governance framework and risk
+management reporting mechanism, as
+well as promoted the inclusion of risk
+indicators in performance evaluation which
+integrates risk management culture into its
+corporate culture. This lays a foundation
+for the healthy, sustainable and steady
+development of the Group's business;
+The Group is actively exploring and
+formulating a risk appetite framework
+in line with its business development
+strategy. It also formulates risk
+management guidelines and standardizes
+risk management requirements of
+subsidiaries;
+The Group has established a risk
+management system on risk concentration,
+which strengthens its ability to manage
+concentrated risks, ranging from policy
+formulation to risk limit management, data
+system establishment and risk reporting,
+improving the Group's overall capability
+of risk management for its integrated
+financial service business;
+Annual Report 2015
+The Group has established an effective risk
+warning mechanism, providing timely and
+effective alerts on industry developments,
+regulatory information or risk matters,
+effectively guarding against potential risk;
+The Group utilized tools and methods
+such as the risk dashboard, scenario
+analysis, stress tests and risk limits to
+continuously develop and optimize
+quantitative techniques and models of risk
+management, analyse risk exposures and
+evaluate their quantitative and qualitative
+impacts on our risk baseline. Such
+measures enable us to plan ahead and take
+necessary precautions in a timely manner
+to mitigate risks and to reduce potential
+losses;
+Insurance Risk
+Annual Report 2015
+Actual Capital
+The Group's risk appetite system has four
+core dimensions: capital adequacy, liquidity
+adequacy, a good reputation, and compliance.
+The Group has used these dimensions to guide
+the subsidiaries in specifying their unique risk
+appetite dimensions according to their business
+features and demand, broken down the risk
+appetites and tolerance into various risk limits
+in different risk categories, and applied the risk
+limits to routine risk monitoring and warning
+so as to support business decision-making and
+strike a balance between risk management and
+business development.
+3,223
+Total cash and
+cash equivalents
+4,668
+333,325
+263,960
+3 months
+The Company believes that the liquid assets
+currently held, together with net cash
+generated from future operations and the
+availability of short-term borrowings, can
+sufficiently meet the expected liquidity
+requirements of the Group.
+The insurance group solvency margin
+represents the consolidated solvency margin
+calculated as if the parent company and its
+subsidiaries, joint ventures and associates were
+a single reporting entity. The group solvency
+margin ratio is an important regulatory measure
+of an insurance group's capital adequacy.
+The following table sets out the relevant
+data in relation to the solvency of the Group
+according to the "Administrative Provisions on
+the Solvency of Insurance Companies ("China
+Solvency I")":
+As at December 31, 2015, the Group's solvency
+margin ratio under China Solvency I was
+195.4%, maintaining at an adequate level. The
+Group's solvency margin ratio decreased by 9.7
+percentage points as compared with the end of
+2014, mainly because of business development
+and dividend distribution.
+The CIRC issued the China Risk Oriented
+Solvency System ("C-ROSS", i.e. Solvency II) in
+February 2015. The insurance industry entered
+the C-ROSS transition period. A risk-oriented
+supervision regime was established under the
+Solvency II to measure the risks of insurance
+undertakings scientifically and comprehensively,
+and calculate a capital requirement that aligns
+with the specific risks with the insurance
+undertakings' risk profiles. Based on the trial
+operations during the transition period and
+as approved by the State Council, the CIRC
+decided to enforce "the Solvency Regulatory
+Rules (No. 1-17) for Insurance Companies" from
+January 1, 2016.
+The solvency margin ratios under Solvency II of
+Ping An Group are as follows:
+(in RMB million)
+GROUP SOLVENCY MARGIN
+Core capital
+maturities within
+66,368
+Net cash inflows from financing activities was
+largely increased to RMB204,976 million in 2015
+from RMB85,368 million in 2014. This was mainly
+due to the significant increase in cash inflow
+from interbank deposit business of Ping An
+Bank.
+(+10%/-10%
+CASH AND CASH EQUIVALENTS
+2014
+December 31, December 31,
+2015
+228,633
+Bonds of original
+192,924
+Cash
+Assets purchased
+under reverse
+purchase agreements
+within 3 months
+101,469
+(in RMB million)
+December 31,
+2015
+730,052
+ratio (regulatory
+requirement >=100%)
+195.4%
+205.1%
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 67
+OUR PERFORMANCE
+Solvency margin
+Risk Management
+RISK MANAGEMENT OBJECTIVES
+Over the past two decades, Ping An has
+regarded risk management as an integral
+part of its operations and business activities.
+We take steady steps to build an enterprise
+risk management system aligned with the
+Group development strategies and the nature
+of our business. By continuously optimizing
+our risk management framework, as well as
+standardizing our risk management procedures,
+adopting both qualitative and quantitative
+risk management methodologies to identify,
+evaluate and mitigate risks, we make the risk
+management to support our decision-making
+and facilitate the effective, sustainable and
+healthy growth of the Group, which help the
+Group to become a world-leading personal
+financial services provider.
+In November 2015, Ping An was designated
+by the Financial Stability Board (FSB) and
+the International Association of Insurance
+Supervisors (IAIS) as one of the Global
+Systemically Important Insurers (G-SIIs) for the
+second round; reflected the global recognition
+of China's financial reforms and achievements
+as well as the Chinese insurance industry's
+influences and roles in the international
+insurance market; this was also a major move
+of the Chinese insurance industry to participate
+in international financial governance and to
+maintain global financial stability. Under the
+guidance and support of the CIRC, Ping An
+has actively participated in the development
+of international insurance regulations by
+keeping international regulators informed of the
+realities in the Chinese insurance and financial
+markets, so as to create a more favourable
+international regulatory environment for
+developing countries and China's insurance
+industry. In 2015, according to the requirement
+of FSB and IAIS, Ping An updated its Systemic
+Risk Management Plan (SRMP), Recovery
+and Resolution Plan (RRP) including Liquidity
+Risk Management Plan (LRMP). Based on the
+changes of the systemic risks assessment
+indicators, Ping An reviewed the changes
+in its business and risk profile. Based on
+comprehensive review and assessment, Ping An
+has effectively kept risks under control with its
+specialized comprehensive risk management
+framework, and Ping An Group's systemic
+impact on the financial market has been limited.
+RRP including LRMP 2015 has been approved by
+the Board of Directors and the CIRC. In addition
+to meeting the G-SII and C-ROSS regulatory
+requirements, Ping An takes the G-SII projects
+as an opportunity to incorporate global best
+practices into its risk management and business
+procedures, effectively prevents risks and risk
+contagion, provides the Company's integrated
+financial business (in particular the innovative
+business) with strong risk management
+protection, and acts as a stabilizer of financial
+markets to make greater contributions to
+China's financial innovation and development.
+As Ping An diversifies its offerings and
+implements its integrated finance strategy
+in the changing domestic and global
+environments amid evolving regulations,
+the Group builds and strengthens a robust
+comprehensive risk management approach in
+line with the highest international standards,
+focusing on capital, oriented by risk appetites,
+constantly enhances risk controls and
+technologies, dynamically manages both
+individual and accumulative risks through
+risk quantification tools and risk performance
+appraisal, and achieves a balance between
+risk management and business development
+based on robust compliance, internal control
+management, and risk governance.
+RISK APPETITE SYSTEM
+A risk appetite system is central to Ping
+An's overall strategy and comprehensive
+risk management. In line with the Group's
+overall strategy and in consideration of the
+subsidiaries' development needs, the Group has
+built a risk appetite system that matches its
+business strategy, and combined risk appetites
+with management decisions as well as business
+development to promote healthy growth of the
+Group and subsidiaries.
+We strive to make Ping An the "World-leading personal
+financial services provider". To achieve this goal, we
+continuously optimize risk control system and promote
+the risk management platform. Through identification and
+evaluation of risks, along with mitigation measures, we achieve
+a balance between risk and return which ultimately contributes
+to the sustainable growth and development of the Group.
+180,381
+219,061
+369,995
+764,677
+Minimum capital
+373,186
+Core solvency margin ratio
+(regulatory requirement >=50%)
+Comprehensive solvency margin
+ratio (regulatory requirement
+>=100%)
+195.6%
+204.9%
+Note: Core solvency margin ratio =core capital/minimum
+capital; comprehensive solvency margin ratio = actual
+capital/minimum capital.
+(in RMB million)
+Actual capital
+Minimum capital
+December 31, December 31,
+2015
+2014
+428,040
+68
+pre/post
+The Group continued to implement monitoring
+regulations and operational risk management
+strategies. It used existing compliance
+management and internal control systems
+as the basis to integrate the advanced
+standards, methods and tools of operational
+risk management of domestic and foreign
+regulations, optimized operational risk
+management structure and the operational
+risk management policies. It also strengthened
+collaboration and cooperation between
+departments, established daily monitoring and
+reporting mechanisms, made regular reports
+to management on the overall operational
+risk situation, developed a set of rules and
+standards for operational risk management,
+strengthened the system platform and
+continued to raise the effectiveness of
+operational risk management.
+period)
+Monitoring credit risk through risk
+information management system.
+Defining credit risk limits in multiple
+dimensions for investments and credit-
+related portfolios;
+Developing standardized policies,
+systems and procedures for credit risk
+management;
+Establishing a credit risk management
+mechanism with credit risk rating as its
+core methodology;
+The Group manages credit risk through several
+measures, including:
+Credit risk is the risk of losses resulting from
+the default of any debtors or counterparties
+or from adverse changes in their risk profiles.
+The Group is exposed to credit risk primarily
+associated with its deposit arrangements with
+other commercial banks, loans and advances to
+third parties from its banking operations, bond
+investments, reinsurance arrangements with
+reinsurance companies, policy loans, securities
+margin trading and off-balance sheet related
+activities.
+Annual Report 2015
+Credit Risk
+2,285
+788
+Decrease
+in equity
+in profit
+Decrease
+all foreign currency
+denominated monetary
+assets and liabilities
+and non-monetary
+assets and liabilities
+measured at fair value
+against the Renminbi
+In the case above, if currency appreciates by
+the same proportion, it will have an inverse
+effect on profit before tax and equity in the
+table.
+Net exposure to
+fluctuations in exchange
+rates assuming a
+simultaneous and
+uniform 5% rate of
+depreciation of
+Ping An Insurance (Group) Company of China, Ltd. 73
+Risk Management
+74
+Operational risk refers to the risk of losses
+resulting from inadequate or failed internal
+procedures and deficiencies in human
+performance, information technology systems
+and external events.
+99.73%
+98.18%
+debts
+The ratio to
+total corporate
+debts/financial
+OUR PERFORMANCE
+Operational Risk
+Group with the domestic
+credit rating of AA and A-1 or
+above
+Corporate bonds held by the
+December 31, 2015
+Furthermore, for credit risk associated with the
+investment business, the Group makes credit
+assessments on investments in line with internal
+risk control policies and procedures, chooses
+a counterparty that has a relatively high credit
+standing and adopts a multi-dimensional
+approach on setting risk limits on investment
+portfolios in order to manage credit risks.
+For reinsurance credit risk associated with
+insurance business, i.e. credit risk which occurs
+when a reinsurance company is unable to fulfil
+its obligations, the Group would evaluate the
+credit of the reinsurer before entering into a
+reinsurance contract, and seek to reinsure with
+companies that have higher credit standing to
+mitigate such risks.
+Based on the different characteristics and
+risk profiles of businesses such as insurance,
+banking and investment, the Group carries
+out targeted measures to control specific
+credit risks and concentration risks. In order
+to manage credit risks associated with the
+banking business, the Group leverages the
+outcomes of the New Basel Capital Accord
+project to enhance loan portfolios management.
+The credit structure has been continuously
+improved in line with changes in the economic
+and financial situation, macroeconomic policies
+and the requirements of regulatory authorities.
+Credit structure was continuously improved
+as credit risk limits were set on portfolios
+in multiple dimensions. The Group conducts
+thorough and stringent credit assessments
+to potential borrowers before issuing loans
+and reviews outstanding loans on a regular
+basis. Risk mitigations were strengthened in
+key areas, preventing the accumulation of
+credit risk from large exposures. Credit risk
+management measures also include obtaining
+collateral and guarantees. In the case of off-
+balance sheet credit related commitments, the
+Group refers to the principles and methods
+applied to on-balance sheet credit asset
+management to set up standard approval
+and management procedures. Collateral and
+guarantees are received to mitigate credit risk.
+The credit quality of the off-balance sheet
+business is sound. The Group continued to
+step up its efforts in credit risk monitoring and
+precautions, enhancing its capability to provide
+early warning of risks and on time response. It
+also actively dealt with changes in the credit
+environment and conducted regular analysis
+of trends and changes of credit risk, taking
+precautionary measures to control risk.
+The Group carries out consolidated analysis,
+monitoring and reporting on the credit
+exposures of lending business and investment
+businesses at the group level. The Group
+further strengthens its credit risk limit system
+through segregated accounts and products.
+To manage high risk exposures and the
+concentration of risk after consolidating the
+Group's financial statement, it also provides
+forward-looking insights and analysis on
+potential credit risks and its impact on the
+Group.
+Financial bonds held by the
+Group with the domestic
+credit rating of A or above
+(in RMB million)
+December 31, 2015
+The Group adopts sensitivity analysis to assess
+its risk exposures. The sensitivity of foreign
+exchange risk is calculated by assuming
+a simultaneous and uniform 5% rate of
+depreciation against the Renminbi of all foreign
+currency denominated monetary assets and
+liabilities, as well as non-monetary assets and
+liabilities measured at fair value as illustrated in
+the table below:
+149
++50 basis
+points
+Decrease in Decrease in
+profit
+equity
+Change in
+interest rate
+carried at fair value
+through profit or loss
+and available-for-sale
+financial asset
+Bond investments
+5,528
+(in RMB million)
+The sensitivity of interest risk is assessed by
+assuming a 50 basis-point parallel shift of the
+government bond yield curve.
+Fixed income investments held by the
+Group are exposed to interest risks. These
+investments are substantially represented by
+bond investments booked at fair value on the
+balance sheet. The Group uses various tools
+such as sensitivity analysis and stress tests to
+evaluate the risk profile of such investments.
+Market risk - Interest risk
+The major market risks for the Group include
+interest risk, equity risk and foreign exchange
+risk.
+The risk monitoring mechanism is
+standardized. Risk reports are issued
+regularly, to provide suggestions for risk
+management and to ensure market risks
+are within the Company's tolerance.
+risk management, for a scientific and
+efficient approach to the assessment and
+management of market risk;
+December 31, 2015
+The interest rate re-pricing risk in banking
+business is assessed primarily through a gap
+analysis approach. Analysis of the re-pricing
+characteristics of our assets and liabilities is
+conducted on a regular basis, and scenario
+analysis on interest rate risk is conducted with
+the aid of the asset and liability management
+system. Based on the condition of the gap,
+the duration mismatch of re-pricing could
+be reduced by adjusting the frequency of
+re-pricing and the duration and category of
+corporate deposits. Meanwhile, the Asset and
+Liability Management Committee holds meeting
+regularly to make timely and appropriate
+adjustments on the asset and liability structure
+and manages interest risks based on the
+analysis of the macroeconomic situation and
+the interest rate policies of the People's Bank
+of China.
+72
+Annual Report 2015
+Market risk Foreign exchange risk
+Foreign currency-denominated assets held by
+the Group are exposed to foreign exchange
+risks. These assets include monetary assets
+such as deposits and bonds held in foreign
+currencies and non-monetary assets measured
+at fair value such as stocks and funds held
+in foreign currencies. The Group's foreign
+currency-denominated liabilities are also
+exposed to risks as a result of fluctuations
+in exchange rates. These liabilities include
+monetary liabilities such as borrowings,
+customers' deposits and claim reserves
+denominated in foreign currencies, as well as
+non-monetary liabilities measured at fair value.
+18,421
+on equity
+Impact
+-
+carried at fair value through
+profit or loss and
+available-for-sale
+equity investment funds
+Listed equity securities and
+(in RMB million)
+December 31, 2015
+As at December 31, 2015, the VaR for listed
+equity securities and equity investment funds is
+as follows:
+The Group adopts the 10-day market price
+value-at-risk ("VaR") technique to estimate its
+risk exposure. The market price VaR measures
+a maximum loss in the value of our portfolio
+of equity investment due to adverse market
+events within a given confidence level ("99%")
+and a specified timeframe ("10 days").
+Listed equity investments held by the Group
+are exposed to market price risks. These
+investments are primarily listed equity
+securities and equity investment funds.
+Market risk - Equity risk
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+The Group manages operational risk primarily
+through the following mechanisms and
+measures:
+The mechanism and processes adopted by the
+Group to manage the insurance risks are as
+follows:
+Develop insurance risk policies, set up a
+scientific and consistent insurance risk
+management framework for the Group;
+Develop a set of key insurance risk
+indicators, closely monitor them, analyse
+any abnormal changes, adopt appropriate
+management measures;
+Establish model management policies,
+standardize the Group actuarial models,
+strictly control model risks;
+Implement effective product development
+and management policies, develop
+products with proper insurance coverage
+and fair pricing, control product pricing
+risks;
+Implement prudent underwriting policies,
+establish relevant guidelines for policy
+contracting and underwriting, effectively
+control and reduce adverse selection risks;
+199
+With strict claim investigation and
+settlement procedures, identify and
+prevent questionable and fraudulent
+claims;
+Follow effective reserve valuation process
+and methodologies, accurately develop the
+unearned premium reserves and unsettled
+reserves, assess the reserve adequacy on a
+regular basis;
+Ping An Insurance (Group) Company of China, Ltd. 71
+OUR PERFORMANCE
+Risk Management
+With effective reinsurance management
+procedures, properly set the retention
+limits, use reinsurance as an effective
+risk transfer tool, transfer excess risks to
+reinsurers with high creditability, control
+the insurance risks.
+Market Risk
+With effective product management
+procedures, do experience and trend
+analysis with the latest, most accurate and
+reliable data, well manage the product mix,
+control the insurance risks;
+2,363
++5%
++5%
+Policy lapse rates
++10%
+10,614
+5,758
+Maintenance expense
+rates
++5%
+1,761
+Morbidity/mortality rates change refers to a 10%
+increase in morbidity rates, mortality of life insurance
+policies and annuity policies before the payment
+period, and a 10% decrease in mortality of annuity
+policies in the payment period.
+Annual Report 2015
+Sensitivity analysis on property and casualty
+insurance and short term life insurance
+contracts
+December 31, 2015
+(in RMB million)
+Property and
+casualty insurance
+Short term life insurance
+Change in
+average claim
+cost
+Impact on
+net liabilities
+(after reinsurance)
+increase/(decrease)
+Market risk refers to potential losses for the
+Ping An Group as a result of changes in interest
+rates, market prices, foreign currency exchange
+rates and other related risk factors.
+payment
+The Group continued to strengthen its market
+risk management system, and reinforced its
+ability to identify, evaluate, measure, analyse
+and report on market risks on multiple levels.
+The Group strengthened its investment risk
+management data platform, which reinforced
+the foundations of risk management and
+enhanced risk management efficiency. The
+Group improved the risk management reporting
+mechanism which enhanced the Group's
+consolidated risk monitoring and management.
+Stress testing was improved to realize its
+decisional value in risk baseline control. A risk
+limit management system was launched to
+establish a risk monitoring mechanism covering
+multiple levels of the Group, subsidiaries and
+business lines. This reinforced the risk warning
+mechanism, leading to more targeted, forward-
+looking and thorough risk management.
+Market risk management is carried out in a
+top-down approach via the Group's RMEC,
+Investment Management Committee
+and Risk Management Committees of
+subsidiaries;
+The Group constantly improves its reputation
+risk management approach as per regulations,
+has built and improved the pre-warning,
+monitoring, review and remediation procedures
+for reputation risk management, closely
+monitors all the business lines and external
+factors to identify risk events and give
+warnings, follows up on the risk warnings,
+and minimizes the probability of a risk event
+happening through effective control and
+remediation.
+Reputation risk is the risk of the Company's
+brand or reputation being hurt and other
+relevant losses caused by a stakeholder's
+negative comment on the Company due to
+a defect in the Company's operation or an
+external event.
+Reputation Risk
+Annual Report 2015
+Based on deep understanding of the state's
+industry policies and the trends of domestic
+and foreign markets, the Group has thoroughly
+verified its high-level plans and development
+strategies as per regulations and coordinated
+strategy development across the Group to
+align the strategic targets of the Group and
+its subsidiaries. The Group regularly makes its
+3-year development plans and annual business
+plans, proactively implements strategies
+and annual plans, regularly monitors the
+implementation of the Group and subsidiaries'
+strategies and annual business plans, guides
+the subsidiaries in management of the strategic
+risk, and promotes synergies among different
+group members and business lines.
+Company's strategy not matching the
+market environments and the Company's
+capabilities due to ineffective development and
+implementation of the strategy or changes in
+the business environments.
+Group-level Risk
+Strategic risk refers to the risk of the
+Promoting a culture of operational risk
+management through operational risk
+management training.
+Conducting research and planning on
+operational risk measurement activities
+according to regulatory requirements and
+management requirements;
+Stepping up the implementation of
+operational risk management tools
+among subsidiaries, such as the Risk and
+Control Self-Assessment (RCSA), Key Risk
+Indicator (KRI) and Loss Data Collection
+(LDC);
+management;
+Continuing to optimize the operational risk
+policy, framework, workflow, system and
+tools, enhancing overall operational risk
+Establishing a robust and comprehensive
+management system covering the
+whole Group which identifies, evaluates,
+monitors, controls/mitigates, reports
+operational risk;
+Strategic Risk
+The Group proactively strengthens risk
+control of its subsidiaries, implements relevant
+regulatory requirements, and constantly
+enhances management of group-level risks such
+as risk contagion, the risk due to an opaque
+organization structure, the concentration risk,
+and risks in non-insurance areas.
+Risk Contagion
+Risk contagion refers to a situation where the
+risk created by a member of the Group spreads
+to another member of the Group by means of
+intercompany transactions or other activities,
+causing losses to such other member.
+Under the principles of safety,
+comprehensiveness and effectiveness,
+and the objective to match assets with
+liabilities, the investment and asset risk
+management guidelines are developed to
+manage market risk in a forward-looking
+manner;
+Ping An Insurance (Group) Company of China, Ltd.
+The Group has a clear shareholding structure.
+The shareholding structure of the Group is
+clear, balanced, and relatively scattered. There
+is no controlling shareholder, nor de facto
+controller. The Group's subsidiaries engage
+in businesses such as insurance, banking,
+investment, and internet; all of the subsidiaries
+I have clear shareholding structures; none
+of them have cross-shareholding or illegal
+subscription for capital instruments.
+Risk of Opaque Organization Structure
+Risk of opaque organizational structure refers
+to the risk of losses in the Group caused by
+the complexity or opaqueness of the Group's
+shareholding structure, management structure,
+operational processes, and business types.
+The Group has centralized the management
+of branding, communication, and information
+disclosure. The Group has implemented central
+management of branding, communication,
+and information disclosure. The Group has
+developed robust rules and procedures for
+brand asset management and information
+disclosure, and strictly implemented them to
+ensure central management and consistency of
+branding.
+The Group has improved its approach to
+outsourcing. Currently, the Group's four
+centres (Administration, Internal Control, HR,
+and Finance) outsource IT services to Ping
+An Technology, including IT advisory service,
+development, application system operation, call
+centre service, office support, and information
+security; they outsource financial operations to
+Ping An Financial Services, including financial
+review and accounting, financial system
+configuration, cash collection and payment,
+financial voucher filing, tax processing, sale/
+purchase and payment of foreign exchanges,
+and personal income tax declaration. The
+Group has specified the information security
+requirements in the outsourcing management
+rules and procedures; going forward, the
+Group will improve the rules and procedures
+for approval, contract signing, and filing of
+outsourcing. In particular, the process for
+approval by the Board of Directors or a body
+delegated by the Board of Directors will
+be formalized, and the Group's outsourcing
+contracts will be filed with the CIRC 20 business
+days before contract signing.
+Annual Report 2015
+The Group has constantly improved its
+approach to management of CPTs. The
+Group attaches great importance to CPT
+management, strictly abides by laws and
+regulations, and constantly improves the rules
+and procedures for CPT management to ensure
+the compliance of all CPTs. The Group has
+established the Connected-Party Transaction
+Committee, which has updated various rules
+and procedures in response to changes
+in regulations and internal management
+requirements, specified management processes,
+enhanced CPT review and management, and
+developed and implemented guidelines for fair
+value-based pricing to ensure fair pricing for
+CPTs and prevent improper transfer of benefits.
+The Group has developed a culture of strong
+compliance awareness for CPTs. The Group
+has improved the approach to CPT disclosure
+and reporting, and disclosed and reported
+CPTs in strict accordance with relevant rules
+and procedures. The Group has constantly
+enhanced the systems for CPT management
+to increase efficiency. The Group's CPT
+management systems and mechanisms have
+been improved and effectively operated.
+manages the subsidiaries through shareholding,
+but neither participates in nor intervenes in the
+subsidiaries' routine business. The subsidiaries
+carry out business activities independently, and
+are supervised by their respective regulators.
+Second, the finance firewalls. The Group and its
+subsidiaries have finance functions respectively;
+senior finance managers may not take
+concurrent offices at different entities within
+Ping An. Each entity has clear accounts, with
+independent accounting, assets, and liabilities.
+Third, the information firewalls. The Group has
+built a robust information security system,
+and implemented consistent high standards
+for information security. The subsidiaries and
+employees manage the Company's information
+assets in strict accordance with the information
+security rules, and strictly protect the
+Company's business information, trade secrets,
+and intellectual properties. The Group attaches
+great importance to customer data protection,
+and has established strict rules and procedures
+for customer data protection at the group
+and subsidiary levels. Moreover, in order to
+ensure effective segregation of customer data,
+the Group has established robust customer
+authorization rules providing that no customer
+data may be used without authorization by
+customers and strict approval within Ping An.
+76
+Risk Management
+OUR PERFORMANCE
+Ping An Insurance (Group) Company of China, Ltd. 75
+The Group has built robust risk firewalls. The
+Group has built robust firewalls between the
+Group and its subsidiaries and among its
+subsidiaries, including legal-entity firewalls,
+finance firewalls, and information firewalls, to
+prevent risk contagion. First, the legal-entity
+firewalls. The Group and its subsidiaries have
+complete governance structures. The Group
+itself engages in no specific business activity. It
+As the Group promotes synergies in integrated
+finance, in order to prevent intra-group
+risk contagion, the Group has strengthened
+management and coordination across the
+Group by building firewalls, managing
+connected-party transactions ("CPTS"),
+managing outsourcing, and coordinating
+the Group's branding, communication, and
+information security functions.
+The Group adopts the following mechanisms
+and procedures to manage market risks:
+Methods such as scenario analysis,
+value at risk (VaR) and stress tests are
+applied daily based on the characteristics
+Multi-layered risk limit systems are
+established according to risk baseline and
+asset and liability management strategies
+to ensure market risks are manageable.
+The determination of risk limits thoroughly
+took into account the risk management
+strategies of the Group and the impact on
+financial conditions;
+of capital investment and market
+377,662,665
+789,001,992
++394,500,996
+H share
+Number of
+pledged or
+frozen shares
+unknown
+380,060,000
+pledged shares
+789,001,992
+pledged shares
+Huaxia Life Insurance Co., Ltd.
+Others
+3.40
+440
+621,586,439
++621,586,439
+A share
+- Universal Insurance Products
+Bloom Fortune Group Limited
+Overseas legal person
+2.77
+505,772,634
+4.32
+Overseas legal person
+All Gain Trading Limited
+A share
+Changes in the Share Capital and
+Shareholders' Profile
+Shareholdings of top ten shareholders as at the end of the reporting period
+Name of shareholder
+Nature of shareholder
+Shareholding
+percentage (%)
+Total number of
+shares held
+Change during the
+reporting period (3)
+Type of shares
+Number of
+selling-restricted
+shares held
+Hong Kong Securities Clearing Company Overseas legal person
+32.10
+5,867,578,046
++3,027,994,525
+H share
+Nominees Limited (¹)
+Shenzhen Investment Holdings Co., Ltd. State
+5.27
+962,719,102
++481,359,551
++252,886,317
+H share
+505,772,634
+pledged shares
+Central Huijin Asset Management Ltd.
+China Securities Finance Corporation
+Limited
+1.03
+188,979,751
++128,864,004
++43,191,199
+A share
+A share
+Note: (1)
+(2)
+(3)
+Shares held by Hong Kong Securities Clearing Company Nominees Limited ("HKSCC Nominees Limited") are held on behalf
+of its clients. The shares owned by All Gain Trading Limited, Bloom Fortune Group Limited and Business Fortune Holdings
+Limited have been registered under the name of HKSCC Nominees Limited. In order to avoid double counting, the shares
+owned by these three companies have been deducted from the shares held by HKSCC Nominees Limited.
+Hong Kong Securities Clearing Company Overseas legal person
+Limited (2)
+Hong Kong Securities Clearing Company Limited is an institution that holds shares as a nominee shareholder of the Shanghai-
+Hong Kong Stock Connect Program.
+Explanation of the connected relationship or acting-in-concert relationship of the above shareholders:
+All Gain Trading Limited, Business Fortune Holdings Limited and Bloom Fortune Group Limited are indirect
+wholly-owned subsidiaries of CP Group Ltd., and they are of connected relationship or acting-in-concert
+relationship since they are under common control.
+Save as the above, the Company is not aware of any connected relationship or acting-in-concert
+relationship among the above-mentioned shareholders.
+Particulars of controlling shareholder and de facto controller
+The shareholding structure of the Company is relatively scattered. There is no controlling shareholder, nor
+de facto controller.
+Information on shareholders holding more than 5% of equity interest of the Company
+As at December 31, 2015, the total number of issued shares of the Company were 18.28 billion, CP Group Ltd.
+indirectly held 1,752,331,636 H shares of the Company in total, representing 9.59% of the total issued shares
+of the Company; Shenzhen Investment Holdings Co., Ltd. held 962,719,102 A Shares of the Company in total,
+representing 5.27% of the total issued shares of the Company.
+84
+During the reporting period, the capital reserve were converted into share capital and 10 bonus shares were issued for every 10
+shares to all shareholders registered on the record date as a result of the implementation of the Company's profit distribution
+proposal for 2014.
+257,728,008
+1.41
+State-owned legal person
+State
+2.65
+483,801,600
++483,801,600
+A share
+State-owned legal person
+2.07
+80
++371,424,483
+A share
+Business Fortune Holdings Limited
+Overseas legal person
+1.43
+261,581,728
++36,652,723
+H share
+111,969,286
+pledged shares
+Shum Yip Group Limited
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 83
+Annual Report 2015
+336,411
+(of which there were 331,687
+domestic shareholders)
+shares
+January 1, 2015
+Changes during the reporting period
+December 31, 2015
+Number of
+shares
+Percentage (%)
+Issue of
+new shares
+Bonus issue
+Domestically listed foreign
+Transfer
+from reserve
+Sub-total
+Number of
+shares
+Percentage (%)
+5,168,381,436
+58.12
+3. Overseas listed foreign shares 3,723,788,456
+4.
+Others
+Others
+2.
+1. RMB ordinary shares
+II. Selling-unrestricted circulating shares
+achieved stable growth of the total business
+scale with optimized business structure,
+stable quality of assets, persistent growth of
+operating efficacy, significant improvement
+of management, enhanced technology
+systems, boosted satisfaction from customers
+and employees as well as extensive brand
+recognition, all of which have been driving us
+towards the goal of "Best Commercial Bank".
+Asset management industry has maintained
+sound in 2015. With the establishment of
+multi-tiered capital markets, the type of
+products continue to enrich, the entire
+business scale of asset management industry
+grew fast with outstanding improvement for
+profitability. Looking ahead to 2016, with the
+level of personal wealth and the demand for
+asset management increasing, the inception
+of mixed-ownership reform for state-owned
+enterprises, the launch of registration-based
+share offering, as well as liberalization of
+interest rate and exchange rate, these will bring
+great opportunity for the development of our
+asset management business. We will grasp the
+opportunities and take full advantage of Ping
+An Group's integrated finance to establish a
+leading investment management platform.
+In recent years, the rapid development of
+internet technology has fueled the vigorous
+growth across industries and continues to
+extend into people's daily life. The combination
+of internet and enterprises enables higher
+efficiency with lower transaction costs and
+also breaks the geographical constraints
+for transactions. The internet finance
+industry is facing both opportunities and
+challenges. Opportunities are mainly from the
+government's strategy of "Internet+" which
+promotes the rapid and sound growth of
+the internet industry and successive policies
+on internet finance which boost the orderly
+operation of the industry and create a favorable
+policy environment for the development of
+internet finance. The major challenges are
+from innovation, including technological and
+business model innovation.
+With the upgrading of technologies such as big
+data, cloud computing and face identification,
+internet finance business also needs to keep
+pace with the evolution of technology and
+strengthen the research and the investment
+on technology. In terms of business model
+innovation, it requires internet finance
+companies to be customer-oriented and
+product-innovative to explore new business
+models. In future, following the strategy of Ping.
+An 3.0, we will take full advantage of the core
+finance business of the Group, expand technical
+innovation and strengthen external partnership,
+and aligning our business processes with the
+core technologies including mobile internet,
+cloud computing and big data to enhance
+customer experience and promote the
+development of our internet finance business.
+OPPORTUNITIES AND CHALLENGES FOR
+FUTURE DEVELOPMENT
+Amid the global economic slowdown in
+2015, China's economy entered a stage of
+"new normal". It made significant progress
+in deepening reform, while being challenged
+by economic downturn. The year of 2016 is
+the beginning of China's 13th Five-Year Plan.
+With growing national wealth and deepening
+reform, China's economy will stay on the
+track of steady and healthy development. It
+has staged the substantial development for
+personal financial services industry and the
+enhanced integration of traditional industries
+with the internet, which has presented valuable
+developmental opportunities for the Company
+to achieve its targeted strategic goal.
+Further, while opportunities abound, the
+Company still faces future developmental
+challenges. On one hand, confronting
+downward pressure, China's economy growth
+may further slow down. On the other hand,
+both traditional finance institutions and
+non-traditional finance companies have actively
+expedited deployment in internet finance field.
+New technologies, with the internet at its core,
+are developing even faster. With technological
+revolution and business model innovations,
+nearly all traditional businesses, including the
+finance industry, are about to face massive
+changes.
+Confronted with opportunities and challenges,
+Ping An will ensure the core finance business
+maintain above-market growth and quality.
+It will also take steps in strategic layout and
+investment to promote future growth, and
+exert great efforts on the development of the
+internet finance business, achieving concurrent
+development of both core finance and internet
+finance businesses.
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 81
+OUR PERFORMANCE
+Changes in the Share Capital and
+Shareholders' Profile
+INFORMATION DISCLOSED UNDER A SHARES REGULATORY REQUIREMENTS
+Changes in Share Capital
+Statement of shareholding changes
+Unit: Shares
+I.
+Selling-restricted shares
+Total
+III. Total number of shares
++5,416,332,249(1)
++247,950,813 (2) +5,664,283,062
+During the reporting period, the total number of A shares of the Company increased by 247,950,813 and
+5,416,332,249 due to the conversion of the Ping An Convertible Bonds and the conversion of the capital
+reserve into share capital, respectively. The total number of H shares increased by 3,723,788,456 due to the
+conversion of the capital reserve into share capital. As at December 31, 2015, the total share capital of the
+Company was 18,280,241,410 shares, of which 10,832,664,498 were A shares and 7,447,576,912 were H shares.
+Existing staff shares
+As at the end of the reporting period, the Company had no staff shares.
+82
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Convertible Bonds
+As approved by the CIRC and CSRC, on November 22, 2013, the Company issued Ping An Convertible
+Bonds with the principal amount of RMB26 billion, and Ping An Convertible Bonds were listed on the SSE
+on December 9, 2013. For the 30 consecutive trading days during the period from November 11, 2014 to
+December 22, 2014, the closing price of the Company's A shares was not less than 130% of the conversion
+price of the Ping An Convertible Bonds on the relevant days (the conversion price being RMB40.63 per
+share from November 11, 2014 to December 9, 2014, and RMB41.22 per share since December 10, 2014) for
+15 trading days (December 2, 2014 to December 22, 2014), and according to the Prospectus in Relation to
+the Public Issuance of A share Convertible Corporate Bonds (including Subordinated Terms) of Ping An
+Insurance (Group) Company of China, Ltd., the redemption conditions of the Ping An Convertible Bonds
+have been satisfied.
+The Board of Directors is authorized by the general meeting of the Company, and the Board of Directors
+then further delegated the authority to the Executive Directors of the Company to handle entirely,
+individually or jointly, the matters related to the Ping An Convertible Bonds. The resolution had been
+passed by all the Executive Directors of the Company to exercise the Company's right of early redemption
+of the Ping An Convertible Bonds, and to redeem all the outstanding Ping An Convertible Bonds held by
+holders who were registered on the redemption record date (i.e. January 9, 2015).
+As at the close of trading on January 9, 2015, a total of RMB25,965,569,000 of Ping An Convertible Bonds were
+converted into 629,922,613 A shares, accounting for 7.95744% of the total number of 7,916,142,092 issued shares
+before conversion of Ping An Convertible Bonds. The total redemption value of the Ping An Convertible
+Bonds amounts to RMB34,431,000, accounting for 0.13243% of the total value of RMB26 billion of Ping An
+Convertible Bonds.
+Starting from January 12, 2015, the Ping An Convertible Bonds ceased to be traded or converted; and
+starting from January 15, 2015, Ping An Convertible Bonds (113005) and Ping An Converted Shares (191005)
+were delisted from the SSE.
+Shareholders' Information
+Number of shareholders and their shareholdings
+Total number of shareholders
+Unit: Shareholder
+Total number of shareholders
+As at the end of the reporting period
+(December 31, 2015)
+325,472
+(of which there were 320,779
+domestic shareholders)
+As at the end of the month prior to
+publication of the annual report
+(February 29, 2016)
+Total number of shares and changes in shareholding structure of the Company
+Annual Report 2015
+There was no public issuance of shares during the reporting period.
+Security issuance and listing
+10,832,664,498
+59.26
+41.88
++3,723,788,456(1)
+8,892,169,892
+100.00
+8,892,169,892
+100.00
++3,723,788,456 7,447,576,912
+40.74
++9,140,120,705 (1)
++9,140,120,705 (1)
++247,950,8132 +9,388,071,518 18,280,241,410
++247,950,813 (2) +9,388,071,518 18,280,241,410
+100.00
+100.00
+(1)
+(2)
+The additional 5,416,332,249 A shares and 3,723,788,456 H shares during the reporting period resulted from the conversion of the
+capital reserve into share capital in the proportion of 10 shares for every 10 shares under the Company's profit distribution proposal
+for 2014.
+The additional 247,950,813 A shares during the reporting period resulted from the conversion of Ping An Convertible Bonds issued by
+the Company in 2013.
+Share issuance of the Company
+Ping An Insurance (Group) Company of China, Ltd.
+The following chart shows the relationship between the Company and the ultimate controller of
+shareholders holding more than 5% of equity interest of the Company:
+Charoen Pokphand Group
+Company Limited
+8.13
+3.31
+86
+98
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd.
+88
+Short position
+The past one year witnessed the gear-shifting
+of China's domestic economy with the
+significant change for business environment
+of commercial banks. The trend is featured
+with "emergence of structural opportunities,
+co-existence of opportunities and challenges
+as well as divergence among industries". While
+confronting the overwhelming challenges such
+as official launch of the deposit insurance
+institution, the growing buzz in internet
+finance and the open-up policies as well as
+competition of private banking, bank industry
+is also facing various opportunities resulting
+from the growth-stabilizing policies, the 13th
+Five-Year Plan with new concepts in economic
+development, reforms in finance regulation,
+upgrades in personal finance and consumption
+demand as well as emerging technologies. In
+response, Ping An Bank adopted the model of
+smart operation and leveraged the integrated
+finance platform of Ping An Group to strength
+the innovation and promote management
+reformation. As a result, Ping An Bank has
+2015 is the year of reform for insurance
+industry with a number of new policies. With
+unification of pension system and liberalization
+of universal insurance's minimum guaranteed
+interest rate at the beginning of the year, and a
+pilot reform in commercial auto insurance and
+COMPANY
+THE DEVELOPMENT TREND OF THE MAJOR
+INDUSTRIES THAT WE ARE INVOLVED IN
+AND MARKET COMPETITION FACED BY THE
+The Company expects to maintain a steady
+growth in its performance in 2016. The insurance
+businesses are expected to keep sustainable
+and solid growth. The banking business
+promotes its strategic transformation steadily,
+and the Company also expects more diversified
+returns for its asset management business.
+The internet finance business will grow rapidly.
+In light of changes in the macroeconomic
+environment, market competition, investment
+market conditions and other factors, the
+Company will make dynamic and timely
+adjustments to its business development goal
+to ensure the continuous improvement of
+market competitiveness.
+Following the concept of
+"Technology-driven Finance" and the
+model of "Internet + Integrated Finance
+and focusing on the daily needs for
+"health, food, housing, transportation and
+entertainment", the Company continued
+to enrich financial and daily living
+scenarios, strengthened internet user
+operation, improved user experience and
+gradually promoted migration, to become
+customers' "wealth manager, health
+advisor and life companion".
+We will continue to refine the integrated
+financial structure and platform which
+places individual client as core, further
+explore and upgrade the customer
+operation model, enhance our customer
+experience, and thoroughly explore the
+customer value to promote customer
+migration and intensify synergy effect.
+In compliance with existing laws and
+regulations, we will actively explore and
+promote overseas investment of insurance
+funds, and improve the stability and
+returns of our insurance fund investments
+through diversification, to advance the
+competitiveness of our insurance products.
+an increase in death benefit for minors in the
+middle of the year, followed by expansion of
+the pilot reform in commercial auto insurance
+and the implementation of the policies on
+preferential individual income tax treatment
+for commercial health insurance at the end of
+2015, these policies indicated that the insurance
+industry will play an increasingly important role
+in social and economic development, as well as
+our daily life in 2016. In 2015, China's insurance
+business realized a total premium income of
+RMB2,428,252 million, representing an increase
+of 20.0% over 2014. Of which, premium income
+from life insurance was RMB1,324,152 million;
+premium income from property and casualty
+insurance was RMB799,497 million; premium
+income from health insurance was RMB
+241,047 million; premium income from accident
+insurance was RMB63,556 million. Total assets
+of insurance companies were RMB12.36 trillion,
+representing an increase of 21.7% as compared
+with the end of 2014. In terms of premium
+income, Ping An Life and Ping An Property &
+Casualty are the second largest life insurance
+company and the second largest property
+and casualty insurance company in China,
+respectively. The insurance industry is among
+the fastest growing industries in China's
+national economy. As Chinese economy keeps
+growing and personal wealth is expanding,
+such rapid growth of our insurance business is
+expected to continue in future.
+Prospects on Future Development
+13.44
+2,457,656,226
+605,324,590
+King Ace International Limited
+H
+Party to s317 agreement
+2,357,656,226
+Long position
+31.66
+12.90
+33.00
+Ping An Insurance (Group) Company of China, Ltd.
+Long position
+1.34
+0.55
+corporations
+Total:
+(1),(2)
+Party to s317 agreement
+100,000,000
+Ping An Insurance (Group) Company of China, Ltd. 79
+We will continue to promote Ping An's
+asset management business as a leading
+investment management platform.
+By leveraging strength in the Group's
+integrated financial service, it offers.
+customers a comprehensive range of
+services which include securities and
+bonds financing, security brokerage,
+financial advisors and asset management,
+improving the customer experience. We
+will enhance the market value of our
+investment projects by strengthening
+our management of the post-investment
+process. We will make reference to
+global experience in managing our
+insurance funds and further improving
+our investment management system.
+In 2016, Ping An Bank will continue to focus
+on its strategic objective to establish the
+"Best Bank". Leveraging the advantages of
+the Group's integrated finance platform,
+Ping An bank will integrate government,
+corporate and interbank as well as
+resources upstream and downstream
+of the industry chain. Adhering to the
+concept of "customer-centric", it will
+focus on innovations in its organizational
+structure and business model, and
+establish its advantages in traditional
+industry through product research and
+technical innovation. Meanwhile, insisting
+on the idea of crossover between
+traditional and internet finance industry,
+Ping An Bank will create new finance
+propositions in the internet era. Ping An
+Bank will endeavor to steadily promote
+in its strategic businesses to ensure
+sustained and reasonable growth in profit.
+As at December 31, 2015, the Group's solvency
+ratio stood at 195.4% which fully met regulatory
+requirements.
+Solvency refers to the Group's ability to repay
+its obligations. The key goal of solvency
+management is to meet statutory capital
+requirements and to maintain a healthy capital
+ratio to support business growth and maximize
+shareholder value.
+SOLVENCY MANAGEMENT
+For equity investment in non-insurance areas,
+the Group has developed rules, standards, and
+limits, established processes for investment
+decision-making, risk management, investment
+review, evaluation, and reporting, and specified
+procedures for activities before, during, and
+after investment deals. Moreover, the non-
+insurance subsidiaries strictly follow the
+Company's strategic planning process to
+analyse the feasibility of business strategies,
+regularly review the ROCs, investment
+pay-back periods, business and financial
+performance, valuations, and evaluate the risk-
+return profiles of various businesses.
+Risk Management
+OUR PERFORMANCE
+Ping An Insurance (Group) Company of China, Ltd. 77
+The mechanism and processes implemented
+by the Group to manage its solvency are as
+follows:
+Annual Report 2015
+Risk in Non-insurance Areas
+The concentration risk management of
+insurance and non-insurance businesses. The
+Group monitors, evaluates, analyses, and
+reports the concentration of its businesses in
+accordance with the CIRC's rules. Regarding
+the insurance business, the Group has
+established the concentration risk management
+system for reinsurance counterparties,
+including risk limit, risk monitoring, analysis,
+and warning. Regarding non-insurance
+businesses, the Group, through analysing the
+structures and risk profiles of non-insurance
+businesses, specified the concentration risk
+indicators to be monitored in the routine
+risk management framework. The Group has
+effectively prevented the concentration risk
+through regular evaluation, monitoring, and
+warning of the concentration risk in insurance
+and non-insurance businesses.
+The concentration risk management of
+investment assets. In order to control the
+concentration risk from the perspective of
+investment assets categories, the Group
+has established rules and procedures for
+management of the concentration risk
+according to the risk-return profiles of different
+asset classes. The Group has appropriately
+categorized the investment assets, and
+specified a set of risk limits for the asset
+classes according to their respective risk-return
+profiles. Moreover, the Group regularly reviews
+the concentration risk posed by investment
+assets at the subsidiary level to prevent any
+solvency risk and liquidity risk arising from
+over-concentration of the Group's investment
+assets in a certain asset class, counterparty, or
+industry.
+The concentration risk management of
+business counterparties. In order to control
+the concentration risk from the perspective
+of business counterparties, the Group has
+specified a set of single risk limits for major
+counterparties based on the counterparties'
+credit ratings and the Group's risk appetites.
+The Group has specified credit risk limits for
+its major business counterparties, including
+ordinary enterprises and financial institutions,
+based on the counterparties' credit ratings, the
+Group's risk appetites, and the industries' risk
+profiles. The Group's set of single risk limits for
+major counterparties covers credit products
+and investment products with credit exposures.
+The concentration risk refers to risks that when
+aggregated at the Group level, which may be
+enough to directly or indirectly threaten the
+Group's solvency position. The Group manages
+the concentration risk through business
+counterparty management, insurance business
+management, non-insurance businesses
+management, and investment management.
+Concentration Risk
+The Group has a transparent governance
+structure. The Group has established a clear
+corporate governance structure in compliance
+with laws and regulations such as the Company
+Law of the PRC and the Securities Law of the
+PRC, with the actual conditions of the Company
+taken into account. The General Meeting
+of Shareholders, the Board of Directors,
+the Supervisory Committee, and the senior
+management have exercised their rights and
+performed their obligations in accordance with
+the Articles of Association. The Group itself
+engages in no specific business activity. It
+manages the subsidiaries through shareholding,
+but neither participates in nor intervenes in the
+subsidiaries' routine business. The Company
+and its subsidiaries have clearly defined
+roles and responsibilities of their respective
+functions, which are independently operated
+and well-coordinated based on checks and
+balances; there is no overlap, absence, or over-
+concentration of powers and responsibilities.
+As an integrated financial service group
+authorized by the State Council to engage
+in separate operations under a listed holding
+group subject to separate regulation, the Group
+has established independent legal entities
+that engage in insurance, banking, investment,
+and internet finance respectively. Regarding
+corporate governance, all the subsidiaries
+in non-insurance areas carry out specialized
+operations independently, and are supervised
+by their respective regulators; the Group
+ensures that all the non-insurance subsidiaries
+are effectively segregated from the insurance
+subsidiaries in terms of assets and liquidity.
+Ensuring the impact on solvency is
+evaluated when developing key initiatives
+such as strategies, business plans,
+investment decisions, and dividend
+distribution;
+Solvency target is a key indicator of the
+Group's risk management mechanism. To
+ensure the Group's solvency is maintained
+at an appropriate level, a warning and
+contingency system is in place against
+significant changes to the solvency margin;
+Including solvency as a KPI at the
+Company level to be instituted from the
+top-down, and used as an evaluation
+criterion for business performance;
+Score continue to increase. With the
+vision of "becoming the leading annuity
+asset management institution and leading
+medical insurance and social benefits
+services provider in China", the business
+of Ping An Annuity has been proactively
+transforming from a sole annuity business
+to asset management focused on annuity,
+and switching from traditional corporate
+group insurance business to medical health
+insurance business, mainly government
+health insurance. Ping An Annuity is also
+undergoing an operational shift, extending
+its focus on group customers, comprising
+mainly corporate clients, to governments
+and their individual customers. Ping
+An Health will strengthen the organic
+integration of health insurance and health
+management to create the No.1 brand of
+health insurance and services in China.
+Annual Report 2015
+Ping An Life placed customer management
+at its core, sticking to the principles of
+teamwork as the foundation, benevolence
+as the root, customer experience and
+innovation as the driving forces. It
+focuses on the synergetic development
+of multiple channels, namely individual
+sales agents, bancassurance outlets,
+telemarketing and internet marketing.
+Ping Life also strives to achieve the
+sustained, healthy and stable development
+of the intrinsic value and business scale,
+to fulfill the vision of “becoming the
+most respected life insurance company
+in China". Leveraging technology and
+the mobile internet, Ping An Property &
+Casualty will establish innovative engine
+to gain unique competitive advantage and
+enhance the capability of risk screening
+and cost control. Meanwhile, it provided
+better customer experience and improved
+customer satisfaction through matching
+specific products and services with
+customer attributes, its Net Promoter
+In 2016, the Company will remain resolute and
+continue to forge ahead with the development
+plans formulated by the Board of Directors
+to achieve reasonable growth and optimize
+its internal structure. The Company is actively
+preparing for the future with a close attention
+to global technological development trends,
+so as to seize valuable opportunities arising
+from the change of traditional finance business
+model led by mobile internet technology. By
+rolling out the model of "Internet + Integrated
+Finance" in all industries, and adhering to the
+development of "Integrated Finance +" and
+"Internet +", the Company is to reach a higher
+level towards the goal of being a "global leader
+in personal financial services".
+In 2015, the Company was committed to driving
+and implementing its business plans effectively.
+The four pillar businesses insurance, banking,
+asset management and internet finance
+maintained sound operation and sustainable
+growth. We steadily enhanced profitability
+and achieved the performance indicators of all
+operating plans as set out last year.
+Our business and operation plans remain
+consistent and stable as no major changes
+have been made to our long-term operating
+objectives as compared with those announced
+last year.
+BUSINESS PLAN FOR 2016
+OUR PERFORMANCE
+Prospects on Future Development
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2015
+78
+As one of the G-SIIs, Ping An is required to
+follow a series of capital regulations which have
+been developing by IAIS from 2019, in addition
+to mandatory compliance with C-ROSS. With
+support from CIRC, Ping An has been actively
+engaging with IAIS in the continuing capital
+rule consultation and development. With
+better understanding of Chinese insurance
+industry and Ping An's business model, IAIS
+is able to accordingly reflect the reality of
+these conditions in the global rule setting.
+Positive progress has been made with Ping An's
+participation.
+In response to the increasingly diversified
+and complicated risks in China's fast-growing
+insurance market, in March 2012, CIRC
+disclosed a plan to develop the China Risk
+Oriented Solvency System (the "C-ROSS").
+In February 2015, C-ROSS regulations (No.1-
+17) were published and the China insurance
+industry started the transition period to
+C-ROSS. Compared to China Solvency I, which
+is more scale oriented, C-ROSS is aligned
+to the international regulatory framework
+and becomes risk oriented. C-ROSS
+consists of three pillars, i.e. quantitative
+capital requirements, qualitative regulatory
+requirements, and market discipline mechanism.
+C-ROSS effectively prevents systemic risks
+and regional risks, and encourages capital
+efficiencies. Compared to China Solvency I,
+C-ROSS can more effectively identify and
+assess risks, helping insurance companies
+to achieve a balance between risks, values
+and growth. In 2015, the Group and its major
+insurance subsidiaries have set up C-ROSS
+project teams to prepare for the formal
+implementation of C-ROSS.
+Adopting sensitivity and scenario stress
+tests to pre-warn potential changes in
+solvency margin.
+Conducting periodic solvency projections
+and dynamic solvency testing, monitoring
+changes and trends on solvency margin;
+Adopting a prudent asset and liability
+management policy, enhance asset quality
+and business operations, strengthen
+capital management and focus on capital
+requirements in tandem with the Group's
+business growth;
+3.31
+8.13
+Interest of controlled
+605,324,590
+Annual Report 2015
+Ping An Insurance (Group) Company of China, Ltd. 85
+CORPORATE GOVERNANCE
+Changes in the Share Capital and
+Shareholders' Profile
+INFORMATION DISCLOSED UNDER H SHARES REGULATORY REQUIREMENTS
+Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying
+Shares of the Company
+As far as is known to any Directors or Supervisors of the Company, as at December 31, 2015, the following
+persons (other than the Directors, Supervisors and chief executive of the Company) who had interests or
+short positions in the shares or underlying shares of the Company which would fall to be disclosed to the
+Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in
+the register required to be kept by the Company pursuant to Section 336 of the SFO:
+Founded on October 13, 2004, with a registered and paid-in capital of RMB21.45 billion, Shenzhen Investment
+Holdings Co., Ltd. is a state wholly-owned limited liability company with the registered address of Floor
+18, Investment Tower, Shennan Road, Futian District in Shenzhen, as well as having Xiong Peijin as its legal
+representative. The business scope of Shenzhen Investment Holdings Co., Ltd. is as follows: investment,
+operation and management of state-owned equities in enterprises in which it has either the wholly-
+ownership, holding stakes or share participation through restructuring and merging, capital operating, asset
+disposing etc.; real estate developments and operations with legal land usage permissions; policy-driven
+and strategic investments aligned with requirements from the Shenzhen Municipal People's Government
+State-owned Assets Supervision and Administration Commission; guarantee provision for state-owned
+enterprises under Shenzhen municipality; other operations as permitted by the Shenzhen Municipal People's
+Government State-owned Assets Supervision and Administration Commission.
+Interests and short positions of substantial shareholders who are entitled to exercise or control the
+exercise of 10% or more of the voting power at any general meeting of the Company
+H/A Shares Capacity
+Notes
+Number of
+H/A Shares
+Nature of
+interest
+Percentage of
+total number of
+H/A shares in
+issue (%)
+Percentage of
+total shares
+in issue (%)
+Charoen Pokphand Group Company
+Limited
+Short position
+CP Group Ltd., the flagship company of CP Group, was established on September 23, 1976 in Thailand
+with registered capital of 17,616,500,000 THB. Its registered address is 313 Silom Road, C.P. Tower, Bangrak,
+Bangkok 10500, Thailand. Its principal businesses include agriculture and animal husbandry and food,
+commercial retail and telecommunication, and also engaged in pharmacy, motorcycle, real estate,
+international trade, finance, media and other businesses, by participating in various industries to realize a
+mutual development and operation. The actual controller of All Gain Trading Limited, Bloom Fortune Group
+Limited and Business Fortune Holdings Limited is CP Group Ltd.
+CP Group was established by brothers Chia Ek Chor and Chia Siew Whooy in Bangkok, Thailand in 1921.
+Originated from agriculture and animal husbandry business, the company increased its scope to production
+of animal feed, fisheries, food, commercial retail, telecommunications, pharmacy, real estate, international
+trade, logistics, finance, media, internet, education and industry. Currently, CP Group has made investment
+in over 16 countries. The company has more than 400 subsidiaries with employees over 300,000. The
+substantial shareholder of CP Group is the Chia Family, which held more than 51% shares of CP Group. CP
+Group controlled its diversified business through CP Group Ltd.
+53.99%
+100%
+Shenzhen Municipal People's Government
+State-owned Assets Supervision and
+Administration Commission
+100%
+All Gain Trading
+Limited
+Business Fortune
+Holdings Limited
+Bloom Fortune
+Group Limited
+Others
+Other H
+shareholders
+Shenzhen Investment
+Holdings Co., Ltd.
+4.32%
+1.43%
+2.77%
+1.07%
+31.15%
+5.27%
+Ping An Insurance (Group) Company of China, Ltd.
+Other A
+shareholders
+H
+Interest of controlled
+corporations
+Name of substantial shareholder
+31.66
+Interest of controlled
+2,357,656,226
+Long position
+31.66
+12.90
+100,000,000
+Long position
+Party to s317 agreement
+2,357,656,226 Long position
+corporations
+Total:
+Party to s317 agreement
+(1),(2)
+(2)
+2,457,656,226
+33.00
+13.44
+0.55
+H
+1.34
+corporations
+Dhanin Chearavanont
+12.90
+Party to s317 agreement
+100,000,000
+Long position
+1.34
+0.55
+Total:
+(1),(2)
+Annual Report 2015
+33.00
+2,457,656,226
+8.13
+Short position
+3.31
+(1)
+Interest of controlled
+13.44
+605,324,590
+June 4, 1992
+: 國平安保險公司
+The Company
+was renamed
+Ping An Insurance
+Company of
+China, becoming a
+national insurance
+company.
+Expanding
+nationwide
+AN IBURANCE COMPANY OF cel
+becoming its single
+October 1995
+Ping An made a
+breakthrough in
+non-insurance
+financial business by
+establishing Ping An
+Securities Co., Ltd.
+October 8, 2002
+HSBC Group took
+a stake in Ping An,
+largest shareholder.
+Stake acquired
+by HSBC
+2
+FOUT
+ALERTARNE
+Annual Report 2018
+To serve the country, society and public, we are
+empowering China's smart city initiative by building
+"1+N" platforms with our core technologies. Such
+platforms now cover more than 100 Chinese
+cities, including Beijing, Shanghai and Shenzhen,
+as well as countries and regions along the
+Belt and Road Initiative. The platforms serve
+hundreds of millions of people through a variety
+of applications, including fiscal management,
+government administration, transportation, life,
+health care, customs control, education, agriculture,
+judicial activities, environmental protection, and
+community governance. We help provincial and
+municipal governments to address pain points and
+difficulties in city governance, improve efficiency and
+effectiveness, reduce urban development costs, and
+help promote citizen satisfaction.
+1994
+July 2006
+integrated operations platform
+in Asia.
+which was the largest
+operations center in Zhangjiang,
+Shanghai started operations,
+Ping An's national integrated
+May 2006
+Ping An acquired Shenzhen
+Commercial Bank, which was
+later renamed Ping An Bank.
+Annual Report 2018
+Support
+Communities
+Rural
+Ping An
+across China at the 30th
+anniversary.
+In response to the
+government's call for
+poverty alleviation, Ping
+An launched the Ping
+An Rural Communities
+Support (covering village
+officers, village doctors
+and village teachers)
+in nine provinces or
+autonomous regions
+金”产业。
+2018
+【有机-无机
+39
+Welcomes the Listing of
+香港交易所
+HKEX
+HealthKonnect completed a Series A financing at
+a post-money valuation of USD8,800 million. Lufax
+At Ping An we empower ecosystems with
+technologies. We are building five ecosystems,
+covering financial services, health care, auto services,
+real estate services, and smart city services. The
+contribution from our technology innovation greatly
+increased. In the fintech and healthtech sectors, we
+have explored and developed innovative business
+models and built a number of unicorns from scratch.
+Several of our unicorns have completed financing to
+enhance their strength. Ping An Good Doctor went
+public on the Main Board of HKEX and successfully
+pursued overseas expansion. OneConnect completed
+a Series A financing at a post-money valuation
+of USD7,500 million. OneConnect established a
+subsidiary in Singapore and also began to export
+technologies to overseas markets. Ping An
+Through our Village Teacher Program, we built
+or upgraded nearly 400 village schools, trained
+nearly 5,000 village teachers, and provided distance
+learning courses for tens of thousands of teachers
+and students. Moreover, we established the Ping
+An Volunteers Association to engage employees in
+volunteer activities. As of the end of 2018, over 100,000
+employees took part in volunteer activities.
+豆退化肥
+深圳市公安局,中国平安集团
+嗯合作签约 N
+① 公安
+In 2018, our market cap rose above RMB1 trillion
+as our strengths and achievements gained world-
+wide recognition. We ranked 29th in the Fortune
+Global 500 and 10th in the Forbes Global 2000 for
+the first time. Our operating profit attributable
+to shareholders of the parent company reached
+RMB112,573 million, up 18.9% year on year. Our net
+profit attributable to shareholders of the parent
+company grew to RMB107,404 million, up 20.6% year
+on year. With fast growing operating profit, we are
+increasing dividends. The cash dividend per share
+for 2018 jumped by 14.7% year on year to RMB1.72.
+In addition, the Company distributed the 30th
+Anniversary Special Dividend of RMB0.20 per share.
+Our integrated financial business model of "one
+customer, multiple products and one-stop services"
+provided 184 million retail customers and 538 million
+internet users with financial products and services
+via cross-selling. The operating profit per customer
+was RMB531. About 63.64 million retail customers held
+multiple contracts with different subsidiaries of the
+Group, up 34.7% from the beginning of 2018.
+The year 2018 marked the 40th anniversary of
+China's reform and opening-up. Also in 2018, Ping
+An celebrated its 30th birthday. With the global
+economic landscape changing and reshaping,
+China's economy has entered a new era of
+development. Technologies are advancing rapidly,
+with unprecedented impacts. The global financial
+services industry is also experiencing rapid and
+fundamental changes, and facing huge challenges
+and opportunities. Against this backdrop and with
+a strong sense of mission and urgency, Ping An has
+taken careful steps to manage the risks and to seize
+the opportunities. As a result, we realized stable
+and healthy growth in assets, revenue and profit in
+2018. To embrace the opportunities ahead, we made
+greater investment in our technologies at a faster
+pace in the year. We continued with our "finance
++ ecosystem" transformation. We are exploring
+data-driven operations and we made encouraging
+progress in developing our business models and
+technological innovations.
+Chairman's Statement
+ABOUT US
+Ping An Insurance (Group) Company of China, Ltd. 3
+GOES PING AN
+.com
+LU陆金所
+Lufax
+Ping An Group
+enhanced its capital
+strength by going public
+June 24, 2004
+H-share
+listing
+PINGANPA
+平安银行
+Ping An Insurance (Group) Company of China, Ltd.
+in Hong Kong, which
+was the largest IPO in
+Hong Kong that year.
+insurance policy
+insurance business in China.
+pioneering individual life
+marketing system,
+十人股中国平安签约代
+individual life insurance
+Ping An introduced the
+First life
+Acquiring SDB
+July 2011
+Ping An became the controlling
+shareholder of Shenzhen
+Development Bank, which later
+merged with the original Ping
+An Bank, was renamed Ping An
+Bank, and built banking business
+presence across the country.
+Lufax was established as
+Ping An began to build
+presence in fintech and
+healthtech.
+2012
+ANDRION
+ARROW
+A-share
+listing
+Ping An Group was
+listed on the Shanghai
+Stock Exchange, which
+was the world's largest
+IPO of an insurance
+company by then.
+March 1, 2007
+2018
+2016
+2012
+2011
+2007
+2004 2006
+Ping An Life's
+written premium
+exceeded RMB300
+billion, and new
+business premium
+exceeded RMB100
+billion.
+2016
+2003
+Ping An was given approval
+to acquire Fujian Asia Bank,
+which marked the start of its
+banking business.
+December 2003
+operations in China's financial
+industry.
+153 Consolidated Statement of Income
+Consolidated Statement of Comprehensive
+Income
+154
+155 Consolidated Statement of Financial Position
+157 Consolidated Statement of Changes in Equity
+158 Consolidated Statement of Cash Flows
+159 Notes to Consolidated Financial Statements
+OTHER INFORMATION
+316 Honors and Awards
+Definitions
+317
+320 Corporate Information
+Cautionary Statements Regarding Forward-Looking Statements
+To the extent any statements made in this report contain information that is not historical, these statements are essentially forward-
+looking. These forward-looking statements include but are not limited to projections, targets, estimates and business plans that the
+Company expects or anticipates will or may occur in the future. These forward-looking statements are subject to known and unknown
+risks and uncertainties that may be general or specific. Certain statements, such as those including the words or phrases "potential",
+"estimates", "expects", "anticipates", "objective", "intends", "plans", "believes", "will", "may", "should", and similar expressions or variations on
+such expressions may be considered forward-looking statements.
+Readers should be cautioned that a variety of factors, many of which are beyond the Company's control, affect the performance,
+operations and results of the Company, and could cause actual results to differ materially from the expectations expressed in any of
+the Company's forward-looking statements. These factors include, but are not limited to, exchange rate fluctuations, market shares,
+competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market
+conditions and other risks and factors beyond our control. These and other factors should be considered carefully and readers should not
+place undue reliance on the Company's forward-looking statements. In addition, the Company undertakes no obligation to publicly update
+or revise any forward-looking statement that is contained in this report as a result of new information, future events or otherwise. None of
+the Company, or any of its employees or affiliates is responsible for, or is making, any representations concerning the future performance
+of the Company.
+中国平安 PING AN
+Dream Chaser on a New Journey
+After 30 years of hard work, with flowers and fruits
+To his original aspiration, the dream chaser remains true
+He set sail in Shekou to explore modern insurance
+He developed integrated finance with determination
+Now he leads technological innovation with passion
+He conducts Ping An Rural Communities Support to contribute to society
+He promotes Smart City to empower the ecosystem
+He seeks technological breakthroughs and advancements
+Artificial intelligence, fintech and smart poverty alleviation
+He enables countless use cases
+By proactively applying cutting-edge technologies
+80 Prospects of Future Development
+This is a new day, a new beginning
+Corporate Sustainability
+Risk Management
+MANAGEMENT DISCUSSION AND ANALYSIS
+125
+Report of the Supervisory Committee
+Significant Events
+8
+Customer Development
+12
+16
+Business Analysis
+16
+20
+27
+32
+36
+42
+46
+Fintech & Healthtech Business
+50
+Life and Health Insurance Business
+Property and Casualty Insurance Business
+Investment Portfolio of Insurance Funds
+Banking Business
+Asset Management Business
+Analysis of Embedded Value and
+Operating Profit
+Liquidity and Capital Resources
+61
+66
+79
+He is determined to seize the day
+And seize the future
+The 40th anniversary of reform and opening-up
+89.35
+Number of contracts per customer (contract)
+2.53
+2.32
+2.21
+2.03
+1.93
+Operating profit per customer (in RMB)
+531.25
+449.69
+N/A
+N/A
+N/A
+Proportion of customers holding multiple contracts with
+different subsidiaries (%)
+34.6
+28.5
+24.0
+19.0
+N/A
+Proportion of the Group's new customers from internet
+users within the Group's five ecosystems (%)
+35.6
+40.4
+109.10
+131.07
+165.73
+183.96
+The 70th birthday of the People's Republic of China
+At this critical moment, Ping An embarks on a new journey
+Marching ahead with you, each family, and the nation
+To pursue a better future
+Ping An strives to become a world-leading technology-powered retail financial
+services group. Ping An furthers "finance + technology" and pursues "finance +
+ecosystem," focusing innovative technologies on two major industries of pan
+financial assets and pan health care. As an industry and technology leader, Ping
+An applies technologies to traditional financial businesses and five ecosystems,
+namely financial services, health care, auto services, real estate services, and
+smart city services.
+For Ping An, now 30 years old, 2019 marks a new starting point. The Company
+will continue to seek survival via competition and pursue development via
+innovation. Ping An will provide customers with better services by empowering
+financial services with technologies, empowering ecosystems with technologies,
+and empowering financial services with ecosystems. Ping An will proceed with
+the Ping An Rural Communities Support to eradicate poverty, develop rural
+communities, and improve people's livelihood.
+Five-Year Summary
+(in RMB million)
+CUSTOMER DEVELOPMENT
+Number of internet users (in million)
+2018/
+December
+123
+31, 2018
+2016/
+December
+31, 2016
+2015/
+December
+31, 2015
+2014/
+December
+31, 2014
+538.43
+436.39
+346.30
+241.57
+137.34
+Number of retail customers (in million)
+2017/
+December
+31, 2017
+22.3
+Report of the Board of Directors
+147 Independent Auditor's Report
+112,573
+68,252
+Operating Profit Attributable to Shareholders of
+the Parent Company (in RMB Million)
+Annual Report 2018
+6
+(1) Dividend per share refers to cash dividend, including final
+dividend and interim dividend.
+December 31, 2018
+December 31, 2017
+December 31, 2016
+637,703
+29.4%
+825,173
+21.5%
+1,002,456
+2018
+Embedded Value (in RMB Million)
+2017
+39.0%
+5.31
+18.8%
+6.31
+2018
+2016
+18.9%
+3.82
+94,708
+2016
+Ping An Insurance (Group) Company of China, Ltd.
+This includes a final dividend of RMB1.10 per share pending
+approval at the 2018 Annual General Meeting. In addition,
+the Company distributed the 30th Anniversary Special
+Dividend of RMB0.20 per share in the first quarter of 2018.
+(2)
+2018
+2017
+32.6%
+67,357
+7.3%
+72,294
+2018
+2016
+50,805
+Value of New Business (in RMB Million)
+2017
+100.0%
+1.50
+14.7%
+1.72(2)
+2018
+2016
+0.75
+Dividend Per Share(1) (in RMB)
+2017
+38.8%
+Basic Operating EPS (in RMB)
+2017
+25.8%
+Contents
+ABOUT US
+i
+Five-Year Summary
+1
+Introduction
+2
+Ping An Milestones
+4
+Chairman's Statement
+6
+Business Performance at a Glance
+CORPORATE GOVERNANCE
+82
+Corporate Governance Report
+97
+Changes in the Share Capital and
+100
+Shareholders' Profile
+Directors, Supervisors, Senior Management
+and Employees
+Technology-Powered Business Transformation
+Performance Overview
+FINANCIAL STATEMENTS
+¥
+Expertise Makes Life Simple
+2018 Annual Report
+Finance Technology
+974,570
+11.0% 1,082,146
+2016
+774,488
+Total Revenue (in RMB Million)
+Financial Results of the Group
+Business Performance at a Glance
+ABOUT US
+Ping An Insurance (Group) Company of China, Ltd. 5
+Annual Report 2018
+Shenzhen, China
+March 12, 2019
+118
+Chairman and Chief Executive Officer
+In 2018, Ping An launched the Ping An Rural Communities Support.
+Li Jian, a famous singer and Ping An brand ambassador, gave an
+outdoor music lesson to children in Baise, Guangxi Province.
+F
+山明
+“家乡与世界”
+村教第一课
+12104
+唱)
+Ping An has been a beneficiary of the changing
+era. On turning 30, Ping An gratefully promoted
+the Ping An Rural Communities Support, covering
+village officers, doctors and teachers. We support
+rural industrial upgrade, strengthen health care in
+poor areas, and improve rural education. Through
+the Village Officer Program, we input over RMB5,000
+million for poverty alleviation and aided over 15,000
+poor rural residents by the end of 2018. Of the
+RMB5,000 million, RMB3,819 million was invested
+in poverty alleviation bonds, benefiting millions
+of people in 65 undeveloped counties in Guangxi,
+Yunnan, Guizhou and Sichuan. We integrate our
+financial and technological resources to support
+entire industry chains in poverty-stricken areas.
+We granted poverty-alleviation loans to support
+oat growing and poultry raising in Ulanqab, Inner
+Mongolia, where 1,995 registered poor households
+increased their average income by nearly RMB3,300.
+Our Village Doctor Program channeled urban medical
+resources to rural areas through Al and telemedicine.
+We built or upgraded over 400 village clinics, and
+held over 100 free medical services programs,
+providing 19,271 checkups and consultations.
+The (fourth) China Smart City International Expo 2018 was held in
+Shenzhen during August 21-24, 2018, co-sponsored by China Center
+for Urban Development under National Development and Reform
+Commission, Shenzhen Municipal Government, and Ping An.
+PINGAN
+PING AN
+अभी
+19.4
+11.8
+GROUP
+105.67
+98.51
+N/A
+N/A
+Core tier 1 capital adequacy ratio (%)
+8.54
+8.28
+8.36
+9.03
+8.64
+ASSET MANAGEMENT BUSINESS
+Net profit of trust business
+Assets held in trust of trust business
+Net profit of securities business
+3,012
+534,124
+1,680
+3,957
+652,756
+2,123
+2,322
+677,221
+2,215
+2,888
+558,435
+2,478
+2,212
+399,849
+924
+FINTECH & HEALTHTECH BUSINESS
+Operating profit
+7,748
+5,488
+159.45
+(3,575)
+overdue (%)
+1.02
+Net profit
+24,818
+23,189
+22,599
+21,865
+19,802
+Net interest margin (%)
+2.35
+2.37
+2.75
+2.81
+2.57
+Cost-to-income ratio (%)
+30.32
+29.89
+25.97
+31.31
+36.33
+Non-performing loan ratio (%)
+1.75
+1.70
+1.74
+1.45
+Provision coverage ratio for loans more than 90 days
+N/A
+N/A
+Notes: (1) The dividend per share was RMB1.72 in 2018. In addition, the Company distributed the 30th Anniversary Special Dividend of
+RMB0.20 per share in the first quarter of 2018.
+NERAR KAN
+ANONIRAN
+WARRENTERING
+Founding
+of the
+Company
+May 27, 1988
+Ping An Insurance
+Company was
+established as the first
+joint-stock insurance
+company in China.
+1988 1992
+Foreign
+investors
+1994
+Ping An brought on
+board Morgan Stanley
+and Goldman Sachs
+as its shareholders,
+becoming the first
+financial institution in
+China to have foreign
+investors.
+April 1996
+Ping An acquired
+ICBC Pearl River Delta
+Financial Trust Joint
+Company, which was
+then renamed Ping An
+Trust & Investment
+Company.
+1994
+1995
+1996
+2002
+Founding of
+the Group
+February 14, 2003
+Ping An Insurance (Group)
+Company of China, Ltd. was
+established, becoming a pilot
+company for integrated
+RADAR ANGAN
+STR+*+ NA
+关于中国平安保险股份有限公司
+分业经营改革的通知
+SEX COMEDY 14
+(2) Some indicators have been disclosed for less than five years. Certain figures have been reclassified or restated to conform to
+relevant periods' presentation.
+i
+Introduction
+Ping An strives to become a world-leading
+technology-powered retail financial services
+group. Ping An furthers "finance + technology" and
+pursues "finance + ecosystem," focusing on two
+major industries of pan financial assets and pan
+health care. Ping An applies new technologies to
+traditional financial businesses and five ecosystems,
+namely financial services, health care, auto services,
+real estate services, and smart city services. Ping An
+is empowering financial services with technologies,
+empowering ecosystems with technologies, and
+empowering financial services with ecosystems. Ping
+An leverages local advantages in line with global
+corporate governance standards. Ping An provides
+184 million retail customers and 538 million internet
+users with financial products and services under an
+integrated financial business model of "one customer,
+multiple products, and one-stop services."
+World-leading Technology-
+powered Retail Financial Services
+Group
+Pan Financial Assets
+Finance + Technology
+Pan Health Care
+Finance + Ecosystem
+Insurance
+BANKING BUSINESS
+Banking
+Financial
+Services
+Ecosystem
+Health
+Auto
+Care
+Services
+Ecosystem Ecosystem
+Real
+Estate
+Services
+Ecosystem
+Smart
+City
+Ecosystem
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+1
+ABOUT US
+Ping An Milestones
+平安保险公
+※保险监督管理委员会>
+Asset
+Management
+164.5
+269.5
+267.3
+3.82
+N/A
+N/A
+Equity attributable to shareholders of the parent company
+556,508
+473,351
+383,449
+334,248
+289,564
+Net profit attributable to shareholders of the parent
+company
+107,404
+89,088
+62,394
+54,203
+39,279
+Dividend per share(1) (in RMB)
+1.72
+1.50
+0.75
+0.53
+0.375
+Group comprehensive solvency margin ratio (%)
+216.4
+5.31
+6.31
+Basic operating earnings per share (in RMB)
+N/A
+Operating return on embedded value (%)
+Embedded value
+Operating profit attributable to shareholders
+of the parent company
+Operating ROE (%)
+23.7
+26.7
+21.0
+19.5
+20.0
+1,002,456
+214.9
+825,173
+551,514
+458,812
+112,573
+94,708
+68,252
+N/A
+N/A
+21.9
+22.0
+19.0
+N/A
+637,703
+care and Technology Company Limited
+210.0
+205.1
+616,319
+454,705
+330,846
+N/A
+218.8
+234.1
+225.9
+219.7
+219.9
+PROPERTY AND CASUALTY INSURANCE BUSINESS
+Net profit
+Combined ratio (%)
+Comprehensive solvency margin ratio (%)
+12,274
+96.0
+13,372
+96.2
+12,700
+95.9
+12,650
+8,817
+95.6
+95.3
+223.8
+217.5
+786,633
+N/A
+N/A
+40,518
+LIFE AND HEALTH INSURANCE BUSINESS
+Operating return on embedded value (%)
+Value of new business
+Embedded value
+Operating profit
+Residual margin
+Comprehensive solvency margin ratio - Ping An Life (%)
+30.8
+35.5
+27.0
+21.4
+204.9
+21.7
+67,357
+50,805
+38,420
+21,966
+613,223
+496,381
+360,312
+325,474
+264,223
+71,345
+52,824
+72,294
+平安健康醫療科技有限公司
+At Ping An we are empowering our financial services
+with technologies by leveraging world-leading Al,
+blockchain and cloud computing to contain cost,
+boost efficiency, enhance risk management, and
+improve our customer experience. As a result, our
+financial offerings gained competitiveness and our
+core financial businesses grew steadily. The operating
+profit of the life and health insurance business was
+RMB71,345 million, up 35.1% year on year. NBV rose
+7.3% year on year to RMB72,294 million. We adopted
+innovative agent management models and tools,
+including an Al-based interview functionality, which
+helped us sharply boost our agent retention rate.
+Ping An Property & Casualty expanded its market
+share and increased premium income by 14.6% year
+on year to RMB247,444 million, with a better-than-
+industry combined ratio of 96.0%. We processed
+96.4% of onsite auto claim investigations within
+5-10 minutes via our upgraded "510 City Superfast
+Onsite Investigation" services. Ping An Bank made
+significant progress in its strategic transformation
+toward retail banking, which accounted for 53.0%
+and 69.0% of the Bank's revenue and net profit
+respectively. Ping An Bank continued to de-risk itself
+and strengthen its risk compensation.
+ABA
+58.30
+(Stock Code: 1833)
+on International Holdings Limited
+威誠國際控股有限公司
+1833 PA GOODDOCTOR
+3309
+On April 27, 2018, Ping An signed a strategic partnership agreement
+中國平安
+The year 2019 marks the 70th anniversary of the
+founding of the People's Republic of China and
+is the beginning of Ping An's fourth decade, a
+crucial period for our strategic transformation. We
+have updated our brand logo, defining "finance +
+technology" as our core businesses. In 2019, we will
+maintain stable, healthy growth of core businesses,
+optimize the business mix, strictly manage risks, and
+build the foundation of our future. We will continue
+to increase investment in technology, pursue
+"finance + ecosystem," and enhance our data-driven
+operations and smart risk management capabilities to
+create value for customers, shareholders and society.
+Competition between ecosystems is heated and the
+era of smart operations has come. Technologies and
+data will empower us to anticipate trends, make
+timely decisions, and take actions ahead of others.
+At this new starting point, Ping An will continue
+to pursue "finance + ecosystem" and the all-round
+development and promotion of our smart data-driven
+operations. With the efforts of our outstanding staff
+and the support of our shareholders, Ping An will
+bravely navigate through the uncharted deep waters
+ahead toward a brighter future.
+(Stock Code: 8107)
+HKE C
+4 Annual Report 2018
+On May 4, 2018, Ping An Healthcare and Technology Co., Ltd. (Ping
+An Good Doctor, 01833.HK) was successfully listed on the HKEX.
+Ping An Insurance (Group) Company of China, Ltd.
+Holding, a leading online wealth management
+platform in China, also concluded a refinancing at
+a post-money valuation of USD39.4 billion, again
+favored by leading global investors.
+with Shenzhen Public Security Bureau to develop "smart policing."
+GE Ming (Chairman),
+YIP Dicky Peter,
+SUN Dongdong,
+OUYANG Hui
+Independent Non-Executive
+Directors
+The composition of the Supervisory Committee and the profile of each Supervisor have been included in
+the section headed “Directors, Supervisors, Senior Management and Employees" of this Annual Report. The
+details of the duty performance of the Supervisory Committee are set out in the section headed "Report of
+the Supervisory Committee.”
+The primary duties of the Audit and Risk Management Committee are
+to review and supervise the Company's financial reporting process and
+conduct risk management. The Audit and Risk Management Committee is
+also responsible for reviewing any matters relating to the appointment or
+removal, and remuneration of the external auditors. In addition, the Audit
+and Risk Management Committee also examines the effectiveness of the
+Company's internal controls, which involve regular reviews of the internal
+controls of various corporate structures and business processes, and take
+into account the respective potential risk and level of urgency, to ensure
+the effectiveness of the Company's business operations and the realization
+of its corporate objectives and strategies. The scope of such examinations
+and reviews includes finance, operations, regulatory compliance and risk
+management. The Audit and Risk Management Committee also reviews
+the Company's internal audit plan and submits relevant reports and
+recommendations to the Board on a regular basis.
+Audit and Risk Management Committee
+Non-Executive Director
+Members
+YANG Xiaoping
+90
+Further, in order to enable the members of the Committee to better evaluate the financial reporting
+systems and internal control procedures of the Company, all the members met with the Company's external
+auditors separately twice during the year.
+The Audit and Risk Management Committee also reviewed and was satisfied with the performance,
+independence and objectiveness of the Company's auditors.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 89
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd.
+In 2018, the Audit and Risk Management Committee held 4 meetings, which were all convened in
+accordance with the Articles of Association and the Charter of the Audit and Risk Management Committee.
+In particular, the Audit and Risk Management Committee reviewed the Company's annual financial
+statements for the year ended December 31, 2017, the first quarterly financial statements for the three
+months ended March 31, 2018, the interim financial results for the six months ended June 30, 2018 and the
+third quarterly financial statements for the nine months ended September 30, 2018. Furthermore, the Audit
+and Risk Management Committee convened a meeting to review the unaudited financial report for the
+year 2018 and agreed to deliver it to the auditor for auditing. The Audit and Risk Management Committee
+also reviewed the audited financial report for the year ended December 31, 2018 at the first meeting in 2019
+and was satisfied with the basis of preparation of the financial report, including the appropriateness of the
+assumptions and accounting policies and standards adopted, and made recommendations to the Board for
+their consideration. The attendance records of the members of the Audit and Risk Management Committee
+are set out in the section headed "Attendance Record of Directors" of this chapter.
+Annual Report 2018
+Members
+YANG Xiaoping,
+WANG Yongjian
+During the Reporting Period, the Independent Non-executive Directors of the Company did not have any
+objection on the resolutions at the Board meetings and other matters that were not submitted to the Board
+meetings of the Company.
+Adoption of Independent Non-executive Directors' suggestions on the Company
+During the Reporting Period, the Independent Non-executive Directors made constructive advice and
+suggestions in respect of the shareholders and the Company as a whole, including but not limited to
+corporate governance, reform and development, business operations, risk management and internal
+control; particularly, attention was paid to the legitimate interests of the minority shareholders in the
+decision-making process. All of their opinions and recommendations were adopted by the Company.
+SPECIALIZED COMMITTEES UNDER THE BOARD
+The Board has established four specialized committees, namely the Strategy and Investment Committee,
+the Audit and Risk Management Committee, the Remuneration Committee and the Nomination Committee.
+The details of the roles, functions and the composition of each of these specialized committees are set out
+below.
+Strategy and Investment Committee
+The primary duties of the Strategy and Investment Committee are
+to conduct research and provide suggestions to the Board for their
+consideration in relation to major investments, property transactions,
+financing, major capital operations, asset management projects,
+production and operation projects and so on, and also to promptly
+monitor and track the implementation of investment projects approved
+by the general meetings or the Board, and promptly notify all Directors of
+any significant progress or changes in process.
+In 2018, the Strategy and Investment Committee held 2 meetings, which
+were convened in accordance with the requirements of the Articles of
+Association and the Charter of the Strategy and Investment Committee.
+The 2018 Work Plan of the Company, the Company's 2017 Annual Plan
+Implementation Evaluation Report, the Resolution on the Suggestion
+to General Meeting concerning Grant of General Mandate to the Board
+to Issue Additional H Shares, and the Resolution on Issuing the Debt
+Financing Instruments were deliberated and approved. The attendance
+records of each member of the Strategy and Investment Committee are
+set out in the section headed "Attendance Record of Directors" of this
+chapter.
+Corporate Governance Report
+Executive Director
+MA Mingzhe (Chairman)
+Independent Non-Executive
+Directors
+YIP Dicky Peter,
+WONG Oscar Sai Hung,
+GE Ming
+Non-Executive Directors
+88
+According to the resolutions of the 2017 Annual General Meeting of the Company, the Company
+reappointed PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers (hereinafter refer to
+as "PricewaterhouseCoopers") as the auditors of the Company's financial statements under CAS and IFRS,
+respectively for the year 2018. PricewaterhouseCoopers has been engaged as the Company's auditor for six
+consecutive years. During the Reporting Period, the remuneration to be paid to PricewaterhouseCoopers is
+set out as follows:
+18
+Audit services for financial statements audits, reviews and agreed upon procedures
+Audit services for internal control
+Corporate Governance Report
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 91
+Annual Report 2018
+In 2018, the Nomination Committee held 4 meetings, which were convened in accordance with the
+requirements of the Articles of Association and the Charter of the Nomination Committee. The meeting
+deliberated and recommended the director candidates, the Chairman and Vice Chairman of the 11th
+Board and the Senior Management, deliberated and approved the Resolution on Improving the Decision
+Mechanism and Organization System of the Executive Committee of the Company and also reviewed the
+Annual Review Report of the Structure of the Board for 2017. The attendance records of each member
+of the Nomination Committee are set out in the section headed "Attendance Record of Directors" of this
+chapter.
+The Nomination Committee also developed and followed the Board Diversity Policy, so as to ensure the
+Board members reach a balance in terms of skills, experience and diversified visions, and to elevate the
+efficiency of the Board and maintain a high level of corporate governance. All appointments under the
+Board are made on a merit basis with due regard for the benefits of diversity of the Board members.
+Selection of candidates will be based on a range of diversity aspects, including but not limited to gender,
+age, cultural and educational background, experience (professional or otherwise), skills and knowledge.
+The ultimate decision will be made upon the merits and contribution that the selected candidates will
+bring to the Board. In 2018, in addition to candidates with extensive experience in law and accounting,
+the Nomination Committee also recommended an Independent Non-executive Director candidate with
+profound experience in technology to the Board to support the Company's strategic development. The
+nomination was approved by the second extraordinary general meeting for 2018 on December 14, 2018, and
+shall become effective upon the CBIRC's approval of his qualification as Director.
+MA Mingzhe,
+REN Huichuan
+Executive Directors
+SUN Dongdong (Chairman),
+WONG Oscar Sai Hung,
+OUYANG Hui
+Independent Non-Executive
+Directors
+Members
+The nomination of Directors is considered with reference to an
+individual's business acumen and undertakings, academic and professional
+achievements and qualifications, experience and independence, having
+regard to the Company's activities, assets and management portfolio. The
+Nomination Committee is delegated with the task of actively considering
+the needs of the Company at the Directors' level and senior management's
+level, studying the criteria and procedure for selecting directors and
+senior management. After considering and identifying appropriate
+candidates, the Nomination Committee then makes recommendations to
+the Board and implements any decisions and recommendations of the
+Board in relation to appointments. The aim and principal objective of
+the Nomination Committee are to ensure that there remains a dedicated,
+professional and accountable Board to serve the Company and its
+shareholders.
+The primary duties of the Nomination Committee are to review, advise
+and make recommendations to the Board regarding candidates to fill
+vacancies on the Board and senior management.
+Nomination Committee
+Ping An Insurance (Group) Company of China, Ltd.
+THE EXECUTIVE COMMITTEE
+(in RMB million)
+SUPERVISORY COMMITTEE AND SUPERVISORS
+In 2018, the Remuneration Committee held 3 meetings, which were all convened in accordance with
+the requirements of the Articles of Association and the Charter of the Remuneration Committee. The
+Committee deliberated and approved the Proposal on Reviewing the Remuneration of the Company's
+Senior Management, the Proposal on Reviewing the Company's 2017 Corporate Governance Report -
+Incentive and Restraint Mechanism, and the Proposal on Reviewing the Implementation of the Long-term
+Service Plan. In addition, the Committee also reviewed reports including the Report on the Participation
+in the 2018 Key Employee Share Purchase Scheme by the Group's Senior Management, the Report on
+the Settlement of Bonus for the Group's Senior Management for 2017, the Performance Report of the
+Remuneration Committee of the Board for 2017, the Report on Awarding Long-term Incentives of 2017
+to the Group's Senior Management, the Report on the Settlement of the 2015 Long-term Incentives for
+the Senior Management of the Group and the Report on the Government's Talent Incentive Policies.
+Attendance of meetings by the members of the Remuneration Committee is set out in the section headed
+"Attendance Record of Directors" of this chapter.
+Other assurance services
+Non-assurance services
+Total
+77
+8
+7
+Objections of Independent Non-executive Directors on relevant matters of the Company
+110
+Remuneration Committee
+The primary duties of the Remuneration Committee is to determine, with
+delegated responsibility by the Board, the specific remuneration packages
+of the Company's Executive Directors and senior management, including
+benefits in kind, pension rights and compensation payments, and to make
+recommendations to the Board on the remuneration of Non-executive
+Directors. The Remuneration Committee also advises the Board in relation
+to establishing a formal and transparent procedure for developing
+remuneration policy in respect of those individuals, considering and
+approving remunerations based on performance and market conditions,
+with reference to the corporate goals and objectives set forth by the
+Board. In particular, the Remuneration Committee is delegated with
+the specific task of ensuring that no Director or any of his associates
+is involved in deciding his own remuneration. Where the remuneration
+of a member of the Remuneration Committee is to be determined, that
+member's remuneration should be determined by the other members of
+the Committee.
+Members
+Independent Non-Executive
+Directors
+YIP Dicky Peter (Chairman),
+SUN Dongdong,
+GE Ming,
+OUYANG Hui
+Non-Executive Director
+Soopakij CHEARAVANONT
+Annual Report 2018
+Attendance of Independent Non-executive Directors at the Board meetings and the general meetings
+The details of the attendance of Independent Non-executive Directors at the Board meetings and the
+general meetings during the Reporting Period are set out in the section headed “Attendance Record of
+Directors" of this chapter.
+Fees payable
+CORPORATE GOVERNANCE
+In the day-to-day operations of the Company, the Company has put in place a robust management
+system and structure, and has established various positions and organs such as the Co-Chief Executive
+Officers (Co-CEOs), President, Executive Committee and management committees. Decisions on all
+material matters are subject to complete and stringent deliberation and decision-making procedures in
+order to ensure that the Chief Executive Officer can perform his duties properly and effectively.
+Since the establishment of the Company, the business and operating results have maintained
+continuous, steady and fast growth, and the management model has been widely recognized. All
+along, the Chairman of the Board has assumed the role of the Chief Executive Officer of the Company.
+Under the leadership of Chairman of the Board and the Chief Executive Officer of the Company,
+Co-Chief Executive Officers practice unified leadership of the retail customers' integrated financial
+business, the corporate customers' integrated financial business and the technology business of
+the Company respectively, and allocate responsibilities professionally. This model has proven to be
+reliable, efficient and successful. Therefore, the continuity of this model will be beneficial to the future
+development of the Company.
+There is clear division of responsibilities of the Board and the management as set out in the Articles of
+Association.
+In light of the above, the Board is of the opinion that the Company's management structure is able to
+provide the Company with effective management and, at the same time, protect the shareholders' rights
+to the greatest extent. Accordingly, the Company does not intend to separate the roles of the Chairman of
+the Board and the Chief Executive Officer at the moment.
+Compliance with the Model Code
+In August 2007, the Company adopted a code of conduct regarding securities transactions by Directors
+and Supervisors of the Company ("Code of Conduct"), which was amended in October 2018, on terms no
+less exacting than the required standard set out in the Model Code. Specific enquiry has been made to all
+Directors and Supervisors of the Company who have confirmed that they had complied with the required
+standards set out in the Model Code and the Code of Conduct for the period from January 1, 2018 to
+December 31, 2018.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+93
+CORPORATE GOVERNANCE
+Corporate Governance Report
+ESTABLISHMENT AND PERFECTION OF THE INTERNAL CONTROL SYSTEM
+The Company has been committed to establishing internal controls in line with international standards
+and regulatory requirements, and improving internal controls in response to risks and environments. With
+its local advantages, the Company implements corporate governance in line with international standards,
+upholds the compliance philosophy of “Laws + 1”, and constantly enhances its risks control to ensure that
+the Group and its subsidiaries abide by laws and regulations in their business activities, to keep single and
+accumulated residual risks at levels acceptable to the Company, and to promote sustainable growth of the
+insurance, banking, investment and fintech & healthtech businesses, as well as that of the Group.
+Regarding the management framework for internal controls, the Company has a robust and well-staffed
+internal control management system in place with well-defined roles and responsibilities in line with
+applicable laws and regulations as well as business and risk control requirements. The Board is responsible
+for establishment, improvement, and implementation of internal controls. The Audit and Risk Management
+Committee under the Board monitors and assesses the implementation of internal controls, coordinates
+audits of internal controls, and oversees other relevant work. The Supervisory Committee supervises the
+establishment and implementation of internal controls. The Risk Management Executive Committee under
+the Group Executive Committee (the management) sets risk management targets, basic policies and rules,
+monitors risk exposures and available capital, and supervises risk management systems of subsidiaries and
+business units. The Company has established robust internal control policies and procedures, and specified
+the internal control targets, responsibilities and procedures to provide guidelines for business activities and
+operations.
+Regarding internal control operations and assessment, the Company continued to act in accordance with
+the Basic Norms for Internal Controls of Enterprises and relevant guidelines, meet regulatory requirements,
+and improve its governance structure, firewall management, connected-party transaction management,
+anti-money laundering management, operational risk management and other procedures. The Group and its
+members improved risk management through data foundation, technologies and management methods. We
+have developed or introduced data analysis models through technologies, monitored risks, and promoted
+targeted compliance reviews. We urged departments concerned to remedy issues and risk events
+identified, draw inferences from one instance, manage risks at earlier stages, and achieve risk information
+transfer and risk management jointly with the first line of defense. Besides, we tested the smart internal
+controls over standard procedures, piloted robotic process automation (RPA) in the internal control
+process, expanded the sampling range and randomness, reduced the manual workload, and improved
+internal control test efficiency. We have been developing a long-term mechanism of terminal information
+security management and a terminal smart dashboard platform, and using tools and rule models to
+optimize strategies and review their implementation, so as to improve the Company's information security
+management. In line with the Guidance for the Internal Control of Insurance Funds and its supplementary
+implementation guidelines, the Company reviewed risks in operations of insurance funds and internal
+controls, developed an internal control framework for insurance funds, and improved its internal control
+of insurance funds. In addition, the Company trained its employees on internal control assessment
+methodology, process, practice and platforms, implemented the compliance and internal control appraisal,
+and promoted the day-to-day operation in which "everyone is involved in internal controls, everyone is
+responsible for compliance, and internal controls have been integrated in the business and processes."
+Since the Company brought in international strategic investors (The Goldman Sachs Group, Inc.
+and Morgan Stanley) in 1994, the Company has built up a Board structure of international standard.
+In terms of the composition of the Board, the Company has reached an international, diversified
+and professional level, and the Company has established a very structured and strict operation
+system and a set of meeting procedural rules. The Chairman, as a convener and chairperson of the
+Board meetings, does not have any special powers different from those of other directors in the
+decision-making process.
+94
+Annual Report 2018
+Corporate Governance Report
+Ping An Insurance (Group) Company of China, Ltd.
+Chairman of the Board and the Chief Executive Officer of the Company
+The Code Provision A.2.1 of the Corporate Governance Code provides that the roles of the Chairman and
+Chief Executive Officer shall be separate and may not be performed by the same individual. However,
+after considering the relevant principle of the Code Provision A.2.1 of the Corporate Governance Code and
+examining the management structure of the Company, the Board is of the view that:
+1.
+2.
+==
+None of the Directors is aware of any information that would reasonably indicate that the Company did not
+meet the applicable Code Provisions set out in the Corporate Governance Code for any part of the period
+from January 1, 2018 to December 31, 2018 save as disclosed below.
+During the Reporting Period, the Board held meetings to review the Company's compliance with the
+Corporate Governance Code and the contents disclosed in the Corporate Governance Report.
+The Board is responsible for performing the corporate governance duties set out in the terms of reference
+in the Code Provision D.3.1 of the Corporate Governance Code.
+Our Compliance with the Corporate Governance Code
+A proposal was made to amend the Articles of Association at the 2018 second extraordinary general
+meeting of the Company. The details of the proposed amendments are listed in the circular and the
+meeting material dated November 16, 2018 which were published on the websites of HKEX (www.hkexnews.
+hk) and SSE (www.sse.com.cn), respectively. As at December 31, 2018, the proposed amendments did not
+come into effect and were still subject to the approval by the relevant regulatory authorities.
+A proposal was made to amend the Articles of Association at the 2018 first extraordinary general meeting
+of the Company. The amendments have been approved by the relevant regulatory authorities and became
+effective during the Reporting Period. The valid Articles of Association after the amendments was
+published on the website of HKEX (www.hkexnews.hk) on August 8, 2018 and the website of SSE (www.sse.
+com.cn) on August 9, 2018.
+3.
+OTHER MATTERS REGARDING CORPORATE GOVERNANCE IN THE REPORTING PERIOD
+Amendments Made to the Articles of Association
+The Company has established an Executive Committee, which is the highest execution authority under the
+Board. The primary duty of the Executive Committee is to review the Company's internal business reports,
+the Company's policies in relation to investment and profit distribution and the Company's management
+policies, development plans and resources allocation plans. The Executive Committee is also responsible
+for making management decisions in relation to matters such as material development strategies,
+risk control compliance, capital allocation, synergy and brand management. In addition, the Executive
+Committee is also responsible for reviewing the business plans of the subsidiaries of the Company and
+evaluating the financial performance of the subsidiaries. The Company has also established 9 management
+committees under the Executive Committee, including the Budget Management Committee, the Investment
+Management Committee, the Risk Management Executive Committee, the Investor Relations Management
+Committee, the Connected-party Transaction Management Committee and the Technology Development
+Committee.
+4.
+Annual Report 2018
+92
+Regarding anti-money laundering (AML) management, in 2018, the Group took the opportunity of receiving
+the fourth round of mutual evaluations by the Financial Action Task Force (FATF) to thoroughly assess the
+compliance and effectiveness of its AML management and improve the AML management framework based
+on the evaluation results. We strictly followed the AML policies and regulations, improved the AML internal
+control rules, and optimized the money laundering risk evaluation framework and the blacklist monitoring
+mechanism. We also carried out AML inspections, strengthened AML performance appraisal, internal and
+external publicity and industry exchanges, and accelerated the development of interdisciplinary talent to
+secure our leading position in the industry. In addition, in order to effectively control the money laundering
+risk, we followed a technology-powered path for AML management, prioritized the R&D of smart products
+for customer identification, institutions' money laundering risk evaluation and regulation analysis, used
+artificial intelligence (AI) to enhance the identification of suspicious transactions, and upgraded AML
+management approaches.
+Annual Report 2018
+The Independent Non-executive Directors of the Company conscientiously performed their duties
+and responsibilities conferred by the Articles of Association, promptly learnt the important operation
+information of the Company, paid close attention to the development of the Company and actively
+attended the meetings of the Board during the Reporting Period. After a due review of the external
+guarantees of the Company in 2017, the Independent Non-executive Directors of the Company believed
+that the Company had exerted stringent control over risks associated with external guarantees and
+that the external guarantees were in compliance with relevant laws and regulations and the Articles of
+Association. The Independent Non-executive Directors of the Company have conscientiously reviewed
+and provided independent opinions to agree with the matters regarding provision of assured entitlement
+to the H shareholders only for the overseas listing of Ping An Good Doctor, profit distribution, significant
+changes in accounting estimates, changes in accounting policies, recommendation of director candidates,
+shareholders' return plan for the next three years, connected transaction, implementation of the long-term
+service plan, buy-back of the shares of the Company and the relevant authorization, and improvement of
+the decision-making mechanism and organization system of the Executive Committee of the Company
+which were put forward by the Board during the Reporting Period.
+Chairman and Chief Executive Officer
+The 11th Board includes 5 Independent Non-executive Directors, reaching one-third of the total number
+of the members of the Board, which is in compliance with the requirements under the regulatory rules
+of the Company's listing jurisdictions. All the Independent Non-executive Directors of the Company are
+professionals with extensive experience in fields including economics, finance, accounting and law, crucial
+to sustainable development of the Company. All Independent Non-executive Directors meet the specific
+independence requirements as set out in the regulatory rules of the Company's listing jurisdictions, and
+have presented their annual confirmation on independence to the Company. Therefore, the Company
+continues to believe that they are independent. The Independent Non-executive Directors owe fiduciary
+duties to the Company and its shareholders, and are especially responsible for protecting the non-
+controlling interests. They are playing a significant check-and-balance role in the decision-making of the
+Board and a key part in the corporate governance of the Company.
+Shenzhen, PRC
+In 2018, all Directors of the Company attended professional training with topics covering corporate
+governance, regulations and the Company's businesses and training organized by the Insurance Association
+of China regarding Insurance asset-liability management, tax policy for insurance industry. In addition, Mr.
+Liu Chong attended training related to accounting organized by Ministry of Finance, and Mr. Yip Dicky
+Peter attended training related to the Belt and Road Initiative organized by Hong Kong Trade Development
+Council.
+Ma Mingzhe
+During the Reporting Period, and under the arrangement of the Company, all Directors of the Company
+actively participated in continuous professional development by attending external training or seminars,
+attending in-house training or reading materials on various topics, to develop and refresh their knowledge
+and skills, which ensure that their contribution to the Board remains informed and relevant. The Directors
+have provided records of training to the Company.
+All Directors of the Company have received a comprehensive Service Manual for the Performance of Duties
+upon their first appointment, so as to ensure their understanding of the business and operations of the
+Group and their responsibilities and obligations under the listing rules and relevant regulatory requirements.
+The Service Manual for the Performance of Duties is updated regularly.
+Continuous professional development of the Directors
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+96
+Ping An Insurance (Group) Company of China, Ltd.
+The Company also continually provides information including updates on statutory and regulatory
+requirements and the business and market changes to all Directors to facilitate the performance of their
+responsibilities and obligations under the listing rules and relevant statutory requirements.
+By order of the Board
+Performance of Duties by Independent Non-Executive Directors
+As disclosed above, in 2018, the Audit and Risk Management Committee held 4 meetings, in which the
+Group's risk management and internal control systems were reviewed. Through the Audit and Risk
+Management Committee, the Board has conducted annual review of the effectiveness of the Group's risk
+management and internal control systems for the year ended December 31, 2018, covering all material
+financial, operational and compliance controls, and it has considered the Group's risk management and
+internal control system are effective and adequate.
+Regarding the management framework for internal audit and supervision, in 2018, we continued
+to implement an independent, vertical and centralized approach to internal audits, and facilitated
+development of the Group-level risk monitoring system and application of Al. Moreover, in accordance
+with the "finance + technology" development strategy, we continued to build an integrated, smart online
+monitoring framework for internal audit risks, and developed a smart internal audit system named "Ping
+An Shield" to give early warnings and take actions in time, repair the loopholes and recover the loss at
+the first time. Keeping abreast of changes in the external environment and internal strategies, we sped up
+audit transformation and integrated audit advisory services with high-risk event disposal, driven by risk
+monitoring and remote models. Novel tools were applied to identify and handle risks while fortifying the
+internal control basis. Meanwhile, we tightened controls over major risks and optimized the mechanism
+of 24/7 emergency response, so as to effectively prevent and mitigate risks in a timely manner and help
+achieve healthy business development.
+In 2018, the Company's internal control evaluations covered the following businesses and matters: corporate
+governance, organizational structures, development strategies, human resources, corporate culture, social
+responsibilities, sales management, insurance fund utilization, treasury management, actuarial management,
+investment and financing management, operations management, financial management, asset management,
+engineering management, document and chop management, inquiries, complaints and outbound calls to
+customers, information system management, information and communication, and internal supervision. We
+paid close attention to the following high-risk areas: sales management, insurance fund utilization, treasury
+management, actuarial management, investment and financing management, operations management,
+financial management, and information system management. In 2018, the Company maintained the
+effectiveness of internal controls over financial reporting in all major aspects in accordance with the Basic
+Norms for Internal Controls of Enterprises and relevant rules. The Internal Control Assessment Report for
+2018 has been approved by the Board of Directors. The Company has engaged PricewaterhouseCoopers
+Zhong Tian LLP to audit the effectiveness of internal controls over financial reporting as well as the
+effectiveness of internal controls over matters other than financial reporting. PricewaterhouseCoopers
+Zhong Tian LLP has issued the Internal Control Audit Report.
+In the year ended December 31, 2018, the Company conducted corporate governance activities and
+improved the corporate governance structure in line with realities and in strict accordance with applicable
+laws including the Company Law of the People's Republic of China, the Securities Law of the People's
+Republic of China, applicable regulations, and principles set out in the Corporate Governance Code. The
+General Meeting of Shareholders, the Board of Directors, the Supervisory Committee, and the senior
+management exercised their respective rights and performed their respective obligations in accordance
+with the Articles of Association. The Company had a robust, effective internal control system in place. The
+Company disclosed relevant information in a truthful, accurate and complete manner. No breach of laws or
+regulations occurred in the Reporting Period.
+Ping An Insurance (Group) Company of China, Ltd. 87
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 95
+CORPORATE GOVERNANCE
+For details of the Company's internal controls, please refer to the Internal Control Assessment Report of
+Ping An for 2018 and the Internal Control Audit Report on Ping An for 2018 released on the same date as
+this report on the website of SSE (www.sse.com.cn).
+RISK MANAGEMENT
+The Company regulates the handling and dissemination of inside information as set out in various inside
+information disclosure procedures to ensure inside information remains confidential until the disclosure of
+such information is appropriately approved, and the dissemination of such information is efficiently and
+consistently made.
+Corporate Governance Report
+Based on the above disclosure, appropriate policies and controls have been designed and established to
+ensure that assets are safeguarded against improper use or disposal, that relevant laws, regulations and
+rules are adhered to and complied with, that reliable financial and accounting records are maintained in
+accordance with relevant accounting standards and regulatory reporting requirements, and that key risks
+that may impact on the Group's performance are appropriately identified and managed. The systems and
+internal controls can only provide reasonable but not absolute assurance against material misstatement
+or loss, as they are designed to manage, rather than eliminate the risk of failure to achieve business
+objectives.
+The Board acknowledges its responsibility for overseeing the Group's risk management and internal control
+systems and reviewing their effectiveness at least annually through the Audit and Risk Management
+Committee. The Audit and Risk Management Committee assists the Board in fulfilling its oversight and
+corporate governance functions in the Group's financial, operational, compliance, risk management and
+internal controls, as well as the role in monitoring and governing finance and internal audits.
+March 12, 2019
+The Company has always taken risk management as a core part of its day-to-day activities and operations.
+We take steady steps to build a comprehensive risk management system that is aligned with the strategies
+and operations of the Company. We keep optimizing our risk management framework and standardizing
+our risk management procedures, while adopting both qualitative and quantitative risk management
+methodologies to identify, evaluate and mitigate risks to facilitate sustainable and healthy development of
+the businesses of the Company.
+For details of the Company's risk management, please refer to the chapter of "Risk Management” in this
+annual report.
+Ms. IP So Lan
+Other positions held with the Group
+Mr. Sun is a Director of Ping An Life, Ping An Property & Casualty, Ping An
+Annuity and Ping An Asset Management.
+Other major offices
+Mr. Sun is a Non-executive Director of China Insurance Security Fund Co.,
+Ltd., and an Independent Non-Executive Director of Haichang Ocean Park
+Holdings Ltd.
+Past offices
+Since joining the Company, Mr. Sun has been the General Manager of the
+Management Department, Senior Vice President, Executive Vice President,
+and Vice Chief Executive Officer of the Company, and the Chairman of the
+board of directors of Ping An Bank.
+Prior to joining the Company, Mr. Sun was the Head of the Wuhan Branch
+of the PBC, the Deputy General Manager of the Wuhan Branch Office of
+the People's Insurance Company of China and the General Manager of
+Wuhan Securities Company.
+Mr. Sun was a Non-executive Director of China Vanke Co., Ltd.
+Diploma in Finance from Zhongnan University of Economics and Law
+(previously known as Zhongnan University of Economics)
+102
+Annual Report 2018
+Mr. XIE Yonglin
+Term of office: May 2018-2021 election
+Education background and qualifications
+Working experience
+Joined the Company in 1990,
+Mr. SUN Jianyi
+Mr. MA Mingzhe
+Mr. YAO Jason Bo
+Mr. CHEN Kexiang
+Ms. TAN Sin Yin
+100
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+101
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+MAJOR WORKING EXPERIENCE AND CONCURRENT POSITIONS OF DIRECTORS, SUPERVISORS, SENIOR
+MANAGEMENT AND KEY PERSONNEL
+Directors
+Mr. MA Mingzhe
+Founder of the Company
+Chairman and CEO (Executive Director)
+Aged 63
+Director since March 1988
+Term of office: May 2018-2021 election
+Since the establishment of the Company, Mr. Ma has successively served as
+the President, Director, and concurrently as the Chairman and CEO of the
+Company, and has been fully involved in the operations and management
+of the Company.
+Prior to founding the Company, Mr. Ma was the Deputy Manager of China
+Merchants Shekou Industrial Zone Social Insurance Company.
+Education background and qualifications
+Doctorate degree in Money and Banking from Zhongnan University
+of Economics and Law (previously known as Zhongnan University of
+Economics)
+Mr. SUN Jianyi
+Senior Vice Chairman (Executive
+Director), Executive Vice President
+Aged 66
+Director since March 1995
+Mr. LEE Yuansiong
+Other major offices
+0
+104
+Directors, Supervisors, Senior
+Management and Employees
+Mr. YAO Jason Bo
+Executive Director, Executive
+Vice President, Chief Financial
+Officer, Chief Actuary
+Aged 48
+Joined the Company in 2001
+Director since June 2009
+Term of office: May 2018-2021 election
+Other positions held with the Group
+Mr. Yao is a Director of a number of controlled subsidiaries of the
+Company including Ping An Bank, Ping An Life, Ping An Property &
+Casualty and Ping An Asset Management.
+Other major offices
+Mr. Yao serves as a Non-executive Director of Lufax Holding, Ping An Good
+Doctor and OneConnect Financial Technology Co., Ltd.
+CORPORATE GOVERNANCE
+Past offices
+Prior to joining the Company, Mr. Yao served in Deloitte Touche Tohmatsu
+as a consulting actuary and Senior Manager.
+Education background and qualifications
+MBA degree from New York University
+Fellow of the Society of Actuaries (FSA)
+Ms. CAI Fangfang
+Executive Director, Chief Human
+Resources Officer
+Aged 45
+Joined the Company in 2007
+Director since July 2014
+Term of office: May 2018-2021 election
+Mr. REN Huichuan
+Ms. CAI Fangfang
+Ms. Cai is a Director of a number of controlled subsidiaries of the Company
+including Ping An Bank, Ping An Life, Ping An Property & Casualty and
+Ping An Asset Management.
+Other positions held with the Group
+Mr. Yao served as the Senior Vice President of the Company from June
+2009 to January 2016. Prior to that, Mr. Yao successively held positions
+of the Deputy General Manager of the Product Centre, the Deputy Chief
+Actuary, the General Manager of the Planning Department, the Deputy
+Financial Officer and Financial Director of the Company.
+103
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Mr. LEE Yuansiong
+Executive Director, Co-CEO, Executive
+Vice President, Chief Insurance
+Business Officer
+Aged 53
+Joined the Company in 2004
+Director since June 2013
+Term of office: May 2018-2021 election
+Other positions held with the Group
+Mr. Lee is a Director of a number of controlled subsidiaries of the Company
+including Ping An Property & Casualty, Ping An Life, Ping An Annuity and
+Ping An Health.
+Other major offices
+Mr. Lee serves as a Non-executive Director of Ping An Good Doctor and
+HealthKonnect Medical and Health Technology Management Company Ltd.
+Past offices
+Mr. Lee served as the Special Assistant to the Chairman of Ping An Life
+from February 2004 to March 2005, President of Ping An Life from March
+2005 to January 2010 and Chairman of Ping An Life from January 2007 to
+February 2012.
+Prior to joining the Company, Mr. Lee was a Senior Vice President of
+Prudential Taiwan Branch and the President of Citic-Prudential, etc.
+Education background and qualifications
+Master's degree in Finance from The University of Cambridge
+Mr. REN Huichuan
+Executive Director, President
+Aged 49
+Joined the Company in 1992
+Director since July 2012
+Term of office: May 2018-2021 election
+Other positions held with the Group
+Mr. Ren is the Chairman of Ping An Trust, a Director of a number of
+controlled subsidiaries of the Company including Ping An Property &
+Casualty, Ping An Life, and Ping An Asset Management.
+Mr. Ren is a member of the Council of Shenzhen Finance Institute.
+Past offices
+Mr. Ren served as a Senior Vice President of the Company from June
+2010 to March 2011, the Chief Insurance Business Officer of the Company
+from June 2010 to December 2010, and was appointed as an Employee
+Representative Supervisor of the Company from March 2009 to March 2010.
+Mr. Ren served as the Chairman and Chief Executive Officer of Shenzhen
+Wanlitong Internet & Information Technology Co., Ltd. from February 2015
+to December 2015, the Chairman and Chief Executive Officer of Ping An
+Property & Casualty from April 2007 to May 2011. Before that, Mr. Ren was
+the Assistant to the President and Financial Director of the Company, the
+Assistant Director of the Development and Reform Center, Vice President
+of Ping An Property & Casualty and the Assistant Manager of the property
+& casualty Insurance business of the Company.
+Education background and qualifications
+MBA degree from Peking University
+Ping An Insurance (Group) Company of China, Ltd.
+From left to right:
+547,459,336
+CORPORATE GOVERNANCE
+Overseas legal person
+3.91
+714,663,997
+H Share
+485,202,650
+pledged shares
+714,663,997
+pledged shares
+Hong Kong Securities Clearing Company
+Others
+3.89
+710,541,257
++315,630,799
+A Share
+New Orient Ventures Limited
+Limited (5)
+Others
+2.99
+Other major offices
+-147,375,226
+A Share
+Limited
+Central Huijin Asset Management Ltd.
+Others
+2.65
+483,801,600
+A Share
+Shum Yip Group Limited
+China Securities Finance Corporation
+H Share
+-11,262,534
+717,306,596
+Shareholding
+percentage
+Total number
+of shares held
+Name of shareholder
+Nature of shareholder(¹)
+(%)
+Changes
+during the
+Reporting Period
+Type of shares
+Hong Kong Securities Clearing Company
+Nominees Limited (3)
+Overseas legal person
+32.78
+5,991,668,030(4)
++10,820,538
+H Share
+Number of
+selling-restricted
+shares held
+(shares)
+Number of pledged
+or frozen shares
+(shares)
+Unknown
+Shenzhen Investment Holdings Co., Ltd.
+State
+5.27
+962,719,102
+A Share
+341,740,000
+pledged shares
+Business Fortune Holdings Limited
+Overseas legal person
+3.92
+State-owned legal person
+Directors, Supervisors, Senior
+Management and Employees
+1.41
+A Share
+As at December 31, 2018, CP Group Ltd. indirectly held 1,680,755,534 H shares of the Company in total,
+representing 9.19% of the total share capital of the Company; Shenzhen Investment Holdings Co., Ltd. held
+962,719,102 A Shares of the Company, representing 5.27% of the total share capital of the Company.
+The following chart shows the relationship between the Company and the ultimate controller of
+shareholders holding more than 5% of equity interest of the Company:
+Charoen Pokphand Group
+Company Limited
+100%
+Shenzhen Municipal People's Government
+State-owned Assets Supervision and
+Administration Commission
+100%
+Business Fortune
+Holdings Limited
+New Orient
+Ventures Limited
+Others
+Other H
+shareholders
+Shenzhen Investment
+Holdings Co., Ltd.
+Information on shareholders holding more than 5% of equity interest of the Company
+3.92%
+1.36%
+31.55%
+5.27%
+Ping An Insurance (Group) Company of China, Ltd.
+Other A
+shareholders
+53.99%
+CP Group Ltd., the flagship company of CP Group, was established on September 23, 1976 in Thailand
+with Dhanin Chearavanont as its legal representative. The principal businesses of CP Group Ltd. include
+agriculture and animal husbandry and food, commercial retail and telecommunication, and it also
+engages in pharmacy, motorcycle, real estate, international trade, finance, media and other businesses, by
+participating in various industries to enhance mutual development and operations.
+Shenzhen Investment Holdings Co., Ltd. is a wholly state-owned limited liability company founded
+on October 13, 2004, with Wang Yongjian as its legal representative. The business scope of Shenzhen
+Investment Holdings Co., Ltd. is as follows: investments in and mergers and acquisitions of financial and
+quasi-financial equities in sectors including banking, securities, insurance, fund management, and guarantee;
+real estate developments and operations with lawfully obtained land use permissions; investments and
+services in strategic emerging industries; investment, operation and management of state-owned equities in
+enterprises in which it has either the whole ownership, controlling stakes or non-controlling stakes through
+restructuring and mergers, capital operations, asset disposal and so on; other operations as authorized
+by the Shenzhen Municipal People's Government State-owned Assets Supervision and Administration
+Commission (if any of the above operations requires government approval, such approval shall be obtained
+before the operation can start).
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+99
+99
+3.91%
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+98
+-
+Dacheng Fund Agricultural Bank of China
+Others
+1.10
+201,948,582
++27,358,546
+A Share
+- Dacheng Zhongzheng Financial Asset
+Management Plan
+Huaxia Fund-Agricultural Bank of
+Others
+China-Huaxia Zhongzheng Financial
+Asset Management Plan
+1.09
+199,511,462
++25,713,964
+A Share
+Notes: (1) Nature of the holders of A shares represents the nature of accounts held by the holders of A shares registered on the
+Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
+(2) As the shares of the Company could be used as underlying securities for margin financing and securities lending, the
+shareholdings of the shareholders are the aggregate of all the shares and interests held in ordinary securities accounts and
+credit securities accounts.
+(3) Hong Kong Securities Clearing Company Nominees Limited ("HKSCC Nominees Limited") is the nominee holder of the shares
+held by non-registered H shareholders of the Company.
+(4) Business Fortune Holdings Limited and New Orient Ventures Limited are indirect wholly-owned subsidiaries of CP Group Ltd.,
+and the shares owned by these two companies have been registered under the name of HKSCC Nominees Limited. In order to
+avoid double counting, the shares owned by the above two companies have been deducted from the shares held by HKSCC
+Nominees Limited.
+(5) The shares held by Hong Kong Securities Clearing Company Limited refer to the shares held by non-registered shareholders of
+the Northbound Trading of the Shanghai-Hong Kong Stock Connect Program.
+Explanation of the connected relationship or acting-in-concert relationship of the above shareholders:
+Business Fortune Holdings Limited and New Orient Ventures Limited are indirect wholly-owned subsidiaries
+of CP Group Ltd., and they are of acting-in-concert relationship since they are under common control.
+Save as disclosed above, the Company is not aware of any connected relationship or acting-in-concert
+relationship among the above-mentioned shareholders.
+Particulars of controlling shareholder and de facto controller
+The shareholding structure of the Company is relatively scattered. There is no controlling shareholder, nor
+de facto controller.
+96
+257,728,008
+Ms. Cai serves as a Non-executive Director of Ping An Good Doctor
+and OneConnect Financial Technology Co., Ltd. and the Executive Vice
+President of Ping An School of Financial Management.
+(shares)(2)
+Ms. Cai was the Vice Chief Financial Officer and General Manager of the
+Planning Department of the Company from February 2012 to September
+2013 and successively held the positions of Vice General Manager and
+General Manager of the Remuneration Planning and Management
+Department of the Human Resources Centre of the Company from October
+2009 to February 2012.
+18,280,241,410
+100.00
+Security issuance and listing
+Security issuance of the Company
+There was no issuance of securities during the Reporting Period.
+Staff shares
+As at the end of the Reporting Period, the Company had no staff shares.
+SHAREHOLDERS' INFORMATION
+Number of shareholders and their shareholdings
+Number of shareholders
+Unit: Shareholder
+Total number of shareholders
+10,832,664,498
+59.26
+7,447,576,912
+40.74
+18,280,241,410
+100.00
+18,280,241,410
+100.00
+December 31, 2018
+February 28, 2019
+537,923 (including 533,258
+domestic shareholders)
+454,179 (including 449,513
+domestic shareholders)
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 97
+CORPORATE GOVERNANCE
+Changes in the Share Capital and
+Shareholders' Profile
+100.00
+Shareholdings of top ten shareholders as at the end of the Reporting Period
+18,280,241,410
+Subtotal
+Changes in the Share Capital and
+Shareholders' Profile
+CHANGES IN SHARE CAPITAL
+Statement of changes in share capital
+There was no change in the total number of shares and shareholding structure of the Company during the
+12 months ended December 31, 2018 (the "Reporting Period").
+Unit: Shares
+Selling-restricted
+shares
+II. Selling-unrestricted
+circulating shares
+January 1, 2018
+Number of
+shares
+Percentage (%)
+Issue of
+new shares
+Bonus issue
+Changes during the Reporting Period
+Transfer from
+reserve
+Others
+Sub-total
+December 31, 2018
+Number of
+shares
+Percentage (%)
+1.
+RMB ordinary shares
+10,832,664,498
+59.26
+2.
+Domestically listed foreign
+shares
+3. Overseas listed foreign shares
+7,447,576,912
+40.74
+4.
+Others
+III. Total number of shares
+Past offices
+Mr. Wang is the Chairman and the Secretary of Party Committee of
+Shenzhen Investment Holdings Co., Ltd., a Director of Guotai Junan
+Securities Co., Ltd., an Executive Director, General Manager and Legal
+Representative of Shenzhen Investment Holding Capital Co., Ltd., a
+Representative of Managing Partner of Shenzhen Investment Holdings
+Shenzhen Bay Equity Investment Fund Partnership (Limited Partnership).
+Annual Report 2018
+105
+55
+Directors, Supervisors, Senior
+Management and Employees
+Mr. LIU Chong
+Non-executive Director
+Aged 59
+Director since January 2016
+Term of office: May 2018-2021 election
+Other major offices
+Mr. Liu is the Vice President of Shum Yip Group Limited and Shum Yip
+Holdings Company Limited, the Vice President and Executive Director of
+Shenzhen Investment Limited.
+Mr. Liu successively served as a Deputy General Manager and Financial
+Controller of Shenzhen SDG Company Limited, a Director and Financial
+Controller of Shenzhen Petrochemical Group Co., Ltd., a Director and
+Financial Controller of Shenzhen Health Mineral Water Co., Ltd., a director
+of Shenzhen Tellus (Group) Company Limited from June 2009 to June 2010,
+and an Independent Non-executive Director of Shenzhen Shenxin Taifeng
+Group Co., Ltd. from May 2009 to February 2014.
+Ping An Insurance (Group) Company of China, Ltd.
+Education background and qualifications
+Senior Accountant qualification
+Mr. WANG Yongjian
+Non-executive Director
+Aged 54
+Director since July 2018
+Term of office: July 2018-2021 election
+Other major offices
+Past offices
+Previously, Mr. Wang served as the Vice Chairman of Shenzhen Nanyou
+(Holdings) Co., Ltd., the Vice Chairman of Shenzhen Samsung Vision Co.,
+Ltd., a Director of Shenzhen Textile (Holdings) Co., Ltd., the Chairman of
+Shenzhen TopoScend Capital Co., Ltd., an Executive Director of Shenzhen
+Angel FOF Management Co., Ltd., a Director of Guosen Securities Co., Ltd.
+and other positions.
+Education background and qualifications
+Master's degree in system engineering at the Management College of
+Shanghai Jiao Tong University
+106
+Ping An Insurance (Group) Company of China, Ltd.
+Bachelor's degree in Accounting from Jiangxi University of Finance and
+Economics
+Annual Report 2018
+Past offices
+Bachelor's degree from Jiangxi Institute of Technology (now known as
+Nanchang University)
+Prior to joining the Company, Ms. Cai served as the Consulting Director
+of Watson Wyatt Consultancy (Shanghai) Ltd. and the Audit Director on
+financial industry of British Standards Institution Management Systems
+Certification Co., Ltd.
+Experience of studying in Japan
+Education background and qualifications
+Master's degree in Accounting from The University of New South Wales
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+9
+Mr. Soopakij
+Non-executive Director
+Aged 55
+Director since June 2013
+Term of office: May 2018-2021 election
+Other major offices
+CHEARAVANONT
+Mr. Yang was a member of the Twelfth National Committee of Chinese
+People's Political Consultative Conference, and served as the Manager of
+Nichiyo Co., Ltd. for China Division and the Chief Representative of Nichiyo
+Co., Ltd. Beijing Office.
+Education background and qualifications
+Mr. Chearavanont is the Chairman of the C.P. Group, an Executive Director
+and the Chairman of C.P. Lotus Corporation, a Non-executive Director and
+the Chairman of Chia Tai Enterprises International Limited, an Executive
+Director and Vice Chairman of C.P. Pokphand Co., Ltd. and the Chairman
+of CP Bright Holdings Limited. Mr. Chearavanont is also a Director of True
+Corporation Public Company Limited and CP ALL Public Company Limited
+(both listed in Thailand) and the Chairman of True Visions Public Company
+Limited based in Thailand.
+Past offices
+Mr. Yang is the Senior Vice Chairman of the CP Group, an Executive
+Director and Vice Chairman of C.P. Lotus Corporation, CEO of CT Bright
+Holdings Limited, the Chairman of Jilin Deda Co., Ltd., the Co-Chairman
+of the board of directors of China Minsheng Investment Group, a Non-
+executive Director of Tianjin Binhai Teda Logistics (Group) Corporation
+Limited, a Non-executive Director of CITIC Limited and a Non-executive
+Director of Honma Golf Limited. Mr. Yang is an Associate Dean of the
+China Institute for Rural Studies of Tsinghua University, an Associate Dean
+of Institute of Global Development of Tsinghua University, a Director of
+China NGO Network for International Exchanges, the President of Beijing
+Association of Enterprises with Foreign Investment and an Adviser of
+Foreign Investment to Beijing Municipal Government.
+Term of office: May 2018-2021 election
+Other major offices
+Mr. YANG Xiaoping
+Non-executive Director
+Aged 55
+CORPORATE GOVERNANCE
+Bachelor's degree in Science from the College of Business and Public
+Administration of New York University
+Education background and qualifications
+Director since June 2013
+shares
+Percentage of
+total issued
+H/A shares
+Percentage of
+total issued
+Change Reason for the change interest
+Long position
+Yao Jason Bo
+(%)
+0.00027
+0.00011
+Nature of
+(%)
+Number of
+shares held at
+the end
+of the period
+20,000
+Number of
+shares held at
+H
+Interest of his
+of the period
+the beginning
+H/A
+shares
+Capacity
+Chairman and CEO
+Ma Mingzhe
+Position
+Name
+Executive Director, Executive Vice President,
+20,000
+Chief Financial Officer and Chief Actuary
+0.00096
+H
+Save as disclosed above, as at December 31, 2018, the interests and short positions of the Directors and
+chief executives of the Company in the shares, underlying shares and debentures of the Company which
+shall have been notified to the Company and HKEX pursuant to Divisions 7 and 8 of Part XV of the SFO,
+including interests and short positions which the Directors, or chief executives of the Company are taken
+as or deemed to have under such provisions of the SFO, or which are recorded in the register required to
+be kept by the Company pursuant to Section 352 of the SFO or as otherwise required to be notified by the
+Directors, and chief executives to the Company and HKEX pursuant to the Model Code, were as follows:
+Beneficial owner A
+60,144
+175,655
++115,511
+Share Purchase Plan
+Share Purchase Plan
+Long position
+0.00552
+0.00327
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+116
+With regard to Directors, the Executive Directors' remunerations are determined according to their posts
+with the Company and the Company's remuneration policy; for the Non-executive Directors from China and
+abroad, emoluments are determined as per the standards approved by the Company's General Meeting of
+Shareholders. Remunerations for all the Directors shall be considered and proposed by the Remuneration
+Committee under the Board of Directors, and shall be deliberated and approved by the Company's General
+Meeting of Shareholders.
+The purpose and principle of the Company's remuneration policy are relatively long-term and stable while
+the specific strategies and structure of remuneration are to be adjusted and optimized according to the
+changes in the market, the development stage of the Group's business and so on, so as to help achieve the
+operating objectives of the Company.
+The Company established a long-term service program as approved at the Second Extraordinary
+General Meeting for 2018. The program is intended to align the Company's long-term interests with the
+employees', enhance internal incentives, improve the corporate governance structure, strengthen long-term
+incentives and restrictions, ensure health and stability of talent pipelines, and create sustainable value for
+shareholders.
+In accordance with the CSRC's Guidelines on Employee Stock Ownership Plans for Public Companies and
+as approved at the First Extraordinary General Meeting of 2015, the Company incepted and implemented
+the Key Employee Share Purchase Plan. This plan will strengthen the long-term value orientation and
+align interests of key employees closely with those of the shareholders and the Company so as to ensure
+the focus on sustainable growth of the Company in the long term, improve the shareholders' value and
+facilitate sustainable development.
+The purpose of the Company's remuneration policy is to attract, retain and motivate talented people so
+as to help achieve the operating objectives of the Company. The principle of the remuneration policy is
+to characterize a clear orientation, reflect differences, motivate performances, respond to the market and
+optimize cost. The remuneration package for the Company's employees is based on the following aspects:
+the salary shall be determined according to its post value so as to keep in line with the market conditions;
+and the bonus shall be determined in light of performance so that contributions could be reflected. In
+addition to remuneration and bonuses, employees also enjoy certain welfare treatment. Meanwhile, the
+structure of remuneration packages of each subsidiary or business unit may not be the same since they
+vary in the operating features, development stage and remuneration level in the market.
+THE ASSESSMENT & EVALUATION AND REMUNERATION SYSTEMS OF THE COMPANY
+Change in the Number of Shares Held in Associated Corporations of the Company
+As at December 31, 2018, none of the Directors and chief executives held or was deemed to hold any
+interests or short positions in the shares, underlying shares or debentures of the Company's associated
+corporations (as defined in the SFO), which shall have been notified to the Company and HKEX pursuant
+to Divisions 7 and 8 of Part XV of the SFO, or which are recorded in the register required to be kept under
+Section 352 of the SFO, or otherwise required to be notified by the Directors and chief executives to the
+Company and the HKEX pursuant to the Model Code.
+0.00035
+0.00086
+Purchase Long position
++20,000
+64,000
+44,000
+spouse
+Interest of his
+spouse
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+115
+Pan Zhongwu
+Employee Representative Supervisor
+Beneficial owner A
+8,378
+15,220
++6,842
+Share Purchase Plan
+Share Purchase Plan
+Share Purchase Plan
+Long position
+0.00003
+0.00002
+Long position
++11,969
+0.00025
+Long position
+0.00014
+0.00008
+Xie Yonglin
+Co-CEO and Senior Vice President
+Beneficial owner A
+62,680
++62,680
+Tan Sin Yin
+Co-CEO, Executive Vice President, Chief
+Beneficial owner A
+0.00015
+62,680
+27,505
+Beneficial owner A
+Chief Financial Officer and Chief Actuary
+Beneficial owner H
+24,000
+24,000
+Long position
+0.00032
+0.00013
+Cai Fangfang
+Lin Lijun (1)
+Executive Director and Chief Human
+Resources Officer
+Retired Non-executive Director
+Beneficial owner A
+15,536
+24,687
++51,179
+Share Purchase Plan
+Long position
+0.00070
+0.00042
+Beneficial owner A
+1,140
+2,897
++1,757
+Wang Zhiliang
+Employee Representative Supervisor
+75,866
+0.00162
++62,680
+Long position
+Beneficial owner A
+26,888
+85,823
+Beneficial owner A
+Beneficial owner A
+52,132
+136,836
+36,714
+70,127
++58,935
++84,704
++33,413
+Share Purchase Plan,
+Purchase
+Share Purchase Plan
+Share Purchase Plan
+Share Purchase Plan
+Long position
++132,968
+0.00163
+Long position
+Long position
+0.00079
+0.00047
+0.00126
+0.00075
+Long position
+0.00065
+0.00038
+Notes: (1) Ms. Lin Lijun ceased to serve as Non-executive Director of the Company on 23 May, 2018.
+(2) Mr. Cao Shifan ceased to serve as the Company's Senior Vice President on January 29, 2019.
+(3) During the Reporting period, there were no share options held by or restricted shares granted to the current Directors,
+Supervisors and Senior Management of the Company and those who vacated office during the Reporting Period.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+0.00096
+Share Purchase Plan
+Share Purchase Plan
+176,164
+Beneficial owner A
+0.00058
+0.00034
+Long position
+0.00058
+0.00034
+Information Officer and Chief Operating
+Officer
+Ip So Lan
+Senior Vice President, Chief Internal Auditor,
+Compliance Officer and Person-in-charge
+of Auditing
+Beneficial owner A
+36,714
+134,959
+43,196
++98,245
+Long position
+0.00125
+0.00074
+Chen Kexiang
+Senior Vice President
+Sheng Ruisheng
+Secretary of the Board
+Long position
+Retired Senior Vice President
+Yao Jun
+Company Secretary
+Share Purchase Plan
+Cao Shifan (2)
+Prior to joining the Company, Ms. Ip worked with AIA, Prudential Hong
+Kong and so on.
+Mr. YIP Dicky Peter
+Mr. Ouyang Hui, an Independent Non-executive Director of the Company, has served as the Associate
+Dean at Cheung Kong Graduate School of Business since February 2018.
+Mr. Gu Liji, an Independent Supervisor of the Company, has ceased to serve as an Independent
+Non-executive Director of Maxphotonics Co., Ltd. since August 2018, and has ceased to serve as a
+Distinguished Professor of Graduate School at Shenzhen, Tsinghua University since January 2019.
+Save as disclosed above, there is no other information required to be disclosed pursuant to Rule 13.51B(1)
+of the HKEX Listing Rules.
+114
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+PUNISHMENTS IMPOSED ON THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT BY
+SECURITIES REGULATORY AUTHORITIES IN THE LAST THREE YEARS
+Mr. Ge Ming, an Independent Non-executive Director of the Company, has ceased to serve as an
+Independent Non-executive Director of Asia Investment Finance Group Limited since December 2018,
+and has served as an Independent Non-executive Director of Asialnfo Technologies Limited since
+December 2018.
+The current Directors, Supervisors and senior management of the Company and those who vacated office
+during the reporting period were not subject to any punishment by securities regulatory authorities over
+the past three years.
+As at December 31, 2018, the interests of the current Directors, Supervisors and Senior Management of the
+Company and those who vacated office during the Reporting Period in the shares of the Company which
+shall be disclosed pursuant to the Standard No. 2 Concerning the Contents and Formats of Information
+Disclosed by Listed Companies - The Contents and Formats of Annual Report (Revised in 2017) issued by
+CSRC, were as follows:
+Name
+Position
+Capacity
+H/A
+shares
+Number of
+shares held at
+the beginning
+of the period
+Number of
+shares held at
+the end
+of the period
+SHAREHOLDINGS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Change in the Number of Shares Held in the Company
+Mr. Wong Oscar Sai Hung, an Independent Non-executive Director of the Company, has ceased to
+serve as a Non-executive Director of Chong Sing Holdings FinTech Group Limited since February 2018,
+has ceased to serve as a Non-executive Director of PAN Securities Group Limited since July 2018, and
+has served as an Independent Non-executive Director of Green Energy Group Limited since June 2018.
+Mr. Wang Yongjian, a Non-executive Director of the Company, has ceased to serve as a Director of
+Guosen Securities Co., Ltd. since July 2018.
+Mr. Yang Xiaoping, a Non-executive Director of the Company, has served as a Non-executive Director
+of Honma Golf Limited since May 2018, and has served as the Co-Chairman of the board of directors of
+China Minsheng Investment Group since February 2019.
+2015.06-2018.05
+Male
+Male
+53
+63
+CAO Shifan (3)
+Retired Senior Management
+2008.10-2018.12
+2007.04-2019.01
+Notes: (1) The election of the new Board of Directors was conducted at the 2017 Annual General Meeting of the Company held on May 23,
+2018. According to the resolution, the 11th Board of Directors is composed of 15 Directors. Ms. Lin Lijun and Mr. Xiong Peijin did
+not stand for re-election as Directors of the Company due to personal work arrangements, and Mr. Stephen Thomas Meldrum
+did not stand for re-election as a Director of the Company due to expiration of his term of office of 6 years as an Independent
+Non-executive Director. According to the resolution passed at the general meeting, Mr. Wang Yongjian was elected as a Non-
+executive Director of the 11th Board of Directors of the Company. The qualification of Mr. Wang Yongjian as a Director of the
+Company was obtained from CBIRC on July 13, 2018, and the appointment of Mr. Wang Yongjian became effective on the same
+day.
+(2) Mr. YAO Jun moved to the office of Senior Legal Counsel of the Board Office of the Company on December 10, 2018, not being.
+a member of the Group's senior management any longer. However, Mr. Yao continues to act as the Company Secretary.
+(3) Mr. CAO Shifan ceased to serve as the Company's Senior Vice President on January 29, 2019.
+CHANGES IN INFORMATION OF DIRECTORS AND SUPERVISORS
+1.
+2.
+3.
+4.
+5.
+6.
+Nature of
+Percentage of Percentage of
+total issued
+H/A shares
+total issued
+shares
+Lee Yuansiong
+Executive Director, Co-CEO, Executive Vice
+President and Chief Insurance Business
+Officer
+Beneficial owner A
+40,601
+141,915
++101,314
+Share Purchase Plan
+Long position
+0.00131
+0.00078
+Ren Huichuan
+Executive Director and President
+Beneficial owner A
+371,372
+597,961
++226,589
+Yao Jason Bo
+0.02338
+76
+0.03945
+0.00613
+Change Reason for the change
+interest
+(%)
+(%)
+Ma Mingzhe
+Sun Jianyi
+Chairman and CEO
+Beneficial owner
+Senior Vice Chairman and Executive Vice
+President
+A
+Beneficial owner A
+893,966
+4,007,565
+1,120,555
+4,273,639
++226,589
++266,074
+Share Purchase Plan
+Share Purchase Plan
+Long position
+0.01034
+Long position
+Executive Director, Executive Vice President,
+Male
+53
+Education background and qualifications
+Bachelor of Arts degree from Nanjing University
+MBA degree from the Chinese University of Hong Kong
+Chief Actuary
+For the work experience and concurrent positions of Mr. Yao Jason Bo, the Chief Actuary of the
+Company, please refer to "Directors" in this chapter.
+Chief Investment Officer
+Mr. CHAN Tak Yin
+From August 2002 to January 2014, Mr. Sheng acted as Assistant to General
+Manager, Deputy General Manager and General Manager of the Company's
+Branding Department.
+Chief Investment Officer
+Aged 58
+Other positions held with the Group
+Mr. Chan serves as a Director of Ping An Life and Ping An Asset
+Management.
+Past offices
+Mr. Chan served as Deputy Chief Investment Officer of the Company,
+Chairman and Chief Executive Officer of Ping An Asset Management
+and the Chairman of Ping An of China Asset Management (Hong Kong)
+respectively. From December 2008 to May 2017, Mr. Chan acted as a Non-
+executive Director of Yunnan Baiyao Group Co., Ltd.
+Previously, he worked as Fund Manager, Investment Director, Chief
+Investment Director, and Managing Director at BNP Paribas Asset
+Management SAS, Barclays Investment Management Limited, SHK Fund
+Management Limited, and Standard Chartered Investment Management
+respectively.
+Education background and qualifications
+Bachelor of Arts degree from the University of Hong Kong
+Joined the Company in 2005
+Past offices
+Mr. Sheng serves as the Brand Director and spokesperson of the Company.
+Other positions held with the Group
+Education background and qualifications
+Bachelor's degree in Computing from the Polytechnic of Central London
+Mr. CHEN Kexiang
+Senior Vice President
+Aged 61
+Joined the Company in 1992
+Term of office: January 2007-present
+Past offices
+From February 2003 to January 2007, Mr. Chen served as Assistant to the
+President of the Company. He served as General Secretary of the Board
+of the Company from June 2002 to May 2006, and Director of the General
+Office from June 2002 to April 2007. From 1999 to 2002, Mr. Chen served as
+Senior Vice President and then President of Ping An Trust. From 1996 to
+1999, Mr. Chen served as Deputy Director and then Director of the General
+Office of the Company. From 1995 to 1996, Mr. Chen served as President of
+Ping An Building Management Company. From 1993 to 1995, he served as
+Assistant Director and then Deputy Director of the General office of the
+Parent Company.
+Education background and qualifications
+Master's degree in Finance from Zhongnan University of Economics and
+Law (former Zhongnan University of Economics)
+112
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. SHENG Ruisheng
+Secretary of the Board
+Aged 49
+Joined the Company in 1997
+Term of office: April 2017-present
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+113
+CORPORATE GOVERNANCE
+Name
+WANG Yongjian (1)
+LIN Lijun (1)
+XIONG Peijin (1)
+Stephen Thomas
+MELDRUM(1)
+YAO Jun (2)
+Position
+Newly-appointed Non-executive Director
+Retired Non-executive Director
+Retired Non-executive Director
+Retired Independent Non-executive
+Director
+Retired Senior Management
+Gender
+Period of appointment
+2018.07-2021 election
+2015.06-2018.05
+Age
+Male
+54
+Female
+56
+Male
+APPOINTMENT OR REMOVAL OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+2016.01-2018.05
+Shenzhen Investment
+Holdings Co., Ltd.
+CP Group
+Directors, Supervisors, Senior
+Management and Employees
+POSITIONS HELD IN CORPORATE SHAREHOLDERS BY DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT
+Name
+Soopakij CHEARAVANONT
+YANG Xiaoping
+LIU Chong
+WANG Yongjian
+Name of corporate shareholder
+CP Group
+Position
+Chairman
+Senior Vice Chairman
+Vice President
+Chairman and Secretary
+of Party Committee
+Period of engagement
+January 2017 - Present
+January 2017 - Present
+April 2010 Present
+July 2017 Present
+Ms. Ip was the Assistant to the President of Ping An Life from February
+2004 to March 2006, and the Assistant to the President of the Company from
+March 2006 to January 2011.
+Past offices
+Shum Yip Group Limited
+Other major offices
+Ph.D. in Finance from the University of California, Berkeley
+Ph.D. in Chemical Physics from Tulane University
+Education background and qualifications
+Previously, Mr. Ouyang served as an Associate Professor of Finance at
+Duke University, Managing Director of UBS AG, Managing Director of
+Nomura Securities, Senior Vice President and Managing Director of Lehman
+Brothers.
+Past offices
+Mr. Ouyang is an Associate Dean and the Dean's Distinguished Chair
+Professor at Cheung Kong Graduate School of Business. Mr. Ouyang is
+also an Independent Non-executive Director of AEGON-INDUSTRIAL Fund
+Management Co., Ltd., Hytera Communications Corporation Limited and
+Peak Reinsurance Limited.
+Other major offices
+108
+Certified Public Accountant qualification of China
+Senior Accountant qualification
+Education background and qualifications
+Mr. Ge served as the Chairman of Ernst & Young Hua Ming LLP, a Partner
+and the Chief Accountant of Ernst & Young Hua Ming LLP, an Independent
+Non-executive Director of Shunfeng International Clean Energy Limited,
+Shanghai Zhenhua Heavy Industries Co., Ltd. and Asia Investment Finance
+Group Limited.
+Past offices
+Mr. Ge is an Independent Non-executive Director of Chong Sing Holdings
+FinTech Group Limited, Focus Media Information Technology Co., Ltd.
+and AsiaInfo Technologies Limited, Supervisor of the Bank of Shanghai,
+Executive Director of the Chinese Institute of Certified Public Accountants,
+a member of the Certified Public Accountants Testing Committee of
+the Ministry of Finance, a Deputy Director of the Industry Development
+Committee of the Beijing Institute of Certified Public Accountants and
+a member of the third session of the Listed Companies Mergers and
+Acquisitions Expert Consultation Committee of CSRC.
+Other major offices
+Term of office: May 2018-2021 election
+Director since August 2017
+Master's Degree in Western Accounting from the Research Institute for
+Fiscal Science, Ministry of Finance (now known as Chinese Academy of
+Fiscal Science)
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Supervisors
+Past offices
+Annual Report 2018
+Term of office: May 2018-2021 election
+Supervisor since June 2016
+Mr. HUANG Baokui
+Independent Supervisor
+Aged 76
+Advanced Management Program AMP (151) certificate from Harvard
+Business School
+Master's degree in Engineering from Management Science Department of
+University of Science and Technology of China
+Bachelor's degree in Engineering from Tsinghua University
+Education background and qualifications
+Mr. Gu was a Distinguished Professor of Graduate School at Shenzhen,
+Tsinghua University from January 2016 to December 2018, an Independent
+Non-executive Director of Maxphotonics Co., Ltd. from December 2014 to
+August 2018, a Director of ERGO China Life Insurance Co., Ltd. from May
+2013 to August 2014, and was an Executive Director of China Merchants
+Technology Holdings Co., Ltd. and China Merchants Technology Investment
+Co., Ltd. (Shenzhen) from November 2008 to October 2010. Before
+retirement in October 2008, Mr. Gu had served as the Managing Director of
+China International Marine Containers Co., Ltd., the Chairman and President
+of China Merchants Shekou Port Service Co., Ltd., the Vice Chairman of the
+Company, a Director of China Merchants Bank and China Merchants Group
+Ltd., the Managing Director of China Merchants Shekou Industrial Zone
+Co., Ltd., Hoi Tung Marine Machinery Suppliers Limited (Hong Kong) and
+China Merchants Technology Group, and the Chairman of China Merchants
+Technology Holdings Co., Ltd.
+Past offices
+Mr. Gu is an Independent Non-executive Director of Shenzhen Changhong
+Technology Co., Ltd., a Non-executive Director of Xiangtan Electric
+Manufacturing Group Co., Ltd (XEMC) and an Independent Non-executive
+Director of Bosera Asset Management Co., Limited. Mr. Gu is also an expert
+on Applied Electronics of Shenzhen Expert Association.
+Other major offices
+Term of office: May 2018-2021 election
+Supervisor since June 2009
+Chairman of Supervisory Committee
+(Independent Supervisor)
+Aged 71
+Mr. GU Liji
+Independent Non-executive Director
+Aged 56
+Mr. OUYANG Hui
+Term of office: May 2018-2021 election
+Director since June 2015
+Mr. Wong is an Independent Non-executive Director of JPMorgan
+Chinese Investment Trust plc (listed in London), a Director of One Asset
+Management Limited (registered in Thailand), and an Independent Non-
+executive Director of Green Energy Group Limited (listed on HKEX).
+Other major offices
+Director since June 2013
+Term of office: May 2018-2021 election
+Mr. WONG Oscar Sai Hung
+Independent Non-executive Director
+Aged 63
+Certified Financial Management Planner certificate
+Certified Financial Planner certificate
+Member of Chartered Institute of Bankers, London
+MBA degree from University of Hong Kong
+Education background and qualifications
+Mr. Yip joined The Hongkong and Shanghai Banking Corporation Limited
+("HSBC") in 1965, and served as a Chief Executive of China Business
+at HSBC's Area Office China from January 2003 to May 2005, a General
+Manager of HSBC from April 2005 to June 2012, and an Executive Vice
+President of Bank of Communications Co., Ltd. from May 2005 to June 2012.
+Mr. Yip also served as a Director of the Company and the original Ping
+An Bank Co., Ltd. from November 2002 to May 2005. Besides, Mr. Yip had
+served in many consultative boards including Hong Kong Aviation Advisory
+Board, Hong Kong Arts Development Council and Hong Kong Urban
+Renewal Authority.
+Past offices
+Mr. Yip is an Independent Non-executive Director of Sun Hung Kai
+Properties Limited, South China Holdings Company Limited (formerly
+known as South China (China) Limited), S.F. Holding Co., Ltd., and DBS
+Bank (China) Limited, respectively. Besides, Mr. Yip is an Honorary Member
+of the Hong Kong Committee of UNICEF.
+Other major offices
+Term of office: May 2018-2021 election
+Director since June 2013
+Ms. Ip is a Non-executive Director of Lufax Holding.
+Independent Non-executive Director
+Aged 71
+Past offices
+Mr. Huang was the Deputy Party Committee Secretary and Disciplinary
+Committee Secretary of China Merchants Shekou Industrial Zone Co., Ltd.
+Mr. Huang was the Deputy General Manager of Shenzhen Huada Electronic
+Co., Ltd. and held the position of supervisor in various companies including
+China Merchants Shekou Industrial Zone Co., Ltd., Shenzhen Shekou Anda
+Industry Co., Ltd., Shenzhen Shekou Telecom Co., Ltd., China Merchants
+Petrochemical Co., Ltd. (Shenzhen) and China Merchants Logistics Co., Ltd.
+Mr. Wong was a director and the President of ICBC (Asia) Investment
+Management Company Limited from September 2008 to December 2011,
+and was a Non-executive Director of PAN Securities Group Limited and
+Chong Sing Holdings FinTech Group Limited, the Vice Chairman of China
+Regenerative Medicine International Limited, the Chairman of LW Asset
+Management Advisors Limited, an Independent Non-executive Director
+of ARN Investment SICAV (listed on the Luxembourg Stock Exchange)
+and the Hong Kong Exchanges and Clearing Limited, the Director and
+Chief Executive of BOCI-Prudential Asset Management Limited and
+Prudential Portfolio Managers Asia Limited, the Non-executive Director of
+the ARN Asian Enterprise Fund Limited (formerly listed on the Irish Stock
+Exchange).
+Higher Diploma in Business Studies (Marketing) from Hong Kong
+Polytechnic (now known as The Hong Kong Polytechnic University)
+Independent Non-executive Director
+Aged 67
+Mr. GE Ming
+Bachelor's Degree of Medical Science from Beijing Medical College (now
+known as Peking University Health Science Center)
+Education background and qualifications
+Mr. Sun served as an Independent Non-executive Director of Zhejiang Dian
+Diagnostics Co., Ltd. from December 2013 to July 2017.
+Past offices
+Mr. Sun is a professor of Law School in Peking University and the director
+of Peking University Health Law Research Center. Mr. Sun is also a deputy
+director of the Social Legal Work Committee of Chinese Peasants' and
+Workers' Democratic Party, a standing director of Chinese Health Law
+Society and China Law Society Research Center of the Law of Protection
+of the Rights and Interests of Consumers, and an expert of the Health
+Insurance Experts Committee under Insurance Association of China and
+Chinese Medical Doctor Association.
+Other major offices
+Term of office: May 2018-2021 election
+Director since June 2013
+Independent Non-executive Director
+Aged 59
+Mr. SUN Dongdong
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+107
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Education background and qualifications
+Education background and qualifications
+Mr. Pan is the Deputy Director of the Group Office of the Company.
+Senior political practitioner
+Other positions held with the Group
+Term of office: June 2015-present
+Joined the Company in 2013
+Co-CEO, Executive Vice President,
+Chief Operating Officer and Chief
+Information Officer
+Aged 41
+Ms. TAN Sin Yin
+Ph.D. in Corporate Management from Nanjing University
+Master's degree in Science from Nanjing University
+Education background and qualifications
+President of Ping An Bank from March 2006 to November 2013, and Special
+Assistant to the Chairman, President and Chief Executive Officer, and the
+Chairman of Ping An Securities from November 2013 to November 2016
+consecutively.
+Term of office: September 2016-present
+Joined the Company in 1994
+Co-CEO and Senior Vice President positions of Operations Director, Human Resources Director, and Vice
+Aged 50
+Mr. Xie served as the Deputy General Manager of Ping An Property and
+Casualty's sub-branches, Deputy General Manager and General Manager of
+Ping An Life's branches, and General Manager of Ping An Life's Marketing
+Department. Mr. Xie was the Deputy Director of the Company's Strategic
+Development & Reform Center from June 2005 to March 2006. He held
+Past offices
+Mr. Xie is the Chairman of Ping An Bank and a Director of Ping An
+Financial Leasing.
+Other positions held with the Group
+Mr. XIE Yonglin
+Ms. Tan is the Chairman of Ping An Technology. She is also a Director
+of a number of controlled companies of the Company including Ping An
+Property & Casualty, Ping An Life, Ping An Annuity, Ping An Financial
+Technology, and Ping An Asset Management.
+For the work experience and concurrent positions of Mr. Ma Mingzhe, Mr. Sun Jianyi, Mr. Lee Yuansiong,
+Mr. Ren Huichuan and Mr. Yao Jason Bo, please refer to “Directors" in this chapter.
+Other major offices
+Past offices
+Bachelor's degree in Physics from Jilin University
+Other positions held with the Group
+Ms. Ip is a Director of a number of controlled subsidiaries of the Company
+including Ping An Bank.
+Term of office: January 2011-present
+Joined the Company in 2004
+Senior Vice President, Chief Internal
+Auditor, Compliance Officer and
+Person-in-charge of Auditing
+Aged 62
+Ms. IP So Lan
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+111
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Master's degree in Electrical Engineering and Computer Science from MIT
+Massachusetts Institute of Technology (MIT)
+Bachelor's degrees in Electrical Engineering and Economics from the
+Education background and qualifications
+Ms. Tan was a Senior Vice President of the Company from June 2015 to
+December 2015, and Deputy CEO of the Company from October 2017 to
+November 2018.
+Ms. Tan is also a Non-executive Director of Lufax Holding and OneConnect
+Financial Technology Co., Ltd.
+Senior Management
+Prior to joining the Company, Ms. Tan was a Global Partner of McKinsey &
+Company.
+Annual Report 2018
+Mr. WANG Zhiliang
+Employee Representative
+Supervisor
+EMBA degree from Guanghua School of Management of Peking University
+Member of CPA Australia
+Bachelor's degree in Economics from University of International Business
+and Economics
+Education background and qualifications
+Before joining CPG Overseas Company Limited (Hong Kong), Ms. Zhang
+worked in the Audit Department of PricewaterhouseCoopers LLP and
+the M&A and Restructuring Department of Deloitte & Touche Financial
+Advisory Services Limited.
+Past offices
+Ms. Zhang is the Managing Director of CPG Overseas Company Limited
+(Hong Kong).
+Other major offices
+109
+Supervisor since June 2013
+Supervisor
+Aged 39
+Shareholder Representative
+Ms. ZHANG Wangjin
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Aged 39
+Joined the Company in July 2002
+Term of office: May 2018-2021 election
+Term of office: May 2018-2021 election
+Master's degree in Finance and Insurance from Wuhan University
+Supervisor since August 2017
+Education background and qualifications
+Mr. Pan served in the Comprehensive Management Department of Ping An
+Property & Casualty.
+110
+Other Positions held with the Group
+Term of office: May 2018-2021 election
+Supervisor since July 2012
+Joined the Company in 1995
+Past offices
+Mr. PAN Zhongwu
+Employee Representative
+Supervisor
+Bachelor's degree in Economic Information Management of the Tianjin
+University of Finance and Economics (previously known as Tianjin Institute
+of Finance and Economics)
+Education background and qualifications
+Mr. Wang served as the Deputy General Manager of the Group Head Office
+in Shanghai and the Deputy Director of the Group Office of the Company,
+and served in the Administration Department of Tianjin Branch of Ping An
+Life.
+Past offices
+Mr. Wang is the Director of the Group Office of the Company.
+Aged 49
+Other Positions held with the Group
+Details of movements in property and equipment and investment properties of the Group during 2018 are
+set out in Notes 35 and 34 to the consolidated financial statements, respectively.
+PRE-EMPTIVE RIGHTS
+There are no provisions regarding pre-emptive rights under the Company Law of the People's Republic of
+China or the Articles of Association, which would oblige the Company to issue new shares to its existing
+shareholders in proportion to their existing shareholdings.
+120
+Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed
+shares during 2018.
+DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS AND REMUNERATIONS
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY
+PROPERTY AND EQUIPMENT AND INVESTMENT PROPERTIES
+EQUITY INVESTMENT DURING THE REPORTING PERIOD
+CHARITABLE AND OTHER DONATIONS
+Details of movements in the reserves of the Company and the Group during 2018 are set out in the Note 40
+to the consolidated financial statements and the Consolidated Statement of Changes in Equity respectively.
+RESERVES
+The change in share capital of the Company in 2018 and the share capital structure of the Company as
+at December 31, 2018 are set out in the section headed "Changes in the Share Capital and Shareholders'
+Profile."
+SHARE CAPITAL
+For equity investment, please refer to the section headed "Significant Events."
+The non-raised funds of the Company mainly come from its core insurance business. The Company has
+been strictly following the relevant requirements of the CBIRC on the management of insurance funds. All
+the investments of insurance funds were made in the normal course of day-to-day operations.
+PARTICULARS ON INVESTMENT DURING THE REPORTING PERIOD
+An aggregate of 594,056,000 new H Shares were successfully allotted and issued by the Company under
+general mandate on December 8, 2014 and the gross proceeds raised from the placing amounted to
+HKD36,831,472,000. The proceeds raised from the placing were used to develop the main businesses and
+replenish the equity and working capital of the Company. The use of the proceeds raised was consistent
+with the purposes approved by the Board of Directors. As at December 31, 2018, HKD4,059 million from the
+placing was kept in the specific fund-raising account, and the rest had been used.
+USE OF PROCEEDS
+Charitable donations made by the Company during 2018 totaled RMB240 million.
+According to the resolutions of the 25th meeting of the 7th Board of Directors and the 2nd meeting of the
+7th Supervisory Committee of the Company, the Company entered into service contracts with all Directors
+of the 11th Board of Directors and all Supervisors of the 9th Supervisory Committee in July 2018. Terms,
+duties, remuneration packages, confidentiality duties of Directors and Supervisors and commencement and
+termination of contracts were specified in the service contracts. As at December 31, 2018, no Director or
+Supervisor had a service contract with the Company which was not terminable by the Company within one
+year without payment of compensation other than statutory compensation.
+121
+DIRECTORS' AND SUPERVISORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF
+SIGNIFICANCE
+For management discussion and analysis, please refer to the section headed “Management Discussion and
+Analysis."
+Based on the information that is publicly available to the Company and within the knowledge of the
+Directors as at the latest practicable date prior to the issue of this Annual Report, being March 12, 2019,
+at all times during the year ended December 31, 2018, not less than 20% of the issued share capital of the
+Company (being the minimum public float applicable to the shares of the Company) was held in public
+hands.
+SUFFICIENCY OF PUBLIC FLOAT
+According to the resolution made at the 2017 Annual General Meeting of the Company, the Company
+continued to engage PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers as
+auditors of the Company's financial statements under CAS and IFRS respectively, and engaged
+PricewaterhouseCoopers Zhong Tian LLP as the auditor of the Company's internal controls in 2018.
+AUDITORS
+Report of the Board of Directors
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+None of the Directors of the Company is aware of any information that would reasonably indicate that the
+Company did not meet the applicable Code Provisions set out in the Corporate Governance Code for any
+part of the period from January 1, 2018 to December 31, 2018, except that Mr. Ma Mingzhe has occupied
+both the positions of the Chairman and Chief Executive Officer of the Company. Further details of the
+Company's arrangements and considered reasons for the Company's intention not to separate the roles of
+the Chairman of the Board of Directors and the Chief Executive Officer of the Company are set out in the
+section headed "Corporate Governance Report."
+Details of remunerations for the Directors and Supervisors for the year ended December 31, 2018 are set out
+in Note 56 to the consolidated financial statements.
+COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE CONTAINED IN APPENDIX 14 TO THE HKEX
+LISTING RULES
+COMPLIANCE WITH LAWS AND REGULATIONS
+Details of the post balance sheet events are set out in Note 62 to the consolidated financial statements.
+POST BALANCE SHEET EVENTS
+The Company has arranged appropriate insurance cover for Directors and senior management's liabilities
+in respect of possible legal actions against its Directors and senior management arising out of corporate
+activities.
+PERMITTED INDEMNITY PROVISION
+As far as the Directors are aware, none of the Directors or Supervisors of the Company has any competing
+interest in a business, which competes or is likely to compete, either directly or indirectly, with the Group's
+business.
+DIRECTORS' AND SUPERVISORS' INTERESTS IN A COMPETING BUSINESS
+At no time during 2018 was the right to acquire benefits by means of acquisition of shares or debentures
+of the Company granted to or exercised by any Directors, Supervisors or their respective spouse or minor
+children, nor was the Company, or any of its subsidiaries, a party to any arrangement which enables the
+Directors or Supervisors to acquire such rights in any other legal entity.
+DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+No Director or Supervisor of the Company or entity connected with the Directors or Supervisors had a
+material interest, directly or indirectly, in any transaction, arrangement or contract of significance to the
+business of the Group to which the Company or any of its subsidiaries was a party during 2018.
+In 2018, the Group maintained compliance with relevant laws and regulations that have significant impacts
+on operations of the Group.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Committed to providing the best training, Ping An School of Financial Management has invested sufficient
+resources in employee development. The school has worked with the Group's member companies to build
+a smart learning platform and a lecturer resources platform. By doing so, the school unlocks value from
+knowledge and supports business development.
+DISTRIBUTABLE RESERVES
+A summary of the results, assets and liabilities of the Group for the past five years is set out in the section
+headed "Five-Year Summary."
+SUMMARY OF FINANCIAL INFORMATION
+The principal activities of the Company and its subsidiaries (the “Group") comprise the provision of a
+wide range of financial products and services with a focus on the businesses of insurance, banking, asset
+management, fintech and healthtech. There were no significant changes in the nature of the Group's
+principal activities during 2018.
+PRINCIPAL ACTIVITIES
+Report of the Board of Directors
+CORPORATE GOVERNANCE
+117
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+In 2018, Ping An School of Financial Management introduced over 300 new face-to-face courses from top
+business schools and consultancies to develop a learning organization and future-oriented talent. The
+courses cover five areas, namely strategy execution, technological innovation, management decision
+making, specialized skills, and personal development. A total of 44,411 employees attended 1,500 face-to-
+face training sessions nationwide, covering 48.25% of the Company's senior managers and higher-level staff.
+We provided financial courses for 1,714 investment, risk management and financial services staff members.
+Moreover, we provided agile software development and database courses for 837 IT staff members.
+On an online learning platform, Ping An School of Financial Management launched highly personalized
+learning products, enabling customization and smart recommendation of contents. By doing so, the school
+delivered precisely targeted training to meet employees' diverse demands throughout their careers. In 2018,
+more than 25.19 million trainees attended online training sessions for over 2.612 million hours, with a monthly
+activity rate of 89.7%.
+MAJOR CUSTOMERS
+By order of the Board of Directors
+Doctorate or master's degree 5.96
+• Bachelor's degree 52.14
+⚫ College education 36.57
+Others 5.33
+Fintech & healthtech personnel 26.43
+Asset management personnel 2.63
+Banking personnel 9.19
+Insurance personnel 61.75
+By education
+(%)
+By profession
+(%)
+As at December 31, 2018, the Company had 376,900 employees, of which 232,752 were in the insurance
+business; 34,626 were in the banking business; 9,911 were in the asset management business; and 99,611
+were in the fintech & healthtech business. Of all the employees, 22,446 held a doctorate or master's
+degree; 196,524 held a bachelor's degree; 137,820 attained college education; and 20,110 had other education
+backgrounds.
+NUMBER OF EMPLOYEES, PROFESSION AND EDUCATION BACKGROUND
+The Company sets forth a clear three-year rotation plan and annual accountability objectives for the senior
+management in accordance with the business plan, conducts accountability appraisals twice a year in light
+of the objectives achieved and evaluates the senior management on the basis of comprehensive feedback.
+Accountability results are closely linked to the long-term and short-term rewards and appointment and
+removal of senior managers. The comprehensive evaluation results serve as an important reference in the
+development of senior managers.
+STAFF TRAINING PROGRAMS
+In 2018, revenue from the Group's five largest customers accounted for less than 1% of the total revenue for
+the year. None of the top five customers is a connected party of the Company.
+RELATIONSHIPS WITH CUSTOMERS
+The Group believes that it is important to maintain good relationships with its customers to fulfill its long-
+term goal “to become a world-leading technology-powered retail financial services group.” To achieve
+this goal and maintain the leading position in terms of brand value, the Group is committed to delivering
+high-quality financial services to its customers. During 2018, there was no material and significant dispute
+between the Group and its customers.
+Report of the Board of Directors
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 119
+Annual Report 2018
+For dividend payouts of the Company over the past three years, please refer to the section headed
+"Liquidity and Capital Resources."
+The Company distributed the 30th Anniversary Special Dividend of RMB0.20 (tax inclusive) per share in the
+first quarter of 2018, and the 2018 interim dividend of RMB0.62 (tax inclusive) per share, which amounted to
+RMB14,989,797,956.20. The Company proposes to pay in cash the 2018 final dividend of RMB1.10 (tax inclusive)
+per share, in a total amount of RMB20,108,265,551.00, based on its total share capital of 18,280,241,410 shares.
+The remaining undistributed profit will be carried forward to 2019. The undistributed profit of the Company
+is mainly for the purpose of organic capital accumulation to maintain a reasonable solvency ratio as well as
+funding for subsidiaries so that they can maintain a reasonable solvency ratio or capital adequacy ratio.
+The above plan will be implemented upon deliberation and approval at the 2018 Annual General Meeting.
+The profit distribution plan is in line with the Articles of Association and relevant deliberation procedures
+and fully protects legitimate interests of the minority shareholders of the Company. All the Independent
+Directors of the Company have expressed independent opinions of their agreement on the profit
+distribution plan.
+As stated in the 2018 audited financial statements of the Group prepared under CAS, the net profit
+attributable to shareholders of the parent company was RMB107,404 million and the net profit of the parent
+company was RMB46,402 million. Pursuant to the Articles of Association and other relevant requirements,
+the Company shall make an appropriation to the statutory surplus reserve based on 10% of the net profit of
+the parent company as shown in the financial statements under CAS before determining the profit available
+for distribution to shareholders. Appropriation to the statutory surplus reserve may cease to apply if the
+balance of the statutory surplus reserve has reached 50% or more of the registered capital of the Company.
+After making the above profit distribution and taking into account the retained profit carried forward from
+the previous year, in accordance with the Articles of Association and other applicable requirements, the
+profit available for distribution to shareholders of the Company was RMB72,250 million.
+The Group's business results for 2018 are set out in the section headed “FINANCIAL STATEMENTS."
+ANNUAL RESULTS AND PROFIT DISTRIBUTION
+The decision-making procedure and mechanism of the above profit distribution plans were complete, and
+the dividend payout standards and proportions were clear. The above profit distribution plans were in line
+with the Articles of Association, and the relevant deliberation procedures had fully protected legitimate
+interests of the minority shareholders. All the Independent Non-executive Directors of the Company have
+expressed independent opinions of their agreement on the profit distribution plans. Implementation of the
+above-mentioned distribution plans has been completed.
+The 2018 interim profit distribution plan of the Company was deliberated and approved at the 2nd
+meeting of the 11th Board of Directors of the Company held on August 21, 2018, according to which the
+Company paid in cash the 2018 interim dividend of RMB0.62 (tax inclusive) per share, in a total amount of
+RMB11,333,749,674.20, based on its total share capital of 18,280,241,410 shares.
+The 30th Anniversary Special Dividend of the Company was deliberated and approved at the 2017
+Annual General Meeting of the Company held on May 23, 2018, according to which the Company paid
+in cash the 30th Anniversary Special Dividend of RMB0.20 (tax inclusive) per share, in a total amount of
+RMB3,656,048,282.00, based on its total share capital of 18,280,241,410 shares.
+The 2017 annual profit distribution plan of the Company was deliberated and approved at the 2017 Annual
+General Meeting of the Company held on May 23, 2018, according to which the Company paid in cash the
+2017 final dividend of RMB1.00 (tax inclusive) per share, in a total amount of RMB18,280,241,410.00, based on
+its total share capital of 18,280,241,410 shares.
+Implementation of Profit Distribution Plans
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+118
+Where an adjustment to our profit distribution policy is required due to the applicable laws and regulations
+and new rules promulgated by the CSRC regarding profit distribution policies of listed companies or
+significant changes in the external business environment and/or operating situations of the Company, it
+shall be done for the purpose of safeguarding the shareholders' interests and in strict compliance with
+the decision-making process. To this end, the Board of Directors shall draft an adjustment plan based
+on the operating situations of the Company and the relevant regulations of the CSRC, and then submit
+the adjustment plan to the general meeting for deliberation. Implementation of the adjustment plan is
+conditional upon approval by shareholders (including their proxies) holding at least two thirds of voting
+rights present at the general meeting.
+In preparing a profit distribution plan, the Board of Directors of the Company shall listen to views and
+advice from shareholders (in particular, the minority shareholders), independent directors and independent
+supervisors in various ways. Independent directors of the Company shall express their independent
+opinions on the profit distribution plan. When a specific cash dividend distribution plan is put forward for
+consideration at a general meeting, a variety of channels shall be provided for communication and opinion
+exchange with shareholders (in particular, the minority shareholders), whose opinions and demands shall
+be fully heard and prompt response shall be given to any issues the minority shareholders are concerned
+about.
+According to Article 217 of the Articles of Association, the Company shall attach importance to the
+reasonable investment returns for investors in its profit distribution. The profit distribution policy shall
+maintain its continuity and stability. The accumulated profit to be distributed in cash for recent three years
+shall not be less than 30% of the average annual distributable profit realized in recent three years, provided
+that the annual distributable profit of the Company (namely profit after tax of the Company after covering
+the losses and making contributions to the surplus reserve) is positive in value and such distribution is
+in compliance with the prevailing laws and regulations and the requirements of regulatory authorities for
+solvency ratio. In determining the specific ratio of distribution of cash dividend, the Company shall take
+into account its profit, cash flow, solvency, and operation and business development requirements. The
+Board of Directors of the Company shall be responsible for formulating and implementing a distribution
+plan according to the provisions of the Articles of Association.
+Cash Dividend Policy
+REPORTING PERIOD
+IMPLEMENTATION OF CASH DIVIDEND POLICY AND PROFIT DISTRIBUTION PLANS DURING THE
+As at December 31, 2018, the Company's distributable reserves totaled RMB72,250 million. The Company has
+proposed to distribute the 2018 final dividend of RMB1.10 per share (tax inclusive) in cash. After deducting
+the 2018 final dividend, the remaining distributable reserves were carried forward to 2019. Besides, the
+Company's capital reserve and surplus reserve amounted to RMB140,901 million, which can be distributed in
+a future capital issue.
+Ma Mingzhe
+Lawful Operation
+Shenzhen, PRC
+Material Non-Equity Investment
+During the Reporting Period, there was no material equity investment that was required to be disclosed.
+Material Equity Investment
+Ping An is an integrated financial services group, and investment is one of its core businesses. The
+investment of insurance funds represents a majority of the equity investment of the Company. The
+investment of insurance funds is subject to relevant laws and regulations. For details of the asset allocation
+of the investment portfolio of insurance funds, please refer to relevant sections headed “Business Analysis."
+GENERAL ANALYSIS OF EXTERNAL INVESTMENT
+Significant Events
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+124
+During the Reporting Period, there was no material non-equity investment that was required to be
+disclosed.
+March 12, 2019
+Chairman of the Supervisory Committee
+GU Liji
+By order of the Supervisory Committee
+In the coming year, the Supervisory Committee will further expand its approach to work, and will continue
+to carry out its duties in accordance with the relevant provisions of the Company Law of the People's
+Republic of China, the Articles of Association and the listing rules. The Supervisory Committee will adhere
+to the principles of honesty, maximize its supervisory efforts with the aim of protecting the interests of the
+Company and its shareholders, and perform supervisory duties honestly and diligently to achieve the best
+results in all respects.
+The Company held the 13th meeting of the 8th Supervisory Committee on March 20, 2018, at which all
+Supervisors deliberated and approved the Proposal on Deliberating Directors' Duty Performance Report
+and Independent Directors' Work Report for 2017, and appraised the composition of the Board of Directors,
+Directors' attendance records at meetings, participation in training sessions and provision of opinions.
+Supervisors present at the meeting concluded unanimously that in 2017 all Directors of the Company, in a
+sincere, loyal, diligent and conscientious manner, performed their duties and responsibilities as stipulated
+under relevant laws, regulations and the Articles of Association, proactively attended meetings of the
+Board of Directors and specialized committees and expressed their opinions. Specialized committees of the
+Board of Directors fully performed their duties and provided professional opinions and advice for the Board
+of Directors' decision making process.
+Appraisal of Directors' Performance of Duties
+The Supervisory Committee acknowledges that the Board of Directors strictly carried out the cash
+dividend policy and plans for shareholder returns, performed relevant decision-making procedures for
+cash dividends in strict compliance, and disclosed the cash dividend policy and its implementation truly,
+accurately and completely.
+Implementation of the Cash Dividend Policy
+Certain members of the Supervisory Committee attended the meetings of the Board of Directors and the
+general meetings as non-voting participants, and did not have any objection to the reports and proposals
+submitted to the general meetings by the Board of Directors. The Supervisory Committee has monitored
+the implementation of the resolutions approved by the general meetings, and was of the opinion that the
+Board of Directors could duly implement the resolutions approved by the general meetings.
+Implementation of the Resolutions Approved by the General Meetings
+Shenzhen, PRC
+FINANCIAL INSTRUMENTS RECORDED AT FAIR VALUE
+Details of financial instruments recorded at fair value of the Company are set out in Note 52 to the
+consolidated financial statements.
+During the Reporting Period, there was no sale of major assets and equities that was required to be
+disclosed.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+126
+26
+During the Reporting Period, one third of the shares under the Plan for this phase were unlocked and
+vested in batches to 680 employees. As to the remaining 41 employees who did not qualify for the vesting,
+210,765 shares were forfeited.
+The share purchase was conducted by the manager of the Plan, China Merchants Securities Asset
+Management Co., Ltd. from March 17, 2016 to March 21, 2016 in the secondary market; 14,803,850 A shares
+of the Company in total were purchased for a total price of RMB481,733,046.11 (expenses inclusive) and an
+average price of RMB32.53 per share, accounting for 0.081% of the total share capital of the Company at that
+time. These shares were subject to a lock-up period from March 23, 2016 to March 22, 2017. For details of the
+share purchase, please refer to the Announcement regarding the Completion of Share Purchase under the
+2016 Key Employee Share Purchase Plan published by the Company on the websites of the HKEX and the
+SSE on March 22, 2016 and March 23, 2016 respectively.
+The participants were 773 key employees of the Company and its subsidiaries including the directors,
+employee representative supervisors, and senior management. The sources of funding were legitimate
+salaries and performance bonuses of the employees.
+Implementation in 2016
+During the Reporting Period, one third of the shares under the Plan for this phase were unlocked and
+vested in batches to 639 employees. As to the remaining 62 employees who did not qualify for the vesting,
+135,515 shares were forfeited. All shares under the Plan for this phase had been unlocked and vested as of
+the end of the Reporting Period.
+As the Company's profit distribution for 2014 included the conversion of capital reserve into share capital
+in a proportion of 10 shares for every 10 shares held, the total number of shares held under the Plan for this
+phase had changed to 8,100,506 shares.
+The share purchase was conducted by the manager of the Plan, China Merchants Securities Co., Ltd.
+(changed to China Merchants Securities Asset Management Co., Ltd. on September 9, 2015 due to
+establishment of the subsidiary) from March 20, 2015 to March 26, 2015 in the secondary market; 4,050,253
+A shares of the Company in total were purchased for a total price of RMB312,047,645 (expenses inclusive),
+accounting for 0.044% of the total share capital of the Company at that time. For details of the share
+purchase, please refer to the Announcement regarding the Completion of Share Purchase under the 2015
+Key Employee Share Purchase Plan published by the Company on the websites of the HKEX and the SSE
+on March 27, 2015 and March 30, 2015 respectively.
+The participants were 839 key employees of the Company and its subsidiaries including the directors,
+employee representative supervisors, and senior management. The sources of funding were legitimate
+salaries and performance bonuses of the employees.
+Implementation in 2015
+As at the end of the Reporting Period, four phases of the Plan had been implemented.
+IMPLEMENTATION OF THE KEY EMPLOYEE SHARE PURCHASE PLAN OF THE COMPANY
+As deliberated at the 16th Meeting of the 9th Board of Directors held on October 28, 2014 and approved at
+the 1st Extraordinary General Meeting for 2015 held on February 5, 2015, the Key Employee Share Purchase
+Plan (the “Plan") of the Company has been officially implemented. Since the implementation of this Plan,
+the Company has had stable operations; the shareholders, the Company, and the employees have shared
+benefits and risks, providing a strong foundation for further improvement of the Company's governance
+structure as well as establishing and improving the long-term incentive and restraint mechanisms to
+facilitate long-term sustainable, healthy development of the Company.
+Significant Events
+CORPORATE GOVERNANCE
+125
+Ping An Insurance (Group) Company of China, Ltd.
+Details of Structured Entities controlled by the Company are set out in Note 4.(2) to the consolidated
+financial statements.
+STRUCTURED ENTITIES CONTROLLED BY THE COMPANY
+Details of major subsidiaries and associates of the Company are set out in Note 4.(1) and Note 32 to the
+consolidated financial statements respectively.
+MAJOR SUBSIDIARIES AND ASSOCIATES OF THE COMPANY
+In 2018, the Supervisory Committee has reviewed the Assessment and Evaluation Report on Internal Control
+of the Company for 2017 and the Work Report on the Internal Control of the Company for the First Half of
+2018, and was of the opinion that the Company has set up a relatively complete, reasonable and effective
+internal control system.
+Chairman and Chief Executive Officer
+Internal Control System
+Connected-Party Transactions
+5/5
+5/5
+5/5
+5/5
+Supervisory
+Committee Meeting
+General Meeting
+Date of
+Appointment
+as Supervisors
+Meetings attended in person/
+Meetings required to attend
+June 28, 2016
+HUANG Baokui
+Shareholder Representative Supervisor
+June 3, 2009
+Independent Supervisors
+Members
+During the Reporting Period, the Supervisors did their best to participate in the general meetings and
+the meetings of the Supervisory Committee in person, as well as to attend the meetings of the Board of
+Directors as non-voting participants, and had no dissents over the supervised matters. The attendance
+records of each Supervisor at the meetings are as follows:
+ATTENDANCE RECORD OF SUPERVISORS
+During the Reporting Period, all the members of the Supervisory Committee duly carried out their
+supervisory duties in a stringent manner and adhered to the principles of fairness and honesty to
+effectively protect the rights and interests of the shareholders, the Company and its employees in
+accordance with the relevant provisions of the Company Law of the People's Republic of China and the
+Articles of Association.
+Report of the Supervisory
+Committee
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+122
+March 12, 2019
+GU Liji (Chairman)
+ZHANG Wangjin
+June 17, 2013
+5/5
+Committee
+Report of the Supervisory
+CORPORATE GOVERNANCE
+123
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+An aggregate of 594,056,000 new H Shares were successfully allotted and issued by the Company
+under a general mandate on December 8, 2014 and the gross proceeds raised from the placing were
+HKD36,831,472,000. The proceeds raised from the placing were used to develop the main businesses and
+replenish the equity and working capital of the Company. The use of the proceeds raised was consistent
+with the use approved by the Board of Directors. As at December 31, 2018, HKD4,059 million from the
+placing was kept in the specific fund-raising account, and the rest had been used.
+Use of Proceeds
+PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers have issued the standard
+unqualified auditor's reports in accordance with the PRC and international auditing standards respectively
+on the Company's financial statements for 2018. The financial statements truly, fairly and accurately
+reflected the financial conditions and results of operations of the Company.
+Authenticity of the Financial Statements
+During the Reporting Period, the Company operated and managed its businesses in accordance with
+the laws and regulations, and its operational results were objective and true. There was substantial
+development and improvement in the depth and breadth of internal control management, and the internal
+control system was complete, reasonable and effective. The Company's operational decision-making
+processes were legitimate. The Directors and other senior management were cautious, conscientious and
+diligent in the business operations and management processes, and they were not found to have breached
+any laws, regulations, or the Articles of Association or harmed the interests of the shareholders.
+INDEPENDENT OPINIONS ON RELEVANT ISSUES FROM THE SUPERVISORY COMMITTEE
+INSPECTIONS AND REVIEWS AT BRANCHES OF SUBSIDIARIES
+In September 2018, certain members of the Supervisory Committee conducted on-site inspections and
+reviews at branches of subsidiaries including Ping An Life, Ping An Property & Casualty and Ping An
+Annuity, in Qinghai and Tibet. Opinions collected from the general staff were consolidated and an
+investigation report was submitted to the management of the Company. The senior management paid
+due attention to relevant issues and a feedback report by them was addressed to all the Directors and
+Supervisors.
+5/5
+5/5
+July 17, 2012
+5/5
+5/5
+August 6, 2017
+PAN Zhongwu
+WANG Zhiliang
+Employee Representative Supervisors
+5/5
+The Supervisory Committee regarded the connected-party transactions of the Company to be fair and
+reasonable in the Reporting Period, and did not find any harm against the interests of the shareholders and
+the Company.
+SALE OF MAJOR ASSETS AND EQUITIES
+2.
+36
+2,055,311,275
+285,847,741
+Party to s317 agreement
+(1), (2)
+Total:
+corporations
+0.49
+1.19
+27.60
+Long position.
+10.76
+26.41
+Long position
+1,966,603,275
+Party to s317 agreement
+Interest of controlled
+H
+Dhanin Chearavanont
+88,708,000
+11.24
+Short position
+3.84
+Party to s317 agreement
+Total:
+corporations
+Annual Report 2018
+0.49
+1.19
+Long position
+88,708,000
+Interest of controlled
+10.76
+26.41
+Long position
+1,966,603,275
+Party to s317 agreement
+H
+King Ace International
+Limited
+1.56
+1.56
+(1), (2)
+(2)
+3.84
+285,847,741
+Group Company Limited
+H
+Charoen Pokphand
+Notes
+Capacity
+H/A
+Shares
+substantial shareholder
+Interest of controlled
+corporations
+Name of
+of total
+Percentage
+of total
+number of
+H/A shares
+Percentage
+Interests and short positions of substantial shareholders who are entitled to exercise or control the
+exercise of 10% or more of the voting power at any general meetings of shareholders of the Company
+As far as is known to any Directors or Supervisors of the Company, as at December 31, 2018, the following
+persons (other than the Directors, Supervisors and chief executive of the Company) had interests or short
+positions in the shares or underlying shares of the Company which shall be disclosed to the Company
+pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO or recorded in the register required to
+be kept by the Company pursuant to Section 336 of the SFO:
+Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying
+Shares of the Company
+shares
+Number of
+H/A Shares
+1,966,603,275
+Nature of
+interest
+in issue
+(1)
+Interest of controlled
+corporations
+11.24
+27.60
+0.49
+1.19
+Long position
+88,708,000
+2,055,311,275
+(1), (2)
+Total:
+Party to s317 agreement
+10.76
+26.41
+Long position
+(%)
+(%)
+in issue
+Short position
+INFORMATION DISCLOSED UNDER H SHARES REGULATORY REQUIREMENTS
+2,055,311,275
+285,847,741
+11.24
+6.89
+16.90
+1,258,789,784
+Total:
+1.21
+2.98
+Lending pool
+Interest of controlled
+221,672,394
+0.00
+Long position
+32,012
+0.03
+0.07
+Long position
+5,101,498
+0.00
+(3)
+786,797,037 Short position
+10.56
+0.67
+Long position
+50,223,057
+Person having a security
+H
+UBS Group AG
+4.41
+10.83
+806,470,037
+Total:
+0.11
+0.26
+Short position
+19,673,000
+Investment manager
+corporations
+4.30
+Approved lending agent
+27.60
+security interest in shares
+Trustee
+H
+JPMorgan Chase & Co.
+Number of
+H/A Shares
+Notes
+Capacity
+Shares
+H/A
+Interest of controlled
+corporations
+substantial shareholder
+Significant Events
+136
+CORPORATE GOVERNANCE
+135
+Ping An Insurance (Group) Company of China, Ltd.
+1.56
+3.84
+Name of
+(3)
+708,377,410
+Long position
+1.77
+4.35
+Long position
+323,606,470
+Investment manager
+3.88
+9.51
+(%)
+(%)
+in issue
+in issue
+of total
+shares
+Percentage
+H/A shares
+of total
+number of
+Percentage
+Nature of
+interest
+Person having a
+As at December 31, 2018, the above undertaking had been fulfilled.
+In relation to the subscription for 210,206,652 new shares of Ping An Bank through non-public issuance, the
+Company undertakes that it shall not transfer the shares within 36 months since the date of listing of the
+new shares (i.e. May 21, 2015). Such shares shall not be disposed of or transferred among its non-connected
+or connected parties during the lock-up period. In addition, no arrangement of any other disposal of
+interests shall be entered into with respect to such shares during the lock-up period.
+Undertaking in Respect of the Subscription for 210,206,652 New Shares of Ping An Bank Through
+Non-Public Issuance
+As at December 31, 2018, the details and movements of the Shanghai Jahwa Share Incentive Scheme in
+relation to the Shanghai Jahwa Options are as follows:
+Significant Events
+129
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+The board of directors of Shanghai Jahwa has the discretion to fix any minimum period(s) for which a
+Shanghai Jahwa Option or any part thereof has to be held before the exercise of the subscription rights
+attaching thereto. The Shanghai Jahwa Share Incentive Scheme is valid from the date of grant of Shanghai
+Jahwa Options and expires on the date of all Shanghai Jahwa Options granted to participants being
+exercised or cancelled, and not exceeding 68 months.
+The exercise price per Shanghai Jahwa Share of a Shanghai Jahwa Option shall be determined by the
+board of directors of Shanghai Jahwa. For details of the value of Shanghai Jahwa Options and related
+accounting policies, please refer to the announcement published by Shanghai Jahwa on the website of SSE
+(www.sse.com.cn) dated July 25, 2018.
+Exercise price
+(per Shanghai
+Jahwa Share,
+RMB)
+The total number of Shanghai Jahwa Shares which may be issued upon exercise of all Shanghai Jahwa
+Options to be granted under the Shanghai Jahwa Share Incentive Scheme and any other share option
+schemes of Shanghai Jahwa must not in aggregate exceed 10% of the issued and outstanding Shanghai
+Jahwa Shares as of May 23, 2018, on which the shareholders of the Company approved the Shanghai Jahwa
+Share Incentive Scheme. According to the Shanghai Jahwa Share Incentive Scheme, the maximum number
+of Shanghai Jahwa Shares to be issued is 4,250,000, representing approximately 0.63% of the total issued
+shares of Shanghai Jahwa as at the date of this report. Unless otherwise approved by a special resolution
+at the general meeting of Shanghai Jahwa, the cumulative total number of Shanghai Jahwa Shares to
+be granted to any of the incentive participant under the fully effective Shanghai Jahwa Share Incentive
+Scheme shall not exceed 1% of the total share capital of Shanghai Jahwa.
+The purpose of Shanghai Jahwa Share Incentive Scheme is to further improve Shanghai Jahwa's
+corporate governance structure, promote the establishment and improvement of its incentive and
+restraint mechanism, encourage the initiative and commitment of its directors, senior management and
+key employees, so as to effectively align the shareholders' interests, Shanghai Jahwa's interests, and
+operators' individual interests, and make all parties stay focused on and strive for the long-term sustainable
+development of Shanghai Jahwa.
+The 2017 Annual General Meeting held by the Company on May 23, 2018 deliberated and approved the
+Shanghai Jahwa Share Incentive Scheme, involving the grant of options ("Shanghai Jahwa Options”) to,
+or for the benefit of, specified participants to subscribe for ordinary shares of Shanghai Jahwa ("Shanghai
+Jahwa Shares").
+SHARE INCENTIVE SCHEME OF SHANGHAI JAHWA OF 2018 ("SHANGHAI JAHWA SHARE INCENTIVE
+SCHEME")
+893,282
+70,039
+3,750
+355,545
+Pursuant to the terms of the Shanghai Jahwa Share Incentive Scheme, the incentive participants of the
+Shanghai Jahwa Share Incentive Scheme comprise the following persons, and shall exclude independent
+directors and supervisors, as well as shareholders individually or in aggregate holding 5% or more of the
+shares of Shanghai Jahwa or the de facto controllers and their spouses, parents or children: directors
+and senior management of Shanghai Jahwa, and the core management personnel and core technical
+personnel who have direct influence on the overall results and sustainable development of Shanghai
+Jahwa. Such personnel refer to those who report directly to the Chief Executive Officer and those who
+are independently responsible for different units and businesses of Shanghai Jahwa, including branding,
+research and development, supply chain, financing, human resources and strategic investment.
+Balance
+as at
+January 1,
+2018
+Type of
+grantees
+Employee
+Exercise period
+External guarantee of the Company and its subsidiaries
+(excluding the guarantee in favor of its subsidiaries)
+(in RMB million)
+MATERIAL CONTRACTS AND THEIR PERFORMANCE
+Guarantee
+The above transaction would not be regarded as a connected transaction of the Company as defined under
+the HKEX Listing Rules.
+The 2nd meeting of the 11th Board of Directors was convened on August 21, 2018 by the Company,
+during which the Resolution regarding Continuing Day-to-day Connected Transactions between Ping
+An Group and Connected Parties was considered and approved. Pursuant to the Resolution, the Group
+was authorized to enter into connected transactions at fair market price with Ping An Good Doctor,
+OneConnect, Ping An HealthKonnect, Lufax Holding and the connected parties under their control
+("Connected Parties") respectively within the ordinary course of business. The annual aggregated amount
+of connected transactions entered into between the Group and the Connected Parties shall not exceed
+5% of the latest audited net assets of the Group for the year. A transaction that falls within the scope
+of the authorization limit may no longer require the corresponding approval procedures and disclosure
+obligations. For details please refer to "Continuing Day-to-day Connected Transactions Announcement"
+published by the Company on Shanghai Securities News, China Securities Journal, Securities Times,
+Securities Daily and the website of SSE (www.sse.com.cn) on August 22, 2018.
+DAY-TO-DAY CONNECTED TRANSACTIONS
+-- 3,400,000
+as at
+December 31,
+2018
+Balance
+Exercised
+during the
+Reporting
+Period
+3,400,000
+Lapsed
+during the
+Reporting
+Period
+Granted
+during the
+Reporting
+Period
+The Number of Options
+35.57
+months from the
+date of grant
+Not exceeding 68
+611,526
+Total external guarantee incurred during the Reporting Period
+Total external guarantee balance as at the end of the Reporting Period
+22.19-83.27
+Type of grantees
+Employee
+AMENDED AND RESTATED 2016 SHARE INCENTIVE PLAN OF AUTOHOME INC. ("AUTOHOME 2016
+SHARE INCENTIVE PLAN")
+During the Reporting Period, the Company did not implement any share incentive scheme based on the
+Company's shares.
+IMPLEMENTATION OF SHARE INCENTIVE SCHEME OF THE COMPANY AND ITS EFFECTS
+Significant Events
+CORPORATE GOVERNANCE
+127
+Ping An Insurance (Group) Company of China, Ltd.
+The Annual General Meeting held by the Company on June 16, 2017 deliberated and approved the
+Autohome 2016 Share Incentive Plan with respect to the grant of options (“Autohome Options”) to the
+directors, consultants, and employees of Autohome Inc. to purchase Class A ordinary shares of Autohome
+Inc. ("Autohome Shares"), restricted shares or restricted stock units and share appreciation rights.
+The manager of the Plan is China Merchants Securities Asset Management Co., Ltd., and was not changed
+during the Reporting Period.
+The participants were 1,296 key employees of the Company and its subsidiaries including the directors,
+employee representative supervisors, and senior management. The sources of funding were legitimate
+salaries and performance bonuses of the employees.
+Implementation in 2018
+During the Reporting Period, one third of the shares under the Plan for this phase were unlocked and
+vested in batches to 1,104 employees. As to the remaining 53 employees who did not qualify for the vesting,
+428,798 shares were forfeited.
+The share purchase was conducted by the manager of the Plan, China Merchants Securities Asset
+Management Co., Ltd. from March 23, 2017 to March 27, 2017 in the secondary market; 16,419,990 A shares
+of the Company in total were purchased for a total price of RMB603,498,822.25 (expenses inclusive) and an
+average price of RMB36.74 per share, accounting for 0.090% of the total share capital of the Company at that
+time. These shares were subject to a lock-up period from March 29, 2017 to March 28, 2018. For details of the
+share purchase, please refer to the Announcement regarding the Completion of Share Purchase under the
+2017 Key Employee Share Purchase Plan published by the Company on the websites of the HKEX and the
+SSE on March 28, 2017 and March 29, 2017 respectively.
+The participants were 1,157 key employees of the Company and its subsidiaries including the directors,
+employee representative supervisors, and senior management. The sources of funding were legitimate
+salaries and performance bonuses of the employees.
+Implementation in 2017
+Annual Report 2018
+The share purchase was conducted by the manager of the Plan, China Merchants Securities Asset
+Management Co., Ltd. on April 27, 2018 in the secondary market; 9,666,900 A shares of the Company in total
+were purchased for a total price of RMB592,698,901.19 (expenses inclusive) and an average price of RMB61.29
+per share, accounting for 0.053% of the total share capital of the Company at that time. These shares are
+subject to a lock-up period from May 2, 2018 to May 1, 2019. For details of the share purchase, please refer
+to the Announcement regarding the Completion of Share Purchase under the 2018 Key Employee Share
+Purchase Plan published by the Company on the websites of the HKEX and the SSE on May 1, 2018 and May
+2, 2018 respectively. During the Reporting Period, there was no change in equity as a result of disposal by
+holders of the Plan.
+The purpose of the Autohome 2016 Share Incentive Plan is intended to provide the relevant participants
+with an incentive for outstanding performance to generate superior returns to Autohome Inc.'s
+shareholders. The Autohome 2016 Share Incentive Plan is also intended to provide flexibility to Autohome
+Inc. in its ability to motivate, attract, and retain its directors, employees, and consultants upon whose
+judgment, interest, and special effort the successful conduct of Autohome Inc.'s operation is largely
+dependent.
+Pursuant to the terms of the Autohome 2016 Share Incentive Plan, Autohome Inc.'s board of directors or
+its compensation committee authorized by the board of directors ("Autohome Committee") may grant
+Autohome incentive awards to eligible participants, including the employees, consultants and all directors
+of Autohome Inc., based on their past, present and expected commitment and contribution to Autohome
+Inc. and/or the related entities, as the Autohome Committee may determine.
+The total number of Autohome Shares which may be issued upon exercise of all Autohome Options to be
+granted under the Autohome 2016 Share Incentive Plan and any other share option schemes of Autohome
+Inc. must not in aggregate exceed 10% of the issued and outstanding Autohome Shares as of June 16,
+2017, on which the shareholders of the Company approved the Autohome 2016 Share Incentive Plan,
+unless further shareholders' approval from the shareholders of Autohome Inc. and the Company have
+been obtained. According to the Autohome 2016 Share Incentive Plan, the maximum aggregate number of
+Autohome Shares issuable pursuant to all awards under this plan is 4,890,000, representing approximately
+4.14% of the total issued and outstanding Autohome Shares as at the date of this report. Unless approved
+by the shareholders of Autohome Inc. and the Company in the manner set out in the Autohome 2016 Share
+Incentive Plan, the total number of Autohome Shares issued and to be issued upon the exercise of the
+Autohome Options granted and to be granted to any participant (including both exercised and outstanding
+Autohome Options) in any 12-month period up to and including the date of grant shall not exceed 1% of
+the issued and outstanding Autohome Shares as at the date of grant.
+CORPORATE GOVERNANCE
+as at
+December 31,
+2018
+Balance
+Exercised
+during the
+Reporting
+Period
+Lapsed
+during the
+Reporting
+Period
+Granted
+during the
+Reporting
+Period
+Balance
+as at
+January 1,
+2018
+Share, US$)
+Exercise price
+(per Autohome
+The Number of Options
+As at December 31, 2018, the Autohome Options granted pursuant to the Autohome 2016 Share Incentive
+Plan are as follows:
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+128
+28
+The Autohome Committee has the discretion to fix any minimum period(s) for which an Autohome Option
+or any part thereof has to be held before the exercise of the subscription rights attaching thereto. The
+Autohome 2016 Share Incentive Plan will expire on the tenth anniversary of the effective date, being March
+21, 2027.
+The exercise price per Autohome Share subject to an Autohome Option shall be determined by the
+Autohome Committee and set forth in the award agreement which may be a fixed or variable price related
+to the fair market value of the Autohome Shares, to the extent not prohibited by the applicable laws.
+Autohome Inc., as a company listed on the New York Stock Exchange, files its annual financial results with
+the U.S. Securities and Exchange Commission under the relevant regulatory rules of the U.S. Considering
+the consistency of information disclosure, the Company would not herein disclose the value of the
+Autohome Options granted to the participants during the Reporting Period and the relevant accounting
+policies.
+Exercise period
+Not exceeding 10
+years from the
+date of grant
+Guarantee of the Company and its subsidiaries in favor of its subsidiaries
+Total guarantee in favor of its subsidiaries incurred during the Reporting Period
+Total guarantee balance in favor of its subsidiaries as at the end of the Reporting Period
+Total guarantee of the Company
+(including the guarantee in favor of its subsidiaries)
+Income Tax Withholding for H Shareholders via the Hong Kong Stock Connect Program
+For Mainland investors (including enterprises and individuals) investing in the Company's H Shares via the
+Hong Kong Stock Connect Program, China Securities Depository and Clearing Corporation Limited, as the
+nominee holding H Shares for investors via the Hong Kong Stock Connect Program, will receive the final
+dividend distributed by the Company and distribute such final dividend to the relevant investors through
+its depositary and clearing system. The final dividend to be distributed to the investors via the Hong
+Kong Stock Connect Program will be paid in Renminbi. Pursuant to the Notice on Tax Policies for Pilot
+Mechanism of Shanghai-Hong Kong Stock Connect Program (Cai Shui [2014] No. 81) and the Notice on Tax
+Policies for Pilot Mechanism of Shenzhen - Hong Kong Stock Connect Program (Cai Shui [2016] No. 127):
+For Mainland individual investors who invest in the H Shares of the Company via the Hong Kong Stock
+Connect Program, the Company will withhold individual income tax at the rate of 20% in the distribution of
+the final dividend. Individual investors may, by producing valid tax payment proofs, apply to the competent
+tax authority of China Securities Depository and Clearing Corporation Limited for tax refund relating to the
+withholding tax already paid abroad. For Mainland securities investment funds that invest in the H Shares
+of the Company via the Hong Kong Stock Connect Program, the Company will withhold individual income
+tax in the distribution of the final dividend pursuant to the above provisions;
+The Company will withhold the enterprise income tax as well as the individual income tax for shareholders
+as required by law on the basis of the Company's register of members of H shares on the Record Date. The
+Company assumes no liability and will not deal with any dispute over income tax withholding triggered by
+failure to submit proof materials within the stipulated time frame, and holders of H shares of the Company
+shall either personally or appoint a representative to attend to the procedures in accordance with the
+applicable tax regulations and relevant provisions of the PRC.
+If individual holders appear on the Company's register of members of H shares and are citizens from the
+countries or regions applying a tax rate of less than 10% under tax agreements, they are not applicable in
+relation to the withheld individual tax at the rate of 10% by the Company, and the Company may handle
+applications on their behalf for preferential treatments as stipulated in relevant agreements pursuant to
+the Notice of the State Administration of Taxation on Issues about the Administrative Measures for Non-
+residents to Enjoy the Treatments of Tax Treaties (Notice of the State Administration of Taxation [2015] No.
+60). Qualified shareholders are required to submit to Computershare Hong Kong Investor Services Limited
+at or before 4:30 p.m. on Friday, May 24, 2019 a written authorization and relevant evidencing documents,
+which shall be handed on by the Company to the applicable tax authorities for approval, and then excess
+portions of the tax amounts withheld can be refunded.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+132
+Pursuant to relative tax regulations, the Company shall generally be obligated to withhold individual
+income tax at the tax rate of 10% when it distributes the 2018 final dividend to individual holders of H shares
+appearing on the Company's register of members of H shares on the Record Date. However, if the tax
+regulations and relevant tax agreements state otherwise, the Company will withhold and pay the individual
+income tax based on the amount of the dividend at the relevant tax rate and in accordance with the
+procedures as stipulated.
+For Mainland enterprise investors that invest in the H Shares of the Company via the Hong Kong Stock
+Connect Program, the Company will not withhold income tax in the distribution of the final dividend and
+the Mainland enterprise investors shall declare and pay the tax on their own.
+Upon the confirmation of the Company after having made consultation with the relevant tax authorities,
+and pursuant to the applicable provisions of the Individual Income Tax Law of the People's Republic
+of China and its implementation regulations, the individual resident shareholders outside the PRC shall
+pay individual income tax upon their receipt of the distributed dividends in respect of the shares issued
+by domestic non-foreign investment enterprises in Hong Kong, which shall be withheld by obligors on
+behalf of such individual shareholders by law. Those individual resident shareholders outside the PRC
+may, however, enjoy relevant preferential treatments in accordance with the provisions of applicable
+tax agreements signed between the countries or regions where they belong by virtue of residential
+identification and the PRC as well as the tax arrangements made between the Mainland China and Hong
+Kong (Macau).
+If any resident enterprise (as defined in the Enterprise Income Tax Law of the People's Republic of China)
+listed on the Company's register of members of H shares which is duly incorporated in the PRC or under
+the laws of a foreign country (or a region) but with a PRC-based de facto management body does not
+I want the Company to withhold the said 10% enterprise income tax, it shall submit to Computershare Hong
+Kong Investor Services Limited at or before 4:30 p.m. on Friday, May 24, 2019 a legal opinion, issued by a
+PRC mainland qualified lawyer (inscribed with the seal of the applicable law firm), that verifies its resident
+enterprise status. The legal opinion shall be handed on by the Company to the applicable tax authorities for
+approval, and then excess portions of the tax amounts withheld can be refunded.
+Pursuant to the applicable provisions of the Enterprise Income Tax Law of the People's Republic of China
+which came into effect on January 1, 2008 and its implementation rules, the Company shall be obligated
+to withhold 10% enterprise income tax when it distributes 2018 final dividend to non-resident enterprise
+holders of H shares, including Hong Kong Securities Clearing Company Nominees Limited, as listed on the
+Company's register of members of H shares on Thursday, May 30, 2019 (the "Record Date").
+Enterprise Income Tax Withholding of Overseas Non-Resident Enterprises
+INCOME TAX WITHHOLDING
+During the Reporting Period, the Company had no failure to abide by any effective judicial ruling.
+INTEGRITY CONDITIONS OF THE COMPANY
+During the Reporting Period, neither the Company nor the Directors, Supervisors, or senior management
+of the Company were investigated by competent authorities, subjected to coercive measures by judicial
+authorities or disciplinary authorities, transferred to judicial authorities or held accountable for criminal
+liabilities, investigated or punished, barred from the market or disqualified by the CSRC, subjected to
+major administrative punishments by environmental protection, work safety, tax or other administrative
+authorities, or denounced by any stock exchanges publicly.
+Individual Income Tax Withholding of Overseas Individual Shareholders
+Income Tax Withholding for A Shareholders via the Shanghai Stock Connect Program
+For Hong Kong investors (including enterprises and individuals) investing in the Company's A Shares
+via the Shanghai Stock Connect Program, the final dividend will be paid in Renminbi by the Company
+through the Shanghai Branch of China Securities Depository and Clearing Corporation Limited to Hong
+Kong Securities Clearing Company Limited, and the Company will withhold income tax at the rate of 10%
+as stipulated in the Notice on Tax Policies for Pilot Mechanism of Shanghai-Hong Kong Stock Connect
+Program (Cai Shui [2014] No. 81).
+For investors via the Shanghai Stock Connect Program who are tax residents of other countries or regions
+(excluding Hong Kong), which have entered into a tax treaty with the PRC stipulating a dividend tax rate
+of less than 10%, those enterprises or individuals may, or may entrust a withholding agent to, apply to the
+competent tax authorities of the Company for the entitlement of the rate under such tax treaty. Upon
+approval by the tax authorities, the paid amount in excess of the tax payable based on the tax rate under
+such tax treaty will be refunded.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+134
+As at December 31, 2018, the above undertaking was still being performed and there was no breach of the
+above undertaking.
+During the period of issuing Ping An Convertible Bonds by the Company, in terms of certain subsidiaries
+engaging in construction of properties for self-use purpose and retirement communities, the Company
+undertakes that, it complies and will strictly comply with relevant regulations in relation to the insurance
+funds used in real estate investment and the principle that the insurance funds should only be applied
+for specific property development purpose without the motive of property speculation or sale in an
+inappropriate form. It will not develop or sell commercial housing by means of investment in retirement
+communities or real estate for self-use purpose.
+Undertaking in Respect of the Issuance of Ping An Convertible Bonds
+As at December 31, 2018, the above undertakings were still being performed and there was no breach of the
+above undertakings.
+(3) The Company undertakes that, after the completion of the major asset restructuring and during the
+period when the Company remains as the controlling shareholder of Shenzhen Development Bank, the
+Company shall maintain the independence of Shenzhen Development Bank and ensure that Shenzhen
+Development Bank is independent from the Company and the enterprises under its control in respect
+of personnel, assets, finance, organization and business.
+(2) The Company undertakes that, after the completion of the major asset restructuring with Shenzhen
+Development Bank, and in respect of the transactions between the Company and the enterprises
+under its control and Shenzhen Development Bank which constitute the connected transactions of
+Shenzhen Development Bank, the Company and the enterprises under its control shall enter into
+such transactions with Shenzhen Development Bank by following the principle of "openness, fairness
+and justness" at fair and reasonable market prices, and shall go through the decision-making process
+according to the requirements of the relevant laws and regulations and regulatory documents, and
+shall perform their obligations of information disclosure as required by law. The Company undertakes
+that the Company and the enterprises under its control shall not procure any illegal interests or make
+Shenzhen Development Bank undertake any illicit obligations through the transactions with Shenzhen
+Development Bank.
+(1) The Company undertakes that, after the completion of the major asset restructuring with Shenzhen
+Development Bank, and during the period when the Company remains as the controlling shareholder
+of Shenzhen Development Bank, and in respect of the businesses or commercial opportunities similar
+to those of Shenzhen Development Bank that the Company and the enterprises under its control
+intend to carry out or have substantially obtained whereby the assets and businesses arising from
+such businesses or commercial opportunities may possibly form potential competition with those of
+Shenzhen Development Bank, the Company and the enterprises under its control shall not engage in
+the businesses identical or similar to those carried out by Shenzhen Development Bank, so as to avoid
+direct or indirect competition with the operations of Shenzhen Development Bank.
+Undertakings in Respect of the Major Asset Restructuring with Shenzhen Development Bank
+FULFILLMENTS OF UNDERTAKINGS
+All investors are requested to read this part carefully. Shareholders are recommended to consult their
+tax advisors for tax effects regarding their holding and disposing of the shares of the Company, involving
+the PRC, Hong Kong and other countries and regions. The Company will announce detailed arrangement
+regarding the income tax withholding when it distributes 2018 final dividend to holders of A shares on the
+website of SSE separately.
+Significant Events
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 133
+Annual Report 2018
+PUNISHMENTS AND RECTIFICATIONS
+Information on the Company's internal control auditors and the remuneration paid to such auditors is set
+out in the sections titled "Report of the Board of Directors" and "Corporate Governance Report."
+APPOINTMENT OF INTERNAL CONTROL AUDITOR
+Significant Events
+1. During the Reporting Period, the Company did not provide any guarantee to its controlling
+shareholder and other connected parties in which the Company holds less than 50% shares, or any
+non-legal entities or individuals;
+According to the relevant requirements of the Notice Concerning the Regulation on the Flow of Funds
+Between Listed Companies and Their Connected Parties and the Provision of Guarantees by Listed
+Companies to External Parties as well as the Notice Regarding the Regulation on the Provision of
+External Guarantee by Listed Companies set out by the CSRC, the Independent Non-executive Directors
+of the Company conducted a prudent review of the Company's external guarantee in 2018. Their specific
+statements and independent opinions are set out as follows:
+INDEPENDENT OPINIONS OF INDEPENDENT NON-EXECUTIVE DIRECTORS ON EXTERNAL GUARANTEE
+OF THE COMPANY
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+130
+(2) During the Reporting Period, the total guarantee incurred was the guarantee withdrawal of RMB27,705 million less the guarantee
+repayment of RMB15,792 million.
+Notes: (1) The data set out in the table above does not include those arising from financial guarantee businesses conducted by Ping
+An Bank (the controlled subsidiary) and other subsidiaries of the Company in strict compliance with the scope of business
+approved by regulatory authorities.
+The amount by which the total guarantee balance of the Company and
+its subsidiaries exceeded 50% of the Company's net asset
+41,596
+Including: Direct or indirect guarantee for the companies with a total liabilities to total
+assets ratio over 70% (as at December 31, 2018)
+7.9
+Total guarantee as a percentage of the Company's net assets (%)
+44,140
+Total guarantee
+44,140
+11,913
+3.
+0.27
+4.
+The Company has strictly observed the approval procedures and internal control policies regarding
+external guarantee as set out in the Articles of Association, and there was no irregular external
+guarantee;
+CORPORATE GOVERNANCE
+131
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Information on the Company's auditors and the remuneration paid to the auditors is set out in the sections
+titled "Report of the Board of Directors" and "Corporate Governance Report."
+APPOINTMENT OF AUDITOR
+During the Reporting Period, there was no material accounting mistake made by the Company.
+Details of changes in accounting policies and accounting estimates of the Company during the Reporting
+Period are set out in note 2.(2) to the consolidated financial statements.
+CHANGES IN ACCOUNTING POLICIES OR ACCOUNTING ESTIMATES, CORRECTIONS OF MATERIAL
+ACCOUNTING MISTAKES
+During the Reporting Period, the Company had no material litigations or arbitrations that were required to
+be disclosed.
+MATERIAL LITIGATIONS AND ARBITRATIONS
+During the Reporting Period, the Company had no event of seizure, distrainment or freeze of major assets
+that was required to be disclosed.
+SEIZURE, DISTRAINMENT OR FREEZE OF MAJOR ASSETS
+During the Reporting Period, the Company engaged in no entrusted asset management or entrusted
+lending outside the normal business scope. For details of the Company's entrusted asset management and
+entrusted lending, refer to the "Notes to Consolidated Financial Statements."
+No matter relating to entrustment, underwriting, lease or other material contracts of the Company was
+required to be disclosed during the Reporting Period.
+ENTRUSTMENT, UNDERWRITING, LEASE, ENTRUSTED ASSET MANAGEMENT, ENTRUSTED LOAN AND
+OTHER MATERIAL CONTRACTS
+The Company has fulfilled its obligation to disclose information on external guarantee and honestly
+provided chartered accountants with all the details about the Company's external guarantee, in strict
+compliance with the relevant requirements under the SSE Listing Rules and the Articles of Association.
+During the Reporting Period, the total guarantee withdrawal provided by the Company and its
+subsidiaries amounted to RMB27,705 million. As at December 31, 2018, the total guarantee balance
+of the Company and its subsidiaries was RMB44,140 million, representing approximately 7.9% of the
+Company's net assets. The sum did not exceed 50% of the net assets as stated in the consolidated
+financial statements of the latest fiscal year of the Company;
+interest in shares
+Short position
+Long position
+Interest of controlled
+corporations
+A
+Beneficial owner
+(6)
+416,914,509
+477,140,054
+29,597,482
+Lending Pool
+5.60
+2.28
+6.41
+Total:
+2.61
+0.40
+0.16
+962,719,102
+Long position
+8.89
+5.27
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Capacity
+Shares
+Short position
+Shenzhen Investment
+Holdings Co., Ltd.
+Approved lending agent
+0.33
+in issue
+in issue
+(%)
+(%)
+BlackRock, Inc.
+H
+Interest of controlled
+corporations
+412,982,017
+Long position
+5.55
+2.26
+(5)
+545,000
+Short position
+0.01
+0.00
+Citigroup Inc.
+H
+Interest of controlled
+corporations
+60,225,545
+Notes
+0.81
+substantial shareholder
+H/A
+Name of
+H/A shares
+Nature of
+interest
+Interest of controlled
+(4)
+1,870,597,412
+Long position
+25.12
+10.23
+corporations
+Total:
+Interest of controlled
+corporations
+(4)
+Number of
+H/A Shares
+25.79
+1,920,820,469
+2,100,861,881
+shares
+of total
+of total
+number of
+Percentage
+Percentage
+11.49
+28.21
+Short position
+10.51
+Interests and Short Positions of Other Substantial Shareholders
+J.P. Morgan Overseas Capital LLC
+N
+100.00
+J.P. Morgan International
+Finance Limited
+304,109,670
+21,004,000
+JPMorgan Chase & Co.
+N
+100.00
+Long position
+JPMorgan Chase Holdings LLC
+1,331,000
+Long position
+Short position
+31,000
+N
+0
+JPMorgan Asset Management (Asia) Inc.
+JPMorgan Asset Management
+Holdings Inc.
+100.00
+Long position
+Short position
+70,026,000
+0
+JPMorgan Asset Management
+Holdings Inc.
+JPMorgan Chase Holdings LLC
+N
+Long position
+Short position
+301,312,570
+19,673,000
+Short position
+100.00
+JPMorgan Chase Holdings LLC
+J.P. MORGAN EUROPE LIMITED
+UBS Group AG
+UBS Asset Management Trust Company
+28,003,000
+250,000
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Singapore) Ltd
+0
+681,500
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management Life Limited
+0
+1,085,500
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Japan) Ltd
+250,000
+15,341,666
+Long position
+Short position
+100.00
+Y
+Long position
+Short position
+3,432,500
+J.P. MORGAN SECURITIES PLC
+100.00
+N
+Long position
+Short position
+4,599,030
+0
+J.P. MORGAN SECURITIES PLC
+J.P. MORGAN CAPITAL
+HOLDINGS LIMITED
+100.00
+N
+Long position
+Short position
+4,599,030
+Short position
+72,413,694
+Y
+100.00
+UBS Group AG
+UBS Fund Management
+(Luxembourg) S.A.
+0
+21,966,066
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (UK) Limited
+0
+Long position
+Short position
+1,883,088
+Long position
+N
+16
+Long position
+Y
+100.00
+Finance Limited
+J.P. Morgan International
+392,500
+0
+Short position
+Long position
+Short position
+100.00
+J.P. MORGAN EUROPE LIMITED
+J.P. Morgan Structured Products B.V.
+J.P. Morgan Europe (UK), Copenhagen
+Br, filial af J.P. Morgan Europe Ltd,
+Storbritannien
+723,000
+0
+Long position
+Short position
+Y
+Y
+66
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+100.00
+shares
+interest
+(Y/N)
+(%)
+Number of
+Nature of
+interest
+of control
+Direct
+Percentage
+J.P. Morgan Bank Luxembourg S.A.
+J.P. Morgan Bank Luxembourg,
+Copenhagen Br, filial af J.P. Morgan
+Bank Luxembourg S.A.
+J.P. MORGAN EUROPE LIMITED
+Name of controlling shareholder
+J.P. Morgan Europe Limited, Helsingin
+sivuliike
+Name of controlled corporation
+100.00
+J.P. Morgan Holdings (Hong Kong)
+Limited
+Copthall Mauritius Investment Limited
+20,000
+20,000
+Long position
+Short position
+Y
+100.00
+JPMorgan Chase Bank, National
+Association
+J.P. Morgan Investment Management Inc.
+JPMORGAN CHASE BANK, N.A.
+- LONDON BRANCH
+33,700,240
+19,673,000
+Short position
+Long position
+Y
+100.00
+JPMorgan Asset Management
+Holdings Inc.
+Highbridge Capital Management, LLC
+0
+9,450,907
+Long position
+Short position
+Y
+78,167,751
+Y
+0
+100.00
+Short position
+Long position
+Y
+100.00
+J.P. Morgan Securities LLC
+0
+1,760,000
+Long position
+Short position
+Y
+100.00
+JPMorgan Asset Management
+(Asia) Inc.
+J.P. Morgan Prime Inc.
+JPMorgan Asset Management (Japan)
+Limited
+0
+149,842,430
+Long position
+Short position
+Y
+JPMorgan Asset Management
+Holdings Inc.
