diff --git "a/China/18.PingAn Insurance_$100.07 B_Financial Service/2016/results.txt" "b/China/18.PingAn Insurance_$100.07 B_Financial Service/2016/results.txt"
new file mode 100644--- /dev/null
+++ "b/China/18.PingAn Insurance_$100.07 B_Financial Service/2016/results.txt"
@@ -0,0 +1,27832 @@
+616,319
+N/A
+N/A
+8.9
+2,215
+8.0
+2,123
+290,320
+399,849
+558,435
+1,962
+2,212
+2,888
+2,322
+677,221
+N/A
+N/A
+N/A
+13.9
+20.6
+3,957
+652,756
+(1) Some indicators have been disclosed for less than five years.
+Net profit
+ROE (%) (¹)
+SECURITIES BUSINESS
+Assets held in trust
+Net profit
+ROE (%) (¹)
+TRUST BUSINESS
+9.90
+10.86
+N/A
+2,478
+924
+510
+SEX COMEDY 14
+※保险监督管理委员会>
+平安保险公
+Ping An Milestones
+ABOUT US
+1
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+Smart
+City
+Ecosystem
+Real
+Estate
+Services
+Ecosystem
+Health
+Auto
+Care
+Services
+Ecosystem Ecosystem
+Financial
+Services
+Ecosystem
+Asset
+Management
+Banking
+Insurance
+Finance + Ecosystem
+Pan Health Care
+Finance + Technology
+Pan Financial Assets
+Group
+powered Personal Financial Services
+World-leading Technology-
+Ping An strives to become a world-leading
+technology-powered personal financial services
+group. In the coming decade, we will pursue "finance
++ technology" and explore "finance + ecosystem".
+Focusing on two major industries of pan financial assets
+and pan health care, we will create new growth drivers
+by applying innovative technologies to traditional
+financial businesses and five ecosystems, i.e. financial
+services, health care, auto services, real estate services,
+and smart city services. We provide 436 million internet
+users and 166 million retail customers with financial
+products and services by exploiting local advantages
+in line with global corporate governance standards
+under an integrated financial business model of "one
+customer, multiple products, and one-stop services".
+Introduction
+i
+(3) In 2017, the Company realigned its business segments according to its operations and business activities, and certain figures have been
+reclassified or restated to conform to relevant period's presentation.
+(2) The figures for 2016 and after are under C-ROSS, comparative figures for 2015 have been restated; the figures for 2014 and before were
+under China Solvency I.
+10.94
+11.53
+11.20
+201.06
+167.1
+164.5
+267.3
+217.5
+Comprehensive solvency margin ratio (%) (2)
+97.3
+95.3
+95.6
+95.9
+96.2
+Combined ratio (%)
+5,841
+8,817
+12,650
+12,700
+13,372
+Net profit
+N/A
+N/A
+N/A
+20.8
+20.0
+ROE (%)(1)
+PROPERTY AND CASUALTY INSURANCE BUSINESS(3)
+171.9
+219.9
+219.7
+BANKING BUSINESS
+关于中国平安保险股份有限公司
+分业经营改革的通知
+ROE (%) (¹)
+Net interest margin (%)
+200.90
+165.86
+155.37
+151.08
+0.89
+1.02
+1.45
+1.74
+1.70
+2.31
+2.57
+2.81
+2.75
+2.37
+15,231
+19,802
+21,865
+22,599
+23,189
+N/A
+N/A
+N/A
+13.2
+11.6
+Capital adequacy ratio (%)
+Provision coverage ratio (%)
+Non-performing loan ratio (%)
+Net profit
+STR+*+ NA
+RADAR ANGAN
+NERAR KAN
+Ping An acquired Shenzhen
+July 2006
+Ping An's national integrated operations
+center in Zhangjiang, Shanghai started
+operations, which was the largest
+integrated operations platform in Asia.
+May 2006
+Ping An ranked 1st among
+global insurance groups
+and joined top ten of global
+financial groups as its market
+cap rose above RMB1 trillion
+to new highs. Ping An ranked
+1st by brand value among
+global insurers on multiple
+international rating lists.
+rose above
+RMB1 trillion
+Market cap
+2017
+|陆金所
+LU.com
+Lufax
+Lufax was established
+as Ping An began
+to build presence in
+fintech and healthtech.
+2012
+2017
+2016
+2012
+Ping An Life's written premium exceeded
+RMB300 billion, and new business
+premium exceeded RMB100 billion.
+2016
+Annaion
+有限公司
+listing
+A-share
+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
+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.
+2011
+July 2011
+Acquiring
+SDB
+Commercial Bank, which was
+later renamed Ping An Bank.
+2007
+Ping An ranked 39th in Fortune's
+Global 500 and 16th in Forbes Global
+2000, maintaining the 1st place
+among Chinese insurers.
+ABOUT US
+SEAR
+3.
+Shenzhen, China
+March 20, 2018
+Chairman and Chief Executive Officer
+अभी
+The future has arrived. Society will see more
+change as technologies and applications
+continue to develop and advance. Turning
+30, Ping An is embarking on a new journey.
+Our achievements in the past 30 years give
+us the confidence for a better future. Ping
+An will combine its unique advantages such
+as technology, talent, financial strength,
+scenarios and data with leading innovations
+and applications to transform into a fintech
+leader under the strategy of "finance +
+ecosystem". Technology will enable us to
+create new drivers of earnings and boost
+Ping An's value.
+As we head into a new 30-year journey, we
+believe that a company's fate is closely tied
+to the national destiny. The rise of a nation
+is often accompanied by the emergence of
+some outstanding enterprises. And it is the
+enterprises' responsibility to support the
+nation and society. We remain true to our
+original aspiration with a thankful heart. We
+have actively answered the CPC Central
+Committee's call to fight a key battle of
+poverty alleviation. In 2017, we established
+the Educational Charity Board, and
+designated Ping An's founding anniversary
+as "Ping An Charity Day". We have
+conducted education support programs
+for 11 consecutive years, schooling over
+300,000 children in remote rural areas.
+We have established the Rural Financial
+Services Development Committee, brought
+insurance, banking and fintech to rural areas,
+and provided rural people with insurance
+protection and financing services worth over
+RMB1 trillion. We have launched an RMB10
+billion Three-village Project composed of the
+Village Officer Program, the Village Doctor
+Program, and the Village Teacher Program
+to strengthen industries, healthcare and
+education in rural areas.
++ technology". Each of the stages lasted
+10 years. Over the past 15 years, Ping An's
+total assets and net profit grew at CAGRS of
+nearly 30% thanks to the staff's hard work.
+We believe that diligence is the mother
+of good fortune. Yesterday determines
+today, and today determines tomorrow.
+Ping An's achievements in the past year
+would not have been possible without
+our efforts in the past 30 years. Since Ping
+An was founded in Shekou 30 years ago,
+Ping An has grown from a 13-person small
+business into a 1.70 million-person fintech
+& healthtech conglomerate. Ping An has
+gone through three stages: exploring
+modern insurance and building mechanisms
+and platforms, focusing on insurance and
+exploring integrated finance, and developing
+integrated finance and exploring "finance
+of Ping An successfully conducted private
+placements: Ping An Good Doctor raised
+USD400 million in late 2017 by completing
+its pre-IPO financing, and filed an IPO
+application with the HKEX; Ping An
+Healthcare Technology and OneConnect
+raised USD1,150 million and USD650 million.
+in early 2018 respectively by completing
+their first rounds of financing. Over the
+past 10 years, Ping An invested heavily to
+promote technological innovations and
+applications. We have applied for over
+3,000 financial and healthcare patents,
+including many world-leading technologies.
+Ping An's face recognition technology
+ranked first in the world according to
+testing results released by Labeled Faces
+in the Wild (LFW), an authoritative
+database. The technology has been used
+to recognize over 1 billion faces in over 200
+scenarios including customhouses, airports,
+financial services, and social security.
+We combine fintech, healthtech, artificial
+intelligence (AI), blockchain, big data,
+and cloud computing to build the Smart
+City Cloud, which is designed to facilitate
+smart brand-new urban lifestyles in eight
+areas: administration, fiscal management,
+security, healthcare, education, real estate,
+environmental protection, and daily life.
+In smart fiscal management, Ping An has
+partnered with provinces and cities such
+as Nanning, Guangdong and Shenzhen to
+build the Smart Fiscal Cloud, a platform for
+local governments to manage public assets
+and liabilities more efficiently. In smart
+healthcare, Ping An Healthcare Technology
+provides social health insurance-related cost
+control and account management services
+for millions of people in over 200 cities
+across China. In public healthcare, using its
+world-leading big data, Ping An has built
+systems and models to predict, prevent
+and control infectious diseases, frequently-
+occurring diseases and chronic diseases in
+cities such as Shenzhen and Chongqing.
+Ping An Insurance (Group) Company of China, Ltd.
+4 Annual Report 2017
+On the other hand, we have developed
+applications for diverse scenarios,
+integrated the applications into core
+technological capabilities, and exported
+the capabilities to serve society. Over the
+years, we have incubated several high-tech
+platforms. Three technology associates
+The Company has accelerated its "finance
++ technology" transformation. On the one
+hand, technology has enabled us to pursue
+innovation, boost efficiency, cut costs,
+improve experience, and manage risks in
+financial and healthcare industries. Our
+core financial businesses became more
+competitive and maintained stable, healthy
+growth. Our long-term value creation
+strategy and protection-oriented product
+philosophy have enabled us to precisely
+seize market and industry opportunities. In
+2017, the life and health insurance business
+boosted the NBEV by 32.6% year on year.
+The life and health insurance business's
+net profit for 2017 was RMB36,143 million,
+up 44.4% year on year. The number of
+sales agents increased by 24.8% to 1.3860
+million and their productivity climbed by
+7.1% year on year. The property & casualty
+business's premium income rose above
+RMB200 billion, up 21.4% year on year while
+Ping An Property & Casualty maintained
+an industry-leading combined ratio of
+96.2%. Ping An Bank's revenue and net
+profit from retail banking increased by
+41.7% and 68.3% year on year respectively
+due to its strategic transformation towards
+retail banking.
+We are paying more attention to retail
+customer development. In cross-selling
+of different offerings, we use fintech &
+healthtech to enhance our efficiency
+and to make our services more secure,
+professional and convenient. In 2017, our
+retail customer base grew by 26.4% to
+166 million. Retail business accounted for
+66.2% of our net profit, and the profit per
+customer reached RMB356. Our internet
+user base grew to 436 million, with 73.56
+million monthly active users.
+For 2017, Ping An's net profit was
+RMB99,978 million, up 38.2% year on year. Its
+net profit attributable to shareholders of
+the parent company was RMB89,088 million,
+up 42.8% year on year. The operating profit
+attributable to shareholders of the parent
+company was RMB94,708 million, up 38.8%
+year on year. The new business embedded
+value (NBEV) rose by 32.6% year on year.
+The cash dividends for 2017 will amount to
+RMB1.50 per share, 100.0% higher than the
+previous year. We were happy to see that
+Ping An's share prices increased sharply
+over the past year and its market cap rose
+above RMB1 trillion to a record high. Ping
+An's strategy and business value have been
+widely recognized by investors. In 2017,
+Ping An ranked 39th in Fortune's Global 500
+and 16th in Forbes Global 2000. For 16 years
+in a row, Ping An has been honored as the
+Most Respected Enterprise in China.
+going to celebrate its 30th anniversary, the
+year 2017 was extremely important because
+it connected the past to the future. We
+remain true to our original aspiration and
+embrace the future with a thankful heart.
+We closely follow national strategies,
+effectively serve the real economy,
+strictly prevent financial risks, and pursue
+growth via innovation. We have adopted a
+strategy to pursue "finance + technology"
+and explore "finance + ecosystem" in the
+coming decade. Our goal is to become
+a world-leading technology-powered
+personal financial services group. Focusing
+on two major industries of pan financial
+assets and pan health care, we apply
+innovative technologies to five ecosystems:
+financial services, health care, auto
+services, real estate services, and smart
+city services. This has enabled us to create
+new value drivers and deliver excellent
+results.
+In 2017, with the continued recovery of the
+global economy, China's economy steadily
+picked up. The 19th National Congress
+of the Communist Party of China (CPC)
+marked the beginning of a new journey
+towards the goal of building a modern
+socialist country. To Ping An, which is
+Ping An established the
+Global Financial & Economic
+Development Research Center
+and the Global Medical &
+Healthcare Research Center with
+Tsinghua University on October
+31, 2017.
+Chairman Ma Mingzhe gave a
+class at Lu'an Hope Primary
+School in Anhui Province on May
+18, 2017.
+10
+記 网发展研究院会
+2
+2.
+1.
+5042
+Chairman's Statement
+Ping An Insurance (Group) Company of China, Ltd. 3
+225.9
+2004 2006
+June 24, 2004
+1996
+Ping An acquired ICBC
+Pearl River Delta Financial
+Trust Joint Company,
+which was then renamed
+Ping An Trust Investment
+Company.
+April 1996
+October 1995
+ALERTARE
+GAN PURANCE COMPANY OF O
+國平安保險公司
+1995
+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.
+1994
+Expanding
+nationwide
+insurance company.
+China, becoming a national
+Insurance Company of
+renamed Ping An
+The Company was
+June 4, 1992
+1988 1992
+Ping An Insurance Company
+was established as the first
+joint-stock insurance company
+in China.
+May 27, 1988
+of Company investors
+Foreign
+Founding
+ENTRAN
+WARRONTEMPING
+ANONIRAN
+2002
+Ping An Group enhanced
+its capital strength by going
+public in Hong Kong, which
+was the largest IPO in Hong
+Kong that year.
+Ping An made a
+breakthrough in
+non-insurance
+establishing Ping An
+H-share
+listing
+PINGANPA
+平安银行
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+十人股中国平安签约代
+insurance policy
+First life
+pioneering individual life
+insurance business in China.
+marketing system,
+individual life insurance
+Ping An introduced the
+1994
+Annual Report 2017
+2
+by HSBC
+Stake acquired
+single largest shareholder.
+in Ping An, becoming its
+HSBC Group took a stake
+October 8, 2002
+2003
+Ping An was given approval to
+acquire Fujian Asia Bank, which
+marked the start of its banking
+business.
+Ping An Insurance (Group)
+Company of China, Ltd. was
+established, becoming a pilot
+company for integrated operations
+in China's financial industry.
+December 2003
+February 14, 2003
+Founding
+of the Group
+Securities Co., Ltd.
+financial business by
+中小銀行互联金門)联盟
+234.1
+N/A
+Blew up the dust of history
+Thirty years of wind and rain
+with you
+aspiration and march forward
+Remain true to our original
+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 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.
+Cautionary Statements Regarding Forward-Looking Statements
+296 Corporate Information
+Definitions
+293
+Looking back, we saw flowers and thorns
+83 Prospects of Future Development
+82
+Risk Management
+68
+Liquidity and Capital Resources
+64
+156
+OTHER INFORMATION
+159 Notes to Consolidated Financial Statements
+Consolidated Statement of Financial Position
+157 Consolidated Statement of Changes in Equity
+158 Consolidated Statement of Cash Flows
+Analysis of Embedded Value and Operating
+Profit
+54
+Fintech & Healthtech Business
+Corporate Social Responsibility
+And passions mixed with dreams
+We, over one million people at Ping An
+Remain true to our original aspiration
+We started from a small two-story building
+Now our office tower is 600 meters tall
+We raise our heads to watch the stars
+N/A
+137,340
+241,570
+346,300
+436,390
+2013
+2014
+2015
+2016
+2017
+Number of internet users (in thousand)
+CUSTOMER DEVELOPMENT (1)
+(in RMB million)
+Five-Year Summary
+As always, Ping An will march forward with you.
+In 2018, as Ping An turns 30, we will continue to seek survival via competition
+and pursue development via innovation. We will remain true to our original
+aspiration with a thankful heart. We will continue to actively answer the CPC
+Central Committee's call to fight a key battle of poverty alleviation. We will
+carry out the Three-village Project to develop rural areas.
+Our goal is to become a world-leading technology-powered personal financial
+services group. Focusing on two major industries of pan financial assets and
+pan health care, we apply innovative technologies to five ecosystems: financial
+services, health care, auto services, real estate services, and smart city. Ping
+An will combine its unique advantages such as technology, talent, financial
+strength, scenarios and data with leading technologies and applications to
+pursue "finance + technology" and explore "finance + ecosystem", and transform
+into an industry and technology leader.
+March forward across the sky
+March forward into the future
+March forward with you
+We take your hand with love and Al
+Under a tech-powered strategy
+Are two huge wings spread by us
+Finance and healthcare
+And the scent of mud so deeply
+Because we love the land so much
+And kiss the land, our motherland
+51
+Asset Management Business
+45
+Banking Business
+CORPORATE GOVERNANCE
+Honors and Awards
+9
+129
+Business Performance at a Glance
+6
+112
+Chairman's Statement
+4
+Ping An Milestones
+2
+Introduction
+1
+Five-Year Summary
+i
+ABOUT US
+Contents
+2017 Annual Report
+With a Thankful Heart
+Embracing the Future
+1988-2018
+30
+三十 更懂你
+中国平安成立30周年
+th
+Insurance Banking Investment
+PINGAN 33
+86
+Number of retail customers (in thousand)
+98
+Shareholders' Profile
+40
+Investment Portfolio of Insurance Funds
+36
+Property and Casualty Insurance Business
+30
+Consolidated Statement of Comprehensive
+Income
+Life and Health Insurance Business
+23
+155
+Performance Overview
+18
+154 Consolidated Statement of Income
+146 Independent Auditor's Report
+FINANCIAL STATEMENTS
+Technology-Powered Business Transformation
+Business Analysis
+18
+14
+Customer Development
+10
+MANAGEMENT DISCUSSION AND ANALYSIS
+Significant Events
+137
+134 Report of the Supervisory Committee
+Report of the Board of Directors
+Corporate Governance Report
+Directors, Supervisors, Senior Management
+and Employees
+Changes in the Share Capital and
+165,730
+131,070
+109,100
+27.0
+35.5
+Operating return on embedded value (%) (1)
+LIFE AND HEALTH INSURANCE BUSINESS (3)
+174.4
+205.1
+204.9
+210.0
+214.9
+Group comprehensive solvency margin ratio (%) (2)
+0.325
+0.375
+0.53
+0.75
+1.50
+Dividend per share (in RMB)
+1.78
+2.47
+2.98
+3.50
+4.99
+Basic earnings per share (in RMB)
+N/A
+N/A
+N/A
+68,252
+94,708
+N/A
+28,154
+N/A
+Value of new business (2)
+N/A
+330,846
+454,705
+Residual margin (1)
+N/A
+N/A
+N/A
+40,518
+52,824
+Operating profit (1)
+13,212
+17,425
+21,200
+25,033
+36,143
+Net profit
+203,038
+264,223
+325,474
+360,312
+496,381
+Embedded value (2)
+18,163
+21,966
+38,420
+50,805
+67,357
+N/A
+Comprehensive solvency margin ratio - Ping An Life (%) (2)
+39,279
+62,394
+Proportion of customers holding multiple contracts with
+different subsidiaries (%)
+N/A
+N/A
+44.4
+67.4
+84.7
+Proportion of users on mobile (%)
+N/A
+N/A
+43,560
+61,990
+73,560
+Number of monthly active users (in thousand)
+N/A
+275.77
+289.07
+311.51
+355.85
+Profit per customer (in RMB)
+N/A
+1.93
+2.03
+2.21
+2.32
+Number of contracts per customer (contract)
+N/A
+89,350
+28.5
+54,203
+24.0
+N/A
+89,088
+182,709
+289,564
+334,248
+383,449
+473,351
+Equity attributable to shareholders of the parent company
+Net profit attributable to shareholders of the parent company
+Operating profit attributable to shareholders of the parent
+company(1)
+16.4
+18.3
+17.1
+17.4
+20.7
+Weighted average ROE (%)
+329,653
+458,812
+551,514
+637,703
+825,173
+Embedded value (2)
+N/A
+N/A
+N/A
+21.0
+26.7
+Operating return on embedded value (%) (1)
+GROUP
+N/A
+19.0
+4.
+269.5
+Meeting, Ping An adopted a
+new strategy to pursue "finance
++ technology" and explore
+"finance + ecosystem" in the
+coming decade.
+0.375
+0.53
+Dividend per Share(1)(2) (in RMB)
+2017
+2016
+2015
+2014
+2013
+473,351
+289,564
+0.325
+334,248
+182,709
+Equity Attributable to Shareholders of the
+Parent Company (in RMB Million)
+2017
+2016
+2015
+2014
+2013
+89,088
+28,154
+39,279
+383,449
+54,203
+0.75
+2013
+At the Group Executive
+Committee's 2017 Annual
+Annual Report 2017
+6
+(4) Data in and after 2016 are assessment results under the
+C-ROSS. Data for 2015 have been restated. Data in and
+before 2014 are assessment results under China Solvency I.
+(3) The final dividend of RMB1.00 per share will be proposed for
+approval at the annual general meeting for 2017.
+(2) Dividend per share refers to cash dividend, including final
+dividend and interim dividend.
+(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 basic
+EPSS and DPSS for the previous periods.
+2017
+2016
+2015
+1.503
+2014
+67,357
+38,420
+50,805
+18,163
+21,966
+Value of New Business (4) (in RMB Million)
+2017
+2016
+2015
+2014
+2013
+62,394
+Ping An Insurance (Group) Company of China, Ltd.
+2017
+4,005,911
+4,765,159
+5,576,903
+6,493,075
+Total Assets (in RMB Million)
+2017
+2016
+2015
+Net Profit Attributable to Shareholders of the
+Parent Company (in RMB Million)
+2013
+3,360,312
+974,570
+530,020
+693,220
+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 2017
+Internet Finance Alliance of
+Small- and Medium-sized Banks
+(Shenzhen) was established in
+Shenzhen on December 6, 2017.
+421,221
+2013
+2014
+2015
+2014
+2015
+2014
+2013
+825,173
+329,653
+458,812
+551,514
+637,703
+Embedded Value (4) (in RMB Million)
+2017
+2016
+2015
+2016
+2017
+Basic EPS() (in RMB)
+3.50
+2.98
+2016
+1.78
+4.99
+2013
+2014
+2.47
+1.37
+corporations
+9.31
+22.85
+Long position
+1,701,786,128
+Interest of controlled
+interest in shares
+0.56
+Long position
+15.97
+Person having a security
+H
+UBS Group AG
+6.51
+Short position
+1,189,596,046
+(4)
+Beneficial owner
+5.11
+12.54
+102,200,383
+Total:
+962,719,102 Long position
+(5)
+Beneficial owner
+A
+Shenzhen Investment Holdings
+Co., Ltd.
+0.00
+0.00
+Short position
+9,000
+(6)
+2.20
+440
+Interest of controlled
+5.40
+Interest of controlled
+corporations
+H
+BlackRock, Inc.
+corporations
+10.99
+26.98
+Short position
+9.87
+24.22
+1,803,986,511
+2,009,378,851
+401,879,058 Long position
+933,925,121
+Person having a security
+Total:
+Changes in the Share Capital and
+Shareholders' Profile
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 89
+Annual Report 2017
+1.53
+3.77
+Short position
+280,535,405
+(3)
+Beneficial owner
+Name of substantial shareholder H/A Shares Capacity
+6.36
+1,162,728,734
+Total:
+1.02
+2.51
+Lending pool
+186,573,336
+Approved lending agent
+0.00
+0.00
+8.89
+15.61
+(4)
+UBS AG
+Beneficial owner
+corporations
+0.55
+1306
+1.36
+101,096,520 Long position
+0.90
+2.22
+Long position
+3.65
+8.97
+H
+Long position
+issue (%)
+total shares in
+Percentage of
+total number of
+H/A shares in
+issue (%)
+Nature of
+interest
+Number of
+H/A Shares
+Notes
+Percentage of
+Interest of controlled
+interest in shares
+667,735,354
+165,093,247
+5.27
+Direct
+interest
+(1)
+100.00
+Chia Tai Primrose Investment Limited
+Jubilee Success Holdings Limited
+728,569,130
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Business Fortune Holdings Limited
+487,622,593
+Y
+Short position
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Easy Boom Developments Limited
+shares
+Number of
+Nature of
+interest
+(Y/N)
+% control
+487,622,593
+Name of controlling person
+Long position
+Majestic Jubilee Limited
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Oriental Power Developments Limited
+42,673,646
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+47,352,072
+King Beyond Global Limited
+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
+76,858,634
+Notes:
+Name of controlled corporation
+Ping An Insurance (Group) Company of China, Ltd.
+N
+100.00
+CPG Overseas Company Limited
+2,256,649,529
+Long position
+N
+100.00
+Charoen Pokphand Group Company Limited
+shares
+Number of
+Long position
+Nature of
+interest
+% control
+Name of controlling person
+Direct
+interest
+Chia Tai Primrose Holdings Limited
+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 December 29, 2017, 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 2,256,649,529 H shares (Long position) and 487,622,593 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+(Y/N)
+Long position
+2,256,649,529
+100.00
+Annual Report 2017
+90
+2,251,580,929
+Long position
+N
+100.00
+Chia Tai Primrose Holdings Limited
+Chia Tai Primrose Investment Limited
+2,251,580,929
+Long position
+CT Bright Group Company Limited
+(Formerly known as Chia Tai Resources
+Holdings Limited)
+N
+5,068,600
+Long position
+Y
+100.00
+Chia Tai Giant Far Limited
+Chia Tai Primrose Holdings Limited
+Chia Tai Giant Far Limited
+2,256,649,529
+Long position
+N
+100.00
+19,478
+6.55
+1.42
+INFORMATION DISCLOSED UNDER H SHARES REGULATORY REQUIREMENTS
+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: 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; 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 provided for state-owned enterprises under Shenzhen municipality;
+other operations as authorized by the Shenzhen Municipal People's Government State-owned Assets
+Supervision and Administration Commission.
+CP Group Ltd., the flagship company of CP Group, was established on September 23, 1976 in Thailand
+with Dhanin Chearavanont as its legal representative. Its principal businesses 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 realize mutual development and operations.
+53.99%
+5.27%
+Ping An Insurance (Group) Company of China, Ltd.
+31.06%
+1.78%
+3.91%
+3.99%
+Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying
+Shares of the Company
+Other A
+shareholders
+Other H
+shareholders
+Others
+New Orient
+Ventures Limited
+Business Fortune
+Holdings Limited
+100%
+Shenzhen Municipal People's Government
+State-owned Assets Supervision and
+Administration Commission
+100%
+Charoen Pokphand Group
+Company Limited
+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:
+As at December 31, 2017, CP Group Ltd. indirectly held 1,769,026,936 H shares of the Company in total,
+representing 9.68% of the total issued shares of the Company; Shenzhen Investment Holdings Co., Ltd. held
+962,719,102 A Shares of the Company, representing 5.27% of the total issued shares of the Company.
+Shenzhen Investment
+Holdings Co., Ltd.
+Information on shareholders holding more than 5% of equity interest of the Company
+As far as is known to any Directors or Supervisors of the Company, as at December 31, 2017, 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:
+Annual Report 2017
+0.55
+1.34
+Long position
+100,000,000
+Party to s317 agreement
+corporations
+12.34
+30.30
+2,256,649,529 Long position
+Interest of controlled
+88
+H
+Percentage of
+total shares in
+issue (%)
+issue (%)
+Percentage of
+total number of
+H/A shares in
+Nature of
+interest
+Number of
+H/A Shares
+Notes
+H/A Shares Capacity
+Name of substantial shareholder
+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
+Ping An Insurance (Group) Company of China, Ltd.
+Charoen Pokphand Group
+Company Limited
+Total:
+Changes in the Share Capital and
+Shareholders' Profile
+Ping An Insurance (Group) Company of China, Ltd. 87
++173,883,872
+394,910,458
+916
+2.16
+Others
+Hong Kong Securities Clearing Company
+Limited (5)
+- Universal Insurance Products
+A Share
+-392,000,000
+396,319,315
+A Share
+2.17
+Huaxia Life Insurance Co., Ltd.
+A Share
+483,801,600
+2.65
+Others
+Central Huijin Asset Management Ltd.
+Limited
+A Share
++2,562,763
+694,834,562
+Others
+CORPORATE GOVERNANCE
+Shum Yip Group Limited
+1.41
+Annual Report 2017
+The shareholding structure of the Company is relatively scattered. There is no controlling shareholder, nor
+de facto controller.
+Particulars of controlling shareholder and de facto controller
+Save as the above, the Company is not aware of any connected relationship or acting-in-concert
+relationship among the above-mentioned shareholders.
+Explanation of the connected relationship or acting-in-concert relationship of the above shareholders:
+Business Fortune Holdings Limited and New Orient Ventures Limited are the indirectly wholly-owned
+subsidiaries of CP Group Ltd., and they are of acting-in-concert relationship since they are under common
+control.
+(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.
+(4) Business Fortune Holdings Limited and New Orient Ventures Limited are the indirectly 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.
+(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.
+(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.
+Notes: (1) Nature of the holders of A shares represents the nature of account held by the holders of A shares registered on the Shanghai
+Branch of China Securities Depository and Clearing Corporation Limited.
+State-owned legal person
+Management Plan
+A Share
++1,386,036
+174,590,036
+0.96
+A Share
+257,728,008
+བཙྪ
+Others
+Dacheng Fund Agriculture Bank of
+-
+China Dacheng CSI Financial Asset
+Interest of controlled
+(1),(2)
+(1)
+2,356,649,529
+Beneficial owner
+H
+New Orient Ventures Limited
+3.99
+9.78
+728,569,130 Long position
+(1)
+Beneficial owner
+H
+Business Fortune Holdings Limited
+(1)
+issue (%)
+Percentage of
+total shares in
+Percentage of
+total number of
+H/A shares in
+Nature of
+interest
+Number of
+H/A Shares
+Notes
+Capacity
+H/A Shares
+Name of substantial shareholder
+Interests and short positions of other substantial shareholders
+2.67
+issue (%)
+4,893,000
+714,663,997 Long position
+3.91
+3.50
+Long position
+260,383,820
+Investment manager
+3.92
+9.61
+715,752,100 Long position
+Beneficial owner
+H
+JPMorgan Chase & Co.
+9.60
+2.67
+257
+6.55
+Short position
+487,622,593
+6.55
+487,622,593 Long position
+(1)
+Beneficial owner
+H
+Easy Boom Developments Limited
+2.67
+Short position
+487,622,593
+12.89
+(1),(2)
+Total:
+corporations
+0.55
+1.34
+Long position
+100,000,000
+12.34
+30.30
+Long position
+2,356,649,529
+2,256,649,529
+Party to s317 agreement
+H
+Dhanin Chearavanont
+corporations
+2.67
+6.55
+Short position
+487,622,593
+12.89
+31.64
+Interest of controlled
+31.64
+12.89
+Party to s317 agreement
+31.64
+2,356,649,529
+(1),(2)
+(2)
+Party to s317 agreement
+Total:
+corporations
+0.55
+1.34
+Long position
+100,000,000
+Interest of controlled
+12.34
+30.30
+Long position
+2,256,649,529
+Party to s317 agreement
+H
+King Ace International Limited
+2.67
+6.55
+Short position
+487,622,593
+(2)
+Trustee
+Excel Trade Developments Limited
+(Y/N)
+100.00
+1,551,830
+Short position
+6,340,000
+JPMorgan Asset Management (UK) Limited
+JPMorgan Asset Management Holdings (UK)
+Limited
+100.00
+Y
+Long position
+Short position
+45,709,424
+0
+Long position
+China International Fund Management Co Ltd
+49.00
+Y
+Long position
+Short position
+4,599,500
+0
+J.P. Morgan Structured Products B.V.
+J.P. Morgan International Finance Limited
+100.00
+% control
+Y
+JPMorgan Asset Management (UK) Limited
+Long position
+Short position
+Y
+J.P. Morgan International Finance Limited
+Long position
+0
+Short position
+5,345,274
+J.P. Morgan Securities plc
+J.P. Morgan Capital Holdings Limited
+100.00
+Y
+Long position
+690,640,392
+100.00
+Short position
+JPMorgan Chase Bank, N.A.
+3.80
+JPMorgan Chase & Co.
+100.00
+Y
+Long position
+209,109,838
+Short position
+0
+J.P. Morgan Chase Bank Berhad
+255,396,051
+Y
+0
+J.P. Morgan Broker-Dealer Holdings Inc
+0
+JPMorgan Asset Management Holdings (UK)
+Limited
+JPMorgan Asset Management International
+Limited
+100.00
+N
+Long position
+Short position
+50,314,924
+0
+JPMorgan Chase Holdings LLC
+JPMorgan Chase & Co.
+66,924,500
+100.00
+Long position
+Short position
+323,093,174
+0
+J.P. Morgan Overseas Capital LLC
+J.P. Morgan International Finance Limited
+100.00
+N
+Long position
+0
+Short position
+N
+13,454,080
+Long position
+Short position
+100.00
+JPMorgan Chase Holdings LLC
+100.00
+N
+Long position
+Short position
+23,559,878
+0
+J.P. Morgan Capital Holdings Limited
+J.P. Morgan International Finance Limited
+100.00
+N
+N
+Long position
+690,640,392
+255,396,051
+JPMorgan Asset Management Holdings Inc
+JPMorgan Chase Holdings LLC
+100.00
+N
+Long position
+Short position
+299,517,414
+0
+JPMorgan Asset Management (Asia) Inc.
+JPMorgan Asset Management Holdings Inc
+Short position
+5,345,274
+100.00
+J.P. Morgan Whitefriars LLC
+Long position
+Short position
+61,666,500
+0
+JPMorgan Asset Management (Japan) Limited
+JPMorgan Asset Management (Asia) Inc.
+100.00
+Y
+Long position
+Short position
+1,972,000
+0
+Y
+JPMorgan Asset Management (Taiwan) Limited
+100.00
+Y
+Long position
+Short position
+3,009,000
+0
+CIFM Asset Management (Hong Kong) Limited
+China International Fund Management Co Ltd
+100.00
+Y
+Long position
+Short position
+JPMorgan Asset Management (Asia) Inc.
+6,000
+0
+99.99
+JF Asset Management Limited
+Direct
+interest
+(Y/N)
+Nature of Number of
+interest
+shares
+J.P. Morgan Broker-Dealer Holdings Inc
+100.00
+Y
+Long position
+Short position
+23,559,878
+0
+JF International Management Inc.
+JPMorgan Asset Management (Asia) Inc.
+JPMorgan Asset Management (Asia) Inc.
+100.00
+Long position
+Short position
+277,000
+0
+JF Asset Management Limited
+JPMorgan Asset Management Holdings Inc
+0.01
+Y
+Long position
+Short position
+61,666,500
+0
+Y
+J.P. Morgan Overseas Capital LLC
+Annual Report 2017
+91
+100.00
+N
+Long position
+4,605,500
+Short position
+0
+China International Fund Management Co Ltd
+JPMorgan Asset Management (UK) Limited
+49.00
+N
+JPMorgan Asset Management Holdings (UK)
+Limited
+Long position
+Short position
+0
+J.P. Morgan Trust Company of Delaware
+J.P. Morgan Equity Holdings, Inc.
+100.00
+Y
+Long position
+15,882
+Short position
+0
+6,000
+Ping An Insurance (Group) Company of China, Ltd.
+JPMorgan Asset Management (UK) Limited
+Short position
+CORPORATE GOVERNANCE
+Changes in the Share Capital and
+Shareholders' Profile
+Direct
+interest
+Name of controlled corporation
+Name of controlling person
+% control
+(Y/N)
+Nature of
+interest
+Number of
+shares
+692,192,222
+280,535,405
+J.P. Morgan Investment Management Inc.
+100.00
+Y
+Long position
+Short position
+120,611,490
+0
+J.P. Morgan International Finance Limited
+JPMorgan Chase Bank, N.A.
+100.00
+N
+Long position
+JPMorgan Asset Management Holdings Inc
+JPMorgan Asset Management International
+Limited
+JPMorgan Asset Management Holdings Inc
+100.00
+0
+UBS Financial Services Inc.
+UBS AG
+100.00
+Y
+Long position
+Short position
+34,814
+0
+UBS Bank (Canada)
+Annual Report 2017
+29,000
+UBS AG
+Y
+Long position
+Short position
+13,700
+0
+Ping An Insurance (Group) Company of China, Ltd.
+93
+CORPORATE GOVERNANCE
+Changes in the Share Capital and
+Shareholders' Profile
+Name of controlled corporation
+UBS Swiss Financial Advisers AG
+100.00
+Direct
+interest
+Long position
+Short position
+100.00
+UBS Global Asset Management (Singapore) Ltd
+UBS AG
+100.00
+Y
+Long position
+Short position
+26,022,000
+0
+UBS Global Asset Management Trust Company
+UBS AG
+100.00
+Y
+Y
+64,000
+0
+UBS Global Asset Management (UK) Ltd
+UBS AG
+100.00
+Y
+Long position
+Short position
+16,052,000
+0
+UBS Global Asset Management (Deutschland)
+GmbH
+UBS AG
+Long position
+Short position
+0
+Name of controlling shareholder
+Nature of
+interest
+Name of controlled corporation
+J.P. Morgan Securities LLC
+According to the disclosure form filed by JPMorgan Chase & Co. on January 2, 2018, the following interests in H shares were held by
+JPMorgan Chase & Co. through its controlled corporations, the details of which are as follows:
+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; 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 2,256,649,529 H shares (Long position) and 487,622,593 H shares (Short position) by virtue of section 317 of the SFO.
+JPMorgan Chase & Co. was deemed to be interested in a total of 1,162,728,734 H shares (Long position) and 280,535,405 H shares
+(Short position) in the Company by virtue of its control over several corporations.
+The entire interests of CP Group Ltd. in the Company included 487,622,593 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 100,000,000 H shares (Long position) by virtue of section 317 of the SFO.
+(3)
+(2)
+(1)
+714,663,997
+Long position
+Y
+Name of controlling person
+100.00
+New Orient Ventures Limited
+57,006,059
+Long position
+Y
+100.00
+Chia Tai Primrose Investment Limited
+Golden Magic Holdings Limited
+71,211,068
+Long position
+Y
+Chia Tai Primrose Investment Limited
+% control
+Y
+0
+Number of
+shares
+UBS AG
+100.00
+Y
+Long position
+Short position
+510,000
+0
+100.00
+Y
+Long position
+Short position
+100.00
+12,000
+UBS Global Asset Management Life Ltd
+UBS AG
+UBS Switzerland AG
+UBS O'Connor Limited
+UBS AG
+UBS AG
+100.00
+Y
+Long position
+Short position
+622,000
+0
+1,964,104
+Long position
+Short position
+Y
+Long position
+Short position
+Long position
+Number of shares
+14,813,082
+79,899,014
+4,137,500
+106,989,300
+Unlisted derivatives -
+Physically settled
+Unlisted derivatives -
+Cash settled
+Nature of interest
+Short position
+Short position
+Long position
+Short position
+416,353,235
+25,660,538
+40,173,486
+15,854,461
+(4)
+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.
+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:
+Long position
+Direct
+interest
+Cash settled
+Listed derivatives -
+Physically settled
+N
+Long position
+Short position
+50,314,924
+0
+JPMorgan Chase Bank, N.A.
+JPMorgan Chase & Co.
+100.00
+N
+Long position
+Short position
+692,192,222
+280,535,405
+Listed derivatives -
+J.P. Morgan Equity Holdings, Inc.
+100.00
+N
+Long position
+Short position
+15,882
+0
+92
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+The entire interests and short positions of JPMorgan Chase & Co. in the Company included a lending pool of 186,573,336 H shares
+(Long position). Besides, 475,477,303 H shares (Long position) and 228,403,313 H shares (Short position) were held through derivatives
+as follows:
+Derivatives
+JPMorgan Chase Holdings LLC
+Name of controlled corporation
+Name of controlling shareholder
+% control
+100.00
+Y
+Long position
+Short position
+370,000
+0
+UBS Global Asset Management (Canada) Inc.
+UBS AG
+100.00
+Y
+Long position
+Short position
+UBS AG
+4,440,000
+UBS Global Asset Management (Hong Kong)
+Limited
+UBS AG
+100.00
+Y
+Long position
+Short position
+12,470,936
+0
+UBS Global Asset Management (Japan) Ltd.
+UBS AG
+100.00
+0
+UBS Global Asset Management (Australia) Ltd
+0
+2,503,000
+(Y/N)
+Nature of
+interest
+Number of
+shares
+UBS Fund Management (Switzerland) AG
+UBS AG
+100.00
+Y
+Long position
+Short position
+13,347,500
+0
+UBS Fund Services (Luxembourg) S.A.
+UBS AG
+100.00
+Y
+Long position
+Short position
+22,604,966
+0
+UBS Global Asset Management (Americas) Inc.
+UBS AG
+100.00
+Y
+Long position
+Short position
+Chia Tai Primrose Investment Limited
+Others
+Short position
+pledged shares
+4,773,199
+58,785,713
+50,971,538
+Number of shares
+Long position
+Short position
+Long position
+Short position
+Long position
+Long position
+Short position
+Long position
+Short position
+Nature of interest
+Unlisted derivatives -
+Cash settled
+Physically settled
+Unlisted derivatives -
+Cash settled
+Listed derivatives -
+Listed derivatives -
+Physically settled
+Derivatives
+Besides, 1,664,979,342 H shares (Long position) and 1,533,075,842 H shares (Short position) were held through derivatives as follows:
+Changes in the Share Capital and
+Shareholders' Profile
+(6)
+990
+96
+24,799,131
+873,785,881
+511,942,656
+735,448,724
+BlackRock, Inc.
+3,888,234
+Long position
+Y
+100.00
+3,888,234
+Long position
+N
+100.00
+shares
+Number of
+CORPORATE GOVERNANCE
+Nature of
+interest
+% control
+BlackRock, Inc.
+Name of controlling person
+Trident Merger, LLC
+BlackRock Holdco 2, Inc.
+BlackRock Investment Management, LLC
+Trident Merger, LLC
+Name of controlled corporation
+According to the disclosure form filed by BlackRock, Inc. on December 28, 2017, 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 401,879,058 H shares (Long position) and 9,000 H shares (Short position) in
+the Company by virtue of its control over several corporations.
+937,548,342
+Direct
+interest
+(Y/N)
+100.00
+95
+Annual Report 2017
+109,500
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Swiss Financial Advisers AG
+19,000
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Europe SE
+0
+128,285
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Bank (Canada)
+23,589
+0
+Long position
+Short position
+Y
+100.00
+0
+UBS Trustees (Bahamas) Limited
+UBS Group AG
+100.00
+18,500
+0
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Trustees (Singapore) Limited
+0
+49,000
+Long position
+Short position
+Y
+100.00
+Ping An Insurance (Group) Company of China, Ltd.
+UBS Group AG
+0
+15,500
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Trustees (Cayman) Limited
+0
+166,000
+Long position
+Short position
+Y
+UBS Trustees (Jersey) Limited
+N
+Long position
+Short position
+100.00
+BlackRock Cayco Limited
+BlackRock Trident Holding Company Limited
+30,582,544
+Long position
+N
+100.00
+BlackRock HK Holdco Limited
+BlackRock Cayco Limited
+174,775,613
+Long position
+N
+86.00
+BlackRock International Holdings, Inc.
+BR Jersey International Holdings L.P.
+174,775,613
+Long position
+N
+100.00
+BlackRock Financial Management, Inc.
+BlackRock International Holdings, Inc.
+3,680,500
+Long position
+BlackRock Japan Holdings GK
+BlackRock Trident Holding Company Limited
+100.00
+China Securities Finance Corporation
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+557,500
+Long position
+N
+100.00
+BlackRock Canada Holdings LP
+BlackRock Canada Holdings ULC
+557,500
+Long position
+N
+Y
+99.90
+BlackRock Canada Holdings LP
+30,582,544
+Long position
+Y
+100.00
+BlackRock Japan Holdings GK
+BlackRock Japan Co., Ltd.
+30,582,544
+Long position
+30,582,544
+Long position
+BR Jersey International Holdings L.P.
+100.00
+BlackRock Capital Holdings, Inc.
+BlackRock Advisors, LLC
+BlackRock Holdco 4, LLC
+BlackRock Holdco 6, LLC
+9,000
+211,079,776
+Long position
+Short position
+N
+100.00
+BlackRock Financial Management, Inc.
+BlackRock Holdco 4, LLC
+8,454,935
+Long position
+100.00
+Y
+BlackRock Holdco 2, Inc.
+BlackRock Financial Management, Inc.
+9,000
+Short position
+389,535,889
+Long position
+N
+100.00
+BlackRock Holdco 2, Inc.
+BlackRock Financial Management, Inc.
+397,990,824
+9,000
+100.00
+UBS Group AG
+N
+211,079,776
+9,000
+3,680,500
+Long position
+N
+100.00
+BlackRock Financial Management, Inc.
+BlackRock Capital Holdings, Inc.
+121,914,000
+Long position
+Y
+100.00
+BlackRock Delaware Holdings Inc.
+Long position
+Short position
+BlackRock Fund Advisors
+Long position
+Short position
+Y
+100.00
+BlackRock Delaware Holdings Inc.
+BlackRock Institutional Trust Company,
+National Association
+211,079,776
+9,000
+Long position
+Short position
+N
+100.00
+BlackRock Holdco 6, LLC
+BlackRock Delaware Holdings Inc.
+89,165,776
+9,000
+UBS Financial Services Inc.
+☐ N
+☐N
+5,007,928
+(Y/N)
+% control
+UBS Group AG
+Name of controlling person
+UBS AG
+Name of controlled corporation
+Direct
+interest
+According to the disclosure form filed by UBS Group AG on January 2, 2018, 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 1,701,786,128 H shares (Long position) and 2,009,378,851 H shares (Short
+position) in the Company by virtue of its control over several corporations.
+(5)
+998,751,061
+450,524,751
+51,911,643
+182,785,280
+29,279,768
+1,252,878
+Short position
+Long position
+Short position
+Long position
+Short position
+Long position
+Unlisted derivatives -
+Cash settled
+Nature of
+interest
+Number of
+shares
+100.00
+0
+4,767,000
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Canada) Inc.
+0
+416,000
+Long position
+Short position
+Y
+Physically settled
+100.00
+UBS Asset Management (Australia) Ltd
+0
+2,434,008
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (Americas) Inc.
+1,529,775,787
+1,999,271,076
+Long position
+Short position
+Y
+UBS Group AG
+Unlisted derivatives -
+Cash settled
+Listed derivatives -
++114,150,820
+H Share
+Shenzhen Investment Holdings Co., Ltd.
+State
+5.27
+962,719,102
+A Share
+Business Fortune Holdings Limited
+Overseas legal person
+3.99
+728,569,130
+5,980,847,492 (4)
++466,987,402
+New Orient Ventures Limited
+Overseas legal person
+3.91
+714,663,997
++714,663,997
+H Share
+Unknown
+341,740,000
+pledged shares
+525,729,565
+pledged shares
+714,663,997
+0
+H Share
+UBS Asset Management (Deutschland) GmbH
+32.72
+Hong Kong Securities Clearing Company
+Nominees Limited(3)
+9,967,000
+9,955,876
+Number of shares
+Short position
+Long position
+Nature of interest
+Listed derivatives -
+Physically settled
+Derivatives
+Besides, 644,518,785 H shares (Long position) and 1,089,909,472 H shares (Short position) were held through derivatives as follows:
+0
+Shareholdings of top ten shareholders as at the end of the Reporting Period
+Overseas legal person
+Total number
+Nature of shareholder(¹)
+Shareholding
+percentage (%)
+of shares held
+(Shares) (2)
+Changes
+during the
+year
+Number of
+selling-restricted
+Number of
+pledged or
+Type of shares
+shares held
+(Shares)
+frozen shares
+(Shares)
+Name of shareholder
+UBS Group AG
+36,500
+Y
+0
+15,094,000
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Fund Management (Switzerland) AG
+0
+47,716,300
+Long position
+Short position
+Y
+UBS Third Party Management Company S.A.
+100.00
+UBS Fund Management (Luxembourg) S.A.
+0
+22,472,566
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+UBS Asset Management (UK) Limited
+0
+3,345,500
+Long position
+Short position
+UBS Group AG
+Y
+UBS Group AG
+Y
+Long position
+Short position
+100.00
+Y
+100.00
+UBS Group AG
+UBS Switzerland AG
+9,567,775
+Long position
+Short position
+Y
+100.00
+UBS Group AG
+100.00
+UBS Securities LLC
+Short position
+540,000
+Long position
+Y
+100.00
+UBS Group AG
+UBS Limited
+0
+Short position
+22,000
+Long position
+540,000
+100.00
+9,567,775
+UBS Asset Management Trust Company
+Name of controlling person
+Name of controlled corporation
+interest
+Direct
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+94
+0
+17,639,166
+Long position
+Short position
+Y
+% control
+100.00
+UBS Asset Management (Hong Kong) Ltd
+0
+213,000
+Long position
+Short position
+Y
+100.00
+UBS Asset Management France SA
+0
+Long position
+Short position
+UBS Group AG
+680.224
+UBS Group AG
+(Y/N)
+UBS Group AG
+Number of
+Nature of
+interest
+Long position
+Short position
+0
+100.00
+UBS Group AG
+UBS Asset Management (Singapore) Ltd
+0
+Short position
+627,000
+Long position
+Y
+Y
+UBS Group AG
+shares
+UBS Asset Management (Japan) Ltd.
+100.00
+UBS Group AG
+100.00
+Y
+33,631,000
+7,307,500
+Short position
+0
+Long position
+UBS Asset Management Life Limited
+Long position
+Long position
+Y
+100.00
+BlackRock Luxembourg Holdco S.à r.l.
+BLACKROCK (Luxembourg) S.A.
+35,174,891
+Long position
+Y
+100.00
+BlackRock Asset Management Ireland Limited
+35,174,891
+Long position
+100.00
+BlackRock Luxembourg Holdco S.à r.l.
+BlackRock Investment Management Ireland
+Holdings Limited
+55,763,891
+20,559,500
+N
+BlackRock Investment Management Ireland
+Holdings Limited
+N
+BlackRock Asset Management Deutschland AG
+100.00
+22,350,936
+100.00
+Long position
+Y
+100.00
+BlackRock Investment Management (UK)
+Limited
+BlackRock Fund Managers Limited
+341,500
+Long position
+BlackRock Investment Management (UK) Limited BlackRock Group Limited
+Y
+BlackRock Investment Management (UK)
+Limited
+19,483,172
+Long position
+Y
+100.00
+BlackRock Investment Management (UK) Limited BlackRock Group Limited
+22,692,436
+Long position
+N
+100.00
+BlackRock Group Limited
+Long position
+3,552,500
+BR Jersey International Holdings L.P.
+BlackRock Group Limited
+20,127,809
+Long position
+Y
+100.00
+BlackRock HK Holdco Limited
+50,710,353
+Long position
+N
+100.00
+BlackRock (Singapore) Holdco Pte. Ltd.
+50,865,853
+Long position
+N
+100.00
+BR Jersey International Holdings L.P.
+BlackRock Asset Management
+North Asia Limited
+BlackRock HK Holdco Limited
+BlackRock (Singapore) Holdco Pte. Ltd.
+BlackRock Life Limited
+90.00
+BlackRock Luxembourg Holdco S.à r.l.
+N
+BlackRock (Netherlands) B.V.
+BlackRock Advisors (UK) Limited
+Long position
+Y
+100.00
+BlackRock Group Limited
+BlackRock International Limited
+15,574,760
+Long position
+N
+100.00
+BlackRock Group Limited
+BlackRock International Limited
+3,293,001
+Long position
+Y
+100.00
+BlackRock Group Limited
+754,500
+Long position
+Y
+100.00
+BlackRock Group Limited
+121,114,260
+BlackRock (Singapore) Limited
+65
+100.00
+2015.06-2018 election
+Female 44
+Executive Director, Chief Human
+CAI Fangfang
+President, Deputy Chief Executive
+Officer and Chief Insurance Business
+Officer
+2015.06-2018 election
+52
+Male
+Executive Director, Executive Vice
+Resources Officer
+LEE Yuansiong
+2015.06-2018 election
+2015.06-2018 election.
+48
+47
+Male
+Executive Director, Executive Vice
+Male
+Executive Director and President
+2015.06-2018 election
+2015.06-2018 election
+2,238,000
+Male
+President, Chief Financial Officer and
+Chief Actuary
+98
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+2016.01-2018 election
+52
+Male
+Non-executive Director
+XIONG Peijin
+2015.06-2018 election
+54
+Male
+Non-executive Director
+YANG Xiaoping
+2015.06-2018 election
+2015.06-2018 election
+54
+Male
+Non-executive Director
+Soopakij CHEARAVANONT
+Female 55
+Non-executive Director
+LIN Lijun
+Period of
+Gender Age appointment
+Positions
+Name
+62
+Male
+Chairman and Chief Executive Officer
+Senior Vice Chairman and Executive
+Vice President
+Gender Age appointment
+The entire interests of BlackRock, Inc. in the Company included 1,728,500 H shares (Long position) and 9,000 H shares (Short position)
+which were held through derivatives, the category of which was through cash settled unlisted derivatives.
+29,500
+Long position
+Y
+100.00
+BlackRock UK Holdco Limited
+BlackRock Asset Management (Schweiz) AG
+29,500
+Long position
+N
+100.00
+BlackRock Luxembourg Holdco S.à r.l.
+BlackRock UK Holdco Limited
+155,500
+Long position
+Y
+100.00
+BlackRock (Singapore) Holdco Pte. Ltd.
+15,574,760
+Long position
+Y
+Percentage figures may not add up to the totals due to rounding.
+BlackRock International Limited
+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, 2017 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.
+Ping An Insurance (Group) Company of China, Ltd.
+Period of
+YAO Jason Bo
+REN Huichuan
+MA Mingzhe
+SUN Jianyi
+Name
+BASIC INFORMATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Positions
+Mr. XIE Yonglin
+Ms. TAN Sin Yin
+Mr. CAO Shifan
+Mr. SUN Jianyi
+Mr. LEE Yuansiong
+Mr. MA Mingzhe
+Mr. REN Huichuan
+Mr. CHEN Kexiang
+Ms. IP So Lan
+From left to right:
+Ms. CAI Fangfang
+Mr. YAO Jason Bo
+Senior Management and Employees
+Supervisors,
+Directors,
+CORPORATE GOVERNANCE
+97
+Annual Report 2017
+Long position
+Male
+100.00
+(1)
+For details of the change of Directors, Supervisors and Senior Management during the reporting period, please refer to
+"Appointment or Removal of Directors, Supervisors and Senior Management" in this chapter.
+100
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+MAJOR WORKING EXPERIENCE AND CONCURRENT POSITIONS 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 currently the Chairman and CEO of the Company. Since the establishment of the Company, Mr. Ma
+has served as President, Director, 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).
+2012.02-2017.04
+SUN Jianyi, has been an Executive Director of the Company since March 1995, and is currently the Senior
+Vice Chairman and the Executive Vice President of the Company. Mr. Sun is the Director of Ping An Life,
+Ping An Property & Casualty, Ping An Annuity and Ping An Asset Management, and is also a Non-executive
+Director of China Insurance Security Fund Co., Ltd., and an Independent Non-executive Director of
+Haichang Ocean Park Holdings Ltd. Mr. Sun was a Non-executive Director of China Vanke Co., Ltd. as
+well. 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 Deputy Chief Executive Officer 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 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).
+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, 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 June 2009 to January 2016. Prior to that, Mr. Yao had 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. Mr. Yao is the Non-executive Director of Lufax. 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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+101
+CORPORATE GOVERNANCE
+Directors, Supervisors,
+Senior Management and Employees
+LEE Yuansiong, has been an Executive Director of the Company since June 2013, and is currently the
+Executive Vice President, Deputy Chief Executive Officer and Chief Insurance Business Officer of the
+Company, and is also the 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. 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. Mr. Lee holds a Master's degree in Finance from the University of
+Cambridge.
+CAI Fangfang, has been an Executive Director of the Company since July 2014. Ms. Cai is the Chief Human
+Resources Officer of the Company and the Executive Vice President of Ping An School of Financial
+Management. Ms. Cai joined the Company in July 2007. She was the Vice Chief Financial Officer and General
+Manager of the Corporate Planning Department of the Company from February 2012 to September 2013
+and successively held the positions of Deputy 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. Ms. Cai is currently 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, and is
+also the Non-executive Director of Lufax. 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.. Ms. Cai holds a Master's degree in
+Accounting from the University of New South Wales.
+REN Huichuan, has been an Executive Director of the Company since July 2012, and is currently the
+President of the Company, the Chairman of the board of directors of Ping An Trust, the 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 also a member of Council of the Shenzhen Finance Institute. 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 Wan LiTong between February 2015 and December 2015. Before that, Mr. Ren had been the
+assistant to the President and Financial Officer 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.
+57
+Male
+Resigned Secretary of the Board
+2007.01-
+CAO Shifan
+Senior Vice President
+Male
+62
+2007.04-
+XIE Yonglin
+Senior Vice President
+49
+2016.09-
+YAO Jun
+Chief Legal Officer, Company Secretary
+Male
+52
+2008.05-
+SHENG Ruisheng(1)
+Secretary of the Board
+Male
+48
+2017.04-
+JIN Shaoliang (1)
+Non-executive Directors
+60
+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
+Horse 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.
+YANG Xiaoping, has been a Non-executive Director of the Company since June 2013, and is currently
+the Senior Vice Chairman of the CP Group, an Executive Director and Vice Chairman of CP Lotus
+Corporation, CEO of CT Bright Holdings Limited, the Chairman of Jilin Deda Co., Ltd., 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 China
+Institute for Rural Studies of Tsinghua University, the 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. Mr. Yang holds a Bachelor's degree from Jiangxi Institute of Technology and has
+experience of studying in Japan.
+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.
+WANG Zhiliang, has been an Employee Representative Supervisor of the Company since August 2017, is
+currently the Deputy General Manager of the Group Head Office in Shanghai of the Company. Mr. Wang
+joined the Group in July 2002 and successively worked in the Administration Department of Ping An
+Life Insurance Company of China, Ltd., Tianjin Branch and the Group Office of the Company. Mr. Wang
+graduated from the Tianjin University of Finance and Economics (previously known as Tianjin Institute of
+Finance and Economics) with a Bachelor's degree in Economic Information Management.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+105
+55
+CORPORATE GOVERNANCE
+Directors, Supervisors,
+Senior Management and Employees
+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 Economics from University of International Business and Economics and has obtained an EMBA degree
+from Guanghua School of Management of Peking University.