+Long position
+Short position
+2,026,000
+0
+100.00
+JPMorgan Chase & Co.
+0
+3,673,500
+Long position
+Short position
+Y
+100.00
+J.P. Morgan International
+Finance Limited
+J.P. Morgan Bank Luxembourg S.A.
+JPMorgan Chase Bank, National
+Association
+J.P. Morgan (Suisse) SA
+709,926,204
+710,360,916
+Short position
+Long position
+Y
+100.00
+J.P. MORGAN CAPITAL HOLDINGS
+LIMITED
+N
+J.P. MORGAN SECURITIES PLC
+Long position
+857,782,641
+723,420,982
+100.00
+JPMorgan Chase Holdings LLC
+J.P. Morgan Broker-Dealer Holdings Inc.
+755,623,477
+723,420,982
+Short position
+Long position
+N
+100.00
+JPMorgan Chase Bank, National
+Association
+J.P. Morgan International Finance
+Limited
+0
+Short position
+13,410,407
+Long position
+N
+100.00
+J.P. Morgan International
+Finance Limited
+Short position
+Y
+0
+Long position
+Short position
+Y
+100.00
+J.P. MORGAN EUROPE LIMITED
+J.P. Morgan Bank Luxembourg S.A.
+J.P. Morgan Europe Limited (UK),
+Stockholm Bankfilial
+0
+7,834,786
+Long position
+Short position
+Y
+100.00
+JPMorgan Chase Bank, National
+Association
+JPMorgan Chase Bank, N.A. - Sydney
+Branch
+0
+2,006,500
+Long position
+Short position
+Y
+100.00
+Long position
+Short position
+12,606,527
+1,970,245
+J.P. Morgan International
+Finance Limited
+Y
+100.00
+JPMorgan Chase Bank, National
+Association
+JPMorgan Chase Bank, N.A. - Hong Kong
+Branch
+0
+32,012
+Long position
+Short position
+Y
+100.00
+J.P. Morgan Equity Holdings, Inc.
+J.P. Morgan Trust Company of Delaware
+0
+Short position
+23,260,320
+Long position
+Y
+100.00
+0
+100.00
+Y
+UBS Asset Management
+(Hong Kong) Ltd.
+According to the disclosure form filed by UBS Group AG on January 3, 2019, the following interests in H shares were held by UBS
+Group AG through its controlled corporations, the details of which are as follows:
+UBS Group AG was deemed to be interested in a total of 1,870,597,412 H shares (Long position) and 2,100,861,881 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+(4)
+53,807,225
+5,048,510
+29,892,732
+365,914,411
+155,825,818
+562,700,456
+1,808,800
+53,539,200
+Number of shares
+93,922,500
+100,784,500
+Long position
+Short position
+Long position
+Short position
+Long position
+Short position
+Long position
+Short position
+Long position
+Short position
+Nature of interest
+Convertible instruments
+Listed derivatives -
+Unlisted derivatives -
+Cash settled
+Unlisted derivatives -
+Physically settled
+Cash settled
+Listed derivatives -
+Listed derivatives -
+Physically settled
+Derivatives
+The entire interests of JPMorgan Chase & Co. in the Company included a lending pool of 221,672,394 H shares (Long position).
+Besides, 693,372,998 H shares (Long position) and 729,871,154 H shares (Short position) were held through derivatives as follows:
+0
+32,012
+Name of controlled corporation
+UBS AG
+Name of controlling
+shareholder
+UBS Group AG
+UBS Group AG
+UBS Europe SE (Luxembourg Branch)
+61,000
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Europe SE
+0
+Short position
+102,501
+Long position
+Y
+Long position
+Short position
+100.00
+UBS Bank (Canada)
+1,660,675,543
+2,056,397,106
+Short position
+Long position
+Y
+100.00
+shares
+Number of
+Nature of
+Interest
+(Y/N)
+(%)
+Direct
+interest
+Percentage
+of control
+UBS Group AG
+N
+100.00
+0
+47,743,900
+0
+JPMORGAN ASSET MANAGEMENT (UK)
+LIMITED
+JPMORGAN ASSET
+100.00
+N
+MANAGEMENT
+Long position
+Short position
+2,917,000
+0
+HOLDINGS (UK) LIMITED
+J.P. Morgan Securities LLC
+J.P. Morgan Broker-Dealer Holdings Inc.
+Long position
+Short position
+100.00
+Long position
+Short position
+20,000
+20,000
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+139
+CORPORATE GOVERNANCE
+Significant Events
+Name of controlled corporation
+J.P. Morgan Holdings (Hong Kong)
+Limited
+J.P. Morgan Equity Holdings, Inc.
+Name of controlling shareholder
+J.P. Morgan International
+Finance Limited
+N
+100.00
+Holdings Inc.
+100.00
+723,000
+Long position
+Short position
+N
+100.00
+shares
+interest
+(Y/N)
+(%)
+Number of
+Nature of
+interest
+of control
+Direct
+N
+J.P. MORGAN CAPITAL
+HOLDINGS LIMITED
+JPMORGAN ASSET MANAGEMENT
+INTERNATIONAL LIMITED
+J.P. Morgan International
+Finance Limited
+100.00
+N
+Long position
+Short position
+714,525,234
+710,360,916
+JPMORGAN ASSET MANAGEMENT
+INTERNATIONAL LIMITED
+100.00
+N
+Long position
+Short position
+47,743,900
+0
+JPMorgan Asset Management
+JPMORGAN ASSET MANAGEMENT
+HOLDINGS (UK) LIMITED
+Y
+Long position
+49,500
+0
+Short position
+14,000
+Long position
+Percentage
+100.00
+UBS Group AG
+UBS Trustees (Singapore) Limited
+0
+Short position
+42,000
+Long position
+Y
+UBS Asset Management (Americas) Inc.
+100.00
+UBS Trustees (Jersey) Limited
+0
+Short position
+12,000
+Long position
+0
+Y
+100.00
+UBS Group AG
+UBS Trustees (Cayman) Limited
+0
+Short position
+137,000
+UBS Group AG
+Long position
+UBS Group AG
+Y
+0
+Short position
+635,724
+Long position
+Y
+100.00
+UBS Group AG
+UBS Asset Management
+(Deutschland) GmbH
+0
+Short position
+3,159,000
+Long position
+Y
+100.00
+100.00
+UBS Asset Management (Canada) Inc.
+0
+Short position
+468,500
+Long position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Australia) Ltd
+0
+Short position
+3,384,330
+Long position
+UBS Group AG
+UBS Group AG
+Y
+UBS Group AG
+154,000
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS La Maison de Gestion
+2,500
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Gestión S.G.I.I.C., SA
+0
+0
+103,154
+Y
+100.00
+UBS Group AG
+UBS Financial Services Inc.
+4,680
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Europe SE (Spain Branch)
+0
+Short position
+100.00
+Long position
+Short position
+100.00
+UBS Swiss Financial Advisers AG
+100.00
+UBS Trustees (Bahamas) Limited
+20,000
+Short position
+859,000
+Long position
+Y
+100.00
+shares
+Number of
+Nature of
+Interest
+(Y/N)
+(%)
+interest
+UBS Group AG
+of control
+Name of controlling
+shareholder
+UBS Switzerland AG
+Name of controlled corporation
+CORPORATE GOVERNANCE
+Direct
+Percentage
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+140
+0
+103,500
+Long position
+Short position
+Y
+UBS Group AG
+J.P. Morgan Bank Luxembourg S.A.
+UBS Fund Management
+(Switzerland) AG
+882,000
+0
+100.00
+BlackRock Finance Europe Limited
+BlackRock Advisors (UK) Limited
+740,500
+Long position
+Y
+100.00
+shares
+interest
+(Y/N)
+(%)
+Y
+Name of controlling shareholder
+BlackRock Finance Europe Limited
+Number of
+Nature of
+interest
+of control
+Direct
+Percentage
+Significant Events
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 143
+Annual Report 2018
+39,165,625
+Name of controlled corporation
+BlackRock (Netherlands) B.V.
+Long position
+538,500
+BlackRock International Limited
+53,529,341
+Long position
+Short position
+N
+100.00
+Black Rock Group Limited-
+Luxembourg Branch
+BlackRock Luxembourg Holdco S.à r.l.
+36,000
+Short position
+53,529,341
+Long position
+N
+100.00
+BlackRock Group Limited
+Black Rock Group Limited-Luxembourg
+Branch
+5,387,000
+Long position
+Y
+100.00
+BlackRock Group Limited
+BlackRock International Limited
+4,961,593
+Long position
+N
+100.00
+BlackRock Group Limited
+Long position
+36,000
+N
+Black Rock Group Limited
+BlackRock HK Holdco Limited
+BlackRock Asset Management North Asia
+Limited
+50,026,607
+Long position
+N
+100.00
+BlackRock (Singapore) Holdco Pte. Ltd.
+J.P. Morgan Bank Luxembourg S.A.
+- Stockholm Bankfilial
+51,668,107
+Long position
+N
+100.00
+100.00
+BlackRock (Singapore) Holdco Pte. Ltd.
+3,000,000
+Long position
+Y
+100.00
+BlackRock Australia Holdco Pty. Ltd.
+BlackRock Investment Management
+(Australia) Limited
+3,000,000
+Long position
+N
+100.00
+BR Jersey International Holdings L.P.
+Y
+Long position
+21,970,828
+BlackRock Finance Europe Limited
+103,043,559
+36,000
+Long position
+Short position
+N
+90.00
+BlackRock Cayman West Bay
+IV Limited
+Black Rock Group Limited
+103,043,559
+36,000
+Long position
+Short position
+N
+100.00
+BlackRock Cayman West Bay
+Finco Limited
+BlackRock Cayman West Bay IV Limited
+103,043,559
+36,000
+Long position
+Short position
+N
+100.00
+BlackRock Cayman 1 LP
+BlackRock Cayman West Bay Finco Limited
+103,043,559
+36,000
+Long position
+Short position
+N
+100.00
+BlackRock Holdco 3, LLC
+BlackRock Cayman 1 LP
+100.00
+BlackRock Investment Management Ireland
+Holdings Limited
+BlackRock Luxembourg Holdco S.à r.l.
+100.00
+Black Rock Mexico Operadora
+203,168
+Long position
+N
+100.00
+BR Jersey International Holdings L.P.
+Phoenix Acquisition B.V.
+2,000
+Long position
+Y
+100.00
+Phoenix Acquisition B.V
+BlackRock Lux Finco S.à r.l.
+44,500
+Long position
+Y
+100.00
+BlackRock UK Holdco Limited
+BlackRock Asset Management
+(Schweiz) AG
+44,500
+Long position
+N
+100.00
+BlackRock Luxembourg Holdco S.à r.l.
+BlackRock Investment Management
+(Taiwan) Limited
+99.90
+Y
+Long position
+Citicorp LLC
+Citibank, N.A.
+1,918,478
+shares
+426,274,119
+Long position
+Short position
+N
+100.00
+Number of
+Nature of
+interest
+Direct
+interest
+(Y/N)
+(%)
+Name of controlling shareholder
+Citigroup Inc.
+Citicorp LLC
+Name of controlled corporation
+of control
+Percentage
+CORPORATE GOVERNANCE
+According to the disclosure form filed by Citigroup Inc. on September 5, 2018, the following interests in H shares of the Company
+were held by Citigroup Inc. through its controlled corporations, the details of which are as follows:
+Citigroup Inc. was deemed to be interested in a total of 60,225,545 H shares (Long position) and 29,597,482 H shares (Short position) in
+the Company by virtue of its control over several corporations.
+The entire interests of BlackRock, Inc. in the Company included 668,500 H shares (Long position) and 173,000 H shares (Short
+position) which were held through derivatives, the category of which were cash settled unlisted derivatives.
+(6)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+144
+203,168
+BlackRock UK Holdco Limited
+1,641,500
+Long position
+Y
+Y
+100.00
+BlackRock Finance Europe Limited
+BlackRock Investment Management (UK)
+Limited
+15,867,280
+Long position
+N
+100.00
+BlackRock Finance Europe Limited
+BlackRock Investment Management (UK)
+Limited
+16,907,500
+36,000
+Long position
+Short position
+Y
+100.00
+BlackRock Luxembourg Holdco S.à r.l.
+BLACKROCK (Luxembourg) S.A.
+36,577,341
+Long position
+Y
+100.00
+BlackRock Investment Management
+Ireland Holdings Limited
+BlackRock Asset Management Ireland
+Limited
+36,577,341
+Long position
+N
+Long position
+BR Jersey International Holdings L.P.
+22,019,345
+BlackRock Investment Management
+(UK) Limited
+100.00
+BlackRock (Singapore) Holdco Pte. Ltd.
+BlackRock (Singapore) Limited
+4,961,593
+Long position
+Y
+100.00
+BlackRock International Limited
+BlackRock Life Limited
+15,541,280
+Long position
+Y
+100.00
+BlackRock Investment Management
+(UK) Limited
+BlackRock Fund Managers Limited
+326,000
+Long position
+Y
+100.00
+BlackRock Investment Management(UK)
+Limited - German Branch - Frankfurt
+BlackRock
+BlackRock Asset Management
+Deutschland AG
+326,000
+Long position
+N
+100.00
+BlackRock Investment Management(UK)
+Limited - German Branch - Frankfurt
+BlackRock
+BlackRock Australia Holdco Pty. Ltd.
+745,000
+Long position
+100.00
+shares
+Number of
+Nature of
+interest
+Direct
+interest
+(Y/N)
+(%)
+BlackRock, Inc.
+Name of controlling shareholder
+BlackRock Investment Management, LLC
+Trident Merger, LLC
+Name of controlled corporation
+N
+of control
+According to the disclosure form filed by BlackRock, Inc. on January 3, 2019, the following interests in H shares were held by
+BlackRock, Inc. through its controlled corporations, the details of which are as follows:
+BlackRock, Inc. was deemed to be interested in a total of 412,982,017 H shares (Long position) and 545,000 H shares (Short position)
+in the Company by virtue of its control over several corporations.
+633,375,905
+490,010,587
+934,029,722
+1,247,756,204
+2,487,950
+10,070,850
+36,035,300
+60,103,106
+Short position
+Long position
+Percentage
+Long position
+5,436,746
+100.00
+BlackRock Holdco 4, LLC
+12,554,593
+Long position
+Y
+100.00
+BlackRock Holdco 2, Inc.
+BlackRock Financial Management, Inc.
+545,000
+394,990,678
+Long position
+Short position
+N
+100.00
+BlackRock Holdco 2, Inc.
+BlackRock Financial Management, Inc.
+545,000
+407,545,271
+Long position
+Short position
+N
+100.00
+BlackRock, Inc.
+Trident Merger, LLC
+BlackRock Holdco 2, Inc.
+5,436,746
+Long position
+Y
+Short position
+Long position
+Short position
+Long position
+Name of controlling
+shareholder
+Name of controlled corporation
+Significant Events
+Ping An Insurance (Group) Company of China, Ltd. 141
+Annual Report 2018
+1,915,848
+1,900,000
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Limited
+0
+345,931
+Long position
+Short position
+Company S.A.
+Y
+100.00
+UBS Group AG
+UBS Third Party Management
+0
+13,399,000
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+Percentage
+of control
+BlackRock Financial Management, Inc.
+Direct
+interest
+(Y/N)
+Short position
+Long position
+Nature of interest
+(5)
+Cash settled
+Unlisted derivatives -
+Physically settled
+Unlisted derivatives -
+Cash settled
+Listed derivatives -
+Physically settled
+Listed derivatives -
+Number of shares
+Derivatives
+Besides, 1,800,357,847 H shares (Long position) and 1,613,511,777 H shares (Short position) were held through derivatives as follows:
+42,044,775
+Short position
+42,044,775
+Long position
+Y
+100.00
+UBS Group AG
+UBS Securities LLC
+Number of
+shares
+Nature of
+Interest
+(%)
+100.00
+100.00
+Long position
+Short position
+BlackRock Japan Co., Ltd.
+28,053,779
+Long position
+N
+100.00
+BlackRock Trident Holding
+Company Limited
+BlackRock Japan Holdings GK
+28,053,779
+Long position
+N
+100.00
+BlackRock Japan Holdings GK
+BlackRock Lux Finco S.à r.l.
+28,055,779
+Long position
+N
+100.00
+BlackRock HK Holdco Limited
+BlackRock Lux Finco S.à r.l.
+36,000
+158,659,834
+Long position
+Short position
+N
+86.00
+BlackRock Trident Holding Company
+Limited
+100.00
+Y
+Long position
+Y
+100.00
+BlackRock Canada Holdings ULC
+BlackRock Asset Management Canada
+Limited
+745,000
+Long position
+N
+100.00
+BlackRock Canada Holdings LP
+BlackRock Canada Holdings ULC
+745,000
+Long position
+N
+99.90
+BlackRock Holdco 3, LLC
+BlackRock Canada Holdings LP
+36,000
+Short position
+103,788,559
+Long position
+N
+100.00
+BR Jersey International Holdings L.P.
+BlackRock Holdco 3, LLC
+28,053,779
+BlackRock International Holdings, Inc.
+BR Jersey International Holdings L.P.
+158,659,834
+36,000
+Long position
+Short position
+146,630,000
+Long position
+Y
+100.00
+BlackRock Delaware Holdings Inc.
+BlackRock Fund Advisors
+83,992,844
+468,000
+Long position
+Short position
+Y
+100.00
+BlackRock Delaware Holdings Inc.
+BlackRock Institutional Trust Company,
+National Association
+230,622,844
+468,000
+Long position
+Short position
+N
+100.00
+BlackRock Holdco 6, LLC
+BlackRock Delaware Holdings Inc.
+230,622,844
+468,000
+Long position
+Short position
+N
+90.00
+BlackRock Holdco 4, LLC
+BlackRock Holdco 6, LLC
+230,622,844
+468,000
+BlackRock Capital Holdings, Inc..
+N
+BlackRock Financial Management, Inc.
+N
+N
+100.00
+BlackRock Financial Management, Inc.
+BlackRock International Holdings, Inc.
+41,000
+5,708,000
+Long position
+Short position
+Y
+100.00
+Number of
+shares
+Nature of
+interest
+(Y/N)
+(%)
+interest
+of control
+Direct
+Percentage
+Name of controlling shareholder
+BlackRock Capital Holdings, Inc.
+Name of controlled corporation
+BlackRock Advisors, LLC
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+142
+41,000
+5,708,000
+Long position
+Short position
+100.00
+Y
+BlackRock HK Holdco Limited
+426,176,821
+shares
+100.00
+N
+Long position
+1,966,603,275
+Active Business Holdings Limited
+CPG Overseas Company Limited
+100.00
+N
+Long position
+33,615,868
+Number of
+Active Business Holdings Limited
+N
+Long position
+23,646,368
+Spring Height International
+Limited
+Express Ascend Limited
+Jumbo Kingdom Ventures Limited
+Spring Height International Limited
+Active Business Holdings Limited
+100.00
+Y
+Long position
+23,646,368
+100.00
+Long position
+Short position
+Nature of
+interest
+(Y/N)
+92.00
+Citigroup Global Markets Holdings
+Bahamas Limited
+Citigroup Global Markets Limited
+2,784,160
+Short position
+12,010,996
+Long position
+N
+49.50
+Citigroup Global Markets Holdings Bahamas Citigroup Financial Products Inc.
+Limited
+12,010,996
+2,784,160
+Long position
+Short position
+Ping An Insurance (Group) Company of China, Ltd.
+0
+Notes:
+(1)
+CP Group Ltd. was deemed to be interested in a total of 1,966,603,275 H shares (Long position) and 285,847,741 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+According to the disclosure form filed by CP Group Ltd. on January 2, 2019, the following interests in H shares were held by CP
+Group Ltd. through its controlled corporations, the details of which are as follows:
+Name of controlled corporation
+CPG Overseas Company Limited
+Name of controlling shareholder
+Charoen Pokphand Group Company
+Limited
+Percentage
+Direct
+of control
+interest
+(%)
+100.00
+Y
+N
+9,969,500
+1,909,341,039
+Chia Tai Primrose Holdings Limited
+Chia Tai Giant Far Limited
+100.00
+N
+Long position
+1,909,341,039
+Chia Tai Primrose Investment Limited
+Chia Tai Primrose Holdings Limited
+100.00
+N
+Long position
+Long position
+Easy Boom Developments Limited
+Chia Tai Primrose Investment Limited
+100.00
+Y
+Long position
+285,847,741
+Short position
+285,847,741
+146
+Chia Tai Primrose Investment Limited
+100.00
+1,909,341,039
+N
+100.00
+CT Bright Group Company Limited
+Epic Success Developments Limited
+Jumbo Kingdom Ventures Limited
+100.00
+Y
+Long position
+9,969,500
+CT Bright Group Company Limited
+(Formerly known as Chia Tai Resources
+Holdings Limited)
+CPG Overseas Company Limited
+100.00
+N
+Long position
+1,932,987,407
+Choice Great Investments Limited
+Project Perfect Limited
+Chia Tai Giant Far Limited
+CT Bright Group Company Limited
+100.00
+N
+Long position
+23,646,368
+Choice Great Investments Limited
+100.00
+Y
+Long position
+23,646,368
+Long position
+Long position
+Short position
+12,010,996
+2,784,160
+Citicorp Banking Corporation
+Derivatives
+The entire interests and short positions of Citigroup Inc. in the Company included a lending pool of 416,914,509 H shares (Long
+position). Besides, 49,522,100 H shares (Long position) and 25,003,389 H shares (Short position) were held through derivatives as
+follows:
+0
+Short position
+10,200
+Long position
+Y
+100.00
+Citibank, N.A.
+Citicorp Trust South Dakota
+0
+Listed derivatives -
+6,238
+Y
+100.00
+Citibank, N.A.
+Citicorp Trust Delaware, National
+Association
+0
+80,860
+Long position
+Short position
+Y
+100.00
+Citigroup Participation Luxembourg
+Limited
+Cititrust (Bahamas) Limited
+Long position
+Short position
+convertible instruments
+Listed derivatives -
+Physically settled
+No further significant events of the Company were required to be disclosed during the Reporting Period.
+OTHER SIGNIFICANT EVENTS
+The Company is not a key pollutant discharging unit announced by the environmental protection
+department. For more information on environmental protection, please refer to the Company's 2018
+Sustainability Report.
+ENVIRONMENTAL PROTECTION
+Save as disclosed above, the Directors and Supervisors of the Company are not aware of any other
+person (other than the Directors, Supervisors and chief executive of the Company) having any interest
+or short position in the shares and underlying shares of the Company as at December 31, 2018 which shall
+be disclosed to the Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO or
+recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO.
+(7) Percentage figures may not add up to the totals due to rounding.
+2,655,698
+13,420,162
+11,697,021
+20,138,346
+10,345,000
+15,782,100
+181,492
+305,670
+Number of shares
+Long position
+Short position
+Short position
+Long position
+Short position
+Long position
+Short position
+Long position
+Nature of interest
+Unlisted derivatives -
+Cash settled
+Physically settled
+Unlisted derivatives -
+0
+Short position
+Limited
+80,860
+Citibank Overseas Investment
+Citi Overseas Investments Bahamas Inc.
+80,860
+0
+Long position
+Short position
+N
+100.00
+Citibank, N.A.
+Citibank Overseas Investment Corporation
+97,298
+0
+Long position
+Short position
+N
+100.00
+Citicorp LLC
+Citibank, N.A.
+224,500
+0
+Long position
+Short position
+Y
+100.00
+Citicorp Banking Corporation
+Citibank (Switzerland) AG
+224,500
+0
+Long position
+Short position
+N
+100.00
+Citigroup Inc.
+Corporation
+Y
+100.00
+Long position
+Short position
+Long position
+N
+100.00
+Number of
+shares
+interest
+(Y/N)
+(%)
+Name of controlling shareholder
+Citigroup Participation Luxembourg Limited Citigroup International Luxembourg
+Name of controlled corporation
+Nature of
+interest
+of control
+Direct
+Percentage
+Significant Events
+Ping An Insurance (Group) Company of China, Ltd. 145
+Annual Report 2018
+0
+80,860
+Long position
+Short position
+N
+100.00
+Citigroup International Luxembourg Limited Citi Overseas Investments Bahamas Inc.
+80,860
+0
+N
+Long position
+Business Fortune Holdings Limited
+Ewealth Global Limited
+0
+JPMorgan Chase Holdings LLC
+100.00
+Y
+N
+50.20
+Citigroup Global Markets Holdings Bahamas Citigroup Global Markets (International)
+Limited
+Finance AG
+32,420
+0
+Short position
+Long position
+Y
+100.00
+Citigroup Financial Products Inc.
+Citigroup Global Markets Inc.
+37,657,969
+24,494,103
+Short position
+Long position
+Y
+100.00
+Citigroup Financial Products Inc.
+Citigroup Global Markets Hong Kong
+Limited
+392,893
+400,741
+Long position
+Short position
+Y
+100.00
+2,917,000
+Long position
+Short position
+Y
+49.00
+Finance Limited
+Short position
+13,060,000
+JPMorgan Chase & Co.
+100.00
+Y
+Long position
+96,897,473
+Short position
+62,045,055
+JPMorgan Asset Management
+(Asia) Inc.
+99.99
+Citigroup Inc.
+Y
+64,767,500
+Short position
+0
+JF International Management Inc.
+JPMorgan Asset Management
+(Asia) Inc.
+100.00
+Y
+Long position
+Short position
+161,500
+0
+China International Fund Management
+Co., Ltd.
+J.P. Morgan GT Corporation
+JPMORGAN ASSET MANAGEMENT
+(UK) LIMITED
+Long position
+0
+Citigroup Global Markets Holdings Inc.
+Short position
+Short position
+12,558,152
+Long position
+N
+100.00
+Citigroup Financial Products Inc.
+Citigroup Global Markets (International)
+Finance AG
+22,278,263
+Short position
+50,248,542
+Long position
+N
+100.00
+Citigroup Global Markets Holdings Inc.
+Citigroup Financial Products Inc.
+22,278,263
+Short position
+50,248,542
+Long position
+Long position
+Short position
+N
+100.00
+Citigroup Inc.
+Citigroup Global Markets Holdings Inc.
+1,918,478
+2,784,160
+Citigroup Global Markets Overseas Finance
+Limited
+Citigroup Global Markets (International)
+Finance AG
+51.86
+547,157
+Long position
+Y
+100.00
+Citigroup Global Markets Overseas
+Finance Limited
+Citigroup First Investment Management
+Limited
+0
+547,157
+Long position
+Short position
+N
+100.00
+Citigroup Global Markets Overseas
+Finance Limited
+0
+Citigroup Global Markets Hong Kong
+Holdings Limited
+Short position
+547,157
+Long position
+N
+48.14
+Citigroup Global Markets Switzerland
+Holding GmbH
+Citigroup Global Markets Overseas Finance
+Limited
+0
+Short position
+547,157
+Long position
+N
+0
+Long position
+Y
+100.00
+33,359,691
+New Orient Ventures Limited
+Chia Tai Primrose Investment Limited
+100.00
+Y
+Long position
+714,663,997
+(2)
+The entire interests of CP Group Ltd. in the Company included 285,847,741 H shares (Short position) which were held through
+derivatives, the category of which was through physically settled unlisted derivatives. In addition, CP Group Ltd. was also deemed
+to be interested in 88,708,000 H shares (Long position) by virtue of section 317 of the SFO.
+Boom Dragon Limited and Long Growth Global Limited held 88,000,000 H shares (Long position) and 708,000 H shares (Long position)
+in the Company respectively; the two companies were wholly owned by King Ace International Limited, which was in turn wholly
+owned by Dhanin Chearavanont. In addition, King Ace International Limited and Dhanin Chearavanont were also deemed to be
+interested in 1,966,603,275 H shares (Long position) and 285,847,741 H shares (Short position) by virtue of section 317 of the SFO.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+137
+CORPORATE GOVERNANCE
+138
+38
+Significant Events
+(3) JPMorgan Chase & Co. was deemed to be interested in a total of 708,377,410 H shares (Long position) and 786,797,037 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+According to the disclosure form filed by JPMorgan Chase & Co. on January 3, 2019, the following interests in H shares were held by
+JPMorgan Chase & Co. through its controlled corporations, the details of which are as follows:
+Percentage
+of control
+Direct
+interest
+717,306,596
+Name of controlling shareholder
+JPMorgan Chase Bank, National
+Association
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+King Beyond Global Limited
+Chia Tai Primrose Investment Limited
+100.00
+Y
+Long position
+51,239,090
+Chia Tai Primrose Investment Limited
+100.00
+Y
+Long position
+30,819,856
+(%)
+Oriental Power Developments Limited
+100.00
+Y
+Long position
+4,893,000
+Excel Trade Developments Limited
+Chia Tai Primrose Investment Limited
+100.00
+Y
+Long position
+71,211,068
+Golden Magic Holdings Limited
+Chia Tai Primrose Investment Limited
+(Y/N)
+Name of controlled corporation
+JPMorgan Chase Bank, N.A. - Taipei
+Branch
+Number of
+Y
+Long position
+Short position
+31,000
+0
+JPMorgan Asset Management (Taiwan)
+Limited
+J.P. Morgan Europe Limited, Oslo Branch
+JPMorgan Asset Management
+(Asia) Inc.
+100.00
+Y
+Long position
+Short position
+3,337,000
+0
+J.P. MORGAN EUROPE LIMITED
+100.00
+100.00
+Y
+210,285
+0
+JPMORGAN ASSET MANAGEMENT (UK)
+LIMITED
+JPMORGAN ASSET MANAGEMENT
+HOLDINGS (UK) LIMITED
+100.00
+Y
+Long position
+Short position
+44,826,900
+0
+J.P. Morgan Chase Bank Berhad.
+JPMorgan Chase Bank, National
+Association
+JF Asset Management Limited
+J.P. Morgan International
+Long position
+Short position
+Nature of
+interest
+J.P. Morgan Overseas Capital LLC
+0
+100.00
+Y
+Long position
+shares
+3,550,100
+Short position
+0
+J.P. Morgan Bank Luxembourg S.A.
+- Amsterdam Branch
+J.P. Morgan Bank Luxembourg S.A.
+100.00
+Y
+Long position
+1,953,000
+Short position
+Annual Report 2018
+J.P. Morgan Broker-Dealer Holdings Inc.
+100.00
+Y
+Long position
+Short position
+1,863,088
+1,311,000
+J.P. Morgan Whitefriars LLC
+J.P. Morgan Securities LLC
+203,719
+Reserves
+Retained profits
+244
+39
+18,280
+18,280
+40
+165,214
+Equity
+comprehensive income
+28
+310,901
+Equity financial assets at fair value through other
+comprehensive income
+29
+222,639
+Fixed maturity investments
+Equity investments
+31
+Investments in associates and jointly controlled entities
+32
+Statutory deposits for insurance operations
+33
+Investment properties
+Debt financial assets at fair value through other
+Property and equipment
+2,075,151
+824,939
+Policy loans
+111,219
+83,203
+Finance lease receivable
+Loans and advances to customers
+25
+Financial assets at fair value through profit or loss
+Financial assets at amortized cost
+2222
+24
+217,881
+112,028
+1,929,842
+1,660,864
+26
+27
+35
+Intangible assets
+Deferred tax assets
+40,141
+155,686
+Policyholder account assets in respect of insurance
+contracts
+38
+32,344
+38,775
+Policyholder account assets in respect of investment
+contracts
+38
+3,964
+4,109
+Total assets
+7,142,960
+6,493,075
+Equity and liabilities
+45,187
+60,981
+58,450
+36
+48
+Other assets
+37
+WA W w wwww w
+30
+2,376,638
+630,676
+Share capital
+154,895
+12,446
+12,250
+34
+38,242
+40,108
+49,323
+47,067
+86,207
+40
+24
+237,190
+451,283
+556,875
+2,211,887
+47
+1,952,695
+2,114,344
+4444% F
+49
+Other liabilities
+1,932,969
+48
+Investment contract liabilities for policyholders
+45
+Insurance contract liabilities
+Bonds payable
+Customer deposits and payables to brokerage customers
+45,622
+52,591
+Policyholder dividend payable
+Deferred tax liabilities
+114,108
+46
+50,309
+Ping An Insurance (Group) Company of China, Ltd.
+YAO Jason Bo
+Director
+Director
+SUN Jianyi
+Annual Report 2018
+156
+Director
+MA Mingzhe
+52,747
+The financial statements on pages 153 to 315 were approved and authorized for issue by the Board of
+Directors on 12 March 2019 and were signed on its behalf.
+5,905,158
+6,459,317
+7,142,960
+Total equity and liabilities
+Total liabilities
+348,463
+259,110
+25,891
+18,476
+6,493,075
+120,688
+Insurance payables
+28,775
+Due to banks and other financial institutions
+Liabilities
+(in RMB million)
+As at 31 December 2018
+Consolidated Statement of Financial Position
+FINANCIAL STATEMENTS
+155
+Ping An Insurance (Group) Company of China, Ltd.
+Notes
+Annual Report 2018
+683,643
+Total equity
+114,566
+127,135
+40
+473,351
+556,508
+Equity attributable to owners of the parent
+Non-controlling interests
+587,917
+31 December 2018
+31 December 2017
+42
+31,416
+Income tax payable
+8,522
+9,779
+Accounts payable
+133,981
+189,028
+43
+17,950
+22,247
+22
+15,633
+Assets sold under agreements to repurchase
+14,060
+16,975
+Financial liabilities at fair value through profit or loss.
+Derivative financial liabilities
+780,530
+803,154
+22
+334,509
+16,671
+261,275
+Reinsurers' share of insurance liabilities
+In preparing the consolidated financial statements, the directors are responsible for assessing the Group's
+ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
+the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
+operations, or have no realistic alternative but to do so.
+Audit and Risk Management Committee are responsible for overseeing the Group's financial reporting
+process.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
+as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
+report that includes our opinion. We report our opinion solely to you, as a body, and for no other purpose.
+We do not assume responsibility towards or accept liability to any other person for the contents of this
+report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
+accordance with HKSAS will always detect a material misstatement when it exists. Misstatements can arise
+from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
+be expected to influence the economic decisions of users taken on the basis of these consolidated financial
+statements.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 151
+FINANCIAL STATEMENTS
+Independent Auditor's Report
+The directors of the Company are responsible for the preparation of the consolidated financial statements
+that give a true and fair view in accordance with IFRSS and the disclosure requirements of the Hong Kong
+Companies Ordinance, and for such internal control as the directors determine is necessary to enable the
+preparation of consolidated financial statements that are free from material misstatement, whether due to
+fraud or error.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS (CONTINUED)
+•
+Identify and assess the risks of material misstatement of the consolidated financial statements,
+whether due to fraud or error, design and perform audit procedures responsive to those risks, and
+obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
+not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
+as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
+internal control.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures
+that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
+effectiveness of the Group's internal control.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
+estimates and related disclosures made by the directors.
+Conclude on the appropriateness of the directors' use of the going concern basis of accounting and,
+based on the audit evidence obtained, whether a material uncertainty exists related to events or
+conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we
+conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
+the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
+to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
+auditor's report. However, future events or conditions may cause the Group to cease to continue as a
+going concern.
+Evaluate the overall presentation, structure and content of the consolidated financial statements,
+including the disclosures, and whether the consolidated financial statements represent the underlying
+transactions and events in a manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
+business activities within the Group to express an opinion on the consolidated financial statements.
+We are responsible for the direction, supervision and performance of the group audit. We remain
+solely responsible for our audit opinion.
+We communicate with Audit and Risk Management Committee regarding, among other matters, the planned
+scope and timing of the audit and significant audit findings, including any significant deficiencies in internal
+control that we identify during our audit.
+As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional
+scepticism throughout the audit. We also:
+We also provide Audit and Risk Management Committee with a statement that we have complied with
+relevant ethical requirements regarding independence, and to communicate with them all relationships and
+other matters that may reasonably be thought to bear on our independence, and where applicable, related
+safeguards.
+If, based on the work we have performed, we conclude that there is a material misstatement of this other
+information, we are required to report that fact. We have nothing to report in this regard.
+RESPONSIBILITIES OF DIRECTORS AND AUDIT AND RISK MANAGEMENT
+COMMITTEE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+Our opinion on the consolidated financial statements does not cover the other information and we do not
+express any form of assurance conclusion thereon.
+reserves
+Refer to note 2. (30), 3. (4), 45 and 51. (1) to the
+consolidated financial statements
+As at 31 December 2018, the Group had
+significant life insurance contract liabilities
+(policyholders' reserve) and non-life insurance
+contract liabilities (claim reserves) represented
+23% of the total liabilities. Significant
+judgements were involved in assessing the
+ultimate total settlement values of insurance
+contract liabilities. Economic assumptions, such
+as investment returns and associated discount
+rates, and operating assumptions such as
+mortality, persistency (including consideration
+of policyholder behaviour) and loss ratio are
+the key assumptions used to estimate these
+insurance contract liabilities. Therefore, we
+identified valuation of policyholders' reserves
+and chaim reserves as key audit matter.
+How our audit addressed the Key Audit Matter
+We involved our actuarial specialists and performed
+following procedures in this area:
+We assessed the Group's methodology for
+calculating the insurance contract liabilities against
+recognized actuarial practices.
+We evaluated assumptions used in the actuarial
+models for the valuation of life insurance contract
+liabilities; specifically we assessed economic and
+operating assumptions by reference to relevant
+company specific and industry historical data, and
+for future development by reference to market
+trends and market volatility, where applicable.
+We evaluated assumptions used in the actuarial
+models for non-life insurance contract liabilities,
+such as ultimate loss ratio, claim adjustment
+expense and risk adjustment to company specific
+and industry historical data, where applicable.
+In connection with our audit of the consolidated financial statements, our responsibility is to read the
+other information and, in doing so, consider whether the other information is materially inconsistent with
+the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
+materially misstated.
+For the life insurance contract liabilities, we
+performed independent model point testing
+for newly modelled products and tested the
+appropriateness of changes made to the actuarial
+models during the year.
+We tested the accuracy and completeness of policy
+data input into the actuarial models.
+We tested the mathematical accuracy of the
+calculation.
+We performed analysis of the movements in life
+insurance contract liabilities during the year,
+including consideration of whether the movements
+were in line with the assumptions adopted by the
+Group, our understanding of developments in the
+business, and our experience derived from market
+practice.
+Based on the work performed, the key valuation
+assumptions and methodologies adopted by the
+management are considered acceptable.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+OTHER INFORMATION
+The directors of the Company are responsible for the other information. The other information comprises
+all of the information included in the annual report other than the consolidated financial statements and our
+auditor's report thereon.
+For the non-life insurance contract liabilities, we
+performed independent modelling on selected
+classes of business. We compared our results
+to those booked by management and evaluated
+significant variances, including consideration of
+retrospective analysis result.
+From the matters communicated with Audit and Risk Management Committee, we determine those matters
+that were of most significance in the audit of the consolidated financial statements of the current period
+and are therefore the key audit matters. We describe these matters in our auditor's report unless law or
+regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
+determine that a matter should not be communicated in our report because the adverse consequences of
+doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Yeung Sheung Yuen.
+PricewaterhouseCoopers
+(22,436)
+(14,625)
+Net earned premiums
+677,703
+572,990
+Reinsurance commission revenue
+7,966
+6,728
+587,615
+Interest revenue from banking operations
+161,714
+147,386
+Interest revenue from non-banking operations
+8
+88,546
+88,376
+Fees and commission revenue from non-insurance operations
+9
+7
+700,139
+6
+(17,420)
+Certified Public Accountants
+Hong Kong, 12 March 2019
+152
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Consolidated Statement of Income
+For the year ended 31 December 2018
+(in RMB million)
+Gross written premiums
+Less: Premiums ceded to reinsurers
+Net written premiums
+Change in unearned premium reserves
+Notes
+2018
+2017
+6
+719,556
+605,035
+(19,417)
+Valuation of policyholders' reserves and claim
+46,277
+Key Audit Matter
+50
+BASIS FOR OPINION
+We conducted our audit in accordance with Hong Kong Standards on Auditing ('HKSAs') issued by
+the Hong Kong Institute of Certified Public Accountants ('HKICPA'). Our responsibilities under those
+standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial
+Statements section of our report.
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
+our opinion.
+Independence
+We are independent of the Group in accordance with the HKICPA's Code of Ethics for Professional
+Accountants ('the Code'), and we have fulfilled our other ethical responsibilities in accordance with the
+Code.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+147
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial
+position of the Group as at 31 December 2018, and of its consolidated financial performance and its
+consolidated cash flows for the year then ended in accordance with International Financial Reporting
+Standards (IFRSS') and have been properly prepared in compliance with the disclosure requirements of the
+Hong Kong Companies Ordinance.
+FINANCIAL STATEMENTS
+KEY AUDIT MATTERS
+Key audit matters are those matters that, in our professional judgment, were of most significance in our
+audit of the consolidated financial statements of the current period. These matters were addressed in
+the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
+thereon, and we do not provide a separate opinion on these matters.
+Key audit matters identified in our audit are summarised as follows:
+•
+Classification of financial assets at amortized cost
+Impairment assessment of loans and advances to customers and financial assets at amortized cost
+Valuation of policyholders' reserves and claim reserves
+Key Audit Matter
+Independent Auditor's Report
+Classification of financial assets at amortized
+Our opinion
+the consolidated statement of cash flows for the year then ended; and
+23
+Independent Auditor's Report
+To the Shareholders of
+Ping An Insurance (Group) Company of China, Ltd.
+(incorporated in the People's Republic of China with limited liability)
+OPINION
+What we have audited
+The consolidated financial statements of Ping An Insurance (Group) Company of China, Ltd. (the
+the notes to the consolidated financial statements, which include a summary of significant accounting
+policies.
+'Company') and its subsidiaries (the 'Group') set out on pages 153 to 315, which comprise:
+the consolidated statement of financial position as at 31 December 2018;
+•
+the consolidated statement of income for the year then ended;
+•
+•
+•
+the consolidated statement of comprehensive income for the year then ended;
+the consolidated statement of changes in equity for the year then ended;
+•
+cost
+Refer to note 2(12) and 27 to the consolidated
+financial statements.
+As at 31 December 2018, the Group's "financial
+assets at amortized cost" as presented on the
+consolidated balance sheet represented 29% of
+total assets.
+3) Application of model assumptions
+Formulating forward-looking adjustment
+4)
+How our audit addressed the Key Audit Matter
+The procedures we performed included:
+We tested the design and operating effectiveness
+of the Group's ECL controls, including the controls
+over model selection, internal credit rating and
+staging determination, forecasts of contractual cash
+flows, etc.
+We tested management's key controls over
+formulation of forward-looking adjustment,
+including selection of macroeconomic indicators
+and determination of weightings to various
+scenario.
+With the assistance of our credit modelling specialists,
+we performed the following procedures:
+We evaluated whether the ECL models built
+appropriately cover the Group's "loans and
+advances to customers" and "financial assets at
+amortized cost".
+Staging determination
+We evaluated the reasonableness of staging
+determination against the Group's historical credit
+loss experience and industry practice.
+We tested the ECL model measurement to check
+whether it is consistent with the Group's ECL model
+methodologies on a sampling basis.
+We also tested the accuracy of ECL data inputs
+during the period on a sampling basis, by reviewing
+the counterparties' credit information such as credit
+exposure, credit risk ratings, loss rates, overdue
+status, collateral information, and other relevant
+information.
+Based on the work performed, the inputs, assumptions
+and methodologies adopted in ECL provisioning by
+the Group for "loans and advances to customers" and
+"financial assets at amortized cost" are considered
+acceptable.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+149
+FINANCIAL STATEMENTS
+150
+We evaluated ECL model methodologies and the
+detailed application of key ECL model parameters
+and assumptions, which includes possibility of
+default, loss given default, exposure at default,
+discount rate, etc., and assessed the reasonableness
+of key management's judgements involved.
+2)
+1) Selecting appropriate ECL models
+We identified impairment assessment under
+IFRS 9 as a key audit matter, as it is complex
+and significant management judgment was
+involved in:
+We identified the classification of these
+financial instruments under IFRS 9 as a key
+audit matter as it is complex and requires
+considerable management judgment in:
+1)
+2)
+Interpreting contract terms for SPPI
+testing purpose;
+Determining business models for debt
+portfolios under the Group's diverse
+business activities.
+How our audit addressed the Key Audit Matter
+We reviewed the Group's accounting policies in
+relation to the classification of these financial assets,
+and performed the following procedures to assess the
+appropriateness of the classification:
+We understood and evaluated the Group's
+methodologies and processes of the solely payment
+of principal and interest ('SPPI') testing and
+business model assessment.
+We tested the design effectiveness and operating
+effectiveness of key controls over SPPI testing.
+We evaluated the design of SPPI testing logic
+and re-performed SPPI testing on a sampling
+basis by examing the contracts of these financial
+instruments.
+We evaluated appropriateness of business model
+assessment for these financial instruments under
+various business lines, and tested the supporting
+evidence on a sampling basis.
+Based on the work performed, management's
+judgements and methodologies adopted in classification
+of "financial assets at amortized cost" are considered
+acceptable.
+148
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Key Audit Matter
+Impairment assessment of loans and advances
+to customers and financial assets at amortized
+cost
+Refer to note 2(12), 25 and 27 to the
+consolidated financial statements.
+As at 31 December 2018, the Group's "loans
+and advances to customers" and "financial
+assets at amortized cost" as presented on the
+consolidated balance sheet represented 56 % of
+total assets and the amounts of expected credit
+loss ('ECL') provision for loans and advances
+to customers and financial assets at amortized
+cost were RMB54,187 million and RMB13,305
+million respectively.
+Independent Auditor's Report
+44,407
+We evaluated the overall reasonableness of macro-
+economic scenario-settings and weightings against
+industry benchmarks.
+10
+Exchange differences on translation of foreign operations
+1,139
+Share of other comprehensive income of associates and
+jointly controlled entities
+390
+93
+Income tax relating to components of other
+comprehensive income
+(1,608)
+(924)
+(11,653)
+(19,121)
+10,623
+Income tax relating to components of other
+comprehensive income
+4,280
+Other comprehensive income for the year, net of tax
+2,137
+21,881
+Total comprehensive income for the year
+Items that will not be reclassified to profit or loss:
+Changes in the fair value of equity instruments at
+fair value through other comprehensive income
+Shadow accounting adjustments
+122,589
+38,653
+(4,288)
+-
+FINANCIAL STATEMENTS
+Consolidated Statement of Comprehensive Income
+For the year ended 31 December 2018
+(in RMB million)
+Profit for the year
+Other comprehensive income
+Items that may be reclassified subsequently to profit or loss:
+Changes in the fair value of debt instruments at
+(5,596)
+fair value through other comprehensive income
+Shadow accounting adjustments
+Notes
+2018
+2017
+120,452
+99,978
+11,263
+767
+Credit risks provision of debt instruments at
+fair value through other comprehensive income
+Available-for-sale financial assets
+121,859
+Attributable to:
+Owners of the parent
+273,513
+305,986
+Financial assets held under resold agreements
+20
+92,951
+99,296
+Premium receivables
+21
+19
+67,150
+Accounts receivable
+22,798
+72,061
+Derivative financial assets
+22
+21,911
+Investment income
+16,192
+45,694
+Balances with the Central Bank
+483,891
+457,524
+- Non-controlling interests
+Annual Report 2018
+108,987
+110,672
+13,602
+11,187
+122,589
+121,859
+Ping An Insurance (Group) Company of China, Ltd.
+Consolidated Statement of Financial Position
+As at 31 December 2018
+(in RMB million)
+Assets
+Notes
+31 December 2018
+31 December 2017
+Cash and amounts due from banks and
+other financial institutions
+18
+153
+Ping An Insurance (Group) Company of China, Ltd.
+154
+6.01
+(427,243)
+Commission expenses on insurance operations
+(130,394)
+(114,587)
+Interest expenses on banking operations
+7
+(86,931)
+(72,501)
+(439,596)
+Fees and commission expenses on non-insurance operations
+(9,086)
+(6,599)
+Net impairment losses on financial assets
+13
+(52,105)
+Loan loss provisions, net of reversals
+14, 25
+(40,814)
+9
+9,415
+10,108
+12
+31,974
+63,725
+4.99
+Share of profits and losses of associates and
+jointly controlled entities
+18,074
+7,145
+Other revenues and other gains
+11
+49,892
+43,813
+Total revenue
+1,082,146
+974,570
+Gross claims and policyholders' benefits
+12
+(449,704)
+(436,658)
+Less: Reinsurers' share and policyholders' benefits
+Net impairment losses on other assets
+Foreign exchange losses
+Claims and policyholders' benefits
+Interest expenses on non-banking operations
+120,452
+99,978
+107,404
+89,088
+13,048
+10,890
+120,452
+Earnings per share attributable to ordinary equity
+134,740
+(34,762)
+holders of the parent:
+- Diluted
+Annual Report 2018
+RMB
+RMB
+17
+General and administrative expenses
+6.02
+4.99
+- Basic
+(42,699)
+99,978
+17
+(128)
+15
+(145,126)
+(18,227)
+(11,167)
+Other expenses
+Total expenses
+(1,709)
+(946)
+(151,581)
+Income tax
+Profit for the year
+Profit before tax
+Attributable to:
+Owners of the parent
+Non-controlling interests.
+(28,420)
+(21,665)
+(918,995)
+(839,830)
+163,151
+14
+and other financial institutions
+- From cash and amounts due from banks
+178
+From loans and advances to customers
+358
+- From financial assets at FVPL
+68,552
+- From other assets
+23,500
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+1 January 2018
+12,246
+1 January 2018
+692,389
+Ping An Insurance (Group) Company of China, Ltd.
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+161
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+(116)
+Annual Report 2018
+FINANCIAL STATEMENTS
+693,799
+- From AFS
+effects (i)
+(a) IFRS 9 Financial Instruments
+31 December 2017
+Remeasurement
+effects (iii)
+Financial assets at fair value through
+profit or loss
+From fixed maturity investments
+(1,410)
+254,316
+(1,294)
+- From available for sale ('AFS')
+346,895
+31,539
+63,801
+- From Held-to-maturity ('HTM')
+9,625
+(211)
+- From Loans and receivables ('LR')
+149,351
+(1,083)
+From equity investments
+415,447
+(116)
+- From financial assets at FVPL
+Impact of adoption (continued)
+- To financial assets at FVPL
+(4)
+- From AFS
+· From financial assets at FVPL
+(6) Financial assets at amortized cost
+Financial assets at amortized cost
+From Loans and advances to customers
+- From other assets
+From fixed maturity investments
+- From AFS
+- From HTM
+- From LR
+(7) Fixed maturity investments
+Fixed maturity investments
+- To financial assets at AC
+To debt financial assets at FVOCI
+162
+Annual Report 2018
+215,229
+215,229
+206,332
+Reclassification
+8,897
+- From equity investments
+other comprehensive income
+Equity financial assets at fair value through
+1 January 2018
+Debt financial assets at fair value through other comprehensive income
+31 December 2017
+Reclassification
+effects (i)
+Remeasurement
+effects (iii)
+1 January 2018
+Debt financial assets at fair value through
+other comprehensive income
+From fixed maturity investments
+- From AFS
+- From LR
+219,533
+Following the adoption of IFRS 9, the adjustments to the carrying amount of each financial statement item
+are illustrated as follows (continued):
+22
+22
+188,793
+19,514
+22
+11,226
+219,555
+From other assets
+(5) Equity financial assets at fair value through other comprehensive income
+Reclassification
+effects (i)
+Remeasurement
+effects (iii)
+208,307
+(3) Financial assets at fair value through profit or loss
+56989
+(4)
+40,141
+Other assets
+10
+238,762
+261,275
+Equity
+Include:
+583,122
+587,917
+Reserves
+Retained profits
+Non-controlling interests
+Liabilities
+Include:
+Insurance contract liabilities
+Investment contract liabilities for policyholders
+Deferred tax liabilities
+Other liabilities
+182,807
+217,881
+269,490
+41,687
+237,190
+99,296
+Deferred tax assets
+Reclassification
+Financial assets at fair value through profit or loss
+Debt financial assets at fair value through other
+comprehensive income
+1 2 3
+459,887
+12,246
+692,389
+483,891
+12,250
+4
+219,555
+Equity financial assets at fair value through other
+comprehensive income.
+Financial assets at amortized cost
+Fixed maturity investments
+Equity investments
+Loans and advances to customers
+215,229
+1,947,974
+7
+2,376,638
+630,676
+1,631,688
+1,660,864
+Financial assets held under resold agreements
+99,295
+112,545
+114,566
+5,903,634
+(504)
+459,887
+Measured at fair value through other
+comprehensive income ('FVOCI')
+3,900
+Measured at amortized cost ('AC')
+483,891
+(27,400)
+(7)
+(497)
+3,893
+455,994
+To financial assets at fair value through
+profit or loss ('FVPL')
+(23,500)
+-
+To cash and amounts due from banks
+and other financial institutions measured
+at FVOCI (ii)
+(2) Statutory deposits for insurance operations
+(3,900)
+31 December 2017
+Reclassification
+effects (i)
+Remeasurement
+effects (iii)
+12,250
+(23,500)
+483,891
+Cash and amounts due from banks and other
+financial institutions
+1 January 2018
+5,905,158
+1,932,228
+1,932,969
+50,295
+25,709
+50,309
+25,891
+347,876
+348,463
+The Group's retained profits was increased by RMB32,300 million upon initial adoption of IFRS 9 on 1
+January 2018, opening balances of reserves was decreased by RMB35,074 million, non-controlling interests
+was decreased by RMB2,021 million and total net asset was decreased by RMB4,795 million respectively.
+160
+Statutory deposits for insurance operations
+Annual Report 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+(a) IFRS 9 Financial Instruments
+Impact of adoption (continued)
+Following the adoption of IFRS 9, the adjustments to the carrying amount of each financial statement item
+are illustrated as follows:
+(1) Cash and amounts due from banks and other financial institutions
+31 December 2017
+Reclassification
+effects (i)
+Remeasurement
+effects (iii)
+Ping An Insurance (Group) Company of China, Ltd.
+31 December 2017
+Classification and measurement of financial assets
+Remeasurement
+effects (iii)
+615
+78,349
+57,330
+164
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+(a) IFRS 9 Financial Instruments
+Impact of adoption (continued)
+Following the adoption of IFRS 9, the adjustments to the impairment provisions of each financial statement
+item are illustrated as follows:
+(1) Impairment provisions of loans and advances to customers
+Impairment provisions of loans and
+advances to customers
+Measured at financial assets at AC
+Measured at financial assets at FVOCI
+Reclassification
+Remeasurement
+31 December 2017
+effects (i)
+effects
+111
+1 January 2018
+27,373
+530
+Fair value gain/(loss) that would have been recognized during
+the year if the financial asset had not been reclassified
+842
+7,659
+(1,238)
+Applying the expected credit risk model resulted in the recognition of impairment provisions of financial
+assets on 1 January 2018 is as follow:
+Impairment provisions
+Loans and advances to customers (1)
+Financial assets at amortized cost (2)
+Debt financial assets at fair value through other
+comprehensive income
+Fixed maturity investments
+Equity investments
+Other financial assets
+Total
+31 December 2017
+1 January 2018
+44,322
+Statutory deposits for insurance operations
+47,763
+8,422
+6,543
+44,322
+(512)
+3,953
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 165
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+(a) IFRS 9 Financial Instruments
+Impact of adoption (continued)
+Classification and measurement of financial assets (continued)
+Financial instruments at fair value through profit or loss have two sub-categories namely financial
+instruments held for trading and those designated at fair value through profit or loss at inception. Financial
+instruments typically bought with the intention to sell in the near future are classified as held for trading. A
+financial instrument can only be designated at inception as at fair value through profit or loss and cannot
+be subsequently changed. For financial instruments designated at fair value through profit or loss, the
+following criteria must be met:
+the designation eliminates or significantly reduces the inconsistent treatment that would otherwise
+arise from measuring the assets or liabilities or recognizing the gains or losses on them on a different
+basis; or
+the assets and liabilities are part of a group of financial assets, financial liabilities or both which are
+managed and their performance evaluated on a fair value basis, in accordance with a documented risk
+management or investment strategy; or
+the financial asset contains an embedded derivative that needs to be separately recorded.
+These financial instruments are initially recorded at fair value. Subsequent to initial recognition, they
+are remeasured at fair value. Fair value adjustments and realized gains and losses are recognized in the
+statement of income.
+Financial assets at fair value through profit or loss include derivative financial instruments.
+Held-to-maturity financial assets are non-derivative financial assets that comprise fixed or determinable
+payments and maturities of which the Group has the positive intention and ability to hold until maturity.
+Investments intended to be held for an undefined period are not included in this classification. These
+investments are initially recognized at cost, being the fair value of the consideration paid for the acquisition
+of the investment. All transaction costs directly attributable to the acquisition are also included in the cost
+of the investment. Subsequent to initial recognition, these investments are carried at amortized cost using
+the effective interest method and less any provision for impairment. The amortized cost is computed as the
+amount initially recognized minus principal repayments, plus or minus the cumulative amortization using
+the effective interest method of any difference between the initially recognized amount and the maturity
+amount. This calculation includes all fees and points paid or received between parties to the contract that
+are an integral part of the effective interest rate, transaction costs and all other premiums and discounts.
+Gains and losses are recognized in the statement of income when the investments are derecognized or
+impaired, as well as through the amortization process.
+Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
+not quoted in an active market. It includes policy loans. Loans and receivables acquired by the Group
+are initially recognized at cost, being the fair value of the consideration paid for the acquisition of the
+investment. All transaction costs directly attributable to the acquisition are also included in the cost
+of the investment. Subsequent to initial recognition, these investments are carried at amortized cost,
+using the effective interest method less any provision for impairment. Gains and losses are recognized
+in the statement of income when the investments are derecognized or impaired, as well as through the
+amortization process. Policy loans originated by the Group are carried at amortized cost.
+166
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+All regular way purchases and sales of financial assets are recognized on the trade date, i.e., the date the
+Group commits to purchase or sell the asset. Regular way purchases or sales of financial assets require
+delivery of assets within the time frame generally established by regulation or convention in the market
+place.
+The classification depends on the purpose for which the investments were acquired or originated. Financial
+assets are classified as at fair value through profit or loss where the Group's documented investment
+strategy is to manage financial investments on a fair value basis, because the related liabilities are also
+managed on this basis. The available-for-sale and held-to-maturity categories are used when the relevant
+liabilities (including shareholders' funds) are relatively passively managed and/or carried at amortized cost.
+Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit
+or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets, as
+appropriate.
+8,422
+44,322
+(512)
+3,899
+54
+47,763
+47,709
+54
+(2) Impairment provisions of financial assets at amortized cost
+Impairment provisions of financial assets
+at amortized cost
+From Loans and advances to customers
+- From fixed maturity investments
+Reclassification
+Fair value as at 31 December 2018
+Remeasurement
+effects (i)
+effects
+1 January 2018
+(i) The reclassification effects has not taken into account of the remeasurement effects.
+Accounting policies applied until 31 December 2017,
+6,353
+2,069
+512
+5,841
+2,069
+31 December 2017
+From FVPL (IAS 39) to FVOCI (IFRS 9)
+Fair value gain/(loss) that would have been recognized during
+the year if the financial asset had not been reclassified
+Fair value as at 31 December 2018
+Equity investments
+-
+To financial assets at FVPL
+To equity financial assets at FVOCI
+Loans and advances to customers
+Loans and advances to customers
+Measured at FVOCI (ii)
+Measured at AC
+-
+To financial assets at FVPL
+- To financial assets at AC
+To loans and advances to customers
+measured at FVOCI (ii)
+(10) Other assets
+Other assets
+-
+To financial assets at FVPL
+- To debt financial assets at FVOCI
+- To financial assets at AC
+Reclassification
+31 December 2017
+Equity investments
+(8)
+Following the adoption of IFRS 9, the adjustments to the carrying amount of each financial statement item
+are illustrated as follows (continued):
+Impact of adoption (continued)
+(2,069)
+24,919
+11,109
+1,914,015
+(2,069)
+1,539
+1,234,143
+678,333
+(72)
+(1,997)
+215,229
+1 January 2018
+1,947,974
+effects (i)
+Reclassification
+2,376,638
+effects (i)
+(2,376,638)
+Remeasurement
+effects (iii)
+1 January 2018
+(1,914,015)
+(254,316)
+(208,307)
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+(a) IFRS 9 Financial Instruments
+31 December 2017
+effects (i)
+1,950,043
+Remeasurement
+effects (iii)
+630,676
+The reclassification effects have not taken into account of the remeasurement effects.
+(ii)
+Remeasurement
+effects (iii)
+1 January 2018
+238,762
+A portion of placements at other institutions, notes, forfeiting and retail loans are held for under business model of both for sale
+and collection of contractual principals and interests. Therefore, those financial assets are classified in the FVOCI measurement
+category under IFRS 9.
+(iii)
+The remeasurement effects are mainly from the change of impairment provision by the adoption of IFRS 9.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+163
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+(a) IFRS 9 Financial Instruments
+Impact of adoption (continued)
+For those AFS been reclassified to financial assets at AC and financial assets at FVPL been reclassified
+to equity financial assets at fair value through other comprehensive income category, the following
+table shows their fair value as at 31 December 2018 and the fair value gain or loss that would have been
+recognized if these financial assets had not been reclassified as part of the transition to IFRS 9:
+31 December 2018
+From AFS (IAS 39) to AC (IFRS 9)
+(i)
+(11,109)
+(11,226)
+(178)
+(630,676)
+(415,447)
+(215,229)
+31 December 2017
+Reclassification
+effects (i)
+Remeasurement
+effects (iii)
+1 January 2018
+1,660,864
+(25,277)
+(3,899)
+1,631,688
+1 January 2018
+24,428
+1,660,864
+(49,705)
+(3,899)
+1,607,260
+(358)
+(24,919)
+(24,428)
+31 December 2017
+Reclassification
+effects (i)
+261,275
+(22,513)
+24,428
+Cash and amounts due from banks and other
+financial institutions
+31 December 2017
+6,493,075
+70
+10,297
+18,280 111,598
+4,173
+(1,235) 19,718 12,164
+55,794
+1,507
+10,227
+334,509
+For the year ended 31 December 2017
+Reserves
+Available-
+for-sale
+Exchange
+differences
+Shadow
+(in RMB million)
+Share
+Share
+capital premium
+127,135 683,643
+investment
+-
+2,996
+Contributions from non-controlling
+interests
+Share purchase scheme
+Other equity instruments issued by
+subsidiaries
+Others
+As at 31 December 2018
+2,996
+1,715
+(18)
+(125)
+(143)
+224
+224
+5
+5
+(2,177) (2,177)
+accounting
+reserves
+adjustments Others
+Total comprehensive income
+for the year
+25,564
+(3,187) 92
+25,564
+(3,187)
+92
+for the year
+(885)
+21,881
+(885)
+89,088
+11,187 121,859
+Dividend declared (Note 16)
+(19,194)
+(19,194)
+297
+Other comprehensive income
+99,978
+10,890
+As at 1 January 2017
+18,280 115,447
+20,525
+(3,229) 6,749
+Surplus
+reserve General
+funds reserves
+11,366 36,799
+on translation
+of foreign
+operations
+Retained
+profits
+Non-
+controlling
+interests
+Total
+equity
+1,253
+176,259
+103,012 486,461
+Profit for the year
+89,088
+non-controlling interests
+Appropriations to surplus reserves
+Equity transactions with
+(1,715)
+107,404
+for the year
+Profit for the year
+112,545 583,122
+269,490
+368
+44,964
+13,048 120,452
+(4,977) 9,114 12,164
+18,280 111,598
+As at 1 January 2018
+(2,021) (4,795)
+32,300
+1,439
+(36,513)
+Change in accounting policy (Note 2)
+9,576
+114,566 587,917
+Other comprehensive income
+for the year
+Include:
+Appropriations to general reserves
+(33,270)
+(33,270)
+-
+Dividend declared (Note 16)
+13,602 122,589
+Total comprehensive income
+107,404
+554 2,137
+1,139
+390
+3,742
+(3,688)
+390
+3,742
+1,139
+237,190
+368
+44,964
+capital premium
+(in RMB million)
+Share
+Share
+Financial
+assets at
+Reserves
+For the year ended 31 December 2018
+FVOCI
+reserves
+For the year ended 31 December 2018
+10,830
+-
+(10,830)
+Transfer of gain on disposal of equity
+investments at fair value through
+other comprehensive income to
+retained profits
+Consolidated Statement of Changes in Equity
+Shadow
+accounting
+adjustments
+Surplus
+Others
+12,164
+(6,416) 9,114
+46,089
+18,280 111,598
+As at 31 December 2017
+equity
+interests
+profits
+operations
+Total
+controlling
+Retained
+Non-
+on translation
+of foreign
+Exchange
+differences
+General
+reserves
+reserve
+funds
+Dividend paid to non-controlling
+interests
+Appropriations to general reserves
+(3,688)
+8,165
+(25,308)
+(35,693)
+(16,109)
+(21,278)
+989
+4,335
+31,264
+178,588
+348,046
+(1,147,255)
+Decrease in cash and cash equivalents
+(54,896)
+Net foreign exchange differences
+Cash and cash equivalents at beginning of the year
+2,262
+308,664
+(3,992)
+367,552
+Cash and cash equivalents at end of the year
+(2,902)
+54
+(986,646)
+Others
+Net cash flows used in investing activities
+Cash flows from financing activities
+Capital injected into subsidiaries by non-controlling interests
+3,220
+5,595
+Proceeds from bonds issued
+860,782
+Net cash flows from financing activities
+953,639
+repurchase of insurance operations, net
+Proceeds from borrowings
+47,382
+166,538
+51,615
+Repayment of borrowings
+Interest paid
+Dividends paid
+Increase in assets sold under agreements to
+308,024
+308,664
+Annual Report 2018
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+Changes in accounting policies (continued)
+The adoption of IFRS 9 Financial Instruments from 1 January 2018 resulted in changes in accounting policies
+and adjustments to the amounts recognized in the financial statements. The new accounting policies are
+set out in note 2(11) - (17).
+159
+(a) IFRS 9 Financial Instruments - Impact of adoption
+The impact on the Group's balance sheet as at 1 January 2018 is as follows:
+(in RMB million)
+Assets
+Note
+1 January 2018
+31 December 2017
+6,486,756
+798
+As IFRS 9 was generally adopted without restating comparative information, the reclassifications and the
+adjustments arising from the new impairment rules are therefore not reflected in the restated balance sheet
+as at 31 December 2017, but are recognized in the opening balance sheet on 1 January 2018.
+Ping An Insurance (Group) Company of China, Ltd.
+IFRS 9 replaces the provisions of IAS 39 that relate to the classification and measurement of financial
+assets, impairment of financial assets and hedge accounting.
+Except for the impact of adopting IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with
+Customers and the other standards have no significant impact on the annual consolidated financial
+statements for the year ended 31 December 2018.
+Ping An Insurance (Group) Company of China, Ltd.
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+1. CORPORATE INFORMATION
+Ping An Insurance (Group) Company of China, Ltd. (the 'Company') was registered in Shenzhen, the
+People's Republic of China (the 'PRC') on 21 March 1988. The business scope of the Company includes
+investing in financial and insurance enterprises, as well as supervising and managing various domestic and
+overseas businesses of subsidiaries, and controlled funds. The Company and its subsidiaries are collectively
+referred to as the Group. The Group mainly provides integrated financial products and services and is
+engaged in life insurance, property and casualty insurance, trust, securities, banking and other businesses.
+The registered office address of the Company is 47th, 48th, 109th, 110th, 111th and 112th Floors, Ping An
+Finance Centre, No. 5033 Yitian Road, Futian District, Shenzhen, Guangdong Province, China.
+These consolidated financial statements are presented in millions of Renminbi ('RMB') unless otherwise
+stated.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+(1) BASIS OF PREPARATION
+The consolidated financial statements have been prepared in accordance with IFRS which comprise
+standards and interpretations approved by the IASB and IFRS Interpretations Committee applicable to
+companies reporting under IFRS. The financial statements have been prepared under the historical cost
+convention, except for financial assets and financial liabilities (including derivative instruments) measured
+at fair value and insurance contract liabilities, which have been measured primarily based on actuarial
+methods.
+The preparation of financial statements in conformity with IFRS requires the use of certain critical
+accounting estimates. It also requires management to exercise its judgment in the process of applying the
+Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where
+assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES
+Changes in accounting policies
+To the extent that a topic is not covered explicitly by IFRS, the IFRS framework permits reference to
+another comprehensive body of accounting principles, and therefore the Group has chosen to refer to the
+accounting practices currently adopted by insurance companies reporting under Accounting Standards for
+Business Enterprises.
+The accounting policies adopted are consistent with those of the annual financial statements for the year
+ended 31 December 2017, except for the adoption of new and amended standards as set out in below.
+A number of new or amended International Financial Reporting Standards ("IFRS") became applicable for
+the current reporting period and the Group had to change its accounting policies and make adjustments as
+a result of adopting the following standards:
+IFRS 9 Financial Instruments, and
+IFRS 15 Revenue from Contracts with Customers.
+Increase in policy loans
+Rentals received
+Annual Report 2018
+(240,426)
+(2,525) (6,675)
+808
+1,109
+(46)
+4,486
+4,486
+2,319
+(46)
+18,280 111,598
+(6,416) 9,114
+12,164
+44,964
+368
+237,190
+386 2,705
+114,566 587,917
+Ping An Insurance (Group) Company of China, Ltd.
+46,089
+157
+301
+Annual Report 2018
+Dividends received
+(798)
+(8,165)
+(354,767)
+Dividend paid to non-controlling
+interests
+Disposal of subsidiaries
+(4,150)
+(2,084) (2,084)
+Equity transactions with
+non-controlling interests
+Contributions from non-controlling
+interests
+Share purchase scheme
+Other equity instruments issued by
+subsidiaries
+As at 31 December 2017
+(704) (704)
+FINANCIAL STATEMENTS
+Others
+58
+(6,675)
+Acquisition of subsidiaries
+(142)
+(104)
+Disposal of subsidiaries
+1,206
+(976)
+(42)
+102,604
+46,890
+37,980
+3,743
+2,757
+(26,281)
+(18,156)
+158
+124,094
+Acquisition of non-controlling interests in subsidiaries
+Interest received
+(1,711,291)
+Consolidated Statement of Cash Flows
+1,960,127
+(2,435,128)
+For the year ended 31 December 2018
+(in RMB million)
+Net cash flows from operating activities
+Cash flows from investing activities
+Purchases of investment properties, property and
+equipment, and intangible assets
+2018
+2017
+55
+Notes
+206,260
+121,283
+(10,663)
+(19,257)
+Proceeds from disposal of investment properties,
+property and equipment, and intangible assets
+Proceeds from disposal of investments
+3,573
+1,349,977
+571
+Purchases of investments
+Impairments do not establish a new cost basis and, accordingly, to the extent an impairment loss has been
+previously recorded due to the significant or prolonged criteria described above, any subsequent losses,
+including any portion attributable to foreign currency changes, are also recognized in profit or loss until the
+asset is derecognized.
+Adverse changes relative to the investee's technology, market, customer base, macroeconomic
+indicators relative to the business, significant legal or regulatory matters.
+Significant financial difficulty of the investee, including failure to comply with contractual obligations,
+financial restructuring, deterioration of going concern expectations;
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Available-for-sale financial assets (continued)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+(a) IFRS 9 Financial Instruments Impact of adoption (continued)
+If after an impairment loss has been recognized on an available-for-sale debt instrument, and the fair
+value of the debt instrument increases in a subsequent period whereby the increase can be objectively
+related to an event occurring after the impairment losses were recognized, the impairment loss is reversed
+which is recognized in profit or loss. Impairment losses recognized for equity instruments classified as
+available-for-sale are not reversed through profit or loss.
+The Group also considers qualitative evidence that includes, but is not necessarily limited to the following:
+Financial assets carried at amortized cost
+(a) IFRS 9 Financial Instruments
+Financial assets carried at cost
+For a financial asset that is individually significant, the Group assesses the asset individually for impairment,
+and recognizes the amount of impairment in profit or loss. For a financial asset that is not individually
+significant, the Group assesses the asset individually for impairment or includes the asset in a group of
+financial assets with similar credit risk characteristics and collectively assesses them for impairment. If
+it is determined that no objective evidence of impairment exists for an individually assessed financial
+asset, whether the financial asset is individually significant or not, the financial asset is included in a
+group of financial assets with similar credit risk characteristics and collectively assessed for impairment.
+Financial assets for which an impairment loss is individually recognized are not included with similar risk
+characteristics in the collective assessment for impairment.
+After the Group recognizes an impairment loss of financial assets carried at amortized cost, if there is
+objective evidence that the financial assets' value restores and the restoration can be related objectively to
+an event occurring after the impairment was recognized, the previously recognized impairment loss shall
+be reversed and recognized in profit or loss. However, the reversal shall not result in a carrying amount of
+the financial asset that exceeds what the amortized cost would have been had the impairment not been
+recognized at the date the impairment was reversed.
+168
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+Impact of adoption (continued)
+For the year ended 31 December 2018
+If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument
+that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset
+that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of
+loss is measured as the difference between the asset's carrying amount and the present value of estimated
+future cash flows discounted at the current market rate of return for a similar financial asset. Impairment
+losses on these assets are not reversed.
+If financial assets carried at amortized cost are impaired, the carrying amount of the financial assets is
+reduced to the present value of estimated future cash flows (excluding future credit losses that have not
+been incurred) and the reduction is recognized as an impairment loss in the statement of income. The
+present value of estimated future cash flows shall be calculated with the financial asset's original effective
+interest rate and the related collateral value shall also be taken into account.
+Notes to Consolidated Financial Statements
+Stage 3: If the financial instrument is credit-impaired, the financial instrument is then moved to 'Stage 3'.
+The impairment provisions is measured based on expected credit losses on lifetime basis.
+167
+(b) IFRS 15, 'Revenue from contracts with customers'
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+176
+The Group recognizes or reverses the loss allowance through profit or loss. For debt instruments measured
+at FVOCI, impairment gains or losses are included in the net impairment losses on financial assets and
+corresponding by reduce the accumulated changes in fair value included in the OCI reserve of equity.
+For account receivables, the Group refers to historical experience of credit loss, combines with current
+situation and forward-looking information, formulate the lifetime expected credit loss of the financial
+assets.
+For the financial Instruments in Stage 1 and Stage 2, the Group calculates the interest income based on its
+gross carrying amount (ie amortized cost) before adjusting for impairment provision using the effective
+interest method. For the financial instruments in Stage 3, the interest income is calculated based on the
+carrying amount of the asset, net of the impairment provision, using the effective interest method. Financial
+assets that are originated or purchased credit impaired are financial assets that are impaired at the time of
+initial recognition, and the impairment provision for these assets is the expected credit loss for the entire
+lifetime.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+(a) IFRS 9 Financial Instruments
+Impact of adoption (continued)
+FINANCIAL STATEMENTS
+Classification and measurement of financial assets (continued)
+After initial recognition, available-for-sale financial assets are subsequently measured at fair value, with
+unrealized gains or losses recognized as other comprehensive income in the capital reserve until the asset
+is derecognized, at which time, the cumulative gain or loss is recognized in investment income, or until
+the investment is determined to be impaired, when the cumulative loss is recognized in the statement of
+income in investment income and removed from the capital reserve.
+Reclassification of financial assets with fixed or determinable payments and fixed maturity from available
+for sale to held-to-maturity is permitted when the Group has the ability and intention to hold the financial
+asset until maturity.
+For a financial asset reclassified from the available-for-sale category, the fair value at the date of
+reclassification becomes its new amortized cost and any previous gain or loss on that asset that has been
+recognized in equity is amortized to profit or loss over the remaining life of the investment using the
+effective interest rate ('EIR'). Any difference between the new amortized cost and the expected cash flows
+is also amortized over the remaining life of the asset using the EIR. If the asset is subsequently determined
+to be impaired, then the amount recorded in equity is reclassified to the statement of income.
+Impairment of financial assets
+The Group assesses at the end of the reporting period the carrying amount of financial assets. If there is
+any objective evidence that a financial asset is impaired, the Group provides for such impairment losses.
+The objective evidence which indicates impairment of financial assets represents events actually occurring
+after initial recognition of financial assets which have an impact on the financial assets' estimated future
+cash flows, and the impact can be reliably measured.
+Available-for-sale financial assets
+As at the end of each reporting period, the Group evaluates each of the available-for-sale equity
+instruments to determine whether the investments are impaired. If objective evidence of impairment exists,
+the Group records an impairment loss in the statement of income equal to the difference between the
+cost of the instrument and the current fair value, adjusted for losses recorded in previous periods. Any
+unrealized gains or losses previously recognized in the available-for-sale financial assets reserve is removed
+and recognized in the statement of income as part of the calculation of impairment loss described above.
+For equity instruments, a significant or prolonged decline in the fair value of an equity instrument bellow
+the cost is objective evidence of impairment. In conducting an impairment analysis, the Group considers
+quantitative and qualitative evidence. More specifically, the Group collectively considers the magnitude of
+the decline in fair value relative to the cost, volatility, and the duration of the decline in evaluating whether
+a decline in fair value is significant. The Group considers the period and consistency of the decline in
+evaluating whether a decline in fair value is prolonged. The Group generally considers a decline of 50% or
+more as significant and a period of 12 months or longer is considered to be prolonged.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Available-for-sale financial investments include equity and debt securities. Equity investments classified
+as available-for-sale are those, which are neither classified as held for trading nor designated at fair
+value through profit or loss. Debt securities in this category are those that are intended to be held for
+an indefinite period of time and which may be sold in response to needs for liquidity or in response to
+changes in the market conditions.
+IFRS 15 deals with revenue recognition and establishes principles for reporting useful information to users
+of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising
+from an entity's contracts with customers. Revenue is recognized when a customer obtains control of a
+good or service and thus has the ability to direct the use and obtain the benefits from the good or service.
+The standard replaces IAS 18 ‘Revenue' and IAS 11 'Construction contracts' and related interpretations. The
+standard is effective for financial years commencing on 1 January 2018. The Group has applied IFRS 15 and
+completed the assessment of the impact which has no material impact on the Group for the year ended 31
+December 2018.
+Annual Report 2018
+Material judgement is required in determining long term insurance contract liabilities and in choosing
+discount rates/investment return, mortality, morbidity, lapse rates, policy dividend, and expenses
+assumptions relating to long term life insurance contracts. Such assumptions should be determined based
+on current information available at the end of the reporting date. The Group has changed the above
+assumptions based on current information available as at 31 December 2018 and updated estimate for
+future cash flows, with the corresponding impact on long term life insurance contract liabilities taken
+into statement of income of the current year. As a result of such changes in assumptions, long term life
+insurance and long term health insurance policyholders' reserves were decreased by RMB3,002 million as at
+31 December 2018 and the profit before tax for the year 2018 was increased by RMB3,002 million (2017: long
+term life insurance and long term health insurance policyholders' reserves were increased by RMB32,193
+million as at 31 December 2017 and the profit before tax for the year 2017 was decreased by RMB32,193
+million).
+those to be measured at fair value through other comprehensive income ("FVOCI"); or
+those to be measured at amortized cost ("AC");
+The Group classifies its financial assets in the following measurement categories, which depends on the
+Group's business model for managing the financial assets and the contractual terms of the cash flows:
+Classification and Measurement
+At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
+asset not at fair value through profit or loss, transaction costs that are incremental and directly attributable
+to the acquisition or issue of the financial asset. Transaction costs of financial assets carried at FVPL are
+expensed in profit or loss.
+The Group shall recognize a financial asset or a financial liability in its statement of financial position when,
+and only when, it becomes a party to the contractual provisions of the instrument.
+Recognition
+(12) FINANCIAL ASSETS
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on
+hand, demand deposits, current accounts with the Central Bank and short term highly liquid investments
+including assets purchased under reverse repurchase agreements and others which are readily convertible
+into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short
+maturity of generally within three months when acquired.
+(11) CASH AND CASH EQUIVALENTS
+For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are
+translated into RMB at the exchange rates for their functional and currencies ruling at the dates of the
+cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are
+translated into RMB at the weighted average exchange rate for the year.
+The functional currency of most of overseas subsidiaries is the Hong Kong dollar. At the end of the
+reporting period, the assets and liabilities of these overseas subsidiaries are translated into the presentation
+currency of the Company at the exchange rates prevailing at the end of the reporting period and their
+statements of income are translated into RMB at the average exchange rate for the year. The resulting
+exchange differences are recognized in other comprehensive income and accumulated in the exchange
+differences on translation of foreign operations reserve. On disposal of a foreign operation, the component
+of other comprehensive income relating to that particular foreign operation is recognized in the statement
+of income.
+those to be measured at fair value through profit or loss ("FVPL").
+(10) FOREIGN CURRENCIES (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+174
+FINANCIAL STATEMENTS
+173
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
+the exchange rates as at the dates of initial transactions. Non-monetary items measured at fair value in a
+foreign currency are translated using the exchange rates at the date when the fair value was determined.
+The gain or loss on change arising on translation of a non-monetary item measured at fair value is treated
+in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation difference
+on the item whose fair value gain or loss is recognized in other comprehensive income or profit or loss is
+also recognized in profit or loss and other comprehensive income, respectively).
+Foreign currency transactions recorded by the entities in the Group are initially recorded using their
+respective functional currency rates prevailing at the dates of the transactions. Monetary assets and
+liabilities denominated in foreign currencies are translated at the functional currency rates of exchange
+ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items
+are recognized in the statement of income.
+These financial statements are presented in RMB, which is the Company's functional and presentation
+currency. Each entity in the Group determines its own functional currency and items included in the
+financial statements of each entity are measured using that functional currency.
+(10) FOREIGN CURRENCIES
+The Group has assessed the nature of its jointly controlled entities and determined them to be joint
+ventures. The Group has rights to the net assets of these jointly controlled entities. The Group's
+investments in its jointly controlled entities are accounted for using the equity method of accounting, less
+any impairment losses. Refer to Note 2. (8) for details of the equity method of accounting.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(9) JOINTLY CONTROLLED ENTITIES
+The Group determines the classification of debt investments according to its business model and the
+contractual cash flow characteristics of the financial assets. The investments shall be classified as FVPL
+if the cash flows cannot pass solely payments of principal and interest on the principal amount ("SPPI”)
+testing. Otherwise, the classification finally depends on the business model. For investments in equity
+instruments, investments are classified as FVPL in general, except those designated as the equity
+investment at FVOCI.
+Ping An Insurance (Group) Company of China, Ltd.
+For the financial assets subject to ECL measurement, the Group assesses the significant increase in credit
+risk since initial recognition or whether an asset is considered to be credit impaired, 'Three-stage' expected
+credit loss models are established and staging definition are set for each of these financial assets class.
+Incorporating forward-looking information, expected credit losses for financial assets are recognized into
+the different stages.
+iii) Establishing the number and relative weightings of forward-looking scenarios for the associated ECL.
+ii) Determining criteria for significant increase in credit risk;
+Choosing appropriate models and assumptions for the measurement of ECL including exposure at
+default (EAD), probability of default (PD), loss given default (LGD), etc.;
+The Group assesses on a forward looking basis the expected credit losses associated with its debt
+instruments carried at amortized cost, FVOCI, with the exposure arising from loan commitments and
+financial guarantee contracts that are not in the scope of 'Insurance Contracts'. A number of significant
+judgements are also required in applying the accounting requirements for measuring ECL, such as:
+Expected credit loss refers to the weighted average amount of credit loss of financial instruments based
+on the probability of default. Credit loss refers to the difference between all contractual cash flows
+receivable and all cash flows that the entity expects to receive, discounted at the original effective interest
+rate.
+Impairment
+(12) FINANCIAL ASSETS (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Annual Report 2018
+175
+The Group subsequently measures all equity investments at fair value. Where the Group's management
+has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent
+reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
+Dividends, representing a return on such investments continue to be recognized in profit or loss when the
+Group's right to receive payments is established.
+Equity instruments
+FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL.
+The gains or losses arisen from fair value changes on the debt investments measured at FVPL are
+recognized in profit or loss.
+FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
+where the assets' cash flows represent solely payments of principal and interest, and that are not
+designated as FVPL are measured at FVOCI. Movements in the carrying amount are taken through
+OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange
+gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the
+cumulative gain or loss on the instrument's amortized cost previously recognized in OCI is reclassified
+from equity to profit or loss. Interest income from these financial assets is included in interest income
+using the effective interest rate method. Such assets held by the group mainly include debt financial
+assets at FVOCI and loans and advances to customers measured at FVOCI, etc.
+Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows.
+represent solely payments of principal and interest, and that are not designated at FVPL are measured
+at amortized cost. Interest income from these financial assets is included in interest income using the
+effective interest rate method. Any gain or loss arising from derecognition or impairment is recognized
+directly in profit or loss. Such assets held by the group mainly include cash and amounts due from
+banks and other financial institution, balances with the central bank, accounts receivable, financial
+assets at AC, loans and advances to customers measured at AC, etc.
+debt instruments:
+Debt instruments are those instruments that meet the definition of a financial liability from the issuer's
+perspective, such as loans, government and corporate bonds, etc. Subsequent measurement of
+debt instruments depends on the Group's business model for managing the asset and the cash flow
+characteristics of the asset. There are three measurement categories into which the Group classifies its
+Debt instruments
+Classification and Measurement (continued)
+(12) FINANCIAL ASSETS (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Changes in accounting estimates
+The results of associates are included in the Group's statement of income to the extent of dividends
+received and receivable. The Group's investments in associates are treated as non-current assets and are
+stated at cost less any impairment losses.
+The financial statements of the associates are prepared for the same reporting period as the parent
+company. Where necessary, adjustments are made to bring the accounting policies in line with those of the
+Group.
+Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
+control, and continue to be consolidated until the date when such control ceases. The financial statements
+of the subsidiaries are prepared for the same reporting period as the parent company, using consistent
+accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from
+intra-group transactions and dividends, are eliminated on consolidation in full, unless the transaction
+provides evidence of an impairment of the transferred asset.
+The consolidated financial statements comprise the financial statements of the Company and its
+subsidiaries as at 31 December 2018 and for the year then ended.
+(5) BASIS OF CONSOLIDATION
+Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and
+part of the operation within that unit is disposed of, the goodwill associated with the operation disposed
+of is included in the carrying amount of the operation when determining the gain or loss on the disposal.
+Goodwill disposed in these circumstances is measured based on the relative value of the disposed
+operation and the portion of the cash-generating unit retained.
+Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of
+cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating
+unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognized. An
+impairment loss recognized for goodwill is not reversed in subsequent periods.
+(4) BUSINESS COMBINATIONS AND GOODWILL (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill
+is tested for impairment annually or more frequently if events or changes in circumstances indicate that
+the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31
+December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the
+acquisition date, allocated to each of the Group's cash-generating units, or groups of cash-generating units,
+that are expected to benefit from the synergies of the combination, irrespective of whether other assets or
+liabilities of the Group are assigned to those units or groups of units.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred,
+the amount recognized for non-controlling interests and any fair value of the Group's previously held
+equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the sum
+of this consideration and other items is lower than the fair value of the net assets acquired, the difference
+is, after reassessment, recognized in profit or loss as a gain on bargain purchase.
+Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition
+date. Contingent consideration classified as an asset or a liability that is a financial instrument and within
+the scope of IFRS 9 is measured at fair value with changes in fair value either recognized in profit or loss or
+as a change to other comprehensive income. If the contingent consideration is not within the scope of IFRS
+9, it is measured in accordance with the appropriate IFRS. Contingent consideration that is classified as
+equity is not remeasured and subsequent settlement is accounted for within equity.
+Total comprehensive income within a subsidiary is still attributed to the non-controlling interest even if it
+results in a deficit balance.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
+classification and designation in accordance with the contractual terms, economic circumstances and
+pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in
+host contracts by the acquiree. If the business combination is achieved in stages, the previously held equity
+interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit
+or loss.
+(4) BUSINESS COMBINATIONS AND GOODWILL
+There are no other IFRSS or IFRIC interpretations that are not yet effective that would be expected to have
+a material impact on the Group.
+IFRS 17, 'Insurance Contracts', was published on 18 May 2017. IFRS 17 established principles for the
+recognition, measurement, presentation and disclosure of insurance contracts issued. It replaces IFRS
+4, which currently permits a wide variety of practices. IFRS 17 requires a current measurement model,
+where estimates are remeasured in each reporting period. The measurement is based on the building
+blocks of discounted, probability-weighted cash flows, a risk adjustment and a contractual service margin
+representing the unearned profit of the contract. The new standard is currently mandatorily effective for
+financial years commencing on or after 1 January 2021, however in November 2018, IASB proposed to defer
+IFRS 17 until the financial period beginning on or after 1 January 2022. The Group has started to assess the
+impact of IFRS 17.
+(3) ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS
+(CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+170
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 169
+IFRS 16, 'Leases' addresses the definition of a lease, recognition and measurement of leases and establishes
+principles for reporting useful information to users of financial statements about the leasing activities of
+both lessees and lessors. A key change arising from IFRS 16 is that most operating leases will be accounted
+on balance sheet for lessees. The standard replaces IAS 17 ‘Leases', and related interpretations. The
+new standard will be effective for financial years commencing on or after 1 January 2019. The Group has
+completed the assessment of the impact of IFRS 16, which would not be expected to have material impact
+on the Group.
+(3) ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS
+The Group has not applied the following new and revised standards, which have been issued but are not
+yet effective.
+Business combinations that are not under common control are accounted for using the acquisition method.
+The cost of an acquisition is measured at the acquisition date fair value which is the sum of the acquisition
+date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owners
+of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For
+each business combination, the Group elects whether to measure the non-controlling interests in the
+acquiree that are present ownership interests and entitle their holders to a proportionate share of net
+assets in the event of liquidation at fair value or at the proportionate share of the acquiree's identifiable
+net assets. All other components of non-controlling interests are measured at fair value. Acquisition-related
+costs are expensed as incurred.
+Upon application of the equity method, the Group determines whether it is necessary to recognize an
+additional impairment loss on the Group's investments in its associates. The Group determines at each
+reporting date whether there is any objective evidence that the investment in the associate is impaired. If
+this is the case, the Group calculates the amount of impairment as the difference between the recoverable
+amount of the associate and its carrying value and recognizes the amount in the statement of income.
+Upon loss of significant influence over the associate, the Group measures and recognizes any remaining
+investment at its fair value. Any differences between the carrying amount of the associate upon loss of
+significant influence and the fair value of the remaining investment, as well as the gain on disposal of the
+associates, are recognized in profit or loss.
+A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
+transaction. If the Group loses control over a subsidiary, it:
+Derecognizes the carrying amount of any non-controlling interest;
+(8) ASSOCIATES (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+172
+The Group's investments in associates are stated in the consolidated financial statement of financial
+position at the Group's share of net assets under the equity method of accounting, less any impairment
+losses. The Group's share of post-acquisition profit or loss is recognized in the income statement, and its
+share of post-acquisition movements in other comprehensive income is recognized in other comprehensive
+income with a corresponding adjustment to the carrying amount of the investment. When the Group's
+share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
+receivables, the Group does not recognize further losses, unless it has incurred legal or constructive
+obligations or made payments on behalf of the associate. Unrealized gains and losses resulting from
+transactions between the Group and its associates are eliminated to the extent of the Group's investments
+in the associates, except where unrealized losses provide evidence of an impairment of the asset
+transferred. Goodwill arising from the acquisition of associates is included in the carrying amount of the
+investment and is neither amortized nor individually tested for impairment.
+An associate is an entity, not being a subsidiary or a jointly controlled entity, in which the Group has a long
+term interest of generally not less than 20% of the equity voting rights and over which it is in a position to
+exercise significant influence.
+(8) ASSOCIATES
+The Group holds beneficiary certificates in its trust products, debt investment plans, equity investment
+plans and asset funding plans.
+The Group has determined that all of its trust products, debt investment plans, equity investment plans
+and asset funding plans, which are not controlled by the Group, are unconsolidated structured entities.
+Trust products, equity investment plans and asset funding plans are managed by affiliated or unaffiliated
+trust companies or asset managers and invest the funds raised in loans or equities of other companies.
+Debt investment plans are managed by affiliated or unaffiliated asset managers and its major investment
+objectives are infrastructure funding projects. Trust products, debt investment plans, equity investment
+plans and asset funding plans finance their operations by issuing beneficiary certificates which entitle the
+holders to agreed stake according to contractual terms in the respective trust products', debt investment
+plans', equity investment plans' and asset funding plans' income.
+The Group determines whether it is an agent or a principal in relation to those structured entities in which
+the Group acts as an asset manager on management's judgement. If an asset manager is agent, it acts
+primarily on behalf of others and so does not control the structured entity. It may be principal if it acts
+primarily for itself, and therefore controls the structured entity.
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant
+factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks
+only, and the relevant activities are directed by means of contractual or related arrangements.
+Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
+(7) STRUCTURED ENTITIES
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(6) SUBSIDIARIES
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+171
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Reclassifies the Group's share of components previously recognized in other comprehensive income to
+profit or loss or retained earnings, as appropriate.
+Recognizes any surplus or deficit in profit or loss; and
+Recognizes the fair value of any investment retained;
+Recognizes the fair value of the consideration received;
+Derecognizes the cumulative translation differences recorded in equity;
+A subsidiary is an entity (including structured entities) over which the Group has control. The Group
+controls an entity when the Group has power over an entity, is exposed to, or has rights to, variable returns
+from its involvement with the entity and has the ability to affect these returns through its power over
+the entity. The results of subsidiaries are included in the Company's statement of income to the extent of
+dividends received and receivable. The Company's investments in subsidiaries are stated at cost less any
+impairment losses.
+Stage 1: A financial instrument that is not credit-impaired on initial recognition is classified in 'Stage 1' and
+has its credit risk continuously monitored by the Group. The impairment provisions is measured
+at an amount equal to the 12-month expected credit losses for the financial assets which are not
+considered to have significantly increased in credit risk since initial recognition.
+Stage 2: If a significant increase in credit risk ('SICR') since initial recognition is identified, the financial
+instrument is moved to ‘Stage 2' but is not yet deemed to be credit-impaired. The impairment
+provisions is measured based on expected credit losses on lifetime basis.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Fully depreciated assets are retained in the financial statements until they are no longer in use and no
+further charge for depreciation is made in respect of these assets.
+(22) CONSTRUCTION IN PROGRESS
+Construction in progress mainly represents costs incurred in the construction of building premises, as well
+as the cost of equipment pending installation, less any impairment losses.
+No provision for depreciation is made on construction in progress until such time the relevant assets are
+completed and ready for use.
+182
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+(23) INTANGIBLE ASSETS (OTHER THAN GOODWILL)
+Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible
+assets acquired in a business combination is the fair value as at the date of acquisition. The useful
+lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
+are subsequently amortized on the straight-line basis over the useful economic life and assessed for
+impairment whenever there is an indication that the intangible asset may be impaired. The amortization
+period and the amortization method for an intangible asset with a finite useful life are reviewed at least at
+each financial year end.
+Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
+cash-generating unit level. Such intangible assets are not amortized. The useful life of an intangible asset
+with an indefinite life is reviewed annually to determine whether the indefinite life assessment continues to
+be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for on
+a prospective basis.
+(a) Core deposits
+Core deposits are accounts that a financial institution expects to maintain for an extended period of time
+due to ongoing business relationships. The intangible asset value associated with core deposits reflects
+the present value of additional cash flow resulted from the use of the deposits at a lower cost alternative
+source of funding in the future periods.
+The useful lives and depreciation methods are reviewed periodically to ensure that the method and period
+of depreciation are consistent with the expected pattern of economic benefits from the items of property
+and equipment.
+(b) Expressway operating rights
+(c) Prepaid land premiums
+Prepaid land premiums are prepaid under PRC law for fixed periods. Prepaid land premiums are initially
+stated at cost and subsequently amortized on the straight-line basis over the lease terms. All lands related
+to the Group's prepaid land premiums are located in Mainland China.
+(d) Trademarks
+Trademarks are initially stated at cost and subsequently amortized on the straight-line basis over the
+estimated useful lives.
+The estimated useful lives of intangible assets are set as below:
+Expressway operating rights
+Prepaid land premiums
+Core deposits
+Trademarks
+Software and others (including patents and know-how, customer relationships and
+contract rights, etc.)
+Estimated useful lives
+20 - 30 years
+Expenditures on acquiring the expressway operating rights are capitalized as intangible assets and
+subsequently amortized on the straight-line basis over the contract terms.
+30
+510 years
+1% - 10%
+0% - 10%
+1% - 10%
+A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of
+the leased asset to the lessee. At the commencement of the lease term, the Group recognizes the minimum
+lease payments receivable by the Group, the initial direct costs and the unguaranteed residual value in the
+finance lease receivable. The difference between (a) the aggregate of the minimum lease payments and
+the unguaranteed residual value and (b) the aggregate of their present values is recognized as unearned
+finance lease income. Finance lease receivable net of unearned finance lease income which represents the
+Group's net investment in the finance lease is presented as finance lease receivable in the consolidated
+statement of financial position. Unearned finance lease income is allocated over the lease term based on
+a pattern reflecting a constant periodic return on the Group's net investment in the finance lease, and is
+recognized as 'other revenues and other gains'.
+The Group incorporates forward looking information in estimating the expected credit loss for finance lease
+receivable. Refer to note 13 and note 24 for details.
+(19) PRECIOUS METALS
+The Group's precious metals represent gold and other precious metals. Precious metals that are not related
+to the Group's precious metals trading activities are initially measured at acquisition cost and subsequently
+measured at the lower of cost and net recoverable amount. Precious metals acquired by the Group for
+trading purposes are initially measured at fair value and subsequent changes in fair value are recorded in
+statement of income.
+(20) INVESTMENT PROPERTIES
+The useful life and depreciation methods are reviewed periodically to ensure that the method and period of
+depreciation are consistent with the expected pattern of economic benefits from the individual investment
+properties.
+Fully depreciated assets are retained in the financial statements until they are no longer in use and no
+further charge for depreciation is made in respect of these assets.
+Transfers to, or from, investment properties are made when, and only when, there is evidence of a change
+in use or the investment property is sold.
+Investment properties are interests in land and buildings that are held to earn rental income and/
+or for capital appreciation, rather than for use in the production or supply of goods or services or for
+administrative purposes.
+Investment properties are initially measured at cost, which is the fair value of the consideration given to
+acquire them, including transaction costs. Subsequently, all investment properties are stated at cost less
+accumulated depreciation and accumulated impairment losses.
+Depreciation is computed on a straight-line basis, after taking into account the estimated residual value (1%
+to 10% of original cost), over the estimated useful lives. The estimated useful lives of investment properties
+vary from 20 to 40 years.
+Annual Report 2018
+Over the shorter of economic
+useful lives and terms of the leases
+20-40 years
+3 - 15 years
+Ping An Insurance (Group) Company of China, Ltd. 181
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(21) PROPERTY AND EQUIPMENT
+Property and equipment, other than construction in progress, are stated at cost less accumulated
+depreciation and any impairment losses. An item of property and equipment is derecognized upon disposal
+or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or
+retirement recognized in the statement of income in the year the asset is derecognized is the difference
+between the net sales proceeds and the carrying amount of the relevant asset.
+The cost of an item of property and equipment comprises its purchase price and any directly attributable
+costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred
+after items of property and equipment have been put into operation, such as repairs and maintenance, is
+normally charged to the statement of income in the year in which it is incurred. In situations where it can
+be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits
+expected to be obtained from the use of an item of property and equipment, and where the cost of the
+item can be measured reliably, the expenditure is capitalized as an additional cost of that asset or as a
+replacement.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and
+equipment to its residual value over its estimated useful life. The principal assumptions used for this
+purpose are as follows:
+Leasehold improvements
+Buildings
+Equipment, furniture and fixtures
+Motor vehicles
+Estimated residual values
+Estimated useful lives
+FINANCIAL STATEMENTS
+(18) FINANCE LEASE RECEIVABLE AND UNEARNED FINANCE INCOME
+50 years,
+indefinite
+10 40 years
+0.8% of the premium income for non-investment type accident insurance; 0.08% of the consideration
+received for investment type accident insurance with guaranteed return, and 0.05% of the
+consideration received for investment type accident insurance without guaranteed return.
+No additional provision is required when the accumulated insurance guarantee fund balances of Ping An
+Life Insurance Company of China, Ltd. ('Ping An Life'), Ping An Annuity Insurance Company of China, Ltd.
+('Ping An Annuity') and Ping An Health Insurance Company of China, Ltd. ('Ping An Health') reach 1% of
+their respective total assets. For Ping An Property & Casualty Insurance Company of China, Ltd. ('Ping An
+Property & Casualty'), no additional provision is required when the accumulated balance reaches 6% of its
+total assets. Insurance guarantee fund levy is charged to expenses as incurred.
+The revenue and premium income used in the calculation of the insurance guarantee fund is the amount
+agreed in the insurance policies.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+185
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS
+Insurance contracts are those contracts under which the Group has accepted significant insurance risk from
+the policyholders by agreeing to compensate the policyholders if a specified uncertain future event (the
+insured event) adversely affects the policyholders. Insurance contracts are classified as direct insurance
+contracts and reinsurance contracts. The significance of insurance risk as determined by the Group is
+mainly dependent on the magnitude of its potential effect.
+Some insurance contracts contain both an insurance component and a deposit component. The Group
+chooses to unbundle those components, if the insurance component and the deposit component are
+distinct and separately measurable. The unbundled insurance component is accounted for according to
+IFRS 4 and the unbundled deposit component is accounted for according to relevant accounting policies.
+If the insurance component and the deposit component are not distinct and separately measurable, the
+whole contract is accounted for as an insurance contract.
+0.8% of the premium income for short term health insurance, and 0.15% of the premium income for long
+term health insurance; and
+(29) SIGNIFICANT INSURANCE RISK TESTING
+(30) INSURANCE CONTRACT LIABILITIES
+The insurance contract liabilities of the Group include long term life insurance policyholders' reserves,
+unearned premium reserves and claim reserves.
+When measuring insurance contract liabilities, the Group classifies insurance contracts whose insurance
+risks are of similar nature as a measurement unit. Property and casualty and short term life insurance
+policies are grouped into certain measurement units by lines of business. For long term life insurance
+policies, the Group mainly considers the characteristics of the policies, including product type, gender, age,
+and durations of policies, when determining the measurement units.
+Insurance contract liabilities are measured based on a reasonable estimate of amount of payments when
+the Group fulfills the relevant obligations under the insurance contracts, which represents the difference
+between expected future cash outflows and inflows under such contracts, i.e., the expected future net cash
+outflows.
+Expected future cash outflows represent reasonable cash outflows which are necessary for the
+Group to fulfill the obligations under the insurance contracts (including benefits attributable to the
+policyholders), and mainly include:
+Guaranteed benefits under the insurance contracts, including claims, mortality benefits, disability
+benefits, morbidity benefits, survival benefits and maturity benefits;
+Non-guaranteed benefits under the insurance contracts arising from constructive obligations,
+including policyholder dividends, etc.;
+Reasonable expenses necessary for policy administration and claims handling, including policy
+maintenance expenses, claim expenses, etc.
+Expected future cash inflows represent cash inflows arising from assuming liabilities under the
+insurance contracts, including premium income and other charges.
+186
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+For other insurance contracts issued by the Group, tests are performed to determine if the contracts
+contain significant insurance risk, and contracts of similar nature are grouped together for this purpose.
+When performing the significant insurance risk test, the Group makes judgments in sequence as to whether
+the contract transfers insurance risk, whether the contract has commercial substance, and whether the
+transferred insurance risk is significant.
+20 years
+0.15% of the consideration received for life insurance with guaranteed return, and 0.05% of the
+consideration received for life insurance without guaranteed return;
+According to the 'Administrative Regulations on the Insurance Guarantee Fund' (CIRC [2008] No.2), the
+Group calculates the insurance guarantee fund as follows:
+228 years
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+183
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+(24) FORECLOSED ASSETS
+Foreclosed assets are initially recognized at fair value. The difference between the initial fair value and the
+sum of the related loan principal, interest receivable and impairment provision is taken into the statement
+of income. At the end of the reporting period, the foreclosed assets are measured at the lower of their
+carrying value and net recoverable amount. When the carrying value of the foreclosed assets is higher than
+the net recoverable amount, a provision for the decline in value of foreclosed assets is recognized in the
+statement of income in 'General and administrative expenses'.
+(25) INVENTORIES
+The Group's inventories comprise raw materials, product in progress, finished goods, other supplemental
+materials, etc. and lands purchased that have been set to be used to build properties for sale by real estate
+subsidiaries. Inventory is initially measured at cost which includes purchasing cost, processing cost and
+other costs which made the inventory to the present place and status.
+The actual cost of inventory is priced based on moving weighted average method.
+0.8% of the premium income for non-investment type property insurance, 0.08% of the consideration
+received for investment type property insurance with guaranteed return, and 0.05% of the
+consideration received for investment type property insurance without guaranteed return;
+At the end of the reporting period, inventory is measured at the lower of its cost and net realizable value. If
+the net realizable value is lower than cost, inventory impairment provisions are allotted.
+Inventory impairment provisions should be accrued when the cost of individual inventory item is higher
+than its net realizable value.
+After allotting inventory impairment provisions, if the influencing factors of previous inventory impairment
+provisions have disappeared, and hence the net realizable value of the inventories are higher than their
+book values, the previous written down amount should be recovered and the reversed amount which is
+within the amount of original allotted inventory impairment provisions should be included in current profit
+and loss.
+(26) IMPAIRMENT OF NON-FINANCIAL ASSETS
+The Group assesses at each reporting date whether there is an indication that a non-financial asset other
+than deferred tax assets may be impaired. If any such indication exists, or when annual impairment testing
+for a non-financial asset is required, the Group makes an estimate of the asset's recoverable amount. A
+non-financial asset's recoverable amount is the higher of the asset's or cash-generating unit's fair value
+less costs to sell and its value in use and is determined for an individual asset, unless the asset does not
+generate cash inflows that are largely independent of those from other assets or groups of assets, in which
+case the recoverable amount is determined for the cash-generating unit to which the asset belongs. Where
+the carrying amount of a non-financial asset exceeds its recoverable amount, the asset is considered
+impaired and is written down to its recoverable amount. In assessing value in use, the estimated future
+cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
+assessments of the time value of money and the risks specific to the asset. In determining fair value less
+costs to disposal, an appropriate valuation model is used. These calculations are corroborated by valuation
+multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
+184
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(26) IMPAIRMENT OF NON-FINANCIAL ASSETS (CONTINUED)
+For non-financial assets other than goodwill, an assessment is made at each reporting date as to whether
+there is any indication that previously recognized impairment losses may no longer exist or may have
+decreased. If such an indication exists, the Group makes an estimate of the recoverable amount. A
+previously recognized impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognized. If that is the case,
+the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
+exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
+been recognized for the asset in prior years. Such a reversal is recognized in the statement of income.
+Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances
+indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable
+amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. The
+recoverable amount is the higher of its fair value less costs to disposal and its value-in-use, determined
+on an individual asset (or cash-generating unit) basis, unless the individual asset (or cash-generating unit)
+does not generate cash flows that are largely independent from those of other assets or groups of assets
+(or groups of cash-generating units). Impairment losses recognized in relation to goodwill are not reversed
+for subsequent increases in its recoverable amount.
+Intangible assets with indefinite useful lives are tested for impairment annually at each year end either
+individually or at the cash-generating unit level, as appropriate.
+(27) INSURANCE GUARANTEE FUND
+Net realizable value is the estimated selling price in the ordinary course of business less the estimated
+costs of completion and the estimated costs necessary to make the sale and related taxes. Estimates of net
+recoverable amount are based on the most reliable evidence available at the time the estimates are made,
+also taking into consideration the purpose for which the inventory is held and the influence of events after
+the end of the reporting period.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2018
+177
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(13) FINANCIAL LIABILITIES (CONTINUED)
+Financial liabilities at fair value through profit or loss (continued)
+The Group may, at initial recognition, designate a financial liability as measured at fair value through profit
+or loss when one of the following criteria is met:
+(a) it eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
+arise from measuring assets or liabilities or recognizing the gains and losses on them on different
+bases; or
+(b) a group of financial liabilities is managed and its performance is evaluated on a fair value basis, in
+accordance with a documented risk management or investment strategy, and information about the
+group is provided internally on that basis to the entity's key management personnel; or
+(c)
+a contract contains one or more embedded derivatives, with the host being not an asset within the
+scope of IFRS 9, and the embedded derivative(s) do(es) significantly modify the cash flows;
+Once designated as at fair value through profit or loss at initial recognition, the financial liabilities shall not
+be reclassified to other financial liabilities in subsequent periods. Financial liabilities designated at FVPL are
+subsequently measured at fair value. Any changes in fair value are recognized in profit or loss, except for
+changes in fair value arising from changes in the Group's own credit risk which are recognized in the OCI.
+Changes in fair value due to changes in the Group's own credit risk are not subsequently reclassified to
+profit or loss upon derecognition of the liabilities.
+Other financial liabilities
+The Group measures other financial liabilities subsequently at amortized cost, using the effective interest
+method, the other financial liabilities of the Group mainly include customer deposits and payables to
+brokerage customers, short term borrowings, long term borrowings and bonds payable, etc.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Such financial liabilities held for trading shall subsequently measured at fair value. All the related realized
+and unrealized gains/(losses) are recognized in profit/(loss) in the current period.
+(b) on initial recognition are part of a portfolio of identified financial instruments that are managed
+together and for which there is evidence of a recent actual pattern of short-term profit-taking; or
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(12) FINANCIAL ASSETS (CONTINUED)
+Derecognition
+Financial assets are derecognized when:
+(a) the contractual rights to receive the cash flows from the financial assets have expired;
+(b) they have been transferred and the Group transfers substantially all the risks and rewards of
+ownership;
+Financial guarantee contracts
+(c) they have been transferred and the Group neither transfers nor retains substantially all the risks and
+rewards of ownership and the Group has not retained control.
+The Group writes off financial assets, in whole or in part, when it has exhausted all practical recovery
+efforts and has concluded there is no expectation of recovery. Indicators that there is no reasonable
+expectation of recovery include: (a) ceasing enforcement activity, and (b) where the Group's recovery
+method is foreclosing on collateral and the value of the collateral is such that there is no reasonable
+expectation of recovering in full.
+(13) FINANCIAL LIABILITIES
+At initial recognition, the Group classifies a financial liability as at fair value through profit or loss or
+other financial liabilities. The Group measures a financial liability at its fair value plus, in the case of a
+financial liability not at fair value through profit or loss, transaction costs that are incremental and directly
+attributable to the acquisition or issue of the financial liability. Transaction costs of financial liabilities
+carried at FVPL are expensed in profit or loss.
+When all or part of the current obligations of a financial liability have been discharged, the Group
+derecognises the portion of the financial liability or obligation that has been discharged. The difference
+between the carrying amount of the derecognised liability and the consideration is recognised in profit or
+loss.
+Financial liabilities at fair value through profit or loss
+Financial liabilities at fair value through profit or loss include financial liabilities held for trading and other
+financial liabilities designated as such at initial recognition. Financial liabilities held for trading are the
+financial liabilities that:
+are incurred principally for the purpose of repurchasing it in the near term;
+When the equity financial assets measured at FVOCI is derecognised, the cumulative gain or loss previously
+recognized in OCI is reclassified from equity to retained profits. When the other financial assets is
+derecognised, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit
+or loss.
+Financial guarantee contracts issued by the Group are those contracts that require a payment to be made
+to reimburse the holder for a loss, which incurs because the specified debtor fails to make a payment when
+due in accordance with the terms of a debt instrument. The Group initially measures such contracts at fair
+value. The fair value at inception is likely to equal the premium received. This amount is recognized ratably
+over the period of the contract to fees and commission income. Subsequently, the liabilities arising from
+the financial guarantee contracts are measured at the higher of the premium received on initial recognition
+less income recognised in accordance with the principles of IFRS 15, and the amount of loss allowance
+calculated as described in note 2.(12).
+(c) are derivatives (except for a derivative that is a designated and effective hedging instrument or a
+financial guarantee contract).
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(15) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
+For financial instruments where there is no active market, the fair value is determined by using valuation
+techniques. Such techniques should be appropriate in the circumstances for which sufficient data is
+available, and the inputs should be consistent with the objective of estimating the price at which an orderly
+transaction to sell the asset or to transfer the liability would take place between market participants at the
+measurement date under current market conditions, and maximize the use of relevant observable inputs
+and minimize the use of unobservable inputs.
+Ping An Insurance (Group) Company of China, Ltd.
+179
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+Such techniques include using recent prices in arm's length transactions, reference to the current
+market value of another instrument which is substantially the same, discounted cash flow analysis and/
+or option pricing models. For discounted cash flow techniques, estimated future cash flows are based on
+management's best estimates and the discount rate used is a market related rate for similar instruments.
+Certain financial instruments, including derivative financial instruments, are valued using pricing models
+that consider, among other factors, contractual and market prices, correlation, time value of money, credit
+risk, yield curve volatility factors and/or prepayment rates of the underlying positions. The use of different
+pricing models and assumptions could produce materially different estimates of fair values.
+Determining whether to classify financial instruments into level 3 of the fair value hierarchy is generally
+based on the significance of the unobservable factors involved in valuation methodologies.
+(16) OFFSETTING OF FINANCIAL INSTRUMENTS
+Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
+statement of financial position when there is a legally enforceable right to offset the recognized
+amounts and there is an intention to settle on a net basis or realize the assets and settle the liabilities
+simultaneously. The legally enforceable right must not be contingent on future events and must be
+enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the
+Group or the counterparty.
+(17) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND ASSETS SOLD
+UNDER REPURCHASE AGREEMENTS
+Assets sold under repurchase agreements continue to be recognized but a liability is recognized and
+presented as 'assets sold under agreements to repurchase' for the proceeds from selling such assets. The
+Group may be required to provide additional collateral based on the fair value of the underlying assets and
+such non-cash collateral assets continue to be recognized on the balance sheet. The difference between
+the selling price and repurchasing price is recognized as interest expense over the term of the agreement
+using the effective interest method.
+The Group enters into purchases of assets under reverse repurchase agreements. Assets purchased under
+such agreements are not recognized. The amounts advanced under these agreements are recognized and
+presented as financial assets held under resold agreements'. The Group may not take physical possession
+of assets purchased under such agreements. In the event of default by the counterparty to repurchase the
+asset, the Group has the right to the underlying assets. The difference between the purchasing price and
+reselling price is recognized as interest income over the term of the agreement using the effective interest
+method.
+Sale of assets under repurchase agreements and purchase of assets under reverse repurchase agreements
+conducted in the bank and securities businesses are included in the operating activities of consolidated
+statement of cash flows and sale of assets under repurchase agreements and purchase of assets under
+reverse repurchase agreements conducted in the insurance business are included in the financing and
+investing activities of consolidated statement of cash flows.
+However, for contracts that include both a loan and an undrawn commitment and the Group cannot
+separately identify the expected credit losses on the undrawn commitment component from those on the
+loan component, the expected credit losses on the undrawn commitment are recognized together with
+the loan allowance for the loan. To the extent that the combined expected credit losses exceed the gross
+carrying amount for the loan, the expected credit losses are recognized as a provision.
+The fair value of a financial instrument that is traded in an active market is determined by reference to
+quoted market bid prices for assets and offer prices for liabilities, at the close of business at the end of the
+reporting period. If quoted market prices are not available, reference can also be made to broker or dealer
+price quotations.
+(15) FAIR VALUE OF FINANCIAL INSTRUMENTS
+Annual Report 2018
+the hybrid contract is not measured at fair value with changes in fair value recognized in profit or
+loss (i.e. a derivative that is embedded in the hybrid contract at fair value through profit or loss is not
+separated).
+Apart from the above financial guarantee contracts issued by the Group's banking operations with are
+accounted for under IFRS 9, the Group has also regarded certain financial guarantee contracts as insurance
+contracts and has elected to apply the accounting policies on insurance contracts (Note 2.(28)) to such
+financial guarantee contracts.
+178
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(14) DERIVATIVE FINANCIAL INSTRUMENTS
+For the above assets, the Group may bifurcate the embedded derivative and measured it at fair value
+through profit or loss, or designate the entire hybrid instrument to be measured at fair value through profit
+or loss.
+The gains or losses arisen from fair value changes of derivatives are recognized in profit or loss.
+An embedded derivative is a component of a hybrid contract that also includes a non-derivative host-with
+the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone
+derivative.
+The Group's derivative financial instruments mainly include interest rate swaps, forward currency contracts
+and swap transaction, credit swap and stock index futures, etc. Such derivative financial instruments are
+initially recognized at fair value on the date of which the related derivative contracts are entered into
+and are subsequently measured at fair value. All derivatives are carried as assets when the fair values are
+positive and as liabilities when the fair values are negative.
+If a hybrid contract contains a host that is not an asset within the scope of IFRS 9, an embedded derivative
+shall be separated from the host and accounted for as a derivative if, and only if:
+a.
+b.
+C.
+the economic characteristics and risks of the embedded derivative are not closely related to the
+economic characteristics and risks of the host;
+a separate instrument with the same terms as the embedded derivative would meet the definition of a
+derivative; and
+180
+157.00
+Credit card
+internet users
+who were also
+135.85
+34.8
+35.10
+47.33
+85.3
+9
+19.8
+50.18
+60.10
+Retail banking
+13.3
+40.98
+46.43
+82.0
+Auto insurance (3)
+Number of customers
+Securities, fund and trust
+76.9
+33.43
+December 31, 2017
+% of
+customers
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Notes: (1) The numbers of accumulated customers and new
+customers do not add up to the total due to elimination
+of double counted customers.
+127.38
+82.4
+151.66
+users
+11.0
+165.73
+183.96
+The Group
+who were also app
+28.0
+35.56
+45.51
+Others(4)
+Number of customers
+14.2
+38.17
+Persons
+With strong operating profit growth, Ping
+An is increasing cash dividends. The yearly
+dividend per share for 2018 rose by 14.7%
+year on year to RMB1.72. In addition, the
+Company distributed the 30th Anniversary
+Special Dividend of RMB0.20 (tax inclusive)
+per share in the first quarter of 2018.
+(in million)
+31, 2017 Change (%)
+6,493,075
+December
+December
+31, 2018
+SEGMENT REPORTING
+Top Ten Highlights
+1
+2
+3
+5
+The Group's operating profit attributable to
+shareholders of the parent company rose
+18.9% year on year to RMB112,573 million.
+The operating ROE was 21.9%. The net
+profit attributable to shareholders of the
+parent company rose 20.6% year on year to
+RMB107,404 million.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Customer development yielded good results.
+The operating profit of retail business rose
+by 31.1% year on year to RMB97,729 million,
+accounting for 86.8% of the operating profit
+attributable to shareholders of the parent
+company. Retail customers grew by 11.0%
+from the beginning of 2018 to 184 million. In
+2018, the Company acquired 40.78 million new
+customers, 35.6% of whom were sourced
+from internet users within the Group's five
+ecosystems. Operating profit per customer
+gained 18.1% year on year to RMB531.
+Contracts per customer rose 9.1% from the
+beginning of 2018 to 2.53. About 63.64 million
+retail customers held multiple contracts with
+different subsidiaries, up 34.7% from the
+beginning of 2018, accounting for 34.6% of all
+customers (up 6.1 pps from the beginning of
+2018).
+Operating profit after tax of the life and
+health insurance business rose 35.1% year
+on year to RMB71,345 million. The annual
+operating ROEV reached 30.8%. Value of
+new business (NBV) rose 7.3% year on year
+to RMB72,294 million as we optimized our
+business mix amid industry restructuring.
+NBV grew by 16.9% year on year in the
+second half of 2018.
+Ping An Property & Casualty's premium
+income grew by 14.6% year on year to
+RMB247,444 million. The combined ratio
+was 96.0%, which improved by 0.2 pps
+year on year. In 2018, Ping An Property &
+Casualty processed 96.4% of the onsite auto
+claim investigations within 5-10 minutes via
+the upgraded "510 City Superfast Onsite
+Investigation" services.
+Annual Report 2018
+10
+Ping An Bank maintained steady, healthy
+business growth, with significant progress
+in its strategic transformation toward retail
+banking. In 2018, retail banking accounted for
+53.0% and 69.0% of the Bank's revenue and
+net profit, up 8.9 pps and 1.4 pps year on
+year respectively. Ping An Bank continued
+to de-risk itself. The Bank's deviation of
+non-performing loans was 97%, down 46
+pps from the beginning of 2018. The balance
+and proportion of loans more than 90 days
+overdue both decreased from the beginning
+of 2018.
+The Company continued to pursue innovative
+business models in fintech and healthtech.
+The fintech and healthtech business
+recorded RMB6,770 million in operating profit
+attributable to shareholders of the parent
+company, accounting for 6.0% of the Group's
+operating profit attributable to shareholders
+of the parent company.
+10.0
+6,459,317 5,905,158
+683,643 587,917
+9.4
+16.3
+December 31, 2018
+% of
+14.5
+53.03
+60.70
+Life insurance (3)
+(%)
+31, 2017
+31, 2018
+(in million)
+Persons customers
+Online customers
+December
+December
+Annual Report 2018
+16
+The life and health insurance business represents
+results of Ping An Life, Ping An Annuity, and Ping
+An Health. The property and casualty insurance
+business represents results of Ping An Property &
+Casualty. The banking business represents results
+of Ping An Bank. The trust business represents
+results of Ping An Trust and Ping An New Capital.
+The securities business represents results of Ping
+An Securities. The other asset management business
+represents results of companies that engage in
+asset management business including Ping An Asset
+Management, Ping An Financial Leasing, and Ping
+An Overseas Holdings. The fintech & healthtech
+business represents results of companies that
+engage in fintech & healthtech business including
+Lufax Holding, Ping An Good Doctor, OneConnect,
+Ping An Health Konnect, and Autohome. Eliminations
+include offsets against cross-shareholding among
+business lines. In 2018, the Company reviewed
+the presentation of cross-shareholding within
+the Company based on the operations of various
+business lines to provide clearer and more concise
+information. The data for 2017 were restated for
+comparison purposes.
+17.6
+473,351
+556,508
+7,142,960
+Change
+Customer Development
+369.42
+Ping An provides internet users with one-stop
+services, constantly improves online user experience,
+and aligns use cases with user needs. As at the end
+of 2018, the Group had 538 million internet users, up
+23.4% from the start of 2018. App users increased to
+474 million, up 28.3% from the beginning of 2018. On
+average, each internet user used 2.37 online services
+from Ping An. Meanwhile, both user activity and
+stickiness increased, and yearly active users reached
+252 million due to efficient user development.
+2017
+customer
+HNWIS
+0.19
+11.30
+(in RMB million)
+Amount
+Channel
+contribution
+percentage
+(%)
+Channel
+contribution
+percentage
+Amount
+(%)
+Affluent
+Middle-class
+Mass
+The Group
+52.45
+3.78
+79.72
+2018
+Contracts per
+Number of customers
+(in million)
+New premium income from cross-selling by agents
+Note: Internet users and app users of the Group included users of
+fintech & healthtech companies and core financial companies,
+excluding duplicates.
+The Company strengthened its technological
+capabilities. As of December 31, 2018,
+Ping An's technology patent applications
+increased by 9,021 from the beginning of the
+year to 12,051, more than most international
+financial institutions. The applications include
+3,397 filed under the Patent Cooperation
+Treaty (PCT) and abroad. Focusing on AI,
+blockchain and cloud computing, Ping An
+won several international awards in fields
+including fintech, medical imaging and smart
+city services.
+VALUE: THE GROUP SAW A STEADY INCREASE IN
+CUSTOMER VALUE AND REMARKABLE RESULTS
+OF CUSTOMER MIGRATION.
+Ping An promotes cross-selling under an integrated
+financial business strategy. As a result, contracts
+per customer and customer value increase year
+by year. As at the end of 2018, about 38.79 million
+customer migrations happened among core
+financial companies of Ping An. About 63.64 million
+retail customers held multiple contracts with
+different subsidiaries, accounting for 34.6% of all
+customers, up 6.1 pps from the beginning of 2018.
+Each customer held 2.53 contracts on average, 9.1%
+more than at the beginning of 2018. Empowered
+by technologies, Ping An maintained healthy, rapid
+profitability growth of major product lines. In 2018,
+the Group's operating profit per customer was
+RMB531, up 18.1% year on year.
+Ping An has gained better insights into customers
+from its long-term customer development: the
+wealthier customers are, the more contracts they
+hold and the more valuable they are. As at the end
+of 2018, the Group had 132 million middle-class or
+higher-level customers, accounting for 72.0% of the
+total, up 6.9 pps from the beginning of 2018. On
+average, each high net worth individual (HNWI) held
+11.30 contracts, far more than affluent customers.
+Customer wealth structure
+Unit: in million
+Middle-class
+HNWIS
+2.25
+0.19
+Affluent
+52.45
+79.72
+Mass
+51.61
+10
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Customers and contracts per customer by segment
+72.0%
+Internet users
+Ping An Property &
+215.94
+December 31,
+2017
+December 31.
+2016
+December 31.
+2015
+Change
+(%)
+December
+31, 2017
+31, 2018
+(in million)
+December
+20.78
+31.50
+47.23
+19.0%
+63.64
+24.0%
+28.5%
+% of total customers
+34.6%
+Unit: in million
+Number of customers holding multiple contracts
+with different subsidiaries
+Number of internet users
+December 31.
+2018
+Internet users
+538.43
+436.39
+293.60
+26.8
+241.01
+305.51
+Core financial companies
+companies
+Fintech & healthtech
+28.3
+473.88
+36.0
+App users
+236.55
+313.58
+Core financial companies
+24.5
+383.32
+477.10
+companies
+Fintech & healthtech
+23.4
+32.6
+Ping An empowers China's smart city.
+initiative by building "1+N" platforms in
+over 100 Chinese cities including Beijing,
+Shanghai and Shenzhen as well as countries
+and regions involved in the Belt and
+Road Initiative. The platforms cover fields
+including fiscal management, government,
+transportation, life, health care, customs
+control, education, agriculture, judicial
+activities, environmental protection, and
+community governance.
+Blockchain
+Ping An Insurance (Group) Company of China, Ltd. 7
+Auto Services Ecosystem
+As to payers, centering on the smart social
+health insurance (SHI) cloud platform, Ping An
+HealthKonnect has developed industry-leading
+technologies including Al, blockchain and cloud
+computing and a powerful medical knowledge bank.
+This enabled Ping An Health Konnect to build a high
+barrier to entry for "technology + ecosystem." Ping
+An HealthKonnect's services cover all participants
+of the health care ecosystem, including SHI, private
+insurers, medical service providers, pharmaceutical
+companies and the insureds. As of the end of
+2018, Ping An HealthKonnect had provided SHI
+management and member services for SHI fund
+managers in over 200 cities. Over 5,000 hospitals
+had connected with the smart private insurance
+platform. The "City OneConnect" app, targeting the
+insureds, had covered 69 cities. Registered family
+doctors on the platform exceeded 50,000.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+In healthcare regulation and servicing, Ping An
+uses multiple technologies to empower over 10
+provincial/municipal health bureaus as well as
+over 3,000 medical institutions. In smart imaging,
+Ping An developed over 40 disease models, 20 of
+which were deployed at about 200 hospitals to
+read over 15 million images with an accuracy rate
+above 90%. Covering 35 diseases, Ping An's disease
+prediction models have been predicting epidemics
+in Shenzhen and Chongqing, with an accuracy rate
+above 92% in influenza prediction. Ping An's Al-
+based medical decision support system debuted
+at the "Smart Medical Decision Support System
+for General Medicine" contest co-sponsored by
+Zhongshan Hospital affiliated to Fudan University
+and Ping An's smart healthcare team. A community
+physician team equipped with the Al-based medical
+decision support system defeated a team that used
+traditional management methods by a sweeping
+margin of 86.2-51.5.
+As to portals, Ping An Good Doctor is China's
+No.1 online health care portal. As of the end of
+2018, Ping An Good Doctor had served over 265
+million users. Ping An Good Doctor conducts
+R&D in Al technologies and uses an Al-based
+consultation system to help over 100 hospitals to
+increase efficiency. Moreover, Ping An Good Doctor
+has built an offline healthcare service network
+covering over 3,000 traditional Chinese medicine
+clinics, checkup centers, dental clinics, and medical
+cosmetic institutions. This enables users to access
+efficient, convenient offline consultation services. By
+integrating Al-assisted in-house medical staff and
+the offline service network, Ping An Good Doctor
+improved the closed loop of OMO (Online Merge
+Offline) services. Ping An Good Doctor provides
+one-stop and whole-process health care services,
+satisfying various needs of users.
+In the health care ecosystem, Ping An has built a
+robust "patient-medical service provider-payer"
+model, penetrating through online portals and
+payers.
+Health Care Ecosystem
+With use cases powered by payment technologies,
+Ping An E-wallet provides customers with optimal
+solutions in terms of accounts, payment and loyalty
+programs. In 2018, Ping An E-wallet processed a
+transaction volume of RMB5.7 trillion, and had over
+200 million registered users.
+OneConnect is committed to building a
+world-leading fintech service cloud platform,
+basing its operations on Ping An's financial services
+and cutting-edge technologies. OneConnect has
+launched Smart Banking Cloud, Smart Insurance
+Cloud, Smart Investment Cloud and an open
+tech-powered platform, providing end-to-end
+fintech solutions for various types of financial
+institutions. As of the end of 2018, OneConnect had
+provided services for over 3,000 financial institutions
+in China. Moreover, OneConnect has expanded
+abroad and established subsidiaries in Hong Kong,
+Singapore and Indonesia to serve local financial
+institutions.
+Lufax Holding is a world-leading online wealth
+management and retail lending technology platform,
+and a leader in providing financial institutions and
+local governments with comprehensive financial
+solutions. Lufax Holding has established extensive
+asset partnerships with over 300 institutions, and
+provided over 11 million active investor users
+with over 5,000 products and customized financial
+services. In retail lending, Lufax Holding has
+provided financing services to over 10 million
+customers, with RMB375,006 million in balance of
+loans under management.
+Ping An has launched financial innovation platforms
+including Lufax Holding and OneConnect, powered
+by "finance + technology" and linking assets to
+funds via "open platforms + open marketplaces.”
+Financial Services Ecosystem
+Technology-Powered Business
+Transformation
+14
+13
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Ping An provides auto services via Autohome, Ping
+An Bank, Ping An Property & Casualty, and Ping An
+Financial Leasing. Moreover, Ping An empowers auto
+assembly plants and service providers by building
+a comprehensive auto services ecosystem covering
+auto showcasing, purchase and use.
+Positioned as a "world-leading technology-powered
+retail financial services group," Ping An proactively
+exports its leading technologies to build five
+ecosystems, namely financial services, health care,
+auto services, real estate services, and smart city
+services. Ping An uses the five ecosystems to
+empower and develop its core financial businesses.
+As to individual users, Ping An provides auto
+owners with excellent services. In December 2018,
+the "Autohome" app had an average of 29 million
+independent user visits per day. Ping An Property
+& Casualty's "Ping An Auto Owner" app had over
+55 million registered users. As to businesses, Ping
+An now covers over 90% of major service providers
+across China. Ping An is working closely with over
+90 auto assembly plants, over 20,000 new car dealers,
+over 30,000 second-hand car dealers and over 70,000
+garages on the car dealer cloud platform, new car
+and second-hand car trading cloud platforms, and
+spare part cloud platform. As a result, it facilitated
+RMB15.8 billion in auto finance and insurance. In
+2018, Ping An Bank's new loans in the auto finance
+business grew by 24.7% year on year; Ping An
+Financial Leasing's auto lease business volume grew
+by over 100% year on year.
+Ping An Urban-Tech is combining construction,
+management, operations and services to build a
+real estate services ecosystem. Ping An Urban-Tech
+created a digital backbone of city space by
+integrating city spatial data and city operational
+data to facilitate digitalized, smart and visualized
+city planning, operations and management. Ping
+An Urban-Tech established a collaborative services
+platform for construction, trading, and services in
+2017 Change (%)
+By developing FiMAX, a proprietary blockchain
+technology, Ping An has exclusively mastered the
+zero-knowledge proof technology in non-currency
+use cases. In the zero-knowledge environment using
+China's state encryption algorithms, FiMAX equals
+or surpasses traditional databases by performance,
+and supports a throughput in excess of 50,000
+transactions per second with latency lower than 0.05
+seconds. Through OneConnect, Ping An built the
+largest commercial blockchain platform in the world,
+providing services to over 200 domestic and foreign
+banks, 200,000 businesses, 500 governmental and
+other business organizations. Over 44,000 blockchain
+nodes have been established. FiMax won the IDC
+FinTech Ranking Real Result Award from IDC, a
+world-renowned data services company.
+Operating profit
+(in RMB million)
+CONSOLIDATED RESULTS
+We offer a wide range of financial products and
+services via various distribution channels under a
+uniform brand. We engage in three core financial
+businesses of insurance, banking and asset
+management through companies including Ping An
+Life, Ping An Property & Casualty, Ping An Annuity,
+Ping An Health, Ping An Bank, Ping An Trust, Ping
+An Securities, Ping An Asset Management, and Ping
+An Financial Leasing. We engage in the fintech &
+healthtech business through companies including
+Lufax Holding, Ping An Good Doctor, OneConnect,
+Ping An Health Konnect, and Autohome.
+In 2018, the Group's basic operating earnings per share rose 18.8% year on
+year to RMB6.31. The operating ROEV was 23.7%.
+The net profit attributable to shareholders of the parent company rose
+20.6% year on year to RMB107,404 million. The ROE was 20.9%. Under the old
+accounting standards for financial instruments, our net profit attributable
+to shareholders of the parent company would have risen 39.5% year on
+year to RMB124,245 million.
+In 2018, the Group's operating profit attributable to shareholders of
+the parent company rose 18.9% year on year to RMB112,573 million. The
+operating ROE was 21.9%.
+Business Analysis
+Performance Overview
+15
+Ping An Insurance (Group) Company of China, Ltd.
+In smart daily life services, Ping An cooperates
+with Shenzhen Municipal Government to promote
+the sharing, development and use of public
+information resources. An integrated portal and a
+universal account have been developed for diverse
+government and daily life services. Functionalities
+including facial recognition, smart customer
+services, smart guidance, smart reservation,
+smart profiling, and all-in-one cards have been
+put into use. Ping An's “i Shenzhen" app enables
+over 700 online government services in health
+care, education, housing and transportation,
+sparing citizens the trouble of visiting government
+departments in person.
+In smart economy and trade, the "Shenzhen Digital
+Economy and Trade Platform" enables economic
+analysis via 4,300 indicators, helping the government
+to strengthen business administration and servicing
+capabilities. The platform was among the Top 50
+"Internet Government Service" Cases in 2018.
+In smart government services, Ping An has built
+several benchmark platforms with government
+departments of Shenzhen. These platforms enable
+Shenzhen government to oversee 3.1 million
+business entities. In the 2018 "Internet + Government
+Service" Contest, Ping An won the Innovative
+Business Award for its solutions and practice in
+smart government service platforms.
+Ping An is committed to empowering China's
+smart city initiative and addressing issues in social
+development. Under the three philosophies of
+"smart planning & decision, smart management
+& operation, and smart impact assessment," Ping
+An has built multiple smart city platforms for
+government services, economic development and
+people's livelihood. By doing so, Ping An strives to
+make life easier and cities better.
+Smart City Ecosystem
+the real estate industry under a holistic, city-centric
+approach to smart city construction. Ping An
+Urban-Tech connects the industry collaboration
+network with the government compliance, approval
+and services platforms to empower the entire
+industry value chain, including development,
+design, construction, supply chain, and operations,
+and to establish the full-cycle real estate services
+ecosystem. As of December 31, 2018, Ping An
+Urban-Tech had signed contracts with 50 cities,
+launched projects in 20 cities, and developed three
+model cities. Ping An Urban-Tech's services help
+the government to break down data silos, increase
+efficiency, strengthen regulation, and improve
+services.
+Annual Report 2018
+Real Estate Services Ecosystem
+Pursuing “Finance + Ecosystem” by Exporting
+Technologies
+Ping An Cloud hosts the trillion-yuan core business
+of Ping An and offers efficient, secure cloud services
+to users in industries including financial services,
+health care, auto services, real estate services,
+and smart city services. With 12 authoritative
+certifications and over 400 cloud computing patent
+applications, Ping An Cloud is seeking market
+development and building a cloud platform covering
+various industries. In 2018, Ping An Cloud became
+GitHub's first managed service provider (MSP) in
+Greater China. Moreover, in addition to nine data
+centers in the People's Republic of China (the PRC),
+Ping An Cloud established three overseas data
+centers in Singapore and other places.
+Cloud Computing
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 11
+MANAGEMENT DISCUSSION AND ANALYSIS
+Technology-Powered Business
+Transformation
+As of December 31, 2018, Ping An's technology patent applications
+increased by 9,021 from the beginning of the year to 12,051, including
+3,397 filed under the Patent Cooperation Treaty (PCT) and abroad. The
+applications cover the core technologies, namely artificial intelligence
+(AI), blockchain and cloud computing. Ping An is No.1 on the 2018 Global
+Fintech Invention Patents Ranking.
+The Ping An Brain smart engine won the Wu Wenjun Al Science &
+Technology Award. Ping An's medical imaging technology won world
+No.1s in contests covering lung nodule detection, stomach cancer
+pathology, and diabetic retinopathy detection.
+THE GROUP'S "FINANCE + TECHNOLOGY" AND "FINANCE + ECOSYSTEM" STRATEGIES
+Ping An furthers "finance + technology" and pursues “finance + ecosystem." Ping An focuses on three
+core technologies, namely Al, blockchain and cloud computing, to support five ecosystems: financial
+services, health care, auto services, real estate services, and smart city services. Ping An strengthens
+competitiveness by diversifying use cases, increasing efficiency, cutting costs, enhancing risk management,
+and creating excellent products and customer experiences. Moreover, Ping An exports innovative
+technologies and services, promotes the efficiency of technology commercialization and empowers the
+whole industry with technologies.
+Ping An has industry-leading technology human resources. The Group has about 99 thousand employees in
+fintech and healthtech, and about 29 thousand employees in technological R&D. Ping An has partnered with
+top universities and research institutes including Peking University, Tsinghua University, Fudan University,
+Massachusetts Institute of Technology, and National Institute of Health to pursue fintech and healthtech
+researches.
+Ping An attaches great importance to developing core technologies and securing proprietary intellectual
+property rights. Each year, Ping An increases technological R&D investments by investing 1% of its revenue
+in technological R&D. As of December 31, 2018, Ping An's technology patent applications increased by 9,021
+from the beginning of the year to 12,051, more than most international financial institutions. The applications
+include 3,397 filed under the Patent Cooperation Treaty (PCT) and abroad.
+SUPPORTING BUSINESS DEVELOPMENT WITH THREE CORE TECHNOLOGIES
+Ping An continued to strengthen R&D of the core technologies, namely Al, blockchain and cloud computing.
+Ping An boosted business value by applying the three core technologies to customer development, channel
+management, customer services, and risk management of core businesses. Ping An successfully incubated
+fintech and healthtech unicorns including Lufax Holding, OneConnect, Ping An Good Doctor, and Ping An
+HealthKonnect.
+ΑΙ
+Ping An is committed to developing Al-based industry-leading capabilities for use cases in financial
+services and health care. Ping An has built basic cognitive capabilities of seeing (facial recognition,
+micro-expression recognition), listening (voiceprint recognition, speech recognition), and speaking/reading
+(speech synthesis, text robot). Moreover, Ping An has established a comprehensive knowledge system and
+created specialized solutions.
+12
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An has world-leading facial, voiceprint and
+medical image recognition technologies. The facial
+and voiceprint recognition technologies have
+accuracy rates of 99.8% and 99.7% respectively. The
+Ping An Brain smart engine won the Wu Wenjun
+Al Science & Technology Award. The natural
+language processing (NLP) technology was ranked
+No.1 in the 2018 SQUAD2.0 global machine reading
+comprehension contest. OneConnect Gamma Lab's
+Memory Augmented Neural Networks achieved
+excellent results in an international top dialogue
+system challenge. In the International "Al +
+Environmental Protection Competition" organized
+by Schneider, Ping An won a world No. 1 with an
+accuracy rate above 80% in detection of abnormal
+energy consumption.
+Ping An has applied Al technologies to financial
+services, health care, and smart city services. In
+financial services, Ping An's Al-based prediction, risk
+management and service capabilities facilitate quick
+claims, smart photography and video recording,
+small and medium-sized business loan approval, and
+smart customer services. In smart risk management,
+nearly 90% of decisions made by the loan approval
+system on the basis of smart micro-expression
+recognition are consistent with those made by
+humans; as a result, labor cost was cut by nearly
+40%. In health care, Ping An is committed to building
+an end-to-end smart health care management
+platform covering all the steps before, during
+and after medical services. Ping An provides
+governments, medical institutions and patients with
+full services including Al-based disease prediction,
+image reading, medical assistance, service quality
+control, medical follow-ups and patient education.
+Ping An won many world No.1s in contests of lung
+nodule detection, stomach cancer pathology, and
+diabetic retinopathy detection. So far, Ping An has
+partnered with 249 medical institutions. In smart
+city services, Ping An empowers China's smart city
+initiative by applying Al to various fields including
+transportation, education, government, security,
+environmental protection, and daily life.
+Going forward, Ping An will continue to focus on
+retail customers, striving to become a world-leading
+technology-powered retail financial services group.
+Centering on five ecosystems of "financial services,
+health care, auto services, real estate services and
+smart city services," Ping An will empower financial
+services with technologies, empower ecosystems
+with technologies, and empower financial services
+with ecosystems. Ping An will improve service
+efficiency and quality of its products and channels,
+enhance customer experience, and boost both retail
+customer value and corporate value.
+Ping An Health
+Cross-selling of insurance businesses maintained
+significant growth. In 2018, new premium income of
+Ping An Property & Casualty, Ping An Annuity and
+Ping An Health from the agent channel rose by 18.8%
+year on year to RMB51,453 million.
+(2) The numbers of customers may not match totals due to
+rounding.
+51.61
+1.67
+Casualty
+41,436
+16.7
+35,828
+16.6
+183.96
+2.53
+attributable to
+Short-term group
+7,921
+45.9
+6,728
+45.7
+2,096
+56.6
+754
+35.1
+Notes: (1) Mass customers are those with annual income below
+RMB100,000, middle class customers RMB100,000-240,000,
+and affluent customers above RMB240,000. HNWIs have
+personal assets of RMB10 million or more.
+insurance business of
+Ping An Annuity
+shareholders of the
+parent company
+112,573
+Total assets
+Total liabilities
+Retail operating
+profit
+in RMB million
+2018
+97,729 +31.1%
+2017
+74,527
+New customers
+in million
+in million
+Dec 31, 2018
+184 +11.0%
+2018
+40.78 -11.9%
+Dec 31, 2017
+166
+2017
+46.30
+Contracts per
+customer
+94,708
+2017
+112,573 +18.9%
+2018
+ABOUT US
+Customer Development
+The Group's retail business operating profit rose 31.1% year on year to
+RMB97,729 million, accounting for 86.8% of the Group's operating profit
+attributable to shareholders of the parent company (up 8.1 pps year on
+year). Retail profit growth was mainly driven by steady increases in retail
+customers and operating profit per customer.
+Shareholders' equity
+Equity attributable to
+shareholders of the
+parent company
+The Group's retail customers (1) grew by 11.0% from the beginning of
+the year to 184 million. In 2018, the Company acquired 40.78 million new
+customers, 35.6% of whom were sourced from internet users within the
+Group's five ecosystems. Operating profit per customer gained 18.1%
+year on year to RMB531. Contracts per customer rose by 9.1% from the
+beginning of 2018 to 2.53.
+The Group's internet users (2) increased 23.4% from the beginning of 2018
+to 538 million. Yearly active users (3) reached 252 million. On average, each
+internet user used 2.37 online services.
+Cross-selling within Ping An Group continues to improve as about 63.64
+million retail customers held multiple contracts with different subsidiaries,
+up 34.7% from the beginning of 2018, accounting for 34.6% of all customers
+(up 6.1 pps from the beginning of 2018).
+CUSTOMER DEVELOPMENT STRATEGY
+Focusing on retail customers, Ping An is committed to becoming a world-leading technology-powered
+retail financial services group. Ping An adheres to the philosophy of “one customer, multiple products and
+one-stop services." Centering on five ecosystems of "financial services, health care, auto services, real
+estate services and smart city services," Ping An continues to increase investment in technologies and
+pursue "finance + ecosystem.” Moreover, Ping An provides customers with diverse products and services
+by empowering financial services with technologies, empowering ecosystems with technologies, and
+empowering financial services with ecosystems.
+Contracts/customer
+Progress of Ping An's integrated financial services strategy has been accompanied by increased
+cross-selling. Retail business has become a strong growth driver as its operating profit grew steadily thanks
+to increasing customers, contracts per customer and product profitability.
+(2) Internet users refer to registered internet users with accounts on internet service platforms (including web platforms and
+apps) of fintech & healthtech companies and core financial companies of the Group.
+(3) The number of yearly active users refers to the number of active users in the 12 months to the end of the Reporting Period.
+8
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Core drivers of the Group's operating profit growth
+Retail customers
+Group operating
+profit
+in RMB million
+Notes: (1) Retail customers refer to retail customers holding valid financial products with core financial companies of the Group.
+The Company launched the Ping An Rural
+Communities Support comprising the Village
+Officer Program, Village Doctor Program and
+Village Teacher Program for smart poverty
+alleviation via industry promotion, health
+care and education support. As of the end
+of 2018, the Company had implemented the
+Ping An Rural Communities Support in nine
+provinces or autonomous regions across
+China. We input RMB5,394 million for poverty
+alleviation, and built or upgraded over 400
+rural clinics, trained 5,702 village doctors, built
+or upgraded 391 rural schools, and trained
+4,819 village teachers.
+Operating profit
+per customer
+(in RMB million)
+18.8
+-0.1 pps
+20.7
+89,088
+107,404
+20.9
+to shareholders of
+the parent company
+ROE (%)
+Net profit attributable
+Ping An Insurance (Group) Company of China, Ltd.
+22.0
+21.9
+Operating ROE (%)
+5.31
+6.31
+(in RMB)
+(4) "Others" include fintech & healthtech, other loans and
+other insurance product lines.
+earnings per share
+Ping An continued to promote migration and
+conversion between customers and users by
+improving service experience across online
+platforms. The proportion of customers who were
+also internet users increased steadily.
+Basic operating
+18.9
+94,708
+20.6
+0.2 pps
+(3) The number of customers of insurance companies is
+counted based on the number of holders of in-force
+policies.
+(2) The number of customers as of the end of 2018 is not
+equal to the sum of the number of customers as of the
+end of 2017 and new customers in the Reporting Period,
+due to customer attrition.
+2.53 +9.1%
+2.32
+RMB/customer
+Corporate operating
+2018
+531.25 +18.1%
+profit
+2017
+449.69
+Dec 31, 2018
+Dec 31, 2017
+2018
+in RMB million
+-26.4%
+2017
+20,181
+Note: Group operating profit is the operating profit attributable to shareholders of the parent company.
+Product profitability
+SCALE: THE GROUP'S RETAIL CUSTOMERS AND
+INTERNET USERS INCREASED STEADILY
+Retail customers
+Ping An continues to optimize its products, channels
+and use cases to deliver excellent customer
+experience. As at the end of 2018, the Group had
+nearly 184 million retail customers, up 11.0% from the
+beginning of 2018. In 2018, the Company acquired
+40.78 million new customers, 14.50 million or 35.6% of
+whom were sourced from internet users within the
+Group's five ecosystems.
+Retail customer structure
+14,844
+2018
+IBNR are measured according to the nature and distribution of insurance risks, claims development,
+experience data, etc., using the chain ladder method, the Bornhuetter-Ferguson method, the loss ratio
+method and the average claim per case method, based on a reasonable estimate of ultimate claim amounts
+as well as margins.
+During the period of recognizing reinsurance premium income, the Group determines reinsurance expenses
+according to the reinsurance contracts and recognizes the expenses through profit or loss. As for profit
+commission, the Group recognizes it as a reinsurance expense through profit or loss according to the
+reinsurance contracts when it is feasible to determine the amount of profit commission to be paid to the
+reinsurers.
+Fee income from providing transaction services
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such
+as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses,
+are recognized on the completion of the underlying transaction and the control of services is transferred
+to customers. Fees or components of fees that are linked to a certain performance are recognized after
+fulfilling the corresponding criteria. These fees may include underwriting fees, corporate finance fees,
+brokerage fees. Loan syndication fees are recognized in the statement of income when the syndication has
+been completed and the Group retains no part of the loans for itself or retains part at the same effective
+interest rate as for the other participants.
+(e) Dividend income
+Dividend income is recognized when the right to receive dividend payment is established.
+(f) Expressway toll fee income
+Expressway toll fee income is recognized upon the completion of the performance obligation of services.
+(g) Sale of goods
+Revenue from the sale of goods is recognized when control of the goods has transferred. The Group
+considers the terms of the contract and its customary business practices to determine the transaction
+price. The transaction price is the amount of consideration to be entitled in exchange for transferring
+promised goods to a customer. When determining the transaction price, the Group consider the effects
+of variable consideration, constraining estimates of variable consideration, the existence of a significant
+financing component in the contract, non-cash consideration and consideration payable to a customer.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(37) REINSURANCE
+The Group undertakes inward and outward reinsurance in the normal course of operations. All of the
+reinsurance business of the Group has significant insurance risk transfer.
+Fees earned from the provision of services over a period of time are accrued over that period. These
+fees include investment fund administration fees, custodian fees, fiduciary fees, credit related fees, asset
+management fees, portfolio and other management fees, advisory fees, etc. However, loan commitment
+fees for loans that are likely to be drawn down are deferred (together with any incremental costs) and
+recognized as an adjustment to the effective interest rate on the loan.
+Outward reinsurance business
+As a cedent, the Group presents in the statement of financial position the assets arising from reinsurance
+contracts and the liabilities arising from insurance contracts separately instead of offsetting the assets
+and liabilities. The Group also presents in the statement of income the income derived from reinsurance
+contracts and the expenses incurred for insurance contracts separately instead of offsetting the income
+and expenses.
+Inward reinsurance business
+Upon receipt of the statement of the reinsurance business, the Group adjusts the reinsurance premium
+income and reinsurance expenses, and then recognizes the adjusted amounts through profit or loss
+according to the ceding company statements.
+(38) POLICYHOLDER DIVIDENDS
+Policyholder dividends represent dividends payable by the Group to policyholders in accordance with the
+terms of direct insurance contracts. The dividends are calculated and provided based on the dividend
+allocation method and the results of actuarial valuation.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 193
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(39) OPERATING LEASES
+Outward reinsurance arrangements do not relieve the Group from its obligations to policyholders. When
+recognizing premium income from insurance contracts, the Group calculates to determine the amount of
+premium ceded and reinsurers' share of expenses and recognize them through profit or loss according
+to reinsurance contracts. When calculating unearned premium reserves, claim reserves and long term
+life policyholders' reserves of insurance contracts, the Group estimates the reinsurance related cash
+flows according to the reinsurance contracts, considers the risk margin when determining the amount of
+insurance contract reserves to be recovered from reinsurers, and recognizes reinsurers' share of insurance
+contract liabilities. When insurance contract liabilities are reduced for actual payment of claims and claim
+expenses, reinsurers' share of insurance contract liabilities are reduced accordingly. In the meantime, the
+Group calculates to determine the amount of claim expenses to be recovered from the reinsurers according
+to the reinsurance contracts and recognizes the amount through profit or loss. When there is an early
+termination of an insurance contract, the Group calculates to determine the adjustment amount of premium
+ceded and reinsurers' share of expenses according to the reinsurance contracts and recognizes the amount
+through profit or loss, and the balance of reinsurers' share of insurance contract liabilities is reversed
+accordingly.
+Fee income earned from services that are provided over a certain period of time
+The fees and commission income of non-insurance operations from a diverse range of services it provides
+to its customers are recognized when the control of services is transferred to customers. Fee income can
+be divided into the following main categories:
+(d) Fees and commission income of non-insurance operations
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(35) PROVISIONS
+A provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past
+event and it is probable that a future outflow of resources will be required to settle the obligation, provided
+that a reliable estimate can be made of the amount of the obligation. When the effect of discounting
+is material, the amount recognized is the present value at the end of the reporting period of the future
+expenditures expected to be required to settle the obligation.
+Except for contingent considerations deriving from or contingent liabilities assumed in business
+combinations, contingent liabilities are recognized as provisions if the following conditions are met:
+An entity has a present obligation as a result of a past event;
+It is probable that an outflow of resources embodying economic benefits will be required to settle the
+obligation; and
+A reliable estimate can be made of the amount of the obligation.
+The Group incorporates forward looking information in estimating the expected credit loss for loan
+commitments and financial guarantee contracts. Refer to note 13 and note 49 for details.
+(36) REVENUE RECOGNITION
+The Group's main revenue is recognized on the following bases:
+(a) Gross premium
+Premium income and reinsurance premium income is recognized when the insurance contracts are issued,
+related insurance risk is undertaken by the Group, it is probable that related economic benefits will flow to
+the Group and related income can be reliably measured.
+Premiums from long term life insurance contracts with installment or single payments are recognized
+as revenue when due. Premiums from property and casualty and short term life insurance contracts are
+recognized as revenue based on the amount of total premium stated in the contracts.
+Reinsurance premiums are recognized as revenue in accordance with the terms stated in the reinsurance
+contracts. Accounting policies for reinsurance contracts are described in Note 2. (37).
+(b) Income from investment contracts
+Revenues from investment contracts issued by the Group are charged fees for policy administration,
+investment management, surrenders or other contract services. The fees may be for fixed amounts or vary
+with the amounts being managed, and will generally be charged as an adjustment to the policyholder's
+balance. The fees are recognized when, or as, the control of services is transferred to customers unless
+the related services still need to be provided in the future period, in which fees should be recognized over
+the period of the contract by reference to the progress towards complete satisfaction of performance
+obligation. Initiation and other front-end fees are charged for certain investment contracts recorded at
+amortized cost and are recognized through an adjustment to the effective yield.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+191
+FINANCIAL STATEMENTS
+192
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(36) REVENUE RECOGNITION (CONTINUED)
+(c) Interest income
+Interest income for interest bearing financial instruments, is recognized in the statement of income using
+the effective interest rate method. When a financial asset is impaired, the Group reduces the carrying
+amount to its recoverable amount, being the estimated future cash flow discounted at the original effective
+interest rate of the instrument, and continues unwinding the discount as interest income.
+Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are
+accounted for as operating leases.
+Where the Group is the lessor, assets leased by the Group under operating leases are included in
+investment properties and rentals receivable under such operating leases are credited to the statement of
+income on the straight-line basis over the lease terms.
+Where the Group is the lessee, rentals payable under operating leases are charged to the statement of
+income on the straight-line basis over the lease terms. The aggregate benefit of incentives provided by the
+lessor is recognized as a reduction in rental expenses over the lease terms on the straight-line basis.
+(40) EMPLOYEE BENEFITS
+195
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(43) TAX (CONTINUED)
+in respect of deductible temporary differences associated with investments in subsidiaries, associates
+and interests in jointly controlled entities, deferred tax assets are only recognized to the extent that it
+is probable that the temporary differences will reverse in the foreseeable future and taxable profit will
+be available against which the temporary differences can be utilized.
+The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
+to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
+part of the deferred tax asset to be utilized. Conversely, previously unrecognized deferred tax assets are
+reassessed by the end of each reporting period and are recognized to the extent that it is probable that
+sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
+Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
+when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
+enacted or substantively enacted at the end of the reporting period.
+Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
+current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and
+the same taxation authority.
+(44) DIVIDENDS
+When the final dividends proposed by the directors have been approved by the shareholders and declared,
+they are recognized as a liability.
+Interim dividends are simultaneously proposed and declared, because the Company's memorandum and
+articles of association grant the directors the authority to declare interim dividends. Consequently, interim
+dividends are recognized immediately as a liability when they are proposed and declared.
+(45) RELATED PARTIES
+A party is considered to be related to the Group if:
+(a) the party is a person or a close member of that person's family and that person:
+(i)
+has control or joint control over the Group;
+(ii) has significant influence over the Group; or
+(iii) is a member of the key management personnel of the Group or of a parent of the Group;
+(b) the party is an entity where any of the following conditions applies:
+(i) the entity and the Group are members of the same Group;
+(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
+subsidiary of the other entity);
+(iii) the entity and the Group are joint ventures of the same third party;
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third
+entity;
+196
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused
+tax credits and any unused tax losses, to the extent that it is probable that taxable profit will be available
+against which the deductible temporary differences, and the carry-forward of unused tax credits and
+unused tax losses can be utilized, except:
+(a) Pension obligations
+The employees of the Group are mainly covered by various defined contribution pension plans. The Group
+makes and accrues contributions on a monthly basis to the pension plans, which are mainly sponsored by
+the related government authorities that are responsible for the pension liability to retired employees. Under
+such plans, the Group has no other significant legal or constructive obligations for retirement benefits
+beyond the said contributions, which are expensed as incurred. Certain employees are also provided with
+group life insurance but the amounts involved are insignificant.
+(b) Housing benefits
+The employees of the Group are entitled to participate in various government-sponsored housing funds.
+The Group contributes on a monthly basis to these funds based on certain percentages of the salaries of
+the employees. The Group's liability in respect of these funds is limited to the contributions payable in each
+period.
+(c) Medical benefits
+The Group makes monthly contributions for medical benefits to the local authorities in accordance with the
+relevant local regulations for the employees. The Group's liability in respect of employee medical benefits is
+limited to the contributions payable in each period.
+(41) SHARE-BASED PAYMENT
+Equity-settled share-based payment transactions
+The Group operates an equity-settled, share-based compensation plan (share purchase scheme), under
+which the Group receives services from employees as consideration for equity instruments.
+The total amount to be expensed is determined by reference to the fair value of the shares granted, which
+includes the impact of market performance conditions (for example, an entity's share price) but excludes
+the impact of any service and non-market performance vesting conditions (for example, profitability,
+sales growth targets and remaining an employee of the entity over a specified time period) and includes
+the impact of any non-vesting conditions (for example, the requirement for employees to save or holding
+shares for a specified period of time). The Group also estimates the number of total shares expected to
+vest taking into consideration of service and non-market performance conditions. Total expense based
+on fair value of the shares granted and number of shares expected to vest is recognized over the vesting
+period.
+194
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(41) SHARE-BASED PAYMENT (CONTINUED)
+Equity-settled share-based payment transactions (continued)
+At the end of each reporting period, the Group revises its estimates of the number of options and awarded
+shares that are expected to vest based on the non-marketing performance and service conditions. It
+recognizes the impact of the revision to original estimates, if any, in the statement of income, with a
+corresponding adjustment to equity.
+The Company settles with the awardees under the share purchase scheme upon vesting.
+(42) SHARES HELD BY CONSOLIDATED STRUCTURED ENTITIES
+The Group's subsidiaries consolidated certain third party assets management scheme. These assets
+management schemes invested in the insurance index shares. As such the Group indirectly hold the
+Company's shares. The employee share purchase scheme consolidated by the Group also hold the
+Company's shares. The consideration paid by the consolidated structured entities in purchasing the
+Company's shares from the market, including any directly attributable incremental cost, is debited to 'Share
+premium' under 'Reserves'. No gain or loss shall be recognized in profit or loss on the sale of those shares,
+the consideration received is credited to 'Share premium' under 'Reserves'.
+(43) TAX
+Income tax comprises current and deferred tax. Income tax is recognized in the statement of income, or in
+other comprehensive income or in equity if it relates to items that are recognized in the same or a different
+period directly in other comprehensive income or in equity.
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to
+be recovered from or paid to the taxation authorities.
+Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting
+period between the tax bases of assets and liabilities and their carrying amounts for financial reporting
+purposes.
+Deferred tax liabilities are recognized for all taxable temporary differences, except:
+when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
+transaction that is not a business combination and, at the time of the transaction, affects neither the
+accounting profit nor taxable profit or loss; and
+in respect of taxable temporary differences associated with investments in subsidiaries, associates and
+interests in jointly controlled entities, when the timing of the reversal of the temporary differences
+can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
+future.
+when the deferred tax asset relating to the deductible temporary differences arises from the initial
+recognition of an asset or liability in a transaction that is not a business combination and, at the time
+of the transaction, affects neither the accounting profit nor taxable profit or loss; and
+Annual Report 2018
+The amount recognized as a provision shall be the best estimate of the expenditure required to settle the
+present obligation at the end of the reporting period with the consideration of risks, uncertainties and the
+present value. Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the
+current best estimate.
+Premium receipts are recognized not as premium income, but rather as liabilities, presented in
+policyholder contract deposits. These liabilities are initially measured at fair value and subsequently
+measured using a discounted cash flow model. Commissions, net of receipts from initial charges that
+are meant to compensate such costs, are recognized as transaction costs in the initial amount of the
+liabilities.
+A reasonable estimate of expected future net cash flows is determined based on information currently
+available as at the end of the reporting period.
+Margins are considered and separately measured in determining insurance contract liabilities. Margins are
+released in the statement of income over the insurance coverage period using systematic and reasonable
+methods. Margins include risk margin and residual margin.
+Risk margin represents provision for the uncertainty associated with the future net cash flows. The
+Group determines risk margins of the long term life insurance policyholders' reserves using the
+scenario comparison method. The unfavorable scenarios are determined according to the uncertainty
+and impact of expected net cash outflows.
+At inception of an insurance contract, any 'day-one' gain is not recognized in the statement of income,
+but included in the insurance contract liabilities as a residual margin. The residual margin is calculated
+net of certain acquisition costs, mainly consisting of commission expenses on insurance operations. At
+inception of an insurance contract, any 'day-one' loss is recognized in the statement of income. Any
+residual margin is subsequently measured based on the assumptions of the years when the policies
+become effective, and will not be adjusted for future change in assumptions. For non-life insurance
+contracts, the Group amortizes the residual margin which is embedded in the unearned premium
+reserves on a time basis during the whole insurance coverage period and records it in profit or loss.
+For life insurance contracts, the Group amortizes the residual margin on the basis of the sums insured
+or the number of policies during the whole insurance coverage period.
+When measuring insurance contract liabilities, the expected period of future net cash outflows is the entire
+insurance period. For insurance policies with a guaranteed renewal option, the expected period is extended
+to the date when the option to renew policy ceases if the probability that the policyholders may execute
+the option is high and the Group does not have the right to reprice the premium.
+Unearned premium reserves
+The unearned premium reserves are provided for unexpired insurance obligations of property and casualty
+and short term life insurance contracts.
+Unearned premium reserves are measured using the unearned premium approach. At inception of the
+insurance contracts, unearned premium reserves are measured based on written premiums, with deductions
+made for commissions, insurance guarantee fund, regulatory charges and other incremental costs.
+Subsequent to initial recognition, unearned premium reserves are measured on a 1/365 basis.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+187
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+(30) INSURANCE CONTRACT LIABILITIES (CONTINUED)
+For the year ended 31 December 2018
+(30) INSURANCE CONTRACT LIABILITIES (CONTINUED)
+Claim reserves
+Claim reserves are insurance contract liabilities provided for insurance claims of the property and casualty
+and short term life insurance contracts. Claim reserves include incurred and reported reserves, incurred but
+not reported (‘'IBNR') reserves and claim expense reserves.
+Incurred and reported reserves are measured at amounts not higher than the sum insured of the insurance
+contracts, using the case-by-case estimate method and average claim per case method, based on a
+reasonable estimate of ultimate claim amounts as well as margins.
+Claim expense reserves are measured based on a reasonable estimate of ultimate necessary claim expenses
+in the future by using the case-by-case estimate method and ratio allocation method as well as margins.
+Long term life insurance policyholders' reserves
+Long term life insurance policyholders' reserves are insurance contract liabilities provided for long term life
+and health insurance contracts.
+The Group determines risk margins of the long term life insurance policyholders' reserves using the
+scenario comparison method. The unfavorable scenarios are determined according to the uncertainty and
+impact of expected net cash outflows.
+The key assumptions used in the measurement of long term life insurance policyholders' reserves include
+insurance accident occurrence rates, lapse and surrender rates, expense assumptions, policy dividend
+assumptions, discount rate, etc. In deriving these assumptions, the Group uses information currently
+available as at the end of the reporting period. Changes in assumptions are recognized immediately in the
+statement of income.
+Liability adequacy test
+At the end of each reporting period, liability adequacy tests are performed on the unearned premium
+reserves, claim reserves and long term life insurance policyholders' reserves. If the insurance contract
+liabilities re-calculated with the insurance actuarial methods exceeds their carrying amounts on date of
+the liability adequacy test, an additional provision is made for the respective insurance contract liabilities
+based on the difference and charged in the statement of income. Otherwise, no adjustment is made for the
+respective insurance contract liabilities.
+188
+Fair value changes on financial assets at FVOCI related to the universal life insurance portfolio are
+recognized in other comprehensive income. Changes in the insurance liabilities for the universal life
+insurance portfolio is also recognized in other comprehensive income to the extent that such change
+is derived from fair value changes on financial assets at FVOCI related to the universal life insurance
+portfolio attributable to policyholders.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+When measuring insurance contract liabilities, the time value of money is considered. The related future
+cash flows are discounted when the impact of time value of money is significant. For short duration
+contracts whose duration is within one year, the cash flows are not discounted. The discount rates used in
+the measurement of time value of money is determined with reference to information currently available as
+at the end of the reporting period and is not locked.
+(33) INVESTMENT-LINKED BUSINESS (CONTINUED)
+Charges including account management fees and surrender charges are calculated at a fixed amount
+or certain percentage of policy account liabilities. Account management fees are recognized as other
+income during the period of service provided and surrender charges are recognized as other income
+as incurred.
+Premium receipts are recognized not as premium income, but rather as liabilities, presented in
+policyholder account liabilities. These liabilities are initially measured and subsequently carried at fair
+value. Commissions, net of receipts from initial charges that are meant to compensate such costs, are
+recognized as transaction costs in the statement of income.
+The Group investment-linked contracts and the deposit component unbundled from the above individual
+investment-linked insurance contracts are accounted for as follows:
+The universal life contracts of the Group contain significant insurance risks are classified as insurance
+contracts. These policies also contain both insurance components and deposit components. The deposit
+components are separated from these hybrid insurance contracts. The rest of the contracts are accounted
+for as insurance contracts as described in Note 2. (30).
+The assets and liabilities related to investment-linked contracts which are regarded as insurance contracts
+are presented as policyholder account assets and liabilities in respect of insurance contracts. The assets
+and liabilities related to investment-linked contracts which are regarded as investment contracts are
+presented as policyholder account assets and liabilities in respect of investment contracts. The assets and
+liabilities of each investment-linked fund are segregated from each other and from the rest of the Group's
+invested assets for record keeping purposes. As the investment risks of investment-linked contracts were
+fully borne by policyholders, the assets and liabilities related to investment-linked contracts were not
+included in the analysis of risk management in Note 51.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+190
+The deposit components separated from the above universal life insurance contracts are accounted for as
+follows:
+FINANCIAL STATEMENTS
+189
+Assets of investment-linked contracts are initially measured and subsequently carried at fair value,
+presented as policyholder account assets.
+Ping An Insurance (Group) Company of China, Ltd.
+The individual investment-linked contracts of the Group contain significant insurance risks and are
+classified as insurance contracts. These policies also contain both insurance components and deposit
+components. The deposit components are unbundled from these hybrid insurance contracts. The rest of
+the contracts are accounted for as insurance contracts. The Group investment-linked contracts of the
+Group that do not contain significant insurance risks are classified as investment contracts.
+(33) INVESTMENT-LINKED BUSINESS
+Charges including policy administration fees are recognized as other income during the period of
+service provided.
+Premium receipts are recognized not as premium income, but rather as liabilities, presented as
+investment contract liabilities. For those non-life investment type policies without guaranteed
+benefits, the related contract liabilities are measured at fair value and the related transaction costs
+are recognized in the statement of income. For other investment contracts, the related liabilities are
+initially measured at fair value and subsequently measured at amortized cost. Commissions, net of
+receipts from initial charges that are meant to compensate such costs, are recognized as transaction
+costs in the initial amount of the liabilities.
+Insurance policies that are not considered insurance contracts under IFRS 4 are classified as investment
+contracts. These policies do not contain significant insurance risk.
+(32) INVESTMENT CONTRACTS
+A shadow accounting adjustment is applied to recognize the change in surplus in other comprehensive
+income to the extent that such change is derived from unrealized gains or losses on supporting assets
+recognized directly in other comprehensive income.
+(31) DPF IN LONG TERM LIFE INSURANCE CONTRACTS AND INVESTMENT CONTRACTS
+Some of the Group's long term life insurance contracts and investment contracts contain a discretionary
+participating feature, which is a contractual right to receive additional benefits as a supplement to
+guaranteed benefits. These contracts are collectively called participating contracts. Under the current
+PRC insurance regulations, the Group is obligated to pay to the policyholders of participating contracts
+at least 70% of the distributable surplus in each period, which includes net investment spread arising from
+the assets supporting these contracts and mortality gains or losses on the pool of contracts to which the
+participating contract belongs. The amounts to be collectively allocated to the policyholders are referred
+to as the eligible surplus. The amount and timing of the subsequent distribution of the eligible surplus
+to individual policyholders of participating contracts is subject to future declarations by the Group. As
+long as the eligible surplus has not been declared and paid, it is included in the long term life insurance
+policyholders' reserves and investment contract reserves. To the extent that there is a subsequent
+change in the expected future eligible surplus due to realized and unrealized gains, which may be paid to
+policyholders of participating insurance contracts in the future under the policy terms, such a change in
+surplus is included in long term life insurance policyholders' reserves and investment contract reserves.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Annual Report 2018
+(34) UNIVERSAL LIFE BUSINESS
+('Ping An Financial Leasing')
+100.00% 13,241,511,182
+Finance lease business,
+Shanghai
+67.93%
+Shanghai, Corporation
+32.07%
+Ping An of China Asset Management
+(Hong Kong) Company Limited
+100.00%
+100.00%
+100.00% HKD345,000,000
+Shenzhen Ping An New Capital
+Investment Co., Ltd.
+Shenzhen, Corporation
+4,000,000,000
+99.88%
+Investment holding,
+Shenzhen
+Ping An International Financial
+Leasing Co., Ltd. (iii)
+Hong Kong, Corporation Asset management,
+Hong Kong
+insurance, Hong Kong
+Shenzhen Wanlitong Network
+Information Technology Co., Ltd.
+100.00%
+77.14%
+Customer loyalty service,
+Shenzhen
+Shenzhen, Corporation
+Ping An Trendwin Capital
+Management Co., Ltd.
+1,000,000,000
+78.63%
+77.14%
+Internet service,
+Shenzhen
+Shenzhen, Corporation
+Ping An E-wallet Electronic
+Commerce Company Limited
+('Ping An E-wallet')
+598,583,070
+100.00%
+100.00%
+IT and business process
+outsourcing services,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Ping An Financial Services
+Co., Ltd.
+Hong Kong, Corporation Property and casualty
+100.00% HKD490,000,000
+Shanghai, Corporation
+and investment
+99.75%
+Shenzhen, Corporation
+Property management
+99.59%
+100.00%
+20,000,000,000
+('Ping An Real Estate')
+management, Shenzhen
+(RMB unless
+otherwise stated)
+Ping An Technology (Shenzhen)
+Co., Ltd. (iii)
+IT services,
+Shenzhen
+68.38%
+31.62%
+('Ping An Technology')
+100.00%
+2,924,763,800
+100.00%
+Shenzhen, Corporation
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+100.00%
+100,000,000
+202
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2018 are set out below
+(continued):
+Proportion of
+Proportion of
+Place of incorporation and
+Name
+Ping An Real Estate Co., Ltd.
+kind of legal entity
+Principal activities and
+place of operation
+ordinary shares
+directly held by
+the Company (%)
+ordinary shares
+indirectly held by
+the Company (%)
+Investment consulting,
+Shanghai
+200,000,000
+Shanghai Pingpu Investment Co., Ltd.
+Shenzhen, Corporation
+Currency brokerage,
+Shenzhen
+Annual Report 2018
+66.92%
+67.00%
+50,000,000
+Ping An Insurance (Group) Company of China, Ltd. 203
+FINANCIAL STATEMENTS
+Shenzhen, Corporation
+Notes to Consolidated Financial Statements
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2018 are set out below
+(continued):
+Name
+Pingan Haofang (Shanghai)
+E-commerce Co., Ltd.
+Place of incorporation and
+kind of legal entity
+Shanghai, Corporation
+Proportion of
+For the year ended 31 December 2018
+Ping An Tradition International Money
+Broking Company Ltd.
+('Ping An Financial Technology')
+Consulting Co., Ltd. (iii)
+Shanghai, Corporation
+Investment management,
+Shanghai
+99.51%
+100.00%
+9,130,500,000
+Ansheng Investment Company Limited
+British Virgin Islands,
+Corporation
+Project investment,
+99.51%
+100.00%
+USD50,000
+British Virgin Islands
+Shenzhen Ping An Financial Technology Shenzhen, Corporation
+Financial advisory
+100.00%
+100.00% 30,406,000,000
+services, Shenzhen
+Principal activities and
+place of operation
+ordinary shares
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Proportion of
+votes (%) (i)
+100.00%
+100.00%
+Real estate investment,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Ping An Real Estate
+Investment Co., Ltd.
+420,000,000
+100.00%
+96.74%
+Futures brokerage,
+Shenzhen
+Shenzhen, Corporation
+Ping An Futures Co., Ltd.
+('Ping An Commercial Property
+Investment')
+1,367,000,000
+99.99%
+99.50%
+Real estate investment,
+Shenzhen
+Property Investment Co., Ltd. (iii)
+1,310,000,000
+Shenzhen Ping An Commercial
+China Ping An Insurance (Hong Kong)
+Company Limited
+68.19%
+Property agency,
+Shanghai
+80.00%
+80.00%
+Registered/
+authorized capital
+(RMB unless
+otherwise stated)
+680,000,000
+Ping An-UOB Wealthtone Asset
+Management Co., Ltd. (iii)
+Shenzhen, Corporation
+Asset management,
+Shenzhen
+68.11%
+100.00%
+800,000,000
+Ping An Fund Management
+Company Limited (iii)
+Shenzhen, Corporation
+Fund raising and
+68.11%
+1,300,000,000
+('Ping An Overseas Holdings')
+A number of significant judgements are also required in applying the accounting requirements for
+measuring ECL, such as:
+100.00%
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 199
+Annual Report 2018
+The discount rate and investment return assumptions are affected by the future macro-economy,
+capital market, investment channels of insurance funds, investment strategy, etc., and therefore
+subject to uncertainty.
+For short term insurance contracts liabilities whose duration is within one year, the future cash flows
+are not discounted.
+For long term life insurance contracts where the future insurance benefits are affected by investment
+return of the underlying asset portfolio, the discount rates are determined based on expected future
+investment returns of the asset portfolio backing those liabilities. The future investment returns
+assumption for the measurement as at 31 December 2018 ranged from 4.75%- 5.00% (31 December 2017:
+4.75%-5.00%).
+Ltd.
+Notes to Consolidated Financial Statements
+For long term non-life insurance contracts where the future insurance benefits are not affected by
+investment return of the underlying asset portfolio, as the risk margin has no material impact on the
+reserve measurement, the discount rate assumption used is the benchmarking yield curve for the
+measurement of insurance contract liabilities published by China Central Depository and Clearing Co.,
+The main assumptions used in the measurement of policyholders' reserves and unearned premium reserves
+are as follows:
+At the end of the reporting period, the Group shall make an estimate of the assumptions used in the
+measurement of insurance contract liabilities. Such assumptions shall be determined based on information
+currently available at the end of the reporting period. To determine these assumptions, the Group selects
+proper risk margins according to both uncertainties and degree of impact of expected future cash
+outflows. Refer to Note 2.(2) for the changes in accounting policies and estimates.
+At the end of the reporting period, when measuring the insurance contract liabilities, the Group needs to
+make a reasonable estimate of amounts of the payments which the Group is required to make in fulfilling.
+the obligations under the insurance contracts, based on information currently available at the end of the
+reporting period.
+(4) MEASUREMENT UNIT AND VALUATION OF INSURANCE CONTRACT LIABILITIES
+The Group makes significant judgments on whether a group of insurance contracts' insurance risks are
+of the same nature. Different measurement units would affect the measurement of insurance contract
+liabilities.
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+For long term life insurance contracts where the future insurance benefits are not affected by
+investment return of the underlying asset portfolio, with consideration of the Cai Kuai [2017] No.637
+issued by CIRC and other relevant regulations, the discount rate assumption is based on the
+benchmarking yield curve for the measurement of insurance contract liabilities published by China
+Central Depository and Clearing Co., Ltd, with consideration of the impact of the tax and liquidity
+premium. The current discount rate assumption for the measurement as at 31 December 2018 ranged
+from 3.28%- 4.75% (31 December 2017: 3.16%- 4.75%).
+For the year ended 31 December 2018
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+(4) MEASUREMENT UNIT AND VALUATION OF INSURANCE CONTRACT LIABILITIES
+(CONTINUED)
+(5) CLASSIFICATION AND UNBUNDLING/SEPARATION OF INSURANCE CONTRACTS AND
+SIGNIFICANT INSURANCE RISK TESTS
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+200
+The major assumptions needed in measuring claim reserves include the claim development factor and
+expected claim ratio, which can be used to forecast trends of future claims so as to estimate the ultimate
+claim expenses. The claim development factors and expected claim ratio of each measurement unit are
+based on the Group's historical claim development experience and claims paid, with consideration of
+adjustments to company policies like underwriting policies, level of premium rates, claim management and
+the changing trends of external environment such as macroeconomic, regulations, and legislation. In the
+measurement of claim reserves, the Group applies the cost of capital approach and considers insurance
+industry guideline ranged from 2.5% to 5.5% to determine risk margins.
+In the measurement of unearned premium reserves for the property and casualty insurance and
+short term life insurance business, the Group applies the cost of capital approach and considers the
+insurance industry guideline ranged from 3% to 6% to determine risk margins.
+The assumption of participating insurance accounts is affected by the above factors, and hence bears
+uncertainty. The future assumption of life and participating insurance with a risk margin is based on a
+dividend rate of 85%.
+The Group uses reasonable estimates, based on expected investment returns of participating insurance
+accounts, participating dividend policy, policyholders' reasonable expectations, etc. in deriving policy
+dividend assumptions.
+The expense assumptions include assumptions of acquisition costs and maintenance costs. The
+assumption of maintenance costs also has a risk margin.
+The Group uses reasonable estimates, based on an expense study and future development trends, in
+deriving expense assumptions. If the future expense level becomes sensitive to inflation, the Group will
+consider the inflation factor as well in determining expense assumptions.
+The assumptions of lapse rates are determined by reference to different pricing interest rates, product
+categories and sales channels.
+The Group uses reasonable estimates, based on actual experience and future development trends, in
+deriving lapse rate assumptions.
+The assumptions of mortality and morbidity rates are affected by factors such as changes in lifestyles
+of national citizens, social development, and improvement of medical treatment, and hence subject to
+uncertainty.
+The assumption of morbidity rates is determined based on the Group's assumptions used in product
+pricing, experience data of morbidity rates, and estimates of current and future expectation as well as
+a risk margin.
+The assumption of mortality rates is based on the industrial benchmark or the Group's prior
+experience data on mortality rates, estimates of current and future expectations, the industry criteria
+the understanding of the China insurance market as well as a risk margin. The assumption of mortality
+rates is presented as a percentage of 'China Life Insurance Mortality Table (2000-2003)', which is the
+industry standard for life insurance in China.
+The Group uses reasonable estimates, based on market and actual experience and expected future
+development trends, in deriving assumptions of mortality rates, morbidity rates, disability rates, etc.
+198
+Establishing groups of similar financial assets for the purposes of measuring ECL.
+Establishing the number and relative weightings of forward-looking scenarios for each type of
+product/market and the associated ECL; and
+Choosing appropriate models and assumptions for the measurement of ECL;
+statements.
+In the process of applying the Group's accounting policies, management has made the following judgments
+and accounting estimation, which have the significant effect on the amounts recognized in the financial
+The Group makes estimates and judgments that affect the reported amounts of revenues, expenses,
+assets and liabilities and the disclosure of contingent liabilities in these financial statements. Estimates and
+judgments are continually assessed based on historical experience and other factors, including expectations
+of future events that are believed to be reasonable under the circumstances.
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES
+Two or more operating segments can be merged as one if they have similar characteristics and satisfy
+certain conditions.
+(c) The Group is able to obtain the accounting information such as the financial position, operating results
+and cash flows of the component.
+(b) The management of the Company regularly assesses the operating results of its business units for the
+purpose of making decisions about resources allocations and performance assessment;
+(a) The component produces income and expenses in its daily operation;
+Operating segments refer to the Group's component that satisfies the following conditions:
+For management purposes, the Group is organized into operating segments based on the internal
+organization structure, management requirements and internal reporting. The reportable segments are
+determined and disclosed based on operating segments and the presentation is consistent with the
+information reported to the Board of Directors.
+(46) SEGMENT REPORTING
+(vii) a person identified in (a) (i) has significant influence over the entity or is a member of the key
+management personnel of the entity (or of a parent of the entity).
+(vi) the entity is controlled or jointly controlled by a person identified in (a); and
+(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
+an entity related to the Group;
+(45) RELATED PARTIES (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+distribution, Shenzhen
+(1) FAIR VALUE OF FINANCIAL INSTRUMENTS DETERMINED USING VALUATION
+TECHNIQUES
+The Group makes significant judgments on whether a written policy undertake both insurance risks and
+other risks, whether contains both an insurance component and a deposit component and whether the
+insurance component and deposit component are distinct and separately measurable. Such judgment
+affects the unbundling/separation of insurance contracts.
+Fair value, in the absence of an active market, is estimated by using valuation techniques, applying
+currently applicable and sufficiently available data, and the valuation techniques supported by other
+information, mainly include market approach and income approach, reference to the recent arm's length
+transactions, current market value of another instrument which is substantially the same, and by using the
+discounted cash flow analysis and option pricing models.
+Ping An Insurance (Group) Company of China, Ltd.
+Determining criteria for significant increase in credit risk;
+•
+•
+The measurement of the expected credit loss allowance for financial assets measured at amortized
+cost and FVOCI is an area that requires the use of complex models and significant assumptions about
+future economic conditions and credit behaviour. Explanation of the inputs, assumptions and estimation
+techniques used in measuring ECL is further detailed in note 51.
+(3) MEASUREMENT OF THE EXPECTED CREDIT LOSS ALLOWANCE
+The contractual cash flows characteristics of financial assets refer to the cash flow attributes of the
+financial assets reflecting the economic characteristics of the relevant financial assets (i.e. whether the
+contractual cash flows generated by the relevant financial assets on a specified date solely represents the
+payments of principal and interest). The principal amount refers to the fair value of the financial asset at
+initial recognition. The principal amount may change throughout the lifetime of the financial assets due
+to prepayment or other reasons. The interest includes the time value of money, the credit risk associated
+with the outstanding principal amount for a specific period, other basic lending credit risks, and the
+consideration of costs and profits.
+An entity's business model refers to how an entity manages its financial assets in order to generate cash
+flows. That is, the entity's business model determines whether cash flows are arising from collecting
+contractual cash flows, selling financial assets or both. The business model of managing financial assets
+is not determined by a single factor or activity. Instead, the entity should consider all relevant evidence
+available when making the assessment. Relevant evidence mainly includes, but not limited to, how the cash
+flow of the group of assets is collected, how the performance of the group of assets is reported to key
+management personnel, and how the risk of group of assets is being assessed and managed.
+The judgments in determining the classification of financial assets include the analysis of business models
+and the characteristics of contractual cash flows.
+(2) CLASSIFICATION OF FINANCIAL ASSETS
+Using different valuation techniques and parameter assumptions may lead to significant difference of fair
+value estimation.
+When using valuation techniques to determine the fair value of financial instruments, the Group would
+choose the input value in consistent with market participants, considering the transactions of related assets
+and liabilities. All related observable market parameters are considered in priority, including interest rate,
+foreign exchange rate, commodity prices and share prices or index. When related observable parameters
+are unavailable or inaccessible, the Group uses unobservable parameters and makes estimates for credit
+risk, market volatility and liquidity adjustments.
+(1) FAIR VALUE OF FINANCIAL INSTRUMENTS DETERMINED USING VALUATION
+TECHNIQUES (CONTINUED)
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+197
+Annual Report 2018
+100.00% HKD7,085,000,000
+The Group makes significant judgments on whether the contract transfers insurance risk, whether transfer
+of insurance risk has commercial substance, and whether the transferred insurance risk is significant when
+performing significant insurance risk tests. Such judgment affects the classification of insurance contracts.
+If the insurance risk ratio of a non-annuity policy is equal or greater than 5% at one or more points in
+time during the policy coverage period, the Group classifies it as an insurance contract. The insurance
+risk ratio of a direct insurance policy is the percentage of the benefits to be paid when the insured
+event occurs divided by the amounts to be paid when the insured event does not occur minus 100%;
+Annuity policies where the longevity risk is transferred are classified as insurance contracts;
+Shanghai, Corporation
+Ping An Annuity
+13,800,000,000
+96.62%
+55.59%
+40.96%
+Securities investment and
+brokerage, Shenzhen
+Annuity insurance,
+Shanghai
+Shenzhen, Corporation
+13,000,000,000
+99.88%
+99.88%
+Investment and trust,
+Shenzhen
+Shenzhen, Corporation
+China Ping An Trust Co., Ltd.
+Shenzhen
+Ping An Securities Company Limited.
+('Ping An Securities')
+86.11%
+13.82%
+100.00%
+Hong Kong, Corporation Investment holding,
+Hong Kong
+China Ping An Insurance Overseas
+(Holdings) Limited
+1,816,577,790
+75.01%
+1.63%
+73.37%
+Health insurance,
+Shanghai
+Shanghai, Corporation
+Ping An Health (iii)
+1,500,000,000
+100.00%
+1.33%
+98.67%
+Asset management,
+Shanghai
+Shanghai, Corporation
+Ping An Asset Management Co., Ltd.
+4,860,000,000
+17,170,411,366
+58.00%
+8.40%
+49.56%
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Ping An Life
+Name
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2018 are set out below:
+4. SCOPE OF CONSOLIDATION
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 201
+FINANCIAL STATEMENTS
+Annual Report 2018
+For further disclosure in respect of the maximum risk exposure of unconsolidated structured entities of the
+Group, see Note 51. (8).
+To determine whether the Group controls the structured entities of which the Group acts as an asset
+manager, management applies judgment based on all relevant fact and circumstance to determine
+whether the Group is acting as the principal or agent for the structured entities. If the Group is acting as
+the principal, it has control over the structured entities. In assessing whether the Group is acting as the
+principal, the Group considers factors such as scope of the asset manager's decision-making authority,
+rights held by other parties, remuneration to which it is entitled, and exposure to variable returns results
+from its additional involvement with structured entities. The Group will perform reassessment once the fact
+and circumstance changes leading to changes in above factors.
+(6) DETERMINATION OF CONTROL OVER THE STRUCTURED ENTITIES
+The unbundling/separation and classification of insurance contracts would affect the Group's revenue
+recognition, liability measurement and financial statement presentation.
+When performing significant insurance risk testing, the Group would group all policies of the same product
+with similar risk characteristics into the same portfolio. The Group would then select sufficient and
+representative policy samples from each policy portfolio to perform individual testing.
+If a property and casualty insurance or a short term life insurance policy obviously meets the criteria
+for significant insurance risk transfer, the Group directly classifies it as an insurance contract.
+When determining whether a reinsurance policy transfers significant insurance risks, judgment is made
+on a comprehensive understanding of the commercial substance of the reinsurance policy and other
+relevant contracts and agreements. If the reinsurance risk ratio of the reinsurance policy is greater than
+1%, the Group classifies it as a reinsurance contract. The reinsurance risk ratio of a reinsurance policy is
+derived from the present value of probability-weighted average net losses where the reinsurer incurs a net
+loss divided by expected premium income of the reinsurer. If a reinsurance policy obviously transfers a
+significant insurance risk, the Group directly classifies it as a reinsurance contract without calculating the
+reinsurance risk ratio.
+Proportion of
+ordinary shares
+directly held by
+the Company (%)
+When determining whether the policies transfer a significant insurance risk, the Group makes the following
+judgments for different policies:
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Registered/
+Banking,
+Shenzhen, Corporation
+Ping An Bank Co., Ltd. (ii)
+('Ping An Bank')
+insurance, Shenzhen
+21,000,000,000
+99.51%
+99.51%
+Property and casualty
+Shenzhen, Corporation
+Ping An Property & Casualty
+33,800,000,000
+99.51%
+99.51%
+Life insurance,
+Shenzhen
+Shenzhen, Corporation
+(RMB unless
+otherwise stated)
+authorized capital
+Proportion of
+votes (%) (i)
+Shenzhen Ping An Financial Center
+Development Company Ltd. (iii)
+Reach Success International
+Company Limited
+Real estate development,
+Shenzhen
+Name
+Shanghai Jahwa (Group) Company Ltd. Shanghai, Corporation
+('Shanghai Jahwa')
+Place of incorporation and
+kind of legal entity
+Principal activities and
+place of operation
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Registered/
+authorized capital
+Proportion of
+votes (%) (i)
+(RMB unless
+otherwise stated)
+Production and sale of
+99.51%
+100.00%
+5,268,261,234
+consumer chemicals,
+Shanghai
+Shanghai Jahwa United Co., Ltd. (iii)
+Shanghai, Corporation
+Industry, Shanghai
+51.85%
+52.11%
+671,713,547
+Shanghai Zean Investment Management Shanghai, Corporation
+Company Limited
+Asset management,
+99.51%
+100.00%
+4,810,000,000
+Shanghai
+Shanghai Pingan Automobile
+E-commerce Co., Ltd.
+Shanghai, Corporation
+ordinary shares
+Proportion of
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2018 are set out below
+(continued):
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+99.51%
+100.00% GBP133,000,000
+Ping An Pioneer Capital Co., Ltd.
+Shenzhen, Corporation
+Asset management,
+Shenzhen
+96.55%
+100.00%
+1,000,000,000
+Shenzhen Pingke Information
+Consulting Co., Ltd.
+Shenzhen, Corporation
+Management consulting,
+Shenzhen
+100.00%
+100.00%
+3,115,150,000
+E-commerce,
+Beijing Jingping Shangdi Investment
+Co., Ltd.
+Property leasing, Beijing
+99.51%
+100.00%
+45,000,000
+Guangzhou Xinping Property
+Investment Co., Ltd.
+Guangzhou, Corporation Property leasing,
+Guangzhou
+99.51%
+100.00%
+50,000,000
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 205
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+Beijing, Corporation
+Hong Kong, Corporation Real estate investment,
+Hong Kong
+94.74%
+63,330,000
+Shenzhen, Corporation
+Crowdfunding & Trading Co., Ltd.
+Private equity Financing,
+Shenzhen
+79.14%
+80.00%
+100,000,000
+Value Success International Limited
+('Value Success International')
+British Virgin Islands,
+Corporation
+Project investment,
+100.00%
+100.00%
+USD50,000
+British Virgin Islands
+Shenzhen Ping An Chuangke Investment Shenzhen, Corporation
+Management Co., Ltd.
+Investment management,
+Shenzhen
+99.79%
+100.00%
+100,000,000
+Shenzhen Ping An Anchuang
+Shenzhen, Corporation
+Investment Management Co., Ltd.
+Investment management,
+Shenzhen
+99.79%
+100.00%
+100,000,000
+206
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Shenzhen, Corporation
+Shenzhen Qianhai Inclusive
+USD100,000,000
+100.00%
+99.59%
+Shanghai
+Shanghai Gezhouba Yangming
+Property Co., Ltd.
+Shanghai, Corporation
+Real estate development
+99.51%
+100.00%
+20,000,000
+and management,
+Shanghai
+Shanghai, Corporation
+Management Co., Ltd.
+Investment management,
+Shanghai
+99.05%
+100.00%
+1,290,000,000
+94.74%
+Shanghai PingXin Asset Management
+Co., Ltd. (iii)
+Asset management,
+Shanghai
+100.00%
+100.00%
+1,010,000,000
+Shenzhen Qianhai Credit Service
+Centre Co., Ltd.
+Shenzhen, Corporation
+Personal and Enterprise
+100.00%
+100.00%
+50,000,000
+Credit Information
+services, Shenzhen
+Pingan Real Estate Capital Limited
+Hong Kong, Corporation Financing platform,
+Hong Kong
+Shanghai, Corporation
+Talent Bronze Limited
+Shanghai Jinyao Investment
+100.00%
+Tongxiang Ping An Investment Co., Ltd. Tongxiang Corporation
+Investment management,
+Tongxiang
+99.59%
+100.00%
+500,000,000
+Ping An Commercial Factoring Co., Ltd. Shanghai, Corporation
+Commercial factoring,
+Shanghai
+100.00%
+100.00%
+700,000,000
+Shanxi Changjin Expressway Co., Ltd.
+Taiyuan, Corporation
+Expressway operation,
+Taiyuan
+59.71%
+60.00%
+750,000,000
+Shanxi Jinjiao Expressway Co., Ltd.
+Taiyuan, Corporation
+Expressway operation,
+Taiyuan
+59.71%
+60.00%
+504,000,000
+Ping An Caizhi Investment Management Shenzhen, Corporation
+Company Limited
+Equity investment,
+96.55%
+100.00%
+600,000,000
+Shenzhen
+204
+419,000,000
+100.00%
+99.51%
+Real estate investment,
+Shenyang
+99.51%
+GBP90,000,160
+100.00%
+5,648,870,000
+Ping An Insurance Sales Services
+Co., Ltd.
+Shenzhen, Corporation
+Sale agency of insurance,
+Shenzhen
+100.00%
+100.00%
+50,000,000
+Ping An Chuang Zhan Insurance
+Sales & Service Co., Ltd
+Shenzhen, Corporation
+Insurance sale,
+Shenzhen
+99.51%
+Annual Report 2018
+100.00%
+British Virgin Islands,
+Corporation
+Project investment,
+99.51%
+100.00%
+USD50,000
+British Virgin Islands
+Jade Reach Investment
+Company Limited
+British Virgin Islands,
+Corporation
+Project investment,
+99.51%
+100.00%
+USD50,000
+British Virgin Islands
+Shenyang, Corporation
+50,000,000
+Ping An Insurance (Group) Company of China, Ltd.
+Shenyang Shengping Investment
+Management Co., Ltd.
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2018 are set out below
+(continued):
+99.51%
+100.00%
+4,500,000,000
+Shenzhen
+Beijing Shuangronghui Investment
+Co., Ltd.
+Beijing, Corporation
+Real estate investment,
+Beijing
+99.51%
+100.00%
+256,323,143
+Chengdu Ping An Property Investment
+Company Co., Ltd.
+Chengdu, Corporation
+Real estate investment,
+Chengdu
+99.51%
+Logistics,
+840,000,000
+Real estate development,
+Hangzhou
+99.51%
+100.00%
+1,600,000,000
+Beijing Jingxinlize Investment Co., Ltd.
+Beijing, Corporation
+Real estate investment,
+Beijing
+99.51%
+100.00%
+1,160,000,000
+Anbon Allied Investment Company
+Limited.(iii)
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Hong Kong, Corporation Real estate investment,
+United Kingdom
+99.51%
+Hangzhou Pingjiang Investment Co., Ltd. Hangzhou, Corporation
+Shenzhen, Corporation
+100.00%
+Tianjin
+Name
+Shenzhen Pingan Real Estate Industrial
+Logistics Company Ltd. (iii)
+Place of incorporation and
+kind of legal entity
+Proportion of
+ordinary shares
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Proportion of
+votes (%) (i)
+96.55%
+100.00%
+Registered/
+authorized capital
+(RMB unless
+otherwise stated)
+(Hong Kong) Company Limited (iii)
+Ping An of China Securities
+100,000,000
+10,400,000,000
+100.00%
+100.00%
+Finance lease business,
+Ping An International Financial Leasing Tianjin, Corporation
+(Tianjing) Co., Ltd. (iii)
+Hong Kong, Corporation Securities investment and
+100.00%
+Principal activities and
+place of operation
+Consulting services,
+Shanghai
+Shanghai, Corporation
+Ping An Wealth Management Co., Ltd.
+brokerage, Hong Kong
+HKD324,681,000
+100.00%
+(1,819)
+(39)
+(51)
+96
+Impairment loss of investment
+assets
+(38)
+1,442
+40
+(26)
+2
+100
+499
+(662)
+income
+Including: Inter-segment investment
+(2,057)
+(188) (2,701)
+136
+and jointly controlled entities
+(22,611)
+63,725
+43,813
+20,980
+18,773
+2,197
+385
+Share of profits and losses of associates
+1,150
+Other revenues and other gains
+(2,411) 7,145
+3,115
+1,814
+183
+557
+3,887
+22,803
+(2,161)
+Fees and commission on the banking business
+1,610
+690
+5,034
+8,049
+709
+Annual Report 2018
+216
+Net fees and commission income from non-insurance operations
+Subtotal
+328
+Others
+44,407
+46,277
+Subtotal
+1,343
+2,344
+Including: Inter-segment other revenues
+Non-operating gains
+Others
+Fees and commission expenses on non-insurance operations
+Brokerage commission
+18,051
+875
+6,599
+37,808
+476
+1,612
+(1,213)
+3,318
+42,032
+Investment income
+(1,955)
+9,086
+37,191
+48
+272
+1,496
+non-insurance operations
+commission revenue from
+Including: Inter-segment fees and
+44,407
+(1,738)
+139
+13,214
+(1,319)
+7
+(268)
+(2,265)
+Investment expenses
+(128)
+(319)
+(152)
+(241)
+2,533
+166
+477
+Foreign exchange (losses)/gains
+(40,814)
+(11)
+(40,803)
+(6,599)
+102
+(59)
+(563)
+Administrative expenses
+(41,886)
+34,184
+(88,143)
+1,212
+(86,931)
+247
+(53)
+(246) (226)
+(47,569)
+(27)
+(145,126)
+4,384
+(9,025) (13,138)
+(3,632)
+(32,941)
+(1,349) (1,022)
+(742)
+Including: Taxes and surcharges
+(70)
+27
+(811)
+(5,051)
+182,965
+207,262
+521,663
+Total revenue
+354
+2
+(22,429)
+6,664
+7,420
+13
+4
+6
+38
+104
+179
+1,760
+1
+8
+(276)
+9,737
+42,647
+(72,501)
+1,558
+(74,059)
+(114,587)
+2,140
+(77,754) (38,973)
+Loan loss provisions, net of reversals
+30,992
+Fees and commission expenses on
+non-insurance operations
+Commission expenses on insurance
+operations
+(427,243)
+188
+(320,957) (106,474)
+Claims and policyholders' benefits
+974,570
+(27,360)
+Interest expenses on banking operations
+37,764
+15,503
+5,723
+467,278
+15,287
+17,059
+370,327
+450,219
+Group business
+Individual business
+Life insurance
+Net of reinsurance premiums ceded
+2017
+2018
+(in RMB million)
+605,035
+719,556
+Gross written premiums
+385,614
+Property and casualty insurance
+Automobile insurance
+174,988
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 215
+Annual Report 2018
+587,615
+700,139
+Net written premiums
+216,393
+202,001
+6,492
+9,378
+Accident and health insurance
+32,410
+48,495
+Non-automobile insurance
+163,099
+232,861
+247,856
+6,552
+9,471
+605,035
+719,556
+Gross written premiums
+216,393
+247,856
+Property and casualty business gross written premiums
+24,152
+(in RMB million)
+31,278
+364,490
+440,422
+Long term life business gross written premiums
+2017
+2018
+(in RMB million)
+605,035
+Short term life business gross written premiums
+For the year ended 31 December 2018
+Gross written premiums
+Individual business
+Accident and health insurance
+39,177
+56,462
+Non-automobile insurance
+170,664
+181,923
+Automobile insurance
+Life insurance
+Property and casualty insurance
+471,700
+Interest expenses on banking operations
+373,139
+454,351
+17,349
+Group business
+2017
+2018
+388,642
+7. NET INTEREST INCOME FROM BANKING OPERATIONS
+(in RMB million)
+Interest revenue from banking operations
+2017
+2018
+Available-for-sale financial assets
+Loans and receivables
+Held-to-maturity investments
+other comprehensive income
+Debt financial assets at fair value through
+80,418
+Financial assets at amortized cost
+8. INTEREST REVENUE FROM NON-BANKING OPERATIONS
+74,885
+74,783
+72,501
+86,931
+14,358
+15,522
+(in RMB million)
+36,949
+8,128
+41,087
+3,125
+Trust service fees
+794
+724
+Underwriting commission
+2,363
+2,320
+37,220
+Brokerage commission
+2017
+2018
+(in RMB million)
+9. NET FEES AND COMMISSION INCOME FROM NON-INSURANCE
+OPERATIONS
+88,376
+88,546
+10,069
+Fees and commission revenue from non-insurance operations
+Fees and commission from the banking business
+48,718
+18,398
+Discounted bills
+53,278
+78,926
+Individual loans and advances to customers
+40,812
+37,188
+Corporate loans and advances to customers
+237
+10,726
+4,232
+4,002
+2017
+2018
+Loans and advances to customers
+Due from financial institutions
+Due from the Central Bank
+10,932
+18,523
+201
+28,355
+2,671
+4,293
+Net interest income from banking operations
+Subtotal
+Bonds payable
+Customer deposits
+Due to financial institutions
+Financial investments
+Due to the Central Bank
+147,386
+161,714
+Subtotal
+4,056
+2,074
+Others
+34,081
+Interest expenses on banking operations
+3,085 (130,394)
+100.00%
+(439,596)
+8,068,893,684
+99.51%
+Ping An Asset Xinxiang No.20 Assets
+Management
+management product
+Investment in wealth
+9,103,702,167
+99.51%
+Ping An Asset Xinxiang No.19 Assets
+Management
+management product
+Investment in wealth
+8,910,000,000
+99.50%
+Ping An Asset Xinxiang No.5 Assets
+Management
+Investment in debts
+9,500,000,000
+Investment in wealth
+management product
+Ping An Asset Xinxiang No.18 Assets
+Management
+99.51%
+3,050,198,071
+99.51%
+Ping An Asset Xinxiang No.11 Assets
+Management
+management product
+Investment in wealth
+5,001,000,000
+99.51%
+99.51%
+Ping An Asset Xinxiang No.14 Assets
+Management
+Investment in wealth
+7,296,884,848
+99.51%
+Ping An Asset Xinxiang No.10 Assets
+Management
+management product
+Investment in wealth
+8,052,180,412
+management product
+Shanghai Trust Huarong Aggregated Fund
+Management Scheme
+Fund Management Scheme
+Investment in debts
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 207
+Annual Report 2018
+The Company and its subsidiaries are subject to the Company Law as well as various listing requirements,
+where applicable. Capital or asset transactions between the Company and its subsidiaries might be
+subject to regulatory requirements. Certain of the Company's subsidiaries are subject to regulatory capital
+requirements. As such, there are restrictions on the Group's ability to access or use the assets of these
+subsidiaries to settle the liabilities of the Group. Please refer to Note 51. (7) for detailed disclosure on the
+relevant regulatory capital requirements.
+Other than the changes above, there are no significant changes to the scope of consolidation as at 31
+December 2018 as compared to 2017.
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+(iii) The registered capitals of these subsidiaries were changed in 2018.
+The proportion of ordinary shares, as shown in the above table, is the sum product of direct holding by the Company and indirect
+holding by a multiplication of the proportion of shares held in each holding layer. The proportion of votes is the sum product of the
+proportion of votes held directly by the Company and indirectly via subsidiaries controlled by the Company.
+(ii)
+(i)
+Notes:
+USD1,191,623
+52.37%
+52.37%
+For the year ended 31 December 2018, Ping An Bank's profit attributable to its non-controlling interest was RMB10,424 million (2017:
+RMB9,740 million), the dividend paid to its non-controlling interest was RMB1,348 million (2017: RMB1,507 million). As at 31 December
+2018, Ping An Bank's equity attributable to its non-controlling interest was RMB100,818 million (2017: RMB93,263 million). Ping An
+Bank's summarized financial information is disclosed in 'Segment reporting' under the 'Banking' segment.
+Investment in wealth
+management product
+(2)
+Name
+10,000,000,000
+59.71%
+Shanghai Trust Changcheng Aggregated
+Trust Scheme
+Investment in debts.
+12,000,000,000
+98.86%
+As at 31 December 2018, the Group consolidated the following principal structured entities:
+Principal activities
+Investment in wealth
+management product
+99.51%
+(RMB)
+Paid-in capital
+Attributable
+equity interest
+Huabao East Aggregated Fund
+Assets Management
+Ping An Asset Xinxiang No.28
+26,425,812,763
+208
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+(19,417)
+545
+(329) 719,556
+Total
+and
+elimination
+211,918
+465,583
+(14)
+Net earned premiums
+reserves
+Change in unearned premium
+Other
+businesses
+Fintech &
+Healthtech
+(5,081) (14,881)
+Less: Premiums ceded to reinsurers
+247,526
+(1,695) (20,727)
+472,359
+(22,436)
+Reinsurance commission revenue
+non-insurance operations
+Fees and commission revenue from
+72
+395
+from non-banking operations
+Including: Inter-segment interest revenue
+7,493
+202 677,703
+71,190
+(1,174) 161,714
+(171) 7,966
+162,888
+-
+Interest revenue from banking operations
+6,964
+1,173
+Interest revenue from non-banking
+operations
+Automotive internet
+platform, Beijing
+Gross written premiums
+Trust
+Total revenue from top five customers
+(in RMB million)
+During 2018 and 2017, the Group's top five customers in respect of total revenue are as follows:
+More than 95% of the Group's revenue is derived from its operations in Mainland China. More than 95% of
+the Group's non-current assets are located in Mainland China.
+Transfer prices between operating segments are on an arm's-length basis in a manner similar to
+transactions with third parties.
+In the year 2018, the Group reorganized the presentation of the cross-shareholding business based on the
+management of the sub-business lines. The comparative figures have been restated accordingly.
+Management monitors the operating results of the Group's business units separately for the purpose of
+making decisions with regard to resources allocation and performance assessment. Segment performance
+is assessed based on indicators such as net profit.
+Except for the above business segments, the other segments did not have material impact on the Group's
+operating outcome, and as such are not separately presented.
+Percentage of total revenue
+The fintech & healthtech segment provides various financial and daily-life services through internet
+platforms such as financial transaction information service platform, health care service platform,
+reflecting performance summary of the fintech & healthtech business subsidiaries, associates and
+jointly controlled entities.
+The securities segment undertakes brokerage, trading, investment banking and asset management
+services;
+The trust segment provides trust products services and undertake investing activities;
+The banking segment undertakes loan and intermediary business with corporate customers and retail
+business customers as well as wealth management and credit card services with individual customers,
+reflecting performance of banking subsidiary;
+The property and casualty insurance segment offers a wide variety of insurance products to individual
+and corporate customers, including automobile insurance, non-automobile insurance and accident and
+health insurance, reflecting performance of property and casualty insurance subsidiary;
+The life and health insurance segment offers a comprehensive range of life insurance products to
+individual and corporate customers, including term, whole-life, endowment, annuity, investment-linked,
+universal life and health care and medical insurance, reflecting performance summary of life insurance,
+annuity insurance and health insurance subsidiaries;
+In 2018, the segment businesses are separately presented as the insurance segment, the banking segment,
+the trust segment, the securities segment, the other asset management segment, the fintech & healthtech
+segment and the other businesses, based on the products and service offerings. The insurance segment
+is divided into the life insurance and health insurance and the property and casualty insurance segment in
+line with the nature of products, risk and asset portfolios. The types of products and services from which
+reportable segments derive revenue are listed below:
+5. SEGMENT REPORTING
+The other asset management segment provides investment management services, finance lease
+business and other asset management services, reflecting performance summary of asset management
+and finance lease and the other asset management subsidiaries;
+Other asset
+Securities management
+2018
+2,628
+Banking
+Property
+and
+casualty
+insurance
+insurance
+health
+(in RMB million)
+Life and
+The segment analysis as at 31 December 2018 and for the year then ended is as follows:
+2017
+5. SEGMENT REPORTING (CONTINUED)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 209
+Annual Report 2018
+0.12%
+0.27%
+1,040
+For the year ended 31 December 2018
+Cayman Islands,
+Corporation
+Autohome Inc.
+52.11% GBP1,154,873
+97
+6,381
+Other revenues and other gains
+25,030
+1,415
+384
+203
+1,177
+2,926 25,038
+11,488
+22
+105
+3
+21
+1,292
+Including: Non-operating gains
+Including: Inter-segment other revenues
+197
+6,230
+Share of profits and losses of associates
+46
+3
+2
+3
+515
+50
+(1,743)
+and jointly controlled entities
+Including: operating lease income from
+4,117
+212
+31
+3
+247
+(867)
+3,743
+investment properties
+1,124
+103
+5
+Life and
+(in RMB million)
+Claims and policyholders' benefits
+Commission expenses on insurance
+operations
+health
+insurance
+(323,494) (116,305)
+Property
+and
+casualty
+insurance
+The segment analysis as at 31 December 2018 and for the year then ended is as follows (continued):
+Other asset
+Banking
+Trust
+Securities management
+Fintech &
+Healthtech
+Other
+businesses
+and
+elimination
+Total
+203
+Ping An Insurance (Group) Company of China, Ltd.
+28
+5. SEGMENT REPORTING (CONTINUED)
+Annual Report 2018
+3
+10
+6,697
+20,025
+8,169
+29
+(2,508) 18,074
+(25,129) 49,892
+(21,100)
+10
+385
+Ping An Insurance (Group) Company of China, Ltd.
+Total revenue
+231,947 212,743
+5,189
+11,597
+47,348
+34,939
+(34,240) 1,082,146
+210
+572,623
+(84,142) (49,337)
+income
+31,974
+77.14%
+Internet service,
+Shenzhen, Corporation
+Ping An Pay Technology Service
+Co., Ltd.
+USD335,000,000
+719,556
+100.00%
+100.00%
+consulting, Hong Kong
+Hong Kong, Corporation Investment management
+An Ke Technology Company Limited
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+and investment
+the Company (%)
+680,000,000
+Lianxin (Shenzhen) Investment
+Management Co., Ltd.
+51.85%
+Infant products,
+United Kingdom
+United Kingdom,
+Corporation
+Mayborn Group Limited
+Tongxiang
+300,000,000
+100.00%
+Shenzhen
+99.79%
+Tongxiang, Corporation
+Tongxiang Anhao Investment
+Management Co., Ltd.
+100,000,000
+100.00%
+99.69%
+Investment management,
+Shenzhen
+Shenzhen, Corporation
+Investment management,
+Including: Inter-segment investment
+ordinary shares
+directly held by
+Place of incorporation and
+kind of legal entity
+commission revenue from
+non-insurance operations
+1,882
+478
+27
+18
+(2,405)
+Including: Inter-segment fees and
+Investment income
+2,980
+10,109
+841
+1,674
+6,033
+8,157
+(1,237)
+3,417
+Principal activities and
+place of operation
+46,277
+52
+Name
+Proportion of
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2018 are set out below
+(continued):
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+8,642
+8
+(2,017) 88,546
+(2,206)
+39
+1,238
+22
+(1,885)
+39,362
+3,801
+4,014
+1,254
+119
+Gross written premiums
+119,438
+(93,169)
+Accounts payable
+7,988
+13,885
+126,387
+repurchase
+Assets sold under agreements to
+(18,683) 803,154
+4,182
+341 210,710
+5,552 567,100
+33,952
+institutions
+Due to banks and other financial
+(13,837) 154,895
+13,789 693,098
+(80,710) 7,142,960
+34,816 39,429
+70,756 23,566
+530,365 123,787
+3,066
+32,445
+50
+8,323
+5,745
+-
+32,519
+Bonds payable
+(60,251) 2,114,344
+25,453
+2,149,142
+brokerage customers
+Customer deposits and payables to
+122,302
+120,688
+-
+29,241
+92,891
+Insurance payables
+(162) 9,779
+1,080
+189,028
+(1,444)
+23,943
+14,880
+59
+Financial assets at amortized cost
+Financial assets at fair value through
+other comprehensive income
+Investments in associates and
+66,285
+30,648
+13,361
+71,187 148,768
+443,974
+Financial assets at fair value through
+profit or loss
+1,237,974
+(19,915) 1,929,842
+Loans and advances to customers
+74 22,798
+165,214
+3,902
+17,016
+165,214
+Finance lease receivable
+1,806
+Accounts receivable
+1,949,757
+Insurance contract liabilities
+94,687 629,366
+126,014
+1,203
+3,587
+83,761 9,464
+287,724 96,838 181,958
+372,624 3,418,592
+2,632,057
+Segment assets
+Others
+jointly controlled entities
+(29,121) 533,540
+639
+49
+44,926
+13
+42,227 72,183
+392,223
+(14,262) 2,075,151
+12,425 824,939
+38,291
+733
+11,040
+8,680 381,884
+1,997,775 213,597
+15,221 111,191
+7,380 556,875
+5. SEGMENT REPORTING (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+212
+53,814
+98
+4
+The segment analysis as at 31 December 2017 and for the year then ended is as follows:
+3,970
+1
+1,410 47,871
+243
+charged to consolidated results
+Total other non-cash expenses
+9,842
+621
+217
+1,484
+(in RMB million)
+Less: Premiums ceded to reinsurers
+(98)
+(3,028) (14,294)
+605,035
+303
+388,642 216,090
+Total
+and
+elimination
+Gross written premiums and policy fees
+Fintech &
+Healthtech
+Trust
+Banking
+Other asset
+Other
+businesses
+Property
+and
+casualty
+insurance
+Life and
+health
+insurance
+Change in unearned premium
+Securities management
+285,959
+615
+215
+178,824 77,014 139,224
+- Attribute to owners of the parent
+6,205
+54,903 24,261 72,436
+2,446,812 295,235 3,178,550
+185,245 77,389 240,042
+Segment equity
+Segment liabilities
+Others
+19,391
+6,205
+92,901
+17,738 29,401
+17,717 27,976
+52,591
+Policyholder dividend payable
+52,747
+19
+52,728
+policyholders
+Investment contract liabilities for
+515 2,211,887
+52,591
+14,549
+141,045
+477,014
+53,351
+(1,248) 348,224
+2,538
+3,960
+276
+209
+9
+56
+4,232
+2,466
+1,936
+617
+3,774
+31,231
+Depreciation and amortization
+Other segment information:
+Capital expenditures
+(6,949) 556,508
+43,161 79,541
+(6,817) 683,643
+87,294
+(73,893) 6,459,317
+36,493
+1,383
+7
+4,286 273,513
+8,153
+(10)
+(125)
+investment operations
+Including: Taxes and surcharges on
+(135)
+2,211
+(256)
+(135)
+(2,090)
+(946)
+(247)
+(16)
+2
+2
+209
+(45)
+Investment expenses
+(851)
+Administrative expenses
+(43,537)
+(2,686)
+Including: Financial costs
+(114)
+(3,939) (1,124)
+operations
+Interest expenses on non-banking
+(2,042)
+(50,034)
+(1,284)
+insurance operations
+Including: Taxes and surcharges on
+6,112 (151,446)
+(13,685)
+(3,478) (9,246)
+(1,038)
+(36,540)
+(758)
+(677)
+Foreign exchange (losses)/gains
+(75)
+(98)
+(4)
+(3,970)
+(217)
+(1)
+(47,871)
+(1,410)
+(53,814)
+(243)
+Net impairment losses on financial
+431 (9,086)
+(489)
+(847)
+(116)
+(8,065)
+Fees and commission expenses on
+non-insurance operations
+assets and other assets
+(3,989)
+Including: Loan impairment losses
+Including: Impairment losses on
+1
+(4)
+(19) (1,992)
+(1)
+(632)
+(1,223)
+(43)
+receivables and others
+(43,657)
+Including: Impairment losses on
+(23)
+(198) (1,978)
+(3,582)
+(187)
+(200)
+investment assets
+(43,657)
+(6,168)
+(17,420)
+(33)
+(63)
+(in RMB million)
+health
+Life and
+The segment analysis as at 31 December 2018 and for the year then ended is as follows (continued):
+5. SEGMENT REPORTING (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+insurance
+FINANCIAL STATEMENTS
+Annual Report 2018
+(4,090) 120,452
+(3,996) 107,404
+(281) (42,699)
+(3,809) 163,151
+30,431 (918,995)
+(28,420)
+16,177
+Ping An Insurance (Group) Company of China, Ltd. 211
+(2,824) (9,097) (5,576)
+(9,583) (34,931) (19,328)
+2,014 12,417 15,611
+(334) (3,400) (627)
+9,017 14,984
+8,264 14,006
+Property
+and
+casualty
+insurance
+Banking
+operations
+statutory deposits for insurance
+Balances with Central Bank and
+(29,870) 457,524
+17,817
+31,150 39,224
+5,779
+Other asset
+53,935 163,047
+other financial institutions
+Cash and amounts due from banks and
+Total
+Other
+businesses
+and
+elimination
+Fintech &
+Healthtech
+Securities management
+Trust
+176,442
+(2,219) (12,113)
+(1,125) (12,105)
+1,599
+14,394
+(2,886)
+(3)
+(8)
+(1,094)
+(81)
+(447)
+(1,253)
+Other expenses
+financial institutions
+repurchase and placements
+sold under agreements to
+Including: Interest expenses on assets
+(15,341)
+1,348
+(63)
+1,345 (18,227)
+from banks and other
+3,008
+(26,571)
+(102)
+12,215
+57,914
+- Attribute to owners of the parent
+1,680
+3,012
+12,274 24,818
+58,757
+(418)
+Profit for the year
+3,913
+81,259 19,515 32,231
+(22,502) (7,241) (7,413)
+Income tax
+Profit before tax
+(9)
+(1,276)
+(491,364) (212,432) (180,512)
+Total expenses
+(901)
+(81,367)
+reserves
+(1)
+(70,032) 1,952,695
+22,307
+2,000,420
+brokerage customers
+Customer deposits and payables to
+(1,176) 114,108
+25,201
+90,083
+Insurance payables
+(887) 8,522
+1,353
+5,107
+2,949
+Accounts payable
+335 133,981
+Bonds payable
+31,174
+8,543 342,492
+9,500
+Others
+45,622
+45,622
+Policyholder dividend payable
+50,309
+41
+50,268
+10,027
+policyholders
+1,932,969
+494
+188,405
+1,744,070
+Insurance contract liabilities
+451,283
+59,574
+Investment contract liabilities for
+23,176
+6,359
+11,714
+77,249
+28,076
+4,086
+89,329 228,734
+285,788
+Others
+27,597 (11,881) 86,207
+27,625
+12,482
+1,326
+8,280
+48,344
+jointly controlled entities
+Investments in associates and
+5,452 2,376,638
+(38,428) 630,676
+15,448
+59
+56,879
+11,587 752,474
+2,297,531
+82,370
+repurchase
+Assets sold under agreements to
+20,555 780,530
+2,189
+135,884
+241
+Segment assets
+4,357 589,580
+institutions
+Due to banks and other financial
+(57,413) 6,493,075
+425,479
+97,672
+25,820
+336,073 3,248,475
+27,724
+27,668
+87,570
+6,288
+47
+42,925
+94
+794
+(35)
+charged to consolidated results
+Total other non-cash expenses
+58
+8,607
+957
+375
+164
+7
+2,691
+580
+3,365
+468
+Depreciation and amortization
+411
+195
+Premium deposits separated out from universal life and
+investment-linked products
+(5,886)
+(5,654)
+Less: Premium deposits of policies without significant
+insurance risk transfer
+692,288
+818,379
+2017
+856
+2018
+(in RMB million)
+6. GROSS AND NET WRITTEN PREMIUMS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+214
+45,251
+95
+Gross written premiums and premium deposits
+53,174
+19,424
+1,677
+19,532
+70,144 222,054
+166,392
+Segment equity
+(43,776) 5,905,158
+62,171
+386,506
+27,192
+70,480
+2,131,139 265,929 3,026,421
+Segment liabilities
+435,139
+6,935
+58,629
+175,914
+15,256
+6,288
+228
+38,973
+(13,637) 587,917
+7,518
+299
+3,056
+1,788
+4,858
+Capital expenditures
+Other segment information:
+57,267
+(13,382) 473,351
+31,658
+25,842
+19,509
+69,804 128,791
+160,450
+- Attribute to owners of the parent
+-
+50,679
+5,510
+11,814
+6,462
+(351)
+(2,282)
+operations
+Interest expenses on non-banking
+(1,736)
+(31)
+(3)
+(91)
+(562)
+(14)
+(303)
+(743)
+(61)
+Impairment loss of other
+assets
+(3,735)
+145
+(19)
+1,728
+(580) (6,096)
+(1,314) (11,167)
+Income tax
+Profit before tax
+(7,158) (21,601)
+(1,689)
+(470,992) (188,363) (152,808)
+Total expenses
+(3)
+(453)
+(120)
+(20,642)
+Other expenses
+(580) (6,096)
+(91)
+(351)
+(2,282)
+Including: Financial costs
+(352)
+50,671 18,899 30,157
+(14,528) (5,527) (6,968)
+4,255
+35,725
+Interest revenue from non-banking
+147,386
+(682)
+148,068
+Interest revenue from banking operations
+6,728
+20
+operations
+6,226
+Reinsurance commission revenue
+572,990
+204
+188,219
+384,567
+Net earned premiums
+(14,625)
+482
+4,292
+67,892
+441
+non-insurance operations
+Fees and commission income from
+(1,903)
+18
+1,038
+112
+44
+7,792
+33
+from non-banking operations
+Including: Inter-segment interest income
+88,376
+2,019
+356
+7,067
+2,809
+658
+(1,047) (13,577)
+4,975
+(1,018)
+1,309
+Accounts receivable
+318,236
+2
+4,205 305,986
+8,043
+statutory deposits for insurance
+operations
+52,886
+Balances with the Central Bank and
+(20,132)
+25,159
+32,681
+30,568
+8,594
+37,844 193,448
+175,729
+483,891
+other financial institutions
+14,470
+(864) 72,061
+62,990
+513,706
+Equity investments
+19,349
+123,395
+33,459
+133,425 800,539
+4,260
+1,261,019
+(3,149) 1,660,864
+1,660,420
+3,593
+Loans and advances to customers
+112,028
+112,028
+Finance lease receivable
+Fixed maturity investments
+2,579
+Cash and amounts due from banks and
+and
+elimination
+3,953
+13,449
+13,307
+35,658
+Attribute to owners of the parent
+99,978
+(453)
+2,043
+(1,314) (11,167)
+(2,135) (5,676) (8,654) 15,917 (21,665)
+(22,397) 25,178 (839,830)
+9,391 20,250 (2,182) 134,740
+(1,888) (3,912) (465) (34,762)
+16,338 (2,647)
+2,123
+3,957
+23,189
+13,372
+36,143
+Profit for the year
+(456)
+7,503
+Total
+7,108
+Annual Report 2018
+Fintech &
+Healthtech
+Trust Securities management
+Banking
+Other asset
+Other
+businesses
+Property
+and
+casualty
+insurance
+insurance
+16,270 (2,700) 89,088
+(in RMB million)
+Life and
+The segment analysis as at 31 December 2017 and for the year then ended is as follows (continued):
+5. SEGMENT REPORTING (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 213
+health
+2,983
+225
+Annual Report 2018
+Management fee from investment-linked products and
+13,756
+2017
+2018
+18,268
+Sales revenue
+(2,701)
+(1,212)
+(2,145)
+656
+2017
+3,271
+(28,284)
+(137)
+120
+2,462
+-
+(199)
+11,213
+from investment contracts
+1,000
+3,588
+Expressway toll fee.
+8,725
+Others
+2,694
+121
+Income from customer loyalty service
+1,256
+416
+Income from guarantees
+5,753
+12,749
+7,829
+4,151
+Finance lease income
+Consulting income
+595
+679
+Annuity management fee
+1,161
+1,195
+2,557
+(28,688)
+(120)
+(12,150)
+Assets
+31 December 2018
+Others
+Stock index options
+Gold derivative instruments
+Currency forwards and swaps
+Interest rate swaps
+(in RMB million)
+Others
+Gold derivative instruments
+Stock index options
+Currency forwards and swaps
+Interest rate swaps
+(in RMB million)
+22. DERIVATIVE FINANCIAL INSTRUMENTS
+Ping An Insurance (Group) Company of China, Ltd.
+47,597
+69,793
+1,536
+2,334
+Liabilities
+Fair value
+Nominal amount
+Fair value
+(191)
+1,677
+2017
+676
+3
+16
+5,398
+-
+2,670
+8,212
+56,020
+12,147
+2,729,192
+438,417
+2,273
+7,622
+12,013
+-
+28,051
+1,564,617
+459,542
+Nominal amount
+6,898
+1,350
+49,892
+218
+427,243
+(9,415)
+436,658
+23,873
+23,873
+Interest credited to policyholder contract deposits
+197,626
+409
+197,217
+Increase in policyholders' reserves
+13,129
+13,129
+Policyholder dividends
+27,709
+27,709
+Maturities and survival benefits
+7,371
+7,371
+Annuities
+(2)
+20,519
+2018
+Gross
+Reinsurers' share
+Gross
+(in RMB million)
+2017
+439,596
+(10,108)
+449,704
+15,654
+116,435
+(7,065)
+123,500
+Property and casualty insurance claims
+307,507
+(2,064)
+(979)
+16,633
+Short term life insurance claims
+309,571
+Long term life insurance contract benefits
+Net
+Reinsurers' share
+(in RMB million)
+20,519
+Surrenders
+137,016
+22,725
+22,725
+Annuities
+21,539
+21,539
+154,608
+(9,743)
+164,351
+Net
+Reinsurers' share
+Gross
+Surrenders
+Claims and claim adjustment expenses
+(in RMB million)
+2018
+(1)
+12. CLAIMS AND POLICYHOLDERS' BENEFITS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Maturities and survival benefits
+22,186
+22,186
+Policyholder dividends
+(9,824)
+146,840
+Claims and claim adjustment expenses
+Net
+Reinsurers' share
+Gross
+(in RMB million)
+2017
+439,596
+43,813
+(10,108)
+17,407
+17,407
+Interest credited to policyholder contract deposits
+184,686
+(365)
+185,051
+Increase in policyholders' reserves
+16,445
+16,445
+449,704
+44,711
+65,159
+2,300
+31 December 2017
+Investment in subsidiaries, associates and jointly controlled entities
+620
+573
+Income from precious metal transactions
+525
+769
+Gain on disposals of loans and advances
+640
+958
+Derivative financial instruments
+3,452
+Available-for-sale financial assets
+(358)
+121
+Loans and receivables
+Financial assets at amortized cost
+2,569
+(199)
+3,069
+2,324
+Debt financial assets at fair value through other
+comprehensive income
+16,736
+24,184
+- Held-to-maturity
+- Available-for-sale
+Fixed maturity investments
+(in RMB million)
+(4) IMPAIRMENT LOSSES
+Financial liabilities at fair value through profit or loss
+- Wealth management investments and other investments
+Financial assets designated at fair value through profit or loss
+Derivative financial instruments
+Stocks
+- Funds
+Bonds
+Financial assets at fair value through profit or loss
+(in RMB million)
+(3) UNREALIZED (LOSSES)/GAINS
+10. INVESTMENT INCOME (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 217
+Annual Report 2018
+7,615
+Financial assets at fair value through profit or loss
+2017
+2018
+63,725
+31,974
+Total investment income
+(2,701)
+3,271
+(28,284)
+24,184
+7,615
+38,971
+52,643
+2017
+2018
+Impairment losses
+Unrealized gains
+Realized gains from disposal
+Net investment income
+(in RMB million)
+10. INVESTMENT INCOME
+Ping An Insurance (Group) Company of China, Ltd.
+(1) NET INVESTMENT INCOME
+(in RMB million)
+2018
+2017
+(in RMB million)
+(2) REALIZED GAINS FROM DISPOSAL
+38,971
+52,643
+(3,456)
+2,757
+3,743
+1,362
+16,533
+- Loan and receivables
+Debt financial assets at fair value through profit or loss
+Operating lease income from investment properties
+Interest expenses on assets sold under agreements to repurchase
+and placements from banks and other financial institutions
+10,291
+Other net investment income
+Available-for-sale financial assets
+comprehensive income
+Equity financial assets at fair value through other
+2,659
+22,076
+Equity financial assets at fair value through profit or loss
+Dividend income
+35,649
+Equity investments
+Available-for-sale
+Total
+92,951
+6,882
+7,614
+92,414
+85,337
+(14)
+(196)
+92,428
+85,533
+959
+92,428
+84,574
+31 December 2017
+31 December 2018
+Premium receivables, net
+Property and casualty insurance
+Life insurance
+Premium receivables, net
+Less: Provision for doubtful receivables
+99,296
+31 December 2018
+69,793
+31 December 2017
+31 December 2018
+Annual Report 2018
+224
+Over 1 year
+Over 3 months but within 1 year.
+Within 3 months
+(in RMB million)
+An aging analysis of premium receivables is as follows:
+The credit terms of premium receivables granted are generally from one to six months, and non-interest
+bearing.
+Premium receivables
+45,694
+34,236
+50,735
+11,458
+16,415
+45,694
+67,150
+(1,903)
+(2,643)
+47,597
+67,150
+Net
+(in RMB million)
+Total
+31 December 2017
+31 December 2018
+Surplus reserve deposits with the Central Bank
+Fiscal deposits with the Central Bank
+· Statutory reserve deposits with the Central Bank for
+banking operations-Foreign Currencies
+-
+Statutory reserve deposits with the Central Bank for
+banking operations-RMB
+Statutory reserve deposits with the Central Bank for banking
+operations
+(in RMB million)
+19. BALANCES WITH THE CENTRAL BANK
+As at 31 December 2018, cash and amounts due from overseas banks and other financial institutions
+amounted to RMB16,187 million (31 December 2017: RMB20,306 million).
+As at 31 December 2018, cash and amounts due from banks and other financial institutions of RMB5,446
+million (31 December 2017: RMB4,506 million) were restricted from use.
+As at 31 December 2018, the provision for impairment losses of placements with banks and other financial
+institutions measured at fair value through other comprehensive income is RMB16 million.
+60,415
+74,434
+3,756
+60,415
+2018
+(in RMB million)
+11. OTHER REVENUES AND OTHER GAINS
+229,525
+271,259
+266,802
+6,458
+Stocks and others
+Net
+Less: Provision for impairment losses
+Gross
+Bills
+Bonds
+(in RMB million)
+20. FINANCIAL ASSETS HELD UNDER RESOLD AGREEMENTS
+For the year ended 31 December 2018
+21. PREMIUM RECEIVABLES
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 223
+Annual Report 2018
+In accordance with relevant regulations, subsidiaries of the Group engaged in bank operations are required
+to place mandatory reserve deposits with the People's Bank of China (the 'PBC') for customer deposits in
+both local currency and foreign currencies. As at 31 December 2018, the mandatory deposits are calculated
+at 12% (31 December 2017: 15%) of customer deposits denominated in RMB and 5% (31 December 2017: 5%)
+of customer deposits denominated in foreign currencies. Mandatory reserve deposits are not available for
+use by the Group in its day to day operations.
+305,986
+1,829
+2,071
+273,513
+32,898
+41,917
+4,457
+FINANCIAL STATEMENTS
+Long term life insurance contract benefits
+223,067
+Short term life insurance claims
+70,678
+(21)
+(172)
+60,436
+70,850
+54,512
+5,924
+2,239
+68,611
+Total
+Measured at fair value through other comprehensive income:
+Placements with other financial institutions
+Net
+Less: Provision for impairment losses
+Gross
+Placements with other financial institutions
+Placements with banks
+Measured at amortized most:
+(in RMB million)
+Details of placements with banks and other financial institutions are as follows:
+31 December 2017
+516
+31 December 2018
+3,229,703
+3
+1,972
+50,663
+1,852
+61,788
+100
+15,848
+535,465
+14,107
+473,565
+1,351,287
+1,035,712
+Fair value
+Nominal amount
+Fair value
+Nominal amount
+Liabilities
+Assets
+31 December 2017
+21,911
+2,052,213
+22,247
+483,891
+457,524
+60,415
+89,088
+107,404
+2017
+2018
+Annual Report 2018
+222
+Diluted earnings per share (in RMB)
+diluted earnings per share
+Weighted average number of ordinary shares for
+Assumed vesting of share purchase scheme
+-
+Adjustments for:
+Weighted average number of ordinary shares in issue
+Weighted average number of ordinary shares (million shares)
+Profit attributable to owners of the parent
+Earnings (in RMB million)
+Diluted earnings per share was computed by dividing the adjusted profit attributable to the equity holders
+of the Company based on assuming conversion of all dilutive potential shares for the year by the adjusted
+weighted average number of ordinary shares in issue. The shares granted by the Company under the share
+purchase scheme (Note 41) have potential dilutive effect on the earnings per share.
+(2) DILUTED
+As at 31 December 2018, 417 million (31 December 2017: 417 million) shares were held by the consolidated assets management
+scheme.
+17,834
+17,837
+29
+26
+74,434
+257,398
+199,238
+161,850
+178,833
+4,228
+5,019
+31 December 2017
+31 December 2018
+19,373
+2
+Placements with banks and other financial institutions
+Term deposits
+Cash on hand
+(in RMB million)
+18. CASH AND AMOUNTS DUE FROM BANKS AND OTHER FINANCIAL
+INSTITUTIONS
+Ping An Insurance (Group) Company of China, Ltd.
+4.99
+17,863
+6.01
+17,863
+Due from banks and other financial institutions
+(i)
+6
+1
+1,705,186
+1,915,951
+127,300
+172,581
+140,929
+172,029
+152,865
+182,363
+303,628
+473,295
+129,844
+153,745
+835,864
+14,756
+761,938
+31 December 2017
+31 December 2018
+Gross
+Others
+Vehicle loans
+Add: Interest receivable
+Property mortgages
+6,237
+Net
+226
+309,297
+As at 31 December 2018, discounted bills with a carrying amount of RMB4,178 million (31 December 2017:
+RMB3,467 million) were pledged for amounts due to the Central Bank.
+As at 31 December 2018, the provision for impairment losses of loans and advances to customers measured
+at fair value through other comprehensive income is RMB154 million (refer to Note 25.(6)).
+1,660,864
+1,929,842
+61,687
+41,702
+19,985
+Carrying amount
+Subtotal
+Discounted bills
+Loans
+Corporate customers
+Measured at fair value through other comprehensive income:
+1,660,864
+1,868,155
+(44,322)
+(54,033)
+Less: Provision for impairment losses
+Credit cards
+New generation loan
+Individual customers
+8,835
+9,112
+5,929
+6,325
+31 December 2017
+31 December 2018
+24. FINANCE LEASE RECEIVABLE
+Reinsurers' share of policyholders' reserves
+Reinsurers' share of claim reserves
+Reinsurers' share of unearned premium reserves
+(in RMB million)
+23. REINSURERS' SHARE OF INSURANCE LIABILITIES
+17,950
+1,937,595
+16,192
+1,590,440
+29
+176
+2
+1,234
+869
+16,671
+15,633
+Discounted bills
+Loans
+Corporate customers
+Measured at amortized cost:
+(1) ANALYSED BY CORPORATE AND INDIVIDUAL
+(in RMB million)
+25. LOANS AND ADVANCES TO CUSTOMERS
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+4
+Ping An Insurance (Group) Company of China, Ltd. 225
+The Group's long-term receivables are financial leases receivable to offset the net unrealized financial gains.
+165,214
+(1,682)
+113,710
+167,783
+(2,569)
+Finance lease receivable, net of unearned finance income
+Less: Provision for impairment losses
+31 December 2017
+31 December 2018
+(in RMB million)
+Annual Report 2018
+17,837
+112,028
+(417)
+6,310
+Cost of sales
+40,814
+Loan loss provisions, net of reversals
+581
+Provision for doubtful debts, net
+1,709
+52,105
+2,394
+2,898
+4,385
+5,053
+1,233
+1,231
+23,873
+17,407
+64,071
+65,904
+2017
+4,325
+Auditors' remuneration
+-
+annual audit, half-year review and
+Annual Report 2018
+220
+64,071
+65,904
+1,794
+1,854
+Others
+14,006
+14,148
+2018
+Retirement benefits, social security contributions and
+welfare benefits
+49,902
+Wages, salaries and bonuses
+2017
+2018
+(in RMB million)
+(2) EMPLOYEE COSTS
+80
+85
+quarterly agreed-upon procedures
+48,271
+Ping An Insurance (Group) Company of China, Ltd.
+Impairment loss on other assets
+Amortization of intangible assets
+(in RMB million)
+13. NET IMPAIRMENT LOSSES ON FINANCIAL ASSETS
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 219
+Annual Report 2018
+427,243
+(9,415)
+436,658
+106,286
+(7,796)
+114,082
+Property and casualty insurance claims
+12,754
+308,203
+17,834
+(1,094)
+(525)
+13,279
+Accounts receivables
+Loans and advances to customers
+2018
+145
+Depreciation of property and equipment
+Depreciation of investment properties
+investment contract reserves
+Interest expenses on policyholder contract deposits and
+Employee costs (Note 14. (2))
+(in RMB million)
+(1) PROFIT BEFORE TAX IS ARRIVED AT AFTER CHARGING THE FOLLOWING ITEMS:
+14. PROFIT BEFORE TAX
+52,105
+Net impairment losses on financial investments
+1,212
+Placements with banks and other financial institutions
+1,047
+Others
+Loan commitments
+Finance lease receivables
+5,244
+676
+Debt financial assets at fair value through other comprehensive income
+Financial assets at amortized cost
+43,657
+(94)
+15. INCOME TAX
+218
+2018
+Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the
+weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased
+by the Group.
+(1) BASIC
+17. EARNINGS PER SHARE
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 221
+Annual Report 2018
+On 12 March 2019, the Board of Directors of the Company approved the Resolution of the Profit Appropriation Plan for 2018,
+agreeing to declare a final cash dividend of RMB1.10(tax inclusive) per share for 2018. It was not recognized as a liability as at 31
+December 2018.
+On 21 August 2018, the Board of Directors of the Company approved the Resolution of the Profit Appropriation Plan for Interim
+Dividend of 2018, and declared an interim cash dividend of RMB0.62 (tax inclusive) per share for 2018. The amount of the interim cash
+dividend for 2018 would be RMB11,334 million.
+On 23 May 2018, the above profit appropriation plans in (i) and (ii) were approved by the shareholders of the Company at the annual
+general meeting.
+On 26 April 2018, the Board of Directors of the Company approved the Resolution of 30th Anniversary Special Dividend, agreeing
+to declare a cash dividend in the amount of RMB0.20 (tax inclusive) per share based on the total shares of 18,280,241,410. The total
+amount of the 30th Anniversary Special Dividend was RMB3,656 million.
+On 20 March 2018, the Board of Directors of the Company approved the Resolution of the Profit Appropriation Plan for 2017,
+agreeing to declare a cash dividend in the amount of RMB1.00 (tax inclusive) per share based on the total shares of 18,280,241,410 for
+2017. The total amount of the cash dividend for 2017 was RMB18,280 million.
+(iv)
+(iii)
+(ii)
+(i)
+9,140
+11,334
+2018
+2017
+Profit attributable to owners of the parent (in RMB million)
+Basic earnings per share (in RMB)
+Weighted average number of ordinary shares in issue
+(417)
+assets management scheme (i)
+(in RMB million)
+Weighted average number of shares held by the consolidated
+(26)
+(29)
+purchase scheme
+Weighted average number of shares held by the share
+RMB0.62 (2017: RMB0.50) per ordinary
+18,280
+Issued ordinary shares as at 1 January
+Weighted average number of ordinary shares in issue (million shares)
+2017
+2018
+4.99
+6.02
+89,088
+17,837
+Weighted average number of ordinary shares in issue (million shares)
+107,404
+18,280
+3,656
+17,834
+-
+Adjustments in respect of current income tax of previous years
+Income not subject to tax
+Expenses not deductible for tax
+Tax at the applicable tax rate of 25% (2017: 25%)
+Profit before tax
+(in RMB million)
+Reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax
+rate of 25% (2017: 25%) is as follows:
+Certain subsidiaries enjoy tax preferential treatments. These subsidiaries are not material to the Group.
+Except for those subsidiaries enjoying tax preferential treatments, the applicable corporate income tax rate
+of the Group for 2018 was 25%.
+42,699
+Income tax per consolidated statement of income
+(8,896)
+(199)
+(336)
+- Adjustments in respect of current income tax of previous years
+Deferred income tax
+43,857
+2017
+30th Anniversary Special Dividend declared in 2018- RMB0.20 (ii)
+2018 interim dividend
+share (iii)
+Current income tax
+51,135
+Charge for the year
+(8,100)
+2018
+34,762
+163,151
+10,054
+18,280
+2017
+2018
+2017
+(in RMB million)
+16. DIVIDENDS
+Taxes for taxable income attained from outside of PRC are measured at the tax rates under local and PRC
+law, regulations and conventions. The income tax credited by the Group is verified by official tax bureau.
+34,762
+42,699
+(199)
+2017 final dividend declared in 2018- RMB1.00 (2016 final dividend
+declared in 2017: RMB0.55) per ordinary share (i)
+40,788
+(13,574)
+(13,527)
+(336)
+14,850
+15,774
+134,740
+33,685
+Xi'an Languang Meidu Enterprise Management Service Ltd.
+49.79%
+351
+571
+(4)
+992
+837
+Wuhan DAJT Property Development Co., Ltd.
+24.92%
+1,295
+5,069
+(266)
+48.90%
+993
+31,486
+Others
+22,383
+15,934
+5,069
+4,755
+25,758
+(6)
+(6)
+874
+Subtotal
+4,034
+1
+1,299
+20,097
+48.85%
+19.73%
+Others
+14,477
+(6)
+14,293
+9,472
+2,468
+26,233
+(98)
+882
+Subtotal
+63,824
+39,488
+123,409
+(1,318)
+(766)
+2,589
+Jointly controlled entities
+Yunnan KunYu Highway Development Co., Ltd.
+('Kunyu Highway')
+1,147
+(403)
+744
+509
+49.94%
+Nanjing Mingwan Property Development Co., Ltd.
+2,174
+(49)
+2,125
+Beijing ZhaoTai Property Development Co., Ltd.
+(6)
+112
+Investments in associates and jointly controlled entities
+23.88%
+240
+(27)
+213
+(348)
+48.76%
+120
+(8)
+44.78%
+Shanxi Taichang
+746
+13
+759
+83
+29.85%
+Beijing-Shanghai Railway
+6,300
+6,300
+198
+39.18%
+Lufax
+9,182
+2,814
+11,996
+43.76%
+Foshan Huatai Property Development Co., Ltd.
+609
+908
+138
+261
+1,734
+(5)
+Veolia Liuzhou
+86,207
+44,557
+24,131
+154,895
+(1,324)
+(772)
+4,323
+234
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+32. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+(CONTINUED)
+The Group's investments in the principal associates and jointly controlled entities as at 31 December 2017
+are as follows:
+2017
+As at
+1 January
+Additional
+investment
+Increase/
+(Decrease) in
+current year
+Provision
+balance
+As at
+as at
+Change of
+provision in
+31 December
+31 December
+current Year
+Cash
+dividends in
+current Year
+Proportion of
+ordinary
+shares held by
+the Group (%)(i)
+(in RMB million)
+Associates
+Veolia Kunming
+Veolia Yellow River
+266
+13,868
+'
+11.94%
+821
+44.78%
+29.85%
+Beijing-Shanghai High-Speed Railway Equity Investment
+Scheme (Beijing-Shanghai Railway')
+6,300
+Lufax Holding Ltd.('Lufax')
+11,996
+8,880
+6,300
+20,876
+305
+35
+62
+39.19%
+Foshan Huatai Property Development Co., Ltd.
+1,046
+(1,046)
+414
+1114
+Massive Idea Investments Limited
+840
+54
+894
+36.65%
+Guangzhou Jinglun Property Development Co., Ltd.
+510
+(11)
+41.14%
+499
+(23)
+12
+Cash
+dividends in
+current Year
+1,046
+Proportion of
+ordinary
+shares held by
+the Group (%)(i)
+(in RMB million)
+Associates
+Veolia Water (Kunming) Investment Co., Ltd.
+('Veolia Kunming')
+Veolia Water (Yellow River) Investment Co., Ltd.
+("Veolia Yellow River')
+Veolia Water (Liuzhou) Investment Co., Ltd.
+10
+261
+13
+('Veolia Liuzhou')
+124
+Shanxi Taichang Expressway Co., Ltd. ('Shanxi Taichang')
+30
+291
+1
+(36)
+23.88%
+213
+(4)
+209
+(395)
+48.76%
+112
+539
+262
+759
+39.92%
+Shenzhen Jinzheng Science & Technology Co., Ltd.
+1,664
+Jiangsu Dezhan Investment Co., Ltd.
+2,001
+114
+2,115
+23.65%
+Zhongan Online Property & Casualty Co., Ltd.
+1,755
+(170)
+1,585
+10.21%
+Beijing Beiqi Penglong Automobile Service Co., Ltd.
+1,415
+114
+38.81%
+1,529
+39.18%
+China Yangtze Power Co., Ltd.
+13,973
+258
+14,231
+China Traditional Chinese Medicine Holdings Co., Ltd.
+2,175
+80
+2,255
+25
+673
+4.47%
+57
+102
+1,173
+(17)
+1,190
+(753)
+911
+(766)
+(766)
+6.00%
+Xuhui Holdings Co., Ltd.
+2,889
+421
+3,310
+156
+9.56%
+Ping An Healthcare and Technology Co., Ltd.
+('Ping An Good Doctor')
+15,710
+2,160
+17,870
+Ping An Medical and Healthcare Management Co., Ltd.
+181
+4,418
+4,599
+OneConnect Financial Technology Co., Ltd. ('OneConnect')
+689
+2,418
+3,107
+39.27%
+38.54%
+39.87%
+Shenzhen China Merchants-Ping An Asset Management
+Co., Ltd.
+China Fortune Land Development Co., Ltd.
+29.34%
+390
+793
+2,944
+989
+333
+Beijing-Shanghai Railway
+The PRC
+The PRC
+Railway investment
+Yes
+16,001
+791
+775
+Jointly controlled entities
+Kunyu Highway
+5,997
+Kunming
+Expressway operation
+Yes
+1,623
+64
+174
+14
+The financial information summary of the Group's principal associates and jointly controlled entities as at
+year end of 2017 are as follows:
+Name of the invested entity
+Place of
+business
+Place of
+incorporation
+Significant to
+the Group's
+Total assets
+as at
+Total
+liabilities
+Kunming
+Yes
+Expressway operation
+Taiyuan
+Veolia Kunming
+Kunming
+Hong Kong
+Water plant operation
+Yes
+1,317
+9
+74
+64
+Veolia Yellow River
+Lanzhou
+Hong Kong
+Water plant operation
+Yes
+773
+3
+(19)
+(21)
+Veolia Liuzhou
+Liuzhou
+Hong Kong
+Water plant operation
+Yes
+305
+3
+18
+14
+Shanxi Taichang
+Taiyuan
+Principal activities
+Associates
+operation
+as at
+31 December
+Expressway operation
+Yes
+6,272
+3,340
+1,033
+346
+Beijing-Shanghai Railway
+The PRC
+The PRC
+Railway investment
+Yes
+16,001
+519
+Taiyuan
+503
+Kunyu Highway
+Kunming
+Kunming
+Expressway operation
+Yes
+1,992
+85
+1,733
+1,070
+The Group has no significant contingent liabilities relating to the associates and jointly controlled entities
+listed above.
+(i) The proportion of ordinary shares, as shown in the above table, is the multiplication of the proportion of shares held in each holding
+layer.
+236
+Change of
+provision in
+current Year
+Jointly controlled entities
+Taiyuan
+Shanxi Taichang
+12
+Total
+revenue in
+current year
+Net profit/
+(loss) in
+current year
+Associates
+Veolia Kunming
+Kunming
+Hong Kong
+Water plant operation
+Yes
+1,157
+48
+66
+58
+Veolia Yellow River
+Lanzhou
+Hong Kong
+Water plant operation
+Yes
+806
+1
+(24)
+(27)
+Veolia Liuzhou
+Liuzhou
+Hong Kong
+Water plant operation
+Yes
+260
+1
+16
+31 December
+Massive Idea Investments Limited
+Net profit/
+(loss) in
+current year
+Total
+liabilities
+as at
+31 December
+1,190
+38.81%
+Jiangsu Dezhan Investment Co., Ltd.
+1,974
+27
+2,001
+23.65%
+Zhongan Online Property & Casualty Co., Ltd.
+848
+907
+1,755
+10.21%
+Beijing Beiqi Penglong Automobile Service Co., Ltd.
+20
+723
+(245)
+1,415
+134
+39.18%
+Others
+8,516
+3,750
+2,027
+14,293
+(98)
+138
+Subtotal
+30,813
+937
+1,170
+Co., Ltd.
+Shenzhen China Merchants-Ping An Asset Management
+47
+840
+36.65%
+Guangzhou Jinglun Property Development Co., Ltd.
+523
+(13)
+510
+39.92%
+Shenzhen Jinzheng Science & Technology Co., Ltd.
+1,648
+16
+1,664
+6.00%
+Xuhui Holdings Co., Ltd.
+2,889
+2,889
+9.56%
+Ping An Good Doctor
+15,710
+15,710
+46.20%
+Ping An Medical and Healthcare Management Co., Ltd.
+181
+181
+44.33%
+OneConnect
+689
+689
+44.30%
+10,720
+Total
+revenue in
+current year
+22,291
+(446)
+Subtotal
+18,142
+3,664
+577
+22,383
+285
+Investments in associates and jointly controlled entities
+48,955
+14,384
+22,868
+86,207
+(446)
+838
+15,934
+Annual Report 2018
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+32. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+(CONTINUED)
+The financial information summary of the Group's principal associates and jointly controlled entities as at
+year end of 2018 are as follows:
+Name of the invested entity
+Place of
+business
+Place of
+incorporation
+Significant to
+the Group's
+Total assets
+as at
+Principal activities
+operation
+31 December
+Ping An Insurance (Group) Company of China, Ltd. 235
+(65)
+2,664
+13,335
+553
+Jointly controlled entities
+Kunyu Highway
+1,243
+(96)
+1,147
+Nanjing Mingwan Property Development Co., Ltd.
+1,689
+485
+2,174
+Beijing ZhaoTai Property Development Co., Ltd.
+1,243
+56
+1,299
+Wuhan DAJT Property Development Co., Ltd.
+632
+205
+837
+Xi'an Languang Meidu Enterprise Management Service Ltd.
+1,000
+(8)
+992
+285
+49.94%
+48.90%
+24.95%
+49.79%
+48.90%
+Others
+63,824
+31 December
+2,142
+As at
+31 December
+2,394
+5,537
+2,778
+134
+10,843
+19,663
+28,704
+12,708
+433
+61,508
+Past due loans refer to the loans with either principal or interest being past due by one day or more.
+(5) ANALYSED BY REGION
+31 December 2018
+Secured by monetary assets
+31 December 2017
+Eastern China
+Amount
+%
+Amount
+%
+588,065
+29.74%
+540,755
+31.71%
+Southern China
+840,288
+42.49%
+637,393
+(in RMB million)
+37.38%
+19,060
+4,974
+17,972
+23,314
+8,973
+1,684
+51,943
+(in RMB million)
+Unsecured
+Guaranteed
+31 December 2017
+Within 3 months
+3 months to 1 year
+1 to 3 years
+More than 3 years
+146
+Total
+6,289
+Annual Report 2018
+104
+16,516
+5,585
+6,641
+2,814
+49
+15,089
+Secured by collateral
+Secured by mortgages
+3,703
+10,237
+7,981
+Western China
+184,593
+9.33%
+2017
+Collectively
+assessed
+Total
+Measured at amortized cost:
+As at 31 December 2017/31 December 2016
+44,322
+8,445
+31,780
+40,225
+Change in accounting policy (Note 2)
+3,387
+As at 1 January 2018/1 January 2017
+47,709
+Individually
+assessed
+8,445
+40,225
+Charge for the year
+43,557
+30,379
+10,435
+40,814
+Write-off and transfer during the year
+(46,409)
+(27,820)
+(11,582)
+(39,402)
+Recovery of loans written off previously
+9,356
+31,780
+2018
+(in RMB million)
+(6) LOAN LOSS PROVISION
+190,016
+11.14%
+Northern China
+298,178
+15.08%
+285,757
+16.76%
+Offshore business
+66,514
+3.36%
+51,265
+3.01%
+Gross
+1,977,638
+100.00%
+1,705,186
+100.00%
+Add: Interest receivable
+6,237
+Less: Loan allowance
+(54,033)
+Carrying amount
+1,929,842
+(44,322)
+1,660,864
+228
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+25. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+8,256
+139
+1,071
+4,441
+Others
+89,501
+107,865
+Subtotal of loans.
+781,923
+835,864
+Discounted bills
+41,702
+14,756
+Subtotal of corporate customers
+823,625
+850,620
+Individual customers
+48,107
+Gross
+Less: Provision for impairment losses
+Carrying amount
+1,929,842
+(3) ANALYSED BY TYPE OF COLLATERAL HELD OR OTHER CREDIT ENHANCEMENTS
+1,154,013
+854,566
+1,977,638
+1,705,186
+6,237
+(54,033)
+(44,322)
+1,660,864
+(in RMB million)
+Unsecured
+Add: Interest receivable
+45,403
+Construction
+135,938
+25. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+(2) ANALYSED BY INDUSTRY
+(in RMB million)
+Corporate customers
+Agriculture, husbandry and fishery
+Extraction (heavy industry)
+31 December 2018
+31 December 2017
+5,837
+9,291
+41,140
+58,048
+Manufacturing (light industry)
+119,845
+141,976
+Energy
+21,745
+25,854
+Transportation and communication
+39,131
+53,274
+Commercial
+101,039
+91,746
+Real estate
+176,016
+163,765
+Social service, technology, culture and sanitary industries
+142,266
+Guaranteed
+1,637
+Secured by collateral
+775,467
+(4) AGING ANALYSIS OF PAST DUE LOANS BY PASS DUE DAYS
+31 December 2018
+(in RMB million)
+Within 3 months 3 months to 1 year
+1 to 3 years
+More than 3 years
+Total
+Unsecured
+Guaranteed
+9,817
+7,140
+1,275
+1,119
+25. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+19,351
+4,610
+2,924
+266
+9,290
+Secured by collateral
+Secured by mortgages
+4,060
+7,123
+3,703
+160
+15,046
+Secured by monetary assets
+2,605
+1,490
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+200,873
+31 December 2017
+592,717
+227,376
+Secured by mortgages
+Secured by monetary assets
+Subtotal
+671,915
+599,210
+287,681
+271,127
+1,935,936
+1,690,430
+Discounted bills
+Gross
+41,702
+14,756
+1,977,638
+1,705,186
+Add: Interest receivable
+6,237
+Less: Provision for impairment losses
+(54,033)
+(44,322)
+Carrying amount
+1,929,842
+1,660,864
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 227
+31 December 2018
+1,859
+3,496
+Unwinding of discount of impairment
+3,115
+2
+31 December 2017
+1,628,508
+239,351
+465,191
+43,588
+2,376,638
+31 December 2017
+1,243,768
+221,871
+99,068
+1,628,508
+31 December 2017
+7,174
+638,859
+384,844
+1,628,508
+471,018
+1,157,490
+1,628,508
+Note: Unlisted debt securities include those traded on the Chinese interbank market and those not publicly traded.
+During 2013, the Group's subsidiary Ping An Bank Co., Ltd. ("Ping An Bank") reclassified bonds with a fair
+value of RMB91,675 million from available-for-sale financial investments to held-to-maturity financial assets
+reflecting its positive intention and ability to hold them until maturity. As at 31 December 2017, the carrying
+amount of these bonds was RMB44,060 million while the corresponding fair value was RMB43,226 million.
+These financial investments are reclassified to the financial assets at amortized cost under IFRS 9.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+31. EQUITY INVESTMENTS
+(in RMB million)
+Security investment funds
+Equity securities
+604,805
+2018
+Listed
+Unlisted
+Finance bonds
+Corporate bonds
+1,722
+222,639
+For the equity investments which are not held for trading but for long term investments, the Group has
+irrevocably elected them at initial recognition to recognize in this category.
+Due to the increase of shareholding of a stock investment in the reporting period, the Group became to
+have significant influence over the investee, so the stock investment in the investee was changed from an
+equity investment designated as FVOCI to an investment in associates and accounted for using the equity
+method. The carrying amount upon transfer was RMB13,973 million. The dividend income recognized for
+the year was RMB673 million, and the accumulated other comprehensive income of RMB1,715 million has
+been transferred to retain profits. There is no other material disposal of equity financial assets at fair value
+through other comprehensive income in the current year.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 231
+FINANCIAL STATEMENTS
+232
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+29. EQUITY FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
+COMPREHENSIVE INCOME (CONTINUED)
+The dividends income of equity financial assets at fair value through other comprehensive income
+recognized during the year are as follows:
+(in RMB million)
+Stocks
+Preferred shares
+Unlisted equity investments
+30. FIXED MATURITY INVESTMENTS
+(in RMB million)
+Bonds (1)
+Asset management schemes
+Debt schemes and trust schemes
+Wealth management products
+(1) BONDS
+(in RMB million)
+Held-to-maturity
+Available-for-sale, at fair value
+Carried at fair value through profit or loss
+Loans and receivables
+(in RMB million)
+Government bonds
+Other equity investments
+220,917
+31 December 2017
+276,916
+276,916
+31 December 2017
+236,228
+126
+9,475
+17,505
+263,334
+Listed
+77,059
+Unlisted
+186,275
+263,334
+Note: Unlisted equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market price
+quotation.
+340
+Annual Report 2018
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+32. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+The Group's investments in the principal associates and jointly controlled entities as at 31 December 2018
+are as follows:
+2018
+Provision
+As at
+Additional
+1 January
+investment
+Increase/
+(Decrease) in
+current year
+balance
+Ping An Insurance (Group) Company of China, Ltd. 233
+276,576
+Designated at fair value through profit or loss
+Held for trading
+263,334
+630,676
+(1) SECURITY INVESTMENT FUNDS
+(in RMB million)
+Available-for-sale, at fair value
+Held for trading
+Listed
+Unlisted
+31 December 2017
+56,935
+33,491
+90,426
+10,806
+79,620
+90,426
+(2) EQUITY SECURITIES
+(in RMB million)
+Available-for-sale, at fair value
+Held for trading
+31 December 2017
+259,938
+16,978
+276,916
+Listed
+Unlisted
+(3) OTHER EQUITY INVESTMENTS
+(in RMB million)
+Available-for-sale, at fair value
+Available-for-sale, at cost
+Carried at fair value through profit or loss
+90,426
+as at
+222,639
+66,682
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+26. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
+(in RMB million)
+Bonds
+Government bonds
+Finance bonds
+Corporate bonds
+Funds
+Stocks
+Preferred shares
+Unlisted equity investments
+Debt schemes
+FINANCIAL STATEMENTS
+Wealth management investments
+Listed
+Unlisted
+Total
+31 December 2018
+40,833
+82,333
+46,201
+200,753
+89,640
+1,177
+57,544
+15,432
+230,846
+60,180
+Other investments
+Ping An Insurance (Group) Company of China, Ltd. 229
+Annual Report 2018
+44,322
+allowances recognized as interest income
+(675)
+(659)
+(659)
+Others
+495
+(96)
+(56)
+(152)
+As at 31 December
+54,033
+11,886
+32,436
+44,322
+Measured at fair value through other
+comprehensive income
+As at 31 December 2017/31 December 2016
+Change in accounting policy (Note 2)
+54
+As at 1 January 2018/1 January 2017
+54
+Charge for the year
+100
+As at 31 December
+154
+As at 31 December 2018/31 December 2017
+54,187
+11,886
+32,436
+824,939
+1,722
+146,082
+824,939
+Bonds
+Government bonds
+Finance bonds
+Corporate bonds
+Margin accounts receivables
+Wealth management investments
+Listed
+Unlisted
+31 December 2018
+123,491
+69,598
+66,225
+16,751
+34,836
+(in RMB million)
+310,901
+261,086
+310,901
+As at 31 December 2018, the total provision for impairment losses recognized in debt financial assets at fair
+value through other comprehensive income is RMB1,180 million.
+29. EQUITY FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
+COMPREHENSIVE INCOME
+Equity financial assets at fair value through other comprehensive income comprise the following individual
+investments:
+(in RMB million)
+Stocks
+Preferred shares
+Unlisted equity investments
+Listed
+Unlisted
+31 December 2018
+154,235
+49,815
+28. DEBT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
+COMPREHENSIVE INCOME
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+As at 31 December 2017, the Group held the investments of RMB21,786 million financial assets designated at
+fair value through profit or loss. With the implementation of IFRS 9, following the tests on business model
+and contractual cash flows characteristics, these financial assets became mandatorily measured at fair
+value through profit or loss, therefore they were de-designated as measured at fair value through profit or
+loss.
+At 31 December 2018, the Group did not hold any financial assets designated at fair value through profit or
+loss.
+27. FINANCIAL ASSETS AT AMORTIZED COST
+(in RMB million)
+Bonds
+Government bonds.
+Finance bonds
+Corporate bonds
+Debt schemes
+Wealth management investments
+Other investments
+Gross
+Less: provision for impairment losses
+Net
+Listed
+Unlisted
+31 December 2018
+894,996
+497,233
+133,650
+301,971
+155,759
+104,847
+2,088,456
+(13,305)
+2,075,151
+130,878
+1,944,273
+2,075,151
+230
+678,857
+Ping An Insurance (Group) Company of China, Ltd.
+63,801
+H shares, par value
+RMB1.00 per share
+5,624
+1,142
+993
+(36)
+(27)
+(9)
+(1,654)
+(249)
+-
+(1,405)
+2,898
+503
+1,629
+723
+233
+235
+12,895
+4,239
+674
+4,901
+918
+2,163
+As at 31 December 2018
+Disposals
+78
+5,841
+14,103
+Net book value
+Goodwill (i)
+(in RMB million)
+2017
+36. INTANGIBLE ASSETS (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 241
+Annual Report 2018
+60,981
+5,305
+9,040
+10,181
+9,751
+6,197
+20,507
+As at 1 January 2018
+58,450
+5,194
+9,407
+9,458
+11,326
+2,545
+20,520
+As at 31 December 2018
+Disposals of subsidiaries
+Expressway
+operating rights
+Charge for the year
+72,553
+Core deposits
+Software
+Prepaid land
+premiums
+Expressway
+operating rights
+Goodwill (i)
+2018
+Accumulated amortization
+As at 31 December 2018
+Disposals/decrease
+Disposals of subsidiaries
+Additions
+Trademarks
+Acquisitions of subsidiaries
+Cost
+(in RMB million)
+36. INTANGIBLE ASSETS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+240
+The Group was still in the process of applying for title certificates for its buildings with a carrying amount
+of RMB295 million as at 31 December 2018 (31 December 2017: RMB390 million).
+40,143
+2,765
+2,935
+5,616
+As at 1 January 2018
+and others
+Total
+20,507
+11,035
+9,910
+15,082
+12,468
+3,538
+20,520
+(311)
+(275)
+(34)
+(2)
+(5,072)
+(249)
+(4,823)
+4,040
+1,746
+445
+1,833
+1
+15
+73,876
+20
+9,544
+20
+9,714
+15,082
+10,669
+8,360
+As at 1 January 2018
+Prepaid land
+premiums
+Software
+Core deposits
+The Group was still in the process of applying for its prepaid land premium with a carrying amount of
+RMB54 million as at 31 December 2018 (31 December 2017: RMB52 million).
+As at 31 December 2018, prepaid land premiums with a carrying amount of RMB3,757 million (31 December
+2017: RMB3,632 million) were pledged as collateral for long term borrowings amounting to RMB2,420 million
+(31 December 2017: RMB2,304 million).
+As at 31 December 2018, expressway operating rights with a carrying amount of RMB2,545 million (31
+December 2017: RMB5,711 million) were pledged as collateral for long term borrowings amounting to
+RMB836 million (31 December 2017: RMB2,939 million).
+63,017
+4,668
+8,922
+10,935
+9,338
+8,515
+20,639
+As at 1 January 2017
+242
+60,981
+9,040
+10,181
+9,751
+6,197
+20,507
+As at 31 December 2017
+Net book value
+12,895
+4,239
+674
+4,901
+5,305
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+36. INTANGIBLE ASSETS (CONTINUED)
+Total
+Other
+Autohome Inc.
+Ping An E-wallet
+Shanghai Gezhouba Yangming Property
+Co., Ltd.
+Beijing Shuangronghui Investment Co., Ltd.
+Ping An Commercial Property Investment
+Ping An Securities
+Mayborn Group Limited
+Shanghai Jahwa
+Ping An Bank
+(in RMB million)
+Net book value
+Less: Impairment losses
+Total
+Other
+Autohome Inc.
+Ping An E-wallet
+Ping An Commercial Property Investment
+Beijing Shuangronghui Investment Co., Ltd.
+Shanghai Gezhouba Yangming Property
+Co., Ltd.
+Ping An Securities
+Mayborn Group Limited
+Shanghai Jahwa
+Ping An Bank
+(in RMB million)
+(i) GOODWILL
+918
+2,163
+(269)
+(269)
+(655)
+(380)
+(275)
+Disposals
+(2,949)
+(77)
+(2,872)
+Disposals of subsidiaries
+2,631
+1,448
+446
+594
+143
+74,849
+8,553
+9,268
+15,082
+10,075
+11,232
+20,639
+As at 1 January 2017
+Additions
+Cost
+Total
+and others
+Trademarks
+As at 31 December 2017
+24,831
+20,507
+10,669
+(1,062)
+(136)
+(926)
+2,394
+759
+328
+754
+181
+372
+11,832
+3,885
+346
+4,147
+737
+2,717
+As at 31 December 2017
+Disposals
+Disposals of subsidiaries
+Charge for the year
+As at 1 January 2017
+Accumulated amortization
+73,876
+9,544
+9,714
+15,082
+8,360
+3,996
+47,067
+3,176
+8,275
+8,513
+5,721
+As at 31 December 2018
+(1,508)
+(360)
+(909)
+(191)
+(48)
+Disposals
+(6)
+1,466
+274
+20,162
+(2)
+(4)
+Disposals of subsidiaries
+-
+274
+Transfer from investment properties, net
+561
+2,231
+1,237
+1,024
+5,053
+-
+23,975
+Impairment losses
+As at 1 January 2018
+49,323
+1,253
+6,407
+8,944
+28,767
+3,952
+As at 31 December 2018
+Net book value
+As at 31 December 2018
+107
+(19)
+19
+107
+21
+86
+(4)
+(15)
+19
+6
+15
+86
+Disposals
+Charge for the year
+As at 1 January 2018
+Charge for the year
+1,265
+6,955
+7,197
+518
+Transfer of construction in progress
+9,169
+1,884
+1,810
+4,507
+279
+689
+Additions
+67,336
+3,176
+9,431
+13,553
+32,401
+8,775
+As at 1 January 2018
+Cost
+Total
+Construction
+in progress
+Motor
+vehicles
+and fixtures
+Buildings
+furniture
+Leasehold
+improvements
+(in RMB million)
+2,896
+4,030
+302
+(3,721)
+4,745
+As at 1 January 2018
+73,405
+1,253
+7,894
+17,219
+37,366
+9,673
+Accumulated depreciation
+As at 31 December 2018
+(5,183)
+(86)
+(3,352)
+(1,137)
+(299)
+(309)
+Disposals
+(14)
+(6)
+(8)
+Disposals of subsidiaries
+2,097
+2,097
+properties, net
+Transfer from/(to) investment
+5
+Less: Impairment losses
+25,118
+8,160
+(6)
+(159)
+Disposals
+(86)
+(180)
+94
+Disposals of subsidiaries
+118
+118
+4,385
+308
+(1,131)
+1,976
+1,073
+Charge for the year
+17,251
+1,167
+6,290
+6,057
+3,737
+As at 1 January 2017
+67,336
+3,176
+9,431
+1,028
+(210)
+(1,506)
+As at 31 December 2017
+8,160
+6,583
+25,118
+4,030
+107
+21
+86
+6
+15
+86
+6
+15
+86
+As at 1 January 2017
+As at 31 December 2017
+Net book value
+As at 31 December 2017
+Charge for the year
+As at 1 January 2017
+Impairment losses
+20,162
+1,265
+6,955
+7,197
+4,745
+13,553
+32,401
+8,775
+Accumulated depreciation
+57,480
+2,765
+4,102
+11,906
+30,974
+7,733
+As at 1 January 2017
+Cost
+(in RMB million)
+Total
+in progress
+Construction
+Motor
+vehicles
+Equipment,
+furniture and
+fixtures
+Buildings
+Leasehold
+improvements
+2017
+35. PROPERTY AND EQUIPMENT (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 239
+Annual Report 2018
+47,067
+3,176
+Additions
+6,583
+495
+3,064
+As at 31 December 2017
+(1,918)
+(219)
+(270)
+(1,317)
+(34)
+(78)
+Disposals
+(185)
+(185)
+Disposals of subsidiaries
+438
+(761)
+1,199
+properties, net
+Transfer from/(to) investment
+(739)
+85
+29
+625
+Transfer of construction in progress
+11,521
+2,130
+Overseas listed
+5,599
+233
+Net book value
+Transfer from investment properties, net
+1 January 2018
+Cost of shares held for
+share purchase scheme
+Share-based compensation expenses (ii)
+Purchased (i)
+As at 1 January 2018
+(in RMB million)
+Movement of reserves relating to the Scheme is as follows:
+The Company has adopted an employee share purchase scheme (the 'Scheme') for the key employees
+(including executive directors and senior management) of the Company and its subsidiaries. Shares shall
+be vested and awarded to the key employees approved for participation in the Scheme, subject to the
+achievement of certain performance targets.
+41. SHARE PURCHASE SCHEME
+In accordance with the relevant regulations, the net profit after tax of the Company for profit distribution
+is deemed to be the lower of (i) the retained profits determined in accordance with PRC Accounting
+Standards and (ii) the retained profits determined in accordance with IFRSS.
+Value of
+employee services
+In accordance with the relevant regulations, general reserves should be set aside to cover catastrophic or
+other losses as incurred by companies operating in the insurance, banking, trust, securities, futures, fund
+businesses, finance lease and financial guarantee businesses. The Group's respective entities engaged in
+such businesses would need to make appropriations for such reserves based on their respective year-end
+profit or risk assets, the companies operating in the insurance should make appropriations for general
+reserves based on 10% of net profit, the company operating in banking should make appropriations based
+on 1.5% of risk assets, the company operating in securities should make appropriations based on 10%
+of net profit, the companies operating in trust should make appropriations based on 5% of trust claim
+reserves, the companies operating in futures should make appropriation based on 10% of net profit, and
+the companies operating in fund should make appropriation based on 10% of fund management fees as
+determined in accordance with PRC Accounting Standards, and based on the applicable PRC financial
+regulations, in their annual financial statements. Such reserves are not available for dividend distribution or
+transfer to share capital.
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+246
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 245
+Annual Report 2018
+18,280
+7,448
+18,280
+40. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+Total
+(1,008)
+(593)
+714
+(603)
+Purchased (i)
+(248)
+431
+(679)
+As at 1 January 2017
+(289)
+1,002
+(1,291)
+As at 31 December 2018
+33
+33
+(277)
+277
+Expired
+Exercised
+565
+(593)
+(294)
+565
+-
+7,448
+Total
+1
+1
+776
+1,636
+1,666
+10,832
+10,832
+Domestic listed
+A shares, par value
+RMB1.00 per share
+31 December 2018
+1 January 2018
+(million shares)
+39. SHARE CAPITAL
+Other assets
+Financial assets held under resold agreements
+Other investments
+Stocks
+Funds
+Bonds
+120
+395
+Cash and amounts due from banks and other financial institutions
+Financial assets at fair value through profit or loss
+31 December 2017
+31 December 2018
+1,128
+(603)
+-
+952
+38,242
+40,108
+67,240
+40,108
+36,568
+66,922
+The fair values of the investment properties as at 31 December 2018 were estimated by the Group, based on
+valuation performed by independent valuers. It falls under level 3 in the fair value hierarchy.
+The rental income arising from investment properties for the year 2018 amounted to RMB3,743 million (2017:
+RMB2,757 million), which is included in net investment income.
+As at 31 December 2018, investment properties with a carrying amount of RMB9,338 million (31 December
+2017: RMB7,666 million) were pledged as collateral for long term borrowings with a carrying amount of
+RMB5,133 million (31 December 2017: RMB4,507 million).
+The Group was still in the process of applying for title certificates for certain investment properties with a
+carrying amount of RMB2,189 million as at 31 December 2018 (31 December 2017: RMB2,046 million).
+238
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+35. PROPERTY AND EQUIPMENT
+2018
+4,109
+3,964
+223
+175
+380
+603
+19
+Share-based compensation expenses (ii)
+524
+524
+As at 31 December
+(3)
+Disposals
+(1,199)
+(2,097)
+Transfer to property and equipment, net
+761
+Transfer from construction in progress
+5,095
+1,188
+Additions
+41,180
+45,834
+As at 1 January
+2017
+2018
+Cost
+(in RMB million)
+34. INVESTMENT PROPERTIES
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+44,925
+FINANCIAL STATEMENTS
+45,834
+As at 1 January
+1
+Fair value as at 31 December
+As at 1 January
+As at 31 December
+Net book value
+As at 31 December
+As at 1 January
+Impairment losses
+5,725
+6,682
+As at 31 December
+(1)
+Disposals
+(118)
+(274)
+Transfer to property and equipment, net
+1,233
+1,231
+Charge for the year
+4,611
+5,725
+Accumulated depreciation
+(in RMB million)
+Ping An Insurance (Group) Company of China, Ltd. 237
+Statutory deposits for insurance operations are placed with PRC national commercial banks in accordance
+with the relevant regulations issued by China Bank and Insurance Regulatory Commission (the 'CBIRC')
+based on 20% of the registered capital for the insurance company subsidiaries and 5% of the registered
+capital for insurance sales agency subsidiaries within the Group, respectively. Statutory deposit for
+insurance operations can only be utilized to settle liabilities during liquidation of insurance companies.
+Ping An Life
+(in RMB million)
+33. STATUTORY DEPOSITS FOR INSURANCE OPERATIONS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+The share-based compensation expense arising from the Scheme and the total value of employee services for the year ended 31
+December 2018 were RMB565 million (31 December 2017: RMB524 million) and RMB565 million (31 December 2017: RMB524 million)
+respectively.
+During the period from 23 March 2017 to 27 March 2017, 16,419,990 ordinary A shares were purchased from the market. The average
+price of shares purchased was RMB36.74 per share.
+As at 27 April 2018, 9,666,900 ordinary A shares were purchased from the market. The average price of shares purchased was
+RMB61.29 per share.
+(ii)
+(i)
+(294)
+33
+714
+(1,008)
+As at 31 December 2017
+3
+30
+Expired
+(244)
+244
+Exercised
+Ping An Property & Casualty
+Annual Report 2018
+Ping An Annuity
+Others
+Total
+12,250
+12,446
+200
+12,250
+12,246
+8
+8
+310
+310
+972
+972
+4,200
+4,198
+6,760
+6,758
+31 December 2017
+31 December 2018
+As at
+Add: Interest receivables
+Subtotal
+Ping An Health
+(2) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INVESTMENT CONTRACTS
+Equipment,
+32,344
+306
+20,639
+143
+(275)
+20,507
+20,639
+143
+(275)
+20,507
+The primary valuation technique used is cash flow projections based on business plans approved by
+management covering a three to five year period and a risk adjusted discount rate. Cash flows beyond that
+period have been extrapolated using a steady growth rate and terminal value. Discount rates used by the
+Group range from 7% to 18% (2017: 9% to 16%) and growth rates, where applicable, range from 1% to 40%
+(2017: 2% to 33%).
+The results of cash flow projections exceed the carrying amount of each related cash-generating unit or
+group of units. However, subsequent impairment tests may be based upon different assumptions and future
+cash flow projections, which may result in an impairment of these assets in the foreseeable future.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 243
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+37. OTHER ASSETS
+(in RMB million)
+Interest receivables
+Other receivables
+Due from reinsurers
+31 December 2018
+31 December 2017
+143
+163
+5,265
+5,265
+2,502
+2,106
+328
+Net
+(351)
+(486)
+134
+2017
+(2)
+20,520
+As at
+1,152
+Decrease
+8,761
+2,502
+(275)
+1,831
+328
+66
+134
+241
+241
+1,073
+1,073
+31 December 2017
+8,761
+51,934
+81,743
+Interest receivables
+Other receivables
+Due from reinsurers
+Foreclosed assets
+Prepayments
+Inventories
+Margin accounts receivables
+Others
+(2,127)
+(2,588)
+-
+(34)
+(1,369)
+(12)
+(256)
+(1,373)
+(12)
+(288)
+-
+(445)
+(4)
+(45)
+38,775
+-
+(40)
+Less: Loss provisions
+263,863
+157,813
+Gross
+8,695
+8,001
+Foreclosed assets
+4,634
+5,251
+Prepayments
+3,209
+2,664
+Precious metals held for trading
+56,835
+87,501
+67,666
+Dividends receivable
+395
+Inventories
+5,082
+4,868
+Amounts in the processing clearance and settlement
+Margin accounts receivables
+1,886
+5,890
+11,266
+Others
+8,160
+4,350
+494
+Increase
+66
+As at
+919
+330
+730
+172
+333
+3,329
+1,481
+24,470
+20,990
+6,118
+2,821
+Other assets
+Financial assets held under resold agreements
+Other investments
+406
+Stocks
+Increase
+Funds
+Bonds
+3,950
+5,070
+31 December 2017
+31 December 2018
+Cash and amounts due from banks and other financial institutions
+Financial assets at fair value through profit or loss
+(in RMB million)
+(1) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE CONTRACTS
+38. POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE/
+INVESTMENT CONTRACTS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+244
+1 January 2017
+261,275
+155,686
+1,829
+5,265
+5,265
+1,073
+1,073
+241
+241
+134
+66
+328
+8,761
+(2)
+2,502
+8,761
+As at
+31 December 2018
+306
+Decrease
+134
+66
+328
+1,831
+321
+20,507
+15
+(2)
+20,520
+2,502
+-
+20,507
+15
+2018
+15
+2018
+2017
+85,031
+(8,604)
+76,427
+46. INVESTMENT CONTRACT LIABILITIES FOR POLICYHOLDERS
+(in RMB million)
+None
+Hybrid capital debt
+Ping An Bank
+(85,507)
+31 December 2018
+10 years
+9,000
+3,650
+End of the
+15 years
+None
+Hybrid capital debt
+Ping An Bank
+(If not redeemed)
+1,466
+2011
+1,533
+tenth year
+instrument
+Fixed
+2009
+1,500
+End of the
+15 years
+31 December
+First 10 years: 5.70%
+Next 5 years: 8.70%
+Fixed
+7.50%
+instrument
+End of the
+10 years
+None
+Tier-2 Capital
+Ping An Bank
+fifth year
+bonds
+6,000
+6,259
+6.50%
+Fixed
+2014
+6,000
+None
+Tier-2 Capital
+Ping An Bank
+3,650
+3,808
+tenth year
+2014
+31 December
+FINANCIAL STATEMENTS
+Interest type
+5.30%-5.56%
+Fixed
+2017
+5,000
+None
+3 years
+None
+Ping An Financial Leasing Private corporate
+notes
+5,000
+5,011
+3.35%-4.55%
+Fixed
+2016
+5,000
+None
+3 years
+None
+Ping An Financial Leasing Private placement
+notes
+4,000
+5,100
+4,081
+5,000
+Ping An Financial Leasing Corporate bonds
+3,964
+48,783
+52,747
+4,109
+46,200
+50,309
+The investment contract liabilities are analysed as follows:
+(in RMB million)
+As at 1 January
+Policyholder principal increased
+Accretion of investment income
+Liabilities released for benefits paid
+Policy administration fees and risk premiums deducted
+Others
+Fixed
+None
+Ping An Financial Leasing Medium term
+217
+2017
+4,400
+None
+3 years
+None
+bonds
+Policyholder account liabilities in respect of investment contracts
+Investment contract reserves
+3.34%-3.58%
+2016
+47. BONDS PAYABLE
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+252
+As at 31 December 2017 and 2018, all reinsurance contracts of the Group transferred significant insurance
+risk.
+50,309
+52,747
+(11)
+(63)
+(59)
+305
+(7,949)
+(8,949)
+2,264
+1,047
+11,138
+10,108
+44,930
+50,295
+2017
+2018
+As at 31 December
+Early
+Fixed
+Par value
+redemption
+4,000
+None
+3-5 years
+None
+Ping An Financial Leasing Medium term
+2017
+2018
+(per annum)
+Interest type
+year
+million)
+option
+Maturity
+type
+Type
+Issuer
+31 December
+31 December
+Coupon rate
+Issued
+(in RMB
+Guarantee
+Coupon rate
+(per annum)
+31 December 2017
+None
+None
+Ping An Financial Leasing Medium term notes
+270 days
+financing bills
+8,075
+Fixed 3.70%-4.49%
+2018
+8,000
+None
+180 days-
+None
+Ping An Financial Leasing Super short-term
+financing bills
+4,697
+3.80%-4.82%
+Fixed
+2018
+4,600
+None
+1 year
+None
+3 years
+Ping An Financial Leasing Short-term
+None
+2018
+year
+million)
+option
+Maturity
+Issued
+(in RMB
+redemption
+Guarantee
+type
+Туре
+Issuer
+Par value
+Early
+47. BONDS PAYABLE (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 253
+Annual Report 2018
+11,500
+2,407
+4.48%
+Fixed
+2,400
+3 years
+10,780
+Fixed
+Ping An Financial Leasing Short-term
+notes
+5,000
+5,031
+Fixed 5.40%-6.10%
+2017
+5,000
+None
+3 years
+None
+Ping An Financial Leasing Private placement
+2,100
+2,189
+Fixed 5.50%
+4,400
+4,472
+Fixed 4.70%-4.89%
+notes
+217
+2017
+2,100
+None
+5.00%-6.29%
+150 days-
+11,500
+2018
+10,508
+None
+2-3 years
+None
+Private corporate
+bonds
+Ping An Financial Leasing
+7,727
+5.20%-6.40%
+Fixed
+2018
+7,500
+None
+1-3 years
+None
+notes
+Ping An Financial Leasing Private placement
+1 year
+financing bills
+Fixed 4.55%-5.46%
+2017
+None
+6.80%
+10 years
+9,000
+None
+Private corporate
+bonds
+Ping An Securities
+2017
+2018
+(per annum)
+Interest type
+year
+million)
+31 December 31 December
+Coupon rate
+Issued
+(in RMB
+redemption
+option
+Maturity
+type
+Type
+Issuer
+Guarantee
+Par value
+Early
+3 years
+47. BONDS PAYABLE (CONTINUED)
+End of the
+2016
+7,983
+Ping An Insurance (Group) Company of China, Ltd.
+None
+Private corporate
+bonds
+Ping An Securities
+1,300
+1,352
+4.65%
+Fixed
+2017
+1,300
+None
+3 years
+None
+Private corporate
+bonds
+Ping An Securities
+second year
+1,500
+1,541
+3.50%
+Fixed
+1,500
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+256
+Fixed 3.35%
+2018
+547
+444
+None
+1 year
+Guaranteed
+(Note 1)
+Offshore USD
+bonds
+Value Success
+International
+1,957
+2,074
+Fixed 3.20%
+2016
+2,003
+None
+5 years
+Guaranteed
+(Note 1)
+Offshore USD
+bonds
+Value Success
+International
+1,283
+1,349
+607
+Value Success
+International
+Offshore HKD
+bonds
+Guaranteed
+(Note 1)
+255
+Ping An Insurance (Group) Company of China, Ltd.
+FINANCIAL STATEMENTS
+Annual Report 2018
+3,442
+4.38%
+Fixed
+2018
+3,440
+None
+8,194
+5 years
+bonds
+Co.,Ltd.
+Offshore USD
+Li Guan International
+2,407
+Fixed 2.50%-2.65%
+2018
+2,196
+None
+1 year
+Guaranteed
+(Note 1)
+3.27%-3.60%
+Fixed
+2016
+None
+3,840
+2018
+Fixed
+5.30%-5.60%
+3,997
+Ping An Securities
+Corporate
+None
+5 years
+End of the
+3,000
+2018
+Fixed
+4.10%
+3,016
+bonds
+third year
+Shenzhen Ping An Real
+Corporate
+None
+2-3 years
+None
+Private corporate
+bonds
+Ping An Securities
+5,500
+4,064
+4.88%-5.48%
+Fixed
+2017
+5,500
+End of the
+6 months-
+3 years
+None
+Private corporate
+bonds
+1 year
+Ping An Securities
+second and
+1,200
+1,251
+4.99%
+Fixed
+2017
+1,200
+End of the
+5 years
+second year
+third year
+Fixed 3.00%
+End of the
+2018
+Shenzhen Dingshuntong
+Corporate bonds
+6,922
+None
+1 year
+End of the
+2,382
+2018
+Fixed
+8.85%
+2,446
+Investment Co. Ltd
+sixth month
+Ping An Real Estate
+Corporate bonds
+None
+3-7 years
+None or end
+of the fifth
+year
+8,000
+Annual Report 2018
+916
+5,000
+Fixed 4.70%-4.80%
+2018
+5,000
+Fixed 8.70%-9.00%
+2,991
+Estate Investment
+bonds
+sixth month
+Co., Ltd.
+Shenzhen Ping An Real
+Estate Investment
+Private corporate
+bonds
+None
+2,852
+1-2 years
+5,305
+2018
+Fixed 9.38%-11.40%
+5,419
+Co., Ltd.
+Ping An Financial
+Technology
+Corporate bonds
+None
+2 years
+None
+None
+9,388
+2016
+None
+fifth year
+8,270
+8,749
+First 5 years: 5.90%
+Fixed
+2014
+8,000
+End of the
+10 years
+None
+Subordinated
+bonds
+Ping An Life
+35,234
+3.79%
+Fixed
+2018
+35,000
+None
+3 years
+None
+Financial bonds
+Next 5 years: 7.90%
+Ping An Bank
+(If not redeemed)
+Capital supplement None
+redemption
+Guarantee
+type
+Туре
+Issuer
+Par value
+Early
+47. BONDS PAYABLE (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+254
+(If not redeemed)
+5,037
+5,064
+First 5 years: 3.90%
+Next 5 years: 4.90%
+fifth year
+bonds
+Fixed
+2015
+5,000
+End of the
+10 years
+Ping An Life
+15,000
+15,083
+4.20%
+2016
+10,000
+End of the
+10 years
+None
+Tier-2 Capital
+Ping An Bank
+3,000
+2,946
+2.95%-3.30%
+Floating
+216
+2016
+3,950
+None
+1-3 years
+None
+Interbank deposits
+Ping An Bank
+fifth year
+bonds
+Fixed
+3.85%
+10,431
+10,000
+Fixed
+2017
+15,000
+None
+3 years
+None
+Financial bonds
+Ping An Bank
+year
+294,376
+(in RMB
+297,201
+Fixed
+2018
+302,670
+None
+Less than 1
+None
+Interbank deposits
+Ping An Bank
+fifth year
+bonds
+2.90%-4.80%
+Issued
+Coupon rate
+31 December
+750
+None
+5 years
+Guaranteed
+(Note 1)
+bonds
+Offshore RMB
+Value Success
+International
+4.75%
+Fixed
+2013
+2,100
+None
+5 years
+Guaranteed
+(Note 1)
+Offshore RMB
+bonds
+Value Success
+International
+3,500
+3,507
+First 5 years: 5.10%
+Next 5 years 6.10%
+(If not redeemed)
+fifth year
+Fixed
+750
+2014
+Fixed
+4.95%
+5 years
+Guaranteed
+(Note 1)
+Offshore HKD
+bonds
+Value Success
+International
+1,806
+1,883
+4.13%
+Fixed
+2014
+1,779
+2017
+None
+Guaranteed
+(Note 1)
+bonds
+International
+Offshore SGD
+Value Success
+751
+351
+2,102
+5
+765
+5.5 years
+1,272
+3,500
+10 years
+(If not redeemed)
+Next 5 years: 4.82%
+fifth year
+10,059
+10,370
+First 5 years: 3.82%
+Fixed
+2016
+10,000
+End of the
+Capital supplement None
+bonds
+Ping An Life
+2017
+2018
+(per annum)
+Interest type
+year
+million)
+option
+Maturity
+31 December
+Ping An Life
+Offshore USD bonds None.
+3-5 years
+None
+None
+Capital supplement
+bonds
+Ping An Property &
+Casualty
+(If not redeemed)
+Next 5 years: 5.79%
+fifth year
+5,043
+5,172
+First 5 years: 4.79%
+Fixed
+End of the
+2015
+End of the
+10 years
+Capital supplement None
+bonds
+Ping An Property &
+Casualty
+7,807
+8,336
+2.38%-2.88%
+Fixed
+2016
+7,872
+5,000
+106,611
+End of the
+114,407
+(92,429)
+110,006
+96,556
+2,211,887
+90,617
+1,932,969
+31 December 2018
+Reinsurers' share
+(1,234)
+Net
+1,981,259
+132,838
+(926)
+14,181
+199,776
+(16,671)
+2,195,216
+31 December 2017
+Reinsurers' share
+Net
+(869)
+1,731,477
+(595)
+(14,511)
+38,775
+32,344
+574,132
+Short term life
+Property and casualty
+Non-current portion
+Long term life
+Short term life
+Property and casualty
+Total
+Insurance
+contract liabilities
+1,982,493
+15,107
+214,287
+2,211,887
+Insurance
+contract liabilities
+1,732,346
+11,723
+188,900
+1,932,969
+31 December 2018
+1,376,017
+31 December 2017
+1,190,925
+502,646
+11,128
+Long term life
+(14,169)
+31 December 2018
+The policyholders' reserves are analysed as follows:
+(in RMB million)
+As at 31 December 2017/2016
+Change in accounting policy
+As at 1 January 2018/2017
+Increase during the year
+Decrease during the year
+O Claims and benefits paid
+Surrender
+-
+Others
+As at 31 December 2018/2017
+Policyholder account liabilities in respect of insurance contracts
+The policyholder contract deposits are analysed as follows:
+31 December 2018
+31 December 2017
+1,376,017
+574,132
+32,344
+1,982,493
+1,190,925
+502,646
+38,775
+(in RMB million)
+Policyholder contract deposits
+Policyholders' reserves
+(in RMB million)
+31 December 2017
+(90,517)
+14,241
+116,645
+(62,348)
+11,073
+106,569
+2,073,010
+1,794,694
+866
+97,642
+650
+82,331
+1,932,969
+Estimated net cash flows within 12 months from the end of the reporting period.
+2,211,887
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 249
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+45. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+(1) LONG TERM LIFE INSURANCE CONTRACTS
+(15,633)
+Current portion*
+(in RMB million)
+(7,796)
+As at 31 December 2018, the carrying amount of bonds deposited in the collateral pool was RMB112,164
+million (31 December 2017: RMB118,607 million). The collaterals are restricted from trading during the period
+of the repurchase transaction. The Group can withdraw the exchange-traded bonds from the collateral
+pool in short time provided that the value of the bonds is no less than the balance of related repurchase
+transactions.
+For bonds repurchase transactions through stock exchange, the Group is required to deposit certain
+exchange traded bonds and/or bonds transferred under new pledged repurchase transaction with fair value
+converted at a standard rate pursuant to stock exchange's regulation no less than the balance of related
+repurchase transaction into a collateral pool.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 247
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+44. CUSTOMER DEPOSITS AND PAYABLES TO BROKERAGE CUSTOMERS
+(in RMB million)
+As at 31 December 2018, bonds with a carrying amount of RMB95,739 million (31 December 2017: RMB94,012
+million) were pledged as collaterals for financial assets sold under agreements to repurchase resulted from
+repurchase transactions entered into by the Group in the inter-bank market. The collaterals are restricted
+from trading during the period of the repurchase transaction.
+Customer deposits
+- Corporate customers
+- Individual customers
+Term deposits
+- Corporate customers
+31 December 2018
+31 December 2017
+491,267
+531,988
+173,372
+Current and savings accounts
+133,981
+189,028
+31 December 2017
+42. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+(in RMB million)
+Deposits from other banks and financial institutions
+31 December 2018
+31 December 2017
+411,702
+450,403
+Due to the Central Bank
+149,756
+130,652
+Short term borrowings
+93,627
+90,310
+Long term borrowings
+148,069
+109,165
+803,154
+780,530
+Refer to Notes 25, 34 and 36 for the assets pledged as collateral to support the above borrowings.
+43. ASSETS SOLD UNDER AGREEMENTS TO REPURCHASE
+(in RMB million)
+Bonds
+31 December 2018
+175,268
+901,739
+778,685
+- Individual customers
+1,952,695
+As at 31 December 2018, bonds classified as financial assets carried at amortized costs with a carrying
+amount of RMB36,924 million (31 December 2017: financial assets classified as fixed maturity investments
+with a carrying amount of RMB21,326 million and bonds classified as loans and receivables with a carrying
+amount of RMB14,624 million) were pledged as collaterals for time deposits from the Central Bank.
+248
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+45. INSURANCE CONTRACT LIABILITIES
+(in RMB million)
+Policyholders' reserves
+Policyholder contract deposits
+Policyholder account liabilities in respect of insurance contracts
+Unearned premium reserves
+Claim reserves
+Total
+(in RMB million)
+Long term life insurance contracts
+Short term life insurance contracts
+Property and casualty insurance contracts
+(in RMB million)
+Long term life insurance contracts
+Short term life insurance contracts
+Property and casualty insurance contracts
+2,114,344
+1,732,346
+22,291
+3,168
+267,697
+140,194
+Guarantee deposits
+175,098
+218,900
+Time deposits from the Central Bank
+38,481
+34,812
+Fiscal deposits
+17,903
+32,729
+Remittance payables and outward remittance
+23,472
+17,828
+2,089,029
+1,930,404
+Payables to brokerage customers
+- Individual customers
+Corporate customers
+20,288
+19,123
+5,027
+25,315
+2018
+174,731
+1,917,336
+1,190,925
+Accretion of investment income
+17,530
+24,490
+Liabilities released for benefits paid
+(34,183)
+(27,787)
+Policy administration fees and risk premiums deducted
+(13,814)
+(13,139)
+87,371
+As at 31 December 2018/2017
+502,646
+250
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+45. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+(2) SHORT TERM LIFE INSURANCE CONTRACTS
+(in RMB million)
+Unearned premium reserves
+Claim reserves
+574,132
+102,318
+431,711
+502,281
+16,633
+Claims incurred during the year
+4,554
+(203)
+4,757
+5,355
+(231)
+5,586
+As at 1 January
+Net
+Reinsurers'
+share
+Gross
+Net
+Gross
+2017
+As at 31 December 2017/2016
+502,646
+431,711
+Change in accounting policy
+As at 1 January 2018/2017
+Policyholder principal increased
+(365)
+31 December 2018
+31 December 2017
+7,992
+6,137
+Premiums earned during the year
+(28,763)
+4,920
+25,538
+(23,843)
+24,151
+(2,948)
+(22,909)
+2,753
+21,203
+(20,156)
+As at 31 December
+7,992
+(525)
+7,467
+6,137
+(365)
+5,772
+The claim reserves of short term life insurance are analysed as follows:
+2018
+2017
+Reinsurers'
+(in RMB million)
+(5,080)
+Claims paid during the year
+30,618
+4,725
+7,115
+5,586
+15,107
+11,723
+The unearned premium reserves of short term life insurance are analysed as follows:
+2018
+2017
+Reinsurers'
+(in RMB million)
+Gross
+share
+Net
+Gross
+Reinsurers'
+share
+Net
+As at 1 January
+6,137
+(365)
+5,772
+4,895
+(170)
+Premiums written during the year
+(15,104)
+share
+7,115
+As at 1 January
+Premiums written during the year
+Premiums earned during the year
+188,495
+(167,518)
+As at 31 December
+124,846
+(5,564) 98,305
+(9,645) 178,850
+9,409 (158,109)
+(5,800) 119,046
+For the year ended 31 December 2018
+90,614
+Net
+(5,888)
+162,856
+(149,601)
+(9,443)
+153,413
+9,767
+(139,834)
+103,869
+(5,564)
+98,305
+The claim reserves of property and casualty insurance are analysed as follows:
+84,726
+Reinsurers'
+share
+Gross
+Net
+45. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+(3) PROPERTY AND CASUALTY INSURANCE CONTRACTS
+As at 31 December
+(in RMB million)
+Unearned premium reserves
+Claim reserves
+31 December 2018
+31 December 2017
+124,846
+103,869
+89,441
+85,031
+214,287
+The unearned premium reserves of property and casualty insurance are analysed as follows:
+188,900
+2018
+2017
+Reinsurers'
+(in RMB million)
+Gross
+share
+2018
+2017
+103,869
+(in RMB million)
+(35,295)
+(99,257)
+(125,478)
+342,700
+329,744
+990,737
+(376)
+990,737
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 251
+Annual Report 2018
+5,355
+(231)
+(10,566)
+11,367
+(1,912)
+1,884
+Reinsurers'
+13,279
+(12,450)
+5,586
+(2,750)
+2,579
+(402)
+13,883
+(12,525)
+6,713
+(33,683)
+3,541
+1,190,549
+1,376,017
+Gross
+share
+Net
+3,384
+Reinsurers'
+share
+Net
+As at 1 January 2018/2017
+85,031
+Claims incurred during the year
+123,530
+Claims paid during the year
+Gross
+As at 31 December 2018/2017
+(119,120)
+2018
+1,190,925
+55,323
+2017
+63,053
+(8,604) 76,427
+(7,086) 116,444
+6,980 (112,140)
+(8,710) 80,731
+89,441
+(7,730)
+(1) INSURANCE RISK (CONTINUED)
+The Group's concentration of insurance risk is reflected by its major lines of business as analysed by
+insurance contract liabilities in Note 45.
+These risks currently do not vary significantly in relation to the location of the risk insured by the Group
+whilst undue concentration by amounts could have an impact on the severity of benefit payments on a
+portfolio basis.
+There would be no significant mitigating terms and conditions that reduce the insured risk accepted for
+contracts with fixed and guaranteed benefits and fixed future premiums. However, for contracts with
+discretionary participation features, the participating nature of these contracts results in a significant
+portion of the insurance risk being shared with the insured party.
+Insurance risk is also affected by the policyholders' rights to terminate the contract, pay reduced
+premiums, refuse to pay premiums or exercise annuity conversion option, etc. Thus, the resultant insurance
+risk is subject to policyholders' behaviour and decisions.
+Concentration of insurance risks
+The Group runs its insurance business primarily within the PRC. Hence the geographical insurance risk is
+concentrated primarily within the PRC.
+Assumptions and sensitivities
+The Group has measured the impact on long term life insurance contract liabilities using sensitivity analysis,
+of varying independently certain assumptions under reasonable and possible circumstances. The following
+changes in assumptions have been considered:
+Assumptions
+Significant judgment is required in determining insurance contract reserves and in choosing discount rates/
+investment return, mortality, morbidity, lapse rates, policy dividend, expenses assumptions relating to long
+term life insurance contracts.
+Sensitivities
+a 5% increase in maintenance expense rates.
+discount rate/investment return assumption increased by 10 basis points;
+discount rate/investment return assumption decreased by 10 basis points;
+a 10% increase in mortality, morbidity, accident rates and etc. (a 10% increase in mortality rates of
+annuity policies before the payment period, a 10% decrease in the payment period);
+a 10% increase in policy lapse rates; and
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(a) Long term life insurance contracts
+For the year ended 31 December 2018
+540,787
+FINANCIAL STATEMENTS
+262
+915,566
+254,211
+408,582
+537,781
+501,062
+2,684,672
+2,451,954
+The above table shows main fiduciary activities of the Group. Where the Group acts in a fiduciary capacity
+such as nominee, trustee or agent, assets held for fiduciary activities together with related undertakings
+on return such assets to customers, are recorded off-balance sheet, as risks and gains of such assets are
+assumed by customers. All of above are off-balance sheet items.
+51. RISK AND CAPITAL MANAGEMENT
+(1) INSURANCE RISK
+Insurance risk refers to the risk that actual indemnity might exceed expected indemnity due to the
+frequency and severity of insurance accidents, as well as the possibility that insurance surrender rates are
+being underestimated. The principal risk the Group faces under such contracts is that the actual claims and
+benefit payments exceed the carrying amount of insurance liabilities. This could occur due to any of the
+following factors:
+Occurrence risk - the possibility that the number of insured events will differ from those expected.
+Severity risk
+-
+the possibility that the cost of the events will differ from those expected.
+Development risk - the possibility that changes may occur in the amount of an insurer's obligation at
+the end of the contract period.
+The variability of risks is improved by diversification of risk of loss to a large portfolio of insurance
+contracts as a more diversified portfolio is less likely to be affected across the board by change in any
+subset of the portfolio. The variability of risks is also improved by careful selection and implementation of
+underwriting strategies and guidelines.
+The insurance business of the Group mainly comprises long term life insurance contracts, property
+and casualty and short term life insurance contracts. For contracts where death is the insured risk, the
+significant factors that could increase the overall frequency of claims are epidemics, widespread changes
+in lifestyles and natural disasters, resulting in earlier or more claims than expected. For contracts where
+survival is the insured risk, the most significant factor is continuing improvement in medical science and
+social conditions that would increase longevity. For property and casualty insurance contracts, claims are
+often affected by natural disasters, calamities, terrorist attacks, etc.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 261
+Notes to Consolidated Financial Statements
+Annual Report 2018
+(13,870)
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+-10bps
+(6,446)
+(6,446)
+6,446
+6,446
+6,622
+6,622
+(6,622)
+(6,622)
++10bps
++10%
+44,436
+(44,436)
+(44,436)
++10%
+13,870
+13,870
+(13,870)
+380,005
++5%
+44,436
+(decrease)
+Increase/
+(decrease)
+before tax
+(1) INSURANCE RISK (CONTINUED)
+Assumptions and sensitivities (continued)
+(a) Long term life insurance contracts (continued)
+Sensitivities (continued)
+(in RMB million)
+Discount rate/investment return
+Discount rate/investment return
+Mortality, morbidity, accident
+rates and etc.
+Policy lapse rates
+Maintenance expense rates
+31 December 2018
+Impact on gross
+policyholders'
+Impact on net
+policyholders'
+Change in
+reserves
+assumptions Increase/(decrease) Increase/(decrease)
+reserves
+Impact on profit
+before tax
+Increase/
+Impact on equity
+Ping An Insurance (Group) Company of China, Ltd.
+442,990
+Assets under trust schemes
+534,124
+(7,687)
+available-for-sale investments
+Fair value adjustments on
+3,420
+(855)
+(658)
+(197)
+value through profit or loss
+(13,310)
+Fair value adjustments on financial
+assets and liabilities carried at fair
+as at
+Temporary
+difference
+As at
+Other
+changes
+Charged to
+equity
+Charged to
+profit or loss
+1 January
+As at
+31 December
+2017
+(20,997)
+Intangible assets-core deposits
+(3,624)
+Others
+14,465
+(3,615)
+(3,615)
+disposal of subsidiaries
+Assets evaluation premium from
+8,288
+83,988
+(2,072)
+(2,102)
+Autohome Inc.
+premium from acquisition of
+Intangible assets evaluation
+10,168
+(2,542)
+189
+(2,731)
+30
+(66)
+(in RMB million)
+(20,840)
+Intangible assets evaluation premium from
+9,412
+(2,353)
+189
+(2,542)
+(2,542)
+Intangible assets-core deposits
+22,172
+acquisition of Autohome Inc.
+(5,543)
+(9,865)
+(9,865)
+other comprehensive income
+instruments at fair value through
+Fair value adjustments on financial
+20,997
+(20,997)
+investments
+4,322
+83,360
+(2,072)
+30
+275
+4,322
+6,964
+1,381 (32,401)
+(33,782)
+(3,419) 13,676
+275
+7
+(2,072)
+(3,701)
+Others
+(3,615) 14,460
+(3,615)
+(3,615)
+subsidiaries
+Assets evaluation premium from disposal of
+8,168
+(2,042)
+(3,701)
+(11)
+(3,701)
+14,799
+607
+1,175
+6,610
+8,579
+30,696
+35,999
+4,150
+5,593
+959
+188,510
+31 December 2017
+31 December 2018
+5,119
+7,573
+3,601
+1,198
+827
+2,251
+134,656
+2,007
+992
+30,705
+31 December 2017
+31 December 2018
+Entrusted investments of banking operations
+Entrusted loans of banking operations
+Assets under asset management schemes
+Assets under annuity investments and annuity schemes
+(in RMB million)
+50. FIDUCIARY ACTIVITIES
+19,039
+Ping An Insurance (Group) Company of China, Ltd.
+259,110
+38,028
+38,482
+5,697
+6,449
+1,941
+6,110
+6,990
+348,463
+1,272
+981
+163
+2020
+2019
+2018
+(in RMB million)
+The following table shows unrecognized tax losses based on its expected expiry date:
+As at 31 December 2018, unrecognized tax losses of the Group were RMB7,573 million (31 December 2017:
+RMB5,119 million).
+48. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+For the year ended 31 December 2018
+2021
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 259
+Annual Report 2018
+135,128
+(33,782)
+(11)
+(13,310)
+(4,120)
+(16,341)
+FINANCIAL STATEMENTS
+2022
+2023
+49. OTHER LIABILITIES
+157
+235
+31 December 2017
+31 December 2018
+Annual Report 2018
+260
+Others
+Contract liabilities
+Deferred income
+Provision payables
+Contingency provision
+Insurance guarantee fund
+Other tax payable
+Interest payable
+Salaries and welfare payable
+management products
+Payable to holders of trust schemes and banking wealth
+Other payables
+(in RMB million)
+621,518
+Accruals
+Increase/(decrease)
+3,066
+2014
+2015
+2016
+2017
+2018
+Total
+Estimated cumulative
+claims paid:
+As at the end of current year
+6,732
+8,415
+11,458
+13,341
+16,879
+(in RMB million)
+One year later
+7,904
+10,875
+12,779
+Two years later
+6,715
+7,900
+10,657
+Three years later
+6,758
+7,875
+Four years later
+6,739
+Estimated cumulative claims
+6,739
+6,786
+7,875
+Reproduced below is an exhibit that shows the development of gross claim reserves of short term life
+insurance by the accident year:
+Assumptions and sensitivities (continued)
+Four years later
+55,312
+Estimated cumulative claims
+55,312
+65,717
+81,264
+101,879
+Cumulative claims paid
+(53,863)
+(63,159)
+(74,469)
+(80,108)
+125,966
+(83,469)
+430,138
+(355,068)
+(b) Property and casualty and short term life insurance contracts (continued)
+Sensitivities (continued)
+Subtotal
+Prior year adjustments,
+unallocated loss adjustment
+expenses, discount and risk
+margin
+Outstanding claim reserves
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 265
+5,661
+80,731
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(1) INSURANCE RISK (CONTINUED)
+75,070
+Cumulative claims paid
+(6,763)
+(7,831)
+Two years later
+6,536
+7,663
+10,675
+Three years later
+6,551
+7,644
+Four years later
+6,536
+Estimated cumulative claims
+6,536
+7,644
+Cumulative claims paid
+(6,536)
+12,191
+(7,644)
+12,191
+(11,823)
+15,809
+(11,227)
+52,855
+(47,427)
+Subtotal
+5,428
+Prior year adjustments,
+unallocated loss adjustment
+expenses and risk margin
+Outstanding claim reserves
+1,285
+6,713
+266
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+10,675
+(10,197)
+10,544
+7,673
+6,574
+10,657
+(10,541)
+12,779
+(12,378)
+16,879
+(11,923)
+54,929
+(49,436)
+Subtotal
+5,493
+Prior year adjustments,
+unallocated loss adjustment
+expenses and risk margin
+1,622
+Outstanding claim reserves
+Reproduced below is an exhibit that shows the development of net claim reserves of short term life
+insurance by the accident year:
+7,115
+(in RMB million)
+2014
+One year later
+15,809
+12,779
+11,033
+8,175
+6,367
+65,717
+As at the end of current year
+Estimated cumulative
+Total
+2018
+2017
+2016
+2015
+claims paid:
+57,416
+Three years later
+81,264
+10,391
+(10,391)
+(10,391)
+Maintenance expense rates
++5%
+2,563
+2,563
+(2,563)
+(2,563)
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 263
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+10,391
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Assumptions and sensitivities (continued)
+(b) Property and casualty and short term life insurance contracts
+Assumptions
+The principal assumption underlying the estimates includes assumptions in respect of average claim
+costs, claims handling costs, claims inflation factors and claim numbers for each accident year which are
+determined based on the Group's past claim experiences. Judgement is used to assess the extent to which
+external factors such as judicial decisions and government legislation affect the estimates.
+Other key assumptions include delays in settlement, etc.
+Sensitivities
+The property and casualty and short term life insurance claim reserves are sensitive to the above key
+assumptions. The sensitivity of certain variables including legislative change, uncertainty in the estimation
+process, etc., is not possible to quantify. Furthermore, because of delays that arise between the occurrence
+of a claim and its subsequent notification and eventual settlement, the outstanding claim reserves are not
+known with certainty at the end of the reporting period.
+Reproduced below is an exhibit that shows the development of gross claim reserves of property and
+casualty insurance by the accident year:
+(in RMB million)
+2014
+2015
+2016
+2017
+2018
+(1) INSURANCE RISK (CONTINUED)
++10%
+Policy lapse rates
+(32,477)
+(3,066)
+(3,066)
+Note: For long term life and health insurance contracts where the future insurance benefits are not affected by investment return of the
+underlying asset portfolio, the amounts above represent the results of sensitivity analysis calculated by the discount rates when the
+benchmarking yield curve for the measurement of insurance contract liabilities increases or decreases 10bps, with consideration of
+the Cai Kuai [2017] No.637 issued by CIRC and other relevant regulations.
+(in RMB million)
+Change in
+assumptions
+Impact on gross
+policyholders'
+reserves
+Increase/(decrease)
+31 December 2017
+Impact on net
+policyholders'
+Impact on profit
+before tax
+reserves
+Fair value adjustments on available-for-sale
+Increase/
+(decrease)
+Impact on equity
+before tax
+Increase/
+(decrease)
+Discount rate/investment return
++10bps
+(32,477)
+32,477
+32,477
++10%
+rates and etc.
+Mortality, morbidity, accident
+Total
+(5,093)
+4,957
+4,957
+(4,957)
+5,093
+(4,957)
+5,093
+-10bps
+Discount rate/investment return
+(5,093)
+3,066
+Estimated cumulative
+As at the end of current year
+5,781
+89,441
+Ping An Insurance (Group) Company of China, Ltd.
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(1) INSURANCE RISK (CONTINUED)
+Assumptions and sensitivities (continued)
+(b) Property and casualty and short term life insurance contracts (continued)
+Sensitivities (continued)
+Reproduced below is an exhibit that shows the development of net claim reserves of property and casualty
+insurance by the accident year:
+(in RMB million)
+2014
+2015
+2016
+2017
+2018
+Annual Report 2018
+Total
+claims paid:
+As at the end of current year
+59,864
+72,724
+85,558
+One year later
+59,479
+70,855
+86,439
+104,195
+101,879
+125,966
+Two years later
+58,057
+69,493
+Estimated cumulative
+264
+Outstanding claim reserves
+unallocated loss adjustment
+expenses, discount and risk
+margin
+69,852
+83,767
+94,445
+One year later
+69,292
+81,490
+95,508
+112,013
+109,867
+134,483
+Two years later
+67,587
+80,012
+89,642
+Three years later
+66,866
+75,772
+Four years later
+Prior year adjustments,
+83,660
+Subtotal
+474,237
+(390,577)
+134,483
+(87,426)
+109,867
+(85,635)
+claims paid:
+89,642
+(81,964)
+(62,833)
+Cumulative claims paid
+75,772
+64,473
+Estimated cumulative claims
+64,473
+(72,719)
+15,472
+35,606
+6,738
+Fixed
+2018
+9.000
+None
+270 days
+None
+Super short-term
+financing bills
+Ping An Real Estate
+1,532
+5.00%
+Fixed
+2018
+1,500
+None
+3.75%-5.15%
+3 years
+Corporate bonds
+Ping An Real Estate
+(Note 2)
+Management Co.,Ltd.
+4.85%
+Fixed
+2015
+1,000
+None
+3 years
+Offshore RMB bonds Guaranteed
+Fuqing Investment
+third year
+1,253
+None
+9,123
+Ping An Real Estate
+Medium term notes
+investments
+Fair value adjustments on available-for-sale
+profit or loss
+Fair value adjustments on financial assets and
+liabilities carried at fair value through
+(in RMB million)
+The deferred tax assets are analysed as follows:
+Net
+Deferred tax liabilities
+Deferred tax assets
+(in RMB million)
+48. DEFERRED TAX ASSETS AND LIABILITIES
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 257
+998
+Annual Report 2018
+None
+3 years
+None
+4,000
+2018
+Fixed
+1,355
+4.73%-5.08%
+556,875
+451,283
+Note 1:
+The bonds are guaranteed by Ping An Overseas Holdings, which is the holding company of Value Success International Limited
+and Li Guan International Co., Ltd..
+Note 2:
+The bonds are guaranteed by Pingan Real Estate Capital Limited, which is a subsidiary of Ping An Real Estate.
+4,017
+3.80%
+Fixed
+2017
+4.88%-5.27%
+Fixed
+2017
+217
+2,500
+None or end
+5 years
+None
+Corporate bonds
+Ping An Real Estate
+2017
+2018
+(per annum)
+Interest type
+year
+31 December
+31 December
+(3,868)
+47. BONDS PAYABLE (CONTINUED)
+Early
+Par value
+Guarantee
+redemption
+2,588
+Issuer
+type
+Maturity
+option
+(in RMB
+million)
+Issued
+Coupon rate
+Type
+2018
+2,492
+Pyear
+1,254
+End of the
+5 years
+Guaranteed
+(Note 2)
+Medium term
+notes
+Management Limited
+Fuxiang Investment
+1,746
+5.10%
+Fixed
+2018
+1,654
+None
+1 year
+Guaranteed
+(Note 2)
+bonds
+Management Limited
+Fuxiang Investment
+Management Limited
+Offshore USD
+bonds
+Guaranteed
+(Note 2)
+3 years
+None
+of the third
+2,709
+Fixed
+3.63%
+2,065
+1,950
+Fuxiang Investment
+Offshore USD
+2016
+31 December 2018
+31 December
+26,711
+7,671
+(104,812)
+26,203
+8,003
+18,200
+(46,612)
+11,653
+1,087
+3,993
+6,573
+(2,640)
+660
+570
+90
+830
+(4,060)
+190
+825
+31 December
+as at
+Temporary
+difference
+31 December
+As at
+Other
+changes
+Charged to
+equity
+Charged to
+profit or loss
+1 January
+As at
+2017
+Insurance contract liabilities
+Impairment loss provisions
+Others
+1,015
+8,501
+(34,004)
+33,359
+45,187
+(18,476)
+(9,751) (10,606)
+(855)
+31 December
+2018
+as at
+31 December
+Other
+changes
+Charged to
+equity
+Charged to
+profit or loss
+1 January
+2018
+policy
+2017
+difference
+As at
+As at
+Change in
+accounting
+13,016
+1,657
+48,032
+(192,128)
+258
+Annual Report 2018
+Fair value adjustments on
+available-for-sale investments
+Ping An Insurance (Group) Company of China, Ltd.
+The deferred tax liabilities are analysed as follows:
+Fair value adjustments on financial assets and
+liabilities carried at fair value through
+profit or loss
+2018
+Temporary
+As at
+31 December
+48. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+Fair value adjustments on financial
+assets and liabilities carried at fair
+value through profit or loss
+(in RMB million)
+(190,204)
+instruments at fair value through
+Fair value adjustments on financial
+(1,804)
+451
+(18)
+(660)
+660
+(567)
+1,036
+21
+1,015
+31 December
+2018
+as at
+31 December
+Other
+changes
+Charged to
+equity
+40,141
+(25,891)
+31 December 2017
+(in RMB million)
+14,250
+As at
+31 December
+other comprehensive income
+Change in
+accounting
+As at
+Temporary
+difference
+1 January
+2017
+policy
+Charged to
+profit or loss
+As at
+860
+2018
+(191)
+(123,952)
+8,501
+8,501
+(795)
+(296)
+7,410
+30,988
+48,032
+48,379
+1,136
+47,551
+860
+(1,650)
+(314)
+347
+(192)
+(29,640)
+26,513
+Insurance contract liabilities
+4,667
+11,653
+(2,676)
+669
+(184)
+(2,169)
+(1,267)
+11,469
+8,033
+(32,132)
+Impairment loss provisions
+Others
+26,203
+310
+before tax
++50 basis
+Increase/
+(decrease)
+in equity
+before tax
+Change in
+interest rate
+31 December 2017
+Increase/
+(decrease)
+in profit
+31 December 2018
+Increase/
+(decrease)
+in profit
+before tax
+Increase/
+(decrease)
+140
+points
+109
+109
+140
+Floating rate term deposits
++50 basis
+Floating interest rate bonds
+18
+points
+in equity
+before tax
+(in RMB million)
+(8,356)
+(c) Interest rate risk (continued)
+31 December 2018
+Increase/
+(decrease)
+in profit
+before tax
+18
+Increase/
+(decrease)
+in equity
+before tax
+-50 basis
+points
+1,739
+8,356
++50 basis
+points
+(1,739)
+The following sensitivity analysis is based on the assumption that the floating rate bonds, floating rate term
+deposits and loans and advances have a static structure of interest rate risk. The analysis only measured
+interest rate changes within one year, reflecting the impact on interest income and interest expenses from
+the re-pricing of financial assets and liabilities within a year with the following assumptions: firstly, the
+interest rate of the floating rate bonds, floating rate term deposits/loans and advances is re-priced after
+the end of the reporting period; secondly, the yield curve moved in parallel with the changes in the interest
+rate; and thirdly, there are no other changes in the portfolio of financial assets and liabilities. Regarding the
+above assumptions, the pre-tax impact on the Group's profit and equity as a result of actual increases or
+decreases in interest rates may differ from that of the following sensitivity analysis.
+31 December 2017
+Increase/
+(decrease)
+in profit
+before tax
+460
+5,072
+(460)
+(5,072)
+272
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+Increase/
+(decrease)
+in equity
+before tax
+18
+3 months to 1 year (including 1 year)
+Loans and advances to customers
+(5,148)
+The following table sets out the Group's term deposits (excluding balances of investment-linked contracts)
+exposed to interest rate risk by maturity or repricing date (whichever is the earlier):
+(in RMB million)
+Fixed interest rate
+Less than 3 months (including 3 months)
+1-2 years (including 2 years)
+2-3 years (including 3 years)
+3-4 years (including 4 years)
+4-5 years (including 5 years)
+More than 5 years
+Floating interest rate
+(5,148)
+31 December 2018
+14,739
+15,213
+21,346
+9,770
+34,745
+43,370
+36,226
+40,537
+points
+31 December 2017
+(5,930)
+(5,930)
+-50 basis
+points
++50 basis
+points
+5,930
+5,930
+5,148
+5,148
+Floating interest rate bonds
+-50 basis
+points
+(109)
+(109)
+(140)
+(140)
+Floating rate term deposits
+-50 basis
+points
+(18)
+(18)
+(18)
+(18)
+Loans and advances to customers
+18
++50 basis
+201,575
+Change in
+interest rate
+2,535
+451,283
+Other liabilities
+25,074
+11,425
+421
+1,280
+214,701
+5,361,972
+11,715
+301,737
+Net position of foreign currency
+(46,320)
+49,325
+15,882
+14,683
+5,698,780
+17,688
+Notional amount of foreign exchange
+derivative financial instruments
+53,939
+(2,444)
+19,189
+(10,070)
+437,033
+45,622
+469
+23
+3
+114,108
+Insurance contract liabilities
+1,930,484
+1,680
+788
+17
+Bonds payable
+1,932,969
+policyholders
+50,301
+7
+1
+50,309
+Policyholder dividend payable
+45,603
+17
+2
+Investment contract liabilities for
+-50 basis
+points
+41,425
+46,881
+31 December 2017
+15,799
+9,455
+The Group expects that current listed stocks and equity investments funds will not lose more than
+RMB15,799 million due to market price movements in a 10-trading-day holding period on 99% of occasions.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 271
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+31 December 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(c) Interest rate risk
+Interest rate risk is the risk that the value/future cash flows of a financial instrument will fluctuate because
+of changes in market interest rates.
+Floating rate instruments expose the Group to cash flow interest rate risk, whereas fixed rate instruments
+expose the Group to fair value interest risk.
+The Group's interest rate risk policy requires it to manage interest rate risk by maintaining an appropriate
+mix of fixed and variable rate instruments. The policy also requires it to manage the maturities of interest
+bearing financial assets and interest bearing financial liabilities. Interest on floating rate instruments is
+repriced at intervals of less than one year. Interest on fixed interest rate instruments is priced at inception
+of the financial instruments and is fixed until maturity.
+The analysis below is performed for reasonably possible movements in interest rate with all other variables
+held constant, for the following financial instruments, showing the pre-tax impact on the Group's profit (fair
+value change on bonds carried at fair value through profit or loss) and equity (fair value change on bonds
+carried at fair value through profit or loss and bonds carried at fair value through other comprehensive
+income).
+(in RMB million)
+Bonds carried at fair value through
+profit or loss and available-for-sale
+Bonds carried at fair value through
+profit or loss and available-for-sale
+Bonds carried at fair value through
+profit or loss and through other
+comprehensive income
+Bonds carried at fair value through
+profit or loss and through other
+comprehensive income
+(2) MARKET RISK (CONTINUED)
+7,619
+Listed stocks and security investment funds
+The analysis below is the estimated impact for listed stocks and security investment funds with 10-day
+reasonable market fluctuation in using the VaR module in the normal market.
+4,613
+59,113
+Off-balance sheet credit commitments
+308,826
+42,808
+1,626
+697
+353,957
+270
+(in RMB million)
+Annual Report 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(b) Price risk
+The Group's price risk exposure relates to financial assets and liabilities whose values will fluctuate as a
+result of changes in market prices (other than those arising from interest rate risk or foreign currency risk),
+which mainly include listed equity securities and security investment funds classified as financial assets at
+fair value through other comprehensive income and financial assets at fair value through profit or loss.
+The above investments are exposed to price risk because of changes in market prices, where changes are
+caused by factors specific to the individual financial instruments or their issuers, or factors affecting all
+similar financial instruments traded in the market.
+The Group managed price risks by diversification of investments, setting limits for investments in different
+securities, etc.
+The Group uses a 10-day market price value-at-risk ('VaR') technique to estimate its risk exposure for
+listed equity securities and equity investments funds. The Group adopts 10-day as the holding period on
+the assumption that not all the investments can be sold in one day. Moreover, the VaR calculation is made
+based on normal market conditions and a 99% confidence interval.
+The use of VaR has limitations because it is based on historical correlations and volatilities in market prices
+and assumes that future price movements will follow a statistical distribution. Due to the fact that VaR
+relies heavily on historical data to provide information and may not clearly predict future changes and
+modifications of the risk factors, the probability of large market moves may be underestimated if changes
+in risk factors fail to align with the normal distribution assumption. The VaR may also be under or over
+estimated due to the assumption placed on risk factors and the relationship between such factors for
+specific instruments. Even though positions may change throughout the day, the VaR only represents the
+risk of the portfolios at the close of each business day, and it does not account for any losses that may
+occur beyond the 99% confidence interval.
+In practice, the actual trading results will differ from the VaR calculation and, in particular, the calculation
+does not provide a meaningful indication of profits and losses in stressed market conditions.
+Ping An Insurance (Group) Company of China, Ltd.
+20,570
+173,178
+27,890
+27,627
+15,944
+18,915
+181,901
+847,198
+1,243,768
+241,025
+74,222
+2,406,213
+119,415
+Interest rates on floating rate term deposits and floating rate bonds are repriced at intervals of less than
+one year. Interest rates on fixed rate term deposits and fixed rate bonds are fixed before maturity.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK
+Credit risks refer to the risk of losses incurred by the inabilities of debtors or counterparties to fulfill their
+contractual obligations or by the adverse changes in their credit conditions. The Group is exposed to
+credit risks primarily associated with its deposit arrangements with commercial banks, loans and advances
+to customers, financial assets at amortized cost and debt financial assets at fair value through other
+comprehensive income, reinsurance arrangement with reinsurers, policy loans, margin financing and with
+the exposure arising from loan commitments and financial guarantee contracts, etc. The Group uses a
+variety of controls to identify, measure, monitor and report credit risk.
+(a) Credit risk management
+Credit risk of banking business
+The banking business of the Group has formulated a set of credit management processes and internal
+control mechanisms, so as to carry out the whole process management of credit business. Credit
+management procedures for its corporate and retail loans comprise of credit origination, credit review,
+credit approval, disbursement, post credit monitoring and collection. In addition, the banking business
+of the Group has formulated procedure manuals for credit management, which clarifies the duties of
+each cycle in the credit management processes, effectively monitoring credit risk and enhancing credit
+compliance.
+The banking business of the Group further enhances credit risk monitoring and early warning management
+mechanism to monitor the credit risks, respond to the changes in credit environment proactively, analyse
+the credit risk situations and trends regularly, take risks monitoring measures prospectively. The Group has
+established enhancement mechanism for problematic credit, aiming to accelerate the progress of handling
+problematic credit and preventing non-performing loans.
+274
+Credit risks arising from financial guarantees and loan commitments are similar to those of loans and
+advances. Therefore, financial guarantees and loan commitments are also subject to the same application,
+post crediting monitoring and collateral requirements as loan and advances business.
+Floating interest rate
+4,626
+99,040
+23,551
+8,881
+253,362
+3-4 years (including 4 years)
+38,321
+103,171
+17,684
+2,712
+934,942
+161,888
+74,132
+110,383
+26,831
+2,786
+214,132
+More than 5 years
+153,567
+703,584
+73,165
+4-5 years (including 5 years)
+121,890
+Credit risk of investment business
+The Group's debt investment mainly includes domestic government bonds, Central Bank bills, financial
+institution bonds, corporate bonds and debt investment schemes. The Group manages the credit risk for
+these investments mainly through controlling the investment scales, selecting counterparties within the
+financial institutions with appropriate credit quality prudently, balancing the credit risks and rate of return
+of investment and considering the internal and external credit rating information comprehensively.
+China Minsheng Banking Corp. Ltd.
+Hengfeng Bank Co., Ltd.
+Agricultural Bank of China Co., Ltd.
+Others
+276
+Annual Report 2018
+31 December 2018
+281,252
+31,461
+31,402
+China Construction Bank Corporation
+26,793
+19,973
+17,729
+17,044
+17,041
+15,997
+15,931
+244,859
+743,483
+Ping An Insurance (Group) Company of China, Ltd.
+24,001
+As to debt investments, the Group applies the credit ratings of the existing investments through internal
+credit rating policies and processes, with high credit quality counterparties selected and strict selection
+criteria set.
+Bank of Shanghai Co., Ltd.
+Bank of Communications Co., Ltd.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 275
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(a) Credit risk management (continued)
+Credit risk of insurance business
+Other major banks and financial institutions
+The Group evaluated the credit rating of the reinsurance companies before signing the reinsurance
+contracts, and choose the reinsurance companies with higher credit quality to reduce the credit risk.
+Credit quality of amounts due from banks and other financial institutions
+The following table sets forth aggregated amounts due from banks and other financial institutions placed
+with the PBC and the major commercial banks in the PRC held by the Group. The following analysis
+excludes balances of investment-linked contracts.
+(in RMB million)
+PBC
+Commercial banks
+Bank of China Limited
+Industrial Bank Co., Ltd.
+China CITIC Bank Corporation Limited
+Industrial and Commercial Bank of China Limited
+The limit of policy loans are based on the cash values of valid insurance policies, with appropriate
+discounts, and the validity periods of policy loans are within the validity periods of insurance policies. The
+credit risk associated with policy loans did not have material impact on the Group's consolidated financial
+statements as at 31 December 2018 and 31 December 2017.
+2-3 years (including 3 years)
+198,291
+7,867
+(in RMB million)
+Financial assets
+at amoritized
+cost
+31 December 2018
+Debt financial
+assets at
+fair value
+through other
+comprehensive
+income
+Financial assets
+at fair value
+through
+profit or loss
+Total
+More than 5 years
+Floating interest rate
+62,195
+37,158
+112,202
+206,170
+38,186
+86,309
+330,665
+193,139
+17,424
+50,202
+12,849
+260,765
+4-5 years (including 5 years)
+2-3 years (including 3 years)
+19,116
+1,000
+3,499
+3,500
+174,138
+161,850
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 273
+FINANCIAL STATEMENTS
+3-4 years (including 4 years)
+Notes to Consolidated Financial Statements
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(c) Interest rate risk (continued)
+The following table sets out the Group's bonds, debt schemes and banking wealth management products
+(excluding balances of investment-linked contracts) by maturity or repricing date (whichever is the earlier):
+(in RMB million)
+Fixed interest rate
+Less than 3 months (including 3 months)
+3 months to 1 year (including 1 year)
+1-2 years (including 2 years)
+For the year ended 31 December 2018
+181,139
+36,457
+39,282
+Carried at fair
+value through
+profit or loss
+Total
+Fixed interest rate
+Less than 3 months.
+(including 3 months)
+100,201
+27,846
+21,249
+26,704
+Available-
+for-sale
+176,000
+163,168
+84,695
+36,103
+1,731
+285,697
+1-2 years (including 2 years)
+76,504
+87,422
+26,498
+3 months to 1 year (including 1 year)
+31 December 2017
+Held-to-
+maturity
+Loans and
+receivables
+256,878
+165,306
+30,194
+28,484
+223,984
+148,573
+34,358
+17,621
+200,552
+969,830
+137,179
+80,714
+1,187,723
+115,665
+25
+57,488
+113,613
+2,042,017
+306,672
+397,258
+2,745,947
+19,393
+Insurance payables
+34,351
+8,522
+RMB
+total
+(in RMB millions)
+Assets
+Cash and amounts due from banks
+and other financial institutions
+367,140
+80,142
+5,516
+4,726
+457,524
+Balances with the Central Bank
+equivalent
+and statutory deposits for
+insurance operations
+7,588
+533
+285,959
+Financial assets held under resold
+agreements
+92,951
+Policy Loans
+111,219
+92,951
+277,838
+111,219
+(RMB
+equivalent)
+(RMB
+(429)
+(445)
+5
+(231)
+(1,668)
+(2,756)
+982
+(2,956)
+268
+equivalent)
+Annual Report 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(a) Foreign currency risk (continued)
+The main monetary assets and liabilities of the Group (excluding balances of investment-linked contracts)
+and non-monetary assets and liabilities measured at fair value are analysed as follows by currency:
+31 December 2018
+RMB
+USD
+(RMB
+equivalent)
+HKD
+Others
+Ping An Insurance (Group) Company of China, Ltd.
+-5%
+Financial assets at fair value
+702,919
+66,011
+1,088
+8,459
+51
+317
+18,958
+310,901
+1,929,842
+-
+67,150
+Accounts receivable
+22,722
+Premium receivables
+76
+Reinsurers' share of insurance liabilities
+15,145
+1,104
+422
+16,671
+Finance lease receivable
+165,214
+165,214
+Other assets
+22,798
+through profit or loss
+103,086
+Loans and advances to customers
+91,480
+Financial assets at amortized cost
+2,046,742
+25,447
+18,976
+2,091
+11,564
+871
+824,939
+2,075,151
+Equity financial assets at fair
+1,799,339
+value through other
+215,145
+7,494
+222,639
+Debt financial assets at fair
+value through other
+comprehensive income
+298,713
+11,864
+7
+comprehensive income
+73,478
+Other currencies
+(305)
+4,037
+336
+(4,037)
+(336)
+Impact on equity
+before tax
+decrease
+(4,037)
+(336)
+Impact on gross
+claim reserves
+increase
+31 December 2017
+Impact on net
+claim reserves
+increase
+Impact on profit
+before tax
+decrease
+Impact on equity
+Change in
+assumptions
+before tax
++5%
++5%
+4,252
+279
+3,821
+268
+(3,821)
+(268)
+(3,821)
+(268)
+The Group limits its exposure to losses from insurance operations mainly through participation in
+reinsurance arrangements. The majority of the business ceded is placed on the quota share basis and
+the surplus basis with retention limits varying by product lines. Amounts recoverable from reinsurers are
+estimated in a manner consistent with the assumptions used for ascertaining the underlying policy benefits
+and are presented in the statement of financial position as reinsurers' share of insurance liabilities and due
+from reinsurers.
+Even though the Group may have reinsurance arrangements, it is not relieved of its direct obligations to its
+policyholders and thus a credit exposure exists with respect to reinsurance ceded, to the extent that any
+reinsurer is unable to meet its obligations assumed under such reinsurance agreements.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 267
+decrease
+FINANCIAL STATEMENTS
+4,472
+356
++5%
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(1) INSURANCE RISK (CONTINUED)
+Assumptions and sensitivities (continued)
+(b) Property and casualty and short term life insurance contracts (continued)
+Sensitivities (continued)
+To illustrate the sensitivities of ultimate claims costs, for example, a respective percentage change in the
+average claim costs alone results in a similar percentage change in claim reserves:
+(in RMB million)
+Average claim costs
+Property and casualty insurance
+Short term life insurance
++5%
+(in RMB million)
+Property and casualty insurance
+Short term life insurance
+(c) Reinsurance
+Change in
+assumptions
+Impact on gross
+claim reserves
+increase
+31 December 2018
+Impact on net
+claim reserves
+Impact on profit
+increase
+before tax
+decrease
+Average claim costs
+(2,344)
+Notes to Consolidated Financial Statements
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Other currencies
++5%
+429
+445
+(5)
+231
+1,668
+2,756
+(982)
+2,344
+2,956
+-5%
+(368)
+(1,253)
+1,282
+(381)
+HKD
+-5%
+(871)
+(1,058)
+USD
+For the year ended 31 December 2018
+305
+871
+(2) MARKET RISK
+Market risk is the risk of changes in fair value of financial instruments and future cash flows from
+fluctuation of market prices, which includes three types of risks from volatility of foreign exchange rates
+(foreign currency risk), market interest rates (interest rate risk) and market prices (price risk).
+(a) Foreign currency risk
+Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates.
+Fluctuations in exchange rates between the RMB and other currencies in which the Group conducts
+business may affect its financial position and results of operations. The foreign currency risk facing the
+Group mainly comes from movements in the USD/RMB and HKD/RMB exchange rates. The Group set
+limitation to its position of foreign currency, monitor the size of foreign currency position, and limit the
+foreign currency position within the threshold set by utilizing hedging strategy.
+The analysis below is performed for reasonably possible movements in key variables with all other variables
+held constant, showing the pre-tax impact on profit and equity (due to changes in fair value of foreign
+currency denominated non-monetary assets and liabilities measured at fair value, as well as monetary
+assets and liabilities). The correlation of variables will have a significant effect on determining the ultimate
+impact on market risk, but to demonstrate the impact due to changes in variables, variables had to be
+changed on an individual basis.
+(in RMB million)
+USD
++5%
+368
+1,058
+Change in
+variables
+Increase/
+(decrease)
+in equity
+before tax
+31 December 2017
+Increase/
+(decrease)
+in profit
+before tax
+(1,282)
+Increase/
+(decrease)
+in equity
+before tax
+1,253
+381
+HKD
++5%
+31 December 2018
+Increase/
+(decrease)
+in profit
+before tax
+4,715
+266
+53
+Fixed maturity investments
+2,336,092
+4,520
+1,675
+2,376,638
+Equity investments
+538,828
+42,026
+41,568
+83,203
+8,254
+Loans and advances to customers
+1,535,529
+99,545
+9,955
+15,835
+1,660,864
+Premium receivables
+44,776
+874
+630,676
+44
+83,203
+99,296
+31 December 2017
+RMB
+USD
+(RMB
+equivalent)
+HKD
+(RMB
+equivalent)
+Others
+(RMB
+equivalent)
+RMB
+equivalent
+total
+Cash and amounts due from banks
+and other financial institutions
+Balances with the Central Bank and
+statutory deposits for insurance
+operations
+399,670
+Policy loans
+68,704
+4,686
+483,891
+311,187
+6,409
+640
+318,236
+Financial assets held under resold
+agreements
+99,296
+10,831
+Assets
+45,694
+72,061
+1,054
+10,179
+780,530
+Financial liabilities held for trading
+14,056
+4
+14,060
+Assets sold under agreements to
+repurchase
+123,964
+93,289
+9,697
+133,981
+Customer deposits and payables to
+brokerage customers.
+1,760,813
+173,434
+14,048
+4,400
+1,952,695
+Accounts payable
+320
+Accounts receivable
+676,008
+Liabilities
+72,061
+Reinsurers' share of insurance liabilities
+14,373
+1,003
+257
+15,633
+Finance lease receivable
+112,028
+112,028
+Due to banks and other financial
+institutions
+Other assets
+2,505
+699
+115
+151,880
+5,695,604
+255,417
+68,514
+30,565
+6,050,100
+148,561
+(in RMB millions)
+(a) Foreign currency risk (continued)
+(2) MARKET RISK (CONTINUED)
+8,299
+3,753
+Accounts payable
+Insurance payables
+9,778
+120,161
+1
+-
+497
+Insurance contract liabilities
+204,325
+2,208,831
+27
+823
+3
+2,114,344
+9,779
+120,688
+16
+2,211,887
+Investment contract liabilities for
+policyholders
+52,740
+2,217
+Policyholder dividend payable
+1,897,967
+Customer deposits and payables to
+78,512
+6,254,576
+326,514
+43,815
+36,565
+6,661,470
+Liabilities
+Due to banks and other financial
+institutions
+707,221
+brokerage customers
+80,572
+11,761
+803,154
+Financial liabilities held for trading.
+16,975
+16,975
+Assets sold under agreements to
+repurchase
+181,235
+7,793
+189,028
+3,600
+52,568
+6
+21
+1
+14,788
+(4,485)
+(12,129)
+(1,826)
+25,053
+21,162
+8,895
+55,110
+Off-balance sheet credit commitments
+56,936
+343,719
+319
+4,475
+397,732
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 269
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+49,219
+21,024
+25,647
+10,265
+52,747
+2
+52,591
+Bonds payable
+533,567
+18,239
+5,069
+556,875
+Other liabilities
+132,627
+2,578
+350
+5
+135,560
+5,913,670
+316,249
+18,168
+15,541
+6,263,628
+Net position of foreign currency
+Notional amount of foreign exchange
+derivative financial instruments
+8,522
+-
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Gross carrying amount
+increase/
+Charge/
+(recover)
+Transfer
+between
+Transfer
+between
+Transfer
+between
+Net
+Stage 1
+Stage 2
+1 January
+(decrease)
+for the year
+and
+Impairment provision (in RMB million)
+Stage 1
+Stages transfers
+(b) Expected credit loss (continued)
+(3) CREDIT RISK (CONTINUED)
+other comprehensive income
+Stage 3
+328
+513
+841
+Subtotal
+220,085
+90,816
+310,901
+Note 1: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+Ping An Insurance (Group) Company of China, Ltd. 283
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Stage
+2018
+(Note 1)
+(Note 2)
+(9,402)
+7,931
+Stage 3
+32,375
+(5,263)
+38,231
+49
+9,402
+(45,804)
+28,990
+Subtotal
+47,763
+3,440
+48,788
+(45,804)
+5,175
+43
+9,600
+3,447
+Stage 2
+and
+Stage 3
+31 December
+Write-offs
+2018
+Loans and advances
+Stage 1
+11,941
+9,592
+957
+(5,175)
+(49)
+17,266
+to customers
+Stage 2
+(889)
+(513)
+556
+Stage 2
+383,823
+(65,775)
+(1,277)
+1,880,008
+to customers
+Stage 2
+44,635
+(20,413)
+65,775
+(44,812)
+45,185
+Stage 3
+71,579
+(13,182)
+1,277
+1,563,237
+44,812
+Stage 1
+2018
+between
+1 January
+(decrease)
+Stage 1 and
+Stage 1 and
+Stage 2 and
+31 December
+Gross carrying amount (in RMB million)
+Stage
+2018
+(Note 1)
+Stage 2
+Stage 3
+Stage 3
+Write-offs
+Loans and advances
+54,187
+(45,804)
+Subtotal
+(3,209)
+6,906
+15,363
+Subtotal
+1,956,396
+132,060
+2,088,456
+Debt financial assets
+Stage 1
+220,085
+90,816
+(556)
+(328)
+310,017
+at fair value through
+11,666
+58,682
+Stage 3
+(6,906)
+1,679,451
+350,228
+(45,804)
+1,983,875
+Financial assets
+Stage 1
+1,931,311
+139,002
+(3,091)
+2,067,222
+at amortized cost
+Stage 2
+13,419
+(3,733)
+3,091
+5,871
+Financial assets
+Stage 1
+3,740
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+Financial assets at amortized cost:
+(in RMB million)
+Credit grade
+Low risk
+31 December 2018
+ECL staging
+Stage 1
+12-month ECL
+Stage 2
+Lifetime ECL
+Stage 3
+Lifetime ECL
+Ping An Insurance (Group) Company of China, Ltd. 285
+Purchased
+credit-impaired
+Annual Report 2018
+29,694
+Default
+58,682
+58,682
+1,880,008
+45,185
+58,682
+1,983,875
+Loss allowance
+(17,114)
+(7,931)
+(28,988)
+(54,033)
+Carrying amount
+1,862,894
+37,254
+1,929,842
+1,017,139
+862,017
+46,037
+1,912,560
+Medium risk
+(4) LIQUIDITY RISK
+Total
+1,913,658
+148,432
+11,003
+15,363
+2,088,456
+(13,305)
+2,075,151
+Liquidity risk is the risk of not having access to sufficient funds or being unable to realize an asset in a
+timely manner at a reasonable price to meet the Group's obligations as they become due.
+The Group is exposed to liquidity risk on insurance policies that permit surrender, withdrawal or other
+forms of early termination. The Group seeks to manage its liquidity risk by matching to the extent possible.
+the duration of its investment assets with the duration of its insurance policies and to ensure that the
+Group is able to meet its payment obligations and fund its lending and investment operations on a timely
+basis.
+The banking business of the Group is exposed to potential liquidity risk. The Group utilizes multiple
+regulatory methods, establish comprehensive liquidity risk management framework, effectively recognize,
+measure, monitor and control liquidity risk, maintain sufficient liquidity level to satisfy various funds
+requirement and to face adverse market status. In case of monitoring liquidity risks effectively, the Group
+pays attentions to the funds resources and diversified utilization, keep relatively high liquidity assets
+consistently. The Group monitors the sourcing and usage of funds, deposit to loan ratio, and quick ratio on
+a daily basis. Moreover, when adopting various benchmarks for management of liquidity risk management
+measurement benchmarks, the Group compares the expected results against the ones derived from stress
+tests, critically assesses the potential impact to the future liquidity risk, and formulates remedial actions
+according to specific situations. The Group seeks to mitigate the liquidity risk of the banking business by
+optimizing the assets and liabilities structure, and maintaining stable deposits, etc.
+286
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+7,976
+1,098
+5,524
+(7,387)
+145,506
+2,926
+High risk
+9,156
+1,847
+Default
+15,363
+Gross carrying amount
+2,067,222
+5,871
+15,363
+Loss allowance
+Carrying amount
+(5,571)
+2,061,651
+(347)
+-
+between
+32,834
+High risk
+8,422
+3,225
+1,658
+13,305
+Debt financial assets at fair
+Stage 1
+530
+158
+24
+(43)
+(14)
+655
+value through other
+comprehensive income
+Stage 2
+43
+Subtotal
+(42)
+7,387
+2,116
+3,759
+(482)
+(1,446)
+5,571
+at amortized cost
+Stage 2
+702
+(80)
+24
+1,446
+(1,745)
+347
+Stage 3
+3,980
+(454)
+1,745
+13,203
+1
+468
+Credit grade
+ECL staging
+Stage 1
+12-month ECL
+Stage 2
+Lifetime ECL
+31 December 2018
+Stage 3
+Lifetime ECL
+Purchased
+credit-impaired
+Total
+Low risk
+1,016,991
+148
+Medium risk
+849,814
+12,203
+(in RMB million)
+Stage 3
+Loans and advances to customers:
+The Group internally grades the financial instruments based on the credit quality and risk characteristics.
+The credit rating of the financial instruments could further be classified as "low risk”, “medium risk”, “high
+risk" and "default" according to the internal rating scale. “Low risk” means that the asset quality is good,
+there is sufficient evidence to show that the asset is not expected to have default, or there is no reason
+to suspect that the asset had incurred default. "Medium risk" means that the asset quality is acceptable or
+there are factors revealing potential negative impact on the asset quality, but there is no sufficient reason
+to suspect that the asset had incurred default. "High risk” means that there is factors revealing significant
+adverse impact on the asset quality, but there is no event indicating incurred default; The criteria of
+"default" are consistent with those of "credit-impaired".
+14
+42
+524
+Subtotal
+530
+158
+492
+1,180
+Note 1: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+Note 2: Changes in PDS, EADs, and LGDs in the current year, arising from regular refreshing of inputs to models and stages transfers.
+284
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+The following table contains an analysis of the credit risk grading of loans and advances to customers
+and financial assets at amortized cost. The carrying amount of financial assets below also represents the
+Group's maximum exposure to credit risk on these assets.
+Transfer
+and
+Stage 3
+Transfer
+between
+12,880
+7,365
+14,874
+35,119
+4,888
+32
+1,682
+35,606
+47,597
+8,001
+113,710
+2,164,524
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 277
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+2,093,799
+(b) Expected credit loss
+Gross total
+108
+2,867
+56
+8,096
+10,008
+854,566
+Premium receivables
+42,674
+11
+19
+5
+Due from reinsurers
+Finance lease receivable
+6,710
+112,028
+259
+892
+35
+1,259
+5,173
+From 1 January 2018, the Group formulates the credit losses of debt instruments carried at amortized cost
+and FVOCI, finance lease receivable, loan commitment and financial guarantee contracts using ECL models
+according to IFRS 9 requirements.
+The parameters and assumptions involved in ECL model are described below.
+The definition of credit-impaired assets
+Under IFRS 9, in order to determine whether credit impairment occurs, the defined standards adopted by
+the Group are consistent with the internal credit risk management objectives for relevant financial assets,
+while considering quantitative and qualitative indicators. When the Group assesses whether the debtor has
+credit impairment, the following factors are mainly considered:
+The debtor has overdue more than 90 days after the contract payment date;
+Internal credit rating is default grade;
+The lender gives the debtor concessions for economic or contractual reasons due to the debtor's
+financial difficulties, where such concessions are normally reluctant to be made by the lender;
+The debtor has significant financial difficulties;
+The debtor is likely to go bankrupt or other financial restructuring;
+The active market for financial assets disappears
+The credit impairment of financial assets may be caused by the joint effects of multiple events, and may
+not be caused by separately identifiable events.
+Forward-looking information
+The determinations of 12 months and the lifetime EAD, PD and LGD also incorporates forward-looking
+information. The Group has performed historical data analysis and identified the key macroeconomic
+variables associated with credit risk and expected credit losses for each portfolio. The Group has
+developed macroeconomic forward looking adjustment model by establishing a pool of macro-economic
+indicators, preparing data, filtering model factors and adjusting forward-looking elements, and the
+indicators include gross domestic product (GDP) year on year percentage change, customer price index
+(CPI) year on year percentage change, purchasing manager's index (PMI) and other macroeconomic
+variables. Through regression analysis, the relationship among these economic indicators in history with
+EAD, PD and LGD is determined, and the EAD, PD, LGD are determined through forecasting economic
+indicator. The forecasting methods and critical assumptions applied have no material change during the
+year ended 31 December 2018.
+In 2018, the Group collected 10-year time series data of macroeconomic parameters from the China
+Macroeconomic Database published by Wind Info Technology Co., Ltd., and analyzed the inter-period
+relationship between economic parameters, and simulated randomization through the Monte Carlo method
+to formulate prediction function. Combined with the expert judgement, the Group established the values
+used for different scenarios. In addition to the base economic scenario, the Group also considers other
+possible scenario and relative weightings. The scenario is set, by analysing of each major product structure,
+to ensure non-linearity is considered. The Group regularly reassess the number of scenarios and their
+attributes. In 2018, the Group combined statistical analysis to determine the weights of different scenarios,
+and also considered the range of possible outcomes represented by each scenario, and determined the
+final macroeconomic assumptions and weights to measure the relevant expected credit loss.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 279
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+The Group set quantitative and qualitative criteria to judge whether the credit risk has SICR after initial
+recognition. The judgement criteria mainly includes the PD changes of the debtors, changes of credit risk
+categories and other indicators of SICR, etc. In the judgement of whether the credit risk has SICR after
+initial recognition, the Group has not rebutted the 30 days past due as presumption of SICR.
+Parameters of ECL model
+Judgement of significant increase in credit risk ('SICR') (continued)
+(3) CREDIT RISK (CONTINUED)
+The Group considers the credit risk characteristics of different financial instruments when determining if
+there is significant increase in credit risk. For financial instruments with or without significant increase in
+credit risk, 12-month or lifetime expected credit losses are provided respectively. The expected credit loss
+is the result of discounting the product of EAD, PD and LGD.
+i)
+ii)
+iii)
+Exposure at Default (EAD): EAD is based on the amounts the Group expects to be owed at the time of
+default, over the next 12 months or over the remaining lifetime.
+Probability of Default (PD): The PD represents the likelihood of a borrower defaulting on its financial
+obligation, either over the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the
+obligation.
+Loss given Default (LGD): LGD represents the Group's expectation of the extent of loss on a defaulted
+exposure. LGD varies by type of counterparty, type and seniority of claim and availability of collateral
+or other credit support. LGD is expressed as a percentage loss per unit of exposure at the time of
+default (EAD). LGD is calculated on a 12-month or lifetime basis.
+The Lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity profile
+looks at how defaults develop on a portfolio from the point of initial recognition throughout the Lifetime.
+The maturity profile is based on historical observed data and is assumed to be the same across all assets
+within a portfolio and credit grading band. This is supported by historical analysis.
+Judgement of significant increase in credit risk ('SICR')
+Under IFRS 9, when considering the impairment stages for financial assets, the Group evaluates the credit
+risk at initial recognition and also whether there is any significant increase in credit risk for each reporting
+period.
+The Group considers various reasonable supporting information to judge if there is significant increase
+in credit risk, including the forward-looking information, when determining the ECL staging for financial
+assets. Major factor being considered include regulatory and operating environment, internal and external
+credit ratings, solvency, and operational capabilities. The Group could base on individual financial
+instruments or portfolios of financial instruments with similar credit risk characteristics to determine
+ECL staging by comparing the credit risks of the financial instruments at the reporting date with initial
+recognition.
+278
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(b) Expected credit loss (continued)
+For the year ended 31 December 2018
+836,462
+850,620
+banks and other financial
+institutions - due from and
+placements with banks and
+other financial institutions
+Assets purchased under
+31 December 2017
+Past due but not impaired
+31 December 2017
+305,986
+40,974
+34,358
+29,051
+21,984
+20,432
+18,434
+17,839
+16,579
+16,343
+Cash and amounts due from
+16,070
+(in RMB million)
+China Minsheng Banking Corp. Ltd.
+Others
+(3) CREDIT RISK (CONTINUED)
+(a) Credit risk management (continued)
+Credit quality of amounts due from banks and other financial institutions (continued)
+(in RMB million)
+PBC
+Top five commercial banks
+Bank of China Limited
+Bank of Communications Co., Ltd.
+Industrial and Commercial Bank of China Limited
+Industrial Bank Co., Ltd.
+China Bohai Bank Co., Ltd.
+Other major banks and financial institutions
+China Construction Bank Corporation
+Bank of Shanghai Limited
+China Zheshang Bank Co., Ltd.
+Agricultural Bank of China Limited
+Aging analysis of financial assets
+Individual customers
+Transfer
+Not due
+and not
+impaired
+1,643,868
+11,151
+6,454
+14,761
+32,366
+28,952
+1,705,186
+Including:
+Corporate customers
+807,406
+5,978
+3,587
+14,705
+24,270
+18,944
+customers
+802,127
+Loans and advances to
+59
+Overdue
+Less than
+30 days
+Overdue
+31 to
+90 days
+Overdue
+More than
+90 days
+Total past
+due but not
+impaired
+Impaired
+Total
+189,268
+1,400
+1,400
+52
+190,720
+reverse repurchase
+agreements
+99,251
+59
+99,310
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+264,077
+(b) Expected credit loss (continued)
+29,694
+1,929,842
+1,660,864
+Accounts receivable
+21,980
+620
+198
+22,798
+72,061
+Finance lease receivable
+161,723
+3,080
+411
+165,214
+112,028
+37,254
+Financial assets held under
+1,862,894
+Loans and advances to
+285,959
+285,959
+318,236
+Debt financial assets at
+fair value through other
+comprehensive income
+310,017
+43
+841
+310,901
+Financial assets at amortized
+cost
+2,061,651
+5,524
+7,976
+2,075,151
+customers
+insurance operations
+resold agreements
+94
+354,755
+5,557,859
+The Group closely monitors collateral of credit-impaired financial assets.
+As at 31 December 2018, the fair value of collateral of credit-impaired loans and advances to customers
+is RMB38,007 million. The fair value of collateral of credit-impaired financial assets at amortized cost is
+RMB13,935 million.
+282
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+The following tables explain the changes in the gross carrying amount and loss allowance of the main
+financial assets between the beginning and the end of the annual period due to these factors:
+Stages transfers
+Net increase/
+(3) CREDIT RISK (CONTINUED)
+397,032
+5,814,126
+92,543
+40,167
+4,751
+51,366
+314
+92,951
+99,296
+Fixed maturity investments
+(excluding measured as
+FVPL)
+Other assets
+76,754
+Subtotal
+5,331,045
+46,615
+39,434
+76,754
+5,417,094
+2,312,837
+143,891
+5,203,104
+Off-balance sheet
+Total
+733
+and statutory deposits for
+391,548
+5,722,593
+457,524
+ECL impairment provision and other liabilities related to ECL recognized in
+the consolidated balance sheet
+Difference-amount
+Difference-percentage
+280
+Annual Report 2018
+31 December 2018
+67,177
+75,168
+(7,991)
+-11%
+Ping An Insurance (Group) Company of China, Ltd.
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+Credit exposure
+Without considering the impact of collateral and other credit enhancements, for on-balance sheet assets,
+the maximum exposures are based on net carrying amounts as reported in the consolidated financial
+statements. The Group also assumes credit risk due to credit commitments and financial guarantee
+contracts. The details are disclosed in Note 59. (3).
+loan commitment from stage 2 to stage 1
+Please refer to Note 25. (2) and (5) for an analysis of concentration of loans and advances by industry and
+geographical region.
+The total amount of ECL impairment provision and other liabilities related to ECL
+under assumption of reclassification of financial assets and
+The following table shows the changes of ECL impairment provision and other liabilities related to ECL
+assuming the financial assets and loan commitment in stage 2 reclassified to stage 1 due to significant
+change in credit risk.
+Forward-looking information (continued)
+483,891
+The impact of these economic indicators on PD and LGD varies to different businesses. The Group
+comprehensively considers internal and external data, expert forecasts and statistical analysis to determine
+the relationship between these economic indicators with PD and LGD. The Group evaluates and forecasts
+these economic indicators at least annually, provides the best estimates for the future, and regularly
+evaluates the results.
+In 2018, the Group considered different macroeconomic scenarios. The key macroeconomic assumptions
+used to estimate expected credit losses are listed below.
+GDP year on year percentage change
+CPI
+year on year percentage change
+PMI
+6.2%-6.6%
+2.0%-3.0%
+49.5%-51.1%
+Broad measure of money supply (M2) – year on year percentage change
+-
+Similar to other economic forecasts, the estimates of economic indicators forecasting have high inherent
+uncertainties, actual results may have significant difference with estimates. The Group considered the
+estimates above represented the optimal estimation of possible outcomes.
+Sensitivity analysis
+Expected credit losses are sensitive to the parameters used in the model, the macroeconomic variables of
+the forward-looking forecast, the weight probabilities in the three scenarios, and other factors considered
+in the application of expert judgement. Changes in these input parameters, assumptions, models, and
+judgments will have an impact on the significant increase in credit risk and the measurement of expected
+credit losses.
+The banking business of the Group assumed that if the weight of the upside scenario increased by 10% and
+the weight of the base scenario reduced by 10%, the Group's ECL impairment provision on 31 December,
+2018 would be reduced by RMB571 million; if the weight of the downside scenario increased by 10% and the
+weight of the base scenarios reduced by 10%, the Group's ECL impairment provision would be increased by
+RMB814 million.
+(in RMB million)
+Collateral and other credit enhancements
+7.9%-9.7%
+The main types of collateral obtained are as follows:
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+The following table presents the credit risk exposure of the financial assets under the scope of expected
+credit loss. Without considering guarantee or any other credit enhancement measures, for on-balance sheet
+assets, the maximum credit risk exposure is presented as the net carrying amount of the financial assets:
+(in RMB million)
+Net carrying amount
+31 December 2018
+Stage 3
+31 December 2017
+Maximum credit
+risk exposure
+Stage 1
+Stage 2
+Cash and amounts due from
+banks and other financial
+institutions
+Balances with the Central Bank
+The amount and type of collateral required depends on an assessment of the credit risk of the
+counterparty. Policies are established regarding to the selection of types of collateral and valuation
+parameters.
+457,524
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+Maximum credit
+risk exposure
+Management monitors the market value of the collateral, and requires additional collateral when needed
+according to contracts, when assessing the adequacy of impairment.
+for policy loans, collaterals are cash value of policies;
+for commercial loans, collaterals are real estate properties, inventories, equity investments and trade
+receivables, etc.;
+for retail loans to individuals, collaterals are residential properties mortgages.
+It is the Group's policy to dispose collateral orderly. The proceeds are used to repay all or part of the
+outstanding balance. Generally, the Group would not use the collateralised assets for business purpose.
+The carrying amount of loans and advances that would otherwise be past due or impaired and whose terms
+have been renegotiated is as follows:
+Loans and advances to customers
+(in RMB million)
+Annual Report 2018
+31 December 2018
+31 December 2017
+23,039
+26,672
+Ping An Insurance (Group) Company of China, Ltd. 281
+for reverse repurchase transactions, collaterals are quoted securities;
+FINANCIAL STATEMENTS
+Operating ROEV of the life and health insurance business
+Change
+(pps)
+2017
+2018
+standards for
+(%)
+Operating return on embedded value (Operating ROEV)
+23.7
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Operating ROEV of the Group
+26.7
+The Group follows the International Financial Reporting Standards 9 - Financial Instruments (the "new
+accounting standards") from January 1, 2018. The insurance subsidiaries continue to follow the old
+standards for financial instruments when preparing their respective statutory financial statements
+because they qualify for a temporary exemption. In accordance with the Group's accounting policies,
+the insurance subsidiaries separately prepare financial statements and notes under the new standards
+for Group consolidation purposes. Reconciliations between net profit attributable to shareholders of the
+parent company in the insurance business's statutory financial statements and statements under the new
+standards are presented below to allow comparison with peers.
+financial instruments
+30.8
+35.5
+(4.7)
+Other information about insurance business's net profit attributable to shareholders of the parent
+company
+(in RMB million)
+Profit attributable to
+shareholders of the
+parent company
+in statutory financial
+statements under the
+18
+old accounting
+(3.0)
+(0.1)
+11.7
+21.9
+19.5
+22.3
+Investment income
+business
+(2.8)
+Fintech & healthtech
+Fintech & healthtech
+business
+79,541
+50,679
+57.0
+business
+22.0
+10.8
+Other businesses and
+Other businesses and
+elimination
+(6,949) (13,382)
+The Group
+556,508 473,351
+(48.1)
+17.6
+elimination
+N/A
+N/A
+N/A
+The Group
+(0.9)
+adjustments (1)
+Annual Report 2018
+financial statements
+43.2
+Notes: (1) Adjustments mainly arise from changes in classification, measurement, and impairment of financial assets under the new
+accounting standards for financial instruments.
+(2) In accordance with rules for transition to the new accounting standards for financial instruments, the Company does not need
+to restate comparable figures for 2017.
+Ping An Insurance (Group) Company of China, Ltd. 19
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Life and Health Insurance Business
+In 2018, operating ROEV of the life and health insurance business was
+30.8%. As the Company continued to optimize the business mix amid
+industry restructuring, value of new business (NBV) rose 7.3% year on
+year to RMB72,294 million. NBV rose 16.9% year on year in the second half
+of 2018 versus 0.2% in the first half. Agent channel NBV rose 5.9% year on
+year driven by a 4.8% increase in average number of agents per month and
+a 1.1% rise in annual NBV per agent. Overall NBV margin reached 43.7%,
+up 4.4 pps year on year which included a 57.1% NBV margin in the agent
+channel which was up 7.2 pps year on year.
+In 2018, operating profit after tax rose 35.1% year on year to RMB71,345
+million. The residual margin stood at RMB786,633 million, up 27.6% from the
+beginning of 2018.
+Al is widely used within our life and health insurance business. Since Al-
+based screening and interview functionalities went live, they have been
+applied to screening of over 11 million potential agents. Via backtesting on
+historical data, our Al-based screening model achieved an accuracy rate of
+95.4% in identifying agents who would remain with us for 13 months.
+BUSINESS OVERVIEW
+The Company conducts the life and health insurance
+business through Ping An Life, Ping An Annuity, and
+Ping An Health.
+In 2018, China's economy grew steadily despite
+the volatile world economy. As financial reforms
+continued, transformations of the insurance industry
+were in full swing. Remaining customer-centric, the
+Company carried out "product+" and "technology+"
+strategies on the basis of strict compliance and risk
+management. In 2018, NBV of the life and health
+insurance business grew by 7.3% year on year to
+RMB72,294 million. NBV grew by 16.9% year on year
+in the second half of 2018, 16.7 pps faster than in the
+first half. Agent channel NBV rose 5.9% year on year
+driven by a 4.8% increase in the average number of
+agents per month and a 1.1% rise in annual NBV per
+agent. The NBV margin was up 4.4 pps year on year.
+In particular, the NBV margin of the agent channel
+reached 57.1%, up 7.2 pps year on year.
+2018
+2017 Change (%)
+NBV (in RMB million)
+Agent productivity
+and income
+Agent channel NBV
+(in RMB million)
+Average number of
+agents per month
+(in million)
+NBV per agent
+(RMB per agent
+per year)
+Activity rate of
+agents (1) (%)
+New individual life
+insurance policies
+per agent (policies
+per agent per
+month)
+72,294
+67,357
+7.3
+64,401
+60,786
+5.9
+36.3
+1.26
+1.32
+48,965
+70,129
+(8.2)
+62.4 12,215 13,307
+under the new
+accounting standards
+for financial
+instruments (2)
+Life and health
+insurance business
+Property and casualty
+insurance business
+Total of
+insurance business
+2018
+2017 Change (%)
+2018
+2017 Change (%)
+2018
+Profit attributable to
+shareholders of the
+parent company in
+2017 Change (%)
+35,658
+107.0
+13,145
+13,307
+(1.2) 86,970 48,965
+77.6
+(15,911)
+N/A (930)
+N/A (16,841)
+N/A
+57,914
+35,658
+73,825
+31,658
+(2) The impact of one-off non-operating item in 2018 referred to the fair value revaluation gain, as required by the accounting
+standards, of the convertible bonds issued by Lufax Holding to the Group as the consideration of Puhui transaction. The fair
+value of the convertible bonds significantly increased due to Lufax Holding's Series C financing. The one-off material item that
+management considered to be non-operating income and expense in 2017 was the financial gain from Ping An Good Doctor's
+restructuring.
+business
+Operating profit attributable to
+non-controlling interests
+696
+65
+9,740
+4
+80
+395
+68
+53
+11,101
+Notes: (1) Short-term investment variance is the variance between the actual investment return and the EV ultimate investment return
+assumption (5%), net of the associated impact on insurance and investment contract liability.
+(3) Numbers may not match totals due to rounding.
+Equity attributable to shareholders of the parent
+Operating ROE
+company
+December
+(in RMB million)
+31, 2018
+December
+31, 2017
+Change
+(%)
+(%)
+2018
+2017
+94,708
+(2,700)
+5,420
+7,108
+4.8
+rate change (C)
+(21,213) -......
+4,532
+(21,213)
+Impact of one-off material
+non-operating items (D)
+10,850(2)
+10,850
+Operating profit (E=A-B-C-D)
+52,824
+13,372
+23,189
+Change
+(pps)
+3,957
+7,503
+5,488
+(2,647)
+105,809
+Operating profit attributable
+to shareholders of the
+parent company
+52,128
+13,307
+13,449
+3,953
+2,043
+2,123
+43,161
+Life and health
+insurance business
+14.7
+17.1
+(2.4)
+Including:
+Including:
+Trust business
+17,717
+19,509
+(9.2)
+Trust business
+16.1
+20.6
+(4.5)
+Securities business
+27,976
+25,842
+8.3
+Securities business
+5.9
+8.0
+(2.1)
+Other asset
+Other asset
+management
+management
+Asset management business
+15.4
+77,009
+88,854
+178,824
+160,450
+11.5
+insurance business
+40.7
+37.6
+3.1
+Property and casualty
+Property and casualty
+insurance business
+77,014
+69,804
+Life and health
+10.3
+16.7
+20.0
+(3.3)
+Banking business
+139,224
+128,791
+8.1
+Banking business
+11.5
+11.6
+(0.1)
+Asset management business
+insurance business
+48,789
+premium
+1.1
+(20,088)
+32.9
+Operating profit after
+tax (G)
+71,345
+52,824
+35.1
+(12,853)
+4,532
+N/A
+265
+58,757
+(21,213)
+N/A
+36,143
+62.6
+Short-term investment
+variance (3) (H)
+Impact of discount
+rate change (1)
+Net profit (J=G+H+I)
+Notes: (1) Return on net worth is the investment return
+on shareholder equity based on the EV ultimate
+investment return assumption (5%).
+(2) Spread income is the expected investment return
+from assets backing contract liability based on the EV
+ultimate investment return assumption (5%) exceeding
+the interest required on contract liability.
+(3) Short-term investment variance is the variance
+between actual investment return and the EV ultimate
+investment return assumption (5%), net of associated
+relevant impact on insurance and investment contract
+liability.
+(4) Figures may not match totals due to rounding.
+As at December 31, 2018, the residual margin of the
+life and health insurance business was RMB786,633
+million, up 27.6% from the beginning of 2018 due to
+contribution from new business.
+Annual Report 2018
+(in RMB million)
+2018
+Opening residual margin
+Contribution from new
+616,319
+(26,698)
+454,705
+34.5
+98,043
+ANALYSIS OF OPERATING PROFIT AND PROFIT
+SOURCES
+Due to the long-term feature of the majority of the
+life and health insurance business, the Company
+introduced the measure of operating profit to
+more appropriately evaluate business performance.
+Operating profit after tax is based on net profit
+from financial statements, excluding items that are
+of short-term, volatile or one-off nature, including:
+Short-term investment variance, which is the
+variance between actual investment return of
+the life and health insurance business and the
+EV ultimate investment return assumption, net
+of associated relevant impact on insurance and
+investment contract liability. The investment
+return of the life and health insurance business
+is locked at 5% after excluding the short-term
+investment variance;
+The impact of discount rate (1) change is the
+effect on insurance contract liability of the life
+and health insurance business due to changes
+in the discount rate;
+Impacts of one-off non-operating items are
+material items that management considered to
+be non-operating income and expenses.
+Note: (1) Refer to "Significant Accounting Policies" in the Notes
+to Consolidated Financial Statements in the 2018 Annual
+Report for information about the discount rate.
+The operating profit after tax which excludes
+fluctuations of the above non-operating items could
+provide a clearer and more objective representation
+of the Company's business performance and trend.
+The operating profit of the life and health insurance
+business is analyzed below:
+(in RMB million)
+2018
+2017 Change (%)
+Release of residual
+margin (A)
+62,287
+49,811
+25.0
+Return on net worth (1) (B)
+Spread income (2) (C)
+Operating variance and
+others (D)
+8,959
+7,357
+21.8
+5,048
+5,637
+(10.4)
+21,749
+10,108
+115.2
+Operating profit before
+tax (E=A+B+C+D)
+Income tax (F)
+72,912
+2017 Change (%)
+35.5
+business
+177,485
+(%)
+31, 2018
+Ping An Annuity
+December
+31, 2017
+Change
+December
+(%)
+31, 2018
+Ping An Health
+December
+31, 2017
+Change
+(%)
+Core capital
+741,727
+680,450
+9.0
+8,677
+7,895
+9.9
+1,690
+1,254
+34.8
+Actual capital
+764,727
+703,450
+8.7
+Impact of discount
+31, 2017
+December
+Change
+December
+168,426
+5.4
+Expected interest growth
+28,498
+22,642
+25.9
+Release of residual margin
+Lapse variances and others
+(62,287) (49,811)
+26,617
+25.0
+20,357
+30.8
+MANAGEMENT DISCUSSION AND ANALYSIS
+Closing residual margin
+616,319
+27.6
+Note: Figures may not match totals due to rounding.
+Ping An Insurance (Group) Company of China, Ltd. 23
+24
+Business Analysis
+Life and Health Insurance Business
+SOLVENCY MARGIN
+As at December 31, 2018, the solvency margin ratios of Ping An Life, Ping An Annuity and Ping An Health
+met regulatory requirements. The solvency margin ratios of Ping An Life, Ping An Annuity and Ping An
+Health declined from the beginning of 2018 due to dividend distribution and business development.
+Ping An Life
+(in RMB million)
+December
+31, 2018
+786,633
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+22
+ratio
+91.4
+91.8 -0.4 pps
+(in RMB million)
+Distribution
+channel
+Premium
+income Surrender
+25-month persistency
+ratio
+88.2
+88.0
+0.2 pps
+Yingyue Rensheng
+Sales agents,
+Annuity (participating)
+Bancassurance
+38,974
+165
+Zunhong Rensheng
+Sales agents,
+December
+31, 2018
+December
+31, 2017
+Change
+(%)
+Endowment Insurance
+(participating)
+Bancassurance
+13-month persistency
+Change
+2017
+2018
+62.6
+65.5 -2.9 pps
+1.22
+1.22
+(RMB per agent
+per month)
+6,294
+6,250
+0.7
+Agent income
+20
+20
+Annual Report 2018
+19,350
+Note: (1) Activity rate of agents = annual total of monthly agents
+who issued policies/annual total of monthly onboard
+agents
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Life provides individuals and groups with
+life insurance products through its nationwide
+service network of 42 branches (including 7
+telemarketing centers) and over 3,300 business
+outlets.
+Ping An Life maintained steady business growth
+under the value creation strategy. Ping An Life
+continued to develop the agent channel and boost
+the written premium. As at December 31, 2018, sales
+agents increased by 2.3% from the beginning of 2018
+to 1.42 million. The bancassurance channel improved
+its business mix. The telemarketing channel
+maintained a large market share. The internet
+channel further optimized its product mix.
+Ping An Life developed protection products,
+optimized services, and diversified service
+scenarios under the "product+" strategy. Ping An
+Life continued to prioritize the protection products.
+On the one hand, Ping An Life tapped various
+market segments, launched the premium-returned
+critical illness insurance product "Fu Man Fen" for
+adults, and reached higher-end customers of critical
+illness insurance. On the other hand, Ping An Life
+strengthened competitiveness of its protection
+products by increasing the number of covered
+critical illnesses to more than 80. Ping An Life
+continued to further the "product +" strategy. Ping
+An Life increased interactions between customers,
+agents and itself by optimizing the reward rules for
+"Ping An RUN" and creating more service scenarios.
+In this way, Ping An Life improved customer
+experience, increased customer stickiness, and
+enhanced customer development.
+Ping An Life pursued Al-powered transformations
+under the "technology+” strategy. In sales
+management, Ping An Life applied Al-based
+solutions to multiple scenarios including agent
+team expansion, training, team management, and
+sales models. Ping An Life developed a set of
+innovative Al-enabled solutions to agent retention
+and productivity promotion. Since Al-based
+screening and interview functionalities went live,
+they have been applied to screening of over 11
+million potential agents. Moreover, via backtesting
+on historical data, our Al-based screening model
+achieved an accuracy rate of 95.4% in identifying
+agents who would remain with us for 13 months.
+In customer development, the upgraded "Jin Guan
+Jia" app can recommend products according to
+customer profiles and facilitate management of
+customer segments. As of the end of 2018, the
+"Jin Guan Jia" app had 184 million registered
+users and over 26 million monthly active users.
+In customer services, Al has enabled Ping An
+Life to significantly reduce turnaround times of
+underwriting, policy administration and claims.
+by upgrading "Smart Customer Services." Of the
+nearly 20 million insurance applications received as
+of December 31, 2018, 96% were underwritten by AI
+automatically, even in real time. Of the nearly 40
+million online policy administration cases handled
+via "Smart Customer Services," 90% were processed
+by Al automatically with a daily average of around
+24,000 cases and a shortest turnaround time of
+three minutes. An innovative task-based robot was
+launched, replacing traditional menu clicks with
+smart interactive Q&As; the robot was accessed
+more than 100,000 times per day on average. Ping An
+Life continued to upgrade the "Smart Quick Claim"
+service. Of the 3.81 million claims, 60% were settled
+within 30 minutes, the shortest turnaround time
+being 26 seconds. Designated family doctors were
+assigned to nearly 60% or 33 million of customers,
+handling 2.2 online consultations per customer.
+All the customers enrolled after 2016 have been
+assigned family doctors. In 2018, Ping An Life's net
+promoter score (NPS) increased by 6.0 pps from the
+beginning of 2018. Going forward, Ping An Life will
+apply Al to more scenarios to improve customer
+services and business management.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 21
+Business Analysis
+Life and Health Insurance Business
+Business data of Ping An Life are as follows:
+OPERATIONS OF INSURANCE PRODUCTS
+Top five products of Ping An Life in terms of
+premium income are presented below.
+(%)
+Ping An Insurance (Group) Company of China, Ltd.
+48,243
+163
+(in thousand)
+14,166
+51
+Number of individual
+life insurance
+sales agents
+1,417,383 1,385,987
+2.3
+Number of group
+insurance sales
+representatives
+4,937
+4,916
+0.4
+Number of
+bancassurance
+relationship managers
+3,151
+3,159
+(0.3)
+Number of
+telemarketing agents
+36,344
+29,837
+21.8
+Note: (1) The number of retail customers is counted on the basis
+of the number of holders of in-force policies. As at
+December 31, 2018, individual policyholders and insureds
+totaled 95.946 million.
+(participating)
+Distribution network
+Bancassurance
+Annuity for Adults
+Ping An Fu Whole Life
+Insurance
+Sales agents,
+Bancassurance
+16,869
+301
+Retail (1)
+57,309
+52,004
+10.2
+-0.6 pps
+Sales agents,
+Corporate
+Number of customers
+2,362
+14.5
+Annuity for Children
+Bancassurance
+(participating)
+15,570
+44
+Total
+59,671
+54,066
+10.4
+Xiyue Rensheng
+Sales agents,
+2,062
+4,532
+Commission expenses on insurance operations
+(in RMB million)
+Short-term investment
+Life insurance and others
+21.0
+84,870
+102,697
+Guangdong
+1.1
+7,130
+7,205
+Accident insurance
+2017 Change (%)
+2018
+(in RMB million)
+23.1
+26,159
+32,198
+Health insurance
+2017 Change (%)
+2018
+8,677
+The written premium of the life and health insurance
+business is analyzed below by region:
+Life and Health Insurance Business
+Business Analysis
+26
+Ping An Insurance (Group) Company of China, Ltd. 25
+Annual Report 2018
+44,739
+Notes: (1) Adjustments mainly arise from changes in classification,
+measurement, and impairment of financial assets under
+the new accounting standards for financial instruments.
+(2) In accordance with rules for transition to the new
+accounting standards for financial instruments, the
+Company does not need to restate comparable figures
+for 2017.
+44,465
+Shandong
+570,523
+Total
+19.2
+193,830
+231,007
+Sub-total
+13.5
+26,431
+29,988
+Beijing
+20.3
+26,179
+31,498
+Zhejiang
+17.6
+27,201
+31,999
+Jiangsu
+8.2
+77,754
+84,142
+Total
+19.5
+29,149
+34,825
+0.6
+for financial instruments
+Profit in statutory financial
+statements under the old
+62.6
+Accident & short-term
+2017 Change (%)
+2018
+36.1
+66,205
+90,105
+Long-term health insurance
+26.8
+79,218
+100,449
+Traditional life insurance
+12.4
+98,790
+111,029
+Universal insurance
+10.9
+187,374
+207,856
+Participating insurance
+Change (%)
+2017
+(in RMB million)
+2018
+The written premium of the life and health insurance
+business is analyzed below by product type:
+(in RMB million)
+health insurance
+43,903
+34,537
+27.1
+36,143
+58,757
+instruments (2)
+standards for financial
+under the new accounting
+Profit in financial statements
+19.9
+475,895
+570,523
+Total
+N/A
+(15,829)
+475,895
+adjustments(1)
+(5.1)
+1,582
+1,502
+Investment-linked insurance
+106.4
+36,143
+74,586
+accounting standards
+91.5
+8,189
+15,679
+Annuity
+Investment income
+19.9
+In 2018, the commission expense of the insurance
+business (mainly paid to the Company's sales
+agents) increased by 8.2% year on year due to
+expansion of the insurance business.
+Administrative expenses
+Total Investment Income
+Interest credited to
+(6.2)
+198,428
+186,043
+reserves
+N/A
+96
+(200)
+investment assets
+Net increase in insurance
+Impairment losses on
+25.3
+13,129
+16,445
+Policyholder dividends
+N/A
+640
+(36,067)
+value changes
+32.6
+(2,001)
+(2,653)
+contracts
+Profit or loss from fair
+79,384
+113,811
+(30.2)
+policyholder contract
+3.6
+6.1
+-2.5 pps
+Total
+323,494 320,957
+0.8
+Claims paid grew by 21.5% year on year, primarily
+due to continued growth in the short-term health
+insurance business.
+Annuity payments increased sharply year on year as
+some products matured in 2018.
+Maturity and survival benefits decreased by 19.9%
+year on year because survival benefits of some
+insurance products peaked in 2017.
+Death, injury and medical care benefits were
+26.8% higher year on year, driven by growth in the
+long-term health insurance business.
+Policyholder dividends climbed 25.3% year on year
+as a result of growth in the participating insurance
+business.
+Net increase in insurance reserves decreased by
+6.2% year on year, mostly due to business growth
+and movement of the benchmarking yield curve for
+measuring reserves for insurance contracts.
+expenses of insurance
+Interest credited to policyholder contract deposits
+was down 27.1% year on year as lower investment
+income decreased the interest payment on universal
+insurance accounts.
+Notes: (1) Net investment income includes interest income from
+deposits and debt financial assets, dividend income
+from equity financial assets, operating lease income
+from investment properties, and the share of profits
+and losses of associates and jointly controlled entities.
+(2) Realized gains include realized capital gains from
+securities investments.
+(3) Net exchange gains or losses on investment assets
+denominated in foreign currencies are excluded from
+computation of the above yields. Average investment
+assets used as the denominator are computed in line
+with principles of the Modified Dietz method.
+In 2018, the net investment yield of the life and
+health insurance business was 5.2%, down 0.6 pps
+year on year, largely because of lower dividend
+income from equity investments and the larger
+scale of the portfolio. In 2018, the domestic and
+international capital markets were quite volatile.
+After the life and health insurance subsidiaries
+implemented the new accounting standards for
+financial instruments, assets carried at fair value
+through profit or loss increased sharply, resulting
+in wider fluctuation in gains or losses from fair
+value changes. As a result, the total investment
+income dropped by 30.2% year on year and the total
+investment yield declined 2.5 pps to 3.6%.
+INCOME TAX
+The income tax increased sharply year on year due
+to rising taxable income driven by business growth.
+Ping An Insurance (Group) Company of China, Ltd.
+5.2
+Net investment yield (3) (%)
+Total investment yield (3) (%)
+(27.1)
+23,873
+17,407
+deposits
+Annual Report 2018
+Net profit reconciliations between the life and health
+insurance businesses' statutory financial statements
+and statements under the new accounting standards
+for financial instruments are presented below to
+allow comparison with peers.
+(71.8)
+1,482
+15,836
+Claims paid
+insurance contracts
+(29.5)
+61
+43
+receivables and others
+Claim expenses of
+Impairment losses on
+5.4
+19.0
+2017 Change (%)
+46,766
+742
+883
+Tax and surcharges
+5.0
+20,519
+21,539
+Surrenders
+49,276
+Operating expenses
+2017 Change (%)
+2018
+(in RMB million)
+Claims and policyholders' benefits
+2018
+(in RMB million)
+13,032
+21.5
+Total
+50,202
+Realized gains (2)
+Reinsurer's share of claim
+5.9
+107,827
+114,169
+Net investment income (1)
+26.8
+18,897
+23,966
+medical care benefits
+Death, injury and
+Change (%)
+5,248
+2017
+Total Investment Income
+(in RMB million)
+(19.9)
+27,709
+22,186
+benefits
+Maturity and survival
+208.3
+7,371
+22,725
+Annuities
+5.5
+47,569
+2018
+variance(¹) (B)
+Notes: (1) Administrative expenses include the administrative
+expenses, taxes and surcharges on investment
+operations and impairment losses on receivables and
+others under the segmented income statement.
+(2) Total investment income includes interest revenue from
+non-banking operations, investment income, share of
+profits and losses of associates and jointly controlled
+entities, impairment losses on investment assets, and
+interest expenses on assets sold under agreements
+to repurchase and placements from banks and other
+financial institutions under the segmented income
+statement.
+475,895
+Annual Report 2018
+265
+265
+7,236(2)
+7,236
+71,345 12,274
+24,818
+3,012
+1,680
+9,017
+7,748 (4,090) 125,804
+70,320
+12,215
+14,394
+3,008
+1,599
+8,264
+6,770
+(3,996) 112,573
+1,026
+59
+10,424
+4
+81
+753
+Operating profit attributable to
+non-controlling interests
+978
+parent company
+Operating profit attributable
+59 10,424
+4
+81
+753
+978
+(94)
+13,048
+Net profit (A)
+58,757
+12,274
+24,818
+3,012
+1,680
+9,017 14,984
+(4,090) 120,452
+Excluding:
+Short-term investment
+variance (¹) (B)
+(12,853)
+(12,853)
+Impact of discount
+rate change (C)
+Impact of one-off material
+non-operating items (D)
+Operating profit (E=A-B-C-D)
+to shareholders of the
+(94)
+13,231
+Ping An Insurance (Group) Company of China, Ltd.
+16,270
+(2,700)
+89,088
+Net profit attributable to
+non-controlling interests
+485
+65
+9,740
+4
+80
+395
+68
+53
+10,890
+Net profit (A)
+36,143
+13,372
+23,189
+3,957
+2,123
+7,503
+16,338
+(2,647)
+99,978
+Excluding:
+7,108
+2,043
+3,953
+13,449
+17
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Performance Overview
+2017
+Life and
+Property
+health and casualty
+insurance
+insurance
+Banking
+business
+business
+843
+Trust
+business
+Fintech &
+healthtech
+Other
+businesses
+business
+and
+elimination
+The Group
+(in RMB million)
+Net profit attributable to
+shareholders of the
+business
+parent company
+35,658
+13,307
+Other asset
+Securities management
+business business
+non-controlling interests
+Net profit attributable to
+107,404
+Profit before tax
+48.4
+6,741
+10,001
+Bancassurance channel
+311.4
+(1,427)
+(5,870)
+expenses
+31.7
+268,259
+353,343
+Agent channel
+Other net revenue and
+32.8
+295,165
+391,956
+Renewed business
+(30.2)
+113,811
+79,384
+Total investment income (2)
+2.1
+12,063
+12,322
+81,259
+50,671
+60.4
+Income tax
+570,523
+Total
+90.6
+32
+61
+Renewed business
+8.2
+20,252
+21,907
+New Business
+8.3
+20,284
+premium
+21,968
+62.6
+36,143
+58,757
+Net profit
+41.9
+20,165
+28,612
+and others
+54.9
+Telemarketing, internet
+(14,528)
+(22,502)
+Group business
+19.9
+5.5
+(50,202)
+Net profit attributable to
+2018
+Life and
+Property
+health and casualty
+insurance
+business
+insurance
+business
+Banking
+business
+Trust
+business
+Other asset
+Securities management
+business
+business
+Fintech &
+healthtech
+business
+Other
+businesses
+and
+elimination
+The Group
+shareholders of the
+parent company
+57,914
+12,215
+14,394
+3,008
+1,599
+8,264
+14,006
+(3,996)
+(in RMB million)
+In 2018, the Group's operating profit attributable to shareholders of the parent company grew by 18.9%
+year on year to RMB112,573 million. The basic operating earnings per share was RMB6.31, up by 18.8% year
+on year. The life and health insurance business's operating profit attributable to shareholders of the parent
+company rose by 34.9% year on year to RMB70,320 million.
+The operating profit after tax which excludes fluctuations of the above non-operating items can provide a
+clearer and more objective representation of the Company's business performance and trend.
+Note: (1) Refer to "Significant Accounting Policies" in the Notes to Consolidated Financial Statements in the 2018 Annual Report for
+information about the discount rate.
+Administrative expenses (1)
+Including: regular
+8.2
+(77,754)
+(84,142)
+insurance operations
+30.0
+15,680
+20,384
+and others
+Commission expenses of
+Telemarketing, internet
+(47,569)
+0.8
+(323,494)
+benefits
+Claims and policyholders'
+(11.5)
+4,803
+4,252
+21.1
+OPERATING PROFIT OF THE GROUP
+Due to the long-term feature of the majority business of the life and health insurance business, the measure
+of operating profit has been applied to more appropriately evaluate business performance. Operating profit
+after tax is based on net profit from financial statements, excluding items that are of short-term, volatile or
+one-off nature, including:
+Short-term investment variance, which is the variance between the actual investment return of the life
+and health insurance business and the EV ultimate investment return assumption, net of associated
+relevant impact on insurance and investment contract liability. The investment return of the life and
+health insurance business is locked at 5% after excluding the short-term investment variance;
+The impact of discount rate (1) change is the effect on insurance contract liability of the life and health
+insurance business due to changes in the discount rate;
+Impacts of one-off non-operating items are material items that management considered to be
+non-operating income and expenses.
+(320,957)
+7,895
+Xiyue Rensheng
+1,690
+(93,169)
+(4.3)
+136,657
+130,715
+Agent channel
+linked products
+and investment-
+(2.4)
+160,446
+156,599
+(81,367)
+New Business
+separated out
+20.4
+455,611
+548,555
+Retail business
+Less: Premium deposits
+Change (%)
+2017
+2018
+(in RMB million)
+from universal life
+14.5
+Including: regular
+Premium income
+9.9
+384,567
+465,583
+Earned premium
+Including: regular
+21.5
+388,642
+472,359
+Gross written premium
+(32.2)
+8,109
+5,500
+Bancassurance channel
+N/A
+659
+Reinsurance premium income
+(3.1)
+128,437
+124,394
+premium
+21.4
+388,642
+471,700
+(3.9)
+(5,886)
+5.8
+insurance risk transfer
+solvency margin
+Comprehensive
+327.2 -21.7 pps
+305.5
+265.1 -15.3 pps
+249.8
+226.5 -14.3 pps
+212.2
+ratio (%) (regulatory
+requirement ≥50%)
+Core solvency margin.
+ratio (%) (regulatory
+44.4
+16.6
+2,978
+3,473
+16.3
+300,453
+349,513
+Minimum capital
+34.8
+(5,654)
+1,254
+553
+requirement ≥100%)
+383
+234.1 -15.3 pps
+significant
+of policies without
+218.8
+The written premium of the life and health insurance
+business is analyzed below by policyholder type and
+channel:
+Written premium
+Less: Premium deposits
+19.9
+Change (%)
+2017
+570,523
+Written premium
+475,895
+Notes: (1) Core solvency margin ratio = core capital/minimum capital; comprehensive solvency margin ratio = actual capital/minimum
+capital.
+(in RMB million)
+ANALYSIS OF FINANCIAL STATEMENTS
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+265.1 -15.3 pps
+Annual Report 2018
+(2) For details of subsidiaries' solvency margin, please visit the Company's website (www.pingan.cn).
+(3) Figures may not match calculation due to rounding.
+305.5
+327.2 -21.7 pps
+249.8
+2018
+Debt financial assets at fair value through other
+229,502
+85,138
+365,179
+510,171
+Interest rate swaps
+824,939
+Derivative financial assets
+Currency forwards and swaps
+Others
+280,037
+85,266
+4
+Funds
+Wealth management investments and
+89,640
+10,346
+79,294
+Stocks
+200,753
+128
+68,764
+131,861
+169,367
+151,024
+18,343
+12,013
+other investments
+12,013
+Stocks
+7,622
+1,722
+Unlisted equity investments
+66,682
+66,682
+Preferred shares
+154,235
+154,235
+Bonds
+comprehensive income
+Equity financial assets at fair value through other
+310,901
+16,751
+258,769
+35,381
+51,587
+16,751
+34,836
+259,314
+223,933
+35,381
+other investments
+Wealth management investments and
+Bonds
+comprehensive income
+21,911
+-
+21,911
+2,276
+2,276
+7,622
+Financial assets at fair value through profit or loss
+For the year ended 31 December 2018
+Level 3 Total fair value
+183,097
+271,673
+183,097
+Other liabilities
+450,142
+8,522
+9,779
+555,701
+8,522
+451,283
+556,875
+9,779
+Bonds payable
+Accounts payable
+1,952,695
+271,673
+2,114,344
+2,090,725
+1,175,568
+940,946
+292,935
+110,136
+571
+28,391
+16,967
+35,743
+28,464
+Other assets
+112,028
+2,170
+1,925,623
+The assets and liabilities of the investment-linked business are not included in the above financial assets
+and liabilities.
+Fair value of financial assets and liabilities not carried at fair value
+The following describes the methodologies and assumptions used to determine fair values for those
+financial instruments which are not recorded at fair value in the financial statements, i.e., financial assets at
+amortized costs and loans and receivables.
+31 December 2018
+Level 2
+Level 1
+(in RMB million)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments recorded at fair value by level of the fair
+value hierarchy:
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+294
+For Level 3 financial instruments, prices are determined based on the significance of the unobservable
+factors to the overall fair value measurement, and valuation methodologies such as discounted cash flow
+models and other similar techniques.
+For Level 2 financial instruments, valuations are generally using observable market inputs, or recent quoted
+market prices. The valuation providers typically gather, analyze and interpret information related to market
+transactions and other key valuation model inputs from multiple sources, and through the use of widely
+accepted internal valuation models, provide a theoretical quote on various securities. Debt securities are
+classified as Level 2 when they are valued at recent quoted price from Chinese interbank market or from
+public valuation service providers. The fair value of debt investments denominated in RMB is determined
+based upon the valuation results by the China Central Depository & Clearing Co., Ltd. All significant inputs
+are observable in the market.
+Valuation methods for Level 2 and Level 3 financial instruments
+The level of fair value measurement is determined by the lowest level input that is significant to the
+entire measurement. As such, the significance of a particular input should be considered from an overall
+perspective in the fair value measurement.
+Level 3: inputs which are based on parameters other than observable market data (unobservable inputs).
+Level 2: either directly (such as price) or indirectly (such as calculated based on price) other than quoted
+prices included within Level 1 that are observable for the asset or liability;
+Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. A market is regarded
+as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry
+group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring
+market transactions on an arm's length basis. The main quoted market price used for financial assets held
+by the Group is the current bid price. Financial instruments included in Level 1 comprise primarily equity
+investments, fund investments and bond investments traded on stock exchanges and open-ended mutual
+funds;
+The Group uses the following hierarchy for determining and disclosing the fair values of financial
+instruments:
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY
+The fair value of fixed rate financial assets and liabilities carried at amortized cost is estimated by
+comparing market interest rates when they were first recognized with current market rates for similar
+financial instruments. The estimated fair value of fixed interest bearing deposits is based on discounted
+cash flows using prevailing money market interest rates for financial products with similar credit risk and
+maturity. For quoted debts issued, the fair values are determined based on quoted market prices. For those
+debts issued where quoted market prices are not available, a discounted cash flow model is used based on
+a current interest rate yield curve appropriate for the remaining term to maturity and credit spreads.
+Fixed rate financial instruments
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED)
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+1,722
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 293
+Annual Report 2018
+Floating rate loans and advances to customers of the Group are repriced within one year, and the interest
+rates are adjusted according to the statutory interest rate announced by the PBC. Thus, the carrying
+amounts approximate to their fair values.
+For financial assets and financial liabilities that have a short term maturity (less than three months), it is
+assumed that the carrying amounts approximate to their fair values. This assumption is also applied to term
+deposits, and savings accounts without a specific maturity. For other variable rate instruments, adjustment
+are also made to reflect the subsequent changes in the market rate after initial recognition.
+Financial assets and liabilities for which fair value approximates to carrying value
+Financial assets
+154,235
+3,202
+1,722
+259,938
+5,610
+254,328
+Equity securities
+56,935
+5,380
+51,555
+Security investment funds
+221,871
+40
+179,155
+42,676
+Bonds
+Available-for-sale financial assets
+16,192
+1,860
+14,107
+225
+16,192
+1,860
+14,107
+225
+Others
+Currency forwards and swaps
+Interest rate swaps
+Derivative financial assets
+141,250
+8,118
+90,767
+Other equity investments
+42,365
+64,969
+236,228
+9,076
+Total financial liabilities
+14,060
+614
+4,370
+9,076
+Other financial liabilities held for trading
+17,950
+17,950
+2,002
+2,002
+15,848
+15,848
+100
+100
+Others
+Currency forwards and swaps
+Interest rate swaps
+Derivative financial liabilities
+Financial liabilities
+Total financial assets
+932,414
+179,417
+362,073
+390,924
+774,972
+171,299
+255,114
+348,559
+171,259
+66,682
+26,980
+19,832
+Total financial liabilities
+8,477
+Financial liabilities at fair value through profit or loss
+22,247
+22,247
+3,202
+74,753
+6,898
+6,898
+12,147
+12,147
+Others
+Currency forwards and swaps
+Interest rate swaps
+Derivative financial liabilities
+1,445,833
+61,687
+61,687
+165,426
+861,289
+419,118
+3,756
+3,756
+Financial liabilities
+Total financial assets
+Loans and advances to customers measured at fair
+value through other comprehensive income
+other comprehensive income
+institutions measured at fair value through
+Placements with banks and other financial
+222,639
+8,477
+7,148
+7,532
+29,779
+16,975
+Other equity investments
+16,978
+281
+16,697
+Equity securities
+33,491
+970
+10,993
+21,528
+Security investment funds
+63,801
+59,661
+4,140
+Bonds
+Carried at fair value through profit or loss
+Financial assets
+(in RMB million)
+Level 3 Total fair value
+31 December 2017
+Level 2
+Level 1
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 295
+Annual Report 2018
+39,222
+966
+966
+29,624
+1,539,172
+25,389
+Finance lease receivable
+5,505
+85,867
+1,820
+agreements
+Financial assets held under resold
+55,285
+54,547
+1,834
+Policy Loans
+167,784
+6,989
+105,906
+39,773
+Other assets
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+The table below summarizes the remaining contractual maturity profile of the financial assets, financial
+liabilities and insurance contract liabilities of the Group (excluding balances of investment-linked contracts)
+based on undiscounted contractual cash flows/expected cash flows.
+(in RMB million)
+Cash and amounts due from banks and
+other financial institutions
+Balances with the Central Bank and
+Repayable
+Less than
+on demand
+3 months
+3 to 12
+months
+31 December 2018
+1 to 5
+years
+Over 5
+years
+Undated
+(4) LIQUIDITY RISK (CONTINUED)
+53,405
+17,972
+346,681
+brokerage customers
+Customer deposits and payables to
+189,108
+189,108
+-
+repurchase
+Assets sold under agreements to
+19,641
+861
+1,580
+17,193
+7
+profit or loss
+Financial liabilities at fair value through
+826,183
+7,608
+101,944
+231,511 341,198
+143,922
+Due to banks and other financial
+institutions
+8,145,649
+821,308
+102,649
+847
+93,602
+111,666
+410
+14,191
+2,159,941 2,465,765
+16,234
+1,333,491
+1,018,463
+Total
+138,242
+99,348
+89,601
+222,639
+Financial assets at amortized cost
+11,170
+Loans and advances to customers
+29,496
+83,377 334,406
+579,429 617,167
+939,296
+1,682,740
+-
+3,050,989
+589,400
+424,717
+2,240,209
+Premium receivables
+22,440
+20,887
+13,447
+10,344
+32
+-
+67,150
+Accounts receivable
+2,689
+6,729
+7,423
+6,551
+-
+-
+23,392
+222,639
+792,706
+-
+Equity financial assets at fair value
+135,813
+19,299
+482,303
+statutory deposits for insurance
+operations
+24,947
+836
+5,462
+7,405
+-
+248,567
+287,217
+Financial assets at fair value through
+profit or loss
+60,158
+39,097
+100,932
+199,434
+152,196
+350,102
+901,919
+Debt financial assets at fair value through
+other comprehensive income
+480
+15,258
+48,256
+151,191
+178,945
+-
+394,130
+through other comprehensive income
+5,481
+Accounts payable
+491,195
+2,185
+1,888
+428,625
+292,432
+41,554
+Fixed maturity investments
+141
+34,862
+510,594
+2,024
+148,707
+101,731
+138,314
+119,818
+Total
+11,812
+Undated
+1 to 5
+years
+3 to 12
+months
+Less than
+3 months
+Repayable
+on demand
+31 December 2017
+statutory deposits for insurance
+operations
+Balances with the Central Bank and
+other financial institutions
+Cash and amounts due from banks and
+(in RMB million)
+(4) LIQUIDITY RISK (CONTINUED)
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2018
+Over 5
+years
+121
+271,259
+1,202,731
+74,040
+12,760
+51,641
+7,956
+1,683
+Accounts receivable
+45,694
+54
+13,314
+12,371
+15,912
+4,043
+Premium receivables
+1,920,621
+356,122
+564,950
+517,173
+432,182
+50,194
+Loans and advances to customers
+646,290
+546,944
+320,083
+3,504,514
+22,320
+33,307
+15,548
+12,785
+12,317
+Equity investments
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 287
+(1,031)
+Bonds payable
+52,591
+-
+52,591
+Policyholder dividend payable
+56,082
+31,018
+17,789
+5,671
+1,604
+liabilities for policyholders
+Insurance and Investment contract
+73,461
+5,952,795
+-
+(33,974) 5,988,623
+573
+9,779
+-
+-
+2,161,169
+-
+2,208
+341,253
+533,807
+6,784
+3,044
+343
+(2,197)
+Insurance contract liability
+4,015
+65,829
+Insurance payables
+Other liabilities
+810
+109,669
+66,809
+32,468
+1,033,891
+-
+920,695
+(921,726)
+116
+(56)
+489
+11,330
+(11,214)
+388,765
+(388,821)
+32,581 488,019
+(34,161) (487,530)
+(1,580)
+685
+15
+(35)
+(449)
+897
+257
+Annual Report 2018
+- Cash outflow
+Cash inflow
+on a gross basis
+Derivative financial instruments settled
+on a net basis
+Derivative financial instruments settled
+Derivative cash flows
+10,132,143
+-
+204,749
+586,585
+-
+35,714
+3,221
+323,186 160,876
+31,203 28,188
+1,246,816 617,510 6,068,392
+1,165,534
+614
+Customer deposits and payables to
+296
+16,192
+1,206,471
+851,510
+Cash and amounts due from banks and
+other financial institutions
+457,524
+483,891
+457,524
+483,891
+Balances with the Central Bank and
+statutory deposits for insurance operations
+285,959
+318,236
+285,959
+318,236
+Loans and advances to customers
+1,929,842
+1,660,864
+1,929,842
+1,661,301
+Financial assets held under resold agreements
+92,951
+99,296
+92,951
+21,911
+775,098
+775,098
+16,192
+1,243,768
+847,198
+Loans and receivables
+2018
+2017
+2018
+2017
+Financial assets
+Financial assets at fair value through profit or loss
+824,939
+141,250
+824,939
+141,250
+Debt financial assets at fair value through other
+99,296
+comprehensive income
+310,901
+Equity financial assets at fair value through other
+comprehensive income
+222,639
+Financial assets at amortized cost
+2,075,151
+222,639
+2,097,405
+Available-for-sale
+Derivative financial assets
+21,911
+Held-to-maturity
+310,901
+Accounts receivable
+22,798
+72,061
+Financial liabilities
+Derivative financial liabilities
+22,247
+17,950
+22,247
+17,950
+Financial liabilities at fair value through profit or loss.
+16,975
+14,060
+16,975
+14,060
+(in RMB million)
+Due to banks and other financial institutions
+780,530
+803,154
+780,530
+Assets sold under agreements to repurchase
+189,028
+133,981
+189,028
+133,981
+Customer deposits and payables to
+brokerage customers
+2,114,344
+803,154
+31 December
+2017
+2017
+22,798
+72,061
+Finance lease receivable
+165,214
+112,028
+165,214
+112,028
+Other assets
+69,829
+143,891
+69,829
+2018
+143,891
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED)
+Carrying values
+Fair values
+31 December
+31 December
+31 December
+31 December
+2018
+292
+1,952,695
+31 December
+31 December
+The size of unconsolidated structured entities and the Group's funding and maximum exposure are shown
+below:
+31 December 2018
+(in RMB million)
+Size
+Carrying amount
+Unconsolidated structured entities
+The Group's
+maximum
+exposure
+Interest held by the Group
+Securitization
+89,581
+5,183
+5,183
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties
+Wealth management products
+managed by affiliated entities
+1,686,384
+236,694
+236,694
+Investment income and
+service fee
+service fee
+Investment income and
+Note 1
+443,679
+443,679
+The following table also shows the Group's maximum exposure to the unconsolidated structured entities
+representing the Group's maximum possible risk exposure that could occur as a result of the Group's
+arrangements with structured entities. The maximum exposure is contingent in nature and approximates
+the sum of direct investments made by the Group.
+The Group uses structured entities in the normal course of business for a number of purposes, for example,
+structured transactions for customers, to provide finance to public and private sector infrastructure
+projects, and to generate fees from managing assets on behalf of third-party investors. These structured
+entities are financed through the issue of notes or units to investors. Refer to Note 3.(6) for the Group's
+consolidation consideration related to structured entities.
+(8) THE GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+78,595
+533,775
+300,453
+36,141
+209.0%
+226.5%
+194.0%
+214.9%
+234.1%
+217.5%
+The Group's solvency ratio is calculated based on the relevant regulations promulgated by the CIRC, which
+is an indicator of the overall solvency position of a financial conglomerate.
+Investment income
+The banking business measures the capital adequacy ratio in accordance with the 'Capital Rules for
+Commercial Banks (Provisional)' issued by the CBRC in June 2012. According to the requirements, Risk
+weighted assets for credit risk is measured by Weighted Approach, Risk weighted assets for market risk is
+measured by Standardised Approach, and risk weighted assets for operation risk is measured by the Basic
+Indicator Approach.
+Core Tier 1 capital adequacy ratio
+Tier 1 capital adequacy ratio
+Capital adequacy ratio
+290
+Annual Report 2018
+31 December 2018
+31 December 2017
+8.54%
+9.39%
+11.50%
+8.28%
+9.18%
+11.20%
+Ping An Insurance (Group) Company of China, Ltd.
+The banking operation's core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio and capital
+adequacy ratio are shown below:
+537,781
+6,156
+6,156
+Wealth management products
+managed by affiliated entities.
+Wealth management products
+managed by third parties
+508,770
+3,030
+3,030
+Investment income and
+service fee
+Note 1
+26,545
+26,545
+Investment income
+Note 1: These assets management products and wealth management products are sponsored by third party financial institutions and the
+information related to size of these structured entities were not publicly available.
+Investment income
+The Group's interest in unconsolidated structured entities are recorded as wealth management investments
+under financial assets at fair value through profit or loss, financial assets at fair value through other
+comprehensive income and financial assets at amortized cost and beneficial right under trust schemes
+under financial assets held under resold agreements.
+Ping An Insurance (Group) Company of China, Ltd. 291
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+The Group's financial instruments mainly consist of cash and amounts due from banks and other financial
+institutions, term deposits, bonds, funds, stocks, loans, borrowings, deposits from other banks and financial
+institutions, customer deposits and payables to brokerage customers, etc.
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS
+The following table sets out the carrying values and fair values of the Group's major financial instruments
+by classification:
+(in RMB million)
+Carrying values
+Fair values
+Annual Report 2018
+31 December
+476,103
+Note 1
+Investment income and
+service fee
+Wealth management products
+managed by third parties
+Note 1
+14,837
+14,837
+Investment income
+Unconsolidated structured entities
+31 December 2017
+(in RMB million)
+Size
+Carrying amount
+476,103
+Securitization
+2,426
+The Group's
+maximum
+exposure
+Interest held by the Group
+2,426
+Investment income and
+service fee
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties
+1,337,658
+175,338
+175,338
+Investment income and
+service fee
+59,223
+32,010
+15,116
+(4) LIQUIDITY RISK (CONTINUED)
+Regulatory capital held
+Core capital
+The table below summarizes the minimum regulatory capital for the Group and its major insurance
+subsidiaries and the regulatory capital held against each of them.
+(7) CAPITAL MANAGEMENT (CONTINUED)
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 289
+Annual Report 2018
+The Group has formally implemented China Risk Oriented Solvency System issued by the CIRC since 1
+January 2016 by reference to the 'Notice on the Formal Implementation of China Risk Oriented Solvency
+System by CIRC. The Group adjusted the objective, policy and process of capital management. As at 31
+December 2018, the Group was compliant with the relevant regulatory capital requirements.
+The Group manages its capital requirements by assessing shortfalls, if any, between the reported and
+the required capital levels on a regular basis. Adjustments to current capital levels are made in light of
+changes in economic conditions and risk characteristics of the Group's activities. In order to maintain or
+adjust the capital structure, the Group may adjust the amount of dividends paid, return capital to ordinary
+shareholders or issue capital securities.
+The Group's capital requirements are primarily dependent on the scale and products of insurance business,
+and the type of business that it undertakes, as well as the industry and geographic location in which it
+operates. The primary objectives of the Group's capital management are to ensure that the Group complies
+with externally imposed capital requirements and to maintain healthy capital ratios in order to support its
+business and to maximize shareholders' value.
+(7) CAPITAL MANAGEMENT
+Operational risk is the risk of loss resulting from inadequate or failure of proper internal controls on
+business processes, employees and systems or from uncontrollable external events. Operational risk in this
+context includes legal risk, but does not include strategic risk and reputational risk. The Group is exposed
+to many types of operational risks in the conduct of its business. The Group manages operational risk by
+establishing and continuously improving risk management framework, formalizing policies and standards,
+using management tools and reporting mechanism, strengthening communication and enhancing training
+to staff members.
+(6) OPERATIONAL RISK
+The objective of the Group's asset and liability management is to match assets with liabilities on the basis
+of both the duration and interest rate. In the current regulatory and market environment, however, the
+Group is unable to invest in sufficient assets with long enough duration to match that of its life insurance
+and investment contract liabilities. When the current regulatory and market environment permits, however,
+the Group will lengthen the duration of its assets by matching the new liabilities of lower guarantee rates,
+while narrowing the gap of existing liabilities of higher guarantee rates.
+(5) MISMATCHING RISK OF ASSETS AND LIABILITIES
+The assets and liabilities related to investment-linked contracts which are regarded as insurance contracts
+are presented as policyholder account assets and liabilities in respect of insurance contracts. The assets
+and liabilities related to investment-linked contracts which are regarded as investment contracts are
+presented as policyholder account assets and liabilities in respect of investment contracts. The assets and
+liabilities of each investment-linked fund are segregated from each other and from the rest of the Group's
+invested assets for record keeping purposes. As the investment risks of investment-linked contracts were
+fully borne by policyholders, the assets and liabilities related to investment-linked contracts were not
+included in the analysis of risk management. Investment-linked contracts are repayable on demand. The
+Group manages liquidity risk related to the investment-linked contracts by investing mainly in assets with
+high liquidity, as disclosed in Note 38.
+Management expects the credit commitments will not be entirely used during the commitment period.
+5,252,160
+Minimum regulatory capital
+Core Solvency margin ratio
+Comprehensive solvency margin ratio
+Core capital
+218.8%
+216.4%
+201.5%
+212.2%
+211.1%
+38,236
+349,513
+596,238
+85,557
+764,727
+51. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+1,290,268
+741,727
+1,258,768
+Ping An
+Property &
+Casualty
+Ping An Life
+The Group
+31 December 2018
+Comprehensive solvency margin ratio
+Core Solvency margin ratio
+Minimum regulatory capital
+Regulatory capital held
+77,057
+Ping An Insurance (Group) Company of China, Ltd.
+494,293
+588,263
+Less than
+(18,600)
+574,945
+(593,545)
+The table below summarizes the remaining contractual maturity profile of the Group:
+(1,059)
+(7,111)
+(6,742)
+4,501
+(5,560)
+256,252 284,253
+(262,994) (291,364)
+29,939
+(33,627)
+(3,688)
+1 months
+(3,494)
+(17)
+395
+(1,400)
+(2,493)
+- Cash outflow
+- Cash inflow
+on a gross basis
+Derivative financial instruments settled
+on a net basis
+Derivative financial instruments settled
+21
+223.8%
+1 to 3
+months
+months
+Annual Report 2018
+288
+95,052
+63,871
+166,735
+106,045
+62,590
+Credit commitments
+31 December 2017
+121,003
+3 to 12
+96,713
+95,850
+59,113
+Credit commitments
+31 December 2018
+(in RMB million)
+Total
+Undated
+years
+Over 5
+1 to 5
+years
+215,584
+31 December 2017
+Ping An
+Property &
+Casualty
+The Group
+14,201
+Finance lease receivable
+brokerage customers
+780,767
+424,848
+432,426
+375,752
+2,957
+Derivative cash flows
+Accounts payable
+24
+2,826
+5,672
+8,522
+Insurance payables
+60,478
+2,256
+568
+1,665
+5,049
+4,255
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+818,203
+7,244,000
+Due to banks and other financial
+institutions
+140,112
+222,766
+340,249
+84,563
+8,526
+796,216
+Assets sold under agreements to
+repurchase
+134,154
+134,154
+Other financial liabilities held for trading
+4,329
+15
+2,016,750
+Insurance contract liabilities
+Other liabilities
+26,894
+70,251
+51,142
+112,552
+9,493
+270,332
+1,058,152
+64,414
+980,598
+721,765
+703,450
+1,146,865
+70,095
+680,450
+1,115,365
+Ping An Life
+487,585
+40,914
+1,070,752
+131,112
+131,071
+23,790
+9,125
+2,257
+5,158,102
+5,193,274
+Investment contract liabilities for
+policyholders
+1,044
+9,083,427
+14,987
+4,158
+Bonds payable
+45,622
+184,488
+Policyholder dividend payable
+52,357
+32,168
+45,622
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Financial assets
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments not recorded at fair value but for which fair
+value is disclosed by level of the fair value hierarchy:
+(in RMB million)
+Level 1
+31 December 2018
+Level 2
+Level 3
+Total fair value
+Financial assets at amortized cost
+Total
+1,963,798
+93,554
+40,053
+1,963,798
+93,554
+2,097,405
+2,097,405
+Financial liabilities
+Total
+40,053
+Bonds payable
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+30
+2,168
+Transfers into Level 3
+Disposals
+Additions
+At 1 January 2018/2017
+Change in accounting policy
+At 31 December 2017/2016
+(in RMB million)
+Reconciliation of movements in Level 3 financial instruments measured at fair value is as follows:
+Financial assets and liabilities for which fair value approximates carry value are not included in the above
+disclosure.
+Total gains in income
+450,142
+381,170
+68,972
+381,170
+68,972
+Available-for-sale
+financial assets
+376
+1,206,471
+376
+1,157,439
+1,157,439
+450,142
+48,656
+48,656
+At 31 December 2018/2017
+2018
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 297
+Annual Report 2018
+8,118
+85,266
+1,416
+9,929
+Carried at fair value through profit or loss
+40
+(112,161)
+2,756
+97,487
+4,721
+89,971
+81,853
+4,721
+8,118
+2017
+(775)
+Total fair value
+Level 3
+31 December 2017
+Level 2
+Disposals
+Issue
+Settlement
+Total gains in income
+At 31 December
+(in RMB million)
+At 1 January
+Additions
+At 31 December
+At 1 January
+(in RMB million)
+Additions
+Disposals
+Total gains in income
+At 31 December
+298
+Annual Report 2018
+119,147
+100,232
+(61,072)
+14,096
+(3,302)
+At 1 January
+(in RMB million)
+At 31 December
+Total gains in other comprehensive income
+Level 1
+Total
+Bonds payable
+Financial liabilities
+Total
+Bonds
+Held-to-maturity
+Financial assets
+(in RMB million)
+555,701
+555,701
+489,499
+489,499
+66,202
+66,202
+2017
+(in RMB million)
+At 1 January
+Additions
+Disposals
+Transfers into Level 3
+Transfers out of Level 3
+Total gains in income
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+1,206,471
+7,773
+Debt financial assets
+16,087
+105
+366
+357
+42,225
+25,830
+304
+Annual Report 2018
+18,949
+Ping An Insurance (Group) Company of China, Ltd.
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+For the year ended 31 December 2017:
+2017
+Emoluments
+Remunerations
+Employer's
+contribution
+received or
+receivable
+received or
+receivable
+in respect of
+director's other
+56. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+services in
+connection
+6,361
+1,489
+518
+132
+ZHANG Wangjin
+510
+510
+130
+HUANG Baokui
+510
+Total
+510
+Subtotal
+1,538
+1,585
+941
+44
+61
+146
+4,315
+130
+with the
+management
+Fees
+Salaries
+3,772
+3,589
+REN Huichuan
+2,119
+1,829
+YAO Jason Bo
+3,222
+3,039
+LEE Yuansiong
+CAI Fangfang
+1,939
+LIN Lijun
+487
+181
+221222
+7
+32
+30
+2,118
+1,939
+2,102
+SUN Jianyi
+Discretionary
+bonuses(ii)
+Housing
+allowance
+Other
+employee
+benefits
+to a
+retirement
+benefit
+in respect of
+of the affairs
+scheme
+accepting
+office as
+director
+of the company
+or its subsidiary
+Individual
+undertaking
+Total
+income tax
+(in RMB thousand)
+Directors
+MA Mingzhe (iii)
+2,817
+2,258
+518
+GU Liji
+775
+1,637
+130
+LIU Chong
+518
+518
+132
+Wang Yongjian (vi)
+236
+236
+510
+63
+205
+205
+52
+YIP Dicky Peter
+518
+518
+132
+WONG Oscar Sai Hung
+XIONG Peijin (vii)
+510
+YANG Xiaoping
+132
+37
+6,454
+4,625
+64
+59
+4,296
+2,853
+LIN Lijun (v)
+-
+186
+62
+3
+5
+9
+265
+72
+Soopakij CHEARAVANONT
+518
+518
+526
+32
+526
+SUN Dongdong
+-
+37,910
+24,341
+Supervisors
+PAN Zhongwu
+643
+376
+27
+211
+26
+1,140
+322
+WANG Zhiliang
+942
+565
+17
+35
+78
+68
+305
+61
+15,146
+526
+526
+134
+GE Ming
+526
+526
+134
+OUYANG Hui
+526
+526
+134
+Stephen Thomas Meldrum (viii)
+214
+-
+214
+42
+Subtotal
+4,823
+17,364
+134
+42
+63 3 3 2 2
+495
+Subtotal
+1,516
+1,406
+1,030
+57
+50
+130
+4,189
+132
+1,367
+6,659
+18,043
+15,804
+155
+139
+374
+41,174
+25,804
+Total
+Annual Report 2018
+518
+HUANG Baokui
+1,085
+332
+13
+38
+954
+496
+13
+30
+518
+634
+GU Liji
+518
+518
+132
+ZHANG Wangjin
+480
+480
+120
+155
+Ping An Insurance (Group) Company of China, Ltd. 305
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+226,589
+115,511
+51,179
+1,757
+11,969
+6,842
+(iv) The long-term benefits attributed to year 2015 for LEE Yuansiong were paid in 2018 as the required payment conditions had been
+fulfilled. The amount after tax paid to LEE Yuansiong were RMB605.0 thousand respectively and was disclosed in the Announcement
+regarding the Resolutions of the Board of Directors of the Company dated 21 August 2018.
+(v)
+101,314
+LIN Lijun resigned as Independent Non-executive Director of the Company on 23 May 2018.
+(vi) Wang Yongjian was appointed as Non-executive Director of the Company on 13 July 2018.
+(viii) Stephen Thomas Meldrum resigned as Independent Non-executive Director of the Company on 23 May 2018.
+(ix)
+(x)
+WOO Ka Biu Jackson resigned as Independent Non-executive Director of the Company on 6 August 2017, took over by OUYANG Hui
+on the same day.
+GAO Peng resigned as Employee Representative Supervisor on 6 August 2017, took over by WANG Zhiliang on the same day.
+306
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+(vii) XIONG Peijin resigned as Non-executive Director of the Company on 23 May 2018.
+266,074
+226,589
+Shares
+For the year ended 31 December 2018
+56. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+(i)
+Other non-monetary benefits include share purchase scheme, in 2015, the Company has adopted an employee share purchase
+scheme for the key employees of the Company and its subsidiaries. In 2018, the vesting condition of the shares purchased during the
+year 2015, 2016 and 2017 for attribution part of year 2018 was achieved. As at 27 April 2018, the shares of MA Mingzhe, SUN Jianyi, LEE
+Yuansiong, REN Huichuan, YAO Jason Bo, CAI Fangfang, LIN Lijun, WANG Zhiliang and PAN Zhongwu were allocated to personal
+accounts at respective employee's request and the closing price was RMB60.89 per share and the vested shares net of tax are
+summarised as follows:
+(ii)
+Name
+MA Mingzhe
+SUN Jianyi
+LEE Yuansiong
+REN Huichuan
+YAO Jason Bo
+CAI Fangfang
+LIN Lijun
+WANG Zhiliang
+PAN Zhongwu
+Discretionary bonuses are determined on the achievement of targeted profit of the Company, the personal performance and
+approved by the compensation committee of the board of directors.
+(iii)
+MA Mingzhe is the Chief Executive Officer of the Company.
+62
+24
+233
+7
+14,774
+98
+89
++4
+5,084
+3,806
+4,049
+2,959
+16,637
+33
+5,640
+23
+65
+4,068
+2,853
+33
+6,297
+4,740
+7,397
+5,143
+Subtotal
+311
+YANG Xiaoping
+518
+LIU Chong
+518
+XIONG Peijin
+503
+YIP Dicky Peter
+518
+WONG Oscar Sai Hung
+518
+SUN Dongdong
+518
+GE Ming
+518
+OUYANG Hui (ix)
+208
+Stephen Thomas Meldrum
+518
+WOO Ka Biu Jackson (ix)
+24
+Soopakij CHEARAVANONT
+58
+2,944
+132
+311
+79
+244
+36,985
+24,437
+Supervisors
+PAN Zhongwu
+518
+597
+32
+GAO Peng (x)
+488
+397
+18
+WANG Zhiliang (x)
+321
+263
+370
+53
+208
+132
+23
+55
+778
+187
+495
+125
+518
+132
+518
+132
+503
+127
+518
+132
+518
+132
+518
+132
+518
+4,169
+26
+26
+1,940
+13,185
+85,531
+93,008
+308,024
+308,664
+Ping An Insurance (Group) Company of China, Ltd.
+55. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+(1) RECONCILIATION OF PROFIT BEFORE TAX TO NET CASH FLOWS FROM OPERATING
+ACTIVITIES:
+2,534
+(in RMB million)
+2018
+163,151
+2017
+134,740
+Adjustments for:
+Depreciation
+6,284
+5,618
+Profit before tax
+Amortization of intangible assets
+32,898
+30,003
+Cash and amounts due from banks and other financial institutions
+Cash on hand
+Term deposits
+Due from banks and other financial institutions
+Placements with banks and other financial institutions
+Balances with the Central Bank
+Bonds
+Financial assets held under resold agreements
+Total
+41,899
+31 December 2018
+The carrying amounts disclosed above approximate their fair values at year end.
+300
+Annual Report 2018
+5,019
+6,800
+4,228
+112,574
+127,569
+53,667
+31 December 2017
+2,394
+Losses on disposal of investment properties, property and
+equipment, intangible assets and settled assets
+38
+78,409
+131
+Changes in operating assets and liabilities:
+Decrease/(Increase) in balances with the Central Bank
+41,589
+(18,299)
+Decrease/(Increase) in amounts due from banks and
+other financial institutions
+52,105
+57,442
+Increase in premium receivables
+(21,456)
+(10,369)
+Decrease/(Increase) in accounts receivable
+49,779
+(49,709)
+(Increase)/Decrease in inventories
+(255)
+(41,146)
+Operating profit before working capital changes
+Net impairment loss of financial assets
+1,709
+1
+Investment income
+(195,233)
+(192,757)
+Fair value losses/(gains) on investments at fair value through
+profit or loss
+28,284
+(3,271)
+Fair value losses on available-for-sale equity investments
+(transfer from equity)
+716
+Interest expenses on non-banking operations
+Foreign exchange losses
+Provision for doubtful debts and others, net
+Loan loss provisions, net of reversals
+Others impairment loss on other assets
+18,227
+946
+11,167
+128
+581
+40,814
+(in RMB million)
+54. CASH AND CASH EQUIVALENTS
+Assets securitization
+Repurchase transactions
+61,687
+Ping An Insurance (Group) Company of China, Ltd.
+52. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The gains or losses of level 3 financial instruments included in the statement of income for the year are
+presented as follows:
+2018
+(in RMB million)
+Financial assets at fair value through profit or loss
+Debt financial assets at fair value through
+other comprehensive income
+Realized gains
+326
+(141)
+Unrealized gains
+9,603
+9,929
+921
+921
+Loans and advances to customers at fair value
+through other comprehensive income
+(141)
+1,106
+Total
+(3,376,952)
+3,414,352
+24,428
+at fair value through
+other comprehensive
+income
+2018
+11,226
+(1,000)
+153,923
+(148,319)
+921
+16,751
+Equity financial assets
+at fair value through
+other comprehensive
+income
+2018
+1,025
+697
+1,722
+Loans and advances
+to customers at fair
+value through other
+comprehensive income
+2018
+(141)
+523
+9,603
+2017
+Transferred financial assets that do not qualify for derecognition include securitized loans and debt
+securities held by counterparties as collateral under repurchase agreement.
+The Group's subsidiaries, Ping An Bank, Ping An Securities and Ping An Financial Leasing, entered into loan
+securitization transactions. The Group has determined that it retains substantially all the risks and rewards
+of certain securitized loans and therefore has not derecognized them.
+Other transferred financial assets that do not qualify for derecognition mainly include debt securities
+held by counterparties as collateral under repurchase agreements. The counterparties are allowed to sell
+or repledge those securities sold under repurchase agreements in the absence of default by the Group,
+but has an obligation to return the securities at the maturity of the contract. If the securities increase or
+decrease in value, the Group may in certain circumstances require or be required to provide additional
+collateral. The Group has determined that it retains substantially all the risks and rewards of these
+securities and therefore has not derecognized them.
+The following table analyses the carrying amount of the above mentioned financial assets transferred to
+third parties that did not qualify for derecognition and their associated financial liabilities:
+31 December 2018
+Carrying
+amount assets
+Carrying amount
+associated
+liabilities
+Carrying
+amount assets
+The Group enters into transactions in the normal course of business by which it transfers recognized
+financial assets to third parties or to structured entities. In some cases where these transfers may give
+rise to full or partial derecognition of the financial assets concerned. In other cases where the transferred
+financial assets do not qualify for derecognition as the Group has retained substantially all the risks and
+rewards of these financial assets, the Group continued to recognize the transferred financial assets.
+31 December 2017
+1,836
+1,836
+2,961
+2,961
+4,299
+2,112
+4,299
+2,112
+(in RMB million)
+Carrying amount
+associated
+liabilities
+53. TRANSFERRED FINANCIAL ASSETS
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+(in RMB million)
+Realized gains
+Unrealized gains
+Total
+Carried at fair value through profit or loss
+Available-for-sale
+1
+1,415
+1,416
+30
+30
+31
+1,415
+1,446
+Transfers
+During the year 2018, there were no significant transfers between Level 1 and Level 2 fair value
+measurements.
+Part of the financial instruments transfer into Level 3 in the year 2018 and 2017 because of the change of the
+valuation inputs.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 299
+FINANCIAL STATEMENTS
+10,709
+Increase in reinsurers' share of insurance liabilities
+(651)
+Increase in loans and advances to customers
+in respect of
+accepting
+office as
+director
+Emoluments
+received or
+receivable
+in respect of
+director's other
+services in
+connection
+with the
+management
+of the affairs
+received or
+receivable
+of the company
+or its subsidiary
+Remunerations
+Fees
+Salaries
+Discretionary
+bonuses(ii)
+Housing
+allowance
+Other
+employee
+benefits
+Employer's
+contribution
+to a
+retirement
+benefit
+scheme
+undertaking
+2018
+Directors
+(in RMB thousand)
+2018
+73
+49
+2017
+Salaries and other short term employee benefits after tax
+Individual income tax
+34
+24
+32
+23
+The long-term benefits attributed to year 2015 for key management personnel other than directors and
+supervisors were paid in 2018 as the required payment conditions had been fulfilled. The amount paid after
+tax was RMB483.7 thousand and was disclosed in the Announcement regarding the Resolutions of the Board
+of Directors of the Company dated 21 August 2018.
+The long-term benefits attributed to year 2014 for key management personnel other than directors and
+supervisors were paid in 2017 as the required payment conditions had been fulfilled. The amount paid after
+tax was RMB2,447.5 thousand and was disclosed in the Announcement regarding the Resolutions of the
+Board of Directors of the Company dated 17 August 2017.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 303
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+56. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+The remuneration of every director and supervisor is set out below:
+For the year ended 31 December 2018:
+Individual
+(in RMB million)
+Total
+MA Mingzhe (iii)
+8,401
+6,178
+REN Huichuan
+-
+2,208
+1,940
+28
+64
+37
+69
+2,852
+YAO Jason Bo
+3,335
+3,040
+-
+CAI Fangfang
+-
+2,207
+4,309
+42
+-
+4,003
+-
+2,923
+2,221
+2
+44
+5,190
+3,667
+SUN Jianyi
+-
+2,186
+1,940
+2
+44
+T
+4,172
+2,875
+LEE Yuansiong (iv)
+-
+4,319
+income tax
+171,299
+(2) COMPENSATION OF KEY MANAGEMENT PERSONNEL OTHER THAN DIRECTORS AND
+SUPERVISORS IS AS FOLLOWS:
+The estimated amount of total compensation has been provided in the Group's 2018 financial statements.
+The total compensation for certain key management personnel has not yet been finalized in accordance
+with relevant policies. The remaining compensation will be disclosed in a separate announcement when
+approved.
+76,289
+Increase in policyholder dividend payable
+6,969
+6,406
+(Decrease)/Increase in assets sold under agreements to
+repurchase of the banking and securities business
+(7,940)
+7,787
+74,448
+(Decrease)/Increase in other liabilities
+49,604
+Cash generated from operations
+Income tax paid
+Net cash flows from operating activities
+254,418
+158,169
+(48,158)
+(36,886)
+(68,564)
+Increase in investment contract liabilities for policyholders
+234,521
+213,435
+(302,291)
+(364)
+(206,451)
+(Increase)/Decrease in assets purchased under reverse repurchase
+agreements of the banking and securities business
+(1,221)
+677
+Decrease/(Increase) in other assets
+16,012
+(78,685)
+(Decrease)/Increase in amounts due to banks and
+other financial institutions
+(26,107)
+Increase in customer deposits and payables to brokerage customers
+138,240
+124,423
+62,110
+Increase in insurance payables
+6,580
+721
+Increase in insurance contract liabilities
+206,260
+Part of compensation of key management personnel is subject to deferred payment requirement for a
+period of 3 years in accordance with the 'Guidance of insurance company's compensation management'
+issued by the CIRC. Unpaid balances subject to deferred payment requirement were included in the total
+compensation payable to the key management personnel.
+121,283
+Ping An Insurance (Group) Company of China, Ltd. 301
+518
+(6,939)
+2,215
+(6,939)
+Balance as at 31 December 2018
+52,616
+82,331
+551,761
+686,708
+1,154
+Annual Report 2018
+56. COMPENSATION OF KEY MANAGEMENT PERSONNEL
+(1) KEY MANAGEMENT PERSONNEL COMPRISE THE COMPANY'S DIRECTORS, SUPERVISORS,
+AND SENIOR OFFICERS AS DEFINED IN THE COMPANY'S ARTICLES OF ASSOCIATION
+The summary of compensation of key management personnel for the year is as follows:
+(in RMB million)
+2018
+2017
+Salaries and other short term employee benefits after tax
+Individual income tax
+76
+49
+Ping An Insurance (Group) Company of China, Ltd.
+544
+Other non-cash movements
+Foreign exchange adjustments
+FINANCIAL STATEMENTS
+302
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2018
+55. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+(CONTINUED)
+(2) NET DEBT RECONCILIATION:
+This section sets out an analysis of net debt and movements in net debt of current year.
+Short term
+borrowings
+Long term
+borrowings
+Bonds payable
+Total
+Balance as at 1 January 2018
+Cash flows
+90,310
+109,165
+(38,238)
+(27,987)
+451,283
+106,899
+650,758
+40,674
+Annual Report 2018
+2,898
+(798)
+The five individuals whose emoluments were the highest in the Group were not included in the key
+management members (2017: 3) whose emoluments were reflected in the analysis presented in Note 56.
+Annual Report 2018
+Director
+YAO Jason Bo
+Director
+SUN Jianyi
+Director
+MA Mingzhe
+The balance sheet of the Company was approved by the Board of Directors on 12 March 2019 and was
+signed on its behalf.
+233,965
+244,568
+12,990
+10,217
+1,165
+Ping An Insurance (Group) Company of China, Ltd. 313
+1,073
+25
+11,800
+9,119
+220,975
+234,351
+59,072
+72,250
+143,623
+143,821
+18,280
+18,280
+233,965
+244,568
+25
+4,469
+FINANCIAL STATEMENTS
+For the year ended 31 December 2018
+28
+128,737
+As at 1 January 2018
+(2)
+- 46
+(48)
+policy
+Change in accounting
+202,695
+Total
+profits
+59,072
+395
+12,164
+Notes to Consolidated Financial Statements
+2,251
+As at 31 December 2017 128,737
+Retained
+General
+reserve
+Surplus
+reserve fund
+Others
+reserves
+premium
+(in RMB million)
+FVOCI
+Share
+Financial
+assets at
+(2) RESERVE MOVEMENT OF THE HOLDING COMPANY:
+64. BALANCE SHEET AND RESERVE MOVEMENT OF THE HOLDING
+COMPANY (CONTINUED)
+76
+2,436
+73
+75
+Cash and amounts due from banks and other financial institutions
+Financial assets held under resold agreements
+Assets
+(in RMB million)
+(1) BALANCE SHEET OF THE HOLDING COMPANY:
+64. BALANCE SHEET AND RESERVE MOVEMENT OF THE HOLDING COMPANY
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+312
+Certain comparative figures have been reclassified or restated to conform to the current year's
+presentation.
+63. COMPARATIVE FIGURES
+Except for the item listed above, the Group does not have significant events after the reporting period
+need to disclose.
+On 12 March 2019, the Board of Directors of the Company approved the Resolution of the Profit Distribution
+Plan for 2018, and declared a final cash dividend of 2018 in the amount of RMB1.10 per share as disclosed in
+Note 16.
+DESCRIPTION OF PROFIT DISTRIBUTION
+31 December 2018
+62. EVENTS AFTER THE REPORTING PERIOD
+Owing to the nature of the insurance, bank and other financial services business, the Group is involved in
+contingencies and legal proceedings in the ordinary course of business, including, but not limited to, being
+the plaintiff or the defendant in litigations and arbitrations. Legal proceedings mostly involve claims on the
+Group's insurance policies and other claims. Provision has been made for probable losses to the Group,
+including those claims where management can reasonably estimate the outcome of the lawsuits taking into
+account any applicable legal advice.
+61. CONTINGENT LIABILITIES
+The Group has adopted an employee share purchase scheme for the key employees of the Company and
+its subsidiaries. Refer to Note 36 for more details.
+(4) SHARE PURCHASE SCHEME
+The Group makes monthly contributions for medical benefits to the local authorities in accordance with
+relevant local regulations for the employees. The Group's liability in respect of employee medical benefits is
+limited to the contributions payable in each period.
+(3) MEDICAL BENEFITS
+60. EMPLOYEE BENEFITS (CONTINUED)
+For the year ended 31 December 2018
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 311
+Annual Report 2018
+The employees of the Group are entitled to participate in and make contributions to various government
+sponsored funds for housing purposes. The Group contributes on a monthly basis to these funds based
+on certain percentages of the salaries of the employees. The Group's liability in respect of these funds is
+limited to the contributions payable in each period.
+No provision has been made for pending assessments, lawsuits or possible violations of contracts when
+the outcome cannot be reasonably estimated or management believes the probability is low or remote. For
+pending lawsuits, management also believes that any resulting liabilities will not have a material adverse
+effect on the financial position or operating results of the Group or any of its subsidiaries.
+31 December 2017
+21,539
+Financial assets at fair value through profit or loss
+191,041
+199,543
+3,001
+13,842
+7,088
+2,143
+14,351
+9,396
+9,536
+Total equity and liabilities
+Total liabilities
+Other liabilities
+Income tax payable
+Due to banks and other financial institutions
+Liabilities
+Total equity
+Retained profits
+Reserves
+Share capital
+Equity
+Equity and liabilities
+Total assets
+Other assets
+Property and equipment
+Investments in subsidiaries and associates
+other comprehensive income
+Fixed maturity investments
+Debt financial assets at fair value through
+Financial assets at amortized cost
+2,251
+12,164
+395
+Profit for the year
+Most Honored Company in Asia
+■Institutional Investor (US)
+Ranked No.10 on the Forbes Global 2000 list and
+No.1 among global insurance conglomerates, and
+again topped the list of Chinese insurers
+■ Forbes
+Ranked No.4 on the Fortune China 500 list, and
+maintained the first place among Chinese insurers
+and among mixed-ownership companies
+■ Fortune China
+Ranked No. 29 on the Fortune Global 500 list,
+and No. 5 among the global financial services
+companies
+■ Fortune
+CORPORATE STRENGTH
+In 2018, Ping An maintained its leading brand value, received
+wide recognition and praise, and won various honors and
+awards from domestic and foreign rating agencies and
+media in respect of comprehensive strength, corporate
+governance, and corporate social responsibility.