+Senior Management
+TAN Sin Yin, has been a Senior Vice President of the Company since June 2015, has been redesignated as
+an Executive Vice President of the Company since January 2016, and has been the Deputy Chief Executive
+Officer of the Company since October 2017. Ms. Tan joined Ping An in January 2013. She has been the Chief
+Information Officer and the Chief Operating Officer of the Company since January 2013 and December
+2013, respectively. She is also the Chairman of Ping An Technology, a subsidiary of the Company. 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, Ping An Financial Technology and Ping An Asset Management. She
+is also a Non-executive Director of Lufax. Prior to joining the Company, Ms. Tan was a Vice Chairman and
+Global Director (Partner) of McKinsey & Company. Ms. Tan graduated from the Massachusetts Institute of
+Technology (MIT) with joint Bachelor's degrees in Electrical Engineering and Economics and joint Master's
+degrees in Electrical Engineering and Computer Science.
+IP So Lan, has been a 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 Ping An in 2004. She 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. Ms. Ip has been a Non-executive Director of Ping An Bank since June 2010, and a Director of Shenzhen
+OneConnect Intelligence Technology Co., Ltd. since September 2017. She is also a Non-executive Director
+of Lufax. Prior to joining the Company, Ms. Ip worked with AIA and Prudential Hong Kong and so on. She
+holds a Bachelor's Degree in Computing from the Polytechnic of Central London.
+CHEN Kexiang, has been a Senior Vice President of the Company since January 2007, in charge of
+administration, and party-mass relationship. 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. 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. 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 a Senior Vice President of the Company since April 2007, and the Chairman of the
+Labour Union of the Company since May 2007. 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 been the Chairman of Ping An
+Securities since April 2017. Mr. Cao has a Master's degree in Economics from Zhongnan University of
+Economics and Law (previously Zhongnan University of Economics).
+XIE Yonglin, has been a Senior Vice President of the Company since September 2016 and Chairman of
+Ping An Bank since December 2016. Mr. Xie joined the Company in 1994 and started as a sales agent before
+serving as 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 positions of Operations Director, Human Resources Director, Vice
+President in Ping An Bank from March 2006 to November 2013, and Special Assistant to Chairman, President
+and Chief Executive Officer, and Chairman of Ping An Securities from November 2013 to November 2016
+consecutively. As a graduate from Nanjing University, he has a Ph.D. in Corporate Management and a
+Master's degree in Science.
+106
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+LIU Chong
+See "Executive Directors" for work experience, positions and concurrent positions of Mr. Ma Mingzhe, Mr.
+Sun Jianyi, Mr. Ren Huichuan, Mr. Yao Jason Bo and Mr. Lee Yuansiong.
+HUANG Baokui, has been an Independent Supervisor of the Company since June 2016. Prior to his
+retirement in January 2003, Mr. Huang was the Deputy Secretary of the Party Committee and the Secretary
+of the Disciplinary Committee 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. Huang obtained his graduation certificate in Physics from Jilin
+University and is a senior political practitioner.
+GU Liji, has been an Independent Supervisor and the Chairman of Supervisory Committee of the Company
+since June 2009, and is currently an Independent Non-executive Director of Maxphotonics Co., Ltd., an
+Independent Non-executive Director of Shenzhen Changhong Technology Co., Ltd., a Non-executive
+Director of Xiangtan Electric Manufacturing Group Co., Ltd (XEMC), an Independent Non-executive 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 Applied 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.
+Supervisors
+102
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+XIONG Peijin, has been a Non-executive Director of the Company since January 2016, and is currently the
+Chairman of the board of directors and Secretary of the Party Committee of Shenzhen Energy Group Co.,
+Ltd. Mr. Xiong had served as the Director, General Manager and Deputy Secretary of the Party Committee
+of Shenzhen Investment Holdings Co., Ltd. from May 2014 to June 2016, the Non-executive Director of
+Guotai Junan Securities Company Limited from December 2014 to May 2016, the Director, General Manager
+and Deputy Secretary of the Party Committee of Shenzhen Special Zone Construction 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..
+Mr. Xiong obtained a Master's degree in Administrative 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.
+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 Deputy
+General Manager and Financial Controller of Shenzhen Tefa Group Co., Ltd., 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 Holding Co., Ltd. from June 2009 to June 2010,
+and was an Independent Non-executive 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 the senior accountant qualification.
+Independent Non-executive Directors
+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, was the Senior Vice President and Chief
+Actuary of the Company from February 2003 to January 2007, and served as the Chief Actuary of the
+Company from 1999 to 2003. Mr. Meldrum was a Vice President and the Director of International Strategies
+of Lincoln National, Fort Wayne USA and International Development 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.
+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 S.F. Holding Co., Ltd.
+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, 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 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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+103
+CORPORATE GOVERNANCE
+Directors, Supervisors,
+Senior Management and Employees
+WONG Oscar Sai Hung, has been an Independent Non-executive Director of the Company since June
+2013, currently serves as an Independent Non-executive Director of JPMorgan Chinese Investment Trust
+plc (listed in London), a Non-executive Director of PAN Securities Group Limited 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 Non-executive Director of 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, 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).
+SUN Dongdong, has been an Independent Non-executive Director of the Company since June 2013, and
+currently serves as a professor of Law School of Peking University and the director of Peking University
+Health Law Research Centre. Mr. Sun was an 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 the Insurance Association of China and the Chinese Medical
+Doctor Association. Mr. Sun graduated with a degree of Medical Science from Beijing Medical College (now
+known as Peking University Health Science Center).
+GE Ming, has been an Independent Non-executive Director of the Company since June 2015, and is currently
+the Independent Non-executive Director of Chong Sing Holdings FinTech Group Limited, Focus Media
+Information Technology Co., Ltd. and Asia Investment Finance Group Limited, Supervisor of the Bank of
+Shanghai 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 third session of the Listed Companies Mergers and Acquisitions Expert Consultation Committee
+of CSRC. Mr. Ge served as Chairman of Ernst & Young Hua Ming, Partner and Chief Accountant of Ernst
+& Young Hua Ming LLP, the Independent Non-executive Director of Shunfeng International Clean Energy
+Limited and Shanghai Zhenhua Heavy Industry Co., Ltd. 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.
+OUYANG Hui, has been an Independent Non-executive Director of the Company since August 2017,
+and is currently the Dean's Distinguished Chair Professor, the director of Research Center on Internet
+Finance and the co-director of Research Center on Financial Innovation and Wealth Management 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. Previously, Mr. Ouyang served as Managing Director of UBS AG, Asia Pacific,
+Managing Director of Nomura Securities, Asia Pacific, Senior Vice President and Managing Director of
+Lehman Brothers, Asia Pacific. Mr. Ouyang obtained a Ph.D. in Finance from the University of California,
+Berkeley and a Ph.D. in Chemical Physics from Tulane University.
+104
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Soopakij CHEARAVANONT, has been a Non-executive Director of the Company since June 2013. Mr.
+Chearavanont is the Chairman of the CP Group, and at the same time has been an Executive Director and
+the Chairman of CP 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., as well as 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 companies are 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.
+Y
+Male
+CHEN Kexiang
+58
+2016.01-2018 election
+Stephen Thomas MELDRUM Independent Non-executive Director
+Male
+75
+2015.06-2018 election
+YIP Dicky Peter
+Independent Non-executive Director
+Male
+Male
+70
+WONG Oscar Sai Hung
+SUN Dongdong
+Independent Non-executive Director
+Independent Non-executive Director
+Male
+62
+2015.06-2018 election
+Male
+58
+2015.06-2018 election.
+2015.06-2018 election
+(7)
+Direct
+interest
+BlackRock Australia Holdco Pty. Ltd.
+BlackRock Investment Management (Australia)
+Limited
+2,238,000
+Long position
+N
+100.00
+BR Jersey International Holdings L.P.
+BlackRock Australia Holdco Pty. Ltd.
+557,500
+Long position
+Y
+100.00
+BlackRock Canada Holdings ULC
+BlackRock Asset Management Canada Limited
+shares
+Number of
+Nature of
+interest
+(Y/N)
+% control
+Name of controlling person
+Name of controlled corporation
+GE Ming
+Senior Vice President
+Independent Non-executive Director
+66
+Male
+70
+2015.06-2018 election
+(Independent Supervisor)
+Male
+75
+Female 38
+Male
+48
+2016.06-2018 election
+2015.06-2018 election
+2015.06-2018 election
+Chairman of Supervisory Committee
+Male
+38
+41
+2017.08-2018 election
+2015.06-2017.08
+Shareholder Representative Supervisor
+Employee Representative Supervisor
+Employee Representative Supervisor
+Resigned Employee Representative
+Supervisor
+Executive Vice President, Deputy Chief
+Executive Officer, Chief Operating
+Officer and Chief Information Officer
+Senior Vice President, Chief Internal
+Auditor, Compliance Officer and
+Person-in-charge of Auditing
+Female 40
+2015.06-
+Female 61
+2011.01-
+Male
+Gender Age appointment
+Positions
+Independent Supervisor
+OUYANG Hui(1)
+WOO Ka Biu Jackson (1)
+Independent Non-executive Director
+55
+Retired Independent Non-executive
+Director
+Male
+55
+2015.06-2018 election
+2017.08-2018 election
+2015.06-2017.08
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+99
+CORPORATE GOVERNANCE
+Directors, Supervisors,
+Senior Management and Employees
+Period of
+Name
+GU Liji
+HUANG Baokui
+ZHANG Wangjin
+PAN Zhongwu
+WANG Zhiliang (1)
+GAO Peng (1)
+TAN Sin Yin
+IP So Lan
+Male
+Male
+Non-executive Director
+MA Mingzhe (Chairman)
+Long position
+0.00048
+0.00029
+Long position
+0.00034
+0.00020
+Beneficial owner
+A
+6,832
+26,888
++20,056
+Resigned Secretary of the Board
+Beneficial owner
+A
+6,211
+26,909
++20,698
+0.00011
+0.00027
+Long position
+20.000
+20,000
+H
+0.00024
+Beneficial owner
+0.00025
+Long position
+0.00015
+0.00025
+Long position
+Share Purchase Plan
+Share Purchase Plan
+0.00015
+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.
+0.00040
+Share Purchase Plan
+Share Purchase Plan
+Share Purchase Plan
+0.00011
+0.00027
+Long position
+20,000
+20,000
+H
+Interest of his spouse
+0.00489
+0.00825
+Long position
+Share Purchase Plan
++717,256
+893,966
+176,710
+A
+Beneficial owner
+Chairman, Chief Executive Officer
++30,892
+36,714
+5,822
+A
+Beneficial owner
+of the period
+Long position
+period
+Reason for the change
+Nature of
+interest
+Percentage of
+total issued
+H/A shares (%)
+Percentage of
+total issued
+shares (%)
+Ma Mingzhe
+Change
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 109
+Directors, Supervisors,
+By education
+(%)
+Management and administration personnel 20.23
+• Sales personnel 56.92
+Technical personnel 12.65
+Others 10.20
+Doctorate or master's degree 5.36
+Bachelor's degree 49.86
+College education 34.21
+Others 10.57
+STAFF TRAINING PROGRAM
+Committed to providing the best training, Ping An School of Financial Management has constantly devoted
+abundant resources to optimizing its training operating system to facilitate employee development.
+Besides, it joined hands with the training departments of the Group's subsidiaries (including branches and
+sub-branches) to develop a shared communication and learning platform and a platform to pool teaching
+resources. Training has been a driving force of business development.
+In 2017, Ping An School of Financial Management optimized its face-to-face course system to provide
+managers at different levels with diverse and quality courses. The Group now has 1,184 face-to-face
+courses. In 2017, 36,145 employees attended 1,241 face-to-face training sessions nationwide, covering 52.48%
+of the Company's managers at senior or above levels. Zhi Niao, the Company's mobile training platform,
+launched 65,000 new courses in 2017, and has accumulatively launched over 180,000 courses. Courses on
+Zhi Niao were viewed for more than 123.991 million times. 33 courses were completed per capita, with
+a monthly activity rate of 89.99%. To develop managers at middle or senior levels, Ping An School of
+Financial Management introduced 15 new courses on leadership, and provided corresponding training for
+986 managers. Moreover, responding to the Group's "finance + technology" transformation, Ping An School
+of Financial Management and Ping An Technology jointly developed eight courses on agile management
+for technology personnel, 565 of whom attended the training sessions. The Company has promoted a
+pro-learning atmosphere covering all the staff.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+111
+CORPORATE GOVERNANCE
+shares
+Corporate Governance Report
+The Board of Directors of the Company (the "Board") is pleased to report
+to the shareholders on the corporate governance of the Company for the
+year ended December 31, 2017 (the "Reporting Period").
+CORPORATE GOVERNANCE
+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 the PRC and the Securities Law of the 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 exercising their
+rights and performing their 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.
+% of
+attendance
+in person (%)
+to attend
+Meetings required
+General Meetings
+attended in
+person/General
+Date of
+appointment
+as Directors
+Members
+(%)
+During the Reporting Period, the Directors did their best to participate in the general meeting in person
+and had actively developed an understanding of the views of shareholders. The attendance records of each
+Director at the general meeting are as follows:
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+112
+During the Reporting Period, the Company convened 1 general meeting, i.e. the 2016 Annual General
+Meeting held on June 16, 2017. The notice, convocation and procedures for convening and voting at the
+general meeting have complied with the requirements of the Company Law of the 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 advice, their information
+rights, participation rights and voting rights on the significant events of the Company can be ensured.
+The announcement regarding the resolutions of the above general meeting was published on Shanghai
+Securities News, China Securities Journal, Securities Times, Securities Daily and the website of SSE
+(www.sse.com.cn) on June 17, 2017. The poll results announcement has also been published on the website
+of HKEX (www.hkexnews.hk) on the same date of the general meeting.
+Shareholders and the General Meetings
+During the Reporting Period, the corporate governance of the Company is described as follows:
+Attendance of Directors at the General Meetings
+By profession
+As at December 31, 2017, the Company had a total of 342,550 employees, of which 69,297 were for
+management and administration, representing 20.23%; 194,991 were for sales, representing 56.92%; 43,327 were
+technicians, representing 12.65%; 34,935 were others, representing 10.20%. Among all the staff, 18,345 held
+a doctorate or master's degree, representing 5.36%; 170,782 held a bachelor's degree, representing 49.86%;
+117,171 attained college education, representing 34.21% and 36,252 were with other education backgrounds,
+representing 10.57%.
+Ping An Insurance (Group) Company of China, Ltd.
+total issued
+Percentage of
+Nature of
+interest
+Reason for
+the change
+Change
+Number of
+shares held at
+the end of
+the period
+shares in
+associated
+corporation (%)
+the beginning
+of the period
+Associated
+Corporation
+Position
+Name
+Number of
+shares held at
+Change in the number of shares held in associated corporations of the Company
+Senior Management and Employees
+Capacity
+Sun Jianyi
+Xiong Peijin
+Ping An Bank
+Annual Report 2017
+110
+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 stick 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.
+With regard to Directors, the Executive Directors' remunerations are determined according to their posts
+within the Company as per 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.
+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's performance in the long term, drive improvement in the
+shareholders' value and facilitate sustainable development.
+Non-executive
+Director
+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;
+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 its
+operating features, development stage and remuneration level in the market.
+Save as disclosed above, as at December 31, 2017, none of the 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 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 executives 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.
+0.00111
+Long position
+190,886
+190,886
+Interest of
+his spouse
+THE ASSESSMENT & EVALUATION AND REMUNERATION SYSTEMS OF THE COMPANY
+Senior Vice Chairman and Executive Vice
+President
+Beneficial owner
+A
+0.00014
+Long position
+Share Purchase Plan
++9,746
+15,536
+5,790
+A
+0.00005
+0.00008
+Long position
+Share Purchase Plan
++5,797
+8,378
+2,581
+A
+0.00056
+0.00094
+Beneficial owner
+Resigned Employee Representative
+Supervisor
+Beneficial owner
+< < < < <
+A
+1,140
+0.00008
++1,140
+Long position
+0.00001
+0.00001
+102,000
+102,000
+Long position
+Share Purchase Plan
+A
+6,165
+20,040
+Senior Vice President
+Beneficial owner
+A
+6,211
+43,196
++36,985
+Chen Kexiang
+Cao Shifan
+Yao Jun
+Sheng Ruisheng Secretary of the Board
+Jin Shaoliang
+Beneficial owner
+A
+6,211
+52,132
++45.921
+Chief Legal Officer, Company Secretary
+Senior Vice President
+Wang Zhiliang Employee Representative Supervisor
+Gao Peng
+of Auditing
+0.00020
++13,875
+Share Purchase Plan
+Long position
+0.00018
+0.00011
+IP So Lan
+Compliance Officer and Person-in-charge
+Senior Vice President, Chief Internal Auditor, Beneficial owner
+5,822
+36,714
++30,892
+Share Purchase Plan
+Long position
+0.00034
+A
+Executive Directors
+Beneficial owner
+Pan Zhongwu
+24,000
+H
+Beneficial owner
+0.00033
+0.00056
+Long position
+0.00203
+0.00343
+Long position
+Share Purchase Plan
+Share Purchase Plan
++48,223
+60,144
+11,921
+A
+Beneficial owner
+Executive Director, Executive Vice President,
+Chief Financial Officer and Chief Actuary
+Yao Jason Bo
+3,844,368
+4,007,565
++163,197
+Share Purchase Plan
+Long position
+0.03700
+24,000
+0.02192
+Executive Director and President
+Beneficial owner
+A
+247,808
+371,372
++123,564
+Ren Huichuan
+Long position
+0.00032
+0.00013
+A
+8,157
+24,687 +16,530
+Share Purchase Plan
+Long position
+0.00023
+Beneficial owner
+0.00014
+Lin Lijun
+Non-executive Director
+Beneficial owner
+Xiong Peijin
+Non-executive Director
+Interest of his spouse
+Resources Officer
+Employee Representative Supervisor
+Executive Director and Chief Human
+0.00022
+Lee Yuansiong Executive Director, Executive Vice President,
+Deputy Chief Executive Officer and Chief
+Insurance Business Officer
+Interest of his spouse
+Beneficial owner
+H
+44,000
+44,000
+Long position
+Cai Fangfang
+0.00059
+A
+40,601
++40,601
+Share Purchase Plan
+Long position
+0.00037
+0.00024
+MA Mingzhe (Chairman)
+NUMBER OF EMPLOYEES, PROFESSION AND EDUCATION BACKGROUND
+1/1
+Board
+Meetings
+attended in
+person/Board
+Meetings required
+Board
+Meetings
+attended by
+proxy/Board
+to attend
+% of
+attendance
+in person (%)
+Meetings required
+% of
+attendance
+to attend
+by proxy (%)
+Members
+Executive Directors
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+116
+OUYANG Hui(1)
+2/2
+100
+0/2
+WOO Ka Biu Jackson (Retired)(1)
+3/3
+During the Reporting Period, the Board 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 Directors entitled to be present. All the Directors have done their best to make
+right decisions on the basis of in-depth 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:
+100
+ooooooo
+0
+0
+0
+0
+(1) Details regarding retirement, resignation and appointment of the Directors during the Reporting Period are set out in the section
+headed "Directors, Supervisors, Senior Management and Employees" of this Annual Report.
+0/3
+March 21 1988
+Corporate Governance Report
+CORPORATE GOVERNANCE
+Soopakij CHEARAVANONT
+CP Group
+Vice President
+Chairman
+April 2010
+Present
+YANG Xiaoping
+Shum Yip Group Limited
+CP Group
+January 2017 - Present
+January 2017 - Present
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+107
+CORPORATE GOVERNANCE
+Directors, Supervisors,
+Senior Vice Chairman
+0/5
+LIU Chong
+Name of corporate shareholder
+115
+Ping An Insurance (Group) Company of China, Ltd.
+SUN Jianyi
+YAO Jun, has been the Chief Legal Officer and Company Secretary since September 2003 and May 2008
+respectively. He has also been the General Manager of Legal & Compliance Department (formerly known
+as Legal Department) of the Company since April 2007. He was Secretary of the Board of the Company
+from October 2008 to February 2012, and Joint Secretary of the Company from June 2004 to May 2008. Mr.
+Yao currently serves as 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 the Institute of Chartered Secretaries and Administrators (FCIS) and a Fellow of the Hong Kong
+Institute of Chartered Secretaries (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.
+SHENG Ruisheng, has been the Secretary of the Board of the Company since April 2017. Mr. Sheng joined
+the Company in July 1997. He has been the Brand Director since February 2014, General Manager of the
+Branding Department since August 2008, and spokesperson of the Company since January 2006. From
+August 2002 to August 2008, he acted as assistant to General Manager and deputy General Manager of the
+Branding Department. Mr. Sheng holds a Bachelor's degree from Nanjing University and an MBA degree
+from the Chinese University of Hong Kong.
+Chief Actuary
+Position
+For the work experience, positions and concurrent positions of Mr. Yao Jason Bo, the Chief Actuary of the
+Company, please refer to “Executive Directors" in this chapter.
+For the work experience, positions and concurrent positions of Mr. Yao Jun, the Company Secretary, please
+refer to "Senior Management" in this chapter.
+Chief Investment Officer
+CHAN Tak Yin, has been the Chief Investment Officer of the Company since August 2012. Mr. Chan joined
+Ping An in 2005, and served as Deputy Chief Investment Officer of the Company, Chairman and Chief
+Executive Officer of Ping An Asset Management and Chairman of Ping An of China Asset Management
+(Hong Kong) respectively. From December 2008 to May 2017, Mr. Chan acted as 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. Mr. Chan graduated from the University of Hong Kong with a Bachelor's degree in Arts.
+POSITIONS HELD IN CORPORATE SHAREHOLDERS BY DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT
+Name
+Period of engagement
+Company Secretary
+Senior Management and Employees
+100
+GE Ming
+3/5
+Soopakij CHEARAVANONT
+100
+5/5
+LIN Lijun
+Non-executive Directors
+0
+0
+оооооо
+0/5
+100
+5/5
+0/5
+100
+5/5
+0/5
+100
+REN Huichuan
+YAO Jason Bo
+Lee Yuansiong
+Cai Fangfang
+5/5
+100
+YANG Xiaoping
+0/5
+100
+0/5
+5/5
+100
+0/5
+5/5
+5/5
+5/5
+100
+XIONG Peijin
+100
+0/5
+YIP Dicky Peter
+5/5
+100
+0/5
+5/5
+WONG Oscar Sai Hung
+100
+0/5
+SUN Dongdong
+5/5
+100
+0/5
+5/5
+5/5
+Stephen Thomas MELDRUM
+0
+4/5
+LIU Chong
+5/5
+100
+88888
+0/5
+Independent Non-executive Directors
+0
+40
+0/5
+0
+1/5
+20
+0/5
+2/5
+APPOINTMENT OR REMOVAL OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Attendance of Directors at the Board Meetings
+2.
+100
+8.8.8
+Independent Non-executive Directors
+Stephen Thomas MELDRUM
+July 17 2012
+1/1
+100
+YIP Dicky Peter
+June 17 2013
+1/1
+100
+WONG Oscar Sai Hung
+June 17 2013
+1/1
+100
+SUN Dongdong
+June 17 2013
+(1)
+100
+1/1
+July 22 2011
+WOO Ka Biu Jackson (Retired) (1)
+0/0
+1/1
+August 6 2017
+100
+1/1
+June 30 2015
+GE Ming
+100
+1/1
+OUYANG Hui(1)
+(2)
+0/1
+0/1
+100
+SUN Jianyi
+March 29 1995
+1/1
+100
+REN Huichuan
+July 17 2012
+100
+YAO Jason Bo
+June 9 2009
+1/1
+100
+LEE Yuansiong
+June 17 2013
+1/1
+100
+CAI Fangfang
+100
+1/1
+55555
+June 17 2013
+January 8 2016
+January 8 2016
+LIU Chong
+XIONG Peijin
+1.
+YANG Xiaoping
+Soopakij CHEARAVANONT
+LIN Lijun
+Non-executive Directors
+100
+1/1
+July 2 2014
+May 16 2003
+June 17 2013
+Details regarding retirement, resignation and appointment of the Directors during the Reporting Period are set out in the section
+headed "Directors, Supervisors, Senior Management and Employees" of this Annual Report.
+100
+Annual Report 2017
+Mr. Ge Ming, the Independent Non-executive Director of the Company, has served as an Independent
+Non-executive Director of Asia Investment Finance Group Ltd. since May 2017, and as a Supervisor of
+Bank of Shanghai Co., Ltd. since June 2017.
+Mr. Sun Dongdong, the Independent Non-executive Director of the Company, has not served as an
+Independent Non-executive Director of Zhejiang Dian Diagnostics Co, Ltd since July 2017.
+Mr. Wong Oscar Sai Hung, the Independent Non-executive Director of the Company, has not served
+as the Vice Chairman of China Regenerative Medicine International Limited since December 2017, has
+not served as a Non-executive Director of Chong Sing Holdings FinTech Group Limited since February
+2018, and has served as a Non-executive Director of PAN Securities Group Limited since February 2018.
+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.
+108
+Mr. Yip Dicky Peter, the Independent Non-executive Director of the Company, has served as an
+Independent Non-executive Director of S.F. Holding Co., Ltd. since February 2017, and has not served
+as an Independent Non-executive Director of DSG International (Thailand) PLC since August 2017.
+Annual Report 2017
+SHAREHOLDINGS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+As at December 31, 2017, 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 2017)" 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) 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,
+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:
+Change in the number of shares held in the Company
+CORPORATE GOVERNANCE
+H/A
+Number of
+shares held at
+the beginning
+Ping An Insurance (Group) Company of China, Ltd.
+Number of
+shares held at
+Mr. Soopakij Chearavanont, the Non-executive Director of the Company, has been redesignated as the
+Chairman of the CP Group (previously the Executive Vice Chairman) since January 2017.
+Mr. Sun Jianyi, the Executive Director of the Company, has not served as the Non-executive Director
+of China Vanke Co., Ltd. since June 2017.
+Some Directors did not attend the general meeting due to business schedules.
+3.
+As the 6-year term of office of Mr. Woo Ka Biu Jackson as the Independent Non-executive Director of the
+Company expired, he tendered his resignation as Independent Non-executive Director of the Company.
+The resolution regarding the appointment of Mr. Ouyang Hui as the Independent Non-executive Director
+of the Company to replace Mr. Woo Ka Biu Jackson was passed at the 2016 Annual General Meeting held
+by the Company on June 16, 2017. The qualification of Mr. Ouyang Hui as the Director of the Company was
+approved by CIRC on August 6, 2017, on which day the appointment of Mr. Ouyang Hui as the Independent
+Non-executive Director of the Company to replace Mr. Woo Ka Biu Jackson became effective.
+Mr. Gao Peng tendered his resignation as the Employee Representative Supervisor of the Company
+due to personal work arrangement. The resolution regarding the appointment of Mr. Wang Zhiliang
+as an Employee Representative Supervisor of the Company to replace Mr. Gao Peng was passed
+at the employees' representatives meeting held by the Company on June 20, 2017. The qualification
+of Mr. Wang Zhiliang as a Supervisor of the Company was approved by CIRC on August 6, 2017, on
+which day the appointment of Mr. Wang Zhiliang as the Employee Representative Supervisor of the
+Company to replace Mr. Gao Peng became effective.
+Mr. Jin Shaoliang tendered his resignation as the Secretary of the Board of Directors of the Company
+due to personal reasons. The resolution regarding the appointment of Mr. Sheng Ruisheng as the
+Secretary of the Board of Directors to replace Mr. Jin Shaoliang was passed at the 11th meeting of the
+10th Board of Directors held by the Company on March 22, 2017. Mr. Sheng Ruisheng's qualification was
+approved by the CIRC on April 22, 2017, and the appointment of Mr. Sheng Ruisheng as the Secretary
+of the Board of Directors of the Company to replace Mr. Jin Shaoliang become effective on April 26,
+2017.
+CHANGES IN INFORMATION OF DIRECTORS AND SUPERVISORS
+Mr. Ren Huichuan, the Executive Director of the Company, has served as a member of Council of the
+Shenzhen Finance Institute since January 2017.
+1.
+3.
+4.
+5.
+6.
+7.
+8.
+2.
+the end of the
+Mr. Yang Xiaoping, the Non-executive Director of the Company, has been redesignated as the Senior
+Vice Chairman of the CP Group (previously the Vice Chairman) since January 2017.
+Name
+114
+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 a record of training to the Company.
+The Company also continually provide information such as updates on 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.
+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 will be updated regularly.
+Continuous Professional Development of the Directors
+Directors, Board and Specialized Committees under the Board
+Directors
+Annual Report 2017
+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.
+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.
+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
+Corporate Governance Report
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 113
+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.
+Ping An Insurance (Group) Company of China, Ltd.
+As at December 31, 2017, 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.
+As at December 31, 2017, all Directors of the Company attended professional training with topics covering
+corporate governance, regulations and the Company's businesses; in addition, some of the Directors and
+all Supervisors attended "the Remote Training on the Compliance Practices of Insurance Companies"
+and "the Remote Training on China Risk Oriented Solvency System (C-ROSS)", which were organized
+by the Insurance Association of China, and Mr. Ge Ming attended the 4th Training Session for Directors
+and Supervisors of Listed Companies in Shanghai for 2017 hosted by Shanghai Branch of the CSRC and
+organized by the Listed Companies Association of Shanghai.
+Position
+Capacity
+Annual Report 2017
+the day-to-day management of the Company's business.
+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
+appointing or dismissing the senior management of the Company, and determining their remuneration
+and award and reprimand matters; and
+formulating proposals for the increase or decrease in the Company's registered capital, the issuance of
+corporate bonds or other securities and listing plans;
+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.
+formulating the Company's profit distribution and loss recovery proposals;
+formulating the Company's annual budgets, 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. 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:
+The Board
+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);
+As at December 31, 2017, the Supervisory Committee consisted of 5 members, among which there were
+2 Independent Supervisors, 1 Shareholder Representative Supervisor and 2 Employee Representative
+Supervisors. 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 the composition
+of the Supervisory Committee are in compliance with the regulatory requirements and the provisions of the
+Articles of Association.
+The details of the duty performance of the Supervisory Committee are set out in section headed "Report of
+the Supervisory Committee”.
+The primary functions and powers of the Supervisory Committee include:
+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;
+examining the Company's financial conditions; and
+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.
+The Executive Committee
+Annual Report 2017
+Information Disclosure and Investor Relations
+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.
+During the Reporting Period, there were no material accounting mistakes, provision of material missing
+information or revision of profitability forecast made by the Company.
+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.
+122
+Ping An Insurance (Group) Company of China, Ltd.
+Supervisors and the Supervisory Committee
+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 Investment Management Committee, the Budget
+Management Committee, the Investor Relations Management Committee, the Risk Management Committee,
+the Connected-party Transaction Management Committee, the Global Systemically Important Insurer
+Management Committee and the Informatization Committee, etc.
+Corporate Governance Report
+0
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+0
+100
+0
+OOI O
+55
+0/1
+0
+0/1
+0
+(1) As approved at the 14th meeting of the 10th Board of Directors, Mr. Ouyang Hui was appointed as the member of the Nomination
+Committee in August 2017.
+(2)
+Mr. Woo Ka Biu Jackson no longer served as the member of the Nomination Committee from August 2017.
+CORPORATE GOVERNANCE
+Annual Report 2017
+121
+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.
+126
+In 2017, the Company organized 2 onsite results announcements, 2 telephone results announcements, 2
+Investor Days, 54 roadshows domestically and abroad and 2 online roadshows, attended approximately 204
+conferences of investment banks and securities brokers domestically and abroad, received approximately
+131 visits of investors/analysts domestically and abroad. Moreover, the Company was committed to
+collecting capital market analysis reports and shareholders' information, and paid 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 took great efforts in improving its internal
+workflow and policy formulation so as to provide investors with better services in a more efficient way.
+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 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, 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.
+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
+Insurance, Banking, Investment and Fintech & Healthtech business, as well as that of the Group. In 2017, the
+Company adopted the philosophy of "taking rules as the foundation, risks as the guidance, processes as the
+links, and internal control platforms as the anchor" to strengthen internal controls on an ongoing basis. In
+addition, the Company vigorously explores cutting-edge technologies, such as fintech, healthtech, big data,
+artificial intelligence (AI), to improve internal controls.
+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 funds, 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, framework, and procedures to provide guidelines for business activities and
+operations.
+Ping An Insurance (Group) Company of China, Ltd.
+125
+CORPORATE GOVERNANCE
+Corporate Governance Report
+Regarding internal control operations and internal control evaluation, in 2017 the Company continued
+to improve its governance structure, firewall management, CPT management, anti-money laundering
+management, operational risk management, etc. Moreover, the Company continued to act in accordance
+with the Basic Norms for Internal Controls of Enterprises and related guidelines. Under the model of
+"Businesses and departments conduct self-assessment, Compliance departments promote and support such
+efforts, and Internal Audit and Supervision departments conduct audits and assessments independently”,
+the Company adopts an advanced methodology to assess the effectiveness of internal controls in
+businesses and processes. Moreover, the Company improved its internal control procedures for insurance
+funds, according to the Guidance for the Internal Control of Insurance Funds and its supplementary
+implementation guidelines. In addition, the Company trained its employees to evaluate internal controls,
+held internal control evaluations, strengthened early warning and education of internal control cases,
+implemented the compliance and internal control appraisal, and promoted the internal control culture
+in which "everyone is involved in internal controls, everyone is responsible for compliance, and internal
+controls have been integrated in the business and processes".
+Regarding anti-money laundering (AML) management, in 2017 the Company continued to implement the
+Administrative Measures for Reporting of Large-amount Transactions and Suspicious Transactions by
+Financial Institutions (No. 3 directive of the PBOC in 2016) and supporting policies, and cooperated with the
+PBOC in preparing for round 4 AML mutual evaluation of the Financial Action Task Force (FATF). Besides,
+the Company improved the organizational structure for AML management and reinforced the Group's
+role in overall planning, coordination and supervision. Instructions were given to units newly obliged to
+perform AML duties to develop an AML management framework. The Company also pushed ahead with
+the revision of AML management rules and improvement of the customer money laundering risk evaluation
+system, and carried out a variety of AML awareness training sessions and culture development activities.
+In the meantime, biometrics like facial recognition to enhance customer identity verification and blacklist
+screening and monitoring were introduced with technologies including natural language processing,
+knowledge map, neural network and unsupervised learning being leveraged to develop suspicious
+transaction models. The Company also made efforts to forge a risk-based smart AML monitoring platform
+that is more scientific, efficient and professional.
+Regarding the management framework for internal audit and supervision, in 2017 the Company implemented
+an independent, vertical and centralized approach to internal audits, and facilitated development of the
+Group-level risk monitoring system and application of AI. Ping An Shield, a smart system for centralized
+risk monitoring and multi-layered prevention and control, was developed to achieve ex-ante risk warning,
+in-the-process monitoring and early warning, and ex-post smart disposal. Keeping abreast of changes in
+the external environment and internal strategies, the Company 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, the
+Company tightened control 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 development for
+businesses.
+26
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+1/1
+INDEPENDENCE OF THE COMPANY FROM THE CONTROLLING SHAREHOLDERS ON BUSINESS, STAFF,
+ASSETS, ORGANIZATION AND FINANCE
+During the Reporting Period, the Company paid special attention to communication with the market in
+respect of its integrated financial strategy, customer management, internet finance strategy and business
+development, and main business. The Company provided illustrations of its annual, interim and quarterly
+results by means of public presentations, video and telephone conferences, onsite roadshows and online
+roadshows, etc. The Company resorted to telephone conferences, roadshow, Investor Day 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 a good communication with the institutional
+investors, the Company also established different channels for communication with small and medium
+investors, including but not limited to online roadshows, the E-interaction platform of SSE, corporate
+website, e-mail and telephone calls, so as to provide better services to them and protect the interests of
+the investors.
+Annual Report 2017
+Annual Report 2017
+Amendments Made to the Articles of Association
+During the Reporting Period, a proposal was made to amend the Articles of Association at the 15th meeting
+of the 10th Board of Directors. The details of the proposed amendments are listed in the announcement
+dated October 27, 2017 which was published on the website of the HKEX (www.hkexnews.hk), and the
+announcement dated October 28, 2017 which was published on the website of SSE (www.sse.com.cn).
+As at December 31, 2017, the proposed amendments to the Articles of Association were still subject to the
+approval at the general meeting of the Company, and will only become effective upon approval by the
+relevant regulatory authorities.
+Ping An Insurance (Group) Company of China, Ltd.
+123
+CORPORATE GOVERNANCE
+Corporate Governance Report
+PERFORMANCE OF DUTIES BY INDEPENDENT NON-EXECUTIVE DIRECTORS
+The 10th Board of Directors consists of 6 Independent Non-executive Directors, which is in compliance
+with the requirements under the regulatory rules of the Company's listing 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, or actuarial science, which is crucial to the healthy growth
+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 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 interests of minority shareholders. 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.
+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, fully 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 2016, 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 such as profit distribution, significant adjustment of the
+accounting estimates, recommendation of director candidates, appointment of senior management and the
+remuneration for senior management which were put forward by the Board during the Reporting Period.
+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 of Directors at
+the General Meetings" and "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 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
+recommendations were adopted by the Company.
+124
+Ping An Insurance (Group) Company of China, Ltd.
+100
+in person/Meetings
+required to attend
+0/1
+0
+o O o O
+0
+0
+0
+0/5
+5/5
+0/5
+100
+5/5
+0/5
+100
+Non-executive Director
+5/5
+100
+5/5
+SUN Dongdong
+YIP Dicky Peter
+Stephen Thomas MELDRUM
+GE Ming (Chairman)
+Independent Non-executive Directors
+Members
+% of
+Attendance
+by proxy (%)
+by proxy/Meetings
+required to attend
+in person (%)
+required to attend
+0/5
+YANG Xiaoping
+4/5
+80
+In 2017, 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 deliberated and approved the Proposal on Reviewing the Remuneration of the Company's
+Senior Management, and the Proposal on Reviewing the Company's 2016 Corporate Governance Report -
+Incentive and Restriction Mechanism. In addition, the Committee also reviewed reports including the Report
+on the Participation in the 2017 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 2016, the Performance
+Report of the Remuneration Committee of the Board in 2016, the Report on Awarding Long-term Incentives
+of 2016 to the Group's Senior Management and the Report on the Settlement of the 2014 Long-term
+Incentives for the Senior Management of the Group. Attendance of meetings by the members of the
+Remuneration Committee is set out below:
+Corporate Governance Report
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 119
+Annual Report 2017
+As at December 31, 2017, the Remuneration Committee comprised 4 Independent Non-executive Directors
+and 1 Non-executive Director, and the proportion 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.
+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.
+Remuneration Committee
+103
+15
+8
+8
+72
+Fees payable
+Total
+Non-assurance services
+Other assurance services
+Audit services for financial statements audits, reviews and agreed upon procedures
+Audit services for internal control
+(in RMB million)
+According to the resolutions of the 2016 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 2017. PricewaterhouseCoopers has been engaged as the Company's auditor for five
+consecutive years. During the Reporting Period, the remuneration to be paid to PricewaterhouseCoopers 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, 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.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+118
+20
+1/5
+Meetings attended
+Members
+% of
+Attendance
+Meetings attended
+by proxy (%)
+to attend
+in person (%)
+required to attend
+% of
+Attendance
+Meetings
+attended by proxy/
+Meetings required
+% of
+Attendance
+in person/Meetings
+Meetings attended
+Annual Report 2017
+YANG Xiaoping
+Non-executive Director
+1/1
+GE Ming
+YIP Dicky Peter
+Independent Non-executive Directors
+MA Mingzhe (Chairman)
+Executive Director
+Members
+In 2017, 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 2017 Work Plan of the Company, the Company's 2016 Annual Plan Implementation Evaluation Report,
+the Resolution on Issuing the Debt Financing Instruments, and the Resolution on the Suggestion to General
+Meeting concerning Grant of General Mandate to the Board to Issue Additional H Shares were deliberated
+and approved. The attendance records of each member of the Strategy and Investment Committee are as
+follows:
+As at December 31, 2017, the Strategy and Investment Committee comprised 5 Directors, which included 3
+Independent Non-executive Directors, and the proportion of Independent Non-executive Directors was 60%.
+The committee had one chairman, which was the Chairman of the Board presiding over the 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 meeting or the Board, and promptly notify all Directors of any significant progress or changes in
+process.
+Strategy and Investment Committee
+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, functions and the composition of each of these specialized committees are set out
+below.
+The Specialized Committees under the Board
+1/1
+WONG Oscar Sai Hung
+100
+0/1
+10
+In 2017, the Audit and Risk Management Committee held 5 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, 2016, the first quarterly financial statements for the three
+months ended March 31, 2017, the interim financial results for the six months ended June 30, 2017 and the
+third quarterly financial statements for the nine months ended September 30, 2017. Furthermore, the Audit
+and Risk Management Committee convened a meeting to review the unaudited financial report for the
+year 2017 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, 2017 at the first meeting in 2018
+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 as follows:
+As at December 31, 2017, the Audit and Risk Management Committee comprised 4 Independent
+Non-executive Directors and 1 Non-executive Director, and the proportion 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.
+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 taking 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
+Corporate Governance Report
+CORPORATE GOVERNANCE
+0
+117
+Ping An Insurance (Group) Company of China, Ltd.
+0
+0/1
+100
+1/1
+0
+0
+oo o
+0/1
+0/1
+0/1
+555
+100
+1/1
+100
+1/1
+100
+1/1
+FFF
+in person/Meetings
+Independent Non-executive Directors
+100
+SUN Dongdong
+Executive Directors
+WOO Ka Biu Jackson (2)
+OUYANG Hui(¹)
+WONG Oscar Sai Hung
+SUN Dongdong (Chairman)
+Independent Non-executive Directors
+0/1
+Members
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+120
+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
+As at December 31, 2017, the Nomination Committee comprised 3 Independent Non-executive Directors
+and 2 Executive Directors, and the proportion of Independent Non-executive Directors was 60% and it was
+chaired by an Independent Non-executive Director.
+0/1
+5585
+100
+YIP Dicky Peter (Chairman)
+MA Mingzhe
+REN Huichuan
+Meetings attended
+% of
+Attendance
+in person (%)
+Meetings attended
+by proxy/Meetings
+required to attend
+% of
+Attendance
+by proxy (%)
+1/1
+100
+1/1
+100
+0/0
+0/0
+1/1
+(2) Mr. Woo Ka Biu Jackson no longer served as the member of the Remuneration Committee from August 2017.
+As approved at the 14th meeting of the 10th Board of Directors, Mr. Ouyang Hui was appointed as the member of the Remuneration
+Committee in August 2017.
+In 2017, the Nomination Committee held 1 meeting, which was convened in accordance with the
+requirements of the Articles of Association and the Charter of the Nomination Committee. The meeting
+deliberated and recommended Mr. Sheng Ruisheng as the Secretary of the Board in place of Mr. Jin
+Shaoliang, recommended Mr. Ouyang Hui as the Independent Non-executive Director in place of Mr.
+Woo Ka Biu Jackson, and also reviewed the Annual Review Report of the Structure of the Board for 2016.
+Besides the nomination of director and senior management candidates, the Nomination Committee also
+developed 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 portfolio
+of the Company, 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. The attendance records of each member of the Nomination
+Committee are as follows:
+0
+WOO Ka Biu Jackson (2)
+Non-executive Director
+Soopakij CHEARAVANONT
+Meetings attended
+(1)
+in person/Meetings
+required to attend
+100
+OUYANG Hui(1)
+2/2
+100
+2/2
+0/2
+100
+2/2
+% of
+Attendance
+by proxy (%)
+by proxy/Meetings
+required to attend
+0/2
+Meetings attended
+% of
+Attendance
+in person (%)
+0/1
+0
+0
+0/2
+100
+GE Ming
+2/2
+0
+0
+1/1
+0/0
+O O O IO
+0/0
+0/2
+100
+(7)
+Annual Report 2017
+Implementation of the Cash Dividend Policy
+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.
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 135
+36
+Report of the Supervisory Committee
+(8) Appraisal of Directors' performance of duties
+The Company held the 9th meeting of the 8th Supervisory Committee on March 22, 2017, at which all
+Supervisors heard and reviewed the Proposal on Deliberating Directors' Duty Performance Report and
+Independent Directors' Work Report for 2016, 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 2016 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.
+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.
+By order of the Supervisory Committee
+GU Liji
+Chairman of the Supervisory Committee
+Shenzhen, PRC
+March 20, 2018
+Annual Report 2017
+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.
+Ping An Insurance (Group) Company of China, Ltd.
+136
+(6) Implementation of the Resolutions Approved by the General Meetings
+August 6 2017
+Internal Control System
+100
+2/2
+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 rule in monitoring and governing financials and internal audits.
+100
+4/4
+July 17 2012
+WANG Zhiliang (1)
+GAO Peng (resigned) (1)
+PAN Zhongwu
+100
+4/4
+June 17 2013
+ZHANG Wangjin
+Shareholder Representative
+Supervisor
+100
+4/4
+Employee Representative
+Supervisor
+June 30 2015
+2/2
+100
+(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.
+(4) Connected-party Transactions
+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, 2017, HKD7,941 million from the
+placing was kept in the specific fund-raising account, and the rest had been used.
+(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 auditing standards respectively
+on the Company's financial statements for 2017. The financial statements truly, fairly and accurately
+reflected the financial conditions and results of operations of the Company.
+(2) 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.
+(1) Lawful Operation
+INDEPENDENT OPINION ON RELEVANT ISSUES FROM THE SUPERVISORY COMMITTEE
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+134
+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
+for supervised items.
+In September 2017, certain members of the Supervisory Committee conducted on-site inspections
+and reviews at branches of subsidiaries such as Ping An Life, Ping An Property & Casualty, Ping An
+Annuity, Ping An Health, Ping An Bank and Ping An Securities in Hebei. Opinions collected from the vast
+ground-level staff were consolidated and a 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.
+Details regarding retirement, resignation and appointment of the Supervisors of the Company during the Reporting Period are set
+out in the section headed "Directors, Supervisors, Senior Management and Employees" of this Annual Report.
+(1)
+In 2017, the Supervisory Committee has heard and reviewed the Assessment and Evaluation Report on
+Internal Control of the Company for 2016 and the Work Report on the Internal Control of the Company for
+the First Half of 2017, and was of the opinion that the Company has set up a relatively complete, reasonable
+and effective internal control system.
+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 and 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.
+Annual Report 2017
+As disclosed above, in 2017, the Audit and Risk Management Committee held 5 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, 2017, 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.
+Cash Dividend Policy
+REPORTING PERIOD
+IMPLEMENTATION OF CASH DIVIDEND POLICY AND PROFIT DISTRIBUTION PROPOSAL DURING THE
+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 personal financial services group”. To
+achieve this goal and maintain the leading position in terms of brand value, the Group aims at constantly
+delivering high-quality financial services to its customers. During 2017, there was no material and significant
+dispute between the Group and its customers.
+RELATIONSHIPS WITH CUSTOMERS
+Looking back to 2017, 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 connected party of the Company.
+MAJOR CUSTOMERS
+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 2017.
+PRINCIPAL ACTIVITIES
+Report of the Board of Directors
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+128
+March 20, 2018
+Shenzhen, PRC
+Chairman and Chief Executive Officer
+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
+standards set out in the Model Code and the Code of Conduct for the period from January 1, 2017 to
+December 31, 2017.
+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 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.
+There is clear division of responsibilities of the Board and the management as set out in the Articles of
+Association.
+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. 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 continuity of this
+model will be beneficial to the future development of the Company.
+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 roles and committees such as the President,
+Executive Committee and other specialized 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 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.
+4.
+June 28 2016
+According to Article 213 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.
+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.
+In preparing the 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 through 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.
+Ping An Insurance (Group) Company of China, Ltd.
+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 meetings to review the Company's compliance with the
+Corporate Governance Code and the contents disclosed in the Corporate Governance Report.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+127
+CORPORATE GOVERNANCE
+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, 2017 to December 31, 2017 save as disclosed below.
+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.
+3.
+The above plan will be implemented upon deliberation and approval at the 2017 Annual General Meeting.
+The profit distribution plan is in line with the Articles of Association and relevant deliberation procedures
+and fully protects the legitimate interests of minority shareholders of the Company. All the Independent
+Directors of the Company have given independent opinions and agree with the profit distribution plan.
+Ping An Insurance (Group) Company of China, Ltd.
+The Company had distributed an interim dividend of RMB0.50 (tax inclusive) per share for 2017, which
+amounted to a total of RMB9,140,120,705.00. The Company proposes to pay 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. The remaining undistributed profit will be carried forward to 2018. The undistributed
+profit of the Company is mainly for the purpose of organic capital accumulation, so as to maintain a
+reasonable solvency ratio as well as fundings for subsidiaries so that they can maintain a reasonable
+solvency ratio or capital adequacy ratio.
+As stated in the 2017 audited financial statements of the Group prepared under CAS, the net profit
+attributable to shareholders of the parent company was RMB89,088 million and net profit of the parent
+company was RMB29,238 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 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
+last year, according to the Articles of Association and other relevant requirements, the profit available for
+distribution to shareholders of the Company was RMB59,072 million.
+The Group's results in 2017 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 relevant deliberation procedures and had fully protected the legitimate
+interests of minority shareholders. All the Independent Directors of the Company have given independent
+opinions that agree with the profit distribution plans. The implementation of the above-mentioned
+distribution plans has been completed.
+The 2017 interim profit distribution plan of the Company was deliberated and approved at the 14th
+Meeting of the 10th Board of Directors of the Company held on August 17, 2017, according to which the
+Company paid in cash the 2017 interim dividend of RMB0.50 (tax inclusive) per share, in a total amount of
+RMB9,140,120,705.00, based on its total share capital of 18,280,241,410 shares.
+The 2016 annual profit distribution plan of the Company was deliberated and approved at the 2016 Annual
+General Meeting of the Company held on June 16, 2017, according to which the Company paid in cash the
+2016 final dividend of RMB0.55 (tax inclusive) per share, in a total amount of RMB10,054,132,775.50, based on
+its total share capital of 18,280,241,410 shares.
+Implementation of Profit Distribution Plan
+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 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 deliberation. 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.
+Report of the Board of Directors
+130
+CORPORATE GOVERNANCE
+129
+Annual Report 2017
+100
+Shenzhen, PRC
+June 3 2009
+CHARITABLE AND OTHER DONATIONS
+Charitable donations made by the Company during 2017 totalled RMB56 million.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+131
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+Details of movements in the reserves of the Company and the Group during 2017 are set out in Note
+35 to the consolidated financial statements and in the "Consolidated Statement of Changes in Equity",
+respectively.
+PROPERTY AND EQUIPMENT AND INVESTMENT PROPERTIES
+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.
+PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY
+Neither the Company, nor any of its subsidiaries, had purchased, sold or redeemed any of the Company's
+listed shares during 2017.
+DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS AND REMUNERATIONS
+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 10th Board of Directors and all Supervisors of the 8th Supervisory Committee in August
+2015. The Company entered into service contracts with newly appointed Directors Mr. Xiong Peijin and Mr.
+Liu Chong on January 28, 2016, with newly appointed Supervisor Mr. Huang Baokui on July 5, 2016, and with
+newly appointed Director Mr. Ouyang Hui and Supervisor Mr. Wang Zhiliang on August 17, 2017. Terms,
+duties, remuneration package, confidentiality duties of Directors and Supervisors and commencement and
+termination of contracts were specified in the service contracts. As at December 31, 2017, 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.
+Details of remunerations for the Directors and Supervisors for the year ended December 31, 2017 are set out
+in Note 51 to the consolidated financial statements.
+DIRECTORS' AND SUPERVISORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF
+SIGNIFICANCE
+Details of movements in property and equipment and investment properties of the Group during 2017 are
+set out in notes 31 and 30 to the consolidated financial statements, respectively.
+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 2017.
+RESERVES
+SHARE CAPITAL
+4/4
+In 2017, 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 2017 has been approved by the Board. 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.
+For details of the Company's internal controls, please refer to the Internal Control Assessment Report of
+Ping An for 2017 and the Internal Control Audit Report on Ping An for 2017 released on the same date as
+this report on the website of SSE (www.sse.com.cn).
+RISK MANAGEMENT
+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 an 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.
+For dividend payouts of the Company over the past three years, please refer to the section headed
+"Liquidity and Capital Resources"
+The change in the share capital of the Company in 2017 and the share capital structure of the Company
+as at December 31, 2017 are set out in the section headed "Changes in the Share Capital and Shareholders'
+Profile".
+DISTRIBUTABLE RESERVES
+MANAGEMENT DISCUSSION AND ANALYSIS
+For management discussion and analysis, please refer to the section headed “Management Discussion and
+Analysis".
+USE OF PROCEEDS
+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 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, 2017, HKD7,941 million from the
+placing was kept in the specific fund-raising account, and the rest had been used.
+PARTICULARS ON INVESTMENT DURING THE REPORTING PERIOD
+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 CIRC on the management of insurance funds. All
+the investments of insurance funds were made in the normal course of day-to-day operations.
+For equity investment, please refer to the section headed "Significant Events".
+As at December 31, 2017, the Company's distributable reserves was RMB59,072 million. The Company has
+proposed to distribute the 2017 final dividend of RMB1.00 per share (tax inclusive) in cash. After deducting
+the 2017 final dividend, the remaining distributable reserves were carried forward to 2018. Besides, the
+Company's capital reserve and surplus reserve amounted to RMB140,901 million, which can be distributed in
+a future capital issue.
+DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+EQUITY INVESTMENT DURING THE REPORTING PERIOD
+DIRECTORS' AND SUPERVISORS' INTERESTS IN A COMPETING BUSINESS
+Ping An Insurance (Group) Company of China, Ltd. 133
+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 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.
+THE WORK OF THE SUPERVISORY COMMITTEE
+During the Reporting Period, the Supervisory Committee held 4 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 Supervisors'
+attendance at meetings of the Supervisory Committee are set out as follows:
+Meetings
+attended/
+Annual Report 2017
+Class of Supervisors
+Date of
+Appointment
+required
+to attend
+% of
+attendance (%)
+Independent Supervisor
+At no time during 2017 was the right to acquire benefits by means of the 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.
+GU Liji (Chairman)
+HUANG Baokui
+Name
+March 20, 2018
+Meetings
+Ma Mingzhe
+PERMITTED INDEMNITY PROVISION
+Chairman and Chief Executive Officer
+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.
+132
+Annual Report 2017
+POST BALANCE SHEET EVENTS
+Details of the post balance sheet events are set out in Note 57 to the consolidated financial statements.
+COMPLIANCE WITH LAWS AND REGULATIONS
+Ping An Insurance (Group) Company of China, Ltd.
+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.
+COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE CONTAINED IN APPENDIX 14 TO THE HKEX
+LISTING RULES
+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, 2017 to December 31, 2017, 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 under
+the section headed "Corporate Governance Report".
+AUDITORS
+According to the resolutions of the 2016 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 2017.
+SUFFICIENCY OF PUBLIC FLOAT
+In 2017, the Group maintained compliance with relevant laws and regulations that have significant impacts
+on operations of the Group.
+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 20, 2018,
+at all times during the year ended December 31, 2017, 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.
+By order of the Board of Directors
+its subsidiaries exceeded 50% of the Company's net asset
+The amount by which the total guarantee balance of the Company and
+Including: Direct or indirect guarantee for the companies with a debt to total assets ratio
+over 70% (as at December 31, 2017)
+Total guarantee of the Company
+(including the guarantee in favor of its subsidiaries)
+Total guarantee
+(5,262)
+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
+32,227
+Total guarantee as a percentage of the Company's net assets (%)
+32,227
+Ping An Insurance (Group) Company of China, Ltd.
+30,466
+Note: (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.
+(2) During the reporting period, total guarantee was the net amount of RMB14,624 million guarantee incurred less RMB19,886 million
+guarantee reduced.
+140
+Annual Report 2017
+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 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 2017. Their specific
+statements and independent opinions are set out as follows:
+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;
+Guarantee of the Company and its subsidiaries in favor of its subsidiaries
+2.
+6.8
+Total external guarantee balance as at the end of the Reporting Period
+Period
+External guarantee of the Company and its subsidiaries
+(excluding the guarantee in favor of its subsidiaries)
+3.
+Type of grantees
+Employee
+Exercise period
+(per
+Autohome
+Share, USD)
+Balance
+as at
+January 1
+2017
+Granted
+during the
+Reporting
+Lapsed
+during the
+Reporting
+Period
+Exercised
+during the
+Reporting
+Period
+Balance
+as at
+December 31
+2017
+Total external guarantee incurred during the Reporting Period
+Not exceeding 10
+years from the
+22.61-65.10
+0
+775,458
+141,606
+22,326
+611,526
+MATERIAL CONNECTED-PARTY TRANSACTIONS
+During the Reporting Period, there was no material connected-party transaction that was required to be
+disclosed.
+MATERIAL CONTRACTS AND THEIR PERFORMANCE
+Guarantee
+(in RMB million)
+date of grant
+4.
+During the Reporting Period, the Company had no failure to abide by any effective judicial ruling.
+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;
+Undertaking in Respect of the Subscription for 210,206,652 New Shares of Ping An Bank through Non-
+public Issuance
+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.
+As at December 31, 2017, the above undertaking was still being performed and there was no breach of the
+above undertaking.
+APPOINTMENT OF AUDITOR
+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 INTERNAL CONTROL AUDITOR
+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".
+PUNISHMENTS AND RECTIFICATIONS
+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 investigated for criminal
+liabilities, 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.
+INTEGRITY CONDITIONS OF THE COMPANY
+Exercise price
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+143
+CORPORATE GOVERNANCE
+Significant Events
+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 implementation rules, the Company shall be obligated
+to withhold 10% enterprise income tax when it distributes 2017 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, June 14, 2018 (the "Record Date").
+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 Friday, June 8, 2018 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.
+Individual Income Tax Withholding of Overseas Individual Shareholders
+As at December 31, 2017, the above undertaking had been fulfilled.