+Honors and Awards
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 315
+CORPORATE GOVERNANCE
+In accordance with the relevant regulations, the net profit after tax of the Company for profit distribution
+is deemed to be the lower of (i) the retained profits determined in accordance with PRC Accounting
+Standards and (ii) the retained profits determined in accordance with IFRSS.
+According to the Company's articles of association, the Company shall set aside 10% of its net profit
+determined in its statutory financial statements, prepared in accordance with PRC Accounting Standards,
+to a statutory surplus reserve fund. The Company can cease such profit appropriation to this fund
+if its balance reaches 50% of the Company's registered share capital. The Company may also make
+appropriations from its net profit to the discretionary surplus reserve fund provided the appropriation is
+approved by a resolution of the shareholders. These reserves cannot be used for purposes other than those
+for which they are created. Profits are used to offset prior year losses before allocations to such reserves.
+(2) RESERVE MOVEMENT OF THE HOLDING COMPANY (CONTINUED):
+64. BALANCE SHEET AND RESERVE MOVEMENT OF THE HOLDING COMPANY
+(CONTINUED)
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+314
+202,695
+59,072
+395
+12,164
+2,251
+76
+Subject to resolutions passed in shareholders' meetings, the statutory surplus reserve fund, discretionary
+surplus reserve fund and capital reserve can be transferred to share capital. The balance of the statutory
+surplus reserve fund after transfers to share capital shall not be less than 25% of the registered capital.
+In accordance with the relevant regulations, general reserves should be set aside to cover catastrophic
+or other losses as incurred by companies operating in the insurance, banking, trust, securities, futures
+and fund businesses. The Group's respective entities engaged in such businesses would need to make
+appropriations for such reserves based on their respective year-end profit or risk assets, as determined in
+accordance with PRC Accounting Standards, and based on the applicable PRC financial regulations, in their
+annual financial statements. Such reserves are not available for profit distribution or transfer to capital.
+■Institutional Investor (US)
+Best IR Team
+Best Investor Day
+Ping An Insurance (Group) Company of China, Ltd.
+57. FIVE HIGHEST PAID INDIVIDUALS
+Annual Report 2018
+316
+Ranked No. 6 on the Best China Brands 2018 list
+■Interbrand
+Ranked No. 1 on the Brand Finance Insurance 100
+2018 list
+Brand Finance
+Ranked No. 8 on the Brand ZTM Top 100 Most
+Valuable Chinese Brands list, again the highest-
+ranking Chinese insurance brand on the list, and
+No. 2 among Chinese financial institutions on the
+list
+Ranked No. 43 on the Brand ZTM Top 100 Most
+Valuable Global Brands list, again No. 1 among
+global insurance brands, and No. 3 among global
+financial brands on the list
+■Millward Brown & WPP
+BRAND
+The Annual Responsibility & Contribution Award
+■Southern Weekly
+The Most Respected Enterprise in China for 17
+consecutive years
+■The Economic Observer
+■World Economic and Environmental Conference
+The International Carbon-Value Award 2018 - The
+Green Responsibility Award
+Alleviation
+A Recommended Case of Targeted Poverty
+CORPORATE SOCIAL RESPONSIBILITY
+■ People's Daily
+Asia's Best CEO - MA Mingzhe
+Best Investor Relations Company
+■ Corporate Governance Asia Magazine
+■The Chamber of Hong Kong Listed Companies
+Hong Kong Corporate Governance Excellence
+Awards 2018
+Best CFO - YAO Jason Bo
+Best CEO - MA Mingzhe
+Best ESG/SRI Metrics
+Best IR Professionals
+Best Corporate Governance
+128,737
+(2) HOUSING BENEFITS
+As at 31 December 2017
+(150)
+General
+reserve
+Surplus
+reserve fund
+Others
+reserve
+premium
+(in RMB million)
+investment
+Share
+Available-
+for-sale
+216,071
+72,250
+395
+12,164
+Retained
+profits
+2,347
+128,737
+As at 31 December 2018
+442
+(346)
+442
+(346)
+150
+(33,270)
+(33,270)
+150
+Share purchase scheme
+Others
+Dividend declared
+Other comprehensive
+income
+46,402
+202,693
+59,118
+46,402
+178
+Total
+As at 1 January 2017
+128,737
+Others
+1,145
+1,145
+135
+135
+798
+(19,194)
+-- (19,194)
+(172)
+(172)
+controlled entities
+associates and jointly
+pick-up from
+Other capital reserve
+Share purchase scheme
+surplus reserves
+Appropriations to
+Dividend declared
+Other comprehensive
+income
+29,238
+29,238
+Profit for the year
+191,693
+49,826
+395
+11,366
+1,121
+248
+(150)
+The employees of the Group are mainly covered by various defined contribution pension plans. The Group
+makes and accrues contributions on a monthly basis to the pension plans, which are mainly sponsored by
+relevant government authorities that are responsible for the pension liability to retired employees. Under
+such plans, the Group has no other significant legal or constructive obligations for retirement benefits
+beyond the said contributions, which are expensed as incurred. Certain employees are also provided with
+Group life insurance but the amounts involved are insignificant.
+Equity investments
+12,072
+49
+Other revenues from
+Interest expenses to
+Ping An Healthcare Technology
+1,285
+Other expenses to
+133
+106
+898
+746
+2,246
+2,467
+490
+211
+39
+48
+32
+25
+25
+1
+1
+(1) PENSION
+24
+2-22
+39
+81
+2017
+490
+OneConnect
+17,501
+Accounts payables and other payables
+Loans and advances to customers
+Customer deposits and payables to brokerage customers
+2
+31 December 2017
+1
+31 December 2018
+Lufax
+Customer deposits and payables to brokerage customers
+CP Group Ltd.
+(3) THE SUMMARY OF BALANCES OF THE GROUP WITH RELATED PARTIES IS AS FOLLOWS:
+(in RMB million)
+58. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+308
+In 2016, in addition to transactions and balances stated above, the Group transferred 100% share holding
+of Gem Alliance Limited to Lufax, which issued convertible bonds amounting to US$1,953.8 million to the
+Group as the consideration. As at 31 December 2018, the Group still held these convertible bonds.
+655
+322
+1
+128
+Other expenses to
+Other revenues from
+Interest expenses to
+Interest revenue from
+Other expenses to
+2018
+Interest expenses to
+Other revenues from
+Other revenues from
+Other expenses to
+Ping An Good Doctor
+-
+1
+1
+1
+2017
+2018
+RMB22,000,000
+-
+RMB19,000,001
+RMB19,000,000
+-
+RMB16,000,001
+RMB13,000,001 RMB16,000,000
+RMB13,000,000
+-
+RMB10,000,001
+RMB7,000,001 - RMB10,000,000
+The number of non-key management personnel whose emoluments after tax fell within the following bands
+is as follows:
+35
+2017
+Salaries and other short term employee benefits after tax
+90
+2018
+(in RMB million)
+Details of emoluments of the remaining highest paid individuals are as follows:
+2
+RMB22,000,001 RMB25,000,000
+RMB25,000,001 - RMB28,000,000
+-
+Interest expenses to
+Interest income from
+Lufax
+Goods purchased from
+Rental income from
+Claims expenses to
+Premiums income from
+CP Group Ltd.
+(in RMB million)
+(2) THE SUMMARY OF SIGNIFICANT RELATED PARTY TRANSACTIONS IS AS FOLLOWS:
+58. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
+For the year ended 31 December 2018
+18,789
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 307
+1
+Annual Report 2018
+As at 31 December 2018, CP Group Ltd. indirectly held 9.19% equity interests in the Company and is the
+largest shareholder of the Company.
+Parent of shareholders
+Shareholder
+Relationship with the Company
+Charoen Pokphand Group Co., Ltd. ('CP Group Ltd.')
+Shenzhen Investment Holdings Co. Ltd.
+Name of related parties
+(1) THE COMPANY'S RELATED PARTIES WHERE SIGNIFICANT INFLUENCE EXISTS
+INCLUDING CERTAIN SHAREHOLDERS ARE SET OUT BELOW:
+58. SIGNIFICANT RELATED PARTY TRANSACTIONS
+Under PRC tax regulations, individual income tax is calculated at progressive rates with a cap of 45%.
+The effective income tax rates of the five highest paid individuals in Mainland China of the Group
+were approximately 41.67%-42.97% (2017: 30.04%-43.45%) for 2018 and the average effective tax rate was
+approximately 41.90% (2017: 39.70%).
+1
+FINANCIAL STATEMENTS
+19
+4
+4,104
+176,352
+194,921
+494,293
+588,263
+190,531
+353,957
+397,732
+55,763
+83,757
+50,039
+62,821
+248,155
+251,154
+31 December 2017
+31 December 2018
+22,257
+1,359
+1,037
+19,439
+13,996
+12,278
+6,902
+6,124
+31 December 2017
+31 December 2018
+Credit risk weighted amounts of credit commitments
+Credit commitments disclosed in the table above do not include the financial guarantees accounted for as
+insurance contracts by the Group.
+Unused limit of credit cards and loan commitments
+Total
+310
+Ping An Insurance (Group) Company of China, Ltd.
+4,784
+2,274
+5,092
+5,614
+2,196
+2,778
+31 December 2017
+31 December 2018
+60. EMPLOYEE BENEFITS
+More than 5 years
+1 to 5 years
+Within 1 year
+(in RMB million)
+The Group leases its investment properties under various rental agreements. Future minimum lease
+receivables under non-cancellable operating leases are as follows:
+27,682
+34,429
+31 December 2017
+31 December 2018
+(5) OPERATING LEASE RENTAL RECEIVABLES
+1,720
+10,666
+Contracted but not provided for
+The Group's investment commitments to jointly controlled entities are as follows:
+(4) INVESTMENT COMMITMENTS
+59. COMMITMENTS (CONTINUED)
+Annual Report 2018
+Subtotal
+140,336
+Guarantees issued
+267
+3,046
+41
+Annual Report 2018
+Accounts receivables and other receivables
+Accounts payables and other payables
+3,468
+15,786
+Customer deposits and payables to brokerage customers
+Letters of credit issued
+6,539
+11,022
+336
+Accounts receivables and other receivables
+OneConnect
+9
+Accounts receivables and other receivables
+317
+Accounts payables and other payables
+452
+Customer deposits and payables to brokerage customers
+Ping An Healthcare Technology
+42
+Accounts receivables and other receivables
+441
+Accounts payables and other payables
+Ping An Good Doctor
+Ping An Insurance (Group) Company of China, Ltd. 309
+Loans and advances to customers
+Notes to Consolidated Financial Statements
+31 December 2018
+31 December 2017
+3,304
+5,922
+3,593
+6,897
+3,545
+9,467
+The Group leases office premises and staff quarters under various rental agreements. Future minimum lease
+payments under non-cancellable operating leases are as follows:
+(in RMB million)
+Within 1 year
+1 to 5 years
+More than 5 years
+(3) CREDIT COMMITMENTS
+(in RMB million)
+Bank acceptances
+FINANCIAL STATEMENTS
+Authorized, but not contracted for
+(2) OPERATING LEASE COMMITMENTS
+Customer deposits and payables to brokerage customers
+For the year ended 31 December 2018
+59. COMMITMENTS
+(1) CAPITAL COMMITMENTS
+The Group had the following capital commitments relating to property development projects and
+investments:
+(in RMB million)
+Contracted, but not provided for
+Ping An Finance Center,
+47th, 48th, 109th, 110th, 111th and 112th Floors,
+REGISTERED ADDRESS
+PR@pingan.com.cn
+IR@pingan.com.cn
+E-MAIL
+LIU Cheng
+REPRESENTATIVE OF SECURITIES AFFAIRS
+FAX
++86 400 8866 338
+H share Ping An of China 2318
+AUTHORIZED REPRESENTATIVES
+SUN Jianyi
+YAO Jun
+SECRETARY OF THE BOARD OF DIRECTORS
+SHENG Ruisheng
+TELEPHONE
+COMPANY SECRETARY
+No. 5033 Yitian Road,
+YAO Jun
+Futian District,
++86 755 8243 1029
+Ping An Insurance (Group) Company of China, Ltd.
+A share 中國平安
+Ministry of Finance of the People's Republic of China
+The People's Bank of China
+Shenzhen
+The Stock Exchange of Hong Kong Limited
+The Shanghai Stock Exchange
+The Rules Governing the Listing of Securities on The Stock Exchange
+of Hong Kong Limited
+The Rules Governing the Listing of Stocks on Shanghai Stock
+Exchange
+The Corporate Governance Code as contained in Appendix 14 to
+the HKEX Listing Rules (formerly known as the Code on Corporate
+Governance Practices)
+The Securities and Futures Ordinance (Chapter 571 of the Laws of
+Hong Kong)
+The Model Code for Securities Transactions by Directors of Listed
+Companies as contained in Appendix 10 to the HKEX Listing Rules
+The Articles of Association of Ping An Insurance (Group) Company
+of China, Ltd.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 319
+OTHER INFORMATION
+Corporate Information
+REGISTERED NAMES
+Full name of the Company (Chinese/English)
+中國平安保險(集團)股份有限公司
+Short name of the Company (Chinese/English)
+中國平安
+Ping An of China
+LEGAL REPRESENTATIVE
+MA Mingzhe
+TYPE OF SECURITY AND LISTING PLACE
+A share The Shanghai Stock Exchange
+H share The Stock Exchange of Hong Kong Limited
+STOCK SHORT NAME AND CODE
+601318
+PLACE OF BUSINESS
+183 Queen's Road East,
+Ping An Finance Center,
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+320
+Shenzhen
+The Bank of New York Mellon
+AMERICAN DEPOSITARY SHARES REGISTRAR
+Wan Chai, Hong Kong
+17M Floor, Hopewell Centre,
+Computershare Hong Kong Investor Services Limited
+H SHARE REGISTRAR
+Central, Hong Kong
+The Landmark, 15 Queen's Road,
+17th Floor, Edinburgh Tower,
+DLA Piper Hong Kong
+LEGAL ADVISOR
+PricewaterhouseCoopers
+22/F, Prince's Building,
+Central, Hong Kong
+International Auditor
+Kevin Chen HUANG
+YEUNG SHEUNG YUEN
+Name of Certified Public Accountants
+Huangpu District, Shanghai, PRC
+China Banking and Insurance Regulatory Commission
+2 Link Square, 202 Hu Bin Road,
+This report is printed on environmental friendly paper
+manufactured from elemental chlorine-free pulp and acid free.
+PING AN
+Expertise Makes Life Simple
+2010 Annual Report
+No. 5033 Yitian Road,
+Futian District,
+POSTAL CODE
+518033
+COMPANY WEBSITE
+www.pingan.cn
+DESIGNATED MEDIA FOR INFORMATION
+DISCLOSURE OF A SHARE
+China Securities Journal,
+Shanghai Securities News,
+Securities Times and Securities Daily
+47th, 48th, 109th, 110th, 111th and 112th Floors,
+WEBSITES FOR THE PUBLICATION OF THE
+www.sse.com.cn
+www.hkexnews.hk
+LOCATION OF REGULAR REPORTS AVAILABLE
+FOR INSPECTION
+Board Office of the Company
+CONSULTING ACTUARIES
+PricewaterhouseCoopers Consultants (Shenzhen)
+Limited
+AUDITORS AND PLACES OF BUSINESS
+Domestic Auditor
+PricewaterhouseCoopers Zhong Tian LLP
+11/F, PricewaterhouseCoopers Center,
+In 2019, Ping An will forge
+ahead while remaining true to
+our original aspiration. Under
+the strategy of empowering
+financial services with
+technologies, empowering
+ecosystems with technologies,
+and empowering financial
+services with ecosystems,
+we will create greater
+value with expertise in five
+ecosystems, namely financial
+services, health care, real
+estate services, auto services,
+and smart city services. The
+traditional Chinese painting,
+reproduced with 3D lines,
+integrates a smart city with the
+beauty of nature to illustrate
+our philosophy of empowering
+the future with "finance +
+technology."
+REGULAR REPORTS
+The former China Banking Regulatory Commission
+Ping An of China Securities (Hong Kong) Co., Ltd., a subsidiary of
+Ping An Securities
+Model Code
+Ping An Securities Co., Ltd., a subsidiary of Ping An Trust
+Ping An Asset Management Co., Ltd., a subsidiary of the Company
+Ping An Bank Co., Ltd., a subsidiary of the Company
+Original Shenzhen Development Bank Co., Ltd., an associate of the
+Company since May 2010, became a subsidiary of the Company in
+July 2011. On July 27, 2012, its name was changed to "Ping An Bank
+Co., Ltd."
+China Ping An Insurance Overseas (Holdings) Limited, a subsidiary
+of the Company
+Ping An International Financial Leasing Co., Ltd., a subsidiary of the
+Company
+Shenzhen Ping An Financial Technology Consulting Co., Ltd., a
+subsidiary of the Company
+Ping An Futures Co., Ltd., a subsidiary of Ping An Securities
+Ping An Caizhi Investment Management Co., Ltd., a subsidiary of
+Ping An Securities
+Ping An Pioneer Capital Co., Ltd., a subsidiary of Ping An Securities
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 317
+OTHER INFORMATION
+Definitions
+Ping An Technology
+Ping An Financial Services
+Lufax Holding
+Lufax
+Puhui Business
+CQFAE
+QEX
+E-wallet
+Ping An Good Doctor
+Shenzhen Ping An New Capital Investment Co., Ltd., a subsidiary of
+Ping An Trust
+Wanjia Healthcare
+China Ping An Trust Co., Ltd., a subsidiary of the Company
+Ping An Health Insurance Company of China, Ltd., a subsidiary of the
+Company
+Articles of Association
+Definitions
+In this report, unless the context otherwise indicates, the following expressions shall have the following
+meanings:
+Ping An, Company, the Company,
+Group, the Group, Ping An Group
+Ping An Life
+Ping An Property & Casualty
+Ping An Health
+Ping An Annuity
+Ping An Trust
+Ping An New Capital
+Ping An Securities
+Ping An Bank
+SDB, Original SDB, Shenzhen
+Development Bank
+Ping An Overseas Holdings
+Ping An Financial Leasing
+Ping An Financial Technology
+Ping An Futures
+Ping An Caizhi
+Ping An Pioneer Capital
+Ping An Securities (Hong Kong)
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Life Insurance Company of China, Ltd., a subsidiary of the
+Company
+Ping An Property & Casualty Insurance Company of China, Ltd., a
+subsidiary of the Company
+Ping An Annuity Insurance Company of China, Ltd., a subsidiary of
+the Company
+OneConnect
+Ping An Asset Management
+Qianhai Credit Centre
+CAS
+No.2 Interpretation
+IFRS
+Written Premium
+CSRC
+Chinese Renminbi unless otherwise specified
+The Accounting Standards for Business Enterprises and the other
+relevant regulations issued by the Ministry of Finance of the People's
+Republic of China
+The No.2 Interpretation of Accounting Standards for Business
+Enterprises (Cai Kuai [2008] No.11) issued by the Ministry of Finance
+International Financial Reporting Standards issued by the
+International Accounting Standards Board
+All premiums received from the policies underwritten by the
+Company, which are prior to the significant insurance risk testing
+and separating of hybrid risk contracts
+China Securities Regulatory Commission
+Former CIRC
+The former China Insurance Regulatory Commission
+Former CBRC
+CBIRC
+Ministry of Finance
+HKEX
+SSE
+HKEX Listing Rules
+SSE Listing Rules
+Corporate Governance Code
+Ping An Health Konnect
+SFO
+RMB
+Ping An Insurance (Group) Company of China, Ltd.
+PBC
+318
+Shanghai Jahwa
+Annual Report 2018
+Autohome
+Ping An Urban-Tech
+Ping An Real Estate
+CP Group Ltd.
+Shenzhen Ping An Financial Services Co., Ltd., a subsidiary of Ping
+An Financial Technology
+Lufax Holding Co., Ltd., an associate of the Company
+Shanghai Lujiazui International Financial Asset Exchange Co., Ltd., a
+subsidiary of Lufax Holding
+The general name of companies under Lufax Holding engaging in
+businesses including financing guarantee, commercial factoring, and
+small lending
+Chongqing Financial Assets Exchange Co., Ltd., a subsidiary of Lufax
+Holding
+Shenzhen Qianhai Financial Assets Exchange Co., Ltd., a subsidiary
+of Lufax Holding
+Ping An Technology (Shenzhen) Co., Ltd., a subsidiary of the
+Company
+Ping An Real Estate Co., Ltd., a subsidiary of the Company
+Ping An E-wallet Electronic Commerce Co., Ltd., a subsidiary of Ping
+An Financial Technology
+Ping An Urban Construction Technology (Shenzhen) Co., Ltd., a
+subsidiary of Ping An Financial Technology
+Autohome Inc., a subsidiary of Ping An Financial Technology
+Shenzhen Qianhai Credit Centre Co., Ltd., a subsidiary of Ping An
+Financial Technology
+Shanghai Jahwa United Co., Ltd., a subsidiary of Ping An Life
+Ping An Medical and Healthcare Management Co., Ltd., an associate
+of the Company
+OneConnect Financial Technology Co., Ltd., an associate of the
+Company
+Ping An Wanjia Healthcare Investment Management Co., Ltd., a
+subsidiary of Ping An Good Doctor
+Ping An Healthcare and Technology Company Limited, an associate
+of the Company
+Charoen Pokphand Group Co., Ltd., the flagship company of CP
+Group
+23 112
+11.2
+515,114
+18.5
+45,771
+1.9
+310,886
+81,195
+54
+1.3
+78,757
+2.8
+10,729
+0.4
+44,276
+Stocks
+1.6
+31,102
+Fixed income
+INVESTMENT PORTFOLIO (BY ACCOUNTING MEASUREMENT)
+%
+0.9
+28,341
+2.9
+1.2
+Total investments
+2,794,620
+100.0
+2,449,474
+Financial assets carried at fair value through
+profit or loss (1)
+100.0
+Equity funds
+Other equity financial assets
+December 31, 2018
+December 31, 2017
+(in RMB million)
+Carrying value
+%
+Carrying value
+Notes: (1) Wealth management products include trust plans from trust companies, products from insurance asset management
+companies, and wealth management products from commercial banks.
+(2) Other investments mainly include statutory deposits for insurance operations, three-month or longer-term financial assets
+purchased under reverse repurchase agreements, and financial derivatives.
+3,886
+30.2
+Financial assets carried at fair value through
+2,449,474
+100.0
+Notes: (1) The Company follows the new accounting standards for financial instruments from January 1, 2018. In accordance with rules
+for transition to the new accounting standards for financial instruments, the Company does not need to restate comparable
+figures for the same period in 2017.
+(2) Others include long-term equity stakes and investment properties.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 33
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+740,695
+Investment Portfolio of Insurance Funds
+(in RMB million)
+Net investment income (1)
+2018
+2017
+Change (%)
+126,707
+24,669
+121,340
+INVESTMENT INCOME
+0.2
+36.0
+27.6
+other comprehensive income (1)
+411,074
+14.7
+Financial assets measured at amortized cost (1)
+Others (2)
+1,721,808
+61.6
+146,624
+5.2
+881,657
+Available-for-sale financial assets
+Loans and receivables
+Total investments
+2,794,620
+100.0
+106,203
+4.3
+-
+675,148
+Held-to-maturity investment
+Other investments(2)
+1.6
+47,769
+Bond investments
+Bond funds
+Preferred stocks
+201,251
+7.2
+163,074
+6.6
+1,270,765
+Debt financial assets
+45.4
+43.7
+43,541
+Realized gains (2)
+11,973
+0.5
+79,881
+2.9
+78,546
+1,071,688
+3.2
+Term deposits
+139,169
+The year 2018 witnessed mixed performance of the
+world's major economies. China's economy grew
+steadily and underwent some changes. The central
+government upheld a new development philosophy
+and continued the supply-side structural reform.
+China furthered the reform and opening-up, and
+strengthened infrastructure. The quality of China's
+economic growth improved. However, China's
+stock markets became more volatile and bond
+rates dropped due to the Fed's rate hikes, offshore
+market fluctuations, China-U.S. trade frictions, and
+risks in A share pledging.
+We continued to improve asset allocation of
+insurance funds. The Company conducted in-depth
+macro-economic research, tracked hot issues and
+analyzed market rates. Based on these efforts,
+the Company increased allocation to tax-exempt
+bonds including central and local government
+bonds as well as long-duration low-risk bonds
+including financial bonds issued by policy banks.
+The Company further narrowed the duration
+gap between assets and liabilities to improve
+asset-liability matching although this remains
+challenging given a shortage of long duration
+assets in the domestic market. In addition, we
+dynamically adjusted proportions of equity assets in
+the portfolio, increased long-term equity stakes, and
+diversified the portfolio to reduce impacts of equity
+market volatility.
+We constantly improved internal controls for
+investment risk management. First, the Company
+strengthened risk management under the C-ROSS,
+reviewed and enhanced risk appetite management,
+and optimized control mechanisms of market risks
+and credit risks. We implemented the C-ROSS Phase
+Il project to improve the solvency management
+system. Second, we carried out asset-liability
+risk management, improved the asset-liability
+management mechanism, and estimated and
+managed the asset-liability mismatch risk. Third,
+we continued to implement the framework for
+managing and monitoring insurance fund operations,
+and strictly conducted special risk management
+including five-category asset classification to ensure
+compliance of insurance fund utilization. Fourth,
+we explored Al technologies and applied smart
+early warning and knowledge graphs to investment
+risk management processes for efficient, effective
+investment risk warning and monitoring.
+32
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+INVESTMENT PORTFOLIO (BY CATEGORY)
+We optimized the presentation of investment assets for 2018 on the basis of risk management to provide
+clearer information, and restated comparable figures for the same period in 2017.
+5.7
+December 31, 2018
+(in RMB million)
+Cash and cash equivalents
+Carrying value
+%
+Carrying value
+%
+116,532
+4.1
+December 31, 2017
+Policy loans
+111,219
+4.0
+Wealth management products (1)
+32,183
+1.2
+39,760
+1.6
+Unlisted equities
+49,757
+1.8
+1.4
+38,785
+Long-term equity stakes
+93,225
+3.3
+58,413
+2.4
+Investment properties
+53,356
+1.9
+1.6
+33,226
+1.6
+44,276
+83,203
+3.4
+Debt schemes
+156,501
+5.6
+140,292
+5.7
+Wealth management products (1)
+285,663
+10.2
+242,761
+9.9
+Equity financial assets
+Stocks
+231,801
+8.3
+272,474
+11.1
+Equity funds
+2.0
+280
+(%)
+4.4
+(93.2)
+Ping An Insurance (Group) Company of China, Ltd. 35
+MANAGEMENT DISCUSSION AND ANALYSIS
+36
+86
+Business Analysis
+Banking Business
+Ping An Bank maintained stable, healthy business growth and realized a
+revenue of RMB116,716 million, up 10.3% year on year, and a net profit of
+RMB24,818 million, up 7.0% year on year.
+Ping An Bank made significant progress in its strategic transformation
+toward retail banking. In 2018, retail banking accounted for 53.0% and 69.0%
+of the Bank's revenue and net profit, up 8.9 pps and 1.4 pps year on year
+respectively. The proportions of retail deposits and loans rose by 4.7 pps
+and 8.0 pps from the beginning of 2018 to 21.7% and 57.8% respectively.
+Ping An Bank continues to de-risk itself. The Bank's deviation of non-
+performing loans was 97%, down 46 pps from the beginning of 2018. Both
+the balance and the percentage of loans more than 90 days overdue
+declined from the beginning of 2018.
+Ping An Bank's core tier 1 capital adequacy ratio was 8.54%, up 0.26 pps
+from the end of 2017. On January 25, 2019, the Bank issued RMB26 billion
+worth of A-share convertible corporate bonds to supplement the core tier
+1 capital.
+Annual Report 2018
+BUSINESS OVERVIEW
+Ping An Bank maintained stable, healthy business
+growth. In 2018, the Bank's revenue increased by
+10.3% year on year to RMB116,716 million. Net profit
+rose by 7.0% year on year to RMB24,818 million.
+(in RMB million)
+Operating results
+Net profit
+2018
+2017 Change (%)
+24,818
+23,189
+7.0
+In 2018, Ping An Bank continued to implement the
+strategy of "technology-driven breakthroughs
+in retail banking and enhancement of corporate
+banking." The Bank attached great importance to
+boosting business, improving customer experiences,
+and enhancing risk management through
+technological innovation and application. Besides,
+the Bank enhanced its capability of serving the real
+economy and managed financial risks in an all-round
+manner, laying a solid foundation for future
+development.
+Net interest revenue
+Net non-interest revenue (2)
+As at December 31, 2018, our investment in equity wealth management products totaled RMB32,183 million,
+accounting for 1.2% of the investable assets. The equity wealth management products held by Ping An are
+mainly products from insurance asset management companies. The underlying assets of these products are
+mainly tradable shares of domestic and foreign high-quality companies, indicating no significant liquidity
+risk. Private equity funds account for a tiny proportion; the exposure to them is small, and their underlying
+assets are mainly from the central and local governments' partnerships, with risks being controllable.
+There has been no default on the debt schemes and debt wealth management products held by Ping An,
+and overall risks are controllable. Over 98% of the debt schemes and trust plans held by Ping An have AAA
+external ratings, and about 2% of them have AA+ or AA external ratings. While some high-credit entities
+do not need credit enhancement for their financing, most of the assets have guarantees or collateral. In
+terms of industry and geographic distribution, we avoid high-risk industries and regions. Our target assets
+are mainly in the non-banking financial services, real estate, and expressway industries in developed and
+coastal areas including Beijing, Shanghai and Guangdong. In terms of investment timing and returns, Ping
+An seized time windows of large supplies of high-quality assets to boost overall portfolio yields.
+6.14
+5.40
+2.33
+2.7
+7.20
+7.00
+2.08
+9.4
+Equity wealth management products
+5.75
+4.23
+100.0
+5.84
+7.46
+3.96
+Notes: (1) The debt schemes and debt wealth management products were classified by industry in line with Shenyin Wanguo's industry
+classification.
+(2) Non-banking financial services refer to financial institutions other than banks, including insurers, asset management companies,
+and financial leasing companies.
+(3) Some industries have been grouped into "others" as they account for small proportions.
+6.83
+22.2
+74,745
+1.0
+17.2
+1,154,013
+849,035
+35.9
+843,516
+855,195
+(1.4)
+Deposits
+1,704,230
+2,128,557
+6.4
+Including: Retail deposits
+461,591
+340,999
+35.4
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+The insurance funds are comprised of investable
+funds from the life and health insurance business
+and the property and casualty insurance business.
+2,000,420
+74,009
+1,997,529
+Change
+(%)
+41,971
+31,777
+32.1
+Operating efficiency
+Cost-to-income ratio (%)
+Net interest margin (%)
+30.32
+29.89
+0.43 pps
+2.35
+Deposits and loans (1)
+Loans and advances
+Including: Retail loans
+Corporate loans
+2.37
+Notes: (1)
+(2)
+Loans and advances, deposits, and their components
+are exclusive of interest receivable.
+In accordance with the Ministry of Finance's Circular
+on Releasing Financial Report Formats for Financial
+Companies for 2018 (Cai Kuai [2018] No.36), we
+reclassified the net interest revenue generated by
+financial assets carried at fair value through profit or
+loss from net interest revenue into net non-interest
+revenue, and did not restate comparable figures for
+the same period in 2017.
+(in RMB million)
+December
+31, 2018
+December
+31, 2017
+-0.02 pps
+4,118
+3.77
+5.73
+6.0
+Total investment yield under
+the old accounting
+standards for financial
+instruments (3)(%)
+5.2
+(0.1)
+-0.6 pps
+-2.3 pps
+3.7
+6.0
+Notes: (1) Net investment income includes interest income from
+deposits and debt financial assets, dividend income
+from equity financial assets, operating lease income
+from investment properties, and the share of profits
+and losses of associates and jointly controlled entities.
+(2) Realized gains include capital gains from securities
+investments.
+(3) Net exchange gains or losses on investment assets
+denominated in foreign currencies are excluded from
+computation of the above yields. Average investment
+assets used as the denominator are computed in line
+with principles of the Modified Dietz method.
+(4) The Company follows the new accounting standards
+for financial instruments from January 1, 2018. The
+investment income data above for the current
+Reporting Period is under the new accounting
+standards for financial instruments. In accordance with
+rules for transition to the new accounting standards for
+financial instruments, the Company does not need to
+restate comparable figures for the same period in 2017.
+In 2018, the portfolio's net investment yield was 5.2%,
+down 0.6 pps year on year. This was mainly due to
+the lower dividend income from equity assets and
+the larger scale of the portfolio. As domestic and
+foreign capital markets fluctuated widely, assets
+carried at fair value through profit or loss surged.
+Meanwhile, gains and losses from fair value changes
+became more volatile under the new accounting
+standards for financial instruments. The Company's
+total investment yield was 3.7%, down 2.3 pps year
+on year.
+To allow comparison with peers, under the old
+accounting standards for financial instruments, the
+portfolio's total investment yield was 5.2%.
+Corporate bonds in capital markets
+As at December 31, 2018, the Company held
+RMB162,040 million worth of corporate bonds,
+which accounted for 5.8% of the investable assets.
+The overall credit rating has improved compared
+with the end of 2017. About 92% of the corporate
+bonds have AA and higher ratings while about 80%
+have AAA ratings. Credit quality of the portfolio
+remained sound as these corporate bonds are
+secure and risks are under control. For investment
+in corporate bonds, the Company carried out
+comprehensive risk management covering asset
+allocation, admission management and dynamic
+monitoring. The Company conducted strict rating
+and admission management, and reviewed and
+adjusted ratings to ensure that credit ratings
+reasonably reflected the credit profiles of bond
+issuers. Moreover, the Company conducted ex-ante
+monitoring of corporate bonds with potential risks
+on the basis of a name list, and established a rapid
+response mechanism to deal with negative opinions.
+The Company effectively identified and reported
+high-risk corporate bonds to enhance early warning
+and risk management.
+Debt schemes and debt wealth management
+products
+As at December 31, 2018, our investment in debt
+schemes and debt wealth management products
+totaled RMB442,164 million, accounting for 15.8%
+of the investable assets. We manage risks in debt
+schemes and debt wealth management products
+at three levels. The first level is asset allocation.
+We have developed a set of effective, robust asset
+allocation models. While keeping the overall risk
+within the risk appetite, we formulated a strategic
+asset allocation plan for each account, and set
+upper and lower limits on proportions of asset
+allocation. In tactical asset allocation, we gave
+opinions on capital allocation to non-standard debt
+instruments according to funds in each account,
+the return and liquidity demands, and similar
+assets' relative attractiveness. The second level is
+asset selection. The selection of assets is subject
+to strict internal and external requirements as
+well as the approval by clients. When selecting
+assets, we prefer projects located in developed
+areas and industry leaders encouraged by China's
+industry policies. The third level is post-investment
+management. Our post-investment management
+team closely monitors the assets. We have
+established a multi-dimensional risk warning
+framework covering all investment areas, assets, and
+instruments to ensure that overall investment risks
+-0.8 pps
+are thoroughly assessed and controllable.
+Total investment yield (3³) (%)
+5.2
+Profits/losses from fair
+value changes
+(37,099)
+648
+Impairment losses
+(387)
+44
+Total investment income
+5.8
+89,501
+N/A
+N/A
+(29.1)
+Total investment income
+under the old accounting
+standards for financial
+instruments
+125,970
+126,150
+Net investment yield (3) (%)
+126,150
+7.27
+34
+Ping An Insurance (Group) Company of China, Ltd.
+2.89
+Infrastructure and development zones
+5.5
+5.69
+10.44
+7.59
+Others (water supply, environmental
+protection, railway...)
+7.30
+Non-banking financial services
+Coal mining
+Others
+Total
+6.6
+5.84
+8.22
+4.74
+30.8
+Real estate
+Annual Report 2018
+5.50
+Electric power
+Structure and yield distribution of debt schemes and debt wealth management products
+Investment
+Nominal yield
+Maturity
+Industry
+proportion (%)
+(year)
+Remaining
+maturity (year)
+6.3
+Infrastructure
+5.77
+9.12
+5.17
+Expressway
+16.5
+5.88
+9.73
+5.41
+34.9
+The Company maintained robust asset-liability management, lengthened
+asset durations, and continued to narrow the duration gap between assets
+and liabilities. The Company improved risk management mechanisms,
+further refined risk limits, increased the monitoring frequency, and
+enhanced early warning and risk review to ensure that overall investment
+risks are controllable.
+53,746
+As of December 31, 2018, the Company's investment portfolio of insurance
+funds grew to RMB2.79 trillion by 14.1% from the beginning of 2018.
+216,090
+14.5
+Net earned premiums
+211,918
+188,219
+12.6
+December
+December
+Change
+(in RMB million)
+31, 2018
+31, 2017
+(%)
+Claim expenses
+(116,305)
+(106,474)
+9.2
+Core capital
+77,057
+70,095
+9.9
+Commission expenses of
+Actual capital
+85,557
+78,595
+8.9
+insurance operations
+(49,337)
+(38,973)
+247,526
+Total premium income
+(22.6)
+106
+8,522
+Accidental injury insurance
+600,225,807
+8,422
+7,478
+2,257
+1,324
+82.3%
+5,726
+Corporate property and
+casualty insurance
+14,834,461
+5,701
+2,687
+26.6
+1,470
+94.4%
+6,325
+Solvency Margin
+As at December 31, 2018, Ping An Property &
+Casualty's solvency margin ratio met the regulatory
+requirement. The solvency margin ratio of Ping An
+Property & Casualty increased from the beginning of
+2018 as Ping An Property & Casualty implemented a
+proactive risk management strategy.
+(in RMB million)
+Change
+2018
+2017
+(%)
+Premium income
+Reinsurance premium income
+247,444
+215,984
+14.6
+82
+150
+89.9%
+Minimum capital
+36,141
+Average investment assets
+249,576
+219,006
+Notes: (1) Core solvency margin ratio = core capital/minimum
+capital; comprehensive solvency margin ratio = actual
+capital/minimum capital.
+(2) For details of Ping An Property & Casualty's solvency
+margin, please visit the Company's website (www.
+pingan.cn).
+FINANCIAL ANALYSIS
+In 2018, Ping An Property & Casualty's profit before
+tax rose 3.3% year on year to RMB19,515 million.
+Net profit was RMB12,274 million, down 8.2% year
+on year, mainly due to the impact of an increase in
+income tax induced by the rising commission rates
+and business growth.
+Notes: (1) Administrative expenses include administrative
+expenses and impairment losses on receivables and
+others under the segmented income statement.
+(2) Total investment income includes interest revenue from
+non-banking operations, investment income, share of
+profits and losses of associates and jointly controlled
+entities, impairment losses on investment assets and
+interest expenses on assets sold under agreements
+to repurchase and placements from banks and other
+financial institutions under the segmented income
+statement.
+(3) The 2018 data are financial results of implementing the
+new accounting standards for financial instruments.
+In accordance with rules for transition to the new
+accounting standards for financial instruments, the
+Company does not need to restate comparable figures
+for 2017.
+Total investment yield (%)
+Other net revenue and expenses
+4.4
+5.3
+(5.6)
+14.0
+-0.9 pps
+19
+120
+(84.2)
+Profit before tax
+19,515
+18,899
+3.3
+Income tax
+(7,241)
+(5,527)
+31.0
+Net profit
+6.3 pps
+217.5
+223.8
+requirement ≥100%)
+5.8
+Administrative expenses (1)
+(44,760)
+(41,886)
+6.9
+Reinsurance commission
+Core solvency margin ratio
+revenue
+6,964
+6,226
+11.9
+(%) (regulatory
+requirement ≥50%)
+201.5
+38,236
+194.0
+Underwriting profit
+8,480
+7,112
+19.2
+Comprehensive solvency
+Combined ratio (%)
+96.0
+96.2
+-0.2 pps
+margin ratio (%)
+(regulatory
+Total investment income (2)
+11,016
+11,667
+7.5 pps
+656
+3,309
+6,492
+Including:
+auto insurance (%)
+23.2
+22.7
+0.5 pps
+Combined ratio (%)
+Profit before tax
+Net profit
+ROE (%)
+96.0
+96.2
+-0.2 pps
+18,899
+3.3
+12,274
+16.7
+13,372
+20.0
+(8.2)
+-3.3 pps
+Note: (1) The market share was calculated in accordance with the
+PRC insurance industry data published by the CBIRC.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 27
+MANAGEMENT DISCUSSION AND ANALYSIS
+28
+Business Analysis
+Property and Casualty Insurance Business
+Under the Group's "technology + ecosystem"
+strategy, Ping An Property & Casualty improved
+the claim efficiency and built differentiated
+advantages. For eight years in a row, Ping An
+Property & Casualty has been honored as China's
+"No.1 Auto and Property & Casualty Insurance
+Brand" for industry-leading customer satisfaction.
+Ping An Property & Casualty provided "superfast,
+convenient, considerate" claims services under
+a "customer-centric" standard, keeping the net
+promoter score above 80% among auto claim
+points of contact. The “510 City Superfast Onsite
+Investigation" capabilities were enhanced. The
+"smart grid" can help Ping An Property & Casualty
+dynamically assign investigators based on their
+locations. The "smart management engine" can
+automatically plan the optimal paths. Under an
+OMO (Online Merge Offline) service model, 96.4%
+of daytime auto accidents in cities requiring onsite
+investigation were investigated offline within 5-10
+minutes. Moreover, Ping An Property & Casualty
+assessed losses within seconds via "Al-based
+image recognition" and settled claims online via
+"facial recognition." In this way, Ping An Property
+& Casualty provided 62.6% of its customers with
+one-stop video-based claims self-services.
+Ping An Property & Casualty applied technologies
+to online customer development and improved
+the service system. Ping An Property & Casualty
+provided one-stop auto use services and diverse auto
+aftermarket services via the "Ping An Auto Owner"
+app. As at December 31, 2018, the "Ping An Auto
+Owner" app had over 55 million registered users,
+over 34 million of whom linked their auto use with
+the app. Of these 34 million users, 26 million are auto
+insurance customers of Ping An Property & Casualty.
+In December 2018, the app had over 11 million
+monthly active users, topping the list of auto service
+apps in China. In 2018, Ping An Property & Casualty
+upgraded its Digital Risk System (DRS). The "online +
+offline" risk management system provided customers
+with superb service experience. In 2018, Ping An
+Property & Casualty provided over 12,000 corporate
+customers with disaster/loss prevention services
+and over 400 major engineering projects with risk
+monitoring services. These included 13 major disaster
+warning/prevention campaigns and 550,000 early
+warnings messages. In this way, Ping An Property &
+Casualty reduced underwriting risks and delivered
+business growth. Ping An Property & Casualty
+sought innovative risk management technologies by
+combining business with research. Ping An Property
+& Casualty built the industry's first fire experiment
+base and developed a fire control loT (Internet of
+things) platform to help customers reduce risks.
+Annual Report 2018
+NUMBER OF CUSTOMERS AND DISTRIBUTION
+NETWORK
+Ping An Property & Casualty distributed the
+products mainly through its network of 42 branches
+and over 2,660 sub-branches, sales service outlets
+and business outlets across China. Main distribution
+channels included in-house sales representatives,
+sales agents, insurance brokers, telemarketing,
+online marketing and cross-selling.
+Number of customers
+(in thousand)
+Retail
+Corporate
+Total
+0.5 pps
+20.5
+21.0
+Market share(1) (%)
+In 2018, the portfolio's net investment yield and total investment yield
+were 5.2% and 3.7% respectively. Under the old accounting standards for
+financial instruments, the portfolio's total investment yield was 5.2%.
+Business Analysis
+Property and Casualty Insurance Business
+In 2018, Ping An Property & Casualty's premium income grew by 14.6% year
+on year, 3.0 pps faster than the market average. The combined ratio was
+96.0%, improved by 0.2 pps year on year; the ROE was 16.7%, indicating
+high quality of business.
+Ping An Property & Casualty enhanced claims services to build
+differentiated advantages. Through upgraded "510 City Superfast Onsite
+Investigation" services, we processed 96.4% of the urban onsite auto claim
+investigations within 5-10 minutes in daytime in 2018. The net promoter
+score at auto claim points of contact stayed above 80%.
+Ping An Property & Casualty applied new technologies to online customer
+development and improved the service system. The "Ping An Auto Owner"
+app had over 55 million registered users, over 34 million of whom linked
+their auto use with the app. In December 2018, the app had over 11 million
+monthly active users, topping the list of auto service apps in China.
+BUSINESS OVERVIEW
+The Company conducts property and casualty
+insurance business mainly through Ping An Property
+& Casualty. The business scope of Ping An Property
+& Casualty covers all lawful property and casualty
+insurance businesses including auto insurance,
+corporate property and casualty insurance,
+engineering insurance, cargo insurance, liability
+insurance, guarantee insurance, home contents
+insurance, accident and health insurance, as well as
+international reinsurance business.
+In 2018, China's economic growth remained stable
+and transformations continued. New growth drivers
+emerged for property and casualty insurance due
+to recoveries of domestic and foreign upstream
+industries including infrastructure, high technology
+and equipment manufacturing. Three provinces,
+namely Shaanxi, Guangxi and Qinghai, fully
+liberalized auto insurance premium rates after the
+third reform of commercial auto insurance premium
+rates was conducted in seven regions. Commercial
+auto insurance premium rates declined on average,
+unlocking reform dividends, benefiting customers,
+and improving the market environment.
+Ping An Property & Casualty maintained excellent
+business quality with strong management and risk
+screening capabilities. Ping An Property & Casualty
+is the second largest property and casualty insurer
+in China by premium income. In 2018, Ping An
+Property & Casualty's profit before tax rose 3.3%
+year on year. The net profit decreased 8.2% year on
+year due to the impact of an increase in income tax
+induced by the rising commission rates and business
+growth. Ping An Property & Casualty steadily
+expanded its share in the auto insurance market by
+following a robust marketing strategy, and realized
+fast growth in the non-auto insurance business. Ping
+An Property & Casualty worked with other members
+of the Group to expand the credit guarantee
+insurance business, keeping risks under control by
+means of fintechs.
+(in RMB million)
+2018
+2017 Change (%)
+Distribution network
+Number of direct sales
+representatives (1)
+Premium income
+Including:
+215,984
+14.6
+auto insurance
+181,768
+170,508
+6.6
+Non-auto insurance
+56,211
+38,929
+44.4
+Accident and health
+insurance
+9,465
+6,547
+44.6
+247,444
+December 31, December 31,
+2018
+2017
+Change (%)
+Earned
+(in RMB million)
+amount
+income
+premium
+Claim
+expenses
+Underwriting
+profit
+Combined
+contract
+ratio
+liabilities
+Auto insurance
+55,213,568
+181,768
+Premium
+170,117
+4,354
+97.4%
+132,594
+Guarantee insurance
+335,613
+33,012
+19,414
+13,789
+2,205
+88.6%
+46,411
+Liability insurance
+644,610,594
+8,463
+91,633
+12,274
+Insured
+Ping An Insurance (Group) Company of China, Ltd.
+60,577
+52,063
+16.4
+1,959
+1,683
+16.4
+62,536
+16.4
+9,272
+8,479
+9.4
+Note: (1) In 2018, Ping An Property & Casualty transformed the
+organizational structure for group business. The number
+of direct sales representatives of group business was
+calculated under the new organizational structure. And
+the data for 2017 was restated.
+Combined Ratio
+Ping An Property & Casualty pursued innovation and
+development, gaining expertise while maintaining
+strong profitability.
+Insurance
+2018
+Expense ratio (¹) (%)
+Loss ratio (2) (%)
+41.1
+39.6
+1.5 pps
+54.9
+56.6
+-1.7 pps
+Combined ratio (%)
+96.0
+96.2
+-0.2 pps
+Notes: (1) Expense ratio = (commission expenses of insurance
+business administrative expenses - reinsurance
+commission revenue)/net earned premiums.
+(2) Loss ratio = claim expenses/net earned premiums.
+Operating Data by Product Type
+Among all insurance products offered by Ping An
+Property & Casualty in 2018, the top five sources of
+premium income were auto insurance, guarantee
+insurance, liability insurance, accidental injury
+insurance and corporate property and casualty
+insurance. Premium income of these five insurance
+segments accounted for 95.9% of Ping An Property &
+Casualty's total premium income in 2018.
+2017 Change (%)
+13,372
+19,515
+Annual Report 2018
+58
+91
+Accident and health insurance
+Profit or losses from
+17.6
+6,712
+7,895
+Non-auto insurance
+5.9
+(1,136)
+(1,203)
+Realized income (2)
+(8.4)
+7,524
+6,895
+Auto insurance
+4.9
+12,810
+13,438
+56.9
+Net investment income(¹)
+fair value changes
+44
+Claim expenses
+(5.6)
+11,667
+11,016
+Total investment income
+(22.6)
+106
+82
+Non-auto insurance
+266.7
+(51)
+(187)
+Investment assets
+Impairment losses on
+(22.6)
+106
+82
+Inward reinsurance premium
+N/A
+(1,032)
+14.294
+14,881
+Ceded premium
+13,568
+12,974
+Shanghai
+17.6
+11,158
+13,127
+Shandong
+17.4
+12,705
+14,920
+Zhejiang
+14.5
+14,960
+17,125
+Jiangsu
+25.8
+34,799
+43,788
+2017 Change (%)
+(4.4)
+Subtotal
+101,934
+87,190
+Change (%)
+2017
+2018
+(in RMB million)
+Change (%)
+2017
+2018
+(in RMB million)
+Total Investment Income
+(in RMB million)
+MANAGEMENT DISCUSSION AND ANALYSIS
+Annual Report 2018
+30
+Facing a developing global reinsurance market,
+Ping An Property & Casualty maintained a prudent
+approach to reinsurance and its close cooperation
+with reinsurance brokers and reinsurers. Ping An
+Property & Casualty fully leveraged reinsurance to
+scale up its underwriting and diversify operating
+risks. While ensuring the healthy and steady growth,
+Ping An Property & Casualty also empowered
+reinsurance with technologies. The reinsurance
+business of Ping An Property & Casualty received
+strong support in key reinsurance markets in
+Europe, the U.S., Bermuda and Asia. Ping An
+Property & Casualty has been in close cooperation
+with nearly 100 reinsurance companies and
+reinsurance brokers worldwide, including China
+Property & Casualty Re, Swiss Re, Munich Re and
+Hannover Re.
+Reinsurance Arrangements
+14.6
+215,984
+247,444
+Premium income in total
+16.9
+Ping An Insurance (Group) Company of China, Ltd.
+2018
+2017
+Change (%)
+Income Tax
+6.2
+39,794
+1,349
+1,284
+Tax and surcharges
+42,253
+Operating expenses
+Change (%)
+2017
+2018
+year.
+In 2018, affected by factors including the lower
+dividend income from equity investments and
+the larger scale of the portfolio, the property and
+casualty insurance business investment portfolio's
+net investment yield was 5.4%, down by 0.4 pps
+year on year. In 2018, capital markets at home and
+abroad fluctuated widely. After Ping An Property
+& Casualty implemented the new accounting
+standards for financial instruments, assets carried
+at fair value through profit or loss surged, while
+gains or losses from fair value changes became
+more volatile. The property and casualty insurance
+business investment portfolio's total investment
+income dropped by 5.6% year on year and the total
+investment yield was 4.4%, down 0.9 pps year on
+(3) Net exchange gains or losses on investment assets
+denominated in foreign currencies are excluded from
+computing of the above yields. Average investment
+assets used as the denominator are computed in line
+with principles of the Modified Dietz method.
+Notes: (1) Net investment income includes interest income from
+deposits and debt financial assets, dividend income
+from equity financial assets, operating lease income
+from investment properties, and the share of profits
+and losses of associates and jointly controlled entities.
+(2) Realized gains include capital gains from securities
+investments.
+(in RMB million)
+Administrative expenses
+In 2018, commission expenses of insurance
+operations grew by 26.6% year on year, while their
+proportion in premium income climbed by 1.9 pps
+year on year, mainly due to premium income growth
+and intensified competition.
+1.9 pps
+18.0
+(4.8)
+Impairment losses on
+Effective tax rate (¹) (%)
+receivables and others
+(8.2)
+Business Analysis
+Ping An Insurance (Group) Company of China, Ltd. 31
+Annual Report 2018
+In 2018, Ping An Property & Casualty's effective
+income tax rate grew by 7.9 pps year on year,
+largely due to the impact of an increase in income
+tax induced by the rising commission rates and
+business growth.
+Note: (1) Effective tax rate = income tax/profit before tax.
+In 2018, administrative expenses rose by 6.9% year
+on year, mainly driven by continued growth in
+insurance business.
+7.9 pps
+29.2
+19.9
+37.1
+2017
+2018
+6.9
+41,886
+44,760
+Total
+64.6
+743
+1,223
+Change
+2018
+income (%)
+Commission expenses as a
+52.2
+2,069
+3,148
+Accident and health insurance
+45.0
+14,842
+21,523
+Non-auto insurance
+2.3
+89,563
+91,634
+Auto insurance
+-0.9 pps
+5.3
+4.4
+-0.4 pps
+5.8
+5.4
+Net investment yield (3) (%)
+Total investment yield (3) (%)
+Total claim expenses
+116,305
+106,474
+9.2
+26.6
+38,973
+49,337
+Total commission expenses
+32.0
+70.3
+1,473
+2,509
+Accident and health insurance
+2.904
+percentage of premium
+3,834
+24.3
+34,596
+42,994
+Auto insurance
+Change (%)
+(in RMB million)
+2017
+2018
+Commission Expenses of Insurance Operations
+Non-auto insurance
+Guangdong
+4.1
+23.2
+7.1
+17,530
+Others
+(54.2)
+27.3
+58,915
+10.9
+12,499
+26,976
+62.7
+10.6
+22,843
+15.0
+37,167
+Direct selling
+24.8
+Telemarketing and online channels
+18.1
+5.8
+Premium income in total
+Investment Portfolio of Insurance Funds
+Business Analysis
+Property and Casualty Insurance Business
+Reconciliations between net profit in Ping An Property & Casualty's statutory financial statements and
+statements under the new standards are presented below to allow comparison with peers.
+(in RMB million)
+Change
+2018
+40.3
+2017
+Below is a breakdown of premium income for our
+property and casualty insurance business by region:
+In 2018, Ping An Property & Casualty transformed
+its channel-based business model from being
+sales-focused to an OMO model of services and
+operations to facilitate business transformation and
+strategic development.
+14.6
+100.0
+215,984
+100.0
+247,444
+(in RMB million)
+39,192
+19.8
+48,903
+2017
+2018
+Amount
+Below is a breakdown of premium income for our property and casualty insurance business by channel:
+Premium Income
+(2) In accordance with rules for transition to the new accounting standards for financial instruments, the Company does not need
+to restate comparable figures for 2017.
+Notes: (1) Adjustments mainly arise from changes in classification, measurement, and impairment of financial assets under the new
+accounting standards for financial instruments.
+Change
+(8.2)
+12,274
+for financial instruments (2)
+Profit in financial statements under the new accounting standards
+N/A
+(935)
+Investment income adjustments (1)
+(1.2)
+13,372
+(in RMB million)
+Amount
+%
+Cross-selling
+79.2
+14.8
+32,047
+(%)
+Profit in statutory financial statements under the old accounting standards
+for financial instruments
+57,442
+Agencies
+17.7
+23.4
+50,488
+24.0
+59,426
+Car dealers
+(%)
+%
+Amount
+13,372
+Ping An Insurance (Group) Company of China, Ltd. 29
+13,209
+3,957
+(21.2)
+(1,319)
+(1,039)
+Administrative expenses (2)
+Total investment income (3)
+Other net revenue and
+expense
+(8.2)
+4,016
+3,685
+(58.0)
+(276)
+(116)
+-0.01 pps
+0.66
+0.65
+(9.6)
+651,302
+588,788
+(11.4)
+4,292
+3,801
+1,104
+2,236
+(50.6)
+163
+(29.8)
+Total
+534,124
+652,756
+(18.2)
+Notes: (1) Other investments refer to investments other than the
+above, including structured equity investment, industrial
+investment, and other investment businesses.
+(2) Pledge and other financing refers to financing other
+than the above, including financing by pledging or
+acquiring securities, financial assets and other debts.
+(3) An administrative trust refers to a trust scheme under
+which a trust company, acting as the trustee, provides
+the trustor (beneficiary) with administrative and
+executive services for specified purposes.
+As at December 31, 2018, Ping An Trust had
+RMB534,124 million in assets under management,
+18.2% lower than at the beginning of 2018, as the
+assets under administration decreased due to the
+business mix adjustment under the new regulations
+on asset management.
+In 2018, the fees and commission revenue from trust
+business declined by 11.4% year on year, mainly
+due to a year-on-year decrease in floating fees and
+commission revenue of the investment business
+amid capital market volatility.
+Fees and commission revenue
+Monthly average assets
+held in trust
+SECURITIES BUSINESS
+The Company provides securities brokerage, futures
+brokerage, investment banking, asset management,
+and financial advisory services through Ping An
+Securities and its subsidiaries including Ping An
+Futures, Ping An Caizhi, Ping An Securities (Hong
+Kong), and Ping An Pioneer Capital.
+In 2018, the capital market delivered lackluster
+performance amid changes in China's macro
+economic conditions and international trade
+frictions. Facing huge challenges, the securities
+industry recorded a year-on-year drop of 41.2% in
+net profit. Ping An Securities sought development
+by building differentiated advantages on the basis
+of the Group's integrated financial business model
+and technologies. In 2018, net profit of Ping An
+Securities dropped by 20.9% year on year, still better
+than industry average. In brokerage business, Ping
+An Securities continued to empower its business
+with technologies, strengthened internal and
+external cooperation, and integrated offline and
+online businesses. In addition, Ping An Securities
+conducted customer development on the basis
+of segmentation, and adopted technologies to
+upgrade customer services and improve customer
+Annual Report 2018
+(21.3)
+4,975
+3,913
+Profit before tax
+Income tax
+288.1
+42
+Business Overview
+352,322
+Change (%)
+2018
+59.7
+(5,051)
+(8,065)
+expense
+Total fee and commission
+24.3
+(345)
+(429)
+Others
+52.5
+(4,213)
+(6,426)
+Bank card fee expense
+145.4
+(493)
+(1,210)
+expense
+Agency commission
+Fee and commission expense
+Net fee and commission
+revenue
+31,297
+30,674
+(in RMB million)
+Fees and commission
+expenses
+Fee rate of assets held in
+trust (¹) (%)
+Results of Operation
+was 192.2% (regulatory requirement ≥100%), and
+the ratio of net capital to net assets was 82.8%
+(regulatory requirement ≥40%), meeting regulatory
+requirements.
+In 2018, China's economy remained stable and
+the economic structure improved. Committed to
+responsible investment, Ping An Trust connected
+customers to opportunities in "institutional asset
+management, boutique alternative investment
+banking, and trust business." Ping An Trust
+constantly enhances product, investment and risk
+management capabilities. Under the new strategies,
+Ping An Trust will focus on its core businesses
+including "financial services, infrastructure
+investment, private equity, and investment banking"
+in the coming years. Ping An Trust has been
+improving its capacity to provide excellent products
+and services. In financial services, Ping An Trust
+provided institutional investors including financial
+institutions with quality trust products and premium
+asset management services. In infrastructure
+investment, Ping An Trust focused on industries
+including urban infrastructure, transportation
+and energy. Ping An Trust channeled private
+capital to China's key infrastructure projects. In
+private equity, Ping An Trust developed business
+in consumption upgrade, health care, modern
+services, cutting-edge technologies and advanced
+manufacturing, facilitating upgrade of the real
+economy. In investment banking, Ping An Trust
+mainly provided small and medium-sized financial
+institutions with comprehensive asset and liability
+management services. Leveraging the Group's
+technologies, Ping An Trust improved its smart
+risk management platform to well manage risks
+and empower business. Ping An Trust continued
+to upgrade the risk management framework
+featuring full participation, full-process control and
+full coverage of business. As at December 31, 2018,
+it had RMB17,145 million in net capital, while the
+ratio of net capital to the total of all risk capital
+The Company provides trust services through Ping
+An Trust and Ping An New Capital.
+Business Overview
+TRUST BUSINESS
+2017
+Ping An Financial Leasing focused on leasing markets in mature industries,
+and developed innovative industry benchmarks including Ping An
+Healthcare Diagnostics Center. Ping An Financial Leasing recorded strong
+net profit growth of 64.7% year on year.
+Ping An Securities continued to outperform peers by pursuing business
+transformation and building differentiated advantages with the support of
+Group's integrated financial services model and technology.
+Ping An Trust strengthened risk management, devised new strategies, and
+adopted new business models.
+Asset Management Business
+Business Analysis
+42
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 41
+Annual Report 2018
+2.0
+Ping An Asset Management maintained steady business growth. As at
+the end of 2018, the investment assets under management (AUM) reached
+nearly RMB2.89 trillion, up 8.3% from the beginning of the year.
+247,425
+Administrative category (3)
+44.5
+Financing category
+1,913
+1,499
+27.6
+Administrative category
+482
+630
+(23.5)
+Assets held in trust
+December
+(in RMB million)
+31, 2018
+December
+31, 2017
+Change (%)
+Fee rate of assets held in
+trust (%)
+0.65
+0.66
+-0.01 pps
+Investment category (%)
+(35.0)
+2,163
+1,406
+Investment category
+(23.9)
+Net fees and commission
+revenue
+Net profit
+Notes: (1) Fee rate of assets held in trust = fees and commission
+revenue/monthly average assets held in trust.
+(2) Administrative expenses include administrative
+expenses, and impairment losses on receivables and
+others under the segmented income statement.
+(3) Total investment income includes interest revenue from
+non-banking operations, investment income, share of
+profits and losses of associates and jointly controlled
+entities, impairment losses on investment assets, and
+interest expenses on assets sold under agreements
+to repurchase and placements from banks and other
+financial institutions under the segmented income
+statement.
+(4) The 2018 data are financial results of implementing the
+new accounting standards for financial instruments.
+In accordance with rules for transition to the new
+accounting standards for financial instruments, the
+Company does not need to restate comparable figures
+for the same period in 2017.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+1.14
+MANAGEMENT DISCUSSION AND ANALYSIS
+Fees and commission revenue
+(in RMB million)
+2018
+2017
+Change (%)
+(11.5)
+Fees and commission revenue
+3,801
+4,292
+(11.4)
+In 2018, net profit of the trust business dropped
+by 23.9% year on year due to: (a) year-on-year
+decreases in exits from projects and dividend
+income; and (b) a year-on-year decrease in net
+fees and commission revenue as Ping An Trust
+proactively adjusted its business mix to comply with
+the new regulations on asset management.
+1.60
+-0.46 pps
+Investment category
+Financing category
+185,870
+167,081
+11.2
+Infrastructure industry
+financing
+12,421
+18,016
+(31.1)
+(29.4)
+Real estate financing
+47,028
+97.6
+Corporate loans
+72,753
+96,661
+(24.7)
+Pledge and other financing (2)
+7,766
+5,376
+92,930
+3,012
+60,046
+Other investments (1)
+100,829
+133,353
+(24.4)
+Financing category (%)
+1.10
+(1,018)
+0.13 pps
+Capital market investment
+46,767
+42,418
+23,341
+100.4
+Administrative category (%)
+0.17
+0.17
+Financial institutions'
+investment
+11,644
+49,966
+(76.7)
+(901)
+0.97
+2,668,805
+third-party asset
+3,444
+(8.0)
+Total investment income (1)
+4,654
+3,321
+40.1
+Other revenue(2)
+2,928
+2,196
+33.3
+Revenue
+10,749
+8,961
+Administrative expenses (3)
+(3,497)
+(3,632)
+Cost-to-income ratio (4) (%)
+52.7
+53.5
+20.0
+(3.7)
+-0.8 pps
+Finance costs
+3,167
+(1,125)
+revenue
+4.4
+Change (%)
+Ping An Financial Leasing
+305,881
+268,718
+management
+Business Analysis
+Asset Management Business
+experience. The market share by trading volume in
+December 2018 was 3.14%, up 0.57 pps year on year.
+In investment banking, Ping An Securities improved
+its industry-specific expertise. Ping An Securities
+ranked among the top tier by the number of bonds
+and ABS underwritten. In trading business, Ping
+An Securities continued to optimize its revenue
+structure by developing the Fixed Income, Currency
+and Commodities (FICC) capacity and employing
+multiple trading strategies.
+Results of Operation
+2018
+2017
+Change (%)
+(5.7)
+(in RMB million)
+Fees and commission revenue
+4,014
+4,255
+Fees and commission
+expenses
+(847)
+(811)
+Net fees and commission
+3.1
+(580)
+(4,113)
+As a leading asset manager in China, Ping An
+Asset Management applied new technologies to
+investment research, investment decision-making,
+trade execution, risk management and so on. Going
+forward, Ping An Asset Management will increase
+investment to facilitate technology-powered
+transformation and innovation. Ping An Asset
+Management will leverage technology to enhance
+its core competitiveness and gain differentiated
+advantages.
+44
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Results of Operation
+(in RMB million)
+2018
+2017
+Net profit
+2,662
+2,581
+Revenue from third-party
+asset management
+1,754
+1,888
+(in RMB million)
+Assets under management
+Including: AUM of
+December
+31, 2018
+December
+31, 2017
+2,889,616
+management services.
+Other expenses (5)
+Amid changes in political and economic landscapes,
+Ping An Asset Management upheld the philosophies
+of value investing and prudence. Ping An Asset
+Management conducted in-depth macro-economic
+research, seized market opportunities, prevented
+market risks, and created value for customers.
+Ping An Asset Management gave full play to its
+advantages in alternative investment to support
+the real economy, facilitate development of the
+society and enhance people's livelihood. In addition
+to serving Ping An's insurance businesses, Ping
+An Asset Management continued to optimize the
+third-party asset management business mix, improve
+business quality and satisfy customers' demands.
+Third-party AUM declined because entrusted
+assets from banks shrank and growth in premium
+income slowed down due to tightening regulation
+and deleveraging. Following the promulgation of
+the new regulations on asset management, Ping
+An Asset Management, as a leading asset manager
+in China, will continue to improve its investment
+capability and risk management. Ping An Asset
+Management is committed to providing investors
+with professional, efficient and premium asset
+Ping An Asset Management
+(2,170)
+94.0
+89.5
+Profit before tax
+2,014
+2,579
+(21.9)
+(334)
+(456)
+(26.8)
+1,680
+2,123
+(20.9)
+Income tax
+Net profit
+Notes: (1) Total investment income includes interest revenue from
+non-banking operations, investment income and share
+of profits and losses of associates and jointly controlled
+entities under the segmented income statement.
+Investment income excludes operating lease income
+from investment properties.
+(2) Other revenue includes other revenues and other
+gains, foreign exchange gains or losses and operating
+lease income from investment properties under the
+segmented income statement. Other revenue and other
+gains exclude non-operating gains.
+(3) Administrative expenses include administrative
+expenses and impairment losses on receivables and
+others under the segmented income statement.
+(4) Cost-to-income ratio = administrative expenses/
+(revenue other expenses).
+(5) Other expenses include interest expenses on assets
+sold under agreements to repurchase and placements
+from banks and other financial institutions, other
+expenses, impairment losses on investment assets,
+and non-operating gains under the segmented income
+statement.
+(6) The 2018 data are financial results of implementing the
+new accounting standards for financial instruments.
+In accordance with rules for transition to the new
+accounting standards for financial instruments, the
+Company does not need to restate comparable figures
+for the same period in 2017.
+OTHER ASSET MANAGEMENT BUSINESSES
+The other asset management business represents
+results of companies including Ping An Asset
+Management, Ping An Financial Leasing, and Ping
+An Overseas Holdings.
+Ping An Asset Management is responsible for
+domestic investment management business of the
+Company. Entrusted with the insurance funds of
+the Company, Ping An Asset Management also
+provides investment products and third-party asset
+management services to other investors through
+various channels.
+Ping An Insurance (Group) Company of China, Ltd. 43
+(7.1)
+8.3
+69.4
+Profit before tax
+Income tax
+32,231
+30,157
+6.9
+(7,413)
+(6,968)
+6.4
+Net profit
+24,818
+23,189
+7.0
+40
+Annual Report 2018
+Notes: (1) Net interest margin = net interest revenue/average
+balance of interest-earning assets.
+(2) Cost-to-income ratio = general and administrative
+expenses/total revenue.
+(3) Credit cost = loan impairment loss/average balance of
+loans (including bill discount).
+(4) In accordance with rules for transition to the new
+accounting standards for financial instruments, the
+Company does not need to restate comparable figures
+for 2017.
+Ping An Bank continued to optimize the business
+mix as the retail loans grew in terms of size and
+proportion, and the return on interest-earning assets
+increased from the beginning of the year. In 2018,
+the net interest spread was 2.26%, up 0.06 pps year
+on year. The net interest margin was 2.35%, down
+0.02 pps year on year. The Bank has optimized its
+business mix, reversed the downward trend, and
+steadily raised the net interest margin quarter on
+quarter since the second quarter of 2018.
+Ping An Insurance (Group) Company of China, Ltd.
+Net Interest Revenue
+(3,210)
+(in RMB million)
+2.55 -0.20 pps
+Other expenses
+10.3
+Capital adequacy ratio (%)
+(regulatory requirement
+General and administrative
+expenses
+(35,391)
+≥ 10.5%)
+11.50
+11.20
+0.30 pps
+Note: Capital requirements regarding credit risk, market risk and
+operational risk are measured by the weighted method,
+standard method, and basic indicator method respectively.
+Ping An Bank continued to make its outlets smarter
+and improved their geographic distribution. As at
+December 31, 2018, Ping An Bank had 80 branches
+and 1,057 business outlets. The Bank has opened or
+renovated 136 retail stores.
+Cost-to-income ratio (2) (%)
+Loan impairment loss
+Average balance of
+loans (including bill
+discount)
+30.32
+(43,657)
+(31,616)
+29.89
+(40,803)
+11.9
+0.43 pps
+7.0
+1,858,353
+1,602,503
+16.0
+Credit cost (3) (%)
+2.35
+(5,437)
+Change (%)
+2018
+Change (%)
+0.89
+32.5
+177,111
+234,657
+Change (%)
+December
+31, 2017
+December
+31, 2018
+Non-performing asset
+ratio (%)
+Total assets
+(in RMB million)
+64.7
+1,999
+75.7
+9,349
+16,427
+3,292
+2017 Change (%)
+2018
+Results of Operation
+(in RMB million)
+Revenue
+Net profit
+Since it was founded, Ping An Financial Leasing
+has upheld the philosophy of "lending everything
+with the heart” and given full play to the industry's
+characteristics of "financing and leasing." Ping An
+Financial Leasing has proactively served the real
+economy and led many segments of the leasing
+market including health care, energy, metallurgy,
+engineering, education, culture, manufacturing, and
+processing. Moreover, Ping An Financial Leasing
+pioneered the "Innovative Leasing 2.0" concept,
+focusing on operating leasing, leasing + the internet,
+and industry operations. Ping An Financial Leasing
+developed many innovative business models
+including Ping An Healthcare Diagnostics Center.
+Ping An Financial Leasing has become an industry
+leader and innovation pioneer by increasing the
+depth and width of leasing business and extending
+the business models.
+Ping An Financial Leasing is a wholly-owned
+subsidiary of Ping An, specializing in financial
+leasing. Ping An Financial Leasing's goal is to
+become an expert leader in serving small and
+medium-sized enterprises (SMEs) and specialized
+markets with unique commercial vitality and
+scalability. To achieve this goal, Ping An Financial
+Leasing takes advantage of the Group's capital
+strength and strong brand, and the integrated
+financial service platform.
+(12.1)
+0.91
+2017
+-0.02 pps
+Ping An Insurance (Group) Company of China, Ltd. 45
+Interest revenue
+In 2018, the net fee and commission revenue of the
+Bank grew 2.0% year on year to RMB31,297 million
+mainly due to the increase in the bank card fee
+revenue.
+Due from the PBC
+4,002
+4,232
+(5.4)
+10.2
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+In wealth management, Lufax Holding provides
+the middle class with over 5,000 financial
+products. In 2018, amid industry adjustments
+and deleveraging, Lufax Holding embraced
+regulatory requirements and pursued business
+transformations and innovations. By applying new
+technologies including AI, Lufax Holding placed a
+robo-advisor on its platform to cut operating costs
+and optimize interactions. The newly launched
+customer management system KYC4.0 facilitates
+precise customer profiling and customized
+product recommendation on the basis of customer
+tagging and machine learning. Lufax Holding uses
+blockchains to link regulators and other parties
+in the wealth management field, facilitating more
+secure, transparent and efficient transaction
+processes. As at the end of 2018, Lufax had 40.35
+million registered users on its platform, up 19.3%
+from the beginning of 2018. AUM dropped by 20.0%
+from the beginning of 2018 to RMB369,414 million
+due to the asset structure adjustment and active
+product cleanup. AUM rebounded in the fourth
+quarter of 2018, up 2.1% from the end of September,
+driven by the product mix adjustment and business
+innovations.
+Lufax Holding is a world-leading comprehensive
+online wealth management and retail lending
+technology platform, and also provides
+financial institutions and local governments
+with comprehensive financial solutions. In 2018,
+Lufax Holding embraced changes in the industry
+and regulations by adjusting the business lines
+and product mix for wealth management, retail
+lending and government finance. By optimizing
+its cost structure, Lufax Holding recorded rapid
+profit growth. Lufax Holding completed its Series
+C financing from world-renowned institutional
+investors at a post-money valuation of USD39,400
+million.
+LUFAX HOLDING
+The Company conducts fintech & healthtech
+business via companies including Lufax Holding,
+Ping An Good Doctor, OneConnect, Ping An
+HealthKonnect, and Autohome.
+OneConnect serves more than 3,000 financial institutions as a fintech
+service platform covering the whole industry chain. In 2018, OneConnect
+completed Series A financing at a post-money valuation of USD7,500
+million. Ping An HealthKonnect raised USD1,150 million in early 2018 at a
+post-money valuation of USD8,800 million.
+Ping An Good Doctor (Stock Code: 01833.HK) provides online-merge-offline
+health care services for over 265 million registered users. In 2018, Ping An
+Good Doctor's revenue was RMB3,338 million, up 78.7% year on year; net
+loss was RMB913 million, down 8.9% from 2017.
+Lufax Holding maintained steady profit growth in wealth management,
+retail lending and government finance by seeking innovations and ensuring
+compliance. Lufax Holding completed its Series C financing from world-
+renowned institutional investors at a post-money valuation of USD39,400
+million.
+Fintech & Healthtech Business
+Business Analysis
+46
+MANAGEMENT DISCUSSION AND ANALYSIS
+Annual Report 2018
+35,725
+(65.3)
+revenue
+9.2
+69.0
+67.6
+1.4 pps
+Net profit from retail banking
+% of net profit from
+retail banking
+Ping An Bank strives to build a smart boutique
+corporate bank. In 2018, Ping An Bank focused
+on developing high-quality businesses, channels
+and projects of corporate banking. The Bank fully
+leverages technologies including cloud computing,
+blockchain and the internet of things to empower
+management and business innovation, and develop
+a smart boutique corporate banking system. As
+at the end of 2018, the "Ping An Pocket Finance"
+app had 280,000 registered users that contributed
+a trading volume of over RMB830 billion. In
+2018, transactions on the supply chain accounts
+receivable service platform (SAS) exceeded
+RMB10,000 million. The platform has provided
+financial services for 111 core enterprises and
+upstream medium, small and micro-businesses. As
+at the end of 2018, Ping An Bank reviewed 14,103
+customers through "KYB for Small Enterprises," and
+granted KYB loans of RMB10,700 million. Besides,
+the Bank fully implemented the asset-light financing
+strategy in developing boutique investment
+banking and interbank business. In 2018, the Bank
+underwrote RMB161.9 billion worth of bonds in the
+interbank market, up 54.0% year on year. Ping An
+Bank increased the value of interbank institutional
+customers by integrating asset management,
+trading and sales. As at the end of 2018, ET-Bank
+had cooperated with 2,079 customers, up 150 from
+the beginning of 2018.
+Note: (1) Retail customers include debit card holders and credit
+card holders, with duplicates removed.
+38
+15,679
+38
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Technology-driven business yielded strong
+results. Taking "technology-driven business" as
+the driver of strategic transformation, Ping An
+Bank increased investment in technology. In 2018,
+IT capital expenditure grew by 82% year on year.
+As at the end of 2018, the Bank's IT staff members
+(including outsourcing personnel) grew to nearly
+6,000, up over 44% from the beginning of 2018. Ping
+An Bank implemented agile transformation. Under
+the lean and agile R&D models, the Bank fully
+integrated technology with business to improve
+the product iteration speed, delivery quality, and
+customer experiences. In 2018, the Bank's business
+requirement development deliveries increased by
+over 100% year on year. Ping An Bank developed a
+leading technology platform. The Bank transformed
+its IT architecture from a centralized framework
+to a distributed one, and its infrastructure from
+a traditional framework to a cloud-based one, to
+support rapid business growth, transformation
+towards online operations, and product and service
+innovation. Ping An Bank continued to promote
+technological innovations. The Bank empowered its
+businesses with the Group's core technologies and
+resources including Al, blockchain, and cloud. In this
+way, Ping An Bank improved customer experiences,
+diversified financial products, innovated business
+models, optimized risk management and operational
+efficiency, and promoted smart management. For
+instance, Ping An Bank applied the robotic process
+automation (RPA) technology to various use cases,
+including background checking for corporate
+account opening and reporting of corporate
+account opening to the PBC. With these innovations,
+business processing efficiency rose by over 60%
+compared with manual operation.
+Asset quality improved markedly. To tackle
+external risks, Ping An Bank adjusted its business
+mix and strengthened recovery of non-performing
+assets (NPAs), which improved the asset
+quality significantly. As of the end of 2018, the
+non-performing loan ratio was generally stable, up
+0.05 pps from the beginning of 2018; special mention
+loans accounted for 2.73%, down 0.97 pps from the
+beginning of 2018. The balance of loans more than
+90 days overdue accounted for 1.70%, down 0.73 pps
+from the beginning of 2018. The provision coverage
+ratio of loans more than 90 days overdue grew by
+53.78 pps from the end of 2017 to 159.45%. The Bank's
+deviation of non-performing loans was 97%, down
+46 pps from the beginning of 2018. In 2018, Ping An
+Bank recovered NPAs of RMB18,744 million, up 96.7%
+year on year; 96.8% of the recovered amount was
+collected in cash, while the rest was in kind.
+(in RMB million)
+Loan quality
+Pass
+Doubtful
+Loss
+Total loans and advances
+Total non-performing loans
+Annual Report 2018
+17,129
+8.9 pps
+44.1
+30.4
+Retail loans (in RMB million) 1,154,013
+849,035
+35.9
+Credit cards in
+circulation (in million)
+51.52
+38.34
+34.4
+(in RMB million)
+2018
+2017
+Change (%)
+Operating results of
+retail banking
+Revenue from retail banking
+% of revenue from
+61,883
+46,692
+32.5
+retail banking
+53.0
+Non-performing loan
+ratio (%)
+1,086,688
+Deviation of non-performing
+loans (1) (%)
+December
+1.75
+1.70
+0.05 pps
+97
+143
+-46 pps
+Balance of loans more than
+90 days overdue
+33,984
+20.4
+41,460
+Percentage of loans more
+than 90 days overdue (%)
+Percentage of special
+mention loans (%)
+Impairment provision
+balance
+Loan loss provision ratio (%)
+Provision coverage ratio (%)
+1.70
+2.43
+-0.73 pps
+2.73
+3.70
+-0.97 pps
+(54,187)
+2.71
+155.24
+(43,810)
+2.57
+151.08
+(18.0)
+28,997
+34,905
+17.2
+31, 2018
+31, 2017
+Change
+(%)
+1,908,072
+1,612,249
+18.3
+Special mention
+Sub-standard
+54,552
+62,984
+(13.4)
+17,955
+12,510
+43.5
+39,362
+3,343
+34.9
+12,441
+13,144
+(5.3)
+1,997,529
+1,704,230
+December
+23.7
+1,416,796
+management (AUM,
+0.29
+0.35
+0.45
+0.48
+Auto loans granted (in RMB million)
+34,167
+23.1
+Xin Yi Dai loans
+0.18
+Credit card receivables
+0.20
+0.27
+Auto loans
+0.16
+0.18
+0.12
+0.12
+December 31, 2018
+Cross-selling
+channel's
+Overall non-
+performing
+loan ratio
+non-
+0.16
+43.4
+48,708
+vintage period
+Ping An Bank made significant progress in its
+strategic transformation toward retail banking.
+In 2018, Ping An Bank made significant progress
+in the transformation toward retail banking by
+optimizing its business mix on the basis of the
+Group's integrated financial business model and
+core technologies.
+Core KPIs of retail banking maintained rapid
+growth. As at the end of 2018, the Bank's retail
+assets under management (AUM) rose by 30.4%
+from the beginning of 2018 to RMB1,416,796 million.
+The balance of retail loans increased by 35.9%
+from the beginning of 2018 to RMB1,154,013 million.
+Ping An Bank increased customer assets and took
+deposits by adhering to the strategy of customer
+management and resource allocation. The Bank
+also raised settlement deposits by developing
+payroll and acquiring services, and boosted retail
+deposits by enhancing active liability products. As
+of December 31, 2018, the balance of retail deposits
+had grown by 35.4% from the beginning of 2018 to
+RMB461,591 million. Cross-selling's contributions
+to retail banking continued to grow. Customers
+referred by the cross-selling channel have lower
+non-performing loan ratios and better asset quality
+than proprietary channels.
+2018
+Ping An Bank pays close attention to risk
+management while developing business. As at the
+end of December 2018, the non-performing asset
+ratio of retail banking declined steadily. The retail
+non-performing loan ratio was 1.07%, down 0.11 pps
+from the beginning of 2018. Risks in the consumer
+finance industry were on the rise, amid the
+economic slowdown, the joint-debt risk and other
+negative factors. The non-performing asset ratios of
+credit card receivables and Xin Yi Dai stood at 1.32%
+and 1.00%, up 0.14 pps and 0.35 pps respectively
+from the beginning of 2018. The risk profile of the
+Bank's auto finance business remained stable. As at
+the end of December 2018, the non-performing loan
+ratio of the Bank's auto finance business was 0.54%,
+down 0.05 pps from the beginning of 2018. Since
+the end of 2017, Ping An Bank has adjusted its risk
+policies proactively to prevent the joint-debt risk
+and reduce the proportion of high-risk customers.
+The quality of new loans remained stable. According
+to a vintage analysis, cardholders' loans more than
+30 days overdue as at the end of a six-month period
+following credit card issuance accounted for 0.29%,
+down 0.06 pps year on year. Xin Yi Dai unsecured
+loans more than 30 days overdue as at the end of a
+six-month period following granting reached 0.18%,
+down 0.02 pps year on year. Auto loans more than
+30 days overdue as at the end of a six-month period
+following granting dropped by 0.02 pps year on year
+to 0.16%.
+Cross-selling
+Cross-selling
+channel's
+channel's contribution
+contribution percentage
+amount
+(%)
+(%)
+The proportion of loans
+2018
+2017
+2016
+2015
+Cross-selling channel's
+more than 30 days
+contributions to retail banking
+Credit cards issued (in million)
+overdue as at the
+6.78
+39.0
+end of the 6-month
+Xin Yi Dai unsecured loans granted
+(in RMB million)
+performing
+loan ratio
+in RMB million)
+Asset quality of the retail
+Note: Vintage analysis, also known as static pool analysis of default
+rates, is a method of evaluating the credit quality of account
+holders by monitoring credit assets in accounts opened in
+different periods and analyzing the vintages. The proportion
+of loans more than 30 days overdue as at the end of the
+6-month vintage period = the balance of current-year new
+loans or credit card receivables more than 30 days overdue
+as at the end of the 6-month vintage period/the balance of
+current-year new loans or credit card receivables that have
+been on books for 6 months.
+69.91
+20.0
+Contribution to the
+number of the Group's
+retail customers (%)
+45.6
+42.2
+Customers holding
+products from other
+83.90
+subsidiaries of the Group
+47.75
+30.49
+56.6
+Customers holding Ping An
+Life's products (in million)
+19.23
+16.29
+18.0
+Retail assets under
+(in million)
+(in million)
+Retail customers (1)
+Customer structure
+Credit card receivables
+1.32%
+1.10%
+Xin Yi Dai unsecured loans
+1.00%
+0.45%
+Auto loans
+0.54%
+0.41%
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 37
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Banking Business
+In 2018, Ping An Bank increased investment in
+technologies and built a technology development
+team of over 3,200 employees dedicated to retail
+banking. We updated the "Ping An Pocket Bank"
+app, in which multiple financial technologies and
+services have been embedded. In December 2018,
+the app's monthly active users grew by 74.6% year
+on year to 25.88 million. Moreover, we built 136 new
+offline retail outlets under a "light, community-
+based, intelligent, and diversified" concept. We
+integrated the app and outlets into a smart OMO
+(Online Merge Offline) service system.
+In 2018, Ping An Bank implemented the private
+banking strategy. With a fully-staffed private
+banking team, Ping An Bank significantly improved
+its abilities in terms of product supply and
+management, marketing and asset allocation,
+laying a solid foundation for a quick increase in
+assets under management (AUM). On the back of
+technology-powered investment advisory services
+and remote support, Ping An Bank can recommend
+the best asset allocation portfolios thorough
+the most suitable channel at the perfect time. In
+products, Ping An Bank fully integrated internal and
+external resources and established an open product
+platform for ongoing supply of excellent wealth
+management products.
+December
+31, 2018
+December
+31, 2017
+Change
+(%)
+3.4 pps
+cross-selling channel
+0.14 pps
+4,509
+Provision coverage ratio
+General and administrative
+expenses
+Cost-to-income ratio (%)
+35,391
+31,616
+11.9
+30.32
+29.89
+4.16 pps
+Total interest expenses
+(88,143)
+8.1
+(74,059)
+Net interest revenue
+74,745
+74,009
+1.0
+Net Fee and Commission Revenue
+(in RMB million)
+2018
+2017
+Change (%)
+Fee and commission revenue
+19.0
+(14,358)
+(15,520)
+Bonds payable
+10.0
+Other net non-interest revenue
+Other net non-interest revenue is comprised of
+investment income, gains and losses from fair value
+changes, foreign exchange gains and losses, other
+business revenue, asset disposal gains and losses
+and other incomes. In 2018, other net non-interest
+revenue increased sharply year on year to RMB10,674
+million.
+Interest expenses
+Due to the PBC
+(4,299)
+(2,671)
+61.0
+Cost-to-income ratio
+(in RMB million)
+2018
+2017
+Change (%)
+Due to financial institutions
+(18,686)
+(19,155)
+(2.4)
+Deposits
+(49,638)
+(37,875)
+31.1
+Settlement fee revenue
+148,068
+2,477
+3.6
+-0.11 pps
+Advisory fee revenue
+1,463
+2,659
+(45.0)
+Asset custody fee revenue
+2,856
+3,046
+(6.2)
+23.11
+Note: (1) Effective tax rate = income tax/profit before tax.
+revenue
+149
+156
+(4.5)
+Others
+1,663
+2,200
+(24.4)
+Total fee and commission
+Account management fee
+23.00
+Change
+2017
+Wealth management fee
+In 2018, as Ping An Bank increased investment
+in strategic transformation and technology
+development, the cost-to-income ratio rose by 0.43
+pps from the beginning of 2018.
+Loan impairment loss
+In 2018, loan impairment losses increased by 7.0%
+year on year.
+revenue
+1,365
+3,411
+(60.0)
+Agency commission
+Income tax
+revenue
+4,123
+3,350
+23.1
+Bank card fee revenue
+25,266
+18,511
+36.5
+Effective tax rate (¹) (%)
+2018
+2,392
+162,888
+0.43 pps
+4,056
+74,009
+1.0
+Net core tier 1 capital
+199,782
+184,340
+8.4
+Net tier 1 capital
+219,735
+204,293
+74,745
+7.6
+interest-earning assets
+3,186,151
+3,120,038
+2.1
+Net capital
+269,115
+249,227
+8.0
+Net interest margin (1) (%)
+Average balance of
+2.35
+Net interest revenue
+2017 Change (%)
+for loans more than
+90 days overdue (%)
+159.45
+105.67
+53.78 pps
+Note: (1) Deviation of non-performing loans = Balance of loans
+more than 90 days overdue/Balance of non-performing
+loans
+Ping An Bank enhanced its financial strength by
+replenishing capital. Ping An Bank furthered the
+reform in capital management, and conducted
+robust capital management. As at the end of 2018,
+the core tier 1 capital adequacy ratio stood at 8.54%,
+up 0.26 pps from the end of 2017. In addition to
+stable internal sources of capital such as retained
+earnings, Ping An Bank forged ahead with the
+plans for issuing RMB26,000 million worth of A-share
+convertible corporate bonds and RMB30,000 million
+worth of qualified tier-2 capital bonds to seek
+capital replenishments from external sources. The
+Bank issued the RMB26,000 million worth of A-share
+convertible corporate bonds on January 25, 2019. The
+equity portion of RMB3,700 million has been directly
+calculated into the core tier 1 capital and the
+remaining portion will be used to replenish the core
+tier 1 capital after conversion to improve the Bank's
+capital adequacy.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 39
+Capital adequacy ratio
+Business Analysis
+(in RMB million)
+Total interest revenue
+December
+31, 2017
+Change
+(%)
+FINANCIAL ANALYSIS
+Operating Results
+(in RMB million)
+2018
+Banking Business
+2.37 -0.02 pps
+December
+31, 2018
+5.1
+9.18
+0.21 pps
+Revenue
+116,716
+105,786
+Due from financial
+institutions
+10,933
+10,726
+9.39
+Loans and advances
+94,976
+1.9
+24.4
+investment
+28,363
+34,078
+(16.8)
+Others
+1,406
+Total risk weighted assets 2,340,236 2,226,112
+118,184
+requirement ≥ 8.5%)
+Interest revenue from
+867.7
+Net non-interest revenue
+ratio (%) (regulatory
+41,971
+31,777
+32.1
+adequacy ratio (%)
+Including: Net fee and
+commission
+(regulatory requirement
+≥ 7.5%)
+8.54
+Core tier 1 capital
+0.26 pps
+8.28
+interest revenue
+Other net non-
+10,674
+Tier 1 capital adequacy
+1,103
+2.0
+30,674
+31,297
+revenue
+The Company has investigated the effect, on the embedded value of the Group, embedded value of the life
+and health insurance business and the value of one year's new business, of certain independently varying
+assumptions regarding future experience. Specifically, the following changes in assumptions have been
+considered:
+Assumptions and model used in 2017
+•
+A 10% increase in mortality, morbidity and accident rates
+Investment return and risk discount rate
+•
+A 5% increase in the policyholders' dividend payout ratio
+•
+A 10% increase in maintenance expenses
+•
+A 10% decrease in fair value of equity asset
+Sensitivity Analysis
+Sensitivity of EV of Group to investment return and risk discount rate
+A 10% increase in policy discontinuance rates
+Note: Figures may not match totals due to rounding.
+[14]=[13]/[[1]+[11])
+[15]=[6]/[1]
+30.8%
+(in RMB million)
+EV operating profit of Group
+EV operating profit of L&H
+Operating ROEV of Group
+Operating ROEV of L&H
+[13]=[6]+[12]
+[6]
+35.5%
+2018
+195,362
+170,569
+153,109
+127,989
+23.7%
+26.7%
+2017
+Investment return increased by 50bps per annum
+Central case
+Investment return decreased by 50bps per annum
+Investment return increased by 50bps per annum
+677,103
+658,978
+628,853
+613,223
+642,235
+598,766
+11.5%
+Investment return decreased by 50bps per annum
+567,269
+555,105
+56
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+(in RMB million)
+580,397
+Central case
+11.0%
+(in RMB million)
+Sensitivity of EV of L&H to investment return and risk discount rate
+Risk discount rate
+10.5%
+11.0%
+11.5%
+1,066,337
+10.5%
+1,048,211
+1,018,086
+969,631
+1,002,456
+987,999
+956,502
+944,338
+Risk discount rate
+1,031,468
+EV operating profit of Group was RMB195,362 million, which was comprised of RMB153,109 million of EV
+operating profit of L&H and RMB42,253 million of operating profit of other business. The main source of EV
+operating profit of L&H was NBV and expected return on opening EV.
+9.6%
+Analysis of Embedded Value and
+72,294
+(18,156)
+85,512
+88,889
+(16,596)
+2017
+2018
+Note: Figures may not match totals due to rounding.
+Value of one year's new business after cost of capital
+Cost of capital
+Value of one year's new business
+67,357
+Operating Profit
+613,223
+Including: EV of L&H
+825,173
+1,002,456
+EV of Group
+(39,909)
+(35,284)
+Cost of capital
+335,610
+418,534
+496,381
+The adjusted net asset value of the life and health insurance business is based on the unaudited
+shareholders' net asset value of the relevant life and health insurance business of the Company as
+measured in compliance with the Standards. This unaudited shareholders' net asset value is calculated
+based on the audited shareholders' net asset value in accordance with CAS by adjusting the relevant
+differences, such as reserves. The adjusted net asset value of other business is based on the audited
+shareholders' net asset value of the relevant business of the Company in accordance with CAS. The
+relevant life and health insurance business includes business conducted through Ping An Life, Ping An
+Annuity and Ping An Health. The values placed on certain assets have been adjusted to the market value.
+52
+2
+8.
+7.
+Policy discontinuance rates have been based on the Company's recent experience studies. The
+discontinuance rates are pricing interest rate and product type specific.
+Discontinuance
+Morbidity rate and accident rate assumptions have been based on the industry table or the Company's
+own pricing table. The trend of long-term morbidity deterioration has been taken into consideration.
+The loss ratios have been assumed to be within the range of 15% and 100% for short-term accident and
+health insurance business.
+6.
+Other incident rates
+5.
+The experience mortality rates have been based on 65% and 65% of China Life (2000-2003) table for
+male and female respectively for non annuitants. For annuitants, the experience mortality rates for
+the grant period have been based on 60% and 50% of China Life Annuity (2000-2003) table for male and
+female respectively.
+Mortality
+4.
+A 25% average income tax rate has been assumed. The percentage of investment returns that can be
+exempted from income tax has been assumed to be 12% in the next year and to be increased by 2%
+annually up to 16%.
+Taxation
+For non-investment-linked insurance funds, the future investment return is assumed to be 4.75%
+in the first year and remains at 5.0% from the second year. For the investment-linked fund, future
+investment returns have been assumed to be slightly higher than the above non-investment-linked
+fund investment returns assumption. These returns have been derived by consideration of the current
+capital market condition, the Company's current and expected future asset allocations and associated
+investment returns for a range of major asset classes.
+Investment return
+The discount rate for calculating the value of in-force and the value of new business of the life and
+health insurance business is assumed to be 11.0%.
+3.
+2.
+1. Risk discount rate
+The assumptions used in the embedded value calculation in 2018 have been made on a "going concern"
+basis, assuming continuation of the economic and legal environment currently prevailing in China.
+The calculation is in line with the Standards and capital requirement under C-ROSS. Certain portfolio
+assumptions were based on the Company's own recent experience as well as considering the more general
+China market and other life insurance markets' experience. The principal bases and assumptions used in the
+calculation are described below:
+Key Assumptions
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+16,758
+17,051
+Value of in-force insurance business written prior to June 1999
+Value of in-force insurance business written since June 1999
+183,920
+Residual margin of L&H
+34.9
+52,128
+70,320
+shareholders of the parent company
+L&H operating profit after tax attributable to
+7.3
+67,357
+72,294
+Value of one year's new business after cost of capital (NBV)
+-4.7 pps
+35.5%
+30.8%
+Operating ROEV of L&H
+18.9
+23.5
+496,381
+613,223
+EV of L&H
+94,708
+112,573
+shareholders of the parent company
+Group operating profit after tax attributable to
+-3.0 pps
+Ultimate investment return rate
+Expense
+Risk discount rate
+616,319
+212,922
+Including: Adjusted net asset value of L&H
+512,713
+602,155
+Adjusted net asset value (ANA)
+2017
+2018
+(in RMB million)
+December 31,
+December 31,
+Components of Economic Value
+The Standards for Actuarial Practice: Valuation Standard for Embedded Value of Life Insurance (the
+"Standards") issued by the China Association of Actuaries became effective in November 2016. The
+Company has disclosed the embedded value for 2018 in accordance with the Standards and China Risk
+Oriented Solvency System (C-ROSS).
+The calculation of the analysis of embedded value relies on a number of assumptions with respect to
+future experience. Future experience may vary from that assumed in the calculation, and these variations
+may be material. The market value of the Company is measured by the value of the Company's shares on
+any particular day. In valuing the Company's shares, investors take into account a variety of information
+available to them and their own investment criteria. Therefore, these calculated values should not be
+construed as a direct reflection of the actual market value.
+In accordance with the related provisions of the Rules for the Compilation of Information Disclosures by
+the Companies Offering Securities to the Public (No. 4) - Special Provisions on Information Disclosures by
+Insurance Companies, the Company has engaged PricewaterhouseCoopers Consultants (Shenzhen) Limited
+to review the reasonableness of the methodology, the assumptions and the calculation results of the
+Company's analysis of embedded value as at December 31, 2018.
+In order to provide investors with an additional tool to understand our economic value and business
+performance results, the Company has disclosed information regarding embedded value ("EV") in this
+section. The embedded value represents the shareholders' adjusted net asset value ("ANA") plus the value
+of the Company's in-force life and health insurance business ("L&H") adjusted for the cost of holding the
+required capital. The embedded value excludes the value of future new business.
+ANALYSIS OF EMBEDDED VALUE
+Analysis of Embedded Value and
+Operating Profit
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 51
+Annual Report 2018
+11.0%
+5.0%
+27.6
+786,633
+5.0%
+11.0%
+21.5
+Expense assumptions have been based on the Company's most recent expenses investigation.
+Expense assumptions mainly consist of acquisition expense and maintenance expenses assumptions.
+The unit maintenance expense was assumed to increase by 2% per annum.
+Policyholder dividends have been based on 75% of the interest and mortality surplus for individual
+participating business. For group participating business, dividends have been based on 80% of interest
+surplus only.
+29,186
+32,030
+Group business
+20.7
+716
+865
+(38.4)
+7,492
+4,613
+Bancassurance
+9.7
+19.6
+6,608
+23.1
+13,071
+16,091
+Tele, internet and others
+15.1
+2,309
+2,657
+(3.3)
+7,163
+5,524
+420
+330
+27.2
+Agency
+49.4%
+54.7%
+47.1%
+53.9%
+Retail business
+2017
+2018
+2017
+2018
+By ANP
+By FYP
+The profit margin of new business by segment:
+(4) Tele, internet and others includes telemarketing, internet marketing and Ping An Health's retail business.
+(5) The differences between FYP used to calculate value of new business and FYP disclosed in MD&A are explained in the
+appendix.
+(3) Long-term protection products cover whole-life, term life, critical illness and long term accident insurance. Protection &
+Saving hybrid products (short-PPP) cover endowment and annuity products with PPP below 10 years. Protection & Saving
+hybrid products (long-PPP) cover endowment and annuity products with PPP of 10 years and above.
+Notes: (1) Figures may not match totals due to rounding.
+(2) "PPP" stands for Premium Payment Period.
+7.3
+67,357
+72,294
+(3.6)
+171,547
+165,446
+Total
+6,929
+Short-term
+51.3
+3,431
+Agency
+7.2
+67,027
+71,874
+(6.3)
+142,361
+133,417
+2017 Change (%)
+2018
+2017 Change (%)
+2018
+Retail business
+(in RMB million)
+Value of new business
+FYP used to calculate value of
+new business
+are:
+The new business volumes measured by first year premium (FYP) and its new business value by segment
+Value of New Business
+Analysis of Embedded Value and
+Operating Profit
+MANAGEMENT DISCUSSION AND ANALYSIS
+53
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+112,712
+Policyholder dividend
+121,798
+64,401
+5,192
+1.7
+9,204
+9,365
+(long-PPP)
+Protection & Saving hybrid
+(6.6)
+8,113
+7,577
+(13.7)
+51,842
+44,717
+(short-PPP)
+Protection & Saving hybrid
+4.4
+46,933
+48,975
+(3.5)
+53,588
+51,701
+Long-term protection
+5.9
+60,786
+(7.5)
+57.1%
+825,173
+26.7%
+1,002,456
+Revenue
+(in RMB million)
+Note: (1) Monthly active users refer to users who access Ping An
+Good Doctor's service or product platform via apps,
+WAP (Wireless Application Protocol) or plug-ins at least
+once in any given month.
+85.4
+29.49
+54.66
+2017 Change (%)
+2018
+(in million)
+Monthly active users in
+December
+2018
+37.5
+92.2
+407.06
+Consultations (in million)
+265.19
+(in million)
+Registered users
+Change
+(%)
+December
+31, 2017
+December
+31, 2018
+Besides the domestic market, Ping An Good
+Doctor also shares resources and pursues joint
+development with leading companies overseas.
+In August 2018, Ping An Good Doctor signed an
+agreement to establish a joint venture with Grab,
+Southeast Asia's largest travel provider. Through
+this joint venture, Ping An Good Doctor will offer
+excellent Al-powered online health care services
+in Southeast Asia. Ping An Good Doctor acquired
+Wanjia Healthcare in October 2018 to develop our
+offline network, strengthen the closed loop, online-
+merge-offline healthcare services, and provide
+integrated services.
+Ping An Good Doctor improved its Al-based
+consultation/treatment system on the basis of
+over 407 million consultations and the expertise
+of its in-house medical staff members. In 2018, the
+in-house medical staff of Ping An Good Doctor
+and over 100 hospitals began to use this system for
+more efficient consultation and treatment. As at
+December 31, 2018, Ping An Good Doctor received
+535,000 consultations per day on average, up 45.4%
+year on year.
+192.84
+211.80
+2017 Change (%)
+3,338
+1,868
+(1,002)
+49.0
+612
+912
+(913)
+93.2
+(1,256)
+(2,426)
+69.8
+242
+411
+Annual Report 2018
+48
+Net profit
+Gross profit
+Cost
+business
+family doctor
+Including: Revenue of
+As of December 31, 2018, OneConnect had provided
+services for 3,289 financial institutions, including
+590 banks, 72 insurers and 2,627 non-bank financial
+institutions in China. The Internet Finance Alliance
+of Small and Medium-sized Banks, with OneConnect
+as an initiator, covers 260 small and medium-sized
+Chinese banks whose assets totaled more than
+RMB47 trillion.
+Adhering to the model of “technology + business",
+OneConnect helps financial institutions to solve pain
+points in business development with cutting-edge
+technologies. OneConnect has launched mobile
+banking, smart marketing, smart risk management,
+supply chain finance, Yi Qi Yin, Smart Quick Claim,
+asset and liability management, ABS ecosystem, Yi
+Zi Guan and core banking cloud. Correspondingly,
+there are more than 270 systems and 47 product
+categories. In 2018, OneConnect established
+subsidiaries in Hong Kong, Singapore and Indonesia
+to serve local financial institutions. OneConnect
+has built the eTradeConnect platform, the world's
+first government-backed, blockchain-based
+trade platform, in cooperation with Hong Kong
+Monetary Authority. The eTradeConnect platform
+was launched in October 2018. As of December 31,
+2018, eTradeConnect had served 13 domestic and
+foreign banks. OneConnect has a world-leading
+fintech expert team recognized by authoritative
+international institutions for cutting-edge
+technologies including Al and blockchain.
+OneConnect is committed to building a
+world-leading fintech service cloud platform.
+OneConnect has launched Smart Banking Cloud,
+Smart Insurance Cloud, Smart Investment Cloud
+and an open tech-powered platform, providing
+end-to-end fintech solutions for various types of
+financial institutions. In early 2018, OneConnect
+completed Series A financing at a post-money
+valuation of USD7,500 million.
+ONECONNECT
+78.7
+Fintech & Healthtech Business
+Business Analysis
+Ping An Insurance (Group) Company of China, Ltd. 47
+Annual Report 2018
+37.2
+7.49
+10.28
+Accumulated borrowers
+16.2
+9.61
+11.17
+Active investor users (1)
+19.3
+33.83
+40.35
+Lufax's registered users
+31, 2017
+Change
+December
+December
+31, 2018
+(in million)
+(%)
+Number of Users
+Note (1) The ratio of loans more than 30 days overdue refers to
+the proportion of loans more than 30 days (inclusive)
+overdue to the balance of loans under management.
+In government finance, Lufax Holding builds Smart
+Fiscal Cloud platforms for provincial and municipal
+governments across China, providing them with
+customized smart fiscal management solutions.
+As of the end of 2018, Lufax Holding had piloted
+projects in cities including Nanning, Changsha and
+Shenzhen to develop role models for smart fiscal
+management. Lufax Holding aims to assist local
+governments in "debt control, asset preservation,
+revenue boosting and cost saving."
+In retail lending, Lufax Holding is a leading 020
+(Offline to Online) non-bank service platform in
+China with 14 years' experience in credit business,
+providing over 10.28 million customers with online
+services. Lufax Holding has established a unique
+platform that provides lending services to qualified
+micro-, small and medium-sized business owners
+and individuals, based on its extensive experience
+in lending and cutting-edge technologies. Lufax
+Holding serves tens of millions of borrowers by
+leveraging high-quality resources of institutions
+in the financial services ecosystem. Lufax Holding
+enables purely online loan application processes
+without physical outlets by applying facial and
+voiceprint recognition to customer identification and
+micro-expression recognition to loan underwriting.
+This greatly improves customer experience
+and operational efficiency. Lufax Holding has
+successfully gone through different credit cycles
+and liquidity squeezes, owing to its unique business
+models and extensive experience in lending. The
+credit risk borne by funding and credit enhancement
+providers remained low. As at December 31, 2018,
+Lufax Holding's balance of loans under management
+reached RMB375,006 million, up 30.0% year to date;
+the ratio of loans more than 30 days overdue (1) was
+2.3%.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Note: (1) Active investor users refer to users who made an
+(8.9)
+investment or had a positive account balance in the
+past 12 months.
+(in RMB million)
+Ping An Good Doctor provides users with
+comprehensive family doctor services via
+Al-assisted in-house medical staff members and
+external doctors. These services include 24/7 online
+consultation, referral, registration, hospitalization
+arrangement, second medical opinions, and 1-hour
+drug delivery. Ping An Good Doctor also provides
+various offline services via its health care service
+network, as well as extensive health management
+offerings to help users embrace healthy lifestyles.
+As at the end of 2018, Ping An Good Doctor had
+over 1,000 in-house medical staff members and
+over 5,000 contracted external doctors (associated
+chief physicians or above at 3A hospitals). The
+1-hour drug delivery network covered 86 cities
+across China. The health care service provider
+network covered nearly 400 clinics of traditional
+Chinese medicine, over 1,300 checkup centers, over
+1,200 dental clinics, and over 120 medical cosmetic
+institutions.
+Ping An Good Doctor (Stock Code: 01833.HK) went
+public on the HKEX's Main Board on May 4, 2018,
+and was included in the Southbound Trading of
+Shanghai-Hong Kong Stock Connect on September
+10, 2018. As an integral part of the Company's health
+care ecosystem strategy, Ping An Good Doctor
+leverages the Group's resources to expand its user
+base, providing users with one-stop high-quality
+health care services. As of December 31, 2018, Ping
+An Good Doctor had provided services for over 265
+million users, including 54.66 million monthly active
+users in December 2018. Ping An Good Doctor is the
+largest online health care platform in China.
+PING AN GOOD DOCTOR
+15.5
+343,792
+(30.3)
+2,117,485
+1,475,008
+396,962
+Wealth management
+New loans
+2017 Change (%)
+Trading Volume
+(in RMB million)
+2018
+Assets under management 369,414
+Balance of loans under
+management
+30.0
+288,434
+375,006
+(20.0)
+461,699
+(%)
+31, 2017
+Change
+December
+December
+31, 2018
+Assets Under Management
+23.7%
+Ping An Insurance (Group) Company of China, Ltd.
+2018
+We have reviewed the Analysis of Embedded Value and Operating Profit of Ping An Insurance (Group)
+Company of China, Ltd. ("The Company") as at December 31, 2018. The EV and Operating Profit results
+include embedded value, value of one year's new business after cost of capital ("NBV"), valuation
+methodology and assumptions, first year premium of new business, profit margin of new business, interest
+margin, embedded value movement, sensitivity analysis, operating profit, source of earning and residual
+margin related data.
+Ping An Insurance (Group) Company of China, Ltd.
+To the directors of
+INDEPENDENT ACTUARIES REVIEW OPINION REPORT ON THE ANALYSIS OF EMBEDDED VALUE AND
+OPERATING PROFIT DISCLOSURES
+The operating profit after tax attributable to shareholders of the parent
+company in 2018 was RMB112,573 million (up by 18.9% year on year). The
+L&H operating profit after tax attributable to shareholders of the parent
+company was up by 34.9% year on year.
+As at December 31, 2018, the residual margin of L&H was RMB786,633 million
+(up by 27.6% from the beginning of the year). The release of residual
+margin of L&H was up by 25.0% year on year.
+The operating ROEV of Group and of L&H were 23.7% and 30.8% respectively.
+In 2018, NBV of the life and health insurance business was RMB72,294
+million (up by 7.3% year on year). The year-on-year NBV growth in the
+second half was 16.9%.
+As at December 31, 2018, the embedded value of the Company hit a
+milestone by exceeding RMB1,000 billion and reaching RMB1,002,456 million
+(up by 21.5% from the beginning of the year).
+Analysis of Embedded Value and
+Operating Profit
+MANAGEMENT DISCUSSION AND ANALYSIS
+The Company prepared the embedded value and NBV results in accordance with the Standards for
+Actuarial Practice: Valuation Standard for Embedded Value of Life Insurance (the "Standards") which was
+promulgated by the China Association of Actuaries in November, 2016. Our responsibility, as independent
+actuaries, is to perform certain review procedures set out in our letter of engagement and, based on these
+procedures, conclude whether the embedded value methodology and assumptions are consistent with the
+Standards and available market information.
+Ping An Insurance (Group) Company of China, Ltd. 49
+Autohome has also developed other competitive
+businesses, including data-based business.
+Autohome integrated data products including smart
+recommendation, smart online sales and smart
+marketing to help auto manufacturers and dealers
+to increase conversion rates. Meanwhile, Autohome
+is developing a closed loop of second-hand car
+trading by exploiting synergies from the strategic
+investment in ttpai.cn, an online platform for
+second-hand car trading. In addition, Autohome
+has made steady progress in the financial business,
+which consists of lending, financial leasing and
+insurance services to consumers and dealers.
+In 2018, Autohome recorded rapid business
+growth and RMB7,230 million in revenue, 11.8% of
+which was from online marketplace bussiness. By
+optimizing user experiences, Autohome realized
+steady traffic growth. In December 2018, the
+"Autohome" app had an average of 29 million daily
+unique visitors, up approximately 10% year on year.
+These achievements have solidified Autohome's
+leading role among auto service apps in China.
+Besides, Autohome enhanced user engagement
+and loyalty by providing customized contents and
+recommendations. Autohome increased users'
+interactions with auto manufacturers and dealers by
+applying new technologies including virtual reality
+(VR) and augmented reality (AR).
+Autohome, a leading internet auto service platform
+in China, is committed to developing a smart auto
+ecosystem under the strategy of "auto content,
+auto dealing, auto finance and auto lifestyle." In
+this ecosystem centering on data and technology,
+Autohome provides auto consumers with diverse
+products and services.
+AUTOHOME
+Ping An HealthKonnect is committed to becoming
+China's leading tech-powered managed care service
+platform. Centering on the social health insurance
+(SHI) cloud platform, Ping An HealthKonnect
+has developed industry-leading technologies like
+Al, blockchain, cloud computing and health risk
+profiling. On this basis, Ping An HealthKonnect
+provides comprehensive smart solutions and
+technical services for SHI, private insurers,
+medical service providers and individual users.
+The smart SHI services for users are professional,
+personalized, dynamic and integrated. In early 2018,
+Ping An Health Konnect raised USD1,150 million at a
+PING AN HEALTHKONNECT
+(1) In 2018, OneConnect optimized the definitions of
+partner banks and other partner non-bank institutions,
+and restated the comparable data for 2017. The new
+standard provides a more objective representation.
+17.0
+414.3
+2,245
+Annual Report 2018
+We have reviewed the methodology and assumptions used in preparing the EV and Operating Profit
+results, including:
+Review the embedded value, value of new business and interest margin of the Company as at
+December 31, 2018;
+Review the sensitivity analysis of the embedded value and NBV;
+Change
+(%)
+2017/
+December
+31, 2017
+2018/
+December
+31, 2018
+Operating Return on EV (Operating ROEV) of Group
+EV of Group
+(in RMB million)
+Jiang Hua Hua, Actuary
+March 12, 2019
+KEY DATA SUMMARY
+PricewaterhouseCoopers Consultants (Shenzhen) Limited
+We also confirm that the EV and Operating Profit results disclosed in the Analysis of Embedded Value and
+Operating Profit chapter in the 2018 annual report are consistent with the results we reviewed.
+The EV and Operating Profit results, in all material aspects, are consistent with the methodology and
+assumptions stated in the Analysis of Embedded Value and Operating Profit chapter in the 2018 annual
+report.
+Based on our review procedures, we have concluded that the methodology and assumptions used in
+preparing the EV results are in compliance with the Standards and consistent with available market
+information;
+•
+OPINION:
+The preparation of the EV results requires assumptions and projections about future economic and financial
+situations, many of which are outside the control of the Company. Therefore, actual experience may differ
+from these assumptions and projections.
+Our review procedures included, but were not limited to, considering whether the methodology and
+assumptions of the EV results are consistent with the Standards and available market information,
+considering whether the methodology of the operating profit results is consistent with the disclosed
+methodology in the 2018 annual report, validating actuarial models on the basis of sample testing, and
+inspecting related documentation. In forming our conclusion, we have relied on the audited and unaudited
+data and information provided by the Company.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+Review the operating profit of the Company, source of earning and residual margin related data of the
+life and health insurance business ("L&H”).
+Review the embedded value movement analysis, and
+•
+50
+50
+Note:
+2,627
+non-bank
+institutions (¹)
+other partner
+Number of blockchain
+per partner bank
+Number of online products
+As of the end of 2018, Ping An HealthKonnect had
+provided SHI and private insurance management
+services in over 200 cities across China. Over 5,000
+hospitals had connected with its service platform.
+"City OneConnect" app, targeting individual users,
+had covered 69 cities.
+post-money valuation of USD8,800 million.
+527.2
+195
+1,223
+(million times)
+product use
+Smart Certification
+65.7
+931
+1,543
+(million times)
+product use
+Risk management
+76.4
+11.52
+20.32
+(in RMB trillion)
+supported
+2017 Change (%)
+nodes (thousand)
+Value of transactions
+Number of partner
+December
+Number of
+14
+72
+partner insurers
+Number of
+41.8
+416
+590
+partner banks (1)
+Including: Number of
+23.0
+2,675
+3,289
+financial institutions
+225.5
+13.7
+44.6
+24.7
+1.86
+2.32
+Change
+(%)
+31, 2017
+31, 2018
+December
+49.9%
+(in RMB million)
+51.9%
+The table below shows how the Company's embedded value changed from the opening balance of
+RMB825,173 million as at December 31, 2017 to the closing balance of RMB1,002,456 million as at December 31,
+2018.
+(in RMB million)
+2018
+Note
+Opening EV of L&H
+[1]
+496,381
+Expected return on opening EV
+[2]
+45,326
+Expected embedded value growth
+Unwinding of in-force value
+38,522
+ANA return
+6,805
+NBV post-risk diversified, including:
+[3]
+93,237
+NBV pre-risk diversified
+72,294
+Diversification effects within
+new business
+Diversification effects with in-force
+Unwinding of opening value of in-force and NBV
+58.5%
+Business written during the Reporting Period, cost of
+capital calculated at policy level
+9,582 Diversification effects within NB lower cost of capital
+Embedded Value Movement
+11,361 Diversification effects between NB and in-force lower
+cost of capital
+Ping An Insurance (Group) Company of China, Ltd.
+54
+42.3%
+40.5%
+41.7%
+Bancassurance
+18.7%
+19.5%
+13.8%
+Group business
+1.3%
+1.1%
+1.8%
+1.6%
+Total
+43.7%
+39.3%
+46.7%
+43.3%
+Note: ANP (Annualised new premium) is calculated as the sum of 100 per cent of annualised first year premiums and 10 per cent of single
+premiums.
+The interest margin and other margins (include mortality, expense and other margins) as percentages of
+value of one year's new business after cost of capital are shown below:
+Interest margin
+as % of NBV
+Other margins
+as % of NBV
+Life and Health Insurance Business
+Including: Long-term protection
+34.0%
+23.5%
+66.0%
+76.5%
+Note: Interest margin of traditional and participating products is defined to be the contribution of investment return exceeding minimum
+guaranteed return for customers and attributable to the Company, while interest margin of universal and unit-linked products is
+defined to be the present value of investment spread and management charges.
+Annual Report 2018
+Operating assumptions and
+[4]
+608
+[12]
+42,253
+Non-Operating profit of other business
+7,236
+Revaluation gain of the convertible bonds held by
+the Company due to the Series C financing of Lufax
+Holding
+Market value adjustment and
+12,998
+other variances
+Closing ANA of other business
+391,279
+before capital changes
+Dividends received
+31,449
+Capital injection
+Dividends payout
+Closing ANA of other business
+Closing EV
+EV per share (in RMB)
+1,002,456
+54.84
+Note: Figures may not match totals due to rounding.
+Annual Report 2018
+Dividends received from Ping An Life
+(225) Capital injection from the Company to Ping An Health
+(33,270) Dividends paid by the Company to shareholders
+389,233
+Ping An Insurance (Group) Company of China, Ltd. 55
+MANAGEMENT DISCUSSION AND ANALYSIS
+Operating profit of other business
+328,792
+[11]
+Opening ANA of other business
+model changes
+Operating variances and others
+[5]
+EV operating profit of L&H
+[6]=
+13,938
+153,109
+Favorable operating experience
+[2+...+5]
+Economic assumptions changes
+[7]
+Market value adjustment
+[8]
+7,191
+41.1%
+Change in market value adjustment of free surplus
+during the Reporting Period
+[9]
+(12,233)
+EV profit of L&H
+[10]=
+148,066
+[6+...+9]
+Capital injection
+Shareholder dividends
+Closing EV of L&H
+225
+(31,449)
+Capital injection from the Company to Ping An Health
+Dividends paid by Ping An Life to the Company
+613,223
+Investment return variance
+Tele, internet and others
+of the Reporting Period calculated via prudent risk
+discount rate of 11%
+94.6%
+38.5%
+32.2%
+38.3%
+Short-term
+39.4%
+55.2%
+37.3%
+Protection & Saving hybrid (long-PPP)
+16.9%
+18.0%
+15.6%
+55.4%
+Protection & Saving hybrid (short-PPP)
+87.9%
+87.6%
+94.7%
+Long-term protection
+32.4%
+16.9%
+(1.8)
+3,008
+3,953
+(23.9)
+1,599
+2,043
+5,420
+8,264
+6,770
+16.3
+13,104
+7,108
+(21.7)
+12,871
+70,320
+13,449
+14,394
+(8.2)
+13,307
+12,215
+34.9
+52,128
+24.9
+(%)
+2017
+Change
+2018
+Note: Figures may not match totals due to rounding.
+The Group
+7.0
+(3,996)
+120,452
+48.0
+10,850
+105,809
+7,236
+125,804
+[5]=[1-2-3-4]
+[4]
+Impact of one-off material non-operating
+items (2)
+4,532
+(21,213)
+(12,853)
+265
+4,532
+(21,213)
+(12,853)
+265
+[3]
+Impact of discount rate change of L&H
+[2]
+Short-term investment variance of L&H(1)
+Excluding:
+(2,700)
+36,143
+99,978
+2017
+2018
+2017
+2018
+L&H business
+Group
+Other businesses and elimination
+[1]
+Net profit
+(in RMB million)
+18.9
+94,708
+112,573
+58,757
+Fintech & healthtech business
+Analysis of Embedded Value and
+Operating Profit
+Securities business
+993,335
+10% increase in policy discontinuance rates
+66,100
+592,822
+982,055
+10% increase in mortality, morbidity and accident rates
+71,389
+610,471
+999,704
+Assumptions and model used in 2017
+72,294
+613,223
+1,002,456
+Central case
+NBV
+EV of L&H
+EV of Group
+(in RMB million)
+Sensitivity to other assumptions
+62,383
+65,577
+68,993
+68,727
+72,294
+76,119
+75,042
+78,981
+83,213
+11.5%
+604,102
+69,376
+10% increase in maintenance expenses
+999,445
+Trust business
+Asset management business
+Banking business
+Property and casualty insurance business
+Life and health insurance business
+(in RMB million)
+Operating profit after tax attributable to shareholders of the parent company
+71,345
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 57
+Annual Report 2018
+The Group operating profit after tax attributable to shareholders of the parent company in 2018 was
+RMB112,573 million, which was up by 18.9% year on year. The L&H operating profit after tax attributable to
+shareholders of the parent company was RMB70,320 million, which was up by 34.9% year on year.
+Note: (1) Refer to "Significant Accounting Policies" in the Notes to Consolidated Financial Statements in the 2018 Annual Report for
+information about the discount rate.
+The operating profit after tax which excludes fluctuations of above non-operating items can provide a
+clearer and more objective representation of the Company's business performance and trend.
+Others
+Impact of one-off non-operating items are significant items that management considered to be non-
+operating income and expenses.
+Short-term investment variance, which is the variance between actual investment return of L&H and
+the EV ultimate investment return assumption, net of associated relevant impact on insurance and
+investment contract liability. The life and health insurance business operating profit is based on a 5%
+investment return assumption after excluding the short-term investment variance;
+Due to the long-term feature of the majority insurance business of life and health, the measure of operating
+profit has been applied to more appropriately evaluate business performance. Operating profit after tax
+is based on net profit from financial statements, excluding items that are of short-term, volatile or one-off
+nature, including:
+Operating profit of the Group
+Below section contains Group Operating Profit and Source of Earning and Residual Margin Analysis of
+L&H. The Company has engaged PricewaterhouseCoopers Consultants (Shenzhen) Limited to review the
+reasonableness of the methodology and the calculation results of the Analysis of Operating Profit as at
+December 31, 2018.
+ANALYSIS OF OPERATING PROFIT
+N/A
+600,124
+985,062
+71,491
+604,227
+993,460
+5% increase in the policyholders' dividend payout ratio
+10% decrease in fair value of equity asset
+71,731
+610,212
+Impact of discount rate (1) change is the effect on insurance contract liability of L&H due to changes in
+discount rate;
+52,824
+Operating profit after tax
+Attributable to:
+10,123
+Total
+165,446
+Note: Numbers may not match totals due to rounding.
+(23,183) Guaranteed renewal and other short
+term products' renewal premiums are
+included in FYP disclosed in MD&A but
+not included in FYP used to calculate
+value of new business
+In compliance with current accounting
+standards, group investment contracts
+are not included in FYP disclosed in
+MD&A, but included in FYP used to
+calculate value of new business due
+to their contribution to value of new
+business
+178,506
+(13,060)
+60
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Liquidity and Capital Resources
+The Company manages its liquidity and capital resources from the
+perspective of the Group as a whole.
+As at December 31, 2018, the solvency of the Group was adequate. The
+comprehensive solvency margin ratio rose by 1.5 pps from the beginning
+of 2018 to 216.4%, higher than the regulatory requirement (100%).
+GENERAL PRINCIPLES
+21,907
+Liquidity refers to the availability of cash assets
+or cash supply to meet the financial requirements
+of the Company whenever needed. The aim of
+the Group's liquidity management is to meet the
+liquidity requirements of its operating, investing and
+financing activities while maximizing shareholders'
+returns by optimizing its financial resources
+allocation and capital structure.
+32,030
+156,599
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 59
+MANAGEMENT DISCUSSION AND ANALYSIS
+Analysis of Embedded Value and
+Operating Profit
+Appendix
+The differences between FYP used to calculate value of new business and FYP disclosed in MD&A are
+explained below.
+12 months ended
+December 31
+(in RMB million)
+Retail business
+FYP used to
+calculate value
+of new business
+133,417
+FYP disclosed
+in MD&A
+Difference Reasons
+Group business
+The Company manages its liquidity and capital
+resources from the perspective of the Group as a
+whole. The Budget Management Committee, Risk
+Management Executive Committee and Investment
+Management Committee under the Group Executive
+Committee are overseeing these essentials at
+group level. As the Group's liquidity management
+execution unit, the Treasury Division is responsible
+for the Group's treasury management functions
+including cash settlement management, cash flow
+management, funding management and capital
+management.
+Liquidity management of the Group comprises
+capital management and cash flow management.
+The Group has put in place a comprehensive capital
+management and decision-making mechanism.
+As part of this process, the Group's subsidiaries
+put forward their capital requirements based on
+their own business development needs. The parent
+company then submits its recommendations on
+the overall capital plan for the Group, based on
+the overall situation of the subsidiaries' business
+development. The Group Executive Committee
+then determines a final capital plan based on the
+strategic plan of the entire group before allocating
+capital accordingly.
+All operating, investing and financing activities
+should meet the requirements of liquidity
+management. Ping An Group and its insurance
+subsidiaries implement separate management of
+their operating cash inflows and outflows. Allocation
+and deployment of funds are centralized through
+the pooling of cash inflows and outflows. The
+Company and its subsidiaries are therefore able to
+monitor cash flow status in a timely manner.
+Issued year
+Maturity
+Ping An Life
+Subordinated bonds
+8,000
+First 5 years: 5.90%
+Next 5 years: 7.90%
+(If not redeemed)
+2014
+10 years
+Ping An Life
+Capital supplement
+5,000
+bonds
+First 5 years: 3.90%
+Next 5 years: 4.90%
+(If not redeemed)
+2015
+10 years
+Coupon rate
+(in RMB million)
+Туре
+Issuer
+Total liabilities to total
+assets ratio
+December
+31, 2018
+December
+31, 2017
+Change
+90.4%
+90.9%
+-0.5 pps
+Note: Figures may not match totals due to rounding.
+Note: Total liabilities to total assets ratio = Total liabilities/Total
+Assets.
+The Group's long-term capital stability stems from
+the profits continuously generated by its various
+businesses. Furthermore, based on the capital
+plan, the Group ensures capital adequacy by
+using capital market instruments, issuing equity
+securities, subordinated bonds, capital supplement
+bonds, hybrid capital bonds and tier-2 capital
+bonds to raise capital. Adjustments are made to
+surplus capital through dividend distribution. As at
+December 31, 2018, the Group's equity attributable
+to shareholders of the parent company was
+RMB556,508 million, up 17.6% from the beginning of
+2018. The parent company's capital mainly comprises
+contributions from shareholders as well as proceeds
+from issuance of H shares and A shares.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 61
+MANAGEMENT DISCUSSION AND ANALYSIS
+Liquidity and Capital Resources
+The following table indicates the balances of subordinated bonds, capital supplement bonds, hybrid capital
+bonds and tier-2 capital bonds issued by the Group and main subsidiaries as at the end of 2018:
+Par value
+CAPITAL STRUCTURE
+11.0%
+616,319
+[6]=[1+...+5]
+2018
+2017
+Note
+62,287
+49,811
+8,959
+7,357
+[3]
+5,048
+5,637
+Operating variances and other
+[4]
+21,749
+10,108
+L&H operating profit before tax
+Income tax
+Spread income
+[5]=[1+2+3+4]
+[1]
+[2]
+Release of residual margin
+-
+Owners of the parent
+Non-controlling interests
+112,573
+13,231
+94,708
+11,101
+70,320
+1,026
+52,128
+696
+Notes: (1) The short-term investment variance and impact of discount rate change of L&H listed above is net of tax.
+(2) The impact of one-off non-operating item in 2018 referred to the fair value revaluation gain, as required by the accounting
+standards, of the convertible bonds issued by Lufax Holding to the Group as the consideration of Puhui transaction. The fair
+value of the convertible bonds significantly increased due to Lufax Holding's Series C financing. The one-off material item
+that management considered to be non-operating income and expense in 2017 was the financial gain from Ping An Good
+Doctor's restructuring.
+(3) Figures may not match totals due to rounding.
+58
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Source of Earning and Residual Margin Analysis of L&H
+The breakdown by source of earning of L&H operating profit has been shown as below.
+(in RMB million)
+Return on net worth
+[6]
+98,043
+(26,698)
+72,912
+(20,088)
+168,426
+Expected interest growth
+[3]
+28,498
+22,642
+Release of residual margin
+[4]
+(62,287)
+(49,811)
+Lapse variances and others
+[5]
+26,617
+20,357
+Business growth and favorable
+lapse experience
+Closing residual margin
+177,485
+[2]
+Contribution from new business
+454,705
+L&H operating profit after tax
+[7]=[5+6]
+71,345
+52,824
+Investment return on
+shareholder equity based on
+EV ultimate investment return
+assumption (5%)
+Investment return from assets
+backing liability based on EV
+ultimate investment return
+assumption (5%) higher than
+interest required on liability
+Favorable operating experiences
+786,633
+Note: Figures may not match totals due to rounding.
+(in RMB million)
+2018
+2017
+Note
+Opening residual margin
+[1]
+616,319
+Residual margin is the present value of future profits with release pattern locked in at the time of policy
+issuance, resulting in stable release and immunity to capital market volatility. As at December 31, 2018,
+residual margin of the life and health insurance business was RMB786,633 million, which rose by 27.6% from
+the beginning of 2018 mainly due to contribution from new business. The movement of L&H residual margin
+has been illustrated below:
+10.5%
+cash dividend
+Investment return decreased by 50bps per annum
+Change
+2018
+2017
+(%)
+1,258,768
+1,115,365
+December 31,
+12.9
+1,146,865
+12.5
+596,238
+533,775
+11.7
+211.1%
+1,290,268
+209.0%
+December 31,
+ratio (regulatory
+64
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+GROUP SOLVENCY MARGIN
+The insurance group solvency margin represents the consolidated solvency margin calculated as if the
+parent company and its subsidiaries, jointly controlled entities and associates were a single reporting
+entity. The group solvency margin ratio is an important regulatory measure of an insurance group's capital
+adequacy.
+The related solvency data under C-ROSS of the Group are as follows:
+requirement >=100%)
+(in RMB million)
+Actual capital
+Minimum capital
+Core solvency margin.
+ratio (regulatory
+requirement >=50%)
+Comprehensive
+solvency margin
+Core capital
+The Company believes that the liquid assets
+currently held, together with net cash generated
+from future operations and the short-term
+borrowings available, will be sufficient to meet the
+foreseeable liquidity requirements of the Group.
+2.1 pps
+214.9%
+204.6%
+224.2%
+30% decrease in fair value of
+equity assets
+205.9%
+204.4%
+219.8%
+208.7%
+Annual Report 2018
+MANAGEMENT DISCUSSION AND ANALYSIS
+Risk Management
+We strive to become a "world-leading technology-powered retail financial
+services group." To achieve this goal, we continuously optimize the risk
+management system and develop a risk management platform. By identifying,
+evaluating and mitigating risks, we achieve a balance between risks and returns
+which ultimately contributes to sustainable growth of the Group.
+RISK MANAGEMENT OBJECTIVES
+For 30 years since its establishment, Ping An has regarded risk management as an integral part of its
+operations and business activities. We take steady steps to build an enterprise risk management system
+aligned with the Group's strategies and the nature of our business. We continuously optimize the risk
+management framework, standardize risk management procedures, and adopt qualitative and quantitative
+risk management methodologies to identify, evaluate and mitigate risks. Keeping risks under control, we
+promote sustainable business growth and build Ping An into a "world-leading technology-powered retail
+financial services group."
+Amid evolving regulations in the changing domestic and global economic environments, Ping An has
+diversified its offerings under the "finance + technology" and "finance + ecosystem" strategy. Based
+on robust compliance management and internal control, the Group builds an effective enterprise risk
+management framework in line with international standards through risk quantification tools and risk
+performance appraisals, centering on capital management and being risk-appetite-oriented. By improving
+risk management and technology, and dynamically managing both individual and cumulative risks, the
+Company aims to achieve a balance between risk management and business development.
+Ping An Insurance (Group) Company of China, Ltd. 65
+216.4%
+50bps decline in interest rate
+218.8%
+1.5 pps
+Notes: (1) Core solvency margin ratio = core capital/minimum capital; comprehensive solvency margin ratio = actual capital/minimum
+capital.
+(2) Figures may not match the calculation due to rounding.
+A stable solvency position ensures that the Company meets capital requirements specified by external
+institutions including regulators and rating agencies, and supports the Company in developing business and
+creating value for shareholders.
+Stress test results about impacts of declines in interest rates and equity assets on Ping An Group, Ping An
+Life and Ping An Property & Casualty's solvency margin ratios as at December 31, 2018 are disclosed below:
+Comprehensive solvency margin ratio
+223.8%
+Ping An
+Ping An
+Property &
+Group
+Life
+Casualty
+Central case
+216.4%
+Ping An
+RISK MANAGEMENT ORGANIZATIONAL STRUCTURE
+(0.2)
+308,024
+22.0
+Notes: (1) Cash dividends include the interim dividend and final dividend for the year.
+(2) The cash dividend paid per share is based on the then share capital.
+(3) Except the 2018 final dividend pending approval at the 2018 Annual General Meeting, the profit distribution for other years was
+completed during the relevant years.
+(4) Total ordinary dividend per share for 2018 was RMB1.72, excluding the 30th Anniversary Special Dividend of RMB0.20 distributed
+in the first quarter. If the 30th Anniversary Special Dividend is included, the total cash dividend per share for 2018 will be
+RMB1.92, equating to a 28.0% dividend growth rate and a 32.7% payout ratio.
+CAPITAL ALLOCATION
+Under the model of integrated finance, the Company's ultimate goals are to support the Group's strategies.
+and maximize capital efficiency. The Company follows three core principles in capital allocation: 1) to
+ensure capital levels of the Group's subsidiaries meet their respective business development needs
+and regulatory requirements; 2) to support mature, high-return businesses, boost performance, and
+create value; and 3) to explore new businesses, seize new growth drivers and opportunities, and realize
+sustainable growth in the future.
+30.8
+Annual Report 2018
+63
+MANAGEMENT DISCUSSION AND ANALYSIS
+Liquidity and Capital Resources
+LIQUIDITY RISK MANAGEMENT
+Liquidity risk refers to the risk of the Company
+being unable to obtain sufficient cash in time, or
+being unable to obtain sufficient cash in time at a
+reasonable cost, to repay debts that have become
+due or fulfill other payment obligations.
+To meet domestic and international regulatory
+requirements including those for the Global
+Systemically Important Insurers (G-SIIs) and those
+under C-ROSS, the Group has developed and
+regularly updated the Liquidity Risk Management
+Plan of Ping An Insurance (Group) Company of
+China, Ltd. (LRMP). The Group has also established
+a robust liquidity risk management framework
+covering risk appetites and limits, risk strategies, risk
+monitoring, stress testing, emergency management,
+appraisal and accountability, and relevant policies.
+Ping An has constantly improved its management
+procedures and processes for better identification,
+evaluation, and management of the liquidity risk at
+the Group and its members.
+Ping An Insurance (Group) Company of China, Ltd.
+Under the Group's principles and guidelines for
+liquidity risk management, the subsidiaries have
+developed their own liquidity risk appetites, risk
+indicators, and risk limits according to the applicable
+regulations, industry practices, and features of their
+business activities. The Group and its subsidiaries
+have established robust liquidity risk information
+systems and liquidity monitoring and reporting
+procedures for adequate identification, accurate
+measurement, continuous monitoring, and effective
+control of the liquidity risk in various business
+activities. The Group and its subsidiaries regularly
+evaluate liquid assets and maturing debts, conduct
+stress tests of cash flows, and carry out forward-
+looking analyses of the liquidity risk for a certain
+period in the future to identify the potential liquidity
+risk and take measures to control liquidity gaps.
+29.3
+31,442
+27,420
+13,710
+Cash dividend
+(in RMB)
+per share
+(%)
+amount
+(in RMB million)
+Net profit
+attributable to
+shareholders of
+the parent
+company
+(in RMB million)
+107,404
+89,088
+62,394
+Cash dividend
+1.72
+14.7
+1.50
+100.0
+0.75
+41.5
+payout ratio
+(%)
+308,664
+The Group and its subsidiaries have established
+liquidity reserve policies and maintained stable,
+convenient, and diverse sources of financing to
+ensure that they have adequate liquidity to tackle
+possible impacts from adverse situations. The Group
+and its subsidiaries have developed robust liquidity
+contingency plans for handling any significant
+liquidity events. The Group has set up internal
+firewalls to prevent intra-group contagion of the
+liquidity risk.
+(in RMB million)
+Change
+(%)
+Cash
+219,959
+202,471
+8.6
+Bonds to mature within
+3 months
+December
+31, 2017
+2,534
+(80.8)
+Financial assets purchased
+under reverse repo
+agreements to mature
+within 3 months
+85,531
+93,008
+(8.0)
+Total cash and cash
+equivalents
+13,185
+CASH FLOW ANALYSIS
+December
+31, 2018
+CASH AND CASH EQUIVALENTS
+Change
+2018
+2017
+(%)
+Net cash flows from
+operating activities
+Net cash flows from
+investing activities
+Net cash flows from
+financing activities
+206,260 121,283
+(in RMB million)
+70.1
+(32.2)
+31,264 178,588
+(82.5)
+Net cash inflows from operating activities increased
+year on year mainly because Ping An Bank's
+cash outflows from operating activities declined
+significantly year on year.
+Net cash outflows from investing activities dropped
+year on year mainly due to a year-on-year decline in
+net cash outflows from investing activities of Ping
+An Bank and Ping An Life.
+Net cash inflows from financing activities fell year
+on year mainly due to a year-on-year decrease
+in net cash inflows from financing activities of
+subsidiaries including Ping An Bank.
+(240,426) (354,767)
+Risk discount rate
+The Group proactively complies with the PRC Company Law and relevant laws, regulations and regulatory
+requirements, as well as the Articles of Association of Ping An Insurance (Group) Company of China, Ltd.
+and relevant corporate risk governance requirements. We have in place a comprehensive risk governance
+framework which holds the Group Board of Directors ultimately accountable, and which is directly upheld
+by the management. Supported closely by various committees and relevant departments, the framework
+covers risk management across all of the Group's members and business lines.
+Group
+Tier-2 capital bonds
+Ping An Bank
+10 years
+2014
+6.80%
+9,000
+10,000
+Tier-2 capital bonds
+10 years
+2014
+6.50%
+6,000
+Tier-2 capital bonds
+Ping An Bank
+Ping An Bank
+15 years
+3.85%
+10 years
+35,570
+38,332
+Change (%)
+2017
+2018
+Closing balance of free cash
+2016
+Others
+Dividend out to shareholders
+Dividend from subsidiaries
+Opening balance of free cash
+(in RMB million)
+The free cash of the Company includes bonds, equity securities, bank deposits and cash equivalents
+that the Company holds. They can be invested in subsidiaries or used in daily operations or for dividend
+distribution. As at December 31, 2018, the Company's free cash amounted to RMB42,010 million, up RMB3,678
+million compared with the beginning of the year.
+FREE CASH OF THE HOLDING COMPANY
+Capital injection into subsidiaries
+7.8
+2011
+3,650
+First 5 years: 4.79%
+5,000
+Capital supplement
+bonds
+Ping An Property &
+Casualty
+Next 5 years: 4.82%
+(If not redeemed)
+10 years
+2015
+2016
+10,000
+Cash dividend
+paid per share
+Sensitivity of NBV to investment return and risk discount rate
+(in RMB million)
+Investment return increased by 50bps per annum
+Central case
+First 5 years: 3.82%
+7.50%
+10 years
+(If not redeemed)
+Hybrid capital debt
+instrument
+Ping An Bank
+15 years
+2009
+Next 5 years: 6.10%
+(If not redeemed)
+First 10 years: 5.70%
+Next 5 years: 8.70%
+(If not redeemed)
+1,500
+Next 5 years: 5.79%
+Hybrid capital debt
+instrument
+10 years
+2017
+First 5 years: 5.10%
+3,500
+Capital supplement
+bonds
+Ping An Property &
+Casualty
+Ping An Bank
+Global Systemically
+Important Insurer
+Management
+Committee
+48,566
+88.9
+Branding Department
+of the Group
+Chief Investment
+Officer of the
+Group
+Group Asset
+Management
+Center
+Member
+companies
+Risk Management/
+Compliance/Internal
+Audit Department of
+member companies
+Brand Director of
+the Group
+Finance & Planning
+Department of
+member companies
+Branding Department
+of member companies
+Asset Risk
+Management
+Department of
+member companies
+66
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Growth of
+Information
+Security/Operations
+Department of
+member companies
+2016
+Information
+Security/Operations
+Department of the
+Group
+Chief Information
+Officer/Chief Operating
+Audit and Risk
+Management Committee
+Group Board of Directors
+Group Executive
+Committee
+Connected-party
+Transaction
+Management
+Committee
+Budget
+Management
+Committee
+Group Risk Management
+Executive Committee
+Chairman: Group Chief
+Risk Officer
+Officer/Co-CEOs
+of the Group
+Investment
+Management
+Committee
+Technology
+Development
+Committee
+Relations
+Management
+Committee
+Group Chief Risk
+Officer/Chief Internal
+Auditor/Compliance
+Officer
+Internal Control
+Management
+Center of the
+Group
+Chief Financial
+Officer of the
+Group
+Finance & Planning
+Center of the
+Group
+Investor
+25,711
+2017
+Given sustained business growth and confidence in our prospect, the Board of Directors proposed to
+increase total ordinary dividend per share for 2018 by 14.7% year on year to RMB1.72.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+62
+9.6
+38,332
+N/A
+The major cash outflows were the dividend to A and H shareholders of RMB33,270 million and capital
+injection into subsidiaries of RMB8,584 million. The major cash inflow was the dividend from subsidiaries of
+RMB48,566 million which is illustrated below:
+3,947
+11.5
+(7,702)
+(8,584)
+73.3
+(19,194)
+(33,270)
+(3,034)
+42,010
+2018
+(in RMB million)
+Ping An Property & Casualty
+According to Article 217 of the Articles of Association, the Company shall attach importance to the
+reasonable investment returns of investors in terms of its profit distribution. The profit distribution policy
+of the Company shall maintain its continuity and stability. The accumulated profit to be distributed in
+cash for any three consecutive years shall not be less than 30% of the average annual distributable profit
+realized in the three years, provided that the annual distributable profit of the Company (namely profit
+after tax of the Company after covering the losses and making contributions to the revenue reserve) is
+positive in value and such distributions are in compliance with the prevailing laws and regulations and
+the requirements of regulatory authorities for solvency ratio. In determining the specific cash dividend
+payout ratio, the Company shall take into account its profit, cash flow, solvency, operation and business
+development requirements. The Board of Directors of the Company shall be responsible for formulating
+and implementing a distribution plan according to the provisions of the Articles of Association. The Board
+of Directors will ensure the stability and continuity of the profit distribution policy, so that the Group can
+seize opportunities for growth in the future while maintaining financial flexibility.
+DIVIDEND DISTRIBUTION
+Ping An Life
+48,566
+1,157
+2,467
+Ping An Life
+6,492
+31,449
+2018
+Total
+Ping An Bank
+Ping An Asset Management
+Ping An Trust
+7,001
+Capital supplement
+bonds
+Low-risk financial assets measured
+at amortized cost held by the
+Group
+Evaluate unearned premium reserves and
+outstanding claims reserves using effective
+reserve assessment procedures and methods,
+and assess the reserve adequacy on a regular
+basis;
+Market Risk - Equity Risk
+Listed equity investments held by the Group are
+exposed to market price risks. These investments
+are primarily listed equity securities and securities
+investment funds.
+The Group adopts the 10-day market price value-at-
+risk ("VaR") technique to estimate its risk exposure.
+The market price VaR measures a maximum loss
+in the value of our portfolios of equity investment
+due to normal market fluctuation within a given
+confidence level (99%) and a specified timeframe (10
+days).
+As at December 31, 2018, the VaR for listed equity
+securities and securities investment funds is as
+follows:
+December 31, 2018
+(in RMB million)
+Listed equity securities and
+securities investment funds
+classified as financial assets
+carried at fair value through
+profit or loss and carried
+at fair value through other
+comprehensive income
+15,799
+The sensitivity to foreign exchange risk is
+calculated by assuming a simultaneous and uniform
+depreciation of 5% against the Renminbi of all
+foreign currency denominated monetary assets
+and liabilities, as well as non-monetary assets and
+liabilities measured at fair value as illustrated in the
+table below:
+December 31, 2018
+(in RMB million)
+Net exposure to fluctuations in
+exchange rates assuming
+a simultaneous and uniform
+depreciation of 5% of all foreign
+currency denominated monetary
+assets and liabilities and non-monetary
+assets and liabilities measured at
+fair value against the Renminbi
+Decrease in
+equity
+2,756
+-
+Market Risk Foreign Exchange Risk
+Foreign currency-denominated assets held by the
+Group are exposed to foreign exchange risks. These
+assets include monetary assets such as deposits and
+bonds held in foreign currencies and non-monetary
+assets measured at fair value such as stocks and
+funds held in foreign currencies. The Group's foreign
+currency-denominated liabilities are also exposed
+to risks as a result of fluctuations in exchange rates.
+These liabilities include monetary liabilities such as
+borrowings, customers' deposits and claim reserves
+denominated in foreign currencies, as well as non-
+monetary liabilities measured at fair value.
+If the above currencies appreciate by the same
+proportion, the appreciation will have an inverse
+effect of the same amount on equity in the table.
+Market Risk - Real Estate Price Risk
+The Group is exposed to real estate price risk
+associated with its holding of investment properties.
+The Group tracks its exposure to property
+investment, monitors the movement of real estate
+prices in relevant regions, analyzes the impact of
+macro policies and regional economic development
+on real estate prices, and conducts stress tests on
+a regular basis. Moreover, the Group has engaged
+independent valuers for the fair value assessment.
+As at December 31, 2018, the fair value of the
+Group's holding of buildings under investment
+properties stood at RMB68,136 million.
+72
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+1.3 Credit Risk
+Credit risk is the risk of unexpected losses resulting
+from the default of any debtors or counterparties
+because of their failure of timely performance
+of their obligations or adverse changes in their
+credit profiles. The Group is exposed to credit risk
+primarily associated with its deposit arrangements
+with other commercial banks, loans and advances
+to third parties, bond investments, reinsurance
+arrangements with reinsurance companies, policy
+loans, margin trading and off-balance-sheet related
+activities.
+Risk Management
+The Group manages credit risk through various
+measures, including:
+Ping An Insurance (Group) Company of China, Ltd. 71
+The impacts of interest rate re-pricing and duration
+mismatch of assets and liabilities on yields are
+assessed through gap analysis. We analyze the
+re-pricing characteristics of assets and liabilities
+on a regular basis, and carry out a scenario-based
+analysis of the interest rate risk through the asset-
+liability management system. On the basis of the
+existing gap, we adjust the re-pricing frequency
+and set limits on the maturity of corporate
+deposits to reduce duration mismatch in re-pricing.
+Meanwhile, the Assets and Liabilities Management
+Committee holds regular meetings to make timely
+and appropriate adjustments to the asset-liability
+structure and manage the interest rate risk in
+response to macro-economic trends and the PBC's
+policies on benchmark interest rates.
+MANAGEMENT DISCUSSION AND ANALYSIS
+1.2 Market Risk
+Market risks refer to the risks that cause the Group
+unexpected loss due to unfavorable changes in
+interest rate, equity price, exchange rate, and real
+estate price.
+The Group has continuously strengthened its market
+risk management approach, and strengthened the
+ability to identify, evaluate, measure, analyze and
+report on market risks from multiple dimensions.
+We further strengthened our investment risk
+management system to reinforce the foundation
+of risk management and improve risk management
+efficiency. We improved the risk management
+reporting mechanism, and consolidated risk
+monitoring and management. Stress testing was
+optimized to realize its decisional role in adherence
+to the bottom line of risk control. A risk limit
+framework was launched to monitor risks in the
+Group, subsidiaries and business lines. The Group
+also enhanced the risk early warning mechanism,
+which led to more targeted, forward-looking and
+thorough risk management.
+The mechanisms and procedures adopted by the
+Group to manage market risks are as follows:
+Market risks are managed in a top-
+down manner by the RMEC, the Group's
+Investment Management Committee and the
+risk management committees of member
+companies;
+Investment and asset risk management
+guidelines are developed to manage market
+risks in a forward-looking manner while
+ensuring safety, comprehensiveness and
+effectiveness, and matching up assets and
+liabilities;
+A multi-layered risk limit framework is
+established on the basis of risk bottom lines
+and asset-liability management strategies to
+keep market risks under control. While setting
+risk limits, the Group takes risk management
+strategies and the impacts on financial strength
+into account;
+Methods such as value at risk (VaR), sensitivity
+analysis and stress tests are applied based on
+the characteristics of investment and market
+risk management, for scientific and effective
+assessment and management of market risks;
+The risk monitoring and reporting mechanism is
+standardized. Risk reports are issued regularly
+to provide suggestions on risk management
+and ensure market risks are within the Group's
+tolerance.
+The main market risks to which the Group is
+exposed are interest rate risk, equity risk, foreign
+exchange risk and real estate price risk.
+Market Risk - Interest Rate Risk
+Fixed maturity investments held by the Group are
+exposed to the interest rate risk. These investments
+are substantially represented by bond investments
+booked at fair value on the balance sheet. The
+Group uses various methods such as sensitivity
+analysis and stress tests to evaluate the interest rate
+risk of such investments.
+The sensitivity of interest risk is assessed by
+assuming a 50 basis-point parallel shift of the
+government bond yield curve.
+December 31, 2018
+(in RMB million)
+Bond investments classified
+as financial assets carried
+at fair value through profit
+or loss and carried at
+fair value through other
+comprehensive income
+Change in
+interest rate
+Decrease in
+profit
+Decrease in
+equity
++50 bps
+1,739
+8,356
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Establishing a credit risk management
+mechanism with risk rating as its core
+methodology;
+Setting credit risk limits in multiple dimensions
+for investments and credit portfolios;
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+2.1 Risk Contagion
+Risk contagion refers to a situation where the
+risk created by a member of the Group spreads
+to another member of the Group by means of
+intercompany transactions or other activities,
+causing losses to such other member.
+As the Group promotes synergies in integrated
+finance, in order to prevent intra-group risk
+contagion, the Group has strengthened management
+and coordination across the Group by building
+firewalls, managing connected-party transactions
+("CPTS"), outsourcing and cross-selling, and
+coordinating the Group's branding, communication,
+and information security functions.
+The Group has built robust firewalls between
+the Group and its subsidiaries and among its
+subsidiaries, including legal-entity firewalls, finance
+firewalls, information firewalls, and personnel
+management firewalls to prevent risk contagion.
+First, the legal-entity firewalls. The Group and its
+subsidiaries have complete governance structures.
+The Group itself engages in no specific business
+activity. The Group manages the subsidiaries
+through shareholding, but neither participates
+in nor intervenes in the subsidiaries' routine
+business. The subsidiaries carry out business
+activities independently, and are supervised by
+their respective regulators. Second, the finance
+firewalls. The Group and its subsidiaries have finance
+functions respectively; senior finance managers
+may not take concurrent offices at different entities
+within the Group. Each entity has clear accounts,
+with independent accounting, assets, and liabilities.
+Third, the information firewalls. The Group has
+established the governance structure with three
+lines of defense for information security. Member
+companies have established information security
+departments to strictly implement the Group's
+information security management rules for effective
+information segregation. Attaching great importance
+to customer information management and security
+of products and businesses on the internet, the
+Group has set up and effectively implemented
+the mechanism for comprehensive in-the-process
+monitoring. Moreover, the Group adopted cutting-
+edge technologies, including artificial intelligence
+(AI) and cloud computing, and security measures
+in terms of infrastructures, terminals, business
+and people to effectively protect customer
+information security. Meanwhile, the Group has been
+increasing awareness of information security and
+building a culture where everyone is responsible
+for information security. The Group is committed
+to building safe, innovative financial ecosystems.
+Fourth, the personnel management firewalls.
+The Group and its subsidiaries have separate
+management structures, with clear roles and
+responsibilities so that personnel do not perform
+roles with potential conflict of interests. Meanwhile,
+an insurance subsidiary's senior management
+may not serve as the senior management of non-
+insurance subsidiaries (unless otherwise stipulated
+by laws, regulations and the CBIRC).
+The Group has constantly improved the
+management of CPTs. In 2018, domestic regulators
+kept focusing on CPTs. The Group and its
+subsidiaries such as the insurance companies,
+bank, trust company, securities company, fund
+management company, and asset management
+company constantly enhanced management of CPTS
+in strict accordance with laws and regulations. The
+Group's Connected-Party Transaction Committee
+functioned effectively, coordinated Group-wide CPT
+management, constantly optimized management
+policies and procedures, and enhanced CPT
+identification, review and fair value-based pricing to
+ensure fair pricing for CPTs. The Group continued to
+increase transparency by disclosing and reporting
+CPTs in strict accordance with rules. The Group
+has developed a culture of strong compliance
+awareness for CPTs. The Group's CPT management
+systems and mechanisms have been improved and
+effectively operated.
+The Group has improved its approach to
+outsourcing. Currently, the Group's four centers
+(Administration, Internal Control, HR, and Finance)
+outsource IT services to Ping An Technology,
+including IT advisory services, development,
+application system operations, call center services,
+office support, and information security. The four
+centers outsource financial operations to Ping An
+Financial Services, including financial review and
+accounting, financial system configuration, cash
+collection and payment, financial voucher filing, tax
+processing, sale/purchase and payment of foreign
+exchanges, and personal income tax declaration.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 75
+Risk Management
+The Group has enhanced the management of
+cross-selling. Retail cross-selling business is mainly
+distribution of insurance products by sideline
+agents. Such agents distribute products in an
+orderly manner under sideline agency agreements
+with Ping An in accordance with laws and
+regulations. If customers need products beyond
+agents' offerings, customers may use specific apps
+or visit platforms of other Ping An subsidiaries for
+information and purchase. The Group Integrated
+Finance Committee coordinates and promotes
+cross-selling of group products within Ping An
+Group. The business is done through distribution
+by insurance agents and business recommendation.
+Distribution by agents is subject to the rules
+on sales agents; business recommendation only
+involves matching both parties' intentions of
+cooperation in strict accordance with market rules.
+All businesses are reviewed independently by each
+subsidiary's risk function in line with the firewall
+policies.
+The Group has centralized the management
+of branding, communication, and information
+disclosure. The Group has developed robust rules
+and procedures for brand asset management and
+information disclosure, and strictly implemented
+them to ensure centralized management and
+consistency of branding.
+2.2 Organizational Structure Non-transparency Risk
+The organizational structure non-transparency risk
+refers to the risk of losses in the Group caused
+by the complexity or opaqueness of the Group's
+shareholding structure, management structure,
+operational processes, and business types.
+The Group has a clear shareholding structure.
+The shareholding structure of the Group is clear,
+balanced, and scattered. There is no controlling
+shareholder, nor de facto controller. The Group's
+subsidiaries engage in businesses such as insurance,
+banking, investment, and technology. All the
+subsidiaries have clear shareholding structures;
+none of them have cross-shareholding or illegal
+subscription for capital instruments.
+The Group has a transparent governance structure.
+The Group has established a clear corporate
+governance structure in accordance with laws
+and regulations such as the Company Law of
+the PRC and the Securities Law of the PRC, with
+the Group's situations taken into account. The
+General Meeting of Shareholders, the Board of
+Directors, the Supervisory Committee, and the
+senior management have exercised their rights and
+performed their obligations in accordance with
+the Articles of Association. The Group engages in
+no specific business activity. The Group manages
+the subsidiaries through shareholding, but neither
+participates in nor intervenes in the subsidiaries'
+routine business. The Company and its subsidiaries
+have clearly defined roles and responsibilities of
+their respective functions, which are independently
+operated and well coordinated subject to checks
+and balances. There is no overlap, absence, or over-
+concentration of powers and responsibilities.
+2.3 Concentration Risk
+The concentration risk refers to the risk that
+members' single or combined risks, when
+aggregated at the Group level, may be enough
+to directly or indirectly threaten the Group's
+solvency position. The Group manages the
+concentration risk through business counterparty
+management, investment management, insurance
+business management, and non-insurance business
+management.
+In order to manage the concentration risk from the
+perspective of business counterparties, the Group
+has specified a set of single risk limits for major
+counterparties based on the counterparties' risk
+tolerance as well as the Group's risk appetite and
+risk tolerance. The Group's set of single risk limits
+covers major non-retail, non-trading counterparties
+in its investment and financing businesses.
+In order to manage the concentration risk in
+investment assets, the Group has classified
+investment assets and specified a set of
+concentration risk limits for asset classes according
+to their respective risk-return profiles. Moreover, the
+Group has regularly reviewed the concentration risk
+posed by investment assets at the subsidiary level
+to prevent any solvency risk and liquidity risk arising
+from over-concentration of the Group's investment
+assets in a certain asset class, counterparty, or
+sector.
+76
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+74
+Developing standardized policies, rules and
+procedures for credit risk management;
+The Group proactively strengthens risk control of
+its subsidiaries, implements relevant regulatory
+requirements, and constantly enhances management
+of group-level risks such as risk contagion, the
+risk due to an opaque organization structure, the
+concentration risk, and risks in non-insurance areas.
+The Group constantly improves its reputation
+risk management approach as per regulations.
+By building and improving the pre-warning,
+monitoring, remediation, review and reputation
+repair procedures for reputation risk management,
+the Group closely monitors the business lines with
+potential risks and external factors to identify risk
+events and give warnings in time, follows up on the
+risk warnings, and minimizes the risk and chance
+of reputation crisis through effective control and
+remediation.
+Monitoring credit risk through a risk
+management system.
+The Group is in strict compliance with the credit
+risk management guidelines issued by regulators.
+Under the guidance of the Board of Directors and
+the management, the Group carries out analysis,
+monitoring and management of the credit risk
+exposures of lending and investment businesses at
+the group level. On this basis, the Group establishes
+and refines credit risk limits for different members
+and business lines to manage high risk exposures
+and the concentration of risk after consolidating
+the Group's financial statements. The Group also
+provides forward-looking insights and analysis
+of potential credit risks and their impacts on the
+Group.
+The Group carries out targeted measures to
+control specific credit risks and concentration
+risks in light of different characteristics and risk
+profiles of businesses such as insurance, banking
+and investment. In order to manage credit risks
+associated with the banking business, the Group
+adopted advanced capital management methods,
+continuously improved credit structure and set
+credit risk limits on portfolios from multiple
+dimensions in line with changes in the financial
+and economic situation, macroeconomic policies
+and the requirements of regulatory authorities. The
+Group conducted thorough and stringent credit
+assessments on potential borrowers before granting
+credit facilities and reviewed outstanding loans on
+a regular basis. Risk mitigations were strengthened
+in key areas to prevent the accumulation of credit
+risk from large exposures. Credit risk management
+measures also included obtaining collateral and
+guarantees. In the case of off-balance sheet credit
+commitments, the Group referred to the principles
+and methods applied to on-balance sheet credit
+asset management to set up standard approval
+and management procedures, and normally
+collected performance deposits to mitigate credit
+risk. The Group stepped up its efforts in credit
+risk monitoring and precautions, enhancing its
+capability to provide early warning of risks and
+make prompt responses. We also actively dealt with
+changes in the market environment and regularly
+analyzed trends and changes of credit risk so as
+to take precautionary measures to control risk.
+Furthermore, for credit risk associated with the
+investment business, the Group assesses the credit
+of potential investment instruments in line with
+internal risk rating policies and procedures, chooses
+a counterparty that has a relatively high credit
+standing and adopts a multi-dimensional approach
+for setting risk limits on investment portfolios
+in order to manage credit risks. For reinsurance
+credit risk associated with insurance business,
+namely, credit risk which occurs when a reinsurance
+company is unable to fulfill its obligations, the
+Group evaluates the credit of the reinsurers before
+entering into a reinsurance contract, and seeks to
+reinsure with companies that have higher credit
+standing to mitigate such risks.
+December 31, 2018
+Percentage of
+carrying value
+92.2%
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 73
+Risk Management
+1.4 Operational Risk
+Operational risk refers to the risk of losses resulting
+from inadequate or flawed internal procedures,
+employees, information technology systems and
+external events.
+The Group strictly follows applicable regulations
+and its operational risk management strategies.
+We use existing compliance management and
+internal control framework as the basis to integrate
+the advanced standards, methods and tools for
+operational risk management of domestic and
+foreign regulators. We optimize the structure
+and policies for operational risk management,
+and strengthen collaboration and cooperation
+between departments. We also established
+daily monitoring and reporting mechanisms to
+provide regular reports to the management on
+the overall operational risk situation. Moreover,
+we developed a set of rules and standards for
+operational risk management and strengthened
+the system development to constantly improve the
+effectiveness of operational risk management.
+The Group manages operational risk primarily
+through the following mechanisms and measures:
+Establishing a robust and comprehensive
+management approach covering the whole
+Group to identify, evaluate, monitor, control/
+mitigate, and report operational risks;
+Constantly optimizing the operational risk
+policies, frameworks, workflows, systems
+and tools to enhance overall operational risk
+management;
+Stepping up the use of operational risk
+management tools among member companies,
+such as the Risk and Control Self-Assessment
+(RCSA), Key Risk Indicator (KRI) and Loss Data
+Collection (LDC);
+Pushing forward the operational risk capital
+measurement according to regulatory
+requirements and management requirements;
+and
+Promoting a culture of operational risk
+management through targeted training.
+1.5 Strategic Risk
+Strategic risks refer to the risks of mismatch
+of strategies and market environment with the
+Company's capacity due to ineffective processes for
+drafting or implementing strategies or changes in
+the operation environment.
+By establishing a sound strategic risk management
+framework and procedures, the Group fully studied
+the macroeconomic conditions both at home and
+abroad, impact of regulatory landscape and market
+movement. We developed high-level strategic plans
+to ensure consistency between the strategic goals
+of members and the strategic plans of the Group
+and synergies between strategic goals of members.
+The Group also formulated medium- and long-
+term strategic plans and annual business plans,
+clarifying strategic priorities of the Group and its
+members. Furthermore, we oversaw and evaluated
+members' implementation of strategic plans to
+ensure effective execution of the Group's high-level
+strategic plans.
+1.6 Reputation Risk
+Reputation risk is the risk of the Company's brand or
+reputation being damaged and other relevant losses
+caused by negative comments from stakeholders
+on the Company due to a defect in the Company's
+operation or an external event.
+2. Group-level Risk
+Annual Report 2018
+Impact on equity
+1.3 Credit Risk
+mechanism.
+The Group utilized tools and methods such as
+the risk dashboard, scenario analysis, stress
+tests and risk limits to continuously develop
+and optimize quantitative techniques and
+models of risk management, analyze risk
+exposures and evaluate their quantitative and
+qualitative impacts on our risk bottom lines.
+Such measures enable us to plan ahead and
+take necessary precautions in a timely manner
+to prevent and mitigate risks.
+The Group has carried out studies and
+practice of asset-liability risk management,
+and consolidated risk monitoring. Artificial
+intelligence was effectively applied to the
+entire risk management cycle to enhance risk
+management capabilities and support the
+Company's "finance + technology" and "finance
++ ecosystem" strategy.
+The Group conducts holistic management of
+subsidiaries' risks, carries out comprehensive
+assessment of risk management capabilities,
+and constantly improves risk monitoring
+indicators and measurement methods.
+Subsidiaries were instructed to apply
+technologies such as artificial intelligence
+to build up their smart risk management. By
+improving the risk management platform of the
+Group, we have enhanced the efficiency of risk
+management.
+RISK ANALYSIS
+The Group has categorized all risks to ensure they
+are well defined and managed. Below are major risks
+and their definitions.
+1. General Risks
+2. Group-level Risks
+1.1 Insurance Risk
+2.1 Risk Contagion
+1.2 Market Risk
+MAJOR MEASURES OF RISK MANAGEMENT
+The Group continues to strengthen its enterprise
+risk management system, improve its organizational
+structure, formulate risk management policy
+and guidelines, standardize procedures for
+risk management, and fulfill risk management
+responsibilities. The Group adopts qualitative
+and quantitative risk management approaches
+to identify, evaluate and mitigate risks, so as to
+effectively prevent systemic risks associated with
+integrated finance, and enhance the overall risk
+management capabilities under an integrated model
+of various businesses.
+2.2 Organizational Structure
+Non-transparency Risk
+2.3 Concentration Risk
+1.4 Operational Risk
+2.4 Non-insurance Risk
+1.5 Strategic Risk
+1.6 Reputation Risk
+1. General Risks
+The Group attaches importance to effective
+management of subsidiaries' general risks. Following
+the requirements of internal management and
+external regulation, the Group has strengthened
+active management of the insurance risk, market
+risk, credit risk, operational risk, strategic risk and
+reputation risk.
+1.1 Insurance Risk
+Insurance risk refers to the risk of adverse deviation
+of the actual mortality rate, morbidity rate,
+loss ratio, expense ratio or surrender rate from
+expectations, which may cause losses to the Group.
+The Group assesses and monitors insurance risks
+with sensitivity analysis, stress testing and so
+on. We mainly evaluate the impacts of actuarial
+assumptions, such as the discount rate, investment
+yield, mortality rate, morbidity rate, surrender rate,
+and expense ratio, on our insurance liability reserve,
+solvency and profit in different scenarios.
+The Group has improved its risk warning
+mechanism, providing timely and effective
+alerts on industry developments, regulatory
+information or risk events, and effectively
+guarding against potential risks. The Group has
+also enhanced its risk emergency management
+The Group has improved the risk management
+system on risk concentration and strengthened
+its ability to manage concentrated risks,
+ranging from policy formulation to risk
+limit management, system building and risk
+reporting, so as to improve the Group's overall
+capability of risk management for its integrated
+financial service business.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+A risk appetite system is central to Ping An's
+overall strategy and enterprise risk management.
+Considering the Group's overall strategy and
+members' development needs, the Group has built
+a risk appetite system that matches its business
+strategies, and combined risk appetites with
+management decisions and business development to
+promote healthy growth of the Group and members.
+RISK APPETITE SYSTEM
+As the risk governance system becomes more
+sophisticated, a risk culture has permeated the
+Group's ranks, from the Board of Directors to senior
+management and from committees to employees.
+This culture has facilitated an effective and efficient
+approach that is both top-down and bottom-up,
+which lays a solid foundation for the effective
+integration of risk management into the Group's
+daily operations. This in turn helps to protect
+shareholder equity, improves capital efficiency,
+supports management decisions, and ultimately
+creates value for the Group.
+RISK MANAGEMENT CULTURE
+Ping An has been designated by the Financial
+Stability Board (FSB) and the International
+Association of Insurance Supervisors (IAIS) as
+one of the Global Systemically Important Insurers
+(G-SIIs) for many years. We have proactively
+participated in development of international
+insurance regulations by keeping regulators
+informed of the realities in the Chinese insurance
+and financial markets, so as to create a more
+favorable international regulatory environment for
+developing countries and China's insurance industry.
+Our efforts have yielded good results. In 2018, as
+required by the FSB and the IAIS, Ping An reviewed
+and updated its Systemic Risk Management Plan
+(SRMP), and Recovery and Resolution Plan (RRP)
+including the Liquidity Risk Management Plan
+(LRMP). Based on the changes of the systemic
+risk assessment indicators, Ping An reviewed the
+changes in its business and risk profile. According
+to the comprehensive review and assessment, Ping
+An has effectively kept risks under control with its
+specialized enterprise risk management framework,
+and the Group's potential systemic impact on the
+financial market was very limited. The RRP including
+LRMP for 2018 has been approved by executive
+directors authorized by the Board of Directors, and
+has been approved by the CBIRC. While meeting
+the G-SII and the C-ROSS regulatory requirements,
+Ping An takes the G-SII projects as an opportunity
+to incorporate global best practices into its
+risk management and business procedures. We
+effectively prevent risks and risk contagion, provide
+our integrated financial business with strong risk
+protection, and safeguard the rapid development of
+our innovative business. Ping An acts as a stabilizer
+of financial markets to make greater contributions
+to China's financial innovation and development.
+Risk Management
+Ping An Insurance (Group) Company of China, Ltd. 67
+Annual Report 2018
+risk management.
+To meet regulatory requirements and support the
+Company's strategy and business development
+in a healthy and effective manner, the Group
+implemented a top-down and performance-linked
+risk evaluation indication system. The evaluation
+criteria for personnel, entities and procedures were
+developed on the principle of "accountability at
+every level with evaluation at each stage." The
+Group aims to closely link risk compliance with
+performance appraisal, and raise the awareness of
+In 2018, the Group closely followed domestic
+and foreign regulatory trends such as G-Slls,
+the New Basel Capital Accord, and the China
+Risk Oriented Solvency System (C-ROSS).
+We continued to strengthen the enterprise
+risk management framework, upgrade the risk
+governance and risk management policies of the
+Group and its members, and improve the Group-
+member risk management structure covering all
+risks and a centralized management platform to
+create synergies for enhanced risk management
+capabilities of the Group. The Group also improved
+its risk appetite system, developed risk management
+guidelines, evaluated enterprise risk management
+capabilities, improved monitoring indicators for
+enterprise risk management, standardized risk
+management requirements, reviewed business
+progress, and optimized capital utilization, to
+strike a balance between business development
+and risk management. The Group fulfilled risk
+management responsibilities and continued to
+optimize risk monitoring and reporting. Through
+the Risk Dashboard, the Group and its members
+have identified, classified and evaluated risks
+in a systematic manner, and applied smart risk
+management approaches to ensure that all risks are
+effectively managed on a timely basis.
+Annual Report 2018
+The Group's Chief Risk Officer acts as the RMEC's
+Chairman, while the Group's President, Chief
+Financial Officer, Chief Information Officer/Chief
+Operating Officer/Co-CEOs, Brand Director and
+Chief Investment Officer as vice chairpersons.
+Members of the RMEC are heads of the Group's
+risk management departments, each of whom has
+clearly-defined responsibilities of managing the
+asset quality risk, liquidity risk, information security
+risk, operational compliance risk, brand reputation
+risk and so on.
+Annual risk assessment reports.
+Risk assessments for major decisions and
+solutions to significant risks;
+The organizational structure and responsibilities
+of risk management;
+Overall objectives of risk management, risk
+appetites and tolerance, and risk management
+policies and procedures;
+The Board of Directors is the highest decision-
+making authority for the Company's risk
+management and takes responsibility for the
+effectiveness of the enterprise risk management
+function. The Audit and Risk Management
+Committee under the Board of Directors is
+responsible for having a thorough understanding of
+major risks and the Group's management situation,
+monitoring effectiveness of the risk management
+framework, and making recommendations to
+the Board of Directors after deliberations on the
+following matters:
+MANAGEMENT DISCUSSION AND ANALYSIS
+With effective reinsurance management
+procedures, properly set self-retained risk
+limits, and use reinsurance as an effective
+risk transfer tool to transfer the excess risks
+to reinsurers with a high level of solvency to
+control insurance risks.
+The Group has established an optimal risk
+governance framework and risk management
+reporting mechanism, and included risk
+indicators in the performance appraisal which
+integrates risk management culture into its
+corporate culture. In this way, we have laid the
+foundation for healthy, sustainable and stable
+development of the Group's business.
+The Group is proactively exploring and
+formulating a risk appetite framework in
+line with its business development strategy.
+The Group also formulates risk management
+guidelines and standardizes risk management
+requirements for members.
+68
+Annual Report 2018
+The Group Executive Committee leads all aspects
+of the Group's risk management, comprising nine
+committees, including the Group Risk Management
+Executive Committee (RMEC), the Investment
+Management Committee, the Budget Management
+Committee, the Investor Relations Management
+Committee, the Connected-party Transaction
+Management Committee, the Global Systemically
+Important Insurer Management Committee, and
+the Technology Development Committee. The
+RMEC as a specialized committee reports to the
+Group Executive Committee and holds the supreme
+leadership in the Group's risk management. The
+RMEC makes major decisions on risk management
+and is fully responsible for the Group's risk
+management results. Main duties of the RMEC
+include deliberating on the overall risk management
+goal, risk appetites, risk limits, policies and operating
+procedures, giving instructions on developing
+risk management frameworks, monitoring the
+Company's risk exposure and available capital,
+deliberating on risk management reports and
+financial management initiatives, overseeing
+establishment of risk management organizations
+in subsidiaries and monitoring their performance,
+supervising implementation of the risk management
+system in each member company or business line,
+and promoting a culture of comprehensive risk
+management across the Group.
+Ping An Insurance (Group) Company of China, Ltd. 69
+The Group's risk appetite system has four core
+dimensions: capital adequacy, liquidity adequacy,
+a good reputation, and compliance. The Group
+has used these dimensions to guide members in
+specifying their unique risk appetite dimensions
+according to their business features and demand.
+We have broken down risk appetites and tolerance
+into risk limits under different categories, and
+applied the risk limits to routine risk monitoring
+and early warning, so as to support business
+decision-making and strike a balance between risk.
+management and business development.
+Risk Management
+expense ratio
++5%
+3,066
+Notes: (1) Change in mortality, morbidity, and accident rates
+Implement prudent underwriting policies,
+establish guidelines for policy contracting
+and underwriting, and effectively prevent and
+reduce adverse selection risks;
+Implement effective product development
+policies to develop products with proper
+insurance coverage and fair pricing, and control
+product pricing risks;
+4,037
+336
++5%
+insurance
+refers to a 10% increase in the morbidity rates, mortality
+rates, accident rate and other rates of life insurance
+policies (a 10% increase in mortality rate of annuity
+policies before the payment period, and a 10% decrease
+after the payment period).
+Short-term life
+70
++5%
+casualty insurance
+Property and
+(in RMB million)
+December 31, 2018
+Impact on net
+claim reserves
+increase/(decrease)
+Change in
+average claim
+costs
+outstanding claims reserves
+Sensitivity analysis of property and casualty
+insurance and short-term life insurance contracts'
+(2) For long term life and health insurance contracts
+where future insurance benefits are not affected by the
+investment yield of the underlying asset portfolio, with
+consideration of the Cai Kuai [2017] No.637 issued by the
+former CIRC and other related regulatory requirements,
+the corresponding sensitivity results are prepared based
+on the benchmarking yield curve for the measurement
+of insurance contract reserve increased or decreased
+by 10 basis points.
+standardize actuarial models of the Group and
+strictly control model risks;
+13,870
+Policy maintenance
+Surrender rate
+December 31, 2018
+(in RMB million)
+Sensitivity analysis of long-term life insurance
+contracts' insurance liability reserve
+Change in
+assumptions
+Impact on insurance
+liability reserve (after
+reinsurance) increase/
+(decrease)
+The mechanisms and procedures adopted by the
+Group to manage insurance risks are as follows:
+Develop insurance risk management policies
+and a scientific and consistent insurance risk
+management framework within the Group;
+Discount rate/
+investment yield
++10%
++10bps
+With effective product management
+procedures, analyze the experience and trends
+with the latest and the most accurate and
+reliable data, and well manage the product mix
+to control insurance risks;
+Discount rate/
+Establish model management policies,
+44,436
+(6,446)
+and accident rates (1)
+Mortality, morbidity,
++10%
+6,622
+With strict claim investigation and settlement
+procedures, identify and prevent questionable
+or fraudulent claims;
+-10bps
+investment yield
+Develop a set of key insurance risk indicators,
+closely monitor them, analyze abnormal
+changes and take management measures;
+98
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2018
+86
+(6) Some Directors did not attend certain meetings due to business schedules.
+June 17, 2013
+6/7
+July 2, 2014
+CAI Fangfang
+5/5
+7/7
+Non-executive Directors
+Soopakij CHEARAVANONT
+June 17, 2013
+2/5
+YANG Xiaoping
+5/5
+LIU Chong
+January 8, 2016
+1/5
+WANG Yongjian(1)
+July 13, 2018
+0/1
+LIN Lijun (Retired)(2)
+May 16, 2003
+0/4
+XIONG Peijin (Retired) (3)
+January 8, 2016
+0/4
+515222
+(5) Mr. Stephen Thomas MELDRUM ceased to be the Director of the Company on May 23, 2018, and ceased to be the member of
+the Audit and Risk Management Committee on the same date.
+(2) Ms. LIN Lijun ceased to be the Director of the Company on May 23, 2018.
+4/4
+6/7
+4/4
+GE Ming
+June 30, 2015
+5/5
+7/7
+2/2
+4/4
+3/3
+OUYANG Hui(4)
+August 6, 2017
+3/3
+5/5
+2/2
+3/3
+Stephen Thomas MELDRUM
+(Retired)(5)
+July 17, 2012
+3/4
+3/3
+2/2
+Notes: (1) Mr. WANG Yongjian has served as a Director of the Company since July 13, 2018, and was appointed as the member of the
+Strategy and Investment Committee on the same date.
+7/7
+7/7
+3/3
+4/4
+5/5
+2/2
+3/4
+6/7
+2/3
+2/3
+2/3
+Independent Non-executive
+Directors
+YIP Dicky Peter
+June 17, 2013
+5/5
+7/7
+7/7
+4/4
+3/3
+WONG Oscar Sai Hung
+June 17, 2013
+5/5
+7/7
+2/2
+4/4
+SUN Dongdong
+June 17, 2013
+2/2
+5/5
+June 9, 2009
+YAO Jason Bo
+Built or upgraded
+391
+Trained
+village schools
+4,819
+village teachers
+690,000
+registered volunteers of the
+Ping An Volunteers Association
+Total corporate
+annuities
+RMB 643
+million
+Customer experience
+Total
+remunerations
+5,702 village doctors
+RMB 49,902
+Trained
+Built or upgraded over
+million
+Employee development
+376,900 employees
+Total training budget
+B 1,046
+million
+RMB
+Total input in public welfare
+BMB 450 million
+Covering
+330,000
+people in poverty
+Over
+15,000
+registered poor residents
+400 village clinics
+million
+We adopted the net promoter score (NPS) to
+gauge customer experiences.
+Group NPS rose to
+Ping An Bank's proportion of loans
+to small and micro-businesses
+15.24%
+Puhui's proportion of loans to
+small and micro-businesses
+50%
+Carbon emissions reduced with
+technologies in 2018
+61,552.3
+metric tons
+Greenhouse gas emissions(1)
+197,904 Coze
+Ping An Insurance (Group) Company of China, Ltd.
+79
+MANAGEMENT DISCUSSION AND ANALYSIS
+Prospects of Future Development
+BUSINESS PLAN FOR 2019
+Communities and environment
+hours
+9.21
+employee per year
+41%
+Ping An Life's customer
+satisfaction degree
+95.3%
+Partners
+3.289 partners
+with OneConnect
+Annual centralized
+procurement
+RMB 5,394
+7,441
+Ping An Property &
+Casualty's auto claims
+approval rate
+99.93%
+1,467 suppliers
+Notes: (1) Greenhouse gas emissions include Scope 1, Scope 2 and Scope 3.
+(2) Above is an excerpt only. For complete data, refer to the 2018 Sustainability Report.
+Annual Report 2018
+Face-to-face/online training per
+RMB
+million
+Annual input of poverty alleviation funds
+Poverty alleviation
+Going forward, we will continue to increase investment in technological R&D and pursue "finance
++ ecosystem" while steadily expanding core financial businesses. We will further the Ping An Rural
+Communities Support to give back to society. We will maximize value for stakeholders in a sustainable way
+with our financial strengths, technologies, and smart capabilities.
+As at December 31, 2018, the Group's solvency
+margin ratio met regulatory requirements under
+C-ROSS. Below are the details:
+(in RMB million)
+Core capital
+Actual capital
+December 31,
+December 31,
+2018
+2017
+Change (%)
+1,258,768
+1,115,365
+12.9
+1,290,268
+1,146,865
+12.5
+Minimum capital
+We conduct sensitivity and scenario stress
+testing to generate warnings about potential
+changes in solvency.
+We conduct solvency assessments and dynamic
+solvency tests on a regular basis, and closely
+monitor changes in solvency;
+We adopt a prudent asset and liability
+management policy, constantly enhance asset
+quality and business operations, strengthen
+capital management, and focus on capital
+requirements arising from rapid business
+growth;
+The solvency indicator has been included as a
+KPI in performance appraisal at the Company
+level to be implemented in a top-down manner;
+The Group also manages the concentration risk
+in insurance and non-insurance businesses. The
+Group evaluates, analyzes, monitors and reports
+the concentration of its businesses in accordance
+with the CBIRC's rules for concentration risk
+management of the Group's insurance and non-
+insurance businesses. Regarding the concentration
+of insurance business, the Group has enhanced
+the framework of concentration risk limits for
+reinsurance counterparties, risk monitoring, risk
+analysis, and risk warning by implementing the
+reinsurer credit and concentration management
+procedures. Regarding the concentration of non-
+insurance businesses, the Group has analyzed
+the structures and risk profiles of non-insurance
+businesses, specified the concentration risk
+indicators to be monitored, and included such
+indicators in the routine risk management
+framework. The Group has effectively prevented
+the concentration risk through regular evaluation,
+monitoring, and warning of the concentration risk in
+insurance and non-insurance businesses.
+2.4 Non-insurance Risk
+As an integrated financial service group
+authorized by the State Council to engage in
+separate operations under a listed holding group
+subject to separate regulation, the Group has
+established independent legal entities that engage
+in insurance, banking, investment, and fintech &
+healthtech businesses respectively. Regarding
+corporate governance, all the subsidiaries in non-
+insurance areas carry out specialized operations
+independently, and are supervised by their
+respective regulators; the Group ensures that
+all the non-insurance subsidiaries are effectively
+segregated from the insurance subsidiaries in terms
+of assets and liquidity.
+For equity investments in non-insurance areas, the
+Group has developed rules, standards and limits,
+established processes for investment decision
+making, risk management, investment review,
+evaluation and reporting, and specified mechanisms
+for management before, during and after investment
+deals. Moreover, the non-insurance subsidiaries
+strictly follow the Company's strategic planning
+process to analyze the feasibility of business
+strategies, regularly review the ROICS, investment
+payback periods, business and financial performance
+as well as valuations, and evaluate the risk-return
+profiles of various businesses.
+Annual Report 2018
+SOLVENCY MANAGEMENT
+Solvency refers to the Group's ability to settle
+its liabilities. An insurance group's solvency is
+the consolidated solvency calculated by taking
+the parent company, subsidiaries, joint ventures,
+and associates as a single reporting entity. An
+insurance group's solvency margin ratio is a key
+regulatory indicator for evaluating an insurance
+group's capital adequacy. The key objective of
+solvency management is to meet statutory capital
+requirements and maintain a healthy capital ratio to
+support business growth and maximize shareholder
+value. A stable solvency margin ratio can ensure
+that the Company meets capital requirements
+specified by external institutions such as regulators
+and rating agencies, and support the Company's
+business development and shareholder value
+creation.
+596,238
+Since the former CIRC began to implement the
+China Risk Oriented Solvency System (C-ROSS)
+three years ago, China's insurance industry
+has realized a smooth, substantive transition
+towards comprehensive risk management.
+C-ROSS has significantly helped to modernize
+insurance regulation, strengthen the industry's risk
+management, promote the industry's transformation
+and upgrading, and increase the global influence
+of China's insurance market. C-ROSS consists of
+three pillars, which are quantitative regulatory
+requirements, qualitative regulatory requirements,
+and market disciplinary mechanisms. C-ROSS
+enables insurers to strike a balance between risk
+prevention and value growth by embedding the
+philosophy of risk management in all dimensions of
+business development.
+Ping An Insurance (Group) Company of China, Ltd. 77
+MANAGEMENT DISCUSSION AND ANALYSIS
+Risk
+Management
+The Group manages its solvency through the
+following mechanisms and processes:
+The impacts on solvency must be evaluated
+when we develop key initiatives including
+strategies, business plans, investment decisions,
+and dividend distribution plans;
+The solvency target is a key indicator for
+the Company's risk management, and an
+emergency reporting and response mechanism
+is in place for significant changes in the
+solvency to ensure the solvency is maintained
+at an appropriate level;
+Qualitative regulatory requirements, as the second
+pillar of C-ROSS, are mainly based on the CBIRC's
+Solvency Aligned Risk Management Requirements
+and Assessment (SARMRA). The SARMRA results
+are linked with an insurer's minimum capital for
+risk control, so as to adjust the minimum capital
+requirement based on the first pillar. According to
+the circular of the CBIRC on SARMRA of insurers
+for 2018, Ping An's insurance member companies
+were not measured in the SARMRA assessment for
+2018 based on spot checks. Therefore, the SARMRA
+results remain unchanged. Ping An Life scored 85.58
+for 2017, allowing its minimum capital requirement
+under C-ROSS to reduce by RMB10,031 million as
+at December 31, 2018. Ping An Property & Casualty
+scored 84.10 for 2017, allowing its minimum capital
+requirement under C-ROSS to reduce by RMB800
+million as at December 31, 2018.
+As we are committed to steady, sustainable business
+development, no major change has been made to
+our long-term operational objectives compared with
+those announced last year.
+533,775
+Core solvency margin
+ratio (regulatory
+requirement ≥50%)
+A decline of 50 bps in
+interest rates
+208.7%
+204.6%
+224.2%
+A decrease of 30% in
+fair value of equity asset
+205.9%
+204.4%
+219.8%
+78
+Annual Report 2018
+As one of the G-SIIs, Ping An is required to follow
+a series of international solvency regulations in
+addition to C-ROSS. These regulations are being
+developed by the IAIS and will come into force
+in 2024. With the encouragement and support
+from the CBIRC, Ping An has proactively worked
+with the IAIS to develop solvency regulations
+for G-SIIs. In this way, the IAIS is able to reflect
+its better understanding of China's insurance
+industry and Ping An's situations in the regulations.
+Positive progress has been made with Ping An's
+participation.
+Ping An Insurance (Group) Company of China, Ltd.
+Corporate Sustainability
+We influence our society with finance and technology, use our expertise to create
+value for the shareholders, customers, employees, communities, environment and
+partners, and pursue sustainable development together with the stakeholders.
+The year 2018 marked the 40th anniversary of China's reform and opening-up. Also in 2018, Ping An
+celebrated its 30th birthday and embarked on a new journey. We continued to reward stakeholders, and
+serve the country, society and people through concrete actions. We implemented the Ping An Rural
+Communities Support for smart poverty alleviation across China, supporting rural economic growth,
+health care and education by empowering local officers, doctors and teachers. Embracing technological
+advancements, we leveraged innovations and technologies to gain deep insights into customers and
+facilitate industry upgrades. These efforts enabled us to better serve our society, people and country. We
+provide financial services for small and micro-businesses to bolster the real economy. In inclusive finance,
+we have granted over RMB100 billion in loans to small and micro-businesses. By building a health care
+ecosystem, we are committed to addressing issues in China's health care system, including high medical
+costs and difficulties in obtaining medical services. We are concerned about global climate change and
+environmental risks. By integrating risk research with product design, we constantly strengthen our ability
+to manage environmental risks. Committed to responsible investing, we have built a presence in industries
+including high and new technologies and environmental protection in response to the government's call for
+"industry upgrades." We have been widely recognized for our unremitting efforts. We have been honored
+as the "Most Respected Enterprise in China" for 17 consecutive years, and the "Most Respected Enterprise
+in Asia" five times. We have won the "International Carbon-Value Award" for six consecutive years, and
+received the "Award for Poverty Alleviation of the Year" at the 2018 People's Corporate Social Responsibility
+Summit.
+223.8%
+218.8%
+216.4%
+Central case
+211.1%
+209.0%
+2.1 pps
+Comprehensive
+solvency margin
+ratio (regulatory
+requirement ≥100%)
+11.7
+216.4%
+1.5 pps
+Notes: (1) Core solvency margin ratio = core capital/minimum
+capital; comprehensive solvency margin ratio = actual
+capital/minimum capital.
+(2) Figures may not match the calculation due to rounding
+We have estimated the impacts of declines in
+interest rates and equity value on the solvency
+margin ratios of Ping An Group, Ping An Life, and
+Ping An Property & Casualty as at December 31,
+2018. Below are the results:
+Comprehensive solvency margin ratio
+Ping An
+Ping An
+Ping An
+Group
+P&C
+Life
+214.9%
+(4) Mr. OUYANG Hui was appointed as the member of the Audit and Risk Management Committee on May 23, 2018.
+In 2018, we were committed to delivering on our
+operational objectives. We furthered "finance +
+technology" and pursued "finance + ecosystem" to
+promote technology-driven reforms, empowering
+financial services with technologies, empowering
+ecosystems with technologies, and empowering
+financial services with ecosystems. We enhanced
+retail customer development and boosted the
+value of retail businesses. We maintained healthy,
+sustainable growth of our insurance, banking, asset
+management and fintech & healthtech businesses.
+Our profitability continued to increase. We delivered
+on all our operational objectives for 2018.
+Being customer-centric, we will apply
+technological innovations to the development
+of retail financial products and the
+improvement of customer services. We will
+continue to optimize customer experiences
+and satisfy customer demands. We will boost
+the value of retail customers by promoting
+cross-selling and customer migrations.
+5 Directors
+8 Directors
+3-5 years
+4 Directors
+Independent Non-executive Directors Non-executive Directors
+5 Directors
+Above 60
+2 Directors
+6-9 years
+6 Directors
+2 Directors
+More than
+10 years
+(inclusive)
+Executive Directors
+Expertise
+In insurance, actuarial science, banking, investment, accounting, law, management, medicine, engineering etc.
+We will continually bring in directors with experience in science and technology.
+Directors
+The Board consists of 15 members, namely 6 Executive Directors, 4 Non-executive Directors and 5
+Independent Non-executive Directors, and the profile of each Director has been included in the section.
+headed "Directors, Supervisors, Senior Management and Employees" of this Annual Report. The number of
+Directors and composition of the Board are in compliance with the regulatory requirements and provisions
+of the Articles of Association. As provided in the Articles of Association, Directors should be elected at the
+general meeting with a term of 3 years, and are eligible for re-election upon expiry of the term. However,
+the Independent Non-executive Directors should not hold office for more than 6 consecutive years.
+Categories
+Annual Report 2018
+3 Directors
+Less than 3 years
+3 Directors
+Under 50 (inclusive)
+appointing or dismissing the senior management of the Company, and determining their remuneration
+and award and punishment; and
+performing the corporate governance function, monitoring, evaluating and ensuring the effectiveness
+of the Company's internal control systems and compliance with relevant laws and regulations.
+On the other hand, responsibilities, functions and types of decisions delegated to the management include:
+implementation of the Company's overall direction, objectives and strategies, business plans and
+investment proposals as determined by the Board from time to time; and
+the day-to-day management of the Company's business.
+84
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Board Diversity
+Board diversity provides professional support for
+effective decision-making of the Board
+4 Directors
+51-55
+3 Directors
+56-60
+Age Group
+Directorship
+with Ping An
+(Number of
+Years)
+Ping An Insurance (Group) Company of China, Ltd. 85
+CORPORATE GOVERNANCE
+Corporate Governance Report
+2/2
+4/4
+SUN Jianyi
+March 29, 1995
+5/5
+7/7
+LEE Yuansiong
+June 17, 2013
+5/5
+7/7
+REN Huichuan
+July 17, 2012
+5/5
+6/7
+3/4
+7/7
+5/5
+March 21, 1988
+MA Mingzhe (Chairman)
+Attendance Record of Directors
+During the Reporting Period, the Directors did their best to participate in the general meetings and the
+meetings of the Board and specialized committees under the Board in person, as well as to make right
+decisions on the basis of in-depth knowledge of circumstances. All the Directors have strictly observed
+their duties and are committed to protecting the interests of the Company and its shareholders as a whole.
+The attendance records of each Director at the meetings are as follows:
+Members
+Meetings attended in person (6) /Meetings required to attend
+Audit and
+Strategy and
+Risk
+formulating proposals for the increase or decrease in the Company's registered capital, the issuance of
+corporate bonds or other securities and listing plans;
+Date of Appointment
+General
+Meeting
+Board
+Investment
+Committee
+Management Remuneration
+Committee Committee
+Nomination
+Committee
+Executive Directors
+as Directors
+formulating plans for mergers or disposals and deciding on major investments, pledging of assets and
+other forms of security (in accordance with the mandate at the general meetings);
+• formulating the Company's profit distribution and loss recovery proposals;
+formulating the Company's annual budgets, financial statements and monitoring the Company's
+performance;
+Ping An has established and kept improving its corporate governance structure
+which is based on both local advantages and international standards, and
+continues to perform global best practice in corporate governance. The board of
+directors of the Company (the "Board" or "Board of Directors") hereby reports
+to the shareholders on the corporate governance of the Company for the year
+ended December 31, 2018 (the “Reporting Period”).
+CORPORATE GOVERNANCE STRUCTURE
+During the Reporting Period, the Company conducted corporate governance activities in line with realities
+and in strict accordance with applicable laws including the Company Law of the People's Republic of
+China, the Securities Law of the People's Republic of China, applicable regulations, and principles set out
+in the Corporate Governance Code. The general meetings ("General Meetings"), Board of Directors, the
+supervisory committee ("Supervisory Committee") and the executive committee ("Executive Committee")
+of the Company exercised their rights and performed their responsibilities conferred by the Articles of
+Association respectively.
+Strategy and
+The Corporate Governance Structure of Ping An
+General Meetings
+Audit and Risk
+Investment Committee Management Committee
+Nomination
+Committee
+Remuneration
+Committee
+Board of
+Directors
+Supervisory
+Committee
+Executive
+Committee
+GENERAL MEETINGS AND SHAREHOLDERS
+General Meetings
+Corporate Governance Report
+Ping An Insurance (Group) Company of China, Ltd. 81
+Annual Report 2018
+Amid domestic and international complexities, we
+will make contributions to China's development by
+closely following national policies, effectively serving
+the real economy, and strictly managing financial
+risks. We will further "finance + technology" and
+pursue "finance + ecosystem," empowering financial
+services with technologies, empowering ecosystems
+with technologies, and empowering financial
+services with ecosystems. We will create value for
+customers and shareholders under an integrated
+financial business model of "one customer, multiple
+products, and one-stop services."
+Our insurance businesses will continue to
+seek stable growth and enhance operational
+results. Ping An Life will continue to pursue
+balanced business growth, aiming for
+long-term sustainable development and stable
+agent force expansion. Ping An Property &
+Casualty will upgrade its online platform to
+offer better services and build differentiated
+advantages. Ping An Annuity will provide
+corporate employees with one-stop insurance,
+annuity and value-added health management
+services, making contributions to old-age care,
+health care and poverty alleviation. Ping An
+Health will carry out its technology-powered
+transformation and mobile strategy to pursue
+product innovations, increase operational
+efficiency, and improve customer experiences.
+Our banking business will follow national
+strategies and adapt to domestic and
+international situations. Ping An Bank
+will continue to pursue "technology-
+driven breakthroughs in retail banking and
+enhancement of corporate banking." First, Ping
+An Bank will transform itself into an industry-
+oriented bank and build capabilities of serving
+the real economy. The Bank will provide
+customers with diverse financial services under
+an industry-specific "commercial banking +
+investment banking + investment" model.
+Second, Ping An Bank will use technologies
+to empower private companies and micro-
+businesses by offering more convenient and
+secure smart financial services. Third, Ping An
+Bank will embrace changes, exploit "ecosystem-
+based" momentums, and seek new business
+drivers by developing ecosystems. Fourth,
+Ping An Bank will ensure compliance and apply
+technologies to risk management.
+Our asset management business will remain
+committed to improving customers' investment
+returns and trading experiences by building a
+leading investment management platform. We
+will pursue product innovations and enhance
+our capabilities of serving the real economy. In
+insurance asset management, we will continue
+to prioritize risk prevention, match assets
+and liabilities, and enhance risk management
+mechanisms.
+We will continue to further "finance +
+technology" and pursue "finance + ecosystem."
+We will utilize our three core technologies,
+namely Al, blockchain and cloud computing, to
+satisfy demands and increase efficiency. We will
+build five ecosystems, namely financial services,
+health care, auto services, real estate services,
+and smart city services. By doing so, we will
+provide customers with better offerings and
+empower the whole industry with technologies.
+80
+50
+During the Reporting Period, the Company convened 5 general meetings. The notice, convocation and
+procedures for convening and voting at the general meetings have complied with the requirements of the
+Company Law of the PRC and the Articles of Association. The general meetings established and expanded
+effective channels for communication between the Company and the shareholders, and through listening to
+their opinions and advice, their information rights, participation rights and voting rights on the significant
+events of the Company can be ensured. The detailed information of the general meetings is as follows:
+Annual Report 2018
+MANAGEMENT DISCUSSION AND ANALYSIS
+In an ever-changing environment, we will seize
+growth opportunities and avoid market risks by
+gaining insights into macroeconomic dynamics,
+revise operational objectives as appropriate, and
+increase our competitive advantages.
+MAJOR INDUSTRY TRENDS AND THE MARKET
+LANDSCAPE
+In 2018, the insurance industry was guided by the
+Thought on Socialism with Chinese Characteristics
+for a New Era. Insurers implemented the strategy
+adopted by the 19th CPC National Congress,
+focusing on long-term risk management and
+protection as their original aspirations. Insurance
+market rules were strengthened as the reform
+of commercial auto insurance premium rates
+continued. Insurers strengthened capabilities of
+serving people's livelihood as new social security
+policies for old-age care and health care were
+implemented. Cutting-edge technologies such as
+Al and cloud computing enabled the insurance
+industry to upgrade itself. As regulations tighten
+and reforms continue, the insurance industry will
+realize sustainable growth by playing its role in risk
+management and social security.
+In 2018, China's economic growth remained stable
+while new momentums emerged. Banks face
+new requirements put forward by the industrial
+development and the market landscape. First, risk
+management remains a top priority. Banks must
+strictly comply with regulatory requirements, and
+improve risk management and asset quality. Second,
+banks should be committed to serving the real
+economy through in-depth industrial research and
+integration into the industrial ecosystems. Third,
+technological innovation will be a core driver of
+development. Banks should utilize technologies to
+cut costs, manage risks and enhance management
+as advanced technologies including Al, blockchain
+and cloud computing mature. Only by doing so can
+banks optimize and upgrade themselves to support
+non-SOEs, financial inclusion, small and micro-
+businesses, agriculture, rural areas and farmers, and
+targeted poverty alleviation.
+In 2018, China's financial industry continued to
+develop and carried out reforms, effectively
+preventing and mitigating systemic risks and
+stabilizing the financial system. Asset managers
+switched the focus back onto managing wealth on
+behalf of customers due to a series of regulatory
+policies including new regulations for asset
+management. Financial institutions became more
+aware of compliance, and investors became more
+aware of risks. We will continue to strengthen our
+investment capabilities and risk management in line
+with national policies and strategies. We will build
+a leading asset management platform in China to
+serve the real economy, upgrade the industry, and
+facilitate the economic transformation.
+In 2018, new technologies such as Al, blockchain
+and cloud computing had significant impacts on
+social development and business models. Traditional
+industries, including financial services, health care,
+automobiles, real estate and urban construction,
+now face huge opportunities and challenges. We
+will continue to increase operational efficiency,
+make better use of resources, and improve user
+experiences by developing and applying new
+technologies. We will closely follow the technology
+tide, invest heavily in technological R&D, diversify
+use cases, and build a world-leading fintech
+company.
+Ping An Insurance (Group) Company of China, Ltd.
+In 2019, we will remain committed to sustainable
+development and carry out the plans formulated
+by the Board of Directors. We will provide better
+offerings for customers and create value for
+shareholders. We will continue to focus on the
+two major industries of pan financial assets and
+pan health care. We will develop five ecosystems:
+financial services, health care, auto services, real
+estate services, and smart city services. We strive to
+become a world-leading technology-powered retail
+financial services group.
+General meeting
+2018 First Extraordinary General Meeting
+2018 First A Shareholders' Class Meeting
+During the Reporting Period, the Company disclosed the relevant information in a truthful, accurate,
+complete, timely and impartial manner in accordance with the laws and regulations and the Articles of
+Association, making sure that every shareholder had equal chances to obtain the information, and there
+was no breach of information disclosure regulations.
+The Company adheres to the principles of compliance, objectiveness, consistency, timeliness, interactivity
+and fairness in providing services proactively, passionately and efficiently to institutional and individual
+investors domestically and abroad, aiming at improving the understanding between the Company and its
+investors, enhancing corporate governance and realizing the fair corporate value of the Company.
+The Company maintains a website at www.pingan.cn, which serves as a communication platform with
+the shareholders and investors and where the Group's business developments and operations, financial
+information, corporate governance practices and other information are available for public access.
+Shareholders and investors may also write directly to the Company's IR Team or email to IR@pingan.com.cn
+for any inquiries. Inquiries are dealt with in an appropriate manner by the Company.
+The Company improves communication effectiveness with the investors and promotes their understandings
+of the Company's value by means of public presentations, video and telephone conferences, and
+onsite roadshows, etc. The Company resorts to telephone conferences, roadshows, gatherings of stock
+market analysts, Investor Days and so on, to actively promote itself to the market, and to improve the
+understanding of the market about the Company and its communication with the Company. While
+maintaining good communication with the institutional investors, the Company also established different
+channels for communication with minority investors, including but not limited to corporate websites, e-mail
+and telephone calls, so as to provide better services to them and protect the interests of the investors.
+Moreover, the Company is committed to collecting capital market analysis reports and shareholders'
+information, and pays special attention to the investors' concerns and advice, aiming at further enhancing
+the operation and management of the Company as well as its corporate governance. The Company also
+made great efforts in improving its internal workflow and policy formulation so as to provide investors with
+better services in a more efficient way.
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd. 83
+CORPORATE GOVERNANCE
+Corporate Governance Report
+In 2018, the Company held 2 Investor Days with an audience of over 1,600, on which the Company paid
+special attention to communication with the market in respect of its core finance businesses and
+technologies. The Company provided webcasts and teleconferences for investors to participate in the
+Investor Days, which further broadened the approaches for participation and better protected the interests
+of minority investors.
+Independence of the Company from the Controlling Shareholders on Business, Staff, Assets,
+Organization and Finance
+The shareholding structure of the Company is scattered and there are no controlling shareholders or de
+facto controllers. As an integrated financial services group, the Company maintains full independence in
+terms of business, staff, assets, organization and finance under the supervision of the CBIRC. The Company
+is an independent legal person responsible for its own profits and losses, runs independent and complete
+business and is capable of independent business operation. During the Reporting Period, no controlling
+shareholders or other connected parties had misappropriated the Company's funds, as specified by
+PricewaterhouseCoopers Zhong Tian LLP's special-purpose explanation in this respect and the Company
+has not given any undisclosed information to any controlling shareholder or de facto controller.
+BOARD AND DIRECTORS
+Corporate Governance Functions of the Board
+The Board is responsible for the management of the Company and accountable to the shareholders
+for their entrusted assets and resources. They represent and owe a duty to act in the interests of the
+shareholders as a whole. The Board recognises its responsibility to prepare the Company's financial
+statements. The principal responsibilities of the Board and the types of decisions that can be made by the
+Board include:
+formulating the Group's overall direction, objectives and strategies, business plans and investment
+proposals as well as monitoring and supervising the management's performance;
+Information Disclosure and Investor Relations
+For putting forward any enquiries as set out in Article 58(5) of the Articles of Association, shareholders
+may send their enquiries or requests in exercise of such rights as mentioned above to the Company's IR
+Team or via email to IR@pingan.com.cn. Shareholders who put forward such enquiries shall provide the
+Company with the written identification documents pursuant to Article 59 of the Articles of Association.
+The Company shall provide the relevant information after having verified the identity of the shareholder.
+In addition, shareholder(s) individually or collectively holding 3% or more of the Company's issued and
+outstanding shares carrying voting rights may submit a written interim proposal to the convener 10 days
+before the date of the general meeting pursuant to Article 75 of the Articles of Association.
+Extraordinary general meetings may be convened on written requisition of shareholder(s) individually or
+jointly holding 10% or more of the Company's issued and outstanding shares carrying voting rights pursuant
+to Article 72(3) of the Articles of Association. Such requisition shall state clearly the matters required to be
+considered and approved at the general meetings and must be signed by the requisitionists and submitted
+to the Board in writing. Shareholders should follow the requirements and procedures as set out in the
+Articles of Association for convening an extraordinary general meeting.
+March 19, 2018
+March 19, 2018
+2018 First H Shareholders' Class Meeting
+2017 Annual General Meeting
+March 19, 2018
+May 23, 2018
+2018 Second Extraordinary General Meeting
+December 14, 2018
+Date of publication of
+resolutions
+Date of the meeting
+March 20, 2018
+March 20, 2018
+March 20, 2018
+May 24, 2018
+December 15, 2018
+China Securities Journal,
+Shanghai Securities News,
+Securities Times and
+Securities Daily
+The resolutions of the above general meetings have also been published on the websites of SSE
+(www.sse.com.cn) and HKEX (www.hkexnews.hk).
+82
+Annual Report 2018
+Ping An Insurance (Group) Company of China, Ltd.
+Shareholders' Rights
+As one of the measures to safeguard shareholders' interests and rights, separate resolutions are proposed
+at the general meetings on each substantial issue, including the election of individual directors, for
+shareholders' consideration and voting. All resolutions put forward at the general meetings will be voted by
+poll and the poll results will be posted on the websites of HKEX, SSE and the Company after the relevant
+general meetings.
+Designated media for
+information disclosure of
+A share
+(3) Mr. XIONG Peijin ceased to be the Director of the Company on May 23, 2018.
+Expertise Creates Value
+9 responsibilities and supported the real
+13.2
+17.9
+18.9
+19.5
+21.7
+6.66
+8.42
+8.40
+7.89
+132,955
+7.48
+2.43
+2.42
+2.38
+2.20
+2.05
+Net profit attributable to shareholders of the parent
+company
+85,665
+111,008
+101,618
+Dividend per share (in RMB)
+143,099
+139,470
+146,895
+Ping An, always true to its original aspiration
+So many things, so many years
+Pioneering and persevering forever
+Ping An, leveraging expertise to promote well-being
+Five-Year Summary
+(in RMB million)
+2023/
+December
+31, 2023
+2022/
+December
+31, 2022
+147,961
+2021/
+December
+31, 2021
+December
+31, 2020
+2019/
+December
+31, 2019
+THE GROUP
+Operating profit attributable to shareholders of the parent
+company(1)
+Operating ROE (¹) (%)
+Basic operating earnings per share(1) (in RMB)
+117,989
+2020/
+149,407
+Equity attributable to shareholders of the parent company
+899,011
+32.1
+37.3
+32.3
+35.0
+40.5
+106,083
+109,810
+97,075
+93,666
+Comprehensive solvency margin ratio of Ping An Life (%)
+88,950
+28,820
+37,898
+49,575
+75,945
+768,440
+818,683
+N/A
+N/A
+N/A
+31,080
+Contractual service margin ("CSM")
+New business value ("NBV")(2)
+Operating profit (1)
+869,191
+812,405
+762,560
+673,161
+Group comprehensive solvency margin ratio (%)
+208.0
+Total assets
+11,583,417
+Total liabilities
+10,354,453
+217.6
+11,009,940
+9,823,944
+233.5
+236.4
+229.8
+10,142,026
+9,064,303
+9,527,870
+8,222,929
+8,539,965
+7,370,559
+LIFE AND HEALTH INSURANCE BUSINESS
+Operating ROE (¹) (%)
+Marketing artemisia selengensis from Funan to bolster the real economy
+194.7
+Ear-tagging yaks in Xizang to provide insurance
+Supporting hard-working citizens with insurance coverage
+MANAGEMENT DISCUSSION AND ANALYSIS
+Changes in the Share Capital and
+Shareholders' Profile
+Directors, Supervisors, Senior Management
+and Employees
+160 Report of the Board of Directors and
+Significant Events
+176 Report of the Supervisory Committee
+10
+Business Analysis
+10
+14
+136
+22
+Life and Health Insurance Business
+Property and Casualty Insurance Business
+FINANCIAL STATEMENTS
+180
+Independent Auditor's Report
+28
+Insurance Funds Investment Portfolio
+188
+Consolidated Income Statement
+Performance Overview
+34
+Business Performance at a Glance
+Chairman's Statement
+2
+中国平安保险(集团)股份有限公司
+Ping An Insurance (Group) Company of China, Ltd.
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+Stock Code: 2318 (HKD counter) and 82318 (RMB counter)
+ANNOUNCEMENT OF AUDITED RESULTS
+FOR THE YEAR ENDED DECEMBER 31, 2023
+The board of directors (the “Board”) of Ping An Insurance (Group) Company of China, Ltd.
+("Ping An” or the “Company”) hereby announces the audited results of the Company and its
+subsidiaries for the year ended December 31, 2023. This announcement, containing the full text
+of the 2023 Annual Report of the Company, complies with the relevant requirements of the Rules
+Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in relation to
+the information to accompany preliminary announcements of annual results.
+The Company has implemented IFRS 17 Insurance Contracts (the “New Accounting Standards
+for Insurance Contracts" or the "New Standards") since the accounting year beginning on
+January 1, 2023, and adjusted financial statements for the same period last year retrospectively.
+Both the Chinese and English versions of this results announcement are available on the websites
+of the Company (www.pingan.cn) and the Hong Kong Exchanges and Clearing Limited (the
+"HKEX") (www.hkexnews.hk). This results announcement is prepared in accordance with the
+International Financial Reporting Standards. The Company's 2023 Annual Report will be sent out
+to the H shareholders of the Company and available for viewing on the websites of the HKEX
+(www.hkexnews.hk) and the Company (www.pingan.cn) before late April 2024.
+4
+By order of the Board
+Ma Mingzhe
+Chairman
+As at the date of this announcement, the executive directors of the Company are Ma Mingzhe, Xie
+Yonglin and Cai Fangfang; the non-executive directors of the Company are Soopakij Chearavanont,
+Yang Xiaoping, He Jianfeng, Cai Xun, Yao Jason Bo and Tan Sin Yin; the independent non-
+executive directors of the Company are Ng Sing Yip, Chu Yiyun, Liu Hong, Ng Kong Ping Albert,
+Jin Li and Wang Guangqian.
+Contents
+ABOUT US
+CORPORATE GOVERNANCE
+114 Corporate Governance Report
+i
+Five-Year Summary
+1
+132
+Shenzhen, the PRC, March 21, 2024
+Banking Business
+189
+40
+Ping An Milestones
+356
+Honors and Awards
+357
+Glossary
+360
+Corporate Information
+Cautionary Statements Regarding Forward-Looking Statements
+To the extent any statements made in this Report contain information that is not historical, these statements are essentially forward-
+looking. These forward-looking statements include but are not limited to projections, targets, estimates and business plans that the
+Company expects or anticipates may or may not occur in the future. Words such as "potential", "estimates”, “expects", "anticipates",
+"objective", "intends", "plans", "believes", "will", "may", "should", variations of these words and similar expressions are intended to identify
+forward-looking statements.
+355
+These forward-looking statements are subject to known and unknown risks and uncertainties that may be general or specific. Readers
+should be cautioned that a variety of factors, many of which are beyond the Company's control, affect the performance, operations and
+results of the Company, and could cause actual results to differ materially from the expectations expressed in any of the Company's
+forward-looking statements. These factors include, but are not limited to, exchange rate fluctuations, market shares, competition,
+environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions and
+other risks and factors beyond our control. The forward-looking statements herein do not constitute a material commitment by the
+Company to investors, and investors and related persons should maintain an adequate understanding of the risks and should understand
+the differences between commitments and forward-looking statements such as plans and forecasts. These and other factors should be
+considered carefully; readers should not place undue reliance on the Company's forward-looking statements, and should pay attention
+to investment risks. In addition, the Company undertakes no obligation to publicly update or revise any forward-looking statement that
+is contained in this Report as a result of new information, future events or otherwise. Neither the Company nor any of its employees or
+affiliates is responsible for, or is making, any representations concerning the future performance of the Company.
+Leveraging Expertise to
+Promote Well-being
+Ping An,
+A treasured brand, a weighty responsibility
+Promoting family well-being and national rejuvenation
+Initiating modern insurance, seeking reasons for claims on behalf of customers
+Delivering one-stop worry-free, time-saving and money-saving experience via
+integrated finance
+Offering heartwarming financial services with leading digital technologies
+Healing the sick, respecting the elderly and caring for the young via healthcare
+and elderly care
+Ping An, forever entrepreneurial
+中国平安 PING AN
+110 Prospects of Future Development
+Sustainability
+92
+Asset Management Business
+Consolidated Statement of Comprehensive
+Income
+44
+Technology Business
+190
+Consolidated Statement of Financial Position
+48
+Integrated Finance
+192
+56
+Healthcare and Elderlycare as a New Driver
+193
+of Value Growth
+Consolidated Statement of Changes in Equity
+Consolidated Statement of Cash Flows
+194 Notes to Consolidated Financial Statements
+60
+Analysis of Embedded Value
+72
+Liquidity and Capital Resources
+78
+Risk Management
+OTHER INFORMATION
+Rushing to aid disaster relief and settle claims amid rainstorms and cold waves
+PING AN
+219.7
+241.8
+Financial Results of the Group
+Dividend Per Share (1) (in RMB)
+2.38
+2021
+2.42
+2.43(2)
+2022
+2023
+Operating ROE of Life and Health Insurance
+Business Performance at a Glance
+Business (3) (%)
+2021
+37.3
+32.1
+2022
+Auto Insurance Combined Ratio (%)
+98.9
+96.6
+Operating Profit Attributable to Shareholders of
+the Parent Company (3) (in RMB million)
+147,961
+32.3
+2021
+ABOUT US
+Ping An Insurance (Group) Company of China, Ltd.
+144.82
+142.09
+N/A
+N/A
+Notes: (1) The Company lowered the long-run investment return assumption to 4.5% in 2023, and retrospectively adjusted data for 2022 as
+per the adjusted investment return assumption.
+(2) The Company prudently lowered the embedded value ("EV") long-run investment return assumption of the life and health
+insurance business ("Life & Health" or "L&H") to 4.5% and the risk discount rate to 9.5% in 2023 in view of the macroeconomic
+environment and the long-run trend of interest rates. NBV for 2022 and earlier periods is computed based on a 5% long-run
+investment return assumption and an 11% risk discount rate. Based on the end-2022 assumptions and model, NBV for 2023
+amounted to RMB39,262 million, up 36.2% on a like-for-like basis.
+(3) The Company has implemented IFRS 17 Insurance Contracts since the accounting year beginning on January 1, 2023, and
+retrospectively adjusted financial statements for the comparative period.
+i
+Introduction
+1
+Ping An strives to become a world-leading integrated
+financial, healthcare and elderlycare services provider.
+Ping An actively responds to China's 14th Five-Year Plan,
+focuses on core financial businesses under a people-
+centered approach, and strengthens the insurance protection.
+function to serve the real economy and support national
+strategies including "Digital China" and "Healthy China."
+Ping An develops TechĔin, green finance, inclusive finance,
+pension finance, and digital finance. Ping An also develops.
+the "integrated finance + healthcare and elderlycare" service
+framework to provide professional "financial advisory, family
+doctor, and elderlycare concierge" services. Ping An advances
+comprehensive digital transformation to pursue high-quality
+business development and improve the quality and efficiency
+of financial businesses. Moreover, Ping An accelerates
+ecosystem development to "empower financial services with
+technologies, empower financial services with ecosystems, and
+advance development with technologies." Remaining customer
+needs-oriented, Ping An continuously develops its integrated
+finance model of "one customer, multiple products, and one-
+stop services" under the people-centered philosophy. Ping
+An provides diverse products and convenient services to 232
+million retail customers under the "worry-free, time-saving,
+and money-saving" value proposition.
+Integrated Financial, Healthcare and
+Elderlycare Services Provider
+Integrated Finance
+Financial adviser
+One customer, multiple products,
+and one-stop services
+Healthcare and Elderlycare
+Family doctors and elderlycare concierges
+Industry standards, central
+procurement, and service supervision
+Technological Empowerment
+Empowering financial services with technologies, empowering financial services
+with ecosystems, and advancing development with technologies
+Annual Report 2023
+World-leading
+146,895
+2022
+117,989
+2021
+2022
+2023
+The Company prudently lowered the EV long-run
+investment return assumption of Life & Health to 4.5%
+and the risk discount rate to 9.5% in 2023 in view of the
+macroeconomic environment and the long-run trend
+of interest rates. NBV for 2022 and earlier periods is
+computed based on a 5% long-run investment return
+assumption and an 11% risk discount rate. Based on the
+end-2022 assumptions and model, NBV for 2023 amounted
+to RMB39,262 million, up 36.2% on a like-for-like basis.
+For 2023, auto insurance combined ratio excluding impacts
+of natural disasters is 96.6%.
+Ping An Insurance (Group) Company of China, Ltd.
+Business Highlights
+1
+2
+3
+1.02
+5
+Cash dividend increased for 12 consecutive
+years. Attaching importance to shareholder
+returns, Ping An plans to pay a final dividend
+of RMB1.50 per share in cash for 2023. Full-
+year cash dividend is RMB2.43 per share,
+up 0.4% year on year. Cash dividend payout
+ratio based on operating profit attributable
+to shareholders of the parent company is
+37.3%, with total dividend increasing for 12
+consecutive years.
+Life & Health achieved steady business
+development, enhanced comprehensive
+strength in channels, and delivered
+significant results in high-quality
+development. Life & Health NBV grew 36.2%
+like for like driven by a 40.3% rise in agent
+channel NBV due to an 89.5% increase in NBV
+per agent and continued strong momentum
+in the newly reformed bancassurance channel
+where NBV climbed 77.7% in 2023. Based on
+the latest assumptions including the return on
+investment and the risk discount rate, NBV
+of L&H amounted to RMB31,080 million. The
+13-month persistency ratio rose 2.5 pps year
+on year.