+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 (i.e. January 9, 2014), excluding the transfer among its connected entities (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 lock-up period, the Company will be free to dispose of such
+shares pursuant to the requirements of the CSRC and Shenzhen Stock Exchange.
+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, 2017, the above undertaking was still being performed and there was no breach of the
+above undertaking.
+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.
+Entrustment, Underwriting, Lease, Entrusted Asset Management, Entrusted Loan and Other Material
+Contracts
+No matter relating to entrustment, underwriting, lease or other material contracts of the Company was
+required to be disclosed during the Reporting Period.
+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".
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 141
+CORPORATE GOVERNANCE
+Significant Events
+SEIZURE, DISTRAINMENT OR FREEZE OF MAJOR ASSETS
+During the Reporting Period, the Company had no event of seizure, distrainment or freeze of major assets
+that was required to be disclosed.
+MATERIAL LITIGATIONS AND ARBITRATIONS
+During the Reporting Period, the total guarantee incurred provided by the Company and its
+subsidiaries amounted to RMB14,624 million. As at December 31, 2017, the total guarantee balance
+of the Company and its subsidiaries was RMB32,227 million, representing approximately 6.8% 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;
+During the Reporting Period, the Company had no material litigations or arbitrations that was required to
+be disclosed.
+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 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.
+(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-party 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 let
+Shenzhen Development Bank undertake any illicit obligations through the transactions with Shenzhen
+Development Bank.
+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.
+As at December 31, 2017, the above undertakings were still being performed and there was no breach of the
+above undertakings.
+Undertaking in Respect of the Issuance of Ping An Convertible Bonds
+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.
+142
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+FULFILLMENTS OF UNDERTAKINGS
+The Number of Options
+Details of major subsidiaries and associates of the Company are set out in Note 5.(1) and Note 29 to the
+consolidated financial statements respectively.
+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 Share Incentive Scheme of 2016 will expire on the tenth anniversary of the effective date, being
+March 21, 2027.
+Ping An Insurance (Group) Company of China, Ltd.
+To the Shareholders of
+Independent Auditor's Report
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 145
+Annual Report 2017
+No further significant events of the Company were required to be disclosed during the Reporting Period.
+OTHER SIGNIFICANT EVENTS
+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 2017 final dividend to holders of A shares on the
+website of SSE separately.
+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.
+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).
+Income Tax Withholding for A Shareholders via the Shanghai Stock Connect Program
+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.
+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;
+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):
+Income Tax Withholding for H Shareholders via the Hong Kong Stock Connect Program
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+144
+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, June 8, 2018 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.
+(incorporated in the People's Republic of China with limited liability)
+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 2017 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.
+OPINION
+The consolidated financial statements of Ping An Insurance (Group) Company of China, Ltd. (the
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+146
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
+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.
+BASIS FOR OPINION
+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 2017, 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.
+Our opinion
+the notes to the consolidated financial statements, which include a summary of significant accounting
+policies.
+the consolidated statement of cash flows for the year then ended; and
+the consolidated statement of changes in equity for the year then ended;
+•
+•
+•
+the consolidated statement of comprehensive income for the year then ended;
+•
+the consolidated statement of income for the year then ended;
+•
+the consolidated statement of financial position as at 31 December 2017;
+•
+'Company') and its subsidiaries (the 'Group') set out on pages 154 to 292, which comprise:
+What we have audited
+As at December 31, 2017, the details and movements of the Autohome Share Incentive Scheme of 2016 in
+relation to the Autohome Options are as follows:
+Annual Report 2017
+GENERAL ANALYSIS OF EXTERNAL INVESTMENT
+The participants were 773 key employees of the Company and its subsidiaries including, among others,
+the directors, employee representative supervisors, and senior management. The sources of funding were
+legitimate salaries and performance bonuses of the employees.
+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 RMB481,578,936.53 (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 are 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.
+During the Reporting Period, one third of the shares under the Plan for this phase were unlocked and
+vested in batches to 721 employees. As to the remaining 52 employees who did not qualify for the vesting,
+582,029 shares were forfeited.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Implementation in 2017
+The participants were 1,157 key employees of the Company and its subsidiaries including, among others,
+the directors, employee representative supervisors, and senior management. The sources of funding were
+legitimate salaries and performance bonuses of the employees.
+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 are 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. During the Reporting Period, there was no change in
+equity as a result of disposal by holders of the Plan.
+The manager of the Plan is China Merchants Securities Asset Management Co., Ltd., and was not changed
+during the Reporting Period.
+IMPLEMENTATION OF SHARE INCENTIVE SCHEME OF THE COMPANY AND ITS EFFECTS
+During the Reporting Period, the Company did not implement share incentive scheme based on the
+Company's shares.
+Amended and restated share incentive scheme of Autohome of 2016 ("Autohome Share Incentive
+Scheme of 2016")
+The Annual General Meeting held by the Company on June 16, 2017 deliberated and approved the
+Autohome Share Incentive Scheme of 2016, involving the grant of options ("Autohome Options") to, or for
+the benefit of, specified participants to subscribe for Class A Ordinary Shares of Autohome ("Autohome
+Shares").
+The purpose of the Autohome Share Incentive Scheme of 2016 is intended to provide such participants with
+an incentive for outstanding performance to generate superior returns to the Autohome's shareholders.
+The Autohome Share Incentive Scheme of 2016 is further intended to provide flexibility to Autohome
+in its ability to motivate, attract, and retain the services of directors, employees, and consultants upon
+whose judgment, interest, and special effort the successful conduct of the Autohome's operation is largely
+dependent.
+Pursuant to the terms of the Autohome Share Incentive Scheme of 2016, the board or the remuneration
+committee authorized by the board of Autohome ("Autohome Committee") may grant options to eligible
+participants, including employees, consultants and all directors of the Autohome, with reference to their
+past, present and expected commitment and contribution to Autohome and/or the related entities, to
+subscribe for such number of Autohome Shares 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 Share Incentive Scheme of 2016 and any other share option schemes of
+Autohome 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 Share Incentive Scheme of
+2016. According to the Autohome Share Incentive Scheme of 2016, the maximum number of Autohome
+shares to be issued is 4,890,000, representing approximately 4.17% of the total issued shares of Autohome
+as at the date of this report. Unless approved by the shareholders of Autohome and the Shareholders of
+the Company in the manner set out in the Autohome Share Incentive Scheme of 2016, 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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 139
+CORPORATE GOVERNANCE
+Significant Events
+The exercise price per Autohome Share of an Autohome Option shall be determined by the Autohome
+Committee 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, 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.
+Implementation in 2016
+Significant Events
+During the Reporting Period, one third of the shares under the Plan for this phase were unlocked and
+vested in batches to 701 employees. As to the remaining 64 employees who did not qualify for the vesting,
+299,622 shares were forfeited.
+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.
+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".
+Material Equity Investment
+During the Reporting Period, there was no material equity investment that was required to be disclosed.
+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 of the Company are set out in Note 47 to the
+consolidated financial statements.
+SALE OF MAJOR ASSETS AND EQUITIES
+During the Reporting Period, there was no sale of major assets and equities that was required to be
+disclosed.
+MAJOR SUBSIDIARIES AND ASSOCIATES OF THE COMPANY
+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.
+STRUCTURED ENTITIES CONTROLLED BY THE COMPANY
+Ping An Insurance (Group) Company of China, Ltd.
+137
+CORPORATE GOVERNANCE
+138
+38
+Significant Events
+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.
+As at the end of the Reporting Period, three phases of the Plan had been implemented.
+Implementation in 2015
+The participants were 839 key employees of the Company and its subsidiaries including, among others,
+the directors, employee representative supervisors, and senior management. The sources of funding were
+legitimate salaries and performance bonuses of the employees.
+Details of Structured Entities controlled by the Company are set out in Note 5.(2) to the consolidated
+financial statements.
+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).
+Ping An Insurance (Group) Company of China, Ltd.
+YAO Jason Bo
+Director
+(22,043)
+(17,827)
+7
+587,615
+451,728
+Change in unearned premium reserves
+(14,625)
+(10,108)
+Net earned premiums
+572,990
+441,620
+Reinsurance commission revenue
+6,728
+6,353
+Interest revenue from banking operations
+8
+147,386
+131,075
+Fees and commission revenue from non-insurance operations
+9
+44,407
+39,859
+Investment income
+10
+152,101
+115,053
+(17,420)
+469,555
+2016
+605,035
+•
+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.
+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.
+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 Chow Sai Keung.
+PricewaterhouseCoopers
+Certified Public Accountants
+Share of profits and losses of associates and
+Hong Kong, 20 March 2018
+Ping An Insurance (Group) Company of China, Ltd.
+153
+FINANCIAL STATEMENTS
+Consolidated Statement of Income
+For the year ended 31 December 2017
+(in RMB million)
+Gross written premiums
+Less: Premiums ceded to reinsurers
+Net written premiums
+Notes
+2017
+7
+Annual Report 2017
+jointly controlled entities
+7,145
+(1,370)
+General and administrative expenses
+13, 23
+(40,814)
+(45,491)
+(128)
+(145,126)
+1,401
+(141,007)
+Finance costs
+(11,167)
+(12,144)
+Other expenses
+(21,665)
+Foreign exchange (losses)/gains
+(21,939)
+(839,830)
+(680,077)
+Profit before tax
+13
+134,740
+94,411
+Income tax
+Profit for the year
+Attributable to:
+Owners of the parent
+Non-controlling interests
+14
+Total expenses
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS (CONTINUED)
+Loan loss provisions, net of reversals
+(6,599)
+Other revenues and other gains
+11
+43,813
+41,898
+Total revenue
+974,570
+774,488
+Gross claims and policyholders' benefits
+12
+Less: Reinsurers' share and policyholders' benefits
+12
+(436,658)
+9,415
+(4,392)
+(334,500)
+Claims and policyholders' benefits
+(427,243)
+(324,814)
+Commission expenses on insurance operations
+(114,587)
+(78,754)
+Interest expenses on banking operations
+8
+(72,501)
+(52,937)
+Fees and commission expenses on
+non-insurance operations
+9
+9,686
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+152
+Impairment of
+Key Audit Matter
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+We also tested the mathematical accuracy of the
+calculation.
+We evaluated the overall reasonableness of the
+collectively assessed loan loss provision with
+respect to the qualitative and quantitative changes
+in underlying loan portfolio, such as changes in
+non-performing loan ratios and provision ratios to
+assess whether it reflected the current economic
+environment and was in line with recent loss
+experience and represented current credit risks.
+We tested the accuracy and completeness of loan
+information used in the impairment model; in
+particular, we evaluated and tested the accuracy of
+overdue periods recorded and the corresponding
+risk classifications.
+For the collectively assessed loan loss provisions,
+we independently evaluated the methodology
+and key assumptions used for material portfolios
+by reference to market practices; in particular,
+we evaluated the migration rate adopted by
+management against the macro economic
+data, financial and industry data issued by the
+government and regulators.
+Collective assessment
+For individually assessed loan loss provisions, on
+a sample of selected impaired loans, we examined
+the forecasts of future cash flows prepared
+by management to support the calculation of
+the impairment, validated accuracy of source
+data, evaluated the assumptions and compared
+estimates to external evidence where available.
+We selected a sample of loans based on our
+experience of the credit risk characteristics
+of borrowers and size of the loan to perform
+independent credit review, to assess whether these
+loans were impaired and whether the loss event
+was identified by management on a timely basis.
+Individual assessment
+(1) Loans and advances to customers
+Individual and collective assessment for loans and
+advances to customers:
+As at 31 December 2017, the Group's loans and
+advances, finance bonds, corporate bonds,
+asset management schemes, debt schemes
+and trust schemes represented 53% of total
+assets. We focused on this area because the
+management exercised significant judgements
+on the credit risk assessment as well as both
+the timing of recognition of impairment and the
+estimation of the size of any such impairment.
+Refer to note 3. (16), 4. (2), 20, 23 and 46. (3) to
+the consolidated financial statements
+Debt schemes and trust schemes
+(5)
+(4) Asset management schemes
+(3) Corporate bonds
+(2) Finance bonds
+(1) Loans and advances to customers
+Key Audit Matter
+Impairment of
+Independent Auditor's Report
+148
+FINANCIAL STATEMENTS
+How our audit addressed the Key Audit Matter
+We assessed and tested the design and operating
+effectiveness of the controls over impairment data
+and calculations. These controls included those over
+the identification of which assets were impaired, the
+assumptions used and accuracy of the data input, and
+the calculation of the impairment.
+147
+(2) Finance bonds
+(4) Asset management schemes
+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 assessed the Group's methodology for
+calculating the insurance contract liabilities against
+recognized actuarial practices.
+We involved our actuarial specialists and performed
+following procedures in this area:
+How our audit addressed the Key Audit Matter
+that involves significant judgements over 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 inputs used to estimate these insurance
+contract liabilities.
+As at 31 December 2017, the Group had
+significant life insurance contract liabilities
+(policyholders' reserve) and non-life insurance
+contract liabilities (claim reserves) represented
+22% of the total liabilities. This is an area
+Refer to note 3. (31), 4. (4), 40 and 46. (1) to the
+consolidated financial statements
+reserves
+Valuation of policyholders' reserves and claim
+Key Audit Matter
+Independent Auditor's Report
+FINANCIAL STATEMENTS
+(3) Corporate bonds
+149
+Annual Report 2017
+Based on the work performed, the impairment
+assessment approach and methodologies adopted by the
+management for the Group's loans and advances, finance
+bonds, corporate bonds, asset management schemes,
+debt schemes and trust schemes are considered
+acceptable.
+We tested the mathematical accuracy of the
+calculation.
+We checked the reasonableness of assumptions
+used in the impairment models, including loss ratio,
+adjustments for risks in specific industries, regions
+and macro-economic environment.
+We reviewed the Group's methodology for
+collective assessment to assess whether it was in
+line with market practices.
+Collective assessment
+We examined the Group's individual assessment
+on sample basis, by reviewing issuers' information
+such as current financial condition and payment
+history to verify whether the management's credit
+ratings of selected investments reflected credit
+risk of those investments under current economic
+environment and to assess whether there was
+evidence of impairment and whether the loss event
+was identified by management on a timely basis.
+Individual assessment
+Individual and collective assessment for finance bonds,
+corporate bonds, asset management schemes, debt
+schemes and trust schemes:
+How our audit addressed the Key Audit Matter
+(continued)
+(5) Debt schemes and trust schemes
+Ping An Insurance (Group) Company of China, Ltd.
+(34,762)
+Ping An Insurance (Group) Company of China, Ltd.
+Based on the work performed, the valuation
+methodologies and inputs adopted by the management
+are considered acceptable.
+IFRS 9 revamps the previously used financial
+instruments classification and measurement
+("C&M") framework adopted by the Group
+and introduces a more sophisticated expected
+credit loss ("ECL”) framework for estimating
+impairment provision. We focus on this area
+because of the significant impact brought
+by changes in classification and significant
+management judgements applied on ECL
+models. There are also new data inputs required
+by these new ECL models, which have not
+been used previously for the preparation of the
+accounting records. Where data is unavailable,
+judgements in developing assumptions and
+seeking reasonable alternatives are required.
+How our audit addressed the Key Audit Matter
+We reviewed the Group's accounting policies in relation
+to IFRS 9, and performed the following procedures
+to assess the reasonableness of the disclosure on the
+impact of adopting IFRS 9:
+We reviewed the Group's overall policies and
+procedures in relation to the C&M and ECL. For
+the classification of debt financial instruments,
+we reviewed the business model documentation
+and tested the supporting evidence on a
+sampling basis. We understood and evaluated the
+methodology and logic of the contractual cash flow
+test, and re-performed contractual cash flow test
+on the debt instruments on a sampling basis. For
+the classification of equity financial instruments, we
+reviewed the designation criteria for classification
+of financial assets designated by management
+as fair value through other comprehensive
+income ("FVOCI") by evaluating whether such
+financial assets satisfied the conditions of equity
+instruments designated as FVOCI under IFRS 9
+on a sampling basis. For the changes to fair value
+measurement due to changes in classification, we
+also assessed the valuation model methodologies
+and the reasonableness of assumptions made
+against industry practices and valuation guidelines.
+We also verified the accuracy of data inputs used
+in valuation on a sampling basis.
+We assessed whether ECL models built covered
+all relevant on and off balance sheet exposures to
+be subject to ECL. For material debt portfolios, we
+involved our credit modelling specialists to review
+ECL model methodologies.
+We involved our credit modelling specialists
+to evaluate the application of key ECL model
+definitions, parameters and assumptions, which
+includes staging, possibility of default, loss
+given default, exposure at default, discount rate,
+etc., and assessed the reasonableness of key
+management judgements involved. We assessed
+the completeness and accuracy of the data transfer
+and tested the accuracy of certain data inputs on a
+sampling basis.
+We reviewed management analysis of the
+impact on the impairment provision from the
+adoption of IFRS 9 to assess whether the impact
+I was in line with our understanding of the ECL
+models adopted, the assumptions made, and our
+understanding of the characteristics of the Group's
+financial instruments which are subject to ECL.
+Based on the work performed, the overall IFRS 9
+approach, the C&M methodologies, major ECL models
+and inputs used by management to support the
+disclosure on the impact of adopting IFRS 9 is considered
+acceptable.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+151
+IFRS 9: Financial instruments ("IFRS 9") is
+a new and complex accounting standard
+effective from 1 January 2018 which requires
+considerable judgements and interpretations
+in its implementation. International Accounting
+Standard 8: Accounting Policies, Changes in
+Accounting Estimates and Errors requires
+disclosure in the financial statements of the
+reasonably estimable information relevant
+to assessing the possible impact of the first
+adoption of IFRS 9.
+FINANCIAL STATEMENTS
+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.
+Our opinion on the consolidated financial statements does not cover the other information and we do not
+express any form of assurance conclusion thereon.
+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.
+RESPONSIBILITIES OF DIRECTORS AND AUDIT AND RISK MANAGEMENT
+COMMITTEE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+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.
+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.
+As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional
+scepticism throughout the audit. We also:
+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.
+Independent Auditor's Report
+Annual Report 2017
+Refer to Note 2 to the consolidated financial
+statements.
+Key Audit Matter
+We assessed the methodologies and models used by
+the Group against industry practices and valuation
+guidelines. We compared assumptions and inputs used
+against relevant benchmarks and investigated significant
+variances. We also tested, for a selection of pricing inputs
+used, that they were correctly input into pricing models.
+How our audit addressed the Key Audit Matter
+We tested the design and operating effectiveness of
+the Group's key controls supporting the identification,
+measurement and oversight of valuation risks of financial
+instruments. Specifically we tested controls over the
+Group's model validation and approval processes, data
+feeds and inputs to valuation model processes and
+reporting processes.
+It is an area which involved significant audit
+effort due to the application of valuation
+techniques involving the exercise of judgement
+and the use of assumptions and estimates.
+Management exercised judgement in selecting
+the valuation techniques and inputs in
+performing the valuation for the complex
+investments.
+As at 31 December 2017, the Group's financial
+instruments carried at fair value and classified
+as Level 3 represented 3% of the total assets.
+Refer to note 3. (11), 4. (1) and 47 to the
+consolidated financial statements
+Valuation of financial instruments
+Key Audit Matter
+Disclosure on the impact of adopting IFRS 9
+Valuation of policyholders' reserves and claim reserves
+Impairment of loans and advances to customers, finance bonds, corporate bonds, asset management
+schemes, debt schemes and trust schemes
+•
+Disclosure on the impact of adopting IFRS 9
+Valuation of financial instruments
+Key audit matters identified in our audit are summarised as follows:
+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
+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.
+Independence
+BASIS FOR OPINION (CONTINUED)
+We tested the accuracy and completeness of policy
+data input into the actuarial models.
+We also 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.
+150
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+•
+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.
+99,978
+72,368
+6,493,075
+5,576,903
+Share capital
+34
+18,280
+18,280
+Reserves
+35
+217,881
+188,910
+Retained profits
+35
+234,806
+237,190
+Equity attributable to owners of the parent
+Non-controlling interests
+473,351
+383,449
+35
+114,566
+103,012
+Total equity
+587,917
+486,461
+Liabilities
+Due to banks and other financial institutions
+37
+176,259
+780,530
+261,413
+Equity
+28
+4,109
+4,084
+Investments in associates and jointly controlled entities
+29
+86,207
+48,955
+Investment properties
+30
+40,108
+36,568
+Property and equipment
+33
+31
+40,143
+Intangible assets
+32
+60,981
+63,017
+Deferred tax assets
+43
+40,141
+28,292
+Other assets
+Total assets
+Equity and liabilities
+47,067
+investment contracts
+584,794
+14,060
+45,622
+39,216
+Bonds payable
+42
+451,283
+349,825
+Deferred tax liabilities
+43
+25,891
+11,274
+Other liabilities
+44
+Policyholder dividend payable
+351,517
+Total liabilities
+5,905,158
+5,090,442
+Total equity and liabilities
+56
+156
+6,493,075
+5,576,903
+The financial statements on pages 154 to 292 were approved and authorized for issue by the Board of
+Directors on 20 March 2018 and were signed on its behalf.
+MA Mingzhe
+Director
+Annual Report 2017
+SUN Jianyi
+Director
+272,834
+Other financial liabilities held for trading
+44,930
+41
+25,883
+Assets sold under agreements to repurchase
+38
+133,981
+89,166
+Derivative financial liabilities
+22
+17,950
+8,715
+Customer deposits and payables to brokerage customers
+39
+1,952,695
+50,309
+1,894,377
+5,468
+Income tax payable
+28,775
+8,565
+22,003
+Insurance payables
+114,108
+113,387
+Insurance contract liabilities
+40
+1,932,969
+1,625,473
+Investment contract liabilities for policyholders
+Accounts payable
+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.
+Policyholder account assets in respect of
+38,775
+jointly controlled entities
+Note
+2017
+2016
+99,978
+72,368
+38,653
+(16,026)
+(4,288)
+4,625
+(924)
+1,190
+Exchange differences on translation of foreign operations
+93
+Income tax relating to components of
+other comprehensive income
+(11,653)
+2,692
+Other comprehensive income for the year, net of tax
+15
+21,881
+(7,567)
+Total comprehensive income for the year
+121,859
+64,801
+Attributable to:
+(48)
+· Owners of the parent
+Shadow accounting adjustments
+Other comprehensive income
+89,088
+62,394
+10,890
+9,974
+99,978
+72,368
+RMB
+RMB
+Earnings per share attributable to ordinary equity
+holders of the parent:
+Basic
+Diluted
+Items that may be reclassified subsequently to profit or loss:
+Available-for-sale financial assets
+154
+17
+4.99
+3.50
+17
+4.99
+3.49
+Ping An Insurance (Group) Company of China, Ltd.
+Consolidated Statement of Comprehensive Income
+For the year ended 31 December 2017
+Share of other comprehensive income of associates and
+(in RMB million)
+Profit for the year
+Annual Report 2017
+39,706
+· Non-controlling interests
+54,710
+318,236
+2,559,137
+561,143
+318,860
+2,156,291
+21
+630,676
+426,908
+23
+16,192
+1,660,864
+8,836
+1,458,291
+24
+19
+45,694
+25
+71,923
+22,353
+26
+15,633
+15,269
+27
+112,028
+78,056
+Policyholder account assets in respect of
+insurance contracts
+28
+35,325
+110,672
+483,891
+80222222
+11,187
+10,091
+121,859
+64,801
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+155
+FINANCIAL STATEMENTS
+Consolidated Statement of Financial Position
+As at 31 December 2017
+(in RMB million)
+Assets
+18
+Cash and amounts due from banks and
+Balances with the Central Bank and statutory deposits
+Notes
+31 December 2017
+31 December 2016
+Fixed maturity investments
+Equity investments
+Derivative financial assets
+Loans and advances to customers
+Premium receivables
+Accounts receivable
+Reinsurers' share of insurance liabilities
+Finance lease receivable
+other financial institutions
+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.
+(354,767)
+(12,564)
+2,757
+Total
+equity
+86
+135,338
+79,323
+413,571
+62,394
+9,974
+72,368
+(8,851)
+(8,851)
+28,248
+1,167
+(7,567)
+1,167
+62,394
+10,091
+(10,054)
+64,801
+(10,054)
+Dividend paid to
+Appropriations to surplus reserves
+Appropriations to general reserves
+117
+8,498
+143,798
+18,280
+Equity attributable to owners of the parent
+Exchange
+differences
+(in RMB million)
+Share
+capital
+Capital
+reserves
+Surplus
+reserve
+funds
+General
+reserves
+on translation
+of foreign
+operations
+Retained
+profits
+Non-
+controlling
+Total
+interests
+equity
+As at 1 January 2016
+Profit for the year
+Other comprehensive income
+for the year
+Total comprehensive income
+for the Year
+Dividend declared (Note 16)
+non-controlling interests
+2,868
+8,551
+(2,868)
+139,492
+11,366
+36,799
+1,253
+176,259
+103,012
+486,461
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+157
+FINANCIAL STATEMENTS
+158
+58
+Consolidated Statement of Cash Flows
+For the year ended 31 December 2017
+(in RMB million)
+Net cash flows from operating activities
+Cash flows from investing activities
+Purchases of investment properties, property and
+equipment, and intangible assets
+Proceeds from disposal of investment properties, property
+18,280
+For the year ended 31 December 2016
+As at 31 December 2016
+4,758
+(8,551)
+Acquisition of subsidiaries
+(1,640)
+6,219
+(1,640)
+6,219
+Equity transactions with
+non-controlling interests
+(1,927)
+(3,276)
+(5,203)
+Contributions from
+non-controlling interests
+1,835
+2,059
+3,894
+Share purchase scheme
+(121)
+(121)
+Other equity instruments
+issued by subsidiaries
+Others
+10,236
+10,236
+4,758
+and equipment, and intangible assets
+587,917
+368 237,190
+for the year
+Other comprehensive income
+Profit for the year
+As at 1 January 2017
+(in RMB million)
+Exchange
+differences
+Equity attributable to owners of the parent
+For the year ended 31 December 2017
+For the year ended 31 December 2017
+Share
+capital
+Consolidated Statement of Changes in Equity
+89,088
+11,187
+-
+(19,194)
+121,859
+-
+(19,194)
+Appropriations to surplus reserves
+Appropriations to general reserves
+(885)
+Capital
+reserves
+Surplus
+reserve
+funds
+Total comprehensive income
+21,881
+297
+(885)
+22,469
+99,978
+10,890
+89,088
+486,461
+103,012
+176,259
+1,253
+36,799
+11,366
+18,280 139,492
+22,469
+controlling
+interests
+Retained
+profits
+Non-
+on translation
+of foreign
+operations
+General
+reserves
+Dividend paid to
+non-controlling interests
+Disposal of subsidiaries
+Equity transactions with
+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.
+166
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+301
+(46)
+(2,525)
+(6,675)
+808
+1,109
+-
+(46)
+2,319
+As at 31 December 2017
+18,280
+160,385
+12,164
+44,964
+4,486
+386
+4,486
+2,705
+(10) CASH AND CASH EQUIVALENTS
+114,566
+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 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.
+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 profit or loss or other comprehensive income, respectively).
+non-controlling interests
+Contributions from
+non-controlling interests
+Share purchase scheme
+Other equity instruments
+issued by subsidiaries
+Others
+798
+8,165
+(798)
+(8,165)
+(2,084)
+(704)
+(2,084)
+(704)
+(4,150)
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(8) JOINTLY CONTROLLED ENTITIES
+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.
+(9) FOREIGN CURRENCIES
+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.
+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.
+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.
+for the year
+Notes
+2016
+There will be no significant impact on the Group's accounting treatment on financial liabilities.
+the majority of equity instruments currently classified as FVTPL will continue to be measured on the
+same basis under IFRS 9 and hence there will be no actual change to the accounting for these assets.
+equity instruments currently classified as AFS, part of which will be reclassified as FVOCI under IFRS
+9. Those instruments are required to be measured at fair value through other comprehensive income
+not recycling (i.e. any gain/loss could not be recycled to profit or loss while the dividend is recognized
+through profit or loss). The remaining equity instruments would be reclassified as FVTPL and those fair
+value change previously recognized in reserves would be reclassified to opening retained profits upon
+first time adoption.
+For the Group's equity instruments:
+debt instruments currently classified as FVTPL will continue to be classified as FVTPL, there will
+be no impact on retained profits from the reclassification and there will be no actual change to the
+accounting for these assets.
+test.
+the majority of debt instruments currently classified as held-to-maturity ('HTM')/loans and receivables
+('LR') will satisfy the conditions as AC and hence there will be no actual change to the accounting
+for these assets. Some of debt instruments will be reclassified as FVOCI due to business model
+consideration, while some of debt instruments will be reclassified as FVTPL because of failing the SPPI
+the majority of debt instruments currently classified as available-for-sale ('AFS') will satisfy the
+conditions for classification as at FVOCI and hence there will be no actual change to the accounting
+for these assets. Some of debt instruments will be reclassified as FVTPL because of failing the solely
+payment of principal and interest test (‘SPPI test').
+For the Group's debt instruments:
+The new impairment model requires the recognition of impairment provisions based on ECL rather than
+only incurred credit losses as is the case under the existing accounting standard, which applies to the
+financial assets measured as AC and the debt instruments classified as FVOCI. This will increase impairment
+provision and decrease opening retained profits upon first time adoption.
+2. ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS ('IFRS') (CONTINUED)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 159
+Annual Report 2017
+The Group has reviewed its financial assets and liabilities and is expecting the following impacts from the
+adoption of the new standard:
+The complete version of IFRS 9 ‘Financial instruments' was issued in July 2014, followed with consequential
+amendments to IFRS 7 'Financial instruments: Disclosure'. IFRS 9 retains but simplifies the mixed
+measurement model and establishes three primary measurement categories for financial assets: 1)
+amortized cost ('AC'), 2) fair value through other comprehensive income ('FVOCI') and 3) fair value through
+profit and loss ('FVTPL'). The entity should consider its business model and the contractual cash flow
+characteristics of the financial asset for classification. 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 other comprehensive income not recycling (i.e. any gain/loss could not be recycled to profit
+or loss while the dividend is recognized through profit or loss). There is now a new expected credit losses
+('ECL') model that replaces the incurred loss impairment model used in the existing accounting standard.
+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 is more principle-based and relaxes the requirements for hedge effectiveness.
+Contemporaneous documentation is still required but is different to that currently prepared under the
+existing accounting standard. The entity needs not restate comparative periods according to the transition
+requirements of IFRS 9. The difference/adjustments between IFRS 9 and the existing accounting standard
+will be transferred to retained profits or reserves. The Group could not apply the temporary exemption from
+IFRS 9 under Appendix F of IFRS 4. The Group will adopt IFRS 9 on 1 January 2018.
+The Group has not applied the following new and revised standards, which have been issued but are not yet
+effective.
+ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+REPORTING STANDARDS ('IFRS')
+2.
+For the year ended 31 December 2017
+The new hedge accounting rules will align the accounting for hedging instruments more closely with the
+Group's risk management strategies. The new concept under IFRS 9 is more principle-based, so there will be
+more hedging relationships meet the criteria of hedge accounting. The Group has confirmed that its current
+hedge relationships will continue be qualified to meet the criteria of hedge accounting under IFRS 9.
+160
+Annual Report 2017
+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').
+Changes in accounting policies
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES
+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.
+The 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 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.
+(1) BASIS OF PREPARATION
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+161
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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 mandatory for financial years
+commencing on or after 1 January 2021. The Group has started to assess the impact of IFRS 17.
+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
+for on balance sheet for lessees. The standard replaces IAS 17 'Leases', and related interpretations. The new
+standard is mandatory for financial years commencing on or after 1 January 2019. The Group has started to
+assess the impact of IFRS 16.
+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 financial years
+commencing on 1 January 2018. The Group has completed the assessment of the impact of IFRS 15 and it is
+expected that it will not have a material impact on the Group.
+Overall, the Group's retained profits will be increased by RMB32.3 billion upon initial adoption of IFRS 9 on
+1 January 2018, opening balances of reserves will be decreased by RMB35.1 billion, non-controlling interests
+will be decreased by RMB2 billion and total net asset will be decreased by RMB4.8 billion respectively.
+The Group will not restate comparatives on initial adoption of IFRS 9 on 1 January 2018 but will provide
+detailed transition disclosure in accordance to the amended requirements of IFRS 7, which expanded
+disclosure requirements and changes in presentation. These are expected to change the nature and extent
+of the Group's disclosures about its financial instruments particularly in the year of the adoption of the new
+standard.
+REPORTING STANDARDS ('IFRS') (CONTINUED)
+2. ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL
+Ping An Insurance (Group) Company of China, Ltd.
+These consolidated financial statements are presented in millions of Renminbi (‘RMB') unless otherwise
+stated.
+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 Center, No. 5033 Yitian Road, Futian District, Shenzhen, Guangdong Province, China.
+1. CORPORATE INFORMATION
+For the year ended 31 December 2017
+Others
+Dividends paid
+Interest paid
+(853,733)
+(1,147,255)
+Repayment of borrowed funds
+267,828
+348,046
+Proceeds from borrowed funds
+(40,926)
+51,615
+repurchase of insurance operations, net
+Increase/(Decrease) in assets sold under agreements to
+762,547
+953,639
+Proceeds from bonds issued
+14,153
+5,595
+Capital injected into subsidiaries by non-controlling interests
+Cash flows from financing activities
+(330,616)
+Net cash flows from financing activities
+Except as listed below, the accounting policies applied are consistent with those of the annual financial
+statements for the year ended 31 December 2016, as described in those annual financial statements.
+(16,109)
+(21,278)
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+367,552
+308,664
+49
+333,325
+367,552
+4,018
+(3,992)
+Cash and cash equivalents at end of the year
+Cash and cash equivalents at beginning of the year
+Net foreign exchange differences
+30,209
+(54,896)
+(Decrease)/Increase in cash and cash equivalents
+133,004
+178,588
+8,113
+4,335
+(11,694)
+(13,284)
+2017
+Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12 'Income tax',
+amendments to IAS 7 'Statement of cash flow', and
+(5,203)
+(1,080)
+(12,558)
+124,094
+116,966
+37,980
+35,917
+1,615
+(18,156)
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 165
+Annual Report 2017
+The results of associates are included in the Company'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.
+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.
+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.
+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.
+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.
+(7) ASSOCIATES
+(6,675)
+(23,139)
+35,873
+(3,243,364)
+50
+121,283
+227,821
+Proceeds from disposal of investments
+Purchases of investments
+Term deposits withdrawn/(placed), net
+Acquisition of non-controlling interests in subsidiaries
+Acquisition and disposal of subsidiaries, net
+Interest received
+Disclosure initiative
+Dividends received
+Others
+Net cash flows used in investing activities
+(19,257)
+(16,624)
+571
+376
+1,960,127
+2,827,962
+(2,471,001)
+Rentals received
+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.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+163
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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 of goodwill 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.
+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 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.
+For the year ended 31 December 2017
+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.
+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.
+(3) BUSINESS COMBINATIONS AND GOODWILL
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+162
+Material judgment 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 2017 (mainly due to decrease of the
+benchmarking yield curve for the measurement of insurance contract liabilities and refined the structure of
+the benchmarking yield curve as well as corresponding comprehensive premium adjustments) and updated
+estimate for future cash flows, with the corresponding impact on long term life insurance contract liabilities
+taken into the current year's statement of income. As a result of such changes in assumptions, 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.
+Changes in accounting estimates
+The adoption of the above amendments has had no significant effect on the consolidated financial
+statements for the year ended 31 December 2017.
+Annual improvements 2014-2016 cycle: Amendments to IFRS 12.
+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.
+(6) STRUCTURED ENTITIES (CONTINUED)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+The consolidated financial statements comprise the financial statements of the Company and its
+subsidiaries as at 31 December 2017 and for the year then ended.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+164
+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.
+(6) STRUCTURED ENTITIES
+A subsidiary is an entity (including structured entities) over which the Company 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.
+(5) SUBSIDIARIES
+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
+(4) BASIS OF CONSOLIDATION
+Recognizes the fair value of any investment retained;
+Recognizes the fair value of the consideration received;
+Derecognizes the cumulative translation differences recorded in equity;
+Derecognizes the carrying amount of any non-controlling interest;
+Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
+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:
+Total comprehensive income within a subsidiary is still attributed to the non-controlling interest even if it
+results in a deficit balance.
+Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
+I 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.
+Dividend declared (Note 16)
+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.
+(11) INVESTMENTS AND OTHER FINANCIAL ASSETS
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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.
+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
+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.
+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.
+(22) 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:
+Estimated residual values
+Estimated useful lives
+(21) INVESTMENT PROPERTIES (CONTINUED)
+Leasehold improvements
+Equipment, furniture and fixtures
+Motor vehicles
+1% - 10%
+0% - 10%
+1% - 10%
+Over the shorter of economic
+useful lives and terms of the leases
+20 - 40 years
+3
+- 15 years
+510 years
+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.
+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.
+Buildings
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(18) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND ASSETS SOLD
+UNDER REPURCHASE AGREEMENTS (CONTINUED)
+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.
+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.
+(19) 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 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 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.
+(20) 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.
+(21) 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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+173
+FINANCIAL STATEMENTS
+174
+(23) CONSTRUCTION IN PROGRESS
+Annual Report 2017
+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.
+Annual Report 2017
+20 years
+10 40 years
+228 years
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+175
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+30 50 years,
+indefinite
+For the year ended 31 December 2017
+(25) 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'.
+(26) 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.
+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.
+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.
+Inventory impairment provisions should be accrued when the cost of individual inventory item is higher
+than its net realizable value.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+-
+2030 years
+Estimated useful lives
+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:
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(24) 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.
+(b) Expressway operating rights
+Expenditures on acquiring the expressway operating rights are capitalized as intangible assets and
+subsequently amortized on the straight-line basis over the contract terms.
+(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 of the Group's
+prepaid land premiums are related to lands 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.)
+No provision for depreciation is made on construction in progress until such time the relevant assets are
+completed and ready for use.
+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.
+172
+(18) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND ASSETS SOLD
+UNDER REPURCHASE AGREEMENTS
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(12) FINANCIAL LIABILITIES (CONTINUED)
+Convertible bonds
+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 bond 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.
+On conversion of the convertible 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'.
+Financial guarantee contracts
+168
+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.
+(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 2017
+Ping An Insurance (Group) Company of China, Ltd. 169
+FINANCIAL STATEMENTS
+170
+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)).
+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.
+Loans and borrowings
+The subsequent measurement of financial liabilities depends on their classification as follows:
+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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+167
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+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.
+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.
+Notes to Consolidated Financial Statements
+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.
+For the year ended 31 December 2017
+(14) FAIR VALUE OF FINANCIAL INSTRUMENTS
+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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+171
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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 credit risk
+characteristic in the collective assessment for impairment.
+(16) IMPAIRMENT OF FINANCIAL ASSETS (CONTINUED)
+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.
+(17) DERECOGNITION OF FINANCIAL INSTRUMENTS
+A financial asset (or, when applicable a part of a financial asset or part of a group of similar financial assets)
+is derecognized when:
+(a) the rights to receive cash flows from the asset have expired; or
+(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.
+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.
+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.
+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 financial
+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.
+Financial assets carried at cost
+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.
+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.
+For financial instruments where there is no active market, the fair value is determined by using valuation
+techniques. Such techniques include using prices in 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 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.
+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.
+(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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+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.
+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.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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
+(27) IMPAIRMENT OF NON-FINANCIAL ASSETS
+16
+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.
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+176
+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 3. (38).
+(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 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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+183
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(37) 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.
+(d) Fees and commission income of non-insurance operations
+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:
+Fee income earned from services that are provided over a certain period of time
+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.
+(a) Gross premium
+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
+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
+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).
+The deposit components separated from the above universal life insurance contracts are accounted for as
+follows:
+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.
+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.
+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.
+Annual Report 2017
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(36) 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 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.
+Ping An Insurance (Group) Company of China, Ltd.
+Fee income from providing transaction services
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(e) Dividend income
+For the year ended 31 December 2017
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(40) OPERATING LEASES
+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.
+(41) EMPLOYEE BENEFITS
+(a) Pension obligations
+Notes to Consolidated Financial Statements
+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.
+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.
+(42) 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.
+186
+(b) Housing benefits
+FINANCIAL STATEMENTS
+185
+Ping An Insurance (Group) Company of China, Ltd.
+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 services.
+(g) Sale of goods
+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.
+184
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(38) 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.
+Outward reinsurance business
+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.
+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
+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.
+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.
+(39) 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 2017
+The Group investment-linked contracts and the deposit component unbundled from the above individual
+investment-linked insurance contracts are accounted for as follows:
+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.
+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 46.
+For the year ended 31 December 2017
+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.
+(31) 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.
+178
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(31) INSURANCE CONTRACT LIABILITIES (CONTINUED)
+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.
+(30) SIGNIFICANT INSURANCE RISK TESTING
+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.
+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.
+(29) INSURANCE CONTRACTS
+(27) 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.
+(28) INSURANCE GUARANTEE FUND
+According to the 'Administrative Regulations on the Insurance Guarantee Fund' (CIRC [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
+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.
+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.
+The revenue and premium income used in the calculation of the insurance guarantee fund is the amount
+agreed in the insurance policies.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+177
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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.
+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 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.
+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.
+180
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+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.
+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.
+(33) INVESTMENT CONTRACTS
+Insurance policies that are not considered insurance contracts under IFRS 4 are classified as investment
+contracts. These policies do not contain significant insurance risk.
+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.
+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.
+(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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+181
+FINANCIAL STATEMENTS
+182
+Notes to Consolidated Financial Statements
+Charges including policy administration fees are recognized as other income during the period of
+service provided.
+(34) INVESTMENT-LINKED BUSINESS (CONTINUED)
+Liability adequacy test
+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.
+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 2017
+Ping An Insurance (Group) Company of China, Ltd.
+179
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+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.
+For the year ended 31 December 2017
+(31) 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.
+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.
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+29.2%
+30.73
+2015
+109
+Unit: million
+46.30 +20.5%
+38.42 +25.0%
+Net profit of
+Ping An Group (1)
+Unit: RMB million
+2017
+89.088 +42.8%
+Profit per
+customer
+2017
+2016
+Contracts per customer
+Unit: contract
+2.32 +5.0%
+2.21 +8.9%
+2015
+2.03
+2016
+2015
+62,394 +15.1%
+54,203
+Net profit from
+institutional business
+and other businesses
+Unit: RMB
+2017
+2016
+2015
+355.85 +14.2%
+311.51 +7.8%
+289.07
+Product profitability
+2015
+2017
+131 +20.1%
+166 +26.4%
+In 2017, the Group had 47.23 million retail customers holding multiple
+contracts with different subsidiaries, accounting for 28.5% of all customers,
+up 4.5 pps and 9.5 pps from 2016 and 2015 respectively.
+CUSTOMER DEVELOPMENT STRATEGY
+Focusing on retail customers, Ping An is
+committed to becoming a world-leading
+technology-powered personal financial services
+group. Ping An adheres to the philosophy of
+"one customer, multiple products and one-stop
+services". Centering on the ecosystems of
+"financial services, healthcare, auto services,
+real estate services and smart city services",
+Ping An provides diverse products and
+excellent services, which have been well
+recognized by customers. All business grew
+steadily. The Group's net profit attributable
+to shareholders of the parent company
+for 2017 was RMB89,088 million. The profit
+from retail business was RMB58,975 million,
+which accounted for 66.2% of the net profit
+attributable to shareholders of the parent
+company, up 0.8 pps year on year. Thanks to
+increasing retail customers and development
+of customer value, retail business value rose
+rapidly and has become an intrinsic driving
+force of Ping An's robust value growth.
+Ping An continued its efforts to enhance the
+service capabilities of both traditional finance
+channels and internet channels in line with its
+strategies. As at December 31, 2017, the number
+of retail customers reached 166 million, up 26.4%
+from the beginning of 2017. The number of new
+customers acquired during 2017 was 46.3 million,
+up 20.5% year on year. Of the new customers,
+18.72 million were the Group's internet users,
+accounting for 40.4%. Progress of Ping An's
+integrated finance strategies was accompanied
+by improved cross-selling among customers. As
+at the end of 2017, 47.23 million customers held
+multiple contracts with different subsidiaries,
+accounting for 28.5% of all customers, up 4.5
+pps from the beginning of 2017. The number of
+contracts per customer stood at 2.32, up 5.0%
+from the beginning of 2017. Through application
+of fintech, Ping An improved the service
+efficiency of product lines, and achieved steady
+growth in major product lines' profitability. In
+2017, the Group recorded profit per customer of
+RMB355.85, up 14.2% year on year.
+Ping An continued to build diverse core
+financial product lines and internet service
+lines, and created synergy through sharing of
+users, customers, services and products via
+Magic Gate to provide customers with ready
+access. In 2017, internet users increased 26.0%
+from the start of 2017 to 436 million and monthly
+active users grew 18.7% year on year to 73.56
+million. On average, each internet user used 2.22
+online services, up 14.4% from the beginning of
+2017.
+(1) Retail customers refer to retail customers holding valid financial products with core financial companies of the Group.
+(2) Internet users refer to registered internet users with accounts on internet service platforms of fintech & healthtech
+companies (including Autohome) and core financial companies (including web platforms and apps) of the Group.
+(3) The number of monthly active users refers to the average number of monthly active users for 12 months as of the end of
+the reporting period.
+10
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Core drivers of the Group's profit growth
+Number of
+2016
+Net profit from
+retail business
+2017
+58,975 +44.4%
+2016
+40,829 +29.5%
+2015
+31,537
+Number of
+new customers
+customers
+Unit: million
+2017
+2017
+2016
+Unit: RMB million
+From the beginning of 2017, internet users (²) increased 26.0% from the start
+of 2017 to 436 million and monthly active users(3) grew 18.7% year on year
+to 73.56 million. On average, each internet user used 2.22 online services, up
+14.4% from the start of 2017.
+Unit: RMB million
+30.113 +39.6%
+21,565 -4.9%
+Persons
+December 31 2017
+% of
+customers
+December 31 2016
+Persons
+% of
+customers
+Credit card
+35.10
+23.31
+50.6
+Number of customers
+Securities, fund
+who were also
+(in million)
+and trust
+17.42
+91.9
+internet users
+135.85
+82.0
+98.73
+75.3
+Others
+35.56
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+16
+33.43
+2016
+24.0
+50.18
+2015
+22,666
+(1) Net profit of Ping An Group is the net profit attributable to shareholders of the parent company.
+THE NUMBER OF THE GROUP'S RETAIL CUSTOMERS (3)
+AND INTERNET USERS INCREASED RAPIDLY
+Retail customers
+By improving channel management and
+customer experience, Ping An achieved
+continuous growth in its retail customer base.
+As at the end of 2017, the Group had 166 million
+customers, up 26.4% from the beginning of 2017.
+The number of new customers acquired during
+the year was 46.30 million, up 20.5% year on
+year. Of the new customers, 18.72 million were
+the Group's internet users, accounting for 40.4%.
+Development of internet users has scaled up
+Ping An's customer base steadily.
+Retail Customer Structure (Table 1)
+Total customers
+December 31
+(4)
+The number of customers of insurance companies is
+counted based on the number of holders of in-force
+policies.
+"Others" include fintech & healthtech, other loans and
+other insurance product lines.
+Ping An has made big pushes into converting
+its offline customers to internet users, providing
+diverse products and services to users through
+its internet platforms. As of the end of 2017, the
+number of the Group's customers who were
+also internet users reached 136 million, up 37.6%
+from the beginning of 2017, accounting for 82.0%
+of all customers. The number of customers
+who were also app users stood at 127 million,
+up 78.0% from the start of 2017, accounting for
+76.9% of all customers.
+Online Customers (Table 2)
+40.47
+December 31
+2017
+2016
+Change %
+Life insurance
+53.03
+46.23
+14.7
+Auto insurance
+40.98
+34.24
+19.7
+Retail banking
+(in million)
+From the beginning of 2017, retail customers (1) grew 26.4% to 166 million
+and contracts per customer rose 5.0%. Profit per customer grew 14.2% year
+on year. New customers increased 20.5% year on year to 46.30 million, 40.4%
+of whom were the Group's internet users.
+Net profit from the Group's retail business grew by 44.4% year on year
+to RMB58,975 million, accounting for 66.2% of the Group's net profit
+attributable to shareholders of the parent company.
+Customer Development
+70.6%
+70.6% of the customers
+are in economically
+developed areas, i.e.
+East China, South China
+and North China
+65.1%
+65.1% from the middle
+class or above;
+every high-net-worth
+individual held 10.48
+contracts on average
+Annual Report 2017
+0
+37.8
+Aged 37.8 on average
+39.1%
+39.1% of the customers
+graduated from junior
+colleges or above
+Ping An Insurance (Group) Company of China, Ltd. 7
+ABOUT US
+Business Performance at a Glance
+Top Ten Highlights
+1
+2
+3
+4
+5
+In 2017, the Company realized a net profit of
+RMB99,978 million, a year-on-year increase of
+38.2%; net profit attributable to shareholders
+of the parent company rose 42.8% year on
+year to RMB89,088 million; operating profit
+attributable to shareholders of the parent
+company reached RMB94,708 million, up
+38.8% year on year; ROE stood at 20.7%. With
+strong results, the Company is increasing
+dividends. Dividend per share jumped by
+100% year on year to RMB1.50.
+The Company's value is well recognized
+in the market. In 2017, Ping An's shares
+rose sharply (with A shares up 101.4% and
+H shares up 114.1%), and its market cap
+exceeded RMB1.2 trillion, hitting a record
+high. Brand value continued to grow. Ping An
+ranked 39th in Fortune's Global 500 and 16th
+in Forbes Global 2000.
+The Company delivered strong results in
+customer development. The number of retail
+customers increased 26.4% to 166 million.
+Each customer held 2.32 contracts on
+average, up 5.0% from the beginning of the
+year. Profit per customer rose 14.2% year on
+year to RMB356. The number of internet users
+reached 436 million, up 26.0% from the start
+of 2017. The number of monthly active users
+on the internet rose to 73.56 million, up 18.7%
+year on year.
+The Company has realized leapfrog
+development in technology research and
+development capabilities. As at the end
+of 2017, the number of Ping An's patent
+applications had risen 262% to 3,030. The
+applications cover technologies such as
+artificial intelligence (AI), blockchain, cloud
+computing, big data, and security. With
+world-leading technologies such as face
+recognition, voiceprint recognition, and
+disease forecasting, Ping An has won many
+international awards in fields such as medical
+image reading and biometrics.
+Customer Profiling
+up 14.4% from the
+beginning of 2017
+online services per user
+2.22
+RMB58,975 million
+Net profit of
+retail business
+up 44.4% year on year
+$
+RMB 355.85
+Profit per customer
+up 14.2% year on year
+m
+2.32
+Contracts per customer
+up 5.0% from the
+beginning of 2017
+166
+In 2017, the NBEV of the life and health
+insurance business grew by 32.6% year on
+year to RMB67,357 million. ROEV stood at
+35.5%, up 8.5 pps year on year. The number
+of Ping An's sales agents increased 24.8%
+to 1.3860 million from the start of 2017 while
+productivity increased by 7.1% year on year.
+The total investment yield of insurance funds
+reached 6.0%, and the net investment yield
+was 5.8%, both higher than industry averages.
+million
+46.30 million
+New customers
+up 20.5% year on year
+18.72
+million
+new customers from
+internet users
+accounting for
+40.4% of new
+customers in 2017
+436 million
+internet users
+up 26.0% from the
+beginning of 2017
+73.56 million
+monthly active users
+up 18.7% year on year
+TH
+Retail customers
+up 26.4% from the
+beginning of 2017
+10
+Ping An Property & Casualty increased its
+premium income by 21.4% year on year to
+over RMB200 billion while maintaining a
+better than industry combined ratio of 96.2%.
+Ping An Property & Casualty increased its
+market share by 1.3 pps. Ping An Property
+& Casualty launched the "510 City Superfast
+Onsite Investigation" service, through which
+92.9% of the auto insurance cases requiring
+an on-site investigation were handled within
+10 minutes.
+The strategic transformation of Ping An
+Bank generated significant effects. Retail
+business revenue rose 41.7% year on year,
+and net profit of retail business increased
+68.3% year on year. Ping An Bank continued
+to improve the structure of its corporate
+business, and adopted "C + SIE + R" and
+"commercial banking + investment banking
++ investment” industry-specific financial
+service models to support the real economy.
+Ping An Bank expanded the application of
+innovative technologies and topped the
+list of joint-stock banks with 14.82 million
+monthly active app users.
+The Most Respected Enterprise in China
+■ World Economic and Environmental
+Conference
+The International Carbon-Value Award
+Carbon-Value Innovative Value Award
+■21st Century Business Herald
+Best Poverty-alleviation Contribution Award
+■ China Business News Corporate Social
+Responsibility Ranking in China
+Outstanding Enterprise Award for Corporate
+Social Responsibility
+Southern Weekly annual ceremony
+The Annual Responsibility & Contribution
+Award
+BRAND
+■Millward Brown & WPP
+Ranked No. 61 on the BrandZ Top 100 Most
+Valuable Global Brands list, again No. 1
+among global insurance brands, and No. 13
+among global financial brands on the list
+Among top 8 on the BrandZ Top 100 Most
+Valuable Chinese Brands list, again the
+highest-ranking Chinese insurance brand on
+the list, and among top 3 Chinese financial
+institutions on the list
+CORPORATE SOCIAL RESPONSIBILITY
+■The Economic Observer
+■Brand Finance
+Ranked No. 1 on the Brand Finance Insurance
+100 2017 list
+E Interbrand
+Ranked No. 6 on the Best China Brands
+2017 list, again the highest-ranking Chinese
+insurance brand on the list
+■ World Brand Lab
+Ranked No. 231 on the list of the World's 500
+Most Influential Brands for 2017
+■ Hurun Research Institute
+Annual Report 2017
+Ranked No. 9 on the Hurun Most Valuable
+Chinese Brands 2017 list, and No. 5 on the Most
+Valuable Privately-Held Chinese Brands list
+Ping An Insurance (Group) Company of China, Ltd.
+9
+ABOUT US
+Ranked No. 79 on the Brand Finance Global
+500 2017 list
+As to portals, Ping An Good Doctor
+has become the No.1 online health care
+portal, on which high-frequency health
+management services are provided to promote
+low-frequency medical services, boost activity,
+and facilitate retention. As at December 31,
+2017, Ping An Good Doctor had about 190
+million registered users. Ping An Wanjia
+Healthcare launched China's first standard clinic
+management platform to help primary medical
+institutions to improve services. Ping An Wanjia
+Healthcare has become a leading open clinic
+platform in China. As at December 31, 2017,
+over 20,000 clinics were using Ping An Wanjia
+Healthcare's cloud, and 58,000 clinics (34.0% of
+urban private medical institutions) were on the
+platform.
+■China Financial Market magazine
+Best Listed Company
+Best CFO - YAO Jason Bo
+Lufax Holding maintained fast growth in
+wealth management, consumer finance
+and institutional trading. By the end of
+2017, AUM rose 5.3% from the start of 2017
+to RMB461,699 million; the loans under
+management increased by 96.7% from the
+start of 2017 to RMB288,434 million. Lufax
+became profitable for the first time in 2017.
+Ping An Good Doctor operates the largest
+online health care platform in China, and has
+provided health management services for over
+190 million users. In its pre-IPO financing, Ping
+An Good Doctor raised USD400 million at a
+post-money valuation of USD5.4 billion. It has
+filed an IPO application with the HKEX.
+Ping An Healthcare Technology
+and OneConnect completed their
+first rounds of financing to raise USD1.15
+billion and USD650 million respectively. The
+two companies' post-money valuations are
+USD8.8 billion and USD7.4 billion respectively.
+8
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Honors and Awards
+In 2017, 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.
+CORPORATE STRENGTH
+■ Fortune
+Ranked No. 39 on the Fortune Global 500 list,
+and No. 1 among Chinese insurers
+■ Fortune China
+■ China Securities Golden Bauhinia Awards
+organized by Ta Kung Pao, the Listed
+Companies Association of Beijing, and the
+Hong Kong Chinese Enterprises Association
+Best Listed Company in Investor Relations
+Ranked No. 5 on the Fortune China 500
+list, and maintained the first place among
+Chinese insurers and among mixed-ownership
+companies
+Ranked No. 16 on the Forbes Global 2000
+list and No. 1 among global insurance
+conglomerates, and again topped the list of
+Chinese insurers
+■Institutional Investor (US)
+Most Honored Company in Asia
+■ China Enterprise Directors Association and
+China Enterprise Confederation
+Ranked No. 8 on the China Top 500 List
+■World-renowned data company IDC
+Ranked No. 38 on the list of 2017 IDC FinTech
+Rankings Top 100, and No. 1 among Chinese
+companies on the list
+CORPORATE GOVERNANCE
+■Institutional Investor (US)
+Best IR Company
+Best Analyst Day
+Best IR Professional
+Best Website
+Best CEO - MA Mingzhe
+■ Forbes
+Operating Results of the Retail Business
+-
+Health Care Ecosystem
+14.3%
+113
+35.1%
+754
+Premium income
+Ping An Health
+44.4%
+5,489
+45.7%
+6,728
+Premium income
+18.7
+61.99
+73.56
+Monthly active users (2)
+Ping An Annuity
+66.0
+130.09
+215.94
+Core financial companies
+insurance business of
+59.4
+151.20
+241.01
+companies
+(1)
+(2)
+Internet users and app users of the Group included
+users of fintech & healthtech companies (including
+Autohome) and core financial companies. Figures from
+repeated counting were eliminated.
+As per the user definition of 2016 (excluding
+Autohome), the number of the Group's monthly active
+users in 2017 would be 67.48 million.
+Number of
+customers
+| Regional population
+Ping An's customers
+29.5%
+The more wealth customers have, the more
+contracts they hold, and the more contributions
+they make.
+Number of contracts per customer (2017)
+Geographic distribution of customers (2017)
+About 70.6% of customers were in economically
+developed regions, higher than the regions'
+share in the national population.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+12
+Through long-term development of customers,
+Ping An has built strong ties of recognition
+and mutual trust with customers. The longer a
+customer has been with us, the more contracts
+he/she holds. For example, 5-year or above
+customers hold 2.69 contracts on average, 79.3%
+more than 1-year or below customers.
+The more wealth customers have, the more
+contracts they hold and the more valuable
+they are. In 2017, the Group had nearly 108
+million middle class or higher-level customers,
+accounting for 65.1% of the total. On average,
+each HNWI held 10.48 contracts, much more
+than affluent customers.
+Short-term group
+With a huge customer base and on-going
+customer data mining, Ping An learns more and
+more about customers: 70.6% of the Group's
+customers are in economically developed East
+China, South China and North China. Customers
+are quite young, with an average age of only
+37.8. And 39.1% of our customers have junior
+college or higher degrees.
+December 31,
+2017
+December 31,
+2016
+December 31,
+2015
+20.78
+31.50
+19.0%
+47.23
+24.0%
+28.5%
+% of total customers
+Unit: million
+THE GROUP SAW A STEADY INCREASE
+IN CUSTOMER VALUE AND REMARKABLE
+RESULTS OF CUSTOMER MIGRATION.
+Number of customers holding multiple
+contracts with different subsidiaries
+CUSTOMER PROFILE
+Fintech & healthtech
+16.2%
+28,792
+New business acquired via cross-selling (Table 4)
+Cross-selling of insurance business maintained
+significant growth. In 2017, new premiums of
+Ping An Property & Casualty, Ping An Annuity
+and Ping An Health from insurance sales agents
+rose by 25.9% year on year to RMB43,310 million.
+Ping An promoted customer migration among
+core financial subsidiaries to boost customer
+value. In 2017, the Group had 47.23 million retail
+customers holding multiple contracts with
+different subsidiaries, accounting for 28.5%
+of total customers. Each customer held 2.32
+contracts, 5.0% more than at the beginning of
+2017. About 36.03 million customer migrations
+happened among core financial subsidiaries of
+Ping An. Through technology innovation and
+efficient management, Ping An maintained
+healthy, sustainable profitability of its major
+product lines. In 2017, the Group recorded profit
+per customer of RMB355.85, up 14.2% year on
+year.
+Number of Internet Users (Table 3)
+Annual accumulated highly active users refer to those
+who log in for 48 or more times annually.
+(1)
+Under a philosophy of "technology-powered
+finance", Ping An provides internet users with
+one-stop services under diversified finance and
+life scenarios. As at the end of 2017, the Group
+had 436 million internet users, up 26.0% from the
+start of 2017; it had 369 million app users, up
+58.3% from the start of 2017; 81.23 million user
+migrations happened among internet platforms.
+On average, every internet user used 2.22
+online services of Ping An, up 14.4% from the
+start of 2017. Meanwhile, user activity increased
+steadily. In 2017, the Company had 73.56 million
+monthly active users, up 18.7% year on year, in
+which annual accumulated highly active users (1)
+accounted for 24.2%. User stickiness continued
+to strengthen.
+Internet users
+Customer Development
+MANAGEMENT DISCUSSION AND ANALYSIS
+11
+Ping An Insurance (Group) Company of China, Ltd.
+(in million)
+Annual Report 2017
+(2)
+Customers who purchased multiple financial products
+were counted more than once. The numbers of
+accumulated customers and new customers do not
+add up to the total due to elimination of repeatedly
+counted customers.
+(1)
+54.6
+71.57
+76.9
+127.38
+who were also app
+users
+26.4
+131.07
+165.73
+Number of customers
+The number of customers as of the end of 2017 is not
+equal to the sum of the number of customers as of the
+end of 2016 and new customers in the reporting period,
+due to customer attrition.
+Number of
+contracts per
+December 31
+2017
+Change (%)
+16.6%
+35,828
+Premium income
+58.3
+233.36
+369.42
+App user base
+Channel
+contribution
+Amount percentage
+Amount percentage
+(in RMB million)
+Ping An Property &
+Casualty
+8.2
+218.66
+December 31
+2016
+236.55
+44.7
+264.91
+383.32
+companies
+Fintech & healthtech
+Channel
+contribution
+26.0
+346.30
+436.39
+Internet user base (1)
+2016
+2017
+Core financial companies
+(in million)
+(in million)
+customer
+(contract)
+SUPPORTING BUSINESS WITH FIVE CORE
+TECHNOLOGIES
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+14
+Ping An Blockchain has been applied to 12 scenarios. With
+over 17,000 application nodes and 57 blockchain-related
+patents, Ping An Blockchain is a leader among peers in China.
+Ping An's micro-expression recognition technology can
+identify 30 smallest facial action units, with a maximum
+precision rate of 98.1% and three unique emotion detection
+models.
+Ping An's pioneering "Al + big data" models for forecasting
+influenza and hand, foot and mouth disease have precision
+rates above 90%.
+Ping An's image reading technology ranked 1st in the world in
+lung nodule detection and false positive reduction according
+to test results of LUNA.
+Ping An's voiceprint recognition technology has a
+text-dependent accuracy rate of 99.7%.
+With an accuracy rate of 99.8%, Ping An's face recognition
+technology has been applied to over 200 scenarios and used to
+recognize over 1 billion faces.
+Level/application of technology
+Ping An takes advantage of five core
+technologies to boost traditional financial
+businesses and increase competitiveness. The
+five core technologies have been applied to
+scenarios such as customer development,
+channel management, customer services, and
+risk management, sharply increasing the value
+of traditional financial businesses. Ping An has
+successfully incubated fintech and healthtech
+platforms such as Lufax Holding, OneConnect,
+Ping An Good Doctor, and Ping An Healthcare
+Technology. Some core technologies have been
+exported to serve external entities.
+Ping An Blockchain
+Ping An Face
+5
+Disease forecasting
+(4)
+Ping An Medical Imaging
+Assistant
+3
+Voiceprint recognition
+2
+Face recognition
+1
+Name of technology
+World-leading technologies:
+6
+Ping An's increasing R&D investments over recent years have generated significant outcomes.
+By December 31, 2017, the number of Ping An's patent applications had risen to 3,030, up 262.0%
+year on year. The applications cover technologies such as Al, blockchain, cloud computing, big
+data, and security. Ping An has boosted business efficiency and customer experience by applying
+leading technologies to scenarios such as financial services and health care.
+ΑΙ
+Blockchain
+Ping An has established business models
+powered by "finance + technology," connected
+assets to funds via "open platforms + open
+marketplaces," and successfully incubated
+innovative financial businesses such as Lufax
+Holding and OneConnect. In June 2017,
+Chongqing Financial Assets Exchange under
+Lufax Holding launched China's first "smart
+cloud platform for public asset and liability
+management" in cooperation with Nanning
+Government. By the end of 2017, it had saved
+the local government RMB37 million to help
+local governments manage accounts and
+save money. OneConnect has established a
+"31" model comprised of Smart Insurance
+Cloud, Smart Banking Cloud, Smart Investment
+Cloud, and an open fintech service platform.
+OneConnect has partnered with 468 banks and
+1,890 non-bank financial institutions, handling
+more than 900 million credit inquiries and an
+interbank transaction volume of over RMB10
+trillion last year.
+Financial Services Ecosystem
+technology-powered personal financial services.
+group," Ping An exploits leading advantages
+and exports innovative technologies to develop
+five ecosystems: financial services, health care,
+auto services, real estate services, and smart
+city.
+Positioned as a "world-leading
+TECHNOLOGIES
+BUILDING ECOSYSTEMS BY EXPORTING
+Ping An has established a 24/7 actively
+perceiving security system which combines
+comprehensive attack and defense
+functionalities. Ping An has built a robust
+information security governance and
+management framework which covers all
+employees and business processes. Ping An
+has built an end-to-end security management
+platform to realize group-wide real-time
+risk monitoring and response and protect
+the Group and customers against malicious
+attacks and frauds. Ping An has constantly
+increased security-related input, cooperated
+with domestic and foreign leading research
+institutions and technology teams, pursued
+R&D of proprietary technologies and
+exploration of frontier technologies, and
+built forward-looking presence in certain
+industries. Moreover, Ping An has established
+the industry's first financial security research
+institute, and is committed to building a new
+financial security ecosystem.
+Security
+Ping An has one of the largest big data
+platforms among Chinese financial institutions.
+In 2017, over 900 million credit inquiries were
+processed. On the big data platform, Ping
+An has built a "1+N" network of ecosystems,
+and applied the big data technology to areas
+such as financial services, health care, auto
+services, and real estate. In financial services,
+Ping An has partnered with 468 banks and 1,890
+non-bank financial institutions. In health care,
+Ping An provides 800 million users and over
+2,000 hospitals with Social Health Insurance
+services in over 200 cities. In auto services,
+Ping An has over 40 million auto insurance
+customers and over 1,000 million claim photos.
+Big Data
+Technology-Powered Business
+Transformation
+15
+been applied to financial business activities
+such as Puhui Business's loan approval.
+Ping An Insurance (Group) Company of China, Ltd.
+Cloud
+Systen
+Clo
+1 S
+Server
+Compute
+Ping An Cloud hosts the trillion-yuan core
+business of Ping An, providing reliable,
+convenient and secure solutions for industries
+such as insurance, banking, asset management,
+fintech, and health care. Core technologies of
+Ping An Cloud are owned and controlled by
+Ping An. Business systems can be deployed in
+Ping An Cloud within minutes thanks to robust
+technologies and data. Ping An's Virtual Private
+Cloud (VPC) hosts 415 banks and 14 insurance
+companies. Ping An Cloud has received eight
+authoritative certifications from China and
+abroad. Ping An has become one of the most
+secure cloud computing service providers in
+the financial industry.
+1117
+Annual Report 2017
+Ping An has established comprehensive
+scenarios of Al applications such as smart
+perception, prediction, risk management,
+and services. Ping An's Al and deep learning
+technologies have reached world-leading
+levels. Our face recognition technology has
+an accuracy rate of 99.8%; our voiceprint
+recognition technology has a text-dependent
+accuracy rate of 99.7%. In disease forecasting,
+Ping An has achieved precision rates of over
+90% for influenza and hand, foot and mouth
+disease and 92% for chronic obstructive
+pulmonary disease respectively. Our medical
+image reading technology ranked first in
+lung nodule detection and false positive
+reduction with precision rates of 95.1% and
+96.8% respectively according to test results of
+LUng Nodule Analysis (LUNA), an international
+authoritative assessment in the medical
+imaging field. Ping An's Al-based musical
+composition technology won the 1st place
+in the international contest of "Al-generated
+music challenge". Ping An provides Al-based
+functionalities such as photography and video
+recording, personal loan risk management, SME
+loan approval, and customer services. Ping An's
+face recognition technology has been used to
+identify over 1,000 million people in over 200
+scenarios within or outside the Group such as
+financial services, medical services, daily-life
+services, and security. Ping An's voiceprint
+recognition technology has been applied to
+over ten scenarios such as app login, identity
+verification, and blacklist identification. Ping
+An's micro-expression recognition technology
+can identify customers' smallest facial actions
+via remote videos in real time, detect frauds,
+and give risk warnings. The technology has
+Cloud Computing
+Ping An Blockchain provides secure,
+retraceable and efficient means of transaction
+recording. The technology can be applied to
+scenarios such as asset trading, financing,
+health care, and real estate trading. Ping An has
+successfully applied blockchain to real financial
+and health care scenarios. By December 31,
+2017, Ping An had built over 17,000 blockchain
+nodes for SMEs. In health care and real estate
+trading, Ping An Blockchain has facilitated
+connectivity among medical clusters and
+establishment of a real estate trading platform.
+Networ b
+In the health care ecosystem, Ping An has built
+a robust "patient – provider – payer" model,
+penetrating through online portals and payers.
+Ping An attaches great importance to technology talent development. Ping An now has over 22,000
+R&D staff members. To maintain the technological leadership, the Group has partnered with top
+universities and research institutes such as Peking University, Tsinghua University, Massachusetts
+Institute of Technology, and National Institute of Health to pursue fintech and healthtech
+researches.
+PING AN GROUP'S STRATEGY OF "FINANCE + TECHNOLOGY"
+9.3%
+(1)
+2.32
+165.73
+1.71
+57.92
+4.4%
+7.4%
+(1)
+The Group
+Mass
+19.4%
+8.9%
+12.1% 11.9%
+14.5%
+2.14
+70.91
+3.61
+36.75
+10.48
+0.15
+Middle-class
+Affluent
+HNWIS
+26.1%
+22.61
+12.6%
+Ping An has adopted a two-pronged strategy of “finance + technology," aiming to become a
+world-leading fintech company on the basis of five core technologies, i.e. Al, blockchain, cloud
+computing, big data, and security. Focusing on fintech and healthtech, Ping An strengthens its
+traditional financial businesses by increasing efficiency, cutting costs, improving experience,
+enhancing risk management, and building ecosystems and platforms. Moreover, Ping An exports
+innovative technologies and services to create value.
+7.9%
+East
+China
+Our face recognition technology has an accuracy rate of 99.8% and our
+voiceprint recognition technology has a text-dependent accuracy rate of
+99.7%, both at world-leading levels.
+By December 31, 2017, the number of Ping An's patent applications had
+risen to 3,030, up 262.0% from the beginning of the year. The applications
+cover technologies such as artificial intelligence (AI), blockchain, cloud
+computing, big data, and security.
+Technology-Powered Business
+Transformation
+MANAGEMENT DISCUSSION AND ANALYSIS
+13
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+57.92
+Mass
+70.91
+36.75
+Affluent
+6.8%
+65.1%
+HNWIS
+Middle-class
+Going forward, Ping An will facilitate
+development of its retail business to become
+a world-leading technology-powered personal
+financial services group. On one hand, it will
+reinforce the advantages in traditional channels,
+expand the user base of internet services and
+scale up the customer base quickly. On the
+other, it will diversify its personal financial
+products and services and optimize customer
+experience through further application of
+innovative technologies. On the whole, the
+Company aims to increase retail customer value
+and achieve development.
+Mass customers are those with annual income below
+RMB100,000, middle class customers RMB100,000-240,000,
+and affluent customers above RMB240,000. HNWls have
+personal assets of RMB10 million or more.
+Unit: million
+Customer wealth structure (2017)
+Middle class or higher-level customers
+accounted for 65.1%, up 2.7 pps from 2016.
+Data of social averages are from the China Statistical
+Yearbook for 2016.
+Northwest
+China
+Central
+China
+Northeast Southwest
+China
+China
+North
+China
+South
+China
+0.15
+The Group
+57.3
+Real estate investment,
+Shenzhen
+100.00%
+100.00%
+1,310,000,000
+Shanghai Pingpu Investment
+Co., Ltd. (iii)
+Shanghai, Corporation
+Investment management,
+Shanghai
+99.51%
+100.00%
+9,130,500,000
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 195
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2017 are set out below (continued):
+Name
+Place of incorporation and
+kind of legal entity
+Principal activities and
+place of operation
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+Ansheng Investment Company Limited
+Real estate investment,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Ping An Real Estate
+Investment Co., Ltd.
+420,000,000
+1,000,000,000
+Commerce Company Limited (iii)
+('Ping An E-wallet')
+Shenzhen
+Shenzhen Wanlitong Network
+Shenzhen, Corporation
+Information Technology Co., Ltd.
+Customer loyalty service,
+Shenzhen
+76.33%
+100.00%
+200,000,000
+British Virgin Islands,
+Corporation
+Shenzhen Ping An Commercial
+Property Investment Co., Ltd.
+Shenzhen, Corporation
+99.49%
+99.98%
+1,095,000,000
+Ping An Futures Co., Ltd.
+Shenzhen, Corporation
+Futures brokerage,
+Shenzhen
+96.74%
+100.00%
+Shenzhen, Corporation
+76.33%
+Project investment,
+British Virgin Islands
+Proportion of
+votes (%) (i)
+100.00%
+200,000,000
+Ping An-UOB Fund Management
+Company Limited
+Shenzhen, Corporation
+Fund raising and
+60.63%
+60.70%
+300,000,000
+distribution, Shenzhen
+Shenzhen Ping An Financial Center
+Development Company Ltd.
+Shenzhen, Corporation
+Real estate development,
+Shenzhen
+99.51%
+100.00%
+5,248,870,000
+Ping An Insurance Sales Services
+Co., Ltd.
+Shenzhen, Corporation
+Sale agency of
+100.00%
+100.00%
+50,000,000
+60.63%
+Asset management,
+Shenzhen
+Shenzhen, Corporation
+Ping An-UOB Wealthtone Asset
+Management Co., Ltd.
+Registered/authorized
+capital (RMB unless
+otherwise stated)
+100.00%
+USD50,000
+Shenzhen Ping An Financial Technology Shenzhen, Corporation
+Financial advisory
+100.00%
+100.00%
+25,644,000,000
+Consulting Co., Ltd. (iii)
+services, Shenzhen
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+99.51%
+Ping An Tradition International Money
+Broking Company Ltd.
+Currency brokerage,
+Shenzhen
+66.92%
+67.00%
+50,000,000
+Pingan Haofang (Shanghai)
+E-commerce Co., Ltd. (iii)
+Shanghai, Corporation
+Property agency,
+Shanghai
+80.00%
+80.00%
+680,000,000
+Shenzhen, Corporation
+insurance, Shenzhen
+76.33%
+Shenzhen, Corporation
+Overseas (Holdings) Limited
+('Ping An Overseas Holdings')
+Hong Kong, Corporation Investment holding,
+Hong Kong
+100.00%
+100.00% HKD7,085,000,000
+China Ping An Insurance (Hong Kong)
+Company Limited
+Hong Kong, Corporation Property and casualty
+100.00%
+100.00%
+HKD490,000,000
+insurance, Hong Kong
+Ping An International Financial
+Leasing Co., Ltd. (iii)
+('Ping An Financial Leasing')
+Shanghai, Corporation
+Finance lease business
+Shanghai
+65.23%
+34.77%
+100.00%
+12,211,208,151
+Ping An of China Asset Management
+(Hong Kong) Company Limited
+194
+Annual Report 2017
+Hong Kong, Corporation
+China Ping An Insurance
+1,516,577,790
+75.01%
+1.89%
+55.59%
+96.62% 13,800,000,000
+brokerage, Shenzhen
+Ping An Annuity Insurance
+Shanghai, Corporation
+Company of China, Ltd.
+Annuity insurance,
+Shanghai
+86.11%
+13.82%
+100.00%
+Asset management,
+4,860,000,000
+Shanghai, Corporation
+Asset management,
+Shanghai
+98.67%
+1.33%
+100.00%
+1,500,000,000
+Ping An Health Insurance
+Company of China, Ltd. (iii)
+Shanghai, Corporation
+Health insurance,
+Shanghai
+73.11%
+Ping An Asset Management Co., Ltd.
+Internet service,
+Hong Kong
+100.00% HKD345,000,000
+Ping An Real Estate Co., Ltd.
+('Ping An Real Estate')
+Shenzhen, Corporation
+Property management
+99.59%
+100.00% 20,000,000,000
+and investment
+management,
+Shenzhen
+Ping An Technology
+(Shenzhen) Co., Ltd.
+Shenzhen, Corporation
+IT services, Shenzhen
+100.00%
+100.00%
+204,763,800
+Shenzhen Ping An Financial
+Services Co., Ltd. (iii)
+Shenzhen, Corporation
+IT and business process
+outsourcing services,
+Shenzhen
+100.00%
+100.00%
+598,583,070
+Ping An E-wallet Electronic
+100,000,000
+100.00%
+99.75%
+Investment consulting,
+Shanghai
+Ping An Insurance (Group) Company of China, Ltd.
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2017 are set out below (continued):
+Name
+Place of incorporation and
+kind of legal entity
+Principal activities and
+Proportion of
+ordinary shares
+directly held by
+place of operation
+the Group (%)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+100.00%
+Proportion of
+votes (%) (i)
+Shenzhen Ping An New Capital
+Shenzhen, Corporation
+Investment holding,
+99.88%
+100.00%
+4,000,000,000
+Investment Co., Ltd.
+Shenzhen
+Ping An Trendwin Capital
+Management Co., Ltd.
+Shanghai, Corporation
+Registered/authorized
+capital (RMB unless
+otherwise stated)
+40.96%
+Ping An Chuang Zhan Insurance
+Sales & Service Co., Ltd
+Insurance sale, Shenzhen
+The Group reviews its loans and advances to customers, finance bonds, corporate bonds, asset
+management schemes, debt schemes and trust schemes at each reporting date to assess whether these
+financial assets are impaired and provision for losses 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 provision required. Refer to Note 3.(16) for the factors which the Group
+considers when making such judgment.
+(2) IMPAIRMENT OF LOANS AND ADVANCES TO CUSTOMERS, FINANCE BONDS, CORPORATE
+BONDS, ASSET MANAGEMENT SCHEMES, DEBT SCHEMES AND TRUST SCHEMES
+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 would
+choose the input value in consistency with market participants, considering in 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
+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.
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+189
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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.
+4. 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.
+(3) The Group is able to obtain the accounting information such as the financial position, operating results
+and cash flows of the component.
+(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;
+(1) The component produces income and expenses in its daily operation;
+Operating segments refer to the Group's component that satisfies the following conditions:
+(3) IMPAIRMENT OF AVAILABLE-FOR-SALE EQUITY INVESTMENTS
+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.
+(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.
+FINANCIAL STATEMENTS
+191
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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 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.
+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 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.
+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 2017 ranged from 4.75%- 5.00% (31 December 2016:
+4.75%- 5.00%).
+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 not affected by
+investment return of the underlying asset portfolio, with the 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 2017 ranged
+from 3.16%-4.75% (31 December 2016: 3.12%- 5.00%).
+The main assumptions used in the measurement of policyholders' reserves and unearned premium reserves
+are as follows:
+(4) MEASUREMENT UNIT AND VALUATION OF INSURANCE CONTRACT LIABILITIES
+(CONTINUED)
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+190
+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 3.(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.
+Ltd.
+Notes to Consolidated Financial Statements
+(47) SEGMENT REPORTING
+(vi) the entity is controlled or jointly controlled by a person identified in (a); and
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+187
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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
+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:
+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 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
+Deferred tax liabilities are recognized for all taxable temporary differences, except:
+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.
+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.
+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.
+(44) TAX
+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) SHARES HELD BY CONSOLIDATED STRUCTURED ENTITIES
+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 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.
+Equity-settled share-based payment transactions (Continued)
+(42) SHARE-BASED PAYMENT (CONTINUED)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2017
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(44) 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.
+(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;
+(46) RELATED PARTIES (CONTINUED)
+3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+188
+(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
+(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;
+(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).
+(b) the party is an entity where any of the following conditions applies:
+(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:
+(46) RELATED PARTIES
+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.
+(45) 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.
+(iii) is a member of the key management personnel of the Group or of a parent of the Group;
+Shenzhen, Corporation
+For the year ended 31 December 2017
+(4) MEASUREMENT UNIT AND VALUATION OF INSURANCE CONTRACT LIABILITIES
+(CONTINUED)
+100.00%
+500,000,000
+196
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Securities Company Limited
+('Ping An Securities')
+13,000,000,000
+99.88%
+99.88%
+Investment and trust,
+Shenzhen
+Shenzhen, Corporation
+China Ping An Trust Co., Ltd. (iii)
+17,170,411,366
+58.00%
+8.40%
+49.56%
+Banking, Shenzhen
+Shenzhen, Corporation
+Ping An Bank Co., Ltd. (ii)
+('Ping An Bank')
+insurance, Shenzhen
+21,000,000,000
+99.59%
+Investment management,
+Tongxiang
+Tongxiang Ping An Investment Co., Ltd. Tongxiang, Corporation
+419,000,000
+99.51%
+100.00%
+50,000,000
+Reach Success International
+Company Limited
+British Virgin Islands,
+Corporation
+Project investment,
+99.51%
+100.00%
+USD50,000
+British Virgin Islands
+99.51%
+Jade Reach Investment Company
+Limited
+Project investment,
+99.51%
+100.00%
+USD50,000
+British Virgin Islands
+Shenyang Shengping Investment
+Management Co., Ltd.
+Shenyang, Corporation
+Real estate investment,
+Shenyang
+99.51%
+100.00%
+British Virgin Islands,
+Corporation
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+99.51%
+Shenzhen, Corporation
+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.
+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:
+(5) CLASSIFICATION AND UNBUNDLING/SEPARATION OF INSURANCE CONTRACTS AND
+SIGNIFICANT INSURANCE RISK TESTS (CONTINUED)
+4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+192
+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.
+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.
+(5) CLASSIFICATION AND UNBUNDLING/SEPARATION OF INSURANCE CONTRACTS AND
+SIGNIFICANT INSURANCE RISK TESTS
+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 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.
+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.
+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 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.
+The Group uses reasonable estimates, based on actual experience and future development trends, in
+deriving lapse rate assumptions.
+The unbundling/separation and classification of insurance contracts would affect the Group's revenue
+recognition, liability measurement and financial statement presentation.
+(6) 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 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.
+For further disclosure in respect of the maximum risk exposure of unconsolidated structured entities of the
+Group, see Note 46. (8).
+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.
+Registered/authorized
+capital (RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+Property and casualty
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+kind of legal entity
+Name
+Place of incorporation and
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2017 are set out below:
+5. SCOPE OF CONSOLIDATION
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 193
+Annual Report 2017
+Principal activities and
+place of operation
+Securities investment and
+(3,675)
+Ping An Insurance (Group) Company of China, Ltd.
+(15,021) 41,898
+Including: Inter-segment other
+revenues
+7,931
+19
+1
+1,665
+3,856
+(13,472)
+Non-operating gains
+(12,355)
+267
+221
+34
+164
+279
+103
+19,335
+17,549
+1,295
+225
+(3)
+(225)
+61
+(1,648)
+Share of profits and losses of
+associates and jointly controlled
+entities
+2,676
+388
+104
+(141)
+(1)
+(625)
+(1,121)
+(2,743) (1,370)
+Other revenues and other gains
+17,311
+873
+331
+197
+(111)
+Total revenue
+390,517 169,452 164,356
+(241,283) (83,398)
+(184)
+Foreign exchange (losses)/gains
+(226)
+91
+(45,435)
+882
+675 (4,392)
+(62) (45,491)
+280
+255
+119
+1,401
+Investment expenses
+(1,041)
+(125)
+1,166
+Administrative expenses
+(40,349)
+(44,358) (31,644) (1,704)
+(818)
+(615)
+(3,450)
+Loan loss provisions, net of reversals
+5,697
+8,849
+25,197
+29,163
+(18,743)
+1,402
+774,488
+(133) (324,814)
+Commission expenses on
+Claims and policyholders' benefits
+insurance operations
+(25,414)
+2,909 (78,754)
+Interest expenses on banking
+operations
+(54,709)
+1,772 (52,937)
+Fees and commission expenses on
+non-insurance operations
+(56,249)
+(7,566)
+(857)
+(617)
+25,033
+Profit for the period
+Income tax
+Profit before tax
+(16,989) (23,474) 15,309 (680,077)
+(6,137)
+(2,946)
+(357,281) (154,138) (134,421)
+Total expenses
+10,529 (21,939)
+(1,130) (3,926) (11,219)
+(259)
+(65)
+(483)
+(15,386)
+Other expenses
+(2,310) (12,144)
+33,236 15,314
+(8,203) (2,614)
+12,700
+29,935
+2,751
+2,712
+Annual Report 2017
+206
+72,368
+(3,535)
+5,922
+5,112
+2,215
+2,322
+(155)
+22,599
+233
+(3,096)
+(497)
+(429)
+(7,336)
+(3,434) 94,411
+5,689
+8,208
+(101) (22,043)
+104
+(5,593)
+(374)
+644
+1,675
+2,589
+7,310
+10,443
+320 115,053
+Including: Inter-segment
+investment income
+1,882
+32
+20
+140
+1,724
+502
+(4,300)
+Impairment loss of
+investment assets
+(141,007)
+Including: Taxes and surcharges
+(791)
+(4,006) (3,445)
+(451)
+(2,747)
+Finance costs
+(1,755)
+(59)
+(141)
+(5) (624)
+(226)
+(514)
+(658)
+other assets
+Impairment loss of
+(9,268)
+(149)
+(266)
+(380)
+(131)
+(100)
+(42)
+230
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2017 are set out below (continued):
+1,738
+Ping An Insurance (Group) Company of China, Ltd. 199
+Annual Report 2017
+USD1,161,623
+52.78%
+52.78%
+Automotive internet
+platform, Beijing
+Cayman Islands,
+Corporation
+Autohome Inc. (iii)
+GBP1,154,873
+100.00%
+99.51%
+Infant products,
+United Kingdom
+United Kingdom,
+Corporation
+Mayborn Group Limited
+300,000,000
+100.00%
+99.79%
+Investment management,
+Tongxiang
+Tongxiang, Corporation
+Tongxiang Anhao Investment
+Management Co., Ltd. (iv)
+100,000,000
+FINANCIAL STATEMENTS
+100.00%
+Notes to Consolidated Financial Statements
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+Name
+(2) As at 31 December 2017, the Group consolidated the following principal structured entities:
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+200
+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 46. (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 2017 as compared to 2016.
+After the completion of the restructuring, the Group lost control over Ping An Good Doctor and its subsidiary, Ping An Health Cloud
+Company Limited. Then Ping An Good Doctor becomes an associate of the Group, and is excluded from the scope of consolidation.
+Under IAS 27, upon loss of control over the subsidiary by partially disposal of equity investments, the Group should re-measure
+the retained investments at its fair value in the consolidated financial statements. The gain from the disposal represented the sum
+of the disposal consideration and fair value of retained investments less the amount of net assets of the subsidiary attributable to
+the Group based on its shareholding. In summary, the Group recognized gain on disposal of RMB10,850 million (after the impact of
+income tax), mainly resulted from re-measurement of retained investments to fair value at the date the Group lost control.
+In 2017, the Group has completed the asset restructuring of Ping An Healthcare and Technology Company Limited ('Ping An Good
+Doctor') and signed equity transfer and option agreements ('the agreements') with outside investors. According to the agreements,
+the Group sold 2.6% shares in Ping An Good Doctor for a cash consideration of USD90 million (equivalent to RMB593 million), and
+meanwhile the Group acquired the repurchase options of the shares (the value of repurchase options was RMB210 million based on
+an independent valuation performed by a third-party valuation firm).
+These entities were newly in scope of consolidation in 2017.
+The registered capitals of these subsidiaries were changed in 2017.
+For the year ended 31 December 2017, Ping An Bank's profit attributable to its non-controlling interest was RMB9,563 million (2016:
+RMB9,306 million), the dividend paid to its non-controlling interest was RMB1,507 million (2016: RMB1,085 million). As at 31 December
+2017, Ping An Bank's equity attributable to its non-controlling interest was RMB92,414 million (2016: RMB84,235 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 Group 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 Group and indirectly via subsidiaries controlled by the Group.
+(v)
+(iv)
+(iii)
+(ii)
+(i)
+Notes:
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2017 are set out below (continued):
+For the year ended 31 December 2017
+99.79%
+Investment management,
+Shenzhen
+Management Co., Ltd.
+Shenzhen Ping An Chuangke
+Investment Management Co., Ltd.
+British Virgin Islands
+USD50,000
+100.00%
+100.00%
+Project investment,
+British Virgin Islands,
+Corporation
+100,000,000
+80.00%
+79.14%
+Private equity Financing,
+Shenzhen
+Shenzhen, Corporation
+Value Success International Limited
+('Value Success International')
+Shenzhen Qianhai Inclusive
+Crowdfunding & Trading Co., Ltd.
+USD100,000,000
+100.00%
+99.59%
+Hong Kong, Corporation Financing platform,
+Pingan Real Estate Capital Limited
+services, Shenzhen
+Credit Information
+Shenzhen, Corporation
+Investment management,
+Shenzhen
+99.79%
+100.00%
+Shenzhen, Corporation
+Lianxin (Shenzhen) Investment
+680,000,000
+100.00%
+76.33%
+Internet service,
+Shenzhen
+Shenzhen, Corporation
+Ping An Pay Technology
+Service Co., Ltd.
+consulting, Hong Kong
+and investment
+Ping An Asset Xinxiang No.28
+100.00% USD335,000,000
+Investment management
+Hong Kong, Corporation
+An Ke Technology Company Limited
+100,000,000
+100.00%
+99.79%
+Investment management,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Ping An Anchuang
+Investment Management Co., Ltd.
+100,000,000
+100.00%
+Assets Management
+Huabao East Aggregated Fund
+Trust Scheme
+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 segment did not have material impact on the Group's
+operating outcome, and as such are not separately presented. The comparative figures have been restated
+accordingly.
+SEGMENT REPORTING (CONTINUED)
+6.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+202
+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 other asset management segment provides investment management services, finance lease
+business and other asset management services reflecting performance summary of asset management
+and financial leasing and the other asset management subsidiaries;
+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 2017, the Group reassessed the composition of operating segments in accordance with business operation
+and management reporting process. In view of the fast growing business in the other asset management
+segment and fintech&healthtech segment and their increasing significance to the Group, management has
+concluded that other asset management segment and fintech&healthtech segment should be separately
+reported. The overall presentation of the segment information was also enhanced. 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:
+6. SEGMENT REPORTING
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 201
+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 2017 and 2016, the Group's top five customers in respect of total income are as follows:
+(in RMB million)
+Other
+businesses
+and
+elimination
+Fintech&
+Healthtech
+Trust Securities management
+Banking
+Other asset
+Property
+health and casualty
+insurance insurance
+(in RMB million)
+Life and
+The segment analysis as at 31 December 2017 and for the year then ended is as follows:
+6. SEGMENT REPORTING (CONTINUED)
+Annual Report 2017
+For the year ended 31 December 2017
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 203
+0.13%
+0.12%
+909
+1,040
+2016
+2017
+Percentage of total income
+Total income from top five customers
+Notes to Consolidated Financial Statements
+50,000,000
+management product
+3,050,198,071
+96.53%
+Ping An Asset Xinxiang No.5
+Investment in debts
+9,500,000,000
+99.51%
+Shanghai Trust Huarong Aggregated Fund
+Management Scheme
+Fund Management Scheme
+Investment in debts
+10,000,000,000
+59.71%
+Shanghai Trust Changcheng Aggregated
+Investment in debts
+12,000,000,000
+98.86%
+management product
+Investment in wealth
+26,425,812,763
+99.51%
+Principal activities
+Paid-in capital
+(RMB)
+Attributable
+equity interest
+9,220,000,000
+Assets Management
+Investment in wealth
+management product
+Ping An Asset Xinxiang No.19
+99.51%
+Ping An Asset Xinxiang No.11
+Assets Management
+Investment in wealth.
+management product
+5,001,000,000
+99.51%
+Ping An Asset Xinxiang No.14
+Assets Management
+Investment in wealth
+management product
+7,296,884,848
+99.51%
+Ping An Asset Xinxiang No.10
+Assets Management
+Investment in wealth
+Investment in wealth
+management product
+99.51%
+Ping An Asset Xinxiang No.18
+Assets Management
+Investment in wealth
+management product
+8,068,893,684
+99.51%
+Ping An Asset Xinxiang No.20
+Assets Management
+Investment in wealth
+management product
+Assets Management
+9,103,702,167
+99.51%
+8,052,180,412
+100.00%
+100.00%
+Personal and Enterprise
+Real estate investment,
+Chengdu
+Chengdu, Corporation
+Chengdu Ping An Property Investment
+Company Co., Ltd.
+256,323,143
+100.00%
+99.51%
+Real estate investment,
+Beijing
+Investment Co., Ltd.
+Beijing, Corporation
+Beijing Shuangronghui
+Logistics Company Limited
+2,000,000,000
+100.00%
+99.59%
+Logistics, Shenzhen
+Shenzhen, Corporation
+Shenzhen Pingan Real Estate Industrial
+6,400,000,000
+100.00%
+100.00%
+Finance lease business
+Tianjin
+99.51%
+100.00%
+840,000,000
+Hangzhou Pingjiang Investment Co., Ltd. Hangzhou, Corporation
+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 Company's principal subsidiaries as at 31 December 2017 are set out below (continued):
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+197
+Ping An International Financial Leasing Tianjin, Corporation
+(Tianjing) Co., Ltd. (iii)
+Ping An Insurance (Group) Company of China, Ltd.
+1,160,000,000
+100.00%
+99.51%
+Real estate investment,
+Beijing
+Beijing, Corporation
+Beijing Jingxinlize Investment Co., Ltd.
+1,600,000,000
+100.00%
+99.51%
+Real estate development,
+Hangzhou
+Annual Report 2017
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+1,250,000,000
+100.00%
+Shanxi Jinjiao Expressway Co., Ltd.
+750,000,000
+60.00%
+59.71%
+Expressway operation,
+Taiyuan
+Taiyuan, Corporation
+Shanxi Changjin Expressway Co., Ltd.
+Shanghai
+700,000,000
+100.00%
+100.00%
+Commercial factoring,
+Ping An Commercial Factoring Co., Ltd. Shanghai, Corporation
+Registered/authorized
+capital (RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+the Group (%)
+Proportion of
+ordinary shares
+directly held by
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Name
+Taiyuan, Corporation
+Expressway operation,
+Taiyuan
+59.71%
+60.00%
+Financing guarantee,
+Tianjin
+Tianjin, Corporation
+Ping An Financing Guarantee (Tianjin)
+Co., Ltd.
+100,000,000
+100.00%
+100.00%
+Consulting services,
+Shanghai
+Shanghai, Corporation
+Ping An Wealth Management
+Co., Ltd. (iii)
+and brokerage,
+Hong Kong
+100.00%
+(Hong Kong) Company Limited
+96.55%
+Hong Kong, Corporation Securities investment
+Ping An of China Securities
+600,000,000
+100.00%
+96.55%
+Equity investment,
+Shenzhen
+Shenzhen, Corporation
+Ping An Caizhi Investment
+Management Company Limited
+504,000,000
+100.00% HKD200,000,000
+Total
+Proportion of
+votes (%) (i)
+Anbon Allied Investment Company
+Limited
+99.05%
+Investment management,
+Shanghai
+Shanghai, Corporation
+Shanghai Jinyao Investment
+Management Co., Ltd.
+and management,
+Shanghai
+20,000,000
+100.00%
+99.51%
+Real estate development
+Shanghai, Corporation
+Shanghai Gezhouba Yangming
+Property Co., Ltd.
+63,330,000
+94.74%
+94.74%
+E-commerce, Shanghai
+Shanghai, Corporation
+Shanghai Pingan Automobile
+E-commerce Co., Ltd.
+4,810,000,000
+100.00%
+99.51%
+Asset management,
+Shanghai
+100.00%
+1,290,000,000
+Shanghai PingXin Asset
+Management Co., Ltd.
+Shanghai, Corporation
+Shenzhen, Corporation
+capital (RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+Registered/authorized
+Proportion of
+ordinary shares
+indirectly held by
+the Group (%)
+Proportion of
+ordinary shares
+directly held by
+the Group (%)
+Principal activities and
+place of operation
+kind of legal entity
+Service Centre Co., Ltd.
+Shenzhen Qianhai Credit
+Management Company Limited
+Name
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2017 are set out below (continued):
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+198
+Shanghai
+10,000,000
+100.00%
+100.00%
+Asset management,
+Place of incorporation and
+Registered/authorized
+capital (RMB unless
+otherwise stated)
+Shanghai, Corporation
+673,416,467
+Management consulting,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Pingke Information
+Consulting Co., Ltd. (iii)
+1,000,000,000
+100.00%
+96.55%
+Asset management,
+Shenzhen
+Shenzhen, Corporation
+Ping An Pioneer Capital Co., Ltd.
+Hong Kong
+GBP133,000,000
+100.00%
+99.51%
+Real estate investment,
+Hong Kong, Corporation
+Talent Bronze Limited
+United Kingdom
+GBP160
+100.00%
+99.51%
+Hong Kong, Corporation Real estate investment,
+100.00%
+100.00%
+3,115,150,000
+Beijing Jingping Shangdi
+Investment Co., Ltd.
+52.02%
+51.69%
+Industry, Shanghai
+Shanghai, Corporation
+Shanghai Jahwa United Co., Ltd.
+consumer chemicals,
+Shanghai
+268,261,234
+100.00%
+99.51%
+Production and sale of
+Shanghai Zean Investment
+Shanghai, Corporation
+50,000,000
+100.00%
+99.51%
+Guangzhou, Corporation Property leasing,
+Guangzhou
+Guangzhou Xinping Property
+Investment Co., Ltd.
+45,000,000
+100.00%
+99.51%
+Property leasing, Beijing
+Beijing, Corporation
+Shanghai Jahwa (Group) Company Ltd.
+('Shanghai Jahwa')
+Gross written premiums
+388,642 216,090
+303
+2,949
+Accounts payable
+(70,032) 1,952,695
+22,307
+2,000,420
+-
+brokerage customers
+Customer deposits and payables to
+335 133,981
+10,027
+23,176
+6,359
+11,714
+82,370
+repurchase
+Assets sold under agreements to
+20,555 780,530
+2,189
+135,884
+241
+4,357 589,580
+2,053
+1,353
+Insurance payables
+90,083 25,201
+6,288
+56,879 27,668 87,570
+2,131,139 265,929 3,026,421
+166,392 70,144 222,054
+Other segment information:
+Segment equity
+Segment liabilities
+Others
+8,543 342,492
+31,174
+Bonds payable
+45,622
+27,724
+Policyholder dividend payable
+41
+50,268
+policyholders
+Investment contract liabilities for
+494 1,932,969
+(1,176) 114,108
+(887) 5,468
+188,405
+1,744,070
+Insurance contract liabilities
+50,309
+6,288
+19,532
+financial institutions
+31,818 27,597 (31,217) 86,207
+77,367 27,635 10,054 570,113
+452,318 106,530 (71,344) 6,493,075
+127,868
+46,899
+5,510
+2 318,236
+4,205 305,986
+138,293 842,473
+6,462 11,814
+1,660,420
+3,593
+Loans and advances to customers
+513,706 62,990
+Equity investments
+1,381,743
+Fixed maturity investments
+8,043
+and statutory deposits
+(20,132) 483,891
+25,159
+32,681
+30,568
+8,594
+37,844 193,448
+175,729
+and other financial institutions
+Balances with the Central Bank
+Total
+11,002
+10,859 2,559,137
+56,204
+10,887
+97,672
+25,820
+59
+14,636
+1,326
+4,086
+8,280
+165,074 84,461 186,800
+2,297,531 336,073 3,248,475
+Segment assets
+Others
+48,344
+jointly controlled entities.
+Investments in associates and
+Due to banks and other
+(864) 71,923
+112,028
+-
+112,028
+-
+4,250
+14,352
+Finance lease receivable
+52,886
+1,299
+Accounts receivable
+(36,897) 630,676
+(3,149) 1,660,864
+elimination
+9,500 59,574
+15,256 178,968 58,629
+70,480 386,506 62,171
+27,192 65,812 44,359
+6,935 438,193
+(43,776) 5,905,158
+6,059
+275
+Reinsurance commission revenue
+441,620
+211
+153,345
+288,064
+Net earned premiums
+(10,108)
+14
+(8,936)
+(1,186)
+reserves
+Change in unearned premium
+(17,827)
+(98)
+(2,014) (15,715)
+Less: Premiums ceded to reinsurers
+469,555
+295
+177,996
+19
+6,353
+Interest revenue from banking
+operations
+8,787
+82,191
+Investment income
+(1,629)
+110
+330
+1,189
+operations
+from non-insurance
+commission revenue
+291,264
+Including: Inter-segment fees and
+(1,485) 39,859
+506
+963
+4,966
+3,600
+31,309
+Fees and commission revenue from
+131,075
+(44)
+131,119
+non-insurance operations
+45,622
+451,283
+Gross written premiums
+and
+elimination
+Total other non-cash expenses
+8,607
+468
+957
+375
+164
+7
+2,691
+580
+3,365
+Depreciation and amortization
+228 19,424
+1,677
+7,518
+299
+-
+3,056
+1,788
+4,858
+Capital expenditures
+(27,568) 587,917
+charged to consolidated results
+(35)
+794
+42,925
+Fintech&
+Healthtech
+Trust Securities management
+Banking
+insurance
+Other asset
+Other
+businesses
+Property
+health and casualty
+insurance
+(in RMB million)
+Life and
+The segment analysis as at 31 December 2016 and for the year then ended is as follows:
+Total
+6. SEGMENT REPORTING (CONTINUED)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 205
+Annual Report 2017
+45,251
+195
+856
+411
+58
+47
+For the year ended 31 December 2017
+5. SCOPE OF CONSOLIDATION (CONTINUED)
+Other
+businesses
+and
+Securities management
+3,887
+controlled entities
+associates and jointly
+Share of profits and losses of
+(2,701)
+(188)
+(662)
+(39)
+(38)
+(1,819)
+(51)
+96
+investment assets
+Impairment loss of
+(3,960)
+58
+1,012
+114
+144
+532
+2,100
+557
+183
+2,985
+3,115
+6
+38
+104
+179
+Non-operating gains
+-
+1
+7
+27
+13,214
+investment income
+revenues
+(22,611) 43,813
+20,980
+18,773
+2,197
+136
+385
+1,150
+22,803
+Other revenues and other gains
+(3,582) 7,145
+Including: Inter-segment other
+4
+Including: Inter-segment
+16,758
+148,068
+banking operations
+Interest revenue from
+6,728
+20
+6,226
+482
+Reinsurance commission revenue
+572,990
+204
+188,219
+384,567
+Net earned premiums
+(1) (14,625)
+(1,047) (13,577)
+reserves
+Change in unearned premium
+(98) (17,420)
+(3,028) (14,294)
+Less: Premiums ceded to reinsurers
+605,035
+(682)
+147,386
+Fees and commission revenue
+35,725
+10,326
+3,285
+2,053
+(1,213)
+11,110
+109,924
+Investment income
+(1,955)
+48
+139
+(142) 152,101
+272
+operations
+from non-insurance
+commission revenue
+Including: Inter-segment fees and
+from non-insurance operations
+(1,738) 44,407
+145
+1,728
+4,255
+4,292
+1,496
+Fintech&
+Healthtech
+1,760
+8
+(22,429)
+(120)
+(352)
+(20,642)
+Other expenses
+(91)
+(351)
+(2,282)
+Finance costs
+(3)
+(19) (562)
+(14)
+(303)
+(743)
+(61)
+other assets
+Impairment loss of
+(3,735)
+(53)
+(246) (226)
+(27)
+(70)
+(3)
+(580) (6,096) (453)
+(2,135) (5,676) (8,654)
+Total expenses
+(470,992) (188,363) (152,808)
+Trust
+Banking
+insurance
+Other asset
+Property
+health and casualty
+insurance
+Life and
+Cash and amounts due from banks
+(in RMB million)
+The segment analysis as at 31 December 2017 and for the year then ended is as follows (continued):
+6. SEGMENT REPORTING (CONTINUED)
+(1,349) (1,022)
+Ping An Insurance (Group) Company of China, Ltd.
+204
+(1,736)
+(31)
+(1,314) (11,167)
+15,917 (21,665)
+25,178 (839,830)
+12,211 18,601 (3,353) 134,740
+(1,888) (3,912) (465) (34,762)
+10,323 14,689 (3,818) 99,978
+(7,158) (21,601) (22,397)
+2,579
+(456)
+2,123
+4,975
+(1,018)
+3,957
+50,671 18,899 30,157
+(14,528) (5,527) (6,968)
+36,143 13,372 23,189
+Profit for the period
+Income tax
+Profit before tax
+(1,689)
+Annual Report 2017
+7,420
+13
+(742)
+4,384 (145,126)
+Fees and commission expenses
+(72,501)
+1,558
+(74,059)
+operations
+Interest expenses on banking
+2,140 (114,587)
+(77,754) (38,973)
+insurance operations
+Commission expenses on
+(28,531) 974,570
+188 (427,243)
+(320,957) (106,474)
+Claims and policyholders' benefits
+40,998
+33,812
+9,737
+6,664
+521,663 207,262 182,965
+Total revenue
+354
+2
+on non-insurance operations
+Loan loss provisions, net of reversals
+(5,051)
+(40,803)
+(276)
+(9,025) (13,138)
+(3,632)
+(41,886) (32,941) (1,319)
+(47,569)
+Administrative expenses
+2,533
+-
+(128)
+(319)
+(152)
+Including: Taxes and surcharges
+(241)
+(59)
+(268)
+(2,265)
+Investment expenses
+477
+Foreign exchange (losses)/gains
+(11) (40,814)
+(6,599)
+102
+(563)
+(811)
+166
+Hong Kong
+11,544
+(2,701)
+2017
+2016
+656
+(2,145)
+(51)
+153
+(736)
+(1,212)
+(1,014)
+(1,648)
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 211
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+11. OTHER REVENUES AND OTHER GAINS
+Total
+(in RMB million)
+Management revenue from investment-linked products and
+revenue from investment contracts
+Expressway toll fee revenue
+Annuity management fee revenue
+Consulting revenue
+Finance lease revenue
+Revenue from guarantees
+Revenue from customer loyalty service
+Others
+12. CLAIMS AND POLICYHOLDERS' BENEFITS
+(1)
+2017
+2016
+13,756
+7,779
+Sales revenue
+2,557
+· Available-for-sale
+- Loan and receivables
+Income from precious metal transactions
+620
+643
+24,184
+(3,805)
+Note : This refers to gains/(losses) from disposals of subsidiaries, associates and jointly controlled entities.
+(3) UNREALIZED GAINS
+(in RMB million)
+Fixed maturity investments
+2017
+2016
+-
+Carried at fair value through profit or loss
+(191)
+Equity investments
+(189)
+-
+O Carried at fair value through profit or loss
+3,342
+3,618
+Derivative financial instruments
+120
+402
+3,271
+3,831
+(4) IMPAIRMENT LOSSES
+(in RMB million)
+Fixed maturity investments
+Available-for-sale
+- Held-to-maturity
+Equity investments
+2,341
+1,161
+1,298
+Increase in policyholders' reserves
+197,217
+409
+197,626
+Interest credited to policyholder contract deposits
+23,873
+23,873
+436,658
+(9,415)
+427,243
+2016
+(in RMB million)
+Gross
+Reinsurers' share
+13,129
+Net
+117,303
+(10,196)
+107,107
+Surrenders
+16,050
+16,050
+Annuities
+5,907
+5,907
+Maturities and survival benefits
+24,520
+24,520
+Policyholder dividends
+11,236
+Claims and claim adjustment expenses
+13,129
+Policyholder dividends
+27,709
+595
+643
+7,829
+8,965
+5,753
+5,868
+1,256
+4,794
+2,694
+2,439
+8,212
+7,771
+43,813
+41,898
+2017
+(in RMB million)
+Claims and claim adjustment expenses
+27,709
+Maturities and survival benefits
+7,371
+7,371
+Annuities
+20,519
+1,586
+20,519
+(9,824)
+146,840
+Net
+Reinsurers' share
+Gross
+Surrenders
+137,016
+11,236
+525
+220
+(2,701)
+(1,648)
+152,101
+115,053
+66,119
+24,166
+85,982
+90,887
+152,101
+115,053
+2016
+Bonds and debt schemes
+- Held-to-maturity
+37,220
+3,831
+31,507
+8,288
+7,629
+-
+- Carried at fair value through profit or loss
+1,087
+197
+- Loans and receivables
+20,444
+16,323
+Term deposits
+- Loans and receivables
+Current accounts
+- Loans and receivables
+Others
+- Available-for-sale
+-
+3,271
+24,184
+875
+536
+Subtotal
+6,599
+4,392
+Net fees and commission income from non-insurance operations
+37,808
+35,467
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 209
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+10. INVESTMENT INCOME
+(3,805)
+(in RMB million)
+Realized gains/(losses) 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
+2017
+2016
+127,347
+116,675
+Net investment income
+- Available-for-sale
+Carried at fair value through profit or loss
+- Loans and receivables
+210
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+10. INVESTMENT INCOME (CONTINUED)
+(2) REALIZED (LOSSES)/GAINS FROM DISPOSAL
+(in RMB million)
+Fixed maturity investments
+· Available-for-sale
+2017
+2016
+(637)
+1,413
+Carried at fair value through profit or loss
+(81)
+116,675
+97
+Equity investments
+(358)
+(3)
+Available-for-sale
+4,089
+(16,343)
+Carried at fair value through profit or loss
+2,650
+(1,477)
+Subsidiaries, associates and jointly controlled entities (Note i)
+16,736
+10,059
+Derivative financial instruments
+640
+- Loans and receivables
+127,347
+(1,924)
+(3,456)
+Dividend income on equity investments
+Securities investment funds
+-
+Available-for-sale
+- Carried at fair value through profit or loss
+Equity securities and other equity investments
+-
+Available-for-sale
+8,368
+9,868
+675
+689
+1,781
+3,272
+275
+310
+11,600
+Interest expenses on assets sold under agreements to repurchase and
+placements from banks and other financial institutions
+1,822
+2,757
+Operating lease income from investment properties
+948
+1,070
+Gain on disposals of bills
+- Carried at fair value through profit or loss
+13,386
+4,137
+1,589
+22,756
+22,263
+11,097
+8,044
+Increase in policyholders' reserves
+142,119
+510
+(924)
+Exchange differences on translation of foreign operations
+Share of other comprehensive income of associates and
+jointly controlled entities
+(in RMB million)
+Items that may be reclassified subsequently to profit or loss:
+Available-for-sale financial assets:
+93
+93
+33,534
+(11,653)
+21,881
+2016
+Before tax
+Tax impact
+After tax
+(924)
+Changes in fair value
+7,909
+(24,359)
+Reclassification adjustments for losses included in the
+statement of income
+- Losses/(gains) on disposal
+15,486
+(3,853)
+11,633
+- Impairment losses
+756
+(188)
+568
+Shadow accounting adjustments
+4,625
+(1,176)
+(32,268)
+3,449
+(3,201)
+(4,288)
+(12,498)
+85
+34,762
+22,043
+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.
+214
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+15. OTHER COMPREHENSIVE INCOME
+(in RMB million)
+Items that may be reclassified subsequently to profit or loss:
+2017
+Before tax
+Tax impact
+1,087
+After tax
+Changes in fair value
+46,746
+(14,732)
+32,014
+Reclassification adjustments for losses included in the
+statement of income.
+- (Gains)/losses on disposal
+(9,047)
+2,230
+(6,817)
+- Impairment losses
+954
+(238)
+716
+Shadow accounting adjustments
+Available-for-sale financial assets:
+Exchange differences on translation of foreign operations
+Share of other comprehensive income of associates and
+jointly controlled entities
+1,190
+1,190
+Profit attributable to owners of the parent (in RMB million)
+89,088
+62,394
+Weighted average number of ordinary shares in issue (million shares)
+17,837
+17,845
+Basic earnings per share (in RMB)
+4.99
+3.50
+2017
+2016
+Weighted average number of ordinary shares in issue (million shares)
+Issued ordinary shares as at 1 January
+18,280
+2016
+18,280
+purchase scheme
+(26)
+(18)
+Weighted average number of shares held by the consolidated
+assets management scheme (i)
+(417)
+(417)
+17,837
+17,845
+Weighted average number of ordinary shares in issue
+(i) As at 31 December 2017, 417 million (31 December 2016: 417 million) shares were held by the consolidated assets management
+scheme.
+216
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Weighted average number of shares held by the share
+2017
+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
+(48)
+(48)
+(10,259)
+2,692
+(7,567)
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 215
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+16. DIVIDENDS
+(in RMB million)
+In respect of previous year:
+2016 final dividend (declared in 2017) - RMB0.55
+2017
+2016
+(2015 final dividend, declared in 2016: RMB0.35) per ordinary share
+17. EARNINGS PER SHARE
+(iii) 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 final cash dividend of RMB1.00 per share for 2017. It
+was not recognized as a liability as at 31 December 2017.
+(ii) On 17 August 2017, the Board of Directors of the Company approved the Resolution of the Profit
+Appropriation Plan for Interim Dividend of 2017, agreeing to declare an interim cash dividend of
+RMB0.50 per share for 2017. The amount of the interim cash dividend for 2017 was RMB9,140 million.
+On 22 March 2017, the Board of Directors of the Company approved the Resolution of the Profit
+Appropriation Plan for 2016, and declared a final cash dividend in the amount of RMB0.55 per share
+based on the total shares of 18,280,241,410. The amount of the cash dividend for 2016 was RMB10,054
+million accordingly. On 16 June 2017, the above profit appropriation plan was approved by the
+shareholders of the Company at the annual general meeting.
+3,656
+9,140
+(13,574)
+(199)
+(2016 interim dividend: RMB0.20) per ordinary share
+-
+(i)
+2017 interim dividend
+In respect of current year:
+6,398
+10,054
+RMB0.50
+10,853
+14,850
+23,603
+Reinsurers' share
+Net
+Long term life insurance contract benefits
+232,009
+(1,457)
+230,552
+Short term life insurance claims
+11,157
+(426)
+10,731
+Property and casualty insurance claims
+91,334
+(7,803)
+83,531
+Gross
+334,500
+324,814
+13. PROFIT BEFORE TAX
+(1) PROFIT BEFORE TAX IS ARRIVED AT AFTER CHARGING 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
+Provision for doubtful debts, net
+Provision for loans, net
+Cost of sales
+2017
+(9,686)
+(in RMB million)
+2016
+427,243
+142,629
+Interest credited to policyholder contract deposits
+17,365
+17,365
+334,500
+(9,686)
+324,814
+212
+Annual Report 2017
+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
+2017
+(9,415)
+436,658
+106,286
+(7,796)
+114,082
+12,754
+64,071
+(525)
+308,203
+(1,094)
+309,297
+Net
+Reinsurers' share
+Gross
+13,279
+3,248
+2016
+23,873
+For the year ended 31 December 2017
+14. INCOME TAX
+(in RMB million)
+2017
+2016
+Current income tax
+Charge for the year
+43,857
+33,723
+- Adjustments in respect of current income tax of previous years
+Deferred income tax
+(199)
+85
+(8,896)
+(11,765)
+Notes to Consolidated Financial Statements
+34,762
+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 2017 was 25%.
+Reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax
+rate of 25% (2016: 25%) is as follows:
+(in RMB million)
+Profit before tax
+Tax at the applicable tax rate of 25% (2016: 25%)
+Expenses not deductible for tax
+Income not subject to tax
+Adjustments in respect of current income tax of previous years
+Income tax per consolidated statement of income
+2017
+2016
+134,740
+94,411
+33,685
+22,043
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 213
+Annual Report 2017
+17,365
+1,233
+737
+4,385
+3,304
+2,394
+2,123
+581
+723
+40,814
+45,491
+4,325
+4,585
+Auditors' remuneration - annual audit, half-year review
+and quarterly agreed-upon procedures
+80
+73
+58,790
+64,071
+1,704
+1,794
+Others
+14,006
+58,790
+Retirement benefits, social security contributions and
+welfare benefits
+48,271
+Wages, salaries and bonuses
+2016
+2017
+(in RMB million)
+(2) EMPLOYEE COSTS
+45,542
+5,034
+2017
+608
+Insurance contract liabilities
+1,471,806
+153,163
+504
+1,625,473
+Investment contract liabilities for
+policyholders
+44,860
+70
+44,930
+Policyholder dividend payable
+39,216
+Bonds payable
+40,862
+8,129 263,464
+Others
+Segment liabilities
+39,119
+1,780,522 219,974 2,751,263
+17,640
+8,565
+113,387
+1,894,377
+(54,320)
+37
+(1,048)
+29,314
+4,509 584,794
+Assets sold under agreements to
+repurchase
+37,126
+9,198
+18,941
+19,655
+2,922
+1,324
+82,950
+89,166
+brokerage customers
+1,921,835
+26,862
+Accounts payable
+3,638
+869
+4,021
+Insurance payables
+85,121
+Customer deposits and payables to
+1,918
+5,750
+39,216
+349,825
+591
+2,453
+225
+25
+244
+6,108
+1,625
+398
+20,348
+21
+120
+151
+550
+375
+6,805
+Total other non-cash expenses
+charged to consolidated results
+659
+554
+2,544
+Depreciation and amortization
+2,394
+738
+21,735
+34,690
+340,709
+8,312
+65,430
+251,571
+27,674
+(14,304) 5,090,442
+Segment equity
+5,500 31,870
+13,368 125,457
+114,566
+18,904
+25,649
+51,863
+26,887
+(17,228)
+486,461
+Other segment information:
+Capital expenditures
+8,816
+63,649 202,171
+46,518
+90,453
+2,562
+7,894
+Fixed maturity investments
+1,137,450
+4,201
+120,553
+306,762
+767,741
+3
+318,860
+38,111
+73,820
+623
+17,993
+2,156,291
+Equity investments
+339,133
+45,840
+572
+13,299
+8,910
+23,315
+Balances with the Central Bank and
+statutory deposits
+561,143
+(28,857)
+16,685
+6. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2016 and for the year then ended is as follows (continued):
+(in RMB million)
+Cash and amounts due from banks
+and other financial institutions
+Life and
+Property
+health and casualty
+insurance
+Other asset
+insurance
+3,434
+Banking
+Fintech&
+Healthtech
+Other
+businesses
+and
+elimination
+Total
+204,304
+36,100
+268,827
+7,876
+34,244
+21,964
+Trust Securities management
+45
+(7,595) 426,908
+9,985
+156,878
+69,309 168,095
+4,500
+9,764
+61,670
+19,926
+15,904 506,046
+Segment assets
+1,895,088
+283,623 2,953,434
+27,216
+91,079
+303,434
+54,561
+(31,532) 5,576,903
+Due to banks and other financial
+institutions
+18,774
+2,460 464,073
+Others
+(29,684) 48,955
+9,331
+21,987
+1,435,869
+90
+13,240
+(893) 1,458,291
+Accounts receivable
+1,244
+Fees and commission expenses on the banking business
+Others
+9,382
+4,562
+Loans and advances to customers
+1,597
+Finance lease receivable
+78,056
+78,056
+Investments in associates and
+jointly controlled entities
+38,200
+7,620
+1,451
+50
+22,353
+104
+5,568
+8
+42,491
+201
+427
+Bonds
+Others
+34,081
+29,668
+4,056
+3,663
+Subtotal
+147,386
+131,075
+Interest revenue from listed investments
+34,078
+29,665
+Interest revenue from unlisted investments
+113,308
+101,410
+Subtotal
+53,278
+41,799
+40,812
+Discounted bills
+Net written premiums
+587,615
+451,728
+208
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+8. NET INTEREST INCOME FROM BANKING OPERATIONS
+(in RMB million)
+Interest revenue from banking operations
+147,386
+Due from the Central Bank
+2016
+4,232
+4,240
+Due from financial institutions
+Loans and advances to customers
+10,726
+8,787
+Corporate loans and advances to customers
+Individual loans and advances to customers
+2017
+162,479
+131,075
+Due to the Central Bank
+2,303
+Underwriting commission revenue
+794
+1,178
+Trust service fees revenue
+5,723
+3,815
+Fees and commission revenue from the banking business
+Others
+34,184
+31,029
+1,343
+1,534
+Subtotal
+44,407
+39,859
+Fees and commission expenses on non-insurance operations
+Brokerage fees expenses
+690
+60
+2,363
+Brokerage commission revenue
+Fees and commission revenue from non-insurance operations
+2017
+Due to financial institutions
+Customer deposits
+Bonds payable
+Subtotal
+Net interest income from banking operations
+2,671
+948
+18,523
+8,327
+Interest expenses on banking operations
+36,949
+14,358
+9,334
+72,501
+52,937
+78,138
+The interest income accrued on impaired financial assets during the year 2017 amounted to RMB659 million
+(2016: RMB544 million).
+9. NET FEES AND COMMISSION INCOME FROM NON-INSURANCE
+OPERATIONS
+(in RMB million)
+2016
+34,328
+202,001
+74,885
+6,492
+605,035
+469,555
+(in RMB million)
+2017
+2016
+Long term life business gross written premiums
+364,490
+271,287
+Short term life business gross written premiums
+24,152
+19,977
+Property and casualty business gross written premiums
+216,393
+178,291
+Gross written premiums
+605,035
+469,555
+(in RMB million)
+Gross written premiums
+Gross written premiums
+Life insurance
+(77,206)
+Premium deposits separated out from universal life and
+investment-linked products
+758
+4,922
+487
+(194)
+48,894
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 207
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+7. GROSS AND NET WRITTEN PREMIUMS
+(in RMB million)
+Gross written premiums and premium deposits
+2017
+2016
+552,072
+Less: Premium deposits of policies without significant
+insurance risk transfer
+(5,886)
+(5,311)
+(81,367)
+Individual business
+692,288
+385,614
+(in RMB million)
+2017
+2016
+Life insurance
+Individual business
+370,327
+272,915
+Group business
+15,287
+469,555
+16,334
+Property and casualty insurance
+Automobile insurance
+163,099
+138,637
+Non-automobile insurance
+32,410
+Accident and health insurance
+18,920
+2017
+289,249
+605,035
+Net of reinsurance premiums ceded
+178,291
+2016
+Group business
+373,139
+275,179
+15,503
+16,085
+388,642
+Gross written premiums
+Property and casualty insurance
+Automobile insurance
+170,664
+291,264
+Non-automobile insurance
+39,177
+24,686
+216,393
+Accident and health insurance
+6,552
+148,645
+4,960
+4,336
+16
+1,094
+45
+8,836
+286
+1,223,464
+550
+951,673
+3,667
+8,010
+Guaranteed
+12,612
+7
+5,585
+3,824
+Nominal amount
+Fair value
+300
+397,404
+422
+754,028
+31,096
+354
+3,434
+388,564
+4,492
+108,312
+4,957
+79,778
+414,311
+413
+19,061
+5,578
+6,641
+Fair value
+2,814
+49
+15,089
+Secured by collateral
+Secured by mortgages
+3,703
+10,237
+4,975
+146
+Secured by monetary assets
+2,395
+5,537
+6,321
+2,777
+10,843
+19,663
+30,162
+11,329
+354
+61,508
+31 December 2016
+(in RMB million)
+Within 3 months
+3 months to 1 year
+1 to 3 years
+More than 3 years
+Total
+Unsecured
+134
+Nominal amount
+Ping An Insurance (Group) Company of China, Ltd.
+Assets
+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
+Annual Report 2017
+220
+Note: Unlisted equity securities include those not traded on stock exchanges, which are mainly open-ended funds with public market price
+quotation.
+181,294
+263,334
+112,039
+Increase/
+(Decrease) in
+current year
+186,275
+77,059
+181,294
+263,334
+6,033
+17,505
+6,077
+9,475
+162,486
+6,698
+31 December 2016
+126
+236,228
+1,787
+142,220
+16,515
+31 December 2017
+69,255
+Liabilities
+Gold derivative instruments
+Others
+31 December 2016
+17,950
+1,937,595
+16,192
+1,590,461
+29
+176
+2
+1
+4
+6
+19,373
+23
+1,972
+50,663
+Stock index options
+1,852
+15,848
+535,465
+14,107
+473,565
+100
+1,351,287
+225
+Fair value
+Liabilities
+Fair value Nominal amount
+1,035,712
+Nominal amount
+Assets
+31 December 2017
+61,788
+25
+Notes to Consolidated Financial Statements
+7,747
+(44,322)
+(40,225)
+Net
+1,660,864
+1,458,291
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 221
+FINANCIAL STATEMENTS
+For the year ended 31 December 2017
+23. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+(2) ANALYZED BY INDUSTRY
+(in RMB million)
+Corporate customers
+Agriculture, husbandry and fishery
+Less: Loan loss provisions
+Extraction (heavy industry)
+Energy
+Transportation and communication
+Commercial
+Real estate
+31 December 2017
+31 December 2016
+9,291
+16,266
+58,048
+70,361
+141,976
+172,255
+25,854
+38,188
+Manufacturing (light industry)
+53,274
+1,498,516
+Gross
+None of the above derivatives has been designated as a hedging instrument.
+276,916
+8,715
+23. LOANS AND ADVANCES TO CUSTOMERS
+(1) ANALYZED BY CORPORATE AND INDIVIDUAL
+(in RMB million)
+Corporate customers
+Loans
+Discounted bills
+Individual customers
+Business loans
+Credit cards
+Property mortgages
+Vehicle loans
+1,705,186
+31 December 2017
+835,864
+14,756
+941,937
+14,846
+124,153
+97,534
+303,628
+181,444
+152,865
+85,229
+130,517
+95,264
+Others
+143,403
+82,262
+31 December 2016
+763
+58,447
+133,448
+31 December 2016
+420,793
+283,486
+Secured by mortgages
+Secured by monetary assets
+Subtotal
+Discounted bills
+Gross
+222
+Annual Report 2017
+599,210
+521,654
+271,127
+257,737
+227,376
+1,690,430
+14,756
+1,705,186
+14,846
+1,498,516
+Ping An Insurance (Group) Company of China, Ltd.
+23. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+(4) AGING ANALYSIS OF PAST DUE LOANS
+(in RMB million)
+Within 3 months 3 months to 1 year
+31 December 2017
+1 to 3 years
+More than 3 years
+Total
+Unsecured
+Guaranteed
+7,980
+1,483,670
+91,746
+592,717
+Guaranteed
+163,765
+163,018
+Social service, technology, culture and sanitary industries
+135,938
+153,318
+Construction
+48,107
+62,768
+Others
+107,865
+73,868
+Subtotal of loans.
+835,864
+941,937
+Secured by collateral
+Discounted bills
+14,846
+(in RMB million)
+Unsecured
+Subtotal of corporate customers
+Individual customers
+Gross
+1,705,186
+(3) ANALYZED BY TYPE OF COLLATERAL HELD OR OTHER CREDIT ENHANCEMENTS
+31 December 2017
+850,620
+956,783
+854,566
+541,733
+1,498,516
+14,756
+340
+As at
+31 December
+276,576
+31 December 2017
+Ping An Health
+Others
+Ping An Annuity
+Ping An Property & Casualty
+Ping An Life
+(in RMB million)
+Details of statutory deposits for insurance operations are as follows:
+In accordance with relevant regulations, subsidiaries of the Group engaged in 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 2017, the mandatory deposits are calculated at 15%
+(31 December 2016: 14.5%) of customer deposits denominated in RMB and 5% (31 December 2016: 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.
+318,860
+318,236
+12,098
+12,250
+Statutory deposits for insurance operations
+1,459
+1,829
+Fiscal deposits with the Central Bank
+51,187
+32,898
+Surplus reserve deposits with the Central Bank
+3,646
+4,457
+Statutory reserve deposits with the Central Bank for banking
+operations-Foreign Currencies
+250,470
+266,802
+Statutory reserve deposits with the Central Bank for banking
+operations-RMB
+254,116
+271,259
+31 December 2016
+31 December 2017
+31 December 2016
+6,760
+6,760
+4,200
+43,588
+65,657
+99,296
+64,634
+83,203
+319,037
+465,191
+329,256
+239,351
+1,342,866
+1,628,508
+31 December 2016
+31 December 2017
+Assets purchased under reverse repurchase agreements
+Wealth management products
+Statutory reserve deposits with the Central Bank for banking
+operations
+Policy loans
+Asset management schemes
+Bonds
+(in RMB million)
+20. FIXED MATURITY INVESTMENTS
+Statutory deposits for insurance operations are placed with PRC national commercial banks in accordance
+with the relevant regulations issued by China Insurance Regulatory Commission (the 'CIRC') 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.
+12,098
+12,250
+6
+8
+160
+310
+972
+972
+4,200
+Debt schemes and trust schemes
+(in RMB million)
+19. BALANCES WITH THE CENTRAL BANK AND STATUTORY DEPOSITS
+For the year ended 31 December 2017
+31 December 2017
+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
+17,863
+3.49
+4.99
+17,863
+18
+26
+Diluted earnings per share (in RMB)
+earnings per share
+31 December 2016
+Weighted average number of ordinary shares for diluted
+Adjustments for:
+17,845
+62,394
+89,088
+2016
+17,837
+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)
+2017
+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) have potential dilutive effect on the earnings per share.
+(2) DILUTED
+17. EARNINGS PER SHARE (CONTINUED)
+· Assumed vesting of share purchase scheme
+34,841
+4,228
+161,850
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 217
+Annual Report 2017
+As at 31 December 2017, cash and amounts due from overseas banks and other financial institutions
+amounted to RMB20,306 million (31 December 2016: RMB16,411 million).
+As at 31 December 2017, cash and amounts due from banks and other financial institutions of RMB4,506
+million (31 December 2016: RMB762 million) were restricted from use.
+97,450
+60,415
+(22)
+(21)
+97,472
+60,436
+1,474
+95,998
+4,499
+54,512
+5,924
+31 December 2017
+Net
+Less: Provision for placements with banks and other financial
+institutions
+Gross
+Placements with other financial institutions
+Placements with banks
+(in RMB million)
+Details of placements with banks and other financial institutions are as follows:
+561,143
+97,450
+60,415
+483,891
+267,534
+257,398
+191,660
+31 December 2016
+2,559,137
+2,156,291
+218
+56,935
+31 December 2016
+Unlisted
+Listed
+31 December 2017
+Held for trading
+Available-for-sale, at fair value
+(in RMB million)
+(1) SECURITY INVESTMENT FUNDS
+426,908
+630,676
+181,294
+263,334
+142,220
+54,590
+276,916
+90,426
+31 December 2016
+31 December 2017
+Other equity investments
+Equity securities
+Security investment funds
+(in RMB million)
+21. EQUITY AND OTHER INVESTMENTS
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 219
+Annual Report 2017
+65,657
+103,394
+99,296
+33,491
+90,426
+142,220
+276,916
+22,657
+119,563
+31 December 2016
+Unlisted
+Listed
+Designated at fair value through profit or loss
+Held for trading
+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
+48,804
+Unlisted
+16,978
+259,938
+31 December 2017
+Held for trading
+Available-for-sale, at fair value
+(in RMB million)
+(2) EQUITY SECURITIES
+103,394
+90,426
+88,799
+79,620
+14,595
+10,806
+103,394
+Listed
+140,433
+Net
+(14)
+604,805
+479,637
+31 December 2016
+638,859
+31 December 2017
+1,342,866
+68,856
+70,392
+193,904
+1,009,714
+31 December 2016
+1,628,508
+99,068
+63,801
+504,479
+1,243,768
+221,871
+Listed
+Unlisted
+Corporate bonds
+Finance bonds
+Government bonds
+(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)
+(1) BONDS
+20. FIXED MATURITY INVESTMENTS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+31 December 2017
+(13)
+384,844
+1,628,508
+Less: Provision for impairment losses
+65,670
+99,310
+Gross
+6,345
+6,882
+Other equity investments and their beneficial rights
+15
+Finance lease receivables
+3,994
+Bills
+53,449
+92,428
+Bonds
+358,750
+1,867
+31 December 2016
+31 December 2017
+(in RMB million)
+(2) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS
+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 2017, the carrying amount of these
+bonds was RMB44,060 million (31 December 2016: RMB59,371 million) while the corresponding fair value was
+RMB43,226 million (31 December 2016: RMB59,472 million). If these bonds were not reclassified, unrealized
+losses of RMB1,012 million (2016: Unrealized losses RMB931 million) would have been recognized in the
+available-for-sale financial assets reserves for the year ended 31 December 2017. During 2017, other
+comprehensive income in the amount of RMB427 million (2016: RMB582 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.
+1,342,866
+16,299
+1,628,508
+970,165
+1,157,490
+372,701
+471,018
+1,342,866
+Trust beneficial rights
+Secured by collateral
+Currency forwards and swaps
+7,060
+11,996
+2,814
+9,182
+Lufax Holding Ltd.('Lufax')
+39.18%
+198
+6,300
+6,300
+('Beijing-Shanghai Railway')
+Railway Equity Investment Scheme
+-
+Beijing-Shanghai High-Speed
+83
+44.78%
+48.76%
+23.88%
+759
+13
+746
+('Shanxi Taichang')
+Shanxi Taichang Expressway Co., Ltd.
+112
+29.85%
+43.76%
+Foshan Huatai Property Development
+Co, Ltd.
+12.39%
+2,889
+2,889
+Xuhui Holdings Co., Ltd.
+6.00%
+1,664
+16
+1,648
+Shenzhen Jinzheng Science & Technology
+Co., Ltd.
+39.92%
+510
+(13)
+523
+Guangzhou Jinglun Property Development
+Co, Ltd.
+36.65%
+840
+47
+793
+Massive Idea Investments Limited
+29.34%
+1,046
+138
+908
+(8)
+120
+Co., Ltd. ('Veolia Liuzhou')
+Veolia Water (Liuzhou) Investment
+4,109
+206
+63
+160
+160
+1,106
+2,016
+1,228
+1,750
+Other assets
+Fixed maturity investments, at amortized cost
+Fixed maturity investments, at fair value
+Equity investments
+1,384
+120
+31 December 2016
+31 December 2017
+Cash and amounts due from banks and other financial institutions
+(in RMB million)
+(2) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INVESTMENT CONTRACTS
+39,706
+38,775
+524
+4,084
+Ping An Good Doctor (5(1)(v))
+Ping An Insurance (Group) Company of China, Ltd. 225
+Notes to Consolidated Financial Statements
+(348)
+213
+(27)
+240
+Co., Ltd. (Veolia Yellow River')
+Veolia Water (Yellow River) Investment
+261
+(5)
+266
+Veolia Water (Kunming) Investment
+Co., Ltd. (Veolia Kunming')
+Proportion of
+ordinary
+shares held by
+the Group (%)
+Cash
+dividends in
+current Year
+Change of
+provision in
+current Year
+Provision
+balance
+as at
+31 December
+Additional
+investment
+1 January
+As at
+2017
+Associates
+(in RMB million)
+The Group's investments in the principal associates and jointly controlled entities as at 31 December 2017
+are as follows:
+29. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+For the year ended 31 December 2017
+FINANCIAL STATEMENTS
+15,710
+15,710
+46.20%
+49.94%
+285
+992
+(8)
+1,000
+Management Service Ltd.
+Xi'an Languang Meidu Enterprise
+837
+205
+632
+Wuhan DAJT Property Development Co., Ltd.
+1,299
+56
+1,243
+Co., Ltd.
+Beijing Zhao Tai Property Development
+2,174
+485
+1,689
+Co., Ltd.
+Nanjing Mingwan Property Development
+1,147
+(96)
+48.90%
+1,243
+24.95%
+48.90%
+Secured by mortgages
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+226
+838
+(446)
+86,207
+22,868
+14,384
+48,955
+_jointly controlled entities
+Investment in associates and
+285
+22,383
+577
+3,664
+18,142
+Subtotal
+15,934
+(65)
+2,664
+13,335
+Others
+49.79%
+213
+Co., Ltd. ('Kunyu Highway')
+Jointly controlled entities
+Zhongan Online Property & Casualty
+23.65%
+2,001
+27
+22
+1,974
+Co., Ltd.
+Jiangsu Dezhan Investment
+38.81%
+1,190
+20
+20
+1,170
+Asset Management Co., Ltd.
+44.30%
+689
+689
+Shenzhen China Merchants-Ping An
+OneConnect Financial Technology Co., Ltd
+44.33%
+181
+Management Co., Ltd.
+Ping An Medical and Healthcare
+Co., Ltd.
+Yunnan KunYu Highway Development
+848
+1,755
+553
+(446)
+63,824
+22,291
+10,720
+30,813
+Subtotal
+138
+(98)
+14,293
+2,027
+3,750
+8,516
+Others
+39.18%
+134
+1,415
+(245)
+937
+723
+Co., Ltd.
+Beijing Beiqi Penglong Automobile Service
+10.21%
+907
+Other assets
+181
+193
+29,618
+26,117
+3,501
+22,719
+40,814
+10,435
+40,225
+31,780
+8,445
+30,379
+during the year
+Write-off and transfer
+Charge for the year
+As at 1 January
+Total
+Collectively
+assessed
+Individually
+assessed
+Total
+assessed
+Collectively
+Individually
+assessed
+(in RMB million)
+2016
+2017
+100.00%
+22,772
+1,498,516
+45,491
+(17,537)
+29
+35
+(152)
+(56)
+(96)
+11,886
+As at 31 December
+Others
+(544)
+(544)
+(659)
+(659)
+impaired loans and advances
+Interest accrued on
+1,515
+1,244
+271
+3,496
+1,859
+1,637
+off previously
+Recovery of loans written
+(35,919)
+(18,382)
+(27,820) (11,582) (39,402)
+64
+100.00%
+72,230
+Northern China
+Western China
+Southern China
+Eastern China
+(in RMB million)
+(5) ANALYZED BY REGION
+Past due loans refer to the loans with either principal or interest being past due by one day or more.
+62,078
+3,098
+11,972
+26,885
+20,123
+9,244
+1,173
+2,114
+2,808
+3,149
+Secured by monetary assets
+23,923
+1,339
+5,778
+638
+9,746
+Offshore business
+4.82%
+Gross
+31 December 2017
+3.01%
+51,265
+19.05%
+285,445
+16.76%
+285,757
+12.93%
+193,780
+11.14%
+190,016
+31.84%
+477,147
+37.38%
+637,393
+31.36%
+469,914
+31.71%
+540,755
+%
+Amount
+%
+Amount
+31 December 2016
+(6) LOAN LOSS PROVISION
+32,436
+1,705,186
+8,445
+15,633
+869
+7,933
+8,835
+6,058
+5,929
+31 December 2016
+31 December 2017
+(150)
+22,353
+(289)
+71,923
+22,503
+72,212
+14,744
+7,759
+6,344
+31 December 2016
+65,868
+31 December 2017
+36,783
+47,597
+1,554
+942
+1,536
+1,350
+34,287
+15,269
+44,711
+Ping An Insurance (Group) Company of China, Ltd.
+27. FINANCE LEASE RECEIVABLE
+Fixed maturity investments, at amortized cost
+6,756
+44,322
+6,448
+5,293
+26,495
+27,971
+3,950
+Fixed maturity investments, at fair value
+Cash and amounts due from banks and other financial institutions
+Equity investments
+31 December 2016
+31 December 2017
+(1) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE CONTRACTS
+(in RMB million)
+78,056
+(1,355)
+28. POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE/
+INVESTMENT CONTRACTS
+112,028
+(1,682)
+113,710
+Finance lease receivable, net of unearned finance income
+Less: Provision for impairment losses
+31 December 2016
+31 December 2017
+(in RMB million)
+79,411
+Annual Report 2017
+31 December 2016
+1,278
+Property and casualty insurance
+35,325
+(1,458)
+(1,903)
+36,783
+31 December 2016
+47,597
+31 December 2017
+Premium receivables, net
+Life insurance
+Premium receivables, net
+Less: Provision for doubtful receivables
+Premium receivables
+(in RMB million)
+24. PREMIUM RECEIVABLES
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 223
+Annual Report 2017
+31,780
+31 December 2017
+As at 31 December 2017, discounted bills with a carrying amount of RMB3,467 million (31 December 2016:
+RMB3,096 million) were pledged for amounts due to the Central Bank.
+40,225
+11,458
+9,663
+45,694
+Gross
+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
+34,236
+Others
+Receivables under factoring
+(in RMB million)
+224
+Annual Report 2017
+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.
+35,325
+45,694
+25,662
+25. ACCOUNTS RECEIVABLE
+Expressway operation
+Shanxi Taichang
+Taiyuan
+Taiyuan
+920
+6,720
+Beijing-Shanghai Railway
+3,668
+4
+Yes
+303
+Cost
+Water plant operation
+Hong Kong
+Liuzhou
+Veolia Liuzhou
+5
+957
+Yes
+Water plant operation
+Hong Kong
+The PRC
+Lanzhou
+Veolia Yellow River
+Yes
+The PRC
+Ping An Insurance (Group) Company of China, Ltd.
+Yes
+(in RMB million)
+88
+As at 1 January
+30. INVESTMENT PROPERTIES
+Annual Report 2017
+228
+Associates and jointly controlled entities above have no significant contingent liabilities for the Group.
+399
+616
+139
+1,968
+Yes
+Expressway operation
+Kunming
+Kunming
+Kunyu Highway
+Jointly controlled entities
+37
+309
+10
+(39)
+44
+(35)
+ཨཿ S=སྤྱི
+16,000
+Railway investment
+1,292
+Water plant operation
+Water plant operation
+Yes
+Railway investment
+The PRC
+The PRC
+Beijing-Shanghai Railway
+346
+1,033
+3,340
+6,272
+Yes
+Expressway operation
+Taiyuan
+Taiyuan
+Shanxi Taichang
+12
+16
+1
+260
+Yes
+Hong Kong
+Liuzhou
+Veolia Liuzhou
+(24)
+Acquisition of subsidiaries
+(27)
+16,001
+Yes
+519
+Jointly controlled entities
+Hong Kong
+Kunming
+Veolia Kunming
+Associates
+Net profit/
+(loss) in
+current year
+(in RMB million)
+Total
+revenue in
+current year
+Total
+liabilities
+as at
+31 December
+31 December
+Total assets
+as at
+Significant to
+the Group's
+operation
+Principal
+activities
+Place of
+incorporation
+Place of
+business
+Name of the invested entity
+The financial information summary of the Group's principal associates and jointly controlled entities as at
+year end of 2016 are as follows:
+1,070
+1,733
+85
+1,992
+Yes
+Expressway operation
+Kunming
+Kunming
+Kunyu Highway
+503
+Additions
+-
+2016
+2,765
+4,102
+11,906
+30,974
+7,733
+As at 1 January 2017
+Cost
+Total
+Construction
+in progress
+vehicles
+Motor
+57,480
+furniture
+and fixtures
+Leasehold
+improvements
+(in RMB million)
+2017
+Equipment,
+31. PROPERTY AND EQUIPMENT
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 229
+Annual Report 2017
+The Group was still in the process of applying for title certificates for certain investment properties with a
+carrying amount of RMB2,046 million as at 31 December 2017 (31 December 2016: RMB1,605 million).
+Buildings
+Additions
+495
+233
+(1,317)
+1
+(34)
+(78)
+Accumulated depreciation
+As at 31 December 2017
+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
+5,599
+3,064
+As at 31 December 2017, investment properties with a carrying amount of RMB11,298 million (31 December
+2016: RMB11,115 million) were pledged as collateral for long term borrowings with a carrying amount of
+RMB4,507 million (31 December 2016: RMB6,491 million).
+The rental income arising from investment properties for the year 2017 amounted to RMB2,757 million (2016:
+RMB1,822 million), which is included in net investment income.
+The fair values of the investment properties as at 31 December 2017 were estimated by the Group, based on
+valuation performed by independent valuers. It falls under level 3 in the fair value hierarchy.
+59,865
+1,233
+Charge for the year
+56
+Acquisition of subsidiaries
+3,923
+4,611
+As at 1 January
+Accumulated depreciation
+41,180
+45,834
+As at 31 December
+(766)
+(3)
+Disposals
+(2,006)
+(1,199)
+Transfer to property and equipment, net
+6,194
+761
+Transfer from construction in progress
+5,108
+5,095
+3,897
+28,753
+41,180
+737
+2017
+Transfer to property and equipment, net
+(35)
+24,827
+36,568
+67,532
+36,568
+40,108
+1
+1
+(1)
+(1)
+3
+1
+Fair value as at 31 December
+As at 1 January
+As at 31 December
+Net book value
+As at 31 December
+Disposals
+Transfer out, net
+As at 1 January
+Impairment losses
+4,611
+As at 31 December
+(70)
+(1)
+Disposals
+(118)
+806
+386
+Water plant operation
+Veolia Yellow River
+Veolia Kunming
+Associates
+(in RMB million)
+Proportion of
+ordinary
+shares held by
+the Group (%)
+Cash
+dividends in
+current Year
+current Year
+Change of
+Provision in
+as at
+31 December
+As at
+31 December
+balance
+Increase/
+(Decrease) in
+current year
+Additional
+investment
+1 January
+As at
+Provision
+2016
+The Group's investments in the principal associates and jointly controlled entities as at 31 December 2016
+are as follows:
+21,881
+Total comprehensive
+income for the year
+25,564
+(3,187)
+92
+22
+Veolia Liuzhou
+(885)
+240
+266
+9,182
+7,154
+2,028
+Lufax
+39.18%
+14
+6,300
+6,300
+Beijing-Shanghai Railway
+29.85%
+16
+746
+44
+702
+Shanxi Taichang
+44.78%
+120
+8
+112
+48.76%
+(348)
+240
+6
+234
+23.88%
+26
+43.76%
+89,088
+121,859
+808
+1,109
+(46)
+(46)
+4,486
+4,486
+Others
+2,319
+(270)
+2,705
+As at 31 December 2017
+111,598
+46,089
+(6,416)
+9,114
+12,164
+44,964
+368
+237,190
+114,566
+569,637
+236
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+29. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+(CONTINUED)
+301
+11,187
+(6,675)
+(4,150)
+Dividend declared
+(Note 16)
+Appropriations to
+798
+(19,194)
+(798)
+(19,194)
+surplus reserves
+Appropriations to
+general reserves
+Dividend paid to non-
+controlling interests
+Disposal of subsidiaries
+Equity transactions with
+non-controlling
+interests
+Contributions from non-
+controlling interests
+Share purchase scheme
+Other equity instruments
+issued by subsidiaries
+8,165
+(8,165)
+(2,084)
+(704)
+(2,084)
+(704)
+(2,525)
+Yes
+Foshan Huatai Property Development
+932
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 227
+Annual Report 2017
+320
+(23)
+(391)
+48,955
+5,738
+16,359
+26,858
+jointly controlled entities
+Investment in associates and
+181
+18,142
+(967)
+11,410
+7,699
+Subtotal
+13,335
+(519)
+10,160
+3,694
+Others
+29. INVESTMENTS IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
+(CONTINUED)
+49.79%
+The financial information summary of the Group's principal associates and jointly controlled entities as at
+year end of 2017 are as follows:
+Place of
+business
+Hong Kong
+Lanzhou
+Veolia Yellow River
+58
+66
+99
+48
+1,157
+Yes
+Water plant operation
+Hong Kong
+Kunming
+Veolia Kunming
+Associates
+(in RMB million)
+current year
+Net profit/
+(loss) in
+Total
+revenue in
+current year
+as at
+31 December
+Total
+liabilities
+31 December
+Total assets
+as at
+Significant to
+the Group's
+operation
+Principal
+activities
+Place of
+incorporation
+Name of the invested entity
+Co, Ltd.
+24.95%
+49.94%
+(43)
+10,087
+(507)
+3,305
+7,289
+Others
+6.00%
+1,648
+4
+1,644
+Co., Ltd.
+Shenzhen Jinzheng Science & Technology
+39.92%
+523
+526
+Co, Ltd.
+Guangzhou Jinglun Property Development
+36.65%
+793
+(3)
+796
+Massive Idea Investments Limited
+29.34%
+908
+(24)
+(23)
+48.90%
+109
+19,159
+181
+632
+56
+576
+Wuhan DAJT Property Development Co, Ltd.
+1,243
+1,250
+Co, Ltd.
+Beijing Zhao Tai Property Development
+1,689
+(26)
+1,715
+Co., Ltd.
+Nanjing Mingwan Property Development
+1,243
+(471)
+1,714
+KunYu Highway
+Jointly controlled entities
+139
+(23)
+(391)
+30,813
+6,705
+4,949
+Subtotal
+(219)
+5,725
+8,775
+Net book value
+(in RMB million)
+Ping An Bank
+2017
+As at
+Disposals
+31 December 2017
+8,761
+2,502
+(275)
+1,831
+328
+241
+1,073
+5,265
+Less: Impairment losses
+Total
+Other
+Autohome Inc.
+Shanghai Jahwa
+Mayborn Group Limited
+Ping An Securities
+As at
+1 January 2017
+Additions
+8,761
+163
+2,502
+328
+Shenzhen Ping An Commercial Property
+Investment Co., Ltd.
+66
+Beijing Shuangronghui Investment Co., Ltd.
+134
+Shanghai Gezhouba Yangming Property
+Co., Ltd.
+Ping An E-wallet
+2,106
+143
+20,639
+143
+Autohome Inc.
+Other
+Total
+Less: Impairment losses
+Net book value
+2016
+-
+Ping An E-wallet
+(275)
+134
+241
+1,073
+5,265
+306
+20,507
+20,507
+66
+Ping An Bank
+Co., Ltd.
+134
+(275)
+20,639
+143
+As at
+1 January 2016
+Increase
+8,761
+Shanghai Gezhouba Yangming Property
+2,502
+328
+Shanghai Jahwa
+Mayborn Group Limited
+Ping An Securities
+Shenzhen Ping An Commercial Property
+Investment Co., Ltd.
+66
+Beijing Shuangronghui Investment Co., Ltd.
+2,106
+(in RMB million)
+(1) GOODWILL
+32. INTANGIBLE ASSETS (CONTINUED)
+As at 1 January 2016
+Acquisitions of subsidiaries
+Charge for the year
+Disposals of subsidiaries
+Disposals
+As at 31 December 2016
+2,231
+Accumulated amortization
+679
+245
+3,174
+9,722
+28
+49
+77
+486
+3,393
+58
+74,849
+9,268
+830
+1,234
+10,532
+Disposals of subsidiaries
+(287)
+(75)
+(362)
+8,553
+Disposals
+(124)
+(413)
+As at 31 December 2016
+20,639
+11,232
+10,075
+15,082
+(289)
+As at
+754
+752
+As at 1 January 2016
+12,460
+9,001
+7,652
+11,689
+2,197
+1,917
+63,017
+44,916
+As at 31 December 2017, none prepaid land premiums (31 December 2016: RMB1,178 million) were pledged as
+collateral for long term borrowings (31 December 2016: RMB400 million).
+As at 31 December 2017, prepaid land premiums with a carrying amount of 52 million (31 December 2016:
+RMB84 million) were still in progress of applying for title certificates.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 233
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+As at 31 December 2017, expressway operating rights with a carrying amount of RMB5,711 million (31
+December 2016: RMB8,515 million) were pledged as collateral for long term borrowings amounting to
+RMB2,939 million (31 December 2016: RMB3,921 million).
+73
+4,668
+10,935
+2,123
+(30)
+(30)
+(60)
+(60)
+2,717
+737
+8,922
+4,147
+3,885
+11,832
+Net book value
+As at 31 December 2016
+20,639
+8,515
+9,338
+346
+Decrease
+31 December 2016
+8,761
+261,413
+234,806
+Domestic listed
+A shares, par value
+RMB1.00 per share
+10,832
+10,832
+Overseas listed
+H shares, par value
+RMB1.00 per share
+(24)
+7,448
+18,280
+297
+(885)
+92
+(3,187)
+25,564
+income for the year
+Total
+Other comprehensive
+(351)
+(40)
+264,001
+236,933
+(2,588)
+(2,127)
+(34)
+(30)
+(1,373)
+(33)
+(1,283)
+(17)
+(288)
+(300)
+(445)
+(406)
+(45)
+(34)
+(12)
+4,470
+99,978
+89,088
+Others
+Shadow
+accounting
+adjustments
+reserve
+Share investment
+premium
+(in RMB million)
+on
+Available-
+for-sale
+Surplus
+reserve
+funds
+Exchange
+differences
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 235
+Annual Report 2017
+18,280
+7,448
+35. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+10,890
+General
+translation
+of foreign
+operations
+Profit for the year
+468,181
+103,012
+176,259
+1,253
+36,799
+11,366
+reserves
+6,749
+20,525
+115,447
+As at 1 January 2017
+Total
+interests
+Non-
+controlling
+Retained
+profits
+(3,229)
+8,468
+4,488
+11,266
+12,460
+8,468
+(289)
+20,639
+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 9% to 16% (2016: 9% to 15%) and growth rates, where applicable, range from 2% to 33%
+(2016: 2% to 34%).
+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.
+234
+20,639
+Annual Report 2017
+33. OTHER ASSETS
+(in RMB million)
+Interest receivables
+Other receivables
+Due from reinsurers
+Foreclosed assets
+Prepayments
+Ping An Insurance (Group) Company of China, Ltd.
+Precious metals held for trading
+(289)
+12,460
+2,502
+2,106
+328
+66
+134
+239
+2
+8,468
+241
+1,073
+5,265
+5,265
+430
+22
+(289)
+163
+1,073
+7,158
+Dividends receivable
+Liquidation receivables
+81,743
+59,203
+8,001
+12,365
+5,251
+4,505
+2,664
+44,980
+4,597
+93,787
+395
+67
+4,868
+5,380
+5,890
+421
+87,501
+Inventories
+51,934
+31 December 2017
+Margin accounts receivables
+Others
+Gross
+(1,918)
+Including: Interest receivables
+Other receivables
+Due from reinsurers
+31 December 2016
+Foreclosed assets
+Inventories
+Margin accounts receivables
+Others
+Net
+34. SHARE CAPITAL
+(million shares)
+1 January 2017
+31 December 2017
+Prepayments
+Additions
+Less: Loss provisions
+2,427
+Transfer of construction in progress
+10
+6,480
+35
+(6,525)
+Transfer from/(to) investment
+properties, net
+13,176
+2,006
+(4,188)
+Disposals of subsidiaries
+(280)
+(3)
+(78)
+(361)
+Disposals
+(6,194)
+(243)
+5,891
+2,570
+As at 1 January 2016
+6,313
+21,120
+10,299
+2,150
+10,508
+50,390
+2,344
+Acquisitions of subsidiaries
+427
+16
+18
+1,417
+Additions
+1,933
+438
+956
+Total
+(23)
+(408)
+331
+Charge for the year
+619
+890
+1,482
+313
+3,304
+4
+Transfer from investment properties, net
+35
+Disposals of subsidiaries
+(152)
+(35)
+(188)
+Disposals
+(176)
+35
+(1,347)
+255
+Acquisitions of subsidiaries
+(933)
+(2,954)
+As at 31 December 2016
+7,733
+30,974
+11,906
+4,102
+72
+2,765
+Accumulated depreciation
+As at 1 January 2016
+3,446
+5,063
+5,758
+882
+15,149
+57,480
+(2)
+in progress
+Motor
+vehicles
+118
+Disposals of subsidiaries
+94
+-
+(180)
+(86)
+Disposals
+118
+(159)
+(1,131)
+(210)
+(1,506)
+As at 31 December 2017
+4,745
+7,197
+6,955
+(6)
+1,265
+Transfer from investment properties, net
+308
+10,454
+32,401
+13,553
+9,431
+3,176
+67,336
+As at 1 January 2017
+4,385
+3,737
+6,290
+1,167
+17,251
+Charge for the year
+1,073
+1,028
+1,976
+6,057
+Construction
+20,162
+As at 1 January 2017
+3,996
+24,831
+5,616
+2,935
+2,765
+40,143
+230
+As at 1 January 2017
+Annual Report 2017
+31. PROPERTY AND EQUIPMENT (CONTINUED)
+(in RMB million)
+Cost
+2016
+Leasehold
+improvements
+Buildings
+Equipment,
+furniture
+and fixtures
+Ping An Insurance (Group) Company of China, Ltd.
+Impairment losses
+47,067
+6,583
+Charge for the year
+As at 31 December 2017
+86
+86
+15
+6
+21
+3,176
+86
+6
+-
+107
+Net book value
+As at 31 December 2017
+4,030
+25,118
+15
+(1,170)
+8,160
+(1,380)
+(1,062)
+-
+(269)
+(269)
+2,163
+918
+4,901
+(136)
+674
+12,895
+Net book value
+As at 31 December 2017
+20,507
+6,197
+9,751
+10,181
+4,239
+9,040
+(926)
+759
+Accumulated amortization
+As at 1 January 2017
+Charge for the year
+Disposals of subsidiaries
+Disposals
+As at 31 December 2017
+2,717
+2,394
+737
+346
+3,885
+11,832
+372
+181
+754
+328
+4,147
+73,876
+5,305
+As at 1 January 2017
+and others
+Total
+(in RMB million)
+Cost
+As at 1 January 2016
+12,460
+11,232
+Trademarks
+8,331
+2,442
+5,091
+54,638
+Acquisitions of subsidiaries
+914
+(32)
+7,113
+15,082
+60,981
+Deposits
+Software
+20,639
+8,515
+9,338
+10,935
+8,922
+4,668
+232
+premiums
+Annual Report 2017
+32. INTANGIBLE ASSETS (CONTINUED)
+2016
+Expressway
+Goodwill (i)
+operating
+rights
+Prepaid land
+Core
+Ping An Insurance (Group) Company of China, Ltd.
+9,544
+63,017
+15,082
+1
+86
+3,996
+2,867
+24,831
+5,616
+2,935
+2,765
+2
+40,143
+1,268
+10,508
+35,158
+The Group was still in the process of applying for title certificates for its buildings with a carrying amount
+of RMB390 million as at 31 December 2017 (31 December 2016: RMB476 million).
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 231
+FINANCIAL STATEMENTS
+4,541
+Notes to Consolidated Financial Statements
+83
+1
+9,714
+6,057
+6,290
+1,167
+17,251
+Impairment losses
+As at 1 January 2016
+86
+Charge for the year
+As at 31 December 2016
+Net book value
+As at 31 December 2016
+As at 1 January 2016
+83
+2
+As at 31 December 2016
+Transfer from investment properties, net
+For the year ended 31 December 2017
+15,974
+2017
+143
+594
+446
+1,448
+2,631
+Disposals of subsidiaries
+(2,872)
+(77)
+32. INTANGIBLE ASSETS
+Disposals
+(275)
+(380)
+(655)
+As at 31 December 2017
+20,507
+8,360
+10,669
+Additions
+74,849
+(2,949)
+3,737
+8,553
+Goodwill (i)
+Expressway
+operating
+rights
+Prepaid land
+premiums
+(in RMB million)
+Trademarks
+Software
+and others
+Total
+Core
+deposits
+Cost
+As at 1 January 2017
+20,639
+11,232
+10,075
+15,082
+9,268
+Ping An Life
+bonds
+2.88%
+Fixed
+5 years
+None
+Offshore USD
+None
+3,280 2016
+4,559
+Fixed
+3,248
+3,443
+Ping An Bank
+Hybrid capital
+None
+15 years
+End of the
+tenth year
+1,500
+2009
+bonds
+4,825
+debt instrument
+Ping An Life
+Fixed
+Next 5 years:4,90%
+(If not redeemed)
+Capital
+None
+10 years
+supplement
+bonds
+End of the
+fifth year
+10,000
+2016
+Fixed
+2.38%
+First 5 years: 3.82%
+10,011
+Next 5 years: 4.82%
+(If not redeemed)
+Ping An Life
+Offshore USD
+None
+3 years
+None
+4,592
+2016
+10,059
+First 10 years: 5.70%
+6.80%
+1,465
+Ping An Bank
+Tier-2 Capital
+bonds
+None
+10 years
+End of the
+9,000
+2014
+Fixed
+9,000
+9,000
+fifth year
+fifth year
+Interbank deposits None
+1-3 years
+None
+3,950
+2016
+Floating
+2.95%-3.30%
+3,971
+fifth year
+3,950
+Ping An Bank
+1,500
+6,000
+6.50%
+465
+Next 5 years: 8.70%
+(If not redeemed)
+Ping An Bank
+Hybrid capital None
+15 years
+End of the
+3,650
+2011
+Fixed
+6,000
+7.50%
+tenth year
+3,650
+3,650
+Ping An Bank
+Tier-2 Capital
+bonds
+None
+10 years
+End of the
+6,000 2014
+Fixed
+debt instrument
+supplement
+bonds
+fifth year
+5,037
+5,043
+5,017
+(If not redeemed)
+Ping An Property &
+Casualty
+Capital
+None
+10 years
+End of the
+3,500
+2017
+First 5 years: 4.79%
+Next 5 years: 5.79%
+Fixed
+fifth year
+First 5 years: 5.10%
+Next 5 years: 6.10%
+3,500
+(If not redeemed)
+Ping An Life
+Subordinated
+bonds
+None
+10 years
+End of the
+9,000
+supplement
+bonds
+2012
+supplement
+bonds
+2015
+1,957
+Ping An Bank
+2,076
+Ping An Property &
+Casualty
+Subordinated
+bonds
+None
+10 years
+End of the
+3,000
+2012
+Fixed
+Fixed
+3,112
+fifth year
+Next 5 years: 6.65%
+(If not redeemed)
+Ping An Property &
+Casualty
+Capital
+None
+10 years
+End of the
+5,000
+First 5 years: 4.65%
+5,012
+Fixed
+First 5 years: 5.00%
+Next 5 years: 7.00%
+(If not redeemed)
+redemption
+option
+(in RMB
+Issued
+Interest
+Coupon rate
+31
+December
+31
+December
+million)
+year
+type
+Maturity
+(per annum)
+2016
+Ping An Life
+Capital
+None
+10 years
+End of the
+5,000
+2015
+Fixed
+First 5 years: 3.90%
+2017
+fifth year
+type
+Issuer
+9,385
+Ping An Life
+Subordinated
+None
+10 years
+End of the
+8,000 2014
+bonds
+fifth year
+HO
+Type
+Fixed
+8,270
+8,186
+244
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+42. BONDS PAYABLE (CONTINUED)
+Par
+Early
+value
+Guarantee
+First 5 years: 5.90%
+Next 5 years: 7.90%
+(If not redeemed)
+Interbank deposits None
+5 years
+231,610
+3 years
+None
+10,000 2017
+Fixed
+5.30%-6.10%
+10,000
+Ping An Financial Leasing
+Corporate bonds None
+270 days-
+3 years
+None
+None
+18,000 2017
+4.55%-5.50%
+18,000
+Ping An Real Estate
+Corporate bonds None
+3-7 years
+None or end
+of the
+8,000 2016
+Fixed
+3.27%-3.60%
+7,983
+Fixed
+7,974
+Private equity
+notes
+4,000
+4.65%-5.48%
+8,000
+Ping An Financial Leasing
+Corporate bonds None
+270 days-
+None
+7,500
+2016
+Fixed
+2.95%-4.35%
+Ping An Financial Leasing
+5,000
+4 years
+Ping An Financial Leasing
+Private equity
+notes
+None
+3 years
+None
+4,000 2016
+Fixed
+3.35%-4.55%
+4,000
+7,500
+Fixed
+fifth year
+Corporate bonds None
+3 years
+None
+2,709
+916
+Fuxiang Investment
+Management Limited
+Corporate bonds None
+3 years
+End of the
+1,254 2017
+217
+Guaranteed
+(Note 2)
+third year
+3.80%
+1,253
+451,283
+349,825
+Note 1: The bonds are guaranteed by Ping An Overseas Holdings, which is the holding company of Value Success International Limited.
+Note 2:
+The bonds are guaranteed by Pingan Real Estate Capital Limited, which is a subsidiary of Ping An Real Estate.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+3.20%
+Fixed
+Ping An Real Estate
+Offshore USD
+Bonds
+2,062
+None or end
+of the
+2,500
+2017
+Fixed
+4.88%-5.27%
+2,492
+third year
+Fuqing Investment
+Management Limited
+Offshore RMB
+Bonds
+Guaranteed
+(Note 2)
+Fuxiang Investment
+Management Limited
+3 years
+1,000
+2015
+Fixed
+4.85%
+998
+994
+2016
+Fixed
+3.63%
+1,950
+None
+Less than 1 year None
+2017
+8,000
+3 years
+None
+15,000
+Ping An International
+Financial Co., Ltd
+Private equity
+notes
+None
+3 years
+None
+45
+Annual Report 2017
+Corporate bonds None
+117
+Fixed
+4.20%
+15,000
+445
+2014
+Fixed
+4.40%
+445
+Ping An Insurance (Group) Company of China, Ltd. 245
+FINANCIAL STATEMENTS
+2017
+246
+Ping An Bank
+1-3 years
+2016
+2016
+Discounted 2.74%-5.10%
+231,610
+229,378
+Ping An Bank
+Tier-2 Capital None
+bonds
+10 years
+End of the
+fifth year
+10,000 2016
+None
+16
+3.85%
+10,000
+10,000
+3,950
+217
+2017
+Floating 2.95%-3.30%
+61,782
+Ping An Bank
+Interbank deposits None
+Fixed
+217
+Notes to Consolidated Financial Statements
+42. BONDS PAYABLE (CONTINUED)
+2014
+Fixed
+6.50%
+3,000
+bonds
+Ping An Securities
+Corporate bonds None
+6 months-
+None or end
+2,500 2016
+3,000
+Fixed
+1,500
+2,500
+3 years
+of the
+second year
+Ping An Securities
+Corporate bonds None
+6 months-
+None
+3 years
+3.50%
+For the year ended 31 December 2017
+None
+None
+Par
+Early
+value
+Issuer
+Type
+Guarantee
+type
+redemption
+(in RMB
+Issued
+Interest
+2 years
+Maturity
+million)
+year
+type
+Coupon rate
+(per annum)
+31
+December
+2017
+31
+December
+2016
+Ping An Securities
+Subordinated
+option
+Fixed
+1,952,695
+2,004
+34,661
+34,812
+Time deposits from the Central Bank
+320,255
+218,900
+Guarantee deposits
+82,206
+Fiscal deposits
+140,194
+620,134
+778,685
+160,708
+175,268
+609,902
+531,988
+- Corporate customers
+- Individual customers
+32,729
+33,448
+Remittance payables and outward remittance
+Ping An Insurance (Group) Company of China, Ltd. 239
+Annual Report 2017
+As at 31 December 2017, bonds classified as held-to-maturity with a carrying amount of RMB21,326 million
+(31 December 2016: RMB29,928 million), and bonds classified as loans and receivables with a carrying amount
+of RMB14,624 million (31 December 2016: RMB5,542 million) were pledged as collaterals for term deposits
+from the Central Bank.
+1,894,377
+26,083
+22,291
+5,988
+3,168
+20,095
+19,123
+- Corporate customers
+- Individual customers
+Payables to brokerage customers
+1,868,294
+1,930,404
+6,980
+17,828
+Term deposits
+FINANCIAL STATEMENTS
+- Individual customers
+-
+71,258
+109,165
+56,904
+90,310
+19,137
+130,652
+437,495
+780,530
+450,403
+31 December 2017
+Long term borrowings
+Short term borrowings
+Due to the Central Bank
+Deposits from other banks and financial institutions
+(in RMB million)
+37. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+31 December 2016
+584,794
+Refer to Notes 23, 30 and 32 for the assets pledged as collateral to support the above borrowings.
+238
+31 December 2016
+31 December 2017
+Current and savings accounts
+Customer deposits
+(in RMB million)
+39. CUSTOMER DEPOSITS AND PAYABLES TO BROKERAGE CUSTOMERS
+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.
+As at 31 December 2017, the carrying amount of bonds deposited in the collateral pool was RMB118,607
+million (31 December 2016: RMB106,230 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
+without delay provided that the value of certain bonds is no less than the balance of related repurchase
+transactions.
+As at 31 December 2017, bonds with a carrying amount of RMB94,012 million (31 December 2016: RMB56,633
+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.
+89,166
+133,981
+31 December 2016
+31 December 2017
+(in RMB million)
+Bonds
+38. ASSETS SOLD UNDER AGREEMENTS TO REPURCHASE
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+Corporate customers
+The share-based compensation expense of the Scheme and the total value of employee services during the year ended 31 December
+2017 were RMB524 million (31 December 2016: RMB342 million) and RMB524 million (31 December 2016: RMB342 million) respectively.
+Notes to Consolidated Financial Statements
+40. INSURANCE CONTRACT LIABILITIES
+(1,278)
+(638)
+(13,353)
+Net
+Reinsurers' share
+31 December 2016
+174,731
+1,917,336
+(15,633)
+(14,169)
+1,460,876
+11,128
+1,731,477
+(869)
+Net
+Reinsurers' share
+31 December 2017
+1,625,473
+67,810
+(595)
+(15,269)
+9,014
+140,314
+1,610,204
+31 December 2017
+Annual Report 2017
+240
+82,331
+1,932,969
+Estimated net cash flows within 12 months from the end of the reporting period.
+Total
+Property and casualty
+Short term life
+1,625,473
+557
+63,610
+650
+1,461,004
+1,794,694
+90,057
+9,095
+1,150
+(62,348)
+11,073
+106,569
+31 December 2016
+90,617
+1,932,969
+For the year ended 31 December 2017
+95,509
+39,706
+(in RMB million)
+Property and casualty insurance contracts
+Short term life insurance contracts
+Long term life insurance contracts
+(in RMB million)
+Property and casualty insurance contracts
+Short term life insurance contracts
+Current portion*
+Long term life insurance contracts
+Total
+Claim reserves
+Unearned premium reserves
+Policyholder account liabilities in respect of insurance contracts
+Policyholder contract deposits
+Policyholders' reserves
+(in RMB million)
+(in RMB million)
+Long term life
+Short term life
+Property and casualty
+38,775
+431,711
+502,646
+990,737
+1,190,925
+31 December 2016
+31 December 2017
+1,625,473
+1,462,154
+9,652
+153,667
+contract liabilities
+Insurance
+1,932,969
+1,732,346
+11,723
+188,900
+contract liabilities
+Insurance
+Long term life
+Non-current portion
+110,006
+Ping An Insurance (Group) Company of China, Ltd.
+During the period from 17 March 2016 to 21 March 2016, 14,803,850 ordinary A shares were purchased from the market. The average
+price of shares purchased was RMB32.53 per share.
+(ii)
+Contributions from non-
+(1,927)
+interests
+non-controlling
+Equity transactions with
+subsidiaries
+Acquisition of
+controlling interests
+controlling interests
+general reserves
+Appropriations to
+surplus reserves
+Appropriations to
+(Note 16)
+Dividend declared
+(38)
+Dividend paid to non-
+1,835
+2,868
+1,167
+(5,203)
+(3,276)
+6,219
+6,219
+(1,640)
+(1,640)
+(8,551)
+8,551
+(2,868)
+(10,054)
+(10,054)
+64,801
+10,091
+62,394
+1,167
+(7,567)
+117
+3,430
+Share purchase scheme
+(12,243)
+Total comprehensive
+interests
+Non-
+controlling
+Retained
+profits
+translation
+of foreign
+operations
+reserves
+General
+Surplus
+reserve
+funds
+Total
+Others
+reserve
+Share investment
+premium
+(in RMB million)
+on
+Available-
+for-sale
+Exchange
+differences
+35. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+(CONTINUED)
+Shadow
+accounting
+adjustments
+As at 1 January 2016
+115,539
+32,768
+(38)
+3,430
+(12,243)
+income for the year
+Other comprehensive
+72,368
+9,974
+62,394
+Profit for the year
+395,291
+79,323
+135,338
+86
+28,248
+8,498
+2,150
+(6,659)
+income for the year
+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.
+(121)
+3,894
+(294)
+714
+(1,008)
+33
+3
+30
+-
+As at 1 January 2016
+(244)
+524
+524
+(603)
+-
+(603)
+(248)
+431
+244
+(312)
+185
+(127)
+(i)
+(248)
+431
+(679)
+As at 31 December 2016
+19
+19
+Expired
+(96)
+96
+Exercised
+342
+342
+Share-based compensation expenses (ii)
+(482)
+(482)
+Purchased (i)
+(679)
+2,059
+Total
+held for share purchase
+176,259
+1,253
+36,799
+11,366
+6,749
+(3,229)
+20,525
+103,012
+115,447
+4,758
+4,758
+10,236
+10,236
+issued by subsidiaries
+Others
+Other equity instruments
+(121)
+As at 31 December 2016
+468,181
+(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, 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 profits, 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 profits, 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 profits, 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.
+Cost of shares
+As at 31 December 2017
+Expired
+Exercised
+Share-based compensation expenses (ii)
+Purchased (i)
+As at 1 January 2017
+(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.
+36. SHARE PURCHASE SCHEME
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 237
+Annual Report 2017
+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
+40. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+2016
+(in RMB million)
+Premiums written during the year
+Premiums earned during the year
+As at 1 January
+Net
+Reinsurers'
+share
+Gross
+Net
+share
+Gross
+(in RMB million)
+Reinsurers'
+2016
+2017
+90,614
+162,856
+153,667
+188,900
+63,053
+85,031
+90,614
+103,869
+31 December 2016
+31 December 2017
+Claim reserves
+Unearned premium reserves
+(in RMB million)
+(3) PROPERTY AND CASUALTY INSURANCE CONTRACTS
+40. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+The unearned premium reserves of property and casualty insurance are analyzed as follows:
+Ping An Insurance (Group) Company of China, Ltd.