+Ping An P&C maintained good business
+quality with steady revenue growth. Ping
+An P&C's insurance revenue rose 6.5%
+year on year to RMB313,458 million in 2023.
+Overall combined ratio excluding guarantee
+insurance was 98.4%. Auto insurance
+combined ratio was 97.7%, better than the
+market average, or 96.6% excluding the
+impacts of natural disasters. Moreover, Ping
+An P&C actively settled disaster insurance
+claims to fulfill its social responsibilities.
+Ping An delivered excellent results in
+insurance funds investment. In a complex
+and volatile market environment, Ping An's
+insurance funds investment portfolio achieved
+a comprehensive investment yield of 3.6% in
+2023, up by 0.9 pps year on year. The portfolio
+achieved a 5.2% average net investment
+yield and a 5.4% average comprehensive
+investment yield over the past decade, higher
+than the EV long-run investment return
+assumption.
+Annual Report 2023
+Ping An Bank maintained steady business
+performance and adequate risk provisions.
+Net profit increased 2.1% year on year to
+RMB46,455 million in 2023. Non-performing
+loan ratio was 1.06% and provision coverage
+ratio was 277.63% as of December 31, 2023.
+Ping An continued to develop its integrated
+finance model. Retail customers increased to
+232 million as of December 31, 2023; 25.3% of
+them held four or more contracts within the
+Group, with a retention rate of 97.7%.
+Ping An continued to implement its
+healthcare and elderlycare ecosystem
+strategy, empowering its core businesses
+with differential advantages. By integrating
+providers, Ping An partnered with all top 100
+hospitals and 3A hospitals, and accumulated
+about 50,000 in-house doctors and contracted
+external doctors in China as of December 31,
+2023. Ping An partnered with approximately
+230,000 pharmacies as of December 31, 2023,
+up by nearly 6,000 from the beginning of
+2023. Customers entitled to service benefits
+in the healthcare and elderlycare ecosystem
+accounted for over 73% of Ping An Life's NBV
+in 2023.
+Ping An actively fulfilled its social
+Ping An achieved steady development of
+core businesses. The Group's operating profit
+attributable to shareholders of the parent
+company reached RMB117,989 million in 2023.
+Three core businesses, namely Life & Health,
+property and casualty insurance, and banking,
+remained steady, generating RMB140,913
+million in operating profit attributable to
+shareholders of the parent company, slightly
+down 2.8% year on year.
+1.06
+1.05
+(5)
+2023
+New Business Value of Life and Health Insurance
+Business (4) (in RMB million)
+37,898
+31,080
+28,820
+2023
+2021
+2022
+2023
+Non-performing Loan Ratio of Banking Business (%)
+97.7(5)
+2021
+2022
+2023
+(1)
+(2)
+Dividend per share refers to the cash dividend per share,
+including the interim dividend and the final dividend.
+This includes a final dividend of RMB1.50 per share pending
+approval at the 2023 Annual General Meeting.
+(4)
+(3)
+The Company lowered the long-run investment return
+assumption to 4.5% in 2023, and retrospectively adjusted
+data for 2022 as per the adjusted investment return
+assumption.
+2 Annual Report 2023
+147.13
+230.4
+and elderlycare ecosystem (in million)
+42.34
+619.24
+278.4
+241.4
+259.2
+Net profit
+46,455
+45,516
+36,336
+28,928
+28,195
+220.0
+Net interest margin (%)
+2.75
+2.79
+2.88
+2.95
+Cost-to-income ratio (%)
+27.90
+27.45
+28.30
+29.11
+2.38
+29.61
+207.8
+98.2
+231.6
+PROPERTY AND CASUALTY INSURANCE BUSINESS
+Net profit
+Combined ratio (%)
+Auto insurance combined ratio (%)
+Comprehensive solvency margin ratio (%)
+BANKING BUSINESS
+8,958
+10,112
+97.2
+16,192
+22,808
+100.7
+99.6
+98.0
+99.1
+96.4
+97.7
+96.6
+98.9
+16,159
+Non-performing loan ratio (%)
+1.06
+1.05
+6,697
+9,448
+8,221
+4,661
+ELDERLYCARE
+Number of retail customers (in million)
+231.57
+Number of contracts per customer (contract)
+2.95
+2,980
+226.64
+2.97
+213.44
+2.81
+198.31
+2.67
+Number of customers holding ≥4 contracts within the
+Group (in million)
+58.56
+Operating profit per customer(1) (in RMB)
+497.64
+59.12
+579.54
+55.64
+585.81
+50.69
+576.17
+221.91
+2.91
+INTEGRATED FINANCE, HEALTHCARE AND
+Operating profit
+TECHNOLOGY BUSINESS
+1.02
+1.18
+1.65
+Provision coverage ratio (%)
+277.63
+290.28
+288.42
+Core tier 1 capital adequacy ratio (%)
+9.22
+8.64
+8.60
+201.40
+8.69
+183.12
+9.11
+ASSET MANAGEMENT BUSINESS
+Net profit
+(19,522)
+3,803
+13,952
+12,292
+10,415
+Number of retail customers who used our healthcare
+Introduction
+Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents
+economy. Ping An cumulatively invested over
+RMB8.77 trillion as of December 31, 2023 to
+bolster the real economy. Green investment
+of insurance funds and green loan balance
+totaled RMB128,568 million and RMB146,345
+million respectively as of December 31, 2023.
+Green insurance premium income amounted
+to RMB37,296 million in 2023. Ping An has
+provided RMB117,882 million for poverty
+alleviation and industrial vitalization since
+the launch of "Ping An Rural Communities
+Support." Ping An maintained "A" in MSCI
+ESG Ratings in 2023, remaining No.1 in the
+multi-line insurance and brokerage industry in
+the Asia-Pacific region.
+Ping An Insurance (Group) Company of China, Ltd. 5
+ABOUT US
+Chairman's Statement
+Ping An seizes growth opportunities via forward-
+looking business models. Ping An is committed
+to becoming a world-leading integrated financial,
+healthcare and elderly care services provider. Over
+the past three decades, Ping An has unswervingly
+pursued integrated finance, which has become a
+core driver of the Group's operating profit.
+Ping An continuously advances its integrated
+finance strategy. Upholding a people-centered
+approach to financial services, Ping An focused on
+core integrated financial businesses and optimized
+business portfolios in 2023. Ping An deepened
+engagement with retail customers and developed
+customer groups under a customer needs-
+oriented business philosophy. Ping An continuously
+developed its integrated finance model of "one
+customer, multiple products, and one-stop services."
+Ping An leveraged technologies and compliant data
+analytics to gain precise insights into customer
+needs. Ping An built a brand of heartwarming
+financial services by delivering "worry-free, time-
+saving, and money-saving" customer experience via
+one-stop, multi-channel integrated finance solutions.
+Moreover, Ping An matched products with scenarios
+and empowered business growth through financial
+integrated accounts by leveraging data, products,
+benefits and an intelligent marketing services
+platform.
+Life & Health achieved steady business
+development, enhanced comprehensive strength
+in channels, and delivered significant results in
+high-quality development. Life & Health NBV grew
+36.2% like for like driven by a 40.3% rise in agent
+channel NBV due to an 89.5% increase in NBV per
+agent and continued strong momentum in the
+newly reformed bancassurance channel where
+NBV climbed 77.7% in 2023. Based on the latest
+assumptions including the return on investment
+and the risk discount rate, Life & Health NBV
+amounted to RMB31,080 million in 2023. The 13-month
+persistency ratio rose 2.5 pps year on year.
+Annual Report 2023
+Ping An P&C maintained good business quality
+with steady revenue growth. Ping An P&C's
+insurance revenue rose 6.5% year on year to
+RMB313,458 million in 2023. Overall combined ratio
+excluding guarantee insurance was 98.4%. Auto
+insurance combined ratio was 97.7%, better than the
+market average, or 96.6% excluding the impacts of
+natural disasters. Ping An P&C has been honored as
+"No.1 Brand" in China's auto insurance and property
+and casualty insurance markets by the Ministry
+of Industry and Information Technology for 13
+consecutive years.
+a 5.4% average comprehensive investment yield
+over the past decade, higher than the EV long-run
+investment return assumption.
+Ping An Bank maintained steady business
+performance and adequate risk provisions. Net
+profit increased 2.1% year on year to RMB46,455
+million in 2023. Non-performing loan ratio was 1.06%
+and provision coverage ratio was 277.63% as of
+December 31, 2023.
+6
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for
+any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
+Ping An delivered excellent results in insurance
+funds investment. In a complex and volatile market
+environment, Ping An's insurance funds investment
+portfolio achieved a comprehensive investment yield
+of 3.6% in 2023, up 0.9 pps year on year. The portfolio
+achieved a 5.2% average net investment yield and
+Ping An's first rescue team reached a disaster-hit area for rescue
+and claim settlement at 3:00 a.m. on December 19, 2023 after an
+earthquake jolted Jishishan, Gansu Province on December 18, 2023.
+10
+Only with secure families can there be a
+prosperous country. The Chinese economy is
+transitioning from a stage of high-speed growth
+to a stage of high-quality development. Consumer
+demands for wealth preservation and growth, health
+and longevity services, and premium elderlycare
+are increasing as personal wealth accumulates and
+population aging accelerates. However, three major
+industries, i.e. finance, healthcare and elderlycare,
+are all facing conflicts between growing consumer
+demands and challenges including supply-demand
+imbalances, a lack of standards, and uneven service
+levels. Only by protecting the weak, healing the sick,
+respecting the elderly and caring for the young can
+we secure family and community well-being.
+Remaining true to its original aspiration, Ping An
+leverages expertise to promote the well-being
+of every family. We believe only those companies
+that can effectively tackle industry challenges,
+meet market demands, and help people fulfill their
+aspirations will stand out from fierce competition.
+After 35 years of development, Ping An is uniquely
+positioned in industries thanks to its leading
+competitive advantages. Under a clear "integrated
+finance healthcare and elderlycare" strategy,
+Ping An has established five major advantages,
+namely its business models, customer base, sales
+networks, cutting-edge technologies, and brand
+reputation. With these advantages, Ping An is
+strongly poised to simultaneously seize new growth
+opportunities in the highly promising financial,
+healthcare and elderlycare industries within the
+coming decade.
+Ping An Insurance (Group) Company of China, Ltd. 3
+ABOUT US
+Chairman's Statement
+As the old saying goes, "Ping An (well-being) is
+worth tons of gold.” In our eyes, promoting well-
+being is our deep-rooted responsibility. Ping An is
+not only our name, but also our customers' trust and
+our weighty responsibility. The Chinese character of
+Ping (), with a balanced structure, represents our
+lofty ideal of peace for all. The Chinese character of
+An (), with a "lady” (X) sitting peacefully under
+a "roof"(), undisturbed by external rainstorms or
+internal disputes, represents our pursuit of peace
+and security. Since Ping An was founded in 1988,
+it has been our vision and aspiration to promote
+the prosperous and contented lives of families,
+prosperity and vitalization of the nation, and
+enduring peace and security of the country.
+2023 is the first year to comprehensively implement
+the spirit of the 20th National Congress of the
+Communist Party of China (the "CPC"), a crucial
+year to carry out the 14th Five-Year Plan, and a
+year of post-pandemic recovery. China's economy
+and consumption growth still faced challenges as
+capital markets fluctuated significantly, credit risk
+heightened, and risks in the real estate industry
+were still being mitigated. Ping An delivered steady,
+resilient business results despite external market
+pressures, internal operational challenges, and the
+persistent impact of a three-year pandemic thanks
+to employees' and agents' hard work, customers'
+and shareholders' trust, and society's support. The
+Group achieved RMB117,989 million in operating
+profit attributable to shareholders of the parent
+company, including RMB140,913 million from three
+core businesses, namely Life & Health, property
+and casualty insurance, and banking. Life & Health's
+NBV increased 36.2% on a like-for-like basis.
+Attaching importance to shareholder returns, Ping
+An continues to increase cash dividends despite
+pressure on performance. Full-year cash dividend
+for 2023 is RMB2.43 per share, up 0.4% year on year.
+Cash dividend payout ratio based on operating
+profit attributable to shareholders of the parent
+company is 37.3%, with total dividend increasing
+for 12 consecutive years, showing Ping An's strong
+confidence in its long-term growth prospect.
+Ping An leverages its expertise to promote the
+well-being of every family.
+Ping An focused on serving the real economy,
+national strategies, and people's livelihoods via
+its core financial businesses throughout 2023. Ping
+An cumulatively invested over RMB8.77 trillion as of
+December 31, 2023 to bolster the real economy. The
+investments cover China's major projects including
+energy, transportation, and water conservancy.
+Ping An P&C provided over 1,500 key engineering
+projects across the country with over RMB3.9
+trillion worth of insurance coverage, and supported
+national strategic initiatives including the Belt
+and Road Initiative and the development of the
+Guangdong-Hong Kong-Macao Greater Bay Area.
+Moreover, Ping An supports agriculture, rural areas
+and farmers with financial resources by cumulatively
+investing RMB117,882 million for poverty alleviation
+and industrial vitalization since the launch of
+"Ping An Rural Communities Support.” We helped
+market artemisia selengensis from Funan County,
+Anhui Province, and ear-tagged 200,000 yaks in Biru
+County, Xizang Autonomous Region.
+4 Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+CHE
+Ping An made every effort to develop inclusive
+finance and pension finance under a people-
+centered approach throughout 2023. Ping An
+Bank provided about RMB572.1 billion in loans for
+1,032.2 thousand small and micro-business owners
+as of December 31, 2023. Ping An P&C provided 2.29
+million small and micro-enterprises with RMB200
+trillion worth of insurance coverage in 2023 via "Qi
+Ye An Xin Bao," a customized employer liability
+insurance product. Ping An P&C supported delivery
+riders by providing these hard-working new urban
+citizens with dedicated insurance coverage about
+650 thousand times per day on average, totaling
+RMB422.5 billion in 43 regions across China in 2023.
+Ping An has rolled out 580 ten-dimensional home-
+based elderlycare service benefits in 54 cities across
+China, with over 80,000 customers entitled to such
+benefits, making the elderly comfortable and their
+children worry-free.
+Ping An fulfilled its responsibility to protect
+people's lives and property by giving full play to
+insurance as a "stabilizer” and responding rapidly
+to extreme natural disasters throughout 2023.
+Ping An was on the front line of disaster relief amid
+rainstorms and floods in Beijing, Tianjin and Hebei,
+cold waves and blizzards in Northeast China, and
+earthquakes in Jishishan, Gansu. Ping An paid about
+RMB2.9 billion in disaster insurance claims in 2023.
+Moreover, Ping An rushed to support earthquake-
+hit areas in Gansu and Qinghai by donating RMB10
+million and delivering much-needed supplies and
+"warmth" to the affected people.
+Ping An provides strong financial support for Baihetan Hydropower
+Station.
+Ping An further increased its brand value.
+In 2023, Ping An ranked 33rd in the Fortune
+Global 500 list (1st among global insurers
+again and 5th among global financial services
+companies), 9th in the Fortune China 500
+list, 16th in the Forbes Global 2000 list, and
+1st in the Brand Finance Insurance 100 list in
+relation to global insurance brand value for
+the 7th consecutive year.
+ESG Risk Management
+Member companies
+Group
+and Management
+ESG Organization
+Ping An deeply integrates the core theories and
+standards of ESG into the Group's risk management,
+and supplements the comprehensive risk management
+with ESG risk management requirements to ensure
+sustainable long-term business development.
+Coordinating sustainability
+work within and outside
+the Group
+Ping An Group's ESG practice matrix
+Insurance
+Investment
+Banking
+Technology
+companies
+A matrix
+responsible for
+ESG practices
+Dual control by the Group
+and its member companies
+& PR Office
+Sustainability Governance Structure
+ESG Integration with Risk
+Management
+Annual Report 2023
+Centralized ESG
+Collaboration and Management
+208.0%
+194.7%
+207.8%
+50 bps decline in current interest
+rates
+156.8%
+95.2%
+171.1%
+203.3%
+Ping An Insurance (Group) Company of China, Ltd.
+Branding Board HR Finance Planning Management Control Procurement Others
+Note: (1) The TCFD was established in 2015 by the Financial
+Stability Board at the request of the Group of 20. The
+TCFD is dedicated to providing investors, lenders and
+insurers with the information they need to properly
+assess and price climate-related risks and opportunities.
+Moreover, Ping An includes climate change-related
+risks in its risk management, focusing on the impact
+of climate change on the Company's business. As
+suggested by the Task Force on Climate-related
+Financial Disclosures (the "TCFD") (¹), Ping An has
+developed a risk identification framework for climate
+change-related risks, and uses risk identification
+results as the basis for insurance and investment
+screening to reduce risks associated with climate
+change.
+AI-ESG smart
+management platform
+ESG management rules
+Market risk
+Credit risk
+Operational risk
+Strategic risk
+Reputation risk
+Liquidity risk
+Insurance risk
+Asset Internal
+Sustainable Development Committee
+ESG Task Forces (CSR/IR/PR/Group Functional Representatives)
+Sustainability
+96
+90
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 95
+Annual Report 2023
+Ping An is deeply involved in the formulation of industry sustainability standards such as the Guidelines
+for Environmental, Social and Governance Information Disclosure of Insurance Institutions and the Green
+Insurance Classification Guidelines.
+Ping An actively participates in sustainability-related initiatives and organizations, including the United
+Nations Environment Programme Finance Initiative (the "UNEP FI"), the Principles for Sustainable Insurance
+(the "PSI"), the Green Investment Principles (the "GIP") for the Belt and Road, and the Principles for
+Responsible Investment (the "PRI"), to promote cooperation in sustainability.
+All of Ping An's employees received incorruptibility and anti-corruption education.
+Ping An ensures transparent and compliant business operations by improving policies and procedures.
+Ping An promotes the discipline of "dare not, cannot, and do not want to commit corruption" in discipline
+inspection and supervision by implementing robust internal controls and developing an incorruptibility
+culture.
+Ping An helps Shenzhen build the world's first "International Mangrove Center" and provides financial
+services for comprehensive mangrove protection.
+Ping An preserves biodiversity by actively carrying out charitable activities to protect endangered animals.
+Ping An channels funds into eco-friendly projects by incorporating biodiversity-related risks into investment
+and financing processes.
+Ping An plans to support mariculture carbon sink trading to increase fishermen's "blue income" and support
+the sustainable development of the fishing industry.
+Ping An helps fishery enterprises and fishermen to better cope with natural disasters and ecological
+accidents by actively exploring ocean carbon sink insurance and providing risk protection for ocean carbon
+sink resources in industries including seagrass beds and algae/shellfish farming.
+The Group's per capita operational carbon emissions amounted to 1.35 tons of carbon dioxide equivalent in
+2023.
+Sustainable Development Management
+Group Functional Units
+Sustainability-related Strategic Planning
+Sustainable development is Ping An's development
+strategy as well as the basis for maximizing the
+Company's long-term value. Based on sustainability-
+related planning, Ping An carried out related work
+around 13 key initiatives in an orderly manner, and
+completed the work review for 2023.
+Having integrated sustainability into its development
+strategy, Ping An builds and practices a rational,
+professional corporate sustainability management
+framework and a clear, transparent ESG governance
+structure. In this way, Ping An continuously instructs
+all the functional centers and member companies
+of the Group to systematically enhance corporate
+governance and business sustainability. Ping An
+Group's sustainability governance structure comprises
+the following four levels:
+Group ESG Office
+Group Executive Committee
+in charge of the Company's
+sustainability-related
+strategic planning, risk
+management, policy
+making, performance
+review and so on
+Responsible for practice
+management of green
+finance, rural vitalization
+and other key ESG
+initiatives, external
+communications for the
+Company's sustainability
+issues and so on
+Overseeing all ESG issues,
+169.4%
+Strategy and Investment Committee
+Board of Directors
+Practice
+Execution
+Management
+Strategy
+Practice: A matrix consisting of the Group's
+various functional units and member companies is
+responsible for ESG practices.
+Execution: The Group ESG Office and the Group's
+various functional centers act as execution task
+forces to coordinate sustainability work within and
+outside the Group.
+Management: The Sustainable Development
+Committee under the Group Executive Committee
+supervises the practice management of green
+finance, rural vitalization and other key ESG
+initiatives, external communications for the
+Company's sustainability issues and so on.
+Strategy: The Board of Directors and its Strategy
+and Investment Committee oversee all ESG issues,
+in charge of the Company's sustainability-related
+strategic planning, risk management, policy making,
+performance review and so on.
+Sustainability Governance Structure
+105.0%
+Test results showing the impacts of declines in interest rates and equity assets on solvency margin ratios of
+Ping An Group, Ping An Life, and Ping An P&C as at December 31, 2023 are disclosed below:
+Base case
+The Group is an integrated financial service group
+authorized by the State Council to engage in
+separate operations under a listed holding group
+subject to separate regulation. While focusing
+on core financial businesses, the Group improves
+its overall specialized capabilities and market
+competitiveness through its diversified business
+presence in non-insurance sectors to effectively
+promote its core financial businesses. The Group
+strictly manages its non-insurance member
+companies' strategic planning processes, and
+regularly evaluates and adjusts its diversification
+strategy.
+For equity investments in non-insurance sectors,
+the Group conducts overall management and has
+developed uniform investment rules, standards and
+limits, established investment decision-making and
+risk management processes as well as investment
+review, evaluation and reporting processes, and set
+up mechanisms for management before, during and
+after investment deals. Moreover, the Group tracks
+and analyzes its investments to evaluate investment
+targets and the risk-return profiles of various
+businesses on a regular basis.
+All the non-insurance member companies of
+the Group engage in specialized operations
+independently, and are supervised by their
+corresponding regulators. Through corporate
+governance and internal mechanisms, the Group
+ensures that all the non-insurance member
+companies are segregated from the insurance
+member companies in terms of assets and liquidity.
+SOLVENCY MANAGEMENT
+The CBIRC released the C-ROSS Phase II at the
+end of December 2021, aiming to prompt insurers
+to focus on insurance protection and core financial
+businesses, better serve the real economy, prevent
+and mitigate risks in the insurance industry, and
+accelerate opening-up of the financial sector. The
+C-ROSS Phase II will make solvency regulation more
+rational, effective, and comprehensive. Insurers
+have implemented the C-ROSS Phase II since 2022.
+Insurers more exposed to the C-ROSS Phase II are
+allowed to implement some of the regulatory rules
+in stages and implement all of them by 2025.
+Non-insurance risk refers to the impact of the
+business activities of non-insurance member
+companies on the solvency of the Company and its
+insurance member companies.
+Being risk-oriented, the C-ROSS Phase II is
+intended to strengthen insurers' asset quality,
+optimize insurers' asset-liability management, and
+comprehensively calibrate risk factors to reflect
+insurers' risk dynamics in time. The Group's and
+its insurance subsidiaries' core and comprehensive
+solvency margin ratios have declined to some extent
+due to implementation of the C-ROSS Phase II, but
+are still above regulatory requirements.
+In accordance with qualitative regulatory
+requirements, namely the second pillar of C-ROSS,
+the CBIRC conducts a Solvency Aligned Risk
+Management Requirements and Assessment
+("SARMRA") of an insurer's solvency risk
+management capability, and links the SARMRA
+result with the insurer's minimum capital for risk
+control to adjust the minimum capital requirement
+based on the first pillar.
+The CBIRC conducted the first SARMRA of Ping
+An Group in 2022 and released the SARMRA score
+in April 2023. The Group's SARMRA score was
+81.53, allowing its minimum capital requirement to
+decrease by RMB12,590 million as of December 31,
+2023.
+The CBIRC conducted a SARMRA of Ping An
+Life in 2022. Ping An Life's SARMRA score was
+84.03, allowing its minimum capital requirement to
+decrease by RMB4,544 million as of December 31,
+2023.
+Ping An P&C's SARMRA score was 85.06 for 2021 and
+the result still applies because Ping An P&C was not
+required by regulators to take a SARMRA in 2022
+and 2023, allowing its minimum capital requirement
+to decrease by RMB1,290 million as of December 31,
+2023.
+90
+Annual Report 2023
+Solvency risk measurement is more prudential
+and rational under the C-ROSS Phase II, with a
+positive impact on the Group's overall solvency
+margin assessment and management. Moreover,
+the C-ROSS Phase II has tightened management
+requirements for insurance group-specific risks,
+which means higher requirements for the Group's
+solvency risk management.
+2.4 Non-insurance Risk
+Risk Management
+89
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Supervisory Committee, and the senior management
+exercise their rights and perform their obligations
+in accordance with the Articles of Association. The
+Group engages in no specific business activity,
+while its member companies engage in various
+businesses including insurance, banking, asset
+management and technology. The Group manages
+its member companies through shareholding, but
+neither participates in nor intervenes in the member
+companies' routine business. The Group and its
+member companies have clearly defined roles and
+responsibilities of their respective functions, and
+each performs its own duties and responsibilities.
+There is no overlap, lack, or overconcentration
+of powers and responsibilities. The Group has a
+robust governance structure and a transparent
+management structure. The Group bans cross-
+shareholding and illegal subscription for capital
+instruments.
+2.3 Concentration Risk
+The Group's concentration risk refers to the risk
+that member companies' single or combined risks,
+when aggregated at the Group level, may directly
+or indirectly threaten the Group's solvency position.
+The Group manages concentration risks from the
+perspectives of counterparties, investment assets,
+industries, regions, customers, and businesses.
+To manage the concentration risk from the
+perspectives of counterparties, the Group has
+followed the principle of reasonably controlling the
+concentration risk of counterparties. The Group
+has specified a set of risk limits for counterparties
+after considering the risk profiles of counterparties
+and the appetite and tolerance of the Group. The
+Group's set of risk limits cover counterparties in its
+investment and financing businesses. For a group
+of corporations and public institutions or interbank
+customers with control relationships among them,
+the Group includes them in the same group, and
+implements unified and combined concentration
+limit management. Moreover, by adopting advanced
+technology, the Group has been improving the
+breadth and depth of the concentration risk
+management, increasing its monitoring frequency
+effectively, and warning against counterparties with
+higher concentration risks promptly.
+To manage the concentration risk in investment
+assets, the Group has followed the principle of
+reasonably controlling the concentration risk in
+investment assets. The Group has set concentration
+risk limits for different asset classes and formed a
+concentration risk limit system for investment assets
+based on reasonable classification of investment
+assets. Moreover, the Group has regularly reviewed
+the concentration risk posed by investment
+assets at the member company level to prevent
+any solvency risk and liquidity risk arising from
+overconcentration of investments in certain asset
+classes after consolidation.
+To manage the concentration risk in industries,
+the Group has established industry-specific
+concentration risk limits based on the principle
+of reasonably controlling the concentration risk
+in industries. Moreover, the Group develops the
+high-risk industry management plans based on its
+macroeconomic and industry analysis every year to
+exercise total controls over high-risk industries and
+optimize the portfolio.
+To manage the concentration risk in regions, the
+insurance member companies have set upper limits
+for the proportions of overseas investments and
+emerging market investments with insurance funds
+in accordance with the CBIRC's requirements for the
+management of regional concentration risk.
+To manage the concentration risk in customers, the
+Group evaluates, analyzes, monitors and reports the
+overall customer concentration in accordance with
+the CBIRC's requirements for the management of
+customer concentration risk. In this way, the Group
+prevents risks caused by the overconcentration of
+the Group's revenue from a single customer or the
+same group of customers, to avoid impact on the
+stability and quality of the Group's business.
+To manage the concentration risk in businesses, the
+Group evaluates, analyzes, monitors and reports the
+concentration of its businesses in accordance with
+the CBIRC's requirements for the management of
+concentration risk in the group's insurance and non-
+insurance businesses. Regarding the concentration
+of insurance business, the Group has enhanced
+the concentration management of the insurance
+business, the framework of concentration risk limits
+for reinsurance counterparties, and the framework
+for risk monitoring, analysis, reporting and warning.
+Regarding the concentration of non-insurance
+businesses, the Group has analyzed the structures
+and risk profiles of non-insurance businesses,
+specified the concentration risk indicators to be
+monitored, and included such indicators in the
+routine risk management framework. The Group has
+effectively prevented the concentration risk through
+regular evaluation, monitoring, and warning of the
+concentration risk in insurance and non-insurance
+businesses.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Firstly, legal-entity firewalls. The Group and its
+member companies have robust governance
+structures. The Group itself engages in no
+specific business activity. The Group manages
+its member companies through shareholding,
+but neither participates in nor intervenes in
+the member companies' routine business. The
+member companies carry out business activities
+independently, and are supervised by their
+corresponding regulators.
+MANAGEMENT DISCUSSION AND ANALYSIS
+The Group manages its solvency through the
+following mechanisms and processes:
+823,985
+819,568
+Core solvency margin ratio (%)
+Comprehensive solvency margin
+ratio (%)
+160.3
+166.4
+208.0
+217.6
+Notes: (1) Core solvency margin ratio = core capital / minimum
+capital. Comprehensive solvency margin ratio = actual
+capital minimum capital.
+(2) The regulatory minimum requirements for the core
+solvency margin ratio and comprehensive solvency
+margin ratio are 50% and 100% respectively.
+Ping An upgraded its "1 + N" carbon account system, and launched a carbon account platform accessible to
+all employees.
+Core solvency margin ratio
+Comprehensive solvency margin ratio
+December 31, 2023
+Ping An Group Ping An Life Ping An P&C Ping An Group Ping An Life Ping An P&C
+Minimum capital
+160.3%
+1,783,772
+1,363,413
+The impacts on solvency must be evaluated
+when the Group develops key initiatives
+including strategies, business plans, investment
+decisions, and dividend distribution plans;
+The solvency target is a key indicator for
+the Company's risk management, and an
+emergency reporting and response mechanism
+is in place for significant changes in the
+solvency level to ensure the solvency is
+maintained at an appropriate level;
+The Group enhances risk appraisal and
+evaluation mechanisms by including solvency
+indicators in performance appraisal to
+strengthen risk control;
+The Group adopts a prudent asset and liability
+management policy, constantly enhances asset
+quality and business operations, strengthens
+capital management, and focuses on capital
+requirements arising from rapid business
+growth;
+The Group conducts solvency assessments and
+dynamic solvency tests on a regular basis, and
+closely monitors changes in solvency; and
+The Group conducts sensitivity and scenario
+stress testing to issue warnings about potential
+changes in solvency.
+The Group's solvency margin ratios met the
+regulatory requirements as of December 31, 2023.
+Below are the details:
+(in RMB million)
+Core capital
+Actual capital
+2023
+December 31, December 31,
+2022
+1,320,654
+1,714,110
+Ping An continuously advances its green finance initiative and explores innovative practices in green
+insurance, green investment, and green loans to support China's transformation toward a green economy
+and upgrade of industry chains.
+Partnerships
+Ping An promotes sustainable lifestyles by launching personal carbon accounts and raising customers' and
+employees' awareness about low-carbon consumption.
+•
+•
+•
+•
+.
+Ping An's key contributions
+•
+EQUALITY
+Quality Education
+QUALITY
+EDUCATION
+Good Health
+and Well-being
+AND WELL-BEING
+GOOD HEALTH
+Zero Hunger
+GENDER
+•
+•
+•
+AND SANITATION
+CLEAN WATER
+Gender Equality
+Ping An continues the "Mom's Needlework" public welfare program to help rural women start businesses
+and increase income.
+Ping An opposes gender discrimination and builds a diverse, equitable and inclusive workplace.
+Ping An fully respects and protects employees' rights and interests.
+Ping An has carried out the "Ping An Inspiration Program" for 20 consecutive years to sponsor college
+students in conducting social research projects and developing hands-on skills.
+Through its long-term commitment to charitable education programs, Ping An conducts five charitable
+education projects and bridges the gap between urban and rural education resources to create a fair
+education environment.
+Ping An advances "insurance + healthcare" and upgrades Ping An Zhen Xiang RUN to provide services
+including family doctors, health management plans, health monitoring, and chronic disease prevention and
+control.
+Ping An focuses on corporate wellness, and provides society with high-quality healthcare services.
+Ping An continuously advances healthtech R&D and has built a proprietary Al-assisted consultation and
+treatment system to enhance management efficiency and satisfy people's healthcare needs.
+Ping An provides agricultural risk protection and financial support through innovative products and services
+including agricultural insurance and agricultural loans to facilitate sustainable agricultural development.
+Ping An diversifies agricultural insurance offerings, innovates farmland protection approaches, and explores
+marine ranching protection to help safeguard food security, support rural vitalization, and build China into
+an agricultural powerhouse.
+Ping An has launched Rural Vitalization Carbon Neutrality Service Alliance, working with various parties to
+provide financial services as new momentum for rural vitalization.
+Ping An provides a series of products and fast-track services dedicated to new urban citizens, including
+insurance, wealth management, financing and elderlycare.
+In active response to the national call for rural vitalization, Ping An consolidates and expands the
+achievements of poverty alleviation, and continuously advances "Ping An Rural Communities Support."
+Ping An develops inclusive insurance products for small and micro-enterprises, agricultural workers, and
+groups with special needs.
+•
+555
+ZERO
+HUNGER
+No Poverty
+POVERTY
+PHILOSOPHY AND MANAGEMENT OF
+SUSTAINABLE DEVELOPMENT
+Ping An promotes rural vitalization and supports industries, healthcare,
+and education through "Ping An Rural Communities Support." Ping An
+has provided RMB117,882 million for poverty alleviation and industrial
+vitalization since 2018.
+Ping An actively contributes to China's carbon peak and neutrality goals by
+upgrading its green finance initiative. Ping An supports China's transformation
+toward a green economy and upgrade of industry chains by leveraging the
+Group's integrated finance advantages and green finance. Ping An's green
+investment of insurance funds totaled RMB128,568 million, and green loan
+balance reached RMB146,345 million as of December 31, 2023. Green insurance
+premium income totaled RMB37,296 million in 2023.
+Ping An focuses on serving the real economy, and continuously improves
+the quality and efficiency of services for the real economy. Ping An
+cumulatively invested over RMB8.77 trillion as of December 31, 2023 to
+bolster the real economy.
+Sustainability
+91
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+205.9%
+187.7%
+203.9%
+167.3%
+94.9%
+155.0%
+10% decrease in fair value of equity
+assets
+Sustainability Philosophy
+Clean Water
+and Sanitation
+Ping An's sustainable development goals are to
+meet people's aspiration for a better life, support
+the economic and social transformation toward
+sustainability, and achieve balanced, high-quality
+and sustainable long-term development of the
+Company. Through full communication and
+cooperation with stakeholders, the Company aims
+to accommodate interests and maximize value
+for all stakeholders. Specifically, the Company
+creates value for: (1) customers by practicing
+the philosophy of "service first and integrity
+guaranteed"; (2) employees by providing them with
+career plans for prosperous and contented lives;
+(3) shareholders by delivering stable returns and
+asset appreciation; and (4) society by giving back to
+society and developing the country.
+Ping An pays close attention to the current situation
+and trend of sustainable development, and maintains
+communication with stakeholders through multiple
+channels. In combination with its objectives and
+business, Ping An dynamically analyzes and
+identifies key initiatives for sustainable development,
+formulates action plans accordingly, and actively
+implements them. Ping An discloses information
+and communicates with stakeholders in an efficient
+and high-quality manner to form a closed loop of
+"communication, analysis, action and disclosure."
+SDGs
+Ping An aligns and integrates the key areas of its business development with the United Nations
+Sustainable Development Goals (“SDGs”), and actively pursues the global SDGs.
+United Nations Sustainable Development Goals and Outcomes
+Sustainability
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 93
+biodiversity.
+In respect of environmental value, Ping An seizes
+opportunities from low-carbon development and
+transformation to contribute to China's carbon
+peak and neutrality goals while realizing its own
+green development. Committed to building an
+environment-friendly business ecosystem, Ping
+An leverages its integrated finance advantages
+to develop green finance, employs leading
+technologies to enable environmental protection
+and governance, and attaches importance to
+In respect of social value, Ping An pursues high-
+quality development by serving the real economy,
+continuously improving the quality and efficiency
+of services for the real economy, and maintaining
+economic and financial security under the technology-
+driven "integrated finance + healthcare and
+elderlycare" strategy. Ping An enables customer
+interest protection, employee development, and
+win-win partnerships through a robust management
+framework. Ping An helps to close the gap between
+urban and rural areas by continuously implementing
+its rural industrial vitalization and support measures.
+Moreover, Ping An continuously explores innovations
+in financial inclusion to empower MSMEs. Using
+digital technology to build "ballast" for sustainable
+development, Ping An drives high-quality development
+via comprehensive digitization in strategies,
+organization, management, operations, talent, and
+services.
+In respect of management and governance, Ping
+An continuously adopts the world's best corporate
+governance practices, aiming to set an example in
+corporate governance and provide stable returns
+to shareholders. Ping An continuously improves its
+corporate governance structure which combines
+local advantages with international standards.
+The Company's General Meeting of Shareholders,
+Board of Directors, Supervisory Committee, and
+management exercise their respective rights and
+perform their respective obligations in accordance
+with the Articles of Association.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+92
+Ping An has formulated and implemented its
+sustainability plan for 2023 to 2027, which specifies
+13 key initiatives and their five-year goals, to
+continuously create value for the Group and
+stakeholders. The 13 key initiatives include
+sustainable insurance, responsible banking,
+responsible investment, responsible products,
+consumer protection and experience, corporate
+governance, climate change and carbon neutrality,
+rural vitalization and community impact.
+Ping An integrates the sustainability philosophy into
+business operations and high-quality development,
+and leverages its integrated finance capabilities
+to safeguard people's lives through practical
+actions. Ping An acts as a main force for serving
+the real economy and ballast for maintaining
+financial stability, giving full play to insurance as
+both an economic shock absorber and a social
+stabilizer. Ping An supports nation development
+and rejuvenation through high-quality development
+of the finance industry by continuously promoting
+TechFin, green finance, inclusive finance, pension
+finance and digital finance.
+Ping An has conducted the campaign of "bringing healthcare to rural areas" in 24 provinces (municipalities
+and regions) across China, providing over 3,000 people with first-aid training on how to use an automated
+external defibrillator ("AED"), donating over 2,000 sets of common medical equipment, and providing free
+checkups for over 2,300 villagers.
+AFFORDABLE AND
+•
+•
+•
+LIFE
+Climate
+Action
+CLIMATE
+ACTION
+Responsible
+Consumption and
+Production
+со
+AND PRODUCTION
+RESPONSIBLE
+CONSUMPTION
+Ping An carries out the "Ping An Guardian" first-aid training program on how to perform cardiopulmonary
+resuscitation and how to use an AED.
+Ping An continuously improves its catastrophe insurance products for risk protection and financial
+compensation to reduce losses caused by natural disasters in cities.
+Ping An provides disaster alert, risk screening, catastrophe risk management and other risk reduction
+services via Digital Risk System Version 2.0.
+Ping An protects the legitimate rights and interests of all its employees, and opposes gender, regional and
+age discrimination to create an inclusive and equitable workplace.
+Ping An continues to expand the primary service network, brings finance and insurance to rural areas, and
+improves the availability of financial services in rural areas.
+Ping An continuously implements "Ping An Rural Communities Support" and consolidates and expands
+achievements in poverty eradication to promote rural vitalization.
+•
+Ping An supports the construction of large hydropower stations and other infrastructure through various
+financial instruments including insurance, credit and debt investment.
+BELOW WATER
+15 ONEL
+•
+.
+•
+for the Goals
+80
+FOR THE GOALS
+PARTNERSHIPS
+Peace, Justice and
+Strong Institutions
+INSTITUTIONS
+AND STRONG
+PEACE, JUSTICE
+Life on Land
+•
+.
+ON LAND
+Life below Water
+Ping An integrates sustainability requirements into its procurement processes to build sustainable value
+chains with suppliers.
+Ping An meets the financing needs of photovoltaic and other emerging industries by innovating financial
+service models through Ping An Bank's "Nebula Plan."
+Ping An digitizes natural disaster risk management to identify risks and give alerts for disaster prevention
+and loss reduction.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+94
+Ping An uses digital means to develop inclusive finance, improving the accessibility of financial services to
+MSMEs.
+Ping An supports the real economy with financial services, and has cumulatively invested over RMB8.77
+trillion to bolster the real economy.
+Ping An develops carbon-linked transition financing products to help high-emission industries and
+companies pursue low-carbon transitions.
+Ping An provides preferential risk protection services for green enterprises or green projects to support
+their stable and healthy operations.
+Ping An actively invests in energy infrastructure and clean energy technology industries to support clean
+energy industries.
+•
+•
+Decent Work and
+Economic Growth
+ECONOMIC GROWTH
+DECENT WORK AND
+Affordable and
+Clean Energy
+CLEAN ENERGY
+SDGs
+Ping An supports the development of high-quality, reliable, sustainable and disaster-resilient infrastructure
+through responsible investment.
+INDUSTRY, INNOVATION
+Industry, Innovation
+•
+•
+•
+Sustainable
+Cities and
+Communities
+AND COMMUNITIES
+SUSTAINABLE CITIES
+Reduced Inequalities •
+•
+•
+•
+•
+Ping An's key contributions
+INEQUALITIES
+REDUCED
+and Infrastructure
+AND INFRASTRUCTURE
+88
+The Group has improved its approach to
+outsourcing management. The Group complies
+with applicable laws, regulations and regulatory
+documents to carry out outsourcing management,
+and outsources its business in accordance with
+its own operation and management requirements.
+The core business of insurance companies may
+not be outsourced. It is not allowed to outsource
+IT management responsibilities, network security
+responsibilities or functions related to IT core
+competitiveness including IT strategy management,
+IT risk management, and IT internal audit. Member
+companies follow the principles of independent
+transactions and fair pricing for outsourcing, and
+perform corresponding approval procedures and
+sign agreements in accordance with applicable
+regulations and management rules for related
+party transactions. The transactions are reported
+and disclosed in accordance with applicable
+regulatory requirements. Moreover, the Group
+strengthens outsourcing risk management,
+improves IT outsourcing risk management rules,
+and monitors IT outsourcing risks in all aspects. In
+this way, the Group strengthens risk monitoring of
+outsourced activities, and reviews the performance
+of outsourced services and functions on a regular
+basis. The Group has established communication
+and service evaluation mechanisms for outsourcing.
+Service providers solicit feedback on satisfaction
+from beneficiaries on a regular basis, and conduct
+internal appraisals on the basis of such feedback to
+ensure constant service improvement.
+2.2 Organizational Structure Non-transparency Risk
+Organizational structure non-transparency risk
+refers to the risk of losses in the Group caused
+by the complexity or opaqueness of the Group's
+shareholding structure, management structure,
+operational processes, and business types.
+The Group has established a complete corporate
+governance structure in accordance with laws and
+regulations including the Company Law of the
+People's Republic of China and the Securities Law
+of the People's Republic of China, with international
+corporate governance norms and the Group's
+situations taken into account. The General Meetings
+of Shareholders, the Board of Directors, the
+Secondly, finance firewalls. The Company has
+built robust finance firewalls and incorporated
+the requirements of finance firewalls in financial
+frameworks and management policies, including
+personnel independence, policy independence,
+account independence, accounting independence,
+and system authority independence. The Group and
+its member companies have respective independent
+finance functions, financial management rules
+and processes, have separate accounts, perform
+independent financial accounting, and implement
+strict management segregation of data in financial
+systems. Moreover, the Group and its member
+companies are separately audited by external
+auditors who issue independent auditor's reports to
+ensure the authenticity of financial data.
+Thirdly, treasury firewalls. The Company has
+built robust treasury firewalls, implementing
+relevant requirements for treasury frameworks
+and management policies. The Group and its
+member companies have respectively established
+independent departments, rules and processes for
+treasury management. The Group and its member
+companies have strictly followed the requirements
+of creating accounts based on legal entities,
+and built hierarchical authorization and approval
+processes for transactions. Ping An exercises strict
+control over arbitrary capital movements and fund
+transfers devoid of business backgrounds to ensure
+the security of funds and prohibit unauthorized fund
+borrowings and transfers.
+Fourthly, information firewalls. The Group has
+established an information security governance
+structure with three lines of defense. Member
+companies have appointed owners of and functions
+for cybersecurity, data security and personal
+information protection, and strictly implement
+the Group's information security policies for
+effective control over information access and
+effective information segregation. Attaching great
+importance to customer information security, the
+security of its products, and the cybersecurity of its
+Annual Report 2023
+businesses, the Group strictly complies with laws
+and regulations including the Cybersecurity Law of
+the People's Republic of China, the Data Security
+Law of the People's Republic of China and the
+Personal Information Protection Law of the People's
+Republic of China, and has set up and effectively
+implemented the comprehensive mechanism for
+ex ante control, in-the-process monitoring and ex
+post audits. Ping An supervises the information
+technology security of the Group and its member
+companies to protect the security, integrity and
+availability of customer information and data.
+Fifthly, personnel management firewalls. The
+Company has established rational, effective
+personnel management firewalls. The Group and
+its member companies have established mutually
+independent organizational structures, personnel
+management rules and processes. Moreover, the
+Company ensures effective personnel segregation
+through an employee conflict of interest
+management framework by taking measures
+including: strictly restricting the double-jobbing
+of senior management among the Group and its
+member companies in accordance with applicable
+laws and regulations; ensuring that no employee
+performs incompatible roles with potential conflict
+of interests at the same post and time through
+appropriate duty segregation; and establishing rules
+for the avoidance of relatives and strengthening
+relevant day-to-day management.
+The Group has constantly improved the
+management of related party transactions. The
+Group and its member companies constantly
+enhance the management of related party
+transactions in strict accordance with applicable
+laws, regulations and regulatory requirements and
+the management principles of good faith, fairness
+and equity, penetration verification and clear
+structures. The Group constantly optimizes the
+management systems, structures and mechanisms,
+improves the management procedures, and
+enhances related party transaction identification,
+review and fair value-based pricing to ensure
+the compliance and fairness of related party
+transactions. The Group continuously increases
+transparency by disclosing and reporting related
+party transactions in strict accordance with
+industries' regulatory rules. Furthermore, the Group
+has developed a culture of strong compliance
+awareness for related party transactions through
+constant training and education emphasizing every
+employee's responsibility for the management of
+related party transactions. The Group has enhanced
+182.0%
+MANAGEMENT DISCUSSION AND ANALYSIS
+Risk Management
+system-based management and related party
+transaction governance by continuously promoting
+the informatization and intelligentization of related
+party management and related party transaction
+management. The Group's related party transaction
+management systems and mechanisms have been
+strengthened and operating effectively.
+209.5%
+The Group has enhanced the management of
+integrated financial services. The Group's retail
+integrated financial service business mainly
+involves distribution of insurance products by
+concurrent agents. Such agents distribute
+products in an orderly manner under concurrent
+agency agreements in accordance with laws
+and regulations. If customers have demands for
+products beyond agents' offerings, customers may
+visit platforms of other member companies for
+information and purchase the products through
+online apps. The Group's corporate integrated
+financial business consists of the insurance business
+agency mechanism and the other business referral
+mechanism. The insurance business agency
+mechanism is managed in strict compliance with the
+agency rules and regulations. The business referral
+mechanism only involves facilitation of both parties'
+intentions to cooperate. Cooperation is conducted
+in strict accordance with market practices. All
+businesses are reviewed independently by each
+member company's risk management function in line
+with the firewall policies.
+Ping An Insurance (Group) Company of China, Ltd. 87
+The Group continuously strengthens the centralized
+management or coordination of branding,
+communication, and information disclosure of
+its member companies to effectively prevent the
+spread and amplification of relevant risks within the
+Group. The Group has developed robust policies,
+rules and procedures for brand asset management
+and information disclosure, and strictly implemented
+them to ensure centralized and consistent brand
+management. In terms of brand asset management,
+the Group constantly improves its reputation
+risk management framework in accordance with
+applicable laws and regulations and regulatory
+requirements. The Group adheres to a reputation
+risk management philosophy centering on
+prevention, and conducts multi-level differentiated
+reputation risk management. The Group takes
+risk prevention and control, effective disposal,
+and image restoration as the ultimate standards
+for reputation risk management. In this way, the
+Group ensures rapid, coordinated responses to and
+efficient handling of reputation risk events, and
+promptly repairs its reputation and image. In terms
+of information disclosure, the Group subjects itself
+to public oversight, and has developed centralized
+interview and information release mechanisms to
+ensure timely and accurate information disclosure
+and prevent reputation risk arising from misreading
+or misunderstanding.
+Adhering to insurance protection, Ping An helps.
+customers cope with extreme weather and other
+climate change-related risks. In response to
+disastrous rains and floods brought by Typhoon
+Doksuri in multiple areas in August 2023, Ping
+An's four insurance subsidiaries jointly released
+warnings and took precautionary measures before
+disasters, and rapidly implemented contingency
+plans and established emergency response teams to
+identify affected customers and provide emergency
+assistance after disasters.
+Ping An actively responds to China's carbon peak
+and neutrality goals, with a promise to achieve
+operational carbon neutrality by 2030. Ping An's
+operational carbon emissions amounted to about 430
+thousand tons of carbon dioxide equivalent in 2023,
+averaging 1.35 tons per capita.
+Operational carbon emissions in the workplace
+Unit: thousand tons of
+carbon dioxide equivalent
+490
+430
+2023
+2021
+2022
+Ping An attaches importance to climate risk
+governance. Climate-related governance
+mechanisms, together with clear objectives and
+responsibilities, have been set up at all levels of
+the sustainability governance structure. Via climate
+change risk assessment, Ping An identifies possible
+impacts of climate change on its business segments
+over different timescales.
+In reducing operational carbon emissions, Ping An
+launched the industry's first carbon account system
+covering all employees in May 2023, incorporating
+employees' low-carbon behavior and carbon
+emission data into general operations. Moreover,
+Ping An held "Low-carbon Month" campaigns
+and also organized carbon account check-in
+campaigns including the "Clean Plate" and "Low-
+carbon Cycling" initiatives to practice the green
+philosophy. Ping An had approximately 113,200
+employees covered by the carbon account who
+cumulatively reduced carbon dioxide emissions
+approximately 494,500 times by 18 thousand tons as
+of December 31, 2023. In addition, to help customers
+reduce carbon emissions, Ping An P&C piloted the
+enterprise carbon account system to record entities'
+carbon footprint in operations by measuring entities'
+carbon emissions based on the average carbon
+emissions generated by customers' online low-
+carbon behaviors. In this way, Ping An encourages
+enterprises to reduce carbon emissions, and helps
+them achieve green growth and sustainable brand
+development. During the pilot period, over 10,000
+enterprises participated in the carbon account
+initiative.
+Rural Vitalization and Community Impact
+Support for Rural Vitalization
+Ping An proactively supports China's rural
+vitalization strategy by promoting industries,
+healthcare, and education via "Ping An Rural
+Communities Support." Ping An leverages its own
+advantages in "integrated finance + healthcare
+and elderlycare" to deliver insurance, finance and
+healthcare to rural areas.
+430
+Climate Change and Carbon Neutrality
+Ping An proactively embraces challenges and
+opportunities from climate change by leveraging its
+integrated finance advantages. Ping An gives full
+play to green finance, advances green operations,
+and takes strong measures to support green
+development, contributing to China's carbon peak
+and neutrality goals.
+Ping An is committed to setting a good example in
+corporate governance and delivering stable returns
+to shareholders. On the basis of local advantages,
+Ping An has established a corporate governance
+structure in line with international standards, and
+continuously implements the world's best corporate
+governance practices. For more details, please refer
+to the section headed “Corporate Governance.”
+101
+Consumer Protection and Experience
+Ping An adheres to its original aspiration and
+mission of providing people-centered financial
+services under the philosophy of serving the real
+economy, people, and society. Ping An incorporates
+consumer rights protection in corporate governance.
+Led by the Related Party Transaction Control and
+Consumer Rights Protection Committee under the
+Board of Directors, Ping An continuously optimizes
+consumer rights protection and management
+mechanisms, actively implements consumer rights
+protection requirements, and conducts and enhances
+comprehensive assessment of consumer rights
+protection. Ping An maintains a regular, standardized
+internal audit framework for consumer rights
+protection, formulates audit plans for consumer
+rights protection, and incorporates consumer rights
+protection in its annual audit. Ping An adopts a daily
+reporting mechanism for consumer rights protection,
+holds management seminars on a regular basis, and
+conducts training on consumer rights protection and
+group-wide top-performer appraisals for consumer
+rights protection personnel to develop an internal
+culture of fair and honest consumer rights protection.
+The training on consumer rights protection covered
+98.5% of Ping An's employees as of December 31,
+2023.
+100
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+In response to the call of the NFRA, the PBC, the
+CSRC and the Cyberspace Administration of China
+to launch "Financial Consumer Rights Protection
+Education and Publicity Month," Ping An carried
+out over 10,000 publicity sessions in September
+2023, covering a total of approximately 650 million
+consumers. By popularizing financial knowledge
+in an all-around, multi-angle and wide-coverage
+manner, Ping An fulfills its social responsibility of
+protecting financial consumers' legitimate rights and
+interests.
+Sustainability
+Ping An enhances complaint management through
+coordination and supervision. For key companies
+and key issues, Ping An strengthens consumer
+rights protection before, during and after service
+cycles by building a full-fledged accountability
+system and strengthening front-line supervision
+and examination. Ping An provides clear customer
+complaint channels and processes on official
+websites and WeChat accounts. Ping An maintains
+a dedicated service hotline 95511 to provide 24/7
+professional services through specialized customer
+service staff. On the basis of the service hotline
+and online customer service representatives, Ping
+An develops new approaches including video- and
+livestreaming-based customer services, dedicated
+advisers on WeCom, and home-based elderlycare
+concierges. Via the service hotline, Ping An provides
+all customers with one-stop service experience.
+There were 775 million inbound calls in 2023, with
+an average of about 2.12 million inquiries per day
+and a connection rate of 98.0%. In this way, Ping An
+swiftly responds to and handles customer inquiries
+and complaints, providing professional, appropriate
+solutions.
+a panoramic view of market trends in the fields
+of finance, insurance, healthcare and elderlycare,
+centering on the elderlycare ecosystem, auto
+ecosystem, investment and wealth management,
+credit products, insurance products and integrated
+services. Moreover, the report summarises
+consumers' demand for worry-free, time-saving,
+and money-saving financial products as well as the
+competitiveness of Ping An's products in providing
+worry-free, time-saving, and money-saving services.
+On the basis of this report, Ping An will further
+focus on customer perception and experience,
+provide more professional and convenient
+integrated financial solutions, and continuously
+improve the coverage and accessibility of its
+"integrated finance + healthcare and elderlycare"
+services to boost customer satisfaction.
+Ping An attaches great importance to privacy
+protection. Adhering to the principles of "people-
+centered, secure, fair and transparent," Ping An
+has built a robust personal information protection
+system, strictly controls the collection, storage and
+use of relevant private information, and prohibits
+the rental, sale or provision of personal data. Ping
+An collects user information in accordance with
+the minimum necessary standard, and promises not
+to actively share or transfer personal information
+with/to third parties without authorization. Ping
+An implements scenario-based authorization
+management for personal information processing,
+and protects personal privacy in all business
+activities to ensure personal information security.
+Corporate Governance
+Ping An has provided RMB117,882 million for poverty
+alleviation and industrial vitalization since "Ping An
+Rural Communities Support" was launched in 2018.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Remaining customer needs-oriented, Ping An
+gives full play to its unique integrated finance
+advantages, and constantly upgrades, optimizes and
+innovates its services to meet consumers' diverse
+financial needs. Ping An released its first Report
+on Value of Worry-free, Time-saving, and Money-
+saving Capabilities in 2023. The report provides
+Under the "Village Industry Program" which
+promotes industrial vitalization, Ping An makes
+full use of financial resources to support rural
+industrial upgrade and promote rural assistance
+initiatives. Ping An also helps expand marketing
+channels through targeted consumption assistance
+to facilitate the sustainable development of rural
+industries. In delivering insurance to rural areas,
+Ping An continuously upgrades the "revitalization
+insurance" model and leverages "insurance +" to
+support the development of industries, help rural
+households increase incomes, and create momentum
+for rural economic growth. Since the program was
+launched in 2021, Ping An has helped approximately
+775,000 farmers increase incomes by RMB9.3 billion as
+of December 31, 2023. In delivering financial services
+to rural areas, Ping An customizes financial services
+to benefit farmers, and provides online financial
+services by leveraging its “finance + technology"
+strengths.
+Annual Report 2023
+In respect of anti-money laundering and anti-
+terrorist financing, Ping An resolutely responds
+to the State's call to combat financial crimes
+and maintain financial security and stability,
+focusing on money-laundering activities that
+infringe on customers' interests, affect people's
+livelihoods, and endanger financial security and
+national security. Ping An provided clues about
+money-laundering cases to regulators and
+judicial departments, winning their recognition.
+Ping An strengthened the identification and
+prevention of cross-market and cross-industry
+money-laundering risks, and effectively
+protected customers' funds and assets. Paying
+high attention to education about anti-money
+laundering and sanctions compliance, Ping
+An launched campaigns including "Publicity
+Month," publicized relevant information on
+WeChat accounts, and provided its employees,
+directors, supervisors and management with
+various training courses given by experts and
+through Zhi Niao to popularize anti-money
+In respect of anti-monopoly and fair trade,
+Ping An complies with anti-monopoly laws and
+regulations, strictly scrutinizes all merger and
+acquisition deals, and declares concentrations
+of undertakings as required by law.
+In respect of tax policies, Ping An always
+upholds the principles and philosophy of
+"integrity, law-abiding and Regulations + 1."
+Ping An strictly complies with all applicable
+laws and regulations, proactively conforms
+with tax policies, discloses tax information as
+required by law, declares and pays taxes on
+time, and prevents illegal tax dodging and
+evasion.
+Ping An has put an independent, vertical internal
+audit and supervision framework in place to
+prevent and control risks related to business
+ethics. Ping An's internal control assessments
+cover corporate governance, social responsibility
+and ESG management, sales management, fund
+utilization management, investment and financing
+management, anti-money laundering management,
+financial management, asset management and so
+on. In strict accordance with all applicable laws and
+regulations, Ping An has formulated procedures
+applicable to all of its member companies, suppliers
+and partners, and pledged the following:
+Corporate Business Ethics
+Ping An cherishes moral values and adheres to the
+"Regulations + 1" compliance philosophy. The Board
+of Directors and its Audit and Risk Management
+Committee and the senior management are jointly
+responsible for supervising the implementation of
+the business code of conduct and anti-corruption
+management rules and work plans. Ping An
+formulated and strictly implements the Business
+Code of Conduct of Ping An Group, the Employee
+Code of Conduct of Ping An Group, and the Policy
+Statement on Responsible Product Management,
+made commitments to the corporate business
+ethics, employee code of conduct, and product
+responsibility, and constantly improves management
+practices. The Internal Control Departments of
+the Group and its member companies conduct
+annual internal audits covering all core businesses
+regarding the implementation of management
+requirements under the Business Code of Conduct
+of Ping An Group and the Employee Code of
+Conduct of Ping An Group.
+Business Code of Conduct
+Under the "Ping An Guardian” initiative, Ping An
+held 30,000 normalized volunteer events in 2023.
+Volunteers from Ping An quickly responded to major
+disasters and actively went to affected areas. Ping
+An launched voluntary blood donation campaigns
+in 28 cities, with nearly 3,000 participants and over
+710,000 milliliters of blood donated. Ping An continued
+to carry out the first-aid training program on how
+to perform cardiopulmonary resuscitation. In
+addition, Ping An organized over 5,300 free first-aid
+training sessions, reaching 100,000 citizens. Ping An
+conducted over 20,000 financial consumer protection
+education sessions in 2023, reaching over 200 million
+consumers in nearly 80 cities across China. The Ping
+An Volunteers Association has set up 20 member
+company branches and 31 regional branches since
+it was established in 2018. Moreover, the association
+has conducted multiple public welfare initiatives on
+the "San Cun Hui" public welfare platform. Ping An
+sponsored a total of 1,702 "Beside You" public welfare
+initiatives in 2023. The "San Cun Hui" public welfare
+platform had 3.49 million registered users, including
+over 500,000 employees and agents of Ping An as of
+December 31, 2023.
+Ping An continues to build the "Ping An Guardian
+Initiative" brand, developing a precise, normalized
+and convenient volunteer service system covering
+"online offline" and "urban + rural" areas.
+Volunteer Services
+Sustainability
+Ping An Insurance (Group) Company of China, Ltd. 103
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An pays close attention to biodiversity. Ping An
+leveraged its integrated finance advantages to help
+Shenzhen build the "International Mangrove Center,"
+launch China's first mangrove carbon sink index
+insurance, and establish China's first mangrove
+ecological conservation charitable trust with a scale
+up to RMB10 million in 2023.
+Ping An continued to upgrade the "Mother's
+Needlework" program, establishing "Orange
+Workshops" in multiple counties. Ping An
+empowered local women to start businesses and
+increase income, and helped their handicrafts go
+global by providing them with financial support,
+product design, technique training and marketing
+support.
+After a 6.2-magnitude earthquake struck Jishishan
+County in Linxia Hui Autonomous Prefecture in
+Gansu, Ping An swiftly initiated an emergency
+response and immediately donated RMB10 million
+to affected areas in Gansu and Qinghai. Ping An
+strives to create a diversified high-quality education
+platform for the youth by continuously carrying
+out the "Ping An Inspiration Program." Ping An
+encouraged college students to conduct social
+researches on three topics, namely finance and
+insurance, healthcare and elderlycare, and low-
+carbon and environmental protection in 2023, pooling
+the youth's wisdom to solve community issues.
+Research funding and prize money provided by Ping
+An under the "Inspiration Program" exceeded RMB1
+million in 2023.
+Ping An takes proactive action to fulfill its social
+responsibilities, giving back to society and
+supporting people's livelihoods. Ping An received
+the China Charity Award, the highest government
+award in the field of public welfare and charity in
+China, for the fourth time in September 2023, for
+its contributions to charitable donations, volunteer
+activities, and rural vitalization.
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An focuses on localizing "managed care,"
+and makes continuous contributions to the
+"Healthy China" initiative. Being people-centered
+and customer needs-oriented, Ping An actively
+innovates "integrated finance + healthcare and
+elderlycare services" models, and advances the
+Chinese "managed care model." Giving full play
+to its business advantages, Ping An continuously
+diversifies offerings under the "worry-free, time-
+saving, and money-saving" value proposition
+to meet customers' emerging healthcare and
+elderlycare needs. In this way, Ping An participates
+in the construction of an elderly-friendly society
+at multiple levels, enabling more people to benefit
+from healthcare/elderlycare innovation and pension
+finance development. For more details, please refer
+to the section headed "Healthcare and Elderlycare
+as a New Driver of Value Growth."
+Funds cumulatively provided for poverty alleviation
+and industrial vitalization
+41,850
+77,153
+in RMB million
+102
+117,882
+December 31,
+2023
+Under the "Village Doctor Program" which promotes
+healthcare, Ping An integrates premium medical
+resources to offer mobile health checkups and
+complimentary medical consultations in rural
+areas, and facilitates the development of primary
+healthcare in rural areas. In delivering healthcare
+services to rural areas, Ping An has launched the
+campaign of "bringing healthcare services to 100
+villages," inviting professional medical workers to
+provide first-aid training and raise the awareness
+about "Golden Four Minutes in First Aid." In this
+way, Ping An consolidates the "healthcare front" for
+rural vitalization.
+Under the "Village Teacher Program" which
+promotes education, Ping An remains committed
+to education public welfare, aiming to provide
+rural children with equal access to high-quality
+education. Ping An gradually upgrades its education
+public welfare actions through five programs,
+namely hardware maintenance, volunteer teaching,
+remote training, summer camps, and scholarships
+and fellowships. Ping An Primary School in Funan
+County, Anhui Province, to which Ping An had
+donated RMB40 million, was inaugurated in May
+2023. Ping An recruited 1,167 teaching volunteers,
+built 206 volunteer teams, and gave 4,052 classes in
+2023, taking 900 teenagers out of the countryside to
+experience the charm of science and technology.
+Annual Report 2023
+Ping An contributed to the construction of 119
+Hope Primary Schools across China, recruited
+approximately 11,721 teaching volunteers, and
+provided over 438,000 hours of teaching services
+cumulatively as of December 31, 2023. Ping An
+continued to implement the "Juvenile Science
+and Technology Literacy Enhancement" program,
+conducting 37 Technology-driven Enterprise Open
+Day events, supporting 1,039 Smart Primary Schools,
+training over 20,000 rural teachers, and benefiting
+over 310,000 rural students.
+Public Welfare Activities
+December 31, December 31,
+2021
+2022
+Responsible Products
+Notes: (1) Responsible investment with insurance funds refers
+to the sum of responsible investments with insurance
+funds of Ping An Life, Ping An P&C, Ping An Annuity,
+and Ping An Health Insurance.
+(2) Green investment includes green financing, green
+publicly-offered funds, green buildings and green
+assets. For details, please refer to the types of projects
+encouraged by the Guidelines for Green Finance issued
+by the Asset Management Association of China.
+(3) Social investment includes infrastructure construction,
+elderly care and healthcare, education and culture.
+Sustainable Insurance
+Proactively playing its role as both an economic
+shock absorber and a social stabilizer, Ping An is
+committed to supporting economic development,
+social progress and environmental improvement
+with comprehensive and professional risk protection,
+integrating the sustainability philosophy into
+insurance business. Ping An has formulated Ping An
+Group's Policy Statement on Sustainable Insurance,
+clarifying the commitment to the four Principles for
+Sustainable Insurance.
+Ping An actively led the development of ESG-
+related standards in the insurance industry in 2023.
+As the leading member of a research group, Ping
+An supported the Insurance Association of China
+in formulating the Guidelines for Environment,
+Social and Governance Information Disclosure
+of Insurance Institutions. Moreover, Ping An was
+deeply involved in the formulation of the Green
+Insurance Classification Guidelines to promote the
+standardized development of green insurance.
+Sustainable Insurance Product Portfolio
+Ping An continues to improve and diversify its
+sustainable insurance product portfolio by integrating
+ESG factors into product development, design and
+evaluation, and integrates sustainable development
+related factors including climate changes into pricing
+of insurance products.
+In respect of green insurance, Ping An further
+developed related insurance products and services
+including mangrove carbon sink insurance and
+sustainable insurance. Ping An launched preferential
+insurance policies for green enterprises or insurance
+customers with green projects including renewable
+energy, energy-saving reconstruction, and green
+buildings.
+In respect of social insurance, Ping An closely
+monitors health trends in China and changes in
+insurance demands brought about by enhanced
+insurance awareness, promotes society and
+livelihood-related products including engineering
+insurance for large projects, food safety insurance
+and medical malpractice insurance, and helps the
+government improve the disaster relief system.
+Sustainability
+In respect of inclusive insurance, Ping An constantly
+innovates insurance products and upgrades
+services to develop inclusive insurance products
+for small and micro-enterprises, agricultural
+workers, "new urban citizens" and groups with
+special needs, providing risk protection for their
+business development, production and operations,
+employment and livelihoods.
+Premium income of sustainable insurance
+in RMB million
+545,548
+557,725
+2022
+2023
+Ping An had 9,835 sustainable insurance products
+as of December 31, 2023. Sustainable insurance
+premium income reached RMB557,725 million, with
+a total insured amount of over RMB709.67 trillion in
+2023.
+The Group's sustainable insurance products in 2023
+are detailed below:
+Ping An Insurance (Group) Company of China, Ltd. 97
+Ping An continues to engage deeply in inclusive
+finance, committed to channeling funds into the
+real economy by providing convenient financial
+services to small and micro-enterprises and new
+urban citizens. Ping An Bank provided inclusive
+loans to over 1.03 million small and micro-
+enterprises, with a loan balance of about RMB572.1
+billion as of December 31, 2023. Lufax Holding
+cumulatively served about 20.94 million customers,
+Iwith a facilitated loan balance of about RMB315.4
+billion, and provided unsecured loan services to
+151 thousand small and micro-enterprises as of
+December 31, 2023. Ping An P&C created a series of
+exclusive insurance products for small and micro-
+enterprises such as “An Xin Bao for Enterprises,"
+providing RMB200 trillion worth of insurance
+coverage for 2.29 million small and micro-enterprises
+in 2023. Moreover, Ping An P&C supported delivery
+riders by providing these hard-working new urban
+citizens with dedicated insurance coverage about
+650 thousand times per day on average, totaling
+RMB422.5 billion in 2023.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Sustainable Development Recognition and Industry
+Exchange
+Ping An actively engages in industry exchange in
+the field of sustainable development, cooperates
+extensively with domestic and international
+sustainable development initiative organizations,
+and continues to leverage its influence in the
+industry. Ping An is the first company in China to
+sign the UNPRI, the Climate Action 100+, and the GIP
+for the Belt and Road as an asset owner. Moreover,
+Ping An is the first company in the Chinese
+mainland to sign the PSI established by the UNEP
+Fl. Ping An is also a member of the Asian Corporate
+Governance Association, a director member of the
+Green Finance Committee of the China Society for
+Finance and Banking, and a director member of the
+ESG Committee of the China Association for Public
+Companies.
+KEY INITIATIVES FOR SUSTAINABLE
+DEVELOPMENT
+Support for Real Economy
+Annual Report 2023
+Ping An adheres to the philosophy of providing
+people-centered financial services. By leveraging its
+"integrated finance + healthcare and elderlycare"
+capabilities, Ping An continuously provides the real
+economy with high-quality financial services. Ping
+An cumulatively invested over RMB8.77 trillion as
+of December 31, 2023 to bolster the real economy.
+The investments cover major infrastructure projects
+including energy, transportation, and water
+conservancy, supporting national strategic initiatives
+including the Belt and Road Initiative and the
+development of the Guangdong-Hong Kong-Macao
+Greater Bay Area. Ping An P&C provided over
+RMB3.9 trillion worth of insurance coverage for over
+1,500 key engineering projects across China, and
+over RMB1.4 trillion worth of insurance coverage for
+public facilities in 111 countries and regions under
+the Belt and Road Initiative as of December 31, 2023.
+Ping An Asset Management cumulatively invested
+over RMB1.40 trillion as of December 31, 2023 to
+directly bolster the real economy through debt
+investment plans, asset funding plans, insurance
+private equity funds and so on, including over
+RMB70 billion invested in 2023. In the field of modern
+industries, Ping An Asset Management invested over
+Cumulative investments supporting real economy
+in RMB trillion
+8.77
+7.89
+December 31,
+2022
+December 31,
+2023
+RMB6 billion in multiple mega-projects including a
+power battery project and a semiconductor memory
+project. In the field of clean energy, Ping An Asset
+Management invested a total of RMB10.6 billion in
+SPIC Jiangxi Electric Power Co., Ltd., Shandong Hi-
+Speed New Energy Group Limited and so on. In the
+field of green infrastructure, infrastructure (green)
+debt investment plans implemented by Ping An
+Asset Management amounted to RMB1.4 billion.
+(4) Inclusive investment includes investment for supporting
+small and micro-enterprises, agriculture, rural areas,
+farmers, rural vitalization, and shantytown renovation.
+(in RMB million)
+Premium income
+Insured amount
+Social
+Insurance (2)
+Notes: (1) Green banking business includes green credit,
+green bonds, green trust, green leasing, green asset
+securitization and so on.
+(2) Inclusive banking business includes insurance for
+supporting small and micro-enterprises, agricultural
+insurance, insurance for rural areas, and insurance for
+farmers and so on.
+(3) Social banking business includes loans for infrastructure
+construction, medicine and healthcare, education and
+culture, rural vitalization and so on.
+Responsible Investment
+Adhering to long-term advantage of insurance
+funds, Ping An implements the sustainability
+philosophy throughout its investment decision-
+making processes. Ping An integrates and develops
+the responsible investment philosophy and business
+by establishing the robust organizational structure
+and policies for responsible investment as well as
+continuously innovating responsible investment
+tools and practices. Ping An has formulated Ping
+An Group's Policy Statement on Responsible
+Investment, and has defined five principles for
+responsible investment, namely ESG Integration,
+Active Ownership, Thematic Investing, Prudence,
+and Information Transparency. The Group ESG
+Office and relevant functions of the Group supervise
+relevant member companies' incorporation of ESG
+requirements into their investment and financing
+processes in accordance with the Guidelines for
+Green Finance in Banking and Insurance Sectors.
+Ping An Asset Management joined the PRI as an
+asset manager to advance responsible investment in
+2023.
+The scale of Ping An's responsible banking business
+was approximately RMB1.21 trillion as of December
+31, 2023, including RMB189,726 million in green
+banking business (1), RMB718,680 million in inclusive
+banking business (2), and RMB303,061 million in social
+banking business (3).
+Annual Report 2023
+99
+Sustainability
+Ping An Group and its member companies, including
+Ping An Life, Ping An P&C, Ping An Annuity, Ping An
+Health Insurance and Ping An Asset Management,
+have established comprehensive ESG risk-related
+management rules and processes in accordance
+with the Guidelines for Green Finance in Banking
+and Insurance Sectors and other regulatory
+requirements, incorporating ESG requirements into
+their management processes and enterprise risk
+management framework. In respect of investment
+process management, Ping An Group and its
+member companies have incorporated ESG factors
+into investment due diligence, compliance review,
+investment approval management, contract
+terms formulation, investment fund disbursement
+management and post-investment management.
+The entire insurance funds investment portfolio has
+been put under the management requirement of
+integrating ESG into investment as of December 31,
+2023.
+Ping An's responsible investment with insurance
+funds amounted to RMB725,256 million as of
+December 31, 2023, including RMB128,568 million in
+green investment (2), RMB573,795 million in social
+investment (3), and RMB22,893 million in inclusive
+investment (4).
+104
+Ping An Insurance (Group) Company of China, Ltd.
+Green
+Insurance (1)
+Ping An deeply engages in inclusive finance as
+per the State's call to increase financial support
+for small and micro-enterprises during the 14th
+Five-Year Plan period. Ping An implements various
+preferential policies for inclusive finance, striving
+to provide convenient financial services for small
+and micro-enterprises and people's livelihoods.
+Leveraging financial and technological advantages,
+Ping An continuously optimizes its inclusive finance
+business portfolio and provides customers, the
+elderly and the disabled with heartwarming financial
+products and services, making financial services
+more inclusive and accessible.
+Ping An advances the green finance industry under
+the philosophy of "providing people-centered
+financial services." Ping An develops personalized
+financing solutions for green industries and projects,
+focusing on key areas including clean energy,
+energy conservation, environmental protection,
+clean production, ecological environments, green
+infrastructure upgrades, and green services. Ping
+An provides innovative green financing products
+and services, including green loans, green bonds,
+green equities and green retail business, to meet
+diverse green financing needs of businesses and
+facilitate green, high-quality development of the real
+economy.
+Inclusive
+Insurance (3)
+37,296
+48,888,259
+506,336
+487,019,482
+14,093
+173,761,736
+Notes: (1) The definition of green insurance is consistent with
+the statistical and reporting standards stipulated in
+the Statistical Rules on Green Insurance Business.
+Green insurance mainly includes insurance services
+that address ESG risks, protect green industries, and
+safeguard green living, such as climate risk insurance
+and new energy vehicle insurance.
+(2) Social insurance includes liability insurance (such as
+food safety insurance), medical insurance, and critical
+illness insurance.
+Ping An actively supports various economic
+activities with environmental and social benefits,
+and continuously optimizes its ESG risk
+management framework. Ping An Bank formulated
+and published Ping An Bank's Environmental, Social
+and Governance Risk Management Procedure for
+Corporate Credit Customers (Trial), strengthening
+ESG risk management of corporate credit customers
+before, during and after lending. Ping An Bank
+integrates ESG risk management into business
+processes including due diligence, credit approval,
+contract management, fund disbursement and post-
+lending management, and applies the classification
+results of ESG risk assessment to credit ratings of
+and credit approval for corporate customers. In
+addition, Ping An Bank formulates differentiated
+rules on ecological and environmental impact
+risks that should be assessed when policies are
+formulated for specific industries including energy
+use, mining, oil and gas. For certain industries
+with significant impact risks, different indicators
+are set at the time of admittance to improve risk
+management.
+(3) Inclusive insurance includes agricultural insurance,
+insurance for rural areas, insurance for farmers,
+insurance for vulnerable groups, and insurance for small
+and micro-enterprise operations.
+98
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Responsible Banking
+Ping An promotes economic development, social
+progress and environmental improvement in line
+with the Principles for Responsible Banking, and
+embeds the sustainability philosophy and the ESG
+risk management philosophy in banking business
+development and operations.
+96
+Annual Report 2023
+In respect of fairness and the protection of
+employees' rights and interests, Ping An protects
+its employees' legitimate rights and interests,
+and prohibits any act of discrimination in terms
+of hiring, onboarding, training, promotion and
+awards. The Company conducts various activities
+to promote a diverse, open, equal and friendly
+work environment without harassment. Any
+individual or team that infringes on employees'
+rights and interests or discriminates against
+others will be punished accordingly. The
+Company protects employees' basic work rights,
+prohibits forced labor and child labor, and strives
+to build a harmonious and friendly working
+environment. Moreover, Ping An has developed
+the Central Procurement Supplier Management
+Procedure and included relevant clauses in
+supplier contracts, requiring suppliers to protect
+their employees' rights and interests.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+106
+Ping An upholds the training philosophy of
+"Knowledge creates value." Taking employees and
+the Company into consideration, Ping An identifies
+learning needs for different scenarios, diversifies
+high-quality courses, and continuously optimizes
+the smart learning platform to support employees
+at all levels in constant efficient learning and
+development. Ping An's employees received 44.9
+hours of training on average in 2023.
+Ping An helps employees maximize their personal
+value by providing them with career plans for
+prosperous and contented lives.
+Development and Welfare of Employees
+Development and Welfare of Employees and
+Agents
+Ping An has built a robust management framework
+for responsible products, formulated principles
+applicable to responsible products, established
+and gradually improved a system of policies
+governing all products and services, and laid down
+rules including the Product Sales Management
+Measures and the Product Development and Design
+Standards. Moreover, Ping An strengthens the full-
+lifecycle risk management of products and services
+covering product development, sales and promotion,
+after-sales services, and emergency response to
+establish a closed loop for effective management
+and develop responsible financial, healthcare and
+elderlycare products.
+As a financial services conglomerate, Ping An
+offers a wide range of products and services
+covering insurance, banking, asset management,
+healthcare and elderlycare, and technology. During
+the lifecycles of all products and services, Ping
+An undertakes to uphold the basic principles
+of compliance, fairness, inclusiveness and
+environmental protection. Ping An will not get
+involved in infringement of legitimate rights and
+interests, violation of the freedom of speech, or
+political repression. Ping An will not get involved
+in high emissions, high pollution, ecological
+destruction, or animal rights violations. Ping An
+will not engage in monopoly, unfair competition,
+pyramid sales, or terrorism. Moreover, Ping An will
+make every effort to put an end to violations of
+laws, regulations, and codes of ethics.
+Product Responsibilities
+Ping An continuously strengthens the management
+of employees' business conduct, proactively
+cracking down on those in violation of laws,
+regulations and discipline. Moreover, Ping An
+provides training regarding the employee code of
+conduct on a half-yearly basis to maintain a culture
+of integrity and self-discipline. All of Ping An's
+employees received anti-corruption education in
+2023.
+55
+In respect of conflicts of interests, tunneling,
+and confidential information management,
+employees are required to understand and
+strictly comply with the Company's rules and
+procedures on conflicts of interest. Ping An
+prevents and punishes tunneling in line with the
+principles of “risk coverage, self-declaration,
+conflict avoidance, and zero tolerance."
+Employees are responsible for maintaining the
+confidentiality of inside information and may
+not divulge it.
+In respect of information management and
+social media management, employees are
+required to strictly follow the requirements for
+customer information security management
+and are prohibited from leaking customer
+information. Employees may not divulge trade
+secrets or spread illegal information through
+official or employee accounts on social media.
+Ping An attaches great importance to employee
+business ethics. Ping An has developed systematic
+management rules and procedures covering full-time
+and part-time employees, including the Employee
+Interest Conflict Management Policy and the Anti-
+fraud Procedure. Moreover, Ping An has laid out
+an employee code of conduct comprising "Five
+Standards" and "Prohibitive Rules," emphasizing
+the "bottom line of compliance" and "limitations
+on employee behaviors" to prevent violations of
+laws, regulations and discipline, mainly covering the
+following aspects:
+Employee Code of Conduct
+Sustainability
+105
+Ping An Insurance (Group) Company of China, Ltd.
+In respect of intellectual property protection,
+Ping An attaches great importance to the
+protection and management of intellectual
+property rights, and ensures the effective and
+efficient commercialization of technological
+innovation outcomes. While protecting its
+own intellectual property rights, Ping An
+fully respects the intellectual property rights
+of others, and prohibits its employees from
+participating in infringements of intellectual
+property rights. By doing so, Ping An
+effectively protects its intangible assets and
+maintains orderly operations in business
+development.
+In respect of petitioning and reporting
+management, Ping An has formulated the
+Whistle-blowing Management Procedure
+and set up a dedicated petitioning and
+reporting hotline (0755-22625145) and an email
+box (lzxfjb@pingan.com.cn) to receive non-
+consumer service complaints against the
+Company, its employees or agents from
+internal and external complainants (including
+but not limited to the Company's employees,
+customers, suppliers, government and
+regulatory authorities). All parties concerned
+have been fully notified of the hotline and the
+email box through various open channels. The
+Company's petitioning unit deals with letters.
+and calls in a lawful, objective, fair, and timely
+manner, and coordinates the joint investigation
+and handling by relevant units, to promote
+the effective and proper handling of petitions.
+Moreover, Ping An requires special protection
+and confidentiality of the petitioners and
+complaints to protect the petitioners' legitimate
+interests and prevent retaliation.
+laundering knowledge and enhance application
+skills. Ping An continued to improve anti-
+money laundering, anti-terrorist financing
+and sanctions compliance management, and
+developed an integrated platform to enable
+digital and intelligent transformation of anti-
+money laundering, enhance internal control
+procedures and risk prevention capabilities, and
+support high-quality development of China's
+financial industry.
+MANAGEMENT DISCUSSION AND ANALYSIS
+In respect of anti-bribery, corruption, and fraud,
+employees or partners may not engage in any
+illegal or improper activities in exchange for
+personal benefits or damage the Company's
+legitimate economic interests and reputation.
+Once a fraudulent action is confirmed, the
+employees involved will be subject to penalties
+and punishments.
+Executive
+Committee
+GENERAL MEETINGS AND SHAREHOLDERS
+General Meetings
+The general meeting established and expanded effective channels for communication between the
+Company and the shareholders, and ensured shareholders' information rights, participation rights and
+voting rights on the Company's significant events through listening to their opinions and advice. During the
+Reporting Period, the notices, convocation and procedures for convening and voting at the general meeting
+were in accordance with the requirements of the Company Law of the People's Republic of China and the
+Articles of Association.
+The Company held the Annual General Meeting for 2022 in Shenzhen on May 12, 2023, and all the 15 then
+Directors of the Company attended the meeting. At the meeting, the attendees deliberated and approved
+nine proposals including the Report of the Board of Directors of the Company for 2022, the Report of
+the Supervisory Committee of the Company for 2022, the Annual Report of the Company for 2022 and
+Its Summary, the Report on Final Accounts of the Company for 2022, the Profit Distribution Plan of the
+Company for 2022 and the Reappointment of Auditors of the Company for 2023. The resolutions of the
+above general meeting have been published on the websites of SSE (www.sse.com.cn) and HKEX
+(www.hkexnews.hk).
+Extraordinary general meetings may be convened on the written request of shareholder(s) individually
+or collectively holding 10% or more of the Company's shares pursuant to Article 72(3) of the Articles of
+Association. Such request shall state clearly the matters to be deliberated at the general meetings and
+shall be signed by the requester(s) and submitted to the Board in writing. Shareholders shall follow the
+requirements and procedures as set out in the Articles of Association for convening an extraordinary
+general meeting.
+Ping An Insurance (Group) Company of China, Ltd.
+Shareholders' Rights
+As one of the measures to safeguard shareholders' interests and rights, separate resolutions are
+deliberated at the general meetings on each material issue, including the election of individual directors, for
+shareholders' consideration and voting. All resolutions put forward at the general meetings are voted on
+by poll and the poll results are posted on the websites of SSE, HKEX and the Company after the relevant
+general meetings.
+Supervisory
+Committee
+In addition, shareholder(s) individually or collectively holding 3% or more of the Company's shares may
+submit an interim proposal in writing to the convener 10 days before the date of the general meeting
+pursuant to Article 75 of the Articles of Association.
+Annual Report 2023
+Board
+Nomination and
+Remuneration Committee
+Strategy and
+Investment Committee
+Related Party Transaction
+Control and Consumer
+Rights Protection Committee
+Audit and Risk
+Management Committee
+Shareholders may put forward any inquiries about information set out in Article 58(5) of the Articles of
+Association in accordance with applicable laws and regulations, and send their inquiries or requests in
+exercise of such rights by mail to the Company's Investor Relations ("IR") Team or by email to IR@pingan.
+com.cn. Shareholders who put forward such inquiries shall provide the Company with written identification
+documents pursuant to laws, regulations, and the Articles of Association. The Company shall provide the
+information after verification.
+Corporate Governance Structure of Ping An
+During the Reporting Period, the Company implemented corporate governance measures taking into
+account practical concerns and in strict accordance with the applicable laws, including the Company
+Law of the People's Republic of China and the Securities Law of the People's Republic of China, the
+applicable regulations issued by regulators, and the principles set out in the Corporate Governance Code.
+The Company's general meetings of shareholders ("General Meetings"), Board of Directors, supervisory
+committee ("Supervisory Committee”) and executive committee (“Executive Committee”) exercised their
+rights and performed their obligations conferred by the Articles of Association respectively, collaborating
+efficiently with effective checks and balances.
+GENERAL APPRAISAL OF CORPORATE GOVERNANCE
+Ping An continuously adopts global best practices in corporate governance and
+improves its corporate governance structure built on both local advantages
+and international standards. The Company's board of directors (the "Board"
+or "Board of Directors") hereby reports to the shareholders on the Company's
+corporate governance for the year ended December 31, 2023 (the “Reporting
+Period").
+Corporate Governance Report
+114
+MANAGEMENT DISCUSSION AND ANALYSIS
+General Meetings
+Information Disclosure and Investor Relations
+Annual Report 2023
+The Company adheres to the principles of compliance, objectiveness, consistency, timeliness, interactivity
+and fairness in providing services proactively, passionately and efficiently to institutional and individual
+investors in China and abroad, facilitating the understanding between the Company and its investors,
+enhancing corporate governance and realizing the Company's fair corporate value.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+day-to-day management of the Company's business.
+In addition, the responsibilities, functions and types of decisions delegated to the management include:
+implementation of the Company's overall direction, objectives and strategies, business plans and
+investment proposals as determined by the Board from time to time; and
+performing the corporate governance function, monitoring, evaluating and ensuring the effectiveness
+of the Company's internal control systems and compliance with applicable laws and regulations.
+appointing or dismissing the Company's senior management, and determining their remuneration,
+reward and punishment; and
+formulating plans for any change in the Company's registered capital, issuance plans of corporate
+bonds or other securities, and listing plans;
+formulating plans for mergers or disposals and deciding on major investments, asset collateralization
+and other forms of guarantee in accordance with the mandate granted by the General Meetings;
+formulating the Company's profit distribution and loss recovery plans;
+formulating the Company's annual budgets and financial statements and monitoring the Company's
+performance;
+formulating the Group's overall direction, objectives and strategies, business plans and investment
+proposals as well as monitoring and supervising the management's performance;
+•
+•
+The Board is responsible for the management of the Company and accountable to the shareholders for
+their entrusted assets and resources. The Board represents and owes a duty to act in the interests of
+the shareholders as a whole. The Board recognizes its responsibility to prepare the Company's financial
+statements. The principal responsibilities of the Board and the types of decisions that can be made by the
+Board include:
+Corporate Governance Functions of the Board
+BOARD AND DIRECTORS
+The Company's shareholding structure is scattered and there are neither controlling shareholders nor de
+facto controlling parties. As an integrated financial group, the Company maintains full independence in
+terms of assets, staff, finance, organization and business under the supervision of the NFRA. The Company
+is an independent corporation responsible for its own profits and losses, runs independent and complete
+business, and is capable of independent business operations. During the Reporting Period, no controlling
+shareholder or other related party misappropriated the Company's funds, as confirmed by Ernst & Young
+Hua Ming LLP in its specific report in this respect.
+The Company's Independence from the Controlling Shareholders on Assets, Staff, Finance, Organization,
+and Business
+The Board has reviewed the shareholder communications policy on a regular basis (including in 2023) and
+ensured its effectiveness, and believes the shareholder communications policy is effective and adequate.
+Corporate Governance Report
+116
+CORPORATE GOVERNANCE
+115
+Ping An Insurance (Group) Company of China, Ltd.
+113
+The Company proactively communicates with the market through various means and channels, including
+but not limited to public presentations, roadshows, videos, conference calls and investor days, to
+improve communication effectiveness and facilitate value recognition. All these efforts have helped to
+deepen the capital market's understanding of the Company. Besides maintaining good communication
+with institutional investors, the Company has also established diverse channels for communication with
+minority investors to provide better investor services and protect their interests, including but not limited
+to corporate websites, email and hotlines. Moreover, the Company is committed to strengthening the
+analysis and reporting of capital market situations and the collection of shareholders' information, paying
+high attention to addressing investors' concerns and advice in order to further enhance the Company's
+operations, management and corporate governance. We constantly improve internal workflows and system
+construction to provide investors with more convenient services precisely and efficiently.
+The "Investor Relations" section on the Company's website (www.pingan.cn) serves as a platform
+for communication with investors on the Company's updates including but not limited to business
+development and operations, financial information and corporate governance practices. Investors may also
+write directly to the Company's IR Team or by email to IR@pingan.com.cn for further inquiries, which will
+be appropriately dealt with by the Company.
+During the Reporting Period, the Company disclosed all material information in a truthful, accurate,
+complete, timely and impartial manner in accordance with the applicable laws and regulations and the
+Articles of Association, making sure that information was disseminated to every shareholder equally, and
+there was no breach of information disclosure regulations.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Amid the ever-changing economic situations
+and market environment, the Company will
+earnestly study and implement the spirit of the
+20th National Congress of the CPC and China's
+Central Financial Work Conference, strictly abide
+by laws and regulations, continuously strengthen
+risk management, constantly improve operations,
+and optimize resource allocation. In this way, the
+Company will improve the quality and efficiency of
+services for the real economy and help realize the
+goal of building China into a financial powerhouse.
+Ping An will advance its technology-driven
+"integrated finance + healthcare and elderlycare"
+strategy and pursue high-quality development with
+Chinese characteristics under a people-centered and
+customer needs-oriented approach, creating long-
+term, steady and sustainable value for customers,
+employees, shareholders and society.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Moreover, Ping An provides partners with training
+on procurement system operation, procurement
+management rules, compliance and so on to
+improve suppliers' sustainability performance. If
+a supplier violates the Group's business code of
+conduct or fails the Group's appraisal, Ping An will
+help it formulate a rectification plan until it passes
+the appraisal. If a supplier violates the procurement
+rules, it will be disqualified and penalized.
+As a responsible purchaser, Ping An is committed
+to achieving win-win cooperation and value
+maximization with partner suppliers. Ping An has
+established the Sustainable Supply Chain Policy of
+Ping An Group, integrating sustainable development
+requirements into supply chain management that
+covers sourcing and introduction, registration and
+verification, bidding and procurement processes,
+contract signing, and fulfillment management.
+Moreover, Ping An conducts regular inspections
+or annual onsite inspections of suppliers as per
+project requirements, focusing on suppliers' ESG
+performance. The Company has also included
+sustainable development requirements in existing
+supplier contracts, setting out articles on anti-
+bribery, information security and privacy protection,
+low-carbon and green technological transformation
+and development, labor rights protection, and
+employee development, and requiring suppliers
+to actively undertake and fulfill corporate social
+responsibilities and obligations. Ping An provided all
+its partnered suppliers with ESG training in 2023.
+Sustainable Supply Chain
+Technology-powered Sustainable Development
+Ping An pursues high-quality development driven
+by comprehensive digitization, focusing on the
+transformation and upgrade of its core businesses.
+Ping An uses technologies to help financial
+businesses boost sales, improve efficiency, control
+risks, and accelerate the building of ecosystems.
+In this way, Ping An empowers financial services
+with technologies, empowers financial services
+with ecosystems, and advances development
+with technologies. For more details on digital
+technology-driven transformation, please refer to
+the section headed "Technology Business."
+Ping An formulated the Ping An Group's Policy
+Statement on Al Ethics Governance in line with the
+five ethical principles of "human-oriented, human
+autonomous, secure and controllable, fair and just,
+and open and transparent." Ping An undertakes to
+oversee the development and application of Al in
+a scientific manner, and is committed to keeping
+technology and financial services under ethical
+review. Ping An has clear ethical goals for data
+use, algorithm R&D, and industry application, and
+constantly improves its Al governance framework.
+Internally, Ping An has established the Al Ethics
+Management Committee, which is responsible
+for steering the general directions of Ping An's
+Al ethics policy. The committee ensures fairness
+and justice in product R&D, oversees information
+security and privacy protection in product and
+service provision, and explores ways to optimize
+management regarding Al-related ethical issues in
+project implementation. Externally, Ping An actively
+participates in global Al governance and promotes
+exchanges with peers and academia, contributing to
+the industry's standardization of Al governance.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+108
+Ping An strictly abides by laws and regulations,
+regulatory policies and requirements, and constantly
+improves its information security management
+system in line with technological innovations and
+best practices, aiming to ensure the confidentiality,
+integrity and availability of information. Ping An has
+formulated rules including Ping An Group's Policy
+Statement on Information Security Management,
+and established a data security governance model
+centering on customer data protection. Ping An
+performs end-to-end security management around
+personnel, data, systems, businesses, and third
+parties, and conducts annual training on security
+for all the employees of the Group and third-party
+personnel. In addition, Ping An regularly conducts
+internal and external audits of its information
+security management and data privacy protection.
+Ping An has passed the ISO27001 information
+security management system certification for
+consecutive years, ensuring the effective and stable
+operations of the information security system.
+Regarding security protection, Ping An takes both
+active and passive defense measures to ensure
+information security of the system, formulates
+emergency plans for cybersecurity incidents, and
+organizes emergency drills at least once a year.
+Ninety-three percent of the Group's member
+companies have passed the ISO/IEC 27001 and
+other information security or privacy protection
+certifications as of December 31, 2023, and no major
+information leak or other cybersecurity incident
+occurred in 2023.
+Information Security and Al Governance
+Adhering to the principle of being people-centered,
+secure, fair and transparent, Ping An strictly
+implements information security management
+norms in line with the highest standards to reinforce
+the Company's information business. Moreover,
+Ping An pays high attention to improving its Al
+governance system to ensure security and control,
+with an Al Ethics Committee at the Group level
+overseeing the development and application of Al in
+a comprehensive and rational manner.
+Development and Welfare of Agents
+To pursue high-quality development, Ping An
+continuously optimizes channel development, builds
+teams for innovative channels, and improves the
+agent force's comprehensive strengths. For more
+details, please refer to the section headed "Life and
+Health Insurance Business."
+The Group's member companies have established
+their trade unions under laws and regulations to
+protect employees' legitimate rights and interests
+and promote high-quality business development.
+Both the unionization rate and the membership
+rate are 100%. Meanwhile, the Group encourages
+its member companies to establish “Employee
+Representative Assemblies." Issues and policies
+related to the interests of employees as well as
+the election and debriefing of employee directors
+and supervisors are all deliberated and approved
+at "Employee Representative Assemblies." In
+addition, Ping An takes care of employees' health
+and well-being by providing regular assistance for
+employees in difficulties, annual employee health
+checkups, and mental health guidance. To meet the
+Company's business needs and employees' career
+development needs, Ping An provides various
+training courses by integrating resources such as
+Ping An (Shenzhen) Financial Education and Training
+Center, lecturers, and the "Zhi Niao" app. In this way,
+Ping An continues to improve employees' innovation
+capabilities, expertise, and business skills.
+Ping An conducted a satisfaction survey of all
+its employees through an external third-party
+professional organization. The overall employee
+satisfaction was 87 points in 2023, higher than the 85
+points in 2022.
+Sustainability
+107
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Ping An respects and safeguards employees' basic
+rights and interests. Ping An provides employees
+with commercial insurance, high-end health insurance
+and regular health checkups, and pools various
+resources to provide employees with discounted
+goods and heartwarming services. Ping An maintains
+a health management platform where employees
+I can directly consult a doctor online and make an
+appointment in a hospital. Ping An invites health
+experts to give health lectures from time to time.
+Ping An maintains the Ping An Employee Assistance
+Program to protect the physical and mental health
+of employees. Ping An continuously optimizes HR-
+X, a smart human resources mobile app, to provide
+employees with a series of convenient services
+including one-click leave application and self-
+service certificate application. Ping An respects
+and cares for female employees, and provides
+mother-and-baby rooms and facilities in the
+workplace for lactating employees. Ping An strictly
+abides by national laws and regulations and local
+government requirements, and implements policies
+on parental leave, breastfeeding breaks and pregnant
+employees' rest breaks. Moreover, Ping An has its
+own employee leaves in addition to those specified
+by laws, regulations and government policies. For
+instance, Ping An fulfills its social responsibilities
+and encourages employees to participate in public
+welfare by granting them blood donation leave
+and volunteer service leave. Ping An provides
+examination leave for special positions to encourage
+employees to develop specialized skills through
+continuous learning. Ping An also has a birthday
+leave policy that allows flexible working hours. Ping
+An has open, safe and diverse channels in place for
+all employees to file complaints and give feedback.
+Ping An properly protects each employee's legitimate
+rights and interests, and maintains a just, equitable,
+harmonious and healthy workplace by keeping
+employees duly informed through communication,
+training and so on.
+talent map and the “8Q + TEL” model to assess
+employees' comprehensive abilities on a yearly
+basis via regular appraisal and talent assessment
+for key positions, focusing on actual performance,
+skill sets and development potential to ensure fair
+and efficient talent selection. Moreover, Ping An
+continues to improve position sequences and talent
+development system, aiming to build broader career
+development channels, develop high-quality talent
+pipelines, and enable employees to grow to their
+fullest potential.
+Regarding talent as the primary driver of business
+development, Ping An attaches great importance
+to team development. Adhering to the strategy of
+developing a strong workforce in the new era, Ping
+An has developed its talent system centering on the
+“integrated finance + healthcare and elderlycare"
+ecosystem, continuously attracting top talent in
+related industries to strengthen Ping An's talent
+competitiveness. Ping An established a series
+of procedures to improve talent management
+standards and systems in 2023. Ping An leverages
+scientific and standardized performance
+management combined with the three-dimensional
+Ping An upholds a principle of fair, equitable and
+transparent remuneration. Ping An continuously
+rationalizes and optimizes performance-based
+remuneration management on the principle of fair
+and equitable distribution according to work, and
+provides competitive remuneration to motivate
+employees. To retain key employees and strengthen
+internal cohesiveness, Ping An has put in place
+long-term incentive and restraint mechanisms, and
+implemented the Key Employee Share Purchase Plan
+and the Long-term Service Plan.
+For resource development, Ping An has developed
+a multi-dimensional curriculum focusing on the
+contents, capabilities and development stages,
+and upgraded the "training system for key stages
+of talent development" to meet multi-tiered,
+comprehensive talent development needs. For
+mechanism and platform development, Ping An
+continuously optimizes the learning platform to
+cover all learning scenarios. Ping An explores a
+"learning passport" model under which employees'
+learning activities and outcomes are completely
+recorded and linked to learning points to enhance
+the planned learning of all employees. By associating
+learning outcomes with career development, Ping
+An effectively motivates all employees, promotes a
+learning atmosphere, and builds itself as a learning
+organization. Ping An provides employees at
+different career development stages with tailor-made
+courses on management capabilities and leadership
+development, with themes covering corporate
+strategies, management decisions, and career
+development.
+MANAGEMENT DISCUSSION AND ANALYSIS
+109
+MANAGEMENT DISCUSSION AND ANALYSIS
+Prospects of Future Development
+MAJOR INDUSTRY TRENDS, MARKET LANDSCAPE,
+AND RISKS
+For healthcare and elderlycare business,
+the Company will continuously advance
+the "integrated finance + healthcare and
+elderlycare" strategy. Ping An will leverage the
+capabilities and advantages of its healthcare
+and elderlycare ecosystem to unlock synergies
+between healthcare and elderly care services
+and integrated financial services, centering
+on family doctor membership. Acting as a
+payer and integrating providers, Ping An will
+constantly integrate "online, in-store and
+home-delivered" healthcare and elderlycare
+service resources to provide corporate and
+retail customers with "worry-free, time-saving
+and money-saving" healthcare and elderlycare
+service experience. Ping An will further pursue
+competitive differentiation by developing
+unique "finance + service" and "insurance +
+service" managed care business models. In this
+way, Ping An will strive to create more stable
+and sustainable value for its shareholders.
+For technology business, the Company will
+comprehensively improve its "integrated
+finance + healthcare and elderlycare"
+service framework, employing cutting-edge
+technologies developed through years of
+continuous R&D to support its core businesses.
+By doing so, the Company will provide
+customers with premium products to meet their
+comprehensive needs for diverse integrated
+financial offerings. Moreover, the Company
+will continuously upgrade its healthcare and
+elderly care ecosystem strategy by improving
+the "managed care model" and integrating
+customer bases and resources to develop the
+healthcare and elderly care ecosystem.
+Ping An Insurance (Group) Company of China, Ltd.
+112
+For asset management business, by enhancing
+investment management, risk management and
+product innovation and maintaining prudent
+operations, the Company will promote high-
+quality development of the financial industry,
+channel funds into the real economy, and help
+capital markets to function as financial hubs.
+Regarding insurance funds investment, the
+Company will take risk prevention as the first
+priority, improve its asset-liability management
+capabilities, adhere to the philosophy of
+long-term investing, and promote economic
+transformation and upgrade.
+For banking business, the Company will
+strengthen and uphold the CPC's leadership,
+and actively implement the spirit of the 20th
+National Congress of the CPC, China's Central
+Financial Work Conference and Central
+Economic Work Conference. The Company
+will adhere to the people-centered philosophy
+of development, continuously advance
+strategic transformation, and actively develop
+TechFin, green finance, inclusive finance,
+pension finance, and digital finance. Moreover,
+the Company will continuously enhance its
+ability to serve the real economy, strengthen
+financial risk prevention and management,
+promote comprehensive digital operations, and
+actively pursue high-quality financial business
+development.
+For insurance business, Life & Health
+will further implement the "channel +
+product" strategy and firmly promote the
+specialization of channels to pursue high-
+quality development. Life & Health will realize
+sustainable long-term growth by continuously
+upgrading insurance products, offering
+"heartwarming insurance," and improving
+business quality. Ping An P&C will continue
+to serve China's overall development, actively
+assume social responsibilities, and provide
+risk reduction services. Ping An P&C will
+pursue comprehensive digital transformation
+and optimize business portfolios to provide
+customers with refined premium services and
+realize high-quality development.
+Being customer-centric, Ping An will gain
+precise insights into customer demands by
+leveraging its technologies and compliant data
+analytics under the “one customer, multiple
+products, and one-stop services" model. Ping
+An will build a heartwarming financial services
+brand and meet customer demands with
+one-stop, multi-channel integrated financial
+service solutions, delivering ultimate "worry-
+free, time-saving, and money-saving" customer
+experience. Moreover, Ping An will boost
+the value of retail customers through the
+sustainable development of integrated finance.
+Prospects of Future Development
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+In 2024, the Company will continue striving to
+become a world-leading integrated financial,
+healthcare and elderly care services provider under
+the business policy of "focusing on core businesses,
+boosting incomes and cutting costs, optimizing
+portfolios, and improving quality and efficiency."
+Annual Report 2023
+DEVELOPMENT STRATEGY AND BUSINESS PLAN
+Facing multiple challenges in internal and external
+business environments, the Company took multiple
+measures to implement the philosophy of "Expertise
+creates value” by leveraging its resources and
+advantages in finance, healthcare, elderlycare
+and technology in a forward-looking manner in
+2023. The Company actively pursued high-quality
+development, focused on core financial businesses,
+and continuously optimized business portfolios. In
+addition, the Company fulfilled its insurance mission
+and corporate social responsibilities to support the
+real economy and China's "domestic circulation”
+strategy. Ping An continuously delivered on its
+brand promise of "Expertise makes life simple."
+Ping An achieved its business goals for 2023 by
+strengthening risk management, optimizing rules,
+and furthering digital transformation. The Company
+focused on the development of its core financial
+businesses, advanced technological innovations in
+finance, healthcare and elderlycare, and developed
+the "integrated finance + healthcare and elderlycare"
+service framework. By doing so, the Company
+maintained the healthy, sustainable development of
+its core businesses.
+For healthcare and elderlycare business,
+China is comprehensively promoting the high-
+quality development of healthcare, aiming to
+meet overall goals under the Healthy China
+initiative by 2035. China is actively developing
+a comprehensive chronic disease prevention
+and treatment system centered on health
+management, improving the healthcare service
+system for the elderly, and enhancing the
+monitoring and management of occupational
+disease hazards. Moreover, the popularization
+and development of Al, digital, internet and
+other technologies in healthcare will continue
+to reduce the costs of diagnosis and treatment
+as well as improve the accuracy and efficiency
+of diagnosis and treatment. Drawing on deep
+insights into users' healthcare and elderlycare
+needs, the Company will leverage premium
+healthcare and elderlycare management
+services to actively tackle population aging and
+help implement the Healthy China initiative.
+For technology application, Ping An will
+advance the digital transformation of financial
+services in response to the state's call to
+develop TechFin, green finance, inclusive
+finance, pension finance and digital finance.
+In addition, Ping An will develop its core
+technologies and leverage technologies to
+boost sales, increase cost-effectiveness, and
+control risks. By doing so, Ping An will improve
+financial service capabilities and coverage to
+meet multi-level, diverse customer needs for
+financial services and insurance protection,
+providing high-quality financial services for
+society.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+110
+For asset management business, as the
+financial regulatory system continuously
+improves and financial risks are effectively
+prevented and mitigated, the asset management
+industry has entered a new stage of high-quality
+development, which presents new development
+opportunities. The Company will strictly
+follow government policies, strengthen its
+resilience against risks, adhere to the bottom
+line of steady operations, seek steady, high-
+quality development, improve the efficiency of
+financial services, and continuously increase
+support for major national strategies and
+industrial upgrades.
+is committed to strengthening the CPC's
+leadership, serving the real economy, and
+preventing and controlling financial risks. The
+Company will adhere to the people-centered
+development philosophy, and stay alert to
+macroeconomic developments, market changes
+and customer demands to improve its ability
+to serve the real economy. In addition, the
+Company will strengthen comprehensive
+financial risk prevention and management,
+promote comprehensive digital transformation,
+and actively support high-quality development.
+For banking business, the banking industry
+For insurance business, the ongoing "Healthy
+China" initiative has raised people's awareness
+of healthcare and elderlycare, benefiting the
+insurance industry in the long term. There is
+a huge potential market for the life insurance
+industry due to the ongoing healthcare
+reform, new government policies on people's
+livelihoods, welfare and security, and people's
+growing awareness of insurance. For the
+property and casualty insurance industry,
+business operations will become more
+specialized, refined and intensive, and the
+role of insurance as both an economic shock
+absorber and a social stabilizer will become
+increasingly prominent with the comprehensive
+reform of auto insurance, promotion of
+operational compliance, and increasing
+government policy-driven contributions from
+non-auto insurance.
+In 2024, amid profound changes in domestic and
+foreign economic environments, China's economy
+and consumption growth will still face challenges
+in the short term. However, there will be new
+business opportunities for the Company in the
+long term. Consumer demands for insurance and
+health management will increase due to people's
+growing awareness of healthcare and elderlycare,
+creating huge room for the development of our
+“integrated finance + healthcare and elderlycare"
+service framework. In addition, as demand for
+digital transformation grows stronger driven
+by government policies and technological
+advancement, Ping An is accelerating the innovation
+of its financial and healthcare business models to
+empower business growth.
+2023 is the first year to comprehensively implement
+the spirit of the 20th National Congress of the CPC,
+and a crucial year to carry out the 14th Five-Year
+Plan. During the year, China's economic recovery
+faced difficulties and challenges while geopolitical
+risks significantly heightened outside China. Despite
+the challenges, China steadily improved the quality
+of economic development, comprehensively
+advanced reform and opening-up, and maintained
+overall economic and social stability under the
+strong leadership of the CPC Central Committee
+with Comrade Xi Jinping at its core.
+In response to the call of the CPC and the state, the
+Company will continue to support the real economy
+with financial services and strengthen financial risk
+management, contributing to the effective upgrade
+and appropriate expansion of China's economic
+output.
+111
+March 15, 2023
+Audit services for financial statements audits, reviews and agreed-upon procedures
+Audit services for internal controls
+Finance & Planning
+Human Resources
+Administration
+Ping An Insurance (Group) Company of China, Ltd.
+The organization structure of the Company
+In August 2007, the Company adopted a code of conduct regarding securities transactions conducted by its
+Directors and Supervisors (the "Code of Conduct"), which was amended in August 2022, on terms no less
+exacting than the required standards set out in the Model Code. Specific inquiries have been made to all
+the Directors and Supervisors of the Company, who have confirmed that they complied with the required
+standards set out in the Model Code and the Code of Conduct from January 1, 2023 to December 31, 2023.
+Compliance with the Model Code
+None of the Directors is aware of any information that would reasonably indicate that the Company did not
+meet the applicable Code Provisions set out in the Corporate Governance Code any time from January 1,
+2023 to December 31, 2023.
+During the Reporting Period, the Board held meetings to review the Company's compliance with the
+Corporate Governance Code and the contents disclosed in the Corporate Governance Report.
+The Board is responsible for performing the corporate governance duties set out in the terms of reference
+in the Code Provision A.2.1 of the Corporate Governance Code.
+Internal Control
+Our Compliance with the Corporate Governance Code
+OTHER MATTERS REGARDING CORPORATE GOVERNANCE IN THE REPORTING PERIOD
+Amendments to the Articles of Association
+Center
+Development Center
+Asset Management
+Strategic
+Corporate Governance Report
+CORPORATE GOVERNANCE
+125
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+The Company canceled 70,006,803 repurchased A shares on June 16, 2023, and amended the terms related to
+the share structure and registered capital of the Articles of Association accordingly after the cancellation.
+The amendments took effect on July 19, 2023, the date at which the Company completed the procedure of
+reporting to the NFRA. The amended Articles of Association was published on the website of HKEX on July
+19, 2023 and the website of SSE on July 20, 2023.
+The Company has established an Executive Committee, which is the highest execution authority under
+the Board. The primary duty of the Executive Committee is to review the Company's internal business
+reports, policies in relation to investment and profit distribution, and management policies, development
+plans and resource allocation plans. The Executive Committee is also responsible for deciding and
+promoting significant matters including the Company's strategic planning, compliance/risk management,
+capital management and fund utilization, human resource synergy and brand management. In addition,
+the Executive Committee is responsible for reviewing business plans of the Company's subsidiaries and
+evaluating the subsidiaries' financial performance. The Company has also established several management
+committees under the Executive Committee, including the Strategy and Budget Management Committee,
+the Investment Management Committee, the Risk Management Executive Committee, the Technology
+Development Committee, the Investor Relations Management Committee, and the Sustainable Development
+Committee.
+Center
+Center
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+126
+Group Office
+Board Office
+Branding
+Organization & HR
+Remuneration Planning
+& Management
+Management
+Performance
+Center
+HR Services
+Planning
+Treasury
+Audit & Supervision
+Legal & Compliance
+Risk Management
+Strategic Planning
+Asset Allocation
+Management Committee
+Secretariat of Investment
+Management Center
+Finance
+(in RMB million)
+THE EXECUTIVE COMMITTEE
+SUPERVISORY COMMITTEE AND SUPERVISORS
+Date
+Executive Director
+Tan Sin Yin
+Non-executive Director
+Yao Jason Bo
+Ng Sing Yip (Chairman),
+Ng Kong Ping Albert,
+Jin Li
+In 2023, the Related Party Transaction Control and Consumer Rights
+Protection Committee held a total of four meetings, all convened in
+accordance with the Articles of Association and the Charter of the Related
+Party Transaction Control and Consumer Rights Protection Committee of
+the Board. All of the members' opinions and suggestions were adopted
+by the Company. The attendance records of each member of the Related
+Party Transaction Control and Consumer Rights Protection Committee
+are set out in the part headed "Attendance Record of Directors" of this
+section.
+Related Party Transaction Control and Consumer Rights Protection Committee
+The primary duties of the Related Party Transaction Control and Consumer
+Rights Protection Committee are to coordinate the management of the
+Company's related party transactions and the protection of consumer
+rights, including determining the overall objectives, basic policies and rules
+in respect of related party transaction management, reviewing material
+related party transactions, ensuring compliance and fairness of the
+Company's related party transactions, guarding against risks arising from
+related party transactions, studying major topics and policies on consumer
+rights protection, and guiding and supervising the establishment and
+improvement of management rules for consumer rights protection.
+Non-executive Directors
+Independent
+Members
+Corporate Governance Report
+March 14, 2023
+123
+Annual Report 2023
+140
+22
+10
+7
+101
+Fees payable
+Total
+Non-assurance services
+Other assurance services
+Ping An Insurance (Group) Company of China, Ltd.
+The composition of the Supervisory Committee and the profile of each Supervisor are set out in the section
+headed "Directors, Supervisors, Senior Management and Employees" of this Report. Duty performance of
+the Supervisory Committee is detailed in the section headed “Report of the Supervisory Committee."
+Contents of the Meeting
+April 17, 2023
+The meeting deliberated and approved proposals including the Proposal to Issue
+Capital Supplementary Bonds.
+The meeting deliberated and approved the Proposal for General Meetings to Grant
+General Mandate to the Board of Directors regarding Placement of New H Shares.
+Non-executive Directors
+Yang Xiaoping,
+He Jianfeng
+Independent Non-executive
+Directors
+Liu Hong,
+Jin Li
+Ma Mingzhe (Chairman)
+Executive Director
+Members
+Contents of the Meeting
+August 29, 2023
+April 17, 2023
+The meeting deliberated and approved the Proposal on Reviewing the Report on
+Related Party Transactions of the Company for 2022, the Proposal on Reviewing the
+Report on Consumer Rights Protection of Ping An Group for 2022, and the Proposal
+on Reviewing Material Related Party Transactions between the Company and Its
+Subsidiaries.
+Date
+The primary duties of the Strategy and Investment Committee are
+to conduct research and provide suggestions to the Board for their
+consideration in relation to the Company's general strategic plans and
+development directions, annual strategic development plans and business
+plans proposed by the Company's management, major investments,
+property transactions, financing plans, major capital operations, asset
+management projects, production and operation projects, ESG matters,
+risks and so on, closely monitor and track the investment projects
+approved by the General Meetings and the Board, and promptly notify all
+the Directors of any significant progress or changes.
+Strategy and Investment Committee
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+124
+The meeting reviewed the Report on the List of Related Parties of the Company
+under the Terms of the CBIRC in the Second Half of 2023.
+The meeting deliberated and approved the Proposal on Reviewing the Report on
+Consumer Rights Protection of Ping An Group for the First Half of 2023.
+The meeting deliberated and approved the Proposal on Reviewing Framework
+Agreement for Material Related Party Transactions of the Company's Subsidiaries.
+October 27, 2023
+August 28, 2023
+In 2023, the Strategy and Investment Committee held a total of three
+meetings, all convened in accordance with the Articles of Association
+and the Charter of the Strategy and Investment Committee of the Board.
+All of the members' opinions and suggestions were adopted by the
+Company. The attendance records of each member of the Strategy and
+Investment Committee are set out in the part headed "Attendance Record
+of Directors” of this section.
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Company's 2023 Annual Work Plan and the Proposal on Reviewing
+the 2022 Sustainability Report of the Company.
+4/4
+Jin Li
+Yang Xiaoping
+8/8
+1/1
+June 17, 2013
+Soopakij Chearavanont
+Non-executive Directors
+Protection
+Committee
+Rights
+Transaction
+Control and
+Consumer
+Related Party
+Audit and Risk
+Management
+Committee
+Nomination and
+Remuneration
+Committee
+June 17, 2013
+8/8
+8/8
+1/1
+8/8
+1/1
+8/8
+1/1
+====
+April 3, 2020
+Tan Sin Yin (1)
+July 2, 2014
+Cai Fangfang
+April 3, 2020
+1/1
+Xie Yonglin
+1/1
+6/6
+July 17, 2019
+Chu Yiyun
+1/1
+July 17, 2019
+Ng Sing Yip
+Directors
+4/4
+3/3
+3/3
+3/3
+Investment
+Committee
+Strategy and
+8/8
+4/4
+8/8
+1/1
+June 9, 2009
+Yao Jason Bo (1)
+8/8
+1/1
+July 1, 2022
+Cai Xun
+8/8
+1/1
+July 1, 2022
+He Jianfeng
+Independent Non-executive
+1/1
+March 21, 1988
+Board
+The 14th meeting of the
+12th session of the Board
+The Board Meeting deliberated and approved proposals
+including the Proposal on Reviewing the Annual Report
+of the Company for 2022 and Its Summary, the Report
+on Final Accounts of the Company for 2022, the Profit
+Distribution Plan of the Company for 2022 and the Report
+of the Board of Directors for 2022.
+Resolutions of the Board Meeting
+March 15, 2023
+The 13th meeting of the
+12th session of the Board
+Date
+Convening of Board of Directors Meetings
+Session of the Board Meeting.
+Corporate Governance Report
+CORPORATE GOVERNANCE
+117
+Ping An Insurance (Group) Company of China, Ltd.
+April 17, 2023
+Annual Report 2023
+Insurance, Actuarial, Technology, Banking, Investment, Accounting, Law, Management, Engineering and so on.
+background
+Male
+12 Directors
+Professional
+Female
+3 Directors
+Gender Group
+Executive Directors
+4 Directors
+5 Directors
+Non-executive Directors
+Independent Non-executive Directors
+Note: As of December 31, 2023.
+Ma Mingzhe (Chairman)
+The 15th meeting of the
+12th session of the Board
+The 16th meeting of the
+12th session of the Board
+General
+Meetings
+as Directors
+Date of appointment
+Meetings attended in person/Meetings required to attend
+Executive Directors
+Members
+During the Reporting Period, the Directors attended the General Meetings and the meetings of the Board
+and specialized committees under the Board in person, and made prudent decisions based on their
+in-depth knowledge of relevant circumstances. All the Directors strictly fulfilled their duties, and are
+committed to protecting the interests of the Company and its shareholders as a whole. The attendance
+records of each Director at the meetings are as follows:
+Attendance Record of Directors
+Performance of Duties by Directors
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+118
+April 26, 2023
+December 22, 2023 The Board Meeting deliberated and approved proposals
+including the Proposal on Revising the Guidelines for
+Independent Directors of the Company and the Proposal
+to Deliberate the Off-office Audit Report on Mr. Hu
+Jianfeng as the Person-in-charge of Auditing of the
+Company.
+October 27, 2023
+September 27, 2023 The Board Meeting deliberated and approved the Proposal
+on Appointment of Senior Management of the Company.
+The Board Meeting deliberated and approved proposals
+including the Proposal on Reviewing the 2023 Interim
+Results Report of the Company and Its Summary, the
+Proposal on Distributing Interim Dividend for 2023, and the
+Proposal on Reviewing the Report on the Consumer Rights
+Protection of Ping An Group for the First Half of 2023.
+The Board Meeting deliberated and approved proposals
+including the Proposal on Appointment of Fu Xin as
+Senior Vice President of the Company and the Proposal
+on Reviewing the Compensation of Executives of the
+Company.
+The Board Meeting deliberated and approved proposals
+including the 2023 First Quarter Report and the Unaudited
+Results for the Three Months Ended March 31, 2023 of the
+Company.
+The Board Meeting deliberated and approved proposals
+including the Proposal on Reviewing Framework
+Agreement for Material Related Party Transactions of the
+Company's Subsidiaries and the Proposal on Appointment
+of the Person-in-charge of Auditing of the Company.
+The 20th meeting of the
+12th session of the Board
+The 19th meeting of the
+12th session of the Board
+The 18th meeting of the
+12th session of the Board
+August 29, 2023
+The 17th meeting of the
+12th session of the Board
+July 7, 2023
+The Board Meeting deliberated and approved proposals
+including the 2023 Third Quarter Report and the Unaudited
+Results for the Nine Months Ended September 30, 2023 of
+the Company.
+July 17, 2019
+Ng Kong Ping Albert
+August 20, 2021
+The meeting deliberated and approved the Proposal on Recommending the
+Assistant President of the Company.
+The meeting deliberated and approved proposals including the Proposal on
+Recommending the Chief Risk Officer of the Company.
+The meeting deliberated and approved proposals including the Proposal on
+Recommending Senior Management of the Company.
+The meeting deliberated and approved the Proposal on Appointment of Mr. Michael
+Guo as the Chief Human Resources Officer of the Company.
+The meeting deliberated and approved proposals including the Proposal on
+Recommending Fu Xin as Senior Vice President of the Company.
+The meeting deliberated and approved the Proposal on Recommending the Person-
+in-charge of Auditing of the Company.
+The meeting deliberated and approved proposals including the Proposal on Review
+of the Performance Evaluation Results of the Company's Senior Management for
+2022 and the Proposal on Review of Participation in the 2023 Key Employee Share
+Purchase Plan.
+Contents of the Meeting
+December 22, 2023
+October 27, 2023
+September 27, 2023
+August 29, 2023
+Audit and Risk Management Committee
+July 7, 2023
+March 15, 2023
+Date
+Corporate Governance Report
+CORPORATE GOVERNANCE
+121
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+In 2023, the Nomination and Remuneration Committee held a total of seven meetings, all convened
+in accordance with the Articles of Association and the Charter of the Nomination and Remuneration
+Committee of the Board. All of the members' opinions and suggestions were adopted by the Company.
+During the Reporting Period, the Nomination and Remuneration Committee implemented the remuneration
+policies for Directors strictly. The attendance records of each member of the Nomination and Remuneration
+Committee are set out in the part headed "Attendance Record of Directors" of this section.
+The Nomination and Remuneration Committee developed and always follows the Board Diversity Policy to
+ensure a balance of Board members in terms of skills, experience and diversified perspectives, and thus to
+promote the effective operations of the Board and maintain a high level of corporate governance. When
+selecting Board members, the Company's Nomination and Remuneration Committee takes full account of
+the need for a diverse Board, and evaluates and selects candidates in multiple aspects, including but not
+limited to gender, age, cultural and educational backgrounds, professional experience, skills and knowledge.
+Moreover, the Nomination and Remuneration Committee suggests that the Board should always include
+female members to maintain gender diversity, in order to continuously improve corporate governance,
+follow global best practices for corporate governance, and further enhance the rationality and effectiveness
+of the Board's decision-making. Currently, the Board's level of gender diversity is in line with this goal.
+Having regard to the Company's business activities, assets and managed portfolios, the Nomination and
+Remuneration Committee selects qualified candidates for positions of Directors and senior management
+with reference to business acumen and undertakings, academic and professional achievements and
+qualifications, experience and independence, makes recommendations to the Board, and implements
+relevant decisions of the Board in relation to appointments.
+Liu Hong,
+Wang Guangqian
+Jin Li (Chairman),
+Ng Sing Yip,
+Chu Yiyun,
+April 17, 2023
+Independent Non-executive
+Directors
+The primary duties of the Audit and Risk Management Committee are
+to review and supervise the Company's financial reporting process and
+conduct risk management. The Audit and Risk Management Committee
+is also responsible for reviewing any matters relating to the appointment,
+removal and remuneration of external auditors. In addition, the Audit and
+Risk Management Committee examines the effectiveness of the Company's
+internal controls through regular reviews of internal controls over various
+corporate structures and business processes, while taking into account
+respective potential risks and levels of urgency to ensure the effectiveness
+of the Company's business operations and the realization of its corporate
+objectives and strategies. Such examinations and reviews cover finance,
+operations, compliance and risk management. The Audit and Risk
+Management Committee also reviews the Company's internal audit plans
+and submits relevant reports and recommendations to the Board regularly.
+Independent
+According to the resolution of the Company's 2022 Annual General Meeting, the Company reappointed
+Ernst & Young Hua Ming LLP and Ernst & Young (collectively "EY”) as auditors of the Company's financial
+statements under CAS and IFRS respectively for 2023, which was the third year for EY to act as auditors of
+the Company. Remuneration payable to EY for the Reporting Period is set out as follows:
+The Audit and Risk Management Committee also reviewed and was satisfied with the performance,
+independence and objectiveness of the Company's auditors.
+Further, the Audit and Risk Management Committee met with the Company's external auditors separately
+twice during the year to help committee members better evaluate the Company's financial reporting rules
+and internal control procedures.
+The meeting deliberated and approved proposals including the Proposal to
+Deliberate the Report on Off-office Audit of Mr. Hu Jianfeng as the Person-in-
+charge of Auditing of the Company and the Proposal to Deliberate the Report on
+Off-office Audit of Ms. Fu Xin as Chief Operating Officer of the Company and In-
+office Audit of Ms. Fu Xin as Senior Vice President of the Company.
+The meeting deliberated and approved proposals including the 2023 Third Quarter
+Report and the Unaudited Results for the Nine Months Ended September 30, 2023 of
+the Company and the Proposal on Reviewing the 2023 Third Quarter Internal Audit
+Report of the Company.
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Interim Report of the Company for 2023 and Its Summary and the
+Brief Report on the Company's Compliance with Governance Standards.
+The meeting deliberated and approved proposals including the 2023 First Quarter
+Report and the Unaudited Results for the Three Months Ended March 31, 2023 of
+the Company and the Proposal on Reviewing the 2023 First Quarter Internal Audit
+Report of the Company.
+The meeting deliberated and approved proposals including the Proposal on
+Recommending the Person-in-charge of Auditing of the Company.
+December 22, 2023
+October 27, 2023
+August 28, 2023
+April 26, 2023
+Members
+April 17, 2023
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Annual Report of the Company for 2022 and Its Summary, the Ernst
+& Young's Report on Audit of the Annual Financial Report of the Company for 2022,
+the Report on Final Accounts of the Company for 2022, the Proposal on Reviewing
+the Annual Compliance Work Report of the Company for 2022, and the Proposal on
+Reviewing the Internal Control Assessment and Evaluation Report of Ping An for
+2022.
+Contents of the Meeting
+March 14, 2023
+Date
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+122
+In 2023, the Audit and Risk Management Committee held a total of six meetings, all convened in accordance
+with the Articles of Association and the Charter of the Audit and Risk Management Committee of the
+Board. All of the members' opinions and suggestions were adopted by the Company. Furthermore, the
+Audit and Risk Management Committee convened a meeting to review the unaudited financial report for
+2023 and agreed to deliver it to auditors for auditing. The Audit and Risk Management Committee also
+reviewed the audited financial report for the year ended December 31, 2023 at the first meeting in 2024,
+was satisfied with the basis of preparation of the financial report, including the appropriateness of the
+assumptions, accounting policies and standards adopted, and made recommendations to the Board for
+consideration. The attendance records of each member of the Audit and Risk Management Committee are
+set out in the part headed "Attendance Record of Directors" of this section.
+Non-executive Director
+Yang Xiaoping
+Chu Yiyun,
+Wang Guangqian
+Ng Sing Yip,
+Non-executive Directors
+Ng Kong Ping Albert
+(Chairman),
+CORPORATE GOVERNANCE
+Members
+The primary duties of the Nomination and Remuneration Committee are
+to: provide recommendations on the size and composition of the Board
+of Directors (including skills, knowledge and experience); study the
+selection criteria and procedures for Directors and senior management,
+select qualified candidates and make recommendations to the Board;
+study and review the remuneration policies, programs and structures
+for all the Directors and senior management of the Company, and
+advise the Board in relation to establishing a formal and transparent
+procedure for developing remuneration policies; review and approve
+senior management's remuneration proposals in line with the corporate
+policies and objectives set by the Board; make recommendations to the
+Board regarding the performance evaluation of senior management; study
+the criteria for appraisal of Directors and senior management, conduct
+appraisals and make recommendations to the Board; and review and/or
+approve matters relating to share schemes specified in Chapter 17 of the
+SEHK Listing Rules.
+Nomination and Remuneration Committee
+4/4
+4/4
+July 20, 2023
+(Newly-appointed) (1)
+Wang Guangqian
+1/1
+3/3
+༄། །བབ
+4/4
+7/7
+8/8
+1/1
+3/3
+6/6
+1/1
+7/7
+8/8
+6/6
+7/7
+8/8
+4/4
+6/6
+7/7
+8/8
+=====
+August 20, 2021
+8/8
+Ouyang Hui (Retired)(1)
+August 6, 2017
+1/1
+The Board has established four specialized committees, namely the Nomination and Remuneration
+Committee, the Audit and Risk Management Committee, the Related Party Transaction Control and
+Consumer Rights Protection Committee, and the Strategy and Investment Committee. The role, function
+and composition of each specialized committee are detailed below.
+SPECIALIZED COMMITTEES UNDER THE BOARD
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+120
+During the Reporting Period, the Company's Independent Non-executive Directors conscientiously
+exercised their powers conferred by the Articles of Association, promptly learned the key operational
+information of the Company, paid comprehensive attention to the Company's development, and actively
+attended the Board meetings. The Company's Independent Non-executive Directors conscientiously
+reviewed and supervised matters including profit distribution, remuneration of the Company's senior
+management, recommendation of candidates for directorship, appointment of the Company's senior
+management and major related party transactions, which were deliberated by the Board during the
+Reporting Period.
+The 12th Board currently includes six Independent Non-executive Directors, exceeding one-third of the
+total number of the members of the Board, which complies with the applicable regulatory rules of the
+Company's listing jurisdictions. The Company's Independent Non-executive Directors are professionals
+with extensive experience in their respective fields, including finance, accounting, law and technology,
+crucial to the Company's smooth development. All the Independent Non-executive Directors meet specific
+independence guidelines set out in the applicable regulatory rules of the Company's listing jurisdictions,
+and have presented to the Company their annual independence confirmations. Therefore, the Company
+continues to believe that they are independent. Independent Non-executive Directors owe fiduciary duties
+to the Company and its shareholders, and are especially responsible for protecting the interests of minority
+shareholders. As a key part of the Company's corporate governance, Independent Non-executive Directors
+play a significant check-and-balance role in the Board's decision-making by ensuring the Board's access to
+independent views and opinions.
+Performance of Duties by Independent Non-Executive Directors
+The Company Secretary of the Company received more than 15 hours of professional training in the
+Reporting Period.
+In 2023, all the Directors of the Company attended professional training on corporate governance, regulatory
+rules, director/supervisor/senior management's abilities to perform their duties and the Company's
+business, as well as training organized by the Insurance Association of China on macroeconomics, industry
+development and so on. Mr. Xie Yonglin, an Executive Director of the Company, took special training
+on improving the quality of listed companies organized by the Shenzhen Office of the CSRC. Mr. Wang
+Guangqian, an Independent Non-executive Director of the Company, attended the SSE's pre-appointment
+training session for listed companies' independent directors. In addition, Mr. Jin Li, Mr. Chu Yiyun, Mr. Liu
+Hong and Mr. Wang Guangqian, Independent Non-executive Directors of the Company, attended the SSE's
+follow-up training session for listed companies' independent directors.
+The Company also continually provides information including updates on statutory and regulatory
+requirements as well as business and market changes to all the Directors to facilitate the performance of
+their responsibilities and obligations under the listing rules and applicable statutory requirements.
+During the Reporting Period, all the Directors of the Company actively participated in continuous
+professional training by attending external training or seminars and in-house training or reading materials
+on various topics, to develop and refresh their knowledge and skills, ensuring that they have comprehensive
+and required information to make contributions to the Board. All the Directors have provided their records
+of training to the Company.
+All the Directors of the Company have received a comprehensive Service Manual for the Performance
+of Duties upon their first appointment, to ensure their understanding of the Company's business and
+operations as well as their responsibilities and obligations under the listing rules and applicable regulatory
+requirements. The Service Manual for the Performance of Duties is updated regularly.
+Continuous Professional Development of the Directors
+Corporate Governance Report
+CORPORATE GOVERNANCE
+119
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+During the Reporting Period, Directors put forward constructive opinions and suggestions in respect of the
+shareholders and the Company as a whole on matters including but not limited to corporate governance,
+reform and development, business operations, risk management, internal controls and consumer rights
+protection. In decision-making processes, Independent Non-executive Directors paid particular attention
+to minority shareholders' legitimate rights and interests. All the opinions and suggestions were adopted by
+the Company.
+Adoption of Directors' Suggestions on the Company
+During the Reporting Period, none of the Directors objected to the resolutions at the Board meetings and
+other matters that were not submitted to the Company's Board meetings.
+Objections of Directors on Relevant Matters of the Company
+Note: (1) Details of re-designations, new appointments and departures of the Company's Directors during the Reporting Period are set
+out in the section headed "Directors, Supervisors, Senior Management and Employees" of this Report.
+2/2
+3/3
+3/3
+4/4
+6 Directors
+10 and above
+Liu Hong
+Director
+6-9
+4 Directors
+As of December 31, 2023, the Board consisted of 15 members, namely four Executive Directors, five Non-
+executive Directors and six Independent Non-executive Directors. The profile of each Director is set out in
+the section headed “Directors, Supervisors, Senior Management and Employees" of this Report. As far as
+is known to the Company, there is no relationship between the Board members and between Chairman of
+the Board and Co-CEOs in terms of finance, business, family members, or other major related aspects. The
+number of Directors and the composition of the Board follow all the applicable laws and regulations. As
+provided in the Articles of Association, Directors shall be elected by the General Meetings with a term of
+three years, and are eligible for re-election upon expiry of such term. However, Independent Non-executive
+Directors shall not hold office cumulatively for more than six years. The term of office of the 12th Board is
+from March 2021 to the date of the 2023 Annual General Meeting.
+Directors with diversified backgrounds provide professional support for
+effective decision-making of the Board of Directors
+Age Group
+3 Directors
+50 and below
+Directorship
+with Ping An
+(Number of Years)
+Category
+Board Diversity
+Less than 2
+7 Directors
+2-5
+4 Directors
+4 Directors
+61 and above
+56-60
+3 Directors
+4 Directors
+51-55
+H Share
+-11,838,752
++96,443,179
+459,836,080
+pledged shares
+Long-term Service Plan of Ping An Insurance
+(Group) Company of China, Ltd. (5)
+Others
+1.93
+350,906,763
+359,636,584
+A Share
+A Share
+State-owned legal person
+1.42
+257,728,008
+2.53
+-
+Dacheng Fund Agricultural Bank of China
+Others
+1.11
+201,948,582
+A Share
+- Dacheng Zhongzheng Financial Asset
+Shum Yip Group Limited
+Overseas legal person
+State-owned legal person
+A Share
++230,032,530
+H Share
+Unknown
+Shenzhen Investment Holdings Co., Ltd.
+State-owned legal person
+5.29
+962,719,102
+A Share
+67,550,000
+pledged shares
+China Securities Finance Corporation Limited
+Others
+Business Fortune Holdings Limited
+3.01
+A Share
+Hong Kong Securities Clearing Company
+Limited (4)
+Others
+2.67
+485,789,140
+-221,974,851
+A Share
+Central Huijin Asset Management Ltd.
+Management Plan
+2.58
+470,302,252
+547,459,258
+Huaxia Fund Agricultural Bank of China -
+Huaxia Zhongzheng Financial Asset
+1.10
+Shenzhen Municipal People's Government
+State-owned Assets Supervision and
+Administration Commission
+100%
+Business Fortune
+Holdings Limited
+Others
+Other H
+shareholders
+Shenzhen Investment
+Holdings Co., Ltd.
+Other A
+shareholders
+2.53%
+3.31%
+35.06%
+100%
+5.29%
+53.81%
+Charoen Pokphand Group Co., Ltd., incorporated in Thailand on September 23, 1976, is a leading company in
+Thailand and serves as a parent company of C.P. Group. As a holding company, Charoen Pokphand Group
+Co., Ltd. holds shares of subsidiaries in Thailand and overseas. C.P. Group operates across many industries.
+ranging from industrial to service sectors, which are categorized into 8 business lines including: Agro-
+Industry and Food Business, Retail and Distribution Business, Media and Telecommunications Business,
+E-Commerce and Digital Business, Property Development Business, Automotive and Industrial Products
+Business, Pharmaceuticals Business to Finance and Investment Business covering 14 business groups and 21
+countries and economies.
+Established in 2004, Shenzhen Investment Holdings Co., Ltd. is a solely state-owned limited liability
+company, and its legal representative is He Jianfeng. Shenzhen Investment Holdings Co., Ltd. mainly
+engages in TechFin, science parks, and the technology industry. On the basis of Shenzhen's urban
+development strategy, Shenzhen Investment Holdings Co., Ltd. focuses on technological innovation and
+industrial cultivation, and strives to create three major industrial clusters of "TechFin, science parks, and
+the technology industry." The company develops a full-lifecycle industry ecosystem in which TechFin is
+"sunshine, rain and dew," science parks are "soil," and the technology industry is "seeds, seedlings and
+trees." By doing so, the company helps Shenzhen improve the whole-process innovative ecochain of "basic
+research + technological breakthroughs + achievement industrialization + TechFin + talent support," and
+develop into a modern, international and innovative city at an accelerated pace.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+135
+CORPORATE GOVERNANCE
+136
+36
+From left to right:
+Ms. Fu Xin
+Ping An Insurance (Group) Company of China, Ltd.
+Others
+Charoen Pokphand Group
+Company Limited
+Ping An Insurance (Group) Company of China, Ltd.
+199,511,462
+A Share
+shares (shares)
+Management Plan
+Notes: (1) Nature of the holders of A shares represents the nature of accounts held by the holders of A shares registered on the
+Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
+(2) Hong Kong Securities Clearing Company Nominees Limited ("HKSCC Nominees Limited") is the nominee holder of the shares
+held by non-registered H shareholders of the Company.
+(3) Business Fortune Holdings Limited is an indirect wholly-owned subsidiary of CP Group Ltd., and the shares owned by Business
+Fortune Holdings Limited have been registered under the name of HKSCC Nominees Limited. In order to avoid double
+counting, the shares owned by Business Fortune Holdings Limited have been deducted from the shares held by HKSCC
+Nominees Limited.
+(4) The shares held by Hong Kong Securities Clearing Company Limited refer to the shares held by non-registered shareholders of
+the Northbound Trading of the Shanghai-Hong Kong Stock Connect Program.
+(5) Participants in the Long-term Service Plan of the Company are the employees of the Company and its subsidiaries. Over
+140,000 employees have participated in the Long-term Service Plan cumulatively throughout the years. The source of funding is
+the remunerations payable to employees.
+(6) The above A shareholders do not participate in securities margin trading or securities lending.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+The following chart shows the relationship between the Company and the ultimate controlling party of
+shareholders holding a 5% or greater equity interest in the Company:
+133
+Changes in the Share Capital and
+Shareholders' Profile
+Explanation of the connected relationship or acting-in-concert relationship among the above shareholders:
+Business Fortune Holdings Limited is an indirect wholly-owned subsidiary of CP Group Ltd. CP Group Ltd.
+indirectly held 1,063,597,013 H shares of the Company, representing approximately 5.84% of the total share
+capital of the Company as of December 31, 2023, through Business Fortune Holdings Limited and other
+subsidiaries.
+Save as disclosed above, the Company is not aware of any connected relationship or acting-in-concert
+relationship among the above-mentioned shareholders.
+Voting delegation, delegated voting right or waiver of voting right regarding the top ten shareholders:
+The Company is not aware of any voting delegation, delegated voting right or waiver of voting right
+regarding the above-mentioned shareholders.
+Particulars of Controlling Shareholder and De Facto Controlling Party
+The shareholding structure of the Company is relatively scattered. There is neither controlling shareholder
+nor de facto controlling party.
+Information on Shareholders Holding a 5% or Larger Equity Interest in the Company
+As of December 31, 2023, CP Group Ltd. indirectly held 1,063,597,013 H shares of the Company in total,
+representing 5.84% of the Company's total share capital; Shenzhen Investment Holdings Co., Ltd. held
+962,719,102 A Shares of the Company, representing 5.29% of the Company's total share capital.
+134
+Annual Report 2023
+CORPORATE GOVERNANCE
+or frozen
+pledged, marked
+Number of
+Appropriate policies and controls have been designed and established to ensure that assets are safeguarded
+against unauthorized use or disposal, that relevant laws, regulations and rules are adhered to and complied
+with, that reliable financial and accounting records are maintained in accordance with relevant accounting
+standards and regulatory reporting requirements, and that key risks that may impact on the Group's
+performance are appropriately identified and managed. The internal control systems can only provide
+reasonable but not absolute assurance against material misstatements or losses, as they are designed to
+manage, rather than eliminate the risk of failure to achieve business objectives.
+The Company manages the handling and dissemination of inside information in accordance with various
+inside information disclosure procedures to ensure inside information remains confidential until the
+disclosure of such information is appropriately approved, and the dissemination of such information is
+efficient and consistent.
+As disclosed above, the Audit and Risk Management Committee held a total of six meetings in the
+Reporting Period to review the Group's risk management and internal control systems. Through the Audit
+and Risk Management Committee, the Board has conducted an annual review of the effectiveness of the
+Group's risk management and internal control systems for the year ended December 31, 2023, covering all
+material financial, operational and compliance controls as well as environmental, social and governance
+performance, and has considered the Group's risk management and internal controls to be effective and
+adequate.
+By order of the Board of Directors
+Ma Mingzhe
+Chairman
+Shenzhen, PRC
+March 21, 2024
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+131
+CORPORATE GOVERNANCE
+Changes in the Share Capital and
+Shareholders' Profile
+CHANGES IN SHARE CAPITAL
+Statement of Changes in Share Capital
+January 1, 2023
+Number of shares Percentage (%)
+Issue of
+new shares
+Bonus issue
+Changes during the Reporting Period
+Transfer
+from reserve
+December 31, 2023
+Others
+Subtotal
+Number of shares
+Percentage (%)
+The Board acknowledges its responsibility for overseeing the Group's risk management and internal
+control systems and reviews their effectiveness at least annually through the Audit and Risk Management
+Committee. The Audit and Risk Management Committee assists the Board in fulfilling its oversight and
+corporate governance functions in the Group's finance, operations, compliance, risk management and
+internal controls, as well as its role in monitoring and governing finance and internal audits.
+For details of the Company's risk management, please refer to the section headed “Risk Management” in
+this Report.
+The Company has always taken risk management as a core part of its operation and management as well
+as business activities. The Company takes steady steps to build a comprehensive risk management system
+that is aligned with the Company's strategies and business characteristics. The Company continuously
+optimizes risk management organizational structures, standardizes risk management processes, and adopts
+qualitative and quantitative risk management methodologies to identify, measure, evaluate, monitor, report,
+control and mitigate risks. Keeping risks under control, the Company promotes its sustainable, healthy
+business growth.
+RISK MANAGEMENT
+Establishment and Perfection of the Internal Control System
+The Company thoroughly studies and implements the spirit of China's central financial work conference,
+focusing its development on serving the real economy and people's livelihoods. The Company improves
+the quality and efficiency of services for the real economy to contribute to high-quality development.
+Being people-centered, the Company effectively safeguards financial security by strengthening the
+bottom line of risk awareness and adhering to the philosophy of sustainable long-term development. The
+Company comprehensively improves its rule formulation and internal control system, strongly advocates
+the philosophy of "compliance creates value," strengthens the active management of internal controls and
+compliance, continuously improves the effectiveness of internal controls, and consolidates the foundation
+of the Company's steady, compliant operations and high-quality development. In this way, the Company
+vigorously pursues financial business development with Chinese characteristics.
+Regarding the internal control management framework, the Company has put in place a well-structured,
+well-staffed internal control system with well-defined powers and responsibilities in line with applicable
+laws and regulations as well as business and risk management needs. The Board is responsible for
+the establishment, improvement and effective implementation of internal controls. The Audit and Risk
+Management Committee under the Board monitors and assesses the implementation of internal controls,
+and coordinates internal control audits and other relevant work. The Supervisory Committee supervises
+the establishment and implementation of internal controls by the Board. The Risk Management Executive
+Committee under the Group's Executive Committee (the management) formulates general targets, basic
+policies and rules for risk management, and supervises operations of the risk management systems of
+subsidiaries or business lines.
+Regarding the formulation and implementation of internal control rules, the Company further improved
+basic management policies and procedures, standardized guidelines for key processes, and enhanced
+implementation of policies and procedures, and promoted compliance of operations in 2023. Firstly, the
+Company further standardized policies and procedures. The Company gradually established a consistent,
+standard framework of policies and procedures based on management practices in accordance with
+laws, regulations and industry norms, and standardized the "formulation, amendment, abolition and
+interpretation" of policies and procedures to ensure that internal controls are rules-based and evidence-
+based. Secondly, the Company increased efforts to supervise and inspect the implementation of policies
+and procedures to ensure proper "formulation, implementation and supervision." Moreover, the Company
+organized the communication and learning of new policies and procedures, and enhanced group-wide
+education to strengthen compliance awareness among employees. Thirdly, the Company built a closed-loop
+management mechanism for “external regulations, policies and procedures, and internal controls.” In this
+way, the Company strengthened the hierarchical and classified supervision of member companies' policies,
+procedures and internal controls to ensure effective routine management of them. Fourthly, the Company
+strengthened the management of policies and procedures. The Company classified policies and procedures
+in a scientific way and managed them in accordance with unified standards. The Company kept policies
+and procedures independent of human will by embedding them in processes and embedding processes in
+systems, laying a solid foundation for high-quality development.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+127
+CORPORATE GOVERNANCE
+128
+28
+Corporate Governance Report
+Regarding internal control operations and assessment, the Company strictly complied with applicable
+laws and regulations. In response to the calls of regulators at all levels for strengthening compliance
+management and preventing compliance risks, the Company continuously optimized its governance
+structure and strengthened internal control management. Firstly, the Company's internal control operations
+and assessment covered all businesses, focusing on key ones. The Company adhered to the principles of
+comprehensiveness, materiality and objectivity in internal control operations and assessment. The Company
+focused on important business units, major matters and high-risk businesses on the basis of comprehensive
+and objective assessments of the Group's headquarters and member companies in different businesses and
+sizes. In this way, the Company continuously improved internal control systems and mechanisms. Secondly,
+the Company enhanced supervision to oversee the fulfillment of responsibilities. The Company organized
+its member companies to monitor and assess the effectiveness of internal control systems and define
+responsibilities in accordance with the Measures for Supervision and Administration of Insurance Group
+Companies, the Basic Norms for Internal Controls of Enterprises, the Basic Rules for Internal Controls of
+Insurance Companies and other rules, aiming to ensure implementation of internal control systems among
+all positions and responsibility owners, oversee the fulfillment of responsibilities for internal control and
+compliance management, and further strengthen mandatory restraints. Thirdly, the Company strengthened
+execution to enhance efficiency. The Company took account of its own business features, risk profiles
+and violation prevention when constantly carrying out internal control assessments and risk screening.
+The Company kept risk and compliance appraisal mechanisms in place for effectively implementation of
+internal controls. Moreover, the Company strengthened management of key positions, areas and processes
+by using digital technologies and approaches to continuously improve overall operational efficiency and
+risk prevention. Fourthly, the Company provided employees with training and education, requiring all of
+them to pass examinations. The Company ensured that all employees received training and education
+and passed online examinations regarding internal controls and the code of conduct in line with internal
+control assessments. Moreover, the Company effectively communicated the internal control philosophy to
+employees and promoted day-to-day operational mechanisms under which "everyone is involved in internal
+controls, everyone is responsible for compliance, and internal controls have been integrated into businesses
+and processes."
+Selling-restricted shares
+Annual Report 2023
+Annual Report 2023
+In active response to the state's call to fight financial crimes and maintain financial security and stability,
+the Group Anti-money Laundering and Anti-terrorist Financing Center strictly abides by laws, regulations
+and regulatory requirements, proactively transforms itself under the "risk-based” principle, and gives full
+play to the advantages of being a financial holding group, enhancing the effectiveness of its anti-money
+laundering activities. Regarding the closed-loop money laundering risk management, the Group enhanced
+money laundering risk prevention in 2023 by pioneering mechanisms including dynamic money laundering
+risk monitoring, money laundering crime typology analysis, and information sharing across the financial
+holding group. By enhancing money laundering risk assessment, the Group improved its risk identification
+capability by establishing dynamic risk monitoring and product and business risk assessment mechanisms.
+By establishing and optimizing a money laundering risk monitoring and management framework
+across different business lines, the Group enhanced the joint money laundering prevention and control
+capabilities for itself and its member companies. The Group focused on money laundering crimes and
+related predicate crimes that infringe on customer's interests and endanger financial and national security,
+tracking risk trends such as money laundering conducted with new technologies and via new channels.
+The Group continued to strengthen risk monitoring and control, and worked with financial regulators
+and competent authorities to combat money laundering threats. With consistent data and platforms, the
+Group ensured effective intra-group dissemination of risk information and prevented money laundering
+crime risk contagion within the Group by actively exploring the establishment of anti-money laundering
+information sharing mechanisms. Regarding improvement of the Group's ability to fulfill anti-money
+laundering responsibilities, the Group positions itself as “a secondary regulator" fulfilling the responsibilities
+of supervision and management. The Group improves the construction of its business supervision
+system, continuously supervises member companies' fulfillment of anti-money laundering responsibilities,
+coordinates rectification, and builds a supervision escalation system. The Group strengthens independent
+testing under the philosophy of “enhancing rectification via inspection, and making progress via
+rectification.” Moreover, the Group continues to enhance its data foundation for anti-money laundering. By
+using innovative unsupervised machine learning and other big data algorithms, the Group has established
+money laundering risk models targeting individuals, gangs, and risks associated with anti-money laundering,
+anti-terrorist financing, and anti-tax evasion characteristic of financial holding groups. The Group upgrades
+its integrated smart platform to empower the digital transformation of anti-money laundering and promote
+the fulfillment of anti-money laundering responsibilities. Committed to its social responsibilities, the Group
+works with regulators to promote public awareness of preventing money laundering risk, illegal fund
+raising, and telecommunications fraud through publicity and education. The Group strengthens exchange
+and collaboration with regulators, offering advice to them. The Group makes active preparations for the
+Guangdong-Hong Kong-Macao Greater Bay Area Anti-money Laundering Summit, drawing upon expertise
+across institutions and businesses. The Group has been recognized and praised by regulators for its efforts
+to operate the Anti-Money Laundering Committee of the Financial Society of Shenzhen Special Economic
+Zone.
+Ping An Insurance (Group) Company of China, Ltd.
+129
+CORPORATE GOVERNANCE
+Corporate Governance Report
+Regarding the management framework for internal audit and supervision, the Company has established
+an independent, vertical audit and supervision framework, and applies a centralized approach to audit
+and supervision by complying with regulatory requirements. The Board of Directors takes the ultimate
+responsibility for establishment, operations and maintenance of the audit and supervision framework as
+well as the independence and effectiveness of audit and supervision. The Audit and Risk Management
+Committee under the Board of Directors reports to the Board of Directors on and supervises and appraises
+auditing and supervisory activities. The Group's Person-in-charge of Auditing is responsible for assisting the
+Audit and Risk Management Committee in organizing auditing and supervisory activities and improving the
+internal audit and supervision framework. The Group Audit and Supervision Department is responsible for
+formulating internal audit and supervision policies and supervising specific and effective implementation.
+The Group's Audit and Supervision Project Center and regional audit and supervision functions are
+responsible for fully implementing audit and supervision projects. They supervise, appraise, and advise
+on financial revenue and expenditure, business development, internal control, and risk management
+independently and objectively. Audit and supervision departments at all levels are independent of
+business operations and management departments. Managed by the Person-in-charge of Auditing, audit
+and supervision departments report to the Board of Directors through the Audit and Risk Management
+Committee, and are appraised and supervised by the Audit and Risk Management Committee. To ensure
+objectivity and fairness, auditing and supervisory activities are independent of business operations and
+management, and audit and supervision departments are not directly involved in or responsible for auditees'
+business activities, business decision-making and execution as well as the design and implementation of
+risk management and internal control frameworks.
+In 2023, the Company's internal control assessments covered the following: corporate governance,
+organizational structures, corporate strategies, human resources, corporate culture, social responsibilities
+and ESG management, sales management, fund utilization management, actuarial management,
+investment and financing management, liquidity management, anti-money laundering management, related
+party transaction management, legal and compliance management, comprehensive risk management,
+operations management, financial management, tax management, asset management, document and seal
+management, inquiries, complaints and customer surveys, information system management, information and
+communications, internal supervision, and consumer rights protection. The Company paid close attention
+to the following high-risk areas: corporate governance, sales management, fund utilization management,
+actuarial management, investment and financing management, anti-money laundering, related party
+transaction management, comprehensive risk management, operations management, financial management,
+and information system management. The Company maintained effective internal controls over financial
+reporting in all major aspects in accordance with the Basic Norms for Internal Controls of Enterprises and
+relevant rules in 2023. The internal control assessment report for the current year has been approved by the
+Board of Directors. The Company has engaged Ernst & Young to audit the effectiveness of internal controls
+over financial reporting, issue the Internal Control Audit Report, and pay attention to the effectiveness of
+internal controls over non-financial reporting matters.
+For details of the Company's internal controls, please refer to the Internal Control Assessment Report of
+Ping An for 2023 and the Internal Control Audit Report on Ping An for 2023 released at the same date as this
+Report on the website of SSE (www.sse.com.cn).
+130
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Ms. Cai Fangfang
+Unit: Shares
+II. Selling-unrestricted circulating shares
+SHAREHOLDERS' INFORMATION
+Number of Shareholders and Their Shareholdings
+Number of Shareholders
+Unit: Shareholder
+Total number of shareholders
+December 31, 2023
+February 29, 2024
+990,870 (including 986,615
+domestic shareholders)
+950,976 (including 946,723
+domestic shareholders)
+132
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Shareholdings of Top Ten Shareholders as at the End of the Reporting Period
+Name of shareholder
+Nature of shareholder(1)
+Shareholding
+percentage
+(%)
+Total number
+of shares held
+Changes during the
+Reporting Period
+Hong Kong Securities Clearing Company
+Nominees Limited (2)
+Overseas legal person
+38.26
+(shares)
+6,966,685,599 (3)
+(shares) Type of shares
+selling-restricted
+shares held
+(shares)
+Number of
+As at the end of the Reporting Period, the Company had no staff share.
+Staff Shares
+There was no issuance of securities during the Reporting Period.
+Security Issuance of the Company
+1.
+RMB ordinary shares
+10,832,664,498
+59.26
+2.
+Domestically listed foreign shares
+3. Overseas listed foreign shares
+7,447,576,912
+40.74
+4.
+Others
+Subtotal
+I.
+III. Total number of shares
+100.00
+100.00
+-70,006,803) -70,006,803 (1) 10,762,657,695
+59.10
+7,447,576,912
+40.90
+-70,006,803) -70,006,803 (1) 18,210,234,607
+100.00
+-70,006,803) -70,006,803 (1) 18,210,234,607
+100.00
+Note: (1) The decrease of 70,006,803 A shares during the Reporting Period was due to the cancellation of repurchased shares.
+Security Issuance and Listing
+18,280,241,410
+18,280,241,410
+Mr. Hu Jianfeng
+Mr. Huang Baoxin
+Mr. Ma Mingzhe
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Mr. Xie Yonglin
+Ms. Zhang Zhichun
+Directors, Supervisors, Senior
+Management and Employees
+Mr. Michael Guo
+Independent Non-executive Director
+Aged 56
+Director since July 2019
+Other major offices
+Mr. Liu is currently a professor and doctoral supervisor at Peking
+University, a Vice President of the Chinese Association for Artificial
+Intelligence, a member of the leading expert group of the national key R&D
+program of "Intelligent Robots" under the "13th Five-Year Plan" and one
+of the first experts under the "National High-level Talent Special Support
+Plan."
+Past offices
+Mr. Liu served as an Independent Director of Shenzhen JingQuanHua
+Electronics Co., Ltd.
+Educational background and qualifications
+Ph.D. in Engineering from Harbin Institute of Technology
+Completed postdoctoral research at Peking University
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+143
+Mr. Liu Hong
+Past offices
+Mr. Ng Kong Ping Albert
+Independent Non-executive Director
+Aged 66
+Director since August 2021
+Other major offices
+Mr. Ng is currently the President of the Hong Kong China Chamber of
+Commerce, an Honorary Advisor of the Hong Kong Business Accountants
+Association, and a member of the Advisory Board of the School of
+Accountancy of The Chinese University of Hong Kong. Mr. Ng is a member
+of the Audit Committee of The Chinese University of Hong Kong, Shenzhen
+and a Council Member of the Education Foundation of The Chinese
+University of Hong Kong, Shenzhen. Mr. Ng is also an Independent Non-
+executive Director of China International Capital Corporation Limited,
+Beijing Airdoc Technology Co., Ltd. and Shui On Land Limited, and an
+Independent Director of Alibaba Group Holding Limited.
+Past offices
+Mr. Ng served as the Chairman of Ernst & Young China, Managing
+Partner of Ernst & Young in Greater China, and a member of the EY
+Global Executive. He has over 30 years of professional experience in the
+accounting industry in Hong Kong and the Chinese mainland. Before
+joining Ernst & Young, Mr. Ng was the partner-in-charge of Arthur
+Andersen LLP in Greater China, the partner-in-charge of China business of
+PricewaterhouseCoopers, and the Managing Director of Citigroup China
+Investment Banking. Mr. Ng served as a member of the First and Second
+Accounting Standards Advisory Committee of the Ministry of Finance of
+the PRC.
+Educational background and qualifications
+Bachelor's degree and Master's degree in Business Administration from The
+Chinese University of Hong Kong
+A member of HKICPA, CA ANZ, CPAA and ACCA
+Mr. Jin Li
+Independent Non-executive
+Director
+Aged 53
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+Ph.D., Master's and Bachelor's degrees in Accounting from Shanghai
+University of Finance and Economics
+Mr. Chu was a member of the First Accounting Standards Advisory
+Committee of the Ministry of Finance, the Executive Secretary-General
+of the Accounting Education Branch of the Accounting Society of China
+(formerly known as Chinese Accounting Professors Association), and
+an Independent Non-executive Director of Universal Scientific Industrial
+(Shanghai) Co., Ltd. and Tellhow Sci-tech Co., Ltd.
+Ms. Tan served as the Chief Information Officer of the Company from
+January 2013 to November 2019, the Chief Operating Officer of the
+Company from December 2013 to February 2021, a Senior Vice President
+of the Company from June 2015 to December 2015, an Executive Vice
+President of the Company from January 2016 to December 2023, a Deputy
+Chief Executive Officer of the Company from October 2017 to November
+2018, and a Co-Chief Executive Officer of the Company from December 2018
+to December 2023.
+Prior to joining the Company, Ms. Tan was a Global Partner of McKinsey &
+Company.
+Educational background and qualifications
+Bachelor's degrees in Electrical Engineering and Economics from the
+Massachusetts Institute of Technology (MIT)
+Master's degree in Electrical Engineering and Computer Science from MIT
+Mr. Ng Sing Yip
+Independent Non-executive Director
+Aged 73
+Director since July 2019
+Other major office
+Mr. Ng currently serves as the Vice Chairman of the Legal Committee
+of the Hong Kong General Chamber of Commerce, a member of the
+Professional Advisory Board of the Asian Institute of International
+Financial Law of the University of Hong Kong, the Chairman of the Board
+of Supervisors of HSBC Bank Vietnam Limited, and an Independent Non-
+executive Director of HSBC Bank Australia Limited and Hang Seng Bank
+Limited.
+Past offices
+Mr. Ng served as a Crown Counsel in the Attorney General's Chambers
+in Hong Kong before going into private practice. Mr. Ng joined HSBC in
+June 1987 as an Assistant Group Legal Consultant, was later appointed as
+a Deputy Head of the Legal and Compliance Department, and the Head
+of Legal and Compliance in Asia Pacific, and served as a Non-executive
+Director of HSBC Bank (China) Limited.
+Educational background and qualifications
+Bachelor's degree and Master's degree in Laws (L.L.B. and L.L.M.) from the
+University of London
+Bachelor's degree in Laws (L.L.B.) from Peking University
+Solicitor to the supreme courts of England, Hong Kong, and Victoria,
+Australia
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Chu Yiyun
+Independent Non-executive Director
+Aged 59
+Director since July 2019
+Other major offices
+Mr. Chu's former name was Chu Yiyun (). He is a professor and
+doctoral supervisor at the School of Accountancy of Shanghai University
+of Finance and Economics, a full-time researcher at the Accounting
+and Finance Research Institute of Shanghai University of Finance and
+Economics, a Key Research Institute of Humanities and Social Sciences
+under the Ministry of Education, a member of the first and second Senior
+Accounting Professional Qualification Evaluation Committee of the National
+Government Offices Administration, a Director of the Ninth Council of
+the Accounting Society of China, and a Renowned Accounting Expert
+designated by the Ministry of Finance. Mr. Chu is also an Independent
+Non-executive Director of Bank of Hebei Co., Ltd. and an Independent
+Supervisor of Bank of China Co., Ltd.
+Past offices
+Director since August 2021
+Educational background and qualifications
+Mr. Jin is currently a Vice President and Chair Professor of Southern
+University of Science and Technology, a member of the Committee for
+Economic Affairs of the 14th CPPCC National Committee, a member of the
+Central Committee of Jiusan Society, a member of the Board of Directors
+and the Academic Committee of the Global Corporate Governance Forum,
+and a Vice Chairman of China Management Science Society. Mr. Jin is also
+an Independent Non-executive Director of Guosen Securities Co., Ltd.
+Past offices
+145
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+Ms. Zhu Xinrong
+Independent Supervisor
+Aged 67
+Supervisor since July 2022
+Other major offices
+Ms. Zhu is currently a second-level professor and doctoral supervisor of
+finance at Zhongnan University of Economics and Law, an expert entitled
+to a special government allowance from the State Council, a national
+master teacher, and the Director of the Collaborative Innovation Center
+of "Industrial Upgrade and Regional Finance," a university-affiliated think
+tank at Zhongnan University of Economics and Law. Ms. Zhu also serves
+as an executive council member of the China Society for Finance and
+Banking and an expert in the consulting expert pool of the Monetary Policy
+Committee of the PBC.
+Past offices
+Ms. Zhu was a member of the National Supervisory Committee for
+Professional Degrees in Finance and the Vice President of Hubei Finance
+Society. Ms. Zhu served as an Independent Non-executive Director of
+Guangdong Sanhe Pile Co., Ltd., Hubei Xianning Rural Commercial Bank
+Co., Ltd. and Wuhan Credit Investment Group Co., Ltd.
+Educational background and qualifications
+Ph.D. in Money and Banking from Zhongnan University of Economics and
+Law (previously known as Zhongnan University of Finance and Economics)
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Liew Fui Kiang
+Independent Supervisor
+Aged 57
+Other major offices
+Mr. Liew currently serves as an Independent Non-executive Director
+of Shandong Gold Mining Co., Ltd., China Apex Group Limited, Zhaoke
+Ophthalmology Limited, Zhengye International Holdings Company Limited,
+and Zhongchang International Holdings Group Limited.
+Past offices
+Mr. Liew served as an Independent Non-executive Director of Baoshan
+Iron & Steel Company Limited and the Chairman of PacRay International
+Holdings Limited.
+Educational background and qualifications
+MBA degree from the University of Hull Business School, United Kingdom
+Bachelor of Laws from the University of Leeds, United Kingdom
+Fellow of the Hong Kong Institute of Directors
+Solicitor of Hong Kong and Solicitor of England and Wales
+146
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Supervisor since July 2022
+Other major offices
+Annual Report 2023
+Educational background and qualifications
+Ms. Tan is a Director of a number of controlled subsidiaries of the
+Company including Ping An Life, Ping An P&C and Ping An Bank.
+Educational background and qualifications
+Ph.D. in Finance from Massachusetts Institute of Technology, USA
+144
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Wang Guangqian
+Independent Non-executive
+Director
+Aged 68
+Director since July 2023
+Other major offices
+Diploma in Finance from Zhongnan University of Economics and Law
+(previously known as Zhongnan University of Finance and Economics)
+Mr. Wang is currently a professor at the School of Finance of Central
+University of Finance and Economics, a Vice President of China Society
+for Finance and Banking, and a Vice President of China Modern Financial
+Society.
+Mr. Wang was a Vice Dean of Central College of Finance (now Central
+University of Finance and Economics) and then a Vice President and the
+President of Central University of Finance and Economics.
+Educational background and qualifications
+Ph.D. in Finance from Renmin University of China
+Supervisors
+Mr. Sun Jianyi
+Chairman of Supervisory
+Committee (Employee
+Representative Supervisor)
+Aged 71
+Joined the Company in 1990
+Supervisor since August 2020
+Past offices
+Since joining the Company in July 1990, Mr. Sun has been the General
+Manager of the Management Department, Senior Vice President, Executive
+Vice President, Deputy Chief Executive Officer and Vice Chairman of the
+Company, and the Chairman of the board of directors of Ping An Bank
+successively.
+Prior to joining the Company, Mr. Sun was the Head of the Wuhan Branch
+of the People's Bank of China, a Deputy General Manager of the Wuhan
+Branch of the People's Insurance Company of China, and the General
+Manager of Wuhan Securities Company.
+Mr. Sun was also a Non-executive Director of China Vanke Co., Ltd., a
+Non-executive Director of China Insurance Security Fund Co., Ltd., and an
+Independent Non-executive Director of Haichang Ocean Park Holdings Ltd.
+Past offices
+Mr. Jin was an Associate Dean of Guanghua School of Management,
+Peking University, a tenured professor and a doctoral supervisor in the
+Department of Finance at Oxford University's Saïd Business School, and
+an associate professor in the Department of Finance at Harvard Business
+School. He was also an Independent Non-executive Director of Yingda
+International Trust Company Limited, Beijing Financial Holdings Group,
+Dacheng Fund Management Co., Ltd. and CITIC aiBank Corporation
+Limited, and an Independent Director of S.F. Holding Co., Ltd.
+Other positions held within the Group
+Educational background and qualifications
+Ph.D. in Corporate Management from Nanjing University
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Ms. Cai Fangfang
+Executive Director,
+Senior Vice President
+Aged 50
+Joined the Company in 2007
+Director since July 2014
+Other positions held within the Group
+Ms. Cai is a Director of a number of controlled subsidiaries of the Company
+including Ping An Life, Ping An P&C and Ping An Bank.
+Other major offices
+Ms. Cai is a Non-executive Director of Ping An Health.
+Past offices
+Ms. Cai successively held the positions of a Vice General Manager and
+the General Manager of the Remuneration Planning and Management
+Department of the Human Resources Center of the Company from
+October 2009 to February 2012, served as the Vice Chief Financial Officer
+and General Manager of the Planning Department of the Company from
+February 2012 to September 2013, the Vice Chief Human Resources Officer
+of the Company from September 2013 to March 2015, and the Chief Human
+Resources Officer of the Company from March 2015 to April 2023.
+Prior to joining the Company, Ms. Cai served as the consulting director of
+Watson Wyatt Consultancy (Shanghai) Ltd. and the audit director on the
+financial industry of British Standards Institution Management Systems
+Certification Co., Ltd.
+Educational background and qualifications
+Master's degree in Accounting from the University of New South Wales,
+Australia
+Mr. Soopakij Chearavanont
+Non-executive Director
+Aged 60
+Director since June 2013
+Other major offices
+Mr. Chearavanont is the Chairman of CP Group, an Executive Director and
+the Chairman of C.P. Lotus Corporation, a Non-executive Director and the
+Chairman of Chia Tai Enterprises International Limited, and an Executive
+Director and the Chairman of C.P. Pokphand Co. Ltd. Mr. Chearavanont
+is also the Chairman of CP ALL Public Company Limited and Charoen
+Pokphand Foods Public Company Limited (both listed in Thailand).
+Past offices
+Mr. Chearavanont served as a Director of True Corporation Public
+Company Limited (listed in Thailand) and the Chairman of CT Bright
+Holdings Limited.
+Master of Science degree from Nanjing University
+Educational background and qualifications
+Mr. Xie was the Deputy Director of the Company's Strategic Development
+& Reform Center from June 2005 to March 2006. He held positions of the
+Operations Director, the Human Resources Director, and a Vice President
+of Ping An Bank from March 2006 to November 2013, and served as the
+Special Assistant to the Chairman, the President and the CEO, and the
+Chairman of Ping An Securities from November 2013 to November 2016
+consecutively. He was a Senior Vice President of the Company from
+September 2016 to December 2019. Previously, Mr. Xie served as a Deputy
+General Manager of Ping An P&C's sub-branches, a Deputy General
+Manager and then the General Manager of Ping An Life's branches, and the
+General Manager of Ping An Life's Marketing Department.
+Past offices
+Ping An Insurance (Group) Company of China, Ltd.
+137
+CORPORATE GOVERNANCE
+138
+38
+Directors, Supervisors, Senior
+Management and Employees
+MAJOR WORK EXPERIENCE AND CONCURRENT POSITIONS OF DIRECTORS, SUPERVISORS, SENIOR
+MANAGEMENT AND KEY PERSONNEL
+Directors
+Mr. Ma Mingzhe
+Founder of the Company
+Chairman (Executive Director)
+Aged 68
+Director since April 2020
+Director since March 1988
+Since the establishment of the Company, Mr. Ma had been fully involved in
+the operations and management of the Company until June 2020 when he
+ceased to act as the CEO. He now plays a core leadership role, in charge
+of decision-making on the Company's strategies, human resources, culture
+and major issues. Mr. Ma successively served as the President, a Director,
+and the Chairman and CEO of the Company.
+Prior to founding the Company, Mr. Ma was the Deputy Manager of China
+Merchants Shekou Industrial Zone Social Insurance Company.
+Educational background and qualifications
+Ph.D. in Money and Banking from Zhongnan University of Economics and
+Law (previously known as Zhongnan University of Finance and Economics)
+Mr. Xie Yonglin
+Executive Director, President and
+Co-CEO
+Aged 55
+Joined the Company in 1994
+Director since April 2020
+Other positions held within the Group
+Mr. Xie is the Chairman of Ping An Bank.
+Other major offices
+Mr. Xie is a Non-executive Director of Lufax Holding.
+Work experience
+Bachelor of Science degree from the College of Business and Public
+Administration of New York University
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Non-executive Director
+Aged 49
+Director since July 2022
+Other major offices
+Ms. Cai is currently an Employee Director and the Deputy Party Committee
+Secretary of Shum Yip Group Limited, an Executive Director of Shenzhen
+Investment Limited, and a Non-executive Director of Road King
+Infrastructure Limited.
+Past offices
+Ms. Cai served as the division director of the Cadre Division I, the division
+director of the Research and Publicity Division, the division director of the
+Cadre Supervision Division and the deputy division director of the Cadre
+Division I and II of the Organization Department of Shenzhen Municipal
+Party Committee.
+Educational background and qualifications
+Bachelor's degree in Economics from Central South University (previously
+known as Central South University of Technology)
+Mr. Yao Jason Bo
+Non-executive Director
+Aged 53
+Director since June 2009
+Past offices
+Mr. Yao served as a Senior Vice President of the Company from June
+2009 to January 2016, the Chief Financial Officer (Financial Director) of
+the Company from April 2010 to December 2022, the Chief Actuary of the
+Company from October 2012 to March 2021, an Executive Vice President
+of the Company from January 2016 to April 2023, and a Co-Chief Executive
+Officer of the Company from July 2020 to April 2023. Prior to that, Mr. Yao
+successively held positions of a Deputy General Manager of the Product
+Center, the Deputy Chief Actuary, the General Manager of the Planning
+Department, the Deputy Financial Officer and the Assistant President of
+the Company.
+Prior to joining the Company, Mr. Yao served as a consulting actuary and a
+senior manager at Deloitte Touche Tohmatsu.
+Educational background and qualifications
+MBA degree from New York University
+Fellow of the Society of Actuaries (FSA)
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+141
+CORPORATE GOVERNANCE
+142
+Directors, Supervisors, Senior
+Management and Employees
+Ms. Tan Sin Yin
+Non-executive Director
+Aged 46
+Ms. Cai Xun
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Admitted to practice in the PRC as a qualified lawyer
+139
+CORPORATE GOVERNANCE
+140
+Directors, Supervisors, Senior
+Management and Employees
+9
+Mr. Yang Xiaoping
+Non-executive Director
+Aged 60
+Director since June 2013
+Other major offices
+Mr. Yang is the Senior Vice Chairman of CP Group, the Vice Chairman and
+CEO of CPG Overseas, an Executive Director and the Vice Chairman of C.P.
+Lotus Corporation, the CEO of CT Bright Holdings Limited, and a Non-
+executive Director of CITIC Limited and Honma Golf Limited. Mr. Yang is
+also an Associate Dean of the China Institute for Rural Studies of Tsinghua
+University, a Vice Director of the Management Committee of the Institute
+for Global Development of Tsinghua University, the President of Beijing
+Association of Enterprises with Foreign Investment and an Adviser on
+Foreign Investment to the Beijing Municipal Government.
+Past offices
+Annual Report 2023
+Mr. Yang was a member of the Twelfth National Committee of the Chinese
+People's Political Consultative Conference, and served as the Manager for
+China Division and the Chief Representative of Beijing Office of Nichiyo
+Co., Ltd. Mr. Yang was a Non-executive Director of Tianjin Binhai Teda
+Logistics (Group) Corporation Limited and Chery Holding Group Co., Ltd.,
+a Non-executive Director and the Vice Chairman of True Corporation
+Public Company Limited, and the Vice Chairman of the board of directors
+of China Minsheng Investment Co., Ltd.
+Bachelor's degree from Nanchang University (previously known as Jiangxi
+Polytechnic College)
+Experience of studying in Japan
+Certificate for completing a doctoral program in Tsinghua University
+Mr. He Jianfeng
+Non-executive Director
+Aged 52
+Director since July 2022
+Other major offices
+Mr. He is currently the Party Committee Secretary and Chairman of
+Shenzhen Investment Holdings Co., Ltd., and the President of Research
+Institute of Tsinghua University in Shenzhen.
+Past offices
+Mr. He served as the Party Committee Secretary and Chairman of
+Shenzhen Agricultural Products Group Co., Ltd., the Party Committee
+Secretary and Chairman of Shenzhen Food Materials Group Co., Ltd., the
+Chief Economist and a Party Committee Member of the State-owned
+Assets Supervision and Management Commission of Shenzhen Municipal
+People's Government, a Vice President of Shenzhen SEZ Construction and
+Development Group Co., Ltd., and so on.
+Educational background and qualifications
+Bachelor of Laws degree in International Law from Wuhan University
+Senior Economist
+Educational background and qualifications
+000
+Past offices
+Mr. Hung was an Independent Non-executive Director and then a Non-
+executive Director of SMI Holdings Group Limited, an Independent Non-
+executive Director, then a Non-executive Director and subsequently a re-
+designated Independent Non-executive Director of Lerthai Group Limited
+(formerly known as LT Commercial Real Estate Limited). Mr. Hung was
+also an Independent Non-executive Director of Zhongchang International
+Holdings Group Limited (formerly known as Henry Group Holdings
+Limited), Tibet Water Resources Ltd., SY Holdings Group Limited (formerly
+known as Sheng Ye Capital Limited), and Gome Finance Technology Co.,
+Ltd. (formerly known as Sino Credit Holdings Limited).
+Mr. Hung's former name was Hung Yu Sum Clement (). He is
+currently serving as an Independent Non-executive Director of Starjoy
+Wellness and Travel Company Limited (formerly known as Aoyuan Healthy
+Life Group Company Limited), China East Education Holdings Limited,
+Huarong International Financial Holdings Limited, Skyworth Group Limited,
+USPACE Technology Group Limited (formerly known as Hong Kong
+Aerospace Technology Group Limited) and JX Energy Ltd., and a Non-
+executive Director of High Fashion International Limited.
+Mr. Hung served Deloitte China for 31 years where he assumed the
+Chairman role of Deloitte China and a board member of Deloitte
+International. Mr. Hung served as an adviser to the Guangzhou Institute of
+O Certified Public Accountants. He also served as a member of the Political
+Consultative Committee of Luohu District, Shenzhen and was appointed
+as an expert adviser to the Ministry of Finance of the People's Republic of
+China.
+Other major offices
+47
+Independent Supervisor
+Aged 68
+Mr. Hung Ka Hai Clement
+Annual Report 2023
+Educational background and qualifications
+Supervisor since July 2022
+Bachelor of Arts in Accountancy from the University of Lincoln, United
+Kingdom (previously known as The Polytechnic, Huddersfield)
+Life member of The Institute of Chartered Accountants in England and
+Wales
+Joined the Company in 2021
+Term of office: March
+2022-present
+147
+0.00039
+0.00023
+Sheng Ruisheng
+Beneficial owner
+A
+379,613
+453,412
++73,799 Key Employee Share Purchase Plan
+Long position
+0.00421
+0.00249
+Zhang Zhichun
+Beneficial owner
+A
+93,999
+106,370
++12,371 Key Employee Share Purchase Plan
+Long position
+0.00099
+0.00058
+Zhang Xiaolu
+Beneficial owner
+A
+12,627
+46,535
++33,908 Key Employee Share Purchase Plan
+Long position
+Long position
+0.00063
+0.00107
+Long position
+0.00054
+0.00022
+Wang Zhiliang
+Beneficial owner
+A
+68,281
+76,840
+Michael Guo
+Beneficial owner
+A
+22,993
+Huang Baoxin
+Beneficial owner
+0.00043
+A
+114,707
+Fu Xin
+Beneficial owner
+A
+25,065
+42,474
++8,559 Key Employee Share Purchase Plan
++22,993 Key Employee Share Purchase Plan
++13,388 Key Employee Share Purchase Plan
++17,409 Key Employee Share Purchase Plan
+Long position
+0.00071
+0.00042
+Long position
+0.00021
+0.00013
+101,319
+0.00026
+Beneficial owner
+H
+Nature of
+interest
+Percentage
+of total
+issued
+H/A shares
+Percentage
+(%)
+of total
+issued shares
+(%)
+Ma Mingzhe
+Interest of his spouse
+H
+20,000
+20,000
+Long position
+0.00027
+0.00011
+Change Reason for
+(shares) the change
+Others(1)
+1,196,936
+1,631,038
++434,102 Others(1)
+Long position
+0.01515
+0.00896
+Sun Jianyi
+Others(1)
+A
+126,381
+126,381
+Long position
+0.00117
+A
+Long position
+Interests
+held at
+the end of
+the period
+(shares)
+H/A
+shares
+10,000
+10,000
+Long position
+0.00013
+0.00005
+Deng Bin
+Beneficial owner
+A
+Hu Jianfeng
+Beneficial owner
+A
+67,836
+5,328
+78.264
+Interests
+held at the
+beginning
+of the period
+(shares)
++5,328 Key Employee Share Purchase Plan
++10,428 Key Employee Share Purchase Plan
+0.00005
+0.00003
+0.00073
+0.00043
+Note: During the Reporting Period, there were no share options held by or restricted shares granted to the current Directors, Supervisors
+and senior management of the Company and those who vacated office during the Reporting Period.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+155
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+Save as disclosed above, as of December 31, 2023, the interests and short positions of the Company's
+Directors, Supervisors and chief executives in the Company's shares, underlying shares and debentures
+which shall have been notified to the Company and the SEHK pursuant to Divisions 7 and 8 of Part XV
+of the SFO (including interests and short positions which the Company's Directors, Supervisors or chief
+executives are taken as or deemed to have under such provisions of the SFO), or are recorded in the
+register required to be kept by the Company pursuant to Section 352 of the SFO, or are otherwise required
+to be notified by the Directors, Supervisors and chief executives to the Company and the SEHK pursuant to
+the Model Code, were as follows:
+Name
+Capacity
+Long position
+Long position
+40,000
+40,000
+H
+Mr. Yang Xiaoping, a Non-executive Director of the Company, ceased to be a Non-executive Director
+and the Vice Chairman of True Corporation Public Company Limited in March 2023 and the Vice
+Chairman of the board of directors of China Minsheng Investment Co., Ltd. in August 2023.
+Mr. Hung Ka Hai Clement, an Independent Supervisor of the Company, ceased to be an Independent
+Non-executive Director of Gome Finance Technology Co., Ltd. in December 2023.
+Mr. Michael Guo, a Co-CEO of the Company, took office as a Non-executive Director of OneConnect
+and Ping An Health in November 2023 and March 2024, respectively.
+Save as disclosed above, there is no other information required to be disclosed pursuant to Rule 13.51B(1)
+of the SEHK Listing Rules.
+PENALTIES IMPOSED ON THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT BY SECURITIES
+REGULATORY AUTHORITIES IN THE LAST THREE YEARS
+The current Directors, Supervisors and senior management of the Company and those who vacated office
+during the Reporting Period were not subject to any punishment by securities regulatory authorities over
+the past three years.
+154
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+SHAREHOLDINGS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Change in the Number of Shares Held in the Company
+As of December 31, 2023, the interests of the Company's current Directors, Supervisors and senior
+management and those who vacated office during the Reporting Period in the Company's shares which
+shall be disclosed pursuant to the Standard No. 2 Concerning the Contents and Formats of Information
+Disclosed by Listed Companies - The Contents and Formats of Annual Report issued by the CSRC, were as
+follows:
+Number of
+shares held at
+Mr. Yao Jason Bo, a Non-executive Director of the Company, ceased to be a Non-executive Director of
+Ping An Life and Ping An P&C in September 2023.
+Name
+H/A
+shares
+the beginning
+of the period
+Number of
+shares held
+at the end of
+the period
+Change
+(shares) Reason for the change
+Nature of
+interest
+Percentage of
+total issued
+H/A shares (%)
+Percentage
+of total issued
+shares (%)
+Ma Mingzhe
+Beneficial owner
+A
+2,245,730
+Capacity
+Sun Jianyi
+Ms. Tan Sin Yin resigned as a Co-CEO, Executive Vice President and other relevant administrative
+positions of the Company in January 2024, and was re-designated from an Executive Director to a Non-
+Executive Director of the Company. In addition, Ms. Tan ceased to be a Non-executive Director of
+OneConnect, an Executive Director of Ping An Technology, and a Non-executive Director of Ping An
+Asset Management and Ping An Health in November 2023, December 2023, February 2024 and March
+2024 respectively.
+Resigned Senior Management
+January 2021
+June 2023
+Resigned Senior Management
+Male
+53
+April 2023
+January 2007
+Notes: (1) Mr. Wang Guangqian took office as an Independent Non-executive Director of the Company on July 20, 2023.
+(2) Mr. Michael Guo took office as a Co-CEO of the Company on September 27, 2023 and as a Senior Vice President of the
+Company on December 20, 2023.
+(3) Ms. Fu Xin took office as a Senior Vice President of the Company on August 31, 2023.
+(4) Mr. Huang Yuqiang took office as the Person-in-charge of Auditing of the Company on June 19, 2023.
+(5) Ms. Zhang Zhichun took office as the Chief Financial Officer (Financial Director) of the Company on January 1, 2023.
+(6) Mr. Ouyang Hui retired as an Independent Non-executive Director of the Company due to the expiration of his term of office
+of six years on July 20, 2023.
+(7) Ms. Tan Sin Yin resigned as a Co-CEO and Executive Vice President of the Company on January 1, 2024. After resigning from
+the senior management position, Ms. Tan Sin Yin was re-designated as a Non-executive Director of the Company on January 1,
+2024.
+(8) Mr. Ji Guangheng resigned as a Senior Vice President of the Company on August 15, 2023.
+7.
+(9) Mr. Hu Jianfeng resigned as the Person-in-charge of Auditing of the Company on June 19, 2023.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+153
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+CHANGES IN INFORMATION OF DIRECTORS AND SUPERVISORS
+1.
+Mr. Xie Yonglin ceased to be a Director of Ping An Overseas Holdings in March 2024.
+2.
+Ms. Cai Fangfang took office as a Non-executive Director of Ping An Health in March 2024.
+3.
+4.
+5.
+(10) Mr. Yao Jason Bo resigned as a Co-CEO, Executive Vice President and other relevant administrative positions of the Company
+on April 26, 2023. After resigning from relevant administrative positions, Mr. Yao Jason Bo was re-designated as a Non-
+executive Director of the Company on April 26, 2023.
+0.00069
+Beneficial owner
+5,048,596
+0.00134
+0.00055
+Yao Jason Bo
+Beneficial owner
+A
+686,391
+837,826
++151,435 Key Employee Share Purchase Plan
+Long position
+0.00778
+0.00460
+Beneficial owner
+H
+Long position
+24,000
+Long position
+0.00032
+0.00013
+Tan Sin Yin
+Beneficial owner
+A
+547,920
+714,249
++166,329 Key Employee Share Purchase Plan
+Long position
+0.00664
+0.00392
+Beneficial owner
+24,000
+A
+100,000
+H
+2,524,802
+5,048,596
++279,072 Key Employee Share Purchase Plan
+Long position
+0.02346
+0.01386
+Long position
+0.04691
+0.02772
+Xie Yonglin
+Beneficial owner
+A
+666,487
+942,767
+100,000
++276,280 Key Employee Share Purchase Plan
+0.00876
+0.00518
+Cai Fangfang
+Beneficial owner
+A
+378,064
+477,260
++99,196 Key Employee Share Purchase Plan
+Long position
+0.00443
+0.00262
+Yang Xiaoping
+Beneficial owner
+Long position
+Ping An Insurance (Group) Company of China, Ltd.
+Xie Yonglin
+A
+Ms. Zhang Xiaolu
+Senior Economist
+Bachelor's degree in Engineering from Huazhong University of Science and
+Technology (previously known as Huazhong Institute of Technology)
+Master's degree in Economics from Zhongnan University of Economics and
+Law
+Educational background and qualifications
+Since joining the Company in 1988, Mr. Sun has successively held the
+positions including a Senior Vice President, an Executive Vice President,
+the President, and the Chairman and Chief Executive Officer of Ping An
+P&C.
+Past offices
+Mr. Sun serves as a Director of Ping An Securities, Ping An Technology and
+Ping An Finserve.
+Other positions held within the Group
+Joined the Company in 1988
+Chief Human Resources Officer
+Aged 62
+Mr. Sun Jianping
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Associate of China Association of Actuaries
+Bachelor's degree in Actuarial Science from Shanghai University of Finance
+and Economics
+Educational background and qualifications
+Ms. Zhang successively served as the Assistant President, Chief Investment
+Officer, Financial Director, and Board Secretary of Ping An P&C from
+December 2017 to December 2022. Before then, she served as a Deputy
+General Manager of Ping An P&C's Planning Department and a Deputy
+General Manager and then the General Manager of the Company's Planning
+Department.
+Past offices
+Ms. Zhang is a Director of a number of controlled subsidiaries of the
+Company including Ping An P&C, Ping An Securities and Ping An Annuity.
+Other positions held within the Group
+2023-present
+Joined the Company in 1998
+Term of office: January
+Ms. Zhang Zhichun
+Chief Financial Officer
+(Financial Director)
+Aged 47
+MBA degree from The Chinese University of Hong Kong
+Educational background and qualifications
+Bachelor of Arts degree from Nanjing University
+Mr. Sheng served as the Assistant to the General Manager, a Deputy
+General Manager, and the General Manager of the Company's Branding
+Department from August 2002 to January 2014.
+Compliance Officer, Chief Risk
+Officer
+Aged 56
+Joined the Company in 2019
+Term of office: June
+Educational background and qualifications
+After joining the Company in July 2004, Mr. Huang successively held
+the positions of the General Manager of Asset Monitoring of the Risk
+Management Department of Ping An Bank and a Deputy General Manager
+(presiding) of the Risk Management Department of the Group.
+Past offices
+Mr. Huang serves as the General Manager of the Group's Audit and
+Supervision Department and a Director of Ping An Financial Leasing.
+Other positions held within the Group
+2023-present
+Joined the Company in 2004
+Term of office: June
+Mr. Huang Yuqiang
+Person-in-charge of Auditing
+Aged 42
+Financial Risk Manager (FRM)
+MBA and master's degree in Quantitative Method and Modeling from
+Baruch College, City University of New York
+Chartered Financial Analyst
+Educational background and qualifications
+Prior to joining the Company, Mr. Deng served as the Chief Investment
+Officer of China Pacific Insurance (Group) Co., Ltd. and China Pacific
+Insurance Co., (H.K.) Ltd., the Head of Investment Analytics & Derivatives
+of AIA Group, and the Head of Market Risk Management (Asia-Pacific ex.
+Japan and South Korea) of AIG.
+Past offices
+Past offices
+Mr. Deng is a Director of Ping An Life, Ping An Annuity, Ping An Asset
+Management and Ping An Overseas Holdings.
+Male
+Assistant President, Chief
+Investment Officer
+Aged 54
+Mr. Deng Bin
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+151
+Ping An Insurance (Group) Company of China, Ltd.
+MBA degree from Massey University, New Zealand
+Educational background and qualifications
+Prior to joining the Company, Ms. Zhang served as a Managing Partner of
+Advisory Service (CEO of Advisory) at Ernst & Young Greater China and
+the General Manager of Consulting Service in Insurance Industry at IBM.
+Ms. Zhang served as the Chief Operating Officer of the Company from
+February 2021 to October 2021, and a Special Assistant to the President of
+Ping An Bank from June 2019 to August 2020.
+Past offices
+2021-present
+Other positions held within the Group
+Mr. Sheng serves as the Brand Director and spokesperson of the Company.
+Other positions held within the Group
+2017-present
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+148
+MBA degree from the University of New South Wales, Australia
+Educational background and qualifications
+Prior to joining the Company, Mr. Guo was a Partner and Managing Director
+of Boston Consulting Group, and a Global Co-CEO of Willis Towers Watson
+Capital Markets.
+Mr. Guo successively held the positions of the Vice Chief Human Resources
+Officer and the Chief Human Resources Officer of the Company from
+August 2022 to September 2023. Before then, he served as the Special
+Assistant to the Chairman and an Executive Vice President of Ping An P&C.
+Past offices
+Mr. Guo is a Non-executive Director of OneConnect and Ping An Health.
+Other major offices
+Joined the Company in 2019
+Term of office: September
+2023-present
+Aged 52
+Co-CEO and Senior Vice
+President
+Mr. Huang Baoxin
+Mr. Michael Guo
+Senior Management and Key Personnel
+Bachelor's degree in Economic Information Management from Tianjin
+University of Finance and Economics (previously known as Tianjin Institute
+of Finance and Economics)
+Educational background and qualifications
+Mr. Wang served as the Administrative Director and the Director of General
+Office of the Group, a Deputy General Manager of the Group's Head Office
+in Shanghai and a Deputy Director of the Group's General Office, and
+served in the Administration Department of Tianjin Branch of Ping An Life.
+Past offices
+Mr. Wang is the Chief Administrative Affairs Officer of the Group and the
+Chairman of Ping An Financial Leasing.
+Other Positions held within the Group
+Joined the Company in 2002
+Supervisor since August 2017
+Aged 44
+Employee Representative
+Supervisor
+Mr. Wang Zhiliang
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+For the work experience and concurrent positions of Mr. Ma Mingzhe, Mr. Xie Yonglin and Ms. Cai Fangfang,
+please refer to "Directors" in this section.
+Bachelor's degree in Business Administration from Nanjing University
+Senior Vice President
+Aged 59
+Other positions held within the Group
+Term of office: April
+Joined the Company in 1997
+Aged 54
+Board Secretary, Company
+Secretary
+Mr. Sheng Ruisheng
+Directors, Supervisors, Senior
+Management and Employees
+50
+150
+CORPORATE GOVERNANCE
+149
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+MBA degree from Shanghai Jiao Tong University
+Joined the Company in 2015
+Term of office: April
+2020-present
+Educational background and qualifications
+Ms. Fu joined the Company as the General Manager of the Group's Planning
+Department in October 2017, and served as the Group's Deputy Chief
+Financial Officer from March 2020 to March 2022 and the Company's Chief
+Operating Officer from March 2022 to September 2023.
+Past offices
+Ms. Fu is a Director of Ping An Life, Ping An Bank and Ping An Asset
+Management.
+Other positions held within the Group
+Term of office: August
+2023-present
+Joined the Company in 2017
+Senior Vice President
+Aged 44
+Ms. Fu Xin
+Bachelor's degree in Finance from Zhongnan University of Economics and
+Law (previously known as Zhongnan University of Finance and Economics)
+Master's degree in Political Economics from Renmin University of China
+Doctorate degree in Public Finance from the Chinese Academy of Fiscal
+Sciences (previously known as Research Institute for Fiscal Science,
+Ministry of Finance of the PRC)
+Educational background and qualifications
+Prior to joining the Company, Mr. Huang served as a Deputy Division
+Director of the Industrial Transportation Department of the Ministry of
+Finance of the PRC, a Deputy Director General of the Second Secretary
+Bureau of the General Office of the State Council of the PRC, a Deputy
+Director General and then the Director General of the Supervisory Bureau
+of the General Office of the State Council of the PRC, and a deputy head
+of the discipline inspection team of the Publicity Department of the Central
+Committee of the CPC accredited by the Central Commission for Discipline
+Inspection of the CPC.
+Past offices
+Mr. Huang is the General Manager of the Group's Beijing Head Office.
+Prior to joining the Company, Ms. Fu served as a Financial Services Partner
+at Roland Berger International Management Consulting and an Executive
+Director of PricewaterhouseCoopers.
+152
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+A
+897,702
+Others
+A
+70,811
+Others(1)
+A
+68,459
+103,368
+92,334
+-897,702 Lapse
++32,557 Others(1)
++23,875 Others(1)
+0.00000
+0.00000
+Long position
+Others(1)
+0.00096
+Long position
+0.00086
+0.00051
+Note: (1) Conditional interests that can be vested in future under the Long-term Service Plan, subject to terms and conditions in the
+Long-term Service Plan of Ping An Insurance (Group) Company of China, Ltd.
+156
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Yao Jason Bo (10)
+Hu Jianfeng (9)
+March 2022 August 2023
+-
+55
+Male
+0.00057
+Resigned Senior Management
+Tan Sin Yin
+Michael Guo
+Wang Zhiliang
+0.00556
+897,702
+1,223,278
++325,576 Others(1)
+Long position
+0.01137
+0.00672
+Cai Fangfang
+Others(1)
+A
+598,468
+815,519
++217,051 Others(1)
+Long position
+0.00329
+0.00758
+Yao Jason Bo
+Interest of his spouse
+H
+64,000
+64,000
+Long position
+0.00086
+0.00035
+Others(1)
+A
+598,468
+598,468
+Long position
+0.00448
+Others(1)
+December 2023
+June 2015
+Wang Guangqian(1)
+Period of appointment
+Age
+Gender
+Position
+Name
+APPOINTMENT OR REMOVAL OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Since July 2020
+Since July 2021
+Since January 2017
+Since January 2017
+The Deputy Party Committee Secretary
+and an Employee Director
+Shum Yip Group Limited
+Michael Guo (2)
+Cai Xun
+Shenzhen Investment Holdings Co., Ltd.
+He Jianfeng
+Senior Vice Chairman
+CP Group
+Yang Xiaoping
+Chairman
+CP Group
+Soopakij Chearavanont
+Name of corporate shareholder
+Name
+Period of appointment
+Position
+POSITIONS HELD IN CORPORATE SHAREHOLDERS BY DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT
+The Party Committee Secretary and the
+Chairman
+August 2017 July 2023
+Newly-appointed Independent Non-executive Director
+Newly-appointed Senior Management
+68
+46
+Female
+Resigned Senior Management
+Ji Guangheng(8)
+Tan Sin Yin (7)
+61
+Male
+Retired Independent Non-executive Director
+Ouyang Hui (6)
+Since January 2023
+47
+Female
+Newly-appointed Senior Management
+Male
+Zhang Zhichun (5)
+42
+Male
+Newly-appointed Senior Management
+Huang Yuqiang (4)
+Since August 2023
+44
+Female
+Newly-appointed Senior Management
+Fu Xin(3)
+Since December 2023
+52
+Male
+Since July 2023
+Since June 2023
+6.
+164
+• Asset management personnel 6.5%
+• Technology personnel 19.2%
+Others 6.9%
+1,086.5
+552.9
+No
+3,414.9
+2,554.4
+Yes
+Ji Guangheng
+Hu Jianfeng
+236.0
+No
+Wang Zhiliang
+2,242.3
+1,191.0
+No
+649.6
+Soopakij Chearavanont
+Huang Yuqiang
+1,901.8
+Sheng Ruisheng
+2,400.5
+1,331.7
+No
+Zhang Zhichun
+2,891.2
+No
+1,675.3
+Zhang Xiaolu
+6,118.2
+4,565.5
+No
+Deng Bin
+3,044.9
+No
+547.6
+142.4
+Yes
+Ng Kong Ping Albert
+Jin Li
+Wang Guangqian
+Zhu Xinrong
+547.6
+142.4
+Liu Hong
+No
+142.2
+No
+547.8
+142.2
+No
+547.6
+547.8
+Chu Yiyun
+Ng Sing Yip
+Yes
+Yang Xiaoping
+547.6
+142.4
+Yes
+He Jianfeng
+500.2
+129.8
+Yes
+Cai Xun
+547.8
+142.2
+Yes
+Ouyang Hui
+303.6
+77.1
+No
+142.4
+2,808.7
+Fu Xin
+78,000
+Long position
+Long position
+0.00014
+0.00667
+Save as disclosed above, as of December 31, 2023, none of the Company's Directors, Supervisors and chief
+executives held or was deemed to hold any interests or short positions in the shares, underlying shares
+or debentures of the Company's associated corporations (as defined in the SFO), which shall have been
+notified to the Company and the SEHK pursuant to Divisions 7 and 8 of Part XV of the SFO, or are recorded
+in the register required to be kept under Section 352 of the SFO, or are otherwise required to be notified by
+the Directors, Supervisors and chief executives to the Company and the SEHK pursuant to the Model Code.
+THE ASSESSMENT & EVALUATION AND REMUNERATION SYSTEMS OF THE COMPANY
+The purpose of the Company's remuneration policy is to attract, retain, and motivate talented people
+so as to help achieve the Company's operating objectives. The principle of the remuneration policy
+is to characterize a clear orientation, motivate performances, respond to the market, and keep costs
+reasonable. The remuneration package for the Company's employees includes base salaries, performance-
+based salaries, benefits, and allowances. Base salaries are determined according to the post value, market
+levels, and so on. Performance-based salaries are linked to the Company's overall business results,
+personal performance, and so on. Benefits and allowances are determined in accordance with government
+regulations and industry standards. The specific structure and strategic arrangement of a remuneration
+package is adjusted and optimized according to market situations and the Company's business
+development needs.
+78,000
+The Executive Directors' and senior management's remunerations are determined according to the
+Company's remuneration policy and their administrative positions within the Company. The Non-executive
+Directors' emoluments are determined as per the standards approved at the Company's General Meetings.
+The Company's appraisal schemes for senior management are determined by the Company in line with
+business plans, risk management and compliance requirements, and social responsibility requirements.
+Appraisal results are linked to senior management's performance-based remunerations and so on.
+Moreover, the Company has established a performance-based remuneration clawback mechanism for senior
+management and key personnel to give full play to the guiding role of performance-based remunerations
+in the Company's operations and management, ensure that remuneration incentives match risk-adjusted
+performance, prevent aggressive business behaviors and violations of laws and regulations, and promote
+prudent operations and sustainable development.
+Ping An Insurance (Group) Company of China, Ltd.
+157
+CORPORATE GOVERNANCE
+158
+58
+Directors, Supervisors, Senior
+Management and Employees
+Annual Report 2023
+REMUNERATIONS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+26,700
+corporation
+(%)
+Name
+Xie Yonglin
+Associated corporation Capacity
+Ping An Bank
+Beneficial owner
+Tan Sin Yin
+OneConnect
+26,700
+Beneficial owner
+(shares)
+Interests
+held at
+the end of
+the period
+(shares)
+Percentage
+of total
+issued shares
+in associated
+Change Reason for
+(shares) the change
+Nature of
+interest
+Interests
+held at the
+beginning
+of the period
+Total after-tax
+remunerations
+received from
+the Company during
+the Reporting Period
+(in RMB thousand)
+Individual income
+tax payable on total
+remunerations
+received from
+the Company during
+the Reporting Period
+(in RMB thousand)
+2,202.8
+1,449.1
+No
+7,486.1
+5,519.8
+No
+No
+Michael Guo
+1,357.5
+No
+Huang Baoxin
+3,313.9
+2,134.3
+No
+2,172.0
+2,241.5
+3,619.7
+No
+Whether received any
+remuneration from
+related parties of
+the Company during
+the Reporting Period
+Name
+Ma Mingzhe
+Sun Jianyi
+Xie Yonglin
+Cai Fangfang
+Yao Jason Bo
+Tan Sin Yin
+3,587.2
+2,512.6
+No
+4,079.5
+2,930.3
+No
+3,909.8
+2,796.8
+4,166.3
+Yes
+547.8
+142.2
+GENERAL ANALYSIS OF EXTERNAL INVESTMENT
+The Company is an integrated financial services group, and investment is one of its core businesses. The
+investment of insurance funds represents the major part of the Company's investment. The utilization of
+insurance funds is subject to applicable laws and regulations. For details of the asset allocation of the
+Company's insurance funds investment portfolio, please refer to the section headed "Business Analysis."
+Material Equity Investment
+During the Reporting Period, there was no material equity investment that shall be disclosed.
+Material Non-Equity Investment
+During the Reporting Period, there was no material non-equity investment that shall be disclosed.
+According to a resolution passed at the Company's 2022 Annual General Meeting, the Company reappointed
+Ernst & Young Hua Ming LLP and Ernst & Young as the auditors of the Company's financial statements
+under CAS and IFRS respectively for the year 2023, and reappointed Ernst & Young Hua Ming LLP as the
+auditor of the Company's internal controls.
+Financial Instruments Measured at Fair Value
+statements.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+163
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+and Significant Events
+The Company's financial instruments measured at fair value are detailed in Note 50 to the financial
+SALE OF MAJOR ASSETS AND EQUITIES
+AUDITORS
+POST BALANCE SHEET EVENTS
+DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS AND REMUNERATIONS
+The Company entered into service contracts with all the Directors and Supervisors in office. As of
+December 31, 2023, no Directors or Supervisors had a service contract with the Company or any of its
+subsidiaries which requires the Company to pay compensation (except statutory compensation) if the
+Company terminates the contract within one year.
+Name lists of the Directors and Supervisors as well as details of their remunerations for the year ended
+December 31, 2023 are set out in Note 54 to the financial statements.
+162
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Post balance sheet events are detailed in Note 60 to the financial statements.
+DIRECTORS' AND SUPERVISORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF
+SIGNIFICANCE
+DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+In 2023, no right to acquire benefits by means of acquisition of the Company's shares or debentures
+was granted to or exercised by any Directors, Supervisors or their respective spouse or minor children,
+and neither the Company nor any of its subsidiaries was a party to any arrangement which enables the
+Directors or Supervisors to acquire any such rights in any other legal entity.
+DIRECTORS' AND SUPERVISORS' INTERESTS IN A COMPETING BUSINESS
+As far as the Directors are aware, none of the Company's Directors or Supervisors has any competing
+interest in a business, which competes or is likely to compete, either directly or indirectly, with the Group's
+business.
+PERMITTED INDEMNITY PROVISION
+The Company has arranged appropriate insurance cover for possible legal actions against its Directors and
+senior management arising out of corporate activities, which was in force during the Reporting Period and
+up to the date of this Report.
+In 2023, none of the Company's Directors or Supervisors or entities connected with the Directors or
+Supervisors had a material interest, directly or indirectly, in any transaction, arrangement or contract (to
+which the Company or any of its subsidiaries was a party) of significance to the Group's business.
+During the Reporting Period, there was no sale of major assets and equities that shall be disclosed.
+Material Acquisitions and Disposals of Subsidiaries, Joint Ventures or Associates
+On January 29, 2021 and April 30, 2021 respectively, the Company announced that a consortium formed
+by Zhuhai Huafa Group Co., Ltd. ("Huafa Group" representing the state-owned enterprises of Zhuhai
+Municipality), the Company and Shenzhen SDG Co., Ltd. will participate in the substantive consolidated
+restructuring (the "Founder Group Restructuring") of Peking University Founder Group Company Limited,
+Peking University Founder Information Industry Group Co., Ltd., PKU Healthcare Industry Group Co.,
+Ltd., Peking University Resources Group Limited, and Founder Industry Holdings Co., Ltd. (collectively
+the "Restructuring Entities"). Ping An Life participated on behalf of the Company in the Founder Group
+Restructuring, and entered into a restructuring investment agreement for the Founder Group Restructuring
+(the "Restructuring Investment Agreement").
+There were 1,754 participants in the Key Employee Share Purchase Plan for 2021. A total of 9,162,837 A
+shares of the Company were purchased in the secondary market at market prices for a total amount of
+RMB670,258,495.86 (expenses inclusive), accounting for approximately 0.050% of the Company's total share
+capital at that time. During the Reporting Period, in accordance with the Key Employee Share Purchase
+Plan and applicable agreed rules, 1,485 employees qualified and 71 employees did not qualify for vesting
+under this phase. For the duration, 178,543 shares were forfeited.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+165
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+and Significant Events
+There were 1,522 participants in the Key Employee Share Purchase Plan for 2020. A total of 7,955,730 A
+shares of the Company were purchased in the secondary market at market prices for a total amount of
+RMB638,032,305.75 (expenses inclusive), accounting for approximately 0.044% of the Company's total share
+capital at that time. During the Reporting Period, in accordance with the Key Employee Share Purchase
+Plan and applicable agreed rules, 1,107 employees qualified and 63 employees did not qualify for vesting
+under this phase. For the duration, 74,422 shares were forfeited. All the shares under this phase have been
+unlocked.
+There were 1,703 participants in the Key Employee Share Purchase Plan for 2022. A total of 12,518,547 A
+shares of the Company were purchased in the secondary market at market prices for a total amount of
+RMB595,602,067.09 (expenses inclusive), accounting for approximately 0.068% of the Company's total share
+capital at that time. During the Reporting Period, in accordance with the Key Employee Share Purchase
+Plan and applicable agreed rules, 1,601 employees qualified and 102 employees did not qualify for vesting
+under this phase. For the duration, 764,902 shares were forfeited.
+The Long-term Service Plan
+The Company has implemented the Long-term Service Plan, which has a duration of ten years, since 2019
+as deliberated at the third meeting of the 11th Board held on October 29, 2018 and approved at the second
+extraordinary general meeting for 2018 held on December 14, 2018. Participants in the Long-term Service
+Plan are the employees of the Company and its subsidiaries, including directors, employee representative
+supervisors and senior management. The source of funding is the remunerations payable to employees. The
+amount that must be paid for each share by participants in the Long-term Service Plan is the market price
+of such share at the time of purchase by the Company. Participants in the Long-term Service Plan may
+apply for vesting only when they are retiring from the Company, and will be awarded the shares after their
+applications have been approved and relevant taxes have been paid.
+Five phases of the Long-term Service Plan were implemented as of the end of the Reporting Period:
+There were 31,026 participants in the Long-term Service Plan for 2019. A total of 54,294,720 A shares
+of the Company were purchased in the secondary market at market prices for a total amount of
+RMB4,296,112,202.60 (expenses inclusive), accounting for approximately 0.297% of the Company's total share
+capital at that time. During the Reporting Period, in accordance with the Long-term Service Plan and
+applicable agreed rules, 45 employees qualified and applied for vesting, and their shares were vested; 1,394
+employees were disqualified due to reasons including their resignation; and 3,352,871 shares were forfeited
+due to reasons including employees' resignation or failure to meet performance targets.
+There were 32,022 participants in the Long-term Service Plan for 2020. A total of 49,759,305 A shares
+of the Company were purchased in the secondary market at market prices for a total amount of
+RMB3,988,648,517.41 (expenses inclusive), accounting for approximately 0.272% of the Company's total share
+capital at that time. During the Reporting Period, in accordance with the Long-term Service Plan and
+applicable agreed rules, 28 employees qualified and applied for vesting, and their shares were vested; 1,574
+employees were disqualified due to reasons including their resignation; and 3,368,186 shares were forfeited
+due to reasons including employees' resignation or failure to meet performance targets.
+166
+There were 3,095 participants in the Key Employee Share Purchase Plan for 2023. A total of 15,030,180 A
+shares of the Company were purchased in the secondary market at market prices for a total amount of
+RMB693,562,104.08 (expenses inclusive), accounting for approximately 0.082% of the Company's total share
+capital at that time. For details of the share purchase, please refer to the Announcement Regarding
+the Completion of Share Purchase under the 2023 Key Employee Share Purchase Scheme published by
+the Company on the websites of the Hong Kong Exchanges and Clearing Limited (the "HKEX") and
+the Shanghai Stock Exchange (the "SSE") on March 24, 2023 and March 25, 2023 respectively. During the
+Reporting Period, no change was made in equity under the Key Employee Share Purchase Plan for 2023.
+The manager of the Key Employee Share Purchase Plan remained unchanged during the Reporting Period.
+The Key Employee Share Purchase Plan held a total of 25,391,496 A shares of the Company as at the end of
+the Reporting Period, accounting for approximately 0.139% of the Company's total share capital.
+Nine phases of the Key Employee Share Purchase Plan were implemented as of the end of the Reporting
+Period. Shares under each phase are subject to a one-year lock-up period after the purchase. After the
+lock-up period expires, one third of the shares for each phase are unlocked each year and vested in phases
+in accordance with the Key Employee Share Purchase Plan. All the shares under the five phases for 2015-
+2019 were unlocked, and the four phases for 2020-2023 were implemented as follows:
+The Company has implemented the Key Employee Share Purchase Plan, which has a duration of six years,
+since 2015 as deliberated at the 16th meeting of the ninth Board held on October 28, 2014 and approved at
+the first extraordinary general meeting for 2015 held on February 5, 2015. The duration of the Key Employee
+Share Purchase Plan has been extended by six years to February 4, 2027 as deliberated at the 13th meeting
+of the 11th Board held on April 23, 2020. Participants in the Key Employee Share Purchase Plan are key
+employees of the Company and its subsidiaries, including directors, employee representative supervisors
+and senior management. The sources of funding are the employees' legitimate incomes and performance
+bonuses. The amount that must be paid for each share by participants in the Key Employee Share Purchase
+Plan is the market price of such share at the time of purchase by the Company.
+Key Employee Share Purchase Plan
+On July 5, 2021, the Company announced that the Restructuring Plan (Draft) of Five Companies
+Including Peking University Founder Group Company Limited, which was formulated on the basis of the
+Restructuring Investment Agreement, was resolved and approved at the creditors' meeting held by the
+Restructuring Entities, and was approved by the civil order of the First Intermediate People's Court of
+Beijing Municipality and came into effect on June 28, 2021.
+On January 31, 2022, the Company announced that Ping An Life received the Approval of Ping An Life
+Insurance Company of China, Ltd.'s Equity Investment in New Founder Group from the CBIRC (Yin Bao
+Jian Fu [2022] No.81) on January 30, 2022, and the CBIRC approved Ping An Life's investment in New
+Founder Group. Ping An Life had fulfilled the fundamental condition for participating in the Founder
+Group Restructuring, and would actively carry forward relevant subsequent work as agreed under the
+Restructuring Investment Agreement and the restructuring plan of the Founder Group Restructuring with
+relevant parties.
+On June 24, 2022, the Company announced that, affected by multiple factors, the restructuring plan of
+the Founder Group Restructuring could not be completed within 12 months as originally scheduled.
+In response to the Restructuring Entities' application, the First Intermediate People's Court of Beijing
+Municipality approved an extension of the execution period of the restructuring plan of the Founder Group
+Restructuring to December 28, 2022 in accordance with laws. Ping An Life would actively carry forward
+relevant subsequent work as agreed under the Restructuring Investment Agreement and the restructuring
+plan of the Founder Group Restructuring with relevant parties.
+On December 20, 2022, the Company announced that New Founder Group had completed corresponding
+change of business registration procedures. Accordingly, New Founder Group's shareholding structure had
+been changed so that New Founder Group is held as to 66.51% and 28.50% by Ping An Life and Huafa Group
+(representing the state-owned enterprises of Zhuhai Municipality) through their shareholding platforms
+respectively, and a 4.99% equity interest in New Founder Group is held by the equity interest platform of
+Founder Group's creditors.
+For more information, please refer to the announcements published by the Company on the websites of
+SSE (www.sse.com.cn) and HKEX (www.hkexnews.hk).
+MAJOR SUBSIDIARIES AND ASSOCIATES OF THE COMPANY
+The Company's major subsidiaries and associates are detailed in Note 4.(1) and Note 29 to the financial
+statements respectively.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+STRUCTURED ENTITIES CONTROLLED BY THE COMPANY
+Structured entities controlled by the Company are detailed in Note 4.(2) to the financial statements.
+CONNECTED TRANSACTIONS
+In respect of connected transactions and continuing connected transactions, the Company has complied
+with requirements under the SEHK Listing Rules as amended from time to time. During the Reporting
+Period, the Company had no connected transaction that shall be disclosed under the SEHK Listing Rules.
+The Company's related party transactions stated in accordance with the accounting standards used in the
+preparation of financial statements for the year ended December 31, 2023 are presented in Note 56 to the
+financial statements.
+IMPLEMENTATION OF SHARE PURCHASE PLANS OF THE COMPANY
+To align the interests of shareholders, the Company and employees, improve corporate governance, and
+establish and improve long-term incentive and restraint mechanisms, the Company has adopted the Key
+Employee Share Purchase Plan and the Long-term Service Plan. Total shares cumulatively held by the Key
+Employee Share Purchase Plan and the Long-term Service Plan do not exceed 10% of the Company's total
+share capital. Total shares corresponding to the equity interest cumulatively vested in a single employee
+of the Company through the Key Employee Share Purchase Plan and the Long-term Service Plan do not
+exceed 1% of the Company's total share capital.
+Based on the information that is publicly available to the Company and within the knowledge of the
+Directors as at the latest practicable date prior to the issue of this Report, being March 21, 2024, at all times
+during the year ended December 31, 2023, not less than 20% of the Company's issued share capital (being
+the minimum public float applicable to the Company's shares) was held in public hands.
+SUFFICIENCY OF PUBLIC FLOAT
+Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed
+securities from January 1, 2023 to December 31, 2023.
+PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY
+NUMBER OF EMPLOYEES BY PROFESSION AND EDUCATIONAL BACKGROUND
+As of December 31, 2023, the Company had 288,751 current employees, of whom 237,019 were in the parent
+company and major subsidiaries, as well as 482 retired employees for whom the parent company and major
+subsidiaries needed to bear costs. By profession, 151,484 of the current employees were in the insurance
+business, 43,119 in the banking business, 18,833 in the asset management business, 55,429 in the technology
+business, and 19,886 in other businesses. By education, 28,635 of the current employees held a doctorate or
+master's degree, 170,835 held a bachelor's degree, 75,432 attained college education, and 13,849 had other
+educational backgrounds. By gender, 141,343 employees were male and 147,408 female.
+By profession
+● Insurance personnel 52.5%
+Banking personnel 14.9%
+By education
+Doctorate or master's degree 9.9%
+Bachelor's degree 59.2%
+•College education 26.1%
+Others 4.8%
+Ping An Insurance (Group) Company of China, Ltd.
+STAFF TRAINING PROGRAMS
+From the perspective of Ping An and its employees, Training Center clarified learning needs under different
+scenarios, improved the training course system, and strengthened lecturer teams in 2023 to provide
+employees with sustained and sufficient training resources via face-to-face lectures, livestreaming, thematic
+training camps and so on. Training Center continued to develop high-quality course resources, and
+provided approximately 67,400 internal and external high-quality online courses as of December 31, 2023. The
+courses were attended by over 40.41 million trainees in 2023, with a monthly activity rate up to 98%. A total
+of approximately 98,100 trainees attended 939 face-to-face and livestreamed training sessions across the
+country. Moreover, Training Center organized special training camps focused on innovation and growth in
+search of new growth curves, covering 160 senior managers.
+Under the philosophy of "Knowledge Creates Value," Training Center continued to innovate and upgrade its
+training system in an all-around and systematic manner. Training Center explored and created a “learning
+passport" model, and established a "compulsory courses + optional courses" learning points framework
+to enhance employees' learning planning, linking learning results to career development. In this way, Ping
+An effectively motivates all its employees to learn, enhances the organizational learning atmosphere, and
+develops itself as a learning organization. Ping An creates an online "learning points passport" for each
+employee to record and manage his/her acquisition and use of learning points. Moreover, Ping An makes
+full use of technologies to manage learning points more intelligently, provide greater convenience for users,
+and boost training efficiency.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+159
+CORPORATE GOVERNANCE
+Ping An (Shenzhen) Financial Education and Training Center ("Training Center”) supports the Group's
+strategy and provides the best training by continuously diversifying high-quality course resources,
+optimizing the smart learning platform, and covering all learning scenarios to support employees'
+continuous and efficient learning and development. Training Center works with the Group's member
+companies to provide employees with all-around training, boosting the value of both employees and the
+Company.
+Annual Report 2023
+(2) Parts of the performance-based remunerations of the Company's senior management will be deferred and paid over a period
+of 3 years in accordance with the Code of Corporate Governance of Banking and Insurance Institutions and the Guidelines for
+Insurance Companies' Remuneration Management (Trial) issued by the CBIRC. The deferred, unpaid parts are included in the
+total remunerations received by the Company's senior management from the Company during the Reporting Period.
+(3) The final remunerations of the Company's full-time Directors, Supervisors and senior management are being recognized, and
+will be disclosed after recognition in accordance with applicable rules.