+(149,601)
+103,869
+(92,429)
+Claims paid during the year
+114,407
+Claims incurred during the year
+(7,730)
+63,053
+As at 1 January
+Net
+Reinsurers'
+share
+Gross
+Net
+share
+As at 31 December
+Gross
+Reinsurers'
+2016
+2017
+The claim reserves of property and casualty insurance are analyzed as follows:
+84,726
+(5,888)
+90,614
+75,804
+133,830
+(124,908)
+11,156
+(6,806)
+(10,238)
+82,610
+144,068
+(136,064)
+(5,888) 84,726
+(9,443) 153,413
+9,767 (139,834)
+(5,564) 98,305
+(in RMB million)
+Annual Report 2017
+242
+4,554
+The claim reserves of short term life insurance are analyzed as follows:
+4,725
+(170)
+4,895
+5,772
+(365)
+6,137
+As at 31 December
+17,967
+(16,781)
+2,173
+(18,954)
+(2,010)
+2017
+19,977
+(2,948)
+2,753
+(22,909)
+Premiums earned during the year
+24,151
+Premiums written during the year
+3,539
+(333)
+3,872
+4,725
+(170)
+4,895
+Net
+21,203
+(20,156)
+2016
+Reinsurers'
+(in RMB million)
+(8,344)
+8,919
+(2,231)
+2,124
+(203)
+3,979
+(96)
+4,075
+11,150
+(10,468)
+4,757
+5,355
+(231)
+5,586
+As at 31 December
+11,367
+(10,566)
+1,884
+(12,450)
+Claims paid during the year
+(1,912)
+13,279
+Claims incurred during the year
+4,554
+(203)
+4,757
+As at 1 January
+Net
+Reinsurers'
+share
+Gross
+Net
+share
+Gross
+As at 31 December
+Reinsurers'
+share
+85,031
+55,323
+106,611
+(85,507)
+1,600 2014
+None
+3-5 years
+Guaranteed
+(Note 1)
+bonds
+Value Success International Offshore RMB
+2,095
+2,102
+4.75%
+Fixed
+2,100 2013
+None
+Fixed
+5 years
+bonds
+Value Success International Offshore RMB
+2016
+31
+December
+31
+December
+2017
+Coupon rate
+(per annum)
+type
+year
+million)
+option
+Maturity
+Interest
+Guaranteed
+(Note 1)
+Issued
+4.15%-4.95%
+751
+None
+5 years
+Guaranteed
+(Note 1)
+bonds
+Value Success International Offshore USD
+1,370
+1,283
+3.00%
+Fixed
+1,272 2016
+None
+5 years
+551
+Guaranteed
+(Note 1)
+Value Success International Offshore HKD
+1,755
+1,806
+4.13%
+Fixed
+1,779 2014
+None
+5.5 years
+Guaranteed
+(Note 1)
+bonds
+Value Success International Offshore SGD
+1,599
+bonds
+(in RMB
+redemption
+Guarantee
+type
+Policyholder principal increased
+As at 1 January
+(in RMB million)
+The investment contract liabilities are analyzed as follows:
+44,930
+50,309
+40,846
+4,084
+4,109
+46,200
+Policyholder account liabilities in respect of investment contracts
+Investment contract reserves
+31 December 2016
+31 December 2017
+Accretion of investment income
+(in RMB million)
+55,323
+(7,730)
+63,053
+76,427
+(75,600)
+8,922
+83,519
+(7,803)
+91,322
+(84,522)
+47,404
+(8,849)
+(1) LONG TERM LIFE INSURANCE CONTRACTS
+41. INVESTMENT CONTRACT LIABILITIES FOR POLICYHOLDERS
+Liabilities released for benefits paid
+Policy administration fees and guaranteed fees deducted
+Others
+Type
+Issuer
+value
+Early
+Par
+42. BONDS PAYABLE
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 243
+Annual Report 2017
+As at 31 December 2016 and 2017, all reinsurance contracts of the Group transferred significant insurance
+risk.
+44,930
+50,309
+(84)
+(625)
+(11)
+(7,741)
+(7,949)
+(63)
+719
+2,264
+9,971
+11,138
+42,690
+44,930
+2016
+2017
+As at 31 December
+(7,796)
+6,922
+(8,604)
+Gross
+56,253
+39,706
+31 December 2017
+The policyholder contract deposits are analyzed as follows:
+As at 31 December
+Others
+-
+Surrender
+Claims and benefits paid
+Decrease during the year
+Increase during the year
+As at 1 January
+(in RMB million)
+The policyholders' reserves are analyzed as follows:
+Policyholder account liabilities in respect of insurance contracts
+Policyholder contract deposits
+Policyholders' reserves
+431,711
+372,759
+Policyholder principal increased
+87,371
+31 December 2016
+80,312
+1,190,925
+990,737
+(in RMB million)
+990,737
+1,190,925
+1,695
+3,384
+(27,198)
+(33,683)
+(81,794)
+(99,257)
+246,548
+329,744
+851,486
+990,737
+2016
+2017
+1,462,154
+1,732,346
+As at 1 January
+431,711
+502,646
+38,775
+Accretion of investment income
+24,490
+16,476
+6,137
+2017
+5,586
+4,757
+11,723
+9,652
+The unearned premium reserves of short term life insurance are analyzed as follows:
+2017
+2016
+Reinsurers'
+(in RMB million)
+As at 1 January
+Gross
+share
+Net
+31 December 2016
+31 December 2017
+4,895
+Unearned premium reserves
+Liabilities released for benefits paid
+(27,787)
+(25,999)
+Claim reserves
+(13,139)
+(11,837)
+502,646
+431,711
+Policy administration fees and guaranteed fees deducted
+As at 31 December
+Ping An Insurance (Group) Company of China, Ltd. 241
+Annual Report 2017
+(in RMB million)
+(2) SHORT TERM LIFE INSURANCE CONTRACTS
+2016
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+40. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+45,694
+874
+44,776
+Premium receivables
+1,660,864
+15,835
+9,955
+44
+(3,615)
+Accounts receivable
+10,179
+780,530
+Other financial liabilities held for
+trading
+14,056
+4
+14,060
+Assets sold under agreements to
+repurchase
+123,964
+9,697
+320
+133,981
+Customer deposits and payables to
+brokerage customers
+1,760,813
+173,434
+14,048
+4,400
+1,952,695
+Accounts payable
+Insurance payables
+5,468
+113,613
+469
+1,054
+99,545
+93,289
+Due to banks and other financial
+institutions
+71,923
+71,923
+Reinsurers' share of insurance liabilities
+14,373
+1,003
+257
+15,633
+Finance lease receivables
+112,028
+-
+112,028
+Other assets
+148,699
+2,505
+699
+115
+152,018
+5,695,604
+255,417
+68,514
+30,565
+6,050,100
+Liabilities
+676,008
+1,535,529
+Loans and advances to customers
+630,676
+Increase/
+(decrease)
+Change in
+variables
+(in RMB million)
+31 December 2017
+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 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.
+in profit
+before tax
+(a) Foreign currency 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)
+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).
+Increase/
+(decrease)
+31 December 2016
+Increase/
+(decrease)
+203
+1,518
+791
+381
+2,344
+305
++5%
+HKD
+(1,282)
++5%
+USD
+before tax
+before tax
+Increase/
+(decrease)
+in equity
+in profit
+in equity
+before tax
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+1,205
+Ping An Insurance (Group) Company of China, Ltd.
+(2,770)
+(228)
+before tax
+Impact on profit Impact on equity
+Increase/
+(decrease)
+Increase/
+(decrease)
+Change in
+assumptions
+31 December 2017
+Impact on net
+claim reserves
+Increase/
+(decrease)
+Impact on gross
+claim reserves
+254
+Short term life insurance
+Property and casualty insurance
+Average claim costs
+(in RMB million)
+Short term life insurance
+Annual Report 2017
+before tax
+Increase/
+(decrease)
++5%
++5%
+4,252
+279
+2,770
+228
+3,159
+238
++5%
++5%
+before tax
+Increase/
+(decrease)
+Impact on equity
+before tax
+Increase/
+(decrease)
+Impact on profit
+31 December 2016
+Impact on net
+claim reserves
+Increase/
+(decrease)
+Increase/
+(decrease)
+Change in
+assumptions
+Impact on gross
+claim reserves
+(3,821)
+(268)
+(3,821)
+(268)
+3,821
+268
+(2,770)
+(228)
+23
+Other currencies
+(5)
+68,704
+399,670
+and other financial institutions
+Balances with the Central Bank
+Cash and amounts due from banks
+(in RMB millions)
+Assets
+total
+10,831
+equivalent
+equivalent)
+RMB
+Others
+USD
+(RMB
+equivalent)
+RMB
+31 December 2017
+(RMB
+equivalent)
+4,686
+483,891
+and statutory deposits
+8,254
+41,568
+42,026
+538,828
+Equity investments
+2,559,137
+1,675
+4,520
+34,351
+2,518,591
+Fixed maturity investments
+318,236
+640
+6,409
+311,187
+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:
++5%
+(a) Foreign currency risk (continued)
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+HKD
+(1,518)
+(791)
+(381)
+1,282
+-5%
+-5%
+USD
+840
+2,956
+(982)
+90
+(154)
+231
+2,813
+(305)
+(2,344)
+(203)
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 255
+Annual Report 2017
+(2,813)
+(840)
+(90)
+154
+(231)
+(2,956)
+982
+5
+-5%
+Other currencies
+(1,205)
+(2) MARKET RISK (CONTINUED)
+3
+53,939
+7,619
+42,808
+Insurance contract liabilities
+90
+(360)
+Insurance contract
+liabilities
+6,993
+756
+(1,176)
+6,573
+(26,292)
+Impairment loss provisions
+221
+9,937
+18,200
+(72,800)
+Others
+6,655
+60
+1,742
+(786)
+7,671
+(30,684)
+23,490
+8,263
+60
+(131)
+on available-for-sale
+(34,004)
+(192,128)
+(in RMB million)
+Fair value adjustments
+on financial assets and
+liabilities carried at fair
+value through profit or
+loss
+Fair value adjustments
+As at
+1 January
+Acquisitions
+of subsidiaries
+2016
+Charged to
+profit or loss
+investments
+Charged to
+Other
+changes
+36
+781
+As at
+31 December
+Temporary
+difference
+as at
+31 December
+8
+825
+(3,300)
+equity
+11,542
+(955)
+(778)
+investments
+(7,687)
+Intangible assets-core
+deposits
+(2,731)
+189
+(13,310)
+(20,997)
+83,988
+(2,542)
+on available-for-sale
+10,168
+evaluation premium
+from acquisition of
+Autohome Inc.
+(2,102)
+30
+(2,072)
+8,288
+Assets evaluation
+premium from
+reorganization of
+Intangible assets
+Fair value adjustments
+3,420
+(855)
+33,359
+(133,436)
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 247
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+43. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+The deferred tax liabilities are analyzed as follows:
+(in RMB million)
+Fair value adjustments
+on financial assets and
+liabilities carried at fair
+value through profit or
+loss
+As at
+Acquisitions
+1 January of subsidiaries
+2017
+Charged to
+profit or loss
+Charged to
+equity
+Other
+changes
+As at
+31 December
+(197)
+(658)
+Temporary
+difference
+as at
+31 December
+(104,812)
+26,203
+8,501
+48,032
+1,657
+13,016
+5,361,972
+301,737
+19,189
+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
+217,755
+Off-balance sheet credit commitments
+Property and casualty insurance
+(2,444)
+46,881
+1,626
+(10,070)
+41,425
+4,613
+59,113
+697
+353,957
+256
+Annual Report 2017
+308,826
+1,280
+421
+11,425
+1,930,484
+1,680
+788
+17
+1,932,969
+Investment contract liabilities for
+policyholders
+50,301
+7
+1
+50,309
+Policyholder dividend payable
+45,603
+17
+2
+45,622
+Bonds payable
+437,033
+11,715
+2,535
+451,283
+Other liabilities
+204,629
+Ping An Insurance (Group) Company of China, Ltd.
+5,468
+114,108
+Ping An Good Doctor
+(in RMB million)
+Fair value adjustments
+on available-for-sale
+investments
+90
+-- 570 -
+660
+(2,640)
+Insurance contract
+liabilities
+6,573
+(4,060)
+3,993
+11,653
+(46,612)
+Impairment loss provisions
+18,200
+8,003
+Others
+7,671
+830
+33,359
+-
+1,087
+1,015
+- 190 1.0
+825
+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
+2017
+31 December 2017
+40,141
+(25,891)
+14,250
+31 December 2016
+28,292
+(11,274)
+17,018
+As at
+Acquisitions
+1 January of subsidiaries
+Charged to
+profit or loss
+Charged to
+equity
+Other
+changes
+As at
+31 December
+Temporary
+difference
+as at
+31 December
+43. DEFERRED TAX ASSETS AND LIABILITIES
+Average claim costs
+HKD
+(RMB
+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:
+(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.
+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' behavior 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.
+The Group's concentration of insurance risk is reflected by its major lines of business as analyzed by
+insurance contract liabilities in Note 40.
+250
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(1) INSURANCE RISK (CONTINUED)
+Assumptions and sensitivities
+(a) Long term life insurance contracts
+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
+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:
+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);
+46. RISK AND CAPITAL MANAGEMENT
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+666
+992
+708
+6,110
+7,843
+6,449
+7,211
+31,291
+(in RMB million)
+351,517
+272,834
+31 December 2017
+31 December 2016
+a 10% increase in policy lapse rates; and
+621,518
+380,005
+317,011
+540,787
+491,361
+408,582
+406,922
+501,062
+742,477
+2,451,954
+2,614,208
+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
+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.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 249
+656,437
+a 5% increase in maintenance expense rates.
+(in RMB million)
+Change in
+assumptions
+10,391
+(10,391)
+(10,391)
+Maintenance expense rates
++5%
+2,563
+2,563
+(2,563)
+(2,563)
+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 contact 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'
+10,391
+reserves
+Increase/
+reserves
+Increase/
+(decrease)
+(decrease)
+Impact on profit
+before tax
+Increase/
+(decrease)
+Impact on equity
+before tax
+Increase/
+(decrease)
+Discount rate/investment return
++10bps
+(8,577)
+(8,568)
+31 December 2016
+Impact on net
+policyholders'
+607
++10%
+(32,477)
+(decrease)
+Impact on gross
+policyholders'
+reserves
+Increase/
+31 December 2017
+Impact on net
+policyholders'
+reserves
+Increase/
+(decrease)
+Impact on profit
+before tax
+Increase/
+(decrease)
+Impact on equity
+before tax
+Increase/
+(decrease)
+Discount rate/investment return
++10bps
+(4,957)
+Policy lapse rates
+(4,957)
+4,957
+Discount rate/investment return
+-10bps
+5,093
+5,093
+(5,093)
+(5,093)
+Mortality, morbidity, accident
+rates and etc.
++10%
+32,477
+32,477
+(32,477)
+4,957
+8,568
+6,582
+6,845
+investments
+(11,363)
+Intangible assets-core
+deposits
+(2,920)
+189
+3,647
+29
+(7,687)
+30,748
+(2,731)
+10,924
+Intangible assets
+evaluation premium
+from acquisition of
+Autohome Inc.
+(2,102)
+(2,102)
+8,408
+Others
+(3,387)
+(17,738)
+(245)
+164
+(156)
+(3,624)
+14,496
+(2,347)
+on available-for-sale
+Fair value adjustments
+788
+(197)
+(3,615)
+14,465
+Others
+(3,624)
+(16,341)
+(66)
+(11)
+(3,701)
+14,799
+(4,120)
+(13,310)
+(11)
+(33,782)
+135,128
+223
+(in RMB million)
+As at
+1 January
+Acquisitions
+of subsidiaries
+2016
+Charged to
+profit or loss
+Charged to
+equity
+Other
+changes
+(68)
+(130)
+Temporary
+difference
+As at
+31 December
+as at
+31 December
+1
+Fair value adjustments
+on financial assets and
+liabilities carried at fair
+value through profit or
+loss
+3,647
+(126)
+(16,341)
+Entrusted loans of banking operations
+Assets under asset management schemes
+Entrusted investments of banking operations
+31 December 2017
+31 December 2016
+294
+235
+334
+114
+330
+1,272
+1,325
+1,662
+Assets under annuity investments and annuity schemes
+1,736
+5,119
+4,019
+31 December 2017
+31 December 2016
+219,215
+159,863
+4,150
+3,019
+35,606
+30,892
+30,696
+24,582
+6,610
+1,836
+9,791
+Assets under trust schemes
+45. FIDUCIARY ACTIVITIES
+65,364
+As at 31 December 2017, unrecognized tax losses of the Group were RMB5,119 million (31 December 2016:
+RMB4,019 million).
+248
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+43. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+The following table shows unrecognized tax losses based on its expected expiry date:
+(in RMB million)
+2017
+2018
+2019
+2020
+2021
+(in RMB million)
+2022
+(in RMB million)
+Other payables
+Payable to holders of trust schemes and banking wealth
+management products
+Salaries and welfare payable
+Interest payable
+Other tax payable
+Receipts in advance
+Contingency provision
+Insurance guarantee fund
+Accruals
+Deferred income
+Others
+44. OTHER LIABILITIES
+8,568
+24,623
+-10bps
+7,904
+10,875
+Two years later
+4,917
+6,715
+7,900
+Three years later
+4,917
+6,758
+Four years later
+4,922
+Estimated cumulative claims
+4,922
+6,758
+Cumulative claims paid
+(4,922)
+(6,758)
+7,900
+(7,831)
+10,875
+(10,373)
+13,341
+(9,662)
+43,796
+(39,546)
+Subtotal
+4,250
+Prior year adjustments,
+unallocated loss adjustment
+expenses and risk margin
+Outstanding claim reserves
+6,786
+5,066
+One year later
+13,341
+(62,525)
+86,439
+(70,739)
+104,195
+(60,790)
+369,207
+(297,712)
+Subtotal
+71,495
+Prior year adjustments,
+unallocated loss adjustment
+expenses, discount and risk
+margin
+4,932
+76,427
+Outstanding claim reserves
+1,336
+Reproduced below is an exhibit that shows the development of gross claim reserves of short term life
+insurance by the accident year:
+2013
+2014
+2015
+2016
+2017
+Total
+Estimated cumulative
+claims paid:
+As at the end of current year
+4,877
+6,732
+8,415
+11,458
+(in RMB million)
+(53,693)
+5,586
+Ping An Insurance (Group) Company of China, Ltd. 253
+Three years later
+4,792
+6,551
+Four years later
+4,797
+Estimated cumulative claims
+4,797
+6,551
+7,663
+10,544
+12,779
+42,334
+Cumulative claims paid
+(4,797)
+(6,551)
+(7,594)
+(10,056)
+(9,313)
+Discount rate/investment return
+Subtotal
+4,023
+Prior year adjustments,
+unallocated loss adjustment
+expenses and risk margin
+1,332
+Outstanding claim reserves
+5,355
+7,663
+6,536
+4,804
+Two years later
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+46. 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 short term life
+insurance by the accident year:
+(in RMB million)
+2013
+2014
+2015
+2016
+Annual Report 2017
+2017
+Estimated cumulative
+claims paid:
+As at the end of current year
+4,717
+6,367
+8,175
+11,033
+12,779
+One year later
+4,862
+6,574
+7,673
+10,544
+Total
+(49,965)
+(38,311)
+69,493
+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.
+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)
+2013
+2014
+2015
+2016
+2017
+Total
+Estimated cumulative
+Assumptions
+claims paid:
+60,361
+69,852
+83,767
+94,445
+112,013
+One year later
+60,876
+69,292
+81,490
+95,508
+Two years later
+60,425
+67,587
+As at the end of current year
+80,012
+(b) Property and casualty and short term life insurance contracts
+(1) INSURANCE RISK (CONTINUED)
+Cumulative claims paid
+8,920
+8,910
+(8,910)
+(8,910)
+rates and etc.
++10%
+22,342
+22,304
+(22,304)
+(22,304)
+Policy lapse rates
++10%
+Assumptions and sensitivities (continued)
+7,115
+(7,131)
+(7,131)
+Maintenance expense rates
++5%
+2,160
+2,160
+(2,160)
+(2,160)
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 251
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+7,131
+Three years later
+Mortality, morbidity, accident
+66,866
+2017
+Total
+(in RMB million)
+Estimated cumulative
+claims paid:
+As at the end of current year
+52,810
+59,864
+72,724
+One year later
+53,124
+59,479
+70,855
+85,558
+86,439
+104,195
+Two years later
+52,747
+58,057
+69,493
+Three years later
+51,993
+57,416
+Four years later
+Estimated cumulative claims
+51,664
+59,552
+57,416
+2016
+2015
+51,664
+2013
+2014
+Estimated cumulative claims
+59,275
+66,866
+Cumulative claims paid
+(57,248)
+(62,554)
+Four years later
+80,012
+(71,830)
+95,508
+(77,677)
+112,013
+(64,634)
+413,674
+(333,943)
+Subtotal
+79,731
+59,275
+unallocated loss adjustment
+Prior year adjustments,
+(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:
+(1) INSURANCE RISK (CONTINUED)
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Assumptions and sensitivities (continued)
+5,300
+Annual Report 2017
+252
+Outstanding claim reserves
+expenses, discount and risk
+margin
+85,031
+Impaired
+Total
+other financial institutions
+189,268
+1,400
+52
+190,720
+Assets purchased under reverse
+repurchase agreements
+1,400
+Total past
+due but not
+impaired
+31 December 2017
+Overdue
+31 to
+90 days
+Overdue
+Less than
+30 days
+and not
+impaired
+Not due
+Past due but not impaired
+placements with banks and
+due from and
+-
+institutions
+banks and other financial
+99,251
+(in RMB million)
+Overdue
+More than
+90 days
+Cash and amounts due from
+807,406
+59
+42,674
+Premium receivables
+Aging analysis of financial assets
+854,566
+10,008
+850,620
+18,944
+24,270
+8,096
+56
+2,867
+5,173
+836,462
+Individual customers
+14,705
+3,587
+5,978
+Corporate customers
+Including:
+28,952 1,705,186
+32,366
+14,761
+6,454
+11,151
+1,643,868
+customers
+Loans and advances to
+99,310
+59
+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.
+57,548
+Collateral and other credit enhancements (continued)
+Industrial Bank Co., Ltd.
+China Bohai Bank Co., Ltd.
+Other major banks and financial institutions
+Industrial and Commercial Bank of China Limited
+Agricultural Bank of China Limited
+Bank of Communications Co., Ltd.
+China Merchants Bank Co., Ltd.
+Bank of China Limited
+Top five commercial banks
+PBOC
+(in RMB million)
+Credit quality of amounts due from banks and other financial institutions (continued)
+(3) CREDIT RISK (CONTINUED)
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 263
+802,127
+16,070
+264,077
+16,343
+16,579
+17,839
+11
+18,434
+China Construction Bank Corporation
+China CITIC Bank Corporation Limited
+China Minsheng Banking Corp. Ltd.
+Others
+31 December 2016
+306,763
+(3) CREDIT RISK (CONTINUED)
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+264
+for retail lending, residential properties mortgages.
+for commercial lending, charges over real estate properties, inventories, equity investments or trade
+receivables, etc.; and
+for reverse repurchase transactions, negotiable securities;
+for policy loans, cash value of policies;
+The main types of collateral obtained are as follows:
+The amount and type of collateral required depends on an assessment of the credit risk of the counterparty.
+Guidelines are implemented regarding to the types of collateral and the valuation parameters.
+Collateral and other credit enhancements
+Management monitors the market value of the collateral, requests additional collateral when needed
+according to contracts and performs an valuation for impairment valuation assessment when applicable.
+Please refer to Note 23. (2) and (5) for an analysis of concentration of loans and advances by industry and
+geographical region.
+Credit exposure
+880,003
+268,871
+14,422
+17,426
+17,578
+19,227
+25,200
+27,434
+30,033
+43,499
+52,002
+Without taking collateral and other credit enhancements into consideration. For on-balance sheet assets,
+the maximum 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 54. (3).
+Due from reinsurers
+Finance lease receivable
+Gross total
+Corporate customers
+259
+98
+6,370
+Due from reinsurers
+36,783
+2,972
+30
+2
+17
+11
+33,781
+Premium receivables
+8,634
+7,221
+207
+3,051
+3,963
+525,878
+Individual customers
+956,783
+27,715
+29,599
+18,342
+6,018
+5,239
+899,469
+3,168
+2,681
+5,947
+48
+20,432
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+266
+23,262
+26,672
+31 December 2016
+31 December 2017
+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 2017 was RMB8,087 million (31 December 2016:
+RMB12,427 million).
+Including:
+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 2017 was RMB13,319 million (31 December 2016:
+RMB37,549 million).
+40,791
+42,797
+21,232
+12,254
+9,311
+1,873,589
+Gross total
+79,411
+1,355
+78,056
+Finance lease receivable
+12,365
+1,957,177
+36,349 1,498,516
+36,820
+18,549
+(in RMB million)
+Aging analysis of financial assets (continued)
+(3) CREDIT RISK (CONTINUED)
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 265
+Annual Report 2017
+35,606 2,164,524
+35,119
+14,874
+Cash and amounts due from
+7,365
+113,710
+8,001
+32
+1,682
+-
+112,028
+2,093,799
+1,259
+108
+47,597
+4,888
+35
+5
+19
+892
+12,880
+6,710
+banks and other financial
+-
+9,069
+9,202
+1,425,347
+customers
+Loans and advances to
+65,670
+13
+264,432
+---- 54
+65,657
+repurchase agreements
+Assets purchased under reverse
+institutions
+264,378
+Total
+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 2016
+placements with banks and
+due from and
+other financial institutions
+21,984
+541,733
+34,358
+800
+(8,364)
+1,795
+2,209
+7,511
+56,254
+549,827
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 257
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+46. 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 available-for-sale
+financial assets 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.
+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 RMB million)
+Listed stocks and security investment funds
+31 December 2017
+31 December 2016
+9,455
+61,111
+485,707
+Off-balance sheet credit commitments
+24,090
+Bonds payable
+332,855
+8,713
+8,257
+=
+349,825
+Other liabilities
+132,657
+1,978
+4,545
+94
+139,274
+8,297
+4,627,670
+27,012
+9,578
+4,914,890
+Net position of foreign currency
+8,940
+29,644
+10,159
+48,743
+Notional amount of foreign exchange
+derivative financial instruments
+21,429
+(5,554)
+30,369
+250,630
+The Group expects that current listed stocks and equity investments funds will not lose more than RMB9,455
+million due to market price movements in a 10-trading-day holding period on 99% of occasions.
+258
+Annual Report 2017
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 259
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(c) Interest rate risk (continued)
+(in RMB million)
+Change in
+interest rate
+31 December 2017
+Increase/
+(decrease)
+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.
+in profit
+before tax
+31 December 2016
+Increase/
+(decrease)
+in profit
+before tax
+Increase/
+(decrease)
+in equity
+before tax
+Floating interest rate bonds
++50 basis
+points
+140
+140
+155
+155
+Floating rate term deposits
++50 basis
+Increase/
+(decrease)
+in equity
+before tax
+39,216
+(5,664)
+(4,026)
+Ping An Insurance (Group) Company of China, Ltd.
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (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 held for trading bonds) and equity (fair value change on held for trading bonds and
+available-for-sale bonds).
+(in RMB million)
+Change in
+interest rate
+31 December 2017
+Increase/
+(decrease)
+(257)
+in profit
+before tax
+(decrease)
+Increase/
+(decrease)
+in equity
+before tax
+in profit
+before tax
+Increase/
+(decrease)
+in equity
+before tax
+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
+-50 basis
+points
++50 basis
+points
+101
+4,026
+257
+5,664
+(101)
+31 December 2016
+Increase/
+2
+16
+39,198
+2,156,291
+Equity investments
+376,666
+27,256
+18,098
+4,888
+426,908
+Loans and advances to customers
+1,309,332
+119,755
+17,712
+11,492
+377
+1,458,291
+34,369
+911
+45
+35,325
+Accounts receivable
+22,192
+116
+45
+22,353
+Reinsurers' share of insurance liabilities
+13,862
+1,120
+Premium receivables
+287
+10,058
+2,128,150
+29,051
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(a) Foreign currency risk (continued)
+(in RMB millions)
+Assets
+Cash and amounts due from banks
+and other financial institutions
+31 December 2016
+RMB
+USD
+(RMB
+equivalent)
+HKD
+(RMB
+equivalent)
+Others
+(RMB
+17,706
+equivalent)
+473,241
+77,183
+7,815
+2,904
+561,143
+Balances with the Central Bank
+and statutory deposits
+305,057
+13,533
+270
+318,860
+Fixed maturity investments
+RMB
+equivalent
+total
+points
+15,269
+78,056
+1,701,494
+179,466
+8,538
+4,879
+1,894,377
+Accounts payable
+8,565
+Insurance payables
+112,747
+613
+25
+2
+brokerage customers
+8,565
+113,387
+1,623,060
+1,845
+553
+15
+1,625,473
+Investment contract liabilities for
+policyholders
+44,922
+7
+1
+44,930
+Policyholder dividend payable
+Insurance contract liabilities
+Finance lease receivables
+89,166
+86,244
+78,056
+Other assets
+118,776
+1,990
+2,371
+31
+123,168
+4,859,701
+259,570
+56,656
+19,737
+5,195,664
+2,922
+Liabilities
+520,068
+57,969
+2,172
+4,585
+584,794
+Other financial liabilities held for
+trading
+25,860
+23
+25,883
+Assets sold under agreements to
+repurchase
+Due to banks and other financial
+institutions
+18
+Customer deposits and payables to
+68
+279,750
+1-2 years (including 2 years)
+66,075
+67,000
+22,632
+1,143
+156,850
+2-3 years (including 3 years)
+33,407
+84,025
+21,369
+1,195
+39,135
+139,996
+49,266
+72,659
+15,751
+227
+137,903
+4-5 years (including 5 years)
+34,262
+100,397
+21,036
+496
+156,191
+More than 5 years
+3-4 years (including 4 years)
+124,712
+23,724
+178,292
+119,415
+27,627
+15,944
+18,915
+181,901
+847,198
+1,243,768
+241,025
+74,222
+2,406,213
+(in RMB million)
+Loans and
+receivables
+38,599
+Held-to-
+maturity
+Available-
+for-sale
+Carried at fair
+value through
+profit or loss
+Total
+Fixed interest rate
+Less than 3 months
+(including 3 months)
+155,299
+9,514
+11,574
+21,386
+197,773
+3 months to 1 year (including 1 year)
+31 December 2016
+Floating interest rate
+597,455
+1,081
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+Credit risk of insurance business
+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.
+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 within the validity period of insurance policy. The credit
+risk associated with policy loans did not have a material impact on the Group's consolidated financial
+statements as at 31 December 2017 and 31 December 2016.
+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 PBOC and major commercial banks in the PRC held by the Group. The following analysis excludes
+balances of investment-linked contracts.
+(in RMB million)
+PBOC
+Top five commercial banks
+Bank of China Limited
+Bank of Communications Co., Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Industrial and Commercial Bank of China Limited
+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
+China Minsheng Banking Corp. Ltd.
+Others
+Annual Report 2017
+31 December 2017
+305,986
+40,974
+18
+Industrial Bank Co., Ltd.
+82,679
+Annual Report 2017
+The Group's equity investments mainly include securities, security investment funds, trust products, wealth
+management products, asset management plans, equity investments and other investments. The Group
+conducts due diligence, reviews and evaluates counterparties' qualification in order to reduce and manage
+credit risks of existing equity investments.
+805,927
+Floating interest rate
+110,677
+40,065
+17,275
+7,634
+175,651
+751,990
+1,009,714
+216,040
+2,050,041
+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.
+262
+Annual Report 2017
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+46. 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, 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.
+Credit risk of banking business
+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.
+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 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.
+Credit risk of investment 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 selective criteria.
+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 2017, 99.98% (31
+December 2016: 99.55%) 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 2017, 99.34% (31 December 2016:
+99.23%) 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 2017, 82.67% (31 December 2016: 88.89%) of the debt investment plans are
+guaranteed by third parties or collateralized.
+Ping An Insurance (Group) Company of China, Ltd. 261
+934,942
+72,297
+73,165
+Fixed interest rate
+Less than 3 months (including 3 months)
+3 months to 1 year (including 1 year)
+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
+31 December 2017
+31 December 2016
+15,213
+33,358
+(in RMB million)
+9,770
+43,370
+17,090
+40,537
+41,441
+20,570
+16,892
+27,890
+22,102
+1,000
+560
+3,500
+13,520
+46,697
+161,850
+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):
+(4,077)
+68
+Loans and advances to customers
+4,626
++50 basis
+points
+5,148
+5,148
+4,077
+4,077
+Floating interest rate bonds.
+-50 basis
+points
+(4,077)
+(140)
+(155)
+(155)
+Floating rate term deposits
+-50 basis
+points
+(18)
+(18)
+(68)
+(68)
+Loans and advances to customers
+-50 basis
+points
+(5,148)
+(140)
+191,660
+(5,148)
+Annual Report 2017
+76,504
+87,422
+26,498
+7,867
+198,291
+2-3 years (including 3 years)
+121,890
+99,040
+23,551
+8,881
+253,362
+38,321
+1-2 years (including 2 years)
+103,171
+2,712
+161,888
+4-5 years (including 5 years)
+74,132
+110,383
+26,831
+2,786
+214,132
+260
+More than 5 years
+153,567
+703,584
+17,684
+285,697
+3-4 years (including 4 years)
+36,103
+Ping An Insurance (Group) Company of China, Ltd.
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(c) Interest rate risk (continued)
+1,731
+(in RMB million)
+Loans and
+receivables
+Held-to-
+maturity
+31 December 2017
+Available-
+for-sale
+Carried at fair
+value through
+profit or loss
+Total
+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):
+163,168
+3 months to 1 year (including 1 year)
+84,695
+176,000
+21,249
+27,846
+26,704
+(including 3 months)
+Less than 3 months
+Fixed interest rate
+100,201
+214.9%
+36,141
+209.0%
+226.5%
+194.0%
+234.1%
+Comprehensive solvency margin ratio
+31 December 2016
+Ping An
+Property &
+300,453
+Ping An Life
+Casualty
+Core capital
+889,883
+217.5%
+The Group
+70,095
+78,595
+Core Solvency margin ratio
+Minimum regulatory capital
+Core Solvency margin ratio
+Comprehensive solvency margin ratio
+31 December 2017
+Ping An
+Property &
+The Group
+Ping An Life
+Regulatory capital held
+Casualty
+1,115,365
+680,450
+501,710
+1,146,865
+703,450
+533,775
+63,439
+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. (6) for the Group's
+consolidation consideration related to structured entities.
+533,710
+8.36%
+9.34%
+11.53%
+(8) THE GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 271
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(8) THE GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES (CONTINUED)
+Minimum regulatory capital
+31 December 2017
+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 size of unconsolidated structured entities and the Group's funding and maximum exposure are shown
+below:
+8.28%
+9.18%
+11.20%
+929,883
+Capital adequacy ratio
+Core Tier 1 capital adequacy ratio
+71,439
+442,729
+236,304
+26,725
+201.0%
+212.3%
+237.4%
+210.0%
+225.9%
+267.3%
+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.
+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.
+The banking operation's core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio and capital
+adequacy ratio are shown below:
+31 December 2017
+31 December 2016
+Tier 1 capital adequacy ratio
+Regulatory capital held
+100,355
+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.
+1,725
+1,060,300 1,029,133
+785,575
+573,022
+4,411,080
+205,167
+7,859,110
+Derivative cash flows
+Derivative financial
+instruments settled on
+a net basis
+(29)
+(587)
+(38)
+(131)
+Derivative financial
+instruments settled on
+a gross basis
+52,275
+-
+30,119
+Other liabilities
+1,242
+(in RMB million)
+for policyholders
+4,233
+13,797
+32,296
+Policyholder dividend payable
+39,216
+51,568
+39,216
+Bonds payable
+148,046
+115,658
+79,226
+48,714
+391,644
+20,693
+Core capital
+Cash inflow
+Credit commitments
+Management expects the credit commitments will not be entirely used during the commitment period.
+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.
+(5) MISMATCHING RISK OF ASSETS AND LIABILITIES
+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. 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.
+(7) CAPITAL MANAGEMENT
+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.
+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 has formally implemented China Risk Oriented Solvency System 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 2017, the
+Group was compliant with the relevant regulatory capital requirements.
+270
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(7) CAPITAL MANAGEMENT (CONTINUED)
+(4) LIQUIDITY RISK (CONTINUED)
+Cash outflow
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Notes to Consolidated Financial Statements
+Annual Report 2017
+(785)
+65,778
+(64,984)
+794
+3,425
+250,657
+(250,622)
+35
+236,106
+196,367
+(196,763)
+(396)
+283,237
+22,833
+(23,105)
+535,635
+(535,474)
+(272)
+71,416
+161
+54,930
+649,114
+Ping An Insurance (Group) Company of China, Ltd. 269
+FINANCIAL STATEMENTS
+For the year ended 31 December 2017
+Securitization
+1,206,471
+Wealth management products
+managed by third parties.
+48,804
+Stocks
+16,978
+22,657
+16,978
+22,657
+33,491
+Others
+12,110
+26,980
+12,110
+Derivative financial assets
+16,192
+8,836
+26,980
+48,804
+33,491
+Funds
+259,938
+119,563
+259,938
+119,563
+Others
+236,228
+162,486
+236,228
+162,486
+Carried at fair value through profit or loss
+Bonds
+63,801
+70,392
+63,801
+70,392
+16,192
+8,836
+Held-to-maturity
+Bonds
+68,856
+99,068
+68,856
+Debt schemes
+704,542
+648,266
+708,854
+649,922
+Policy loans
+83,203
+64,634
+83,203
+64,634
+Investment contract liabilities
+Assets purchased under
+99,068
+Stocks
+Bonds
+318,236
+1,661,301
+1,243,768
+1,009,714
+1,049,062
+Loans and receivables
+Cash and amounts due from banks and
+other financial institutions
+483,891
+561,143
+483,891
+561,143
+Balances with the Central Bank and
+statutory deposits
+318,860
+Loans and advances to customers
+1,660,864
+1,458,291
+318,860
+1,460,853
+54,590
+56,935
+54,590
+Unconsolidated structured entities
+The Group's
+31 December 2016
+(in RMB million)
+Securitization
+Size
+Carrying
+amount
+maximum
+exposure
+50,273
+520
+520
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties.
+Wealth management products
+managed by affiliated entities
+1,372,960
+148,446
+148,446
+26,545
+Note 1
+26,545
+3,030
+Unconsolidated structured entities
+Size
+Carrying
+amount
+The Group's
+maximum
+exposure
+59,223
+2,426
+2,426
+1,337,658
+175,338
+175,338
+Note 1
+476,103
+476,103
+508,770
+3,030
+Note 1
+Assets management products
+managed by affiliated entities.
+Assets management products
+managed by third parties
+Wealth management products
+managed by affiliated entities
+345,414
+Wealth management products
+managed by third parties
+(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 2017 31 December 2016 31 December 2017 31 December 2016
+221,871
+193,904
+221,871
+193,904
+Funds
+56,935
+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,
+due from reinsurers and insurance payables.
+345,414
+47. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+Annual Report 2017
+744,043
+Note 1
+20,415
+550
+550
+20,415
+Interest held by the Group
+Investment income
+and service fee
+Investment income
+and service fee
+Investment income
+Investment income
+and service fee
+Investment income
+Interest held by the Group
+Investment income
+and service fee
+Investment income
+and service fee
+Investment income
+Investment income
+and service fee
+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 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 beneficial right of loans and receivables purchased under
+trust schemes under assets purchased under reverse repurchase agreements.
+272
+Ping An Insurance (Group) Company of China, Ltd.
+4,442,564
+5,481
+61,148
+Total
+Due to banks and other
+financial institutions
+140,112
+222,766
+340,249
+84,563
+Undated
+8,526
+Assets sold under agreements
+to repurchase
+134,154
+-
+Other financial liabilities held
+for trading
+796,216
+5 years
+Over
+1 to 5
+years
+292,935
+940,946 1,175,568 2,090,725 1,925,623
+818,203 7,244,000
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 267
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(4) LIQUIDITY RISK (CONTINUED)
+31 December 2017
+(in RMB million)
+Repayable
+on demand
+Less than
+3 months
+3 to 12
+months
+4,255
+4,329
+5,049
+568
+1,665
+9,125
+15
+2,016,750
+5,468
+64,414
+2,257 5,158,102
+-
+5,193,274
+Investment contract liabilities
+for policyholders
+1,044
+4,158
+14,987
+32,168
+52,357
+23,790
+110,274
+Insurance contract liabilities
+60,478
+134,154
+14,201
+Customer deposits and
+payables to brokerage
+customers
+Accounts payable
+780,767
+24
+424,848
+1,635
+432,426
+3,809
+375,752
+2,957
+-
+-
+Insurance payables
+2,256
+571
+28,391
+16,967
+institutions
+119,818
+138,314
+101,731
+148,707
+2,024
+-
+510,594
+Balances with the Central
+Bank and statutory deposits
+34,862
+Fixed maturity investments
+Equity investments
+41,554
+12,317
+141
+292,432
+12,785
+banks and other financial
+1,888
+428,625
+15,548
+Total
+5 years
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(4) LIQUIDITY RISK
+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..
+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
+Repayable
+Less than
+on demand
+3 months
+3 to 12
+months
+31 December 2017
+1 to 5
+years
+Over
+Undated
+Policyholder dividend payable
+11,812
+271,259 320,083
+Accounts receivable
+1,545
+7,956
+51,641
+12,760
+45,694
+73,902
+Finance lease receivable
+reverse repurchase agreements
+29,624
+74,753
+2,170
+112,028
+Other assets
+28,602
+35,743
+-
+121
+54
+12,371
+1,202,731
+33,307
+1,539,172
+25,389
+3,504,514
+546,944
+646,290
+Loans and advances to
+customers
+50,194
+432,182 517,173
+564,950
+356,122
+1,920,621
+Premium receivables
+4,043
+15,912
+13,314
+45,622
+45,622
+Bonds payable
+Finance lease receivable
+3,819
+20,641
+52,084
+1,512
+78,056
+Other assets
+20,265
+273,014
+28,100
+934,290 1,114,997
+15,931
+10,063
+1,643,526
+9,778
+84,137
+1,595,899
+22,604
+647,122
+8,798
+9,427
+customers
+45,651
+349,707
+499,454
+508,345
+Premium receivables.
+3,760
+14,054
+10,620
+6,818
+252,309
+73
+1,655,466
+35,325
+Accounts receivable
+19
+4,360
+Loans and advances to
+6,208,848
+financial institutions
+Accounts payable
+832,094
+358,233
+7
+Insurance payables
+51,302
+48
+8,231
+Insurance contract liabilities
+53,502
+433,847
+8,510
+1,603
+29,091
+320,893
+3,109
+1,948,176
+8,565
+12
+43,488
+customers
+Due to banks and other
+26,185
+595,611
+113,534
+319,332
+90,661
+63,331
+8,753
+Assets sold under agreements
+to repurchase
+89,266
+Other financial liabilities held
+for trading
+3,454
+21,114
+1,617
+Customer deposits and
+payables to brokerage
+89,266
+4,316,483
+450,111
+2,973,949
+268
+Annual Report 2017
+(2,493) (1,400)
+395
+(17)
+21
+(3,494)
+29,939 256,252 284,253
+(33,627) (262,994) (291,364)
+(3,688) (6,742) (7,111)
+2,712 165,923 166,735
+4,501
+(5,560)
+(1,059)
+63,871
+95,052
+574,945
+(593,545)
+-
+(18,600)
+Credit commitments
+494,293
+Cash outflow
+-
+Other liabilities
+26,894
+184,488 131,112 131,071 40,914
+71,442 53,005 112,552
+9,493
+1,058,152 1,070,752 980,598 721,765 5,252,160
+-
+487,585
+273,386
+9,083,427
+Derivative cash flows
+Derivative financial
+instruments settled on
+a net basis
+Derivative financial
+instruments settled on
+a gross basis
+-
+Cash inflow
+393,006
+Ping An Insurance (Group) Company of China, Ltd.
+(4) LIQUIDITY RISK (CONTINUED)
+Bank and statutory deposits
+52,780
+5,527
+Fixed maturity investments
+26,165
+298,335
+1,614
+398,111
+Equity investments
+6,786
+9,992
+21,915
+6,257
+928,015
+11,279
+254,116
+320,294
+1,323,323
+7,133
+Balances with the Central
+46. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+588,906
+111,867
+(in RMB million)
+Cash and amounts due from
+31 December 2016
+Repayable
+on demand
+Less than
+3 months
+3 to 12
+months
+1 to 5
+years
+Over
+5 years
+Undated
+Total
+banks and other financial
+institutions
+117,588
+215,329
+142,351
+1,771
+99,296
+318,236
+99,296
+4,140
+59,661
+63,801
+Security investment funds
+21,528
+10,993
+970
+33,491
+Equity securities
+16,697
+281
+16,978
+Other equity investments
+19,832
+7,148
+26,980
+42,365
+90,767
+8,118
+141,250
+Derivative financial assets
+Interest rate swaps
+Currency forwards and swaps
+Others
+225
+Bonds
+14,107
+Carried at fair value through profit or loss
+Total fair value
+274
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+47. 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 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;
+Level 2: other valuation techniques for which all inputs which have a significant effect on the recorded fair
+value are observable, either directly (such as price) or indirectly. (such as calculated based on price). 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 (unobservable inputs).
+The level of fair value calculation is determined by the lowest level input with material significance 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
+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.
+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. As at 31 December 2017, the key assumptions adopted for majority of the Group's
+financial instruments within Level 3 were expected returns, ranged from 3.8% to 6.0%.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 275
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+47. 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)
+31 December 2017
+Level 1
+Level 2
+Level 3
+Financial assets
+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.
+1,860
+225
+Total financial assets
+Financial liabilities
+Derivative financial liabilities
+Interest rate swaps
+Currency forwards and swaps
+Others
+100
+15,848
+100
+15,848
+2,002
+2,002
+17,950
+17,950
+Other financial liabilities held for trading
+Total financial liabilities
+9,076
+4,370
+614
+14,060
+9,076
+22,320
+614
+276
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+65,657
+932,414
+16,192
+179,417
+390,924
+14,107
+1,860
+16,192
+Available-for-sale financial assets
+Bonds
+42,676
+179,155
+40
+221,871
+Security investment funds
+51,555
+5,380
+56,935
+Equity securities
+254,328
+5,610
+259,938
+Other equity investments
+64,969
+171,259
+236,228
+348,559
+255,114
+171,299
+774,972
+362,073
+Fixed rate financial instruments
+32,010
+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.
+5,226,100
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 273
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+47. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED)
+(in RMB million)
+Financial liabilities
+Derivative financial liabilities
+Other financial liabilities
+Carrying values
+Fair values
+31 December 2017 31 December 2016
+31 December 2017
+31 December 2016
+17,950
+8,715
+17,950
+8,715
+Due to banks and other financial
+institutions
+780,530
+584,794
+780,530
+6,017,985
+584,794
+123,196
+123,196
+5,182,534
+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.
+Wealth management products
+43,588
+65,657
+43,588
+34,841
+Premium receivables
+45,694
+35,325
+45,694
+35,325
+Accounts receivable
+71,923
+22,353
+71,923
+22,353
+Finance lease receivable
+112,028
+78,056
+112,028
+78,056
+Other assets
+152,018
+Total financial assets
+6,050,533
+152,018
+Assets sold under agreements to
+34,841
+133,981
+46,200
+40,846
+Policyholder dividend payable
+45,622
+39,216
+45,622
+39,216
+Bonds payable
+451,283
+349,825
+450,142
+350,868
+Other liabilities
+281,337
+211,181
+281,337
+211,181
+Total financial liabilities
+3,793,540
+3,313,716
+3,792,399
+3,314,759
+The assets and liabilities of the investment-linked business are not included in the above financial assets
+and liabilities.
+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.
+repurchase
+40,846
+46,200
+Fair value of financial assets and liabilities not carried at fair value
+Investment contract liabilities
+89,166
+for policyholders
+133,981
+89,166
+Other financial liabilities held
+for trading
+14,060
+25,883
+14,060
+25,883
+Customer deposits and payables to
+brokerage customers
+1,952,695
+Financial assets and liabilities for which fair value approximates to carrying value
+1,952,695
+1,894,377
+64,414
+61,148
+64,414
+Insurance payables
+61,148
+5,468
+8,565
+5,468
+1,894,377
+Accounts payable
+8,565
+WONG Oscar Sai Hung
+518
+518
+132
+SUN Dongdong
+518
+518
+132
+GE Ming
+518
+132
+Subtotal
+5,143
+16,637
+132
+98
+89
+244
+36,985
+24,437
+Supervisors
+PAN Zhongwu (iv)
+597
+518
+14,774
+518
+518
+YANG Xiaoping
+370
+518
+518
+132
+WOO Ka Biu Jackson (v)
+311
+311
+79
+Stephen Thomas Meldrum
+518
+518
+518
+OUYANG Hui (v)
+208
+53
+XIONG Peijin
+503
+503
+127
+LIU Chong
+518
+132
+YIP Dicky Peter
+132
+208
+132
+GAO Peng (vi)
+120
+HUANG Baokui
+518
+518
+132
+Subtotal
+1,516
+1,406
+1,030
+57
+50
+480
+130
+-
+4,189
+1,367
+Total
+6,659
+18,043
+15,804
+155
+139
+374
+-
+-
+32
+480
+518
+488
+397
+18
+WANG Zhiliang (vi)
+321
+263
+7
+233
+24
+13
+13
+ZHANG Wangjin
+6330
+1,085
+332
+38
+954
+496
+30
+634
+155
+GU Liji
+518
+-
+62
+125
+3,806
+495
+MA Mingzhe (iii)
+SUN Jianyi (iv)
+Discretionary
+Fees
+Salaries
+bonuses (ii)
+Housing
+allowance
+Other
+employee
+benefits
+Employer's
+contribution
+to a
+retirement
+benefit
+scheme
+Remunerations
+received or
+receivable
+Directors
+in respect
+of accepting
+received or
+receivable
+in respect
+of director's
+other services
+in connection
+with the
+management
+of the affairs
+of the
+Company or
+its subsidiary
+undertaking
+Individual
+Total
+income tax
+-
+2,817
+2,258
+office as
+director
+2
+(in RMB thousand)
+2017
+-
+The estimated amount of total compensation has been provided in the Group's 2017 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.
+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.
+(2) COMPENSATION OF KEY MANAGEMENT PERSONNEL OTHER THAN DIRECTORS AND
+SUPERVISORS IS AS FOLLOWS:
+(in RMB million)
+Salaries and other short term employee benefits after tax
+Individual income tax
+2017
+32
+23
+2016
+28
+20
+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.
+Emoluments
+The long-term benefits attributed to year 2013 for key management personnel other than directors and
+supervisors were paid in 2016 as the required payment conditions had been fulfilled. The amount paid after
+tax was RMB3,135.0 thousand and was disclosed in the Announcement regarding the Resolutions of the
+Board of Directors of the Company dated 17 August 2016.
+Ping An Insurance (Group) Company of China, Ltd. 283
+2016
+65
+43
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+51. 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 2017:
+Annual Report 2017
+7
+5,084
+-
+-
+3
+33
+7,397
+5,640
+CAI Fangfang (iv)
+2,118
+1,939
+LIN Lijun (iv)
+487
+181
+3,589
+330
+24
+58
+4,169
+2,944
+32
+23
+55
+-
+778
+187
+Soopakij CHEARAVANONT
+30
+3,772
+-
+LEE Yuansiong (iv)
+2,102
+1,939
+2
+6
+4,049
+2,959
+REN Huichuan (iv)
+-
+2,119
+1,829
+32
+23
+65
+4,068
+2,853
+YAO Jason Bo (iv)
+-
+3,222
+3,039
+-
+3
+33
+-
+6,297
+4,740
+495
+41,174
+83
+284
+470
+170
+581
+294
+28
+23
+60
+986
+267
+819
+519
+147
+29
+60
+1,451
+585
+257
+257
+70
+1,230
+1,400
+813
+57
+57
+24
+47
+503
+503
+230
+30
+169
+169
+515
+145
+507
+143
+515
+145
+515
+470
+145
+22,193
+Supervisors
+GU Liji
+ZHANG Wangjin
+PAN Zhongwu (vii)
+GAO Peng
+PENG Zhijian (viii) (x)
+HUANG Baokui (x)
+Subtotal
+Total
+Annual Report 2017
+Sę ' '
+33,699
+49
+120
+1,239
+WANG Zhiliang
+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.
+MA Mingzhe is the Chief Executive Officer of the Company.
+Shares
+717,256
+163,197
+123,564
+48,223
+40,601
+16,530
+1,140
+GAO Peng
+5,797
+9,746
+(iv) The long-term benefits attributed to year 2014 for SUN Jianyi, REN Huichuan, YAO Jason Bo, LEE Yuansiong, CAI Fangfang, LIN
+Lijun, PAN Zhongwu and SUN Jianping were paid in 2017 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, PAN Zhongwu and SUN Jianping were
+RMB4,125.0 thousand, RMB4,125.0 thousand, RMB825.0 thousand, RMB605.0 thousand, RMB275.0 thousand, RMB54.5 thousand, RMB177.2
+thousand and RMB804.2 thousand respectively and was disclosed in the Announcement regarding the Resolutions of the Board of
+Directors of the Company dated 17 August 2017.
+(v)
+(vi)
+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.
+(vii) The long-term benefits attributed to year 2013 for SUN Jianyi, REN Huichuan, YAO Jason Bo, LEE Yuansiong, LIN Lijun and PAN
+Zhongwu were paid in 2016 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 and PAN Zhongwu, were RMB4,125.0 thousand, RMB4,125.0 thousand, RMB825.0
+thousand, RMB605.0 thousand, RMB206.5 thousand, RMB192.7 thousand respectively and was disclosed in the Announcement
+regarding the Resolutions of the Board of Directors of the Company dated 17 August 2016.
+(viii) During the year 2016, PENG Zhijian waived emoluments of RMB100 thousand.
+(ix) FAN Mingchun and LU Hua resigned as Director on 8 January 2016, took over by XIONG Peijin and LIU Chong.
+(x)
+PENG Zhijian resigned as supervisor on 28 June 2016, took over by HUANG Baokui.
+286
+Annual Report 2017
+13,875
+3,667
+PAN Zhongwu
+CAI Fangfang
+6,187 16,234
+14,313
+152
+130
+30
+350
+37,366
+23,432
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 285
+Notes to Consolidated Financial Statements
+LIN Lijun
+For the year ended 31 December 2017
+(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 2017, the shares purchased during the year 2015 and 2016
+began to vest, and the vesting conditions of employee share purchase scheme for MA Mingzhe, SUN Jianyi, REN Huichuan, YAO
+Jason Bo, LEE Yuansiong, CAI Fangfang, LIN Lijun, PAN Zhongwu, Gao Peng and WANG Zhiliang had been fulfilled in 2017. As at 28
+April 2017, the shares were allocated to personal accounts at respective employee's request and the closing price was RMB37.96 per
+share, and the vested shares net of tax are summarised as follows:
+(ii)
+(iii)
+Name
+MA Mingzhe
+SUN Jianyi
+REN Huichuan
+YAO Jason Bo
+LEE Yuansiong
+51. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+95
+13,500
+4,957 14,834
+SUN Jianyi (vii)
+2,102
+1,939
+REN Huichuan (vii)
+2,115
+1,939
+29
+YAO Jason Bo (vii)
+2,808
+2,626
+LEE Yuansiong (vii)
+2,692
+2,945
+CAI Fangfang
+1,564
+1,389
+27
+LIN Lijun (vii)
+484
+151
+29
+62 33 ∞
+% 2222
+8
+2,764
+7
+2,816
+income tax
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+51. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+For the year ended 31 December 2016:
+(in RMB thousand)
+Directors
+2016
+Discretionary
+Housing
+Fees
+MA Mingzhe (iii)
+Salaries
+Other
+employee
+benefits
+Employer's
+contribution
+to a
+retirement
+benefit
+scheme
+Emoluments
+Remunerations
+received or
+receivable in
+respect of
+accepting
+office as
+director
+received or
+receivable
+in respect
+of director's
+other services
+in connection
+with the
+management
+of the affairs
+of the
+Company or
+its subsidiary
+undertaking
+Individual
+Total
+bonuses (ii) allowance
+5,523
+4,162
+4,049
+515
+515
+145
+Stephen Thomas Meldrum
+507
+507
+143
+43
+FAN Mingchun (ix)
+LU Hua (ix)
+XIONG Peijin (ix)
+WOO Ka Biu Jackson
+468
+468
+4648
+YIP Dicky Peter
+515
+WONG Oscar Sai Hung
+507
+SUN Dongdong
+515
+GE Ming
+515
+Subtotal
+LIU Chong (ix)
+173
+477
+477
+2,960
+22
+63
+4,168
+2,946
+30
+5,467
+4,066
+30
+5,742
+4,291
+18
+24
+25
+52
+3,050
+2,047
+55
+743
+174
+Soopakij CHEARAVANONT
+470
+470
+170
+YANG Xiaoping
+25,804
+73
+3,434
+2017
+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.
+48. TRANSFERRED FINANCIAL ASSETS
+For the year ended 31 December 2017
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 279
+Annual Report 2017
+During the year 2017, there were no significant transfers between Level 1 and Level 2 fair value
+measurements. Transfer into 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.
+Transfers
+290
+219
+Transferred financial assets that do not qualify for derecognition include securitized loans and debt
+securities held by counterparties as collateral under repurchase agreement.
+71
+77
+213
+219
+(6)
+Carried at fair value through profit or loss
+Available-for-sale
+Total
+Unrealized gains
+Realized gains
+(in RMB million)
+2016
+1,446
+77
+1,415
+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.
+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:
+4,228
+31 December 2016
+31 December 2017
+Cash and amounts due from banks and other financial institutions
+Cash on hand
+(in RMB million)
+735
+298
+298
+735
+4,299
+2,112
+2,112
+4,299
+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.
+liabilities
+Carrying
+amount assets
+amount
+associated
+liabilities
+Carrying
+amount assets
+Carrying
+Carrying
+31 December 2016
+31 December 2017
+49. CASH AND CASH EQUIVALENTS
+Assets securitization
+Repurchase transactions
+(in RMB million)
+amount
+associated
+4,499
+31
+30
+Total gains in other comprehensive income
+Total gains in income
+Transfers out of Level 3
+Transfers into Level 3
+Disposals
+Additions
+At 1 January
+(in RMB million)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+47. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+At 31 December
+Annual Report 2017
+4,721
+8,118
+213
+1,416
+(1,156)
+(775)
+4,719
+2,756
+945
+4,721
+At 31 December
+278
+30
+Available-for-sale financial assets
+2016
+1,416
+1,415
+1
+Total
+Unrealized gains
+Realized gains
+2017
+Carried at fair value through profit or loss
+Available-for-sale
+(in RMB million)
+The gains or losses of level 3 financial instruments included in the statement of income for the year are
+presented as follows:
+119,147
+2017
+1,662
+77
+30
+(3,302)
+1,021
+14,096
+(87,714)
+(61,072)
+129,882
+100,232
+74,219
+119,147
+2,168
+171,299
+Total gains in income
+Term deposits
+1,710
+2,376
+(364)
+(Increase)/Decrease in reinsurers' share of insurance liabilities
+(1,210)
+523
+Decrease/(Increase) in inventories
+(4,739)
+(49,709)
+Increase in accounts receivable
+(1,253)
+(10,369)
+Increase in loans and advances to customers
+Increase in premium receivables
+(41,146)
+Increase in amounts due from banks and other financial institutions
+(14,103)
+(18,299)
+Increase in balances with the Central Bank and statutory deposits
+Changes in operating assets and liabilities:
+Operating profit before working capital changes
+Loan loss provisions, net of reversals
+13,101
+131
+45,491
+(28,305)
+40,814
+(206,451)
+Decrease in assets purchased under reverse repurchase agreements
+(4,093)
+7,787
+of the banking and securities business
+Increase/(Decrease) in assets sold under agreements to repurchase
+6,188
+6,406
+Increase in policyholder dividend payable
+62,192
+76,289
+Increase in investment contract liabilities for policyholders
+30,902
+158,867
+(223,768)
+234,521
+721
+187,201
+62,110
+(97,276)
+141,374
+124,423
+Increase in amounts due to banks and other financial institutions
+Increase in customer deposits and payables to brokerage customers
+Increase in insurance payables
+(78,685)
+Increase in other assets
+33,688
+625
+of the banking and securities business
+Increase in insurance contract liabilities
+7,773
+723
+(1,401)
+(1) RECONCILIATION OF PROFIT BEFORE TAX TO NET CASH FLOWS FROM OPERATING
+ACTIVITIES:
+50. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+280
+The carrying amounts disclosed above approximate their fair values at year end.
+367,552
+308,664
+Total
+58,766
+93,008
+(in RMB million)
+Assets purchased under reverse repurchase agreements
+13,185
+Bonds
+51,973
+32,898
+Balances with the Central Bank
+86,492
+30,003
+Placements with banks and other financial institutions
+156,883
+127,569
+Due from banks and other financial institutions
+7,229
+581
+Profit before tax
+134,740
+128
+12,144
+11,167
+Provision for doubtful debts and others, net
+Foreign exchange losses/(gains)
+Finance costs
+568
+716
+(141,168)
+(3,831)
+(3,271)
+Fair value gains on investments at fair value through profit or loss.
+Fair value losses on available-for-sale equity investments
+(transfer from equity)
+2017
+(192,757)
+1
+Losses on disposal of investment properties, property and
+equipment, intangible assets and settled assets
+2,123
+2,394
+4,041
+5,618
+94,411
+2016
+Amortization of intangible assets
+Depreciation
+Adjustments for:
+Investment income
+Disposals
+Additions
+At 1 January
+Equity securities
+Security investment funds
+Carried 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):
+Ping An Insurance (Group) Company of China, Ltd.
+Increase/(Decrease) in other liabilities
+49,656
+(7,412)
+Cash generated from operations
+Other equity investments
+158,169
+Net cash flows from operating activities
+(36,886)
+253,730
+(25,909)
+121,283
+227,821
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 281
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+50. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
+(2) NET DEBT RECONCILIATION:
+Income tax paid
+This section sets out an analysis of net debt and movements in net debt of current year.
+Derivative financial assets
+Currency forwards and swaps
+422
+153,963
+4,721
+83,798
+65,444
+12,110
+4,703
+7,291
+116
+22,657
+245
+Interest rate swaps
+22,412
+18
+8,076
+40,710
+70,392
+68,186
+2,206
+Total fair value
+Level 3
+31 December 2016
+Level 2
+Level 1
+Others
+48,804
+3,434
+Net debt
+Liquid investments (i)
+367,552
+(54,896)
+(3,992)
+153,963
+(15,864)
+(289,782)
+(188,205)
+(43,138)
+(111,292)
+43,528
+(225,190)
+2,963
+(1,029)
+Balance as at 31 December 2017
+308,664
+Other non-cash movements
+3,151
+141,250
+(18,153)
+(332,920)
+(317,838)
+(200,844)
+(i) Liquid investments comprise current investments that are traded in an active market, being the Group's financial assets held at fair
+value through profit or loss.
+282
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+51. 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)
+(21,304)
+Cash and cash equivalents
+Foreign exchange adjustments
+Balance as at 1 January 2017
+Borrowings repayable within 1 year
+Borrowings - repayable after 1 year
+Cash and liquid investment
+Gross debt - fixed interest rates
+Gross debt - variable interest rates
+31 December 2017
+308,664
+141,250
+(332,920)
+(317,838)
+(200,844)
+Cash flows
+449,914
+(408,282)
+(200,844)
+Other assets
+Cash and
+cash equivalents
+investments
+Liquid
+Liabilities from
+financing activities
+Borrowings -
+repayable
+within 1 year
+Borrowings -
+repayable
+after 1 year
+Total
+(242,476)
+4,980
+8,836
+422
+Held-to-maturity
+Financial assets
+(in RMB million)
+381,170
+68,972
+Total financial liabilities
+381,170
+68,972
+Bonds payable
+Financial liabilities
+Total financial assets
+Bonds
+1,206,471
+1,206,471
+376
+1,157,439
+1,157,439
+48,656
+48,656
+Total fair value
+Level 3
+Level 2
+Level 1
+31 December 2017
+Bonds
+Held-to-maturity
+Financial assets
+376
+(in RMB million)
+Total financial assets
+Bonds payable
+2016
+Carried at fair value through profit or loss
+2017
+(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.
+350,868
+350,868
+325,468
+325,468
+25,400
+25,400
+1,049,062
+Financial liabilities
+1,200
+1,200
+1,004,869
+1,004,869
+42,993
+42,993
+Total fair value
+Level 3
+Level 2
+Level 1
+31 December 2016
+450,142
+450,142
+Total financial liabilities
+1,049,062
+(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:
+47. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+For the year ended 31 December 2017
+272,354
+530,543
+119,147
+204,486
+206,910
+162,486
+119,147
+43,339
+Other equity investments
+119,563
+3,422
+297,120
+116,141
+54,590
+5,429
+49,161
+Security investment funds
+193,904
+152,296
+41,608
+Bonds
+Available-for-sale financial assets
+8,836
+4,980
+Equity securities
+123,868
+693,342
+Total financial assets
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 277
+Annual Report 2017
+34,598
+196
+12,076
+22,326
+25,883
+196
+3,361
+22,326
+Other financial liabilities held for trading
+Total financial liabilities
+8,715
+8,715
+3,869
+3,869
+354
+4,492
+4,492
+354
+Others
+Currency forwards and swaps
+Interest rate swaps
+Derivative financial liabilities
+Financial liabilities
+Salaries and other short term employee benefits after tax
+Individual income tax
+Bonds
+47. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+20.8
+business
+business
+Banking
+insurance
+insurance
+and casualty
+health
+Property
+Life and
+2017
+Net profit attributable to shareholders of
+(in RMB million)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+20
+20
+In 2017, Ping An's operating profit attributable
+to shareholders of the parent company rose
+38.8% year on year to RMB94,708 million; the
+operating profit attributable to shareholders
+of the parent company of the life and health
+insurance business rose 29.7% year on year to
+RMB52,128 million.
+It is believed that the operating profit after
+tax which excludes fluctuations of above
+non-operating related items could provide a
+clearer and more objective representation of
+business performance and trend.
+Impact of one-off non-operating items
+are material items that management
+considered to be non-operating income
+and expenses.
+Impacts of discount rate change is the
+effect on insurance contract liability of
+life and health insurance business due to
+changes in discount rate;
+OPERATING PROFIT OF THE GROUP
+Due to the long-term feature of the
+majority insurance business of the life and
+health insurance business, the measure of
+operating profit has been introduced 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:
+40
+4.0
+3.3
+17.4
+20.7
+The Group
+N/A
+N/A
+business
+Asset
+management
+business
+Fintech &
+healthtech
+Other
+businesses
+and
+4,532
+Short-term investment variance (1) (B)
+Excluding:
+99,978
+(3,818)
+14,689
+16,403
+23,189
+13,372
+36,143
+10,890
+53
+89,088
+(3,871)
+N/A
+14,621
+68
+9,740
+65
+485
+15,924
+13,449
+13,307
+35,658
+Net profit (A)
+Minority interests
+the parent company
+Group
+elimination
+business
+The
+479
+Impact of discount rate change (C)
+elimination
+3.6
+insurance business
+Life and health
+2016 Change (pps)
+2017
+ROE
+(%)
+Business Analysis
+Performance Overview
+MANAGEMENT DISCUSSION AND ANALYSIS
+19
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+23.4
+383,449
+64.9
+(27,314) (16,563)
+473,351
+The Group
+elimination
+Other businesses and
+98.2
+19,056
+37,772
+business
+Fintech & healthtech
+18.3
+49,430
+58,497
+business
+management
+The other asset management business's profit
+grew sharply, driven by strong performance
+of companies like Ping An Asset Management,
+Ping An Financial Leasing, and Ping An
+Overseas Holdings. The fintech & healthtech
+business's profit soared year on year due to
+Lufax Holding's profit for 2017, the RMB10,850
+million in net profit for 2017 from Ping An Good
+Doctor's restructuring, and the RMB9,497 million
+Other asset
+25.7
+22.1
+3.6
+Property and casualty
+37.6
+41.2
+business
+Fintech & healthtech
+13.5
+17.5
+business
+management
+Other asset
+(0.9)
+8.9
+8.0
+Securities business
+6.7
+Other businesses and
+13.9
+Trust business
+Including:
+3.5
+12.2
+15.7
+business
+Asset management
+(1.6)
+13.2
+11.6
+Banking business
+(0.8)
+20.0
+insurance business
+20.6
+(21,213)
+Impact of one-off material
+non-operating items (D)
+(3,803)
+(3,309)
+9,412
+13,108
+12,638
+40,206
+shareholders of the parent company
+Operating profit attributable to
+78,355
+(3,535)
+(3,575)
+9,649
+22,599
+12,700
+40,518
+9,497
+9,497(2)
+(17,652)
+2,168
+Operating profit (E=A-B-C-D)
+non-operating items (D)
+Impact of one-off material
+(17,652)
+Impact of discount rate change (C)
+2,168
+Short-term investment variance (1) (B)
+Excluding:
+72,368
+(3,535)
+68,252
+Operating profit attributable
+to minority shareholders
+312
+The new standards retain but simplify the
+mixed measurement model, and establish three
+primary measurement categories for financial
+assets: (1) amortized cost; (2) fair value through
+other comprehensive income; and (3) fair value
+through profit or loss. The basis of classification
+depends on an entity's business model and
+the contractual cash flow characteristics of
+financial assets. Generally, investments in equity
+instruments are required to be measured at fair
+value through profit or loss with the irrevocable
+option at inception to be measured at fair
+value through other comprehensive income
+(profit or loss at disposal may not be recycled;
+however, dividends are included in profit/
+loss). The incurred loss impairment model
+under the old standards is replaced by the
+expected credit losses model under the new
+standards. For financial liabilities there were
+no changes to classification and measurement
+IMPLEMENTATION OF NEW ACCOUNTING
+STANDARDS FOR FINANCIAL INSTRUMENTS
+In March 2017, the Ministry of Finance of
+the People's Republic of China released the
+amended Accounting Standards for Enterprises
+No. 22 Recognition and Measurement of
+Financial Instruments, No. 23 - Transfer of
+Financial Assets, No. 24 - Hedge Accounting,
+and No. 37 Presentation and Reporting of
+Financial Instruments (hereinafter referred to as
+"new accounting standards concerning financial
+instruments" or "new standards"). Companies
+dual-listed in China and abroad should
+implement the new standards from January 1,
+2018. The new standards maintain convergence
+with "IFRS 9 Financial Instruments". On June
+22, 2017, the Ministry of Finance promulgated
+the Circular on Transitional Measures for
+Implementation of New Accounting Standards
+for Financial Instruments by Insurers (Cai Kuai
+[2017] No. 20), under which for an insurer that
+meets specific criteria, the implementation of
+the new standards may be postponed until
+January 1, 2021.
+-
+8.5
+27.0
+35.5
+the life and health
+insurance business
+5.7
+21.0
+26.7
+the Group
+Operating ROEV of
+Operating ROEV of
+Change
+(pps)
+2016
+5,922
+2017
+ROEV
+Business Analysis
+Performance Overview
+22
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 21
+Annual Report 2017
+(2) The one-off material item regarded by management as non-operating income and expense in 2017 mainly refers to
+the net profit from Ping An Good Doctor's restructuring. The one-off material item regarded by management as
+non-operating income and expense in 2016 mainly refers to the net profit from Puhui Business's restructuring.
+(3) Numbers may not add up to totals due to rounding.
+Notes: (1) 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.
+10,104
+268
+(266)
+237
+9,491
+62
+(%)
+9,649
+22,599
+12,700
+11,101
+53
+68
+479
+9,740
+65
+696
+to minority shareholders
+Operating profit attributable
+94,708
+(3,871)
+3,771
+15,924
+13,449
+(in RMB million)
+13,307
+shareholders of the parent company
+Operating profit attributable to
+105,809
+(3,818)
+3,839
+16,403
+23,189
+13,372
+52,824
+10,850
+10,850(2)
+(21,213)
+4,532
+Operating profit (E=A-B-C-D)
+52,128
+5.5
+Net profit attributable to shareholders of
+Life and
+health
+25,033
+9,974
+268
+(266)
+237
+9,491
+62
+182
+62,394
+(3,803)
+6,188
+9,412
+13,108
+12,638
+2016
+24,851
+Minority interests
+the parent company
+Group
+The
+and
+elimination
+Other
+businesses
+Fintech &
+healthtech
+business
+Asset
+management
+business
+Banking
+business
+insurance
+business
+business
+insurance
+and casualty
+Property
+Net profit (A)
+except for the recognition of changes in own
+credit risk in other comprehensive income for
+liabilities measured at fair value through profit
+or loss. The new accounting standards on
+hedge accounting raise the principle-oriented
+philosophy, and relax the requirements for
+hedge effectiveness. Contemporaneous
+documentation is still required but is different
+from that currently prepared under the old
+standards. Entities are not required to restate
+previous comparable data according to the
+new standards; differences between the new
+standards and the old ones as at the first date
+of implementation will be included in opening
+retained earnings or other comprehensive
+income.
+24,487
+Securities business
+business
+Shareholder's equity
+Asset management
+2.6
+22,599
+23,189
+For analysis of other business segments'
+results, please refer to the following sections.
+in net profit for 2016 from Puhui Business's
+restructuring. For details of Ping An Good
+Doctor's restructuring, please refer to the notes
+to financial statements.
+Banking business
+5.3
+12,700
+13,372
+insurance business
+Property and casualty
+44.4
+25,033
+36,143
+insurance business
+Life and health
+Change (%)
+2016
+2017
+(in RMB million)
+Net Profit
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+18
+For the year 2017, the Company reviewed and
+redefined its business segments according to
+business operations in order to provide clear
+and concise information. 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
+subsidiaries that engage in asset management
+business such as 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
+such as Lufax Holding, Ping An Good Doctor,
+OneConnect, Ping An Healthcare Technology
+and Autohome. Eliminations include offsets
+against cross-shareholding among business
+lines. The data for 2016 were restated for
+comparison purposes.
+SEGMENT REPORTING
+16,403
+9,649
+70.0
+Including:
+Banking business
+101.9
+5,112
+10,323
+business
+10.2
+63,649
+70,144
+insurance business
+management
+Property and casualty
+Other asset
+45.2
+114,566
+23.4
+166,392
+(4.2)
+2,215
+2,123
+Securities business
+Life and health
+70.4
+2,322
+3,957
+Trust business
+(%)
+2016
+Change
+December 31 December 31
+2017
+(in RMB million)
+insurance business
+222,054
+383,449
+20.9
+25.8
+774,488
+974,570
+Total revenue
+2016 Change (%)
+2017
+(in RMB million)
+CONSOLIDATED RESULTS
+The Group's net profit attributable to
+shareholders of the parent company for
+2017 was RMB89,088 million, up 42.8% year
+on year. The operating profit attributable to
+shareholders of the parent company for 2017
+was RMB94,708 million, up 38.8% year on year.
+As at December 31, 2017, the equity attributable
+to shareholders of the parent company was
+RMB473,351 million, up 23.4% compared with
+the beginning of 2017; the Company's total
+assets stood at over RMB6.49 trillion, up 16.4%
+compared with the beginning of 2017.
+We offer a wide range of financial products and
+services via various distribution channels under
+a uniform brand. We engage in three core
+finance businesses of insurance, banking and
+asset management through Ping An Life, Ping
+An Property & Casualty, Ping An Annuity, Ping
+An Health, Ping An Bank, Ping An Trust, Ping
+An Securities, and Ping An Asset Management.
+Besides, we engage in the fintech & healthtech
+business through a number of units including
+Lufax Holding, Ping An Good Doctor,
+OneConnect, Ping An Healthcare Technology,
+and Autohome.
+The Group's ROE for 2017 was 20.7%, up 3.3 pps year on year; ROEV was
+26.7%, up 5.7 pps year on year.
+The Group's operating profit attributable to shareholders of the parent
+company for 2017 was RMB94,708 million, up 38.8% year on year.
+The Group's net profit for 2017 was RMB99,978 million, up 38.2% year on
+year. Its net profit attributable to shareholders of the parent company was
+RMB89,088 million, up 42.8% year on year.
+Business Analysis
+Performance Overview
+MANAGEMENT DISCUSSION AND ANALYSIS
+17
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+In smart health care, Ping An Healthcare
+Technology provides cost control and account
+management services for social health
+insurance in over 200 Chinese cities, reducing
+medical spending and improving health
+care. In public health care, on the basis of
+world-leading big data, Ping An builds systems
+and models for predicting and preventing
+infectious diseases, frequently-occurring
+diseases, and chronic diseases in cities such
+as Shenzhen and Chongqing. In smart fiscal
+management, Ping An works with provinces
+and cities such as Nanning, Guangdong,
+Shenzhen and Changsha to build Smart Fiscal
+Cloud, a smart platform for local governments
+to manage public assets and liabilities more
+efficiently.
+Ping An closely follows the Communist Party
+of China and the government to serve the
+nation, real economy, and people. To make
+cities better, Ping An empowers cities with
+technologies by building the Smart City Cloud,
+which covers eight key areas of people's
+livelihood: administration, fiscal management,
+security, healthcare, education, real estate,
+environmental protection, and daily life.
+Smart City Ecosystem
+Specifically, pinganfang.com provides
+consumers with real estate information,
+advisory services, and social interactions via
+online and offline portals. Brokerage Cloud
+provides small- and medium-sized real estate
+agents and brokers with system services and
+one-stop financial solutions to help them win
+customers, obtain real estate information, cut
+costs, and improve efficiency. Smart City Cloud
+allows the government to boost administrative
+efficiency via e-government innovations
+on a real estate service management cloud
+platform combining "one website, one chart,
+one platform, and one report." Smart Real
+Estate Cloud is designed as a smart end-to-end
+solution for informatization of the real estate
+industry, serving all players on the industry
+chain and promoting smart management across
+the industry.
+platform, Ping An Haofang will provide an
+empowerment system that covers the entire
+industry chain, and develop a leading business
+model that serves the whole real estate
+ecosystem.
+In the real estate services ecosystem, Ping An
+Haofang provides solutions on "one website
+and three clouds" (pinganfang.com, Brokerage
+Cloud, Smart City Cloud, and Smart Real Estate
+Cloud) to penetrate three markets: real estate
+marketing, management, and finance. Ping
+An Haofang connects with partners including
+developers, leasing companies, brokers and
+government agencies to build a data asset
+platform based on real estate information,
+consumers, brokers, and contents. On this
+Real Estate Services Ecosystem
+As China's leading online auto service platform,
+Autohome provides comprehensive auto
+services including media, e-commerce, finance,
+and lifestyle services. In 2017, Ping An Bank
+remained as a leader in the auto finance market
+as its new auto loans grew by 44.2% year on
+year to RMB118,384 million. On the "Ping An
+Auto Owner" app, Ping An combines extensive
+auto service resources and cooperates with
+thousands of car dealers and garages across
+the country to provide excellent one-stop auto
+services including maintenance, insurance, and
+lifestyle services. As at December 31, 2017, the
+"Ping An Auto Owner" app had 44.24 million
+registered users, over 26.94 million of whom had
+bound their vehicles to accounts; in December,
+the app had 9.53 million monthly active users.
+In the auto services ecosystem, Ping An serves
+large numbers of auto-related retail financial
+customers and internet users via Autohome,
+Ping An Bank, and Ping An Property & Casualty.
+Moreover, via the car dealer platform, new car
+and second-hand car trading platforms, and
+spare part platform, Ping An serves various
+auto service businesses including most auto
+assembly plants and car dealers in China as
+well as leading second-hand car dealers and
+garages. Ping An is building a comprehensive
+trade and finance service platform for auto
+purchase, use, maintenance and sale.
+Auto Services Ecosystem
+As to payers, Ping An Healthcare Technology
+is committed to building China's best tech-
+powered managed care service platform.
+Through efficient connection and effective
+collaboration with healthcare service
+participants, Ping An Healthcare Technology
+provides comprehensive smart solutions for
+upstream and downstream service providers of
+social health insurance, private insurance and
+healthcare, and even for consumers of such
+services. Over 2,000 hospitals have connected
+with Ping An Healthcare Technology's system.
+Including: Premium
+income
+605,035
+469,555
+486,461
+587,917
+16.0
+5,090,442
+16.4
+6,493,075 5,576,903
+5,905,158
+Total assets
+Total liabilities
+Shareholders' equity
+Equity attributable to
+shareholders of the
+parent company
+(%)
+2016
+Change
+December 31 December 31
+2017
+(in RMB million)
+42.8
+62,394
+473,351
+89,088
+to shareholders of
+Net profit attributable
+38.2
+72,368
+99,978
+Net profit
+42.7
+94,411
+134,740
+Profit before tax
+28.9
+23.5
+(680,077)
+(839,830)
+Total expense
+the parent company
+202,171
+9.8
+Fintech & healthtech
+9,928
+business
+Property and casualty
+management
+49.2
+107,558
+160,450
+insurance business
+Other asset
+Life and health
+(4.4)
+2,137
+2,043
+Securities business
+(%)
+2016
+Change
+December 31 December 31
+2017
+(in RMB million)
+70.5
+2,319
+3,953
+Trust business
+Including:
+parent company
+69.2
+9,412
+15,924
+business
+4,956
+100.3
+insurance business
+69,804
+3.3
+18,882
+19,509
+42.8
+Trust business
+62,394
+89,088
+The Group
+Including:
+1.8
+(3,803)
+(3,871)
+elimination
+11.9
+Equity attributable to shareholders of the
+92,799
+business
+Other businesses and
+Asset management
+136.3
+6,188
+14,621
+business
+9.8
+117,259
+128,791
+Banking business
+Fintech & healthtech
+10.2
+63,340
+103,848
+Asset management
+2.6
+13,108
+Net profit attributable to shareholders of the
+management
+Other asset
+6.0
+25,649
+27,192
+Securities business
+38.2
+72,368
+99,978
+The Group
+3.3
+18,904
+19,532
+business
+Trust business
+8.0
+(3,535)
+(3,818)
+elimination
+Other businesses and
+16.7
+96,416
+112,536
+business
+Asset management
+148.0
+5,922
+14,689
+business
+Including:
+25,842
+65,812
+26.9
+13,449
+Banking business
+20.9
+486,461
+587,917
+The Group
+5.3
+12,638
+13,307
+insurance business
+Property and casualty
+60.0
+(17,228)
+(27,568)
+51,863
+elimination
+24,851
+35,658
+insurance business
+Other businesses and
+Life and health
+65.0
+26,887
+44,359
+business
+2016 Change (%)
+2017
+(in RMB million)
+Fintech & healthtech
+parent company
+43.5
+The Group will adopt the new standards from
+January 1, 2018 as it does not qualify for a
+temporary exemption granted by Cai Kuai
+[2017] No. 20.
+Short-term investment variance, which is
+the variance between actual investment
+return of 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
+life and health insurance business is locked
+at 5% after excluding the short-term
+investment variance;
+2018.
+27.3
+373,781
+475,895
+Written premium
+Change (%)
+2016
+2017
+(in RMB million)
+Release of residual
+Change (%)
+2017
+(in RMB million)
+Results of Operation
+Note: Figures may not match totals due to rounding.
+Ending residual margin
+35.5
+454,705
+616,319
+2016
+Less: Premium deposits
+margin (A)
+49,811
+Operating variance and
+Less: Premium deposits
+51.7
+3,715
+5,637
+Spread income (C) (2)
+10.8
+(5,311)
+(5,886)
+risk transfer
+30.3
+5,648
+7,357
+worth (B)(1)
+significant insurance
+Return on net
+of policies without
+30.4
+38,202
+37.4
+14,811
+20,357
+30.4
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 25
+Annual Report 2017
+Short-term investment variance, which is
+the variance between actual investment
+return of 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
+life and health insurance business is locked
+at 5% after excluding the short-term
+investment variance;
+Analysis of operating profit and profit sources
+Due to the long-term feature of the
+majority insurance business of the life and
+health insurance business, the measure of
+operating profit has been introduced 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:
+In 2017, the Company reviewed and redefined
+its business segments according to business
+operations. The life and health insurance
+business represents business results of Ping
+An Life, Ping An Annuity, and Ping An Health.
+To be comparable, figures in 2016 have been
+restated accordingly.
+FINANCIAL ANALYSIS
+(1) Calculated by the CIRC's rules.
+In 2017, among all the insurance products
+offered by Ping An Life, the top five
+contributors to premium income were Yingyue
+Rensheng Annuity, Zunhong Rensheng
+Endowment Insurance, Ping An Fu Whole
+Operations of insurance products
+(1) The number of individual customers is counted on the
+basis of the number of holders of in-force policies. As
+at December 31, 2017, individual applicants and insureds
+totaled 87.59 million.
+1.5 pps
+0.4 pps
+86.5
+88.0
+25 months
+91.4
+91.8
+13 months
+26
+separated out from
+Business Analysis
+Impact of discount rate change is the
+effect on insurance contract liability of
+life and health insurance business due to
+changes in discount rate;
+(38,202)
+(49,811)
+margin
+Operating variance
+and others
+30.2
+17,391
+22,642
+29.7
+129,860
+168,426
+37.4
+330,846
+454,705
+Beginning residual
+margin
+Contribution from
+new business
+Expected interest
+growth
+Release of residual
+Change (%)
+2016
+2017
+(in RMB million)
+It is believed that the operating profit after
+tax which excludes fluctuations of above
+non-operating related items could provide a
+clearer and more objective representation of
+business performance and trend. The operating
+profit of the life and health insurance business
+is analyzed below.
+Impact of one-off non-operating items
+are material items that management
+considered to be non-operating incomes
+and expenses.
+Life and Health Insurance Business
+others (D)
+10,108
+6,317
+Total investment
+(1) Total investment income includes investment income
+and share of profits and losses of associates and
+jointly controlled entities under the segmented income
+statement.
+As at December 31, 2017, the residual margin of
+the life and health insurance business reached
+RMB616,319 million, which rose by 35.5% from the
+end of 2016 due to strong growth of new business.
+(4) Figures may not match totals due to rounding.
+(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.
+(2) Spread income is the expected investment return from
+assets backing contract liability based on EV ultimate
+investment return assumption (5%) exceeding the
+interest required on contract liability.
+Note: (1) Return on net worth is the investment return on
+shareholder equity based on EV ultimate investment
+return assumption (5%).
+17.9
+(47,569) (40,349)
+expenses
+Administrative
+44.4
+25,033
+36,143
+Net profit (J=G+H+I)
+38.2
+(77,754) (56,249)
+operations
+20.2
+income (1)
+(17,652)
+113,811
+34.1
+Ping An Life, Ping An Property & Casualty,
+Ping An Annuity, Ping An Health, and Ping
+An Asset Management will continue to follow
+the old standards for financial instruments
+when preparing statutory financial statements
+because they qualify for a temporary
+exemption granted by Cai Kuai [2017] No. 20.
+However, according to accounting policies of
+the Group, these subsidiaries should separately
+prepare financial statements and notes
+under the new standards for consolidation
+by the Group from January 1, 2018. Other
+non-insurance subsidiaries of the Group will
+implement the new standards from January 1,
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+44.4
+25,033
+36,143
+Net profit
+77.1
+(8,203)
+(14,528)
+52.5
+33,236
+50,671
+Profit before tax
+Income tax
+(21.3)
+(1,814)
+(1,427)
+expenses
+Other net revenue and
+84,867
+Persistency ratio (%)
+(21,213)
+on insurance
+(20,088)
+Income tax (F)
+33.4
+291,264
+388,642
+Premium income
+35.3
+53,882
+72,912
+(E=A+B+C+D)
+before tax
+5.4
+(77,206)
+(81,367)
+products
+Operating profit
+investment-linked
+universal life and
+60.0
+(13,365)
+rate change (1)
+50.3
+384,567
+Commission expenses
+109.0
+2,168
+4,532
+variance (H)(3)
+33.0
+(241,283)
+(320,957)
+benefits
+Short-term investment
+policyholders'
+30.4
+40,518
+52,824
+tax (G)
+Claims and
+Operating profit after
+33.5
+288,064
+Earned premium
+3.9
+Impact of discount
+6,250
+Ping An Insurance (Group) Company of China, Ltd. 23
+(2) Premium income 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.
+(1) Written premium means all premiums received from the
+policies underwritten by the Company, which are prior
+to the significant insurance risk testing and separating of
+hybrid contracts.
+1.5 pps
+12.7
+14.2
+Market share of
+premium income (%)
+Ping An Life
+24.0
+37,848
+46,933
+31.0
+46,413
+60,786
+The agent channel
+Including: Long-term
+protection business
+32.6
+50,805
+67,357
+Value of new business
+(NBEV)
+33.4
+MANAGEMENT DISCUSSION AND ANALYSIS
+291,264
+Business Analysis
+24
+52,004
+Individuals (1)
+(in RMB
+(in thousand)
+Number of customers
+Life Insurance, Zunyu Rensheng Endowment
+Insurance, and Xinli Endowment Insurance,
+which together generated 28.0% of Ping An
+Life's premium income for 2017.
+(%)
+2016
+Change
+December 31 December 31
+2017
+Business data of Ping An Life are as follows:
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Life adopted cutting-edge
+technologies to develop a new engine for
+future development. Artificial intelligence
+(AI) technology is applied to customer
+development and development of the new
+model based on precision marketing. Focusing
+on customer needs, Ping An Life has sourced
+a large number of customers at various
+scenarios. Through frequent interaction with
+customers, it conducts 360-degree customer
+profiling and customer classification based
+on multiple dimensions. Products, services,
+channels and contact timing were created in
+a smart way, and product information was
+pushed to customers and agents. Artificial
+intelligence (AI) technology is applied to
+team management to improve agent retention
+rate and productivity. Ping An Life adopted
+Al-based technologies, such as neural networks,
+facial recognition and voiceprint recognition, to
+conduct agent profiling and full-process online
+management of new agents, and accurately
+identify agents with a high possibility of being
+retained. By setting the best growth path for
+agents and giving real-time online guidance,
+Ping An Life increased retention rate and
+productivity of agents. Artificial intelligence
+(AI) technology is applied to customer
+services to provide premium customer
+experience. It pioneered "Smart Customer
+Services". Leveraging customer data and Al
+technology from the Group, Ping An Life has
+developed capabilities on four fronts, including
+business type identification, risk identification,
+online self-service function and online stores,
+to enhance efficiency in policy administration,
+claim settlement and underwriting. Seventy
+percent of claims can be paid within 30 minutes,
+and 96% of insurance applications can be
+processed in real time. In the two months
+following the launch of the "Smart Customer
+Services", Ping An Life handled over 28,000
+cases online, with a daily average of around
+400 cases and a quickest turnaround time of 3
+minutes.
+activities and health management. In 2017, Ping
+An Life launched the "new lifestyle campaign"
+and promoted healthy lifestyles through
+activities such as fitness walking and book
+donations. Over 22 million users took part in the
+campaign.
+Annual Report 2017
+Ping An Life regards its "Jin Guan Jia” app
+as a core mobile financial services platform
+to integrate online and offline customer
+development in various scenarios. As at
+December 31, 2017, the app provided 136 million
+registered users with comprehensive financial
+services relating to policies, wealth increase,
+On the basis of the philosophy that “insurance
+should be protection-oriented”, Ping An
+Life employed the "Product+” strategy to
+extend the life insurance product line. In 2017,
+Ping An Life upgraded its flagship protection
+product Ping An Fu to increase the benefit
+limits. Moreover, it developed protection
+products with multiple reimbursements for
+cancer, long-term disability care and high-end
+whole-life insurance, for different segments
+to establish a comprehensive benefit system.
+Leveraging resources of the Group, Ping An
+Life launched the "360 healthcare services",
+providing customers with the "diagnosis -
+treatment - recovery" whole-process solution
+and services. With the Ping An RUN Vitality
+program, Ping An Life developed the closed.
+health care loop of "disease prevention in the
+upstream, compensation for the midstream and
+health care services for the downstream" to
+satisfy comprehensive demand of customers
+for health risk management.
+Ping An Life's agents, bancassurance,
+telemarketing and internet channels
+flourished hand-in-hand, achieving synergy.
+The agent channel enjoyed stable growth of
+headcount, capacity and income. Significant
+breakthroughs were made in the transformation
+for regular premium of the bancassurance
+channel. The written premium of new regular
+premium business represented 65.4%, up 38.5
+pps year on year. The telemarketing channel
+extended its lead in the market. With the "O20
++ external" platforms, Ping An Life adopted
+new technologies, such as big data, to conduct
+precision customer sourcing and intelligent
+marketing. This enabled Ping An Life to grow
+written premium of its new business quickly.
+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. In 2017, Ping An Life
+realized net profit of RMB34,732 million, up 42.1%
+year on year, mainly attributed to rapid growth
+in the release of residual margin.
+Life and Health Insurance Business
+46,141
+388,642
+172.5
+Ping An Annuity
+Written premium (1)
+Ping An Life
+2016 Change (%)
+2017
+(in RMB million)
+The written premium and premium income
+of the Company's life and health insurance
+business are as follows:
+In 2017, China's economy picked up steadily,
+with improving economic structures, effective
+control of financial risks, and increasing
+support for the real economy. Moreover,
+the protection-oriented insurance industry
+ushered in the key stage for transformation
+and upgrade in 2017. The Company's life and
+health insurance business was powered by
+the "finance + technology" strategy of the
+Group. On the basis of compliance and risk
+prevention, the Company entered the new
+era of platform operations. With improving
+core competitive advantages in products and
+technology, the Company maintained stable,
+healthy development of its embedded value
+and business scale. In 2017, the NBEV of the
+life and health insurance business grew by
+32.6% year on year to RMB67,357 million. The
+NBEV of the agent channel rose 31.0% year on
+year to RMB60,786 million, to which long-term
+protection-oriented business contributed
+RMB46,933 million or 77.2%.
+insurance business through Ping An Life, Ping
+An Annuity and Ping An Health.
+The Company conducts life and health
+BUSINESS OVERVIEW
+Net profit rose 44.4% year on year to RMB36,143 million; operating profit
+increased 30.4% year on year to RMB52,824 million. As of the end of 2017,
+residual margin grew by 35.5% from the start of 2017 to RMB616,319 million.
+Ping An Life boosted the number and productivity of its sales agents.
+The number of sales agents increased by 24.8% to 1.3860 million; first year
+written premium per agent grew by 7.1% year on year.
+The value of new business (NBEV) and written premium registered rapid
+and sustained growth. The NBEV rose by 32.6% year on year, and the
+written premium increased by 27.3% year on year. ROEV of life and health
+insurance business stood at 35.5%, up 8.5 pps year on year.
+Life and Health Insurance Business
+Business Analysis
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+6,016
+For the new accounting standards for financial
+instruments and the impacts of accounting
+policy changes, please refer to Note 2. "Issued
+but not yet effective international financial
+reporting standards" to the consolidated
+financial statements.
+453,557
+19,956
+Total
+355,274
+17,578
+788
+2,147
+14.8
+15,294
+17,561
+Ping An Annuity
+Ping An Health
+34.1
+275,182
+368,934
+Ping An Life
+Premium income (2)
+27.3
+373,781
+475,895
+Total
+156.4
+929
+Ping An Health
+13.5
+27.7
+12.7
+2,382
+Distribution
+channel
+Number of
+60
+660
+12,613
+(participating)
+2.1
+3,094
+3,159
+relation managers
+Sales agents,
+Bancassurance
+Insurance
+bancassurance
+Xinli Endowment
+Number of
+12,976
+(participating)
+3.1
+4,768
+4,916
+telemarketing agents
+representatives
+29,837
+0.7
+Agent income (RMB
+per agent per month)
+million)
+1.2
+1.2
+per agent per month)
+per agent (policies
+insurance policies
+New individual life
+7.1
+7,821
+8,373
+Change (%)
+2016
+(RMB per agent per
+month)
+premium per agent
+First-year written
+and income
+Agent productivity
+29,626
+Bancassurance
+2017
+Yingyue Rensheng
+Sales agents,
+Zunhong Rensheng
+Endowment Insurance
+39,734
+Bancassurance
+Annuity (participating)
+Premium
+income
+12.7
+47,966
+54,066
+Total
+Sales agents,
+13.0
+1,825
+2,062
+Corporate
+income(¹)
+new premium
+Annualized
+Distribution network
+Endowment Insurance
+12,402
+Number of individual
+insurance sales
+Sales agents,
+Zunyu Rensheng
+Number of group
+11
+Bancassurance
+Bancassurance
+Life Insurance
+24.8
+17,797
+1,385,987
+agents
+Sales agents,
+Ping An Fu Whole
+life insurance sales
+3
+20,317
+1,110,805
+(participating)
+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.
+58. COMPARATIVE FIGURES
+Except for the item listed above, the Group does not have significant events after the reporting period need
+to disclose.
+On 20 March 2018, the Board of Directors of the Company approved the Resolution of the Profit Distribution
+Plan for 2017, and declared a final cash dividend of 2017 in the amount of RMB1.00 per share as disclosed in
+Note 16.
+DESCRIPTION OF PROFIT DISTRIBUTION
+56. CONTINGENT LIABILITIES
+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 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.
+(3) MEDICAL BENEFITS
+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
+57. EVENTS AFTER THE REPORTING PERIOD
+Certain comparative figures have been reclassified or restated to conform to the current year's presentation.
+140,336
+Annual Report 2017
+Equity
+Equity and liabilities
+Total assets
+55. EMPLOYEE BENEFITS (CONTINUED)
+Other assets
+Property and equipment
+Equity investments
+Investments in subsidiaries and associates
+Fixed maturity investments
+Cash and amounts due from banks and other financial institutions
+Assets
+(in RMB million)
+(1) BALANCE SHEET OF THE HOLDING COMPANY:
+59. BALANCE SHEET AND RESERVE MOVEMENT OF THE HOLDING COMPANY
+Ping An Insurance (Group) Company of China, Ltd.
+290
+For the year ended 31 December 2017
+More than 5 years
+FINANCIAL STATEMENTS
+Unused limit of credit cards and irrevocable loan commitments
+Total
+99,287
+Share capital
+494,293
+649,114
+Credit risk weighted amounts of credit commitments
+176,352
+217,364
+As at 31 December 2017, apart from the above irrevocable credit commitments, revocable loan commitments
+granted by the Group amounted to RMB1,736.0 billion (31 December 2016: RMB2, 148.2 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
+guarantees accounted for as insurance contracts by the Group.
+(4) OPERATING LEASE RENTAL RECEIVABLES
+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 to 5 years
+31 December 2017
+31 December 2016
+2,196
+Ping An Insurance (Group) Company of China, Ltd. 289
+Annual Report 2017
+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
+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
+Notes to Consolidated Financial Statements
+55. EMPLOYEE BENEFITS
+12,072
+3,295
+4,784
+5,408
+5,092
+1,521
+10,224
+31 December 2017
+219,178
+21,539
+1,165
+955
+12,990
+9,205
+233,965
+The balance sheet of the Company was approved by the Board of Directors on 20 March 2018 and was
+signed on its behalf.
+MA Mingzhe
+Director
+SUN Jianyi
+Director
+YAO Jason Bo
+Director
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 291
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+Others
+associates and jointly controlled
+entities
+549,827
+As at 31 December 2017
+Other capital reserve pick-up from
+Share purchase scheme
+25
+Appropriations to surplus reserves
+Other comprehensive income
+Profit for the year
+As at 1 January 2017
+(in RMB million)
+(2) RESERVE MOVEMENT OF THE HOLDING COMPANY:
+59. BALANCE SHEET AND RESERVE MOVEMENT OF THE HOLDING COMPANY
+(CONTINUED)
+Dividend declared
+31 December 2016
+950
+11,800
+11,528
+13,842
+17,947
+3,001
+6,802
+191,041
+182,067
+73
+16
+4,469
+818
+233,965
+219,178
+Reserves
+Retained profits
+Total equity
+Liabilities
+209,973
+220,975
+49,826
+59,072
+141,867
+143,623
+7,300
+18,280
+Total equity and liabilities
+Total liabilities
+Other liabilities
+Income tax payable
+Assets sold under agreements to repurchase
+Due to banks and other financial institutions
+18,280
+353,957
+Interest income from
+103,097
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 287
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2017
+53. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
+(2) THE SUMMARY OF SIGNIFICANT RELATED PARTY TRANSACTIONS IS AS FOLLOWS:
+(in RMB million)
+CP Group Ltd.
+Premiums income from
+Claims expenses to
+Rental income from
+Goods purchased from
+Lufax
+As at 31 December 2017, CP Group Ltd. indirectly held 9.68% equity interests in the Company and is the
+largest shareholder of the Company.
+Interest expenses to
+Other income
+2017
+2016
+4
+1
+25
+29
+32
+29
+3-22
+39
+92
+490
+1,296
+Other expenses
+Parent of shareholders
+Shareholder
+Relationship with the Company
+Shenzhen Investment Holdings Co. Ltd.
+52. FIVE HIGHEST PAID INDIVIDUALS
+The five individuals whose emoluments were the highest in the Group include 3 (2016: 3) key management
+members whose emoluments were reflected in the analysis presented in Note 51.
+As at 1 January 2016
+Details of emoluments of the remaining highest paid individuals are as follows:
+(in RMB million)
+2017
+35
+Salaries and other short term employee benefits after tax
+2016
+25
+The number of non-key management personnel whose emoluments after tax fell within the following bands
+is as follows:
+RMB7,000,001
+RMB10,000,001
+-
+RMB10,000,000
+-
+RMB13,000,000
+RMB13,000,001 - RMB16,000,000
+Charoen Pokphand Group Co., Ltd. ('CP Group Ltd.')
+Name of related parties
+(1) THE COMPANY'S RELATED PARTIES WHERE SIGNIFICANT INFLUENCE EXISTS INCLUDING
+CERTAIN SHAREHOLDERS ARE SET OUT BELOW:
+53. 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 42.94%-43.45% (2016: 42.77%-43.14%) for 2017 and the average effective tax rate was
+approximately 39.70% (2016: 42.90%).
+1
+898
+RMB19,000,001 - RMB22,000,000
+2016
+1
+2017
+RMB19,000,000
+-
+RMB16,000,001
+2
+1,483
+2,246
+1,504
+8,512
+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
+288
+Annual Report 2017
+31 December 2017
+31 December 2016
+6,902
+13,996
+6,472
+13,042
+1,359
+2,101
+22,257
+21,615
+55,763
+Letters of credit issued
+82,107
+50,039
+Guarantees issued
+364,623
+9,467
+248,155
+31 December 2017
+Bank acceptances
+(in RMB million)
+(3) CREDIT COMMITMENTS
+54. COMMITMENTS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+31 December 2016
+Subtotal
+2,322
+5,922
+3,545
+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 2017, the Group still held these convertible bonds.
+(3) THE SUMMARY OF BALANCES OF THE GROUP WITH RELATED PARTIES IS AS FOLLOWS:
+(in RMB million)
+CP Group Ltd.
+31 December 2017
+31 December 2016
+Customer deposits and payables to brokerage customers
+Lufax
+Customer deposits and payables to brokerage customers
+Loans and advances to customers
+Accounts payables and other payables
+2
+5
+18,789
+11,260
+1,720
+2,800
+31 December 2016
+31 December 2017
+(2) OPERATING LEASE COMMITMENTS
+Authorized, but not contracted for
+Contracted, but not provided for
+(in RMB million)
+6,190
+The Group had the following capital commitments relating to property development projects and
+investments:
+54. COMMITMENTS
+Accounts receivables and other receivables
+4,259
+11,022
+13,246
+15,786
+(1) CAPITAL COMMITMENTS
+Profit for the year
+A share The Shanghai Stock Exchange
+Dividend declared
+H share
+A share
+STOCK SHORT NAME AND CODE
+H share The Stock Exchange of Hong Kong Limited
+TYPE OF SECURITY AND LISTING PLACE
+MA Mingzhe
+LEGAL REPRESENTATIVE
+Ping An of China
+Short name of the Company (Chinese/English)
+中國平安
+Ping An Insurance (Group) Company of China, Ltd.
+Full name of the Company (Chinese/English)
+中國平安保險(集團)股份有限公司
+REGISTERED NAMES
+Corporate Information
+OTHER INFORMATION
+中國平安
+Ping An Insurance (Group) Company of China, Ltd. 295
+The Articles of Association of Ping An Insurance (Group) Company
+of China, Ltd.
+The Model Code for Securities Transactions by Directors of Listed
+Companies as contained in Appendix 10 to the HKEx Listing Rules
+The Securities and Futures Ordinance (Chapter 571 of the Laws of
+Hong Kong)
+The Corporate Governance Code as contained in Appendix 14 to
+the HKEX Listing Rules (formerly known as the Code on Corporate
+Governance Practices)
+The Rules Governing the Listing of Stocks on Shanghai Stock
+Exchange
+The Rules Governing the Listing of Securities on The Stock Exchange
+of Hong Kong Limited
+The Shanghai Stock Exchange
+The Stock Exchange of Hong Kong Limited
+The People's Bank of China
+Ministry of Finance of the People's Republic of China
+Articles of Association
+Model Code
+SFO
+Corporate Governance Code
+Annual Report 2017
+Ping An of China
+601318
+2318
+AUTHORIZED REPRESENTATIVES
+Other comprehensive income
+COMPANY WEBSITE
+518033
+POSTAL CODE
+Shenzhen
+Futian District,
+No. 5033 Yitian Road,
+Ping An Finance Center,
+47th, 48th, 109th, 110th, 111th and 112th Floors,
+PLACE OF BUSINESS
+Shenzhen
+Futian District,
+Fu Hua No. 3 Road,
+Galaxy Development Center,
+Offices at 15th, 16th, 17th and 18th Floors,
+REGISTERED ADDRESS
+PR@pingan.com.cn
+SUN Jianyi
+YAO Jun
+SECRETARY OF THE BOARD OF DIRECTORS
+SHENG Ruisheng
+COMPANY SECRETARY
+YAO Jun
+SSE Listing Rules
+SECURITIES AFFAIRS REPRESENTATIVE
+TELEPHONE
++86 400 8866 338
+FAX
++86 755 8243 1029
+E-MAIL
+IR@pingan.com.cn
+LIU Cheng
+DESIGNATED MEDIA FOR INFORMATION
+HKEx Listing Rules
+HKEX
+Gem Alliance Co., Ltd., a subsidiary of Lufax Holding
+Lu International (Singapore) Financial Asset Exchange Pte. Ltd., a
+subsidiary of Lufax Holding
+Shanghai Lujiazui International Financial Asset Exchange Co., Ltd., a
+subsidiary of Lufax Holding
+Lufax Holding Co., Ltd., an associate of the Company
+Ping An Technology (Shenzhen) Co., Ltd., a subsidiary of Ping An
+Financial Technology
+Ping An of China Securities (Hong Kong) Co., Ltd., a subsidiary of
+Ping An Securities
+Ping An Pioneer Capital Co., Ltd., a subsidiary of Ping An Securities
+Ping An Caizhi Investment Management Co., Ltd., a subsidiary of
+Ping An Securities
+PA Haofang
+Autohome
+Wanjia Healthcare
+Qianhai Credit Centre
+Ping An Healthcare Technology
+OneConnect
+The companies under Gem Alliance Limited with the business
+including financing guarantee, commercial factoring and micro-
+lending
+Ping An Good Doctor
+QEX
+CQFAE
+Puhui Business
+Gem Alliance Limited
+Lu International
+Lufax
+Lufax Holding
+Ping An Technology
+Ping An Securities (Hong Kong)
+Ping An Pioneer Capital
+Ping An Caizhi
+Definitions
+294
+OTHER INFORMATION
+E-wallet
+Chongqing Financial Assets Exchange Co., Ltd., a subsidiary of Lufax
+Holding
+Shenzhen Qianhai Financial Assets Exchange Co., Ltd., a subsidiary
+of Gem Alliance Limited
+Ping An E-wallet Electronic Commerce Co., Ltd., a subsidiary of Ping
+An Financial Technology
+PBOC
+Ministry of Finance
+China Banking Regulatory Commission
+China Insurance Regulatory Commission
+CBRC
+CIRC
+CSRC
+China Securities Regulatory Commission
+All premiums received from the policies underwritten by the
+Company, which are prior to the significant insurance risk testing
+and separating of hybrid contracts
+International Financial Reporting Standards issued by the
+International Accounting Standards Board
+The No. 2 Interpretation of Accounting Standards for Business
+Enterprises (Cai Kuai [2008] No. 11) issued by the Ministry of Finance
+The Accounting Standards for Business Enterprises and the other
+relevant regulations issued by the Ministry of Finance of the
+People's Republic of China
+Chinese Renminbi unless otherwise specified
+Charoen Pokphand Group Co., Ltd., the flagship company of CP
+Group
+Ping An PUHUI Real Estate Service Company, Ltd., a subsidiary of
+Ping An Financial Technology
+Written Premium
+IFRS
+Ping An Healthcare and Technology Company Limited, an associate
+of the Company
+OneConnect Financial Technology Co., Ltd., an associate of the
+Company
+Ping An Medical and Healthcare Management Co., Ltd., an associate
+of the Company
+Shenzhen Qianhai Credit Service Centre Co., Ltd., a subsidiary of
+Ping An Financial Technology
+Ping An Wanjia Healthcare Investment Management Co., Ltd., a
+subsidiary of Ping An Financial Technology
+Autohome Inc., a subsidiary of Ping An Financial Technology
+SSE
+Ping An Property (Shanghai) E-commerce Co., Ltd., a subsidiary of
+Ping An Financial Technology
+Ping An Insurance (Group) Company of China, Ltd.
+PAES
+CP Group Ltd.
+RMB
+CAS
+No. 2 Interpretation
+Annual Report 2017
+DISCLOSURE OF A SHARE
+www.pingan.cn
+Shanghai Securities News,
+533
+877
+12,164
+8,498
+395 59,072 202,695
+395
+34,070
+28,678
+173,110
+28,678
+(285)
+(285)
+2,868
+(10,054) (10,054)
+(2,868)
+244
+244
+128,737
+128,737
+248
+11,366
+395
+49,826 191,693
+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.
+292
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+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
+China Securities Journal,
+1,121
+2,251
+76
+128,737
+Appropriations to surplus reserves
+Share purchase scheme
+As at 31 December 2016
+Available-
+for-sale
+Share investment
+premium
+reserve
+Others
+Surplus
+reserve
+fund
+General
+reserve
+Retained
+profits
+Total
+128,737
+248
+1,121
+11,366
+395
+49,826
+191,693
+(150)
+(150)
+-
+1,145
+1,145
+135
+Ping An Property & Casualty,
+Ping An P&C
+(798)
+798
+(19,194) (19,194)
+(172)
+(172)
+29,238 29,238
+-
+135
+Ping An Health
+Ping An Life
+Ping An Trust
+Ping An Annuity
+AMERICAN DEPOSITARY SHARES REGISTRAR
+Wan Chai, Hong Kong
+183 Queen's Road East,
+17M Floor, Hopewell Centre,
+Computershare Hong Kong Investor Services Limited
+H SHARE REGISTRAR
+No. 15 Queen's Road,
+Central, Hong Kong
+17/F Floor, Edinburgh Tower, The Landmark,
+DLA Piper Hong Kong
+LEGAL ADVISOR
+PricewaterhouseCoopers
+22/F, Prince's Building,
+Central, Hong Kong
+International Auditor
+Kevin Chen HUANG
+Charles CHOW
+Name of Certified Public Accountants
+Huangpu District, Shanghai, PRC
+Securities Times, and Securities Daily
+WEBSITES FOR THE PUBLICATION OF THE
+REGULAR REPORTS
+www.sse.com.cn
+www.hkexnews.hk
+LOCATION OF REGULAR REPORTS AVAILABLE
+FOR INSPECTION
+296
+Board Office of the Company
+PricewaterhouseCoopers Consultants (Shenzhen)
+Limited
+AUDITORS AND PLACES OF BUSINESS
+Domestic Auditor
+PricewaterhouseCoopers Zhong Tian LLP
+11/F, PricewaterhouseCoopers Center,
+2 Link Square, 202 Hu Bin Road,
+CONSULTING ACTUARIES
+Annual Report 2017
+The Bank of New York Mellon
+Ping An Insurance (Group) Company of China, Ltd. 293
+Ping An New Capital
+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 New Capital Investment Co., Ltd., a subsidiary of Ping An
+Trust
+Ping An Securities
+Ping An Asset Management
+Ping An Bank
+SDB, Original SDB, Shenzhen
+Development Bank
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Overseas Holdings
+Ping An Financial Leasing
+Original Ping An Bank
+Ping An Hong Kong
+Annual Report 2017
+Ping An Futures Co., Ltd., a subsidiary of Ping An Securities
+Ping An of China Asset Management (Hong Kong) Co., Ltd., a
+subsidiary of Ping An Overseas Holdings
+China Ping An Insurance (Hong Kong) Co., Ltd., a subsidiary of Ping.
+An Overseas Holdings
+Ping An Financial Technology
+Ping An International Financial Leasing Co., Ltd., a subsidiary of the
+Company
+China Ping An Insurance Overseas (Holdings) Limited, a subsidiary
+of the Company
+Shenzhen Ping An Financial Technology Consulting 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."
+Ping An Bank Co., Ltd., a subsidiary of the Company
+Ping An Asset Management Co., Ltd., a subsidiary of the Company
+Ping An Securities Co., Ltd., a subsidiary of Ping An Trust
+Ping An Futures
+Ping An Asset Management
+(Hong Kong)
+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
+With a Thankful Heart
+PINGAN 32
+Embracing the Future
+1988-2018
+30
+This report is printed on environmental friendly paper
+manufactured from elemental chlorine-free pulp and acid free.
+In 2018, Ping An will celebrate
+its 30th anniversary. For 30
+years, we have closely followed.
+national strategies, sought
+growth via innovation, and
+won worldwide recognition
+for tremendous achievements.
+Going forward, we will
+remain true to our original
+aspiration and implement the
+strategy of pursuing "finance
++ technology" and exploring
+"finance + ecosystem" to create
+more value. The covers' main
+color should be celebrative
+red. Use a 3D effect to show
+the "weight" of Ping An's
+turning 30. Ornament the
+covers with silk braids to show
+Ping An's brand philosophy of
+"embracing the future with a
+thankful heart."
+2017 Annual Report
+2016
+4,803
+premium
+Including: regular
+(28.4)
+11,319
+8,109
+channel
+27.3
+373,781
+475,895
+Total
+Bancassurance
+27.3
+152,300
+193,830
+Sub-total
+3,041
+57.9
+Claims and policyholders' benefits
+Telemarketing,
+76.8
+Written premium
+The written premium of the life and health
+insurance business is analyzed below by
+policyholder type and channel:
+The written premium of the life and health
+insurance business is analyzed below by region:
+(in RMB million)
+15,680
+others
+36.2
+27.8
+20,519
+Surrenders
+internet and
+Change (%)
+2016
+2017
+(in RMB million)
+16,050
+94,276
+128,437
+premium
+28.9
+353,494
+455,611
+Retail business
+27.2
+22,912
+29,149
+Shandong
+Change (%)
+2016
+2017
+(in RMB million)
+31.5
+64,537
+84,870
+Guangdong
+Change (%)
+Jiangsu
+2017
+27,201
+24.3
+Including: regular
+26.0
+20,782
+26,179
+Zhejiang
+34.5
+101,634
+136,657
+The agent channel
+19.2
+22,178
+26,431
+Beijing
+31.7
+121,822
+160,446
+New Business
+21,891
+Claim expenses of
+10,842
+(1) Net investment income includes interest income from
+deposits and bonds, dividend income from equity
+investments, rents from investment properties, and the
+share of profits and losses of associates and jointly
+controlled entities.
+36
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 35
+Annual Report 2017
+(3) Figures may not match the calculation due to rounding.
+(www.pingan.cn).
+(2) For details of Ping An Property & Casualty's
+solvency margin, please visit the Company's website
+capital/minimum capital.
+(1) Core solvency margin ratio = core capital/minimum
+capital; comprehensive solvency margin ratio = actual
+In 2017, the net investment income fell by
+0.2% year on year, mainly due to the declined
+income from fixed-income assets and the
+deceased dividend from equity investments.
+The net investment yield was 5.8%. Benefiting
+from a capital market recovery, gains from
+stock and fund trading increased. In 2017, the
+total investment income of the property and
+casualty insurance business gained a growth of
+27.2% year on year, with a total investment yield
+of 5.3%.