+Notes: (1) The remunerations of Directors, Supervisors and senior management are calculated based on their respective periods in office
+during the Reporting Period.
+No
+243.8
+65.6
+No
+547.8
+142.2
+No
+Liew Fui Kiang
+Hung Ka Hai Clement
+547.6
+142.4
+No
+547.6
+142.4
+Yes
+Report of the Board of Directors
+and Significant Events
+Change in the Number of Shares Held in Associated Corporations of the Company
+PRINCIPAL ACTIVITIES
+MAJOR CUSTOMERS
+Ping An Insurance (Group) Company of China, Ltd.
+161
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+and Significant Events
+The above plan will be implemented upon deliberation and approval at the 2023 Annual General Meeting.
+The profit distribution plan is in line with the Articles of Association and the applicable deliberation
+procedures. The Company's full-year cash dividend payout ratio for 2023 based on net profit attributable to
+shareholders of the parent company exceeds the range (in principle, 20%-40% of net profit attributable to
+shareholders of the parent company for the corresponding year) specified in its profit distribution plan for
+2021-2023. However, the Company maintains the continuity and stability of its profit distribution policy, and
+fully protects the legitimate interests of all its shareholders including minority shareholders.
+For dividend payouts of the Company over the past five years, please refer to the section headed "Liquidity
+and Capital Resources."
+Annual Report 2023
+DISTRIBUTABLE RESERVES
+SHARE CAPITAL
+Changes in the Company's share capital in 2023 and the Company's share capital structure as of December
+31, 2023 are set out in the section headed "Changes in the Share Capital and Shareholders' Profile."
+PROPERTY AND EQUIPMENT AND INVESTMENT PROPERTIES
+Changes in the Group's property and equipment and investment properties during 2023 are detailed in
+Notes 32 and 31 to the financial statements respectively.
+PRE-EMPTIVE RIGHTS
+There is no provision regarding pre-emptive rights under the Company Law of the People's Republic of
+China or the Articles of Association, which would oblige the Company to issue new shares to its existing
+shareholders in proportion to their existing shareholdings.
+As of December 31, 2023, the Company's distributable reserves totaled RMB137,648 million. The Company has
+proposed to distribute the 2023 final dividend of RMB1.50 per share (tax inclusive) in cash. After deduction
+of the 2023 final dividend, the remaining distributable reserves will be carried forward to 2024. Moreover, the
+Company's capital reserve and surplus reserve amounted to RMB134,976 million, which can be distributed in
+a future capital issue.
+The Company distributed the 2023 interim dividend of RMB0.93 per share (tax inclusive) in cash, which
+amounted to RMB16,840,107,055.35 (tax inclusive). The Board of Directors proposed to distribute the 2023
+final dividend of RMB1.50 per share (tax inclusive) in cash to the Company's shareholders. Pursuant to the
+Shanghai Stock Exchange's Guidelines for Self-regulation of Listed Companies No.7 - Repurchase of Shares
+and other applicable regulations, the Company's A shares in the Company's repurchased securities account
+after trading hours on the record date of A shareholders for the final dividend will not be entitled to the
+final dividend distribution. The actual total amount of the final dividend payment is subject to the total
+number of shares that will be entitled to the dividend distribution on the record date of A shareholders.
+The total amount of the final dividend payment for 2023 is RMB27,161,462,992.50 (tax inclusive) based on the
+total share capital of 18,210,234,607 shares less the 102,592,612 A shares of the Company in the repurchased
+securities account as of December 31, 2023. The final dividend payment will have no material impact on the
+Group's solvency margin ratios. After the final dividend payment, the Group's solvency margin ratios will
+still meet the applicable regulatory requirements. The Company's remaining undistributed profit will be
+carried forward to 2024. The Company's undistributed profit is mainly for the purpose of its organic capital
+accumulation to maintain reasonable solvency margin ratios as well as provide funding for subsidiaries
+to support subsidiaries' business development for stable shareholder returns and maintain subsidiaries'
+solvency margin or capital adequacy ratios at reasonable levels.
+As stated in the Group's 2023 audited consolidated financial statements prepared under CAS and IFRS
+respectively, the net profit attributable to shareholders of the parent company was RMB85,665 million and
+the net profit of the parent company was RMB52,755 million. Pursuant to the Articles of Association and
+other applicable requirements, the Company shall make an appropriation to the statutory surplus reserve
+based on 10% of the net profit of the parent company as shown in the financial statements under CAS
+before determining the profit available for distribution to shareholders. Appropriation to the statutory
+surplus reserve may cease to apply if the balance of the statutory surplus reserve has reached 50% or more
+of the Company's registered capital. After making the above profit distribution and carrying forward the
+retained profit from the previous year, in accordance with the Articles of Association and other applicable
+requirements, the profit available for distribution to the Company's shareholders based on undistributed
+profit in the parent company's financial statements under CAS or IFRS (whichever is lower) was RMB137,648
+million.
+The Group's business results for 2023 are set out in the section headed "FINANCIAL STATEMENTS."
+Revenue from the Group's five largest customers accounted for less than 1% of the total revenue for 2023.
+IMPLEMENTATION OF CASH DIVIDEND POLICY AND PROFIT DISTRIBUTION PLANS DURING THE
+REPORTING PERIOD
+Cash Dividend Policy
+According to Article 216 of the Articles of Association, the Company shall attach importance to the
+reasonable investment returns for investors in its profit distribution. The profit distribution policy shall
+maintain its continuity and stability. The accumulated profit to be distributed in cash for the recent three
+years shall not be less than 30% of the average annual distributable profit realized in the recent three
+years, provided that the Company's annual distributable profit (namely the Company's profit after tax
+after covering the losses and making contributions to the surplus reserve) is positive in value and such
+distribution is in compliance with the prevailing laws and regulations and the requirements of regulatory
+authorities for solvency margin ratios. In determining a specific cash dividend payout ratio, the Company
+shall consider its profit, cash flow, solvency, and operational and business development requirements. The
+Board of Directors is responsible for formulating and implementing a distribution plan in accordance with
+the provisions of the Articles of Association.
+In preparing a profit distribution plan, the Board of Directors shall fully listen to and take into account
+views and advice from shareholders (in particular the minority shareholders), independent directors, and
+independent supervisors in various ways. When a specific cash dividend distribution plan is put forward for
+consideration at a general meeting, a variety of channels shall be provided for communication and opinion
+exchange with shareholders, in particular the minority shareholders, whose opinions and demands shall be
+fully heard, and prompt responses shall be given to any issues the minority shareholders are concerned
+about.
+Where an adjustment to our profit distribution policy is required due to the applicable laws and regulations
+and new rules promulgated by the CSRC regarding listed companies' profit distribution policies or
+significant changes in the Company's external business environment and/or operating situations, the
+adjustment shall be done for the purpose of safeguarding the shareholders' interests and in strict
+compliance with the decision-making procedures. To this end, the Board of Directors shall draft an
+adjustment plan based on the operating situations of the Company and the applicable regulations of the
+CSRC, and then submit the adjustment plan to the general meeting for deliberation. Implementation of the
+adjustment plan is conditional upon approval by shareholders (including their proxies) holding at least two
+thirds of voting rights present at the general meeting.
+160
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Implementation of Profit Distribution Plans
+The Company's 2022 profit distribution plan was deliberated and approved at the 2022 Annual General
+Meeting, pursuant to which the Company paid in cash the 2022 final dividend of RMB1.50 per share (tax
+inclusive), totaling RMB27,161,462,992.50 (tax inclusive) based on 18,107,641,995 shares, the actual number
+of shares entitled to the dividend distribution (exclusive of the Company's A shares in the repurchased
+securities account).
+The Company's 2023 interim profit distribution plan was deliberated and approved at the 17th meeting of
+the 12th session of the Board of Directors held on August 29, 2023, pursuant to which the Company paid
+in cash the 2023 interim dividend of RMB0.93 per share (tax inclusive), totaling RMB16,840,107,055.35 (tax
+inclusive) based on 18,107,641,995 shares, the actual number of shares entitled to the dividend distribution
+(exclusive of the Company's A shares in the repurchased securities account).
+The decision-making procedure and mechanism of the above profit distribution plans were complete, and
+the dividend payout standards and ratios were clear. The above profit distribution plans were in line with
+the Articles of Association and the applicable deliberation procedures, which fully protected the minority
+shareholders' legitimate interests. The above profit distribution plans have been implemented.
+ANNUAL RESULTS AND PROFIT DISTRIBUTION
+The principal activities of the Company and its subsidiaries (the “Group") comprise the provision of a
+wide range of financial products and services with a focus on the businesses of insurance, banking, asset
+management, and technology. There was no significant change in the nature of the Group's principal
+activities during 2023.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+H/A
+Long position
+(3)
+Cash settled
+Unlisted derivatives -
+Physically settled
+Unlisted derivatives -
+17,644,233
+676,214
+66,750
+11,100
+71,000
+597,500
+Number of H shares
+Short position
+Long position
+Short position
+Long position
+Short position
+Long position
+Nature of interest
+Convertible instruments
+Short position
+Long position
+Short position
+410,481,371
+Unlisted derivatives -
+Short position
+Physically settled
+Long position
+Unlisted derivatives -
+Short position
+Cash settled
+Long position
+Listed derivatives -
+31,993,000
+46,968,500
+Listed derivatives -
+Number of H shares
+Long position
+Nature of interest
+Physically settled
+Listed derivatives -
+Derivatives
+The entire interests and short positions of JPMorgan Chase & Co. in the Company included a lending pool of 230,152,823 H
+shares (long position). In addition, 94,815,360 H shares (long position) and 120,347,960 H shares (short position) were held
+through derivatives as follows:
+According to the disclosure form filed by JPMorgan Chase & Co. on December 28, 2023, JPMorgan Chase & Co. was deemed
+to be interested in a total of 461,835,283 H shares (long position) and 147,470,198 H shares (short position) of the Company by
+virtue of its controlled corporations.
+130,391,836
+51,069,194
+198,496,171
+Short position
+Long position
+Cash settled
+Physically settled
+401,713,391 Long position
+S
+corporations
+Interest of controlled
+H
+BlackRock, Inc.
+corporations
+0.16
+0.40
+Short position
+30,529,269
+(4)
+Interest of controlled
+2.20
+5.38
+401,101,481
+(4)
+Total:
+1.93
+4.73
+352,841,906 Lending pool
+5.39
+2.20
+Interest of controlled
+(5)
+Listed derivatives -
+Derivatives
+The entire interests and short positions of UBS Group AG in the Company included 462,835,379 H shares (long position) and
+346,669,990 H shares (short position) held through derivatives as follows:
+(2) According to the disclosure form filed by UBS Group AG on January 4, 2024, UBS Group AG was deemed to be interested in a
+total of 711,184,930 H shares (long position) and 520,441,099 H shares (short position) of the Company by virtue of its controlled
+corporations.
+Notes: (1) According to the disclosure form filed by CP Group Ltd. on May 30, 2023, CP Group Ltd. was deemed to be interested in a total
+of 1,114,859,403 H shares (long position) of the Company by virtue of its control over several wholly-owned corporations. As of
+December 31, 2023, CP Group Ltd. indirectly held 1,063,597,013 H shares (long position) of the Company in total, representing
+5.84% of the Company's total share capital.
+Report of the Board of Directors
+and Significant Events
+CORPORATE GOVERNANCE
+173
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Listed derivatives -
+5.29
+Long position
+962,719,102
+Beneficial owner
+A
+Shenzhen Investment
+Holdings Co., Ltd.
+corporations
+0.00
+0.00
+Short position
+591,000
+8.94
+Cash settled
+Short position
+Listed derivatives -
+Employee Representative Supervisors
+Sun Jianyi (Chairman)
+Wang Zhiliang
+Independent Supervisors
+Zhu Xinrong
+Liew Fui Kiang
+Hung Ka Hai Clement
+August 28, 2020
+August 6, 2017
+July 18, 2022
+July 18, 2022
+July 18, 2022
+Nature of interest
+1/1
+1/1
+==
+6/6
+6/6
+ミミ
+1/1
+6/6
+Members
+Supervisory
+Committee Meetings
+General Meetings
+Meetings attended in person/
+Meetings required to attend
+Long position
+Short position
+Number of H shares
+3,857,500
+591,000
+As figures for the percentage of H shares held have been rounded down to the nearest second decimal place, they may not
+add up to the totals. The percentage figures are based on the number of shares of the Company as of December 31, 2023.
+Save as disclosed above, to the best knowledge of the Directors and Supervisors, as of December 31, 2023,
+no person (other than the Company's Directors, Supervisors and chief executives) had any interest or short
+position in the Company's shares or underlying shares which shall be disclosed to the Company pursuant
+to the provisions of Divisions 2 and 3 of Part XV of the SFO or recorded in the register required to be kept
+under Section 336 of the SFO.
+By order of the Board of Directors
+Ma Mingzhe
+Chairman
+Shenzhen, PRC
+1/1
+March 21, 2024
+Ping An Insurance (Group) Company of China, Ltd.
+175
+CORPORATE GOVERNANCE
+Report of the Supervisory
+Committee
+During the Reporting Period, all the members of the Supervisory Committee duly carried out their
+supervisory duties in a stringent manner and adhered to the principle of good faith to effectively protect
+the rights and interests of the shareholders, the Company and its employees in accordance with the
+Company Law of the People's Republic of China and the Articles of Association.
+ATTENDANCE RECORD OF SUPERVISORS
+During the Reporting Period, the Supervisors attended one General Meeting and six Supervisory Committee
+meetings in person, and sat in on Board meetings held by the Company. The Supervisors devoted sufficient
+time and energy to the supervision work, and attached importance to professional learning and experience
+summarization to further improve their ability to perform duties. The Supervisors had no objection to the
+matters under supervision.
+The attendance records of each Supervisor at the meetings are as follows:
+Date of
+Appointment
+as Supervisors
+Annual Report 2023
+6/6
+1/1
+6/6
+Unlisted derivatives -
+Physically settled
+Unlisted derivatives -
+Convertible instruments
+Listed derivatives -
+Physically settled
+Listed derivatives -
+Derivatives
+The entire interests and short positions of Citigroup Inc. in the Company included a lending pool of 352,841,906 H shares (long
+position). In addition, 8,549,090 H shares (long position) and 27,017,772 H shares (short position) were held through derivatives
+as follows:
+According to the disclosure form filed by Citigroup Inc. on November 23, 2023, Citigroup Inc. was deemed to be interested in a
+total of 401,101,481 H shares (long position) and 30,529,269 H shares (short position) of the Company by virtue of its controlled
+corporations.
+Nature of interest
+(4)
+1,713,759
+37,854,277
+6,313,867
+21,498,633
+54,704,734
+90,000
+14,026,550
+Annual Report 2023
+174
+Convertible instruments
+Long position
+Ping An Insurance (Group) Company of China, Ltd.
+(4)
+Long position
+Long position
+INSPECTIONS AND REVIEWS AT BRANCHES OF SUBSIDIARIES
+In September 2023, certain members of the Supervisory Committee conducted on-site inspections and
+reviews at branches of subsidiaries including Ping An Bank, Ping An Life, Ping An Property & Casualty
+and Ping An Annuity in Lanzhou and Xi'an. Opinions collected from employees were consolidated and an
+investigation report was submitted to the Company's management. The management paid high attention to
+relevant issues, tackled each of them, and submitted a feedback report to all the Directors and Supervisors.
+176
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Unlisted derivatives -
+Derivatives
+(6)
+The entire interests and short positions of BlackRock, Inc. in the Company included 3,857,500 H shares (long position) and
+591,000 H shares (short position) held through derivatives as follows:
+According to the disclosure form filed by BlackRock, Inc. on December 23, 2023, BlackRock, Inc. was deemed to be interested
+in a total of 401,713,391 H shares (long position) and 591,000 H shares (short position) of the Company by virtue of its
+controlled corporations.
+Short position
+9,288,195
+(5)
+2,051,683
+996,575
+15,836,077
+58,590
+1,893,500
+5,442,242
+Number of H shares
+Long position
+Short position
+Short position
+Long position
+Cash settled
+substantial shareholder
+Approved lending agent
+0.26
+Ping An Insurance (Group) Company of China, Ltd.
+Entrustment, Underwriting, Lease, Entrusted Asset Management, Entrusted Lending and Other Material
+Contracts
+During the Reporting Period, the Company had no matter relating to entrustment, underwriting, lease or
+other material contracts that shall be disclosed.
+The Company engaged in no entrusted asset management or entrusted lending outside its ordinary
+business scope during the Reporting Period. For details of the Company's entrusted asset management and
+entrusted lending, refer to the "Notes to Consolidated Financial Statements."
+INFORMATION OF TAX DEDUCTION FOR HOLDERS OF LISTED SECURITIES
+Enterprise Income Tax of Overseas Non-Resident Enterprise Shareholders
+Pursuant to the tax laws and regulations of the Chinese mainland, the Company is required to withhold
+10% enterprise income tax when it distributes dividends to non-resident enterprise holders of H shares as
+listed on the Company's register of members on the record date, including Hong Kong Securities Clearing
+Company Nominees Limited.
+If any resident enterprise (as defined in the Enterprise Income Tax Law of the People's Republic of China)
+listed on the Company's register of members of H shares on the record date which is duly incorporated in
+the Chinese mainland or under the laws of an overseas country (or region) but with a Chinese mainland-
+based de facto management body does not want the Company to withhold the said enterprise income
+tax, it shall submit to Computershare Hong Kong Investor Services Limited a legal opinion, at or before
+4:30 p.m. one business day before closure of register of the H shareholders for the dividend, issued by a
+lawyer qualified to practice law in the Chinese mainland and inscribed with the seal of the applicable law
+firm, that verifies its resident enterprise status. The legal opinion shall be submitted by the Company to
+the applicable tax authorities for approval, and then excess portions of the tax amounts withheld can be
+refunded.
+Individual Income Tax of Overseas Individual Shareholders
+Pursuant to the applicable tax laws and regulations of the Chinese mainland, the individual resident
+shareholders outside the Chinese mainland shall pay individual income tax upon their receipt of the
+distributed dividends in respect of the shares issued by domestic non-foreign investment enterprises in
+Hong Kong, which shall be withheld by the Company on behalf of such individual shareholders at the
+tax rate of 10% in general. However, if the tax laws and regulations and relevant tax agreements state
+otherwise, the Company will withhold and pay the individual income tax based on the amount of the
+dividend at the relevant tax rate and in accordance with the procedures as stipulated.
+Those individual resident shareholders outside the Chinese mainland who hold the shares issued by
+domestic non-foreign investment enterprises in Hong Kong may enjoy preferential treatments (if any) in
+accordance with the provisions of applicable tax agreements signed between the countries or regions
+where they belong by virtue of residential identification and the People's Republic of China as well as the
+tax arrangements made between the Chinese mainland and Hong Kong (Macao). Qualified shareholders
+are required to submit to Computershare Hong Kong Investor Services Limited a written authorization and
+relevant evidencing documents, at or before 4:30 p.m. one business day before closure of register of the H
+shareholders for the dividend, which shall be submitted by the Company to the applicable tax authorities
+for approval, and then excess portions of the tax amounts withheld can be refunded.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+169
+CORPORATE GOVERNANCE
+Report of the Board of
+of 
+Directors
+and Significant Events
+shares
+Income Tax of H Shareholders via the Hong Kong Stock Connect Program
+For the Chinese mainland investors (including enterprises and individuals) investing in the Company's H
+shares via the Hong Kong Stock Connect Program, China Securities Depository and Clearing Corporation
+Limited, as the nominee holding H shares for investors via the Hong Kong Stock Connect Program, will
+receive the dividend distributed by the Company and distribute such dividend to the relevant investors
+through its depositary and clearing system. The dividend to be distributed to the investors via the Hong
+Kong Stock Connect Program will be paid in RMB. Pursuant to the applicable tax laws and regulations of
+the Chinese mainland:
+•
+For the Chinese mainland individual investors who invest in the Company's H shares via the Hong
+Kong Stock Connect Program, the Company will withhold individual income tax at the rate of 20%
+in the distribution of the dividend. Individual investors may, by producing valid tax payment proofs,
+apply to the competent tax authority of China Securities Depository and Clearing Corporation Limited
+for tax refund relating to the withholding tax already paid abroad.
+For the Chinese mainland securities investment funds that invest in the Company's H shares via
+the Hong Kong Stock Connect Program, the Company will withhold individual income tax in the
+distribution of the dividend pursuant to the above provisions.
+Annual Report 2023
+The Company fulfilled its obligation to disclose information on external guarantee and honestly
+provided chartered accountants with all the details about the Company's external guarantee in strict
+accordance with the SSE Listing Rules and the Articles of Association during the Reporting Period.
+The Company strictly observed the approval procedures and internal control policies regarding
+external guarantee as set out in the Articles of Association, and there was no non-compliant external
+guarantee during the Reporting Period;
+The total guarantee withdrawal provided by the Company and its subsidiaries during the Reporting
+Period amounted to RMB4,191 million. The total guarantee balance of the Company and its subsidiaries
+was RMB8,762 million as of December 31, 2023, representing 1.0% of the Company's net assets. The
+balance did not exceed 50% of the Company's net assets as stated in its consolidated financial
+statements for the latest fiscal year;
+Total external guarantee incurred during the Reporting Period
+Total external guarantee balance as at the end of the Reporting Period
+Guarantee of the Company and its subsidiaries in favor of its subsidiaries
+Total guarantee in favor of its subsidiaries incurred during the Reporting Period
+Total guarantee balance in favor of its subsidiaries as at the end of the Reporting Period
+(5,474)
+8,762
+Total guarantee
+Total guarantee as a percentage of the Company's net assets (%)
+Total guarantee of the Company (including the guarantee in favor of its subsidiaries)
+8,762
+For the Chinese mainland enterprise investors that invest in the Company's H shares via the Hong
+Kong Stock Connect Program, the Company will not withhold income tax in the distribution of the
+dividend, and such investors shall declare and pay the tax on their own.
+1.0
+8,194
+The amount by which the total guarantee balance of the Company and its
+subsidiaries exceeded 50% of the Company's net assets
+Notes: (1) The data set out in the table above does not include those arising from financial guarantee businesses conducted by the
+Company's controlled subsidiaries including Ping An Bank in strict compliance with the scope of business approved by
+regulatory authorities.
+(2) The total guarantee incurred during the Reporting Period was the guarantee withdrawal of RMB4,191 million less the guarantee
+repayment of RMB9,665 million.
+Specific Statements of Independent Non-Executive Directors on External Guarantees of the Company
+According to the Guidelines for Supervision of Listed Companies No.8-Regulatory Requirements for Fund
+Transactions and External Guarantees of Listed Companies issued by the CSRC, the Independent Non-
+executive Directors of the Company conducted a prudent review of the Company's external guarantees in
+2023. Their specific statements are set out as follows:
+1.
+2.
+3.
+4.
+The Company provided no guarantee to any controlling shareholder or other related parties in which
+the Company holds less than 50% shares, any non-legal-person entities, or individuals during the
+Reporting Period;
+Including: Direct or indirect guarantee for the companies with a total liabilities to total
+assets ratio over 70% (as of December 31, 2023)
+External guarantee of the Company and its subsidiaries
+(excluding the guarantee in favor of its subsidiaries)
+Income Tax of A Shareholders via the Shanghai Stock Connect Program
+For investors via the Shanghai Stock Connect Program who are tax residents of other countries or regions
+(excluding Hong Kong) which have entered into a tax treaty with the Chinese mainland stipulating a
+dividend tax rate of less than 10%, those enterprises or individuals may, or may appoint a withholding agent
+to, apply to the competent tax authorities of the Company for the entitlement to the rate under such tax
+treaty. Upon approval by the tax authorities, the paid amount in excess of the tax payable based on the tax
+rate under such tax treaty will be refunded.
+MATERIAL LITIGATION AND ARBITRATION
+During the Reporting Period, the Company had no material litigation or arbitration that shall be disclosed.
+PENALTIES AND RECTIFICATION
+During the Reporting Period, neither the Company nor its Directors, Supervisors or senior management
+were investigated or subjected to coercive measures by competent authorities, detained by disciplinary
+inspection and supervisory authorities, transferred to judicial authorities or held accountable for criminal
+liabilities, investigated or subjected to administrative punishment by the CSRC, subjected to major
+administrative punishment by other competent authorities, or subjected to disciplinary action by any
+securities exchanges.
+FULFILLMENT OF UNDERTAKINGS
+Undertakings in Respect of the Major Asset Restructuring with Shenzhen Development Bank
+(1) The Company undertakes that, after the completion of the major asset restructuring with Shenzhen
+Development Bank, and during the period when the Company remains as the controlling shareholder
+of Shenzhen Development Bank, and in respect of the businesses or commercial opportunities similar
+to those of Shenzhen Development Bank that the Company and other enterprises under its control
+intend to carry out or have substantially obtained whereby assets and businesses arising from
+such businesses or commercial opportunities may possibly form potential competition with those
+of Shenzhen Development Bank, neither the Company nor other enterprises under its control shall
+engage in the businesses identical or similar to those carried out by Shenzhen Development Bank, so
+as to avoid direct or indirect competition with Shenzhen Development Bank's operations.
+(2) The Company undertakes that, after the completion of the major asset restructuring with Shenzhen
+Development Bank, and in respect of transactions between the Company and other enterprises under
+its control and Shenzhen Development Bank which constitute related party transactions of Shenzhen
+Development Bank, the Company and other enterprises under its control shall enter into such
+transactions with Shenzhen Development Bank on the principles of openness, fairness and justness
+at fair and reasonable market prices, shall go through the decision-making process in accordance
+with applicable laws, regulations and regulatory documents, and shall perform their obligations of
+information disclosure as required by law. The Company undertakes that neither the Company nor
+other enterprises under its control shall procure any illegal interests or make Shenzhen Development
+Bank undertake any illicit obligations through transactions with Shenzhen Development Bank.
+(3) The Company undertakes that, after the completion of the major asset restructuring and during the
+period when the Company remains as the controlling shareholder of Shenzhen Development Bank,
+the Company shall maintain Shenzhen Development Bank's independence and ensure that Shenzhen
+Development Bank is independent from the Company and other enterprises under its control in
+respect of personnel, assets, finance, organization and business.
+As of December 31, 2023, the above undertakings were still being performed and there was no breach of the
+above undertakings.
+172
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN SHARES
+AND UNDERLYING SHARES OF THE COMPANY
+As far as is known to any Directors or Supervisors of the Company, as of December 31, 2023, the following
+persons (other than the Company's Directors, Supervisors and chief executives) had interests or short
+positions in the Company's shares and underlying shares which shall be disclosed to the Company pursuant
+to the provisions of Divisions 2 and 3 of Part XV of the SFO or recorded in the register required to be kept
+under Section 336 of the SFO:
+Percentage
+of total
+number of
+H/A shares
+Percentage
+of total
+shares
+Name of
+During the Reporting Period, the Group maintained compliance with applicable laws and regulations that
+have significant impacts on the Group's operations.
+COMPLIANCE WITH LAWS AND REGULATIONS
+Report of the Board of Directors
+and Significant Events
+CORPORATE GOVERNANCE
+All investors are requested to read this part carefully. Shareholders are recommended to consult their tax
+advisers on tax effects in the Chinese mainland, Hong Kong and other countries and regions regarding the
+holding and disposal of the Company's shares.
+170
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+ENVIRONMENTAL PROTECTION
+The Company is not a key pollutant discharging unit announced by the environmental protection
+department. For more information on environmental protection, please refer to the Company's 2023
+Sustainability Report.
+No administrative penalty was imposed on the Company due to environmental problems during the
+Reporting Period.
+CHARITABLE AND OTHER DONATIONS
+Charitable donations made by the Group in 2023 totaled RMB318 million.
+SEIZURE, DISTRAINMENT OR FREEZE OF MAJOR ASSETS
+For Hong Kong investors (including enterprises and individuals) investing in the Company's A shares
+via the Shanghai Stock Connect Program, pursuant to the applicable tax laws and regulations of the
+Chinese mainland, the dividend will be paid in RMB by the Company through the Shanghai Branch of
+China Securities Depository and Clearing Corporation Limited to Hong Kong Securities Clearing Company
+Limited, and the Company will withhold income tax at the rate of 10%.
+During the Reporting Period, the Company had no event of seizure, distrainment or freeze of major assets
+that shall be disclosed.
+The Company had neither failure to abide by any effective judicial ruling, nor default on any substantial
+debt due during the Reporting Period.
+RELATIONSHIPS WITH CUSTOMERS
+The Group aims to provide customers with "worry-free, time-saving, and money-saving" premium financial
+services. Adhering to a "customer-centric" business philosophy, the Group has embedded consumer rights
+protection in its corporate governance, corporate culture and development strategy.
+As required by the NFRA, the Group has set up the Related Party Transaction Control and Consumer Rights
+Protection Committee under the Board of Directors. The Related Party Transaction Control and Consumer
+Rights Protection Committee oversees the protection of consumer rights, determines the responsibilities
+for consumer rights protection, improves the consumer rights protection framework, strengthens the
+implementation and oversight of decisions on consumer rights protection, conducts front-line supervision
+and examination of consumer protection and complaint handling, promotes consumer protection reviews
+and evaluations, enhances the consumer rights protection culture, ensures the effective execution of
+policies and the achievement of goals for consumer rights protection, and constantly upgrades consumer
+rights protection capabilities.
+There was no material and serious dispute between the Group and its customers in 2023.
+MANAGEMENT AND CONTROL OVER SUBSIDIARIES
+The Company implemented the Measures for the Supervision and Administration of Insurance Group
+Companies and managed the Group's human resources, finance and accounting, data governance,
+information systems, fund utilization, branding, and corporate culture. The Company instructed its
+subsidiaries to establish standard corporate governance structures, and continued to improve the group-
+wide risk management, internal control, compliance and internal audit frameworks. Moreover, the Company
+organized its subsidiaries to monitor and assess the effectiveness of internal control systems in accordance
+with the Basic Norms for Internal Controls of Enterprises and the Basic Principles for Internal Controls of
+Insurers, continuously improving the Group's operational efficiency and risk prevention capability. For the
+matters covered, high-risk areas and conclusions of the internal control assessments over subsidiaries,
+please refer to the section headed “Establishment and Perfection of the Internal Control System" in this
+Report.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+171
+INTEGRITY CONDITIONS OF THE COMPANY
+(in RMB million)
+Guarantee
+MATERIAL CONTRACTS AND THEIR PERFORMANCE
+Total:
+1.26
+3.09
+Lending pool
+230,152,823
+Approved lending agent
+0.00
+0.00
+Long position
+8,412
+Trustee
+interest in shares
+0.02
+0.05
+Long position
+0.52
+1.28
+Long position.
+95,845,736
+3,836,904
+Person having a security
+Investment manager
+(3)
+461,835,283
+6.20
+2.53
+0.64
+48,259,575 Long position
+Interest of controlled
+H
+Citigroup Inc.
+0.80
+1.98
+147,470,198
+(3)
+Total:
+corporations
+0.00
+Short position
+307,992
+Investment manager
+corporations
+0.80
+1.97
+Short position
+147,162,206
+(3)
+Interest of controlled
+0.00
+0.72
+1.77
+Long position
+CP Group Ltd.
+(%)
+(%)
+in issue
+in issue
+Nature of
+interest
+Number of
+H/A shares
+Notes
+Capacity
+Annual Report 2023
+H
+There were 90,960 participants in the Long-term Service Plan for 2021. A total of 57,368,981 A shares
+of the Company were purchased in the secondary market at market prices for a total amount of
+RMB4,184,093,674.69 (expenses inclusive), accounting for approximately 0.314% of the Company's total share
+capital at that time. During the Reporting Period, in accordance with the Long-term Service Plan and
+applicable agreed rules, 19 employees qualified and applied for vesting, and their shares were vested; 7,311
+employees were disqualified due to reasons including their resignation; and 5,719,593 shares were forfeited
+due to reasons including employees' resignation or failure to meet performance targets.
+There were 83,651 participants in the Long-term Service Plan for 2023. A total of 96,608,364 A shares
+of the Company were purchased in the secondary market at market prices for a total amount of
+RMB4,450,946,615.20 (expenses inclusive), accounting for approximately 0.528% of the Company's total share
+capital at that time. For details of the share purchase, please refer to the Announcement Regarding the
+Completion of Share Purchase under the 2023 Long-term Service Plan published by the Company on the
+websites of the HKEX and the SSE on March 24, 2023 and March 25, 2023 respectively. During the Reporting
+Period, in accordance with the Long-term Service Plan and applicable agreed rules, 4 employees qualified
+and applied for vesting, and their shares were vested; 7,707 employees were disqualified due to reasons
+including their resignation, and 7,419,689 shares were forfeited due to reasons including employees'
+resignation or failure to meet performance targets.
+The manager of the Long-term Service Plan remained unchanged during the Reporting Period.
+The Long-term Service Plan held a total of 350,906,763 A shares of the Company as at the end of the
+Reporting Period, accounting for approximately 1.927% of the Company's total share capital.
+The Company has operated stably and healthily since the implementation of the Key Employee Share
+Purchase Plan and the Long-term Service Plan. The shareholders, the Company and the employees have
+shared benefits and risks, providing a strong foundation for further improving the Company's governance
+structure, establishing and strengthening long-term incentive and restraint mechanisms, and facilitating the
+Company's sustainable and healthy long-term development.
+IMPLEMENTATION OF SHARE INCENTIVE SCHEME OF THE COMPANY AND ITS EFFECTS
+The Company implemented no share incentive scheme based on the Company's shares during the
+Reporting Period.
+Ping An Insurance (Group) Company of China, Ltd.
+167
+CORPORATE GOVERNANCE
+168
+Report of the Board of Directors
+and Significant Events
+There were 90,960 participants in the Long-term Service Plan for 2022. A total of 93,314,482 A shares
+of the Company were purchased in the secondary market at market prices for a total amount of
+RMB4,438,825,366.37 (expenses inclusive), accounting for approximately 0.510% of the Company's total share
+capital at that time. During the Reporting Period, in accordance with the Long-term Service Plan and
+applicable agreed rules, 14 employees qualified and applied for vesting, and their shares were vested; 9,472
+employees were disqualified due to reasons including their resignation; and 10,996,458 shares were forfeited
+due to reasons including employees' resignation or failure to meet performance targets.
+corporations
+Interest of controlled
+corporations
+1,114,859,403
+131,991,408
+(3)
+Interest of controlled
+H
+JPMorgan Chase & Co.
+corporations
+2.85
+6.98
+Short position
+520,441,099
+(1)
+3.90
+Long position
+711,184,930
+Interest of controlled
+corporations
+Interest of controlled
+H
+UBS Group AG
+6.12
+14.96
+Long position
+9.54
+The Company will withhold the enterprise income tax and the individual income tax for shareholders as
+required by law on the basis of the Company's register of members of H shares on the record date. The
+Company assumes no liability and will not deal with any dispute over income tax withholding triggered by
+failure to submit proof materials within the stipulated time frame, and holders of the Company's H shares
+shall either personally or appoint a representative to attend to the procedures in accordance with the
+applicable tax laws and regulations of the Chinese mainland.
+Cash settled
+The Group uses a number of models and
+assumptions in the measurement of expected
+credit losses, for example:
+Conclude on the appropriateness of the directors' use of the going concern basis of accounting and,
+based on the audit evidence obtained, whether a material uncertainty exists related to events or
+conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we
+conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
+the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
+to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
+auditor's report. However, future events or conditions may cause the Group to cease to continue as a
+going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
+estimates and related disclosures made by the directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures
+that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
+effectiveness of the Group's internal control.
+Identify and assess the risks of material misstatement of the consolidated financial statements,
+whether due to fraud or error, design and perform audit procedures responsive to those risks, and
+obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
+not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
+as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
+internal control.
+As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain
+professional scepticism throughout the audit. We also:
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
+accordance with HKSAS will always detect a material misstatement when it exists. Misstatements can arise
+from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
+be expected to influence the economic decisions of users taken on the basis of these consolidated financial
+statements.
+Evaluate the overall presentation, structure and content of the consolidated financial statements,
+including the disclosures, and whether the consolidated financial statements represent the underlying
+transactions and events in a manner that achieves fair presentation.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
+a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
+that includes our opinion. Our report is made solely to you, as a body, and for no other purpose. We do not
+assume responsibility towards or accept liability to any other person for the contents of this report.
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+Independent Auditor's Report
+FINANCIAL STATEMENTS
+185
+Ping An Insurance (Group) Company of China, Ltd.
+The directors of the Company are assisted by the Audit and Risk Management Committee in discharging
+their responsibilities for overseeing the Group's financial reporting process.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
+business activities within the Group to express an opinion on the consolidated financial statements.
+We are responsible for the direction, supervision and performance of the group audit. We remain
+solely responsible for our audit opinion.
+186
+Annual Report 2023
+Annual Report 2023
+Performance of the Board of Directors and Senior Management in Reputation Risk Management
+Members of the Supervisory Committee, by sitting in on the Board meetings and reviewing reports,
+heard the reports made by the senior management on the Company's reputation risk management, and
+supervised the Board's performance in reputation risk management.
+During the Reporting Period, the Supervisory Committee reviewed the Assessment and Evaluation Report
+on Internal Control of the Company, and was of the opinion that the Company had set up a complete,
+reasonable and effective internal control system.
+Internal Control System
+The Supervisory Committee considered the Company's related party transactions to be fair and reasonable
+during the Reporting Period, and found no harm done to the interests of the shareholders or the Company.
+Related Party Transactions
+During the Reporting Period, the Supervisory Committee reviewed special reports on the depositing and
+actual use of the Company's proceeds raised, and was of the opinion that the Company's disclosures about
+the use of the proceeds were timely, truthful, accurate and complete, and that there was no violation of
+rules in the use and management of the proceeds.
+Use of Proceeds
+Ernst & Young Hua Ming LLP and Ernst & Young have issued the standard unqualified auditor's reports
+in accordance with the PRC and international auditing standards respectively on the Company's financial
+statements for 2023. The financial statements truthfully, objectively and accurately reflect the Company's
+financial status and operating results.
+Authenticity of the Financial Statements
+During the Reporting Period, the Company operated and managed its businesses in accordance with laws
+and regulations, and its operational results were objective and truthful. There was substantial development
+and improvement in the depth and breadth of internal control management, and the internal control system
+was complete, reasonable and effective. The Company's operational decision-making processes were
+legitimate. The Directors and senior management were cautious, conscientious and diligent in the business
+operations and management processes, and they were not found to have breached any laws, regulations,
+or the Articles of Association or harmed the shareholders' interests.
+Lawful Operations
+The Supervisory Committee held six meetings in 2023 to deliberate 27 proposals including the Work Report
+of the Supervisory Committee for 2022, the Report on Consumer Rights Protection of Ping An Group
+for 2022 and the First Half of 2023, hear 12 reports on the annual performance appraisal results of senior
+management, internal control assessment and evaluation, performance in reputation risk management, and
+the implementation of the relevant regulatory opinions and requirements of the CBIRC, and review 11 filed
+documents including a brief report on the Company's compliance with governance guidelines, internal audit
+reports, and the meeting minutes of the Audit and Risk Management Committee. Supervisors exercised
+voting rights appropriately at the meetings, and expressed the following opinions objectively and fairly:
+INDEPENDENT OPINIONS ON RELEVANT ISSUES FROM THE SUPERVISORY COMMITTEE
+Significant increase in credit risk - The
+selection of criteria for identifying significant
+increase in credit risk is highly dependent on
+judgement and may have a significant impact
+on the expected credit losses for loans and
+advances to customers, financial assets at
+amortized cost and debt financial assets
+at fair value through other comprehensive
+income with longer remaining periods to
+maturity.
+In preparing the consolidated financial statements, the directors of the Company are responsible for
+assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to
+going concern and using the going concern basis of accounting unless the directors of the Company either
+intend to liquidate the Group or to cease operations or have no realistic alternative but to do so.
+The directors of the Company are responsible for the preparation of the consolidated financial statements
+that give a true and fair view in accordance with IFRSS issued by the IASB and the disclosure requirements
+of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is
+necessary to enable the preparation of consolidated financial statements that are free from material
+misstatement, whether due to fraud or error.
+RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL
+STATEMENTS
+In connection with our audit of the consolidated financial statements, our responsibility is to read the
+other information and, in doing so, consider whether the other information is materially inconsistent with
+the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to
+be materially misstated. If, based on the work we have performed, we conclude that there is a material
+misstatement of this other information, we are required to report that fact. We have nothing to report in
+this regard.
+-
+Impairment assessment of loans and advances to
+customers, financial assets at amortized cost and
+debt financial assets at fair value through other
+comprehensive income (continued)
+Key audit matter
+KEY AUDIT MATTERS (CONTINUED)
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+Independent Auditor's Report
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 183
+In response to the macroeconomic changes, we
+assessed the reasonableness of the expected
+credit loss model methodology and related
+parameters, including probability of default, loss
+given default, exposure at default, and significant
+increase in credit risk.
+Expected credit loss model:
+1)
+With the support of our internal experts, we
+evaluated and tested the important parameters of the
+expected credit loss model, management's significant
+judgements and related assumptions, mainly focusing
+on the following aspects.
+We adopted a risk-based sampling approach in our
+credit review procedures on loans and advances to
+customers, financial assets at amortized cost and
+debt financial assets at fair value through other
+comprehensive income. We assessed the debtors'
+repayment capacity and evaluated the Group's
+credit rating, taking into consideration post lending
+or investing investigation reports, debtors' financial
+information, collateral valuation reports and other
+available information.
+We evaluated and tested the design and operating
+effectiveness of key controls over the approval
+process, post approval credit management, credit
+rating system, collateral monitoring, deferred
+principal and interest payments as well as impairment
+assessment of loans and advances to customers,
+financial assets at amortized cost and debt financial
+assets at fair value through other comprehensive
+income, including relevant data quality and
+information systems.
+How our audit addressed the key audit matter
+Models and parameters Inherently complex
+models are used to measure expected credit
+losses. Modelled parameters have numerous
+inputs and the parameter estimation involves
+many judgements and assumptions.
+Ping An Insurance (Group) Company of China, Ltd.
+Forward-looking information - Expert
+judgement is used to create macroeconomic
+forecasts and to consider the impact on
+expected credit losses under multiple
+economic scenarios given different weights.
+Relevant disclosures are included in Note 2.(12),
+Note 3.(3), Note 24, Note 26, Note 27 and Note
+49.(3) to the consolidated financial statements.
+Our opinion on the consolidated financial statements does not cover the other information and we do not
+express any form of assurance conclusion thereon.
+The directors of the Company are responsible for the other information. The other information comprises
+the information included in the Annual Report, other than the consolidated financial statements and our
+auditor's report thereon.
+OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+184
+We evaluated and tested the design and operating
+effectiveness of internal controls related to
+disclosures of credit risk and impairment allowance.
+model changes, ongoing monitoring of model
+performance, model validation and parameter
+calibration.
+Evaluated and tested key controls over expected
+credit loss models, including approval of
+Evaluated and tested the data and processes
+used to determine expected credit losses,
+including business data, internal credit rating
+data, macroeconomic data, as well as impairment
+system computational logic, inputs and interfaces
+among relevant systems.
+Design and operating effectiveness of key
+controls:
+Evaluated the models and the related
+assumptions used in individual impairment
+assessment and analysed the amount, timing and
+likelihood of management's estimated future cash
+flows, especially cash flows from collateral.
+Assessed the forward-looking information
+management used to determine expected credit
+losses, including the forecasts of macroeconomic
+variables and the assumptions and weightings of
+multiple macroeconomic scenarios.
+How our audit addressed the key audit matter
+Individual impairment assessment
+Identifying credit impaired loans and
+advances to customers, financial assets at
+amortized cost and debt financial assets
+at fair value through other comprehensive
+income requires consideration of a range
+of factors, and individual impairment
+assessments are dependent upon estimates
+of future cash flows.
+177
+Ping An Insurance (Group) Company of China, Ltd.
+Report of the Supervisory
+Committee
+Independent Auditor's Report
+FINANCIAL STATEMENTS
+181
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+CORPORATE GOVERNANCE
+Evaluated and tested the design and operating
+effectiveness of key controls over the valuation
+of insurance contract liabilities.
+Reviewed the Group's accounting policies in
+relation to the valuation of insurance contract
+liabilities.
+With the support of our internal experts, we
+performed the following audit procedures:
+How our audit addressed the key audit matter
+The valuation of insurance contract liabilities
+involves significant judgement and estimates over
+the eligibility for the measurement approach, the
+determination of coverage unit and the uncertain
+future cash flows.
+As at 31 December 2023, the Group's insurance
+contract liabilities amounted to RMB4,159,801
+million, representing 40% of total liabilities. We
+identified the valuation of insurance contract
+liabilities as a key audit matter, as it requires
+significant estimates and judgements.
+Valuation of insurance contract liabilities
+Key audit matter
+We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the
+consolidated financial statements section of our report, including in relation to these matters. Accordingly,
+our audit included the performance of procedures designed to respond to our assessment of the risks
+of material misstatement of the consolidated financial statements. The results of our audit procedures,
+including the procedures performed to address the matters below, provide the basis for our audit opinion
+on the accompanying consolidated financial statements.
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+KEY AUDIT MATTERS (CONTINUED)
+Key audit matter
+How our audit addressed the key audit matter
+We identified the impairment assessment of
+loans and advances to customers, financial assets
+at amortized cost and debt financial assets at
+fair value through other comprehensive income
+as a key audit matter, as it involves significant
+management judgements and assumptions.
+As at 31 December 2023, the Group's loans
+and advances to customers, financial assets
+at amortized cost and debt financial assets at
+fair value through other comprehensive income
+represented 29%, 11% and 23% of total assets and
+the amounts of expected credit loss provision for
+loans and advances to customers, financial assets
+at amortized cost and debt financial assets at fair
+value through other comprehensive income were
+RMB100,045 million, RMB46,977 million and RMB8,818
+million respectively.
+Impairment assessment of loans and advances to
+customers, financial assets at amortized cost and
+debt financial assets at fair value through other
+comprehensive income
+Key audit matter
+KEY AUDIT MATTERS (CONTINUED)
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Key audit matters are those matters that, in our professional judgement, were of most significance in
+our audit of the consolidated financial statements of the current period. These matters were addressed
+in the context of our audit of the consolidated financial statements as a whole, and in forming our
+opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our
+description of how our audit addressed the matter is provided in that context.
+Annual Report 2023
+Evaluated the overall reasonableness of the
+insurance contract liabilities by performing
+movement analysis and assessing the impact of
+changes in assumptions.
+Tested the completeness and accuracy of
+the underlying data used in the valuation of
+insurance contract liabilities.
+Assessed the appropriateness of the valuation
+approaches of insurance contract liabilities.
+Performed independent recalculation on
+insurance contract liabilities of selected typical
+insurance products or groups of insurance
+contracts.
+Evaluated the reasonableness of key judgements
+and assumptions.
+Relevant disclosures are included in Note 2.(28),
+Note 3.(4), Note 3.(5), Note 3.(6), Note 3.(7), Note
+43 and Note 49.(1) to the consolidated financial
+statements.
+Complex actuarial models and actuarial
+assumptions with highly judgemental nature
+are used to support the valuation of insurance
+contract liabilities. Key assumptions include
+mortality, morbidity, lapse rates, discount rates,
+expenses, claim ratios, policy dividends and risk
+adjustment for non-financial risk, etc.
+Valuation of insurance contract liabilities (continued)
+182
+KEY AUDIT MATTERS
+Evaluated and tested the design and operating
+effectiveness of the related IT systems and
+controls over the valuation of insurance contract
+liabilities, including IT general controls, data
+transmission and computational logic of the
+related systems.
+Annual Report 2023
+In the coming year, the Supervisory Committee will further expand its approach to work and continue to
+carry out its duties in accordance with the Company Law of the People's Republic of China, the Articles
+of Association, and the listing rules. The Supervisory Committee will adhere to the principle of good faith,
+maximize its supervisory efforts with an aim to protect the interests of the Company and its shareholders,
+and perform supervisory duties faithfully and diligently to achieve the best results in all respects.
+In accordance with the Rules for Appraisal of Supervisors' Performance of Duties, the Supervisory
+Committee organized and conducted the appraisal of Supervisors' performance of duties for 2023.
+According to comprehensive evaluation, all the Company's Supervisors performed their duties and
+responsibilities as stipulated under applicable laws, regulations and the Articles of Association in a faithful,
+loyal, diligent and conscientious manner in 2023, and the performance appraisal results of all the Company's
+Supervisors for 2023 are "competent."
+SUMMARY AND OUTLOOK
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+178
+During the Reporting Period, the Supervisory Committee supervised the Company's information disclosure,
+reviewed the Company's regular reports, and put forward written review opinions. No violation of laws or
+regulations was found in the Company's information disclosure throughout the year.
+Implementation of the Company's Information Disclosure Management Rules
+During the Reporting Period, the Company's management strictly abided by the Articles of Association
+and carried out business management in a lawful and compliant manner; all the senior management of
+the Company duly performed their duties and responsibilities in accordance with relevant requirements
+including loyalty and diligence obligations.
+Ping An Insurance (Group) Company of China, Ltd.
+All Supervisors evaluated the composition of the Board of Directors, Directors' meeting attendance
+records, participation in training sessions and provision of opinions, and concluded unanimously that all
+the Company's Directors performed their duties and responsibilities as stipulated under applicable laws,
+regulations and the Articles of Association in a faithful, loyal, diligent and conscientious manner in 2023.
+Specialized committees of the Board of Directors fully performed their duties and provided professional
+opinions and advice for the Board of Directors' decision-making processes. All Supervisors agree that the
+performance appraisal results of all the Company's Directors for 2023 are "competent."
+Appraisal of Directors' Performance of Duties
+The Supervisory Committee acknowledges that the Board of Directors strictly carried out the cash
+dividend policy, performed relevant decision-making procedures for cash dividends in strict compliance,
+and disclosed the cash dividend policy and its implementation truthfully, accurately and completely. The
+Company's full-year cash dividend payout ratio for 2023 based on net profit attributable to shareholders
+of the parent company exceeds the range (in principle, 20%-40% of net profit attributable to shareholders
+of the parent company for the corresponding year) specified in its profit distribution plan for 2021-2023.
+The Company maintains the continuity and stability of its profit distribution policy, and delivers sustained,
+stable and reasonable returns to all its shareholders.
+Implementation of the Cash Dividend Policy
+Members of the Supervisory Committee sat in on the Board meetings and the General Meetings, and had
+no objection to the reports and proposals submitted to the General Meetings by the Board of Directors.
+The Supervisory Committee monitored the implementation of the resolutions approved by the General
+Meetings, and was of the opinion that the Board of Directors could duly implement the resolutions
+approved by the General Meetings.
+Implementation of the Resolutions Approved by the General Meetings
+By order of the Supervisory Committee
+Sun Jianyi
+Appraisal of Senior Management's Performance of Duties
+Shenzhen, PRC
+180
+We have audited the consolidated financial statements of Ping An Insurance (Group) Company of China,
+Ltd. (the "Company") and its subsidiaries (the "Group") set out on pages 188 to 354, which comprise
+the consolidated statement of financial position as at 31 December 2023, and the consolidated income
+statement, the consolidated statement of comprehensive income, the consolidated statement of changes in
+equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated
+financial statements, including material accounting policy information.
+OPINION
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAS") issued by
+the Hong Kong Institute of Certified Public Accountants ("HKICPA"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial
+statements section of our report. We are independent of the Group in accordance with the HKICPA's Code
+of Ethics for Professional Accountants (the "Code"), and we have fulfilled our other ethical responsibilities
+in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
+appropriate to provide a basis for our opinion.
+CORPORATE GOVERNANCE
+Independent Auditor's Report
+179
+Ping An Insurance (Group) Company of China, Ltd.
+March 21, 2024
+Chairman of the Supervisory Committee
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial
+position of the Group as at 31 December 2023, and of its consolidated financial performance and its
+consolidated cash flows for the year then ended in accordance with International Financial Reporting
+Standards ("IFRSS") issued by the International Accounting Standards Board ("IASB") and have been
+properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.
+BASIS FOR OPINION
+Asset management business
+244,777
+222,956
+Banking business
+5.8
+117,799
+124,647
+344,892
+11.6
+308,946
+9.8
+Life and health insurance business (1)
+Change (%)
+2022
+2023
+(in RMB million)
+December 31,
+December 31,
+Property and casualty insurance business
+92,836
+97,250
+(20.7)
+OPERATING EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY
+13
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+N/A
+917,492
+6.6
+Note: (1) Excluding changes in fair value of debt investments measured at fair value through other comprehensive income backing life
+117,143
+and health insurance business, as well as accumulated insurance finance expenses for insurance contract liabilities recognized
+through other comprehensive income that can be reclassified into profit or loss, except for the part subject to the VFA.
+Ping An Insurance (Group) Company of China, Ltd.
+(1,138)
+13,090
+2.4
+94,937
+The Group (1)
+Other businesses and elimination
+Technology business
+Annual Report 2023
+(4.7)
+Note: Figures may not match the calculation due to rounding.
+13.2
+2023
+2022
+Change (%)
+105,070
+108,544
+(3.2)
+8,918
+10,066
+(11.4)
+26,925
+26,380
+2.1
+(20,747)
+2,292
+N/A
+Life and Health Insurance Business
+1,905
+The Group
+Technology business
+46
+19,136
+1,511
+1,239
+873
+23,809
+Notes: (1) The life and health insurance business represents the results of three subsidiaries, namely Ping An Life, Ping An Annuity, and
+Ping An Health Insurance. The property and casualty insurance business represents the results of Ping An P&C. The banking
+business represents the results of Ping An Bank. The asset management business represents the results of subsidiaries that
+engage in asset management business including Ping An Securities, Ping An Trust, Ping An Asset Management, Ping An
+Financial Leasing, and Ping An Overseas Holdings. The technology business represents the results of member companies that
+engage in technology business including Autohome, Lufax Holding, OneConnect, and Ping An Health. Eliminations include
+offsets against shareholding among business lines.
+(2) Figures may not match the calculation due to rounding.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+OPERATING PROFIT ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY
+(in RMB million)
+Life and health insurance business
+Property and casualty insurance business
+Banking business
+Asset management business
+Other businesses and elimination
+5,458
+(65.1)
+(4,083)
+12.4
+(1.0)
+Asset management business
+(19.8)
+2.4
+N/A
+Technology business
+2.0
+5.8
+(3.8)
+Other businesses and elimination
+N/A
+N/A
+N/A
+The Group
+11.4
+Banking business
+(1.4)
+8.8
+(5,845)
+(30.1)
+117,989
+146,895
+(19.7)
+OPERATING ROE
+(%)
+17.9
+2023
+Change (pps)
+Life and health insurance business
+32.1
+37.3
+(5.2)
+Property and casualty insurance business
+7.4
+2022
+Reformed Life & Health business gathered momentum. Life & Health NBV
+grew 36.2% like for like driven by a 40.3% rise in agent channel NBV due to
+an 89.5% increase in NBV per agent and continued strong momentum in
+the newly reformed bancassurance channel where NBV climbed 77.7% in
+2023. Based on the latest assumptions including the return on investment
+and the risk discount rate, NBV of L&H amounted to RMB31,080 million.
+"Insurance + service" offerings are gaining traction. Ping An Life provided
+health management services to over 20 million customers in 2023. Over
+80,000 customers have qualified for home-based elderlycare services,
+which have covered 54 cities across China. Ping An's high-end elderly care
+projects have expanded to four cities, following the opening of a "Ping An
+Zhen Yi Nian" experience center in Sanya, Hainan Province in July 2023.
+Business quality improved steadily. Ping An Life recorded a material
+improvement in its persistency ratios with the 13-month persistency ratio
+rising 2.5 pps year on year and 25-month persistency ratio rising 6.8 pps
+year on year in 2023.
+11.0
+The Company conducts its life and health insurance business through Ping An Life, Ping An Annuity, and
+Ping An Health Insurance.
+9,813
+2.5 pps
+50.8
+53.3
+89.5
+47,639
+90,285
+(26.0)
+481
+356
+40.3
+22,932
+7,051
+32,169
+2022
+2023
+Agent channel NBV(1)
+Average number of agents
+per month (in thousand)
+NBV per agent(1) (RMB per
+agent per year)
+Activity rate of agents (2) (%)
+Agent income (RMB per
+agent per month)
+Agent productivity and
+income
+(in RMB million)
+Agent channel. Ping An Life advances the
+high-quality transformation of the agent
+channel and improves the team structure,
+aiming to build a team of "high-competence,
+high-performing, and high-quality" agents.
+On a like-for-like basis, agent channel NBV
+grew 40.3%, and income per agent increased
+39.2% in 2023. In respect of expanding the
+high-productivity agent base, Ping An Life
+empowers agents via skill improvement,
+training, honors and incentives, and resource
+support. In this way, Ping An Life effectively
+improved agent productivity and expanded
+the high-productivity agent base. NBV per
+agent increased 89.5% on a like-for-like basis
+in 2023. In respect of enhancing organizations,
+Ping An Life upgraded its management
+framework featuring 5-Star outlets with strong
+performance, high quality and good behaviors
+by motivating them to focus on operating
+results, managing action plans in a scientific
+manner, and enhancing their operational
+capabilities to build high-performing teams.
+In respect of stabilizing the agent force, Ping
+An Life focused on recruiting high-quality
+new agents through high-quality existing
+ones, standardized operations, enhanced the
+competence of new agents, and stimulated
+their long-term engagement willingness.
+Proportion of "Talent +” new agents increased
+by 25.2 pps year on year in 2023.
+•
+Under the value proposition of high-quality
+development, Ping An Life continued to deepen the
+transformation and build multi-channel professional
+sales capabilities, significantly improving the
+development quality. Innovative channels including
+bancassurance and Community Grid accounted for
+16.5% of Ping An Life's NBV in 2023.
+CHANNEL DEVELOPMENT
+MANAGEMENT DISCUSSION AND ANALYSIS
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Change (%)
+39.2
+Including: Income from
+Ping An Life's products
+(RMB per agent per
+month)
+7,402
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+16
+In respect of insurance products, Ping An Life
+continued to focus on three markets, namely
+wealth management, pension, and insurance
+protection in 2023. Ping An Life continued to
+meet diverse customer demands for insurance
+by optimizing and balancing the product
+portfolio. Ping An Life developed wealth
+management and insurance markets. Ping
+An Life followed the regulatory requirement
+to adjust the assumed rate of return on
+investment of life insurance products. Ping An
+Life focused on traditional insurance products
+and participating insurance products. Ping
+An Life launched three traditional products,
+namely "Jin Yue Zun Xiang," "Yu Xiang Jin
+Yue" and "Yu Xiang Cai Fu 3.0," and two
+participating products, namely "Jin Yue Zun
+Xiang Participating Insurance" and "Yu Xiang
+Jin Yue Participating Insurance." Ping An Life
+further developed the pension insurance
+market. In response to an aging population,
+Ping An Life launched "Jin Yue Zhi Zun," an
+annuity product complemented by "medical +”
+services to provide comprehensive elderlycare
+and healthcare solutions. Ping An Life also
+introduced "Yu Xiang Cai Fu Elderlycare 3.0," an
+upgraded annuity product meeting customers'
+demand for premium elderlycare. Ping An Life
+continued to consolidate insurance protection
+business. Ping An Life has focused on the
+critical illness insurance market, promoted "Ping
+An Juvenile Shouhu Quanneng Endowment"
+with upgraded benefits, and upgraded Shouhu
+and Sheng Shi Fu critical illness products.
+Ping An Life actively follows national strategies,
+serving as both an economic shock absorber and a
+social stabilizer. Ping An Life continues to diversify
+and upgrade its insurance product portfolio under
+the customer-centric philosophy to provide more
+comprehensive products. By leveraging the Group's
+healthcare and elderlycare ecosystem, Ping An Life
+rolls out “insurance + service" products in an orderly
+and determined manner, providing customers with
+heartwarming services.
+LIFE INSURANCE PRODUCTS
+(1) Retained customers are customers holding in-force
+insurance policies which were sold by Ping An Life's
+former agents before their agency relationship
+terminated.
+Community Grid and other channels. Ping
+An Life continued to roll out Community
+Grid, focusing on "retained customers (1)" and
+providing them with high-quality, sustainable
+and heartwarming services. Ping An Life has
+set up 65 Community Grid outlets in 51 cities,
+an increase of 30 outlets and 26 cities since
+the end of 2022, fully covering branches across
+the country. Ping An Life has built a team of
+over 15,000 highly competent specialists as
+of December 31, 2023. Community specialists
+delivered effective service operations by
+furthering and upgrading the “Pre-sell, Soft-
+sell, Cross-sell and Up-sell" business model.
+As a result, Ping An Life's 13-month policy
+persistency ratio of "retained customers" in the
+cities with Community Grid outlets improved
+by 5.4 pps year on year, higher than the overall
+13-month persistency ratio improvement of
+2.5 pps. In addition, Ping An Life continuously
+promoted sales via the lower-tier channel
+in seven provinces in 2023, further exploring
+innovative development models.
+Bancassurance channel. In response to the
+volatile business environment in 2023, Ping
+An Life implemented the value-oriented
+transformation strategy and focused on
+improving quality and efficiency. On a like-for-
+like basis, bancassurance channel NBV grew
+77.7% in 2023, indicating high-quality, leapfrog
+growth with a significant increase in the
+channel's contribution. Ping An Life furthered
+the exclusive agency model with Ping An Bank,
+and helped Ping An Bank improve insurance
+sales skills and customer services. As a result,
+value contributions from Ping An Bank reached
+new highs. Moreover, Ping An Life selectively
+expanded external bancassurance channels and
+outlets, and boosted per capita productivity of
+bancassurance teams by standardizing outlets'
+operations and improving teams' professional
+skills.
+Note:
+Life and Health Insurance Business
+Business Analysis
+15
+Ping An Insurance (Group) Company of China, Ltd.
+(22.0)
+445
+347
+Number of individual life
+insurance sales agents
+(in thousand)
+31, 2022 Change (%)
+December
+December
+31, 2023
+Number of individual life insurance sales agents
+Ping An Life
+(3) Figures may not match the calculation due to rounding.
+(2) Activity rate of agents = annual total of monthly agents
+who issued insurance policies/ annual total of monthly
+agents on board.
+Notes: (1) NBV for 2023 is computed based on the end-2022
+assumptions and model.
+37.3
+5,390
+Annual Report 2023
+BUSINESS OVERVIEW
+14
+75,505
+First-year premium ("FYP")
+N/A
+N/A
+18.7
+NBV margin (%)
+N/A
+N/A
+31,080
+NBV(2)
+24.1 -0.5 pps
+23.7
+NBV margin (%) on a like-for-
+like basis(1)
+used to calculate NBV
+Change
+(%)
+36.2
+39,262
+NBV on a like-for-like basis(1)
+2022/
+December
+31, 2022
+2023/
+December
+31, 2023
+(in RMB million)
+(5) Figures may not match the calculation due to rounding.
+(4) The Company lowered the investment return
+assumption to 4.5% in 2023, and retrospectively adjusted
+data for the comparative period as per the adjusted
+investment return assumption.
+(2) Ping An prudently lowered the L&H EV long-run
+investment return assumption to 4.5% and the risk
+discount rate to 9.5% in 2023 in view of the macroeconomic
+environment and the long-run trend of interest rates.
+(3) Expected return on opening EV is based on a 5%
+long-run investment return assumption and an 11% risk
+discount rate. L&H operating ROEV is 10.6% for 2023
+based on the latest assumptions including the return on
+investment and the risk discount rate.
+Notes: (1) NBV and EV for 2023 are based on the end-2022
+assumptions and model.
+0.2 pps
+Key Indicators
+Ping An Life continued to enhance its channels and improve business quality under the "4 channels +
+3 products" strategy in 2023. By rolling out "insurance + service" products, Ping An Life strengthened
+its presence in healthcare and elderlycare sectors. In this way, Ping An Life provides customers with
+professional, heart-warming services, empowering high-quality development of the Company. Life & Health
+NBV grew 36.2% like for like driven by a 40.3% rise in agent channel NBV due to an 89.5% increase in NBV
+per agent and continued strong momentum in the newly reformed bancassurance channel where NBV
+climbed 77.7% in 2023. Based on the latest assumptions including the return on investment and the risk
+discount rate, NBV of L&H amounted to RMB31,080 million.
+28,820
+165,784 119,336
+38.9
+EV on a like-for-like basis (1)
+37.3 -5.2 pps
+32.1
+73,391
+Net profit
+Operating ROE (4) (%)
+(3.4)
+21.9
+315,274
+109,810
+106,083
+Operating profit after tax (4)
+384,254
+from new business sold
+Present value of expected premiums
+10.9
+-1.0 pps
+35,122
+11.1
+10.1
+New business CSM margin (%)
+38,951
+New business CSM
+1,004
+11.2
+Operating ROEV(3) (%)
+N/A
+N/A
+830,974
+EV(2)
+6.3
+930,160 874,786
+(2.8)
+Net profit attributable to non-controlling
+interests
+860,643
+(5,845)
+business
+insurance
+Life and
+health
+2023
+The reconciliation between operating profit and reported net profit is as follows:
+The Group's operating profit attributable to shareholders of the parent company declined 19.7% year on
+year to RMB117,989 million, and net profit attributable to shareholders of the parent company declined 22.8%
+year on year to RMB85,665 million in 2023. Basic operating earnings per share declined 20.9% year on year
+to RMB6.66. Three core businesses, namely Life & Health, property and casualty insurance, and banking,
+maintained steady performance. The three businesses delivered RMB140,913 million in operating profit
+attributable to shareholders of the parent company, down slightly by 2.8% year on year.
+China's economic recovery still faced challenges in 2023. The state adopted multiple pro-growth
+macroeconomic policies including central government bond issuances, reserve requirement ratio and
+interest rate cuts, and tax and fee cuts. Moreover, China increased financing support for key sectors to
+mitigate economic and financial risks in an orderly manner. Determined strategic measures provided strong
+momentum for maintaining a sound and stable economic environment, and laid a solid foundation for
+sustainable recovery of the national economy. Facing opportunities and challenges, Ping An focused on
+core financial businesses and strengthened the insurance protection function to serve the real economy.
+Ping An continued to implement its business policy of “focusing on core businesses, boosting incomes and
+cutting costs, optimizing portfolios, and improving quality and efficiency." Following the technology-driven
+"integrated finance + healthcare and elderly care" strategy, Ping An continuously consolidated its integrated
+finance advantages, remained customer needs-oriented, and pursued high-quality development.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+10
+Property
+and casualty
+insurance
+business
+(2) Ping An lowered the investment return assumption to
+4.5% in 2023, and retrospectively adjusted data for the
+comparative period as per the adjusted investment
+return assumption.
+The impact of one-off material non-operating
+items and others is the impact of material
+items that management considered to be non-
+operating incomes and expenses. Such impact
+in 2023 and 2022 comprised the revaluation gain
+or loss on the convertible bonds issued by
+Lufax Holding to the Company.
+Short-term investment variance applies to Life
+& Health business excluding the part subject
+to the variable fee approach (the "VFA")(1).
+This short-term investment variance is the
+variance between the actual investment return
+on the aforesaid business and the embedded
+value long-run investment return assumption.
+Net of the short-term investment variance,
+the investment return on the aforesaid Life
+& Health business is locked at 4.5% (2). Debt
+investments at fair value through other
+comprehensive income backing such business
+are measured at cost.
+OPERATING PROFIT OF THE GROUP
+Operating profit is a meaningful business
+performance evaluation metric given the long-term
+nature of the Company's major L&H. Ping An defines
+operating profit after tax as reported net profit
+excluding the following items which are of a short-
+term, volatile or one-off nature:
+Note: (1) Ping An lowered the long-run investment return
+assumption to 4.5% in 2023, and retrospectively adjusted
+data for the comparative period as per the adjusted
+investment return assumption.
+(22.8)
+-3.5 pps
+111,008
+13.2
+85,665
+9.7
+ROE (%)
+parent company
+to shareholders of the
+Notes: (1) Insurance finance income or expenses of liabilities
+subject to the VFA match the changes in the fair
+value of the underlying items backing such business.
+Therefore, no adjustment is made when operating
+metrics are measured.
+Banking
+business
+Asset
+management
+business
+Technology
+business
+106,083
+Operating profit (A)
+23,829
+946
+1,075
+1,225
+19,530
+40
+1,013
+Operating profit attributable to non-
+controlling interests
+117,989
+(4,083)
+1,905
+(20,747)
+26,925
+8,918
+105,070
+shareholders of the parent company
+Operating profit attributable to
+(in RMB million)
+The Group
+elimination
+Other
+businesses
+and
+Net profit attributable
+8,958
+0.4
+2.43
+Ping An Insurance (Group) Company of China, Ltd.
+Shenzhen, PRC
+March 21, 2024
+Chairman
+उली
+Annual Report 2023
+To develop into a financial powerhouse, China has
+a long, long way to go. Being people-centered and
+customer needs-oriented, Ping An will adhere to
+the business policy of "focusing on core businesses,
+boosting incomes and cutting costs, optimizing
+portfolios, and improving quality and efficiency"
+in 2024. Ping An will continuously strengthen risk
+management, improve operations, and enhance
+financial service capabilities and coverages.
+Moreover, Ping An will comprehensively develop
+TechFin, green finance, inclusive finance, pension
+finance, and digital finance. By doing so, Ping An
+will create robust and sustainable long-term value
+for customers, employees, shareholders and society,
+contributing to China's development into a financial
+powerhouse.
+A family is the smallest unit of a nation while a
+nation is numerous families put together. We will
+celebrate the 75th anniversary of the founding of
+the People's Republic of China in 2024. People's
+livelihoods are a nation's critical interests, and well-
+being is people's fundamental need. Ping An will
+comprehensively implement the spirit of China's
+Central Financial Work Conference, and work hard
+with perseverance to race ahead. We will further
+advance the high-quality development of the
+"integrated finance + healthcare and elderlycare"
+service framework by seizing new opportunities
+from consumer demands for insurance, finance,
+health management and premium elderlycare. In
+addition, as the demand for digital transformation
+grows stronger driven by government policies and
+technological advancement, we will continuously
+accelerate the innovation of financial, healthcare and
+elderlycare models to realize effective improvement
+and reasonable growth of business.
+Looking ahead to 2024, we will pursue high-quality
+development despite challenges and difficulties!
+We firmly believe that favorable conditions for
+China's development outweigh unfavorable factors,
+and the essential long-term uptrend of the Chinese
+economy has not changed. New blueprints for
+domestic financial, insurance, healthcare and
+elderly care markets are unfolding gradually. The
+success of the "managed care model" after more
+than a decade of development around the world
+has proved the feasibility and potential of the
+"insurance + healthcare" model. Focused on our
+new business drivers for the coming decade, we
+will dig deeply into the huge Chinese market to
+gain insights into people's needs and aspirations
+for a better life. We are committed to building
+healthcare and elderly care service models with
+Chinese characteristics for our 232 million retail
+customers, surpassing Western experience in terms
+of depth and breadth. To this end, we will build
+efficient service platforms by integrating domestic
+and overseas premium healthcare and elderlycare
+resources externally and empowering businesses
+with advanced healthtech and Al capabilities
+internally. In this way, we will promote the well-
+being of every family with the most professional and
+cost-effective healthcare and elderlycare services!
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+9
+8
+Digital finance improves the efficiency of services.
+Ping An continuously strengthens core technological
+capabilities by independently developing underlying
+technologies. Ping An now ranks first globally by
+the number of patent applications in both fintech
+and healthcare. Ping An had a first-class technology
+team of over 20,000 technology developers and over
+3,000 scientists as of December 31, 2023. Ping An's
+technology patent applications led most
+international financial institutions, totaling 51,533
+as of December 31, 2023. The volume of services
+provided by Al service representatives reached
+about 2.22 billion times in 2023. Ping An continuously
+advances its healthtech research and development
+("R&D"). Ping An ranked first globally by the
+number of healthcare patent applications as of
+December 31, 2023. Ping An has one of the world's
+largest healthcare databases, enables precise
+diagnosis of nearly 5,000 diseases, and proactively
+builds a leading remote consultation and treatment
+platform. By building technological capabilities
+in a forward-looking manner, Ping An effectively
+supports the sustainable development of its
+healthcare and elderlycare ecosystem.
+Ping An has integrated its online and offline
+professional service networks. Offline, Ping An has
+over 1.3 million sales service agents for property
+and casualty insurance, life insurance and other
+businesses, and over 7,000 outlets for life insurance,
+property and casualty insurance, banking and
+other businesses, covering all provinces and cities
+across China. Online, Ping An provides customers
+with premium products and convenient services
+anytime via hundred-million-user apps including
+Ping An Jin Guan Jia, Ping An Pocket Bank, Ping
+An Auto Owner, and Ping An Health. We maintain
+exclusive health records for customers, and
+provide 24/7 healthcare services and membership-
+based elderly care services via family doctors and
+elderlycare concierges. Ping An guides members
+through an end-to-end "online, in-store and home-
+delivered" service network covering consultation,
+diagnosis, treatment and services under Al-
+enabled 24/7 seconds-level management. Ping An
+accumulated about 50,000 in-house and external
+doctors, and partnered with over 36,000 hospitals
+including all top 100 hospitals and 3A hospitals in
+China as of December 31, 2023.
+Chairman's Statement
+Ping An Insurance (Group) Company of China, Ltd. 7
+Annual Report 2023
+Our massive customer base continuously generates
+value. Ping An's retail customers nearly quadrupled
+in the past decade to 232 million as of December 31,
+2023, including 29.20 million acquired in 2023, thanks
+to diverse integrated finance offerings and
+convenient customer outreach channels. As retail
+cross-selling continued to deepen, 22.42 million
+customer migrations occurred within the Group in
+2023. Continuous customer development leads to
+declining customer acquisition expenses, obvious
+economies of scale in terms of service costs, more
+contracts per customer, and higher customer
+retention. 25.3% of our customers held four or more
+contracts within the Group as of December 31,
+2023, with a 97.7% retention rate. Middle-class and
+above customers accounted for more than 77.4% of
+the Group's total retail customers as of December
+31, 2023. High-net-worth individuals ("HNWIS")
+held 21.16 contracts per customer as of December
+31, 2023. With a massive customer base and in a
+highly promising market, we expect our “managed
+care model" to generate greater value based on
+the depth and breadth of our healthcare services
+in combination with home-based and high-end
+elderly care services.
+Ping An's healthcare and elderlycare ecosystem
+not only creates standalone direct value, but also
+empowers its core financial businesses through
+differentiated "Product + Service" offerings. Nearly
+64% of Ping An's 232 million retail customers used
+services from the healthcare and elderly care
+ecosystem as of December 31, 2023. Customers
+entitled to service benefits in the healthcare and
+elderly care ecosystem accounted for over 73% of
+Ping An Life's NBV in 2023. Ping An's healthcare
+ecosystem had over 56,000 paying corporate clients
+in 2023. Ping An Health had nearly 40 million paying
+users over the past 12 months. Ping An achieved
+over RMB140 billion in health insurance premium
+income in 2023.
+Ping An Life and Ping An Health jointly launched services including
+five highlights, namely unique checkups, blood sugar control, online
+consultation, outpatient appointment assistance and accompanying
+consultation, and critical illness management.
+Ping An has developed an innovative Chinese
+"managed care model” by leveraging its over ten
+years of operational and management experience
+in insurance and healthcare industries. The model
+covers multiple business lines, including finance,
+healthcare, and technology. Ping An builds its
+service moat by empowering retail financial
+customers and corporate clients as well as
+developing an online flagship medical platform. Ping
+An seamlessly combines differentiated healthcare
+and elderly care services with financial businesses in
+which Ping An acts as a payer. By acting as a payer
+and integrating providers, Ping An offers the most
+cost-effective healthcare and elderly care services
+under unique business models.
+111,008
+We strive to build a national brand that is trusted
+by the state, treasured by the people, and keeps
+pace with the times. Brand value lies in our
+response to people's yearning for a better life. Ping
+An provides customers with convenient premium
+services by following international standards
+and leveraging its local advantages. Ping An is
+committed to seamlessly connecting daily life
+services with financial services in nine scenarios,
+namely auto, home and insurance purchases,
+investments, savings, credit cards, health, medical
+care and elderlycare. Thanks to people's trust, Ping
+An has ranked first in the Brand Finance Insurance
+100 list in relation to global insurance brand value
+for seven years in a row. Moreover, Ping An ranked
+33rd in the Fortune Global 500 list (1st among global
+insurers) in 2023.
+ABOUT US
+Business Analysis
+Performance Overview
+The Group's operating profit attributable to shareholders of the parent
+company reached RMB117,989 million in 2023. Three core businesses,
+namely Life & Health, property and casualty insurance, and banking,
+remained steady, generating RMB140,913 million in operating profit
+attributable to shareholders of the parent company, slightly down 2.8%
+year on year.
+(in RMB)
+Dividend per share
+(20.9)
+-4.7 pps
+17.9
+13.2
+Operating ROE (%) (¹)
+8.42
+6.66
+per share (in RMB)(1)
+Basic operating earnings
+(19.7)
+146,895
+117,989
+parent company(1)
+shareholders of the
+2022 Change (%)
+2023
+attributable to
+Operating profit
+(in RMB million)
+Ping An provides a wide range of financial products
+and services via multiple distribution channels.
+Ping An engages in financial business through
+subsidiaries including Ping An Life, Ping An P&C,
+Ping An Annuity, Ping An Health Insurance, Ping An
+Bank, Ping An Trust, Ping An Securities, Ping An
+Asset Management, and Ping An Financial Leasing.
+Ping An engages in technology business through
+member companies including Autohome, Lufax
+Holding, OneConnect, and Ping An Health.
+CONSOLIDATED RESULTS
+Attaching importance to shareholder returns, Ping An plans to pay a final
+dividend of RMB1.50 per share in cash for 2023. Full-year cash dividend is
+RMB2.43 per share, up 0.4% year on year. Cash dividend payout ratio based
+on operating profit attributable to shareholders of the parent company is
+37.3%, with total dividend increasing for 12 consecutive years.
+2.42
+46,455
+ABOUT US
+2,980
+45,516
+10,112
+109,810
+Operating profit (A)
+24,071
+873
+1,239
+1,511
+19,136
+46
+1,266
+controlling interests
+Operating profit attributable to non-
+146,895
+(5,845)
+5,458
+2,292
+26,380
+10,066
+108,544
+shareholders of the parent company
+Operating profit attributable to
+(in RMB million)
+3,803
+The Group
+6,697
+170,966
+3,614
+(19,522)
+2,292
+26,380
+10,066
+of the parent company
+Net profit attributable to shareholders
+134,817
+(4,972)
+4,853
+3,803
+45,516
+10,112
+75,505
+Net profit (D=A+B+C)
+(1,844)
+(1,844)
+operating items and others (C)
+Impact of one-off material non-
+(34,305)
+(34,305)
+Short-term investment variance (B)
+Plus:
+(4,972)
+elimination
+74,501
+Technology
+business
+(20,747)
+26,925
+8,918
+72,598
+Net profit attributable to shareholders
+of the parent company
+109,274
+(3,137)
+3,129
+(19,522)
+46,455
+2,054
+8,958
+Net profit (D=A+B+C)
+149
+149
+operating items and others (C)
+Impact of one-off material non-
+(32,692)
+(32,692)
+(3,137)
+Plus:
+and
+73,391
+(4,083)
+Short-term investment variance (B)
+Net profit attributable to non-controlling
+interests
+management
+business
+85,665
+Banking
+business
+Other
+businesses
+Asset
+2022 (Restated)
+Property
+and casualty
+insurance
+business
+business
+insurance
+health
+Life and
+141,818
+12
+793
+19,530
+40
+1,225
+1,075
+Business Analysis
+Performance Overview
+23,609
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 11
+MANAGEMENT DISCUSSION AND ANALYSIS
+946
+Financial
+assets at
+For the year ended 31 December 2022 (Restated)
+Reserves
+finance
+Insurance
+2,801 (5,001) 622,050 329,953 1,228,964
+(2,675) (2,675)
+1,019 12,137
+(451)
+(214,296) 13,092 12,164 130,353
+18,210 123,739 195,899
+11,569
+(30)
+(3,979)
+Others
+Other equity instruments issued/redeemed by
+subsidiaries
+5,995
+48
+48
+(1,817) (1,923)
+(7,023)
+(7,023)
+(311)
+(12,485)
+As at 31 December 2023
+expenses
+Share
+premium
+(in RMB million)
+111,598
+12,485
+18,280
+As at 1 January 2022
+99,124
+Changes in accounting policies
+(36,413)
+equity
+Total
+controlling
+interests
+Retained
+profits
+shares
+Treasury
+Non-
+on translation
+Surplus
+reserve General
+funds reserves
+Others
+for insurance
+contracts
+issued
+FVOCI
+reserves
+Share
+capital
+18,280 111,598
+As at 31 December 2021
+Exchange
+differences
+of foreign
+operations
+107,935
+Cancellation of repurchased shares (Note 36)
+Retained controlling
+profits interests
+shares
+Treasury
+Non-
+operations
+on translation
+of foreign
+Exchange
+differences
+funds reserves
+12,164 115,104
+2,764
+(84,153) (21,361)
+115,744
+-
+39,099
+-
+(30,778)
+18,280 118,095
+Others
+General
+Surplus
+reserve
+FVOCI
+reserves
+62,711
+contracts
+issued
+Total
+equity
+18,280 118,095 84,966
+(84,153) 17,738 12,164 117,868
+(3,979)
+(30)
+Key Employee Share Purchase Plan (Note 38)
+Long-term Service Plan (Note 39)
+Contributions from non-controlling interests
+(106)
+Equity transactions with non-controlling interests
+(2,687)
+2,998
+Disposal of equity investments at fair value through
+other comprehensive income
+Dividend paid to non-controlling interests
+Appropriations to general reserves
+(70) (5,925)
+(44,002)
+Dividends declared (Note 17)
+23,596 90,415
+85,665
+755
+107,935 (127,456) (80)
+-
+(13) (18,859)
+755
+(127,456) (80)
+2,046 (10,996) 595,661 316,623 1,175,298
+(2,478) 182 10,698
+2,046 (10,996) 593,183 316,805 1,185,996
+85,665 23,609 109,274
+(44,002)
+47,302
+(41,884) (25,964)
+(41,884) 21,338
+(7,164) (7,164)
+(1,573) (9,895) 569,834
+(29,205)
+Notes
+Interest received
+Disposal of subsidiaries, net
+Acquisition of subsidiaries, net
+Purchases of investments
+Proceeds from disposal of investments
+intangibles and other long-term assets, net
+Proceeds from disposal of property and equipment,
+Purchases of property and equipment, intangibles and other
+long-term assets
+Cash flows from investing activities
+Net cash flows from operating activities
+(in RMB million)
+For the year ended 31 December 2023
+Consolidated Statement of Cash Flows
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+192
+246 7,317
+2,046 (10,996) 593,183 316,805 1,185,996
+12,164 117,868
+84,966 (84,153) 17,738
+574
+2023
+6,497
+118,095
+2022
+476,776
+76,974
+capital premium
+73,533
+146,953
+139,390
+Net cash flows used in investing activities
+Dividends received
+507
+(37,620)
+65
+-
+(2,406,664)
+(2,066,919)
+2,012,393
+1,756,672
+568
+1,068
+(8,871)
+(7,810)
+360,403
+53
+(Restated)
+18,280
+(1,101)
+(1,101)
+(43,820)
+(43,820)
+Dividends declared (Note 17)
+118,949
+111,008 24,465
+3,619
+(41,062) (242)
+21,161
+Total comprehensive income for the year
+656 (15,868)
+3,619
+(41,062) (242)
+21,161
+Other comprehensive income for the year
+23,809 134,817
+265,449 1,081,938
+(1,573) (9,895) 540,629
+111,008
+Profit for the year
+12,164 103,121
+131 4,215
+265,318 1,077,723
+Appropriations to general reserves
+14,747
+(14,747)
+Disposal of equity investments at fair value through
+(4,113)
+85
+85
+(4,113)
+As at 31 December 2022
+Others
+Other equity instruments issued/redeemed by
+subsidiaries
+Acquisition of shares
+Long-term Service Plan (Note 39)
+Key Employee Share Purchase Plan (Note 38)
+916
+12,164 101,108
+2,013
+916
+(2,959) (2,863)
+Equity transactions with non-controlling interests
+42,437 42,437
+Acquisition of subsidiaries
+1,803,047
+(6,585)
+Dividend paid to non-controlling interests
+113
+1,094 (1,207)
+other comprehensive income
+Contributions from non-controlling interests
+Total comprehensive income for the year
+265,449
+Profit for the year
+www
+Retained profits
+Treasury shares
+Reserves
+9,994,079
+11,009,940
+11,583,417
+140,312
+156,463
+134,995
+35
+64,289
+89,321
+101,337
+46
+14,185
+1,640,519
+1,445,641
+Financial assets at amortized cost
+26
+1,243,353
+36
+1,124,035
+18,210
+18,280
+Total equity
+316,805
+329,953
+37
+Non-controlling interests
+816,489
+869,191
+899,011
+Equity attributable to owners of the parent
+540,629
+593,183
+622,050
+37
+(9,895)
+(10,996)
+(5,001)
+40
+267,475
+268,724
+263,752
+37
+18,280
+1,228,964
+1,064,246
+comprehensive income
+Other assets
+Total assets
+Equity and liabilities
+Equity
+Share capital
+31
+121,406
+114,763
+86,041
+32
+50,401
+53,657
+49,758
+33
+99,078
+99,411
+68,462
+34
+9,794
+12,580
+(104,001)
+Deferred tax assets
+Debt financial assets at fair value through other
+Right-of-use assets
+Property and equipment
+27
+2,637,008
+2,500,790
+2,265,326
+Equity financial assets at fair value through other
+comprehensive income
+28
+264,877
+264,771
+277,883
+Investments in associates and joint ventures
+29
+258,877
+280,793
+284,061
+Statutory deposits for insurance operations
+30
+14,903
+14,444
+12,606
+Investment properties
+Intangible assets
+1,185,996
+1,081,938
+190
+8,912,141
+9,823,944
+10,354,453
+Total liabilities
+403,187
+416,688
+357,025
+47
+Other liabilities
+13,605
+14,217
+14,148
+46
+Deferred tax liabilities
+14,208
+13,013
+10,234
+34
+Lease liabilities
+1,097,523
+931,098
+Total equity and liabilities
+964,007
+11,583,417
+9,994,079
+As at 1 January 2023
+Changes in accounting policies
+As at 31 December 2022
+(in RMB million)
+Share
+Share
+for insurance
+Reserves
+For the year ended 31 December 2023
+finance
+expenses
+Insurance
+Financial
+assets at
+For the year ended 31 December 2023
+Consolidated Statement of Changes in Equity
+FINANCIAL STATEMENTS
+191
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+XIE Yonglin
+Director
+MA Mingzhe
+Director
+The financial statements on pages 188 to 354 were approved and authorized for issue by the Board of
+Directors on 21 March 2024 and were signed on its behalf.
+11,009,940
+45
+Bonds payable
+3,002,049
+39,738
+44,531
+22
+Derivative financial liabilities
+57,376
+84,659
+48,619
+797,646
+923,088
+963,718
+41
+Due to banks and other financial institutions
+Financial liabilities at fair value through profit or
+loss
+1 January 2022
+(Restated)
+(Restated)
+31 December 2022
+31 December 2023
+Notes
+Liabilities
+(in RMB million)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+35,049
+Assets sold under agreements to repurchase
+42
+241,803
+3,431,999
+3,534,539
+44
+customers
+Customer deposits and payables to brokerage
+105
+53
+Reinsurance contract liabilities
+16,247
+3,340,870
+3,671,177
+Other comprehensive income for the year
+4,159,801
+Insurance contract liabilities.
+16,076
+7,117
+Income tax payable
+6,663
+10,349
+8,858
+Accounts payable
+127,718
+271,737
+43
+(215,760)
+(6,585)
+Capital injected into subsidiaries by non-controlling interests
+1,530
+Insurance finance expenses for insurance contracts issued
+Reinsurance finance income for reinsurance contracts held
+Reserve from cash flow hedging instruments
+(117,017)
+(36,851)
+240
+358
+10
+(350)
+Exchange differences on translation of foreign operations
+812
+3,914
+Share of other comprehensive income of associates and joint
+ventures
+(579)
+(314)
+35
+Changes in the fair value of equity instruments at fair value through
+other comprehensive income
+Insurance finance expenses for insurance contracts issued
+17,575
+(11,062)
+6,254
+(4,413)
+Share of other comprehensive income of associates and joint
+ventures
+(16)
+59
+Other comprehensive income for the year, net of tax
+(18,859)
+(15,868)
+Total comprehensive income for the year
+90,415
+Items that will not be reclassified to profit or loss:
+118,949
+Credit risks provision of debt instruments at fair value through
+other comprehensive income
+91,144
+187
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+21 March 2024
+Hong Kong
+Certified Public Accountants
+Ernst & Young
+From the matters communicated with the Audit and Risk Management Committee, we determine those
+matters that were of most significance in the audit of the consolidated financial statements of the current
+period and are therefore the key audit matters. We describe these matters in our auditor's report unless
+law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
+we determine that a matter should not be communicated in our report because the adverse consequences
+of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Benny Bing Yin
+Cheung.
+We also provide the Audit and Risk Management Committee with a statement that we have complied with
+relevant ethical requirements regarding independence and to communicate with them all relationships and
+other matters that may reasonably be thought to bear on our independence, and where applicable, actions
+taken to eliminate threats or safeguards applied.
+We communicate with the Audit and Risk Management Committee regarding, among other matters, the
+planned scope and timing of the audit and significant audit findings, including any significant deficiencies in
+internal control that we identify during our audit.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS (CONTINUED)
+Cash flows from financing activities
+13,944
+4.74
+Ping An Insurance (Group) Company of China, Ltd.
+Consolidated Statement of Comprehensive Income
+For the year ended 31 December 2023
+(in RMB million)
+Profit for the year
+Other comprehensive income
+2023
+2022
+(Restated)
+109,274
+134,817
+Items that may be reclassified subsequently to profit or loss:
+Changes in the fair value of debt instruments at fair value through
+other comprehensive income
+6.27
+Attributable to:
+Owners of the parent
+Non-controlling interests
+21
+21
+167,660
+91,514
+61,583
+Accounts receivable
+Derivative financial assets
+35,636
+36,118
+26,628
+Insurance contract assets
+223
+Financial assets purchased under reverse
+repurchase agreements
+22
+29,278
+30,957
+43
+3
+Reinsurance contract assets
+22,215
+20,615
+19,926
+Finance lease receivable
+23
+180,674
+186,858
+44,978
+308,348
+281,115
+270,976
+Annual Report 2023
+66,819
+94,484
+23,596
+24,465
+90,415
+118,949
+Ping An Insurance (Group) Company of China, Ltd.
+189
+FINANCIAL STATEMENTS
+Consolidated Statement of Financial Position
+As at 31 December 2023
+(in RMB million)
+Assets
+Notes
+31 December 2023
+31 December 2022
+(Restated)
+Financial assets at fair value through profit or loss
+1 January 2022
+(Restated)
+Cash and amounts due from banks and other
+financial institutions
+19
+804,077
+774,841
+592,151
+Balances with the Central Bank
+20
+FINANCIAL STATEMENTS
+200,701
+Consolidated Income Statement
+(in RMB million)
+15
+Profit before tax
+(842,851)
+(911,746)
+Total expenses
+(27,964)
+(39,638)
+15
+Other expenses
+(22,698)
+(24,346)
+Interest expenses on non-banking operations
+120,117
+(78)
+Changes in insurance premium reserves
+3,144
+(79,815)
+(1,367)
+(80,553)
+(83,877)
+15
+General and administrative expenses
+120
+Foreign exchange gains/(losses)
+(1,327)
+14
+Net impairment losses on other assets
+(230)
+(77,744)
+142,335
+16
+18
+6.36
+4.84
+18
+RMB
+RMB
+Annual Report 2023
+188
+Diluted
+Basic
+of the parent:
+Earnings per share attributable to ordinary equity holders
+Income tax
+134,817
+23,809
+23,609
+111,008
+85,665
+Non-controlling interests
+Owners of the parent
+Attributable to:
+134,817
+109,274
+Profit for the year
+(7,518)
+(10,843)
+109,274
+13
+Net impairment losses on financial assets
+(9,928)
+Share of profits and losses of associates and joint ventures
+Other revenues and other gains
+(2,311)
+33,324
+10
+Investment income
+45,982
+45,806
+9
+operations
+Fees and commission revenue from non-insurance
+115,933
+118,503
+1,434
+8
+228,784
+227,552
+7
+Interest revenue from banking operations
+525,981
+536,440
+6
+Insurance revenue
+(Restated)
+2022
+2023
+Notes
+Interest revenue from non-banking operations
+10,165
+11
+68,804
+(8,773)
+9
+Fees and commission expenses on non-insurance operations
+(97,688)
+(108,605)
+7
+Interest expenses on banking operations
+564
+542
+Less: Net reinsurance finance income for reinsurance
+contracts held
+(99,933)
+(14,919)
+10,605
+10,448
+(123,959)
+43
+Net insurance finance expenses for insurance contracts
+issued
+Less: Amount recovered from reinsurer
+(14,179)
+Allocation of reinsurance premiums paid
+(422,221)
+(440,178)
+12
+Insurance service expenses
+985,186
+1,031,863
+Total revenue
+60,652
+For the year ended 31 December 2023
+Loans and advances to customers
+25
+3,318,122
+(10,100)
+Others
+(19,239)
+(7,565)
+Net cash flows used in financing activities
+(222,056)
+(230,873)
+Net increase in cash and cash equivalents
+34,346
+30,143
+Net foreign exchange differences
+Cash and cash equivalents at the beginning of the year
+1,924
+444,202
+8,580
+405,479
+(5,650)
+Cash and cash equivalents at the end of the year
+480,472
+444,202
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 193
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+1. CORPORATE INFORMATION
+Ping An Insurance (Group) Company of China, Ltd. (the "Company") was registered in Shenzhen, the
+People's Republic of China (the “PRC") on 21 March 1988. The business scope of the Company includes
+investing in insurance enterprises, supervising and managing various domestic and overseas businesses of
+subsidiaries, conducting insurance funds investment, domestic and overseas insurance and other business
+approved by regulators. The Company and its subsidiaries are collectively referred to as the Group. The
+Group mainly provides integrated financial products and services and is engaged in life insurance, property
+and casualty insurance, trust, securities, banking and other businesses.
+The registered office address of the Company is 47th, 48th, 109th, 110th, 111th and 112th Floors, Ping An
+Finance Center, No. 5033 Yitian Road, Futian District, Shenzhen, Guangdong Province, China.
+These consolidated financial statements are presented in millions of Renminbi ("RMB") unless otherwise
+stated.
+2.
+MATERIAL ACCOUNTING POLICIES
+(1) BASIS OF PREPARATION
+52
+These consolidated financial statements have been prepared in accordance with International Financial
+Reporting Standards ("IFRSs"), amendments to IFRSS and interpretations issued by the International
+Accounting Standards Board ("IASB"), also comply with the applicable disclosure provisions of the Rules
+Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the applicable
+disclosure requirements of the Hong Kong Companies Ordinance. They have been prepared under the
+historical cost convention, except for some financial instruments, insurance contract assets or liabilities and
+reinsurance contract assets or liabilities.
+Payment of redemption for other equity instruments by
+subsidiaries
+3,104
+24
+(4,439)
+Repayment of lease liabilities
+(5,522)
+Payment of shares purchased for Long-term Service Plan
+(1,101)
+Payment of acquisition of shares
+2,266
+(5,166)
+and other financial institutions, net
+(Decrease)/increase in insurance placements from banks
+(49,582)
+(50,707)
+Dividends paid
+(6,533)
+(28,218)
+Interest paid
+(1,206,226)
+(1,202,227)
+Repayment of borrowings
+186,022
+107,295
+Proceeds from borrowings
+118,241
+(81,822)
+repurchase of insurance operations, net
+(Decrease)/increase in assets sold under agreements to
+773,258
+1,064,814
+Proceeds from bonds issued
+(22,380)
+The preparation of financial statements in conformity with IFRSS requires the use of certain critical
+accounting estimates. It also requires management to exercise its judgement in the process of applying
+the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas
+where assumptions and estimates are significant to the consolidated financial statements are disclosed in
+Note 3.
+(4,451)
+The Group adopted International Financial Reporting Standard 17 Insurance Contracts ("IFRS 17") on 1
+January 2023 and restated the comparative information in accordance with IFRS 17. The adoption of IFRS 17
+has brought about major changes in the recognition for insurance revenue and insurance service expenses,
+the measurement of insurance contract liabilities and the presentation of financial statements. The new
+accounting policies in relation to insurance contracts are set out in Note 2.(28).
+(3) ISSUED BUT NOT YET EFFECTIVE STANDARDS, AMENDMENTS AND INTERPRETATIONS
+The Group has not adopted the following revised IFRSS that have been issued but are not yet effective.
+Standards/Amendments
+Amendments to IAS 1
+Amendments to IFRS 16
+Content
+Classification of Liabilities as
+Current or Non-current
+Lease Liability in a Sale and
+Leaseback
+Effective for annual periods
+beginning on or after
+1 January 2024
+1 January 2024
+These amendments are not expected to have any significant impact on the Group's financial statements.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+195
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+In accordance with IFRS 17, considering that retrospective approach is impracticable for some of the
+groups of insurance contracts, the Group has applied the modified retrospective approach or the fair value
+approach on the transition date.
+For the year ended 31 December 2023
+Business combinations that are not under common control are accounted for using the acquisition method.
+The cost of an acquisition is measured at the acquisition date fair value which is the sum of the acquisition
+date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owners
+of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For
+each business combination, the Group elects whether to measure the non-controlling interests in the
+acquiree that are present ownership interests and entitle their holders to a proportionate share of net
+assets in the event of liquidation at fair value or at the proportionate share of the acquiree's identifiable
+net assets. All other components of non-controlling interests are measured at fair value. Acquisition-related
+costs are expensed as incurred.
+When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
+classification and designation in accordance with the contractual terms, economic circumstances and
+pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in
+host contracts by the acquiree.
+If the business combination is achieved in stages, the previously held equity interest is remeasured at its
+acquisition date fair value and any resulting gain or loss is recognized in profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition
+date. Contingent consideration classified as an asset or a liability that is a financial instrument and within
+the scope of IFRS 9 is measured at fair value with changes in fair value either recognized in profit or loss or
+as a change to other comprehensive income. If the contingent consideration is not within the scope of IFRS
+9, it is measured in accordance with the appropriate IFRSs. Contingent consideration that is classified as
+equity is not remeasured and subsequent settlement is accounted for within equity.
+Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred,
+the amount recognized for non-controlling interests and any fair value of the Group's previously held equity
+interests in the acquiree over the net identifiable assets acquired and liabilities assumed. If the sum of this
+consideration and the amount recognized for non-controlling interests and any fair value of the Group's
+previously held equity interests in the acquiree is lower than the fair value of the net assets acquired, the
+difference is, after reassessment, recognized in profit or loss as a gain on bargain purchase.
+After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill
+is tested for impairment annually or more frequently if events or changes in circumstances indicate that
+the carrying value may be impaired. The Group performs its annual impairment test of goodwill as at 31
+December. For the purpose of impairment testing, goodwill acquired in a business combination is, from the
+acquisition date, allocated to each of the Group's cash-generating units, or groups of cash-generating units,
+that are expected to benefit from the synergies of the combination, irrespective of whether other assets or
+liabilities of the Group are assigned to those units or groups of units.
+Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of
+cash-generating units) to which the goodwill relates. Where the recoverable amount of the
+cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss
+is recognized. An impairment loss recognized for goodwill is not reversed in subsequent periods.
+Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and
+part of the operation within that unit is disposed of, the goodwill associated with the operation disposed
+of is included in the carrying amount of the operation when determining the gain or loss on the disposal.
+Goodwill disposed of in these circumstances is measured based on the relative value of the operation
+disposed of and the portion of the cash-generating unit retained.
+196
+Ping An Insurance (Group) Company of China, Ltd.
+2,980,975
+Annual Report 2023
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES
+Changes in accounting policies
+3,238,054
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+2,999
+(4) BUSINESS COMBINATIONS AND GOODWILL
+2,033,759
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+2,500,790
+194
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
+Changes in accounting policies (Continued)
+In accordance with IFRS 17, the Group is not required to disclose the amount of the adjustment for each
+financial statement line item affected for the current period and each prior period presented. Therefore,
+the Group has only summarized the impact of the adoption of IFRS 17 on key financial indicators for the
+comparative period, as disclosed below:
+Total assets
+Equity attributable to owners of the parent
+31 December 2022
+Before the adoption
+After the adoption
+of IFRS 17
+Impact of the
+adoption of IFRS 17
+(127,228)
+(137,926)
+Total liabilities
+11,137,168
+9,961,870
+858,675
+(1,880,467)
+Debt financial assets at fair value through other
+comprehensive income
+Financial assets at amortized cost
+of IFRS 17
+31 December 2022
+1,124,035
+3,004,502
+Impact of the
+reclassification
+After reclassification
+31 December 2022
+Before reclassification
+The Group has adopted IFRS 9 Financial Instruments before 1 January 2023. In accordance with IFRS 17, the
+Group reassessed its business models for managing financial assets and redetermined the classification
+of financial assets held for activities related to insurance contracts based on the measurement models of
+the insurance contracts on 1 January 2023. For financial assets derecognized between 1 January 2022 and
+31 December 2022, the Group has applied the classification overlay to reclassify them item-by-item based
+on same classification method, and adjusted the comparative information. The major changes in the above
+reclassification of financial assets were disclosed as follows:
+869,191
+11,009,940
+9,823,944
+10,516
+31 December 2022
+467,031
+The Group classifies its financial assets in the following measurement categories, which depends on the
+Group's business model for managing the financial assets and the contractual terms of the cash flows:
+Recognition
+Classification and measurement
+At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
+asset not at fair value through profit or loss, transaction costs that are incremental and directly attributable
+to the acquisition or issue of the financial asset. Transaction costs of financial assets carried at fair value
+through profit or loss are expensed in profit or loss.
+The Group shall recognize a financial asset or a financial liability in its statement of financial position when,
+and only when, it becomes a party to the contractual provisions of the instrument.
+(a) those to be measured at amortized cost ("AC");
+For the year ended 31 December 2023
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on
+hand, demand deposits, current accounts with the Central Bank and short term highly liquid investments
+including assets purchased under reverse repurchase agreements and others which are readily convertible
+into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short
+maturity of generally within three months when acquired.
+(11) CASH AND CASH EQUIVALENTS
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 199
+(b) those to be measured at fair value through other comprehensive income ("FVOCI"); or
+Annual Report 2023
+(12) FINANCIAL ASSETS
+(c) those to be measured at fair value through profit or loss ("FVPL”).
+Equity instruments
+200
+For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are
+translated into RMB at the exchange rates for their functional and currencies ruling at the dates of the
+cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are
+translated into RMB at the weighted average exchange rate for the year.
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 201
+Annual Report 2023
+The Group subsequently measures all equity investments at fair value. Where the Group's management has
+elected to present fair value gains and losses on equity investments in other comprehensive income, there
+is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition
+of the investment. Dividends, representing a return on such investments, continue to be recognized in
+profit or loss when the Group's right to receive payments is established.
+(c) FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. The
+gains or losses from fair value changes on the debt investments measured at FVPL are recognized
+in profit or loss. The Group also irrevocably designate financial assets at fair value through profit or
+loss if doing so significantly reduces or eliminates a mismatch created by assets and liabilities being
+measured on different bases.
+(b) FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
+where the assets' cash flows represent solely payments of principal and interest, and that are not
+designated at FVPL are measured at FVOCI. Movements in the carrying amount are taken through
+other comprehensive income, except for the recognition of impairment gains or losses, interest income
+and foreign exchange gains and losses on the instrument's amortized cost which are recognized
+in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously
+recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income
+from these financial assets is included in the interest revenue using the effective interest rate method.
+Such assets held by the Group mainly include debt financial assets at FVOCI and loans and advances
+to customers measured at FVOCI, etc.
+(a) Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows
+represent solely payments of principal and interest, and that are not designated at FVPL are measured
+at amortized cost. Interest income from these financial assets is included in the interest revenue
+using the effective interest rate method. Any gain or loss arising from derecognition or impairment is
+recognized directly in profit or loss. Such assets held by the Group mainly include cash and amounts
+due from banks and other financial institution, balances with the Central Bank, accounts receivable,
+finance lease receivable, financial assets at AC, loans and advances to customers measured at AC, etc.
+debt instruments:
+Debt instruments are those instruments that meet the definition of a financial liability from the issuer's
+perspective, such as loans, government and corporate bonds, etc. Subsequent measurement of
+debt instruments depends on the Group's business model for managing the asset and the cash flow
+characteristics of the asset. There are three measurement categories into which the Group classifies its
+Debt instruments
+Classification and measurement (Continued)
+(12) FINANCIAL ASSETS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+The Group determines the classification of debt investments according to its business model and the
+contractual cash flow characteristics of the financial assets. The debt investments shall be classified as
+FVPL if the cash flows characteristics cannot pass the test on solely payments of principal and interest on
+the principal amount. Otherwise, the classification of debt investments will depend on the business model
+provided the fair value option is not elected. Investments in equity instruments are classified as FVPL in
+general, except those designated as at FVOCI.
+The functional currency of most of overseas subsidiaries is the Hong Kong dollar. At the end of the
+reporting period, the assets and liabilities of these overseas subsidiaries are translated into the presentation
+currency of the Company at the exchange rates prevailing at the end of the reporting period and their
+income statements are translated into RMB at the average exchange rate for the year. The resulting
+exchange differences are recognized in other comprehensive income and accumulated in the exchange
+differences on translation of foreign operations reserve. On disposal of a foreign operation, the component
+of other comprehensive income relating to that particular foreign operation is recognized in the income
+statement.
+(6) SUBSIDIARIES
+Foreign currency transactions recorded by the entities in the Group are initially recorded using their
+respective functional currency rates prevailing at the dates of the transactions. Monetary assets and
+liabilities denominated in foreign currencies are translated at the functional currency rates of exchange
+ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items
+are recognized in the income statement.
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+197
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+A subsidiary is an entity (including structured entities) over which the Company has control. The Company
+controls an entity when the Company has power over an entity, is exposed to, or has rights to, variable
+returns from its involvement with the entity and has the ability to affect these returns through its power
+over the entity. The results of subsidiaries are included in the Company's income statement to the extent
+of dividends received and receivable. The Company's investments in subsidiaries are stated at cost less any
+impairment losses.
+(g) Reclassifies the Group's share of components previously recognized in other comprehensive income to
+profit or loss or retained earnings, as appropriate.
+(f) Recognizes any surplus or deficit in profit or loss; and
+For the year ended 31 December 2023
+(e) Recognizes the fair value of any investment retained;
+(c) Derecognizes the cumulative translation differences recorded in equity;
+(b) Derecognizes the carrying amount of any non-controlling interest;
+(a) Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
+Total comprehensive income within a subsidiary is still attributed to the non-controlling interest even if it
+results in a deficit balance. If the Group loses control over a subsidiary, it:
+Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
+control, and continue to be consolidated until the date when such control ceases. The financial statements
+of the subsidiaries are prepared for the same reporting period as the parent company, using consistent
+accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from
+intra-group transactions and dividends, are eliminated on consolidation in full, unless the transaction
+provides evidence of an impairment of the transferred asset.
+subsidiaries.
+The consolidated financial statements comprise the financial statements of the Company and its
+(5) BASIS OF CONSOLIDATION
+(d) Recognizes the fair value of the consideration received;
+Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
+the exchange rates as at the dates of initial transactions. Non-monetary items measured at fair value in a
+foreign currency are translated using the exchange rates at the date when the fair value was determined.
+The gain or loss on change arising on translation of a non-monetary item measured at fair value is treated
+in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation difference
+on the item whose fair value gain or loss is recognized in other comprehensive income or profit or loss is
+also recognized in profit or loss and other comprehensive income, respectively).
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant
+factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks
+only, and the relevant activities are directed by means of contractual or related arrangements.
+These financial statements are presented in RMB, which is the Company's functional and presentation
+currency. Each entity in the Group determines its own functional currency and items included in the
+financial statements of each entity are measured using that functional currency.
+(10) FOREIGN CURRENCIES
+The Group has assessed the nature of its joint ventures and determined them to be joint ventures. The
+Group has rights to the net assets of these joint ventures. The Group's investments in its joint ventures are
+accounted for using the equity method of accounting, less any impairment losses. Refer to Note 2.(8) for
+details of the equity method of accounting.
+(9) JOINT VENTURES
+The results of associates are included in the Group's income statement to the extent of dividends received
+and receivable. The Group's investments in associates are treated as non-current assets and are stated at
+cost less any impairment losses.
+Upon loss of significant influence over the associate, the Group measures and recognizes any remaining
+investment at its fair value. Any differences between the carrying amount of the associate upon loss of
+significant influence and the fair value of the remaining investment, as well as the gain on disposal of the
+associates, are recognized in profit or loss.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+(7) STRUCTURED ENTITIES
+Annual Report 2023
+After application of the equity method, the Group determines whether it is necessary to recognize
+impairment losses on the Group's investments in its associates. The Group determines at each reporting
+date whether there is any objective evidence that the investment in the associate is impaired. If this is the
+case, the Group calculates the amount of impairment as the difference between the recoverable amount of
+the associate and its carrying value and recognizes the amount in the income statement.
+The financial statements of the associates are prepared for the same reporting period as the Group. Where
+necessary, adjustments are made to bring the accounting policies in line with those of the Group.
+The Group's investments in associates are stated in the consolidated statement of financial position at
+the Group's share of net assets under the equity method of accounting, less any impairment losses. The
+Group's share of post-acquisition profit or loss is recognized in the income statement, and its share of
+post-acquisition movements in other comprehensive income is recognized in other comprehensive income
+with a corresponding adjustment to the carrying amount of the investment. When the Group's share
+of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
+receivables, the Group does not recognize further losses, unless it has incurred legal or constructive
+obligations or made payments on behalf of the associate. Unrealized gains and losses resulting from
+transactions between the Group and its associates are eliminated to the extent of the Group's investments
+in the associates, except where unrealized losses provide evidence of an impairment of the asset
+transferred. Goodwill arising from the acquisition of associates is included in the carrying amount of the
+investment and is neither amortized nor individually tested for impairment.
+An associate is an entity, not being a subsidiary or a joint venture, in which the Group has a long-term
+interest of generally not less than 20% of the equity voting rights and over which it is in a position to
+exercise significant influence.
+(8) ASSOCIATES
+The Group holds beneficiary certificates in its fund products, trust products, debt investment plans, equity
+investment plans and asset funding plans.
+The Group has determined that all of its fund products, trust products, debt investment plans, equity
+investment plans and asset funding plans, which are not controlled by the Group, are unconsolidated
+structured entities. Fund products, trust products, equity investment plans and asset funding plans are
+managed by affiliated or unaffiliated trust companies or asset managers and invest the funds raised in
+bonds, stocks and loans or equities of other companies. Debt investment plans are managed by affiliated
+or unaffiliated asset managers and its major investment objectives are infrastructure funding projects. Fund
+products, trust products, debt investment plans, equity investment plans and asset funding plans finance
+their operations by issuing beneficiary certificates which entitle the holders to agreed stake according
+to contractual terms in the respective fund products', trust products', debt investment plans', equity
+investment plans' and asset funding plans' income.
+The Group determines whether it is an agent or a principal in relation to those structured entities in which
+the Group acts as an asset manager on management's judgement. If an asset manager is agent, it acts
+primarily on behalf of others and so does not control the structured entity. It may be principal if it acts
+primarily for itself, and therefore controls the structured entity.
+198
+For the year ended 31 December 2023
+When a financial liability (or part of it) is extinguished, the Group derecognizes the financial liability (or
+part of it). The difference between the carrying amount of the derecognized liability and the consideration
+is recognized in profit or loss.
+(12) FINANCIAL ASSETS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+If a hybrid contract contains a host that is not an asset within the scope of IFRS 9, an embedded derivative
+shall be separated from the host and accounted for as a derivative if, and only if:
+An embedded derivative is a component of a hybrid contract that also includes a non-derivative
+host-with the effect that some of the cash flows of the combined instrument vary in a way similar to a
+stand-alone derivative.
+Except for those related to hedge accounting, the gains or losses from fair value changes of derivatives are
+recognized in profit or loss.
+The Group's derivative financial instruments mainly include interest rate swaps, forward currency contracts
+and swap transaction, credit swap and stock index futures, etc. Such derivative financial instruments are
+initially recognized at fair value on the date of which the related derivative contracts are entered into and
+are subsequently measured at fair value. All derivatives are carried as assets when the fair value is positive
+and as liabilities when the fair value is negative.
+(14) DERIVATIVE FINANCIAL INSTRUMENTS
+Apart from the above financial guarantee contracts issued by the Group's banking operations which are
+accounted for under IFRS 9, the Group has also regarded certain financial guarantee contracts as insurance
+contracts.
+Financial guarantee contracts issued by the Group are those contracts that require a payment to be made
+to reimburse the holder for a loss, which incurs because the specified debtor fails to make a payment
+when due in accordance with the terms of a debt instrument. The Group initially measures such contracts
+at fair value. The fair value at inception is likely to equal the premium received. This amount is recognized
+rateably over the period of the contract in fees and commission income. Subsequently, the liabilities
+arising from the financial guarantee contracts are measured at the higher of premium received on the
+initial recognition less income recognized in accordance with the principles of IFRS 15, and the amount of
+impairment provision calculated as described in Note 2.(12) -impairment.
+(b) a separate instrument with the same terms as the embedded derivative would meet the definition of a
+derivative; and
+Financial guarantee contracts
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+204
+The Group measures other financial liabilities subsequently at amortized cost, using the effective interest
+method. Other financial liabilities of the Group mainly include customer deposits and payables to brokerage
+customers, short-term borrowings, long-term borrowings and bonds payable, etc.
+Other financial liabilities
+Once designated as financial liabilities at fair value through profit or loss at initial recognition, the financial
+liabilities shall not be reclassified to other financial liabilities in subsequent periods. Financial liabilities
+designated at FVPL are subsequently measured at fair value. Any changes in fair value are recognized in
+profit or loss, except for changes in fair value arising from changes in the Group's own credit risk which are
+recognized in other comprehensive income. Changes in fair value due to changes in the Group's own credit
+risk are not subsequently reclassified to profit or loss upon derecognition of the liabilities.
+(c) a contract contains one or more embedded derivatives, with the host being not an asset within the
+scope of IFRS 9, and the embedded derivative(s) do(es) significantly modify the cash flows.
+(13) FINANCIAL LIABILITIES (CONTINUED)
+(b) a group of financial liabilities is managed and its performance is evaluated on a fair value basis, in
+accordance with a documented risk management or investment strategy, and information about the
+group is provided internally on that basis to the entity's key management personnel;
+(c) the hybrid contract is not measured at fair value with changes in fair value recognized in profit or loss
+(i.e., a derivative that is embedded in the hybrid contract at fair value through profit or loss is not
+separated).
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+206
+Sale of assets under repurchase agreements and purchase of assets under reverse repurchase agreements
+conducted in the bank and securities businesses are included in the operating activities of consolidated
+statement of cash flows and sale of assets under repurchase agreements and purchase of assets under
+reverse repurchase agreements conducted in the insurance business are included in the financing and
+investing activities of consolidated statement of cash flows.
+The amounts advanced under these agreements are recognized and presented as “financial assets
+purchased under reverse repurchase agreements". The Group may not take physical possession of assets
+purchased under such agreements. In the event of default by the counterparty to repurchase the assets,
+the Group has the right to the underlying assets. The difference between the purchasing price and reselling
+price is recognized as interest income over the term of the agreement using the effective interest method.
+Assets sold under repurchase agreements continue to be recognized but a liability is recognized and
+presented as "assets sold under agreements to repurchase" for the proceeds from selling such assets. The
+Group may be required to provide additional collateral based on the fair value of the underlying assets and
+such non-cash collateral assets continue to be recognized on the balance sheet. The difference between
+the selling price and repurchasing price is recognized as interest expense over the term of the agreement
+using the effective interest method.
+(17) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND ASSETS SOLD
+UNDER REPURCHASE AGREEMENTS
+Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
+statement of financial position when there is a legally enforceable right to offset the recognized
+amounts and there is an intention to settle on a net basis or realize the assets and settle the liabilities
+simultaneously. The legally enforceable right must not be contingent on future events and must be
+enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the
+Group or the counterparty.
+For the above assets, the Group may bifurcate the embedded derivative and measured it at fair value
+through profit or loss, or designate the entire hybrid instrument to be measured at fair value through profit
+or loss.
+(16) OFFSETTING OF FINANCIAL INSTRUMENTS
+Such techniques include using recent prices in arm's length transactions, reference to the current
+market value of another instrument which is substantially the same, discounted cash flow analysis and/
+or option pricing models. For discounted cash flow techniques, estimated future cash flows are based on
+management's best estimates and the discount rate used is a market rate for similar instruments. Certain
+financial instruments, including derivative financial instruments, are valued using pricing models that
+consider, among other factors, contractual and market prices, correlation, time value of money, credit risk,
+yield curve volatility factors and/or prepayment rates of the underlying positions. The use of different
+pricing models and assumptions could produce materially different estimates of fair values.
+For financial instruments where there is active market, the fair value is determined by quoted prices in
+active markets. For financial instruments where there is no active market, the fair value is determined
+by using valuation techniques. Such techniques should be appropriate in the circumstances for which
+sufficient data is available, and the inputs should be consistent with the objective of estimating the price at
+which an orderly transaction to sell the asset or to transfer the liability would take place between market
+participants at the measurement date under current market conditions, and maximize the use of relevant
+observable inputs and minimize the use of unobservable inputs.
+(15) FAIR VALUE OF FINANCIAL INSTRUMENTS
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 205
+Determining whether to classify financial instruments into level 3 of the fair value hierarchy is generally
+based on the significance of the unobservable factors involved in valuation methodologies.
+(a) it eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
+arise from measuring assets or liabilities or recognizing the gains and losses on them on different
+bases;
+The Group may, at initial recognition, designate a financial liability as at fair value through profit or loss.
+when one of the following criteria is met:
+The above financial liabilities are subsequently measured at fair value. All the realized and unrealized gains/
+(losses) are recognized in profit or loss.
+Impairment (Continued)
+(12) FINANCIAL ASSETS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+202
+The Group recognizes or reverses the impairment provision through profit or loss. For debt instruments
+measured at FVOCI, impairment gains or losses are included in the net impairment losses on financial
+instruments and correspondingly reduce the accumulated changes in fair value included in the other
+comprehensive income reserves of equity.
+For the financial instruments at Stage 1 and Stage 2, the interest income is calculated based on its gross
+carrying amount (i.e., amortized cost) before adjusting for impairment provision using the effective interest
+method. For the financial instruments at Stage 3, the interest income is calculated based on the carrying
+amount of the asset, net of the impairment provision, using the effective interest method. Financial assets
+that are originated or purchased credit impaired are financial assets that are impaired at the time of initial
+recognition, and the impairment provision for these assets is the expected credit loss for the entire lifetime
+since initial recognition as purchased or originated credit-impaired financial assets.
+For account receivables, the Group refers to historical experience of credit loss, combines with current
+situation and forward-looking information, formulate the lifetime expected credit loss of the financial
+assets.
+Stage 3: If the financial instrument is credit-impaired, the financial instrument is then moved to "Stage 3”.
+The impairment provisions are measured based on expected credit losses on lifetime basis.
+Stage 1: A financial instrument that is not credit-impaired on initial recognition is classified in "Stage
+1" and has its credit risk continuously monitored by the Group. The impairment provisions are
+measured at an amount equal to the 12-month expected credit losses for the financial assets
+which are not considered to have significantly increased in credit risk since initial recognition;
+For the financial instruments subject to ECL measurement, the Group assesses the significant increase in
+credit risk since initial recognition or whether an instrument is considered to be credit impaired, outlines a
+"three-stage" model expected credit loss models are established and staging definition are set for each of
+these financial assets class. Incorporating forward-looking information, expected credit losses for financial
+assets are recognized into the different stages and measured the impairment provisions respectively.
+(c) Forward-looking information.
+(b) Determining criteria for significant changes in credit risk;
+(a) Choosing appropriate models and assumptions for the measurement of ECL including exposure at
+default (EAD), probability of default (PD), loss given default (LGD), etc.;
+The Group assesses on a forward-looking basis the expected credit losses associated with its debt
+instruments carried at amortized cost and FVOCI, and with the exposure arising from loan commitments
+and financial guarantee contracts that are not accounted for as “insurance contracts". A number of
+significant judgements are required in measuring the expected credit loss ("ECL"), such as:
+Expected credit loss refers to the weighted average amount of credit loss of financial instruments based
+on the probability of default. Credit loss refers to the difference between all contractual cash flows that are
+due to the entity in accordance with the contract and all the cash flows that the entity expects to receive,
+discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or
+originated credit-impaired financial assets).
+Impairment
+Stage 2: If a significant increase in credit risk ("SICR") since initial recognition is identified, the financial
+instrument is moved to "Stage 2" but is not yet deemed to be credit-impaired. The impairment
+provisions are measured based on expected credit losses on a lifetime basis;
+For loan commitments' the loss allowance is recognized as a provision. However, for contracts that include
+both a loan and an undrawn commitment and the Group cannot separately identify the expected credit
+losses on the undrawn commitment component from those on the loan component, the expected credit
+losses on the undrawn commitment are recognized together with the loss allowance for the loan. To
+the extent that the combined expected credit losses exceed the gross carrying amount of the loan, the
+expected credit losses are recognized as a provision.
+Derecognition
+Financial assets are derecognized when:
+(c) are derivatives (except for a derivative that is a designated and effective hedging instrument or a
+financial guarantee contract).
+(b) on initial recognition are part of a portfolio of identified financial instruments that are managed
+together and for which there is evidence of a recent actual pattern of short-term profit-taking;
+(a) are incurred principally for the purpose of repurchasing in the near term;
+Financial liabilities at fair value through profit or loss include financial liabilities held for trading and other
+financial liabilities designated as such at initial recognition. Financial liabilities held for trading are the
+financial liabilities that:
+Financial liabilities at fair value through profit or loss
+(13) FINANCIAL LIABILITIES (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 203
+Annual Report 2023
+At initial recognition, the Group classifies a financial liability at fair value through profit or loss or other
+financial liabilities. The Group measures a financial liability at its fair value plus, in the case of a financial
+liability not at fair value through profit or loss, transaction costs that are incremental and directly
+attributable to the acquisition or issue of the financial liability. Transaction costs of financial liabilities
+carried at FVPL are expensed in profit or loss.
+(13) FINANCIAL LIABILITIES
+The Group writes off financial assets, in whole or in part, when it has exhausted all practical recovery
+efforts and has concluded there is no expectation of recovery. Indicators that there is no reasonable
+expectation of recovery include (i) ceasing enforcement activity and (ii) where the Group's recovery
+method is foreclosing on collateral and the value of the collateral is such that there is no reasonable
+expectation of recovering in full.
+When the equity financial assets measured at FVOCI are derecognized, the cumulative gain or loss
+previously recognized in other comprehensive income is reclassified from equity to retained profits. When
+the other financial assets are derecognized, the cumulative gain or loss previously recognized in other
+comprehensive income is reclassified from equity to profit or loss.
+(c) they have been transferred and the Group neither transfers nor retains substantially all the risks and
+rewards of ownership and the Group has not retained control.
+(b) they have been transferred and the Group transfers substantially all the risks and rewards of
+ownership;
+(a) the contractual rights to receive the cash flows from the financial assets have expired;
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(a) the economic characteristics and risks of the embedded derivative are not closely related to the
+economic characteristics and risks of the host;
+(8) ASSOCIATES (CONTINUED)
+Notes to Consolidated Financial Statements
+Inventory impairment provisions should be accrued when the cost of individual inventory item is higher
+than its net realizable value.
+Net realizable value is the estimated selling price in the ordinary course of business less the estimated
+costs of completion and the estimated costs necessary to make the sale and related taxes. Estimates of net
+recoverable amount are based on the most reliable evidence available at the time the estimates are made,
+also taking into consideration the purpose for which the inventory is held and the influence of events after
+the end of the reporting period.
+At the end of the reporting period, inventory is measured at the lower of its cost and net realizable value. If
+the net realizable value is lower than cost, inventory impairment provisions are allotted.
+The actual cost of inventory is priced based on moving weighted average method.
+The Group's inventories comprise raw materials, product in progress, finished goods, other supplemental
+materials, etc. and lands purchased for property development by real estate subsidiaries. Inventory is
+initially measured at cost which includes purchasing cost, processing cost and other costs which made the
+inventory to the present place and condition.
+(25) INVENTORIES
+Foreclosed assets are initially recognized at fair value. The difference between the initial fair value and the
+sum of the related loan principal, interest receivable and impairment provision is taken into the income
+statement. At the end of the reporting period, the foreclosed assets are measured at the lower of their
+carrying value and net recoverable amount. When the carrying value of the foreclosed assets is higher
+than the net recoverable amount, a provision for the decline in value of foreclosed assets is recognized as
+impairment losses in the income statement.
+(24) FORECLOSED ASSETS
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+After allotting inventory impairment provisions, if the influencing factors of previous inventory impairment
+provisions have disappeared, and hence the net realizable value of the inventories are higher than their
+cost, the previous written down amount should be recovered and the reversed amount which is within the
+amount of original allotted inventory impairment provisions should be included in current profit and loss.
+FINANCIAL STATEMENTS
+Annual Report 2023
+2 25 years
+10 40 years,
+indefinite
+20 years
+50 years,
+indefinite
+30
+20 30 years
+Estimated useful lives
+Software and others (including patents and know-how, customer relationships and
+contract rights, etc.)
+Trademarks
+Ping An Insurance (Group) Company of China, Ltd. 209
+(26) IMPAIRMENT OF NON-FINANCIAL ASSETS
+The Group assesses at each reporting date whether there is an indication that a non-financial asset other
+than deferred tax assets may be impaired. If any such indication exists, or when annual impairment testing
+for a non-financial asset is required, the Group makes an estimate of the asset's recoverable amount. A
+non-financial asset's recoverable amount is the higher of the asset's or cash-generating unit's fair value
+less costs to sell and its value in use and is determined for an individual asset, unless the asset does not
+generate cash inflows that are largely independent of those from other assets or groups of assets, in which
+case the recoverable amount is determined for the cash-generating unit to which the asset belongs. Where
+the carrying amount of a non-financial asset exceeds its recoverable amount, the asset is considered
+impaired and is written down to its recoverable amount. In assessing value in use, the estimated future
+cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
+assessments of the time value of money and the risks specific to the asset. In determining fair value less
+costs to disposal, an appropriate valuation model is used. These calculations are corroborated by valuation
+multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
+210
+For the year ended 31 December 2023
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS (CONTINUED)
+(28.7) Measurement of insurance contracts
+Investment properties are initially measured at cost, which is the fair value of the consideration given to
+acquire them, including transaction costs. Subsequently, all investment properties are stated at cost less
+accumulated depreciation and accumulated impairment losses.
+Measurement on initial recognition
+On initial recognition, the Group shall measure a group of insurance contracts at the total of the fulfilment
+cash flows and the contractual service margin. The contractual service margin represents the unearned
+profit the Group will recognize as it provides insurance contract services under the insurance contracts in
+the group. The fulfilment cash flows comprise:
+(a) estimates of future cash flows;
+(b) an adjustment to reflect the time value of money and the financial risks related to the future cash
+flows; and
+(c) a risk adjustment for non-financial risk.
+Risk adjustment for non-financial risk is the compensation the Group requires for bearing the uncertainty
+about the amount and timing of the cash flows that arises from non-financial risk as the Group fulfils
+insurance contracts. The fulfilment cash flows do not reflect the non-performance risk of the Group.
+When the Group estimates the future cash flows at a higher level of aggregation, the Group allocates the
+resulting fulfilment cash flows to individual groups of contracts. The estimates of future cash flows shall:
+(a) be unbiased probability-weighted mean;
+(b) be consistent with observable market prices for market variables;
+(c) be current - the estimates shall reflect conditions existing at the measurement date, including
+assumptions at that date about the future;
+(d) be explicit the Group shall estimate the cash flows separately from the adjustment for the time value
+of money and financial risk, unless the most appropriate measurement technique combines these
+estimates.
+The Group includes in the measurement of a group of insurance contracts all the future cash flows within
+the boundary of each contract in the group. Cash flows are within the boundary of an insurance contract if
+they arise from substantive rights and obligations that exist during the reporting period in which the Group
+can compel the policyholder to pay the premiums or in which the Group has a substantive obligation to
+provide the policyholder with insurance contract services. A substantive obligation to provide insurance
+contract services ends when:
+(a) the Group has the practical ability to reassess the risks of the particular policyholder and, as a result,
+can set a price or level of benefits that fully reflects those risks; or
+(b) the Group has the practical ability to reassess the risks of the portfolio of insurance contracts that
+contains the contract and, as a result, can set a price or level of benefits that fully reflects the risk of
+that portfolio; and the pricing of the premiums up to the date when the risks are reassessed does not
+take into account the risks that relate to periods after the reassessment date.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Core deposits
+Notes to Consolidated Financial Statements
+Prepaid land premiums
+The estimated useful lives of intangible assets are set as below:
+Leasehold improvements
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and
+equipment to its residual value over its estimated useful life. The principal assumptions used for this
+purpose are as follows:
+The cost of an item of property and equipment comprises its purchase price and any directly attributable
+costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred
+after items of property and equipment have been put into operation, such as repairs and maintenance,
+is normally charged to the income statement in the year in which it is incurred. In situations where it can
+be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits
+expected to be obtained from the use of an item of property and equipment, and where the cost of the
+item can be measured reliably, the expenditure is capitalized as an additional cost of that asset or as a
+replacement.
+Property and equipment, other than construction in progress, are stated at cost less accumulated
+depreciation and any impairment losses. An item of property and equipment is derecognized upon disposal
+or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal
+or retirement recognized in the income statement in the year the asset is derecognized is the difference
+between the net sales proceeds and the carrying amount of the relevant asset.
+(21) PROPERTY AND EQUIPMENT
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 207
+Buildings
+Annual Report 2023
+Fully depreciated assets are retained in the financial statements until they are no longer in use and no
+further charge for depreciation is made in respect of these assets.
+The useful life and depreciation methods are reviewed periodically to ensure that the method and period of
+depreciation are consistent with the expected pattern of economic benefits from the individual investment
+properties.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(18) FINANCE LEASE RECEIVABLE AND UNEARNED FINANCE INCOME
+A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of
+the leased asset to the lessee. At the commencement of the lease term, the Group recognizes the minimum
+lease payments receivable by the Group, the initial direct costs and the unguaranteed residual value in
+the finance lease receivable. The difference between (a) the aggregate of the minimum lease payments,
+the unguaranteed residual value and the initial direct costs and (b) the aggregate of their present values
+is recognized as unearned finance lease income. Finance lease receivable net of unearned finance lease
+income which represents the Group's net investment in the finance lease is presented as finance lease
+receivable in the consolidated statement of financial position. Unearned finance lease income is allocated
+over the lease term based on a pattern reflecting a constant periodic return on the Group's net investment
+in the finance lease, and is recognized as "other revenues and other gains".
+The impairment provision measurement and derecognition of finance lease receivable are complied with
+the basic accounting policy of the financial assets (Note 2.(12)). The Group incorporates forward looking
+information in estimating the expected credit loss for finance lease receivable. The Group derecognizes
+finance lease receivables when the rights to receive cash flows from the finance lease have expired or have
+been transferred and the Group has transferred substantially all the risks and rewards of ownership. Refer
+to Note 13 and Note 23 for details.
+(19) PRECIOUS METALS
+The Group's precious metals represent gold and other precious metals. Precious metals that are not related
+to the Group's precious metals trading activities are initially measured at acquisition cost and subsequently
+measured at the lower of cost and net recoverable amount. Precious metals acquired by the Group for
+trading purposes are initially measured at fair value and subsequent changes in fair value are recorded in
+income statement.
+(20) INVESTMENT PROPERTIES
+Investment properties are interests in land and buildings that are held to earn rental income and/
+or for capital appreciation, rather than for use in the production or supply of goods or services or for
+administrative purposes.
+Transfers to, or from, investment properties are made when, and only when, there is evidence of a change
+in use or the investment property is sold.
+Equipment, furniture and fixtures
+Motor vehicles
+Estimated residual values
+Estimated useful lives
+Trademarks are initially stated at cost and subsequently amortized on the straight-line basis over the
+estimated useful lives.
+Trademarks
+Prepaid land premiums are prepayments for land under PRC law for fixed periods. Prepaid land premiums
+are initially stated at cost and subsequently amortized on the straight-line basis over the lease terms. All
+lands related to the Group's prepaid land premiums are located in Mainland China.
+Prepaid land premiums
+Expenditures on acquiring the expressway operating rights are capitalized as intangible assets and
+subsequently amortized on the straight-line basis over the contract terms.
+Expressway operating rights
+Core deposits are accounts that a financial institution expects to maintain for an extended period of time
+due to ongoing business relationships. The intangible asset value associated with core deposits reflects
+the present value of additional cash flow resulted from the use of the deposits at a lower cost alternative
+source of funding in the future periods.
+Core deposits
+Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
+cash-generating unit level. Such intangible assets are not amortized. The useful life of an intangible asset
+with an indefinite life is reviewed annually to determine whether the indefinite life assessment continues to
+be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for on
+a prospective basis.
+Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible
+assets acquired in a business combination is the fair value as at the date of acquisition. The useful
+lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
+are subsequently amortized on the straight-line basis over the useful economic life and assessed for
+impairment whenever there is an indication that the intangible asset may be impaired. The amortization
+period and the amortization method for an intangible asset with a finite useful life are reviewed at least at
+each financial year end.
+(23) INTANGIBLE ASSETS (OTHER THAN GOODWILL)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+208
+No provision for depreciation is made on construction in progress until such time the relevant assets are
+completed and ready for use.
+Construction in progress mainly represents costs incurred in the construction of building premises, as well
+as the cost of equipment pending installation, less any impairment losses.
+(22) CONSTRUCTION IN PROGRESS
+Fully depreciated assets are retained in the financial statements until they are no longer in use and no
+further charge for depreciation is made in respect of these assets.
+The useful lives and depreciation methods are reviewed periodically to ensure that the method and period
+of depreciation are consistent with the expected pattern of economic benefits from the items of property
+and equipment.
+3 25 years
+Over the shorter of economic
+useful lives and terms of the leases
+15 40 years
+315 years
+0% - 10%
+0% - 10%
+0% - 15%
+Expressway operating rights
+216
+(28.7.1) General model
+Ping An Insurance (Group) Company of China, Ltd. 215
+(b) the Group expects to pay to the policyholder an amount equal to a substantial share of the fair value
+returns on the underlying items; and
+(c) the Group expects a substantial proportion of any change in the amounts to be paid to the
+policyholder to vary with the change in fair value of the underlying items.
+Reinsurance contracts issued and reinsurance contracts held cannot be insurance contracts with direct
+participation features.
+212
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS (CONTINUED)
+(28.2) Identification of insurance contract
+The Group assesses the significance of insurance risk contract by contract. A contract is an insurance
+contract only if it transfers significant insurance risk. A contract that meets the definition of an insurance
+contract remains an insurance contract until all rights and obligations are extinguished (i.e., discharged,
+cancelled or expired), unless the contract is derecognized because of a contract modification.
+Below assessments are performed to determine whether the insurance risk is significant:
+(a) the contractual terms specify that the policyholder participates in a share of a clearly identified pool
+of underlying items;
+(a) Insurance risk is significant if, and only if, an insured event could cause the Group to pay additional
+amounts that are significant in any single scenario that has commercial substance, even if the
+insured event is extremely unlikely, or even if the expected probability-weighted present value of the
+contingent cash flows is a small proportion of the expected present value of the remaining cash flows
+from the insurance contract. The additional amounts refer to the present value of amounts that exceed
+those that would be payable if no insured event had occurred. Those additional amounts include
+claims handling and assessment costs.
+(28.3) Combination of insurance contracts
+A set or series of insurance contracts with the same or a related counterparty may achieve, or be designed
+to achieve, an overall commercial effect. In order to report the substance of such contracts, the Group
+treats the set or series of contracts as a whole.
+(28.4) Separating components from an insurance contract
+An insurance contract may contain more components. The Group separates the following non-insurance
+components from such contracts:
+(a) embedded derivatives that should be separated in accordance with IFRS 9;
+(b) distinct investment components, except for those that can meet the definition of investment contract
+with discretionary participation features;
+(c) promises to transfer distinct goods or services other than insurance contract services.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 213
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+(b) In addition, a contract transfers significant insurance risk only if there is a scenario that has
+commercial substance in which the Group has a possibility of a loss on a present value basis. However,
+even if a reinsurance contract does not expose the issuer to the possibility of a significant loss, that
+contract is deemed to transfer significant insurance risk if it transfers to the reinsurer substantially all
+the insurance risk relating to the reinsured portions of the underlying insurance contracts.
+Insurance contract with direct participation features is an insurance contract that meet the following
+conditions at inception:
+(c) that are contractually based on the returns on specified items.
+(b) the timing or amount of which are contractually at the discretion of the issuer; and
+Intangible assets with indefinite useful lives are tested for impairment annually at each year end either
+individually or at the cash-generating unit level, as appropriate.
+For non-financial assets other than goodwill, an assessment is made at each reporting date as to whether
+there is any indication that previously recognized impairment losses may no longer exist or may have
+decreased. If such an indication exists, the Group makes an estimate of the recoverable amount. A
+previously recognized impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognized. If that is the case,
+the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
+exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
+been recognized for the asset in prior years. Such a reversal is recognized in the income statement.
+Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances
+indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable
+amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. The
+recoverable amount is the higher of its fair value less costs to disposal and its value-in-use, determined
+on an individual asset (or cash-generating unit) basis, unless the individual asset (or cash-generating unit)
+does not generate cash flows that are largely independent from those of other assets or groups of assets
+(or groups of cash-generating units). Impairment losses recognized in relation to goodwill are not reversed
+for subsequent increases in its recoverable amount.
+(26) IMPAIRMENT OF NON-FINANCIAL ASSETS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(27) INSURANCE GUARANTEE FUND
+The Group calculates the insurance guarantee fund based on the sum of benchmark rate and risk
+differential rate for the year:
+(a) Benchmark rate: 0.8% of the consideration received for property insurance, short-term health insurance
+and accident insurance; 0.3% of the consideration received for life insurance, long-term health
+insurance and annuities; including 0.05% of the consideration received for investment-linked insurance.
+(b) Risk differential rate: based on the result of the solvency integrated risk rating.
+No additional provision is required for Ping An Life Insurance Company of China, Ltd. ("Ping An Life"), Ping
+An Annuity Insurance Company of China, Ltd. ("Ping An Annuity") and Ping An Health Insurance Company
+of China, Ltd. ("Ping An Health Insurance"), when the accumulated insurance guarantee fund balances of
+life insurance industry reach 1% of the industry total assets. For Ping An Property & Casualty Insurance
+Company of China, Ltd. ("Ping An Property & Casualty"), no additional provision is required when the
+accumulated balance of property and casualty insurance industry reaches 6% of the industry total assets.
+The consideration received used in the calculation of the insurance guarantee fund is the amount agreed in
+the insurance policies, excluding VAT.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 211
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS
+(28.1) Definition of insurance contract
+Insurance contract is a contract under which one party (the issuer) accepts significant insurance risk from
+another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future
+event (the insured event) adversely affects the policyholder. Insured event is an uncertain future event
+covered by an insurance contract that creates insurance risk. Insurance risk is the risk, other than financial
+risk, transferred from the holder of a contract to the issuer.
+The Group applies IFRS 17 to:
+(a) insurance contracts, including reinsurance contracts, the Group issues;
+(b) reinsurance contracts the Group holds;
+(c) insurance contracts the Group acquired in a transfer of insurance contracts or a business combination;
+(d) investment contracts with discretionary participation features the Group issues.
+Reinsurance contract is an insurance contract issued by the reinsurer to compensate the cedent for claims
+arising from one or more insurance contracts issued by the cedent.
+Investment contract with discretionary participation features is a financial instrument that provides a
+particular investor with the contractual right to receive, as a supplement to an amount not subject to the
+discretion of the issuer, additional amounts:
+(a) that are expected to be a significant portion of the total contractual benefits;
+For the year ended 31 December 2023
+FINANCIAL STATEMENTS
+Depreciation is computed on a straight-line basis, after taking into account the estimated residual value (0%
+to 10% of original cost), over the estimated useful lives. The estimated useful lives of investment properties
+vary from 15 to 40 years.
+(28.5) Level of aggregation of insurance contracts
+(28.4) Separating components from an insurance contract (Continued)
+Investment component is the amounts that an insurance contract requires the Group to repay to a
+policyholder in all circumstances, regardless of whether an insured event occurs. An investment component
+is distinct if, and only if, both the following conditions are met:
+(a) the investment component and the insurance component are not highly interrelated. An investment
+component and an insurance component are highly interrelated if, and only if:
+(i) the Group is unable to measure one component without considering the other. Thus, if the value
+of one component varies according to the value of the other, the two components are highly
+interrelated; or
+(ii) the policyholder is unable to benefit from one component unless the other is also present. Thus,
+if the lapse or maturity of one component in a contract causes the lapse or maturity of the other,
+the two components are highly interrelated; and
+(b) a contract with equivalent terms is sold, or could be sold, separately in the same market or the same
+jurisdiction, either by entities that issue insurance contracts or by other parties.
+Insurance contract services are the services that the Group provides to a policyholder of an insurance
+contract, including: coverage for an insured event (insurance coverage); for insurance contracts without
+direct participation features, the generation of an investment return for the policyholder (investment-return
+service); and for insurance contracts with direct participation features, the management of underlying
+items on behalf of the policyholder (investment-related service). The Group separates from an insurance
+contract a promise to transfer distinct goods or services other than insurance contract services to a
+policyholder. For the purpose of separation, the Group does not consider activities that the Group must
+undertake to fulfill a contract unless the Group transfers a good or service other than insurance contract
+services to the policyholder as those activities occur. A good or service other than an insurance contract
+service promised to a policyholder is distinct if the policyholder can benefit from the good or service either
+on its own or together with other resources readily available to the policyholder. A good or service other
+than an insurance contract service that is promised to the policyholder is not distinct if: the cash flows and
+risks associated with the good or service are highly interrelated with the cash flows and risks associated
+with the insurance components in the contract; and the Group provides a significant service in integrating
+the good or service with the insurance components.
+After the separation of any cash flows related to embedded derivatives and distinct investment
+component, the Group attributes the remaining cash flows to insurance component (including unseparated
+embedded derivatives, non-distinct investment component and promises to transfer goods or services
+other than insurance contract services which are not distinct) and promises to transfer distinct goods or
+services other than insurance contract services.
+214
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+The Group identifies portfolios of insurance contracts. A portfolio comprises contracts subject to similar
+risks and managed together. The Group divides portfolios of insurance contracts into groups of insurance
+contracts and applies the recognition and measurement requirements to the groups of insurance contracts.
+Insurance contracts issued more than one year apart are not included in the same group. The Group
+determines the group to which contracts belong by considering individual contracts. If the Group has
+reasonable and supportable information to conclude that a set of contracts will all be in the same group,
+the Group may measure the set of contracts to determine the group.
+The Group divides a portfolio of insurance contracts issued into a minimum of:
+(a) a group of contracts that are onerous at initial recognition, if any;
+(b) a group of contracts that at initial recognition have no significant possibility of becoming onerous
+subsequently, if any; and
+(c) a group of the remaining contracts in the portfolio, if any.
+(28.6) Recognition of insurance contracts
+The Group recognizes a group of insurance contracts it issues from the earliest of the following:
+(a) the beginning of the coverage period of the group of contracts;
+(b) the date when the first payment from a policyholder in the group becomes due; and
+(c) for a group of onerous contracts, when the group becomes onerous.
+For individual contract that meet one of the criteria set out above, the Group determines the group to
+which it belongs at initial recognition and does not reassess the composition of the groups subsequently.
+Coverage period is the period during which the Group provides insurance contract services.
+The Group recognizes an asset for insurance acquisition cash flows paid or payable before the related
+group of insurance contracts is recognized. The Group allocates insurance acquisition cash flows to groups
+of insurance contracts using a systematic and rational method. Insurance acquisition cash flows are cash
+flows arising from the costs of selling, underwriting and starting a group of insurance contracts (issued or
+expected to be issued) that are directly attributable to the portfolio of insurance contracts to which the
+group belongs. The Group derecognizes an asset for insurance acquisition cash flows when the insurance
+acquisition cash flows are included in the measurement of the related group of insurance contracts. At the
+end of each reporting period, the Group assesses the recoverability of an asset for insurance acquisition
+cash flows if facts and circumstances indicate the asset may be impaired. If the Group identifies an
+impairment loss, the Group adjusts the carrying amount of the asset and recognizes the impairment loss
+in profit or loss. The Group recognizes in profit or loss a reversal of some or all of an impairment loss
+previously recognized and increase the carrying amount of the asset, to the extent that the impairment
+conditions no longer exist or have improved.
+Annual Report 2023
+(28) INSURANCE CONTRACTS (CONTINUED)
+Notes to Consolidated Financial Statements
+The Group measures the contractual service margin at the end of the reporting period for a group of
+reinsurance contracts held as the carrying amount determined at the start of the reporting period, adjusted
+The Group adjusts the loss-recovery component to reflect changes in the loss component of an onerous
+group of underlying insurance contracts. The carrying amount of the loss-recovery component does not
+exceed the portion of the carrying amount of the loss component of the onerous group of underlying
+insurance contracts that the Group expects to recover from the group of reinsurance contracts held.
+(c) any cash flows arising at that date; and
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(a) the fulfilment cash flows;
+On initial recognition for a group of reinsurance contracts held, the Group calculates the sum of:
+The Group determines the risk adjustment for non-financial risk so that it represents the amount of risk
+being transferred by the holder of the group of reinsurance contracts to the issuer of those contracts.
+(28) INSURANCE CONTRACTS (CONTINUED)
+(28.8) Recognition and measurement for reinsurance contracts held (Continued)
+(28.8.1) Recognition for reinsurance contracts held (Continued)
+The Group recognizes a group of reinsurance contracts held from the earlier of the following:
+(a) the beginning of the coverage period of the group of reinsurance contracts held; and
+(b) the date the Group recognizes an onerous group of underlying insurance contracts.
+If a group of reinsurance contracts held provide proportionate coverage, the Group recognizes such group
+of reinsurance contracts held from the earlier of the following:
+(a) the later date of the beginning of the coverage period of the group of reinsurance contracts held and
+the date that any underlying insurance contract is initially recognized; and
+For the year ended 31 December 2023
+(b) the date the Group recognizes an onerous group of underlying insurance contracts.
+The Group recognizes any net cost or net gain of the above total amounts as a contractual service margin.
+If the net cost relates to events that occurred before the purchase of the group of reinsurance contracts
+held, the Group recognizes such a cost immediately in profit or loss as an expense.
+224
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28.8.2) Measurement for reinsurance contracts held
+(28) INSURANCE CONTRACTS (CONTINUED)
+(28.8) Recognition and measurement for reinsurance contracts held (Continued)
+(28.8.2) Measurement for reinsurance contracts held (Continued)
+If the reinsurance contract held is entered into before or at the same time as the onerous underlying
+insurance contracts are recognized, when the Group recognizes a loss on initial recognition of an onerous
+group of underlying insurance contracts or on addition of onerous underlying insurance contracts to a
+group, the Group recognizes a loss-recovery component of the asset for remaining coverage for such
+groups of reinsurance contracts held by multiplying:
+(a) the loss recognized on the underlying insurance contracts; and
+(b) the percentage of claims on the underlying insurance contracts the Group expects to recover from the
+group of reinsurance contracts held.
+The Group adjusts the same amount calculated above to contractual service margin and recognizes as
+amount recovered from reinsurer in profit or loss.
+(d) loss-recovery component of assets for remaining coverage of reinsurance contracts held.
+(b) the amount derecognized at that date of any asset or liability previously recognized for cash flows
+related to the group of reinsurance contracts held;
+(f) the amount recognized in profit or loss because of services received in the period, determined by the
+allocation of the contractual service margin remaining at the end of the reporting period (before any
+allocation) over the current and remaining coverage period of the group of reinsurance contracts held.
+Annual Report 2023
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 219
+(ii) fulfilment cash flows that do not vary based on the returns on underlying items.
+(i) the amount of the Group's share of the fair value of the underlying items; less
+(28) INSURANCE CONTRACTS (CONTINUED)
+(a) the obligation to pay the policyholder an amount equal to the fair value of the underlying items; and
+(b) a variable fee that the Group will deduct from (a) in exchange for the future service provided by the
+insurance contract, comprising:
+reassessment afterwards.
+(28.7.2) Measurements for insurance contract with direct participation features (Variable Fee Approach)
+The Group assesses whether an insurance contract can meet the definition of insurance contracts with
+direct participation features by using its expectations at inception of the contract and does not perform
+When applying IAS 21 The Effects of Changes in Foreign Exchange Rates to a group of insurance contracts
+that generate cash flows in a foreign currency, the Group treats the group of contracts, including the
+contractual service margin, as a monetary item. The Group includes exchange differences on changes in the
+carrying amount of groups of insurance contracts in the statement of profit or loss, unless they relate to
+changes in the carrying amount of groups of insurance contracts included in other comprehensive income
+for insurance finance income or expenses, in which case they are included in other comprehensive income.
+(b) disaggregating insurance finance income or expenses for the period to include in profit or loss an
+amount determined by a systematic allocation of the expected total insurance finance income or
+expenses over the duration of the group of contracts, the difference between the insurance finance
+income or expenses and the total insurance finance income or expenses for the period is included in
+other comprehensive income.
+(a) including insurance finance income or expenses for the period in profit or loss; or
+The Group makes accounting policy choices to portfolios of insurance contracts between:
+Subsequent measurement (Continued)
+Insurance contracts with direct participation features are contracts under which the Group's obligation to
+the policyholder is the net of:
+(28.7.1) General model (Continued)
+(28.7) Measurement of insurance contracts (Continued)
+For insurance contracts with direct participation features, the carrying amount of the contractual service
+margin of a group of contracts at the end of the reporting period equals the carrying amount at the start
+of the reporting period adjusted for:
+(28) INSURANCE CONTRACTS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+220
+(iii) such decreases in the fulfilment cash flows are allocated to the loss component of the liability for
+remaining coverage.
+(ii) such increases in the fulfilment cash flows exceed the carrying amount of the contractual service
+margin, giving rise to a loss; or
+(28.7.2) Measurements for insurance contract with direct participation features (Variable Fee Approach)
+(Continued)
+if the Group mitigates the effect of financial risk using derivatives, reinsurance contracts held or
+non-derivative financial instruments measured at fair value through profit or loss, when meets
+certain conditions, the Group may choose to recognize insurance finance income or expenses
+for the period in profit or loss to reflect some or all of the changes in the effect of the time
+value of money and financial risk on the fulfilment cash flows. However, if the Group chooses to
+disaggregate insurance finance income or expenses of such reinsurance contracts held between
+profit or loss and other comprehensive income, the insurance finance income or expenses
+mentioned above should also be disaggregated accordingly;
+(c) the changes in fulfilment cash flows relating to future service and do not vary based on the returns on
+underlying items, except to the extent that:
+(iii) the increase in the amount of the Group's share of the fair value of the underlying items is
+allocated to the loss component of the liability for remaining coverage.
+(ii) the decrease in the amount of the Group's share of the fair value of the underlying items exceeds
+the carrying amount of the contractual service margin, giving rise to a loss; or
+if the Group mitigates the effect of financial risk using derivatives or reinsurance contracts held,
+when meets certain conditions, the Group may choose to recognize insurance finance income
+or expenses for the period in profit or loss to reflect some or all of the changes in the effect of
+the time value of money and financial risk on the amount of the Group's share of the underlying
+items. However, if the Group chooses to disaggregate insurance finance income or expenses
+of such reinsurance contracts held between profit or loss and other comprehensive income,
+the insurance finance income or expenses mentioned above should also be disaggregated
+accordingly;
+(i)
+(b) the change in the amount of the Group's share of the fair value of the underlying items, except to the
+extent that:
+(a) the effect of any new contracts added to the group.
+(i)
+(28.7) Measurement of insurance contracts (Continued)
+(28) INSURANCE CONTRACTS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 217
+If the total amount represents net cash inflows, the Group recognizes it as contract service margin. If the
+total amount represents net cash outflows, the Group recognizes a loss in profit or loss.
+(b) the derecognition at the date of initial recognition of any asset for insurance acquisition cash flows
+and any other asset or liability previously recognized for cash flows related to the group of contracts;
+(c) any cash flows arising from the contracts in the group at that date.
+(a) the fulfilment cash flows;
+The Group calculates the total amount of below items on initial recognition of a group of insurance
+contracts:
+The Group adjusts the estimate of the present value of the future cash flows to reflect the compensation
+that the Group requires for bearing the uncertainty about the amount and timing of the cash flows that
+arises from non-financial risk.
+Notes to Consolidated Financial Statements
+(b) be consistent with observable current market prices for financial instruments with cash flows whose
+characteristics are consistent with those of the insurance contracts, and exclude the effect of factors
+that influence such observable market prices but do not affect the future cash flows of the insurance
+contracts.
+The Group uses appropriate discount rate to adjust the estimates of future cash flows to reflect the time
+value of money and the financial risks related to those cash flows, to the extent that the financial risks are
+not included in the estimates of cash flows. The discount rates applied to the estimates of the future cash
+flows shall:
+Measurement on initial recognition (Continued)
+(28.7.1) General model (Continued)
+(28.7) Measurement of insurance contracts (Continued)
+(28) INSURANCE CONTRACTS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2023
+(a) reflect the time value of money, the characteristics of the cash flows and the liquidity characteristics
+of the insurance contracts;
+For the year ended 31 December 2023
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS (CONTINUED)
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+218
+The Group recognizes the change in the liability for remaining coverage and the liability for incurred
+claims because of the effect of the time value of money and the effect of financial risk as insurance finance
+income or expenses.
+The Group determines insurance service expenses related to insurance acquisition cash flows in a
+systematic way on the basis of the passage of time. The Group recognizes the same amount as insurance
+revenue to reflect the portion of the premiums that relate to recovering those cash flows.
+The Group recognizes the reduction in the liability for remaining coverage because of services provided
+in the period as insurance revenue. The Group recognizes the increase in the liability for incurred claims
+because of claims and expenses incurred in the period and any subsequent changes in fulfilment cash flows
+relating to incurred claims and incurred expenses as insurance service expenses. Insurance revenue and
+insurance service expenses presented in profit or loss has excluded any investment components.
+(e) the amount recognized as insurance revenue because of the transfer of insurance contract services in
+the period, determined by the allocation of the contractual service margin remaining at the end of the
+reporting period (before any allocation) over the current and remaining coverage period.
+(d) the effect of any currency exchange differences on the contractual service margin.
+(c) the changes in fulfilment cash flows relating to future service, except that such increases in the
+fulfilment cash flows exceed the carrying amount of the contractual service margin, giving rise to a
+loss; or except that such decreases in the fulfilment cash flows are allocated to the loss component of
+the liability for remaining coverage.
+(b) interest accreted on the carrying amount of the contractual service margin during the reporting
+period, measured at the discount rates determined at the date of initial recognition of a group of
+contracts, applied to nominal cash flows that do not vary based on the returns on any underlying
+items.
+(a) the effect of any new contracts added to the group.
+For insurance contracts without direct participation features, the carrying amount of the contractual
+service margin of a group of contracts at the end of the reporting period equals the carrying amount at the
+start of the reporting period adjusted for:
+The carrying amount of a group of insurance contracts at the end of each reporting period shall be the
+sum of the liability for remaining coverage and the liability for incurred claims. The liability for remaining
+coverage comprises the fulfilment cash flows related to future service allocated to the group at that date
+and the contractual service margin of the group at that date. The liability for incurred claims comprises the
+fulfilment cash flows related to past service allocated to the group at that date.
+Subsequent measurement
+(28.7.1) General model (Continued)
+(28.7) Measurement of insurance contracts (Continued)
+(28.7) Measurement of insurance contracts (Continued)
+Ping An Insurance (Group) Company of China, Ltd.
+(28.7.2) Measurements for insurance contract with direct participation features (Variable Fee Approach)
+(Continued)
+(e) the amount recognized as insurance revenue because of the transfer of insurance contract services in
+the period, determined by the allocation of the contractual service margin remaining at the end of the
+reporting period (before any allocation) over the current and remaining coverage period.
+(e) the effect of any currency exchange differences arising on the contractual service margin.
+(d) the changes in the fulfilment cash flows relating to future service, except that such change results
+from a change in fulfilment cash flows allocated to a group of underlying insurance contracts that
+does not adjust the contractual service margin for the group of underlying insurance contracts; or
+except that such change results from onerous contracts, if the Group measures a group of underlying
+insurance contracts applying the premium allocation approach.
+(c) the loss-recovery component of the asset for remaining coverage for such groups of reinsurance
+contracts held, and reversals of a loss-recovery component recognized to the extent those reversals
+are not changes in the fulfilment cash flows of the group of reinsurance contracts held.
+(b) interest accreted on the carrying amount of the contractual service margin, measured at the discount
+rates determined at the date of initial recognition of a group of contracts, to nominal cash flows that
+do not vary based on the returns on any underlying items.
+(a) the effect of any new contracts added to the group.
+for:
+FINANCIAL STATEMENTS
+The Group uses consistent assumptions to measure the estimates of the present value of the future cash
+flows for the group of reinsurance contracts held and the estimates of the present value of the future cash
+flows for the group of underlying insurance contracts. In addition, the Group includes in the estimates of
+the present value of the future cash flows for the group of reinsurance contracts held the effect of any risk
+of non-performance by the issuer of the reinsurance contract.
+Ping An Insurance (Group) Company of China, Ltd. 223
+(c) a group of the remaining contracts in the portfolio, if any.
+(b) a group of contracts that at initial recognition have no significant possibility of becoming to have net
+gain subsequently, if any; and
+(a) a group of contracts that there is a net gain at initial recognition, if any;
+The Group divides portfolios of reinsurance contracts held into a minimum of:
+(28.8.1) Recognition for reinsurance contracts held
+In addition to the requirements for insurance contracts set out above, the recognition and measurement
+for reinsurance contracts held are modified as follows. The requirements of measurements for onerous
+insurance contracts are not applicable for reinsurance contracts held.
+(28.8) Recognition and measurement for reinsurance contracts held
+Annual Report 2023
+When the Group applies the premium allocation approach, insurance revenue for the period is the amount
+of expected premium receipts (excluding any investment component and adjusted to reflect the time
+value of money and the effect of financial risk) allocated to the period. The Group allocates the expected
+premium receipts to each period of insurance contract services on the basis of the passage of time; but if
+the expected pattern of release of risk during the coverage period differs significantly from the passage of
+time, then on the basis of the expected timing of incurred insurance service expenses.
+Annual Report 2023
+FINANCIAL STATEMENTS
+226
+(c) the allocation of the contractual service margin is modified so that the Group recognizes the
+contractual service margin over the duration of the group of contracts in a systematic way that
+reflects the transfer of investment services under the contract.
+(b) the contract boundary is modified so that cash flows are within the contract boundary if they result
+from a substantive obligation of the Group to deliver cash at a present or future date. The Group has
+no substantive obligation to deliver cash if the Group has the practical ability to set a price for the
+promise to deliver the cash that fully reflects the amount of cash promised and related risks.
+(a) the date of initial recognition is the date the Group becomes party to the contract.
+In addition to the requirements for insurance contracts set out above, the recognition and measurement for
+investment contract with discretionary participation features are modified as follows:
+(28.9) Investment contracts with discretionary participation features
+(b) the coverage period of each contract in the group of reinsurance contracts held is one year or less.
+Ping An Insurance (Group) Company of China, Ltd. 225
+(a) the Group reasonably expects the resulting measurement would not differ materially from the result
+of not applying the premium allocation approach set out above, unless the Group expects significant
+variability in the fulfilment cash flows that would affect the measurement of the asset for remaining
+coverage during the period before a claim is incurred; or
+The Group recognizes the reduction in the asset for remaining coverage because of insurance contract
+services received from the reinsurer in the period as allocation of reinsurance premiums paid. The Group
+recognizes the increase in the asset for incurred claims because of claims and expenses that are expected
+to be reimbursed in the period and any subsequent related changes in fulfilment cash flows as amount
+recovered from reinsurer. The Group treats amounts from the reinsurer that it expects to receive that
+are not contingent on claims of the underlying contracts as the reduction to the allocation of reinsurance
+premiums paid. Allocation of reinsurance premiums paid and amount recovered from reinsurer presented in
+profit or loss has excluded any investment components.
+(28.8.2) Measurement for reinsurance contracts held (Continued)
+(28.8) Recognition and measurement for reinsurance contracts held (Continued)
+(28) INSURANCE CONTRACTS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+The Group uses the premium allocation approach to simplify the measurement of a group of reinsurance
+contracts held, if at the inception of the group:
+The Group measures the liability for incurred claims for the group of insurance contracts at the fulfilment
+cash flows relating to incurred claims and other related expenses. The Group is not required to adjust
+future cash flows for the time value of money and the effect of financial risk if those cash flows are
+expected to be paid or received in one year or less from the date the claims are incurred. The Group would
+also not include in the fulfilment cash flows mentioned above any such adjustment.
+If at any time during the coverage period, facts and circumstances indicate that a group of insurance
+contracts is onerous, to the extent that the fulfilment cash flows exceed the carrying amount of the liability
+for remaining coverage, the Group recognizes a loss as insurance service expenses in profit or loss and
+increase the liability for remaining coverage.
+The Group adjusts the carrying amount of the liability for remaining coverage to reflect the time value of
+money and the effect of financial risk using the discount rates determined on initial recognition. The Group
+is not required to adjust the carrying amount of the liability for remaining coverage to reflect the time
+value of money and the effect of financial risk if, at initial recognition, the Group expects that the time
+between providing each part of the services and the related premium due date is no more than a year.
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 221
+Annual Report 2023
+Any amounts allocated to the loss component of the liability for remaining coverage shall not be
+recognized as insurance revenue.
+(c) insurance finance income or expenses.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(b) changes in the risk adjustment for non-financial risk recognized in profit or loss because of the release
+from risk; and
+After the Group has recognized a loss on an onerous group of insurance contracts, the Group allocates
+below changes of the liability for remaining coverage on a systematic basis between the loss component of
+the liability for remaining coverage and the liability for remaining coverage excluding the loss component:
+(b) for a group of insurance contracts with direct participation features, the decrease in the amount of the
+Group's share of the fair value of the underlying items exceed the carrying amount of the contractual
+service margin.
+(a) the amount of unfavourable changes relating to future service in the fulfilment cash flows allocated
+to the group arising from changes in estimates of future cash flows and the risk adjustment for
+non-financial risk exceed the carrying amount of the contractual service margin;
+A group of insurance contracts becomes onerous (or more onerous) on subsequent measurement if meets
+one of the following conditions, the Group recognizes a loss as insurance service expenses in profit or loss
+and increases the liability for remaining coverage:
+If a group of insurance contracts is onerous at the date of initial recognition, or if additional loss caused
+by contracts added to the group of onerous contracts, the Group recognizes a loss as insurance service
+expenses in profit or loss for the net outflow for the group of onerous contracts, resulting in the carrying
+amount of the liability for remaining coverage for the group being equal to the fulfilment cash flows.
+(28.7.3) Measurements for onerous insurance contracts
+For insurance contracts with direct participation features that the Group holds the underlying items, the
+Group makes the accounting policy choice of disaggregating insurance finance income or expenses for the
+period between profit or loss and other comprehensive income, includes in profit or loss an amount that
+exactly match the income or expenses included in profit or loss for the underlying items, resulting in the
+net of the separately presented items being nil.
+(a) estimates of the present value of future cash flows for claims and expenses released from the liability
+for remaining coverage because of incurred insurance service expenses;
+(28) INSURANCE CONTRACTS (CONTINUED)
+(28.7) Measurement of insurance contracts (Continued)
+(28.7.3) Measurements for onerous insurance contracts (Continued)
+(28.7.4) Premium Allocation Approach (Continued)
+(28.7) Measurement of insurance contracts (Continued)
+(28) INSURANCE CONTRACTS (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+222
+At the end of each subsequent reporting period, the carrying amount of the liability for remaining coverage
+is the carrying amount at the start of the reporting period plus the premiums received in the period, minus
+insurance acquisition cash flows, plus any amounts relating to the amortization of insurance acquisition
+cash flows recognized as insurance service expenses in the reporting period, plus any adjustment to a
+financing component, minus the amount recognized as insurance revenue for services provided in that
+period, and minus any investment component paid or transferred to the liability for incurred claims.
+Using the premium allocation approach, on initial recognition, the carrying amount of the liability for
+remaining coverage is the premiums received at initial recognition, minus any insurance acquisition cash
+flows at that date, and plus or minus any amount arising from the derecognition at that date of any asset
+for insurance acquisition cash flows and any other asset or liability previously recognized for cash flows
+related to the group of contracts.
+For contracts issued to which the Group applies the premium allocation approach, the Group assumes
+no contracts in the portfolio are onerous at initial recognition, unless facts and circumstances indicate
+otherwise.
+(b) the coverage period of each contract in the group is one year or less.
+(a) the Group reasonably expects that such simplification would produce a measurement of the liability
+for remaining coverage for the group that would not differ materially from the one that would be
+produced applying general model, unless the Group expects significant variability in the fulfilment
+cash flows that would affect the measurement of the liability for remaining coverage during the period
+before a claim is incurred; or
+The Group simplifies the measurement of a group of insurance contracts using the premium allocation
+approach if, and only if, at the inception of the group:
+(28.7.4) Premium Allocation Approach
+(b) for any subsequent decreases relating to future service in fulfilment cash flows allocated to the group
+arising from changes in estimates of future cash flows and the risk adjustment for non-financial risk,
+and any subsequent increases in the amount of the Group's share of the fair value of the underlying
+items, the Group reverses the insurance service expenses in profit or loss and decreases the loss
+component of the liability for remaining coverage until that component is reduced to zero, the Group
+adjusts the contractual service margin only for the excess of the decrease over the amount allocated
+to the loss component.
+(a) for any subsequent increases relating to future service in fulfilment cash flows allocated to the group
+arising from changes in estimates of future cash flows and the risk adjustment for non-financial risk,
+and any subsequent decreases in the amount of the Group's share of the fair value of the underlying
+items, the Group recognizes a loss as insurance service expenses in profit or loss and increases the
+liability for remaining coverage;
+After the Group has recognized a loss on an onerous group of insurance contracts, the subsequent
+measurements are:
+(d) the effect of any currency exchange differences arising on the contractual service margin.
+On initial recognition, the Group measures a group of reinsurance contracts held at the total of the
+fulfilment cash flows and the contractual service margin. The contractual service margin represents the net
+cost or net gain the Group will recognize as it receives insurance contract services from the reinsurer.
+Current tax assets and liabilities for the current and prior periods are measured at the amount expected to
+be recovered from or paid to the taxation authorities.
+Annual Report 2023
+(29) PROVISIONS (CONTINUED)
+The amount recognized as a provision shall be the best estimate of the expenditure required to settle the
+present obligation at the end of the reporting period with the consideration of risks, uncertainties and the
+present value. Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the
+current best estimate.
+The Group incorporates forward looking information in estimating the expected credit loss for loan
+commitments and financial guarantee contracts. Refer to Note 13 and Note 47 for details.
+(30) REVENUE RECOGNITION
+The Group's main revenue is recognized on the following bases:
+Insurance revenue
+The Group recognizes insurance revenue as it provides insurance contract services under groups of
+insurance contracts.
+For insurance contracts not measured under the premium allocation approach, insurance revenue
+comprises the relevant amount arising from changes of the liability for remaining coverage that relate to
+services for which the Group expects to receive consideration, excludes investment components, and the
+amortization of insurance acquisition cash flows, the details are as follows:
+(a) Amounts relating to the changes in the liability for remaining coverage:
+(i) expected insurance service expenses incurred in the period;
+(ii) change in the risk adjustment for non-financial risk;
+(iii) amount of contractual service margin recognized for services provided in the period;
+(iv) other amounts, such as experience adjustments for premium receipts that relate to current or
+past service, if any;
+(b) For insurance acquisition cash flows recovery, the Group allocates a portion of premiums related
+to the recovery in a systematic way based on the passage of time over the expected coverage of a
+group of contracts. The allocated amount is recognized as insurance revenue with the same amount
+recognized as insurance service expenses.
+For insurance contracts measured under the premium allocation approach, the Group recognizes insurance
+revenue for the period based on the passage of time by allocating expected premium receipts to each
+period of service. However, when the expected pattern of release from risk during the coverage period
+differs significantly from the passage of time, the premium receipts are allocated based on the expected
+pattern of incurred insurance service expenses.
+Interest income
+Interest income for interest bearing financial instruments, is recognized in the income statement using the
+effective interest rate method. When a financial asset is impaired, the Group reduces the carrying amount
+to its recoverable amount, being the estimated future cash flow discounted at the original effective interest
+rate of the instrument, and continues unwinding the discount as interest income.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 229
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+Ping An Insurance (Group) Company of China, Ltd.
+228
+Ping An Insurance (Group) Company of China, Ltd. 227
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS (CONTINUED)
+(28.10)
+Modification and derecognition (Continued)
+When the Group derecognizes an insurance contract because it transfers the contract to a third party
+or derecognizes an insurance contract and recognizes a new contract, the Group applies the following
+requirements:
+(a) adjusts the contractual service margin of the group from which the contract has been derecognized,
+for the difference between (i) and either (ii) for contracts transferred to a third party or (iii) for
+contracts derecognized due to modification:
+(i) the change in the carrying amount of the group of insurance contracts resulting from the
+derecognition of the contract.
+(ii) the premium charged by the third party.
+(iii) the premium the Group would have charged had it entered into a contract with equivalent terms
+as the new contract at the date of the contract modification, less any additional premium charged
+for the modification.
+(b) measures the new contract recognized assuming that the Group received the premium described in
+(a)(iii) at the date of the modification.
+If the Group derecognizes an insurance contract because it transfers the contract to a third party or
+derecognizes an insurance contract due to modification, the Group reclassifies to profit or loss as a
+reclassification adjustment any remaining amounts for the group that were previously recognized in other
+comprehensive income, unless for insurance contracts with direct participation features that the Group
+holds the underlying items.
+(29) PROVISIONS
+A provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past
+event and it is probable that a future outflow of resources will be required to settle the obligation, provided
+that a reliable estimate can be made of the amount of the obligation. When the effect of discounting
+is material, the amount recognized is the present value at the end of the reporting period of the future
+expenditures expected to be required to settle the obligation.
+Except for contingent considerations deriving from or contingent liabilities assumed in business
+combinations and the provision recognized for the loss allowance of off-balance sheet credit exposure,
+contingent liabilities are recognized as provisions if the following conditions are met:
+(a) An entity has a present obligation as a result of a past event;
+(b) It is probable that an outflow of resources embodying economic benefits will be required to settle the
+obligation; and
+(c) A reliable estimate can be made of the amount of the obligation.
+Annual Report 2023
+(c) the number of coverage units for expected remaining insurance contract services is adjusted.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Fees and commission income of non-insurance operations
+The employees of the Group are mainly covered by various defined contribution pension plans. The Group
+makes and accrues contributions on a monthly basis to the pension plans, which are mainly sponsored by
+the related government authorities that are responsible for the pension liability to retired employees. Under
+such plans, the Group has no other significant legal or constructive obligations for retirement benefits
+beyond the said contributions, which are expensed as incurred. Certain employees are also provided with
+group life insurance but the amounts involved are insignificant.
+Housing benefits
+Deferred tax liabilities are recognized for all taxable temporary differences, except:
+Medical benefits
+The Group makes monthly contributions for medical benefits to the local authorities in accordance with the
+relevant local regulations for the employees. The Group's liability in respect of employee medical benefits is
+limited to the contributions payable in each period.
+Annual Report 2023
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 231
+232
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(33) SHARE-BASED PAYMENT
+Equity-settled share-based payment transactions
+The Group operates an equity-settled, share-based compensation plan, under which the Group receives
+services from employees as consideration for equity instruments.
+The total amount to be expensed is determined by reference to the fair value of the shares granted, which
+includes the impact of market performance conditions (for example, an entity's share price) but excludes
+the impact of any service and non-market performance vesting conditions (for example, profitability,
+sales growth targets and remaining an employee of the entity over a specified time period) and includes
+the impact of any non-vesting conditions (for example, the requirement for employees to save or holding
+shares for a specified period of time). The Group estimates the number of total shares expected to vest
+taking into consideration of service and non-market performance conditions. Based on number of shares
+expected to vest, related cost or expense is recognized over the vesting period according to fair value of
+the shares granted on granted date.
+At the end of each reporting period, the Group revises its estimates of the number of options and awarded
+shares that are expected to vest based on the non-marketing performance and service conditions.
+It recognizes the impact of the revision to original estimates, if any, in the income statement, with a
+corresponding adjustment to equity.
+The Company settles with the awardees under the share purchase scheme upon vesting.
+(34) TAX
+Income tax comprises current and deferred tax. Income tax is recognized in the income statement, or in
+other comprehensive income or in equity if it relates to items that are recognized in the same or a different
+period directly in other comprehensive income or in equity.
+Pension obligations
+(30) REVENUE RECOGNITION (CONTINUED)
+(32) EMPLOYEE BENEFITS
+The Group mainly leases buildings as right-of-use assets. The Group applies the lease recognition
+exemption to short-term leases and leases of low-value assets, and does not recognize the right-of-use
+assets and lease liabilities. Lease payments on short-term leases and leases of low-value assets are
+recognized as costs of asset or expenses on a straight-line basis over the lease term. Except for lease
+applying lease recognition exemption, leases are recognized as a right-of-use asset at the date at which the
+lease begins, lease liabilities are initial measured at the present value of the lease payments that have not
+been paid. Lease payments include fixed payments, variable lease payment based on an index or a rate, the
+exercise price of a purchase option if the lessee is reasonably certain to exercise that option and payments
+of penalties for terminating the lease, etc. The variable lease payments determined on a certain percentage
+of sales are not included in the lease payments and are recognized in profit or loss when incurred.
+The fees and commission income of non-insurance operations from a diverse range of services it provides
+to its customers are recognized when the control of services is transferred to customers. Fee income can
+be divided into the following main categories:
+Fee income earned from services that are provided over a certain period of time
+Fees earned from the provision of services over a period of time are accrued over that period. These
+fees include investment fund administration fees, custodian fees, fiduciary fees, credit related fees, asset
+management fees, portfolio and other management fees, advisory fees, etc. However, loan commitment
+fees for loans that are likely to be drawn down are deferred (together with any incremental costs) and
+recognized as an adjustment to the effective interest rate on the loan.
+Fee income from providing transaction services
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such
+as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses,
+are recognized on the completion of the underlying transaction and the control of services is transferred
+to customers. Fees or components of fees that are linked to a certain performance are recognized after
+fulfilling the corresponding criteria. These fees may include underwriting fees, corporate finance fees and
+brokerage fees. Loan syndication fees are recognized in the income statement when the syndication has
+been completed and the Group retains no part of the loans for itself or retains part at the same effective
+interest rate as for the other participants.
+Dividend income
+Dividend income is recognized when the right to receive dividend payment is established.
+Expressway toll fee income
+Expressway toll fee income is recognized upon the completion of the performance obligation of services.
+Sale of goods
+Revenue from the sale of goods is recognized when control of the goods has been transferred. Control
+of goods or services refers to the ability to direct the use of, and obtain substantially all of the remaining
+benefits from, the goods or services.
+The amount of revenue from the sale of goods shall be measured by the transaction price, which is
+allocated to each performance obligation. The transaction price is the amount of consideration to be
+entitled in exchange for transferring promised goods to a customer. The Group considers the terms of the
+contract and its customary business practices to determine the transaction price. When determining the
+transaction price, the Group considers the effects of variable consideration, the existence of a significant
+financing component in the contract, non-cash consideration and consideration payable to a customer.
+The part with unconditional rights is recognized as a receivable by the Group, while the rest is recognized
+as contracts assets. And the impairment provisions of receivables and contracts assets are recognized
+based on ECL. If the consideration received or receivable from the contract exceeds the performance
+completed, the excess part would be recognized as contracts liabilities. The Group presents the net amount
+by the offsetting between contracts assets and contracts liabilities under one contact.
+230
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(31) LEASES
+Leases refer to a contract in which the lessor transfers the right to use the assets to the lessee for a
+certain period of time to obtain the consideration. Leases where substantially all the rewards and risks of
+ownership of assets remain with the lessor are accounted for as operating leases.
+As lessor of operating leases
+Where the Group is the lessor, assets leased by the Group under operating leases are included in
+investment properties and rentals receivable under such operating leases are credited to the income
+statement on the straight-line basis over the lease terms. Contingent rents are recognized as profit or loss
+in the period in which they are earned.
+Group as a lessee
+Right-of-use assets are initial measured at cost comprising the amount of the initial measurement of lease
+liability, any lease payments made at or before the commencement date less any lease incentives received,
+any initial direct costs and deduct any lease incentives receivable. The right-of-use asset is depreciated
+over the asset's useful life on a straight-line basis if the Group can reasonably determine the ownership of
+the assets at the end of the lease term; The right-of-use asset is depreciated over the shorter of the asset's
+useful life and the lease term if the ownership of the assets is uncertain at the end of the lease term. When
+the recoverable amount is lower than the carrying amount of the right-of-use asset, the Group reduces its
+carrying amount to the recoverable amount.
+Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting
+period between the tax bases of assets and liabilities and their carrying amounts for financial reporting
+purposes.
+(b) the contractual service margin of the group is adjusted; and
+The Group derecognizes an insurance contract when it is extinguished, i.e. when the obligation specified in
+the insurance contract expires or is discharged or cancelled. The Group derecognizes an insurance contract
+from within a group of contracts by applying the following requirements:
+(c) Establishing the number and relative weightings of forward-looking scenarios for each type of product
+and the associated ECL; and
+(b) Choosing appropriate models and assumptions for the measurement of ECL;
+(a) Determining criteria for significant increase in credit risk;
+A number of significant judgements are also required in applying the accounting requirements for
+measuring ECL, such as:
+The measurement of the expected credit losses for financial assets measured at amortized cost and FVOCI
+is an area that requires the use of complex models and significant assumptions about future economic
+conditions and credit behaviour. Explanation of the inputs, assumptions and estimation techniques used in
+measuring ECL is further detailed in Note 49.
+(3) MEASUREMENT OF THE EXPECTED CREDIT LOSSES
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 235
+Annual Report 2023
+The contractual cash flows characteristics of financial assets refer to the cash flow attributes of the
+financial assets reflecting the economic characteristics of the relevant financial assets (i.e., whether the
+contractual cash flows generated by the relevant financial assets on a specified date solely represents the
+payments of principal and interest). The principal amount refers to the fair value of the financial asset at
+initial recognition. The principal amount may change throughout the lifetime of the financial assets due
+to prepayment or other reasons. The interest includes the time value of money, the credit risk associated
+with the outstanding principal amount for a specific period, other basic lending credit risks, and the
+consideration of costs and profits.
+An entity's business model refers to how an entity manages its financial assets in order to generate cash
+flows. That is, the entity's business model determines whether cash flows are arising from collecting
+contractual cash flows, selling financial assets or both. The business model of managing financial assets
+is not determined by a single factor or activity. Instead, the entity should consider all relevant evidence
+available when making the assessment. Relevant evidence mainly includes, but not limited to, how the cash
+flow of the group of assets is collected, how the performance of the group of assets is reported to key
+management personnel, and how the risk of group of assets is being assessed and managed.
+The judgements in determining the classification of financial assets include the analysis of business models
+and the contractual cash flows characteristics.
+(2) CLASSIFICATION OF FINANCIAL ASSETS
+Using different valuation techniques and parameter assumptions may lead to significant difference of fair
+value estimation.
+When using valuation techniques to determine the fair value of financial instruments, the Group would
+choose the input value in consistent with market participants, considering the transactions of related assets
+and liabilities. All related observable market parameters are considered in priority, including interest rate,
+foreign exchange rate, commodity prices and share prices or index. When related observable parameters
+are unavailable or inaccessible, the Group uses unobservable parameters and makes estimates for credit
+risk, market volatility and liquidity adjustments.
+Fair value, in the absence of an active market, is estimated by using valuation techniques, applying
+currently applicable and sufficiently available data, and the valuation techniques supported by other
+information, mainly include market approach and income approach, reference to the recent arm's length
+transactions, current market value of another instrument which is substantially the same, and by using the
+discounted cash flow analysis and option pricing models.
+(1) FAIR VALUE OF FINANCIAL INSTRUMENTS DETERMINED USING VALUATION
+TECHNIQUES
+In the process of applying the Group's accounting policies, management has made the following
+judgements and accounting estimation, which have the significant effect on the amounts recognized in the
+financial statements.
+(d) Establishing groups of similar financial assets for the purposes of measuring ECL.
+The Group makes estimates and judgements that affect the reported amounts of revenues, expenses,
+assets and liabilities and the disclosure of contingent liabilities in these financial statements. Estimates
+and judgements are continually assessed based on historical experience and other factors, including
+expectations of future events that are believed to be reasonable under the circumstances.
+(4) LEVEL OF AGGREGATION AND RECOGNITION OF GROUP OF INSURANCE CONTRACTS
+(a) based on the likelihood of changes in assumptions which, if they occurred, would result in the
+contracts becoming onerous; and
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(28) INSURANCE CONTRACTS (CONTINUED)
+(28.10)
+Modification and derecognition
+If the terms of an insurance contract are modified, the Group derecognizes the original contract and
+recognizes the modified contract as a new contract, if, and only if, any of the conditions below are
+satisfied:
+(a) if the modified terms had been included at contract inception:
+(i)
+the modified contract would have been excluded from the scope of IFRS 17;
+(ii) the Group would have separated different components from the host insurance contract, resulting
+in a different insurance contract to which IFRS 17 would have applied;
+(iii) the modified contract would have had a substantially different contract boundary; or
+(iv) the modified contract would have been included in a different group of contracts.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+236
+Expected coverage period is derived based on the consideration of the contract terms and estimates used
+when measures fulfilment cash flows, including mortality rates, morbidity rates, lapse rate, etc.
+In assessing the quantity of services provided by insurance contracts, the Group considers the terms and
+benefit features of the contracts, based on the service pattern of insurance coverage, investment-return
+service and investment-related service, as applicable. For contracts providing multiple services, the Group
+determines the relative weighting of each services based on related factors, including the expected
+maximum benefits, investment component, etc.
+The Group allocates the contractual service margin at the end of the period equally to each coverage unit
+provided in the current period and expected to be provided in the future, and recognizes as insurance
+revenue in each period. The Group identifies the coverage units of a group of insurance contracts in each
+period. The number of coverage units in a group is the quantity of insurance contract services provided
+by the contracts in the group, determined by considering the quantity of the benefits provided and the
+expected coverage period.
+(6) DETERMINATION OF COVERAGE UNIT
+The Group assesses the eligibility for the premium allocation approach and the variable fee approach
+when measures a group of insurance contracts on initial recognition, based on the characteristics of the
+insurance contracts and applicable facts and circumstances.
+(5) ELIGIBILITY FOR THE PREMIUM ALLOCATION APPROACH AND THE VARIABLE FEE
+APPROACH
+(b) using information about profitability estimation for the relevant group of products.
+For contracts issued to which the Group does not apply the premium allocation approach, the judgements
+exercised in determining whether contracts are onerous on initial recognition or those that have no
+significant possibility of becoming onerous subsequently are:
+(a) the fulfilment cash flows allocated to the group are adjusted to eliminate the present value of the
+future cash flows and risk adjustment for non-financial risk relating to the rights and obligations that
+have been derecognized from the group;
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES
+Annual Report 2023
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 233
+Annual Report 2023
+Interim dividends are simultaneously proposed and declared, because the Company's memorandum and
+articles of association grant the directors the authority to declare interim dividends. Consequently, interim
+dividends are recognized immediately as a liability when they are proposed and declared.
+When the final dividends proposed by the directors have been approved by the shareholders and declared,
+they are recognized as a liability.
+(35) DIVIDENDS
+Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
+current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and
+the same taxation authority.
+Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
+when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
+enacted or substantively enacted at the end of the reporting period.
+The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
+to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
+part of the deferred tax asset to be utilized. Conversely, previously unrecognized deferred tax assets are
+reassessed by the end of each reporting period and are recognized to the extent that it is probable that
+sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
+(b) in respect of deductible temporary differences associated with investments in subsidiaries, associates
+and interests in joint ventures, deferred tax assets are only recognized to the extent that it is probable
+that the temporary differences will reverse in the foreseeable future and taxable profit will be available
+against which the temporary differences can be utilized.
+(a) when the deferred tax asset relating to the deductible temporary differences arises from the initial
+recognition of an asset or liability in a transaction that is not a business combination and, at the time
+of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give
+rise to equal taxable and deductible temporary differences; and
+Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused
+tax credits and any unused tax losses, to the extent that it is probable that taxable profit will be available
+against which the deductible temporary differences, and the carry-forward of unused tax credits and
+unused tax losses can be utilized, except:
+(34) TAX (CONTINUED)
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+(b) in respect of taxable temporary differences associated with investments in subsidiaries, associates
+and interests in joint ventures, when the timing of the reversal of the temporary differences can be
+controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
+(a) when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in
+a transaction that is not a business combination and, at the time of the transaction, affects neither
+the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible
+temporary differences; and
+(b) the original contract met the definition of an insurance contract with direct participation features, but
+the modified contract no longer meets that definition, or vice versa; or
+(c) the Group applied the premium allocation approach to the original contract, but the modifications
+mean that the contract no longer meets the eligibility criteria for that approach.
+If a contract modification meets none of the conditions above, the Group treats changes in cash flows
+caused by the modification as changes in estimates of fulfilment cash flows.
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd.
+For the year ended 31 December 2023
+(36) RELATED PARTIES
+234
+Two or more operating segments can be merged as one if they have similar characteristics and satisfy
+certain conditions.
+(c) The Group is able to obtain the accounting information such as the financial position, operating results
+and cash flows of the component.
+(b) The management of the Company regularly assesses the operating results of its business units for the
+purpose of making decisions about resource allocation and performance assessment;
+(a) The component produces income and expenses in its daily operation;
+Operating segments refer to the Group's component that satisfies the following conditions:
+For management purposes, the Group is organized into operating segments based on the internal
+organization structure, management requirements and internal reporting. The reportable segments are
+determined and disclosed based on operating segments and the presentation is consistent with the
+information reported to the Board of Directors.
+(37) SEGMENT REPORTING
+(vii) a person identified in (a) (i) has significant influence over the entity or is a member of the key
+management personnel of the entity (or of a parent of the entity).
+(vi) the entity is controlled or jointly controlled by a person identified in (a); and
+2. MATERIAL ACCOUNTING POLICIES (CONTINUED)
+(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
+an entity related to the Group;
+(iii) the entity and the Group are joint ventures of the same third party;
+(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
+subsidiary of the other entity);
+(i) the entity and the Group are members of the same Group;
+(b) the party is an entity where any of the following conditions applies:
+Or
+(iii) is a member of the key management personnel of the Group or of a parent of the Group;
+(ii) has significant influence over the Group; or
+(i) has control or joint control over the Group;
+(a) the party is a person or a close member of that person's family and that person:
+A party is considered to be related to the Group if:
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third
+entity;
+The employees of the Group are entitled to participate in various government-sponsored housing funds.
+The Group contributes on a monthly basis to these funds based on certain percentages of the salaries of
+the employees. The Group's liability in respect of these funds is limited to the contributions payable in each
+period.
+Project investment, British
+Virgin Islands
+99.51%
+Name
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+At the end of the reporting period, when measuring the insurance contract liabilities, the Group needs
+to make a reasonable estimate of the present value of the fulfilment cash flows within the boundary
+of insurance contract, based on information currently available at the end of the reporting period, and
+considers the risk adjustment for non-financial risk.
+The main assumptions used in measuring the present value of the fulfilment cash flows include discount
+rates, insurance incident occurrence rates, lapse rates, expense assumption, policy dividend assumptions,
+claim ratios, risk adjustment for non-financial risk, etc.
+(a) Discount rates
+For the estimated fulfilment cash flows that do vary based on the returns on underlying items and those
+that do not, the Group determines discount rates applying the bottom-up approach, which means the
+discount rates are determined by base rate curve with comprehensive premium in consideration of the time
+value of money. The comprehensive premium is added by considering taxation impacts, the liquidity and
+other relevant factors. The current discount rate assumption for the measurement as at 31 December 2023
+ranged from 2.62% to 4.60% (31 December 2022: 2.59%-4.60%).
+The discount rate assumptions are affected by the future macro-economy, capital market, investment
+channels of insurance funds, investment strategy, etc., and therefore subject to uncertainty.
+(b) Insurance incident occurrence rates
+The Group uses reasonable estimates, based on market and actual experience and expected future
+development trends, in deriving assumptions of mortality rates, morbidity rates, disability rates, etc.
+The assumption of mortality rates is based on the Group's prior experience data on mortality rates,
+estimates of current and future expectations, the industrial benchmark and the understanding of the China
+insurance market. The assumption of mortality rates is presented as a percentage of “China Life Insurance
+Mortality Table (2010-2013)", which is the industry standard for life insurance in China. The assumption
+of morbidity rates is determined based on the industrial benchmark, the Group's assumptions used in
+product pricing, experience data of morbidity rates, and estimates of current and future expectation.
+The assumptions of mortality and morbidity rates are affected by factors such as changes in lifestyles
+of national citizens, social development, and improvement of medical treatment, and hence subject to
+uncertainty.
+(c) Lapse rates
+Ping An Insurance (Group) Company of China, Ltd.
+The Group uses reasonable estimates, based on actual experience and future development trends, in
+deriving lapse rate assumptions. The assumptions of lapse rates are determined by reference to different
+pricing interest rates, product categories and sales channels.
+The Group uses reasonable estimates, based on an expense study and future development trends, in
+deriving expense assumptions. If the future expense level becomes sensitive to inflation, the Group will
+consider the inflation factor as well in determining expense assumptions. The expense assumptions include
+assumptions of insurance acquisition cash flows, policy administration and maintenance costs, and claim
+handling costs.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 237
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+(7) ESTIMATION OF THE FULFILMENT CASH FLOWS OF INSURANCE CONTRACTS
+(CONTINUED)
+(e) Policy dividend assumptions
+The Group uses reasonable estimates, based on expected investment returns of participating insurance
+accounts, participating dividend policy, policyholders' reasonable expectations, etc. in deriving policy
+dividend assumptions. As at 31 December 2023, policyholder dividend assumption was determined based on
+75% (31 December 2022: 75%) of the interest and mortality surplus for individual participating business.
+(d) Expense assumption
+(f) Claim ratios
+Annual Report 2023
+8,232,101,395
+Beijing, Corporation
+Property leasing and
+99.51%
+100.00%
+3,380,000,000
+property management,
+Beijing
+New Founder (Beijing) Enterprise
+Management Development Co., Ltd.
+Beijing, Corporation
+Corporation management,
+Beijing
+99.51%
+246
+100.00%
+New Founder Holding Development
+Company Limited ("New Founder
+Group")
+Zhuhai, Corporation
+Investment and technical
+services, Beijing
+66.18%
+66.51%
+7,250,000,000
+Founder Securities Co., Ltd. ("Founder Changsha, Corporation
+Securities")
+Securities brokerage,
+Changsha
+19.00%
+28.71%
+50,000,000
+Beijing Jinkunlize Property Co., Ltd.
+The Group uses reasonable estimates, based on historical claim development experience and claims paid,
+with consideration of adjustments to company policies like underwriting policies, level of premium rates,
+claim management and the changing trends of external environment such as macroeconomic, regulations,
+and legislation, in deriving claim development factors and claim ratios.
+The Group uses the confidence level, confidence level conversion to determine the risk adjustment for
+non-financial risk. As at 31 December 2023, the risk adjustment for non-financial risk of insurance contracts
+and reinsurance contracts held was determined based on the confidence level of 75% (31 December 2022:
+75%).
+Property and casualty
+insurance, Shenzhen
+99.55%
+99.55%
+21,000,000,000
+Ping An Bank Co., Ltd. (ii)
+("Ping An Bank")
+Shenzhen, Corporation
+Banking, Shenzhen
+49.56%
+8.40%
+58.00%
+Shenzhen, Corporation
+19,405,918,198
+Shenzhen, Corporation
+("Ping An Trust")
+Investment and trust,
+Shenzhen
+99.88%
+99.88%
+13,000,000,000
+Ping An Securities Co., Ltd.
+Shenzhen, Corporation
+("Ping An Securities")
+Securities investment and
+brokerage, Shenzhen
+Ping An Trust Co., Ltd.
+(g) Risk adjustment for non-financial risk
+Ping An Property & Casualty
+99.51%
+(8) DETERMINATION OF CONTROL OVER THE STRUCTURED ENTITIES
+To determine whether the Group controls the structured entities of which the Group acts as an asset
+manager, management applies judgement based on all relevant fact and circumstance to determine
+whether the Group is acting as the principal or agent for the structured entities. If the Group is acting as
+the principal, it has control over the structured entities. In assessing whether the Group is acting as the
+principal, the Group considers factors such as scope of the asset manager's decision-making authority,
+rights held by other parties, remuneration to which it is entitled, and exposure to variable returns results
+from its additional involvement with structured entities. The Group will perform reassessment once the fact
+and circumstance changes leading to changes in above factors.
+For further disclosure in respect of the maximum risk exposure of unconsolidated structured entities of the
+Group, see Note 49.(8).
+238
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+4. SCOPE OF CONSOLIDATION
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below:
+Name
+Place of incorporation and
+kind of legal entity
+33,800,000,000
+Principal activities and
+Proportion of
+ordinary shares
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Registered/
+authorized capital
+Proportion of
+votes (%) (i)
+(RMB unless
+otherwise stated)
+Ping An Life
+Shenzhen, Corporation
+Life insurance, Shenzhen
+99.51%
+place of operation
+40.96%
+property management,
+Ningbo
+70.00%
+USD14,794,701
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 245
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+Proportion of
+ordinary shares
+100.00%
+Name
+Principal activities and
+place of operation
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Proportion of
+votes (%) (i)
+Registered/
+authorized capital
+(RMB unless
+otherwise stated)
+China PA Wealth Management (Hong
+Kong) Company Limited
+Hong Kong, Corporation Insurance brokerage,
+Place of incorporation and
+kind of legal entity
+96.55%
+100.00%
+Global Voyager Fund (HK) Company
+Limited
+Shenzhen, Corporation
+Investment platform,
+Shenzhen
+99.81%
+100.00%
+5,000,000
+Chongqing Youshengda Real Estate
+Consulting Co., Ltd.
+Chongqing, Corporation
+Real estate consulting,
+Chongqing
+99.51%
+100.00%
+Hong Kong, Corporation Asset management,
+Hong Kong
+12,537,286,000
+Investment management,
+Shanghai
+99.51%
+100.00%
+10,000,000
+Shenzhen Hengchuang Investment
+Management Co., Ltd.
+Shenzhen, Corporation
+Investment platform,
+Shenzhen
+99.62%
+100.00%
+5,000,000
+Hangzhou Xiaoshan Ping An Cornerstone Hangzhou, Corporation
+Il Equity Investment Co., Ltd.
+800,000,000
+100.00%
+Hong Kong
+70.00%
+USD24,500,000
+property management,
+Beijing
+Chengdu Raffles City Industry Co., Ltd.
+Chengdu, Corporation
+Property leasing and
+69.66%
+70.00%
+USD217,700,000
+69.66%
+property management,
+Raffles City (Hangzhou) Real Estate
+Development Co., Ltd.
+Hangzhou, Corporation
+Property leasing and
+69.66%
+70.00% USD299,740,000
+property management,
+Hangzhou
+Ningbo Xinyin Business Management
+Service Co., Ltd.
+Ningbo, Corporation
+Property leasing and
+69.66%
+Chengdu
+HKD1,000,000
+Property leasing and
+Beijing Xinjie Real Estate Development
+Co., Ltd.
+Ping An Commodities Trading Co., Ltd.
+Shenzhen, Corporation
+Commodity trade,
+Shenzhen
+96.64%
+100.00%
+1,000,000,000
+Shanghai Raffles Kaixuan Commercial
+Management Service Co., Ltd.
+Shanghai, Corporation
+Property leasing and
+69.66%
+Beijing, Corporation
+70.00%
+property management,
+Shanghai
+Shanghai Huaqing Real Estate
+Management Co., Ltd.
+Shanghai, Corporation
+Property leasing and
+59.71%
+60.00%
+USD30,000,000
+property management,
+Shanghai
+2,208,601,418
+Shenzhen Pingjia Investment
+Management Co., Ltd.
+55.59%
+13,800,000,000
+Investment management,
+Shanghai
+99.51%
+100.00%
+9,130,500,000
+Anseng Investment Company Limited
+British Virgin Islands,
+Corporation
+Project investment, British
+Virgin Islands
+99.51%
+100.00%
+USD50,000
+Shanghai, Corporation
+Shenzhen Ping An Financial Technology Shenzhen, Corporation
+Consulting Co., Ltd. ("Ping An Financial
+Technology")
+100.00%
+100.00%
+30,406,000,000
+advisory services,
+Shenzhen
+Ping An Tradition International Money
+Broking Company Ltd.
+Shenzhen, Corporation
+Currency brokerage,
+Shenzhen
+66.92%
+67.00%
+50,000,000
+Corporation management
+Pingan Haofang (Shanghai) E-commerce Shanghai, Corporation
+Co., Ltd.
+Shanghai Pingpu Investment Co., Ltd.
+100.00%
+Custom loyalty service,
+Shenzhen
+77.14%
+100.00%
+200,000,000
+Shenzhen Ping An Commercial Property Shenzhen, Corporation
+Investment Co., Ltd. (iii) ("Ping An
+Property leasing and
+99.50%
+99.99%
+1,810,000,000
+property management,
+1,310,000,000
+Commercial Property Investment")
+Ping An Futures Co., Ltd.
+Shenzhen, Corporation
+Futures brokerage,
+Shenzhen
+96.64%
+100.00%
+721,716,042
+Shenzhen Ping An Real Estate
+Investment Co., Ltd.
+Shenzhen, Corporation
+Real estate investment and
+management, Shenzhen
+100.00%
+Shenzhen
+Information Technology Co., Ltd.
+Property agency, Shanghai
+100.00%
+68.11%
+68.19%
+1,300,000,000
+Shenzhen Ping An Financial Center
+Development Company Ltd.
+Shenzhen, Corporation
+Property leasing and
+99.51%
+100.00%
+6,688,870,000
+property management,
+Shenzhen
+(RMB unless
+otherwise stated)
+Ping An Insurance Sales Services Co.,
+Ltd.
+Sales agency of insurance,
+Shenzhen
+75.10%
+75.10%
+515,000,000
+Ping An Chuang Zhan Insurance Sales & Guangzhou, Corporation Insurance agent, Shenzhen
+Service Co., Ltd.
+99.55%
+100.00%
+50,000,000
+Reach Success International Limited
+British Virgin Islands,
+Corporation
+Shenzhen, Corporation
+100.00%
+Proportion of
+votes (%) (i)
+Registered/
+1,930,000,000
+Ping An Wealthtone Investment
+Management Co., Ltd.
+Shenzhen, Corporation
+Asset management,
+Shenzhen
+68.11%
+100.00%
+800,000,000
+240
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+authorized capital
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Proportion of
+ordinary shares
+Place of incorporation and
+Name
+kind of legal entity
+Ping An Fund Management Company
+Limited
+Shenzhen, Corporation
+Principal activities and
+place of operation
+Fund raising and
+distribution, Shenzhen
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+96.62%
+Shenzhen, Corporation
+HKD25,124,600
+Hong Kong, Corporation Property and casualty
+100.00%
+100.00%
+HKD490,000,000
+insurance, Hong Kong
+Ping An International Financial Leasing Shanghai, Corporation
+Co., Ltd. ("Ping An Financial Leasing")
+Financial leasing, Shanghai
+69.44%
+30.56%
+100.00%
+China Ping An Insurance (Hong Kong)
+Company Limited
+14,500,000,000
+Hong Kong, Corporation
+Asset management,
+Hong Kong
+100.00%
+100.00%
+HKD395,000,000
+Shenzhen Ping An Innovation Capital
+Investment Co., Ltd.
+Shenzhen, Corporation
+Investment holding,
+Shenzhen
+99.88%
+100.00%
+Ping An of China Asset Management
+(Hong Kong) Company Limited
+4,000,000,000
+100.00% HKD7,085,000,000
+Hong Kong, Corporation Investment holding,
+Hong Kong
+Ping An Annuity
+Shanghai, Corporation
+Annuity insurance,
+Shanghai
+94.18%
+5.79%
+100.00%
+11,603,419,173
+Ping An Asset Management Co., Ltd.
+Shanghai, Corporation
+Asset management,
+Shanghai
+100.00%
+98.67%
+100.00%
+1,500,000,000
+Ping An Health Insurance
+Shanghai, Corporation
+Health insurance, Shanghai
+74.33%
+0.68%
+75.01%
+4,616,577,790
+China Ping An Insurance Overseas
+(Holdings) Limited
+1.33%
+Shenzhen Wanlitong Network
+Ping An Trendwin Capital Management Shanghai, Corporation
+Co., Ltd.
+99.75%
+Ping An Technology (Shenzhen) Co., Ltd. Shenzhen, Corporation
+IT services, Shenzhen
+37.66%
+62.34%
+100.00%
+5,310,315,757
+Shenzhen Ping An Finserve Co., Ltd.
+Shenzhen, Corporation
+IT and business process
+outsourcing services,
+Shenzhen
+100.00%
+(RMB unless
+otherwise stated)
+100.00%
+Ping An E-wallet Electronic Commerce
+Company Limited ("Ping An E-wallet")
+Shenzhen, Corporation
+Internet service, Shenzhen
+77.14%
+78.63%
+1,000,000,000
+eLink Commerce Company Limited
+Hong Kong, Corporation E-commerce trade,
+Hong Kong
+99.89%
+100.00%
+598,583,070
+Investment consulting,
+Shanghai
+authorized capital
+Proportion of
+votes (%) (i)
+100.00%
+100,000,000
+Ping An Real Estate Co., Ltd.
+("Ping An Real Estate”)
+Shenzhen, Corporation
+Property management and
+99.62%
+100.00%
+21,160,523,628
+investment management,
+Shenzhen
+Registered/
+Annual Report 2023
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+Proportion of
+Place of incorporation and
+kind of legal entity
+Principal activities and
+place of operation
+ordinary shares
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Ping An Insurance (Group) Company of China, Ltd. 239
+100.00% USD5,038,967,126
+(7) ESTIMATION OF THE FULFILMENT CASH FLOWS OF INSURANCE CONTRACTS
+Investment holding,
+Cayman Islands
+Shanghai, Corporation
+Industry, Shanghai
+51.56%
+51.88%
+678,873,194
+Falcon Vision Global Limited
+British Virgin Islands,
+Corporation
+Investment management,
+Shanghai
+99.51%
+100.00%
+USD50,000
+Shanghai Zean Investment Management Shanghai, Corporation
+Company Limited
+Property leasing, Shanghai
+99.51%
+100.00%
+4,810,000,000
+PA Dragon LLC
+100.00%
+99.51%
+Real estate development
+Shanghai Gezhouba Yangming Property Shanghai, Corporation
+Co., Ltd.
+63,330,000
+94.74%
+Shanghai Jahwa United Co., Ltd. (iii)
+94.74%
+Shanghai, Corporation
+Shanghai Pingan Automobile
+E-commerce Co., Ltd.
+100.00% USD143,954,940
+99.52%
+Logistics and real estate,
+USA
+USA, Corporation
+E-commerce, Shanghai
+consumer chemicals,
+Shanghai
+5,268,261,234
+100.00%
+Proportion of
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+242
+ordinary shares
+45,000,000
+99.51%
+Property leasing, Beijing
+Beijing Jingping Shangdi Investment Beijing, Corporation
+Co., Ltd.
+5,092,341,943
+100.00%
+100.00%
+100.00%
+20,000,000
+Name
+Principal activities and
+place of operation
+99.51%
+Production and sale of
+Shanghai Jahwa (Group) Company Ltd. Shanghai, Corporation
+("Shanghai Jahwa")
+Guangzhou
+50,000,000
+100.00%
+Place of incorporation and
+kind of legal entity
+99.51%
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+directly held by
+the Company (%)
+Guangzhou Xinping Property Investment Guangzhou, Corporation Property leasing,
+Co., Ltd.
+Management consulting,
+Shenzhen
+and management,
+Shanghai
+Investment management,
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+Proportion of
+ordinary shares
+Name
+Place of incorporation and
+kind of legal entity
+Principal activities and
+place of operation
+directly held by
+the Company (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Proportion of
+votes (%) (i)
+An Ke Technology Company Limited
+Hong Kong, Corporation Investment management
+100.00%
+100.00%
+Registered/
+authorized capital
+Tongxiang Anhao Investment
+Management Co., Ltd.
+489,580,000
+100.00%
+77.14%
+Internet service, Shanghai
+Ping An Pay Electronic Payment Co., Ltd. Shanghai, Corporation
+For the year ended 31 December 2023
+680,000,000
+77.14%
+Internet service, Shenzhen
+Ping An Pay Technology Service Co., Ltd. Shenzhen, Corporation
+and investment
+consulting, Hong Kong
+USD582,996,000
+(RMB unless
+otherwise stated)
+100.00%
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 243
+345,075,000
+100.00%
+100.00%
+Credit information services,
+Shenzhen
+Shenzhen Qianhai Credit Service Centre Shenzhen, Corporation
+Co., Ltd.
+1,010,000,000
+Pingan Real Estate Capital Limited
+100.00%
+Asset management,
+Shanghai
+Shanghai Pingxin Asset Management Shanghai, Corporation
+Co., Ltd.
+Shanghai
+1,290,000,000
+100.00%
+99.05%
+100.00%
+Shanghai Jinyao Investment Management Shanghai, Corporation
+Co., Ltd.
+Hong Kong, Corporation
+99.62%
+Annual Report 2023
+600,000,000
+100.00%
+100.00%
+Guangzhou, Corporation Micro loan, Guangzhou
+Guangzhou Ping An Good Loan
+Microfinance Co., Ltd.
+Investment platform,
+Hong Kong
+100,000,000
+100.00%
+Investment consulting,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Pulian Consulting Co., Ltd.
+2,536,129,600
+100.00%
+100.00%
+Jiaxing, Corporation
+Shenzhen Pingke Information Consulting Shenzhen, Corporation
+Co., Ltd.
+1,000,000,000
+59.71%
+60.00%
+504,000,000
+Jincheng
+Ping An Caizhi Investment Management Shenzhen, Corporation
+Company Limited (iii)
+Equity investment,
+Shenzhen
+96.55%
+100.00%
+300,000,000
+Ping An of China Securities (Hong Kong) Hong Kong, Corporation Investment holding, Hong
+Company Limited
+Kong
+Ping An of China Futures (Hong Kong) Hong Kong, Corporation Futures brokerage, Hong
+Company Limited
+Kong
+Annual Report 2023
+96.55%
+100.00%
+HKD663,514,734
+96.55%
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+ordinary shares
+directly held by
+the Company (%)
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Name
+Proportion of
+Expressway operation,
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 241
+HKD20,000,000
+100.00%
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Taiyuan, Corporation
+Shanxi Jinjiao Expressway Co., Ltd.
+750,000,000
+100.00%
+99.51%
+Property management and
+Shenyang, Corporation
+Shenyang Shengping Investment
+Management Co., Ltd.
+Virgin Islands
+419,000,000
+USD50,000
+99.51%
+Project investment, British
+British Virgin Islands,
+Corporation
+Jade Reach Investments Limited
+USD50,000
+100.00%
+100.00%
+Registered/
+investment management,
+Tongxiang Ping An Investment Co., Ltd. Jiaxing, Corporation
+60.00%
+59.71%
+Expressway operation,
+Jincheng
+Taiyuan, Corporation
+Shanxi Changjin Expressway Co., Ltd.
+2,700,000,000
+Shenyang
+100.00%
+Commercial factoring,
+Shanghai
+Ping An Commercial Factoring Co., Ltd. Shanghai, Corporation
+500,000,000
+100.00%
+99.62%
+Investment management,
+Jiaxing
+100.00%
+equity investment,
+Shenzhen
+authorized capital
+(RMB unless
+otherwise stated)
+Hangzhou Pingjiang Investment Co., Ltd. Hangzhou, Corporation
+Real estate development
+99.51%
+100.00%
+1,430,000,000
+and management,
+Hangzhou
+Beijing Jingxinlize Investment Co., Ltd.
+Beijing, Corporation
+Investment management,
+Beijing
+99.51%
+100.00%
+1,160,000,000
+Anbon Allied Investment Company
+Limited
+Hong Kong, Corporation Real estate investment
+99.51%
+100.00%
+100.00%
+96.55%
+Financial products and
+Shenzhen, Corporation
+Ping An Pioneer Capital Co., Ltd.
+Kingdom
+840,000,000
+and management, United
+99.51%
+Hong Kong, Corporation Real estate investment
+Talent Bronze Limited
+Kingdom
+and management, United
+GBP90,000,160
+100.00% GBP133,000,000
+100.00%
+99.51%
+Real estate investment and
+management, Chengdu
+Fund sales, Shanghai
+Shanghai, Corporation
+Shanghai Lufax Fund Sales Co., Ltd.
+HKD440,000,000
+100.00%
+96.55%
+95.43%
+Hong Kong, Corporation Securities investment and
+brokerage, Hong Kong
+Hong Kong
+HKD20,000,000
+100.00%
+96.55%
+Hong Kong, Corporation Investment management,
+Ping An of China Capital (Hong Kong)
+Company Limited
+China PA Securities (Hong Kong)
+Company Limited
+Proportion of
+votes (%) (i)
+100.00%
+Fuer Insurance Broker Co., Ltd.
+Chengdu, Corporation
+Chengdu Ping An Property Investment
+Co., Ltd.
+256,323,143
+100.00%
+99.51%
+Property leasing, Beijing
+20,000,000
+Beijing, Corporation
+service, Shanghai
+50,000,000
+100.00%
+100.00%
+Insurance brokerage
+Shanghai, Corporation
+Beijing Shuangronghui Investment Co.,
+Ltd.
+Investment management,
+Jiaxing
+100.00%
+99.00%
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+100,000,000
+100.00%
+99.81%
+Investment management,
+Shenzhen
+Proportion of
+Shenzhen Ping An Chuangke Investment Shenzhen, Corporation
+Management Co., Ltd.
+100.00%
+79.21%
+IT services, Shenzhen
+Ping An Urban-Tech (Shenzhen) Co., Ltd. Shenzhen, Corporation
+100.00% USD677,161,910
+99.51%
+Hong Kong, Corporation Project investment,
+Hong Kong
+Helios P.A. Company Limited
+50,000,000
+50,000,000
+Place of incorporation and
+ordinary shares
+directly held by
+Shenzhen, Corporation
+Lianxin (Shenzhen) Investment
+Shenzhen
+100,000,000
+100.00%
+99.81%
+Investment management,
+Shenzhen, Corporation
+Principal activities and
+Shenzhen Anchuang Investment
+Management Co., Ltd.
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+the Company (%)
+place of operation
+kind of legal entity
+Name
+(RMB unless
+otherwise stated)
+100.00%
+42.52%
+Insurance brokerage,
+Shanghai
+100,000,000
+100.00%
+100.00%
+Investment consulting,
+Shenzhen
+Shenzhen Dingshuntong Investment Co., Shenzhen, Corporation
+Ltd.
+100,000,000
+100.00%
+100.00%
+Shenzhen Ping An Evergreen Investment Shenzhen, Corporation
+Development Holding Co., Ltd.
+Consulting services,
+Shanghai
+Ping An Fortune Management Co., Ltd.
+1,000,000,000
+98.02%
+Investment management,
+Shenzhen
+Ping An Infrastructure Investment Fund Shenzhen, Corporation
+Management Co., Ltd.
+300,000,000
+100.00%
+99.81%
+Shanghai, Corporation
+Investment consulting,
+Shenzhen
+100.00%
+100.00%
+Shanghai, Corporation
+Shanghai Tianhe Insurance Brokerage
+Co., Ltd.
+HKD10,000,000
+100.00%
+96.55%
+Hong Kong, Corporation Asset management,
+Hong Kong
+China PA Asset Management (Hong
+Kong) Company Limited
+5,625,000,000
+80.00%
+79.61%
+Logistics and warehousing,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Anpu Development Co., Ltd.
+10,400,000,000
+100.00%
+100.00%
+Financial leasing, Tianjin
+Ping An International Financial Leasing Tianjin, Corporation
+(Tianjin) Co., Ltd.
+1,500,100,000
+Management Co., Ltd. ("Lianxin
+Investment")
+Investment management,
+Shenzhen
+244
+100.00%
+57.96%
+100.00%
+5,000,000,000
+TTP Car Inc.
+Cayman Islands,
+Corporation
+Second-hand car platform,
+Shanghai
+21.69%
+51.00%
+Shenzhen Shengjun Investment
+Management Co., Ltd.
+Shenzhen, Corporation
+Investment management,
+Shenzhen
+99.72%
+100.00%
+5,000,000
+Overseas W.H. Investment Company
+Limited
+Cayman Islands,
+Corporation
+99.72%
+Asset management,
+Shenzhen
+Shenzhen, Corporation
+USD15,753
+1,000,000
+5,100,000,000
+Ping An Wealth Management Co., Ltd.
+Autohome Inc.
+Cayman Islands,
+Corporation
+Automotive internet
+platform, Beijing
+42.52%
+46.50%
+Mayborn Group Limited
+United Kingdom,
+Corporation
+USD1,273,469
+51.56%
+100.00%
+GBP1,154,873
+Jiaxing Ping An Cornerstone | Equity
+Investment Management Co., Ltd.
+Jiaxing, Corporation
+Investment management,
+Shanghai
+Infant products, United
+Kingdom
+99.51%
+100.00%
+Total expenses
+Income tax
+Profit before tax
+(96) (3,804)
+11,159 (27,964)
+26,835 (842,851)
+(271,434) (295,926) (224,452)
+(59,548)
+(841)
+(14,378)
+67,755
+7,750
+(3,896)
+(18,326)
+9,878
+75,505
+57,253
+(11,737)
+8,247
+(4,444)
+4,217
+636
+(5,015)
+142,335
+43
+(7,518)
+Profit for the year
+10,112
+(286)
+45,516
+234
+(540)
+(321)
+Other expenses
+Interest expenses on non-banking
+operations
+(4,448)
+(1,305)
+(19,017)
+3,803
+2,393
+(22,698)
+Including: Financial costs
+(2,016)
+(870)
+(18,176)
+(321)
+2,489
+(18,894)
+Including: Interest expenses on assets
+sold under agreements
+to repurchase and
+placements from banks
+and other financial
+institutions
+(2,432)
+(435)
+(20,023)
+4,853
+(12,462)
+134,817
+insurance
+(Restated)
+(Restated)
+insurance
+(in RMB million)
+Asset Technology
+Other
+businesses
+Property
+and casualty
+Life and
+health
+The segment analysis as at 31 December 2022 and for the year then ended is as follows (continued):
+5. SEGMENT REPORTING (CONTINUED)
+Banking management
+For the year ended 31 December 2023
+256
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 255
+Annual Report 2023
+111,008
+(5,845)
+3,614
+2,292
+26,380
+(78)
+Notes to Consolidated Financial Statements
+business
+and
+elimination
+(Restated)
+Total
+(Restated)
+- Attributable to owners of the parent
+74,501
+25,975
+117
+8,239
+Accounts receivable
+295,559
+5
+10,066
+5
+281,115
+4,263
+10,171
+operations
+statutory deposits for insurance
+Balances with the Central Bank and
+774,841
+24,076
+130,915
+236,412
+59,688
+336,212
+Cash and amounts due from banks and
+other financial institutions
+(4,972)
+(78)
+(in RMB million)
+11,885 (79,815)
+Other
+businesses
+Asset
+Technology
+insurance
+(Restated)
+insurance
+(Restated)
+(137,256) (284,978)
+Banking management
+business
+and
+elimination
+(Restated) (Restated)
+Property
+and casualty
+Total
+(422,221)
+845
+(14,919)
+(440)
+10,605
+4
+(99,933)
+2,344
+Less: Net reinsurance finance income
+for reinsurance contracts held
+13
+health
+Life and
+(5,151)
+359
+Total revenue
+339,189
+305,804
+281,705
+67,795
+22,543
+(31,850)
+985,186
+254
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2022 and for the year then ended is as follows (continued):
+(in RMB million)
+Insurance service expenses
+Allocation of reinsurance premiums
+paid
+(3,480) (12,284)
+Less: Amount recovered from reinsurer
+2,184
+8,861
+Net insurance finance expenses for
+insurance contracts issued
+(94,786)
+81
+490
+564
+Interest expenses on banking
+38
+(13,300)
+Including: Impairment losses on
+receivables and others
+(58)
+(51)
+(372)
+(3,331)
+(638)
+(4,452)
+Foreign exchange gains/(losses)
+(447)
+(252)
+4,548
+(614)
+General and administrative expenses
+(12,631)
+(657)
+(51,114)
+(13,755)
+34
+(13,543)
+(125)
+3,144
+(6,021)
+Changes in insurance premium reserves
+(6,766)
+(570)
+operations
+(98,748)
+1,060
+(97,688)
+Fees and commission expenses on non-
+insurance operations
+(7,546) (2,432)
+50
+(9,928)
+Net impairment losses on financial
+assets and other assets
+(628)
+(32)
+(71,306)
+(9,352)
+(600)
+(2)
+(81,920)
+Including: Loan impairment
+Including: Impairment losses on
+losses, net
+investment assets
+(64,168)
+(64,168)
+19
+(557)
+6,289,478,815
+Reinsurance contract assets
+Beijing, Corporation
+Founder Financing Securities Co., Ltd.
+1,005,000,000
+92.44%
+17.56%
+Futures brokerage, Beijing
+Beijing, Corporation
+Founder Cifco Futures Co., Ltd.
+3,000,000,000
+100.00%
+Securities underwriting and
+66.18%
+Zhuhai, Corporation
+PKU Healthcare Management Co., Ltd.
+(RMB unless
+otherwise stated)
+authorized capital
+Registered/
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+the Company (%)
+place of operation
+kind of legal entity
+Hospital management,
+Beijing
+19.00%
+100.00%
+1,400,000,000
+100.00%
+19.00%
+Hong Kong, Corporation Asset management,
+Hong Kong
+Founder Asset Management (Hong
+Kong) Limited
+consulting, Hong Kong
+HKD410,000,000
+100.00%
+19.00%
+Founder Securities (Hong Kong) Limited Hong Kong, Corporation Securities trading and
+management, Beijing
+130,000,000
+100.00%
+12.67%
+Customer-specific asset
+Beijing, Corporation
+Beijing Founder Fubon Crown Asset
+Management Co., Ltd.
+Shanghai
+500,000,000
+100.00%
+17.56%
+Investment management,
+Shanghai Jifeng Investment Management Shanghai, Corporation
+Co., Ltd. (iii)
+sponsorship, Beijing
+Name
+HKD22,000,000
+ordinary shares
+directly held by
+Place of incorporation and
+(24,920) 264,771
+138,842
+26,000
+82,103
+78,487
+(44,639) 280,793
+Others
+Segment assets
+289,381
+39,495
+49
+205,133
+25,268
+(9,416) 646,987
+4,263,511
+447,987 5,321,514
+966,947
+141,792
+(131,811) 11,009,940
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+businesses
+97,126
+6
+6,380
+21,772
+Proportion of
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2023 are set out below
+(Continued):
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+119,936
+446,133
+180,050
+Financial assets at amortized cost
+127,624
+150,655
+731,850
+169,245
+10,752
+811
+13,273 1,640,519
+(56,150)
+1,124,035
+Debt financial assets at fair value
+through other comprehensive income
+Equity financial assets at fair value
+through other comprehensive income
+Investments in associates and joint
+ventures
+2,215,809
+9,587
+172,233
+94,669
+8,492 2,500,790
+261,484
+Principal activities and
+Founder Fubon Fund Management Co., Beijing, Corporation
+Ltd.
+Fund raising and
+distribution, Beijing
+12.67%
+The property and casualty insurance segment offers a wide variety of insurance products to individual
+and corporate customers, including auto insurance, non-auto insurance, accident and health insurance,
+reflecting performance of Ping An Property & Casualty;
+The life and health insurance segment offers a comprehensive range of life insurance products to
+individual and corporate customers, including term, whole-life, endowment, annuity, investment-linked,
+universal life and health care and medical insurance, reflecting performance summary of Ping An Life,
+Ping An Annuity and Ping An Health Insurance;
+The segment businesses are separately presented as the insurance segment, the banking segment, the
+asset management segment, the technology business segment and the other businesses, based on the
+products and service offerings. The insurance segment is divided into the life and health insurance and
+the property and casualty insurance segment which are in line with the nature of products, risk and asset
+portfolios. The types of products and services from which reportable segments derive revenue are listed
+below:
+5. SEGMENT REPORTING
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+248
+Investment in wealth
+management products
+MOM Single Asset Management Plan
+20,381,188,007
+The banking segment undertakes loan and intermediary business with corporate customers and retail
+customers as well as wealth management and credit card services with individual customers, reflecting
+performance of Ping An Bank;
+99.51%
+-
+Ping An Fund
+Investment in wealth
+management products.
+11,784,108,709
+99.51%
+Ping An Fund - Ping An Life Fixed Income
+No. 1 MOM Single Asset Management
+Plan
+management products
+Investment in wealth
+5,540,918,880
+99.51%
+Ping An Life Equity No. 2
+The asset management segment provides trust products services, brokerage services, trading services,
+investment banking services, investment management services, finance lease business and other
+asset management services, reflecting performance summary of Ping An Trust, Ping An Securities,
+Ping An Asset Management Co., Ltd. and Ping An Financial Leasing and the other asset management
+subsidiaries;
+The technology business segment provides various financial and daily-life services through internet
+platforms such as financial transaction information service platform, health care service platform,
+reflecting performance summary of the technology business subsidiaries, associates and joint ventures.
+Except for the above business segments, the other segments did not have a material impact on the Group's
+operating outcome, and as such are not separately presented.
+Management monitors the operating results of the Group's business units separately for the purpose of
+making decisions with regard to resource allocation and performance assessment. Segment performance is
+assessed based on key performance indicators.
+16,474
+(1,233) 20,615
+Finance lease receivable
+186,858
+Loans and advances to customers
+3,242,258
+(4,204)
+186,858
+3,238,054
+Financial assets at fair value through
+profit or loss
+870,375
+Property
+Life and
+Other
+The segment analysis as at 31 December 2023 and for the year then ended is as follows:
+5. SEGMENT REPORTING (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 249
+Annual Report 2023
+During 2023 and 2022, revenue from the Group's top five customers accounted for less than 1% of the total
+revenue for the year.
+Transfer prices between operating segments are based on the amount stated in the contracts agreed by
+both sides.
+Ping An Asset Xinxiang No.18 Assets
+Management
+management products
+Investment in wealth
+5,511,269,442
+interest
+Attributable equity
+Scheme
+Huabao East Aggregated Fund Trust
+Ping An Asset Xinxiang No.28 Assets
+Management
+Name
+(2) As at 31 December 2023, the Group consolidated the following principal structured entities:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 247
+Annual Report 2023
+The Company and its subsidiaries are subject to the Company Law as well as various listing requirements,
+where applicable. Capital or asset transactions between the Company and its subsidiaries might be
+subject to regulatory requirements. Certain of the Company's subsidiaries are subject to regulatory capital
+requirements. As such, there are restrictions on the Group's ability to access or use the assets of these
+subsidiaries or use them to settle the liabilities of these subsidiaries. Please refer to Note 49.(7) for detailed
+disclosure on the relevant regulatory capital requirements.
+The registered capitals of these subsidiaries were changed in 2023.
+For the year ended 31 December 2023, Ping An Bank's profit attributable to its non-controlling interest was RMB19,530 million (2022:
+RMB19,136 million), the dividend paid to its non-controlling interest was RMB4,667 million (2022: RMB4,200 million). As at 31 December
+2023, Ping An Bank's equity attributable to its non-controlling interest was RMB227,551 million (31 December 2022: RMB211,724 million).
+Ping An Bank's summarized financial information is disclosed in "segment reporting" under the "Banking" segment.
+The proportion of ordinary shares, as shown in the above table, is the sum product of direct holding by the Company and indirect
+holding by a multiplication of the proportion of shares held in each holding layer. The proportion of votes is the sum product of the
+proportion of votes held directly by the Company and indirectly via subsidiaries controlled by the Company.
+(iii)
+(ii)
+(i)
+Notes:
+660,000,000
+66.70%
+99.51%
+36,118
+Paid-in capital
+Principal activities
+99.51%
+Ping An Asset Xinxiang No.20 Assets
+Management
+management products
+Management
+Investment in wealth
+102,235,678
+99.55%
+Ping An Asset Xinxiang No.5 Assets
+management products
+Investment in wealth
+15
+99.51%
+Ping An Asset Xinxiang No.19 Assets
+Management
+Investment in debt schemes
+9,500,000,000
+99.52%
+Shanghai Trust Huarong Aggregated Fund
+Trust Scheme
+Investment in debt schemes
+12,000,000,000
+98.87%
+management products
+Investment in wealth
+18,284,946,602
+(RMB)
+(18,973)
+5,374
+3,217
+10
+(145)
+(9,940)
+Including: Impairment losses on
+receivables and others
+(428)
+Foreign exchange gains/(losses)
+4
+General and administrative expenses
+(21,274)
+Changes in insurance premium reserves
+(386)
+(80)
+(682)
+(230)
+(1,500)
+(3,758)
+(269)
+(13,493)
+43
+662
+(47,677)
+(138)
+(13,650)
+(41)
+(287)
+(13,066)
+12,472
+120
+(83,877)
+(230)
+Interest expenses on non-banking
+operations
+(8,628)
+(1,446)
+Including: Financial costs
+(5,533)
+(837)
+(6,298)
+5,239
+(119)
+(1,422)
+Less: Net reinsurance finance income
+for reinsurance contracts held
+55
+518
+(31)
+542
+Interest expenses on banking
+operations
+-
+(109,626)
+1,021
+(108,605)
+Fees and commission expenses on non-
+insurance operations
+(1,415)
+(5,612) (1,815)
+69
+(8,773)
+investment assets
+Including: Impairment losses on
+(62,833)
+-
+(62,833)
+-
+(17,801)
+(16,684)
+losses, net
+(102) (79,071)
+(269)
+(505) (59,094) (17,251)
+(1,850)
+assets and other assets
+Net impairment losses on financial
+Including: Loan impairment
+(179)
+(179)
+3,708 (24,346)
+3,767
+(3,314) 120,117
+177 (10,843)
+(3,137)
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 251
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2023 and for the year then ended is as follows (continued):
+(in RMB million)
+Life and
+health
+insurance
+Property
+and casualty
+insurance
+Other
+businesses
+Asset Technology
+and
+Banking management
+business
+elimination
+4,320 270,976
+10,573
+operations
+statutory deposits for insurance
+Balances with the Central Bank and
+804,077
+109,274
+(4,083) 85,665
+(26,040)
+119,676
+47,827 317,991
+316,898
+other financial institutions
+Cash and amounts due from banks and
+Total
+27,725
+33 (123,959)
+3,129
+2,054
+(59)
+10,953
+28,427 (911,746)
+(19,466)
+Including: Interest expenses on assets
+sold under agreements
+to repurchase and
+placements from banks
+and other financial
+institutions
+(3,095)
+(609)
+(1,117)
+Other expenses
+(31,979)
+(679)
+(259)
+(13,833)
+Total expenses
+(317,750) (318,933) (221,606)
+(3,841)
+(17,396)
+2,938
+191
+57,718 (16,629)
+(11,263) (2,893)
+46,455 (19,522)
+26,925 (20,747)
+8,918
+72,598
+Attributable to owners of the parent
+8,958
+(4,880)
+(39,638)
+73,391
+8,818
+140
+2,805
+Income tax
+70,586
+Profit before tax
+(64,488)
+Profit for the year
+5
+(630) 10,448
+(5,483)
+7,956
+13,284
+801
+(2,538) 118,503
+Including: Inter-segment interest
+revenue from non-
+banking operations
+82
+34
+3,048
+81
+(3,245)
+Investment income
+19,483
+99,000
+4,623
+(5,173)
+493
+(1,852)
+33,324
+Including: Inter-segment
+investment income
+2,057
+133
+(17)
+132
+42
+(2,347)
+5,666
+8
+from investment
+15,750
+operations
+Interest revenue from non-banking
+(3,831)
+health and casualty
+insurance
+insurance
+Asset Technology
+and
+Banking management
+business
+elimination
+Total
+Insurance revenue
+223,600
+313,458
+(618)
+536,440
+Interest revenue from banking
+operations
+227,617
+(65)
+227,552
+331
+3,510
+(10)
+operations
+from non-insurance
+and commission revenue
+properties
+Including: Inter-segment fees
+(3,937)
+9,277
+35,042
+5,424
+non-insurance operations
+Fees and commission revenue from
+45,806
+7,893
+387
+50
+(31,741) 1,031,863
+250
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2023 and for the year then ended is as follows (continued):
+(in RMB million)
+Life and
+health
+insurance
+(133,978) (306,390)
+Property
+and casualty
+insurance
+Other
+businesses
+Asset Technology
+and
+Banking management
+business
+(118,509)
+Net insurance finance expenses for
+insurance contracts issued
+8,540
+2,538
+Less: Amount recovered from reinsurer
+(12,496)
+20,334
+(2,714)
+Allocation of reinsurance premiums
+Insurance service expenses
+(440,178)
+190
+Total
+elimination
+paid
+1,031 (14,179)
+47,859
+327,751
+41
+(1,465)
+6,906
+Share of profits and losses of
+associates and joint ventures
+3,166
+465
+921
+Other revenues and other gains
+37,663
+1,249
+915
+29,550
+583
+18,457
+(3,701) 1,434
+(19,030) 68,804
+Including: Inter-segment
+other revenues
+388,336
+Total revenue
+816
+-
+(18,296)
+5,187
+5
+279,324
+3,136
+85
+254
+423
+Including: Non-operating gains
+25
+58
+9,890
+49
+5
+Including: Operating lease income
+4,650
+(in RMB million)
+Insurance revenue
+Interest revenue from banking
+operations
+Fees and commission revenue from
+non-insurance operations
+Other
+Life and
+health
+Property
+and casualty
+businesses
+Asset
+Technology
+and
+insurance
+(Restated)
+insurance
+(Restated)
+11,296
+37,754
+228,784
+(94)
+228,878
+525,981
+The segment analysis as at 31 December 2022 and for the year then ended is as follows:
+(435)
+232,194
+(Restated)
+Total
+elimination
+(Restated)
+business
+Banking management
+294,222
+(3,068)
+5. SEGMENT REPORTING (CONTINUED)
+Notes to Consolidated Financial Statements
+1,611
+518
+Depreciation and amortization
+10,560
+1,497
+6,324
+1,156
+1,739
+(350)
+(619)
+13,094
+20,657
+Total other non-cash expenses charged
+to consolidated results
+1,850
+505
+59,094
+17,251
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 253
+Annual Report 2023
+(93,119)
+74,638
+Life and health insurance
+For the year ended 31 December 2023
+tax
+(in RMB million)
+Other segment information
+Other information of life and health insurance segment subject to general model as at 31 December 2023 is
+as follows:
+79,071
+102
+269
+Accumulated changes in the fair value and credit risks provision of debt financial
+assets at fair value through other comprehensive income, net of tax
+Accumulated insurance finance expenses for insurance contracts issued in other
+comprehensive income that may be reclassified subsequently to profit or loss, net of
+4,672
+45,982
+commission revenue from
+from investment
+properties
+7,321
+393
+46
+50
+(1,632)
+6,178
+Share of profits and losses of
+associates and joint ventures
+4,344
+620
+5,419
+Other revenues and other gains
+Including: Inter-segment other
+24,229
+1,152
+544
+33,922
+Accounts receivable
+64
+103
+159
+Including: Non-operating gains
+18
+Including: Operating lease income.
+27
+revenues
+60,652
+(19,059)
+10,165
+(4,414)
+4,196
+19,864
+10,045
+Including: Inter-segment fees and
+(2,655)
+(8)
+non-insurance operations
+2,768
+287
+Interest revenue from non-banking
+operations
+93,368
+7,961
+(3,055)
+15,760
+595
+(1,751) 115,933
+Including: Inter-segment interest
+revenue from non-
+banking operations
+203
+71
+2,139
+197
+2,255
+income
+Including: Inter-segment investment
+(2,311)
+(3,029)
+152
+(2,112)
+14,529
+1,849
+(14,946)
+Investment income
+(2,500)
+87
+1,398
+859
+59
+Capital expenditures
+20,138
+6,214
+46
+49
+(12,987) 264,877
+Investments in associates and joint
+ventures
+140,452
+Others
+Segment assets
+307,410
+26,859
+37,151 287,134
+-
+62,507
+83,402
+251,417
+4,653,433 476,023 5,587,116
+78,112
+22,012
+138,447
+(49,053) 258,877
+(7,460) 729,649
+(136,713) 11,583,417
+252
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2023 and for the year then ended is as follows (continued):
+Life and
+(in RMB million)
+health
+insurance
+Property
+and casualty
+Other
+businesses
+Asset Technology
+865,111
+through other comprehensive income
+7,990 2,637,008
+50,762
+224
+5,784
+29,356
+1,747
+(341)
+285,879
+35,636
+Insurance contract assets
+3
+3
+Reinsurance contract assets
+6,066
+17,454
+(1,305)
+Finance lease receivable
+-
+180,674
+22,215
+180,674
+16,348 161,931
+through other comprehensive income 2,399,977
+Equity financial assets at fair value
+Debt financial assets at fair value
+8,701 1,803,047
+(54,235) 1,243,353
+7,821
+976
+137,743 450,293 149,211
+167,956 772,467 189,477
+and
+166,712
+1,049,278
+profit or loss
+Financial assets at fair value through
+(1,988) 3,318,122
+3,320,110
+Loans and advances to customers
+Financial assets at amortized cost
+insurance
+-
+business
+51,587
+3,458,287
+64,797
+(40,132) 3,534,539
+Bonds payable
+57,101
+10,543 728,328
+165,253
+Others
+Segment liabilities
+Segment equity
+113,125
+4,259,715
+393,718
+42,257 144,388
+186,784
+21,210
+2,782 964,007
+(26,090) 481,674
+350,605 5,114,788
+13,090 899,011
+Other segment information:
+97,250
+Banking management
+92,836
+124,647 244,777
+brokerage customers
+326,411
+10,705 1,228,964
+115,762
+111,033
+125,418 472,328
+22,685
+754,078
+- Attributable to owners of the parent
+Customer deposits and payables to
+(147,418) 10,354,453
+645
+institutions
+53
+elimination
+41,197
+1,828 725,633
+277,985
+Total
+(83,570)
+963,718
+Assets sold under agreements to
+repurchase
+90,788
+34,603
+58,152
+57,396
+Due to banks and other financial
+3,899,625
+53
+261,153
+Reinsurance contract liabilities
+Insurance contract liabilities
+8,858
+(977) 4,159,801
+241,803
+830
+1,863
+168
+6,292
+Accounts payable
+864
+(295)
+Adjustments in respect of current income tax of previous years
+Others
+(31,232)
+(32,250)
+Income not subject to tax
+2023 interim dividend
+3,343
+Expenses not deductible for tax
+35,584
+30,029
+3,989
+2,122
+10,843
+7,599
+(1,985)
+Income tax per consolidated income statement
+ordinary share (ii)
+7,518
+Taxes for taxable income attained from outside of the PRC are measured at the tax rates under local and
+PRC law, regulations and conventions. The income tax credited by the Group is verified by official tax
+bureau.
+17. DIVIDENDS
+(in RMB million)
+2023
+2022 final dividend declared in 2023 - RMB1.50 (2021 final dividend
+declared in 2022 - RMB1.50) per ordinary share (i)
+1,162
+2023
+1,162
+(20,125)
+120,117
+(in RMB million)
+2022
+16. INCOME TAX
+2022
+Ping An Insurance (Group) Company of China, Ltd.
+(Restated)
+Current income tax
+Charge for the year
+15,577
+26,481
+Adjustments in respect of current income tax of previous years
+Deferred income tax
+2,122
+(6,856)
+10,843
+7,518
+Certain subsidiaries enjoy tax preferential treatments. These subsidiaries are not material to the Group.
+Except for those subsidiaries enjoying tax preferential treatments, the applicable corporate income tax rate
+of the Group for 2023 was 25%.
+Reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax
+rate of 25% (2022: 25%) is as follows:
+(in RMB million)
+2023
+2022
+(Restated)
+Profit before tax
+Tax at the applicable tax rate of 25% (2022: 25%)
+142,335
+27,161
+6.36
+-
+Weighted average number of ordinary shares in issue (million shares)
+2023
+2022
+Issued ordinary shares as at 1 January
+18,280
+18,280
+Weighted average number of shares held by the Key Employee
+Share Purchase Plan
+(26)
+Weighted average number of shares held by the Long-term
+Service Plan
+(331)
+(234)
+Weighted average number of shares held by the consolidated
+assets management schemes (i)
+Weighted average number of the treasury shares cancelled
+Weighted average number of shares held by the treasury share
+Weighted average number of ordinary shares in issue
+(i) As at 31 December 2023, no shares (31 December 2022: 261 million) were held by the consolidated assets management schemes.
+(33)
+(406)
+(39)
+(134)
+Annual Report 2023
+(164)
+(2) DILUTED
+17,717
+17,454
+4.84
+17,454
+17,717
+111,008
+RMB0.93 (2022 interim dividend
+RMB0.92) per
+16,840
+16,659
+(i)
+(ii)
+(iii)
+On 15 March 2023, the Board of Directors of the Company approved the Profit Distribution Plan of the Company for 2022, agreeing
+to declare a cash dividend in the amount of RMB1.50 (tax inclusive) per share. The total amount of the cash dividend for 2022 was
+RMB27,161 million (tax inclusive).
+On 12 May 2023, the above profit distribution plan was approved by the shareholders of the Company at the annual general meeting.
+On 29 August 2023, the Board of Directors of the Company approved the Profit Distribution Plan of the Company for Interim
+Dividend of 2023, and declared an interim cash dividend of RMB0.93 (tax inclusive) per share. The total amount of the cash dividend
+was RMB16,840 million (tax inclusive).
+On 21 March 2024, the Board of Directors of the Company approved the Profit Distribution Plan of the Company for 2023, and
+declared a final cash dividend of 2023 in the amount of RMB1.50 (tax inclusive) per share. Pursuant to the Shanghai Stock Exchange's
+Guidelines for Self-regulation of Listed Companies No.7 - Repurchase of Shares and other applicable regulations, the Company's
+A shares in the Company's repurchased securities account after trading hours on the record date of A shareholders for the final
+dividend will not be entitled to the final dividend distribution. The actual total amount of final dividend payment is subject to the
+total number of shares that will be entitled to the dividend distribution on the record date of A shareholders. The total amount of
+the final dividend payment for 2023 is RMB27,161,462,992.50 (tax inclusive) based on the total share capital of 18,210,234,607 shares less
+the 102,592,612 A shares of the Company in the repurchased securities account as at 31 December 2023, which was not recognized as
+a liability as at 31 December 2023.
+27,161
+Annual Report 2023
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+18. EARNINGS PER SHARE
+(1) BASIC
+Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the
+weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased
+by the Group.
+2023
+2022
+(Restated)
+Profit attributable to owners of the parent (in RMB million)
+Weighted average number of ordinary shares in issue (million shares)
+Basic earnings per share (in RMB)
+85,665
+Ping An Insurance (Group) Company of China, Ltd. 263
+262
+80,768
+39,638
+2022
+(Restated)
+83,877
+79,815
+39,638
+27,964
+77,744
+80,553
+1,327
+1,367
+2023
+2022
+(Restated)
+Employee costs
+75,798
+Including: Wages, salaries and bonuses
+61,505
+57,802
+Retirement benefits, social security contributions
+and welfare benefits
+17,364
+16,169
+Property and equipment costs
+20,702
+(in RMB million)
+20,864
+(2) GENERAL AND ADMINISTRATIVE EXPENSES
+Net impairment losses on financial assets (Note 13)
+Annual Report 2023
+Investments in associates and joint ventures
+Others
+(in RMB million)
+Diluted earnings per share was computed by dividing the adjusted profit attributable to owners of the
+parent based on assuming conversion of all dilutive potential shares for the year by the adjusted weighted
+average number of ordinary shares in issue. The shares granted by the Company under the Key Employee
+Share Purchase Plan (Note 38) and Long-term Service Plan (Note 39) have a potential dilutive effect on the
+earnings per share.
+2023
+2022
+(Restated)
+864
+928
+463
+439
+1,327
+1,367
+Ping An Insurance (Group) Company of China, Ltd. 261
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+15. PROFIT BEFORE TAX
+(1) PROFIT BEFORE TAX IS ARRIVED AT AFTER CHARGING THE FOLLOWING ITEMS:
+(in RMB million)
+2023
+General and administrative expenses (Note 15.(2))
+Other expenses (Note 15.(3))
+Net impairment losses on other assets (Note 14)
+27,964
+Including: Depreciation of property and equipment
+6,932
+(36,701)
+(34,536)
+(92,078)
+(88,299)
+83,877
+79,815
+(3) OTHER EXPENSES
+(in RMB million)
+2023
+2022
+(Restated)
+Cost of sales
+14,827
+9,284
+Depreciation of investment properties
+4,692
+3,645
+Interest expenses on finance lease operations
+7,150
+6,824
+Others
+12,969
+8,211
+Amounts recognized in insurance service expenses
+7,486
+(53,763)
+Less: Expenses directly attributable to insurance contracts
+Insurance acquisition cash flows recognized in liabilities
+for remaining coverage
+Amortization of intangible assets
+Depreciation of right-of-use assets
+Operation expenses and regulatory charges
+Administrative costs
+Taxes and surcharges
+Others
+2,509
+2,133
+4,736
+5,839
+59,184
+56,710
+2,979
+3,626
+3,665
+3,414
+8,657
+7,702
+Including: Audit fee
+125
+95
+175,955
+168,114
+(55,377)
+2023
+Nominal amount
+(Restated)
+Fair value
+3,956,299
+14,070
+2,587,657
+12,718
+1,228,639
+27,015
+1,218,587
+27,780
+20,804
+702
+25,476
+1,999
+27,999
+1,255
+2,469
+145
+7,993
+333
+9,372
+128
+15,508
+1,603
+Fair value Nominal amount
+2,493
+Liabilities
+31 December 2023
+Others
+(in RMB million)
+Interest rate swaps
+Currency forwards and swaps
+Gold derivative instruments
+Stock index options
+Stock index swaps
+Others
+23. FINANCE LEASE RECEIVABLE
+31 December 2023
+31 December 2022
+(Restated)
+156,011
+84,920
+8,787
+2,676
+3,112
+4,059
+167,910
+91,655
+(250)
+167,660
+(141)
+91,514
+Assets
+Stock index swaps
+1,761
+44,978
+776
+48,074
+428
+20,277
+2,142
+4,917,019
+29,278
+3,322,527
+39,738
+(in RMB million)
+31 December 2023
+31 December 2022
+Finance lease receivables, net of unrealized financial gains
+Less: Provision for impairment losses
+185,658
+(4,984)
+192,444
+(5,586)
+180,674
+186,858
+The Group's finance lease receivables are the net amount offsetting the unrealized financial gains.
+As at 31 December 2023, finance lease receivables with an amount of RMB17,207 million (31 December 2022:
+RMB24,052 million) were pledged as collateral for long-term and short-term borrowings.
+266
+Annual Report 2023
+14. NET IMPAIRMENT LOSSES ON OTHER ASSETS
+Ping An Insurance (Group) Company of China, Ltd.
+7,669
+5,257,242
+160
+88
+3,846,054
+44,531
+31 December 2022
+Assets
+Liabilities
+Nominal amount
+Fair value
+Nominal amount
+Fair value
+3,819,447
+11,893
+992,397
+15,602
+2,102,061
+1,146,546
+10,062
+23,498
+36,240
+1,049
+43,741
+3,172
+17,143
+146
+2,233
+3,718
+2022
+Stock index options
+Currency forwards and swaps
+31 December 2022
+(Restated)
+3,690
+4,165
+259,756
+284,645
+319,924
+352,110
+220,707
+133,921
+804,077
+774,841
+31 December 2023
+31 December 2022
+Details of placements with banks and other financial institutions are as follows:
+(in RMB million)
+Measured at amortized cost
+Placements with banks
+Placements with other financial institutions
+Gross
+Less: Provision for impairment losses
+Net
+Measured at fair value through other comprehensive income
+Placements with other financial institutions
+31 December 2023
+Total
+Placements with banks and other financial institutions
+Term deposits
+Earnings (in RMB million)
+Profit attributable to owners of the parent
+85,665
+111,008
+Weighted average number of ordinary shares (million shares)
+Weighted average number of ordinary shares in issue
+17,717
+17,454
+Adjustments for:
+Assumed vesting of Key Employee Share Purchase Plan
+Assumed vesting of Long-term Service Plan
+26
+331
+22
+234
+Weighted average number of ordinary shares for diluted earnings
+per share in issue (million shares)
+Diluted earnings per share (in RMB)
+264
+Annual Report 2023
+18,074
+4.74
+17,710
+6.27
+Ping An Insurance (Group) Company of China, Ltd.
+19. CASH AND AMOUNTS DUE FROM BANKS AND OTHER FINANCIAL
+INSTITUTIONS
+(in RMB million)
+Cash on hand
+Due from banks and other financial institutions
+Gold derivative instruments
+68,410
+153,229
+68,952
+Fiscal deposits with the Central Bank
+202
+268
+270,976
+281,115
+In accordance with relevant regulations, subsidiaries of the Group engaged in bank operations are required
+to place mandatory reserve deposits with the People's Bank of China for customer deposits in both local
+currency and foreign currencies. As at 31 December 2023, the mandatory deposits are calculated at 7.0%
+(31 December 2022: 7.5%) of customer deposits denominated in RMB and 4.0% (31 December 2022: 6.0%) of
+customer deposits denominated in foreign currencies. Mandatory reserve deposits are not available for use
+by the Group in its day-to-day operations.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 265
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+21. FINANCIAL ASSETS PURCHASED UNDER REVERSE REPURCHASE
+AGREEMENTS
+Classified by collateral:
+(in RMB million)
+Bonds
+Bills
+Stocks and others
+Gross
+Less: Provision for impairment losses
+Net
+22. DERIVATIVE FINANCIAL INSTRUMENTS
+(in RMB million)
+Interest rate swaps
+5,529
+40,467
+64,520
+43,450
+2,020
+221,639
+133,472
+(932)
+(2,328)
+220,707
+131,144
+220,707
+2,777
+133,921
+As at 31 December 2023, the Group has no placement with banks and other financial institutions measured
+at fair value through other comprehensive income (31 December 2022: the provision for impairment
+losses of placements with banks and other financial institutions measured at fair value through other
+comprehensive income is RMB91 million).
+As at 31 December 2023, cash and amounts due from banks and other financial institutions of RMB7,961
+million (31 December 2022: RMB10,919 million) were restricted from use.
+As at 31 December 2023, cash and amounts due from overseas amounted to RMB30,224 million (31 December
+2022: RMB60,616 million).
+20. BALANCES WITH THE CENTRAL BANK
+(in RMB million)
+31 December 2023
+31 December 2022
+Statutory reserve deposits with the Central Bank for banking
+operations
+227,324
+240,380
+Statutory reserve deposits with the Central Bank for banking
+operations - RMB
+225,304
+234,851
+Statutory reserve deposits with the Central Bank for banking
+operations foreign currencies
+Surplus reserve deposits with the Central Bank
+80,553
+Assets sold under agreements to
+1,570
+Expected insurance service expenses incurred in the period
+Others
+85,516
+93,387
+(7)
+(118)
+Amortization of insurance acquisition cash flows
+48,218
+47,078
+Subtotal
+218,815
+7,426
+231,233
+317,625
+294,748
+536,440
+525,981
+(in RMB million)
+Contracts under the fair value approach
+Contracts under the modified retrospective approach
+Other contracts
+7. NET INTEREST INCOME FROM BANKING OPERATIONS
+2023
+Insurance contracts measured under the premium allocation
+approach
+7,224
+Change in the risk adjustment for non-financial risk
+83,460
+Accumulated changes in the fair value and credit risks provision of debt financial assets
+at fair value through other comprehensive income, net of tax
+Life and health insurance
+(Restated)
+37,378
+Accumulated insurance finance expenses for insurance contracts issued in other
+comprehensive income that may be reclassified subsequently to profit or loss, net of
+tax
+(28,830)
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 257
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+6. INSURANCE REVENUE
+(in RMB million)
+Insurance contracts not measured under the premium allocation
+approach
+Insurance revenue relating to the changes in the liability for
+2023
+2022
+(Restated)
+remaining coverage
+Amount of contractual service margin recognized in
+profit or loss
+77,864
+2022
+(Restated)
+19,824
+20,793
+Interest expenses on banking operations
+Due to the Central Bank
+4,101
+3,860
+Due to and placements from banks and other
+financial institutions and assets sold under
+agreements to repurchase
+12,539
+8,054
+Customer deposits
+74,927
+66,304
+Bonds payable
+17,038
+19,470
+Subtotal
+108,605
+97,688
+Net interest income from banking operations
+118,947
+131,096
+258
+Annual Report 2023
+228,784
+(in RMB million)
+227,552
+31,992
+160,400
+329,355
+356,216
+175,833
+536,440
+525,981
+(in RMB million)
+2023
+2022
+Interest revenue from banking operations
+Due from the Central Bank
+3,844
+3,715
+Due from and placements with banks and other
+financial institutions and financial assets purchased
+under reverse repurchase agreements
+8,776
+4,795
+Loans and advances to customers
+183,807
+188,282
+Financial investments
+31,125
+Subtotal
+Other segment information
+Other information of life and health insurance segment subject to general model as at 31 December 2022 is
+as follows:
+81,920
+3,424,203
+24,593
+185
+247,871
+13,303
+55,139
+411
+271,737
+2,653
+1,025
+(499)
+10,349
+(897)
+3,671,177
+Reinsurance contract liabilities
+105
+105
+Customer deposits and payables to
+brokerage customers
+52,465
+3,352,266
+73,363
+Bonds payable
+41,916
+10,487
+Insurance contract liabilities
+692,075
+6,985
+178,291
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2022 and for the year then ended is as follows (continued):
+(in RMB million)
+insurance
+(Restated)
+Life and
+health
+Property
+and casualty
+Asset Technology
+insurance
+(Restated)
+Banking management
+business
+Other
+businesses
+and
+elimination
+(Restated)
+Total
+(Restated)
+Due to banks and other financial
+institutions
+39,386
+4,366
+656,586
+293,553
+3,428
+(74,231)
+923,088
+repurchase
+Accounts payable
+Ping An Insurance (Group) Company of China, Ltd.
+179,223
+136,877
+(1,138) 869,191
+Other segment information:
+Capital expenditures
+7,077
+1,204
+6,170
+2,992
+1,681
+(1,694) 17,430
+Depreciation and amortization
+9,650
+1,624
+6,535
+1,273
+1,950
+(730) 20,302
+Total other non-cash expenses
+charged to consolidated results.
+628
+32
+71,306
+9,352
+600
+2
+94,937
+Others
+117,143
+117,799
+41,842
+172,604
+224,146
+23,591
+(46,095)
+7,397
+(14,669)
+3,431,999
+931,098
+584,391
+Segment liabilities
+3,880,123
+329,449
+4,886,834
+828,077
+77,744
+(128,583) 9,823,944
+Segment equity
+383,388
+118,538
+434,680
+138,870
+113,748
+(3,228) 1,185,996
+- Attributable to owners of the parent
+317,494
+222,956
+Annual Report 2023
+28,044
+(in RMB million)
+65
+1,371
+(9,039)
+(36,936)
+260
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+11. OTHER REVENUES AND OTHER GAINS
+(in RMB million)
+Sales revenue
+Expressway toll fee
+Annuity management fee
+Management fee and consulting fee income
+Finance lease income
+Others
+12. INSURANCE SERVICE EXPENSES
+(in RMB million)
+Claims and other expenses
+Amortization of insurance acquisition cash flows
+Losses on onerous contracts and reversal of those losses
+13. NET IMPAIRMENT LOSSES ON FINANCIAL ASSETS
+(in RMB million)
+Accounts receivable
+418
+Loans and advances to customers
+2,295
+(22,598)
+15
+Investment in subsidiaries, associates and joint ventures
+388
+(1,977)
+(49,933)
+(55,973)
+(3) UNREALIZED GAINS/(LOSSES)
+(in RMB million)
+2023
+2022
+(Restated)
+Financial assets at fair value through profit or loss
+Bonds
+8,497
+(4,079)
+Funds
+(3,850)
+(20,277)
+Stocks
+(5,286)
+8,229
+Wealth management investments, debt schemes and
+other investments
+(10,760)
+Financial liabilities at fair value through profit or loss
+Derivative financial instruments
+410
+Debt financial assets at fair value through
+2023
+152
+62,833
+(23)
+64,168
+Financial assets at amortized cost
+Finance lease receivable
+476
+7,719
+168
+3,472
+697
+1,763
+Placements with banks and other financial institutions
+(1,485)
+2,175
+Credit commitments
+Due from banks and other financial institutions
+Others
+3,689
+5,758
+(1,512)
+1,502
+5,175
+8. INTEREST REVENUE FROM NON-BANKING OPERATIONS
+(Restated)
+other comprehensive income
+2022
+422,221
+2022
+(Restated)
+27,413
+899
+20,316
+844
+1,558
+1,535
+7,017
+9,609
+16,592
+16,650
+15,325
+11,698
+68,804
+60,652
+2023
+309,810
+301,042
+120,708
+113,210
+9,660
+7,969
+440,178
+2023
+Precious metal transactions investment gains
+2022
+(Restated)
+2,403
+34,986
+Others
+3,330
+2,293
+Subtotal
+45,806
+45,982
+Fees and commission expenses on non-insurance operations
+Brokerage commission
+2,392
+2,238
+Fees and commission on the banking business
+5,612
+7,546
+Others
+769
+144
+Subtotal
+8,773
+9,928
+Net fees and commission income from non-insurance operations
+37,033
+36,054
+Ping An Insurance (Group) Company of China, Ltd. 259
+31,532
+FINANCIAL STATEMENTS
+Fees and commission from the banking business
+939
+2023
+3,255
+2022
+(Restated)
+Financial assets at amortized cost
+33,202
+30,082
+Debt financial assets at fair value through
+other comprehensive income
+85,301
+85,851
+118,503
+115,933
+9.
+NET FEES AND COMMISSION INCOME FROM NON-INSURANCE
+OPERATIONS
+(in RMB million)
+2023
+2022
+Fees and commission revenue from non-insurance operations
+Brokerage commission
+6,541
+Underwriting commission
+960
+618
+Trust service fees
+1,544
+Notes to Consolidated Financial Statements
+9,045
+10. INVESTMENT INCOME
+6,906
+6,178
+92,296
+90,598
+(2) REALIZED GAINS/(LOSSES)
+(in RMB million)
+2023
+2022
+(Restated)
+Financial instruments at fair value through profit or loss
+(53,184)
+(58,221)
+other comprehensive income
+599
+(243)
+Financial assets at amortized cost
+(506)
+(273)
+Derivative financial instruments
+(43)
+For the year ended 31 December 2023
+1,471
+Gains on disposals of loans and advances at fair value through
+other comprehensive income
+Operating lease income from investment properties
+15,818
+Debt financial assets at fair value through
+other comprehensive income
+Net investment income
+Realized gains/(losses)
+Unrealized gains/(losses)
+Total investment income
+18,131
+(in RMB million)
+2023
+2022
+(Restated)
+92,296
+(49,933)
+(55,973)
+(9,039)
+(36,936)
+90,598
+(2,311)
+(1) NET INVESTMENT INCOME
+(in RMB million)
+Equity financial assets at fair value through
+2023
+68,602
+2022
+(Restated)
+Financial assets at fair value through profit or loss
+33,324
+67,259
+41.80%
+13,338
+(7)
+13,345
+Shanghai Yibin Property Co., Ltd.
+9,217
+10,070
+853
+Vivid Synergy Limited
+56
+Guangzhou Futures Exchange Co., Ltd.
+1,386
+30.00%
+29.85%
+450
+(151)
+465
+185,579
+(12,998)
+1,330
+(7,283)
+6,040
+186,822
+Subtotal
+1,729
+(1,156)
+38,047
+(3,574)
+5,988
+35,633
+Others
+15.00%
+15
+Ping An Consumer Finance
+10.21%
+25.02%
+39.18%
+1,807
+(23)
+1,499
+38.81%
+22
+102
+1,098
+(472)
+32.12%
+2,079
+(232)
+29.55%
+(928)
+2,988
+198
+13.36%
+15,882
+4.34%
+40
+146
+(1,558)
+7,139
+2
+7,137
+China Jinmao Holding Group Co., Ltd.
+(9,822)
+2,522
+(1,099)
+3,621
+China Fortune
+11.94%
+38
+2,790
+807
+6,256
+Total assets
+as at
+Yunnan Kunyu Highway Development Co., Ltd.
+Total
+liabilities
+as at
+31 December
+31 December
+the Group's
+operation
+Principal activities
+Place of
+incorporation
+Place of
+business
+Total
+revenue in
+current year
+(in RMB million)
+The financial information summary of the Group's principal associates and joint ventures as at year end of
+2023 are as follows:
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 273
+Significant to
+Net profit/
+(loss) in
+current year(ii)
+Associates
+39.41%
+5,121
+8,068
+(323)
+4,674
+3,253
+16,520
+Yes
+Online health care
+Technology-as-a-service Yes
+cloud platform for
+financial institutions
+Cayman
+China
+OneConnect
+Cayman
+China
+Ping An Health
+Annual Report 2023
+Joint ventures
+10,180
+(12,998)
+2,795
+Founder Meiji Yasuda Life Insurance Co., Ltd.
+49.81%
+468
+(14)
+482
+2,795
+Wuhan DAJT Property Development Co., Ltd.
+1,619
+(13)
+1,632
+Beijing Zhaotai Property Development Co., Ltd.
+(762)
+762
+24.95%
+33.75%
+Others
+94,363
+280,793
+(17,777)
+14,509
+284,061
+Total
+3,924
+95,214
+(10,494)
+8,469
+97,239
+Subtotal
+3,924
+90,332
+(9,705)
+5,674
+(928)
+18,739
+90,332
+41.44%
+(15,364)
+1,843
+95,214
+Subtotal
+2,925
+(311)
+81,693
+(311)
+(14,335)
+976
+Others
+33.75%
+(199)
+(199)
+76,973
+(510)
+(510)
+3,264
+Provision
+2022
+The Group's investments in the principal associates and joint ventures as at 31 December 2022 are as
+follows:
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+272
+7,605
+(864)
+(13,272)
+258,877
+(24,171)
+2,255
+280,793
+Total
+2,982
+As at
+1 January
+(680)
+2,795
+185,579
+Subtotal
+2,689
+(354)
+(1,347)
+31,473
+412
+(6,986)
+38,047
+Others
+15.00%
+495
+3,668
+30
+412
+(8,807)
+177,184
+(12,762)
+Founder Meiji Yasuda Life Insurance Co., Ltd.
+49.81%
+460
+(8)
+468
+Wuhan DAJT Property Development Co., Ltd.
+24.95%
+339
+1,278
+(341)
+1,619
+Beijing Zhaotai Property Development Co., Ltd.
+Joint ventures
+4,341
+(354)
+867
+Additional
+investment
+Increase
+/(Decrease) in
+current year
+balance
+18,922
+Ping An Health
+1,281
+51,564
+Lufax Holding
+31
+Ping An HealthKonnect
+39.92%
+39.18%
+ཆ ' ཙེཧ
+(4,336)
+4,336
+Xuhui Holdings Co., Ltd.
+637
+36.66%
+2,903
+OneConnect
+2,259
+3,250
+52,845
+ནཱཀླི ©
+2,797
+China Traditional Chinese Medicine Holdings Co., Ltd.
+15,684
+China Yangtze Power Co., Ltd.
+1,830
+Beijing Beiqi Penglong Automobile Service Co., Ltd.
+(236)
+1,735
+Zhong An Online
+1,570
+Shenzhen China Merchants-Ping An Asset Management
+Co., Ltd.
+52
+(64)
+1,131
+9,489
+29.85%
+93
+158
+23.88%
+309
+272
+Veolia Liuzhou
+Veolia Yellow River
+Veolia Kunming
+Associates
+(in RMB million)
+Proportion of
+ordinary
+shares held by
+the Group (%)
+Cash
+dividends in
+current year
+Change of
+provision in
+current year
+as at
+31 December
+As at
+31 December
+Shanxi Taichang
+(183)
+873
+Beijing-Shanghai Railway
+1,032
+44.78%
+(23)
+147
+48.76%
+(402)
+140
+(18)
+£ག་ཡོ་ཚེ
+701
+Guangzhou Jinglun Property Development Co., Ltd.
+1,074
+Massive Idea Investments Limited
+171
+9,318
+159
+(363)
+As at 1 January
+Charge for the year
+Disposals
+China
+1,716
+-
+1,716
+Transfer from investment properties, net
+(853)
+95
+Disposals of subsidiaries
+31
+Transfer from/(to) construction in progress
+4,479
+2,228
+70
+1,843
+210
+727
+(2)
+(3)
+(5)
+Accumulated depreciation
+96,045
+4,047
+1,823
+26,325
+50,347
+13,503
+As at 31 December
+(3,581)
+(46)
+(480)
+(2,170)
+(563)
+(322)
+Disposals
+128
+As at 1 January
+Additions
+-
+Leasehold
+improvements
+Cost
+(in RMB million)
+32. PROPERTY AND EQUIPMENT
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+2023
+FINANCIAL STATEMENTS
+Annual Report 2023
+The Group was still in the process of applying for title certificates for certain investment properties with
+a carrying amount of RMB3,669 million as at 31 December 2023 (31 December 2022: RMB3,465 million).
+As at 31 December 2023, investment properties with a carrying amount of RMB11,613 million (31 December
+2022: RMB19,411 million) were pledged as collateral for long-term and short-term borrowings with a carrying
+amount of RMB7,937 million (31 December 2022: RMB7,270 million).
+The rental income arising from investment properties for the year 2023 amounted to RMB6,906 million (2022:
+RMB6,178 million), which is included in net investment income.
+The fair value of the investment properties as at 31 December 2023 were estimated by the Group, based on
+valuation performed by independent valuers. It falls under level 3 in the fair value hierarchy.
+121,526
+Ping An Insurance (Group) Company of China, Ltd. 275
+Equipment,
+furniture and
+Buildings
+fixtures
+-
+15
+-
+-
+Acquisitions of subsidiaries
+93,421
+2,718
+2,236
+26,544
+48,953
+12,970
+As at 1 January
+Total
+Construction
+in progress
+Motor
+vehicles
+15
+154,690
+9,254
+-
+171
+(74)
+47
+198
+43
+61
+Net carrying amount
+67
+(34)
+-
+29
+18
+43
+72
+(40)
+As at 31 December
+2,989
+35,281
+465
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+276
+53,657
+2,718
+848
+10,104
+36,271
+3,716
+As at 1 January
+50,401
+4,047
+656
+7,428
+83
+Acquisitions of subsidiaries
+As at 31 December
+Charge for the year
+132
+4,309
+1,935
+14
+14
+39,566
+7,808
+1,345
+12,599
+(2)
+Disposals of subsidiaries
+Transfer from investment properties, net
+1,432
+Charge for the year
+16,368
+714
+714
+(3)
+As at 1 January
+Impairment losses
+45,473
+1,124
+18,836
+14,999
+10,514
+As at 31 December
+(2,626)
+(352)
+(1,853)
+(249)
+(172)
+Disposals
+(1)
+Disposals
+154,690
+162,654
+86,041
+30. STATUTORY DEPOSITS FOR INSURANCE OPERATIONS
+Note ii: Net profit/(loss) refers to the net profit/(loss) attributable to shareholders of the parent company of Ping An Health, OneConnect
+and Lufax Holding respectively.
+Note: The proportion of ordinary shares, as shown in the above table, is the multiplication of the proportion of shares held in each
+holding layer.
+The Group has no significant contingent liabilities relating to the associates and joint ventures listed above.
+8,699
+58,116
+(in RMB million)
+254,476
+Yes
+Financial technology
+Cayman
+China
+Lufax Holding
+financial institutions
+349,263
+Ping An Life
+Ping An Property & Casualty
+Ping An Annuity
+1,100
+2,322
+2,322
+4,200
+4,200
+6,760
+6,760
+31 December 2022
+31 December 2023
+Total
+Add: Interest receivable
+Less: Provision for impairment losses
+Subtotal
+Others
+Ping An Health Insurance
+(872)
+940
+4,464
+8,882
+the Group's
+operation
+Principal activities
+Place of
+incorporation
+Place of
+business
+(in RMB million)
+Significant to
+Total assets
+as at
+The financial information summary of the Group's principal associates and joint ventures as at year end of
+2022 are as follows:
+34,255
+143,339
+237,023
+Yes
+Financial technology
+Cayman
+887
+Total
+liabilities
+Total
+Net profit/
+(636)
+6,205
+3,653
+17,184
+Yes
+Online health care
+Technology-as-a-service Yes
+cloud platform for
+Cayman
+China
+Cayman
+China
+Associates
+Ping An Health
+OneConnect
+(loss) in
+current year()
+revenue in
+current year
+as at
+31 December
+31 December
+5,604
+18
+18
+14,400
+26,215
+As at 31 December
+(4)
+(1)
+Disposals
+1,058
+21,327
+(714)
+3,645
+4,692
+Charge for the year
+507
+911
+Acquisition of subsidiaries
+Transfer (to)/from property and equipment, net
+Impairment losses
+As at 31 December
+Net carrying amount
+114,763
+114,763
+121,406
+1
+48
+(3)
+(1)
+4
+1
+48
+As at 1 January
+As at 31 December
+Fair value
+As at 1 January
+As at 31 December
+16,121
+21,327
+As at 1 January
+Accumulated depreciation
+As at 1 January
+Cost
+(in RMB million)
+31. INVESTMENT PROPERTIES
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+274
+Statutory deposits for insurance operations are placed with PRC national commercial banks in accordance
+with the Insurance Law and relevant regulations issued by regulatory authorities based on 20% of the
+registered capital for the insurance company subsidiaries and 5% of the registered capital for insurance
+sales agency subsidiaries within the Group, respectively. Statutory deposits for insurance operations
+can only be utilized to settle liabilities during liquidation of insurance companies, insurance sales agency
+companies and insurance brokerage companies.
+14,444
+14,903
+208
+508
+(4)
+(5)
+14,240
+2023
+Lufax Holding
+2022
+102,166
+136,091
+147,669
+As at 31 December
+(150)
+(166)
+Disposals
+4,740
+(1,716)
+Transfer (to)/from property and equipment, net
+3,536
+2,379
+Additions
+25,799
+11,081
+Acquisition of subsidiaries
+136,091
+Guangzhou Futures Exchange Co., Ltd.
+(in RMB million)
+13,329
+607
+708
+623
+38,966
+Secured by monetary assets
+827
+5,639
+21,417
+12,318
+1,035
+262
+595
+87
+41,338
+78
+Secured by mortgages
+2,372
+18,784
+3
+Less: Loan allowance
+Add: Interest receivable
+Gross
+Overseas
+Head office
+Northern
+Western
+Southern
+Eastern
+(in RMB million)
+(5) ANALYSED BY REGION
+Past due loans refer to the loans with either principal or interest being past due by one day or more.
+63,098
+343
+1,941
+343
+Carrying amount
+14,983
+Total
+38,581
+2,871
+-
+258
+1,109
+1,504
+19,251
+Secured by monetary assets
+34
+1,223
+4,714
+13,584
+Secured by mortgages
+Secured by collateral
+19,555
+1,904
+165
+59,901
+3 years
+1 to 3 years
+More than
+3 months
+to 1 year
+Within 3 months
+31 December 2022
+Secured by collateral
+Guaranteed
+Unsecured
+(in RMB million)
+(4) AGING ANALYSIS OF PAST DUE LOANS BY PASS DUE DAYS (CONTINUED)
+24. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+268
+25,934
+91
+2,194
+(6) LOAN IMPAIRMENT PROVISION
+31 December 2023
+17,779
+Recovery of loans written off previously
+(80,727)
+Write-off and transfer during the year
+61,837
+62,973
+(65,136)
+11,942
+Charge for the year
+97,919
+As at 1 January
+Measured at amortized cost
+2022
+2023
+3,238,054
+89,256
+Unwinding of discount of impairment provisions recognized
+as interest income
+(83)
+Others
+2,692
+As at 31 December
+(445)
+Write-off and transfer during the year
+2,331
+(140)
+(Recover)/charge for the year
+946
+3,277
+Measured at fair value through other comprehensive income
+As at 1 January
+97,919
+97,353
+As at 31 December
+(45)
+65
+(508)
+3,318,122
+(in RMB million)
+11,016
+(97,919)
+9,954
+335,842
+19.54%
+649,810
+20.73%
+706,021
+21.31%
+9.86%
+708,410
+780,270
+%
+Amount
+%
+Amount
+31 December 2022
+22.91%
+310,665
+9.34%
+559,056
+100.00%
+3,324,957
+100.00%
+3,405,521
+0.90%
+29,775
+0.97%
+41.80%
+34.18%
+1,136,487
+29.11%
+991,440
+14.73%
+489,810
+16.42%
+(97,353)
+3,277
+4
+127
+As at 31 December 2023, the provision for impairment losses of loans and advances to customers measured
+at fair value through other comprehensive income was RMB2,692 million (31 December 2022: RMB3,277
+million), refer to Note 24.(6).
+As at 31 December 2023, discounted bills with a carrying amount of RMB26 million (31 December 2022:
+RMB211 million) were pledged for amounts due to the Central Bank.
+3,238,054
+3,318,122
+Carrying amount
+331,880
+Ping An Insurance (Group) Company of China, Ltd. 267
+453,930
+197,547
+214,799
+Discounted bills
+134,333
+239,131
+Loans
+Subtotal
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+183,192
+200,675
+18,899
+17,821
+3,124
+3,575
+31 December 2022
+31 December 2023
+Energy
+Manufacturing
+Mining
+Agriculture, husbandry and fishery
+Loans and advances to customers
+(2) ANALYSED BY INDUSTRY
+24. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+Corporate customers
+37,527
+Measured at fair value through other comprehensive income
+2,864,192
+31 December 2022
+31 December 2023
+Gross
+Business loans
+Consumer loans
+Credit card receivables
+973,872
+Mortgage loans
+Loans
+Corporate customers
+Measured at amortized cost
+(1) ANALYSED BY CORPORATE AND INDIVIDUAL
+(in RMB million)
+24. LOANS AND ADVANCES TO CUSTOMERS
+Annual Report 2023
+Individual customers.
+945,687
+303,568
+284,443
+Net
+(97,919)
+(97,353)
+Less: Provision for impairment losses
+11,016
+9,954
+Add: Interest receivable
+2,993,077
+2,951,591
+582,009
+614,768
+602,247
+545,291
+578,691
+514,092
+2,906,174
+35,281
+33,091
+59,744
+306,287
+1,316,244
+1,283,638
+221,241
+31 December 2022
+1,313,001
+335,238
+1,315,512
+226,971
+3,190,722
+214,799
+3,405,521
+9,954
+(97,353)
+3,318,122
+31 December 2023
+Carrying amount
+Less: Provision for impairment losses
+Add: Interest receivable
+Gross
+Discounted bills
+Subtotal
+(4) AGING ANALYSIS OF PAST DUE LOANS BY PASS DUE DAYS
+3,127,410
+197,547
+3,324,957
+11,016
+(97,919)
+404
+19
+Total
+3 years
+1 to 3 years
+to 1 year
+12,372
+1,056
+1,115
+Guaranteed
+22,378
+Unsecured
+Within 3 months
+(in RMB million)
+More than
+3 months
+31 December 2023
+3,238,054
+Secured by monetary assets
+Transportation and communication
+Secured by mortgages
+Guaranteed
+Individual customers
+45,868
+52,760
+Construction
+219,219
+246,241
+1,977,719
+Social service, technology, culture and sanitary industries
+255,322
+Real estate
+124,729
+151,160
+Wholesaling and retailing
+51,441
+283,484
+2,047,390
+Others
+402,977
+Unsecured
+(in RMB million)
+(3) ANALYSED BY TYPE OF COLLATERAL HELD
+Carrying amount
+Less: Provision for impairment losses
+Add: Interest receivable
+Gross
+3,238,054
+3,318,122
+(97,919)
+11,016
+9,954
+(97,353)
+3,324,957
+3,405,521
+314,520
+Secured by collateral
+As at 31 December
+32,892
+101,196
+31 December 2022
+31 December 2023
+(in RMB million)
+Equity financial assets at fair value through other comprehensive income comprise the following individual
+investments:
+28. EQUITY FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
+COMPREHENSIVE INCOME
+As at 31 December 2023, the total provision for impairment losses recognized in debt financial assets at fair
+value through other comprehensive income is RMB8,818 million (31 December 2022: RMB8,557 million).
+2,500,790
+2,637,008
+2,124,964
+2,272,268
+375,826
+364,740
+2,500,790
+Stocks
+2,637,008
+127,506
+49,126
+-
+114,289
+108,515
+78,393
+75,772
+380,170
+1,733,996
+1,973,152
+352,063
+(Restated)
+31 December 2022
+31 December 2023
+144,816
+Unlisted
+Preferred shares
+Total
+2023
+Veolia Water (Kunming) Investment Co., Ltd.
+("Veolia Kunming")
+Associates
+(in RMB million)
+The Group's investments in the principal associates and joint ventures as at 31 December 2023 are as
+follows:
+29. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 271
+Annual Report 2023
+The dividend income of equity financial assets at fair value through other comprehensive income
+recognized during the year are disclosed in Note 10.
+In 2023, for the consideration of optimizing asset allocation and asset-liability management, the Group
+disposed of equity financial assets at fair value through other comprehensive income amounted to
+RMB21,956 million (2022: RMB27,224 million), and the net cumulative losses of RMB311 million (2022: net
+cumulative gains of RMB113 million) on disposal was transferred from other comprehensive income to
+retained profits.
+Other equity investments
+For the equity investments which are not held for trading but for long-term investments, the Group has
+irrevocably elected to recognize them in this category at initial recognition.
+4,940
+5,298
+264,877
+259,831
+259,579
+4,940
+264,771
+264,877
+5,298
+85,784
+174,047
+177,686
+81,893
+(Restated)
+Unlisted
+Listed
+264,771
+As at
+1 January
+Listed
+Wealth management investments
+16,102
+14,196
+Debt schemes
+53,131
+47,433
+Corporate bonds
+32,047
+32,113
+767,761
+892,641
+Finance bonds
+Government bonds
+Bonds
+Wealth management investments
+(Restated)
+31 December 2023
+1,640,519
+1,803,047
+198,459
+1,442,060
+316,044
+1,487,003
+1,640,519
+1,803,047
+76,244
+103,810
+238,092
+258,313
+60,698
+72,237
+31 December 2022
+Total
+117,172
+Other investments
+Margin accounts receivable
+Debt schemes
+Corporate bonds
+Finance bonds
+Government bonds
+Bonds
+(in RMB million)
+27. DEBT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
+COMPREHENSIVE INCOME
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+270
+1,124,035
+1,243,353
+147,424
+61,208
+1,062,827
+Unlisted
+Listed
+1,124,035
+1,243,353
+Net
+(40,803)
+(46,977)
+Less: Provisions for impairment losses
+1,164,838
+1,290,330
+Gross
+148,373
+186,775
+62,757
+1,180,596
+Additional
+investment
+Increase
+/(Decrease) in
+current year
+Provision
+balance
+845
+39.18%
+111
+10.21%
+2,905
+115
+2,790
+China Traditional Chinese Medicine Holdings Co., Ltd.
+16,141
+259
+15,882
+China Yangtze Power Co., Ltd.
+1,768
+4.03%
+(39)
+Beijing Beiqi Penglong Automobile Service Co., Ltd.
+2,008
+509
+1,499
+("ZhongAn Online")
+ZhongAn Online P&C Insurance Co., Ltd.
+38.81%
+992
+(106)
+1,098
+Management Co., Ltd.
+Shenzhen China Merchants-Ping An Asset
+32.12%
+1,807
+29.55%
+28
+China Fortune Land Development Co., Ltd.
+(9)
+13,338
+Shanghai Yibin Property Co., Ltd.
+29.85%
+10,216
+146
+30.00%
+1,533
+147
+445
+10,070
+Vivid Synergy Limited
+1,386
+11.94%
+("Ping An Consumer Finance")
+13.18%
+58
+(1,558)
+5,606
+(1,533)
+7,139
+China Jinmao Holding Group Co., Ltd.
+25.02%
+(9,820)
+1,740
+(782)
+2,522
+("China Fortune")
+Ping An Consumer Finance Co., Ltd.
+39.41%
+1,913
+(166)
+Investment Scheme ("Beijing-Shanghai Railway")
+Beijing-Shanghai High-Speed Railway Equity
+29.85%
+100,045
+115
+1,032
+Shanxi Taichang Expressway Co., Ltd. ("Shanxi Taichang")
+(147)
+147
+("Veolia Liuzhou")
+Veolia Water (Liuzhou) Investment Co., Ltd.
+(140)
+440
+9,489
+140
+Veolia Water (Yellow River) Investment Co., Ltd.
+23.88%
+(37)
+327
+305
+(4)
+309
+Proportion of
+ordinary
+shares held by
+the Group (%))
+Cash
+dividends in
+current year
+Change of
+provision in
+current year
+31 December
+as at
+As at
+31 December
+("Veolia Yellow River")
+4
+9,493
+16
+2,079
+OneConnect Financial Technology Co., Ltd. ("OneConnect")
+3,236
+248
+2,988
+Company Limited ("Ping An HealthKonnect")
+HealthKonnect Medical and Health Technology Management
+18,673
+(66)
+18,739
+("Ping An Health")
+Ping An Healthcare and Technology Co., Ltd.
+41.43%
+594
+52,465
+(380)
+52,845
+Lufax Holding Ltd. ("Lufax Holding")
+39.92%
+644
+36.66%
+1,102
+(29)
+་སྦྱི
+637
+Guangzhou Jinglun Property Development Co., Ltd.
+1,131
+Massive Idea Investments Limited
+59.14%
+133,295
+127,304
+1,147
+Unlisted
+Debt schemes
+Unlisted equity investments
+Preferred shares
+Stocks
+Funds
+Corporate bonds
+Finance bonds
+Wealth management investments
+Government bonds
+(in RMB million)
+25. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 269
+Annual Report 2023
+Bonds
+Total
+Other investments
+290,788
+22,929
+83,995
+156,514
+517,951
+475,511
+81,142
+78,485
+Listed
+23,164
+135,150
+200,566
+(Restated)
+31 December 2022
+31 December 2023
+(in RMB million)
+26. FINANCIAL ASSETS AT AMORTIZED COST
+307,378
+Charge for the year
+Disposals
+As at 31 December
+Impairment losses
+3,146
+7,886
+As at 31 December
+58
+220
+278
+11
+69
+1
+221
+12
+290
+Net carrying amount
+As at 31 December
+44,060
+1,794
+33,386
+As at 1 January
+23,175
+Additions
+2,885
+As at 1 January
+11,387
+783
+10,039
+24,739
+134
+134
+189
+761
+754
+110
+1,357
+3,171
+(36)
+(45)
+3,335
+3,744
+8,640
+893
+27,999
+Acquisitions of subsidiaries
+469
+1,983
+13,571
+9,987
+15,082
+26,268
+5,129
+23,233
+As at 1 January
+Cost
+Total
+93,270
+Software
+and others
+Core deposits
+Prepaid
+land premiums
+Goodwill (i) operating rights
+Expressway
+(in RMB million)
+2022
+33. INTANGIBLE ASSETS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Trademarks
+As at 1 January
+Acquisitions of subsidiaries
+1,045
+Accumulated amortization
+127,700
+15,965
+10,056
+15,082
+37,130
+5,129
+44,338
+As at 31 December
+8,857
+(790)
+(353)
+Disposals
+25,318
+1,786
+69
+2,358
+21,105
+Additions
+9,902
+(437)
+23,383
+As at
+9,163
+44,407
+(58)
+127
+44,338
+Total
+738
+(58)
+9
+787
+Other
+20,977
+-
+20,977
+New Founder Group
+2,438
+2,438
+TTP Car Inc.
+5,265
+5,265
+Less: Impairment losses
+(278)
+(13)
+(291)
+1,749
+Mayborn Group Limited
+2,502
+8,761
+8,761
+2,502
+31 December
+Decrease
+Increase
+1 January
+Autohome Inc.
+Shanghai Jahwa
+(in RMB million)
+As at
+As at
+2022
+44,116
+(58)
+114
+44,060
+Net carrying amount
+Ping An Bank
+1,073
+1,073
+241
+Ping An Bank
+(in RMB million)
+As at
+278
+2023
+(1) GOODWILL
+33. INTANGIBLE ASSETS (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+Shanghai Jahwa
+FINANCIAL STATEMENTS
+Annual Report 2023
+As at 31 December 2023, the Group has no prepaid land premiums without title certificates (31 December
+2022: RMB1,936 million).
+As at 31 December 2023, prepaid land premiums with a carrying amount of RMB981 million (31 December
+2022: RMB1,485 million) were pledged as collateral for long-term borrowings amounting to RMB638 million
+(31 December 2022: RMB579 million).
+As at 31 December 2023, expressway operating rights with a carrying amount of RMB1,467 million (31
+December 2022: RMB1,604 million) were pledged as collateral for long-term borrowings amounting to
+RMB157 million (31 December 2022: RMB260 million).
+68,462
+3,521
+9,204
+99,411
+4,566
+Ping An Insurance (Group) Company of China, Ltd. 279
+6,442
+7,196
+Mayborn Group Limited
+1 January
+241
+Shanghai Gezhouba Yangming Property Co., Ltd.
+Ping An E-wallet
+134
+134
+Beijing Shuangronghui Investment Co., Ltd.
+66
+66
+Ping An Commercial Property Investment
+328
+Ping An Securities
+328
+118
+1,766
+2,502
+2,502
+8,761
+8,761
+31 December
+Decrease
+Increase
+1,884
+99,411
+(2)
+9,163
+53,657
+2,718
+848
+10,104
+36,271
+3,716
+198
+14
+184
+43
+72
+83
+6
+6
+2
+37
+66
+81
+As at 1 January
+3,935
+31,279
+10,304
+1,071
+As at 1 January
+Total
+Software
+and others
+Trademarks
+Core deposits
+Prepaid
+land premiums
+Goodwill (i) operating rights
+Expressway
+2023
+As at 31 December
+Cost
+33. INTANGIBLE ASSETS
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 277
+Annual Report 2023
+The Group was still in the process of applying for title certificates for its buildings with a carrying amount
+of RMB523 million as at 31 December 2023 (31 December 2022: RMB558 million).
+49,758
+3,169
+(in RMB million)
+Net carrying amount
+As at 31 December
+Additions
+1
+Acquisitions of subsidiaries
+36,081
+1,549
+13,832
+12,150
+8,550
+As at 1 January
+93,421
+1
+2,718
+26,544
+48,953
+12,970
+(2,705)
+(11)
+(458)
+(1,502)
+(199)
+(535)
+2,236
+44,338
+Charge for the year
+1,573
+As at 1 January
+Impairment losses
+39,566
+1,345
+16,368
+12,599
+9,254
+As at 31 December
+(2,966)
+1,954
+(326)
+(66)
+(1,250)
+Disposals
+(1,058)
+(1,058)
+Transfer to investment properties, net
+7,508
+122
+3,859
+(1,324)
+5,129
+Acquisitions of subsidiaries
+37,130
+1,138
+-
+Disposals
+13
+Additions
+278
+As at 1 January
+Impairment losses
+As at 31 December
+31,299
+As at 31 December
+12,745
+9,394
+4,646
+3,524
+(92)
+(53)
+(39)
+(1)
+(1)
+3,370
+990
+1,412
+291
+290
+6,442
+33,386
+1,794
+44,060
+As at 1 January
+99,078
+4,490
+9,084
+5,688
+12
+34,095
+44,116
+As at 31 December
+Net carrying amount
+339
+48
+(2)
+17
+51
+38
+1,605
+4,566
+97
+918
+As at 31 December
+(566)
+(158)
+(350)
+(58)
+Disposals
+(1)
+(1)
+Disposals of subsidiaries
+44,407
+2,444
+18
+823
+127
+Additions
+1,139
+127,700
+15,965
+1
+10,056
+15,082
+1,476
+754
+5,129
+15,082
+189
+23
+-
+-
+23
+27,999
+11,387
+893
+8,640
+38,741
+3,744
+Disposals
+Disposals of subsidiaries
+Charge for the year
+Acquisitions of subsidiaries
+As at 1 January
+Accumulated amortization
+130,716
+17,283
+10,074
+3,335
+1,766
+Ping An Securities
+328
+984
+(1,439)
+Total
+employee services
+Purchase Plan
+Value of
+Cost of shares held for
+Key Employee Share
+(ii)
+(i)
+As at 31 December 2022
+(455)
+Expired
+Share-based compensation expenses (ii)
+Purchased (i)
+As at 1 January 2022
+(in RMB million)
+(400)
+861
+(1,261)
+55
+55
+-
+Exercised
+(515)
+(596)
+573
+Vested
+(iii) Movement of shares relating to the Key Employee Share Purchase Plan is as follows (refer to Note 54.(3) for details about directors):
+38. KEY EMPLOYEE SHARE PURCHASE PLAN (CONTINUED)
+Directors
+RMB80.17 per share
+From 24 February 2020
+to 27 February 2020
+Type
+Average price of
+shares purchased
+Period of purchase
+Ping An Insurance (Group) Company of China, Ltd.
+(596)
+Annual Report 2023
+The share-based compensation expenses of the Key Employee Share Purchase Plan and the total value of employee services were
+RMB609 million during 2023 (2022: RMB573 million).
+During the period from 16 March 2023 to 23 March 2023, 15,030,180 ordinary A shares were purchased from the market. The average
+price of shares purchased was RMB46.13 per share. The total purchasing cost was RMB694 million (transaction expenses included).
+During the period from 18 March 2022 to 25 March 2022, 12,518,547 ordinary A shares were purchased from the market. The average
+price of shares purchased was RMB47.56 per share. The total purchasing cost was RMB596 million (transaction expenses included).
+(370)
+767
+(1,137)
+108
+108
+(790)
+790
+573
+284
+515
+609
+609
+In June 2023, the Company cancelled 70,006,803 A shares repurchased under the 2019 A Share Repurchase
+Plan, and the total share capital of the Company was changed from 18,280,241,410 shares to 18,210,234,607
+shares.
+18,280
+10,762
+10,832
+18,210
+7,448
+7,448
+Total
+Overseas listed
+H shares, par value
+RMB1.00 per share
+A shares, par value
+RMB1.00 per share
+Domestic listed
+37. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+31 December 2022
+(million shares)
+36. SHARE CAPITAL
+156,463
+134,995
+Net
+(1,389)
+(2,036)
+(279)
+(363)
+(1,699)
+31 December 2023
+In accordance with the relevant regulations, general reserves should be set aside to cover catastrophic
+or other losses as incurred by companies operating in the insurance, banking, trust, securities, futures
+and fund businesses. The Group's respective entities engaged in such businesses would need to make
+appropriations for such reserves based on their respective year-end profit or risk assets, the companies
+operating in insurance should make appropriations for general reserves based on 10% of net profit, the
+company operating in banking should make appropriations based on 1.5% of risk assets, the company
+operating in securities should make appropriations based on 10% of net profit, the companies operating in
+trust should make appropriations based on 5% of trust claim reserves, the companies operating in futures
+should make appropriations based on 10% of net profit, and the companies operating in fund should make
+appropriations based on 10% of fund management fees as determined in accordance with PRC Accounting
+Standards, and based on the applicable PRC financial regulations, in their annual financial statements. Such
+reserves are not available for dividend distribution or transfer to share capital.
+In accordance with the relevant regulations, the net profit after tax of the Company for profit distribution
+is deemed to be the lower of (i) the retained profits determined in accordance with PRC Accounting
+Standards and (ii) the retained profits determined in accordance with IFRSS.
+Annual Report 2023
+(694)
+(370)
+767
+(1,137)
+(694)
+Total
+Value of
+employee services
+Cost of shares held for
+Key Employee Share
+Purchase Plan
+As at 31 December 2023
+Expired
+Exercised
+Share-based compensation expenses (ii)
+Purchased (i)
+As at 1 January 2023
+(in RMB million)
+Movement of reserves relating to the Key Employee Share Purchase Plan is as follows:
+The Company has adopted a Key Employee Share Purchase Plan for the key employees (including
+executive directors and senior management) of the Company and its subsidiaries. Shares shall be vested
+and awarded to the key employees approved for participation in the plan, subject to the achievement of
+certain performance targets.
+38. KEY EMPLOYEE SHARE PURCHASE PLAN
+The Group's subsidiaries consolidated certain asset management schemes that were managed by third
+parties. These asset management schemes invested in the insurance index shares which included the
+Company's shares. As such the Group indirectly hold the Company's shares. The consideration paid by the
+consolidated asset management schemes in purchasing the Company's shares from the market, including
+any directly attributable incremental cost, is debited to "Share premium" under "Reserves". No gain or loss
+shall be recognized in profit or loss on the sale of those shares, the consideration received is credited to
+"Share premium" under "Reserves". As at 31 December 2023, these assets management schemes have been
+liquidated, there is no consolidated assets management scheme that holds shares of the Company (as at
+31 December 2022, 261 million shares of the Company were held by these consolidated assets management
+schemes).
+37. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+(CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 283
+Unvested as at
+1 January
+(1,587)
+2023
+during
+the year [2]
+472
+(4,451)
+(15,916)
+Total
+1,429
+(13)
+472
+-
+970
+Value of
+employee
+services
+(19,895)
+(21,324)
+(16,886)
+(4,451)
+Service Plan
+Cost of shares
+held for Long-term
+As at 31 December 2023
+Exercised
+Share-based compensation expenses (ii)
+Purchased (i)
+As at 1 January 2023
+(in RMB million)
+Movement of reserves relating to the Long-term Service Plan is as follows:
+13
+The Company has adopted a Long-term Service Plan for the employees of the Company and its
+subsidiaries. Shares shall be vested and awarded to the employees participated in the Long-term Service
+Plan, subject to the confirmation of their applications made when they retire from the Company.
+(in RMB million)
+Purchased (i)
+286
+The share-based compensation expenses and the total value of employee services of the Long-term Service Plan were RMB472
+million during 2023 (2022: RMB326 million).
+From 18 March 2022 to 25 March 2022, 93,314,482 ordinary A shares were purchased from the market. The average price of shares
+purchased was RMB47.56 per share. The total purchasing cost was RMB4,439 million (transaction expenses included).
+From 16 March 2023 to 23 March 2023, 96,608,364 ordinary A shares were purchased from the market. The average price of shares
+purchased was RMB46.06 per share. The total purchasing cost was RMB4,451 million (transaction expenses included).
+(ii)
+(i)
+(15,916)
+970
+(16,886)
+(18)
+As at 1 January 2022
+18
+326
+(11,803)
+(4,439)
+662
+Total
+services
+Value of
+employee
+(12,465)
+(4,439)
+Cost of shares
+held for Long-term
+Service Plan
+As at 31 December 2022
+Share-based compensation expenses (ii)
+Exercised
+326
+39. LONG-TERM SERVICE PLAN
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+From 18 March 2022
+to 25 March 2022
+1,937,251
+1,935,297
+4,051,091
+Other employees
+paid individuals
+The five highest
+539,222
+539,215
+1,078,437
+RMB47.56 per share
+Directors
+From 26 April 2021
+to 29 April 2021
+1,472,470
+1,546,892
+Other employees
+paid individuals
+The five highest
+2023
+Unvested as at
+31 December
+394,275
+394,275
+RMB73.13 per share
+Directors
+2,685,633
+895,209
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 285
+Annual Report 2023
+The relevant shares are locked for one year from the purchasing date; one third of the shares will be unlocked each year and
+vested in batches to employees after the lock-up period according to rules of the Key Employee Share Purchase Plan.
+The weighted average price of the domestic listed A shares on the trading day before the grant date was RMB53.83 per share.
+From 1 January 2023 to 31 December 2023, the number of shares lapsed under the Key Employee Share Purchase Plan
+(excluding directors and the five highest paid individuals) reached 1,017,867; there was no share cancellation under the Key
+Employee Share Purchase Plan.
+The closing price of the domestic listed A shares on the trading day before the period of purchase was RMB45.95 per share.
+The lock-up period of the relevant shares is from 25 March 2023 to 24 March 2024. One third of the shares under the Key
+Employee Share Purchase Plan will be unlocked each year and vested in batches to employees after the lock-up period
+according to rules of the Key Employee Share Purchase Plan, if employees achieve the requirements of the Company's
+performance indicators (including compliant operation indicators, risk management indicators, economic efficiency indicators,
+and social responsibility indicators).
+[4]
+[3]
+[2]
+[1]
+12,333,609
+12,333,609
+6,045,353
+2,675,673
+19,503
+2,675,673
+19,503
+3,021,866
+9,832,121
+Other employees
+Directors
+The five highest
+paid individuals
+Other employees
+to 23 March 2023
+RMB46.13 per share
+From 16 March 2023
+paid individuals
+The five highest
+1,790,424
+Addition
+during
+the year[1]
+Accumulated depreciation
+(5,056)
+Precious metals held for trading
+Others
+7,150
+4
+7,146
+Disposals
+Charge for the year
+As at 1 January
+Accumulated depreciation
+15,673
+12
+15,661
+4,787
+As at 31 December
+(1)
+(7,979)
+Disposals
+3,923
+4
+3,919
+Additions
+19,730
+9
+19,721
+(7,980)
+As at 1 January
+5
+(6,065)
+3
+3
+12,580
+50
+12,575
+9,794
+4
+9,790
+3
+3
+4,792
+As at 31 December
+As at 1 January
+As at 31 December
+Additions
+As at 1 January
+Impairment provision
+As at 31 December
+5,876
+8
+5,868
+(6,066)
+(1)
+Net carrying amount
+Total
+Others
+Buildings
+Other
+20,977
+20,977
+New Founder Group
+2,438
+2,438
+TTP Car Inc.
+5,265
+5,265
+Autohome Inc.
+676
+1,073
+241
+241
+Shanghai Gezhouba Yangming Property Co., Ltd.
+Ping An E-wallet
+134
+134
+Beijing Shuangronghui Investment Co., Ltd.
+66
+66
+Ping An Commercial Property Investment
+328
+1,073
+111
+787
+Total
+2023
+Cost
+(in RMB million)
+RIGHT-OF-USE ASSETS
+34. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
+The Group's right-of-use assets include the above prepaid land premiums and right-of-use assets disclosed
+in Note 34.
+Fair value is based on the fair value of stocks issued in the public market or applicable valuation
+techniques. The present value of future cash flows is based on business plans approved by management
+covering a five-year period and a risk adjusted discount rate. Cash flows beyond that period have been
+extrapolated using a steady growth rate and terminal value. Discount rates used by the Group range from
+10% to 17% (2022: from 10% to 17%) and growth rates, where applicable, range from 2% to 25% (2022: from 2%
+to 35%) for 2023.
+When assessing the impairment of goodwill, the main valuation technique used to determine the
+recoverable amount of the groups of assets (or groups of cash-generating units) are Fair Value Less Cost
+to Sell and Present Value of Future Cash Flows.
+(1) GOODWILL (CONTINUED)
+33. INTANGIBLE ASSETS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+280
+44,060
+20,885
+23,175
+Net carrying amount
+(278)
+(220)
+44,338
+21,105
+23,233
+(58)
+Less: Impairment losses
+Annual Report 2023
+(9,530)
+Ping An Insurance (Group) Company of China, Ltd. 281
+Notes to Consolidated Financial Statements
+90,806
+76,052
+Other receivables
+(Restated)
+31 December 2022
+31 December 2023
+(in RMB million)
+35. OTHER ASSETS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Foreclosed assets
+282
+6,107
+Total cash outflows for lease
+584
+660
+applied the simplified approach
+Expense relating to leases of low-value assets and short-term leases
+555
+451
+Interest expense on lease liabilities
+2022
+7,044
+2023
+1,804
+Prepayments
+Foreclosed assets
+Including: Other receivables
+(8,423)
+(13,516)
+Less: Impairment provisions
+164,886
+148,511
+Gross
+20,509
+18,987
+2,070
+Others
+39,036
+Amounts in the processing clearance and settlement
+1,060
+378
+Dividends receivable
+16,834
+10,043
+Precious metals held for trading
+3,927
+2,211
+29,680
+(in RMB million)
+The Group's right-of-use assets include the above assets and prepaid land premiums disclosed in Note 33.
+The amount recognized in the Consolidated Income Statement and the Consolidated Statement of Cash
+Flows for the year relating to the lease contracts are as follows:
+14,185
+19,721
+As at 31 December
+(11,460)
+(11,459)
+Disposals
+6,434
+6
+6,428
+Additions
+24,756
+9
+4
+As at 1 January
+Total
+Others
+Buildings
+2022
+Cost
+(in RMB million)
+RIGHT-OF-USE ASSETS (CONTINUED)
+34. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED)
+For the year ended 31 December 2023
+24,752
+19,730
+Accumulated depreciation
+As at 1 January
+12,580
+5
+1
+12,575
+14,184
+As at 1 January
+Net carrying amount
+As at 31 December
+As at 31 December
+As at 1 January
+Impairment provision
+As at 31 December
+7,150
+4
+7,146
+(9,403)
+(1)
+(9,402)
+Disposals
+5,982
+2
+5,980
+Charge for the year
+10,571
+3
+10,568
+FINANCIAL STATEMENTS
+As at 31 December
+Ping An Insurance (Group) Company of China, Ltd.
+(1)
+Acquisitions of subsidiaries
+86,023
+3,169
+2,657
+24,202
+43,510
+12,485
+Disposals
+Cost
+167
+Total
+Construction
+Motor
+vehicles
+Equipment,
+furniture and
+fixtures
+Buildings
+Leasehold
+improvements
+2022
+(in RMB million)
+32. PROPERTY AND EQUIPMENT (CONTINUED)
+Annual Report 2023
+in progress
+8,823
+As at 1 January
+33
+1,780
+Disposals of subsidiaries
+(4,740)
+(640)
+(4,100)
+Transfer to investment properties, net
+1
+120
+450
+655
+(1,226)
+3,958
+Transfer from/(to) construction in progress
+10,886
+Additions
+198
+83
+1,945
+3
+1,343
+(1)
+89,976
+29,764
+193,836
+31,826
+Agent channel
+143,887
+90,503
+200,368
+Including: Regular premium
+70,352
+18,387
+Bancassurance channel
+19,699
+10,989
+Including: Regular premium
+12,139
+8,864
+Community Grid, tele and
+others
+18,066
+Note: PAA insurance products mainly include insurance contracts
+with a coverage period shorter than one year; non-PAA
+insurance products mainly include insurance contracts
+of long-term traditional, participating, universal, and
+investment-linked insurance.
+Non-PAA
+INSURANCE REVENUE AND INSURANCE SERVICE
+EXPENSES
+181,973
+Life and Health Insurance Business
+Including: Regular premium
+Insurance revenue will be recognized over the
+coverage period based on the provision of services,
+exclusive of the investment component (an amount
+that an insurance contract requires the insurer
+to repay to a policyholder in all circumstances,
+regardless of whether an insured event occurs.)
+(in RMB million)
+2023
+WRITTEN PREMIUM
+Written premium refers to all premium received
+from insurance policies issued. Life & Health's
+written premium amounted to RMB601,934 million in
+2023.
+Life & Health's written premium is analyzed below
+by policyholder type and channel:
+2023
+119,558
+2022
+(in RMB million)
+Insurance revenue
+223,600
+232,194
+Retail business
+582,716
+523,350
+Premium allocation approach
+("PAA")
+New business
+2022
+4,261
+19,218
+Insurance service expenses comprise incurred claims
+and other insurance service costs, exclusive of the
+investment component.
+27,436
+New business
+18,965
+19,436
+Non-PAA
+107,548
+109,820
+Renewed business
+253
+228
+Total
+601,934
+543,014
+INSURANCE CONTRACT LIABILITIES
+December
+(in RMB million)
+31, 2023
+December
+31, 2022
+Insurance contract liabilities
+26,430
+PAA
+19,664
+Business Analysis
+Renewed business
+400,743
+403,792
+Agent channel
+358,237
+363,629
+Bancassurance channel
+20,388
+18,074
+5,205
+(in RMB million)
+2022
+Community Grid, tele and
+others
+22,118
+22,089
+Insurance service expenses
+133,978
+137,256
+Group business
+2023
+MANAGEMENT DISCUSSION AND ANALYSIS
+3,056
+Ping An Insurance (Group) Company of China, Ltd.
+others
+Net profit
+73,391
+N/A
+75,505
+(2.8)
+Notes: (1) Investment service result is the operating investment
+income less the required return on reserves.
+(2) Figures may not match the calculation due to rounding.
+SOLVENCY MARGIN
+Solvency margin ratios of Ping An Life, Ping An Annuity, and Ping An Health Insurance were all significantly
+above the regulatory requirements as of December 31, 2023.
+Ping An Life
+Ping An Annuity
+December
+December
+(in RMB million)
+31, 2023
+31, 2022
+December
+31, 2023
+(2) Figures may not match the calculation due to rounding.
+Notes: (1) Excluding changes in financial risks of insurance
+contracts subject to the VFA.
+non-operating items and
+Impact of one-off material
+CSM release base
+843,227
+899,273
+(6.2)
+Operating profit
+106,083
+109,810
+(3.4)
+Release of CSM
+December
+(74,787)
+(7.2)
+Short-term investment
+Closing CSM
+768,440
+818,683
+(6.1)
+variance
+(32,692) (34,305)
+(4.7)
+(80,590)
+19
+Ping An Health Insurance
+December
+31, 2022
+105.0
+124.1
+174.9
+136.1
+248.8
+218.6
+Comprehensive solvency margin
+ratio (%)
+194.7
+219.7
+264.3
+216.2
+306.1
+265.9
+Notes: (1) Core solvency margin ratio = core capital / minimum capital. Comprehensive solvency margin ratio = actual capital / minimum
+capital.
+(2) The minimum regulatory requirements for the core solvency margin ratio and comprehensive solvency margin ratio are 50%
+and 100% respectively.
+(3) For details of subsidiaries' solvency margin, please visit the Company's website (www.pingan.cn).
+(4) Figures may not match the calculation due to rounding.
+Annual Report 2023
+Core solvency margin ratio (%)
+3,899,625
+3,147
+6,233
+31, 2023
+31, 2022
+Core capital
+415,458
+495,845
+9,509
+8,482
+7,829
+6,681
+December
+Actual capital
+877,807
+14,368
+13,480
+9,631
+8,125
+Minimum capital
+395,780
+399,557
+5,436
+770,771
+3,424,203
+Guangdong
+21,404
+99.6
+1.1 pps
+Total investment income (3)
+12,316
+10,014
+23.0
+Other net revenue and
+(in RMB million)
+2023
+2022 Change (%)
+expenses
+(1,415)
+(1,218)
+16.2
+Operating profit
+8,958
+10,112
+(11.4)
+Profit before tax
+100.7
+COR (%)
+N/A
+1,082
+Net expense from
+reinsurance contracts
+held(¹)
+313,458
+294,222
+2023
+2022
+Change (%)
+6.5
+(306,390)
+(284,978)
+8,818
+7.5
+(3,423)
+15.6
+Net insurance financial
+result and others (2)
+(5,195)
+(4,739)
+9.6
+Underwriting profit
+(2,083)
+(3,956)
+9,878
+(10.7)
+Operating ROE (%)
+Combined loss ratio (3)
+Notes: (1) Net expense from reinsurance contracts held =
+(%)
+71.5
+71.3
+0.2 pps
+allocation of reinsurance premiums paid - amount
+recovered from reinsurer.
+Insurance revenue
+313,458
+0.9 pps
+294,222
+Including:
+Auto insurance
+209,538
+197,462
+6.1
+Non-auto insurance
+82,041
+72,650
+12.9
+6.5
+Insurance revenue
+Insurance service
+expenses
+28.3
+ratio (2) (%)
+7.4
+COR(¹) (%)
+100.7
+8.8
+99.6
+-1.4 pps
+Income tax
+140
+234
+(40.2)
+29.2
+1.1 pps
+Net profit
+8,958
+10,112
+(11.4)
+Combined expense
+Operating profit
+8,958
+10,112
+(11.4)
+Including:
+PAA
+(in RMB million)
+Key Indicators
+115,759
+84,770
+Beijing
+40,479
+35,904
+Traditional life insurance
+163,480
+121,052
+Shandong
+37,621
+33,915
+Long-term health insurance
+109,604
+113,733
+Jiangsu
+36,674
+32,416
+Accident & short-term health
+Zhejiang
+Universal insurance
+94,951
+103,049
+119.6
+21,075
+Non-PAA
+3,878,221
+3,403,128
+20
+20
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Life & Health's written premium is analyzed below
+35,397
+by product type:
+Life & Health's written premium is analyzed below
+by major region:
+2023
+2022
+(in RMB million)
+2023
+2022
+Participating insurance
+62,723
+69,851
+(in RMB million)
+30,113
+insurance
+39,966
+Standards for Enterprises No. 25 - Insurance Contracts issued
+by the Ministry of Finance in 2006. Lapse rate = surrender /
+(opening balance of life insurance reserve + opening balance
+of long-term health insurance reserve + long-term insurance
+premium income).
+Ping An Insurance (Group) Company of China, Ltd.
+21
+22
+Business Analysis
+Property and Casualty Insurance Business
+Ping An P&C grew insurance revenue by 6.5% year on year in 2023, with
+a 100.7% overall combined ratio (“COR”) and a better-than-average 97.7%
+auto insurance COR. Overall COR excluding guarantee insurance is 98.4%;
+auto insurance COR excluding impacts of natural disasters is 96.6%.
+Ping An P&C's "Ping An Auto Owner" app ranks as the largest automotive
+service app in China having accumulated over 200 million registered users
+as of December 31, 2023, with over 136 million vehicles linked to it. As a
+core service platform for auto owners, the "Ping An Auto Owner" app
+enables the Company to precisely acquire potential customers and convert
+users into insurance customers via digital operations. Monthly active users
+of the app exceeded 40.49 million in December 2023.
+With leading online claims services, Ping An P&C scored 94.52 in the Auto
+Insurance Service Quality Index evaluation by CBIT, ranking among top
+players in the property and casualty insurance industry.
+BUSINESS OVERVIEW
+Note: Lapse rate is calculated according to the Accounting
+The Company conducts property and casualty
+insurance business mainly through Ping An P&C
+whose business scope covers all lawful property
+and casualty insurance business lines including auto,
+corporate property and casualty, engineering, cargo,
+liability, guarantee, credit, home contents, and
+accident & health insurance, as well as international
+reinsurance business. Ping An P&C has been
+honored as "No.1 Brand" in China's auto insurance
+and property and casualty insurance markets by the
+Ministry of Industry and Information Technology for
+13 consecutive years.
+Ping An P&C applies technologies to data-driven
+online operations and services. The "Ping An Auto
+Owner" app is committed to providing one-stop
+services covering “auto insurance, auto services
+and auto life," offering 82 service items including
+refueling, auto washing, designated driver services,
+emergency assistance and annual inspection by
+integrating over 260,000 partners in the ecosystem.
+The "Ping An Auto Owner" app had over 200 million
+registered users as of December 31, 2023, with over
+136 million vehicles linked to it. As a core service
+platform for auto owners, the "Ping An Auto
+Owner" app enables the Company to precisely
+acquire potential customers and convert users into
+insurance customers via digital operations. Monthly
+active users of the app exceeded 40.49 million in
+December 2023.
+Ping An P&C continued to improve online claim
+settlement to create "worry-free, time-saving, and
+money-saving" service experience. Ping An P&C
+enabled worry-free and heartwarming concierge
+claims experience with its "exclusive claims
+manager" service, and further improved customers'
+claims experience through upgraded video-based
+claims processing, scheduled loss assessment, and
+other functions. With excellent customer services,
+Ping An P&C scored 94.52 in the Auto Insurance
+Service Quality Index evaluation (1) by CBIT, ranking
+among top players in the property and casualty
+insurance industry.
+Note:
+(1) From the Auto Insurance Service Quality Index
+evaluation results released by China Banking and
+Insurance Information Technology Management Co.,
+Ltd. ("CBIT") in April 2023.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Focusing on serving the real economy and people's
+livelihoods, Ping An P&C integrates the ESG
+philosophy into company values and business
+operations, promoting insurance products in line
+with national strategies, including green insurance,
+technology insurance, inclusive insurance and
+catastrophe insurance. Ping An P&C has provided
+over RMB3.9 trillion worth of insurance coverage
+for over 1,500 key engineering projects across
+China as of December 31, 2023. Moreover, Ping An
+P&C provided RMB200 trillion worth of insurance
+coverage for 2.29 million small and micro-enterprises
+in 2023.
+Ping An P&C maintained stable business growth and
+good business quality. Ping An P&C grew insurance
+revenue by 6.5% year on year to RMB313,458 million
+in 2023, with a 100.7% overall COR and a better-
+than-average 97.7% auto insurance COR. Overall
+COR excluding guarantee insurance is 98.4%; auto
+insurance COR excluding the impacts of natural
+disasters is 96.6%.
+Analysis of Profit Sources
+2.07
+2022
+42,699
+Subtotal
+253,220
+227,299
+Annuity
+110,126
+110,532
+Investment-linked insurance
+276
+2.06
+377
+601,934
+543,014
+Total
+601,934
+543,014
+LAPSE RATE
+Annual Report 2023
+Lapse rate (%)
+2023
+Total
+(8,092) (3,685)
+Operating variances and
+220.6
+2022
+2023
+Ping An P&C's premium income is analyzed below
+by product type:
+Ping An P&C's core and comprehensive solvency
+margin ratios were significantly above the
+regulatory requirements as of December 31, 2023.
+SOLVENCY MARGIN
+Property and Casualty Insurance Business
+Business Analysis
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 25
+Annual Report 2023
+Note: The Company has implemented IFRS 17 since January 1, 2023. Insurance revenue, insurance service expenses, underwriting profit,
+COR, and net insurance contract liabilities (insurance contract liabilities - insurance contract assets) are all data under IFRS 17. Data
+for the comparative period has been retrospectively adjusted as per IFRS 17.
+9,485
+131.1%
+(6,834)
+28,625
+22,003
+665
+47,393
+Guarantee insurance
+(in RMB million)
+Amount
+Percentage
+(%)
+Amount
+73,056
+21.5
+64,899
+67.5
+201,298
+70.8
+213,851
+Auto insurance
+Non-auto insurance
+Accident and health
+insurance
+125,337
+56,976
+7,659
+60,734
+126,230
+Actual capital
+101,193
+102,875
+December 31, December 31,
+2022
+2023
+Core capital
+(in RMB million)
+Percentage
+(%)
+Minimum capital
+24.5
+97.7%
+7,128
+21,811
+21,848
+23,221
+868,698,218
+Liability insurance
+185,461
+97.7%
+4,732
+200,840
+209,538
+213,851
+289,778,369
+Net insurance
+contract
+liabilities
+COR
+profit
+Underwriting
+service
+expenses
+revenue
+income
+(1,373)
+106.3%
+23,310
+Health insurance
+9,090
+9,423
+21,568,692
+casualty insurance
+Corporate property and
+10,521
+106.0%
+(672)
+11,646
+213
+11,224
+958,588,454
+Accidental injury insurance
+7,340
+95.2%
+511
+9,979
+10,655
+13,250
+140,735,069
+10,160
+Insurance
+23,410
+23,684
+38,463
+Cross-selling
+13.6
+40,403
+16.8
+50,678
+Direct selling
+27.5
+81,999
+30.1
+91,061
+Car dealers
+28.2
+84,107
+31.3
+94,662
+Agencies
+Note:
+Percentage
+(%)
+12.7
+40,942
+13.7
+Telemarketing and
+insurance
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+26
+Note: Figures may not match the calculation due to rounding.
+100.0
+298,038
+100.0
+302,160
+Amount
+Total
+26,274
+7.9
+23,550
+Others
+8.2
+24,313
+1.2
+3,746
+online channels
+8.8
+7.7
+Percentage
+(%)
+(in RMB million)
+(in RMB million)
+PREMIUM INCOME
+(3) For details of Ping An P&C's solvency margin, please
+refer to the Company's website (www.pingan.cn).
+(2) The regulatory minimum requirements for the core
+solvency margin ratio and comprehensive solvency
+margin ratio are 50% and 100% respectively.
+Notes: (1) Core solvency margin ratio = core capital / minimum
+capital. Comprehensive solvency margin ratio = actual
+capital minimum capital.
+Ping An P&C's premium income is analyzed below
+by major region:
+220.0
+207.8
+margin ratio (%)
+Comprehensive solvency
+177.6
+169.4
+(%)
+100.0
+100.0 298,038
+302,160
+Total
+Core solvency margin ratio
+8.0
+Guangdong
+Jiangsu
+Zhejiang
+Shanghai
+2023
+2022
+51,832
+2022
+2023
+Total
+Subtotal
+Ping An P&C's premium income is analyzed below
+by channel:
+Sichuan
+Premium income refers to premiums computed based on
+written premium after the significant insurance risk testing
+and separation of hybrid contracts in accordance with the
+Circular on the Insurance Industry's Implementation of the
+No.2 Interpretation of Accounting Standards for Business
+Enterprises (Bao Jian Fa [2009] No.1) and the Circular
+on Issuing the Regulations regarding the Accounting
+Treatment of Insurance Contracts (Cai Kuai [2009] No.15).
+298,038
+302,160
+Amount
+125,638
+16,022
+16,733
+16,342
+18,288
+20,109
+21,015
+23,093
+22,401
+50,072
+130,269
+Income tax
+Premium
+Auto insurance
+(6.7)
+others
+88,587
+91,710
+(3.4)
+Contribution from new
+Release of CSM
+74,787
+80,590
+(7.2)
+CSM release base
+843,227
+899,273
+(6.2)
+business ("New Business
+CSM")
+38,951
+35,122
+10.9
+CSM release rate (%)
+Change (%)
+2022
+2023
+877,135
+bancassurance
+11,951
+1,949
+OPERATING PROFIT SOURCES
+Operating profit is a meaningful business
+performance evaluation and comparison metric
+given the long-term nature of the Company's major
+life and health insurance business. Ping An defines
+operating profit after tax as reported net profit
+excluding items which are of a short-term, volatile
+or one-off nature and others:
+Short-term investment variance applies to Life
+& Health business excluding the part subject
+to the VFA (1). This short-term investment
+variance is the variance between the actual
+investment return on the aforesaid business
+and the embedded value long-run investment
+return assumption. Net of the short-term
+investment variance, the investment return on
+the aforesaid Life & Health business is locked at
+4.5% (2) Debt investments at fair value through
+other comprehensive income backing such
+business are measured at cost;
+The impact of one-off material non-operating
+items and others is the impact of material
+items that management considered to be non-
+operating incomes and expenses.
+Notes: (1) Insurance finance income or expenses of liabilities
+subject to the VFA match the changes in the fair
+value of the underlying items backing such business.
+Therefore, no adjustment is made when operating
+metrics are measured.
+(2) The Company lowered the investment return
+assumption to 4.5% in 2023, and retrospectively adjusted
+data for the comparative period as per the adjusted
+investment return assumption.
+8.9
+18
+Ping An Insurance (Group) Company of China, Ltd.
+(in RMB million)
+2023
+2022
+Change (%)
+(in RMB million)
+Insurance service result and
+Opening CSM
+818,683
+Annual Report 2023
+9.0
+-0.1 pps
+Present value of expected
+others
+7,771
+5,236
+48.4
+Changes in estimates that
+adjust CSM(1)
+(46,374)
+(42,160)
+10.0
+Changes in financial risks of
+(6.5)
+Investment service result (1)
+21,785
+17.5
+Operating profit before tax
+114,176
+113,495
+0.6
+insurance contracts subject
+to VFA
+6,635
+2,069
+25,589
+Agents,
+-1.0 pps
+10.1
+25,332 27,106
+Change in risk adjustment
+premiums from new
+for non-financial risk
+6,029
+5,884
+Opening risk adjustment
+142,249
+138,165
+2.5
+3.0
+11.1
+business sold
+315,274
+21.9
+New business CSM margin
+Risk adjustment release
+rate (%)
+4.2
+4.3
+-0.1 pps
+(%)
+Expected interest growth
+384,254
+Insured
+amount
+Fu Whole Life
+Insurance
+587
+Notes: (1) COR under IFRS 17 = (insurance service expenses +
+(allocation of reinsurance premiums paid amount
+recovered from reinsurer) + (net insurance finance
+expenses for insurance contracts issued - net
+reinsurance finance income for reinsurance contracts
+held) changes in insurance premium reserves)/
+insurance revenue.
+(3) Total investment income includes interest revenue
+from non-banking operations, investment income,
+share of profits and losses of associates and joint
+ventures, impairment losses on investment assets, and
+interest expenses on assets sold under agreements
+to repurchase and placements from banks and other
+financial institutions.
+(2) Net insurance financial result and others = Net
+insurance finance expenses for insurance contracts
+issued net reinsurance finance income for reinsurance
+contracts held + changes in insurance premium
+reserves.
+(9.3)
+24,110
+21,879
+MANAGEMENT DISCUSSION AND ANALYSIS
+•
+Meanwhile, Ping An launched "Sheng Shi Tong
+Fu❞ to proactively develop the critical illness
+insurance market for substandard groups. In
+addition, Ping An Life penetrated the non-
+critical illness insurance market by expanding
+scenarios and increasing benefit limits of
+accident insurance products, meeting diverse
+customer demands for insurance protection.
+In respect of “insurance + healthcare," Ping
+An Life provided health management services
+to over 20 million customers in 2023. About
+76% of newly enrolled customers used health
+management services, which were widely
+welcomed by customers. Since its launch
+in 2021, Ping An Zhen Xiang RUN Health
+Services Plan ("Ping An Zhen Xiang RUN")
+has provided customers with full-lifecycle
+healthcare services including five highlights,
+namely unique checkups, blood sugar control,
+online consultation, outpatient appointment
+assistance and accompanying consultation,
+and critical illness management. Ping An Life
+upgraded Ping An Zhen Xiang RUN in July
+2023 by including health management plans,
+health diagnostics and family doctor services
+and upgrading chronic disease prevention
+and control services. In this way, Ping An
+Life provides customers with full-lifecycle
+protection by delivering worry-free, time-
+saving, and money-saving one-stop healthcare
+experience in three main service scenarios,
+namely health, medical care and chronic
+disease.
+In respect of "insurance + home-based
+elderlycare," Ping An integrates internal and
+external service providers to offer one-stop,
+home-based elderly care solutions through
+committed Al concierges, life concierges
+and doctor concierges, making the elderly
+comfortable and their children worry-free.
+The solutions cover ten scenarios including
+medical care, housing, nursing, dining and
+entertainment, enabling 24/7 online customer
+services. With a robust service supervision
+system, Ping An continuously expands
+its "online, in-store, and home-delivered"
+service network to optimize customer service
+experience. Ping An collaborated with parties
+concerned in introducing the Home-based
+Rehabilitation Nursing Alliance System
+and establishing industry standards and
+ecosystems. In this way, Ping An helps the
+elderly live a dignified life at home, striving to
+build the No.1 home-based elderly care brand
+in China. Ping An's home-based elderly care
+services covered 54 cities across China as
+of December 31, 2023. Over 80,000 customers
+have qualified for the home-based elderlycare
+services, giving positive general feedback.
+In respect of “insurance + high-end
+elderlycare," Ping An is committed to
+developing the premium elderlycare market
+and delivering innovative "one-stop"
+full-lifecycle elderly care solutions. Under
+the core philosophy of "seven-dimensional
+healthcare" and the value proposition of
+"prime life, exclusive services, and respectful
+care," Ping An provides customized elderlycare
+services and high-quality heartwarming
+elderlycare experience to meet the growing
+demand for premium elderlycare in China. Ping
+An has unveiled high-end elderlycare projects
+in four cities as of December 31, 2023, including
+"Shanghai Yi Nian Cheng" unveiled in February
+2023 and a "Ping An Zhen Yi Nian" experience
+center opened in Sanya, Hainan Province in
+July 2023.
+Note: (1) Seven-dimensional healthcare refers to seven health
+dimensions, namely the body, cognition, emotion, spirit,
+financial status, career and social interaction.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+17
+Business Analysis
+Life and Health Insurance Business
+Ping An Life's 13-month persistency ratio of
+insurance policies improved by 2.5 pps year on
+year to 92.8%, and 25-month persistency ratio
+improved by 6.8 pps year on year to 85.8% in 2023,
+indicating steadily improving business quality. Going
+forward, Ping An Life will boost persistency ratios
+and the efficiency of renewal premium collection
+by continuously enhancing smart, digital ex ante
+services and precise premium collection regarding
+policies to be renewed.
+(2) Combined expense ratio = (acquisition cost
+amortization + maintenance expenses)/insurance
+revenue.
+(3) Combined loss ratio = (settled loss + outstanding
+loss profit or loss of loss contracts + (allocation
+of reinsurance premiums paid - amount recovered
+from reinsurer) + (net insurance finance expenses for
+insurance contracts issued - net reinsurance finance
+income for reinsurance contracts held) + changes in
+insurance premium reserves)/insurance revenue.
+Annual Report 2023
+(in RMB million)
+Insurance
+Guarantee insurance premium income dropped 97.0%
+year on year to RMB665 million in 2023. Guarantee
+insurance COR rose by 5.5 pps year on year to
+131.1% mainly because small and micro-enterprise
+customers' repayment capacity was still under
+pressure due to changes in the macroeconomic
+environment. Historically, guarantee insurance
+business produced a significant underwriting profit,
+but in recent years, its COR has been hampered by
+changes in the market environment. Ping An P&C
+has continuously reduced the scale of guarantee
+insurance business in recent years, and suspended
+financing guarantee insurance business in the fourth
+quarter of 2023. With the rapid reduction in risk
+exposure of the guarantee insurance business, its
+impact on Ping An P&C's overall business quality will
+decrease significantly.
+Guarantee Insurance
+Corporate Property and Casualty Insurance
+Ping An P&C's premium income from corporate
+property and casualty insurance business reached
+RMB9,423 million in 2023, up 14.8% year on year.
+COR of corporate property and casualty insurance
+business remained good at 97.7%, improving by
+1.5 pps year on year. Going forward, Ping An P&C.
+will adhere to the principle of serving national
+development strategies, the real economy, and
+people's livelihoods. Moreover, Ping An P&C will
+strengthen the application of insurtech to provide
+enterprises with risk protection and risk reduction
+services, facilitating their high-quality development.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+24
+Accidental injury insurance premium income fell
+27.4% year on year to RMB10,160 million in 2023.
+Accidental injury insurance COR reached 106.0%
+mainly due to increased customer travels and
+product upgrades. Putting customer satisfaction
+first, Ping An P&C expands insurance coverages
+and raises sums insured to better meet customers'
+protection needs. Moreover, Ping An P&C provides
+users with convenient insurance services through
+apps including "Ping An Auto Owner" and "Ping An
+Good Life."
+Ping An Life
+Accidental Injury Insurance
+Health Insurance
+Liability insurance premium income grew 6.6%
+year on year to RMB23,221 million in 2023. Liability
+insurance COR rose by 4.6 pps year on year to
+106.3% in 2023 and overall business risk was under
+control. Ping An P&C finished building its risk pricing
+database, and leveraged the database to develop a
+pricing model, further enhancing its precise pricing
+capability. Regarding its underwriting capability,
+Ping An P&C improved its underwriting services
+by realizing 100% online middle-office support for
+liability insurance, centering on end-to-end business
+processes and requirements of customers and sales
+teams.
+Liability Insurance
+Ping An P&C actively refines operations and
+continuously improves its sales and customer
+service capabilities. Overall operations are steady
+and healthy in good order. Auto insurance premium
+income increased 6.2% year on year to RMB213,851
+million, and vehicles insured by Ping An P&C
+increased 6.4% year on year in 2023. Moreover, Ping
+An P&C continuously improves its auto insurance
+profitability by actively promoting risk reduction
+and building an exclusive framework for pricing,
+services and claims for new energy vehicles. Auto
+insurance COR reached 97.7%, or 96.6% excluding the
+impacts of natural disasters in 2023. Going forward,
+Ping An P&C will strengthen core technologies in
+new auto insurance segments including autonomous
+driving and usage-based insurance, and innovate
+products and services to meet diverse customer
+demands and drive the high-quality development of
+auto insurance business.
+Auto Insurance
+OPERATING DATA BY PRODUCT TYPE
+Property and Casualty Insurance Business
+Business Analysis
+Ping An Insurance (Group) Company of China, Ltd. 23
+Ping An P&C thoroughly implements the spirit of
+the 20th National Congress of the CPC and the
+"Healthy China" strategy. Answering the state's
+call to “further improve China's medical insurance
+system" under the 14th Five-Year Plan, Ping An
+P&C gives full play to health insurance's role as
+a complement to China's multi-layered medical
+security system. Health insurance premium income
+grew 36.7% year on year to RMB13,250 million in
+2023. Health insurance COR remained good at 95.2%.
+Ping An P&C continuously transforms its customer
+development approach from "treatment-centered"
+to "health-centered,” developing needs-oriented
+products and services to address health-related pain
+points of customer segments from children to the
+elderly, from individuals to families, and from cities
+to counties.
+2023
+2022
+2021
+Jinrui (2021)
+Annuity
+Agents,
+Insurance
+bancassurance
+15,461
+373
+Ping An Yuxiang
+Jinrui Annuity
+Ping An Caifu
+Agents,
+bancassurance
+15,285
+300
+Ping An Jinrui
+Rensheng
+(2021) Annuity
+Insurance
+Agents,
+bancassurance
+15,029
+Insurance
+Ping An Ping An
+Life Insurance
+32,183
+13-month persistency ratio (%)
+92.8
+90.3
+86.3
+25-month persistency ratio (%)
+85.8
+79.0
+78.1
+INSURANCE PRODUCT INFORMATION
+11
+The following table lists the top five insurance
+products of Ping An Life by premium income in 2023.
+Sales channel
+Ping An Sheng
+Shi Jin Yue
+(Exclusive
+Version) Whole Agents, direct
+selling
+Premium
+income Surrender
+(in RMB million)
+Accident and health
+39. LONG-TERM SERVICE PLAN (CONTINUED)
+Period of purchase
+From 7 May 2019
+to 14 May 2019
+28,981
+1,693
+91
+1,784
+Changes that relate to future services
+(2,765)
+5,518
+(114)
+2,639
+Adjustments to liabilities for incurred
+claims
+(6,800)
+Changes in estimates that do not adjust
+the contractual service margin
+(409)
+Changes that relate to past services
+(6,800)
+(409)
+(7,209)
+Insurance service result
+1,479
+(2,009)
+(83,574)
+(84,104)
+Insurance finance expenses
+116,769
+(7,209)
+5,718
+(42,240)
+41,507
+2,099,128
+140,880
+2,099,128
+140,880
+879,551
+879,551
+3,119,559
+3,119,559
+Contractual service margin recognized
+for services provided
+(83,460)
+(83,460)
+Change in the risk adjustment for non-
+financial risk for risk expired
+Experience adjustments
+(7,118)
+733
+(7,118)
+11,044
+Changes that relate to current services
+11,044
+(7,118)
+(83,460)
+Contracts initially recognized in the
+period
+(45,965)
+4,694
+42,126
+855
+Changes in estimates that adjust the
+contractual service margin
+11,044
+27,245
+149,732
+Total changes in the statement of
+823,222
+823,222
+3,422,812
+3,422,812
+292
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+(3) THE EFFECT ON THE MEASUREMENT COMPONENTS OF INSURANCE CONTACTS
+ARISING FROM THE INITIAL RECOGNITION OF CONTRACTS NOT MEASURED UNDER THE
+PREMIUM ALLOCATION APPROACH THAT WERE INITIALLY RECOGNIZED IN THE PERIOD
+IS AS FOLLOWS:
+(in RMB million)
+Insurance acquisition cash flows
+Other cash outflows
+144,589
+2023
+Others
+Total
+2,874
+46,203
+14,135
+287,540
+49,077
+301,675
+Estimates of the present value of
+future cash outflows
+17,009
+333,743
+Onerous contracts
+2,455,001
+Including: Insurance contract liabilities
+144,589
+comprehensive income
+118,248
+3,709
+(56,329)
+65,628
+Premiums received
+553,591
+553,591
+Insurance acquisition cash flows
+(39,751)
+(39,751)
+Claims and other expenses paid
+(267,949)
+(267,949)
+Other cash flows
+(4,639)
+(4,639)
+Total cash flows
+241,252
+241,252
+Other movements
+(3,627)
+(3,627)
+Net insurance contract liabilities as at
+31 December
+2,455,001
+Total
+Contractual
+service margin
+risk
+Risk adjustment
+for non-financial
+(76,766)
+Contracts initially recognized in the
+period
+(44,495)
+3,055
+42,547
+1,107
+Changes in estimates that adjust the
+contractual service margin
+32,717
+9,257
+(41,974)
+Changes in estimates that do not adjust
+the contractual service margin
+(77,864)
+2,803
+2,974
+Changes that relate to future services
+(8,975)
+12,483
+573
+4,081
+Adjustments to liabilities for incurred
+claims
+(7,194)
+(436)
+(7,630)
+Changes that relate to past services
+171
+(7,174)
+8,272
+Changes that relate to current services
+(2) THE ANALYSIS BY MEASUREMENT COMPONENT OF CONTRACTS NOT MEASURED UNDER
+THE PREMIUM ALLOCATION APPROACH IS AS FOLLOWS:
+(in RMB million)
+Net insurance contract liabilities as at
+1 January
+2023
+Estimates of the
+present value of
+future cash flows
+Risk adjustment
+for non-financial
+risk
+Contractual
+service margin
+Total
+2,455,001
+144,589
+Including: Insurance contract liabilities
+2,455,001
+144,589
+823,222
+823,222
+3,422,812
+3,422,812
+Contractual service margin recognized
+for services provided
+(77,864)
+(77,864)
+Change in the risk adjustment for non-
+financial risk for risk expired
+(7,174)
+(7,174)
+Experience adjustments
+8,272
+8,272
+(7,194)
+350,752
+(436)
+Insurance service result
+265,065
+Other movements
+(2,494)
+(2,494)
+Net insurance contract liabilities as at
+31 December
+2,964,209
+158,628
+Including: Insurance contract liabilities
+2,964,209
+158,628
+771,438
+771,438
+265,065
+3,894,275
+3,894,275
+Ping An Insurance (Group) Company of China, Ltd. 291
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+(2) THE ANALYSIS BY MEASUREMENT COMPONENT OF CONTRACTS NOT MEASURED UNDER
+THE PREMIUM ALLOCATION APPROACH IS AS FOLLOWS (CONTINUED):
+(in RMB million)
+Net insurance contract liabilities as at
+1 January
+Including: Insurance contract liabilities
+2022 (Restated)
+Estimates of the
+present value of
+future cash flows
+Annual Report 2023
+Total cash flows
+624
+624
+(7,897)
+4,873
+(77,291)
+(80,315)
+Insurance finance expenses
+254,534
+9,166
+25,507
+289,207
+Total changes in the statement of
+comprehensive income
+246,637
+14,039
+(51,784)
+208,892
+Premiums received
+612,322
+612,322
+Insurance acquisition cash flows
+(45,806)
+(45,806)
+Claims and other expenses paid
+(302,075)
+(302,075)
+Other cash flows
+(7,630)
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+Estimates of the present value of future cash inflows
+Risk adjustment for non-financial risk
+(83,574)
+710
+27,245
+Total changes in the statement
+of comprehensive income
+Contractual service margin as
+at 31 December
+(14,564)
+(79,724)
+37,959
+(56,329)
+124,149
+659,970
+39,103
+37,249
+823,222
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 295
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+(5) THE ANALYSIS OF INSURANCE FINANCE EXPENSES/(INCOME) IS AS FOLLOWS:
+2023
+(in RMB million)
+Insurance finance expenses/(income)
+Changes in fair value of underlying items of
+contracts with direct participation features
+Interest accreted to insurance contracts using
+locked-in rate and effect of changes in
+financial assumptions
+As at 31 December 2023, the Group expects that 61% (31 December 2022: 60%) of the contractual service
+margin will be recognized in profit or loss within the next 10 years.
+Foreign exchange gains
+(105,085)
+25,361
+Insurance finance expenses
+138,713
+739,694
+1,144
+879,551
+recognized for services
+provided
+(10,148)
+(68,752)
+(4,560)
+(83,460)
+Changes that relate to future
+1,174
+services
+in the period
+42,126
+42,126
+Changes in estimates that
+adjust the contractual
+service margin
+Insurance service result
+(5,590)
+(15,738)
+(36,333)
+(317)
+(42,240)
+Contracts initially recognized
+Total
+Represented by:
+Amounts recognized in profit or loss
+Total
+66,843
+Foreign exchange losses
+Total
+82,902
+5,219
+88,121
+(13)
+(13)
+149,732
+5,219
+Insurance contracts
+measured under
+the premium
+allocation approach
+154,951
+Amounts recognized in profit or loss
+94,709
+5,224
+99,933
+Amounts recognized in other comprehensive
+income
+55,023
+(5)
+55,018
+296
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Represented by:
+2022 (Restated)
+170,772
+1
+Amounts recognized in other comprehensive
+income
+(in RMB million)
+Insurance finance expenses/(income)
+Changes in fair value of underlying items of
+contracts with direct participation features
+Interest accreted to insurance contracts using
+locked-in rate and effect of changes in
+financial assumptions
+Insurance contracts
+not measured under
+the premium
+allocation approach
+150,691
+Insurance contracts
+measured under
+the premium
+allocation approach
+Total
+150,691
+138,506
+5,524
+144,030
+10
+10
+289,207
+5,524
+294,731
+118,436
+5,523
+170,771
+Insurance contracts
+not measured under
+the premium
+allocation approach
+66,843
+123,959
+Total
+Other contracts
+Contracts under
+the modified
+retrospective
+approach
+Contracts under
+the fair value
+approach
+Risk adjustment for non-financial risk
+362
+4,332
+Contractual service margin
+42,126
+Losses recognized on initial recognition
+855
+4,694
+42,126
+855
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 293
+(342,202)
+FINANCIAL STATEMENTS
+For the year ended 31 December 2023
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+(4) THE ANALYSIS OF CONTRACTUAL SERVICE MARGIN FOR CONTRACTS NOT MEASURED
+UNDER THE PREMIUM ALLOCATION APPROACH IS AS FOLLOWS:
+(in RMB million)
+Contractual service margin as
+at 1 January
+Changes that relate to current
+services
+Contractual service margin
+Contracts under
+the fair value
+approach
+2023
+Notes to Consolidated Financial Statements
+(329,181)
+(13,021)
+Estimates of the present value of future cash inflows
+510
+Contractual service margin
+Losses recognized on initial recognition
+(378,835)
+2,545
+42,547
+(395,247)
+3,055
+42,547
+1,107
+1,107
+(in RMB million)
+Insurance acquisition cash flows
+Other cash outflows
+2022 (Restated)
+Onerous contracts
+Others
+Total
+2,117
+40,840
+11,397
+241,883
+42,957
+253,280
+Estimates of the present value of
+future cash outflows
+13,514
+282,723
+296,237
+Contracts under
+the modified
+retrospective
+approach
+(16,412)
+Other contracts
+124,149
+22,393
+2,031
+25,507
+Total changes in the statement
+of comprehensive income
+Contractual service margin as
+at 31 December
+(11,600)
+(73,344)
+33,160
+(51,784)
+112,549
+586,626
+72,263
+1,083
+771,438
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+(4) THE ANALYSIS OF CONTRACTUAL SERVICE MARGIN FOR CONTRACTS NOT MEASURED
+UNDER THE PREMIUM ALLOCATION APPROACH IS AS FOLLOWS (CONTINUED):
+(in RMB million)
+Contractual service margin as
+at 1 January
+Changes that relate to current
+services
+Contractual service margin
+2022 (Restated)
+294
+Insurance finance expenses
+(77,291)
+31,129
+659,970
+39,103
+823,222
+recognized for services
+provided
+(9,247)
+(59,365)
+(9,252)
+(77,864)
+Changes that relate to future
+services
+Contracts initially recognized
+in the period
+42,547
+42,547
+Changes in estimates that
+adjust the contractual
+service margin
+(3,436)
+(36,372)
+(2,166)
+(41,974)
+Insurance service result
+(12,683)
+(95,737)
+Total
+Ping An Insurance (Group) Company of China, Ltd.
+(79,534)
+290
+114,066
+5,395
+124,676
+4,228
+248,365
+Insurance revenue
+(218,815)
+(218,815) (317,625)
+(317,625)
+Incurred claims and other expenses
+(3,516)
+3,422,812
+97,347
+(5,200)
+251,567
+2,798
+249,165
+Amortization of insurance acquisition
+cash flows
+48,218
+48,218
+72,490
+72,490
+Losses on onerous contracts and
+93,831
+60,285
+5,606
+3,356,921
+2023
+Contracts not measured under the premium allocation approach
+Liabilities for remaining coverage
+Contracts measured under the premium allocation approach
+Liabilities for remaining coverage
+Liabilities for incurred claims
+Estimates of
+Excluding loss
+component
+Loss
+component
+Liabilities for
+incurred claims
+Total
+Excluding loss
+component
+Loss
+component
+the present Risk adjustment
+value of future for non-financial
+cash flows
+risk
+Total
+Net insurance contract liabilities as at
+1 January
+3,356,921
+5,606
+60,285
+3,422,812
+114,066
+5,395
+124,676
+4,228
+248,365
+Including: Insurance contract liabilities
+reversal of those losses
+(in RMB million)
+4,081
+5,579
+288,799
+161
+247
+289,207
+2,566
+18
+2,840
+100
+5,524
+Total changes in the statement of
+comprehensive income
+Insurance finance expenses
+118,202
+89,964
+208,892
+(242,569)
+397
+231,367
+382
+(10,423)
+Investment components
+(216,298)
+216,298
+(6,843)
+726
+(15,947)
+282
+228,527
+5,579
+Changes to liabilities for incurred
+claims
+(7,630)
+(7,630)
+(23,040)
+(2,516)
+(25,556)
+Insurance service expenses
+48,218
+565
+89,717
+138,500
+72,490
+379
+228,527
+282
+301,678
+Insurance service result
+(170,597)
+565
+89,717
+(80,315)
+(245,135)
+379
+4,081
+6,843
+(1) THE ANALYSIS OF LIABILITIES FOR REMAINING COVERAGE AND LIABILITIES FOR
+INCURRED CLAIMS IS AS FOLLOWS:
+Ping An Insurance (Group) Company of China, Ltd.
+RMB72.92 per share
+Directors
+The five highest
+paid individuals
+Other employees
+959,784
+27,970
+754,116
+27,970
+56,378,508
+8,070
+56,576,106
+From 18 March 2022
+to 25 March 2022
+RMB47.56 per share
+From 16 March 2023
+From 26 April 2021
+to 29 April 2021
+RMB46.06 per share
+Directors
+The five highest
+paid individuals
+Other employees
+Directors
+The five highest
+paid individuals
+Other employees
+1,471,562
+23,124
+1,156,227
+23,124
+91,818,990
+6,071
+92,128,254
+1,302,305
+35,812
+976,729
+35,812
+95,270,247
+805
+to 23 March 2023
+48,882,741
+53,640
+48,749,253
+Average price of
+shares purchased
+Туре
+RMB79.10 per share
+(iii) Movement of shares relating to the Long-term Service Plan is as follows (refer to Note 54.(3) for details about directors):
+Vested
+Unvested as at
+31 December
+Unvested as at
+1 January
+2023
+Addition
+during
+the year [1]
+during
+the year [2]
+2023
+Directors
+The five highest
+884,666
+44,233
+695,095
+44,233
+From 24 February 2020
+to 28 February 2020
+RMB80.15 per share
+paid individuals
+Other employees
+Directors
+The five highest
+paid individuals
+Other employees
+53,188,568
+96,599
+53,281,540
+873,264
+43,662
+686,136
+43,662
+95,595,018
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES
+Annual Report 2023
+[2]
+191,916
+Short-term borrowings
+93,322
+121,945
+Long-term borrowings
+Annual Report 2023
+151,539
+963,718
+923,088
+42. ASSETS SOLD UNDER AGREEMENTS TO REPURCHASE
+(in RMB million)
+208,783
+Bonds
+31 December 2023
+31 December 2022
+228,250
+13,553
+262,798
+8,939
+241,803
+271,737
+As at 31 December 2023, bonds with a carrying amount of RMB171,868 million (31 December 2022: RMB168,705
+million) were pledged as collateral for financial assets sold under agreements to repurchase resulted from
+repurchase transactions entered into by the Group in the inter-bank market. The collaterals are restricted
+from trading during the period of the repurchase transactions.
+As at 31 December 2023, the carrying amount of bonds deposited in the collateral pool was RMB304,409
+million (31 December 2022: RMB321,996 million). The collaterals are restricted from trading during the period
+of the repurchase transactions. The Group can withdraw the exchange-traded bonds from the collateral
+pool in short time provided that the value of the bonds is no less than the balance of related repurchase
+transactions.
+For bonds repurchase transactions through stock exchange, the Group is required to deposit certain
+exchange traded bonds and/or bonds transferred under new pledged repurchase transactions with fair
+value converted at a standard rate pursuant to stock exchange's regulation no less than the balance of
+related repurchase transactions into a collateral pool.
+288
+Annual Report 2023
+Others
+457,688
+526,452
+31 December 2022
+[3]
+[4]
+The closing price of the domestic listed A shares on the trading day before the period of purchase was RMB45.95 per share.
+Shares shall be vested and awarded to the employees when they retire from the Company, and the number of shares eligible
+for vesting is determined according to their performance.
+The weighted average price of the domestic listed A shares on the trading day before the grant date was RMB49.17 per share.
+From 1 January 2023 to 31 December 2023, there was no share lapse or cancellation under the Long-term Service Plan.
+Shares shall be vested and awarded to the employees participating in the Long-term Service Plan, subject to the confirmation
+of their applications made and the payment of relevant taxes when they retire from the Company.
+Ping An Insurance (Group) Company of China, Ltd. 287
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+40. TREASURY SHARES
+(in RMB million)
+Treasury shares
+31 December 2022
+Additions
+10,996
+-
+Disposals 31 December 2023
+(5,995)
+5,001
+As at 31 December 2023, 102,592,612 uncancelled A shares had been purchased from the Shanghai Stock
+Exchange by centralized bidding (31 December 2022: 172,599,415 shares). The total repurchasing cost was
+RMB5,001 million (31 December 2022: RMB10,996 million) (transaction expenses included).
+41. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+(in RMB million)
+Deposits from other banks and financial institutions
+Due to the Central Bank
+31 December 2023
+[1]
+Premiums received
+135,161
+612,322 349,777
+149,295
+181
+256
+149,732
+2,602
+6
+2,525
+86
+5,219
+Total changes in the statement of
+comprehensive income
+Insurance finance expenses
+(34,860)
+101,628
+65,628
+(226,014)
+2,381
+208,499
+697
+(14,437)
+Investment components
+(181,355)
+181,355
+(6,387)
+(1,140)
+(19,656)
+611
+205,974
+2,639
+2,639
+5,330
+5,330
+Changes to liabilities for incurred
+claims
+(7,209)
+(7,209)
+(10,069) (1,860)
+(11,929)
+Insurance service expenses
+47,078
+(1,321)
+101,372
+147,129
+66,132
+2,375
+205,974
+611
+275,092
+Insurance service result
+(184,155)
+(1,321) 101,372
+(84,104) (228,616)
+2,375
+6,387
+reversal of those losses
+Premiums received
+553,591
+3
+(1,576)
+Net insurance contract liabilities as at
+31 December
+3,356,921
+5,606
+60,285
+3,422,812
+114,066
+5,395
+124,676
+(1,349)
+4,228
+Including: Insurance contract liabilities
+3,356,921
+5,606
+60,285
+3,422,812
+114,066
+5,395
+124,676
+4,228
+248,365
+612,322
+248,365
+(230)
+(3,627)
+(1,565)
+324,519
+324,519
+Insurance acquisition cash flows
+(39,751)
+(39,751)
+(68,584)
+(68,584)
+(267,949)
+(267,949)
+(196,288)
+(196,288)
+Other cash flows
+(4,639)
+(4,639)
+(16,580)
+(16,580)
+Total cash flows
+509,201
+(267,949)
+241,252
+239,355
+(196,288)
+43,067
+Other movements
+(2,062)
+553,591
+Losses on onerous contracts and
+Claims and other expenses paid
+66,132
+Net insurance contract liabilities as at
+31 December
+3,825,144
+6,332
+62,799 3,894,275
+122,419
+5,792
+132,701
+4,611
+265,523
+Including: Insurance contract liabilities 3,825,144
+6,332
+(1,400)
+62,799
+122,427
+5,792
+132,696
+4,611
+265,526
+Insurance contract assets
+(8)
+5
+(3)
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 289
+3,894,275
+1
+(1,251)
+(150)
+349,777
+66,132
+Insurance acquisition cash flows
+(45,806)
+(45,806) (73,582)
+(73,582)
+Claims and other expenses paid
+(302,075)
+(302,075)
+(228,934)
+(228,934)
+Other cash flows
+624
+624
+(18,280)
+(18,280)
+Total cash flows
+567,140
+Other movements
+(821)
+(302,075)
+(1,673)
+265,065
+257,915
+(228,934)
+(2,494)
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+-
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+6,746
+46,816
+3,119,559
+107,342
+3,014
+107,427
+3,528
+221,311
+Insurance revenue
+(231,233)
+(294,748)
+3,065,997
+(294,748)
+(3,960)
+108,581
+104,621
+(2,955)
+216,043
+2,471
+215,559
+Amortization of insurance acquisition
+cash flows
+For the year ended 31 December 2023
+47,078
+47,078
+Incurred claims and other expenses
+Including: Insurance contract liabilities
+(231,233)
+3,528
+2022 (Restated)
+Contracts not measured under the premium allocation approach
+Liabilities for remaining coverage
+(1) THE ANALYSIS OF LIABILITIES FOR REMAINING COVERAGE AND LIABILITIES FOR
+INCURRED CLAIMS IS AS FOLLOWS (CONTINUED):
+221,311
+Contracts measured under the premium allocation approach
+Liabilities for remaining coverage Liabilities for incurred claims
+Estimates of
+Excluding loss
+(in RMB million)
+component
+Loss
+component
+Total
+Excluding loss
+component
+Loss
+component
+the present Risk adjustment
+value of future for non-financial
+cash flows
+Liabilities for
+incurred claims
+risk
+Total
+Net insurance contract liabilities as at
+1 January
+107,427
+3,065,997
+6,746
+46,816
+3,119,559
+107,342
+3,014
+31 December
+(2,606)
+10,424
+(22,404)
+(6,265)
+114,676
+(28,669)
+189
+Intangible assets-core deposits
+(1,610)
+(1,799)
+as at
+6,442
+Temporary
+difference
+Fair value adjustments on financial
+assets and liabilities carried at fair
+value through profit or loss
+(10,552)
+(274)
+(80,779)
+Intangible assets valuation premium
+(35,735)
+323,116
+(in RMB million)
+7,952
+Fair value adjustments on financial
+assets at fair value through other
+comprehensive income
+As at
+1 January
+Charged to
+profit or loss
+Charged to
+equity
+Other
+changes
+As at
+31 December
+2022 (Restated)
+from acquisition of Autohome Inc.
+FINANCIAL STATEMENTS
+39
+(in RMB million)
+3,533
+2023
+The following table shows unrecognized tax losses based on its expected expiry date:
+As at 31 December 2023, unrecognized tax losses of the Group were RMB53,158 million (31 December 2022:
+RMB38,697 million).
+46. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 303
+Annual Report 2023
+193,214
+(48,303)
+(2,612)
+(6,192)
+(1,923)
+9,302
+39,676
+(9,919)
+(2,606)
+73
+1,122
+(8,508)
+Others
+14,460
+(3,615)
+(3,615)
+disposal of subsidiaries
+Assets valuation premium from
+7,536
+(1,884)
+(48,801)
+(48,303)
+99,485
+(6,426)
+Charged to
+equity
+Charged to
+profit or loss
+1 January
+As at
+2023
+Fair value adjustments on financial
+assets and liabilities carried at fair
+value through profit or loss
+(in RMB million)
+The deferred tax liabilities are analysed as follows:
+46. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+302
+(493,628)
+123,407
+Other
+changes
+423
+10,823
+(79,760)
+(215,260)
+(8,348)
+(167,588)
+2,087
+41,897
+53,815
+19,940
+419
+128
+11,629
+7,764
+Others
+(510)
+6,018
+2024
+48,307
+12,676
+25,704
+As at
+31 December
+as at
+(274)
+(81)
+3,848
+(9,919)
+Others
+14,460
+(3,615)
+(3,615)
+Assets valuation premium from
+disposal of subsidiaries
+7,380
+(1,845)
+39
+(1,884)
+from acquisition of Autohome Inc.
+Temporary
+difference
+Intangible assets valuation premium
+(1,422)
+188
+(1,610)
+Intangible assets-core deposits
+257,292
+(64,323)
+(35,654)
+(28,669)
+Fair value adjustments on financial
+assets at fair value through other
+comprehensive income
+12,592
+-- (3,148)
+(542)
+(2,606)
+31 December
+5,688
+2025
+Notes to Consolidated Financial Statements
+31 December 2023
+(i)
+Insurance risk refers to the risk that actual indemnity might exceed expected indemnity due to the
+frequency and severity of insurance accidents, as well as the possibility that insurance surrender rates are
+being underestimated. The principal risk the Group faces under such contracts is that the actual claims and
+benefit payments exceed the carrying amount of insurance contract liabilities. This could occur due to any
+of the following factors:
+Type of insurance risk
+4,120,222
+4,369,644
+886,840
+1,013,060
+178,386
+155,382
+1,848,567
+1,800,776
+669,251
+750,293
+537,178
+Occurrence risk
+(Restated)
+650,133
+31 December 2023
+(1) INSURANCE RISK
+49. RISK AND CAPITAL MANAGEMENT
+Entrusted investments of banking operations
+Assets under asset management schemes
+Entrusted loans of banking operations
+Assets under annuity investments and annuity schemes
+Assets under trust schemes
+(in RMB million)
+48. FIDUCIARY ACTIVITIES
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+304
+31 December 2022
+416,688
+-
+(ii) Severity risk - the possibility that the cost of the events will differ from those expected.
+Impairment provisions
+2022
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+306
+(iii) a 5% increase in maintenance expense rates.
+(ii) a 10% increase or decrease in policy lapse rates (depends on which situation results in the
+unfavourable changes in fulfilment cash flows by insurance product); and
+a 10% increase in mortality, morbidity, accident rates, etc. (a 10% increase in mortality rates of annuity
+policies before the payment period, a 10% decrease in the payment period);
+(i)
+The Group has measured the impact on long-term life insurance contract liabilities using sensitivity analysis,
+of varying independently certain assumptions under reasonable and possible circumstances. The following
+changes in assumptions have been considered:
+Sensitivities
+Significant judgements are required in determining and choosing discount rates/investment return,
+mortality, morbidity, lapse rates, policy dividend, and expenses assumptions relating to long-term life
+insurance contracts.
+Assumptions
+(a) Long-term life insurance contracts
+the possibility that the number of insured events will differ from those expected.
+Assumptions and sensitivities
+Concentration of insurance risks
+Insurance risk is also affected by the policyholders' rights to terminate the contract, pay reduced
+premiums, refuse to pay premiums or exercise annuity conversion option, etc. Thus, the resultant insurance
+risk is subject to policyholders' behaviour and decisions.
+There would be no significant mitigating terms and conditions that reduce the insured risk accepted for
+contracts with fixed and guaranteed benefits and fixed future premiums. However, for contracts with
+discretionary participation features, the participating nature of these contracts results in a significant
+portion of the insurance risk being shared with the insured party.
+Type of insurance risk (Continued)
+(1) INSURANCE RISK (CONTINUED)
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2023
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 305
+Annual Report 2023
+These risks currently do not vary significantly in relation to the location of the risk insured by the Group
+whilst undue concentration by amounts could have an impact on the severity of benefit payments on a
+portfolio basis.
+The insurance business of the Group mainly comprises long-term life insurance contracts, property
+and casualty and short-term life insurance contracts. For contracts where death is the insured risk, the
+significant factors that could increase the overall frequency of claims are epidemics, widespread changes
+in lifestyles and natural disasters, resulting in earlier or more claims than expected. For contracts where
+survival is the insured risk, the most significant factor is continuing improvement in medical science and
+social conditions that would increase longevity. For property and casualty insurance contracts, claims are
+often affected by natural disasters, calamities, terrorist attacks, etc.
+The variability of risks is improved by diversification of risk of loss to a large portfolio of insurance
+contracts as a more diversified portfolio is less likely to be affected across the board by change in any
+subset of the portfolio. The variability of risks is also improved by careful selection and implementation of
+underwriting strategies and guidelines.
+(iii) Development risk - the possibility that changes may occur in the amount of an insurer's obligation at
+the end of the contract period.
+The Group runs its insurance business primarily within the PRC. Hence the geographical insurance risk is
+concentrated primarily within the PRC.
+2026
+357,025
+66,892
+Insurance guarantee fund
+Contingency provision
+Other tax payable
+Salaries and welfare payable
+Payables to non-controlling interests of consolidated structured
+entities
+Other payables
+101,337
+(14,148)
+(66,631)
+66,631
+Net
+31 December 2023
+Offsetting
+(in RMB million)
+47. OTHER LIABILITIES
+Deferred tax liabilities
+Deferred tax assets.
+Provision payables
+(in RMB million)
+38,697
+53,158
+21,203
+16,723
+11,572
+2027
+2028
+6,041
+7,267
+7,077
+7,261
+5,864
+5,855
+2,992
+31 December 2022
+The net amounts of deferred tax assets and liabilities after offsetting are as follows:
+83,710
+Accruals
+Contract liabilities
+15,232
+10,035
+6,382
+5,345
+1,909
+1,765
+11,538
+10,638
+5,781
+5,140
+1,161
+1,000
+15,401
+18,795
+Deferred income
+9,886
+47,723
+49,771
+22,260
+10,207
+195,705
+168,866
+(Restated)
+31 December 2022
+31 December 2023
+89,321
+(14,217)
+Net
+31 December 2022 (Restated)
+Offsetting
+(34,086)
+34,086
+Others
+Finance lease deposits
+8,571
+14,156
+500
+39,215
+For the year ended 31 December 2023
+45. BONDS PAYABLE (CONTINUED)
+The information of the Group's main bonds payable is as follows (Continued):
+(in RMB million)
+Early
+redemption/
+Selling back
+Notes to Consolidated Financial Statements
+Issued
+Coupon rate
+Issuer
+Туре
+Guarantee Maturity
+option
+Par value
+Interest
+year
+FINANCIAL STATEMENTS
+Annual Report 2023
+None
+2,000
+2023
+Fixed 2.95%
+2,031
+Ping An Securities
+Ping An Insurance (Group) Company of China, Ltd. 299
+Corporate bonds
+2 years
+None
+1,000
+2023
+Fixed 2.78%
+1,015
+None
+type
+(per annum)
+31 December
+2023
+Fixed
+2.95%
+506
+Ping An Securities
+Corporate bonds
+None
+2023
+3 years
+1,500
+2023
+Fixed
+3.00%
+1,504
+Ping An Securities
+None
+500
+None
+3 years
+31 December
+2022
+Ping An Securities
+Corporate bonds
+None
+5 years
+None
+1,500
+2023
+Fixed
+3.25%
+1,521
+Ping An Securities
+Corporate bonds
+None
+3 years
+None
+Corporate bonds
+Ping An Securities
+Corporate bonds
+None
+5 years
+None
+750
+2023
+Ping An Securities
+Fixed 3.60%
+Ping An Securities
+Corporate bonds
+None
+3 years None
+500
+2023
+772
+1,234
+Fixed 3.33%
+2023
+Ping An Securities
+Corporate bonds
+None
+5 years
+None
+1,800
+2023
+Fixed
+3.60%
+1,855
+Ping An Securities
+Corporate bonds
+None
+3 years None
+1,200
+Fixed 3.39%
+Corporate bonds
+514
+Corporate bonds
+None
+1,000
+2023
+Fixed
+3.03%
+1,018
+3 years
+Ping An Securities
+None
+2 years None
+1,500
+2023
+Fixed 2.90%
+1,526
+Corporate bonds
+None
+Corporate bonds
+Ping An Securities
+None
+3 years None
+1,000
+2023
+Fixed
+3.15%
+1,021
+Ping An Securities
+Corporate bonds
+None
+2 years None
+2,000
+2023
+Fixed 3.02%
+2,041
+Ping An Securities
+501
+None
+None
+Ping An Financial
+Technology
+Private corporate
+None
+3 years
+End of the
+950
+year
+550
+Fixed 3.60%
+96
+956
+bonds
+second year
+Lianxin Investment
+2020
+Lianxin Investment
+bonds
+3,063
+3.40%
+2,046
+bonds
+year
+Ping An Financial
+Private corporate
+Technology
+None
+End of the third
+150
+2020
+Fixed
+4.00%
+153
+5 years
+Founder Securities
+Private corporate
+bonds
+Private corporate
+bonds
+Corporate bonds
+None
+2019
+Fixed
+3.70%
+639
+640
+640
+629
+year
+4 years
+End of the
+2,700
+2019
+Fixed 4.10%-4.18%
+2,748
+None
+629
+End of the third
+5 years
+5 years
+End of the third 2,000
+2020
+Corporate bonds
+Private corporate
+bonds
+Private corporate
+bonds
+Private corporate
+bonds
+None
+5 years
+End of the third
+2,710
+2018
+Fixed
+4.20%-4.30%
+2,758
+year
+None
+Fixed
+2020
+2,000
+End of the third
+End of the fifth
+750
+2019
+Fixed
+4.40%
+766
+7 years
+765
+Ping An Real Estate
+Corporate bonds
+None
+7 years
+End of the fifth
+940
+year
+None
+Corporate bonds
+Ping An Real Estate
+800
+2023
+Fixed
+3.00%
+800
+Ping An Securities
+Corporate bonds
+None
+2 years
+None
+1,200
+2023
+Fixed
+2.98%
+1,200
+40
+3 years
+2019
+957
+End of the third
+120
+20
+2019
+Fixed
+3.85%
+5 years
+121
+year
+Ping An Financial
+Technology
+(11,474)
+Private corporate
+None
+5 years
+121
+None
+Private corporate
+bonds
+Technology
+957
+year
+Ping An Real Estate
+Corporate bonds
+None
+7 years
+End of the fifth
+244
+2016
+Fixed
+3.28%
+245
+45
+year
+Ping An Financial
+Fixed 4.30%
+Fixed 2.80%
+2022
+500
+End of the third
+5 years
+None
+Corporate bonds
+Ping An Financial Leasing
+year
+1,840
+2,518
+3.00%-3.45%
+Fixed
+2019
+2,474
+End of the third
+5 years
+2,513
+None
+2020
+3.60%-3.70%
+2 years
+End of the first
+3,500
+2023
+Fixed
+2.75%-3.62%
+Fixed
+3,554
+Ping An Financial Leasing
+Ping An Financial Leasing
+Ping An Financial Leasing
+year
+2,799
+1,869
+year
+Corporate bonds
+Ping An Financial Leasing
+2022
+45. BONDS PAYABLE
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 297
+Annual Report 2023
+The information of the Group's main bonds payable is as follows:
+As at 31 December 2023, bonds classified as financial assets carried at amortized costs with a carrying
+amount of RMB31,059 million (31 December 2022: RMB22,945 million) were pledged as main collaterals for
+term deposit with the Central Bank.
+3,534,539
+125,828
+116,384
+29,018
+26,083
+96,810
+3,431,999
+(in RMB million)
+Early
+redemption/
+2023
+(per annum)
+type
+year
+Par value
+option
+Guarantee Maturity
+Туре
+Issuer
+31 December
+31 December
+Coupon rate
+Interest
+Issued
+Selling back
+None
+Corporate bonds
+second year
+5,687
+Ping An Financial Leasing
+Ping An Financial Leasing
+Corporate bonds
+None
+3-5 years End of the third
+year
+1,700
+2021
+second year
+Fixed
+1,726
+1,730
+Corporate bonds
+None
+3-4 years End of the
+8,800
+3.89%-4.08%
+3,155
+2,437
+3.85%-4.40%
+None
+4 years
+End of the
+718
+2020
+Fixed 3.00%-3.10%
+729
+731
+second year
+Corporate bonds
+None
+2-4 years End of the
+2,400
+2021
+Fixed
+2022
+90,301
+Fixed
+8,937
+3,200
+2022
+Fixed
+2.50%-3.15%
+3,250
+3,257
+End of the first
+year
+None
+4 years
+End of the
+5,600
+2023
+Fixed 3.37%-4.35%
+Corporate bonds
+2 years
+None
+Corporate bonds
+8,957
+second year
+Ping An Financial Leasing
+Corporate bonds
+None
+5 years
+End of the third
+1,500
+2022
+Fixed
+3.33%-3.80%
+1,523
+1,527
+year
+Ping An Financial Leasing
+Ping An Financial Leasing
+Ping An Financial Leasing
+3.09%-3.65%
+751,544
+3,306,171
+3,418,155
+938,713
+3 years None
+3,000
+2022
+Fixed
+2.80%
+3,035
+None
+3,034
+Corporate bonds
+None
+9 months None
+2,000
+2022
+Fixed 1.95%
+Ping An Securities
+Corporate bonds
+Ping An Securities
+corporate bonds
+corporate bonds
+ཨྰཿཏིཙྪོ
+2,348
+512
+1,936
+Ping An Securities
+Subordinated
+None
+5 years None
+1,100
+2022
+Fixed
+3.56%
+1,124
+1,124
+2,015
+1,937
+Ping An Securities
+None
+Corporate bonds
+None
+3 years
+None
+2,500
+2022
+Ping An Securities
+Fixed
+2,518
+2,518
+Ping An Securities
+Corporate bonds
+None
+6 months None
+2.65%
+1,011
+1,012
+Fixed 3.22%
+3 years
+None
+500
+2022
+Fixed
+2.75%
+505
+505
+Ping An Securities
+Corporate bonds
+None
+5 years
+None
+1,000
+2022
+Corporate bonds
+second year
+3.10%
+2022
+53,463
+(4,637)
+Current and savings accounts
+(in RMB million)
+44. CUSTOMER DEPOSITS AND PAYABLES TO BROKERAGE CUSTOMERS
+(21,940)
+119,284
+31 December 2023
+Carrying amount as at 31 December
+(481)
+17,411
+39,553
+(Restated)
+2022
+3,601
+1,617
+Fixed 5.40%
+31 December 2022
+Corporate customers
+1,415,106
+1,321,068
+297,141
+842,380
+868,022
+290,352
+Total
+Subtotal
+Corporate customers
+Individual customers
+Payables to brokerage customers
+Subtotal
+Individual customers
+Corporate customers
+Term deposits
+Individual customers
+991
+Fixed
+83,169
+Amounts reclassified to retained profits
+Income tax
+Debt financial assets at fair value through
+Financial assets at fair value through profit or loss
+2023
+(in RMB million)
+(6) THE COMPOSITION OF THE UNDERLYING ITEMS FOR CONTRACTS WITH DIRECT
+PARTICIPATION FEATURES AND THEIR FAIR VALUES ARE AS FOLLOWS:
+43. INSURANCE CONTRACT ASSETS AND LIABILITIES (CONTINUED)
+other comprehensive income
+Fixed
+512
+Subordinated
+None
+3 years
+None
+1,900
+3.42%
+Equity financial assets at fair value through
+other comprehensive income
+Others
+2022
+(Restated)
+Amounts reclassified to profit or loss
+Carrying amount as at 1 January
+Changes in fair value
+2023
+(in RMB million)
+(7) THE RECONCILIATION OF CUMULATIVE AMOUNTS INCLUDED IN OTHER
+COMPREHENSIVE INCOME FOR FINANCIAL ASSETS MEASURED AT FAIR VALUE
+THROUGH OTHER COMPREHENSIVE INCOME RELATED TO THE GROUPS OF CONTRACTS
+TO WHICH THE GROUP APPLIED THE MODIFIED RETROSPECTIVE APPROACH OR THE
+FAIR VALUE APPROACH AS AT 1 JANUARY 2022, IS PROVIDED IN THE TABLE BELOW.
+2,155,630
+2,291,050
+94,263
+102,325
+193,884
+187,127
+1,411,309
+1,484,003
+456,174
+517,595
+53,463
+Ping An Bank
+Ping An Financial Leasing
+Ping An Financial Leasing
+None
+Corporate bonds
+Ping An Securities
+2,566
+3.70%
+Fixed
+2020
+None
+2,550
+3 years
+None
+Corporate bonds
+Ping An Securities
+4,062
+3.58%
+None
+Fixed
+3 years
+3,000
+2,446
+Fixed 3.48%
+2021
+2,400
+None
+3 years
+None
+None
+Ping An Securities
+3,059
+3,060
+3.40%
+Fixed
+2021
+Corporate bonds
+2020
+4,000
+None
+End of the third
+5 years
+None
+Corporate bonds
+Ping An Securities
+2022
+1,500
+2023
+type
+year
+Par value
+option
+Guarantee Maturity
+Туре
+(per annum)
+2020
+Fixed
+3.40%
+3 years
+None
+3,077
+3.19%
+Fixed
+2020
+3,000
+None
+3 years
+None
+Private corporate
+bonds
+Corporate bonds
+Ping An Securities
+Ping An Securities
+year
+1,548
+2,445
+Ping An Securities
+Corporate bonds
+None
+2,024
+2,025
+3.47%
+Fixed
+2021
+2,000
+Ping An Securities
+None
+None
+Corporate bonds
+Ping An Securities
+3,034
+3,035
+3.05%
+5 years
+Corporate bonds
+None
+3 years
+2,009
+Fixed 3.25%
+2021
+2,000
+None
+2 years
+None
+Private corporate
+Ping An Securities
+2,616
+2,617
+Fixed 3.37%
+2021
+2,600
+None
+Fixed
+Issuer
+2021
+None
+2,000
+None
+2 years
+None
+Corporate bonds
+Ping An Securities
+2021
+1,221
+3.50%
+Fixed
+2021
+1,200
+None
+3 years
+1,222
+Fixed
+3.35%
+2,034
+3 years
+None
+Corporate bonds
+Ping An Securities
+1,825
+1,826
+3.25%
+Fixed
+2021
+1,800
+None
+3 years
+None
+Corporate bonds
+Ping An Securities
+3,000
+31 December
+31 December
+Coupon rate
+Financial bonds
+Ping An Bank
+20,070
+20,069
+Fixed 2.45%
+2022
+None
+20,000
+3 years
+None
+Financial bonds
+Ping An Bank
+5,020
+5,020
+None
+3 years
+None
+30,000
+20,767
+20,873
+First 5 years: 3.58%
+Fixed
+2020
+20,000
+End of the fifth
+10 years
+None
+Capital
+Ping An Life
+30,598
+2.77%
+Fixed
+2023
+Fixed 2.45%
+supplementary
+2022
+None
+None
+3 years
+None
+Ping An Bank
+year
+bonds
+20,000
+30,151
+Fixed 3.69%
+2021
+30,000
+End of the fifth
+Tier-2 Capital
+bonds
+10 years
+30,153
+2022
+Fixed 2.45%
+20,098
+3 years
+None
+Financial bonds
+Ping An Bank
+5,020
+5,020
+Fixed 2.45%
+2022
+5,000
+None
+3 years
+None
+Financial bonds
+Ping An Bank
+20,099
+5,000
+bonds
+year
+bonds
+supplementary
+bonds
+Corporate bonds
+Ping An Securities
+10,487
+10,543
+First 5 years: 4.64%
+Fixed
+year
+2019
+End of the fifth
+10 years
+None
+Ping An Property & Casualty Capital
+716
+716
+10,000
+None
+5 years
+End of the third
+year
+Interest
+Issued
+Selling back
+Early
+redemption/
+(in RMB million)
+The information of the Group's main bonds payable is as follows (Continued):
+45. BONDS PAYABLE (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+298
+100
+Next 5 years: 5.64%
+(if not redeemed)
+3.00%
+Fixed
+2018
+100
+Fixed 3.40%
+Next 5 years: 4.58%
+2022
+None
+None
+2 years
+None
+second year
+1,031
+Fixed 4.50%
+1,000
+2021
+End of the
+3 years
+None
+year
+2,003
+(if not redeemed)
+1,000
+2022
+Fixed
+3.49%
+2 years
+None
+Corporate bonds
+Founder Securities
+817
+Fixed 3.18%
+2022
+800
+None
+366 days
+None
+Corporate bonds
+Founder Securities
+1,025
+1,026
+700
+Ping An Securities
+Financial bonds
+Private corporate
+bonds
+Private corporate
+bonds
+Charged to
+equity
+Charged to
+profit or loss
+1 January
+As at
+101,337
+(14,148)
+31 December 2022
+Other
+changes
+31 December 2023
+(in RMB million)
+The deferred tax assets are analysed as follows:
+Deferred tax liabilities
+Deferred tax assets
+(in RMB million)
+46. DEFERRED TAX ASSETS AND LIABILITIES
+2023
+For the year ended 31 December 2023
+As at
+(Restated)
+41,897
+Insurance contract liabilities
+2,087
+comprehensive income
+(25,052)
+6,263
+31 December
+6
+5,668
+Fair value adjustments on financial
+assets and liabilities carried at fair
+value through profit or loss
+Fair value adjustments on financial
+assets at fair value through other
+31 December
+as at
+Temporary
+difference
+89,321
+(14,217)
+589
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 301
+None
+Corporate bonds
+Founder Securities
+2,005
+Fixed 3.14%
+2023
+2 years None
+2,000
+2 years
+None
+Corporate bonds
+Founder Securities
+3,016
+3.50%
+None
+2,000
+2023
+Fixed
+Annual Report 2023
+As at 31 December 2023, the original terms of income certificates issued by Founder Securities, but
+unmatured were from 366 days to 733 days, and the annual interest rates were from 3.00% to 4.40% (31
+December 2022: the original terms were from 366 days to 733 days, and the annual interest rates were from
+3.20% to 4.45%). The carrying amount was RMB7,262 million (31 December 2022: RMB5,569 million).
+As at 31 December 2023, the original terms of income certificates issued by Ping An Securities, but
+unmatured were from 14 days to 90 days, and the annual interest rates were from 2.30% to 5.10% (31
+December 2022: the original term was 14 days, and the annual interest rates were from 4.48% to 5.11%). The
+carrying amount was RMB122 million (31 December 2022: RMB81 million).
+As at 31 December 2023, the original terms of short-term financial bonds issued by Founder Securities,
+but unmatured were from 140 days to 365 days, and the annual interest rates were from 2.70% to 3.40% (31
+December 2022: the original terms were from 175 days to 365 days, and the annual interest rates were from
+3.05% to 4.20%). The carrying amount was RMB7,711 million (31 December 2022: RMB8,999 million).
+As at 31 December 2023, there is no unmatured short-term financial bond issued by Ping An Real Estate (31
+December 2022: the original term was 210 days, the annual interest rate was 3.38%, and the carrying amount
+was RMB1,520 million).
+As at 31 December 2023, the original terms of short-term financial bonds issued by Ping An Financial
+Leasing, but unmatured were from 120 days to 365 days, and the annual interest rates were from 2.16% to
+3.40% (31 December 2022: the original terms were from 63 days to 365 days, and the annual interest rates
+were from 2.64% to 4.10%). The carrying amount was RMB12,745 million (31 December 2022: RMB3,970 million).
+As at 31 December 2023, the original terms of short-term financial bonds issued by Ping An Securities,
+but unmatured were from 91 days to 274 days, and the annual interest rates were from 2.20% to 2.79% (31
+December 2022: the original terms were from 92 days to 365 days, and the annual interest rates were from
+1.84% to 2.66%). The carrying amount was RMB16,107 million (31 December 2022: RMB11,109 million).
+As at 31 December 2023, the original terms of interbank certificates of deposit and certificates of deposit
+issued by Ping An Bank, but unmatured were from 3 months to 1 year, and the annual interest rates were
+from 2.22% to 5.32% (31 December 2022: the original terms were from 1 month to 1 year, and the annual
+interest rates were from 1.65% to 3.01%). The carrying amount was RMB565,833 million (31 December 2022:
+RMB529,764 million).
+The information of the Group's main bonds payable is as follows (continued):
+45. BONDS PAYABLE (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+300
+2,000
+3.20%
+Impairment provisions
+Others
+53,815
+19,940
+(16,152)
+1,016
+17,870
+None
+3 years
+None
+20,000
+2021
+Fixed 3.45%
+Financial bonds
+20,630
+Ping An Bank
+Tier-2 Capital
+None
+Insurance contract liabilities
+4
+(1,098)
+20,629
+Ping An Bank
+30,414
+Fixed 2.30%
+End of the fifth
+Ping An Securities
+10 years
+30,000
+2019
+Fixed 4.55%
+30,907
+year
+Ping An Bank
+Financial bonds
+None
+3 years
+None
+30,000
+2020
+3,181
+Fixed
+comprehensive income
+(22,672)
+123,407
+(146,700)
+36,675
+(97)
+(1,038)
+(219,728)
+3,323
+54,932
+(277,336)
+69,334
+(3,056)
+764
+91
+(1,414)
+43,589
+101
+41,238
+167,968
+(671,872)
+5,668
+31 December
+as at
+Temporary
+difference
+4,650
+1,018
+As at
+31 December
+Other
+changes
+Charged to
+equity
+Charged to
+profit or loss
+1 January
+As at
+2022 (Restated)
+Fair value adjustments on financial
+assets and liabilities carried at fair
+value through profit or loss
+(in RMB million)
+Fair value adjustments on financial
+assets at fair value through other
+2023
+30,908
+None
+Founder Securities
+1,007
+1,007
+Fixed 2.95%
+2022
+1,000
+Corporate bonds
+None
+None
+Corporate bonds
+Founder Securities
+611
+611
+Fixed 3.18%
+3 years
+None
+2 years
+None
+1,305
+Fixed 2.94%
+2022
+1,300
+None
+3 years
+None
+Corporate bonds
+Founder Securities
+702
+703
+2.75%
+Fixed
+2022
+700
+2022
+1,304
+600
+None
+Fixed
+2022
+1,500
+None
+2 years
+None
+3.07%
+1,501
+Fixed
+1,500
+None
+None
+3,000
+2 years
+3.20%
+1,544
+1,544
+Ping An Securities
+Corporate bonds
+Founder Securities
+5 years None
+None
+Corporate bonds
+Ping An Securities
+Ping An Securities
+2,349
+3.00%
+Fixed
+2022
+2,300
+None
+3 years
+None
+Corporate bonds
+2 years None
+Founder Securities
+2021
+None
+None
+3 years
+None
+Corporate bonds
+Founder Securities
+corporate bonds
+3,000
+511
+Fixed
+2023
+500
+None
+3 years
+None
+3.80%
+Subordinated
+2023
+3.23%
+Corporate bonds
+Corporate bonds
+Founder Securities
+3.28%
+Fixed
+2023
+Fixed
+500
+3 years
+3 years
+None
+Corporate bonds
+Founder Securities
+3,035
+None
+Founder Securities
+504
+1,534
+Fixed
+2023
+1,600
+2 years None
+None
+Corporate bonds
+Founder Securities
+Founder Securities
+400
+400
+Fixed 4.30%
+2022
+400
+None
+corporate bonds
+2 years
+3.56%
+1,648
+None
+None
+Subordinated
+2023
+1,500
+None
+2 years
+None
+Subordinated
+Fixed 3.68%
+corporate bonds
+Founder Securities
+None
+1,200
+3 years
+2023
+Fixed 4.10%
+1,234
+3,337,590
+939,205
+brokerage customers
+Customer deposits and payables to
+53
+53
+Reinsurance contract liabilities
+4,159,801
+25
+832
+6,844
+166,007
+24,258
+Bonds payable
+4,152,100
+8,858
+8,858
+64,555
+3,892
+11,475
+963,718
+Financial liabilities at fair value
+through profit or loss.
+Insurance contract liabilities
+47,645
+48,619
+Assets sold under agreements to repurchase
+237,017
+Other liabilities
+241,803
+Accounts payable
+974
+4,786
+277,745
+4,582
+Off-balance sheet credit commitments
+1,914,722
+20,232
+4,176
+2,764
+16,424
+9,251
+106,687
+86,087
+1,946,969
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+883,796
+(2) MARKET RISK (CONTINUED)
+(a) Foreign currency risk (Continued)
+312
+272,251
+(4,421)
+(29,779)
+13,407
+544
+854
+17,535
+3,534,539
+964,007
+58
+9,878,515
+(12,936)
+272,006
+Net position of foreign currency
+Notional amount of foreign exchange
+derivative financial instruments
+47,793
+33,955
+29,093
+29,360
+10,199,143
+111,108
+19,529
+38,294
+92,046
+Liabilities
+84,875
+3,170,396
+Loans and advances to customers
+180,674
+180,674
+Finance lease receivable
+22,215
+432
+2,565
+19,218
+Reinsurance contract assets
+3
+3
+Insurance contract assets
+35,636
+80
+35,555
+6,183
+804,077
+The main monetary assets and liabilities of the Group and non-monetary assets and liabilities measured at
+fair value are analysed as follows by currency (continued):
+Balances with the Central Bank and
+statutory deposits for insurance operations
+282,634
+31,833
+2,830
+285,879
+Financial assets purchased under
+reverse repurchase agreements
+167,660
+167,660
+Accounts receivable
+415
+31,018
+3,318,122
+Financial assets at fair value through
+profit or loss
+through other comprehensive income
+Other assets
+261,926
+345
+2,606
+264,877
+103,979
+Equity financial assets at fair value.
+1,244
+182
+10,438,459
+319,799
+53,484
+58,453
+107,644
+10,870,195
+2,239
+Due to banks and other financial institutions
+2,637,008
+1,876
+1,688,592
+4,786
+17,623
+1,803,047
+Financial assets at amortized cost
+1,202,740
+14
+36,037
+3,353
+1,243,353
+Debt financial assets at fair value
+through other comprehensive income
+2,605,544
+29,574
+1,223
+(in RMB million)
+1,589
+31 December 2022 (Restated)
+105
+105
+Reinsurance contract liabilities
+10,349
+3,671,177
+24
+775
+3,353
+3,667,025
+Insurance contract liabilities
+10,349
+Accounts payable
+84,659
+271,737
+4,868
+266,869
+Assets sold under agreements to repurchase
+88
+2,787
+419,266
+67,544
+54,937
+10,292,139
+Liabilities
+Due to banks and other financial institutions
+Customer deposits and payables to
+803,396
+12,567
+14,897
+923,088
+Financial liabilities at fair value
+through profit or loss
+81,784
+92,228
+brokerage customers
+3,169,278
+242,914
+21,618
+33,319
+9,645,748
+113,188
+Notional amount of foreign exchange
+derivative financial instruments
+14,888
+54,899
+Off-balance sheet credit commitments
+27,686
+39,858
+1,790,679
+(17,841)
+15,478
+(19,114)
+9,399
+94,074
+1,826,960
+8,074
+Annual Report 2023
+25,879
+9,750,392
+40,011
+379,255
+13,817
+5,990
+3,431,999
+Bonds payable
+901,191
+29,907
+Net position of foreign currency
+931,098
+317,192
+3,198
+527
+619
+321,536
+9,217,189
+Other liabilities
+Assets
+118,465
+4,449
+1,242
+18,955
+Reinsurance contract assets
+36,118
+101
+1
+36,016
+Accounts receivable
+91,514
+91,514
+repurchase agreements
+Financial assets purchased under reverse
+295,559
+397
+6,116
+289,046
+statutory deposits for insurance operations
+RMB
+USD
+(RMB
+equivalent)
+HKD
+(RMB
+equivalent)
+Others
+(RMB
+equivalent)
+RMB
+equivalent
+total
+418
+Cash and amounts due from banks
+647,573
+112,157
+8,758
+6,353
+774,841
+Balances with the Central Bank and
+and other financial institutions
+20,615
+Finance lease receivable
+186,858
+2,799
+1,124,035
+Debt financial assets at fair value
+through other comprehensive income
+Equity financial assets at fair value
+2,472,746
+26,773
+2,356
+1,271
+through other comprehensive income
+Other assets
+258,239
+688
+5,844
+264,771
+112,160
+2,500,790
+267
+46,441
+Financial assets at amortized cost
+186,858
+Loans and advances to customers
+3,048,119
+124,470
+37,780
+27,685
+1,072,439
+3,238,054
+profit or loss
+1,516,727
+96,929
+9,131
+17,732
+1,640,519
+Financial assets at fair value through
+70,282
+Three years later
+Cash and amounts due from banks and
+other financial institutions
+Subtotal
+211,506
+(199,786)
+(175,433)
+(158,827)
+Cumulative claims paid
+179,704
+160,563
+Estimated cumulative claims
+160,563
+Four years later
+179,704
+162,360
+Three years later
+211,506
+185,344
+163,992
+Two years later
+2023
+Total
+Estimates of undiscounted
+cumulative claims:
+As at the end of accident year
+172,726
+216,105 257,451 1,025,329
+(190,811) (168,451) (893,308)
+132,021
+196,080
+One year later
+168,835
+188,032
+217,423
+226,604
+216,105
+257,451
+223,617
+Prior year adjustments, unallocated
+loss adjustment expenses, risk
+adjustment for non-financial risk
+and effect of discounting
+Total gross liabilities for incurred
+claims
+cumulative claims:
+As at the end of accident year
+162,307
+184,805
+205,113
+One year later
+Estimates of undiscounted
+158,421
+200,356
+211,821
+202,307
+244,937
+Two years later
+153,834
+174,567
+176,760
+2022
+Total
+2022
+11,366
+143,387
+308
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+2023
+(1) INSURANCE RISK (CONTINUED)
+(b) Property and casualty and short-term life insurance contracts (Continued)
+Sensitivities (continued)
+Reproduced below is an exhibit that shows the development of net liabilities for incurred claims of
+property and casualty insurance and short-term life insurance by the accident year and reconciliation with
+the aggregate carrying amount:
+(in RMB million)
+2019
+2020
+2021
+Assumptions and sensitivities (Continued)
+194,925
+2021
+2019
+Increase/(decrease) in profit before tax
+31 December 2022 (Restated)
+(702)
+(14,486)
+(3,562)
+(15,369)
+(3,611)
+(706)
+(474)
+(477)
++5%
+(1,775)
+(1,794)
++/-10%
+(7,487)
+(8,017)
++10%
+Net of reinsurance
+Net of reinsurance Gross of reinsurance
+assumptions Gross of reinsurance
+Ping An Insurance (Group) Company of China, Ltd. 313
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(1) INSURANCE RISK (CONTINUED)
+Assumptions and sensitivities (Continued)
+(a) Long-term life insurance contracts (Continued)
+Sensitivities (continued)
+Increase/(decrease) in equity before tax
+(in RMB million)
+Policy lapse rates
+Maintenance expense rates
+31 December 2023
+Increase/(decrease) in profit before tax
+Increase/(decrease) in equity before tax
+Change in
+Mortality, morbidity, accident rates, etc.
+Change in
+(in RMB million)
+assumptions Gross of reinsurance
+Other key assumptions include delays in settlement, etc.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 307
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+The principal assumptions underlying the estimates includes assumptions in respect of average claim
+costs, claims handling costs, claims inflation factors and claim numbers for each accident year which are
+determined based on the Group's past claim experiences. Judgement is used to assess the extent to which
+external factors such as judicial decisions and government legislation affect the estimates.
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Assumptions and sensitivities (Continued)
+(b) Property and casualty and short-term life insurance contracts (Continued)
+Sensitivities
+The liabilities for incurred claims of property and casualty and short-term life insurance are sensitive to the
+above key assumptions. The sensitivity of certain variables including legislative change, uncertainty in the
+estimation process, etc., is not possible to quantify. Furthermore, because of delays that arise between the
+occurrence of a claim and its subsequent notification and eventual settlement, the liabilities for incurred
+claims are not known with certainty at the end of the reporting period.
+Reproduced below is an exhibit that shows the development of gross liabilities for incurred claims of
+property and casualty insurance and short-term life insurance by the accident year and reconciliation with
+the aggregate carrying amount:
+(in RMB million)
+(1) INSURANCE RISK (CONTINUED)
+2020
+Assumptions
+(638)
+Net of reinsurance
+Gross of reinsurance
+Net of reinsurance
+Mortality, morbidity, accident rates, etc.
++10%
+Policy lapse rates
+(b) Property and casualty and short-term life insurance contracts
++/-10%
+Maintenance expense rates
++5%
+(479)
+(7,077)
+(1,566)
+(479)
+(13,300)
+(2,831)
+(638)
+(12,654)
+(2,755)
+(7,665)
+(1,567)
+152,464
+169,280
+Four years later
+USD
+4,704
+2,173
+5,334
+2,657
+774
+397
+821
+449
++5%
+Other currencies
+1,185
+484
+209
+(320)
++5%
+HKD
+The analysis below is performed for reasonably possible movements in key variables with all other variables
+held constant, showing the pre-tax impact on profit and equity (due to changes in fair value of foreign
+currency-denominated non-monetary assets and liabilities measured at fair value, as well as monetary
+assets and liabilities). The correlation of variables will have a significant effect on determining the ultimate
+impact on market risk, but to demonstrate the impact due to changes in variables, variables had to be
+changed on an individual basis.
+31 December 2023
+Change in
+(in RMB million)
+Increase/
+(decrease) in
+variables profit before tax
+Increase/
+(decrease) in
+equity before tax
+-5%
+31 December 2022 (Restated)
+Increase/
+(decrease) in
+profit before tax
+USD
++5%
+2,528
+4,304
+1,292
+2,745
+Increase/
+(decrease) in
+equity before tax
+(2,528)
+(4,304)
+(1,292)
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(a) Foreign currency risk (Continued)
+The main monetary assets and liabilities of the Group and non-monetary assets and liabilities measured at
+fair value are analysed as follows by currency:
+FINANCIAL STATEMENTS
+(in RMB million)
+31 December 2023
+RMB
+USD
+(RMB
+equivalent)
+HKD
+(RMB
+equivalent)
+Others
+(RMB
+equivalent)
+RMB
+equivalent
+total
+Assets
+Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates.
+Fluctuations in exchange rates between the RMB and other currencies in which the Group conducts
+business may affect its financial position and results of operations. The foreign currency risk facing the
+Group mainly comes from movements in the USD/RMB and HKD/RMB exchange rates. The Group sets
+limitation to its position of foreign currency, monitors the size of foreign currency position, and limits the
+foreign currency position within the threshold set by utilizing hedging strategy.
+Ping An Insurance (Group) Company of China, Ltd. 311
+(5,334)
+(2,745)
+HKD
+-5%
+320
+(209)
+(484)
+(2,173)
+(1,185)
+-5%
+(449)
+(821)
+(397)
+(774)
+(2,657)
+Other currencies
+(a) Foreign currency risk
+Market risk is the risk of changes in fair value of financial instruments and future cash flows from
+fluctuation of market prices, which includes three types of risks from volatility of foreign exchange rates
+(foreign currency risk), market interest rates (interest rate risk) and market prices (price risk).
+(2) MARKET RISK
+Annual Report 2023
+11,126
+126,054
+17,333
+143,387
+Ping An Insurance (Group) Company of China, Ltd. 309
+Total gross liabilities for incurred
+claims
+FINANCIAL STATEMENTS
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(1) INSURANCE RISK (CONTINUED)
+Assumptions and sensitivities (Continued)
+(b) Property and casualty and short-term life insurance contracts (Continued)
+Sensitivities (continued)
+To illustrate the sensitivities of ultimate claims costs, for example, a respective percentage change in the
+average claim costs alone results in a similar percentage change in liabilities for incurred claims:
+Notes to Consolidated Financial Statements
+(in RMB million)
+Amounts recoverable on incurred
+claims
+loss adjustment expenses, risk
+adjustment for non-financial risk
+and effect of discounting
+150,790
+Estimated cumulative claims
+150,790
+169,280
+Cumulative claims paid
+(149,622)
+Net liabilities for incurred claims
+(165,854)
+202,307
+(180,831)
+244,937
+(163,979)
+962,239
+(847,311)
+Subtotal
+114,928
+Prior year adjustments, unallocated
+194,925
+(187,025)
+719,538
+Average claim costs
+Short-term life insurance
++5%
+(c) Reinsurance
+Net of reinsurance
+(6,251)
+(648)
+(5,467)
+(538)
+(6,251)
+(648)
+Short-term life insurance
+(5,467)
+(538)
+Even though the Group may have reinsurance arrangements, it is not relieved of its direct obligations to its
+policyholders and thus a credit exposure exists with respect to reinsurance ceded, to the extent that any
+reinsurer is unable to meet its obligations assumed under such reinsurance agreements.
+310
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+The Group limits its exposure to losses from insurance operations mainly through participation in
+reinsurance arrangements. The majority of the business ceded is placed on the quota share basis and
+the surplus basis with retention limits varying by product lines. Amounts recoverable from reinsurers are
+estimated in a manner consistent with the assumptions used for ascertaining the underlying policy benefits
+and are presented in the statement of financial position as reinsurance contract assets or liabilities.
+Property and casualty insurance
++5%
+Average claim costs
+31 December 2023
+Change in
+Increase/(decrease) in profit before tax Increase/(decrease) in equity before tax
+assumptions Gross of reinsurance Net of reinsurance Gross of reinsurance Net of reinsurance
++5%
++5%
+(6,551)
+(618)
+(5,759)
+(543)
+Property and casualty insurance
+(6,551)
+(618)
+31 December 2022 (Restated)
+Increase/(decrease) in equity before tax.
+Change in
+assumptions
+Increase/(decrease) in profit before tax
+Gross of reinsurance Net of reinsurance
+Gross of reinsurance
+(in RMB million)
+(5,759)
+(543)
+FINANCIAL STATEMENTS
+(4,704)
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 315
+Annual Report 2023
+3,192
+33,582
+880
+(667)
+40,304
+4,635
+1,116
+(1,233)
++10bps
+Insurance contracts, net of reinsurance
+contracts held
+(3,543)
+(30,390)
+(1,547)
+635
+(5,064)
+(35,669)
+1,207
+(2,349)
++10bps
+Financial instruments
+(33,933)
+(912)
+(40,733)
+(1,142)
+-10bps
+(2) MARKET RISK (CONTINUED)
+(c) Interest rate risk (Continued)
+The banking segment
+Interest rate risks of the Group's banking segment mainly consist of transaction account interest rate risk
+and bank account interest rate risk.
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+316
+(1,697)
+(2,891)
+equity
+1,697
+Increase/
+(decrease) in
+2,891
+31 December 2022
+Increase/
+(decrease) in
+net interest
+income
+Increase/
+(decrease) in
+equity
+income
+contracts held
+31 December 2023
+Increase/
+(decrease) in
+net interest
+(2,105)
++50bps
+Financial assets and liabilities
+2,105
+-50bps
+Financial assets and liabilities
+rate
+(in RMB million)
+Interest
+In respect of the financial assets and liabilities at fair value through profit or loss of the Group's banking
+segment, the interest rate risk arising from this portfolio is not significant. For other financial assets and
+liabilities, the Group mainly uses a gap analysis to measure and control the related interest rate risk. As at
+31 December 2023 and 31 December 2022, the gap analyses of the financial assets and liabilities (excluding
+financial assets and liabilities at fair value through profit or loss) were as follows. The analysis of the net
+interest income is based on the effect of a reasonable possible change in interest rates on the net interest
+income before tax for one year, in respect of the financial assets and liabilities (excluding financial assets
+and liabilities at fair value through profit or loss) held at the balance sheet date. The analysis of equity
+is based on the effect of a reasonable possible change in interest rates on the equity before tax, which
+calculated by revaluing the year end portfolio of fixed-rate financial assets at fair value through other
+comprehensive income.
+Bank account interest rate risk arises from the mismatch of the maturity date or contract re-pricing date
+between interest-earning assets and interest-bearing liabilities. The Group manages bank account interest
+rate risk primarily by adjusting the asset/liability pricing structure, regularly monitoring sensitive gaps of
+interest rate, analysing characteristics of asset/liability re-pricing, and using an asset/liability management
+system to conduct scenario analysis on interest risk.
+Transaction account interest rate risk arises from the change in interest rates and product price of the
+transaction account resulting from the change in market interest rates, which in turn affects the profit
+or loss for the year. The Group mainly manages the interest rate risk of transaction account by adopting
+measures such as the interest rate sensitive limit and daily and monthly stop-loss limit to ensure that the
+fluctuations of interest rate and market value of products are within the affordable scope of the Group.
+1,540
+(1,540)
+Insurance contracts, net of reinsurance
+(16,161)
+23,697
+1,003
+35,669
+-10%
+Financial instruments
+18,796
+42,057
+(22,825)
+Increase/
+(decrease) in
+equity before tax
+24,653
+(9,895)
+31 December 2022 (Restated)
+Increase/
+(decrease) in
+profit before tax
+48,436
+(24,839)
+30,668
+(11,872)
++10%
+Insurance contracts
++10%
+Equity prices profit before tax equity before tax
+Financial instruments
+(in RMB million)
+Increase/
+(decrease) in
+Increase/
+(decrease) in
+31 December 2023
+The analysis below is performed for a 10% increase or decrease in equity prices with all other variables held
+constant, for the financial instruments and insurance contracts, showing the pre-tax impact on the Group's
+profit and equity.
+The Group manages price risks through balanced asset allocation, dynamic portfolio management and
+diversification of investments, etc.
+The Group's price risk exposure relates to financial assets and liabilities whose values will fluctuate as a
+result of changes in market prices (other than those arising from interest rate risk or foreign currency risk),
+which mainly include listed equity securities and security investment funds classified as equity financial
+assets at fair value through other comprehensive income and financial assets at fair value through profit or
+loss, and related insurance contracts with direct participation features.
+(b) Price risk
+(2) MARKET RISK (CONTINUED)
+1,547
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Insurance contracts
+-10%
+The above financial instruments and insurance contracts are exposed to price risk because of changes in
+market prices, where changes are caused by factors specific to the individual financial instruments or their
+issuers, or factors affecting all similar financial instruments traded in the market.
+23,597
+(48,436)
+24,837
+(23,599)
+rate profit before tax
+2,349
+(30,668)
+11,871
+(18,797)
+-10bps
+Financial instruments
+30,390
+Increase/
+(decrease) in
+equity before tax
+31 December 2022 (Restated)
+Increase/
+(decrease) in
+profit before tax
+Increase/
+(decrease) in
+equity before tax
+31 December 2023
+Increase/
+(decrease) in
+(in RMB million)
+The analysis below is performed for a 10 basis points decrease or increase in interest rates with all other
+variables held constant, for the financial instruments and life insurance contracts/reinsurance contracts,
+showing the pre-tax impact on the Group's profit and equity.
+Floating rate instruments expose the Group to cash flow interest rate risk, whereas fixed rate instruments
+expose the Group to fair value interest risk. The Group's interest rate risk policy requires it to manage
+the maturities of interest-bearing financial assets and interest-bearing financial liabilities by maintaining
+an appropriate mix of fixed and variable rate instruments. The Group manages the interest rate risk by
+extending assets duration, repricing products and adjusting the business structure to match the term
+structure and to match the cost and benefit.
+Interest rate risk of the Group's insurance segment is the risk that the value/future cash flows of a financial
+instrument (mainly include debt investments classified as financial assets at fair value through profit or loss
+and financial assets at fair value through other comprehensive income) will fluctuate because of changes
+in market interest rates, and the value of insurance contract liabilities will fluctuate because of changes in
+market interest rates (discount rate). Since most markets do not have assets of sufficient tenor to match
+insurance contract liabilities, an uncertainty arises around the reinvestment of maturing assets.
+Interest
+The interest rate risks facing the Group mainly comes from the insurance segment and the banking
+segment.
+14,758
+(24,653)
+9,866
+(14,787)
+The insurance segment
+(42,057)
+(19,261)
+314
+22,796
+Ping An Insurance (Group) Company of China, Ltd.
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(c) Interest rate risk
+Annual Report 2023
+19,232
+(106,821)
+434
+(1,098)
+Stage 2
+91,725
+(21,507) 106,821
+-
+Stage 3
+38,784
+3,335,973
+(69,424)
+69,424
+3,269,769
+107,615
+(68,585) 38,091
+Total
+148,087
+(68,585) 3,415,475
+Financial assets
+Stage 1
+1,079,637
+170,692
+132,684
+(434)
+3,205,464
+Stage
+Loans and advances
+to customers
+at amortized cost
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (Continued)
+The following tables explain the changes in the gross carrying amount and impairment provision of the
+main financial assets between the beginning and the end of the annual period due to these factors:
+(in RMB million)
+2023
+Stages transfers
+Transfer
+Transfer
+Gross carrying amount
+1 January
+Net increase/
+(decrease)
+(Note)
+between
+Stage 1
+between
+Stage 1
+Transfer
+between
+and Stage 2
+and Stage 3
+Stage 2
+and Stage 3
+Write-offs 31 December
+Stage 1
+Stage 2
+1,000
+(515)
+Ping An Insurance (Group) Company of China, Ltd.
+-
+2,564
+3,564
+other comprehensive income
+Stage 3
+Total
+2,284
+(545)
+185
+1,924
+2,500,790
+136,218
+-
+-
+2,637,008
+Note: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+(in RMB million)
+2023
+Stages transfers
+Net increase/
+Charge/
+(recover)
+Stage 2
+18,518
+at fair value through
+-
+(19,967)
+19,967
+(254)
+-
+Stage 3
+66,683
+(6,018)
+-
+254
+(18,323)
+18,323
+(659)
+1,192,100
+19,647
+78,583
+Total
+1,164,838
+126,151
+(659) 1,290,330
+Debt financial assets
+Stage 1
+2,497,506
+136,763
+(2,564)
+(185)
+2,631,520
+Annual Report 2023
+37,172
+As at 31 December 2023, the fair value of collateral of credit-impaired loans and advances to customers
+is RMB13,940 million (31 December 2022: RMB16,747 million). The fair value of collateral of credit-impaired
+financial assets at amortized cost is RMB6,074 million (31 December 2022: RMB10,311 million).
+Stage 1
+Debt financial assets
+1,164,838
+(164)
+71,075
+1,093,927
+66,683
+(164)
+16,116
+3,164
+(3,613)
+51,180
+Stage 3
+18,518
+(16,116)
+26,700
+(2,141)
+10,075
+Stage 2
+at amortized cost
+1,079,637
+2,259,808
+(3,164)
+237,643
+2,497,506
+2022 (Restated)
+(in RMB million)
+Note: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+2,500,790
+2,284
+(24)
+(24)
+235,488
+2,265,326
+Total
+384
+(723)
+2,647
+Stage 3
+other comprehensive income
+1,000
+(384)
+(55)
+(1,432)
+2,871
+Stage 2
+at fair value through
+55
+322
+(26,700)
+1,032,672
+2,500,790
+Other assets
+114,610
+271
+2,591
+117,472
+Subtotal
+8,212,721
+97,724
+54,796
+8,365,241
+Credit commitments
+1,826,854
+Total
+10,039,575
+6,193
+103,917
+147
+1,833,194
+54,943
+10,198,435
+The Group closely monitors collateral of credit-impaired financial assets.
+2,284
+76,829
+1,000
+Debt financial assets at fair value through other
+comprehensive income
+Stage 1
+Accounts receivable
+35,909
+169
+40
+36,118
+Finance lease receivable
+179,398
+6,695
+765
+186,858
+Loans and advances to customers
+3,152,071
+74,444
+11,539
+3,238,054
+Financial assets at amortized cost
+1,071,718
+15,145
+Transfer
+1,124,035
+2,497,506
+Transfer
+52,320
+between
+1 January
+(Note) and Stage 2 and Stage 3 and Stage 3
+Write-offs 31 December
+Loans and advances
+Stage 1
+2,992,010
+340,539
+(126,378)
+(707)
+to customers
+Stage 2
+44,549
+(14,009)
+126,378
+(65,193)
+Stage 3
+33,672
+(986)
+707
+3,205,464
+91,725
+65,193 (59,802) 38,784
+Total
+Stage
+3,070,231
+Gross carrying amount
+Stage 1
+5,685
+8,818
+Note 1: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+Note 2: Changes in PDS, EADS, and LGDs in the current year, arising from regular update of inputs to models.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+323
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (Continued)
+The following tables explain the changes in the gross carrying amount and impairment provision of
+the main financial assets between the beginning and the end of the annual period due to these factors
+(continued):
+(in RMB million)
+2022 (Restated)
+Stages transfers
+Net
+increase/
+(decrease)
+Transfer
+between
+Stage 1
+Transfer
+between
+Transfer
+between
+Stage 2
+-
+325,544
+3,335,973
+High risk
+68,480
+2,925
+65,555
+Medium risk
+1,002,370
+1,002,370
+Total
+Stage 3
+Stage 2
+31 December 2022 (Restated)
+Stage 1
+Low risk
+Credit grade
+(in RMB million)
+1,243,353
+38,985
+16,505
+1,187,863
+Carrying amount
+(46,977)
+11,712
+(59,802)
+14,101
+Default
+Financial assets
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+326
+1,124,035
+37,172
+15,145
+1,071,718
+Carrying amount
+(40,803)
+1,164,838
+66,683
+(29,511)
+(3,373)
+(7,919)
+Impairment provision
+18,518
+1,079,637
+Gross carrying amount
+68,175
+66,683
+1,492
+25,813
+Transfer
+-
+(628)
+408
+Stages transfers
+Stage 3
+27,308
+4,197 44,192
+-
+-
+(408)
+(16,566)
+16,566
+24,455
+(68,585)
+23,270
+Total
+101,196
+24,762 42,672
+-
+(68,585)
+100,045
+Financial assets
+Stage 1
+7,919
+(6,782)
+6,782
+620
+20,752
+17,357
+between
+(decrease)
+for the year
+Impairment provision
+Stage
+1 January
+(Note 1)
+(Note 2)
+Stage 1
+and Stage 2
+Stage 1
+between
+Stage 2
+and Stage 3
+and Stage 3
+Write-offs 31 December
+Loans and advances
+Stage 1
+56,531
+24,435
+(22,272)
+to customers
+Stage 2
+(3,870)
+889
+at amortized cost
+3,373
+(393)
+(425)
+(140)
+(53)
+2,164
+at fair value through
+Stage 2
+227
+602
+140
+969
+other comprehensive income
+Stage 3
+5,155
+(235)
+712
+-
+53
+-
+Total
+8,557
+3,175
+Stage 2
+Stage 1
+46,977
+10
+(3,645)
+638
+(635)
+(22)
+4,237
+635
+(1,514)
+3,142
+Stage 3
+29,511
+(816)
+10,026
+22
+1,514
+(659)
+39,598
+Total
+40,803
+(186)
+7,019
+(659)
+Debt financial assets
+Impairment provision
+Total
+1 January
+(vi) The active market for financial assets disappears.
+The credit impairment of financial assets may be caused by the joint effects of multiple events, and may
+not be caused by separately identifiable events.
+Forward-looking information
+The determinations of 12 months and the lifetime EAD, PD and LGD also incorporates forward-looking
+information. The Group has performed historical data analysis and identified the key macroeconomic
+variables associated with credit risk and expected credit losses for each portfolio. The Group has
+developed macroeconomic forward looking adjustment model by establishing a pool of macro-
+economic indicators, preparing data, filtering model factors and adjusting forward-looking elements,
+and the indicators include gross domestic product (GDP) accumulated year on year percentage change,
+customer price index (CPI) year on year percentage change, purchasing manager's index (PMI) and other
+macroeconomic variables. Through regression analysis, the relationship among these economic indicators
+in history with EAD, PD and LGD is determined, and the EAD, PD, LGD are then determined through
+forecasting economic indicator.
+During the reporting period, the Group adjusted the predicted values of forward-looking economic
+indicators by statistical analysis and also considered the range of possible outcomes represented by each
+scenario, to determine the final macroeconomic scenarios and weights for measuring the relevant expected
+credit loss. The impact of these economic indicators on PD and LGD varies to different businesses. The
+Group comprehensively considers internal and external data, expert forecasts and statistical analysis to
+determine the relationship between these economic indicators with PD and LGD. The Group evaluates
+and forecasts these economic indicators at least annually, provides the best estimates for the future, and
+regularly evaluates the results. Similar to other economic forecasts, the estimates of economic indicators
+have high inherent uncertainties, actual results may have significant difference with estimates. The Group
+considered the estimates above represented the optimal estimation of possible outcomes.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 319
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (Continued)
+Stage
+In 2023, the key macroeconomic assumptions used by the Group to estimate expected credit losses in
+different macroeconomic scenarios include GDP accumulated year on year percentage change, CPI year on
+year percentage change, PMI and other macroeconomic variables. For the GDP accumulated year on year
+percentage change, the average predictive value in the base scenario in year 2024 is about 5%, and is 0.49
+percentage upper in the upside scenario while 0.4 percentage lower in the downside scenario. The average
+predictive value in the base scenario in year 2025 is about 4.79%, and is 0.46 percentage upper in the upside
+scenario while 0.48 percentage lower in the downside scenario.
+Sensitivity analysis
+Expected credit losses are sensitive to the parameters used in the model, the macroeconomic variables of
+the forward-looking forecast, the weight probabilities in the three scenarios, and other factors considered
+in the application of expert judgement. Changes in these input parameters, assumptions, models, and
+judgements will have an impact on the significant increase in credit risk and the measurement of expected
+credit losses.
+The Group has the highest weight of the base scenario, and the weight of the base scenario is slightly
+higher than the sum of the weight of other base scenarios. The banking business of the Group assumed
+that if the weight of the upside scenario increased by 10% and the weight of the base scenario reduced
+by 10%, the Group's ECL impairment provision on 31 December 2023 would be reduced by RMB1,982 million
+(31 December 2022: RMB1,177 million); if the weight of the downside scenario increased by 10% and the
+weight of the base scenarios reduced by 10%, the Group's ECL impairment provision would be increased by
+RMB1,236 million (31 December 2022: RMB1,144 million).
+In 2023, the Group's management has also taken into account and consequently charged provision for
+losses for situations such as the external environment that are not reflected in the model, thus further
+increasing the risk offsetting capacity.
+Credit exposure
+Without considering the impact of collateral and other credit enhancements, for on-balance sheet assets,
+the maximum exposures are based on net carrying amounts as reported in the consolidated financial
+statements. The Group also assumes credit risk due to credit commitments and financial guarantee
+contracts. The details are disclosed in Note 57.(2).
+(v) The debtor is likely to go bankrupt or other financial restructuring;
+Please refer to Note 24.(2) and (5) for an analysis of concentration of loans and advances by industry and
+geographical region.
+(iv) The debtor has significant financial difficulties;
+(ii) Internal credit rating is default grade;
+(b) Expected credit loss
+The Group formulates the credit losses of financial assets at amortized cost, debt financial assets at FVOCI,
+finance lease receivable and other financial assets, as well as loan commitment and financial guarantee
+contracts using expected credit loss models according to IFRS 9 requirements.
+Parameters of ECL model
+The parameters and assumptions involved in ECL model are described below.
+The Group considers the credit risk characteristics of different financial instruments when determining if
+there is significant increase in credit risk. For financial instruments with or without significant increase in
+credit risk, 12-month or lifetime expected credit losses are provided respectively. The expected credit loss
+is the result of discounting the product of EAD, PD and LGD.
+(i) Exposure at Default (EAD): EAD is based on the amounts the Group expects to be owed at the time of
+default, over the next 12 months or over the remaining lifetime.
+(ii) Probability of Default (PD): The PD represents the likelihood of a borrower defaulting on its financial
+obligation, either over the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the
+obligation.
+(iii) Loss Given Default (LGD): LGD represents the Group's expectation of the extent of loss on a defaulted
+exposure. LGD varies by type of counterparty, type and seniority of claim and availability of collateral
+or other credit support.
+The Lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity profile.
+looks at how defaults develop on a portfolio from the point of initial recognition throughout the Lifetime.
+The maturity profile is based on historical observed data and is assumed to be the same across all assets
+within a portfolio and credit grading band. This is supported by historical analysis.
+Judgement of significant increase in credit risk ("SICR")
+Under IFRS 9, when considering the impairment stages for financial assets, the Group evaluates the credit
+risk at initial recognition and also whether there is any significant increase in credit risk for each reporting
+period. The Group considers various reasonable supporting information to judge if there is significant
+increase in credit risk, including the forward-looking information, when determining the ECL staging for
+financial assets, Major factor being considered include regulatory and operating environment, internal and
+external credit ratings, solvency, and operational capabilities. The Group could base on individual financial
+instruments or portfolios of financial instruments with similar credit risk characteristics to determine
+ECL staging by comparing the credit risks of the financial instruments at the reporting date with initial
+recognition.
+The Group set quantitative and qualitative criteria to judge whether the credit risk has SICR after initial
+recognition. The judgement criteria mainly include the PD changes of the debtors, changes of credit
+risk categories and other indicators of SICR, etc. In the judgement of whether the financial instruments
+have SICR after initial recognition, the Group considers the 30 days past due as one of criteria of SICR, in
+accordance with the standard.
+318
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (Continued)
+The definition of credit-impaired assets
+Under IFRS 9, in order to determine whether credit impairment occurs, the defined standards adopted by
+the Group are consistent with the internal credit risk management objectives for relevant financial assets,
+while considering quantitative and qualitative indicators. When the Group assesses whether the debtor has
+credit impairment, the following factors are mainly considered:
+(i) The debtor has overdue more than 90 days after the contract payment date;
+(iii) The lender gives the debtor concessions for economic or contractual reasons due to the debtor's
+financial difficulties, where such concessions are normally reluctant to be made by the lender;
+(3) CREDIT RISK (CONTINUED)
+320
+Ping An Insurance (Group) Company of China, Ltd.
+Maximum credit
+Carrying amount (in RMB million)
+Stage 1
+Stage 2
+Stage 3
+risk exposure
+Cash and amounts due from banks and other
+financial institutions
+804,077
+804,077
+Balances with the Central Bank and statutory
+deposits for insurance operations
+285,879
+285,879
+Financial assets purchased under reverse
+repurchase agreements
+167,073
+200
+387
+167,660
+Accounts receivable
+35,528
+46
+31 December 2023
+Annual Report 2023
+The following table presents the credit risk exposure of the financial assets under the scope of expected
+credit loss. Without considering guarantee or any other credit enhancement measures, for on-balance sheet
+assets, the maximum credit risk exposure is presented as the net carrying amount of the financial assets:
+(3) CREDIT RISK (CONTINUED)
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (Continued)
+Collateral and other credit enhancements
+The amount and type of collateral required depends on an assessment of the credit risk of the
+counterparty. Policies are established regarding to the selection of types of collateral and valuation
+parameters.
+The main types of collateral obtained are as follows:
+(i)
+for policy loans, collaterals are cash value of policies;
+(ii) for reverse repurchase transactions, collaterals are quoted securities;
+(iii) for commercial loans, collaterals are real estate properties, inventories, equity investments and trade
+receivables, etc.;
+(iv) for retail lending loans to individuals, collaterals are residential properties mortgages.
+Management monitors the market value of the collateral, and requires additional collateral when needed
+according to contracts, when assessing the adequacy of impairment.
+It is the Group's policy to dispose collateral orderly. The proceeds are used to repay all or part of the
+outstanding balance. Generally, the Group would not use the collateralised assets for business purpose.
+Restructured loans and advances to customers
+Restructured loans and advances to customers are those loans and advances to customers for which the
+Group has renegotiated the contract terms with borrowers as a result of the deterioration in their financial
+position or of their inability to make payments when due. Concessions are given by the Group that would
+not otherwise be granted to these borrowers for economic or legal reasons relating to their financial
+difficulties. As at 31 December 2023, the Group's restructured loans and advances to customers was
+RMB32,030 million (31 December 2022: RMB17,107 million).
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 321
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(b) Expected credit loss (Continued)
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+Stage 1
+Low risk
+Credit grade
+(in RMB million)
+Financial assets at amortized cost
+(b) Expected credit loss (Continued)
+(3) CREDIT RISK (CONTINUED)
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 325
+Annual Report 2023
+3,238,054
+11,539
+74,444
+3,152,071
+Carrying amount
+(97,919)
+(27,245)
+(17,281)
+31 December 2023
+Stage 2
+(53,393)
+Stage 3
+1,137,714
+(39,598)
+(3,142)
+(4,237)
+Impairment provision
+1,290,330
+78,583
+19,647
+1,192,100
+Gross carrying amount
+78,583
+78,583
+Default
+28,153
+14,331
+13,822
+High risk
+45,880
+5,316
+40,564
+Medium risk
+1,137,714
+Total
+Loss allowance
+3,335,973
+38,784
+3,219,967
+Carrying amount
+(23,103)
+(24,448)
+(49,802)
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK
+Credit risks refer to the risk of losses incurred by the inabilities of debtors or counterparties to fulfil their
+contractual obligations or by the adverse changes in their credit conditions. The Group is exposed to
+credit risks primarily associated with its deposit arrangements with commercial banks, loans and advances
+to customers, financial assets at amortized cost and debt financial assets at fair value through other
+comprehensive income, reinsurance arrangement with reinsurers, policy loans, margin financing, financial
+guarantee contracts and loan commitments, etc. The Group uses a variety of controls to identify, measure,
+monitor and report credit risk.
+(a) Credit risk management
+Credit risk of banking business
+The banking business of the Group has formulated a set of credit management processes and internal
+control mechanisms, so as to carry out the whole process management of credit business. Credit
+management procedures for its corporate and individual loans of comprise credit origination, credit review,
+credit approval, disbursement, post credit management. In addition, the banking business of the Group has
+formulated procedure manuals for credit management, which clarifies the duties of each part in the credit
+management processes, effectively monitoring credit risk and enhancing credit compliance.
+Credit risks arising from credit commitments are similar to those of loans and advances. Therefore, financial
+guarantees and loan commitments are also subject to the same application, post credit management and
+collateral requirements as loan and advances business.
+Credit risk of investment business
+As to debt investment, the Group rates these investments by internal credit rating policies, selects
+counterparties with high credit quality and sets strict entry criteria.
+The Group's debt investment mainly includes domestic government bonds, the Central Bank bills, financial
+institution bonds, corporate bonds and debt investment schemes, wealth management investments, etc.
+The Group manages the credit risk for these investments mainly through controlling the investment scales,
+selecting counterparties within the financial institutions with appropriate credit quality prudently, balancing
+the credit risks and rate of return of investment and considering the internal and external credit rating
+information comprehensively.
+Credit risk of insurance business
+The Group evaluated the credit rating of the reinsurance companies before signing the reinsurance
+contracts, and chose the reinsurance companies with higher credit quality to reduce the credit risk.
+The limits of policy loans are based on the cash values of valid insurance policies, with appropriate
+discounts, and the validity periods of policy loans are within the validity periods of insurance policies. The
+credit risk associated with policy loans did not have material impact on the Group's consolidated financial
+statements.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 317
+FINANCIAL STATEMENTS
+83,167
+14,988
+(97,353)
+3,318,122
+(in RMB million)
+91,725
+3,205,464
+Gross carrying amount
+38,784
+38,784
+Default
+53,380
+51,916
+1,464
+High risk
+62
+1,782,480
+1,461,329
+1,426,465
+Medium risk
+4,945
+1,777,535
+Low risk
+Total
+Stage 3
+31 December 2022
+Stage 2
+Stage 1
+Credit grade
+34,864
+35,636
+Forward-looking information (Continued)
+175,988
+29,681
+Total
+29,511
+(164)
+2,615
+1,461
+3,077
+(366)
+22,888
+Stage 3
+3,373
+(2,615)
+4,577
+281
+(107)
+1,237
+Stage 2
+at amortized cost
+7,919
+(1,461)
+(4,577)
+1,737
+6,191
+9,549
+40,803
+19
+178
+(28)
+5,505
+Stage 3
+other comprehensive income
+227
+(19)
+(15)
+107
+(67)
+221
+Stage 2
+at fair value through
+3,175
+15
+(86)
+190
+3,056
+Stage 1
+Debt financial assets
+(164)
+(519)
+2,210
+Stage 1
+(11,847)
+20,225
+53,285
+Stage 1
+Loans and advances
+31 December
+Write-offs
+Stage 2
+and Stage 3
+and Stage 3
+Stage 1
+Stage 1
+and Stage 2
+(Note 2)
+for the year
+between
+between
+between
+Transfer
+Transfer
+Transfer
+Charge/
+(recover)
+Net
+increase/
+(decrease)
+(Note 1)
+(5,185)
+5,556
+53
+to customers
+Financial assets
+101,196
+(59,802)
+49,057
+21,739
+90,202
+Total
+27,308
+Finance lease receivable
+17,357
+(23,044)
+23,044
+(53)
+34,659
+2,631
+26,829
+Stage 3
+5,185
+26,245
+(1,117)
+10,088
+Stage 2
+56,531
+5,155
+(59,802)
+8,782
+8,603,535
+108,179
+67,898
+8,779,612
+Credit commitments
+Total
+1,932,131
+10,535,666
+4,621
+112,800
+320
+1,937,072
+68,218
+10,716,684
+31 December 2022 (Restated)
+Carrying amount (in RMB million)
+Stage 1
+Stage 2
+Stage 3
+Maximum credit
+risk exposure
+Cash and amounts due from banks and other
+financial institutions
+774,841
+774,841
+Subtotal
+Balances with the Central Bank and statutory
+107,203
+676
+Total
+4,021
+665
+180,674
+Loans and advances to customers
+3,219,967
+83,167
+14,988
+3,318,122
+Financial assets at amortized cost
+1,187,863
+16,505
+38,985
+1,243,353
+Debt financial assets at fair value through other
+comprehensive income
+2,631,520
+3,564
+1,924
+2,637,008
+95,640
+10,887
+deposits for insurance operations
+Other assets
+295,559
+3,269,769
+107,615
+38,091
+3,415,475
+Loss allowance
+Credit grade
+(in RMB million)
+Loans and advances to customers
+The following table contains an analysis of the credit risk grading of loans and advances to customers,
+financial assets at amortized cost and debt financial assets at fair value through other comprehensive
+income. The carrying amount of financial assets below also represents the Group's maximum exposure to
+credit risk on these assets:
+(b) Expected credit loss (Continued)
+(3) CREDIT RISK (CONTINUED)
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+324
+Note 1: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+Note 2: Changes in PDs, EADS, and LGDs in the current year, arising from regular update of inputs to models.
+8,557
+(519)
+199
+295,559
+95
+Gross carrying amount
+38,091
+The Group internally grades the financial instruments based on the credit quality and risk characteristics.
+The credit rating of the financial instruments could further be classified as "low risk”, “medium risk”, “high
+risk" and "default" according to the internal rating scale. “Low risk” means that the asset quality is good,
+there is sufficient evidence to show that the asset is not expected to have default, or there is no reason
+to suspect that the asset had incurred default. "Medium risk" means that the asset quality is acceptable or
+there are factors revealing potential negative impact on the asset quality, but there is no sufficient reason
+to suspect that the asset had incurred default. "High risk" means that there are factors revealing significant
+adverse impact on the asset quality, but there is no event indicating incurred default. The criteria of
+"default" are consistent with those of "credit-impaired".
+Default
+repurchase agreements
+38,091
+91,109
+405
+91,514
+31 December 2023
+Stage 1
+Financial assets purchased under reverse
+Stage 3
+Total
+Low risk
+1,754,904
+Stage 2
+7,777
+Medium risk
+1,488,318
+41,077
+1,762,681
+1,529,395
+High risk
+26,547
+58,761
+85,308
+120
+2,190
+44,337
+1,857
+146
+repurchase
+Assets sold under agreements to
+3,815
+Accounts payable
+Insurance contract liabilities
+Reinsurance contract liabilities
+48,650
+through profit or loss
+13,270,857
+977,949
+1,628
+70,989
+363,817 256,511
+285,004
+institutions
+Due to banks and other financial
+4,920,418
+1,298 131,211
+Customer deposits and payables
+24,523
+1,710,372
+4,580
+3,234,355
+Financial liabilities at fair value
+to brokerage customers
+300,756
+1,022
+45,562
+1,810,484
+236,229
+713
+73,294
+Derivative cash flows
+25,703
+1,504,499
+8,523,199 14,743,926
+41,389 994,739
+367 11,559
+14,209 245,667
+3,611,873
+992,925
+216,078
+6,897
+89,733
+1,381,110
+577,390
+436,516
+3,048
+47,915
+1,392,727
+225
+48,248
+1,636,286
+120
+Other liabilities
+Lease liabilities
+744,754
+1,296,804
+182
+100
+8,602,520
+8,465,604
+3,474
+60,148
+82
+8,858
+2
+768
+3,560
+241,929
+-
+-
+5,700
+Bonds payable
+75,107
+437,239
+7,695
+-
+72,867
+29,223
+1,854
+9,396
+7,244
+3,112
+4
+(3)
+8
+(1)
+-
+36,730
+461
+9,804
+18,493
+167,794
+622
+5,356
+161,088
+728
+277
+customers
+Loans and advances to
+Finance lease receivable
+Reinsurance contract assets
+Insurance contract assets
+Accounts receivable
+Derivative financial instruments settled
+99,471
+1,463,974
+37,733
+640
+12,050
+264,877
+264,877
+4,079,689
+3,150,720
+694,082
+179,775
+54,303
+809
+457,670 354,002 1,931,421
+520,938 657,214 1,543,867
+96,894
+231,570
+39,357
+112,933
+21,212
+11,631
+971,867
+Other assets
+comprehensive income
+value through other
+Equity financial assets at fair
+through other comprehensive income
+Debt financial assets at fair value
+Financial assets at amortized cost
+through profit or loss.
+Financial assets at fair value
+3,767,104
+1,246,550 718,242
+955,224
+835,038
+57,485
+204,055
+on a net basis
+86,734
+on a gross basis
+4,033
+44,531
+60
+60
+3,973
+44,471
+12,718
+27,780
+12,718
+27,780
+Total financial liabilities
+through profit or loss
+2,792
+Financial liabilities at fair value
+Others
+Currency forwards and swaps
+Interest rate swaps
+Derivative financial liabilities
+Financial liabilities
+5,203,840
+178,864
+4,381,282
+Placements from banks and other financial institutions
+measured at fair value through profit or loss
+2,792
+2,780
+5,572
+43,965
+88,436
+2,637,008
+2,500,790
+Equity financial assets at fair value through other
+comprehensive income
+264,877
+264,771
+264,877
+264,771
+Other assets
+107,203
+117,472
+107,203
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+336
+66
+95,942
+1,934
+48,619
+1,874
+643,694
+2,500,790
+Total financial assets
+453,930
+605
+2,389,281
+11,101
+Debt financial assets at fair value
+through other comprehensive income
+Bonds
+44,978
+318
+44,660
+3,893
+2,400,987
+318
+14,070
+27,015
+27,015
+14,070
+Currency forwards and swaps
+Others
+Interest rate swaps
+Derivative financial assets
+584,593
+1,803,047
+166,654
+170,810
+3,575
+Wealth management investments,
+debt schemes and other investments
+11,101
+Loans and advances to customers measured at
+fair value through other comprehensive income
+264,877
+5,298
+3,277
+3,290
+83,914
+177,673
+81,893
+-
+81,893
+2,021
+177,686
+13
+177,673
+Other equity investments
+Preferred shares
+Equity financial assets at fair value
+through other comprehensive income
+Stocks
+236,021
+2,637,008
+4,446
+3,841
+232,180
+2,621,461
+453,930
+2,637,008
+comprehensive income
+Debt financial assets at fair value through other
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS
+The following table sets out the carrying amount and fair value of the Group's major financial instruments
+by classification:
+(in RMB million)
+Financial assets
+Carrying amount
+FINANCIAL STATEMENTS
+Fair value
+31 December
+31 December
+31 December
+2023
+2022
+2023
+2022
+(Restated)
+31 December
+Ping An Insurance (Group) Company of China, Ltd. 333
+Annual Report 2023
+The Group's financial instruments mainly consist of cash and amounts due from banks and other financial
+institutions, term deposits, bonds, funds, stocks, loans, borrowings, deposits from other banks and financial
+institutions, customer deposits and payables to brokerage customers, etc.
+257,681
+Investment income and
+service fee
+Note 1
+616,070
+616,070
+Investment income
+886,840
+9,075
+9,075
+Investment income and
+service fee
+Note 1
+7,228
+7,228
+Investment income
+Note 1: These assets management products and wealth management products are sponsored by third party financial institutions and the
+information related to size of these structured entities were not publicly available.
+The Group's interests in unconsolidated structured entities are recorded as wealth management
+investments under FVPL, FVOCI and AC, and beneficial right under trust schemes under assets purchased
+under reverse repurchase agreements.
+The unconsolidated structured entities held by the Group included the trust plans consolidated by Lufax
+Holding.
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(Restated)
+Cash and amounts due from banks and other financial
+institutions
+804,077
+774,841
+180,674
+186,858
+180,674
+186,858
+Loans and advances to customers
+3,318,122
+3,238,054
+3,318,122
+3,238,054
+Financial assets at fair value through profit or loss
+1,803,047
+1,640,519
+1,803,047
+1,640,519
+Financial assets at amortized cost
+1,243,353
+1,124,035
+1,272,437
+1,142,252
+Finance lease receivable
+416,420
+1,177,317
+29,278
+29,278
+804,077
+774,841
+Balances with the Central Bank and statutory deposits
+for insurance operations
+285,879
+295,559
+285,879
+295,559
+Financial assets purchased under reverse repurchase
+agreements
+167,660
+91,514
+167,660
+91,514
+Accounts receivable
+35,636
+36,118
+35,636
+36,118
+Derivative financial assets
+44,978
+44,978
+257,681
+454,920
+Wealth management investments, debt schemes and
+other investments
+3,104
+2,564
+5,668
+1,924
+1,924
+3,564
+1,924
+2,637,008
+2,574,907
+54,509
+Stage 1
+Stage 2
+Stage 3
+Total
+2,450,027
+32,994
+14,485
+1,000
+2,450,027
+33,994
+31 December 2022 (Restated)
+1,000
+53,509
+2,574,907
+Credit grade
+Stage 1
+31 December 2023
+Stage 2
+Stage 3
+Total
+Low risk
+Medium risk
+High risk
+Default
+Carrying amount
+2,631,520
+(in RMB million)
+Credit grade
+Low risk
+Medium risk
+High risk
+Default
+Carrying amount
+(4) LIQUIDITY RISK
+14,485
+(in RMB million)
+2,284
+2,497,506
+Total
+269,825
+235,400
+116,808
+177,595
+108
+799,736
+Balances with the Central Bank and
+Over
+5 years
+statutory deposits for
+227,230
+43,746
+648
+1,610
+13,650
+286,884
+Financial assets purchased under
+reverse repurchase agreements
+insurance operations
+1 to 5
+years
+3 to 12
+months
+Less than
+3 months
+1,000
+2,284
+2,500,790
+Liquidity risk is the risk of not having access to sufficient funds or being unable to realize an asset in a
+timely manner at a reasonable price to meet the Group's obligations as they become due.
+The Group is exposed to liquidity risk on insurance policies that permit surrender, withdrawal or other
+forms of early termination. When surrender, withdrawal or other forms of early termination happens, the
+Group determines the amounts that are payable on demand to policyholders in accordance with the terms
+of insurance contracts, which are usually the unearned premiums or the cash values of the relevant part of
+contracts, after deducting the applicable early termination fees. The Group seeks to manage its liquidity
+risk by matching to the extent possible the duration of its investment assets with the duration of its
+insurance policies and to ensure that the Group is able to meet its payment obligations and fund its lending
+and investment operations on a timely basis.
+The banking business of the Group is exposed to potential liquidity risk. The Group utilizes multiple
+regulatory methods, establish comprehensive liquidity risk management framework, effectively recognize,
+measure, monitor and control liquidity risk, maintain sufficient liquidity level to satisfy various funds
+requirement and to face adverse market status. In case of monitoring liquidity risks effectively, the Group
+pays attention to the funds resources and diversified utilization, keeps relatively high liquidity assets
+consistently. The Group monitors the sourcing and usage of funds, deposit to loan ratio, and quick ratio
+on a daily basis. Moreover, when adopting various benchmarks for management of liquidity risk, the Group
+compares the expected results against the ones derived from stress tests, critically assesses the potential
+impact to the future liquidity risk, and formulates remedial actions according to specific situations. The
+Group seeks to mitigate the liquidity risk of the banking business by optimizing the assets and liabilities
+structure, and maintaining stable deposits, etc.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 327
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(4) LIQUIDITY RISK (CONTINUED)
+The table below summarizes the remaining contractual maturity profile of the financial assets, financial
+liabilities, insurance contract liabilities and reinsurance contract liabilities of the Group based on
+undiscounted contractual cash flows/expected cash flows:
+(in RMB million)
+Cash and amounts due from banks and
+other financial institutions
+31 December 2023
+Undated
+Repayable
+on demand
+2,284
+Debt financial assets at fair value through other comprehensive income
+(b) Expected credit loss (Continued)
+(3) CREDIT RISK (CONTINUED)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 335
+Annual Report 2023
+For Level 3 financial instruments, the consideration of being classified as Level 3 is mainly based on the
+significance of the unobservable factors to the overall fair value measurement.
+For Level 2 financial instruments, valuations are generally using observable market inputs, or recent quoted
+market prices. The valuation providers typically gather, analyse and interpret information related to market
+transactions and other key valuation model inputs from multiple sources, and through the use of widely
+accepted internal valuation models, provide a theoretical quote on various securities. Debt securities are
+classified as Level 2 when they are valued at recent quoted price from Chinese interbank market or from
+public valuation service providers. The fair value of debt investments denominated in RMB is determined
+based upon the valuation results by the CCDC. All significant inputs are observable in the market.
+Valuation methods for Level 2 and Level 3 financial instruments
+The level of fair value measurement is determined by the lowest level input that is significant to the
+entire measurement. Assessing the significance of a particular input to the entire measurement requires
+judgement, taking into account factors specific to the asset or liability.
+For the year ended 31 December 2023
+Level 3: inputs which are based on parameters other than observable market data (unobservable inputs).
+Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
+access at the measurement date. A market is regarded as active if quoted prices are readily and regularly
+available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and
+those prices represent actual and regularly occurring market transactions on an arm's length basis. The
+main quoted market price used for financial assets held by the Group is the current closing price. Financial
+instruments included in Level 1 comprise primarily equity investments, fund investments and bond
+investments traded on stock exchanges and open-ended mutual funds;
+The Group uses the following hierarchy for determining and disclosing the fair value of financial
+instruments by valuation techniques:
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY
+The fair value of fixed rate financial assets and liabilities carried at amortized cost is estimated by
+comparing market interest rates when they were first recognized with current market rates for similar
+financial instruments. The estimated fair value of fixed interest-bearing deposits is based on discounted
+cash flows using prevailing money market interest rates for financial products with similar credit risk and
+maturity. For quoted debts issued, the fair values are determined based on quoted market prices. For those
+debts issued where quoted market prices are not available, a discounted cash flow model is used based on
+a current interest rate yield curve appropriate for the remaining term to maturity and credit spreads.
+Fixed rate financial instruments
+Fair value of financial instruments not carried at fair value (Continued)
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED)
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Level 2: either directly (such as price) or indirectly (such as calculated based on price) other than quoted
+prices included within Level 1 that are observable for the asset or liability. This valuation method maximizes
+the use of observable market data and minimizes the use of unobservable inputs;
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments recorded at fair value by level of the fair
+value hierarchy:
+(in RMB million)
+586,429
+475,511
+156,514
+114
+3,547
+182,657
+1,269
+155,131
+Stocks
+289,307
+Funds
+495
+576,971
+8,963
+Bonds
+Financial assets at fair value through profit or loss
+Financial assets
+Total fair value
+Level 3
+Level 2
+Level 1
+31 December 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+334
+For financial assets and financial liabilities that have a short-term maturity (less than three months), it is
+assumed that the carrying amounts approximate to their fair value. This assumption is also applied to term
+deposits, and savings accounts without a specific maturity. For other variable rate instruments, adjustment
+is also made to reflect the subsequent changes in the market rate after initial recognition.
+Assets sold under agreements to repurchase
+39,738
+44,531
+39,738
+44,531
+Derivative financial liabilities
+84,659
+48,619
+84,659
+48,619
+Financial liabilities at fair value through profit or loss
+923,088
+963,718
+923,088
+963,718
+Due to banks and other financial institutions
+Financial liabilities
+117,472
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+241,803
+1,519
+271,737
+271,737
+Financial instruments for which fair value approximates to carrying amount
+The following describes the methods and assumptions used to determine fair value of financial instruments
+measured at amortized cost.
+Fair value of financial instruments not carried at fair value
+269,338
+927,784
+3,431,999
+3,534,539
+962,802
+213,717
+3,431,999
+931,098
+269,338
+964,007
+213,717
+Other liabilities
+Bonds payable
+3,534,539
+customers
+Customer deposits and payables to brokerage
+10,349
+8,858
+10,349
+8,858
+Accounts payable
+241,803
+Derivative financial instruments settled
+2,643,426
+Investment income and
+7,031
+3,098,274
+1,176
+4,662,058
+139,444
+12,790,617
+Due to banks and other financial
+institutions
+Financial liabilities at fair value through
+profit or loss
+280,241
+32,111
+1,883,967
+351,876
+1,544
+937,990
+260
+2,231
+76,451
+3,434
+2,501
+84,877
+217,595
+1,273,243
+475,689
+1,397,386
+101,005
+212,871
+501,325
+546,966
+1,385,528
+Debt financial assets at fair value through
+other comprehensive income
+1,149
+79,815
+246,178
+684,115
+3,004,409
+4,015,666
+Equity financial assets at fair value
+through other comprehensive income
+Other assets
+264,771
+264,771
+69,351
+29,775
+Assets sold under agreements to
+23,361
+repurchase
+4,065
+593,162
+448,189
+Lease liabilities
+Other liabilities
+260
+259
+61,261
+1,632,943
+1,232
+38,291
+1,834,088
+3,959
+66,424
+1,392,212
+824,090
+241,987
+8,678
+101,343
+1,191,067
+232,385
+3,507,332
+Derivative cash flows
+Derivative financial instruments settled
+on a net basis
+Derivative financial instruments settled
+on a gross basis
+Cash inflow
+Cash outflow
+Annual Report 2023
+42,764
+965,325
+539
+14,667
+15,746 283,065
+8,073,813 14,124,383
+Bonds payable
+805,516
+1,284,564
+330
+271,890
+Accounts payable
+4,387
+1,152
+4,204
+612
+Insurance contract liabilities
+59,480
+51,194
+(75,153)
+Reinsurance contract liabilities
+210
+(14)
+(55)
+8,013,239
+(19)
+10,355
+8,048,760
+Customer deposits and payables to
+brokerage customers
+267,495
+Financial assets at amortized cost
+1,746,276
+246,982
+Balances with the Central Bank and
+statutory deposits for insurance
+31 December 2022 (Restated)
+Less than
+3 to 12
+months
+Undated
+Repayable on
+demand
+3 months
+1 to 5
+years
+Cash and amounts due from banks and
+other financial institutions
+Over
+Total
+300,236
+160,910
+130,437
+180,290
+9
+771,882
+operations
+5 years
+(in RMB million)
+(4) LIQUIDITY RISK (CONTINUED)
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Cash inflow
+Cash outflow
+328
+Annual Report 2023
+(8)
+552
+(376)
+(119)
+45
+94
+(959)
+3,344 1,146,342 1,047,088
+(4,303) (1,146,911) (1,050,180)
+(569) (3,092)
+235,881
+(235,306)
+575
+-
+-
+2,432,655
+(2,436,700)
+(4,045)
+Ping An Insurance (Group) Company of China, Ltd.
+Financial assets purchased under reverse
+repurchase agreements
+Accounts receivable
+Reinsurance contract assets
+69,870
+2,055
+32,166
+81,560
+93,346
+494
+209,621
+16,163
+734,127
+991,547
+1,208,446
+811,056
+3,761,339
+profit or loss
+892,336
+15,394
+40,912
+156,246
+394,406
+50,965
+(38)
+8,291
+783
+Finance lease receivable
+Loans and advances to customers
+Financial assets at fair value through
+240,279
+40,836
+598
+1,618
+13,577
+296,908
+905
+85,849
+5,412
+92,166
+6,239
+7,303
+16,156
+7,447
+1
+37,146
+9,831
+service fee
+(100)
+604
+The banking operation's core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio and capital
+adequacy ratio are shown below:
+31 December 2023
+31 December 2022
+Core Tier 1 capital adequacy ratio
+Tier 1 capital adequacy ratio
+Capital adequacy ratio
+9.22%
+8.64%
+(7) CAPITAL MANAGEMENT (CONTINUED)
+10.90%
+13.43%
+13.01%
+(8) THE GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES
+The Group uses structured entities in the normal course of business for a number of purposes, for example,
+structured transactions for customers, to provide finance to public and private sector infrastructure
+projects, and to generate fees from managing assets on behalf of third-party investors. These structured
+entities are financed through the issue of beneficiary notes or trust units to investors. Refer to Note 3.(8)
+for the Group's consolidation consideration related to structured entities.
+The following table also shows the size, the Group's funding and the Group's maximum exposure to
+the unconsolidated structured entities representing the Group's maximum possible risk exposure that
+could occur as a result of the Group's arrangements with structured entities. The maximum exposure is
+contingent in nature and approximates the sum of direct investments made by the Group.
+The size of unconsolidated structured entities and the Group's funding and maximum exposure are shown
+below:
+31 December 2023
+(in RMB million)
+10.40%
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+1,363,413
+495,845
+101,193
+1,783,772
+877,807
+125,337
+819,568
+399,557
+56,976
+166.4%
+124.1%
+177.6%
+217.6%
+219.7%
+220.0%
+The banking business subsidiary measures the capital adequacy ratio in accordance with the Capital Rules
+for Commercial Banks (Provisional). According to the requirements, risk weighted assets for credit risk
+is measured by Weighted Approach, risk weighted assets for market risk is measured by Standardised
+Approach, and risk weighted assets for operation risk is measured by the Basic Indicator Approach.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 331
+FINANCIAL STATEMENTS
+Securitization
+Casualty
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties
+Wealth management products
+managed by affiliated entities
+Wealth management products
+managed by third parties
+Annual Report 2023
+5,702
+5,702
+Investment income
+Ping An Insurance (Group) Company of China, Ltd.
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(8) THE GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES (CONTINUED)
+Unconsolidated structured entities
+The Group's
+maximum
+exposure
+Note 1
+31 December 2022 (Restated)
+Securitization
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties
+Wealth management products
+managed by affiliated entities
+Wealth management products
+managed by third parties
+Size
+Carrying amount
+Interest held by the Group
+43,748
+3,856
+3,856
+(in RMB million)
+Investment income and
+service fee
+10,358
+10,358
+Unconsolidated structured entities
+Size
+Carrying amount
+The Group's
+maximum
+exposure
+Interest held by the Group
+21,639
+3,917
+3,917
+Investment income and
+service fee
+2,685,824
+234,915
+234,915
+Investment income and
+service fee
+Note 1
+580,243
+580,243
+Investment income
+1,013,060
+332
+Ping An Life
+The Group
+Ping An
+Property &
+Credit commitments
+Less than 1 month
+1 to 3 months
+3 to 12 months
+1 to 5 years
+Over 5 years
+Total
+198,948
+31 December 2022
+297,947
+203,173
+572,672
+445,350
+432,052
+1,946,969
+679,558
+486,699
+363,726
+93,804
+Credit commitments
+31 December 2023
+(in RMB million)
+11
+21
+8,006
+1,277,050
+(8,885) (1,281,920)
+129,244
+762,245
+(767,601) (129,054)
+(879)
+(4,870)
+(5,356)
+2,176,545
+(2,187,460)
+190
+(10,915)
+Ping An Insurance (Group) Company of China, Ltd. 329
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(4) LIQUIDITY RISK (CONTINUED)
+The table below summarizes the remaining contractual maturity profile of the credit commitments of the
+Group:
+1,826,960
+Management expects the credit commitments will not be entirely used during the commitment period.
+(5) MISMATCHING RISK OF ASSETS AND LIABILITIES
+The objective of the Group's asset and liability management is to match the maturity and interest rates of
+assets and liabilities. Under the current constraints of the shortage of long-term interest rate bond market,
+however, the Group does not have sufficient long-duration assets for investment to match the duration of
+insurance and investment contract liabilities. As permitted by law regulations and market conditions, the
+Group actively invests in preferred stocks and other broad-term duration assets, and continuously improves
+the allocation of long-duration assets, considering the requirements for asset-liability duration matching
+and revenue-cost matching.
+The Group
+Ping An Life
+Ping An
+Property &
+Casualty
+1,320,654
+415,458
+102,875
+1,714,110
+770,771
+126,230
+823,985
+395,780
+60,734
+160.3%
+105.0%
+169.4%
+208.0%
+194.7%
+207.8%
+31 December 2022
+31 December 2023
+(456)
+Comprehensive solvency margin ratio
+Minimum capital
+(6) OPERATIONAL RISK
+Operational risk is the risk of loss resulting from inadequate or failure of proper internal controls on
+business processes, employees and systems or from uncontrollable external events. Operational risk in this
+context includes legal risk, but does not include strategic risk and reputational risk. The Group is exposed
+to many types of operational risks in the conduct of its business. The Group manages operational risk by
+establishing and continuously improving risk management framework, formalizing policies and standards,
+using management tools and reporting mechanism, strengthening staff education and training.
+(7) CAPITAL MANAGEMENT
+The Group's capital requirements are primarily dependent on the scale, products of insurance business,
+and the type of business that it undertakes, as well as the industry and geographic location in which it
+operates. The primary objectives of the Group's capital management are to ensure that the Group complies
+with externally imposed capital requirements and to maintain healthy capital ratios in order to support its
+business and to maximize shareholders' value.
+330
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+49. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(7) CAPITAL MANAGEMENT (CONTINUED)
+The Group manages its capital requirements by assessing shortfalls, if any, between the reported and
+the required capital levels on a regular basis. Adjustments to current capital levels are made in light of
+changes in economic conditions and risk characteristics of the Group's activities. In order to maintain or
+adjust the capital structure, the Group may adjust the amount of dividends paid, return capital to ordinary
+shareholders or issue capital securities.
+The Group computes solvency margin ratios and recognizes, assesses and manages related risks in
+accordance with the Regulatory Rules on Solvency of Insurance Companies (II), the Notice on the
+Implementation of Regulatory Rules on Solvency of Insurance Companies (II), and the National Financial
+Regulatory Administration's Circular on Improving Regulatory Standards for Solvency of Insurance
+Companies. The Group was compliant with the requirements of regulatory authorities for solvency margin
+ratios as of December 31, 2023.
+The table below summarizes the minimum regulatory capital for the Group and its major insurance
+subsidiaries and the regulatory capital held against each of them.
+Core capital
+Actual capital
+Minimum capital
+Core solvency margin ratio
+Comprehensive solvency margin ratio
+Core capital
+Actual capital
+Core solvency margin ratio
+122
+1,107,349
+(59,251)
+520
+He Jianfeng (v)
+255
+Cai Xun (vi)
+255
+Ouyang Hui (vii)
+Yang Xiaoping
+535
+520
+Chu Yiyun
+510
+Liu Hong
+503
+Ng Kong Ping Albert
+Ng Sing Yip
+520
+520
+2,602
+Yao Jason Bo (iv)
+5,708
+1,246
+21
+42
+7,017
+Soopakij Chearavanont
+5,146
+3,000
+769
+31
+46
+68
+3,914
+Cai Fangfang
+Jin Li
+510
+Huang Wei (xiii)
+Hung Ka Hai Clement (xii)
+236
+ ྃ་་་,,,
+111
+13
+70
+236
+1,859
+520
+110
+520
+110
+255
+65
+22 3 2 2 2 2 2 282 2 2 2 2 2
+Liew Fui Kiang (xi)
+234
+Zhu Xinrong (x)
+248
+Sun Jianyi
+2,130
+1,940
+2
+8
+4,080
+Wang Zhiliang
+1,201
+Gu Liji (xiv)
+270
+Zhang Wangjin (xv)
+287
+Huang Baokui (xvi)
+270
+6,172
+8,275
+42
+25
+Ping An Insurance (Group) Company of China, Ltd.
+54. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+For the year ended 31 December 2022:
+2022
+Emoluments
+Annual Report 2023
+Discretionary
+Ma Mingzhe (iii)
+Xie Yonglin
+Fees
+Salaries
+bonuses(ii)
+Housing
+allowance
+(in RMB thousand)
+344
+142
+548
+1,383
+735
+34
+15
+75
+2,242
+1,191
+548
+548
+142
+548
+548
+142
+Hung Ka Hai Clement (xii)
+548
+Other
+employee
+benefits
+255
+Employer's
+contribution to
+in respect
+4,091
+233
+31
+Tan Sin Yin
+5,708
+2,500
+1,099
+21
+3,959
+2,821
+49
+79
+4,483
+2,966
+8
+2,850
+income tax
+Total
+received or
+receivable in
+respect of director's
+other services
+in connection
+with the management
+of the affairs of
+of accepting
+the Company or
+a retirement
+office as
+its subsidiary
+Individual
+benefit scheme
+director
+undertaking
+Remunerations
+received or
+receivable
+2,930
+65
+115
+2,734
+2,734
+From 18 March 2022
+to 25 March 2022
+RMB47.56 per share
+Ma Mingzhe
+5,468
+777,593
+518,396
+Xie Yonglin
+741,021
+247,007
+494,014
+Cai Fangfang
+259,197
+264,074
+Wang Zhiliang
+87,491
+Xie Yonglin
+307,643
+153,821
+153,822
+Cai Fangfang
+109,365
+87,493
+54,682
+Yao Jason Bo
+153,111
+76,555
+76,556
+Tan Sin Yin
+174,984
+54,683
+88,024
+176,050
+Yao Jason Bo
+798,619
+Cai Fangfang
+Yao Jason Bo
+Tan Sin Yin
+302,440
+302,440
+798,619
+205,441
+536,227
+536,227
+Wang Zhiliang
+15,546
+15,546
+Annual Report 2023
+205,441
+Xie Yonglin
+to 23 March 2023
+From 16 March 2023
+447,689
+149,229
+298,460
+Tan Sin Yin
+455,256
+151,752
+303,504
+Wang Zhiliang
+17,445
+5,815
+11,630
+RMB46.13 per share
+Ma Mingzhe
+832,946
+832,946
+166,668
+166,666
+333,334
+Ma Mingzhe
+236
+57
+236
+57
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 345
+58
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+54. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+(i)
+Other non-monetary benefits include the Key Employee Share Purchase Plan and the Long-Term Service Plan
+346
+234
+67
+51
+520
+110
+510
+130
+503
+127
+520
+110
+510
+130
+62
+2.930
+787
+270
+67
+The participation of the Company's directors and supervisors in the Key Employee Share Purchase Plan is as follows:
+535
+Average price of
+Addition
+Cai Fangfang
+39,901
+39,901
+Yao Jason Bo
+59,853
+59,853
+119,705
+Tan Sin Yin
+74,816
+Wang Zhiliang
+2,495
+2,495
+From 26 April 2021
+to 29 April 2021
+RMB73.13 per share
+74,816
+119,705
+Xie Yonglin
+to 27 February 2020
+Vested
+during
+Period of purchase
+From 24 February 2020
+shares purchased
+Name
+2023
+the year
+during
+the year
+Unvested as at
+31 December
+2023
+RMB80.17 per share
+Ma Mingzhe
+100,000
+100,000
+Unvested as at
+1 January
+4,079
+-
+7
+588
+(51,021)
+69,876
+Changes in other assets
+(506)
+banking and securities business
+Changes in assets purchased under agreements to resell of
+Changes in due to banks and other financial institutions
+706
+(332,746)
+Changes in loans and advances to customers
+1,576
+Changes in inventories
+(3,529)
+330
+Changes in account receivable
+(165,754)
+(570)
+90,799
+Changes in customer deposits and payables to
+387,061
+Cash generated from operations
+62,146
+(100,698)
+Changes in other liabilities
+(25,252)
+127,431
+51,034
+275,281
+317,849
+Changes in insurance contract assets/liabilities
+380,410
+111,984
+brokerage customers
+Changes in assets sold under agreements to repurchase of
+banking and securities business
+(1,332)
+Changes in reinsurance contract assets/liabilities
+other services
+Fair value losses/(gains) on investments at fair value through
+profit or loss
+(151,374)
+(156,452)
+non-banking operations
+(311)
+(563)
+9,039
+equipment, intangible assets and other long-term assets
+Investment income and interest revenue from
+47
+591
+Amortization of long-term deferred expenses
+5,982
+4,792
+Depreciation of right-of-use assets
+Gains on disposal of investment properties, property and
+36,936
+Interest expenses on non-banking operations
+24,346
+(97,449)
+(18,183)
+12,661
+Changes in balances with the Central Bank and statutory deposits
+Changes in amounts due from banks and other financial institutions
+Changes in operating assets and liabilities:
+149,413
+96,691
+Operating profit before working capital changes
+81,920
+79,071
+Net impairment losses of financial assets and other assets
+(3,144)
+(120)
+Foreign exchange gains/(losses)
+22,698
+505,423
+Less: Current income tax charged for the year
+(17,699)
+(27,643)
+Salaries and other short-term employee benefits after tax
+Individual income tax
+(in RMB million)
+(2) COMPENSATION OF KEY MANAGEMENT PERSONNEL OTHER THAN DIRECTORS AND
+SUPERVISORS IS AS FOLLOWS
+Parts of the performance-based remunerations of the Company's senior management will be deferred
+and paid over a period of 3 years in accordance with the Code of Corporate Governance of Banking and
+Insurance Institutions and the Guidelines for Insurance Companies' Remuneration Management (Trial).
+The deferred, unpaid parts are included in the total remunerations received by the Company's senior
+management from the Company during the Reporting Period.
+The estimated amount of total compensation has been provided in the Group's 2023 financial statements.
+The final remunerations of the Company's full-time directors, supervisors and senior management are being
+recognized, and will be disclosed after recognition in accordance with applicable rules.
+42
+2023
+40
+63
+2022
+2023
+Salaries and other short-term employee benefits after tax
+Individual income tax
+(in RMB million)
+The summary of compensation of key management personnel for the year is as follows:
+66
+2022
+29
+26
+received or
+Emoluments
+Remunerations
+2023
+For the year ended 31 December 2023:
+The remuneration of every director and supervisor is set out below:
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+54. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 343
+Annual Report 2023
+17
+20
+(1) KEY MANAGEMENT PERSONNEL COMPRISE THE COMPANY'S DIRECTORS, SUPERVISORS
+AND SENIOR MANAGEMENT
+3,171
+54. COMPENSATION OF KEY MANAGEMENT PERSONNEL
+944,748
+As at 1 January 2023
+(in RMB million)
+This section sets out an analysis of net debt and movements in net debt of current year.
+(2) NET DEBT RECONCILIATION:
+53. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+(CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Cash flows
+Annual Report 2023
+476,776
+360,403
+(1,004)
+(8,959)
+Net cash flows from operating activities
+Changes in income tax payable
+342
+Foreign exchange adjustments
+Other non-cash movements
+As at 31 December 2023
+48,962
+79,217
+22,852
+22,852
+(30,118)
+411
+11,453
+206
+111
+1,079,782
+910,237
+61,045
+(12,194)
+108,500
+(29,377)
+94
+Total
+Bonds payable
+Long-term
+borrowings
+Short-term
+borrowings
+1,072,927
+3,370
+7,508
+7,808
+Ng Kong Ping Albert
+Jin Li
+Wang Guangqian (viii)
+Michael Guo (ix)
+Sun Jianyi
+Wang Zhiliang
+Liu Hong
+Zhu Xinrong (x)
+ឌ ឌ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ គឺ
+548
+548
+142
+548
+548
+Liew Fui Kiang (xi)
+Chu Yiyun
+Ng Sing Yip
+Cai Xun (vi)
+Ouyang Hui (vii)
+1,802
+9
+14
+2,203
+1,449
+Tan Sin Yin
+5,708
+1,702
+33
+43
+7,486
+5,520
+Soopakij Chearavanont
+Yang Xiaoping
+He Jianfeng (v)
+142
+378
+500
+130
+548
+142
+244
+244
+66
+1,506
+548
+641
+16
+2,172
+1,358
+2,130
+1,940
+2
+9
+142
+548
+548
+548
+548
+142
+304
+548
+548
+304
+77
+548
+142
+548
+142
+548
+548
+142
+500
+Ping An Insurance (Group) Company of China, Ltd.
+Yao Jason Bo (iv)
+3,620
+444,202
+480,472
+Total
+89,964
+163,342
+Subtotal
+Annual Report 2023
+84,739
+received or with the management
+Discretionary
+Housing
+(in RMB thousand)
+Ma Mingzhe (iii)
+Fees
+in connection
+Ping An Insurance (Group) Company of China, Ltd. 341
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+Depreciation of property and equipment
+3,645
+4,692
+Amortization of intangible assets
+Depreciation of investment properties
+(Restated)
+142,335
+2022
+120,117
+2023
+Adjustments for:
+Profit before tax
+(in RMB million)
+(1) RECONCILIATION OF PROFIT BEFORE TAX TO NET CASH FLOWS FROM OPERATING
+ACTIVITIES:
+53. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+For the year ended 31 December 2023
+Salaries
+2,242
+bonuses (ii)
+Other
+employee
+benefits
+2,513
+Xie Yonglin
+3,743
+34
+53
+80
+3,587
+3,910
+Cai Fangfang
+3,000
+469
+34
+49
+68
+2,797
+7
+2
+725
+Employer's
+contribution to
+receivable in
+respect of
+of the affairs of
+the Company or
+a retirement
+accepting office
+its subsidiary
+Individual
+benefit scheme
+as director
+undertaking
+Total
+income tax
+2,853
+25
+allowance
+receivable in
+respect of director's
+FINANCIAL STATEMENTS
+Bonds
+3,995
+5,225
+Financial assets purchased under reverse repurchase agreements
+159,347
+299
+907,886
+19,599
+1,142,252
+1,142,252
+134,693
+134,693
+1,007,389
+1,007,389
+170
+170
+Total fair value
+Cash equivalents
+Level 3
+Level 1
+962,802
+962,802
+940,714
+940,714
+22,088
+22,088
+1,272,437
+1,272,437
+164,705
+164,705
+1,107,349
+383
+383
+Level 3 Total fair value
+31 December 2023
+Level 2
+Level 1
+31 December 2022 (Restated)
+Level 2
+Total
+354,238
+40,450
+of transferred
+or continuing
+involvement
+financial assets
+Carrying amount
+of associated
+liabilities
+3,235
+1,487
+2,918
+1,487
+31 December 2022
+Carrying amount
+of transferred
+or continuing
+involvement
+financial assets
+Carrying amount
+of associated
+liabilities
+998
+1,070
+2,115
+2,115
+31 December 2023
+31 December 2022
+(Restated)
+317,130
+Cash
+Term deposits
+Due from banks and other financial institutions
+Placements with banks and other financial institutions
+Balances with the Central Bank
+Subtotal
+3,690
+20,158
+4,165
+11,357
+169,477
+240,091
+80,373
+58,175
+43,432
+Cash and amounts due from banks and other financial institutions
+Cash on hand
+Carrying amount
+Bonds payable
+Total
+50
+6,128
+23,498
+23,498
+10,062
+10,062
+Others
+Currency forwards and swaps
+Interest rate swaps
+Derivative financial liabilities
+Financial liabilities
+4,770,015
+257,755
+6,178
+331,880
+581,700
+Total financial assets
+fair value through other comprehensive income
+Loans and advances to customers measured at
+2,777
+2,777
+comprehensive income
+Placements with banks and other financial institutions
+measured at fair value through other
+264,771
+2,991
+87,734
+174,046
+4,940
+331,880
+3,930,560
+Financial liabilities
+39,688
+39,738
+Financial assets at amortized cost
+Financial assets
+(in RMB million)
+Total
+Bonds payable
+Financial liabilities
+Total
+Financial assets at amortized cost
+Financial assets
+(in RMB million)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments not recorded at fair value but for which fair
+value is disclosed by level of the fair value hierarchy:
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+For the year ended 31 December 2023
+50
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 337
+Annual Report 2023
+128,508
+84,659
+3,819
+3,869
+117,781
+6,858
+78,093
+2,747
+Financial liabilities at fair value through profit or loss
+Total financial liabilities
+4,111
+4,111
+Placements from banks and other financial institutions.
+measured at fair value through profit or loss
+FINANCIAL STATEMENTS
+2,991
+31 December 2023
+52. CASH AND CASH EQUIVALENTS
+170,810
+203,547
+Debt financial assets at fair value through
+other comprehensive income
+As at 1 January
+51,152
+61,234
+Purchase
+2,204
+Disposals
+(209)
+(8,916)
+Issue
+As at 31 December
+546,191
+(49,132)
+(551,693)
+Transfers into Level 3
+2,779
+Total gains/losses
+Losses/gains through profit or loss
+(43)
+2,759
+Losses through other comprehensive income
+(101)
+(627)
+As at 31 December
+4,446
+Settlement
+51,152
+(2,369)
+Losses through profit or loss
+299
+927,784
+Financial assets and liabilities for which fair value approximates carrying amount are not included in the
+above disclosure.
+338
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+Reconciliation of movements in Level 3 financial instruments measured at fair value is as follows:
+(in RMB million)
+Financial assets at fair value through profit or loss
+2023
+2022
+(Restated)
+(14,809)
+As at 1 January
+Disposals
+Transfers into Level 3
+203,547
+201,032
+27,022
+(43,476)
+65,906
+(61,689)
+758
+859
+Transfers from Level 3
+(2,232)
+(192)
+Total gains/losses
+Additions
+(in RMB million)
+Equity financial assets at fair value through
+As at 1 January
+2022
+(in RMB million)
+Financial assets at fair value through profit or loss
+Realized gains
+2,394
+Unrealized gains
+Total
+(4,763)
+(2,369)
+Debt financial assets at fair value through
+other comprehensive income
+2,759
+2,759
+5,153
+(4,763)
+(43)
+(14,852)
+390
+For the year ended 31 December 2023 and the year ended 31 December 2022, there were no significant
+transfers between Level 1 and Level 2 fair value measurements.
+51. TRANSFERRED FINANCIAL ASSETS
+The Group enters into transactions in the normal course of business by which it transfers recognized
+financial assets to third parties or to structured entities. When the Group has neither transferred nor
+retained substantially all the risks and rewards of the financial asset and retained control of the asset, the
+Group continues to recognize the financial asset to the extent of the Group's continuing involvement, in
+which case, the Group also recognizes an associated liability. In other cases where the transferred financial
+assets do not qualify for derecognition as the Group has retained substantially all the risks and rewards of
+these financial assets, the Group continued to recognize the transferred financial assets.
+The Group's subsidiaries, Ping An Bank and Ping An Financial Leasing, entered into loan securitization
+transactions. The Group may retain risks or rewards in the securitization business which would give rise to
+the Group's continuing involvement in the transferred assets. Those financial assets are recognized on the
+statement of financial position to the extent of the Group's continuing involvement, otherwise the financial
+assets are derecognized.
+340
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+51. TRANSFERRED FINANCIAL ASSETS (CONTINUED)
+Other transferred financial assets that do not qualify for derecognition mainly include debt securities
+held by counterparties as collateral under repurchase agreements. The counterparties are allowed to sell
+or repledge those securities sold under repurchase agreements in the absence of default by the Group,
+but has an obligation to return the securities at the maturity of the contract. If the securities increase or
+decrease in value, the Group may in certain circumstances require the counterparties to provide additional
+or return collateral. The Group has determined that it retains substantially all the risks and rewards of these
+securities and therefore has not derecognized them.
+The following table analyses the carrying amount of the above-mentioned financial assets transferred to
+third parties that did not qualify for derecognition or continuing involvement and their associated financial
+liabilities:
+(in RMB million)
+Repurchase transactions
+Assets securitization
+Transfers
+other comprehensive income
+(43)
+(16,229)
+(14,809)
+Additions
+Disposals
+2,991
+2,559
+554
+784
+(270)
+Total gains/losses
+Gains/losses through other comprehensive income
+As at 31 December
+15
+(352)
+3,290
+1,377
+2,991
+Ping An Insurance (Group) Company of China, Ltd. 339
+927,784
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2023
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The gains or losses of level 3 financial instruments included in the income statement for the year are
+presented as follows:
+(in RMB million)
+Financial assets at fair value through profit or loss
+Debt financial assets at fair value through
+other comprehensive income
+2023
+Realized gains
+1,377
+Unrealized gains
+Total
+(16,186)
+Annual Report 2023
+907,886
+1,949
+85,784
+83,995
+498
+1,154
+82,343
+507,080
+517,951
+4,704
+203,987
+309,260
+864
+496,725
+9,491
+Level 3 Total fair value
+Level 2
+Level 1
+31 December 2022 (Restated)
+Currency forwards and swaps
+Others
+Interest rate swaps
+Derivative financial assets
+debt schemes and other investments
+Wealth management investments,
+Stocks
+Funds
+Bonds
+Financial assets at fair value through profit or loss
+Financial assets
+(in RMB million)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments recorded at fair value by level of the fair
+value hierarchy (continued):
+50. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+85,784
+134
+401,228
+19,599
+197,481
+203,547
+174,047
+333,878
+1,035,744
+1
+174,046
+Other equity investments
+Stocks
+through other comprehensive income
+Equity financial assets at fair value
+308,231
+2,500,790
+50,386
+51,152
+257,845
+2,443,212
+6,426
+debt schemes and other investments
+Wealth management investments,
+2,192,559
+Preferred shares
+2,185,367
+766
+531,493
+1,640,519
+11,893
+11,893
+15,602
+1,718
+15,602
+1,783
+29,213
+65
+29,278
+Debt financial assets at fair value
+through other comprehensive income
+Bonds
+6,426
+65
+Interest expenses to
+15176
+62
+59
+Interest revenue from
+33
+Claims paid
+3
+132256
+4
+10
+26
+29
+63
+27
+33
+60
+2022
+6
+Premiums received
+2
+2,879
+Lufax Holding
+2,071
+1,772
+440
+578
+144
+71
+Interest expenses to
+Ping An Health
+2023
+Other expenses to
+1,609
+2,948
+1,998
+Other revenues from
+624
+464
+Interest expenses to
+21
+11
+Interest revenue from
+Other expenses to
+Rental revenue from
+348
+Other expenses to
+- - |-IIN
+1
+1
+2022
+2023
+122
+2022
+RMB35,000,001 - RMB40,000,000
+RMB35,000,000
+-
+-
+-
+RMB25,000,000
+-
+RMB20,000,000
+-
+RMB15,000,000
+-
+RMB10,000,001
+RMB15,000,001
+RMB20,000,001
+RMB25,000,001
+RMB30,000,001
+RMB5,000,001 - RMB10,000,000
+RMB30,000,000
+211IIN 1
+2
+The five highest paid individuals in the Group pay individual income tax in strict accordance with the local
+tax rules. The tax rate is between 15% and 45%.
+Other revenues from
+Interest expenses to
+Rental revenue from
+Claims paid
+Premiums received
+CP Group
+(in RMB million)
+FOLLOWS:
+(2) THE SUMMARY OF SIGNIFICANT MAJOR RELATED PARTY TRANSACTIONS IS AS
+56. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Other revenues from
+As at 31 December 2023, CP Group indirectly held 5.84% (31 December 2022: 6.52%) equity interests in the
+Company and is the largest shareholder of the Company.
+Parent of shareholders
+Shareholder
+Relationship with the Company
+Charoen Pokphand Group Co., Ltd. ("CP Group")
+Shenzhen Investment Holdings Co., Ltd. ("SIHC”)
+Name of related parties
+BELOW:
+(1) SHAREHOLDERS HOLDING MORE THAN 5% OF THE COMPANY'S SHARE ARE AS SET OUT
+56. SIGNIFICANT RELATED PARTY TRANSACTIONS
+SIHC
+Other expenses to
+Ping An HealthKonnect
+18
+Interest expenses to
+667
+Loans and advances to customers
+Customer deposits
+Ping An HealthKonnect
+82
+93
+Accounts receivable and other receivables
+2,885
+1,211
+1,286
+Accounts payable and other payables
+2,704
+Customer deposits
+Ping An Health
+4,304
+147
+Accounts receivable and other receivables
+4,457
+2,698
+Accounts payable and other payables
+4,083
+447
+871
+126
+Accounts receivable and other receivables
+866
+1,511
+1,302
+56
+38
+1,110
+10
+788
+818
+785
+Derivative financial liabilities
+Derivative financial assets
+Customer deposits
+OneConnect
+Accounts receivable and other receivables
+Accounts payable and other payables
+5,289
+177
+213
+Accounts payable and other payables
+Derivative financial liabilities
+821
+Loans and advances to customers
+2,598
+2,233
+Other expenses to
+1,708
+1,407
+Other revenues from
+10
+Interest expenses to
+3
+Annual Report 2023
+Interest revenue from
+47
+9
+306
+104
+27
+51
+32
+28
+Other revenues from
+Other expenses to
+OneConnect
+Ping An Insurance (Group) Company of China, Ltd. 349
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+14,316
+10,880
+Customer deposits
+590
+745
+3,266
+2,657
+101
+117
+31 December 2022
+31 December 2023
+Lufax Holding
+Loans and advances to customers
+Customer deposits
+SIHC
+Customer deposits
+(in RMB million)
+FOLLOWS:
+(3) THE SUMMARY OF BALANCES OF THE GROUP WITH MAJOR RELATED PARTIES IS AS
+56. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
+For the year ended 31 December 2023
+Interest revenue from
+CP Group
+62. STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE
+COMPANY
+In addition to transactions and balances stated above, the Group transferred 100% shareholding of Gem
+Alliance Limited to Lufax Holding, which issued convertible bonds amounting to USD1,953.8 million to the
+Group as the consideration in 2016, and pay interest to the Group every six months at an annual rate of
+0.7375%. In December 2022, Lufax Holding entered into an amended and supplemental agreement with the
+Group pursuant to which the maturity date of 50% of the outstanding principal amount of the convertible
+bonds was extended from October 2023 to October 2026 and the remaining 50% outstanding principal
+amount was redeemed. As at 31 December 2023, the par value of these convertible bonds held by the Group
+amounted to USD976.9 million.
+Others
+Surplus
+reserve
+fund
+General
+reserve
+Retained
+profits
+Total
+128,737
+215
+2,992
+12,164
+395
+32
+ས.
+-
+128,895
+52,755
+273,398
+52,755
+39
+(44,002)
+FVOCI
+reserves
+Share
+premium
+Financial
+assets at
+For the year ended 31 December 2023
+(in RMB million)
+As at 1 January
+Profit for the year
+Other comprehensive income
+Dividend declared
+Employee Share Purchase Plan
+Cancellation of repurchased
+shares
+(44,002)
+Others
+(in RMB million)
+As at 1 January
+Profit for the year
+Other comprehensive income
+Dividend declared
+Employee Share Purchase Plan
+Others
+As at 31 December
+As at 31 December
+(2) RESERVE MOVEMENT OF THE COMPANY
+456
+(5,925)
+2,976
+12,164
+395
+108,854
+63,861
+253,337
+63,861
+4
+(36)
+(32)
+(43,820)
+128,737
+44
+8
+215
+2,992
+12,164
+(43,820)
+44
+211
+128,737
+Total
+Retained
+profits
+2
+122,812
+247
+Annual Report 2023
+12,164
+(5,925)
+2
+395
+456
+137,648
+For the year ended 31 December 2022
+Financial
+assets at
+Share
+premium
+FVOCI
+reserves
+Surplus
+reserve
+Others
+fund
+General
+reserve
+276,723
+62. STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE
+COMPANY (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+Income tax payable
+Lease liabilities
+Other liabilities
+Total liabilities
+Total equity and liabilities
+31 December 2023
+31 December 2022
+20,627
+31,324
+2,440
+1,770
+9,070
+8,452
+30,654
+1,214
+8,000
+8,531
+Due to banks and other financial institutions
+Liabilities
+Total equity
+Retained profits
+(1) STATEMENT OF FINANCIAL POSITION OF THE COMPANY
+(in RMB million)
+Assets
+Cash and amounts due from banks and other financial institutions
+Financial assets purchased under reverse repurchase agreements
+Financial assets at fair value through profit or loss
+Financial assets at amortized cost
+Debt financial assets at fair value through other
+comprehensive income
+Investments in subsidiaries and associates
+Investment properties
+238,113
+Property and equipment
+Right-of-use assets
+Other assets
+Total assets
+Equity and liabilities
+Equity
+Share capital
+Reserves
+Treasury shares
+Intangible assets
+236,919
+1,055
+1,020
+10
+172
+31
+1,492
+1,478
+21,675
+20,936
+311,607
+19,417
+301,618
+MA Mingzhe
+Director
+XIE Yonglin
+Director
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 353
+FINANCIAL STATEMENTS
+354
+The statement of financial position of the Company was approved by the Board of Directors on 21 March
+2024 and was signed on its behalf.
+8
+20,011
+289,932
+28
+27
+995
+995
+169
+31
+456
+11,335
+280,682
+311,607
+18,210
+18,280
+139,075
+144,503
+(5,001)
+(10,996)
+137,648
+128,895
+301,618
+395
+128,895
+273,398
+(4) KEY EMPLOYEE SHARE PURCHASE PLAN
+The Group makes monthly contributions for medical benefits to the local authorities in accordance with
+relevant local regulations for the employees. The Group's liability in respect of employee medical benefits is
+limited to the contributions payable in each period.
+(3) MEDICAL BENEFITS
+The employees of the Group are entitled to participate in and make contributions to various government
+sponsored funds for housing purposes. The Group contributes on a monthly basis to these funds based
+on certain percentages of the salaries of the employees. The Group's liability in respect of these funds is
+limited to the contributions payable in each period.
+(2) HOUSING BENEFITS
+58. EMPLOYEE BENEFITS (CONTINUED)
+For the year ended 31 December 2023
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 351
+Annual Report 2023
+The employees of the Group are mainly covered by various defined contribution pension plans. The Group
+makes and accrues contributions on a monthly basis to the pension plans, which are mainly sponsored by
+relevant government authorities that are responsible for the pension liability to retired employees. Under
+such plans, the Group has no other significant legal or constructive obligations for retirement benefits
+beyond the said contributions, which are expensed as incurred. Certain employees are also provided with
+group life insurance but the amounts involved are insignificant.
+(1) PENSION
+58. EMPLOYEE BENEFITS
+11,784
+7,839
+31 December 2022
+The Group has adopted a Key Employee Share Purchase Plan for the key employees of the Company and
+its subsidiaries. Refer to Note 38 for more details.
+(5) LONG-TERM SERVICE PLAN
+The Company has adopted a Long-term Service Plan for the employees of the Company and its
+subsidiaries. Refer to Note 39 for more details.
+59. CONTINGENT LIABILITIES
+BRAND
+■ Kantar BrandZ
+Ranked No. 85 on the BrandZTM Top 100 Most
+Valuable Global Brands list
+Ranked No. 11 on the BrandZTM Top 100 Most
+Valuable Chinese Brands list
+■Brand Finance
+Ranked No. 1 on the Brand Finance Insurance 100
+list
+Ranked No. 30 on the Brand Finance Global 500 list
+356
+31 December 2023
+Annual Report 2023
+352
+As stated in Note 2.(2), due to the adoption of IFRS 17, the accounting treatment and presentation of
+certain items and balances in the consolidated financial statements have been revised to comply with the
+new requirements. Accordingly, certain prior year adjustments have been made, and certain comparative
+amounts have been restated to conform with the current year's presentation and accounting treatment,
+and a third statement of financial position as at 1 January 2022 has been presented.
+61. COMPARATIVE FIGURES
+On 21 March 2024, the Board of Directors of the Company approved the Profit Distribution Plan of the
+Company for 2023, and declared a final cash dividend of 2023 in the amount of RMB1.50 (tax inclusive) per
+share as disclosed in Note 17.
+(1) PROFIT DISTRIBUTION
+60. EVENTS AFTER THE REPORTING PERIOD
+No provision has been made for pending assessments, lawsuits or possible violations of contracts when
+the outcome cannot be reasonably estimated or management believes the probability is low or remote. For
+pending lawsuits, management also believes that any resulting liabilities will not have a material adverse
+effect on the financial position or operating results of the Group or any of its subsidiaries.
+Owing to the nature of the insurance, bank and other related business, the Group is involved in
+contingencies and legal proceedings in the ordinary course of business, including, but not limited to, being
+the plaintiff or the defendant in litigations and arbitrations. Legal proceedings mostly involve claims on the
+Group's insurance policies and other claims. Provision has been made for probable losses to the Group,
+including those claims where management can reasonably estimate the outcome of the lawsuits taking into
+account any applicable legal advice.
+Ping An Insurance (Group) Company of China, Ltd.
+Contracted but not provided for
+(in RMB million)
+The Group's investment commitments to associates and joint ventures are as follows:
+Letters of credit issued
+Guarantees issued
+Bank acceptances
+(in RMB million)
+(2) CREDIT COMMITMENTS
+10,031
+9,517
+19,548
+16,220
+9,751
+6,469
+Subtotal
+31 December 2022
+Contracted, but not provided for
+Authorized, but not contracted for
+(in RMB million)
+The Group had the following capital commitments relating to investments and property development
+projects.
+(1) CAPITAL COMMITMENTS
+57. COMMITMENTS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+350
+31 December 2023
+CORPORATE SOCIAL RESPONSIBILITY
+■Ministry of Civil Affairs of the PRC
+The 12th China Charity Award
+Unused limit of credit cards
+31 December 2023
+(3) INVESTMENT COMMITMENTS
+Credit commitments disclosed in the table above do not include the financial guarantees accounted for as
+insurance contracts by the Group.
+Credit risk weighted amounts of credit commitments
+506,034
+594,788
+1,826,960
+1,946,969
+889,566
+Total
+960,439
+986,530
+122,487
+148,823
+111,005
+92,852
+703,902
+744,855
+31 December 2022
+937,394
+Ping An Insurance (Group) Company of China, Ltd.
+Top 1% S&P Global ESG Score among Chinese
+companies
+Maintaining "A" and remaining No. 1 in the multi-
+line insurance and brokerage industry in the Asia-
+Pacific region
+Stake acquired
+by HSBC
+2003
+2004
+H-share listing
+2007
+A-share listing
+2011
+Acquiring SDB
+2012
+Founding of Lufax
+2016
+Record high written
+premium
+2017
+Market cap exceeded
+RMB1 trillion
+HSBC Group took a stake in Ping An, becoming its single largest shareholder.
+Founding of
+the Group
+Ping An Insurance (Group) Company of China, Ltd. was established, becoming
+a pilot company for integrated operations in China's financial industry.
+2002
+1996
+1995
+Foreign investors
+According to the Company's articles of association, the Company shall set aside 10% of its net profit
+determined in its statutory financial statements, prepared in accordance with PRC Accounting Standards,
+to a statutory surplus reserve fund. The Company can cease such profit appropriation to this fund
+if its balance reaches 50% of the Company's registered share capital. The Company may also make
+appropriations from its net profit to the discretionary surplus reserve fund provided the appropriation is
+approved by a resolution of the shareholders. These reserves cannot be used for purposes other than those
+for which they are created. Profits are used to offset prior year losses before allocations to such reserves.
+Subject to resolutions passed in shareholders' meetings, the statutory surplus reserve fund, discretionary
+surplus reserve fund and capital reserve can be transferred to share capital. The balance of the statutory
+surplus reserve fund after transfers to share capital shall not be less than 25% of the registered capital.
+In accordance with the relevant regulations, general reserves should be set aside to cover catastrophic
+or other losses as incurred by companies operating in the insurance, banking, trust, securities, futures
+and fund businesses. The Group's respective entities engaged in such businesses would need to make
+appropriations for such reserves based on their respective year-end profit or risk assets, as determined in
+accordance with PRC Accounting Standards, and based on the applicable PRC financial regulations, in their
+annual financial statements. Such reserves are not available for profit distribution or transfer to capital.
+In accordance with the relevant regulations, the net profit after tax of the Company for profit distribution
+is deemed to be the lower of (i) the retained profits determined in accordance with PRC Accounting
+Standards and (ii) the retained profits determined in accordance with IFRSS.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Milestones
+Ping An Insurance Company was established as the first joint-stock insurance
+company in China.
+The Company was renamed Ping An Insurance Company of China,
+becoming a national insurance company.
+Ping An brought on board Morgan Stanley and Goldman Sachs as its
+shareholders, becoming the first financial institution in China to have foreign
+investors.
+Ping An Group enhanced its capital strength by going public in Hong Kong,
+which was the largest initial public offering ("IPO") in Hong Kong that year.
+Founding of
+Building trust
+business presence
+Ping An made a breakthrough in non-insurance financial business by
+establishing Ping An Securities Co., Ltd.
+Ping An acquired ICBC Pearl River Delta Financial Trust Joint Company, which
+was then renamed Ping An Trust & Investment Company.
+1988
+Founding of
+the Company
+1992
+Expanding nationwide
+1994
+Ping An Securities
+Ping An Group was listed on the Shanghai Stock Exchange, which was the
+world's largest IPO of an insurance company by then.
+Ping An became the controlling shareholder of Shenzhen Development Bank,
+which later merged with the original Ping An Bank, was renamed Ping An
+Bank, and built banking business presence across the country.
+Lufax was established as Ping An began to build its technology business.
+OTHER INFORMATION
+Honors and Awards
+In 2023, Ping An maintained its leading brand value, received
+wide recognition and praise, and won various honors and
+awards from domestic and foreign rating agencies and
+media in respect of comprehensive strength, corporate
+governance, corporate social responsibility, and so on.
+CORPORATE STRENGTH
+■ Fortune
+Ranked No. 33 on the Fortune Global 500 list, and
+No. 5 among global financial services companies
+■ Fortune China
+Ranked No. 9 on the Fortune China 500 list
+Ping An Insurance (Group) Company of China, Ltd. 355
+■ Forbes
+CORPORATE GOVERNANCE
+■The Hong Kong Institute of Directors
+Chairman Ma Mingzhe received the Directors Of
+The Year Award 2023
+■Institutional Investor
+Most Respected Enterprise in Asia
+Best Board of Directors
+SUSTAINABILITY
+■MSCI ESG Ratings
+Ranked No. 16 on the Forbes Global 2000 list
+■ S&P's Sustainability Yearbook (China) 2023
+In celebration of its 35th anniversary, Ping An provided numerous customers
+with "worry-free, time-saving, and money-saving" "integrated finance +
+healthcare and elderlycare" services via thanksgiving programs, and gave back
+to society via charitable activities.
+Annual Report 2023
+Ping An Rural
+Communities Support
+2018
+2019
+OneConnect's listing
+2020
+Fighting COVID-19
+2021
+Implementing healthcare
+ecosystem strategy
+35th Anniversary
+2022
+Ping An Life's written premium exceeded RMB300 billion, and new business
+premium exceeded RMB100 billion.
+Ping An hit a record high with a market cap of over RMB1 trillion, ranking first
+among insurance groups and becoming one of the top 10 financial services
+groups across the world. Ping An's brand value ranked first in the global
+insurance industry in several international ratings.
+In response to the government's call for poverty alleviation, Ping An launched
+"Ping An Rural Communities Support" (comprising Village Industry Program,
+Village Doctor Program, and Village Teacher Program) in nine provinces or
+autonomous regions across China at its 30th anniversary.
+OneConnect completed its IPO on the New York Stock Exchange, being the
+first U.S.-listed technology company incubated by Ping An.
+Ping An fought the global pandemic promptly by providing insurance
+protection, healthtech, charitable donations and so on.
+Ping An built a closed loop of supply, demand and payment by exploring an
+innovative Chinese "managed care model" to provide customers with "worry-
+free, time-saving, and money-saving" healthcare services.
+Ping An returned its logo slogan to "Expertise Creates Value" to highlight its
+commitment to providing the most professional financial advisory, family doctor
+and elderlycare concierge services, aiming to build a century-old trusted, first-
+choice service brand.
+2023
+Upgrading the logo
+slogan
+3,457
+91
+(iii)
+210,223
+Tan Sin Yin
+315,335
+Wang Zhiliang
+23,124
+23,124
+315,335
+From 16 March 2023
+Ma Mingzhe
+434,102
+434,102
+to 23 March 2023
+Xie Yonglin
+325,576
+RMB46.06 per share
+420,446
+13,985
+210,223
+137,112
+Tan Sin Yin
+205,668
+Wang Zhiliang
+13,985
+From 18 March 2022
+RMB47.56 per share
+Ma Mingzhe
+420,446
+to 25 March 2022
+Xie Yonglin
+315,335
+Cai Fangfang
+210,223
+Yao Jason Bo
+Cai Fangfang
+Tan Sin Yin
+217,051
+325,576
+217,051
+54. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+(x)
+(xi)
+Zhu Xinrong was appointed as an Independent Supervisor of the Company on 18 July 2022.
+Liew Fui Kiang was appointed as an Independent Supervisor of the Company on 18 July 2022.
+(xii) Hung Ka Hai Clement was appointed as an Independent Supervisor of the Company on 18 July 2022.
+(xiii) Huang Wei ceased to be a Non-executive Director of the Company on 1 July 2022 due to the change of his personal work
+arrangements.
+(xiv) Gu Liji resigned as an Independent Supervisor on 18 July 2022 since his term of office exceed six years.
+(xv) Zhang Wangjin resigned as a Shareholder Representative Supervisor on 18 July 2022 due to personal work arrangements.
+(xvi) Huang Baokui resigned as an Independent Supervisor on 18 July 2022 since his term of office exceed six years.
+55. FIVE HIGHEST PAID INDIVIDUALS
+The total emoluments of the five highest paid individuals in the Group, except for key management
+personnel whose emoluments were reflected in Note 54, are as follows:
+(in RMB million)
+Salaries and other short-term employee benefits after tax
+2023
+For the year ended 31 December 2023
+137,112
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 347
+325,576
+Wang Zhiliang
+23,875
+23,875
+Discretionary bonuses for the Group's executive directors and senior management are determined on the bonus scheme approved
+by the Board of Directors and the personal performance of senior management.
+MA Mingzhe is the Founder, Chairman (Executive Director) of the Company.
+(iv) Yao Jason Bo was re-designated from an Executive Director to a Non-executive Director of the Company on 26 April 2023.
+(v)
+3 3 3 3
+(vi)
+He Jianfeng was appointed as a Non-executive Director of the Company on 1 July 2022.
+Cai Xun was appointed as a Non-executive Director of the Company on 1 July 2022.
+(vii) Ouyang Hui resigned as an Independent Non-executive Director on 20 July 2023 since his term of office exceed six years.
+(viii) Wang Guangqian was appointed as an Independent Non-executive Director of the Company on 20 July 2023.
+(ix) Michael Guo took office as a Co-CEO of the Company on 27 September 2023 and as a Senior Vice President of the Company on 20
+December 2023. Pursuant to Paragraph 24.5 of Appendix 16 to the SEHK Listing Rules, persons disclosed in this table include Mr.
+Michael Guo.
+Annual Report 2023
+FINANCIAL STATEMENTS
+Yao Jason Bo
+210,223
+137,112
+the year
+2023
+RMB79.10 per share
+Ma Mingzhe
+252,762
+252,762
+to 14 May 2019
+Xie Yonglin
+189,571
+189,571
+Cai Fangfang
+126,381
+126,381
+Yao Jason Bo
+126,381
+Unvested as at
+31 December
+126,381
+during
+137,112
+The number of five highest paid individuals in the Group whose emoluments after tax fell within the
+following bands is as follows:
+(ii)
+54. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+(i)
+Other non-monetary benefits include the Key Employee Share Purchase Plan and the Long-Term Service Plan (continued)
+The participation of the Company's directors and supervisors in the Long-term Service Plan is as follows:
+Average price of
+Unvested as at
+1 January
+Addition
+Vested
+Period of purchase
+From 7 May 2019
+shares purchased
+Name
+during
+the year
+Tan Sin Yin
+2023
+Sun Jianyi
+124,752
+124,752
+Tan Sin Yin
+187,128
+Wang Zhiliang
+18,712
+18,712
+Yao Jason Bo
+RMB72.92 per share
+274,224
+274,224
+Xie Yonglin
+205,668
+205,668
+Cai Fangfang
+189,571
+Ma Mingzhe
+124,752
+From 26 April 2021
+to 29 April 2021
+Cai Fangfang
+126,381
+124,752
+126,381
+Wang Zhiliang
+12,638
+12,638
+RMB80.15 per share
+Ma Mingzhe
+From 24 February 2020
+249,504
+249,504
+to 28 February 2020
+Xie Yonglin
+187,128
+187,128
+Annual Report 2023
+Autohome Inc., a subsidiary of the Company
+Ping An Insurance (Group) Company of China, Ltd.
+Charoen Pokphand Group Company Limited, a parent company of
+C.P. Group
+The Bank of New York Mellon
+Founder Securities Co., Ltd., a subsidiary of New Founder Group
+New Founder Holding Development Company Limited, a subsidiary
+of Ping An Life
+360
+Ping An Healthcare and Technology Company Limited, an associate
+of Ping An Financial Technology
+HKEX
+Shanghai Lufax Information Technology Co., Ltd., a subsidiary of
+Lufax Holding
+SSE Listing Rules
+SSE
+SEHK Listing Rules
+SEHK
+Written premium
+CAS
+AMERICAN DEPOSITARY SHARES REGISTRAR
+IFRS
+Ping An E-wallet Electronic Commerce Co., Ltd., a subsidiary of Ping
+An Financial Technology
+Wan Chai, Hong Kong
+Level 17, Ernst & Young Tower, Oriental Plaza,
+No.1 East Changan Avenue,
+17M Floor, Hopewell Centre,
+Ernst & Young (China) Advisory Limited
+RMB
+AUDITORS AND PLACES OF BUSINESS
+Domestic Auditor
+Ernst & Young Hua Ming LLP
+Dongcheng District, Beijing, P.R. China
+Names of Certified Public Accountants
+Huang Yuedong
+Wu Cuirong
+International Auditor
+183 Queen's Road East,
+Ernst & Young (Registered PIE Auditor)
+27/F, One Taikoo Place,
+Quarry Bay, Hong Kong
+LEGAL ADVISER
+DLA Piper Hong Kong.
+25th Floor, Three Exchange Square,
+8 Connaught Place,
+Central, Hong Kong
+H SHARE REGISTRAR
+Computershare Hong Kong Investor Services
+Limited
+979 King's Road,
+CP Group Ltd.
+OneConnect Financial Technology Co., Ltd., an associate of Ping An
+Financial Technology
+New Founder Group
+Ping An Life Insurance Company of China, Ltd., a subsidiary of the
+Company
+Ping An Insurance (Group) Company of China, Ltd.
+Lufax Holding
+Ping An Finserve
+Ping An Technology
+Ping An Financial Technology
+Ping An Overseas Holdings
+Ping An Asset Management
+Ping An Financial Leasing
+Ping An Health Insurance Company of China, Ltd., a subsidiary of the
+Company
+Ping An Securities
+Ping An Wealth Management
+SDB, Shenzhen Development Bank
+Ping An Bank
+Ping An P&C, Ping An Property &
+Casualty
+Ping An Annuity
+Ping An Health Insurance
+Ping An Life
+Ping An, Company, the Company,
+Group, the Group, Ping An Group
+CONSULTING ACTUARY
+Ping An Trust
+Founder Securities
+Ping An Annuity Insurance Company of China, Ltd., a subsidiary of
+the Company
+Ping An Bank Co., Ltd., a subsidiary of the Company
+Autohome
+OneConnect
+Ping An Health
+E-wallet
+Lufax
+Glossary
+OTHER INFORMATION
+Ping An Insurance (Group) Company of China, Ltd. 357
+Annual Report 2023
+Ping An Property & Casualty Insurance Company of China, Ltd., a
+subsidiary of the Company
+Lufax Holding Ltd., an associate of Ping An Financial Technology
+Ping An Technology (Shenzhen) Co., Ltd., a subsidiary of Ping An
+Financial Technology
+Shenzhen Ping An Financial Technology Consulting Co., Ltd., a
+subsidiary of the Company
+China Ping An Insurance Overseas (Holdings) Limited, a subsidiary
+of the Company
+Ping An Asset Management Co., Ltd., a subsidiary of the Company
+Ping An International Financial Leasing Co., Ltd., a subsidiary of the
+Company
+Ping An Securities Co., Ltd., a subsidiary of Ping An Trust
+Ping An Trust Co., Ltd., a subsidiary of the Company
+Ping An Wealth Management Co., Ltd., a subsidiary of Ping An Bank
+Shenzhen Development Bank Co., Ltd., an associate of the Company
+since May 2010, became a subsidiary of the Company in July 2011. It
+was renamed "Ping An Bank Co., Ltd." on July 27, 2012
+Shenzhen Ping An Finserve Co., Ltd., a subsidiary of Ping An
+Financial Technology
+Board Office of the Company
+CSRC
+www.hkexnews.hk
+The Ministry of Finance of the People's Republic of China
+The former China Banking and Insurance Regulatory Commission
+The National Financial Regulatory Administration
+China Securities Regulatory Commission
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 359
+OTHER INFORMATION
+Corporate Information
+REGISTERED NAMES
+Full name of the Company (Chinese/English)
+中國平安保險(集團)股份有限公司
+Ping An Insurance (Group) Company of China, Ltd.
+Short name of the Company (Chinese/English)
+中國平安
+Ping An
+LEGAL REPRESENTATIVE
+Ma Mingzhe
+TYPES OF SECURITIES AND LISTING PLACES
+A share
+The Shanghai Stock Exchange
+H share The Stock Exchange of Hong Kong Limited
+The People's Bank of China
+The Articles of Association of Ping An Insurance (Group) Company
+of China, Ltd.
+The Model Code for Securities Transactions by Directors of Listed
+Issuers as contained in Appendix C3 to the SEHK Listing Rules
+The Securities and Futures Ordinance (Chapter 571 of the Laws of
+Hong Kong)
+The International Financial Reporting Standards issued by the
+International Accounting Standards Board
+All premiums received from insurance polices underwritten by the
+Company, which are prior to the significant insurance risk testing
+and separation of hybrid contracts
+Hong Kong Exchanges and Clearing Limited
+The Stock Exchange of Hong Kong Limited
+The Rules Governing the Listing of Securities on The Stock Exchange
+of Hong Kong Limited
+Shanghai Stock Exchange
+The Rules Governing the Listing of Stocks on Shanghai Stock
+Exchange
+358
+Annual Report 2023
+STOCK SHORT NAMES AND CODES
+Ping An Insurance (Group) Company of China, Ltd.
+SFO
+Model Code
+Articles of Association
+PBC
+Ministry of Finance
+CBIRC
+NFRA
+In this Report, unless the context otherwise indicates, the following expressions shall have the following
+meanings:
+The Corporate Governance Code as contained in Appendix C1 to the
+SEHK Listing Rules
+Corporate Governance Code
+A share
+H share
+中國平安
+Futian District,
+Shenzhen
+PLACE OF BUSINESS
+47th, 48th, 108th, 109th, 110th, 111th, 112th Floors,
+Ping An Finance Center,
+No.5033 Yitian Road,
+Futian District,
+Shenzhen
+POSTAL CODE
+No.5033 Yitian Road,
+518033
+www.pingan.cn
+DESIGNATED MEDIA FOR A-SHARE INFORMATION
+DISCLOSURE
+China Securities Journal
+Shanghai Securities News
+Securities Times
+Securities Daily
+WEBSITES FOR PUBLICATION OF REGULAR
+REPORTS
+www.sse.com.cn
+COMPANY WEBSITE
+LOCATION OF REGULAR REPORTS AVAILABLE
+FOR INSPECTION
+Ping An Finance Center,
+REGISTERED ADDRESS
+601318
+Ping An
+2318 (HKD counter)
+Ping An-R
+82318 (RMB counter)
+AUTHORIZED REPRESENTATIVES
+Tan Sin Yin
+Sheng Ruisheng
+SECRETARY OF THE BOARD OF DIRECTORS
+Sheng Ruisheng
+47th, 48th, 109th, 110th, 111th, 112th Floors,
+COMPANY SECRETARY
+REPRESENTATIVE OF SECURITIES AFFAIRS
+Shen Xiaoxiao
+TELEPHONE
++86 400 8866 338
+FAX
++86 755 8243 1029
+E-MAIL
+IR@pingan.com.cn
+PR@pingan.com.cn
+Sheng Ruisheng
+Glossary
+Chinese Renminbi unless otherwise specified
+The Accounting Standards for Business Enterprises and other
+relevant regulations issued by the Ministry of Finance of the People's
+Republic of China
+34
+Average balance of loans
+and advances
+3,387,714
+3,190,601
+6.2
+Credit cost (4) (%)
+1.85
+2.01
+-0.16 pps
+Other expenses
+(210)
+(222)
+(5.4)
+Profit before tax
+57,718
+57,253
+0.8
+Income tax
+(11,263)
+(11,737)
+(2.1)
+(64,168)
+(62,833)
+Loan impairment loss
+(1,727)
+(0.5)
+ratio(3) (%)
+9.22
+8.64
+0.58 pps
+Operating profit before
+Notes: (1) Deposits, total loans and advances, and their
+components are exclusive of interest receivable and
+payable.
+(2) Deviation of loans more than 60 days overdue = balance
+of loans more than 60 days overdue / balance of non-
+performing loans.
+(3) The minimum regulatory requirement for the core tier 1
+capital adequacy ratio is 7.75%.
+impairment losses on
+assets
+117,022
+128,781
+(9.1)
+Impairment losses on credit
+and other assets
+(59,094)
+(71,306)
+(17.1)
+Including:
+(4.0)
+Net profit
+46,455
+45,516
+(6.6)
+58.4
+57.3
+1.1 pps
+66,047
+70,741
+(6.6)
+56.4
+54.9
+1.5 pps
+5,525
+19,828
+(72.1)
+43.6
+-31.7 pps
+11.9
+Ping An Bank continued to implement its retail
+transformation strategy, maintaining steady revenue and
+operating profit from retail business before impairment
+losses on assets. However, as China's economy was still
+gradually recovering and stabilizing, some retail customers'
+debt repayment capacity remained under pressure.
+Therefore, Ping An Bank increased retail asset write-offs
+and provisioning, resulting in a year-on-year decline in net
+profit from retail business.
+In liability business, Ping An Bank drives fast
+growth in retail deposits through its payroll
+business, payment and settlement services, and
+diversified operations. Retail deposit balance
+grew by 16.7% from the beginning of 2023 to
+RMB1,207,618 million as of December 31, 2023.
+In asset business, Ping An Bank expanded
+medium- and low-risk customer groups, and
+increased home mortgage loans, collateral
+mortgage loans, and new energy vehicle loans
+in response to changes in the external business
+environment. Retail loan balance declined 3.4%
+from the beginning of 2023 to RMB1,977,719
+million as of December 31, 2023, including a
+secured loan balance of RMB1,162,316 million, up
+4.8% from the beginning of 2023.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+103,007
+96,161
+Change (%)
+2022
+2.1
+Notes: (1) Net interest margin = net interest revenue / average
+balance of interest-earning assets.
+(2) Other net non-interest revenue includes investment
+income, foreign exchange gains or losses, other
+revenues and other gains or losses less non-operating
+gains under the segmented income statement.
+(3) Cost-to-income ratio = general and administrative
+expenses/revenue.
+(4) Credit cost = loan impairment losses / average balance
+of loans and advances.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+35
+MANAGEMENT DISCUSSION AND ANALYSIS
+36
+(1,718)
+36
+Ping An Bank's net interest margin narrowed by
+0.37 pps year on year to 2.38% for 2023. The margin
+narrowed as the bank continued to support the
+real economy and adjusted the asset portfolio amid
+the repricing of loans and the fluctuation in market
+interest rates.
+Ping An Bank's net non-interest revenue amounted
+to RMB46,708 million in 2023, down 6.1% year
+on year mainly due to decreases in net non-
+interest revenues from credit card and foreign
+exchange businesses driven by factors including
+the macroeconomic environment. Meanwhile,
+Ping An Bank seized market opportunities and
+achieved growth in net non-interest revenues from
+bancassurance and bond investment businesses.
+RETAIL BUSINESS
+Ping An Bank actively carries out its original mission
+of serving the real economy and supporting people's
+livelihoods with financial services, adhering to its
+retail business strategy. In response to changes in
+the external environment, Ping An Bank increases
+the proportion of high-quality customers, optimizes
+the portfolio of asset business, consolidates the
+foundation of liability business, and enhances asset
+allocation services. By doing so, Ping An Bank
+promotes the high-quality sustainable development
+of its retail business.
+(in RMB million)
+Retail business operating results
+Revenue from retail business
+Proportion of revenue from retail
+business (%)
+Operating profit from retail
+business before impairment
+losses on assets
+Proportion of operating profit
+from retail business before
+impairment losses on assets (%)
+Net profit from retail business
+Proportion of net profit from retail
+business (%)
+Note:
+2023
+Business Analysis
+Banking Business
+Tax and surcharges
+Core tier 1 capital adequacy
+0.45 pps
+130,130
+(9.3)
+Deposits
+3,407,295
+3,312,684
+2.9%
+Average balance of
+interest-earning assets
+4,966,063
+4,738,938
+4.8
+Including: Retail deposits
+1,207,618
+1,034,970
+16.7%
+Net interest margin (1) (%)
+2.38
+2.75
+-0.37 pps
+Corporate deposits
+2,199,677
+117,991
+2,277,714
+Net interest revenue
+2022
+-0.37 pps
+2.75
+2.38
+Net interest margin (%)
+-0.98 pps
+12.36
+11.38
+Weighted average ROE (%)
+-0.04 pps
+0.89
+Ping An Insurance (Group) Company of China, Ltd.
+December
+December
+Analysis of Profit Sources
+(in RMB million)
+Deposits and loans (1)
+31, 2023
+31, 2022
+Change
+(in RMB million)
+2023
+Change (%)
+Annual Report 2023
+(3.4%)
+46,708
+Other net non-interest
+revenue(2)
+17,278
+19,557
+-12.65 pps
+Revenue
+164,699
+179,895
+(8.4)
+Deviation of loans more than
+60 days overdue (2)
+General and administrative
+0.74
+0.83
+-0.09
+expenses
+(45,959)
+(49,387)
+(6.9)
+Capital adequacy ratio
+Cost-to-income ratio (3) (%)
+27.90
+27.45
+0.01 pps
+Net non-interest revenue
+1.05
+290.28
+Provision coverage ratio (%)
+49,765
+(6.1)
+Total loans and advances
+3,407,509
+3,329,161
+2.4%
+Including:
+Including: Retail loans
+Corporate loans
+1,977,719
+2,047,390
+(3.4%)
+1,429,790
+1,281,771
+11.5%
+Net fee and commission
+revenue
+29,430
+30,208
+(2.6)
+Asset quality
+Non-performing loan ratio (%)
+1.06
+277.63
+(11.7)
+REINSURANCE ARRANGEMENTS
+assets (%)
+(in RMB million)
+December 31, 2023
+Carrying value
+December 31, 2022
+Percentage (%)
+Carrying value
+Percentage (%)
+Financial assets measured at fair value through
+profit or loss
+Fixed income
+Stocks
+Equity funds
+1,114,074
+23.6
+933,156
+21.5
+676,958
+14.3
+567,739
+13.1
+117,012
+2.5
+57,334
+1.3
+144,340
+3.1
+146,988
+3.4
+INVESTMENT PORTFOLIO (BY ACCOUNTING MEASUREMENT)
+Other equity financial assets
+(5) Figures may not match the calculation due to rounding.
+(3) Total investments exclude assets of investment-linked insurance.
+Unlisted equities
+106,840
+2.3
+109,797
+2.5
+Long-term equity stakes
+205,281
+4.3
+205,286
+4.7
+Investment properties
+128,059
+2.7
+117,985
+2.7
+Other investments (2)
+18,067
+0.3
+19,014
+0.5
+Total investments
+4,722,228
+100.0
+4,332,918
+100.0
+Notes: (1) Wealth management products include trust plans from trust companies, products from insurance asset management
+companies, and wealth management products from commercial banks.
+(2) Other investments mainly include statutory deposits for insurance operations, three-month or longer-term financial assets
+purchased under reverse repurchase agreements, and derivative financial assets.
+(4) Ping An has implemented IFRS 17 since January 1, 2023, and retrospectively adjusted data for the comparative period as per
+IFRS 17.
+1.2
+Financial assets measured at fair value through
+3.7
+100.0
+4,332,918
+0.85
+Notes: (1) Others include long-term equity stakes, investment properties, and derivative financial assets.
+(2) Total investments exclude assets of investment-linked insurance.
+(4) Figures may not match the calculation due to rounding.
+(3) Ping An has implemented IFRS 17 since January 1, 2023, and retrospectively adjusted data for the comparative period as per
+IFRS 17.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 29
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Insurance Funds Investment Portfolio
+INVESTMENT INCOME
+The Company's insurance funds investment portfolio achieved a comprehensive investment yield of 3.6%
+in 2023, up by 0.9 pps year on year mainly due to a balanced asset allocation strategy and a year-on-year
+improvement in the performance of equity assets. Net investment yield declined by 0.5 pps year on year
+to 4.2% mainly because existing assets matured partially and yields on new additions to the investment
+portfolio were lower.
+(in RMB million)
+2023
+2022
+Change (%)
+Net investment income (1)
+176,424
+180,319
+(2.2)
+Net realized and unrealized gains (2)
+Impairment losses on investment assets
+(51,239)
+(86,459)
+(40.7)
+(1,286)
+(551)
+4,722,228
+175,764
+Total investments
+323,861
+161,095
+3.7
+other comprehensive income
+2,645,104
+56.0
+2,452,325
+56.6
+Fixed income
+2,469,121
+52.3
+2,279,989
+52.6
+Stocks
+175,097
+3.7
+171,462
+4.0
+Other equity financial assets
+886
+874
+Financial assets measured at amortized cost
+Others (1)
+629,160
+13.3
+623,576
+14.4
+333,890
+7.1
+7.5
+133.4
+50,847
+68,399
+2022
+Insurance contract liabilities
+261,153
+247,871
+PAA
+Non-PAA
+244,892
+227,885
+16,261
+19,986
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 27
+MANAGEMENT DISCUSSION AND ANALYSIS
+28
+Business Analysis
+Insurance Funds Investment Portfolio
+The Company's insurance funds investment portfolio grew 9.0% from the
+beginning of 2023 to over RMB4.72 trillion as of December 31, 2023.
+In a complex and volatile market environment, the Company upheld
+a balanced and prudent approach to its insurance funds investment
+portfolio under the guidance of long-term strategic asset allocation in
+2023. Via active and disciplined tactical operations, the portfolio achieved
+a comprehensive investment yield of 3.6% in 2023, up by 0.9 pps year on
+year. The portfolio achieved a 5.2% average net investment yield and a
+5.4% average comprehensive investment yield over the past decade, higher
+than the EV long-run investment return assumption.
+INVESTMENT PORTFOLIO OVERVIEW
+The Company's insurance funds investment portfolio
+is comprised of investable funds from Life & Health
+and property and casualty insurance businesses.
+The Company's insurance funds investment portfolio
+grew 9.0% from the beginning of 2023 to over
+RMB4.72 trillion as of December 31, 2023.
+China's economy recovered and met
+macroeconomic growth expectations in 2023. At the
+stage of economic recovery, China will continue to
+use proactive fiscal policies and prudent monetary
+policies to mitigate risks related to the real estate
+sector, local government debts, and small and
+medium-sized financial institutions and further
+restore consumption and market confidence.
+In a complex and volatile market environment,
+the Company is committed to creating stable
+investment incomes across macroeconomic cycles
+via value investing. The Company's insurance funds
+investment portfolio achieved a comprehensive
+investment yield of 3.6%, up by 0.9 pps year on year,
+and a net investment yield of 4.2%, down by 0.5 pps
+year on year in 2023.
+ASSET-LIABILITY MANAGEMENT
+The Company is committed to creating stable
+investment incomes across macroeconomic cycles
+and meeting liability needs under a liability-driven
+approach, taking solvency as a core metric.
+At the asset allocation level, the Company keeps a
+prudent risk appetite and continuously optimizes
+its 10-year strategic asset allocation across
+macroeconomic cycles. The Company strikes a two-
+dimensional balance between long-duration interest
+rate bonds and risk assets as well as between robust
+equity assets and growth equity assets. Moreover,
+the Company carries out disciplined tactical asset
+allocation, diversifies investment risks, and selects
+excellent managers and high-quality assets to cope
+with various market environments.
+In fixed income investment, the Company
+proactively responds to the risk of falling interest
+rates. The Company lengthened asset durations
+and locked in long-term returns by proactively
+increasing allocation to long-duration low-risk
+bonds, including central and local government
+bonds and policy bank bonds, at a faster pace. The
+duration gap between assets and liabilities narrowed
+continuously.
+In equity investment, the Company actively serves
+the real economy and maintains long-term allocation
+to value-based equity assets under the portfolio
+management principles of balanced allocation
+and risk diversification. Moreover, the Company
+manages an extensive and diversified portfolio of
+growth equity assets via market-based channels,
+identifying excellent managers and responding to
+market changes in a balanced manner. In this way,
+the Company seeks to outperform the market with
+robust long-term investment returns.
+In addition, the Company diversifies the sources of
+assets and incomes by proactively investing in high-
+quality alternative assets and optimizing allocation
+to high-quality overseas assets.
+2023
+The Company continuously strengthens its
+investment research, product innovation and
+post-investment management. The Company's
+investment management covers the whole process
+of "fundraising, investing, management and exit" to
+facilitate rapid identification, reporting, mitigation
+and disposal of investment risks and maximize the
+value of its investments.
+(in RMB million)
+INSURANCE CONTRACT LIABILITIES
+Ping An P&C adheres to a prudent approach to
+its reinsurance business to scale up underwriting
+capabilities, diversify business risks, and ensure
+healthy business growth and stable operating
+results. Ping An P&C maintains close long-standing
+relationships with the world's major reinsurance
+brokers and reinsurers, actively sharing business
+experience and empowering reinsurance with
+technologies. Currently, Ping An P&C conducts
+reinsurance business with nearly 100 reinsurers and
+reinsurance brokers worldwide, including China
+Property & Casualty Re, Swiss Re, SCOR, and
+Munich Re.
+(in RMB million)
+2023
+2022
+Premiums ceded to reinsurers
+16,973
+17,725
+Auto insurance
+5,563
+5,821
+Non-auto insurance
+11,301
+11,778
+Accident and health
+insurance
+109
+126
+Inward reinsurance premium
+258
+36
+Auto insurance
+144
+Non-auto insurance
+114
+36
+Note:
+Premiums ceded to reinsurers and inward reinsurance
+premium are premium data from the measurement of
+reinsurance arrangements in accordance with the Circular
+on the Insurance Industry's Implementation of the No.2
+Interpretation of Accounting Standards for Business
+Enterprises (Bao Jian Fa [2009] No.1) and the Circular
+on Issuing the Regulations regarding the Accounting
+Treatment of Insurance Contracts (Cai Kuai [2009] No.15).
+December 31, December 31,
+1.4
+Annual Report 2023
+INVESTMENT PORTFOLIO (BY CATEGORY)
+Perpetual bonds
+50,388
+1.1
+37,675
+0.9
+Debt schemes
+189,349
+4.0
+182,571
+4.2
+Wealth management products (1)
+227,461
+4.8
+265,107
+6.1
+Equity financial assets
+Stocks
+292,109
+6.2
+228,796
+5.3
+Equity funds
+144,340
+3.1
+146,988
+3.4
+Wealth management products(¹)
+2.7
+Ping An Insurance (Group) Company of China, Ltd.
+116,749
+113,991
+(in RMB million)
+Cash and cash equivalents
+Term deposits
+Debt financial assets
+Bond investments
+Bond funds
+December 31, 2023
+Carrying value
+Percentage (%)
+December 31, 2022
+Carrying value Percentage (%)
+121,613
+2.6
+144,508
+3.3
+206,076
+4.4
+234,142
+5.4
+2,743,086
+58.1
+2,364,493
+54.6
+107,169
+2.3
+108,960
+2.5
+Preferred stocks
+2.4
+Total investment income
+100.0
+93,309
+27.45
+27.90
+Cost-to-income ratio (%)
+(8.4)
+2.1
+45,516
+46,455
+Net profit
+0.45 pps
+179,895
+Revenue
+Operating results
+Change (%)
+2022
+2023
+(in RMB million)
+Ping An Bank's revenue totaled RMB164,699 million in
+2023, down 8.4% year on year mainly due to ongoing
+support for the real economy, the adjusted asset
+portfolio, and market volatilities. Ping An Bank
+improved operational cost-effectiveness via digital
+transformation, strengthened asset quality control
+and management, and enhanced non-performing
+asset recovery and disposal. Net profit grew by 2.1%
+year on year to RMB46,455 million in 2023.
+164,699
+Average return on total
+123,899
+Annual Report 2023
+10.7
+4.92
+2.55
+Electric power
+6.6
+4.67
+5.13
+Infrastructure and development zones
+15.8
+4.68
+5.60
+Others (water supply, environmental protection,
+railway, and so on)
+23.0
+4.63
+3.93
+Non-banking financial services (2)
+16.7
+KEY INDICATORS
+Ping An Bank (excluding Ping An Wealth
+Management) had 109 branches and 1,201 business
+outlets as of December 31, 2023.
+Ping An Bank adheres to its mission to be "China's
+most outstanding, world-leading smart retail bank"
+under the strategy of "strong retail banking, selective
+corporate banking, and specialized interbank business."
+Ping An Bank continuously upgrades its retail,
+corporate and interbank business strategies, enhances
+its ability to serve the real economy, strengthens
+risk management, comprehensively advances digital
+transformation, and maintains steady overall business
+performance.
+BUSINESS OVERVIEW
+(3) The real estate industry is broadly defined as comprising: real estate financial products with funds directly invested in real
+estate projects; and trust schemes, infrastructure investment schemes, project funding schemes, and so on with funds used
+indirectly in connection with real estate enterprises.
+(4) Some industries have been grouped into "others" as they account for small proportions.
+(5) Figures may not match the calculation due to rounding.
+The Company pays close attention to credit risk in the market, ensuring the overall risks of debt schemes
+and debt wealth management products held by Ping An in its insurance funds investment portfolio are
+under control. Debt schemes and debt wealth management products in the Company's insurance funds
+investment portfolio have good credit ratings. Over 96.4% of the debt schemes and trust plans held by
+Ping An have AAA external ratings, and about 1.0% of them have AA+ external ratings. Aside from some
+high-credit entities which do not need credit enhancement for financing, most of the assets held by
+the Company have guarantees or collateral. In terms of industry and geographic distribution, Ping An
+proactively avoids high-risk industries and regions. Ping An's target assets are diversified, mainly in the
+non-banking financial services industry, the expressway industry and so on in economically developed and
+coastal areas including Beijing, Shanghai, and Guangdong.
+32
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+EQUITY WEALTH MANAGEMENT PRODUCTS
+Equity wealth management products in the Company's insurance funds investment portfolio totaled
+RMB68,399 million as of December 31, 2023, accounting for 1.4% of the portfolio. Most equity wealth
+management products held by Ping An are from insurance asset managers. These products' underlying
+assets are mainly tradable shares of domestic and foreign high-quality companies in the secondary market,
+indicating no significant liquidity risk. Private equity funds account for a small proportion, and their
+underlying assets are mainly equities in central or local governments' partnerships, with risks under control.
+REAL ESTATE INVESTMENTS
+The balance of real estate investments in the Company's insurance funds investment portfolio was
+RMB203,987 million as of December 31, 2023, accounting for 4.3% of the portfolio. The real estate investments
+were mainly in real properties (including developer-owned real properties invested in directly or in the
+form of equity stakes in project companies) measured at cost, which represented 78.4% of real estate
+investments. Such investments were made primarily in rent-collecting properties including premium
+commercial and office properties, logistics real estate, industrial parks, and long-term rental apartments,
+to match the duration of liabilities, with solid track records. Besides, debt investments and other equity
+investments accounted for 17.3% and 4.3% of real estate investments respectively.
+INVESTMENT RISK MANAGEMENT
+The Company attaches great importance to risk management in matching costs and returns, and has
+established a risk appetite framework in which the matching of costs and returns is a key quantitative
+indicator. The Company conducts regular reviews and strict stress tests which are embedded in the asset
+allocation process with ex ante risk management. In the event of increased market volatility, the Company
+I will carry out intensified and more frequent stress tests to ensure the soundness of the portfolio even
+under extreme market impacts.
+The Company has further strengthened investment rules and processes. To continuously optimize end-to-
+end risk management, the Company has standardized its business processes, improved its investment risk
+management framework, and enhanced key processes including risk admittance strategies, credit rating,
+counterparty and issuer credit facility management, concentration management, risk monitoring, and
+emergency management. Moreover, the Company employs technologies to empower the management of
+key post-investment matters and constantly optimizes its risk warning platform. Based on consolidated
+statements of investment portfolios, the Company monitors comprehensive risk signals covering market
+fluctuations, public sentiment, financial changes and so on, and closely watches forward-looking indicators
+automatically generated by systems. By using smart analytics models, the Company conducts rapid risk
+identification, reporting, mitigation and disposal.
+The Company further strengthens substantive risk management in addition to meeting regulatory
+requirements concerning investment concentration. The Company improves its policies and procedures
+for the management of investment concentration in a prudent, comprehensive, dynamic, and independent
+manner. The Company optimizes the Group's and its member companies' investment concentration limits.
+Moreover, the Company enhances the setting, using, warning, and adjustment mechanisms of credit
+limits for major clients and the monitoring and management of key sectors and risk areas. In this way,
+the Company prevents the risk of investment overconcentration in certain counterparty(ies), sector(s),
+region(s) and asset class(es) to avoid potential indirect threats to the Company's solvency, liquidity,
+profitability or reputation.
+The Company keeps a close eye on the market credit conditions, and strengthens research and forward-
+looking analysis on credit risk. The Company constantly upgrades its risk monitoring framework and risk
+management information system, and improves its risk management databases. In this way, the Company
+ensures systematic management of risks in asset-liability matching and investment portfolios.
+(2) Non-banking financial services refer to financial institutions other than banks, including insurers, asset management companies,
+and financial leasing companies.
+Expressway
+Notes: (1) Debt schemes and debt wealth management products were classified by industry in line with Shenyin Wanguo's industry
+classification.
+Others
+Ping An Bank promoted the high-quality sustainable development of its
+retail business. Retail assets under management ("AUM") rose 12.4% from
+the beginning of 2023 to RMB4,031,177 million, and retail deposit balance
+grew by 16.7% from the beginning of 2023 to RMB1,207,618 million as of
+December 31, 2023.
+Ping An Bank continuously strengthened risk management and maintained
+adequate risk provisions. Non-performing loan ratio was 1.06% and
+provision coverage ratio was 277.63% as of December 31, 2023.
+Ping An Bank maintained steady business performance. Net profit grew by
+2.1% year on year to RMB46,455 million in 2023. Core tier 1 capital adequacy
+ratio increased by 0.58 pps from the beginning of 2023 to 9.22% as of
+December 31, 2023.
+Business Analysis
+Banking Business
+33
+5.30
+2.03
+Real estate industry (3)
+12.5
+4.80
+2.85
+14.7
+4.58
+3.05
+100.0
+4.80
+3.29
+Total
+4.27
+Ping An Insurance (Group) Company of China, Ltd.
+56.1
+3.0
+2.4
+0.6 pps
+3.6
+2.7
+0.9 pps
+4.3
+4.9
+-0.6 pps
+3.2
+2.8
+0.4 pps
+3.6
+2.6
+1.0 pps
+Notes: (1) Net investment income includes interest income from deposits and debt financial assets, dividend income from equity financial
+assets, operating lease income from investment properties, and the share of profits and losses of associates and joint ventures.
+(2) Net realized and unrealized gains include capital gains from securities investments and fair value gains or losses.
+(3) Comprehensive investment income excludes a fair value change of RMB120,605 million in debt investments at fair value through
+other comprehensive income backing Life & Health business.
+(4) Average investment assets used as the denominator are computed in line with principles of the Modified Dietz method.
+Computation of investment yields excludes changes in fair values of debt investments at fair value through other
+comprehensive income backing Life & Health business.
+The average investment yields on the Company's insurance funds investment portfolio for the past 10 years
+are higher than the EV long-run investment return assumption (4.5%).
+Average net investment yield (%)
+Average total investment yield (%)
+Average comprehensive investment yield (%)
+30
+Annual Report 2023
+2014-2023
+5.2
+5.0
+5.4
+-0.5 pps
+4.7
+4.2
+Comprehensive investment yield (4) (%)
+32.8
+Comprehensive investment income (3)
+147,907
+100,220
+47.6
+Net investment yield (4) (%)
+4.2
+4.7
+-0.5 pps
+Total investment yield (4) (%)
+3.0
+2.4
+0.6 pps
+Ping An Insurance (Group) Company of China, Ltd.
+Comprehensive investment yield (4) (%)
+2.7
+0.9 pps
+Life & Health's and property and casualty insurance business's investment yields in 2023 are as below:
+2023
+2022
+Change (%)
+Life & Health
+Net investment yield (4) (%)
+Total investment yield (4) (%)
+Comprehensive investment yield (4) (%)
+Ping An P&C
+Net investment yield (4) (%)
+Total investment yield (4) (%)
+3.6
+4.71
+CORPORATE BONDS
+DEBT SCHEMES AND DEBT WEALTH MANAGEMENT PRODUCTS
+Debt schemes and debt wealth management products include debt investment schemes undertaken by
+insurance asset management companies, debt trust plans issued by trust companies, and debt wealth
+management products issued by commercial banks. Debt schemes and debt wealth management products
+in the Company's insurance funds investment portfolio totaled RMB416,810 million as of December 31, 2023,
+accounting for 8.8% of the portfolio, down 1.5 pps from the beginning of 2023.
+The Company manages risks in debt schemes and debt wealth management product investments at
+three levels. The first level is asset allocation. The Company has developed a set of rational, effective
+asset allocation models. While keeping overall risks within the risk appetite, the Company formulates a
+strategic asset allocation plan for each account, and sets upper and lower limits on the proportions of asset
+allocation. In tactical asset allocation, the Company gives opinions on capital allocation to debt schemes
+and debt wealth management products according to the funding level in each account, the required return
+and liquidity, and similar assets' relative attractiveness. The second level is internal credit risk management.
+The Company has established a comprehensive credit analysis methodology, an excellent internal credit
+analysis team, and a robust investment admittance management process. All investment instruments must
+meet the conditions for admittance specified by the Company's internal credit rating team, and must be
+approved by a relevant committee. The third level is post-investment management. The Company ensures
+adequate assessment and dynamic management of risks in investment assets by closely monitoring
+investments and strictly conducting rapid risk identification, reporting, mitigation and disposal.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Insurance Funds Investment Portfolio
+31
+Investment
+Nominal yield
+Industry
+proportion (%)
+(%)
+Remaining
+maturity (year)
+Infrastructure
+Structure and Yield Distribution of Debt Schemes and Debt Wealth Management Products
+The Company held RMB81,913 million worth of corporate bonds in its insurance funds investment portfolio
+as of December 31, 2023, which accounted for 1.7% of the total investment assets, down 0.4 pps and 0.5
+pps from the beginning of 2023 and the beginning of 2022 respectively. Corporate bond portfolio enjoys
+high credit ratings with about 99.3% rated AA or higher externally and about 61.5% having AAA or higher
+external ratings. In terms of credit loss risk, corporate bonds in the portfolio are secure as their risks are
+under control. For risk management of corporate bonds, the Company ensures end-to-end assessment
+and management of investment risks through asset allocation, admittance management, and dynamic
+review. The Company established an internal credit rating team in 2003. Since then, the team has conducted
+admittance management of corporate bond investments in strict accordance with internal credit ratings,
+and enhanced the review and adjustment of ratings to ensure they reasonably reflect bond issuers' credit
+standings. Moreover, the Company carries out ex ante monitoring of potential risks in corporate bonds
+on the basis of a bond issuer list, and has put in place a rapid response mechanism that deals with public
+sentiment warnings. The Company effectively manages the review and reporting of corporate bonds to
+enhance the efficiency of risk warning and management.
+Note:
+Ping An's AUM increased steadily to approximately RMB7 trillion as of
+December 31, 2023.
+The Company continuously enhances its capabilities of making asset
+allocation, achieving stable long-term returns, and managing multi-asset
+portfolios to deliver robust and sustainable returns to customers.
+BUSINESS OVERVIEW
+The Company conducts asset management business
+primarily through companies including Ping An
+Securities, Ping An Trust, Ping An Financial Leasing,
+and Ping An Asset Management. Ping An's AUM(1)
+increased steadily to approximately RMB7 trillion as
+of December 31, 2023.
+Affected by the macroeconomic environment, some
+assets came under pressure due to rising credit risks
+and volatile capital markets in 2023. The Company
+managed risks actively, made provisions proactively
+and prudently, and revaluated some investments. As
+a result, the profit of asset management business
+declined.
+The Company continuously enhances its capabilities
+of making asset allocation, achieving stable long-
+term returns, and managing multi-asset portfolios
+to deliver robust and sustainable returns to
+customers. Staying customer-centric, the Company
+will continuously strengthen risk management,
+optimize asset-liability management, pursue high-
+quality development, and proactively help improve
+the real economy's quality and efficiency. Moreover,
+the Company will continuously increase support for
+major national strategies and projects in key areas.
+0.05 pps
+0.02 pps
+The Company provides securities brokerage, futures
+brokerage, investment banking, asset management,
+and financial advisory services through Ping An
+Securities and its subsidiaries.
+Ping An Securities adheres to its strategy of
+building a smart securities services platform under
+Ping An's integrated financial services strategy.
+Ping An Securities focuses on boosting ROE as
+well as optimizing existing business and achieving
+breakthrough growth by promoting integrated
+finance, professional quality and technological
+empowerment. Ping An Securities implemented five
+measures, namely customer insight and resource
+integration, process reengineering, data support,
+internal control enhancement, and organizational
+guarantee. As a result, business performance
+remains steady.
+40
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Securities furthered its strategic
+transformation for brokerage business. Ping An
+Securities advanced the strategy of innovative
+customer acquisition, customer development,
+and institutional brokerage. Being customer-
+centric, Ping An Securities built a complete
+digital investment advisory service system
+and a leading smart brokerage platform by
+leveraging contents and digital tools. Ping An
+Securities ranked 1st in the industry by the
+number of retail customers (over 23 million)
+and among the top three by the activeness of
+app users as of December 31, 2023. The market
+share of Ping An Securities in terms of equity
+and fund trading volume (excluding seat
+leasing) (1) reached 3.62% in 2023.
+Asset Management Business
+SECURITIES BUSINESS
+38
+Business Analysis
+Ping An Insurance (Group) Company of China, Ltd. 39
+(%)
+Benefiting from net profit growth and refined capital
+management, Ping An Bank's core tier 1 capital
+adequacy ratio, tier 1 capital adequacy ratio and
+capital adequacy ratio rose by 0.58 pps, 0.50 pps and
+0.42 pps from the beginning of 2023 respectively as
+of December 31, 2023.
+CAPITAL ADEQUACY
+In respect of corporate asset quality, Ping An
+Bank's corporate non-performing loan ratio was
+0.63% as of December 31, 2023, up by 0.02 pps from
+the beginning of 2023. Ping An Bank focused on
+key industries, regions and customers, selected
+industries with low cyclicality, stable growth and
+good asset quality, and reduced exposure to high-
+risk customers. As a result, corporate credit metrics
+remained good.
+Ping An Securities adhered to its business
+strategy of selective investment banking. In
+investment bank business, Ping An Securities
+continued to enhance its industry focus,
+and stepped up efforts in the key areas
+and industries under a customer-centric
+approach. Moreover, Ping An Securities
+actively participated in product innovations
+and responded to the government's call to
+serve the real economy. Ping An Securities
+remained among top players in the industry by
+bond underwriting scale, ranking 1st in asset-
+backed securities (2) volume and 6th in bond (2)
+underwriting respectively in 2023.
+In respect of retail asset quality, Ping An Bank's
+retail non-performing loan ratio rose by 0.05 pps
+from the beginning of 2023 to 1.37% as of December
+31, 2023. Ping An Bank constantly increased reviews
+of its pre-lending policies, strictly controlled
+customer admittance, improved risk prevention and
+management, proactively expanded loan collection
+channels, and enhanced efforts to dispose of non-
+performing loans. Moreover, Ping An Bank steadily
+restructured its retail lending business portfolio by
+gradually increasing the proportion of secured loans.
+Ping An Bank improved customer risk identification
+with industry-leading technologies and risk models,
+and enhanced its ability to withstand risks by
+implementing differentiated risk management
+policies.
+Capital adequacy ratio
+Core tier 1 capital adequacy
+ratio
+Ping An Insurance (Group) Company of China, Ltd.
+Change
+Non-performing loan ratios
+Retail loans
+Corporate loans
+Annual Report 2023
+1.37
+0.63
+1.32
+0.61
+December
+31, 2022
+MANAGEMENT DISCUSSION AND ANALYSIS
+December
+31, 2023
+Change
+Annual Report 2023
+OVERVIEW OF PING AN WEALTH MANAGEMENT
+Ping An Wealth Management, a wholly-owned
+subsidiary of Ping An Bank, continuously develops
+channels, strengthens its investment research
+framework, adheres to prudent investment
+strategies, diversifies its product portfolio, and
+strengthens risk management. The balance of wealth
+management products managed by Ping An Wealth
+Management increased by 14.2% from the beginning
+of 2023 to RMB1,013,060 million as of December 31,
+2023.
+Ping An Bank and its wholly-owned subsidiary Ping
+An Wealth Management Co., Ltd. ("Ping An Wealth
+Management") are included in the computation of the
+above capital adequacy ratios. According to the Additional
+Regulations for Systematically Important Banks (Trial) and
+the 2022 List of Systematically Important Banks in China,
+Ping An Bank is included in the first group on the list, and
+shall meet conditions including a 0.25% supplementary
+capital ratio effective from January 1, 2023, which means the
+minimum regulatory requirements for the core tier 1 capital
+adequacy ratio, tier 1 capital adequacy ratio, and capital
+adequacy ratio are 7.75%, 8.75%, and 10.75% respectively.
+Note:
+0.42 pps
+13.01
+December
+31, 2022
+13.43
+10.40
+10.90
+Tier 1 capital adequacy ratio
+Capital adequacy ratio
+0.58 pps
+8.64
+9.22
+0.50 pps
+(1) The AUM is the sum of AUMS of Ping An Securities,
+Ping An Trust, Ping An Financial Leasing, Ping An Asset
+Management and so on.
+Selected customers: Ping An Bank has
+established a tiered development framework
+for customers from strategic ones to small
+and micro-enterprises to build "long-term❞
+operational capabilities. Ping An Bank had 754
+thousand corporate customers as of December
+31, 2023, up by 138.1 thousand or 22.4% from the
+beginning of 2023.
+(in thousand)
+3,407,509
+3.4
+34,861
+36,036
+(1.4)
+60,592
+59,732
+3,329,161
+Special mention
+Non-performing loans
+3,233,708
+3,311,741
+Loan quality
+Pass
+Change (%)
+December
+31, 2022
+December
+31, 2023
+(in RMB million)
+2.4
+2.4
+1.06
+1.05
+December
+31, 2023
+(%)
+-0.09 pps
+0.87
+0.78
+Percentage of loans more
+than 60 days overdue (%)
+mention loans (%)
+Provision coverage ratio (%)
+Provision to loan ratio (%)
+Total loans and advances
+Non-performing loan ratio (%)
+Percentage of special
+-0.10 pps
+3.04
+2.94
+290.28 -12.65 pps
+277.63
+-0.07 pps
+1.82
+1.75
+0.01 pps
+China's macroeconomy stabilized and resumed an
+upward trend in 2023. However, business entities still
+needed to be invigorated, and repayment capacity
+of retail customers and small and medium-sized
+enterprises remained under pressure. In line with
+national strategies, Ping An Bank actively served
+the real economy, supported non-state-owned
+enterprises and MSMEs, enhanced non-performing
+asset disposal, and kept overall asset quality stable.
+Number of retail customers (1)
+ASSET QUALITY
+In respect of investment trading, Ping An Bank
+maintains prudent investment by continuously
+strengthening macroeconomic analysis and
+appropriately allocating investment portfolios
+while ensuring the liquidity and security of
+assets. Moreover, Ping An Bank leverages
+its professional financial market trading
+capabilities to expand the market making
+business. Ping An Bank boosts market liquidity
+and trading efficiency by enhancing two-way
+market-making quotes in key sectors including
+green bonds, small and micro-enterprise
+bonds, and rural vitalization bonds. Ping An
+Bank's market share measured by bond trading
+volume was 3.2% in 2023, with RMB2.67 trillion of
+cash bonds sold by institutions, up 21.4% year
+on year.
+1,377.5
+1.9
+123,080.0
+125,432.0
+31, 2022 Change (%)
+December
+31, 2023
+December
+1,265.2
+Retail AUM (in RMB million)
+customers (2)
+Private banking
+Including:
+(in thousand)
+customers
+Wealth management
+Including:
+(in thousand)
+8.9
+90.2
+80.5
+Leveraging professional investment trading and
+customer service capabilities, Ping An Bank expands
+the bond market making business, diversifies
+customer business offerings, and promotes financial
+markets' high-quality development.
+INTERBANK BUSINESS
+Business Analysis
+Banking Business
+Ping An Insurance (Group) Company of China, Ltd. 37
+Annual Report 2023
+year.
+Selected products: Focusing on core customer
+groups, Ping An Bank enhances its sector-
+specific, differentiated and comprehensive
+product portfolio, and develops innovate
+business models with its "finance + technology"
+strength to offer comprehensive services. Ping
+An Bank's supply chain financing amounted to
+RMB1,333,185 million in 2023, up 14.1% year on
+Selected sectors: Building sector-specific
+differential advantages, Ping An Bank focuses
+on new energy, next-generation infrastructure,
+and new manufacturing to develop new
+momentum for selected sectors. Investments in
+new energy, next-generation infrastructure, and
+new manufacturing totaled RMB204,552 million
+in 2023, up 32.5% year on year.
+•
+In corporate business, Ping An Bank closely
+followed national strategies, and continued to
+increase financing support for key areas including
+the manufacturing sector, specialized and
+sophisticated enterprises that produce new and
+unique products, non-state-owned enterprises,
+micro-, small and medium-sized enterprises
+("MSMES"), rural vitalization, green finance, and
+infrastructure. Ping An Bank developed and
+strengthened strategic customer groups to serve
+the real economy. Corporate loan balance grew by
+11.5% from the beginning of 2023 to RMB1,429,790
+million as of December 31, 2023. Corporate deposit
+balance declined 3.4% from the beginning of 2023
+to RMB2,199,677 million as Ping An Bank responded
+to rising foreign currency interest rates by
+appropriately decreasing corporate deposits held in
+foreign currencies, controlling the cost of deposits,
+and improving the deposit portfolio.
+CORPORATE BUSINESS
+(2) A qualified private banking customer refers to a
+customer who has over RMB6 million in average daily
+assets for any one of the past three months.
+Notes: (1) Retail customers include debit and credit cardholders,
+with duplicates removed.
+12.4
+3,587,274
+4,031,177
+12.0
+In respect of customer business, Ping An Bank
+fulfills its responsibilities for serving financial
+markets and the real economy by leveraging its
+strengths in comprehensive customer services,
+focusing on the fund ecosystem, asset custody,
+bond underwriting, corporate hedging and so
+on. The balance of third-party funds distributed
+under the "ET-Bank" increased 66.8% from the
+beginning of 2023 to RMB185,620 million as of
+December 31, 2023. Net assets under custody
+increased 5.8% from the beginning of 2023 to
+RMB8.70 trillion as of December 31, 2023. Bonds
+sold via the interbank channel increased 49.8%
+year on year to RMB207,908 million in 2023. The
+number of customers that conducted spot and
+derivative foreign exchange hedging at Ping An
+Bank increased 11.8% year on year to 12,859 in
+2023.
+Ping An Securities enhanced its expertise
+and service quality in trading and asset
+management businesses. In the trading
+business, Ping An Securities strengthened
+the integration and innovation of trading and
+technology enabled by the comprehensive
+trading system of “proprietary trading +
+customer business." Yield of bond trading
+significantly outperformed the market, and size
+of the customer business grew strongly. In the
+asset management business, Ping An Securities
+continuously enhanced its core capabilities
+of "fixed-income +" to meet the investment
+demands of internal and external insurance and
+bank wealth management customer segments.
+Ping An Securities ranked among the industry's
+top 10 by average monthly AUM (3) in the fourth
+quarter of 2023.
+Net profit (1)
+Annual Report 2023
+OneConnect continued to improve its operations,
+significantly reduced losses, and remained well-
+funded in 2023. OneConnect's revenue reached
+RMB3,668 million and net loss narrowed by 58.4%
+year on year to RMB363 million in 2023. Free cash (1)
+amounted to RMB2,072 million as of December 31,
+2023.
+Note: (1) The free cash is exclusive of Ping An OneConnect Bank
+(Hong Kong) Limited.
+OneConnect continued to deepen engagement
+with its customers, further integrate and upgrade
+products, and expand its financial service
+ecosystem and overseas markets. In digital banking,
+OneConnect provides financial institutions in the
+banking industry with products and solutions
+covering digital retail banking, digital credit
+management, and digital operation solutions. Such
+products and solutions enable financial institutions
+to improve sales team productivity, carry out
+precision marketing, optimize end-to-end credit risk
+control, and anticipate trends, make timely decisions
+and take action ahead of others in business
+management. In digital insurance, OneConnect
+gradually builds an end-to-end auto insurance
+solution which is comprised of underwriting,
+claim settlement, and ecosystem-based services.
+OneConnect's solution scope has extended from
+auto insurance to the non-auto insurance field.
+Moreover, One Connect continuously enhances
+its partnership with world-renowned insurance
+companies, and helps them improve their channels'
+efficiency through the digital "Omnichannel
+Agent Solution." In terms of Gamma Platform,
+OneConnect's intelligent voice services can
+standardize Al financial scenarios, processes
+and training methodologies and enable financial
+institutions to promote Al remote services more
+quickly and improve Al application more effectively
+while reducing operating costs.
+OneConnect focuses on digital banking solutions
+tailored for Southeast Asian financial institutions
+and partners with multiple banks to seize growth
+opportunities arising from overseas financial
+institutions' digital transformation needs. Taking
+intelligent lending platforms and core systems as
+flagship products, OneConnect helps banks improve
+service efficiency and quality as well as reduce risks
+and costs.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 45
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Technology Business
+Financial Data
+(in RMB million)
+Revenue
+Gross profit (1)
+Net loss (2)
+OneConnect (NYSE: OCFT; SEHK: 06638.HK) is a
+technology-as-a-service provider for the financial
+services industry. OneConnect provides "full-
+stack" integrated technology solutions to financial
+institutional customers, including digital banking
+solutions and digital insurance solutions.
+OneConnect also provides digital infrastructure
+for financial institutions through Gamma Platform.
+Under the "business + technology" model,
+OneConnect's solutions enable its customers'
+digital transformations, which help them improve
+efficiency, enhance service quality, and reduce costs
+and risks.
+2023
+Change
+(%)
+3,668
+4,464
+(17.8)
+1,478
+1,791
+(17.5)
+(363)
+(872)
+(58.4)
+Notes: (1) Gross profit is non-IFRS adjusted gross profit.
+(2) Net loss refers to net loss attributable to OneConnect's
+shareholders of the parent company.
+Operational Data
+2023
+2022
+(45.3)
+576,539
+315,395
+Lufax Holding (NYSE: LU; SEHK: 06623.HK) is a
+leading financial services enabler for small business
+owners ("SBOs") in China. Lufax Holding is
+committed to providing SBOs with comprehensive,
+convenient financial products and services as
+well as enabling financial institutions to reach and
+serve SBOS efficiently. Lufax Holding furthered its
+strategic transformation to adapt to changes in the
+market environment, achieving RMB34,255 million in
+total income in 2023. Loan scale was under pressure
+and asset quality declined mainly due to the impact
+of macro conditions, while credit impairment costs
+were high because of Lufax Holding's increased risk
+sharing. As a result, net profit declined to RMB887
+million.
+Lufax Holding integrates high-quality resources
+in the financial services ecosystem as a leading
+financial services enabler for SBOs in China. With
+proprietary data accumulated over 18 years and
+Al-driven dynamic risk modeling, Lufax Holding has
+provided 20.94 million SBOs and retail customers
+with offline-to-online credit enablement services
+from offline consultation to online application.
+In addition, Lufax Holding has promoted the
+application of technologies, and enhanced its
+borrower risk identification capabilities via its
+increased application of Al in areas including
+borrower acquisition, customer risk identification,
+and loan management.
+44
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Financial Data
+(in RMB million)
+Total income
+MANAGEMENT DISCUSSION AND ANALYSIS
+Change
+2023
+2022
+(%)
+34,255
+887
+58,116
+(41.1)
+8,699
+10.1
+19.02
+20.94
+Change
+(%)
+December
+31, 2022
+December
+31, 2023
+2022
+OneConnect
+loans enabled
+borrowers (in million)
+Outstanding balance of
+Cumulative number of
+Operational Data
+Note: (1) Net profit refers to net profit attributable to Lufax
+Holding's shareholders of the parent company.
+(89.8)
+(in RMB million)
+Notes: (1) The computation of the market share in terms of equity
+and fund trading volume (excluding seat leasing)
+excludes the Northbound Stock Connect market.
+(2) Asset-backed securities (ABS) refer to ABS products
+regulated by the CSRC, and bonds refer to corporate
+bonds and bonds issued by state-owned enterprises.
+(3) The ranking in the asset management industry is from
+the Asset Management Association of China, exclusive
+of ABSs.
+Change
+(%)
+221
+Ping An Asset Management adheres to the
+philosophies of value investing and long-term
+investing. Ping An Asset Management is widely
+recognized in the market for its customer-centric
+approach and commitment to doing the right things
+in the long term. As one of the largest and most
+influential institutional investors in China, Ping An
+Asset Management has profound experience in asset
+management. AUM amounted to RMB5.03 trillion as
+of December 31, 2023, including stocks, bonds, funds,
+debts, and equity stakes on open and non-open
+capital markets as well as money markets. Moreover,
+Ping An Asset Management possesses capabilities
+of cross-market asset allocation and full-spectrum
+asset investment.
+Ping An Asset Management, entrusted with the
+Company's insurance funds, is responsible for the
+domestic investment management business of the
+Company. Moreover, Ping An Asset Management
+also provides comprehensive third-party asset
+management services and diverse, one-stop
+investment management solutions to domestic and
+overseas customers.
+PING AN ASSET MANAGEMENT
+0.05 pps
+(7.1)
+Change (%)
+1.17
+1.22
+asset ratio (%)
+Non-performing
+258,385
+240,024
+Total assets
+December
+31, 2022
+(in RMB million)
+December
+31, 2023
+Ping An Financial Leasing maintains steady overall
+operations by continuously strengthening risk
+management and refining management before,
+during and after leasing deals. Non-performing
+asset ratio was kept stable and controllable
+despite a slight increase from the beginning of
+2023 to 1.22% as of December 31, 2023. Sufficient
+provisions have been set aside, indicating an ample
+risk buffer. Moreover, Ping An Financial Leasing
+keeps overall risks under control by tightening
+customer admittance management, enhancing
+risk assessment, business operations and asset
+monitoring, dynamically adjusting differentiated
+asset management strategies for existing customers,
+and continuously strengthening risk asset disposal.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+42
+Ping An Financial Leasing is committed to becoming
+a world-leading innovative financial leasing
+expert focusing on industries and serving the
+real economy. Ping An Financial Leasing has built
+presence in various areas including engineering and
+construction, manufacturing and processing, next-
+generation infrastructure, urban development, city
+operations, auto finance, commercial vehicles, small
+and micro finance, structured financing, and Ping An
+factoring. In the future, Ping An Financial Leasing
+will accelerate its presence in new energy, next-
+generation infrastructure and new lifestyles, and
+actively explore operation-oriented, management-
+oriented and service-oriented business models.
+PING AN FINANCIAL LEASING
+In adjusting its business portfolio, Ping An Trust
+focused on its core trust business by actively
+exploring and developing family trust, insurance
+trust and family service trust businesses in
+accordance with the new regulation on trust
+classification. As a result, Ping An Trust has
+significantly improved its business portfolio. Total
+assets held in trust amounted to RMB662,503 million
+as of December 31, 2023.
+In controlling risks, Ping An Trust upgraded its
+enterprise risk management by improving risk
+governance structure, strictly controlling asset
+quality, strengthening post-investment closed-loop
+management, promoting risk review and mitigation,
+and upgrading the smart risk management platform.
+Moreover, Ping An Trust strictly adhered to the
+bottom line of risk management and compliance,
+conducted accountability enhancement programs,
+established and improved whole-process
+management mechanisms covering fundraising,
+investment, management and exit, and ensured
+full-lifecycle management of products to fulfill
+its responsibilities as a manager. As a result, Ping
+An Trust has continuously enhanced its ability
+to withstand risks. Ping An Trust had RMB19,609
+million in net capital as of December 31, 2023. The
+ratio of net capital to total risk capital was 322.7%
+and the ratio of net capital to net assets was 75.3%
+as of December 31, 2023, both meeting regulatory
+requirements (i.e. not less than 100% and 40%
+respectively).
+Positioned as a capital-light service provider, Ping
+An Trust focuses on its core businesses including
+trust services and private equity. Ping An Trust
+prudentially controlled risks and adjusted its
+business portfolio in 2023.
+TRUST BUSINESS
+Asset Management Business
+Business Analysis
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 41
+(in RMB million)
+December
+31, 2023
+December
+31, 2022
+Change (%)
+(5.9)
+Note:
+208
+(1) The number of premium-plus customers is the number
+of institutional customers contributing at least RMB1
+million to One Connect's annual revenue, excluding Ping
+An Group and its subsidiaries.
+Ping An Health
+Ping An Health (SEHK: 01833.HK; stock short name:
+PA GOODDOCTOR), centering on family doctor
+membership and leveraging a diversified, premium
+online-to-offline ("O20") service network, has
+developed a specialized, comprehensive, high-
+quality and one-stop “healthcare and elderlycare"
+services platform to provide users with "worry-
+free, time-saving, and money-saving" healthcare
+and elderly care services. Ping An Health achieved
+RMB4,674 million in revenue for 2023, and its net loss
+decreased 49.3% year on year to RMB323 million. The
+number of cumulative paying users approached 40
+million for the twelve months ended December 31,
+2023.
+In respect of ecosystem development, as
+an integral part of the Group's "managed
+care model” and a flagship in the healthcare
+and elderly care ecosystem, Ping An Health
+facilitates the Group's "heartwarming
+financial services" by acting as a payer,
+integrating providers and unlocking synergies
+in "integrated finance + healthcare and
+elderlycare." Via the improving O2O network,
+Ping An Health provides large numbers of
+retail financial users, corporate clients, and
+retail consumers with full-scenario, high-quality
+healthcare and elderlycare services in five
+scenarios, namely health, sub-health, disease,
+chronic disease and elderlycare management.
+Moreover, Ping An Health has developed
+healthcare and elderly care service capabilities
+for years to offer effective solutions to the
+industry's pain points, namely unbalanced
+supply and demand, insufficient high-quality
+services, underutilization of resources, and
+fragmented market supply. Ping An Health
+has established a preliminary "Enterprise
+EZHealth" health management product suite for
+enterprises and their employees by innovating
+product and service models, integrating its
+business units and capabilities, and leveraging
+the Group's abundant payment service
+resources. The product suite includes two
+core products ("Health Checkup +" and "Health
+Management +") and four customized products.
+In respect of medical service capabilities, Ping
+An Health positions family doctors as doctors,
+customer managers and navigators. While
+helping Ping An Health integrate supply-side
+healthcare and elderlycare resources and
+improve 020 closed-loop services, family
+doctors also help users address breakpoints in
+online and offline services to meet full-lifecycle,
+pan-healthcare user needs with professional,
+efficient and heartwarming services.
+46
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+LUFAX HOLDING
+The Company engages in technology business
+mainly through member companies including
+Lufax Holding, OneConnect, Ping An Health and
+Autohome, providing diverse products and services
+for ecosystem users, with significant synergies.
+healthcare are from the 2023 Fintech Patent Analysis
+White Paper and the 2023 Healthcare Patent Analysis
+White Paper released by Intellectual Property Publishing
+House respectively. The Group ranks second globally in
+health monitoring and first globally in other areas.
+(2) The volume of services provided by Al service
+representatives refers to the total times of inbound and
+outbound call services provided by speech robots and
+text robots for credit card and insurance business lines.
+Notes: (1) Rankings by patent applications in fintech and
+From the perspective of transforming and upgrading
+Ping An's core businesses, technology benefits are
+reflected in higher sales, better business efficiency,
+and stronger risk management. Renewal premiums
+collected via self-service under smart guidance
+reached RMB300.3 billion in 2023, up 13% year on
+year. The volume of services provided by Al service
+representatives (2) reached about 2.22 billion times.
+Claims loss reduction via smart risk identification
+reached RMB10.82 billion, up 16.0% year on year.
+AUM
+Including: Third-party AUM
+5,033,945
+528,427
+4,371,172
+514,933
+15.2
+2.6
+Annual Report 2023
+Premium-plus customers (1)
+Ping An Insurance (Group) Company of China, Ltd. 43
+Business Analysis
+Technology Business
+Ping An remains focused on technological empowerment to build leading
+technological capabilities and empower its ecosystems. The Group ranks
+first globally by the number of patent applications in both fintech and
+healthcare.
+The Company engages in technology business through member companies
+including Lufax Holding, OneConnect, Ping An Health and Autohome, providing
+diverse products and services for ecosystem users, with significant synergies.
+TECHNOLOGICAL EMPOWERMENT
+Ping An continuously invests in R&D to build leading
+technological capabilities, which have been widely
+utilized to empower its core financial businesses and
+accelerate the development of its ecosystems. Ping
+An promotes technological empowerment in diverse
+business scenarios. Moreover, Ping An improves
+the industry ecosystem and technology by sharing
+leading innovative products and services with
+external entities.
+Ping An remains focused on developing core
+technologies and securing proprietary intellectual
+property rights. Ping An had a first-class technology
+team of over 20,000 technology developers and
+over 3,000 scientists as of December 31, 2023. The
+Group's patent applications led most international
+financial institutions, totaling 51,533. Of the patent
+applications, nearly 95% were for inventions, and
+9,346 were made under the Patent Cooperation
+Treaty (PCT) and abroad. The Group ranks first
+globally by the number of patent applications in
+both fintech and healthcare (1).
+MANAGEMENT DISCUSSION AND ANALYSIS
+In private banking and wealth management
+business, Ping An provides customers with
+"worry-free, time-saving and money-saving"
+service experience by continuously upgrading
+products, services, teams and branding
+capabilities, and strengthening wealth
+management and asset allocation services.
+Retail AUM rose 12.4% from the beginning of
+2023 to RMB4,031,177 million as of December
+31, 2023, including RMB1,915,515 million in AUM
+of private banking customers, up 18.2% from
+the beginning of 2023. Moreover, Ping An Bank
+has built a new wealth management team who
+understands insurance well. Revenue from
+bancassurance reached RMB2,989 million in 2023,
+up 50.7% year on year.
+Notes: (1) Mass customers are those with annual income
+Ping An deepens its understanding of customers
+through long-term customer development. The
+wealthier the customers are, the more contracts
+they hold. Middle-class and above customers
+accounted for more than 77.4% of the Group's total
+retail customers as of December 31, 2023. HNWIS
+held 21.16 contracts per customer as of December
+31, 2023, far more than affluent customers.
+58.56
+198.31
+213.44
+231.57
+226.64
+221.91
+50.69
+Unit: million
+Number of retail customers by the number of
+contracts per customer
+The higher the number of contracts per customer,
+the higher the customer retention rate
+Increasing the number of contracts per customer
+is key to raising profit per customer and improving
+customer churn. Continuous customer development
+leads to more contracts per customer and higher
+customer retention. 25.3% of our customers held four
+or more contracts within the Group as of December
+31, 2023, and their retention rate was as high as
+97.7%, 14.4 pps higher than that of those holding only
+one contract.
+Integrated Finance
+MANAGEMENT DISCUSSION AND ANALYSIS
+53
+Ping An Insurance (Group) Company of China, Ltd.
+1 contract 2-3 contracts ≥4 contracts
+55.64
+59.12
+42.34
+86.11
+81.33
+≥4
+2-3
+83.3%
+89.5%
+97.7%
+Contracts per
+customer
+Customer retention rate
+For the twelve months ended December 31, 2023
+74.64
+85.85
+83.59
+80.50
+76.64
+Annual Report 2023
+85.77
+As Ping An advances its integrated finance
+strategy, retail cross-selling continues to deepen.
+Approximately 22.42 million customer migrations
+occurred within the Group in 2023. Over 88.01 million
+retail customers held multiple contracts with
+different subsidiaries of the Group as of December
+31, 2023. Contracts per retail customer reached
+2.95 as of December 31, 2023. Retail customers.
+and contracts per retail customer increased 16.8%
+and 10.5% respectively from December 31, 2019 to
+December 31, 2023. The new customers are mainly
+auto, accident and health insurance policyholders,
+credit cardholders, and bank depositors.
+(2) Figures may not match the calculation due to rounding.
+221.91
+231.57
+226.64
+Unit: million
+Retail customers increase steadily year by year
+Ping An Insurance (Group) Company of China, Ltd.
+198.31
+Annual Report 2023
+52
+(4) Retail customers of separate product lines do not add
+up to the total due to the removal of duplicates.
+(3) Others include other investments, other loans, and
+other insurance products.
+(2) Retail banking includes debit and credit cardholders,
+with duplicates removed.
+Notes: (1) The numbers of insurance companies' customers are
+based on holders of in-force policies rather than policy
+beneficiaries.
+2.2
+2
+December 31, December 31, December 31, December 31, December 31,
+2019
+2020
+below RMB100,000, middle-class customers between
+RMB100,000 and RMB240,000, and affluent customers
+above RMB240,000. HNWIs have personal assets of
+RMB10 million or more.
+1.91
+Mass
+22.6%
+Ping An's retail customer structure
+Unit: contract per customer
+2.46
+Middle-class
+33.5%
+3.79
+Affluent
+43.8%
+21.16
+HNWIS
+0.1%
+Retail customer structure and contracts per
+customer
+2023
+2022
+2021
+2. Contracts per customer
+83.94
+87.16
+December 31, December 31, December 31,
+68.0
+9,972
+Insurance
+Ping An Health
+45.9
+7,567
+Note: Premium income refers to original premium income.
+short-term insurance
+Ping An P&C
+(in RMB million)
+12.7
+38,463
+Channel contribution in 2023
+Amount Percentage (%)
+21.6
+Ping An Annuity's
+Ping An's customers increase continuously; in
+particular, the growth in middle-class and above
+customers is faster than the Group average, and
+will boost customer value continuously. Leveraging
+unique integrated finance advantages, Ping An will
+offer diverse products and services to meet the
+demands of different customer segments.
+Going forward, Ping An will remain customer-
+centric and strengthen technological capabilities to
+drive product innovation and service enhancement,
+improve customer experience, and create value for
+retail customers continuously.
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Secondly, Ping An's healthcare and elderlycare
+ecosystem generates revenue by offering
+employee health management programs to
+corporate clients via integration with employee
+benefit products of Ping An P&C, Ping An
+Annuity, and Ping An Health Insurance; and
+Firstly, Ping An's healthcare and elderlycare
+ecosystem generates revenue as the Group's
+internal service provider by empowering retail
+financial customers of the Group's member
+companies including Ping An Life and Ping An
+Bank;
+medical resources supply. Ping An's healthcare and
+elderlycare ecosystem builds its service moat on
+the following three fronts, developing the Chinese
+"managed care model" by seamlessly combining
+differentiated healthcare and elderly care services
+with financial businesses in which Ping An acts as a
+payer to create unique business models:
+China's per capita health expenditure(1) is over
+RMB5,000 (versus Japan's approximately RMB30,000
+and Singapore's approximately RMB24,000),
+indicating huge room for growth. In addition,
+China's elderly population (2) exceeded 200 million in
+2022 (and is forecast to be over 300 million by 2035),
+larger than Japan's approximately 37 million and
+Singapore's approximately 0.85 million, indicating
+significant room for the development of China's
+Ping An has developed its healthcare and elderlycare
+ecosystem for over ten years, covering business
+lines including insurance, healthcare, investment and
+technology. Ping An implements the healthcare and
+elderly care ecosystem strategy through coordinated
+operations of companies including Ping An Life,
+Ping An P&C, Ping An Annuity, Ping An Health
+Insurance, and Ping An Health (stock short name: PA
+GOODDOCTOR).
+"HEALTHCARE AND ELDERLYCARE ECOSYSTEM"
+STRATEGY
+Ping An's healthcare and elderlycare ecosystem is creating both
+standalone direct value and also significant indirect value by empowering
+our core financial businesses through differentiated "Product + Service"
+offerings. Nearly 64% of Ping An's 232 million retail customers used
+services from the healthcare and elderlycare ecosystem as of December
+31, 2023. They held approximately 3.37 contracts and RMB55,900 in AUM per
+capita, 1.6 times and 3.5 times those held by non-users of these services
+respectively.
+Over the past decade, Ping An has been building a healthcare and
+elderlycare ecosystem in China with increasingly significant differential
+advantages including online, in-store and home-delivery service
+capabilities, wide coverage of hundreds of healthcare and elderlycare
+service resources, and access to high-quality proprietary resources. This
+is very important for quality assurance purposes. Ping An had about 50,000
+in-house doctors and contracted external doctors as of December 31,
+2023. Moreover, Ping An partnered with over 36,000 hospitals (including
+all top 100 hospitals and 3A hospitals in China), over 100,000 healthcare
+management institutions and approximately 230,000 pharmacies as of
+December 31, 2023.
+Ping An has launched an innovative Chinese "managed care model"
+by seamlessly combining its online/offline healthcare and elderly care
+ecosystem with financial businesses in which Ping An acts as a payer,
+leveraging its over ten years of operational and management experience in
+insurance and healthcare industries.
+Healthcare and Elderlycare as a New
+Driver of Value Growth
+56
+MANAGEMENT DISCUSSION AND ANALYSIS
+55
+21.2
+58.3
+36.9
+Integrated finance's
+contribution percentage
+in 2023 (%)
+45.02
+2-5 years
+68.9
+159.47
+5 or more years
+Proportion (%)
+Number of
+customers
+(in million)
+December 31, 2023
+Proportion of customers by years with Ping An
+Over 159 million or 68.9% of our customers have
+been with the Group for five or more years as of
+December 31, 2023, showing high customer retention.
+Note: Figures may not match the calculation due to rounding.
+December 31,
+2023
+December 31,
+2022
+2021
+2020
+2019
+19.4
+226.64
+Less than 2 years
+11.7
+Newly acquired customers
+Net increase in retail AUM
+Value of auto loans granted
+New credit cards issued
+Bank's retail business
+Integrated finance's contributions to Ping An
+Premium income from cross-selling by Ping An
+Life's agents
+Cross-selling between the Company's insurance
+businesses steadily deepened. Ping An Health
+Insurance's premium income from cross-selling by
+Ping An Life's agents rose 13.2% year on year in 2023.
+Integrated finance continued to make contributions
+to the Company's insurance businesses and Ping An
+Bank's retail business in 2023.
+3. Profit per customer
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+54
+Note: Figures may not match the calculation due to rounding.
+100.0
+231.57
+The Group
+27.07
+231.57
+213.44
+5.3
+Strong online-merge-offline channel networks:
+Offline, Ping An has over 1.3 million sales
+service agents for property & casualty
+insurance, life insurance and other businesses,
+and over 7,000 outlets for life insurance,
+property & casualty insurance, banking and
+other businesses, covering all provinces
+and cities across China. Online, Ping An has
+developed apps including Ping An Jin Guan
+Jia, Ping An Pocket Bank, Ping An Auto Owner,
+and Ping An Health to provide customers with
+convenient services and premium products.
+largest life insurer in China by premium income.
+Ping An P&C is the second largest property and
+casualty insurer in China by premium income.
+Ping An Asset Management is the second
+largest insurance asset manager in China by
+AUM. Ping An Bank ranks firmly among top
+joint-stock commercial banks in China by a
+combination of assets, net profit and so on.
+An industry leader focusing on Chinese markets
+and core financial businesses: Ping An focuses
+on the Chinese mainland in retail integrated
+financial business. Ping An Life is the second
+An integrated financial services group with
+a full suite of financial business licenses,
+extensive presence and strong synergies: Ping
+An is an integrated financial services group
+with a full suite of financial business licenses
+and a robust shareholding structure. The
+Group has multiple core member companies in
+sectors including insurance, banking, and asset
+management. Ping An has developed into a
+leading company that can provide customers
+with comprehensive financial services in China.
+•
+Ping An's Unique Integrated Finance Advantages
+Ping An has unique advantages in implementing the
+retail integrated finance model:
+Robust ecosystem-based service capabilities:
+The coupling of Ping An's breadth of business
+with its powerful online ecosystems enables the
+Group to provide diverse products and services
+in a full range of healthcare and elderlycare
+scenarios. 31.5% of the Group's new retail
+customers were acquired from its healthcare
+and elderly care ecosystem in 2023. Retail
+customers who used services from the Group's
+healthcare and elderlycare ecosystem held
+approximately 3.37 contracts and RMB55,900 in
+AUM per capita, 1.6 times and 3.5 times those
+held by non-users of these services respectively
+as of December 31, 2023.
+Note: (1) Retail customers refer to retail customers holding
+valid financial products with the Group's core financial
+companies.
+THE INTEGRATED FINANCE STRATEGY
+Contracts per retail customer reached 2.95. Over 88.01 million retail
+customers held multiple contracts with different subsidiaries.
+The Group's retail customers increased 2.2% from the beginning of 2023
+to 232 million as of December 31, 2023; 25.3% of them held four or more
+contracts within the Group, with a retention rate of 97.7%.
+Integrated finance brings higher operational efficiency to Ping An,
+reflected especially by lower customer acquisition cost, lower
+management and service costs, and higher customer retention rates.
+Integrated Finance
+Ping An Insurance (Group) Company of China, Ltd. 47
+Ping An's integrated finance strategy is focused on
+deepening engagement with retail customers (1) and
+developing customer groups under a customer-
+centric business philosophy. In retail business,
+Ping An leverages its ecosystems to build a brand
+of heartwarming financial services by providing
+"worry-free, time-saving, and money-saving" one-
+stop integrated finance solutions.
+48
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+New customers
+Retail customers
+Ping An's retail operating profit is driven by the number of retail customers, contracts per customer, and
+profit per customer. The number of retail customers stood at 232 million as of December 31, 2023, with
+2.95 contracts per customer. Operating profit per customer amounted to RMB497.64 in 2023. The three
+numbers were under pressure in 2023 due to macroeconomic challenges, declining consumer willingness to
+consume and investment, and heightening credit risk. However, markets are expected to recover further
+as macroeconomic control intensifies. Ping An has full confidence in the future, firmly optimistic about the
+positive long-term fundamentals of China's economy and the huge potential of domestic markets. Ping An
+will continue to advance its integrated finance strategy to meet customer needs, unlock value from existing
+customers, and create value steadily.
+Group Operating Profit Growth Drivers
+Integrated Finance
+49
+Ping An Insurance (Group) Company of China, Ltd.
+Benefits to shareholders. Integrated finance
+improves operational efficiency. This is shown by
+three metrics: 1) lower customer acquisition cost
+of integrated finance channels than that of external
+channels due to shorter customer acquisition paths
+and lower friction cost; 2) lower management
+and service costs as Ping An has a world-leading
+integrated operations center which is the largest
+in Asia, has built an integrated intelligent services
+system via back-office integration, rule management
+and tool empowerment, and improves quality and
+efficiency continuously; and 3) stronger customer
+retention as the retention rate of customers holding
+four or more contracts within the Group is as high
+as 97.7%.
+Benefits to customers. Being customer needs-
+oriented, Ping An adheres to the “worry-free,
+time-saving, and money-saving" value proposition,
+providing comprehensive asset allocation and one-
+stop services. Ping An provides worry-free services
+for customers through professional advisers, who
+simplify complex concerns, popularize professional
+matters, and facilitate tedious issues. Ping An helps
+customers save time with one-stop services-based
+integrated accounts, which combine information
+from multiple accounts of a customer, enabling one-
+stop allocation to multiple products and one-click
+access to multiple services. Ping An helps customers
+save money by customizing superior protection
+and allocation, achieving asset preservation and
+appreciation via professional services, realizing
+flexible redemption via connection of loyalty points
+and benefits, avoiding unnecessary expenditures,
+and meeting more potential needs of customers.
+and Shareholders
+Integrated Finance Brings Benefits to Customers
+Highly synergistic organizational culture: The
+"One Ping An" culture centering on value
+maximization allows member companies to
+cooperate closely in various businesses under
+the common goal of boosting customer value
+and the philosophy of "one customer, multiple
+products, and one-stop services." Ping An
+unifies and coordinates its management
+culture in customer development, risk
+management, investment operations, back-
+office centralization and operations, consumer
+rights protection, brand management, and the
+value system. This enables close cooperation
+and resource saving among businesses, driving
+growth in the Group's customer base, contracts
+per customer and profit per customer as well
+as value enhancement.
+The Group
+MANAGEMENT DISCUSSION AND ANALYSIS
+Annual Report 2023
+Annual Report 2023
+(2) Net profit refers to non-GAAP adjusted net income
+attributable to Autohome Inc.
+Notes: (1) The number of mobile daily active users is from Quest
+Mobile.
+(0.4)
+(323)
+(24.7)
+(9.7)
+1,671
+1,509
+6,205
+4,674
+Change
+(%)
+2022
+2023
+Net loss (1)
+Gross profit
+Revenue
+(in RMB million)
+In respect of customer acquisition capabilities,
+Ping An Health seeks customers from payers
+by maintaining in-depth collaboration with
+the Group's core financial businesses and
+leveraging Ping An Health's own channels.
+Regarding integrated finance channels, Ping An
+Health maintains in-depth collaboration with
+the Group's core financial businesses through
+"product integration, central procurement of
+benefits, and value-added services." Moreover,
+Ping An Health works to acquire large and
+medium-sized corporate clients. In this way,
+Ping An Health provides full-lifecycle healthcare
+and elderly care services for retail financial
+users and corporate clients' employees. Ping
+An Health cumulatively served over 1,500
+enterprises as of December 31, 2023.
+MANAGEMENT DISCUSSION AND ANALYSIS
+(636)
+Unit: million
+(49.3)
+(2) Ping An Health changed the measurement of "health
+membership program" contracts in accordance
+with applicable accounting standards in 2023, and
+retrospectively adjusted relevant data for 2022.
+2,168
+3.5
+6,941
+7,184
+2,160
+(%)
+2022
+2023
+Change
+Revenue
+Net profit (2)
+(in RMB million)
+In a complex and volatile market environment,
+China's passenger car sales resumed growth driven
+by NEV sales in 2023, showing huge development
+potential and market space. Autohome not only
+provides NEV makers with traditional services
+including media and leads generation, but integrates
+different business models to upgrade NEV
+marketing practices, providing partners with new
+retail services through Autohome Energy Space.
+The expansion of Autohome Energy Space, which
+now has a presence in 20 cities across the country
+to help partners boost sales, helps Autohome build
+brand awareness among users. Autohome's NEV
+business revenue continued to grow faster than
+broader industry sales in 2023.
+in digitization and new energy vehicle ("NEV")
+marketing to seize development opportunities in the
+auto industry. In respect of digitization, Autohome
+enables the digital transformation of automakers
+and dealers in comprehensive marketing by
+upgrading the data product matrix and diversifying
+application scenarios for Al and large language
+models. In this way, Autohome maintained double-
+digit growth in data product revenue in 2023.
+Autohome continuously makes breakthroughs
+Autohome (NYSE: ATHM; SEHK: 02518.HK), the
+leading online destination for automobile consumers
+in China, is committed to developing a smart auto
+ecosystem centered on data and technology.
+Within this ecosystem, Autohome provides auto
+consumers with diverse products and services
+across the full auto lifecycle. Autohome's mobile
+daily active users (1) increased 25.4% year on year
+to 68.19 million in December 2023. In addition,
+Autohome continuously upgrades its "ecosystem
+strategy," providing comprehensive services for
+consumers, automakers, and various players in
+the auto ecosystem. Autohome's revenue and net
+profit reached RMB7,184 million and RMB2,160 million
+respectively in 2023.
+Autohome
+Notes: (1) Net loss refers to net loss attributable to Ping An
+Health's shareholders of the parent company.
+Unit: million
+Strong technology platform capabilities:
+Ping An advances comprehensive digital
+transformation, and employs technologies
+to improve the quality, efficiency, and risk
+management of its financial businesses.
+Premiums from self-service insurance renewal
+enabled by smart guidance increased by 13%
+year on year to RMB300.3 billion in 2023. Ping
+An has a world-leading integrated operations
+center which is the largest in Asia. Al service
+representatives recorded a customer service
+volume of approximately 2.22 billion times.
+Claims savings from smart risk identification
+increased by 16.0% year on year to RMB10.82
+billion in 2023. Leveraging the technological
+strength of integrated finance, Ping An
+continuously enhances the capability and
+efficiency of cross-selling to meet customer
+needs for migration within the Group.
+232
+December 31, 2023
+(in million)
+Retail customer mix by product line
+December 31, December 31,
+2023
+Ping An's retail customers reached approximately
+232 million as of December 31, 2023, up 2.2% from the
+beginning of 2023. The Group's diverse integrated
+finance products and channels continued to support
+the expansion of its customer base. The number of
+new customers totaled 29.20 million in 2023.
+1. Number of retail customers
+Profit Drivers of Retail Integrated Finance
+The continuously expanding retail customer base,
+steadily increasing contracts per customer, and
+robust product profitability have become drivers of
+Ping An's sustained retail business growth.
+2022
+An intelligent marketing services platform. The
+Group's member companies coordinate the
+themes and launches of seasonal marketing
+campaigns based on the pace of business
+development to drive customer migration
+and product sales. Events including "Ping An
+January 8 Marketing Campaign," "Ping An 35th
+Anniversary Customer Appreciation Campaign,"
+"August Pet Festival" and "September 9
+Health Festival" brought RMB3.8 trillion in
+total transaction volume in 2023, effectively
+empowering member companies to drive
+business growth.
+Integrated Finance
+MANAGEMENT DISCUSSION AND ANALYSIS
+51
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Products. Ping An has established an evaluation
+system which drives member companies to
+upgrade their flagship products and services
+to deliver "worry-free, time-saving, and money-
+saving" experience. Ping An Group joined
+hands with external authoritative consulting
+agencies to release the first Evaluation Report
+on Ping An Group's Capabilities of "Worry-free,
+Time-saving, and Money-saving" Services in
+2023. The report offers a panorama of cutting-
+edge trends in integrated finance, healthcare
+and elderly care based on benchmarking and
+research, facilitating product upgrades. For
+instance, Ping An launched innovative products
+including "insurance trust + elderlycare" to
+meet personalized customer needs, effectively
+boosting AUM and empowering agents. New
+insurance trusts grew 22.3% year on year to
+RMB50,684 million in 2023, contributing RMB4,897
+million and RMB1,466 million to Ping An Life's
+FYP and NBV respectively.
+Benefits. Ping An accelerates the development
+of its healthcare and elderlycare ecosystems,
+and enhances its capabilities of "worry-free,
+time-saving, and money-saving" services. Ping
+An empowers business development with
+various healthcare and elderlycare benefits,
+effectively boosting Ping An Bank's AUM and
+intermediary business revenue and Ping An
+Life's policy conversion. For instance, Ping An
+Bank worked with Ping An Health and Ping An
+Healthcare Diagnostics Center to invite wealth
+management customers to high-end checkups,
+successfully developing family-based pension
+asset allocation and one-stop services. In close
+collaboration with Ping An Health, Ping An
+Life launched services including five highlights,
+namely unique checkups, blood sugar control,
+online consultation, outpatient appointment
+assistance and accompanying consultation, and
+critical illness management. In this way, Ping
+An provides customers with "worry-free, time-
+saving, and money-saving" one-stop value-
+added healthcare and elderly care benefits, with
+an overall satisfaction degree of 99%. Ping An
+Life provided health management services to
+over 20 million customers in 2023.
+Change (%)
+59.28
+62.01
+78.22
+82.40
+Others(3)
+(3.0)
+50.72
+49.20
+Securities, funds and trusts
+1.9
+123.08
+125.43
+Retail banking (2)
+4.7
+59.88
+62.71
+(4.4)
+Data. Ping An further strengthened personal
+information protection and consumer
+rights protection under a customer-centric
+philosophy. Moreover, Ping An enhanced
+comprehensive digital development in a strictly
+compliant manner. By continuously improving
+customer profiling and precisely understanding
+customer needs, Ping An provides customers
+with the most suitable products and services
+according to product and channel profiles.
+In this way, Ping An continuously enhances
+demand-driven financial products and services
+to optimize customer experience.
+Accounts. Remaining customer-centric, Ping
+An combines information of customer demands
+for different businesses within the Group
+in integrated accounts to provide efficient,
+suitable one-stop financial services and deliver
+the best "worry-free, time-saving, and money-
+saving" experience. Integrated accounts, as
+a universal login system for customers to
+log in to Ping An's online platforms, facilitate
+consistent brand perception and improve
+our capabilities of acquiring customers
+and retaining customers, funds and assets.
+Moreover, the integrated account system,
+covering group-wide loyalty points and
+benefits, can provide customers with a wider
+choice of benefits and further boost customer
+retention.
+Life insurance (1)
+Auto insurance (1)
+In retail business, Ping An adopts the model of "one
+customer, multiple products, and one-stop services,"
+leveraging technology and compliant data analytics
+to gain precise insights into customer needs. Ping
+An builds a brand of heartwarming financial services
+by meeting customer needs and delivering "worry-
+free, time-saving, and money-saving" ultimate
+customer experience via one-stop, multi-channel
+integrated finance solutions. Moreover, Ping An
+matches products with scenarios, and empowers
+business growth through financial integrated
+accounts by leveraging data, products, benefits and
+an intelligent marketing services platform.
+customer
+Contracts per
+131,346
+2022
+115,239 -12.3%
+2023
+Unit: RMB million
+29.70
+2022
+227
+December 31, 2022
+Retail operating
+profit
+•
+2023
++2.2%
+Unit: contract per customer
+2.95 -0.8%
+29.20 -1.7%
+December 31, 2023
+Operating profit
+per customer
+Retail Integrated Finance Strategy
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+50
+Notes: (1) The above operating profits are operating profits attributable to shareholders of the parent company.
+(2) Figures may not match the calculation due to rounding.
+579.54
+RETAIL INTEGRATED FINANCE
+Product profitability
+497.64 -14.1%
+2023
+Unit: RMB per customer
+2.97
+December 31, 2022
+2022
+MANAGEMENT DISCUSSION AND ANALYSIS
+66
+Analysis of
+of 
+Embedded Value
+(in RMB million)
+Dividends received
+Dividends paid
+Note
+42,717
+Dividends upstreamed from Ping An Life to the
+Company
+(44,002)
+(2,486)
+Other business closing ANA
+65
+Dividends paid by the Company to shareholders
+Long-term Service Plan and Key Employee Share
+Purchase Plan, as well as the offset effect for the
+amortization during the Reporting Period
+2023
+Ping An Insurance (Group) Company of China, Ltd.
+12,919
+562,923
+559,152
+Operating profit of other business
+Non-operating profit of other business
+(76,604) Adjustments of EV investment return assumption,
+risk discount rate, etc.
+Change in market value adjustment of free surplus
+during the Reporting Period
+(29,060) Lower than assumed investment return
+(42,717) Dividends upstreamed from Ping An Life to the
+Company
+Annual Report 2023
+(1,521) L&H's Long-term Service Plan and Key Employee
+Share Purchase Plan, as well as the offset effect
+for the amortization during the Reporting Period
+548,977
+149
+Revaluation gain or loss on the convertible bonds
+issued by Lufax Holding to the Company
+878
+Market value adjustment and other
+variance
+Other business closing ANA before
+capital changes
+830,974
+Closing group EV
+The Company has investigated the effect, on the embedded value of the Group, embedded value of the life
+and health insurance business and the value of one year's new business, of certain independently varying
+assumptions regarding future experience. Specifically, the following changes in assumptions have been
+considered:
+Closing group EV per share (in RMB)
+Other business opening ANA
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+A 10% decrease in the fair value of equity assets
+A 5% increase in the policyholders' dividend payout ratio
+A 10% increase in maintenance expenses
+A 10% increase in policy discontinuance rates
+A 10% increase in mortality, morbidity and accident rates
+A 50 bps increase or decrease in risk discount rate
+A 50 bps increase or decrease in investment return
+Assumptions and model used in 2022
+•
+•
+•
+•
+•
+SENSITIVITY ANALYSIS
+76.34
+Note: Figures may not match the calculation due to rounding.
+EV operating profit of L&H in 2023 was RMB98,216 million, mainly comprised of the NBV and expected return
+on opening EV.
+(in RMB million)
+L&H EV operating profit
+L&H operating ROEV (%)
+1,390,126
+[6]
+2023
+2022
+98,216
+11.2
+96,074
+11.0
+Note: Figures may not match the calculation due to rounding.
+[12]=[6]/[1]
+L&H Closing EV
+Employee stock ownership plan
+Shareholder dividends
+Long-run investment return assumption (%)
+0.2 pps
+11.0
+11.2
+L&H operating ROEV(3) (%)
+N/A
+N/A
+31,080
+4.5
+L&H value of one year's new business after cost of capital
+(NBV) (2)
+N/A
+830,974
+L&H EV(2)
+36.2
+28,820
+39,262
+L&H value of one year's new business after cost of capital
+(NBV) on a like-for-like basis (1)
+874,786
+N/A
+5.0
+-0.5 pps
+Risk discount rate (%)
+2022
+December 31,
+December 31,
+2023
+(in RMB million)
+Components of Economic Value
+The Standards for Actuarial Practice: Valuation Standard for Embedded Value of Life Insurance (the
+"Standards") issued by the China Association of Actuaries became effective in November 2016. The
+Company has disclosed the embedded value for 2023 in accordance with the Standards and China Risk
+Oriented Solvency System ("C-ROSS").
+The calculation of the analysis of embedded value relies on a number of assumptions with respect to
+future experience. Future experience may vary from that assumed in the calculation, and these variations
+may be material. The market value of the Company is measured by the value of the Company's shares on
+any particular date. In valuing the Company's shares, investors take into account a variety of information
+available to them and their own investment criteria. Therefore, these calculated values should not be
+construed as a direct reflection of the actual market value.
+In accordance with the related provisions of the Rules for the Compilation of Information Disclosures by
+the Companies Offering Securities to the Public (No. 4) - Special Provisions on Information Disclosures
+by Insurance Companies, the Company has engaged Ernst & Young (China) Advisory Limited to review
+the reasonableness of the methodology, assumptions and calculation results of the Company's analysis of
+embedded value as of December 31, 2023.
+The Company has disclosed information regarding EV in this section in order to provide investors with an
+additional tool to understand our economic value and business results. The embedded value represents
+the shareholders' adjusted net asset value ("ANA”) plus the value of the Company's in-force life and health
+insurance business adjusted for the cost of holding the required capital. The embedded value excludes the
+value of future new business.
+ANALYSIS OF EMBEDDED VALUE
+Analysis of
+of 
+Embedded Value
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 61
+Annual Report 2023
+(3) Expected return on opening EV is based on a 5% long-run investment return assumption and an 11% risk discount rate. L&H
+operating ROEV is 10.6% for 2023 based on the latest assumptions including the return on investment and the risk discount rate.
+Notes: (1) L&H EV and NBV for 2023 are based on the end-2022 assumptions and model.
+(2) Ping An prudently lowered the L&H EV long-run investment return assumption to 4.5% and the risk discount rate to 9.5% in 2023
+in view of the macroeconomic environment and the long-run trend of interest rates.
+-1.5 pps
+11.0
+9.5
+930,160
+L&H EV on a like-for-like basis (1)
+6.3
+Change (%)
+•
+Review the embedded value and NBV of the Company as of December 31, 2023;
+•
+We have reviewed the methodology and assumptions used in preparing the EV and Operating Profit
+results, including:
+The Company prepared the embedded value and NBV results in accordance with the Standards for
+Actuarial Practice: Valuation Standard for Embedded Value of Life Insurance (the "Standards") which was
+promulgated by the China Association of Actuaries in November 2016. Our responsibility, as independent
+actuaries, is to perform certain review procedures set out in our letter of engagement and, based on these
+procedures, conclude whether the embedded value methodology and assumptions are consistent with the
+Standards and available market information.
+We have reviewed the Analysis of Embedded Value and Operating Profit of Ping An Insurance (Group)
+Company of China, Ltd. (the “Company”) as of December 31, 2023. The EV and Operating Profit results
+include embedded value, new business value after cost of capital ("NBV"), valuation methodology
+and assumptions, first year premium of new business, profit margin of new business, embedded value
+movement, sensitivity analysis, operating profit, sources of earnings and contractual service margin related
+data as at December 31, 2023.
+Ping An Insurance (Group) Company of China, Ltd.
+To the directors of
+INDEPENDENT ACTUARIES REVIEW OPINION REPORT ON THE ANALYSIS OF EMBEDDED VALUE AND
+OPERATING PROFIT DISCLOSURES
+On a like-for-like basis, L&H NBV grew 36.2% in 2023. Based on the latest
+assumptions including the return on investment and the risk discount rate,
+NBV of L&H amounted to RMB31,080 million.
+Life and health insurance business EV amounted to RMB830,974 million as
+of December 31, 2023.
+Analysis of Embedded Value
+59
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+In the long run, Ping An Health will continuously
+promote its services' penetration of the Group's
+retail financial customer base by unlocking synergies
+with the core insurance business. Centering on
+family doctors, Ping An Health will boost business
+by enhancing user retention and conversion
+(into paying users) in Ping An's healthcare and
+elderlycare ecosystem via active user development.
+Moreover, Ping An Health will continuously integrate
+premium healthcare and elderlycare resources to
+develop its "online, in-store and home-delivered"
+service network, increasing cost-effectiveness
+via the economies of scale. In this way, Ping An
+Health will become a long-term profit center while
+empowering the Group's core financial businesses.
+Ping An Health provides Ping An Life's policyholders
+with access to diverse healthcare and elderlycare
+services under the carefully built service brand
+of "Ping An Family Doctor." Leveraging such
+scenarios, Ping An Health continuously creates
+policyholder touchpoints, maintains health records
+for policyholders, and tracks and manages
+policyholders' health in real time. For instance,
+through Ping An Zhen Xiang RUN, Ping An Health
+provides Ping An Life's policyholders with services
+including five highlights, namely unique checkups,
+blood sugar control, online consultation, outpatient
+appointment assistance and accompanying
+consultation, and critical illness management. By
+doing so, Ping An Health delivers one-stop "worry-
+free, time-saving, and money-saving" healthcare and
+elderly care services.
+a financial account. In this way, Ping An Health
+continuously empowers the Group's core financial
+businesses, strengthens differential advantages of
+insurance business, and boosts customer acquisition,
+customer retention and customer value.
+Under "insurance + service" and other models, Ping
+An Health works with Ping An Life to participate in
+policyholders' health management by integrating
+different healthcare and elderlycare service benefits
+into life insurance policies. The "insurance + service"
+model gives Ping An's insurance customers access
+to "online, in-store, and home-delivered" services in
+the healthcare and elderlycare ecosystem. Moreover,
+Ping An Health tracks and improves policyholders'
+health through in-house family doctors, providing
+policyholders with a health account as well as
+Review the embedded value movement analysis;
+L&H adjusted net asset value (ANA)
+•
+Employee stock ownership plan
+2022/
+December
+31, 2022
+2023/
+December
+31, 2023
+Liang Yong Hua, Actuary
+March 21, 2024
+(in RMB million)
+KEY INDICATORS
+Ernst & Young (China) Advisory Limited
+This report has been prepared for and only for the Board of Directors of the Company in accordance with
+our letter of engagement and for no other purpose. We do not accept or assume responsibility for any
+other purpose or to any other person whom this report is shown or in whose hands it may come save
+where expressly agreed by our prior consent in writing.
+We also confirm that the EV and Operating Profit results disclosed in the Analysis of Embedded Value
+chapter in the Annual Report 2023 are consistent with the results we reviewed.
+The EV and Operating Profit results, in all material aspects, are consistent with the methodology and
+assumptions stated in the Analysis of Embedded Value chapter in the Annual Report 2023.
+The methodology and assumptions used in preparing the EV results are in compliance with the
+Standards and consistent with available market information;
+•
+•
+Based on our review procedures, we have concluded that:
+OPINION:
+The preparation of the EV results requires assumptions and projections about future economic and financial
+situations, many of which are outside the control of the Company. Therefore, actual experience may differ
+from these assumptions and projections.
+Our review procedures included, but were not limited to, considering whether the methodology and
+assumptions of the EV results are consistent with the Standards and available market information,
+considering whether the methodology of the operating profit results is consistent with the disclosed
+methodology in the Annual Report 2023, validating actuarial models on the basis of sample testing,
+and inspecting related documentation. In forming our conclusion, we have relied on the accuracy and
+completeness of the audited and unaudited data and information provided by the Company.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+60
+Review the sensitivity analysis of the embedded value and NBV; and
+384,510
+374,080
+Value of in-force insurance business before cost of capital
+New Business Value
+FYP used to calculate New Business Value
+The new business volumes based on the end-2022 assumptions and model measured by first year premium
+and its new business value by segment are as follows:
+New Business Value
+Analysis of Embedded Value
+63
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Policyholder dividends have been based on 75% of the interest and mortality surplus for individual
+participating business. For group participating business, dividends have been based on 80% of interest
+surplus only.
+Policyholder dividend
+Expense assumptions have been based on the Company's most recent expenses investigation.
+Expense assumptions mainly consist of acquisition expense and maintenance expenses assumptions.
+The unit maintenance expense was assumed to increase by 2% per annum.
+Expense
+8.
+7.
+Policy discontinuance rates have been based on the Company's recent experience studies. The
+discontinuance rates are pricing interest rate and product type specific.
+Discontinuance
+Morbidity rate and accident rate assumptions have been based on the industry table or the Company's
+own pricing table. The trend of long-term morbidity deterioration has been taken into consideration.
+The loss ratios have been assumed to be within the range of 15% to 100% for short-term accident and
+health insurance businesses.
+6.
+Other incident rates
+(in RMB million)
+5.
+2023
+Change (%)
+18,091
+Bancassurance
+40.3
+22,932
+32,169
+59.3
+63,100
+100,513
+Agency
+36.8
+28,439
+38,900
+50.3
+88,913
+133,662
+Retail business
+Change (%)
+2022
+2023
+2022
+Ping An's healthcare and elderlycare ecosystem
+empowers its core financial businesses through
+customer acquisition and retention. Synergies
+between integrated finance and the healthcare and
+elderlycare ecosystem give Ping An Health and
+PKU Healthcare Group access to corporate and
+retail customers of Ping An's financial businesses.
+Meanwhile, they also give companies including Ping
+An Life access to service benefits in the Group's
+healthcare and elderlycare ecosystem. Nearly 64% of
+Ping An's 232 million retail customers used services
+from the healthcare and elderly care ecosystem
+as of December 31, 2023. They held approximately
+3.37 contracts and RMB55,900 in AUM per capita, 1.6
+times and 3.5 times those held by non-users of these
+services respectively.
+The experience mortality rates have been based on the China Life Insurance Mortality Table (2010-2013)
+and the Company's most recent experience studies. They are tailored to be product specific and future
+mortality improvement has been taken into consideration for annuity products.
+A 25% average income tax rate has been assumed. The percentage of investment returns that can be
+exempted from income tax has been assumed to be 20%.
+Value of one year's new business
+2022
+2023
+(in RMB million)
+Notes: (1) L&H EV as of December 31, 2023 was RMB930,160 million based on the end-2022 assumptions and model.
+(2) Figures may not match the calculation due to rounding.
+1,423,763
+1,390,126
+Group EV
+548,977
+559,152
+Other business ANA
+874,786
+830,974
+L&H EV(¹)
+(67,673)
+(104,128)
+568,379
+550,593
+Cost of capital
+Cost of capital
+Mortality
+Value of one year's new business after cost of capital(1)
+34,486
+(5,666)
+Taxation
+For non-investment-linked insurance funds, the future annual investment return is assumed to be
+4.5%. For investment-linked funds, future investment returns have been assumed to be slightly higher
+than the above non-investment-linked fund investment returns assumption. These returns have
+been derived by consideration of the current capital market conditions, the Company's current and
+expected future asset allocations and associated investment returns for a range of major asset classes.
+Investment return
+The discount rate for calculating the value of in-force and the value of new business of the life and
+health insurance business is assumed to be 9.5%.
+4.
+3.
+2.
+1. Risk discount rate
+The assumptions used in the embedded value calculation as at December 31, 2023 have been made on a
+"going concern" basis, assuming continuation of the economic and legal environment currently prevailing in
+China. The calculation is in line with the Standards and capital requirement under C-ROSS. Certain portfolio
+assumptions are based on the Company's own recent experience as well as considering the more general
+China market and other life insurance markets' experience. The principal bases and assumptions used in the
+calculation are described below:
+Key Assumptions
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+62
+The adjusted net asset value of the life and health insurance business is based on the shareholders' net
+asset value of the relevant life and health insurance business of the Company as measured in compliance
+with the Standards. This shareholders' net asset value is calculated based on the shareholders' net asset
+value as measured in accordance with China Accounting Standards (CAS) and adjusted for relevant
+differences including reserves. The adjusted net asset value of other business is based on the shareholders'
+net asset value of the relevant business of the Company in accordance with CAS. The relevant life and
+health insurance business includes business conducted through Ping An Life, Ping An Annuity and Ping An
+Health Insurance. The values placed on certain assets have been adjusted to the market values.
+(2) Figures may not match the calculation due to rounding.
+Notes: (1) Value of one year's new business after cost of capital for 2023 was RMB39,262 million based on the end-2022 assumptions and
+model.
+28,820
+31,080
+37,614
+(6,534)
+users.
+Review the operating profit of the Company, source of earnings and contractual service margin related
+data of L&H.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Fourth quarter of 2023
+POSITIVE RESULTS FROM A PROPRIETARY
+"HEALTHCARE AND ELDERLYCARE ECOSYSTEM"
+Ping An's proprietary healthcare and elderlycare
+ecosystem provides customers with excellent,
+efficient service experience. Ping An has built up
+a strong reputation by providing excellent, efficient
+and convenient services through the healthcare
+and elderly care ecosystem, enhancing its brand
+image by word of mouth. For instance, Ping An
+Heath has established an online consultation and
+treatment platform which covers nine medical
+specialties including dermatology, pediatrics and
+traditional Chinese medicine. Patients can see a
+doctor remotely on a 24/7 basis and get responses
+within 60 seconds by means of images, texts,
+speeches, videos and so on, without a need to
+queue offline. For difficult and complicated diseases,
+remote consultations can be conducted. Moreover,
+Ping An Health helps users prevent diseases by
+maintaining health records for them and carrying
+out regular clinical follow-ups. There has been
+no major healthcare incident since the online
+specialty consultation and treatment platform was
+established, with five-star reviews from over 98% of
+21,020
+23.1
+Year of 2023
+31,080
+165,784
+18.7
+19.8
+Note: Figures may not match the calculation due to rounding.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+Embedded Value Movement
+The table below shows how the Company's embedded value changed from the opening balance of
+RMB1,423,763 million as of December 31, 2022 to the closing balance of RMB1,390,126 million as of December
+31, 2023.
+(in RMB million)
+2023
+Note
+L&H Opening EV
+64
+30,863
+6,105
+Third quarter of 2023
+23.7
+24.1
+32.9
+30.1
+Notes: (1) ANP (annualized new premium) is calculated as the sum of 100 percent of annualized first year premiums and 10 percent of
+single premiums.
+(2) Figures may not match the calculation due to rounding.
+Quarterly NBV based on the end-2023 assumptions and model is as follows:
+(in RMB million)
+NBV
+FYP used to
+calculate NBV
+NBV
+margin (%)
+First quarter of 2023
+10,682
+65,514
+16.3
+Second quarter of 2023
+9,430
+48,387
+19.5
+[1]
+874,786
+Expected return on opening EV
+[2]
+[4]
+changes
+Operating variances and others
+[5]
+4,442
+L&H EV operating profit
+[6]=[2+...+5]
+98,216
+Economic assumptions changes
+[7]
+Market value adjustment
+[8]
+7,875
+Investment return variance
+[9]
+Non-operating one-off item and others [10]
+L&H EV profit
+[11]=[6+...+10]
+426
+Operating assumptions and model
+Total
+with in-force
+(10,049) Mainly due to adjustments of fund of insurance
+guarantee assumptions and lapse rate based on
+experience
+68,218
+Including: Unwinding of in-force
+54,216
+In-force unwind at the 11% risk discount rate
+value
+ANA return
+NBV post-risk diversification benefits
+Including: NBV pre-risk diversified
+Diversification effects
+within new business
+14,002
+[3]
+35,605
+31,080
+2,767
+1,758
+Reported NBV based on a cost of capital calculated
+at policy level
+Diversification within new business lowers cost of
+capital
+Diversification between new business and in-force
+lowers cost of capital
+Diversification effects
+1.7
+4,863
+1.2
+Payers:
+"HEALTHCARE AND ELDERLYCARE ECOSYSTEM"
+PROGRESS
+As an online flagship platform of the Group's
+healthcare and elderlycare ecosystem and a bridge
+between payers and providers in the healthcare and
+elderly care industry chain, Ping An Health helps the
+Group's retail and corporate customers seamlessly
+navigate online and offline service resources in our
+healthcare and elderlycare ecosystem. In addition,
+after acquiring PKU Healthcare Group, Ping An will
+further optimize its strategies, strengthen its offline
+medical resources, and build its proprietary flagship
+brand.
+(2) Elderly population data on China is from the database
+of the National Bureau of Statistics of China and
+the Research Report on Aging in China 2022. Elderly
+population data on Japan and Singapore is from the
+World Bank's database.
+Notes: (1) Per capita health expenditure for 2020. Data on China
+is derived from computation on the basis of "the total
+national health expenditure" in the database of the
+National Bureau of Statistics of China. Data on Japan
+and Singapore is from the World Bank's database and
+estimated in RMB.
+Thirdly, Ping An's healthcare and elderlycare
+ecosystem generates long-term revenue by
+developing an online flagship medical platform
+and proprietary healthcare institutions to meet
+domestic mid-market and high-end customers’
+healthcare and elderlycare needs.
+MANAGEMENT DISCUSSION AND ANALYSIS
+10,696
+69.1
+3,643
+2,050
+77.7
+Community Grid, tele and others
+15,058
+15,116
+(0.4)
+3,087
+3,457
+(10.7)
+Ping An made significant progress in both
+retail and corporate customer development by
+effectively integrating insurance with healthcare and
+elderly care services. Ping An's healthcare ecosystem
+had over 56,000 paying corporate clients in 2023.
+Ping An Health had nearly 40 million paying users
+over the past 12 months. Ping An achieved over
+RMB140 billion in health insurance premium income
+and customers entitled to service benefits in the
+healthcare and elderlycare ecosystem accounted for
+over 73% of Ping An Life's NBV in 2023.
+Group business
+"Finance + healthcare":
+1.7
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+58
+In addition, Ping An continuously advances
+healthtech R&D. Ping An ranked first globally by
+the number of healthcare patent applications as of
+December 31, 2023. Ping An has one of the world's
+largest healthcare databases, enables precise
+diagnosis of nearly 5,000 diseases, and proactively
+builds a leading remote consultation and treatment
+platform. In this way, Ping An effectively supports
+sustainable development of the healthcare and
+elderlycare ecosystem by building technological
+capabilities in a forward-looking manner.
+Note: (1) According to Newsweek's World's Best Hospitals List.
+In respect of partner networks: Ping An
+provides services via an "online, in-store,
+and home-delivered" network by integrating
+domestic and overseas premium resources
+including medical services, health services,
+commodities and medicines. Ping An had
+about 50,000 in-house doctors and contracted
+external doctors in China as of December
+31, 2023. Ping An partnered with over 36,000
+hospitals (including all top 100 hospitals
+and 3A hospitals), over 100,000 healthcare
+management institutions and approximately
+230,000 pharmacies (over 37% of all pharmacies,
+up by nearly 6,000 from the beginning of 2023)
+in China as of December 31, 2023. Moreover,
+Ping An launched 580 ten-dimensional home-
+based elderly care service items as of December
+31, 2023. Overseas, Ping An partnered with over
+1,300 healthcare institutions in 33 countries
+across the world as of December 31, 2023,
+including seven of global top 10 and 56 of global
+top 100(1)
+comprehensive, full-cycle health services.
+In accordance with the CPC Central
+Committee's decisions on the Healthy China
+initiative, Ping An will explore and establish a
+unique, high-quality and efficient healthcare
+service system to provide people with
+In the future, Ping An will comprehensively
+develop its presence in healthcare and
+elderly care industries, further integrate PKU
+Healthcare Group with Ping An's existing
+healthcare ecosystem, and further unlock
+synergies between healthcare and insurance.
+PKU Healthcare Group will strive to become a
+leading medical group in China by promoting
+synergistic development of its four business
+lines, namely medical, health management,
+rehabilitation and digital services. As the
+flagship hospital of PKU Healthcare Group,
+Peking University International Hospital
+develops prestigious national/regional medical
+centers, high-end medical centers and a global
+medical service integration platform. Moreover,
+Peking University International Hospital has
+partnered with the world's top hospitals
+including Mayo Clinic, Cleveland Clinic and
+UCLA Health.
+In respect of proprietary flagships: PKU
+Healthcare Group's revenue has continued to
+grow, driven by its robust operations and faster
+development since its takeover by Ping An in
+2021. PKU Healthcare Group's revenue reached
+approximately RMB5 billion in 2023. Peking
+University International Hospital continuously
+strengthened discipline development,
+streamlined operations management, and
+comprehensively improved patient services.
+Peking University International Hospital's
+revenue exceeded RMB2.1 billion in 2023, up
+significantly from its pre-takeover revenue
+of RMB1.3 billion in 2020. Annual outpatient
+visits exceeded 1.18 million, and the number of
+available beds reached 1,200 for the first time
+in 2023. Ping An had five general hospitals, one
+rehabilitation hospital, one cardiovascular and
+cerebrovascular hospital, 17 health management
+centers and 10 children's rehabilitation centers
+as of December 31, 2023.
+Providers:
+Healthcare and Elderlycare as a New
+Driver of Value Growth
+57
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Ping An maintains exclusive health records for
+customers, and provides membership-based
+healthcare and elderlycare services via family
+doctors and elderlycare concierges. Ping An
+guides members through an end-to-end "online,
+in-store and home-delivered" service network
+covering consultation, diagnosis, treatment and
+services under Al-enabled 24/7 seconds-level
+management.
+Membership manager:
+Ping An prioritizes the development of
+"insurance + home-based elderlycare" and
+"insurance + high-end elderlycare" products,
+providing convenient, premium elderly care
+services up to international standards for
+middle- and high-income and ultra-high-net-
+worth customers. Customers entitled to home-
+based elderly care services increased by 60,000
+from the beginning of 2023 to over 80,000 as of
+December 31, 2023.
+"Finance + elderlycare services":
+For mid-market and high-end retail customers,
+Ping An provides "heartwarming services"
+by focusing on "insurance + health" products
+and exploring “insurance + healthcare"
+products. Since its launch in 2021, Ping An
+Zhen Xiang RUN has been upgraded on the
+basis of interactive health management via
+the introduction of 18 service items including
+five highlights, namely unique checkups, blood
+sugar control, online consultation, outpatient
+appointment assistance and accompanying
+consultation, and critical illness management.
+Over 20 million customers of Ping An Life used
+services from the healthcare and elderlycare
+ecosystem in 2023. Notably, about 76% of
+Ping An Life's newly-enrolled customers
+used health management services in 2023.
+The chronic disease prevention and control
+function has served approximately 1.50 million
+users as of December 31, 2023, with a quarterly
+outcome within-range rate of 80% and a service
+satisfaction degree of 99%.
+32,122
+For large and medium-sized corporate clients,
+Ping An provides employee health management
+programs featuring comprehensive benefits,
+premium services and high cost-effectiveness
+via "commercial insurance + healthcare fund
++ healthcare service" products. Over 56,000
+corporate clients and their nearly 26 million
+employees were served in 2023.
+5.6
+39.6
+38.5
+Agency
+32.0
+36.3
+45.3
+45.9
+Bancassurance
+19.2
+28.6
+22.7
+Community Grid, tele and others
+20.5
+22.9
+20.6
+23.0
+Group business
+1.1
+30,423
+32.0
+29.1
+20.1
+2022
+362
+Retail business
+380
+(4.7)
+Total
+165,784
+38.9
+39,262
+28,820
+36.2
+119,336
+Notes: (1) Community Grid, tele and others include Community Grid, telemarketing and Ping An Health Insurance's retail business.
+(2) The differences between FYP used to calculate NBV and FYP disclosed in Management Discussion and Analysis ("MD&A") are
+explained in the appendix.
+(3) Figures may not match the calculation due to rounding.
+The NBV margin based on the end-2022 assumptions and model by segment is as follows:
+By FYP (%)
+By ANP (%)
+2023
+2022
+2023
+51.4
+repurchases, %)
+on net profit
+attributable to
+shareholders of the
+parent company
+(inclusive of share
+Cash dividend
+payout ratio based
+28.1
+40,063
+37,340
+28.7
+994
+53.6
+5,001
+46.3
+Ping An Group's solvency margin ratios were significantly above the regulatory requirements as of
+December 31, 2023. Stable solvency margin ratios ensure that the Company meets capital requirements
+specified by external institutions including regulators and rating agencies, and support the Company in
+developing business and continuously creating value for shareholders.
+28.3
+Notes: (1) For 2022, the cash dividend payout ratio based on restated operating profit attributable to shareholders of the parent company
+was 29.8%, and the cash dividend payout ratio based on restated net profit attributable to shareholders of the parent company
+(inclusive of share repurchases) was 40.5%.
+(2) Cash dividend per share includes the interim dividend and final dividend for the year. Pursuant to the Shanghai Stock
+Exchange's Guidelines for Self-regulation of Listed Companies No.7 - Repurchase of Shares promulgated by the SSE, the
+Company's A shares in the Company's repurchased securities account are not entitled to dividend distribution.
+(3) Except for the 2023 final dividend pending approval at the 2023 Annual General Meeting, profit distributions for other years
+were completed in relevant years.
+CAPITAL ALLOCATION
+When investing in subsidiaries, the Company strictly abides by laws, regulations, regulatory requirements
+and its internal decision-making procedures. In respect of capital allocation, the Company prioritizes
+supporting strategic development, ensuring steady growth in core financial businesses, and boosting
+capital efficiency. The Company invests its capital prudentially, encourages capital-light operations, and
+constantly optimizes returns on invested capital and asset-liability structures.
+GROUP SOLVENCY MARGIN
+(in RMB million)
+Actual capital
+19.2
+Core capital
+28.7
+2.05
+Cash dividend
+2.20
+2022
+Minimum capital
+2021
+2020
+2019
+per share
+(in RMB)
+Growth of cash
+dividend per share
+(%)
+Cash dividend
+payout ratio based
+on operating profit
+Cash dividend
+attributable to
+amount shareholders of the
+(in RMB million) parent company (%)
+Share
+repurchase
+amount
+(in RMB million)
+2.43
+7.3
+0.4
+37.3
+2.42
+1.7
+43,820
+29.5
+1,101
+2.38
+8.2
+43,136
+29.2
+3,900
+44,002
+December 31,
+(in RMB million)
+2023
+194.7%
+207.8%
+50 bps decline in current interest
+rates
+156.8%
+95.2%
+171.1%
+203.3%
+182.0%
+209.5%
+10% decrease in fair value of equity
+assets
+155.0%
+94.9%
+167.3%
+203.9%
+187.7%
+205.9%
+LIQUIDITY RISK MANAGEMENT
+Liquidity risk refers to the risk of the Company being unable to obtain sufficient cash in time, or being
+unable to obtain sufficient cash in time at a reasonable cost, to repay debts that have become due or fulfill
+other payment obligations.
+In accordance with international and domestic regulatory requirements, the Group has established a
+liquidity risk management framework and guiding principles covering risk appetites and tolerance, risk
+limits, risk monitoring, stress testing, and emergency management. Member companies have developed
+their own management procedures and liquidity risk appetites, risk tolerance, and risk limits in line with
+the applicable regulations, industry practices, and features of their business activities. The Group organizes
+its member companies to regularly evaluate liquid assets and maturing debts, and use tools including
+stress testing of cash flows to identify risks in advance. The Group and its member companies hold
+sufficient liquid assets and maintain stable, convenient and diverse sources of financing to ensure that we
+have adequate liquidity resources to tackle possible impacts from adverse situations. Moreover, we have
+developed comprehensive emergency liquidity plans for effectively handling any significant liquidity risk
+events. In addition, the Group effectively prevents the intra-group contagion of liquidity risk with internal
+firewalls.
+76
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+2023
+208.0%
+169.4%
+105.0%
+160.3%
+2022
+1,320,654
+1,714,110
+1,363,413
+1,783,772
+819,568
+823,985
+160.3
+Core solvency margin ratio (%)
+Comprehensive solvency margin ratio (%)
+208.0
+166.4
+December 31,
+217.6
+(2) The minimum regulatory requirements for the core solvency margin ratio and comprehensive solvency margin ratio are 50%
+and 100% respectively.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 75
+MANAGEMENT DISCUSSION AND ANALYSIS
+Liquidity and Capital Resources
+Test results showing the impacts of declines in interest rates and equity assets on solvency margin ratios of
+Ping An Group, Ping An Life, and Ping An P&C as at December 31, 2023 are disclosed below:
+Core solvency margin ratio
+December 31, 2023
+Comprehensive solvency margin ratio
+Ping An Group Ping An Life Ping An P&C Ping An Group Ping An Life
+Ping An P&C
+Base case
+Notes: (1) Core solvency margin ratio = core capital / minimum capital. Comprehensive solvency margin ratio = actual capital / minimum
+capital.
+Sensitivity to key assumptions
+Dividend payouts of the parent company are decided by taking account of the Group's operating profit
+attributable to shareholders of the parent company. The Company's cash dividends and cash dividend
+payout ratios computed on the basis of operating profit attributable to shareholders of the parent
+company for the past five years are shown in the table below. Ping An has grown its full-year cash dividend
+amount at a 7.0% compound annual growth rate over the past five years.
+Annual Report 2023
+CSM release rate (%)
+899,273
+843,227
+[3]
+CSM release base
+80,590
+74,787
+[2]
+Release of CSM
+others
+91,710
+88,587
+[1]=[2]+[5]+[8]
+Insurance service result and
+2022 Note
+2023
+(in RMB million)
+Source of Earnings and Contractual Service Margin Analysis of L&H
+The breakdown by source of earnings of L&H operating profit is presented below:
+Note: Figures may not match the calculation due to rounding.
+[4]=[2]/[3]
+Change in risk adjustment for [5]
+8.9
+6,029
+9.0
+Operating profit before tax
+Income tax
+21,785
+25,589
+[9]
+Investment service result(¹)
+5,236 Mainly affected by the
+growth of operating
+variances such as claim
+deviation
+others
+7,771
+[8]
+24,760
+Operating variances and
+138,165
+4.3
+4.2
+[7]=[5]/[6]
+Risk adjustment release
+142,249
+[6]
+Opening risk adjustment
+non-financial risk
+5,884
+rate (%)
+10,108
+26,023
+27,592
+The Group(1)
+Other businesses and elimination
+2.4
+94,937
+97,250
+(20.7)
+117,143
+92,836
+9.8
+Note:
+222,956
+Technology business
+Asset management business
+Banking business
+5.8
+117,799
+124,647
+Property and casualty insurance business
+11.6
+308,946
+244,777
+[10]=[1]+[9]
+13,090
+N/A
+39,030
+26,696
+39,920
+L&H
+Group
+Fourth quarter of 2023
+Third quarter of 2023
+First quarter of 2023
+Second quarter of 2023
+(in RMB million)
+(1,138)
+OPAT attributable to shareholders
+of the parent company
+Analysis of Embedded Value
+MANAGEMENT DISCUSSION AND ANALYSIS
+69
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+(1) Excluding changes in fair value of debt investments measured at fair value through other comprehensive income backing life
+and health insurance business, as well as accumulated insurance finance expenses for insurance contract liabilities recognized
+through other comprehensive income that can be reclassified into profit or loss, except for the part subject to the VFA.
+6.6
+860,643
+917,492
+Quarterly OPAT based on the embedded value long-run investment return assumption of 4.5% is as follows:
+114,176
+113,495
+[11]
+The differences between FYP used to calculate NBV and FYP disclosed in MD&A are explained below.
+Appendix
+Notes: (1) Excluding changes in the financial risks under the insurance contracts subject to the VFA.
+(2) Figures may not match the calculation due to rounding.
+Mainly affected by
+fluctuations in capital
+markets
+and prudent adjustments
+to noneconomic
+assumptions
+Mainly affected by policy
+withdrawal differences
+and downward market
+interest rate
+Mainly affected by changes
+in business structure
+818,683
+For the twelve months
+768,440
+(74,787)
+899,273
+843,227
+2,069
+6,635
+[9]=X%*[8]
+[10]=[8]+[9]
+[8]=[1]+[2]+[5]+[6]+[7]
+Closing CSM
+Release of CSM
+(80,590)
+CSM release base
+ended December 31, 2023
+Retail business
+71
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+Note: Figures may not match the calculation due to rounding.
+(35,154)
+200,938
+(48,311) Guaranteed renewal and other short-
+term products' renewal premiums
+are included in FYP disclosed in
+MD&A but not included in FYP used
+to calculate value of new business
+In compliance with current accounting
+standards, group investment
+contracts are not included in FYP
+disclosed in MD&A, but included in
+FYP used to calculate value of new
+business due to their contribution to
+value of new business
+165,784
+Total of L&H
+(in RMB million)
+13,157
+32,122
+Group business
+181,973
+133,662
+Reasons
+Difference
+in MD&A
+FYP disclosed
+FYP used to
+calculate NBV
+18,965
+344,892
+to the VFA
+[7]
+Contribution from new business [2]
+[1]
+Opening CSM
+2022 Note
+2023
+(in RMB million)
+As of December 31, 2023, the contractual service margin of life and health insurance business was
+RMB768,440 million. The movement of L&H contractual service margin in 2023 is presented below:
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+("New Business CSM")
+70
+compared to the
+comparative period
+109,810
+106,083
+[12]=[10]+[11]
+Operating profit after tax
+in tax adjustments
+Mainly due to differences
+(3,685)
+(8,092)
+Notes: (1) Investment service result is the part of operating investment income that exceeds the required return on reserves.
+(2) Figures may not match the calculation due to rounding.
+insurance contracts subject
+Present value of expected
+818,683
+Changes in financial risks of
+adjust CSM(1)
+27,106
+(42,160)
+(46,374)
+[6]
+Changes in estimates that
+25,332
+[5]
+Expected interest growth
+[3]
+(%)
+10.1
+[4]=[2]/[3]
+New business CSM margin
+premiums from new
+business sold
+315,274
+384,254
+35,122
+38,951
+877,135
+11.1
+Life and health insurance business (1)
+Change (%)
+2022
+Operating profit attributable to
+of the parent company
+Operating profit attributable to shareholders
+(in RMB million)
+2022
+2023
+2022
+2023
+L&H
+non-controlling interests (1)
+The Group
+The Group's operating profit after tax attributable to shareholders of the parent company in 2023 was
+RMB117,989 million, down 19.7% year on year, with an operation ROE of 13.2%. L&H operating profit after tax
+attributable to shareholders of the parent company was RMB105,070 million, down 3.2% year on year, with an
+operation ROE of 32.1%.
+(2) The Company lowered the investment return assumption to 4.5% in 2023, and retrospectively adjusted data for the comparative
+period as per the adjusted investment return assumption.
+Notes: (1) Insurance finance income or expenses of liabilities subject to the VFA match the changes in the fair value of the underlying
+items backing such business. Therefore, no adjustment is made when operating metrics are measured.
+The impact of one-off material non-operating items and others is the impact of material items that
+management considered to be non-operating incomes and expenses. Such impact in 2023 and 2022
+comprised the revaluation gain or loss on the convertible bonds issued by Lufax Holding to the
+Company.
+Short-term investment variance applies to Life & Health business excluding the part subject to the
+VFA. This short-term investment variance is the variance between the actual investment return on
+the aforesaid business and the embedded value long-run investment return assumption. Net of the
+short-term investment variance, the investment return on the aforesaid Life & Health business is locked
+at 4.5% (2) Debt investments at fair value through other comprehensive income backing such business
+are measured at cost;
+Operating profit is a meaningful business performance evaluation and comparison metric given the long-
+term nature of the Company's major life and health insurance business. Ping An defines operating profit
+after tax as reported net profit excluding items which are of a short-term, volatile or one-off nature and
+others:
+Operating Profit of the Group
+Analysis of Embedded Value
+MANAGEMENT DISCUSSION AND ANALYSIS
+Operating profit after tax attributable to shareholders of the parent company
+The reconciliation between operating profit and reported net profit is as follows:
+67
+Operating profit
+146,895
+[3]
+Impact of one-off material non-operating
+items and others (2)
+(34,305)
+(32,692)
+(34,305)
+(32,692)
+[2]
+Short-term investment variance of L&H (2)
+Plus:
+117,989
+109,810
+170,966
+141,818
+[1]
+1,266
+1,013
+24,071
+23,829
+108,544
+105,070
+106,083
+149
+Ping An Insurance (Group) Company of China, Ltd.
+The discount rate used for the measurement of insurance contract liabilities in life and health insurance
+business is determined based on observable current market interest rates that reflect the characteristics of
+insurance contracts. In order to optimize the match between assets and liabilities, the Company chooses to
+classify some debt investments backing the business as debt investments measured at fair value through
+other comprehensive income. When measuring operating metrics, we exclude the fair value changes
+of debt investments backing life and health insurance business measured at fair value through other
+comprehensive income, as well as the financial changes of insurance contract liabilities recognized in other
+comprehensive income that may be reclassified subsequently into profit or loss, to reflect the essence
+of the Company's asset liability management, except for the relevant part of the business subject to the
+VFA. The financial changes in insurance contract liabilities subject to the VFA are matched with the fair
+value changes of the underlying assets backing this type of business, so no adjustments are made when
+measuring operating metrics.
+725,341
+1,284,494
+29,652
+809,667
+1,368,819
+38,600
+936,703
+1,495,855
+39,262
+23,574
+930,160
+31,080
+830,974
+1,390,126
+NBV
+L&H EV
+Group EV
+Investment return increased by 50 bps per annum
+Risk discount rate increased by 50 bps per annum
+Investment return decreased by 50 bps per annum
+Risk discount rate decreased by 50 bps per annum
+10% increase in mortality, morbidity and accident rates
+Assumptions and model used in 2022
+Base case
+1,489,313
+Annual Report 2023
+1,413,383
+32,633
+This section contains the Group Operating Profit and Operating ROE, and Source of Earning and
+Contractual Service Margin Analysis of L&H. The Company has engaged Ernst & Young (China) Advisory
+Limited to review the reasonableness of the methodology and the calculation results of the Analysis of
+Operating Profit for 2023.
+ANALYSIS OF OPERATING PROFIT
+N/A
+810,293
+1,362,293
+31,018
+822,245
+1,381,397
+5% increase in the policyholders' dividend payout ratio
+10% decrease in the fair value of equity assets
+854,231
+30,863
+1,386,312
+10% increase in maintenance expenses
+30,803
+828,707
+1,387,860
+10% increase in policy discontinuance rates
+28,453
+803,670
+1,362,822
+827,160
+MANAGEMENT DISCUSSION AND ANALYSIS
+(1,844)
+[4]=[1+2+3]
+Banking business
+(1.4)
+8.8
+7.4
+Property and casualty insurance business
+(5.2)
+37.3
+32.1
+Life and health insurance business
+11.4
+Change (pps)
+2023
+(%)
+Operating ROE
+Note: Figures may not match the calculation due to rounding.
+(19.7)
+146,895
+117,989
+The Group
+(30.1)
+2022
+(5,845)
+12.4
+Asset management business
+2023
+(in RMB million)
+December 31,
+December 31,
+Operating equity attributable to shareholders of the parent company
+(4.7)
+17.9
+13.2
+The Group
+(1.0)
+N/A
+N/A
+Other businesses and elimination
+(3.8)
+5.8
+2.0
+Technology business
+N/A
+2.4
+(19.8)
+N/A
+Net profit
+(4,083)
+(65.1)
+Annual Report 2023
+68
+(3) Figures may not match the calculation due to rounding.
+Notes: (1) Operating profit attributable to non-controlling interests = net profit attributable to non-controlling interests in the
+consolidated financial statements - (1 - proportion of shares held by the Company) * the above adjusted items.
+(2) The short-term investment variance is based on a long-run investment return assumption of 4.5%, and data for the comparative
+period has been retrospectively adjusted as per the adjusted investment return assumption. The short-term investment
+variance and impact of one-off material non-operating items and others set out above are net of tax.
+1,004
+793
+23,609
+74,501
+72,598
+Ping An Insurance (Group) Company of China, Ltd.
+111,008
+23,809
+interests
+Net profit attributable to non-controlling
+parent company
+Net profit attributable to shareholders of the
+75,505
+73,391
+134,817
+109,274
+85,665
+Other businesses and elimination
+(in RMB million)
+Life and health insurance business
+5,458
+1,905
+N/A
+2,292
+(20,747)
+2.1
+26,380
+26,925
+(11.4)
+H2023
+10,066
+(3.2)
+108,544
+105,070
+Change (%)
+2022
+Technology business
+Asset management business
+Banking business
+Property and casualty insurance business
+8,918
+Ping An Insurance (Group) Company of China, Ltd.
+28,931
+10 years
+2019
+Fixed rate of 4.55%
+30,000
+Tier 2 capital bonds
+Ping An Bank
+(If not redeemed)
+Next 5 years: 5.64%
+10 years
+2019
+First 5 years: 4.64%
+10,000
+Capital supplementary
+bonds
+Ping An P&C
+2020
+First 5 years: 3.58%
+Next 5 years: 4.58%
+(If not redeemed)
+10 years
+20,000
+Ping An Bank
+20,000
+10 years
+2021
+Fixed rate of 3.69%
+30,000
+Tier 2 capital bonds
+Ping An Bank
+Undated
+2020
+First 5 years: 3.85%
+Adjusted every 5 years
+30,000
+Undated capital bonds
+Ping An Bank
+Adjusted every 5 years
+Undated
+First 5 years: 4.10%
+Undated capital bonds
+Capital supplementary
+bonds
+Ping An Life
+Maturity
+11,583,417
+10,354,453
+Change (%)
+December 31,
+2022
+2023
+December 31,
+Total liabilities to total
+assets ratio (%)
+(in RMB million)
+Total assets
+Total liabilities
+The Group has put in place a robust capital
+management and decision-making mechanism.
+The Group's subsidiaries put forward their capital
+demands based on their own business development
+needs. The parent company then submits its
+recommendations on the overall capital plan for
+the Group, based on the overall situation of the
+subsidiaries' business development. The Board
+of Directors of the Group then determines a final
+capital plan based on the strategic plan of the
+Group before allocating capital accordingly.
+The Company coordinates and manages its liquidity
+and capital resources at the Group level. The
+Strategy and Budget Management Committee,
+and the Risk Management Executive Committee
+under the Group's Executive Committee oversee
+these essentials at the Group level. The Treasury
+Department of the Group is the execution unit for
+liquidity and capital resources management.
+The aim of the Group's liquidity management is to
+maximize shareholder returns by strictly enforcing
+liquidity risk limits, improving the efficiency of fund
+utilization, reducing funding costs, and optimizing
+the allocation of financial resources and the capital
+structure on the premise of security.
+OVERVIEW
+Ping An plans to pay a final dividend of RMB1.50 per share in cash for 2023.
+The full-year cash dividend will be RMB2.43 per share, up 0.4% year on year.
+The cash dividend payout ratio based on operating profit attributable to
+shareholders of the parent company is 37.3%, with total dividend increasing
+for 12 consecutive years.
+Free cash of the parent company remained reasonable at RMB37,407 million
+as of December 31, 2023.
+Ping An's comprehensive solvency margin ratio and core solvency margin
+ratio under the C-ROSS Phase II were 208.0% and 160.3% respectively as of
+December 31, 2023, both well above regulatory requirements.
+Liquidity and Capital Resources
+11,009,940
+9,823,944
+5.2
+5.4
+89.4
+89.2
+year
+Coupon rate
+(in RMB million)
+Туре
+Issuer
+Issuance
+Par value
+Ping An Securities
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+72
+In accordance with its capital plan, the Group
+ensures capital adequacy by issuing capital market
+instruments including equity securities, capital
+supplementary bonds, tier 2 capital bonds, undated
+capital bonds, perpetual subordinated bonds, and
+subordinated corporate bonds to raise capital.
+Adjustments are made to surplus capital through
+dividend distribution or otherwise.
+CAPITAL STRUCTURE
+Note: Total liabilities to total assets ratio = total liabilities / total
+assets.
+0.2 pps
+The following table shows the balances of capital bonds issued by the Group and main subsidiaries as of
+December 31, 2023:
+Perpetual subordinated
+bonds
+2019
+First 5 years: 3.86%
+Adjusted every 5 years
+(in RMB million)
+5,000
+The major free cash outflows were the dividends of RMB44,002 million to shareholders.
+Liquidity and Capital Resources
+Ping An Insurance (Group) Company of China, Ltd. 73
+Annual Report 2023
+37,407
+Ping An Life
+(24,369)
+62,820
+42,958
+2023
+Closing balance of free cash
+Dividends paid out to shareholders
+Others
+Dividends from subsidiaries
+Opening balance of free cash
+(44,002)
+(in RMB million)
+Ping An Bank
+Ping An Asset Management
+74
+According to Article 216 of the Articles of Association, the Company shall attach importance to reasonable
+investment returns for investors in terms of profit distribution. The profit distribution policy of the
+Company shall maintain its continuity and stability. The accumulated profit to be distributed in cash for
+the past three years shall not be less than 30% of the average yearly distributable profit realized in the past
+three years, provided that the annual distributable profit of the Company (namely the profit after tax of
+the Company after covering losses and making contributions to the revenue reserve) is positive in value
+and such distributions are in compliance with the prevailing laws and regulations and the requirements
+of regulatory authorities for solvency margin ratios. In determining the specific cash dividend payout
+ratio, the Company shall consider its profitability, cash flows, solvency position, and operational and
+business development needs. The Board of Directors of the Company is responsible for formulating and
+implementing a profit distribution proposal in accordance with the Articles of Association. The Board of
+Directors will ensure the continuity and stability of the profit distribution policy so that the Group can seize
+opportunities for future growth while maintaining financial flexibility. The Board of Directors proposed to
+pay a final dividend of RMB1.50 per share (tax inclusive) in cash for 2023. As the Company already paid an
+interim cash dividend of RMB0.93 per share (tax inclusive), the full-year cash dividend for 2023 is RMB2.43
+per share (tax inclusive), up 0.4% year on year.
+DIVIDEND DISTRIBUTION
+62,820
+614
+834
+1,389
+Ping An P&C
+1,480
+2,741
+53,672
+2023
+Total
+Ping An Securities
+Ping An Trust
+Ping An Financial Leasing
+2,090
+Free cash of the parent company includes bonds, bank deposits and cash equivalents that the parent
+company holds. Free cash of the parent company is mainly invested in subsidiaries or used for daily
+operations or dividend distribution. Free cash of the parent company remained reasonable at RMB37,407
+million as of December 31, 2023.
+The major free cash inflows were the dividends of RMB62,820 million from subsidiaries as detailed below:
+3 years
+5 years
+2022
+3.56%
+1,100
+Subordinated corporate
+Ping An Securities
+bonds
+3 years
+2022
+3.10%
+1,900
+Subordinated corporate
+Ping An Securities
+FREE CASH OF THE PARENT COMPANY
+2021
+bonds
+Founder Securities
+Undated
+1,200
+2023
+3.80%
+500
+Subordinated corporate
+bonds
+Founder Securities
+Subordinated corporate
+2023
+3.68%
+2 years
+Subordinated corporate
+bonds
+Founder Securities
+bonds
+3 years
+2023
+4.10%
+1,500
+Optimizing standardized policies, rules and
+procedures for credit risk management;
+Setting and continuously monitoring credit
+risk limits in multiple dimensions including
+customers and portfolios to effectively prevent
+and control large risk exposures;
+Continuously strengthening the risk
+management system to standardize the Group's
+consolidated credit risk management; and
+Strengthening the risk warning and monitoring,
+and enhancing post-investment management.
+The Group is in strict compliance with the credit
+risk management guidelines issued by regulators.
+Under the guidance of the Board of Directors and
+the senior management, the Group carries out
+consolidated analysis, monitoring and management
+of the credit risk exposures of lending and
+investment businesses at the Group level. On this
+basis, the Group establishes and refines credit
+risk limits for different companies and business
+lines to manage credit risk of large risk exposures
+in the Group's consolidated financial statements.
+The Group also provides forward-looking insights
+into and analysis of potential credit risks and their
+impacts on the Group.
+In addition, the Group continuously enhances credit
+risk management for key sectors including real
+estate in light of macroeconomic situations and
+sectoral risk trends. While meeting financing needs
+of enterprises in various sectors in line with national
+macroeconomic policies, the Group strengthens
+new business admittance and asset portfolio
+management for key areas. By doing so, the Group
+continuously optimizes its asset portfolio and
+reduces overall portfolio risks.
+84
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+credit risk associated with the banking business,
+the Group continuously improved the whole-
+process management of credit risks and effectively
+enhanced the management of bank credit risks in
+line with changes in the financial and economic
+situation and macro-control policies as well as the
+requirements of regulatory authorities. The Group
+implemented the strategy of "strong retail banking,
+selective corporate banking, and specialized
+interbank business” to continuously optimize the
+asset portfolio. The Group strengthened the early
+warning management to establish and continuously
+improve the automatic early warning system based
+on big data, strictly implemented post-lending
+management policies, and regularly reviewed
+customers' risk profiles and overall asset quality.
+Risk management was strengthened in key areas
+to prevent the accumulation of credit risk from
+large exposures. The disposal of non-performing
+assets was enhanced by leveraging the Group's
+specialized strengths. For credit risk associated with
+the investment business of insurance funds and so
+on, the Group assesses the credit status of potential
+investment assets and counterparties in line with
+internal risk policies and procedures, strictly reviews
+the quality of counterparties through means
+including credit rating, name lists and admittance
+management, chooses counterparties that have
+a relatively high credit standing, and adopts a
+multi-dimensional approach for setting risk limits
+on investment portfolios to manage credit risks.
+Moreover, the Company established investment and
+financing risk alerting mechanisms, optimized risk
+warning and monitoring, screened public opinion for
+alert signals, and minimized potential losses from
+risk events.
+core methodology;
+December 31, 2023
+The Group carries out targeted measures to control
+credit risk in light of the different characteristics
+and risk profiles of businesses including insurance,
+banking and investment. For reinsurance credit risk
+associated with insurance business, namely, credit
+risk which occurs when a reinsurance company is
+unable to fulfill its obligations, the Group evaluates
+the credit of the reinsurers before entering into
+a reinsurance contract, and cooperates with
+selected reinsurance companies that have a high
+credit standing for mitigating credit risks. For
+Continuously improving the credit risk
+management mechanism with risk rating as its
+Increase/
+(decrease)
+in equity
+before tax
+Credit risk refers to the risk of unexpected
+losses caused by the default of any debtors or
+counterparties or by the adverse changes in
+their credit conditions. The Group is exposed to
+credit risks primarily associated with its deposit
+arrangements with commercial banks, loans
+and advances to customers, bond investments,
+investments in debt schemes and debt financial
+products, reinsurance arrangements with reinsurers,
+policy loans, margin financing, financial guarantees,
+loan commitments, and so on.
+Low-risk financial assets measured
+at amortized cost held by the
+Group
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+83
+Risk Management
+The sensitivity to foreign exchange risk is
+calculated by assuming a simultaneous and uniform
+depreciation of 5% against the Renminbi of all
+foreign currency-denominated monetary assets
+and liabilities, as well as non-monetary assets and
+liabilities measured at fair value as illustrated in the
+table below:
+December 31, 2023
+(in RMB million)
+Net exposure to fluctuations in exchange
+rates assuming a simultaneous and
+uniform depreciation of 5% of all foreign
+currency-denominated monetary assets
+and liabilities and non-monetary assets
+and liabilities measured at fair value
+against the Renminbi
+(5,334)
+If the above currencies appreciate by the same
+proportion, the appreciation will have an inverse
+effect of the same amount on equity before tax in
+the table.
+-
+Market Risk Real Estate Price Risk
+The Group is exposed to real estate price risk
+associated with its holding of investment properties.
+The Group tracks its exposure to property
+investment, monitors the movement of real estate
+prices in relevant regions, analyzes the impact of
+macro policies and regional economic development
+on real estate prices, has engaged independent
+valuers for the fair value assessment, and conducts
+stress tests on a regular basis.
+The fair value of the Group's holding of buildings
+under investment properties stood at RMB162,654
+million as of December 31, 2023.
+1.3 Credit Risk
+The Group manages credit risk through various
+control measures, including:
+As a percentage of
+carrying value
+Branding
+Department of
+member companies
+1.4 Operational Risk
+The Group has set up a group-level reputation risk
+management system to identify and prevent the
+reputation risk across the Group, and cope with
+negative impacts of reputation events in accordance
+with applicable laws, regulations and regulatory
+requirements. Measures include establishing and
+improving an ex ante evaluation mechanism for
+reputation risk, nipping reputation risk triggers
+in the bud, developing emergency plans on the
+basis of evaluation results, improving the in-the-
+process procedures for reputation risk management,
+carrying out hierarchical response and whole-
+process disposal, conducting ex post reviews and
+summarization, and carrying out appraisal and
+supervision on the basis of results. The Group
+adheres to a reputation risk management philosophy
+centering on prevention, and conducts multi-level
+and differentiated reputation risk management,
+taking risk prevention and control, effective risk
+disposal, and image repair as the ultimate standards
+for reputation risk management. The Group has put
+in place rational, reasonable, timely and efficient risk
+prevention, response and disposal mechanisms to
+rapidly respond to and efficiently handle reputation
+risk events in a coordinated manner so that its
+reputation and social image, if damaged, can be
+repaired in time.
+1.7 Liquidity Risk
+For details of the Company's liquidity risk
+management, please refer to the section headed
+"Liquidity and Capital Resources."
+2. Group-level Risks
+The Group proactively strengthens risk management
+of its member companies, implements applicable
+regulatory requirements, and constantly enhances
+management of group-level risks including
+risk contagion, organizational structure non-
+transparency risk, concentration risk, and non-
+insurance risk.
+2.1 Risk Contagion
+Risk contagion refers to a situation where the
+risk created by a member company of the Group
+spreads to another member company of the Group
+by means of related party transactions or other
+activities, causing unexpected losses to such other
+member company or the Group.
+As the Group unlocks synergies in integrated
+finance, in order to prevent intra-group risk
+contagion, the Group has strengthened management
+and coordination across the Group by building
+firewalls, managing related party transactions,
+outsourcing and integrated financial services,
+and centralizing branding, communications and
+information disclosure. The management of risk
+contagion within the Group has been fully improved.
+The Group has built strict firewalls, including legal-
+entity firewalls, finance firewalls, treasury firewalls,
+information firewalls, and personnel management
+firewalls, between the Group and its member
+companies and among its member companies to
+prevent material risk contagion.
+98
+86
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+The Group formulates its allocation strategies for
+assets including foreign exchange assets based
+on the Company's risk appetite, risk profiles of
+the asset class, and stress test results. Through
+measures including limits management and hedging,
+the Group keeps foreign exchange risk under
+control by continuing to optimize the aggregate
+foreign currency assets and liabilities as well as the
+structures, enhances overseas asset management,
+and regularly analyzes the sensitivity to foreign
+exchange risk.
+Reputation risk is the risk of the Company's brand
+being tarnished or operations of the Group and its
+member companies being affected due to negative
+comments of stakeholders, the public and media on
+the Company arising from behaviors of the Group
+and its member companies, behaviors of employees
+and agents, and external events.
+91.5%
+1.6 Reputation Risk
+between strategies and the market environment as
+well as the Company's capabilities due to ineffective
+processes of developing or implementing strategies
+or changes in the business environment.
+Operational risk refers to the risk of direct or
+indirect losses resulting from inadequate or flawed
+internal procedures, employees, information
+technology systems, and external events.
+The Group strictly follows applicable regulations
+and its operational risk management strategies. The
+Group uses the existing compliance management
+and internal control framework as the basis to
+integrate domestic and foreign regulators' advanced
+standards, methods, and tools for operational risk
+management. The Group optimizes the structure
+and policies for operational risk management, and
+strengthens collaboration and cooperation between
+departments. The Group has established daily
+monitoring and reporting mechanisms to provide
+regular reports to the management on the overall
+operational risk situation. Moreover, the Group
+develops rules and standards for operational risk
+management and strengthens system development
+to constantly improve the effectiveness and level of
+operational risk management.
+The Group manages operational risks primarily
+through the following mechanisms and measures:
+Establishing and improving a comprehensive
+management approach covering the whole
+Group to identify, evaluate, monitor, report,
+control and mitigate operational risks;
+Constantly optimizing the operational risk
+policies, frameworks, workflows, systems,
+and tools to enhance overall operational risk
+management;
+Stepping up the use of operational risk
+management tools among member companies,
+including the Risk and Control Self-Assessment
+(RCSA), Key Risk Indicator (KRI), and Loss Data
+Collection (LDC);
+Pushing forward the operational risk capital
+measurement according to regulatory
+requirements and management requirements;
+and
+Promoting a culture of operational risk
+management through targeted training.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd.
+85
+Risk Management
+1.5 Strategic Risk
+Strategic risks refer to the risks of a mismatch
+With a robust strategic risk management framework
+and relevant procedures, the Group studies
+macroeconomic conditions in China and abroad,
+impacts of the regulatory landscape, and market
+competition dynamics to conduct thorough
+evaluation and research of the Group's general
+strategies and development plans. The Group
+coordinates and regularly formulates its general
+strategies and annual business plans, sets out
+strategic priorities for the Group and its member
+companies, and ensures not only the consistency
+between member companies' and the Group's
+strategic goals, but also the coordination between
+member companies' strategic goals. Furthermore,
+the Group oversees and evaluates member
+companies' implementation of strategic plans and
+annual plans to ensure effective implementation
+of the Group's general strategic plans. The Group
+strengthened the management of its product
+strategy, investment strategy, brand strategy and
+overseas development strategy, and effectively
+implemented relevant plans in accordance with the
+strategic risk management rules in 2023.
+Finance and Planning
+Department of
+member companies
+Market Risk - Foreign Exchange Risk
+Foreign currency-denominated assets held by the
+Group are exposed to foreign exchange risks. These
+assets include monetary assets such as deposits and
+bonds held in foreign currencies and non-monetary
+assets measured at fair value including stocks and
+funds held in foreign currencies. The Group's foreign
+currency-denominated liabilities are also exposed
+to risks as a result of fluctuations in exchange rates.
+These liabilities include monetary liabilities such as
+borrowings, customers' deposits and liabilities for
+incurred claims denominated in foreign currencies,
+as well as non-monetary liabilities measured at fair
+value.
+before tax
+Risk assessments for major decisions and
+solutions to significant risks; and
+The organizational structure and responsibilities
+of risk management;
+Overall objectives of risk management, risk
+appetites and tolerance, and risk management
+policies and procedures;
+The Audit and Risk Management Committee under
+the Board of Directors is responsible for having
+a thorough understanding of the Company's
+major risk exposures and management situations,
+monitoring effectiveness of the risk management
+framework, deliberating the following matters and
+making recommendations to the Board of Directors:
+The Board of Directors is the highest decision-
+making authority for the Company's risk
+management and takes responsibility for the
+effectiveness of the enterprise risk management
+function.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+78
+member companies
+Department of
+Annual risk assessment reports.
+CASH FLOW ANALYSIS
+Net cash flows from operating activities
+Net cash flows from investing activities
+Net cash flows from financing activities
+2023
+2022
+Change (%)
+360,403
+476,776
+(24.4)
+(104,001)
+(222,056)
+(215,760)
+(51.8)
+(230,873)
+(in RMB million)
+(3.8)
+The Company has set up the Related Party
+Transaction Control and Consumer Rights Protection
+Committee under the Board of Directors. The
+Related Party Transaction Control and Consumer
+Rights Protection Committee coordinates related
+party transactions management of the Company,
+ensures the compliance and fairness of the
+Company's related party transactions, and prevents
+risks from related party transactions. The Committee
+performs its duties as follows:
+To review material related party transactions,
+including but not limited to providing opinions
+on related party transactions and matters
+deliberated by the Company's Board of
+Directors according to regulatory requirements,
+submitting them to the Company's Board
+of Directors for review and approval, and
+giving opinions in writing on the compliance,
+fairness, and necessity of material related party
+transactions, and whether the interests of the
+Company and insurance consumers would be
+affected;
+comprehensive risk management system, improves
+its organizational structure, formulates risk
+management policies and guidelines, standardizes
+risk management procedures, and fulfills risk
+management responsibilities. The Group adopts
+qualitative and quantitative risk management
+approaches to identify, measure, evaluate,
+monitor, report, control and mitigate risks, so as to
+effectively prevent systemic risks associated with
+integrated finance and enhance risk management
+under an integrated development model of various
+businesses.
+RISK MANAGEMENT METHODOLOGY
+The Group continuously strengthens its
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+60
+80
+The Company's business development and risk
+management came under pressure due to internal
+and external environments in 2023. The Group
+maintained a prudent risk appetite, operated in
+strict compliance with laws and regulations, took
+reasonable and appropriate risks, effectively
+controlled credit, market and other risks, prevented
+operational, compliance, IT and brand reputation
+risk events, and strengthened strategic risk
+management. Moreover, the Group ensured that its
+solvency position was always in line with regulatory
+requirements, and kept overall risk under control.
+The Group's risk appetite system consists of
+three parts, namely the risk appetite statement,
+risk tolerance, and risk limits. The risk appetite
+statement describes the amount of risk that the
+Group is willing to take to achieve its business
+objectives. The risk tolerance defines each risk
+category in the risk appetite statement in detail,
+covering all the major risk categories in the Group's
+enterprise risk management. Risk limits further
+quantify the risk tolerance. On the basis of the
+risk tolerance, the Group sets corresponding risk
+limits for risk categories that can be monitored
+with quantitative indicators, and applies the risk
+limits to routine risk monitoring and alerting, so as
+to support business decision-making and strike a
+balance between risk management and business
+development.
+A risk appetite system is central to Ping An's
+overall strategy and enterprise risk management.
+Considering the Group's overall strategy and its
+member companies' development needs, the Group
+continued to improve the risk appetite system that
+matches its business strategies, and combined risk
+appetites with management decisions and business
+development to promote healthy growth of the
+Group and its member companies.
+RISK APPETITE SYSTEM
+To determine the overall targets, basic policies,
+and procedures for the management of related
+party transactions;
+Based on a continuously upgraded and improved
+risk governance framework, a risk culture has
+permeated the Group's ranks, from the Board
+of Directors to senior management and from
+specialized committees to employees. This culture
+has facilitated the establishment of an effective
+and efficient approach that combines top-down
+management and bottom-up communication, which
+lays a solid foundation for the effective integration
+of risk management into the Group's daily
+operations. This in turn helps to protect shareholder
+equity, improves capital efficiency, supports
+management decisions, and ultimately creates value
+for the Group.
+The Group fulfills domestic and international
+regulatory requirements related to systemic risk
+management in accordance with high standards,
+and continuously conducts assessment and analysis
+of systemic risk. According to a comprehensive
+review and assessment, Ping An's systemic impact
+on financial markets is limited and under control.
+Moreover, the Group continuously builds and
+improves the early warning system and the recovery
+and resolution management mechanism in response
+to external market situations and the Group's
+business development, develops a multi-level crisis
+control mechanism that covers the Group and its
+member companies, and organizes emergency drills,
+supporting steady, healthy business development of
+the Group.
+clarified the management responsibilities and
+implemented a risk management structure of
+"dual management" by the Group and its member
+companies. In respect of risk limit management,
+the Group defined limits for various risks at the
+Group level by setting risk appetites, established
+an enterprise risk management indicator system,
+and continuously monitors its implementation. In
+respect of risk management standards, the Group
+reviews and standardizes the risk management
+procedures and requirements, and incorporates
+them into management policies. The Group requires
+member companies to implement the management
+requirements at the Group level. In this way, the
+Group adheres to the risk limits through effective
+risk management. Moreover, the Group further
+improved its risk appetite system, optimized the
+enterprise risk indicator system, and enhanced the
+risk monitoring, alerting and reporting mechanisms.
+The Group also applied artificial intelligence to risk
+management to ensure that all risks are effectively
+identified and managed on a timely basis. In
+addition, the Group continued to conduct risk
+reviews of business development and optimized
+capital utilization to maintain a balance between
+business development and risk management. The
+Group fully implemented regulatory requirements
+to support the Company's sustainable, healthy
+strategic and business development. The Group
+established and continuously enhanced risk
+appraisal and evaluation mechanisms to strengthen
+risk control and raise the awareness of risk
+management.
+Risk Management
+79
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2023
+In 2023, the Group continuously improved its
+enterprise risk management framework, and
+further consolidated the basis for enterprise risk
+management in line with the latest regulatory
+requirements and internal management needs.
+In respect of risk management coverage,
+the Company's enterprise risk management
+framework covers all kinds of general risks and
+insurance group-specific risks. In respect of
+risk management responsibilities, the Company
+The Group Executive Committee leads all
+the aspects of the Group's risk management,
+comprising committees including the Risk
+Management Executive Committee (RMEC),
+the Investment Management Committee, the
+Strategy and Budget Management Committee,
+the Investor Relations Management Committee,
+the Technology Development Committee, and the
+Sustainable Development Committee. The RMEC,
+as a specialized committee, directly reports and
+is responsible to the Group Executive Committee
+and holds the supreme risk management power
+under the Group Executive Committee. The RMEC is
+responsible for the decision-making and execution
+of the Group's risk management, and performing
+management functions, including comprehensive
+risk management strategies, policies and rules,
+implementation and handing out awards and
+punishments. In addition, the RMEC develops an
+integrated risk management framework for the
+Group and its member companies to ensure full
+coverage of risk management. An executive at the
+Group level in charge of risk management acts as
+the RMEC's chairman. Members of the RMEC are
+the executives in charge of different risk categories,
+each of whom has clearly-defined responsibilities for
+managing various risks.
+Other duties that shall be undertaken according
+to regulations and other tasks stipulated by
+the Charter of the Related Party Transaction
+Control and Consumer Rights Protection
+Committee and authorized by the Board of
+Directors.
+To regularly review the related party list under
+the Measures for the Administration of Related
+Party Transactions of Banking and Insurance
+Institutions; and
+To review annual reports on related party
+transactions;
+RISK MANAGEMENT CULTURE
+Net cash inflows from operating activities decreased year on year mainly due to a decrease in cash inflows
+from Ping An Bank's deposits.
+Net cash outflows from investing activities decreased year on year mainly due to a decrease in net cash
+outflows from Ping An Life's investing activities.
+Net cash outflows from financing activities decreased year on year mainly due to increased cash inflows
+from negotiable certificates of deposit issued by Ping An Bank.
+For over 30 years since its establishment, Ping An has regarded risk management as an integral part of
+its operations and business activities. Ping An takes steady steps to build an enterprise risk management
+system aligned with its strategies and the nature of its business. Ping An continuously optimizes the
+risk management framework, standardizes risk management procedures, and adopts qualitative and
+quantitative risk management methodologies to identify, measure, evaluate, monitor, report, control and
+mitigate risks. Keeping risks under control, Ping An promotes sustainable, healthy business growth in order
+to become a "world-leading integrated financial, healthcare and elderlycare services provider."
+The Group continuously improves its compliance and internal control management mechanisms in response
+to changing domestic and global economic conditions, evolving laws, regulations and regulatory policies,
+and diversifying businesses of the Group. The Group builds a rational, robust enterprise risk management
+framework in line with international standards centering on capital management, based on risk governance,
+oriented by risk appetites, and capitalizing on risk quantification tools and risk performance appraisals. The
+Group strikes a balance between risk management and business development by constantly enhancing
+its risk management and techniques as well as dynamically managing its single and accumulated risks to
+support sustainable, healthy business development.
+RISK MANAGEMENT ORGANIZATIONAL STRUCTURE
+The Group proactively complies with risk governance requirements under the Company Law of the People's
+Republic of China and other applicable laws and regulations as well as the Articles of Association and other
+applicable company policies and procedures. Ping An has put in place a comprehensive risk management
+organizational framework which holds the Board of Directors ultimately accountable and is directly upheld
+by the management. Supported closely by various committees and relevant functions, the framework
+covers risk management across all of the Group's member companies and business lines.
+Board of Directors
+Audit and Risk Management
+Committee
+Group Executive
+Committee
+Strategy and Budget
+Management
+Committee
+Related Party Transaction
+Control and Consumer Rights
+Protection Committee
+Investment
+Management
+Committee
+Risk Management
+Executive Committee
+RISK MANAGEMENT OBJECTIVES
+Technology
+Development
+Committee
+Sustainable
+Development
+Committee
+Group
+Legal and Compliance
+Department, Internal
+Control Management
+Center of the Group
+Risk Management
+Department, Internal
+Control
+Management Center
+of the Group
+Branding
+Department of the
+Group
+Finance & Planning
+Center of the Group
+Technological
+Security
+Center of the Group
+Member
+Companies
+Legal & Compliance
+Department of
+member companies
+Risk Management
+Department of
+member companies
+Investor
+Relations
+Management
+Committee
+Ping An strives to become a "world-leading integrated financial, healthcare
+and elderlycare services provider." To achieve this goal, the Group continuously
+optimizes the risk management system and strengthens the management of
+various risks. By identifying, evaluating, and mitigating risks, Ping An achieves
+a balance between risks and returns, which ultimately contributes to healthy
+business growth.
+Risk Management
+MANAGEMENT DISCUSSION AND ANALYSIS
+CASH AND CASH EQUIVALENTS
+(in RMB million)
+Cash
+Bonds of original maturities within 3 months
+Financial assets purchased under reverse repurchase
+agreements of original maturities within 3 months
+Total
+December 31,
+December 31,
+2023
+2022
+Change (%)
+317,130
+3,995
+354,238
+5,225
+(10.5)
+(23.5)
+159,347
+84,739
+88.0
+Information
+Technology
+444,202
+8.2
+The Company believes that the liquid assets currently held, together with net cash generated from future
+operations and the short-term borrowings available, will be sufficient to meet the foreseeable liquidity
+requirements of the Group.
+Annual Report 2023
+Ping An Insurance (Group) Company of China, Ltd. 77
+The Group improves its risk governance
+framework and risk management reporting
+mechanism, includes risk indicators in its
+performance appraisal system, and integrates
+its risk management culture into its corporate
+culture. In this way, the Group has laid the
+foundation for healthy, sustainable and stable
+business development;
+The Group improves the risk appetite
+framework in line with its business development
+strategy. The Group also optimizes risk
+management policies and standardizes risk
+management requirements for its member
+companies;
+The Group strengthens consolidated risk
+monitoring, conducts holistic management
+of its member companies' risks, carries out
+comprehensive risk review and assessment,
+and improves the system of risk monitoring
+indicators;
+The Group continuously improves the
+management framework for general risks
+including credit risk and group-level risks
+including concentration risk. The Group has
+strengthened its ability to manage various risks
+via rule formulation, risk limit management,
+system development, and risk reporting, so as
+to comprehensively improve the Group's risk
+management for its integrated finance business;
+Implement prudent underwriting policies,
+establish guidelines for policy contracting
+and underwriting, and effectively prevent and
+reduce adverse selection risks;
+Annual Report 2023
+82
+Implement effective product development
+policies to develop products with proper
+insurance coverage and fair pricing, and control
+product pricing risks;
+Establish model management policies,
+standardize actuarial models of the Group, and
+strictly control model risks;
+Develop a set of key insurance risk indicators,
+monitor them on a regular basis, analyze
+abnormal changes, and take management
+measures;
+Develop insurance risk management policies
+and a scientific and consistent insurance risk
+management framework within the Group;
+The mechanisms and procedures adopted by the
+Group to manage insurance risks are as follows:
+(543)
+(5,759)
+(618)
+Maintain strict claim investigation and
+settlement procedures, identify and prevent
+questionable or fraudulent claims;
+(6,551)
+(5,759)
+(618)
++5%
+insurance
+Short-term life
+(6,551)
++5%
+insurance
+Property and casualty
+Increase/(decrease) in equity before tax
+Net of reinsurance
+Gross of reinsurance
+(543)
+Maintain effective product management
+procedures, analyze the experience and trends
+based on the latest, accurate and reliable data,
+and carefully manage the product portfolio to
+control insurance risks;
+Evaluate the liability for remaining coverage
+and the liability for incurred claims using
+effective insurance contract liability assessment
+procedures and methods, and assess the
+insurance contract liability adequacy on a
+regular basis; and
+Ping An Insurance (Group) Company of China, Ltd.
+in equity
+Increase/
+(decrease)
+Listed equities and securities
+investment funds classified as
+financial assets measured at fair
+value through profit or loss and
+measured at fair value through
+other comprehensive income
+December 31, 2023
+(in RMB million)
+The sensitivity to equity risk is assessed by
+assuming a 10% decrease in the prices of equity
+investments, the impact of which is illustrated in the
+table below:
+Listed equity investments held by the Group are
+exposed to market price risks. These investments
+are primarily listed equities and securities
+investment funds. The Group uses various methods
+including sensitivity analysis and stress tests to
+evaluate the equity risk faced by such investments.
+Market Risk - Equity Risk
+(35,669)
+(2,349)
++10 bps
+Increase/ Increase/
+(decrease) in (decrease) in
+profit
+equity
+before tax before tax
+Change in
+interest rate
+at fair value through profit
+or loss and measured at
+fair value through other
+comprehensive income
+financial assets measured
+Debt investments classified as
+(in RMB million)
+December 31, 2023
+Interest rate sensitivity of insurance businesses is
+assessed by assuming a 10 basis-point parallel shift
+of the government bond yield curve, the impacts of
+which are illustrated in the table below:
+Fixed maturity investments held by the Group are
+exposed to the interest rate risk. These investments
+are substantially represented by debt investments
+booked at fair value on the balance sheet. The
+Group uses various methods including sensitivity
+analysis and stress tests to evaluate the interest rate
+risk faced by such investments.
+Market Risk - Interest Rate Risk
+The Group continuously improves its market
+risk management framework, and enhances the
+abilities to identify, measure, evaluate, monitor,
+report, control and mitigate market risks. The
+Group improves the risk management reporting
+mechanism, and consolidates risk monitoring and
+management. The Group optimizes stress testing to
+realize its decisional role in adherence to risk limits.
+The Group improves its risk limit framework to
+monitor risks across the Group, member companies,
+and business lines. The Group enhances the risk
+warning mechanism to ensure more targeted,
+forward-looking and thorough risk management. The
+main market risks to which the Group is exposed are
+interest rate risk, equity risk, foreign exchange risk,
+and real estate price risk.
+Market risks refer to the risks that cause unexpected
+losses to the Group due to unfavorable changes in
+interest rates, equity prices, foreign exchange rates,
+and real estate prices.
+1.2 Market Risk
+Maintain effective reinsurance management
+procedures, properly set retained risk limits,
+and use reinsurance as an effective risk transfer
+tool to transfer the excess risks to reinsurers
+with a high level of security to control
+insurance risks.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Increase/(decrease) in profit before tax
+claim costs Gross of reinsurance Net of reinsurance
+(48,436)
+(in RMB million)
+December 31, 2023
+Proactively complying with the requirements of
+internal management and external regulation,
+the Group has strengthened the management of
+insurance risk, market risk, credit risk, operational
+risk, strategic risk, reputation risk, and liquidity
+risk at the Group level. The Group instructs and
+coordinates risk management at member companies,
+and actively promotes the implementation of the
+Group's management requirements by member
+companies.
+1. General Risks
+Risk Management
+Ping An Insurance (Group) Company of China, Ltd. 81
+Annual Report 2023
+1.7 Liquidity Risk
+1.6 Reputation Risk
+1.5 Strategic Risk
+2.4 Non-insurance Risk
+1.4 Operational Risk
+2.3 Concentration Risk
+1.1 Insurance Risk
+2.2 Organizational Structure
+Non-transparency Risk
+1.2 Market Risk
+2.1 Risk Contagion
+1.1 Insurance Risk
+2. Group-level Risks
+1. General Risks
+The Group has categorized all risks to ensure they
+are well identified and systematically managed.
+Below are major risks faced by the Group and their
+definitions as per the C-ROSS Phase II and other
+regulatory requirements:
+RISK ANALYSIS
+Member companies are encouraged to employ
+smart system platforms in risk management
+and effectively apply IT capabilities to the
+entire risk management cycle to enhance risk
+management capabilities and execute the
+Company's strategies.
+The Group has improved its risk warning
+mechanism, providing timely and effective
+alerts on industry developments, regulatory
+information and risk events, and effectively
+guarding against potential risks. The Group has
+also enhanced its risk emergency management
+mechanism; and
+quantitative and qualitative impacts on the
+risk limits. Such measures enable the Group to
+plan ahead and take necessary precautions in a
+timely manner to prevent and mitigate risks;
+The Group utilizes tools and methods including
+scenario analysis, stress tests and risk limits to
+continuously develop and optimize quantitative
+techniques and models of risk management,
+analyze risk exposures and evaluate their
+1.3 Credit Risk
+Insurance risk refers to the risk of adverse deviation
+of the actual mortality rate, morbidity rate, loss
+ratio, expense, and lapse rate from expectations,
+which may cause losses to the Group.
+The Group assesses and monitors insurance risks
+involved in insurance business through sensitivity
+analysis, stress testing and so on. The Group
+mainly evaluates the pre-tax impacts of actuarial
+assumptions, including the morbidity rate, lapse
+rate and expense, on its profit, equity and so on in
+different scenarios.
+Sensitivity analysis of assumptions for the Group's long-term life insurance contracts
+Increase/(decrease) in profit before tax
+Net of reinsurance
+Sensitivity analysis of assumptions for the Group's property and casualty insurance and short-term life
+insurance contracts
+Note: (1) Change in mortality, morbidity, and accident rates refers to a 10% increase in the morbidity rate, mortality rate, accident rate,
+and other rates for life insurance policies (and a 10% increase before the payment period and a 10% decrease in the payment
+period in the mortality rate for annuity policies).
+(702)
+(14,486)
+(3,562)
+(706)
+(3,611)
+(15,369)
+(474)
+(7,487)
+(1,775)
+(477)
+(8,017)
+(1,794)
++5%
++/-10%
++10%
+rates
+Maintenance expense
+Policy lapse rates
+accident rates, etc.(¹)
+Gross of reinsurance
+Increase/(decrease) in equity before tax
+Net of reinsurance
+Gross of reinsurance
+Change in an
+assumption
+Mortality, morbidity,
+(in RMB million)
+December 31, 2023
+Change in
+average
+480,472