+36
+(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.
+-49.8 pps
+267.3
+217.5
+solvency margin
+ratio (%) (regulatory
+requirement ≥100%)
+Comprehensive
+-43.4 pps
+237.4
+194.0
+requirement ≥50%)
+ratio (%) (regulatory
+(2) Realized gains include capital gains from securities
+investments.
+0.5 pps
+Business Analysis
+The total investment yield and net investment yield on insurance funds for
+2017 were 6.0% and 5.8% respectively, higher than industry averages and
+Ping An's ultimate investment return assumption.
+Premium income in
+total
+215,984
+177,908
+21.4
+Others
+12,499
+9,447
+32.3
+Premium income in
+total
+215,984
+Investment Portfolio of Insurance
+Funds
+177,908
+Auto insurance: The premium income grew
+by 14.8% year on year, mainly due to our
+efforts to provide good customer services in a
+favorable market environment with innovative
+technologies, and the continuous and steady
+growth in premium income from cross-selling
+and car dealers.
+Non-auto insurance: The premium income
+delivered a year-on-year increase of 59.2%.
+In 2017, the premium income of guarantee
+insurance jumped from RMB8,136 million in
+2016 to RMB19,880 million, mainly boosted by
+adjustments to product structures and business
+activities, and quick development of the online
+business model. The premium income of special
+risk insurance, liability insurance and home
+contents insurance grew by 45.6%, 21.3% and
+50.0% year on year respectively.
+Accident and health insurance: The accident
+and health insurance business developed
+steadily, with a year-on-year increase of 32.1%
+in premium income.
+Below is a breakdown of premium income for
+our property and casualty insurance business.
+by region:
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+With risk prevention as a precondition,
+we constantly improved investment risk
+management. Firstly, we constantly enhanced
+risk management in accordance with Solvency
+Aligned Risk Management Requirement and
+Assessment (SARMRA). We proactively
+improved organization structures, policies,
+procedures and reports, and systems and
+data to strengthen abilities to manage market
+and credit risks. Secondly, we built a robust
+platform for quantitative asset and liability
+management to enhance the management
+system, strengthen the management capability,
+and prevent asset-liability mismatch risks.
+Thirdly, we developed the framework for
+managing and monitoring insurance fund
+operations, enhanced rules for credit rating and
+counterparty management, and strengthened
+procedures for risk management before,
+during, and after investment deals. Fourthly,
+we closely monitored and promptly addressed
+risks in the portfolio of insurance funds via
+risk management efforts such as five-category
+asset classification, audits of internal controls
+over insurance fund operations, internal risk
+reserves, and the public opinion warning
+system. Meanwhile, we constantly built the
+credit risk rating and risk management teams
+to manage credit risks. We have evaded many
+widely recognized credit events thanks to
+abundant experience and strict credit rating
+criteria.
+In 2017, amid recoveries of the world's major
+economies, China's economy picked up steadily
+while financial regulation strengthened.
+A-shares diverged and bond yields soared due
+to tighter liquidity and financial regulation. We
+properly adjusted asset allocation to protect
+and increase the value of insurance assets via
+robust asset-liability management on the basis
+of in-depth research on capital markets. Firstly,
+when bonds adjusted, we lengthened asset
+durations to improve asset-liability matching.
+Secondly, we increased the proportion of
+equity assets in the portfolio, effectively seized
+opportunities in equity markets, and expanded
+our exposure to blue chips to gain excess
+returns. Thirdly, we increased holdings of Hong
+Kong stocks via the Hong Kong Stock Connect
+to profit from lower valuations of Hong Kong
+stocks.
+The insurance funds are formed by the funds
+available for investment from the Company
+and its subsidiaries engaged in the insurance
+business.
+Ping An constantly improved risk management to ensure overall
+investment risks are controllable.
+21.4
+4.8
+5.3
+yield (%) (3)
+(in RMB million)
+Change
+December 31 December 31
+N/A
+104
+(51)
+investment assets
+Solvency Margin of Ping An Property &
+Casualty
+In 2017, Ping An Property & Casualty's income
+tax grew by 111.4% year on year, largely due to
+limited tax-free revenue in this reporting period
+and an increase in the commission for business
+growth.
+Income Tax
+2017
+Impairment losses on
+(80)
+44
+fair value changes
+Profit or losses from
+(0.2)
+(69.2)
+(3,685)
+(1,136)
+Realized gains (2)
+12,836
+12,810
+N/A
+2016
+(%)
+Total investment
+Core solvency margin
+Total investment
+35.2
+26,725
+36,141
+Minimum capital
+-1.0 pps
+6.8
+5.8
+yield (%) (3)
+Net investment
+10.0
+71,439
+78,595
+Actual capital
+10.5
+63,439
+70,095
+Core capital
+27.2
+9,175
+11,667
+income
+33.8
+17,071
+22,843
+Direct selling
+assets
+219,006
+190,192
+15.1
+Non-auto insurance
+106
+88
+20.5
+Total investment
+yield (%)
+Average investment
+5.3
+0.5 pps
+FINANCIAL ANALYSIS
+In 2017, the Company redefined business
+segments according to its operations and
+management. The property and casualty
+insurance business represents only business
+results of Ping An Property & Casualty, while
+Ping An Hong Kong has been placed under
+another business segment named “other
+businesses and elimination". To be comparable,
+figures in 2016 have been restated accordingly.
+Net profit
+(1) Total investment income includes investment income
+and share of profits or losses of associates and jointly
+controlled entities in the segmented income statement.
+Other net revenue and
+expenses
+120
+(95)
+N/A
+4.8
+20.5
+88
+106
+(24.5)
+Including:
+Non-auto insurance
+6,712
+5,709
+17.6
+Combined ratio of
+catastrophes (%)
+0.18
+0.40
+-0.22 pps
+Accident and health
+insurance
+58
+35
+65.7
+Total investment
+income(¹)
+11,667
+9,175
+27.2
+Inward reinsurance
+premium
+Profit before tax
+Income tax
+income (1)
+18,899
+23.4
+(6.8)
+Non-auto insurance
+38,929
+24,452
+59.2
+Cross-selling
+39,192
+29,671
+32.1
+Accident and health
+63,223
+Car dealers
+41,485
+21.7
+insurance
+6,547
+4,955
+32.1
+Agencies
+32,047
+17,011
+88.4
+50,488
+58,915
+online channels
+14.8
+(5,527)
+(2,614)
+111.4
+13,372
+12,700
+5.3
+32
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+2017
+2016
+Change (%)
+Premium Income
+Below is a breakdown of premium income for
+our property and casualty insurance business
+by product type:
+(in RMB million)
+Below is a breakdown of premium income for
+our property and casualty insurance business.
+by channel:
+(in RMB million)
+2016
+Change (%)
+Telemarketing and
+Auto insurance
+170,508
+148,501
+15,314
+9,971
+2016 Change (%)
+Net investment
+170,508
+42,957,205
+Auto insurance
+liabilities
+ratio
+profit
+expenses
+premium
+income
+contract
+159,019
+Combined
+Claim
+Earned
+Premium
+Insured
+amount
+(in RMB million)
+Insurance
+Among all insurance products offered by Ping An Property & Casualty, 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 96.1% of Ping An Property & Casualty's total premium income in 2017.
+Operating Data by Product Type
+Ping An Property & Casualty persisted in innovation and development, and continued to improve
+its professional and technical expertise while maintaining sound profitability.
+Property and Casualty Insurance
+Business
+Underwriting
+Business Analysis
+89,563
+97.5%
+1,059
+1,447
+4,851
+5,633
+Accidental injury insurance 436,784,747
+6,506
+91.2%
+425
+2,651
+4,805
+4,032
+6,289
+Liability insurance
+31,830
+88.6%
+1,379
+8,130
+12,066
+19,880
+264,214
+Guarantee insurance
+128,080
+57,539,191
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 33
+Annual Report 2017
+8,869
+12,705
+Zhejiang
+17.2
+11,432
+13,395
+Sichuan
+30.4
+10,403
+13,568
+17.2
+Shanghai
+12,155
+14,960
+25.3
+27,771
+34,799
+Guangdong
+Jiangsu
+Change (%)
+2016
+2017
+(in RMB million)
+23.1
+89,427
+72,603
+23.2
+(2) Loss ratio = claim expenses/net earned premiums.
+(1) Expense ratio = (commission expenses of insurance
+business + administrative expenses - reinsurance
+commission revenue)/net earned premiums.
+0.3 pps
+95.9
+96.2
+Combined ratio (%)
+2.2 pps
+54.4
+56.6
+Loss ratio (%) (2)
+-1.9 pps
+41.5
+39.6
+Expense ratio (%) (1)
+Change
+2016
+2017
+Combined Ratio
+Subtotal
+21.4
+177,908
+215,984
+Premium income in
+total
+78.2%
+4,034
+Corporate property and
+casualty insurance
+34,596
+Auto insurance
+2016 Change (%)
+2017
+(in RMB million)
+(5.6)
+44,358
+41,886
+Total
+12.9
+21,019
+658
+on receivables and
+others
+Impairment losses
+(66.3)
+4,006
+1,349
+Tax and surcharges
+Commission Expenses of Insurance Operations
+In 2017, claim expenses rose by 27.7% year on
+year due to continued growth in insurance
+business size.
+0.3
+39,694
+743
+Non-auto insurance
+2,904
+3,359
+(in RMB million)
+Total Investment Income
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+34
+3.7 pps
+14.3
+18.0
+premium income (%)
+as a percentage of
+Commission expenses
+53.4
+25,414
+38,973
+expenses
+Total commission
+In 2017, administrative expenses dropped by
+5.6% year on year, driven by reductions in tax
+and surcharges as a result of the reform of
+replacing business tax with value-added tax.
+42.2
+1,036
+1,473
+insurance
+Accident and health
+64.6
+(13.5)
+39,794
+2017
+Operating expenses
+83,398
+188,405
+96.2%
+7,112
+106,474
+188,219
+215,984
+N/A
+Total
+12,160
+105.0%
+Claim expenses
+(242)
+4,803
+8,438
+Others(1)
+5,795
+82.8%
+459
+1,393
+2,675
+5,236
+12,952,881
+3,290
+(in RMB million)
+2017
+2016
+106,474
+Total claim expenses
+Change (%)
+2016
+2017
+(in RMB million)
+Administrative expenses
+In 2017, commission expenses of insurance
+operations grew by 53.4% year on year, while
+their proportion in premium income climbed by
+3.7 pps, mainly due to premium income growth
+and intensified competition.
+(1) Others include health insurance, agricultural insurance, and credit insurance.
+4.7
+1,976
+2,069
+insurance
+Accident and health
+66.1
+8,936
+14,842
+Non-auto insurance
+23.6
+72,486
+89,563
+Auto insurance
+Change (%)
+27.7
+7,524
+2017
+0.3 pps
+Policyholder dividends climbed 16.8% year on
+year as a result of growth in the participating
+insurance business.
+Net increase in insurance reserves increased by
+38.6% compared with the prior year, mostly due
+to business growth, business structure changes,
+together with movement of the benchmarking
+yield curve for measuring reserves for
+insurance contracts.
+Interest credited to policyholder contract
+deposits was up 37.5% year on year as higher
+investment income increased interest payment
+on universal insurance accounts.
+Total investment income
+(in RMB million)
+2017
+Auto insurance
+Change (%)
+Net investment
+income (1)
+Realized gains (2)
+Profit or loss from fair
+value changes
+Impairment losses on
+investment assets
+107,827
+94,542
+Life and Health Insurance Business
+14.1
+(11,713)
+N/A
+640
+2,655
+(75.9)
+96
+(617)
+N/A
+Total
+113,811
+5,248
+Business Analysis
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 27
+44,237
+Annuities increased 24.8% year on year,
+primarily thanks to growth in business size.
+49.7
+Casualty & short-term
+health insurance
+34,537
+26,819
+Annuity
+8,189
+12,605
+28.8
+(35.0)
+Maturity and survival benefits grew by 13.0%
+year on year because survival benefits of some
+insurance products reached its peak in 2017.
+Investment-linked
+insurance
+1,582
+1,752
+(9.7)
+Total
+475,895
+373,781
+27.3
+Death, injury and medical care benefits were
+31.5% higher year on year, driven by growth
+in long-term health insurance and universal
+insurance business.
+Annual Report 2017
+84,867
+66,205
+34.1
+yield (%) (3)
+Total investment
+yield (%) (3)
+Administrative expenses
+(in RMB million)
+Tax and surcharges
+Operating expenses
+Impairment losses
+on receivables and
+others
+Total
+2017
+2016
+Change (%)
+In 2017, the commission expense of the
+insurance business (mainly paid to the
+Company's sales agents) increased by 38.2%
+year on year due to expansion of the insurance
+business.
+742
+46,766
+39,516
+(6.2)
+18.3
+61
+42
+45.2
+47,569
+40,349
+17.9
+In 2017, the taxes and surcharges dropped by
+6.2% year on year as a result of the reform of
+replacing business tax with value-added tax.
+The operating expenses increased by 18.3%
+year on year mainly due to expansion of the
+insurance business and higher operating costs
+such as labor and office expenses.
+791
+38.2
+56,249
+77,754
+5.8
+6.0
+-0.2 pps
+6.1
+5.3
+0.8 pps
+Commission expenses on insurance operations
+(in RMB million)
+Change (%)
+2017
+2016
+Health insurance
+26,159
+17,420
+50.2
+Accident insurance
+7,130
+5,681
+25.5
+Life insurance and
+others
+44,465
+33,148
+34.1
+Total
+Net investment
+(1) Net investment income includes interest from deposits
+and bonds, dividends from equity investments, and rents
+from investment properties and the share of profits and
+losses of associates and jointly controlled entities.
+insurance
+55.1
+13.0
+channel
+6,741
+5,217
+29.2
+Death, injury and
+Telemarketing,
+medical care
+internet and
+benefits
+24,520
+18,897
+31.5
+others
+20,165
+13,438
+50.1
+Reinsurer's share of
+Group business
+20,284
+20,287
+claim expenses of
+14,372
+27,709
+benefits
+Bancassurance
+Including: regular
+insurance contracts
+premium
+12,063
+8,751
+37.8
+Claims paid
+13,032
+10,915
+19.4
+Renewed business
+295,165
+231,672
+27.4
+Annuities
+7,371
+5,907
+24.8
+The agent channel
+268,259
+213,017
+25.9
+Maturity and survival
+New business
+Long-term health
+20,252
+insurance contracts
+product type:
+Total
+320,957
+241,283
+33.0
+(in RMB million)
+2017
+2016
+Change (%)
+Participating insurance
+37.5
+187,374
+29.7
+Universal insurance
+98,790
+92,860
+6.4
+Claims paid grew by 19.4% year on year,
+primarily due to continued growth in casualty &
+short-term health insurance business.
+Traditional life
+insurance
+79,218
+51,089
+144,419
+17,365
+23,873
+deposits
+(2,001)
+(2,286)
+(12.5)
+Renewed business
+32
+27
+18.5
+Policyholder dividends
+13,129
+11,236
+16.8
+Net increase in
+Total
+475,895
+373,781
+27.3
+insurance reserves
+198,428
+143,204
+38.6
+Interest credited to
+The written premium of the life and health
+insurance business is analyzed below by
+policyholder contract
+20,260
+(2) Realized gains include realized capital gains from
+securities investments.
+2016
+In 2017, the net investment yield of the life and
+health insurance business was 5.8%, down 0.2
+pps, largely due to a decrease in interest rates
+of bonds and lower dividend income from fund
+investment. Amid improved capital markets, the
+total investment income of the life and health
+insurance business grew 34.1% year on year,
+and the total investment yield was 6.1%, up 0.8
+pps year on year.
+52,063
+40.571
+28.3
+1,683
+1,502
+12.1
+53,746
+42,073
+27.7
+Distribution network
+Number of direct sales
+representatives
+(%)
+7.768
+1.4
+(1) In 2017, Ping An Property & Casualty optimized the
+standards for defining corporate customers and restated
+the data for 2016. The new standards reflect the number
+of corporate customers more objectively.
+Ping An Property & Casualty distributed
+its products mainly through its network
+of 42 branches and over 2,510 tier-3
+and tier-4 branches across China. Main
+distribution channels included in-house sales
+representatives, sales agents, insurance
+brokers, telemarketing, online marketing and
+cross-selling.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 31
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Property and Casualty Insurance
+Business
+Reinsurance Arrangement
+7.658
+Ping An Property & Casualty maintained a
+proactive and prudent approach to reinsurance,
+which strengthened its underwriting
+capabilities, diversified operating risks and
+ensured long-term healthy and steady growth.
+It deepened cooperation with reinsurers to
+increase ceding channels. 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.
+2016
+Number of customers
+(in thousand)
+Retail
+Corporate (1)
+Adhering to a customer-centric model, Ping
+An Property & Casualty has been honored as
+China's "No.1 Brand" of auto insurance and
+property and casualty insurance for seven
+consecutive years and outpaced peers by
+customer satisfaction.
+Premium and Market Share
+The premium income and market share of Ping
+An Property & Casualty are as follows. Ping
+An Property & Casualty is the second largest
+property and casualty insurance company in
+China by premium income.
+(in RMB million)
+Premium income
+Including: auto
+insurance
+Market share (%) (1)
+Including: market share
+of auto insurance (%)
+2017
+2016 Change (%)
+215,984
+177,908
+Total
+21.4
+148,501
+14.8
+20.5
+19.2
+1.3 pps
+22.7
+21.7
+1.0 pps
+(1) The market share was calculated in accordance with the
+PRC insurance industry data published by the CIRC.
+Number of Customers and Distribution Network
+December 31 December 31
+Change
+2017
+170,508
+Premium income
+operations
+Administrative
+53.4
+(41,886)
+(44,358)
+(5.6)
+commission revenue
+6,226
+6,059
+2.8
+(in RMB million)
+2017
+(25,414)
+2016 Change (%)
+7,112
+6,234
+14.1
+Ceded premium
+14,294
+15,715
+(9.0)
+Combined ratio (%)
+96.2
+95.9
+Underwriting profit
+(38,973)
+of insurance
+Commission expenses
+expenses
+Reinsurance
+Results of Operation
+(in RMB million)
+2017
+2016
+Change (%)
+215,984
+177,908
+21.4
+Reinsurance premium
+income
+106
+88
+20.5
+Premium income
+Net earned premiums
+216,090
+177,996
+21.4
+(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.
+153,345
+22.7
+Claim expenses
+(106,474)
+(83,398)
+27.7
+For property and casualty insurance, Ping An
+Property & Casualty updated its Digital Risk
+System (DRS). Through such core functions as
+risk rating, disaster early warning and customer
+map, DRS provides customized services for
+government departments and major clients. By
+the end of 2017, Ping An Property & Casualty
+had provided disaster prevention services
+for over 10,000 businesses, including 360,000
+early warnings and seven typhoon-resistance
+campaigns. The estimated loss reduced for the
+clients was about RMB620 million.
+made claim services comprising online self-
+service claims, claims after accident reporting
+and on-site investigation, and claims with
+remote-assistance investigation. Powered by
+the self-developed "smart management engine"
+and "smart grid model", the 510 City Superfast
+Onsite Investigation service completes fast
+onsite handling of reported auto insurance
+cases within 5-10 minutes in the city proper
+in daytime. Since its launch in May 2017, this
+service has covered 334 prefecture-level cities
+nationwide. In December 2017, 92.9% of on-site
+cases were handled within 10 minutes. Ping
+An Property & Casualty developed the Smart
+Quick Claim product jointly with OneConnect,
+leveraging Al to achieve image-based loss
+assessment. This technology has covered
+100% of appearance damage cases, with an
+identification accuracy rate of 92.6%. While
+reinforcing risk management of small cases,
+Ping An Property & Casualty has achieved loss
+assessment within seconds and superfast claim
+services.
+188,219
+Annual Report 2017
+(%)
+680,450
+501,710
+35.6
+7,895
+6,306
+25.2
+1,254
+251
+399.6
+2016
+Actual capital
+533,710
+31.8
+7,895
+6,306
+25.2
+1,254
+251
+399.6
+Minimum capital
+300,453
+703,450
+2017
+(%)
+2016
+Income tax
+Ping An Insurance (Group) Company of China, Ltd.
+The income tax increased sharply year on year,
+driven by an increase in taxable income caused
+by business growth and commission increases.
+28
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+(in RMB million)
+Core capital
+Solvency Margin
+December 31
+2017
+Ping An Life
+Ping An Annuity
+Ping An Health
+December 31
+Change December 31
+December 31
+Change
+December 31
+Change
+2016
+(%)
+2017
+236,304
+27.1
+December 31
+2,529
+15.8 pps
+327.2
+147.4
+179.8 pps
+(1) Core solvency margin ratio = core capital/minimum capital; comprehensive solvency margin ratio = actual capital/minimum
+capital.
+(2) For details of subsidiaries' solvency margin, please visit the Company's website (www.pingan.cn).
+(3) Figures may not match the calculation due to the rounding.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 29
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Property and Casualty Insurance
+Business
+Ping An Property & Casualty recorded premium income of over RMB200
+billion, with its market share up 1.3 pps. Business quality and profitability
+remained sound, with a combined ratio of 96.2% and ROE of 20.0%.
+The "Ping An Auto Owner" app had over 44 million registered users,
+including 9.53 million active users in December 2017. The app stably topped
+the list of auto service apps.
+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
+such as auto insurance, corporate property
+and casualty insurance, engineering insurance,
+cargo insurance, liability insurance, credit
+insurance, home contents insurance, accident
+and health insurance, as well as international
+reinsurance business.
+In 2017, the macro-economy was stabilizing
+with an upturn in the upstream sectors of
+property and casualty insurance, bringing
+many growth opportunities to the industry.
+The on-going reform of commercial auto
+insurance premium rates and implementation
+of the China Risk Oriented Solvency System
+(C-ROSS) imposed more requirements on the
+operations of property and casualty insurers.
+Ping An Property & Casualty recorded rapid
+business growth through proactive market
+strategies, improved its cost competitiveness
+and maintained sound profitability based on
+its long-term application of risk screening
+technologies. Meanwhile, Ping An Property &
+Casualty continued efforts to implement its
+technology strategy. Based on its "Ping An
+Auto Owner" app, Ping An Property & Casualty
+provides customers with a variety of auto
+aftermarket services and one-stop auto use
+services. As at December 31, 2017, 26.94 million
+out of 44.24 million registered users linked their
+auto use with the app and the number of active
+users in December reached 9.53 million. These
+achievements enabled the app to stably top the
+list of auto service apps.
+In 2017, Ping An Property & Casualty facilitated
+application of cutting-edge technology.
+Through technology innovation and application,
+it improved customer service efficiency
+and experience, thus gaining differentiation
+advantages.
+For auto insurance service, Ping An Property
+& Casualty launched the Auto Insurance
+Cloud Claim model, the 510 City Superfast
+Onsite Investigation service, and the Smart
+Quick Claim product, through which customer
+satisfaction was enhanced vastly with an NPS
+of 78.0% for auto claims in December 2017. As
+a brand-new claim service model, the Auto
+Insurance Cloud Claim provides optimum tailor-
+2,978
+30
+50
+249.3
+265.1
+Ping An Property & Casualty facilitated application of cutting-edge
+technology and gained differentiation advantages. The image-based loss
+assessment technology has covered 100% of appearance damage cases,
+with an identification accuracy rate of 92.6%. We pioneered the "510 City
+Superfast Onsite Investigation" service, through which 92.9% of on-site
+auto insurance cases were handled within 10 minutes.
+225.9
+170
+383
+17.8
+8.2 pps
+125.3
+Core solvency margin
+ratio (%) (regulatory
+requirement >50%)
+212.3
+14.2 pps
+265.1
+226.5
+15.8 pps
+327.2
+147.4
+234.1
+179.8 pps
+Comprehensive
+requirement ≥100%)
+ratio (%) (regulatory
+249.3
+solvency margin
+3,046
+2,745
+11.0
+ratio (%)
+13.0
+27,973
+29.89
+25.97
+1,978
+2,200
+revenue
+3.92 pps
+Others
+31,616
+Asset custody fee
+General and
+expenses
+12,401
+18,511
+11.2
+revenue
+49.3
+Advisory fee revenue
+2,659
+3,963
+(32.9)
+administrative
+Account management
+fee revenue
+156
+166
+(6.0)
+Cost-to-income
+Total fee and
+(345)
+35,725
+Others
+(299)
+15.4
+Income tax
+2017
+2016
+50.4
+Change
+commission expense
+(5,051)
+(3,450)
+2016 Change (%)
+Effective tax rate (%) (1)
+46.4
+Total fee and
+(2,801)
+(4,213)
+expense
+31,309
+14.1
+Fee and commission
+expense
+Agency commission
+expense
+(493)
+(350)
+40.9
+Bank card fee
+In 2017, as Ping An Bank increased
+investment in its strategic transformation, the
+cost-to-income ratio rose by 3.92 pps year on
+year.
+Loan impairment losses
+In 2017, loan impairment losses decreased by
+10.2% year on year.
+commission revenue
+2017
+discount)
+Bank card fee
+25.97
+(45,435)
+3.92 pps
+(10.2)
+Average balance of
+loans (including bill
+1,602,503
+1,348,543
+29.89
+(40,803)
+18.8
+Other expenses
+2.55
+(3,210)
+3.37
+(4,372)
+-0.82 pps
+(26.6)
+Profit before tax
+30,157
+Credit cost (%) (3)
+Loan impairment loss
+ratio (%) (2)
+Cost-to-income
+23.11
+interest revenue
+1,103
+3,445
+(68.0)
+Revenue
+105,786
+107,715
+(1.8)
+General and
+administrative
+expenses
+(31,616)
+(27,973)
+13.0
+29,935
+0.7
+Income tax
+(6,968) (7,336)
+2,216
+7.9
+Wealth management
+fee revenue
+3,411
+4,835
+(29.5)
+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, other incomes
+and asset disposal gains and losses. For 2017,
+other net non-interest revenue was RMB1,103
+million, down 68.0% year on year, mainly due to
+the reduced profit from bill trading.
+Agency commission
+revenue
+3,350
+3,005
+11.5
+Cost-to-income ratio
+2,392
+(in RMB million)
+revenue
+revenue
+(5.0)
+Net profit
+23,189
+22,599
+2.6
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 43
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Banking Business
+Net fee and commission revenue
+(in RMB million)
+2017
+2016
+Change (%)
+Fee and commission
+Settlement fee
+24.51
+2016 Change (%)
+Net fee and commission
+Fee rate of assets
+held in trust (%) (1)
+0.66
+0.58
+0.08 pps
+Fees and commission
+4.6
+expenses
+(615)
+(55.1)
+Net fees and
+commission revenue
+4,016
+2,985
+(276)
+622,506
+651,302
+assets held in trust
+18,016
+18,257
+(1.3)
+Real estate financing
+Corporate loans
+Pledge and other
+financing (2)
+Administrative
+category(3)
+47,028
+27,163
+73.1
+96,661
+86,334
+12.0
+5,376
+13,061
+(58.8)
+Total
+Monthly average
+34.5
+15.4
+Administrative
+(1,319)
+2,751
+80.8
+Income tax
+(1,018)
+(429)
+137.3
+4,975
+Net profit
+2,322
+70.4
+46
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Other net non-
+3,957
+Profit before tax
+2016.
+N/A
+(1,704)
+(22.6)
+Total investment
+income (2)
+2,236
+1,872
+19.4
+Other net revenue and
+(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 the end of 2017, Ping An Trust
+had RMB652,756 million of assets under
+management, 3.6% lower than that at the end of
+expenses
+42
+(402)
+expenses
+144,815
+167,081
+Financing category
+Infrastructure industry
+financing
+In institutional asset management, Ping An
+Trust strengthened its integrated financial
+service capabilities to cater for asset allocation
+needs of institutional investors. As at the end
+of 2017, Ping An Trust provided one-stop asset
+management services for nearly 50 pension
+annuities and over 100 banks.
+In investment and investment banking, Ping
+An Trust serves outstanding companies
+in infrastructure, new energy, mixed
+ownership reform of state-owned enterprises,
+bio-medicine and high-end manufacturing
+sectors by various means of direct finance such
+as equity, debts, mezzanine financing and fund
+services. Besides, it is efficiently channeling
+capital into the real economy, and playing
+an active role in government-backed areas
+such as urbanization, the supply-side reform,
+the industry upgrade and the Belt and Road
+Initiative.
+In strict accordance with the Group's "finance
++ technology" strategy, Ping An Trust fully
+leveraged its technology advantage to apply
+Al, big data and cloud to its operations and
+management. For Al application, it carried out
+customer profiling to provide customers with
+tailor-made asset allocation advice. For big
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 45
+MANAGEMENT DISCUSSION AND ANALYSIS
+wealth customers, 42.2% higher from the year
+beginning. Leveraging its strong brand, Ping An
+Trust launched four series of family trust plans
+and integrated services of wealth inheritance,
+asset allocation and insurance coverage.
+The insurance trust plans launched through
+cooperation with Ping An Life registered an
+industry-leading AUM.
+Business Analysis
+2017
+2016 Change (%)
+revenue
+4,292
+3,600
+19.2
+Asset Management Business
+In personal wealth management, backed by
+the Group's advantages in technology and
+integrated finance, Ping An Trust provides
+HNW clients with wealth management
+services via smart platforms. Its differentiation
+advantage comes from the variety of quality
+products and convenient and considerate
+customer service. As of the end of 2017,
+Ping An Trust served 74.7 thousand active
+In 2017, Ping An Trust furthered its "wealth +
+fund" transformation to become an industry
+leader in funds and assets under the models
+of "wealth management, asset management,
+and investment and investment banking."
+In the area of funds, Ping An Trust provides
+individuals with wealth management and
+institutional customers with asset management
+to help them achieve optimal asset allocation,
+value preservation, and capital appreciation.
+Ping An Trust builds industry-leading wealth
+management and asset management platforms
+to become a benchmark in China's wealth
+and asset management market. In the area of
+assets, Ping An Trust provides comprehensive
+financial services for the economy and channels
+social capital into responsible investments
+by promoting fund-based investment and
+investment banking businesses and offering
+diverse financial instruments.
+The Company offers investment and financing
+services through Ping An Trust and Ping An
+New Capital to high-net-worth individuals
+(HNWIS), institutional clients, and other
+subsidiaries of the Company.
+(1) Effective tax rate = income tax/profit before tax.
+revenue
+30,674
+27,859
+10.1
+44
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Business Analysis
+Asset Management Business
+Ping An Trust strengthened its risk management, and furthered the
+"wealth + fund" transformation.
+Ping An Securities pursued tech-powered transformation, built up its
+competitive advantage and continued to outperform the industry.
+Ping An Asset Management maintained steady business growth. The
+assets under management (AUM) totaled RMB2.67 trillion, up 18.1% from
+the beginning of the year.
+TRUST BUSINESS
+Business Overview
+data application, the risk management platform
+of Ping An Trust was connected with the
+Group's enterprise credit reference platform,
+while asset big data analysis results were used
+to provide the investment risk assessment
+department with risk information about
+projects and counterparties and strengthen
+Ping An Trust's active management capability.
+For cloud services, by making use of the
+Group's cloud services, Ping An Trust bettered
+system processes and architecture design to
+lower operating cost and improve business
+management and customer experience.
+Ping An Trust continued to upgrade the risk
+management framework featured by full
+participation, full-process control and full
+coverage of business. According to market
+movements and regulatory policies, Ping An
+Trust proactively adjusted and improved its risk
+appetites and limits, and managed to ensure
+adequate net capital, tight control over asset
+quality, tolerable market risks and real-time
+liquidity monitoring. As at December 31, 2017, it
+had RMB19,420 million in net capital, while the
+ratio of net capital to the total of all risk capital
+was 229.3%, the ratio of net capital to net assets
+81.2%, meeting regulatory requirements.
+Results of Operation
+(in RMB million)
+(5.6)
+Capital market
+investment
+23,341
+30,129
+(22.5)
+Financial institutions'
+investment
+49,966
+48,824
+2.3
+Other investments (1)
+60,046
+62,358
+(3.7)
+141,311
+-1.4 pps
+133,353
+(%)
+Fees and commission
+(1) Fee rate of assets held in trust = fees and commission
+revenue/monthly average assets held in trust.
+(2) Total investment income includes investment income
+and share of profits and losses of associates and
+jointly controlled entities under the segmented income
+statement.
+In 2017, the net profit of the trust business rose
+by 70.4% year on year, driven by year-on-year
+growth in the net fees and commission revenue
+and investment income, and tightened reins on
+expenses.
+Assets held in trust
+(in RMB million)
+352,322
+391,095
+(9.9)
+652,756
+677,221
+(3.6)
+December 31 December 31
+2017
+2016
+Change
+Investment category
+10.1
+849,035
+30,674
+(%)
+(%)
+Industry
+Maturity
+yield
+proportion
+(year)
+Remaining
+Investment
+Structure and yield distribution of the non-standard debt portfolio
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+38
+As realized capital gains from stocks and funds
+increased due to domestic capital market
+recoveries, the total investment income grew
+by 33.0% year on year, and the total investment
+yield increased by 0.7 pps year on year to 6.0%.
+Nominal
+maturity
+(year)
+Infrastructure
+37.05
+4.78
+Infrastructure and development zones
+3.31
+7.38
+5.56
+6.72
+Electric power
+6.29
+9.85
+5.97
+17.63
+Expressway
+5.25
+8.56
+5.81
+In 2017, the net investment income of our
+investment portfolio of insurance funds rose
+by 12.3% year on year. The net investment yield
+dropped by 0.2pps to 5.8% as a result of a larger
+investment portfolio and lower interest rates of
+debt-related investments.
+5.72
+As at December 31, 2017, our non-standard debt
+assets totaled RMB335,925 million, accounting
+for 13.7% of the investable assets. Please refer
+to the following table for the structure of our
+non-standard debt portfolio. We manage risks
+in non-standard debt assets from three aspects.
+The first is asset allocation. We have developed
+a set of effective, robust asset allocation
+models. While observing the risk appetite
+of insurance funds and 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 percentages
+of non-standard debt holdings. The second is
+asset selection. We prefer assets in developed
+areas and in industries aligned with the state's
+industry policies, especially those issued by
+industry leaders. The third is post-investment
+management. Our post-investment
+management team constantly tracks the assets.
+We have established a multi-dimensional risk
+warning framework covering investment areas,
+assets, and instruments to ensure that all
+investment risks are under control.
+In 2017, we effectively seized opportunities in
+equity markets and lower valuations of Hong
+Kong stocks, and increased holdings of blue
+chips and Hong Kong stocks. As a result, the
+comprehensive investment yield increased
+significantly by 3.3pps to 7.7%.
+investment income 163,825
+Comprehensive
+N/A
+(15,860)
+37,675
+assets
+78,994
+for-sale financial
+94,854
+126,150
+N/A
+(495)
+44
+(75.2)
+33.0
+107.4
+Net investment
+yield (%) (3)
+(4) Comparable data of investment income have been
+restated.
+(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.
+(2) Realized gains include capital gains from security
+investments.
+(1) Net investment income includes interest income from
+deposits and bonds, dividend income from equity
+investments, rents from investment properties and the
+share of profits and losses of associates and jointly
+controlled entities.
+5.3 0.7pps
+6.0
+6.0 -0.2pps
+5.8
+4.4 3.3pps
+7.7
+(%) (3)
+investment yield
+Comprehensive
+yield (%) (3)
+Total investment
+Non-standard Debt Assets
+2,612
+6.93
+Others (water supply, environmental
+1,475,801
+1,704,230
+Deposits and Loans
+Loans and advances
+Including:
+(%)
+2016
+Change
+15.5
+December 31 December 31
+2017
+on year. (The revenue before impacts of the
+value-added tax reform grew by 1.7% year on
+year.)
+Ping An Bank maintained stable, healthy
+business growth. Ping An Bank's net profit
+and total assets rose steadily. The revenue for
+2017 was RMB105,786 million, down 1.8% year
+In 2017, China maintained stable growth
+thanks to the "Belt and Road Initiative" and
+the supply-side reform. Ping An Bank sought
+"technology-driven breakthroughs in retail
+banking and enhancement of corporate
+banking" in line with national strategies and
+economic conditions. The Bank promoted
+technological innovations and applications
+to transform into a smart retail bank, and
+shifted its corporate banking business from
+scale-driven inorganic growth to value- and
+quality-powered organic growth. Ping An
+Bank strictly managed various financial risks
+and strengthened its ability to serve the real
+economy. The strategic transformation has
+shown positive effects.
+The Company engages in banking business
+through Ping An Bank (the "Bank"), which
+is a national joint-stock commercial bank
+headquartered in Shenzhen and listed on the
+Shenzhen Stock Exchange (stock code: 000001).
+Ping An Bank provides corporate, retail, and
+government customers with diverse financial
+services through 1,079 outlets across the
+country.
+BUSINESS OVERVIEW
+Ping An Bank has kept asset quality risks under control. The non-
+performing loan ratio and proportion of special mention loans decreased
+by 0.04 pps and 0.41 pps to 1.70% and 3.70% respectively.
+(in RMB million)
+Retail loans (including
+credit card loans)
+Corporate loans
+849,035
+2017
+(in RMB million)
+26.8
+269,022
+340,999
+Personal deposits
+4.1
+1,921,835
+2,000,420
+Deposits
+Including:
+(8.5)
+934,857
+855,195
+57.0
+540,944
+Ping An Bank's strategic transformation towards retail banking generated
+significant effects. Retail banking accounted for 44.1% of the Bank's
+revenue and 67.6% of its net profit. Ping An Bank continued to improve
+the structure of its corporate business, and adopted "C+SIE+R" and
+"commercial banking + investment banking + investment" industry-specific
+financial service models to support the real economy. The Bank launched
+technology-powered smart services and topped the list of joint-stock
+banks with 14.82 million monthly active app users.
+4.83
+Ping An Bank maintained steady growth and realized a net profit of
+RMB23,189 million, up 2.6% year on year.
+Ping An Insurance (Group) Company of China, Ltd. 39
+4.73
+7.26
+6.20
+31.57
+4.82
+7.68
+17.94
+5.71
+Total
+Others
+Coal mining
+Real estate
+Non-banking financial services
+protection, railway...)
+7.92
+6.06
+5.72
+3.17
+Annual Report 2017
+There has been no default on non-standard debt assets held by Ping An, and overall risks are
+controllable. In terms of credit status, such assets are of high credit quality. Over 95% of the debt
+plans and trust plans held by Ping An have AAA external ratings, and about 5% of them have
+AA+ or AA external ratings. While some high-credit entities do not need credit enhancement
+for their financing, most of the debts have guarantees or collateral. Over 80% of the debts have
+full-coverage cash flows. In terms of industry and geographic distribution, we avoid high-risk
+industries and regions, and our target assets are mainly in the non-banking financial services
+and expressway industries in developed and coastal areas such as Beijing, Shanghai and Jiangsu.
+In terms of investment timing and return, Ping An seized time windows of large supplies of
+high-quality debts to boost overall yields.
+27,859
+4.55
+7.47
+6.00
+100.00
+4.49
+7.25
+5.93
+10.16
+2.62
+7.43
+6.04
+3.28
+Business Analysis
+Banking Business
+2016
+648
+108,069
+(15,332)
+33,226
+Equity funds
+6.8
+136,350
+11.1
+272,474
+1.4
+Stocks
+366,876
+23.7
+580,305
+Equity investments
+4.7
+93,497
+18.2
+30,096
+1.5
+Equity stakes (3)
+Wealth management products (1)
+3.7
+74,721
+3.2
+78,546
+Preferred stocks
+0.6
+12,544
+0.5
+11,973
+Bond funds
+3.5
+71,051
+4.0
+97,198
+4.5
+86,888
+109,384
+6.2
+1,470,798
+68.5
+1,680,071
+Term deposits
+Fixed-income investments
+By category
+73.4
+%
+%
+Carrying value
+December 31 2017
+(in RMB million)
+INVESTMENT PORTFOLIO
+Strategic asset allocation (SAA) is a key part of Ping An's insurance investment management. We
+use robust quantitative models to select optimal allocation plans in line with our risk appetites
+to boost efficiency of fund operations. We use specialized statistical model-based stochastic
+simulation and multi-dimensional stress testing to test allocation plans, effectively control volatility
+risks and tail risks in the portfolio, and ensure security of investment funds.
+December 31 2016
+Carrying value
+163,074
+6.6
+206,548
+124,004
+8.0
+195,633
+Wealth management products (1)
+6.8
+135,781
+5.7
+140,292
+Debt plan investments
+45.4
+910,968
+43.7
+1,071,688
+Bond investments
+10.3
+Other fixed-income investments (2)
+12.3
+N/A
+3.5
+2.1
+Ping An Insurance (Group) Company of China, Ltd. 37
+Annual Report 2017
+(3) According to the current asset classification, equity stakes include investments in associates and jointly controlled entities,
+unlisted equities, and private equity funds. Comparable data have been retrospectively restated.
+(2) Other fixed-income investments include financial assets purchased under agreements to resell, policy loans, and statutory
+deposits for insurance operations.
+(1) Wealth management products include trust plans from trust companies and wealth management products from
+commercial banks.
+100.0
+MANAGEMENT DISCUSSION AND ANALYSIS
+2,004,780
+2,449,474
+Total investments
+4.2
+84,820
+4.3
+106,203
+100.0
+Business Analysis
+Investment Portfolio of Insurance
+Funds
+121,340
+4,118
+2016 Change (%)
+2017
+value of available-
+Changes in fair
+income
+Total investment
+Impairment losses
+fair value changes
+Profits/losses from
+Realized gains (2)
+income (1)
+Net investment
+(in RMB million)
+INVESTMENT INCOME
+Others
+42,114
+33.0
+30.2
+2,004,780
+100.0
+2,449,474
+Total investments
+6.2
+123,664
+100.0
+5.8
+Cash, cash equivalents and others
+2.2
+43,442
+2.0
+47,769
+Investment properties
+141,329
+By purpose
+Financial assets carried at fair value
+through profit or loss
+45,771
+740,695
+Loans and receivables
+36.0
+721,527
+36.0
+881,657
+Held-to-maturity investment
+23.6
+471,914
+27.6
+675,148
+Available-for-sale financial assets
+3.2
+64,461
+1.9
+662,058
+Change (%)
+(1) The non-standard debt assets were reclassified by industry in line with Shenyin Wanguo's industry classification.
+(2) Some industries have been grouped into "others" as they account for small proportions.
+23,189
+Due from the PBOC
+(%) (regulatory
+Interest revenue
+adequacy ratio
+Core tier 1 capital
+2017
+4,232
+(in RMB million)
+9.5
+2,033,715
+2,226,112
+Operating results
+Net profit
+Total risk weighted
+(3) Credit cost = loan impairment losses/average balance of
+loans (including bill discount).
+Net interest revenue
+4,240
+(0.2)
+requirement >=7.5%)
+Loans and advances
+-0.16 pps
+9.34
+9.18
+requirement >=8.5%)
+22.1
+8,787
+10,726
+ratio (%) (regulatory
+institutions
+Tier 1 capital adequacy
+Due from financial
+-0.08 pps
+8.36
+8.28
+6.3
+94,976
+234,387
+Net capital
+Ping An Bank strengthened management of
+its organizational structure, made its outlets
+smarter, and improved geographic distribution
+of its outlets. As at the end of 2017, Ping An
+Bank had 70 branches and 1,079 business
+outlets.
+9.7
+7.16 pps
+98.51
+105.67
+(%)
+42
+ratio for loans more
+than 90 days overdue
+-4.29 pps
+155.37
+151.08
+ratio (%)
+Provision coverage
+-0.14 pps
+Provision coverage
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Capital Adequacy Ratio
+7.5
+190,041
+204,293
+Net tier 1 capital
+(2) Cost-to-income ratio = general and administrative
+expenses/total revenue.
+8.4
+170,088
+184,340
+Net core tier 1 capital
+(%)
+2016
+(1) Net interest margin = net interest revenue/average
+balance of interest-earning assets.
+Change
+December 31 December 31
+2017
+(in RMB million)
+249,227
+2.71
+84,904
+Capital adequacy
+2,774,577
+3,120,038
+assets
+interest-earning
+35.4
+(74,059) (54,708)
+12.5
+Total interest expenses
+(3.1)
+76,411
+74,009
+Net interest revenue
+53.8
+(14,358) (9,334)
+Average balance of
+Net interest revenue
+74,009
+76,411
+revenue
+commission
+Net fee and
+Including:
+1.5
+31,304
+31,777
+revenue
+Net non-interest
+-0.38 pps
+2.75
+2.37
+margin (%) (1)
+Net interest
+(3.1)
+Bonds payable
+11.9
+5.5
+(8,531)
+15.1
+3,523
+4,056
+Others
+-0.33 pps
+11.53
+Total interest revenue
+11.20
+14.9
+29,665
+34,078
+investment
+ratio (%) (regulatory
+Interest revenue from
+requirement >=10.5%)
+148,068
+131,119
+12.9
+(19,155)
+(37,875) (35,895)
+Deposits
+Change (%)
+2016
+2017
+(in RMB million)
+Operating Results
+institutions
+181.8
+(948)
+(2,671)
+Due to the PBOC
+Due to financial
+Interest expenses
+FINANCIAL ANALYSIS
+Note: Capital requirements regarding credit risk, market risk
+and operational risk are measured by the weighted
+method, standard method, and basic indicator method
+respectively.
+124.5
+2.57
+assets
+(39,932)
+Life's products
+holding Ping An
+Number of customers
+51.3
+20.15
+30.49
+(million)
+Group (million)
+from other
+holding products
+Number of customers
+2.2 pps
+40.0
+42.2
+subsidiaries of the
+customers (%)
+16.29
+40.9
+(million)
+cards in circulation
+Number of credit
+RMB million)
+57.0
+540,944
+11.56
+credit card loans, in
+36.2
+797,600
+1,086,688
+in RMB million)
+management (AUM,
+Retail assets under
+Retail loans (including
+Group's retail
+number of the
+Contribution to the
+3.92 pps
+25.97
+29.89
+Operating efficiency
+Cost-to-income
+ratio (%)
+1.5
+31,304
+Net interest margin (%)
+31,777
+(3.1)
+76,411
+74,009
+Net interest revenue(1)
+Net non-interest
+2.6
+22,599
+revenue
+2.37
+2.75
+-0.38 pps
+33.4
+52.39
+Loan loss provision
+ratio (%)
+(million)
+customers (1)
+Number of retail
+Customer structure
+Change
+(%)
+2016
+December 31 December 31
+2017
+Transformation towards a smart retail bank
+generated significant effects. Ping An Bank
+continued to transform into a smart retail
+bank centering on "SAT" (social media + app
++tele). The Bank integrated apps, enhanced
+online functionalities, and realized one-
+stop management of credit cards and debit
+cards. The new "Ping An Pocket Bank" app
+combines advanced biometrics with Al to
+improve customer services and experience.
+The Bank opened new offline retail outlets
+which show new images, offer upgraded
+services, and represent a new model. The
+Bank built agile mechanisms and a vertical
+management framework to increase efficiency
+of retail operations. The Bank's retail customer
+base, retail assets under management
+(AUM), and retail loans (including credit card
+loans) continued to grow rapidly due to the
+transformation into a smart retail bank. For
+2017, retail banking accounted for RMB46,692
+million or 44.1% of the Bank's revenue, up 13.5
+pps year on year, and RMB15,679 million or
+67.6% of the Bank's net profit, up 26.4 pps year
+on year.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+40
+(1) The net interest margin declined and the net interest
+revenue reduced by 3.1% due to the value-added tax
+reform and higher interbank interest rates.
+38.34
+25.61
+69.91
+(1) Retail customers include debit card holders and credit
+card holders, with duplication removed; the number of
+retail customers as at the end of 2016 has been restated
+4,494
+3,343
+Doubtful
+(9.6)
+13,833
+12,510
+(25.6)
+3.8
+62,984
+Special mention
+Sub-standard
+16.0
+1,389,396
+1,612,249
+(%)
+60,703
+Loss
+13,144
+78.2
+49.7
+(43,810)
+-0.41 pps
+4.11
+3.70
+Percentage of special
+mention (%)
+Impairment provision
+balance
+-0.04 pps
+1.74
+1.70
+12.8
+25,702
+28,997
+15.5
+1,704,230 1,475,801
+Total loans and
+advances
+Total non-performing
+loans
+Non-performing loan
+ratio (%)
+2016
+Change
+7,375
+Pass
+41.7
+32,947
+46,692
+Change (%)
+2016
+% of net profit from
+retail banking
+44.1
+Net profit from retail
+banking
+Revenue from retail
+banking
+(in RMB million)
+Operating results of retail banking
+Annual Report 2017
+December 31 December 31
+2017
+accordingly.
+% of revenue from retail
+banking
+30.6
+2017
+15,679
+(in RMB million)
+Loan Quality
+13.5 pps
+enhanced its debt collection capability by
+strengthening expertise and promoting a shift
+towards an asset-light, capital-light business
+model. In 2017, the Bank recovered RMB 9,528
+million of non-performing assets (NPAs),
+up 81.6% year on year; 83% of the recovered
+amount was collected in cash, while the rest in
+kind.
+Ping An Bank had strong, orderly risk
+management in place, and achieved
+significant results in collection. The
+Bank actively managed external risks and
+restructured its business portfolio by lending to
+higher-quality retail customers and enhancing
+corporate banking to maintain stable asset
+quality. In 2017, the non-performing loan ratio
+and the proportion of special mention loans
+decreased, while the provision coverage ratio
+for loans more than 90 days overdue increased.
+Ping An Bank maintained strict risk control
+over new loans, and effectively identified and
+mitigated risks in existing ones. The Special
+Asset Management Business Unit has achieved
+strong results since it was established in late
+2016. In 2017, the department significantly
+to marketing, risk management and other
+activities. The "Al+ robot Xiao An" has gone
+live on the Pocket Bank app. Offline robots
+have engaged in interactive marketing at
+outlets. In Al+ investment advisory services,
+Ping An Bank provides customized advice to
+different customers. On the Pocket Bank app,
+new functionalities such as Recommended
+Portfolio, Insurance Zone, Investment Advisory
+Livecast, and Financial News have gone live.
+The Pocket Bank app allows customers to
+purchase a package of products with one
+click. In "Al+ risk management", risk models
+were deployed to monitor and evaluate risks
+across the Bank. For small and medium-sized
+enterprises (SMEs), Ping An Bank pursued
+product and service innovation. On the one
+hand, it is developing a specialized platform
+for SMEs, and building a mobile integrated
+service system to provide SMEs with payment,
+settlement and wealth management services.
+On the other hand, it is forging a credit service
+system for SMEs. Under the newly developed
+KYB model, SMEs are provided with diverse
+online smart financing services. Moreover, Ping
+An Bank leverages technologies to promote the
+influence of Orange E Platform, Cross-border E,
+Factoring Cloud and ET-Bank by offering better
+products and services.
+Business Analysis
+Banking Business
+Ping An Insurance (Group) Company of China, Ltd. 41
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Bank developed its corporate
+banking business under the philosophy
+of being asset-light, capital-light, and
+industry-oriented. Ping An Bank built
+expertise in selected sectors, and adopted
+"C+SIE+R" (core customers + supply chains,
+industry chains, ecosystem customers +
+retail customers) and "commercial banking +
+investment banking + investment” industry-
+specific financial service models to support
+the real economy. As at the end of 2017, the
+industry-specific business units had RMB165,490
+million of total deposits and RMB490,490 million
+of assets under management. As to asset-light,
+capital-light products, the Bank promoted
+low-risk-weight, low/zero-capital-requirement
+businesses and exploited the Group's
+integrated finance resources and platforms to
+expand channels and boost revenues. In 2017,
+Ping An Bank strengthened cooperation with
+Ping An Securities, and fulfilled 76 investment
+banking projects worth RMB32,900 million. The
+Bank underwrote RMB105,105 million worth
+of bonds in 2017, increasing the market share
+from 1.9% to 2.7%. The Bank had RMB6.13 trillion
+in net assets under custody at the end of
+December 2017, and realized RMB3,046 million
+in asset custody fee revenue for 2017. As at the
+end of 2017, the number of gold accounts rose
+by 1,504,200 or 41.8% from the beginning of 2017
+to 5,104,200.
+26.4 pps
+41.2
+67.6
+68.3
+9,315
+Ping An Bank launched technology-powered
+smart services and expanded business
+application scenarios. To ensure successful
+transformation towards smart retail banking,
+Ping An Bank benchmarked itself against
+internet finance companies, and established
+an IT team of over 2,100 members dedicated to
+retail banking. Ping An Bank integrated three
+apps into one, i.e. Pocket Bank 4.0, boosting
+customer experience with fingerprint, voiceprint
+and face recognition technologies. The number
+of monthly active app customers reached 14.82
+million, dwarfing most other joint-stock banks.
+Ping An Bank has applied Al+ innovations
+0.17
+0.13
+Market share in
+category (%)
+brokerage volumes
+Administrative
+0.04 pps
+-0.17 pps
+users (in million)
+0.97
+Financing category (%)
+64.4
+0.87
+1.43
+0.65 pps
+(%)
+0.95
+1.14
+2.57
+(in RMB million)
+0.53 pps
+1.60
+2016
+2017
+Fixed-income business
+Other revenue(2)
+Asset Management Business
+Business Analysis
+MANAGEMENT DISCUSSION AND ANALYSIS
+2.04
+Ping An Insurance (Group) Company of China, Ltd. 47
+In institutional business, Ping An Securities
+carried on transformation amid deep-going
+corrections of the bond market, embarked
+on innovative business and strove to make
+breakthroughs. On the primary market, Ping
+An Securities maintained its leading role in
+bond underwriting and ranked 4th as a lead
+underwriter. Meanwhile, it spared no effort to
+develop asset securitization, and ranked 3rd
+among peers by completing 38 asset-backed
+securitization issuances. For equity business,
+Ping An Securities proactively explored ways
+of partnering with Ping An Bank to provide
+comprehensive tailor-made solutions for clients,
+made breakthroughs in implementing major
+projects and scaled up the project pipeline.
+For secondary trading, Ping An Securities is
+developing a new fixed-income business model
+that is "asset-light, high-return and low-risk",
+with the focus being shifted to market making,
+strategy trading and trading services. Ping An
+Securities saw steady growth in the trading
+volume of interest rate swap (IRS) market
+making, and ranked among the top by IRS
+market making. The yields of strategy and
+market making grew by 300% year on year.
+Besides, Ping An Securities launched bond ETF
+indexes in cooperation with China Securities
+Index Co., Ltd. and China Central Depository &
+Clearing Co., Ltd. to develop an ecosystem for
+passive investment in bond ETFs.
+In online brokerage, with the Group's huge
+customer base, Ping An Securities deepened
+cooperation with internal and external
+platforms. The number of its customers rose by
+28.9% from the beginning of 2017 to 13.01 million,
+which enables Ping An Securities to stably rank
+first among peers. Besides, customer activity,
+the market share in brokerage volumes and the
+balance of margin trading further increased.
+The number of daily active users rose by 64.4%
+from the start of 2017, while the market share
+In 2017, the capital market recorded mixed
+performance. The ROE of Ping An Securities
+was 30% higher than the industry average.
+The Company provides securities brokerage,
+futures brokerage, investment banking, asset
+management, and financial advisory services
+through Ping An Securities and its subsidiaries,
+i.e. Ping An Futures, Ping An Caizhi, Ping An
+Securities (Hong Kong), and Ping An Pioneer
+Capital.
+SECURITIES BUSINESS
+Business Overview
+In 2017, the total investment income of the trust
+business grew 19.4% year on year, mainly due to
+the exit from investment projects.
+Total investment income
+In 2017, the fees and commission revenue
+from the trust business amounted to RMB4,292
+million, 19.2% higher year on year, mainly due to
+the increased floating management fee.
+Annual Report 2017
+category (%)
+Fees and commission
+Investment
+1,499
+Financing category
+48.6
+1,456
+2,163
+Investment category
+in brokerage volumes gained 0.53 pps and
+advanced by 4 places in the rankings from
+the beginning of 2017. The market share of
+margin trading rose to 1.5%, up 0.3 pps from the
+beginning of 2017.
+19.2
+3,600
+4,292
+revenue
+Change (%)
+2016
+2017
+(in RMB million)
+Fees and commission revenue
+Change (%)
+1,741
+(13.9)
+Administrative
+December 31 December 31
+2017
+28.9
+10.09
+13.01
+(in million)
+0.08 pps
+0.58
+0.66
+in trust (%)
+Number of daily active
+Number of customers
+Online brokerage
+56.3
+403
+630
+category
+(%)
+2016
+Change
+Fee rate of assets held
+Results of Operation
+(in RMB million)
+As of the end of 2017, OneConnect provided
+one-stop fintech solutions for 468 banks
+Ping An Insurance (Group) Company of China, Ltd. 49
+2016 Change (%)
+3,632
+3,675
+(1.2)
+40.5
+46.7
+-6.2 pps
+(1) Cost-to-income ratio = general and administrative
+expenses/revenue.
+Annual Report 2017
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Asset Management Business
+Operating Data:
+16.2
+(in RMB million)
+2017
+2016
+Change (%)
+Net profit
+2,581
+2,221
+Revenue from third
+party business
+2017
+ratio (%) (¹)
+Cost-to-income
+expenses
+-0.05 pps
+0.18
+0.24
+-0.06 pps
+rate (%)
+Other fees and
+commission revenue
+652
+1,028
+Total
+4,255
+1,888
+4,966
+Affected by the declining bond issuance in the
+market, the bond underwriting volume of Ping
+An Securities dropped from 2016, resulting in a
+year-on-year decline of 32.6% in the commission
+revenue of underwriting business in 2017. Other
+fees and commission revenue dropped by 36.6%
+mainly due to a year-on-year decline of revenue
+from investment advisory business amid market
+weakness.
+Total investment income
+In 2017, total investment income increased
+by 28.2% year-on-year due to the increase in
+returns from Ping An Caizhi's PE projects at
+exit as well as good performance in strategy
+trading.
+Cost-to-income ratio
+Ping An Securities' cost-control initiatives
+started to take effect as the cost-to-income
+ratio dropped by 6.2 pps year on year.
+OTHER ASSET MANAGEMENT BUSINESSES
+Ping An Asset Management
+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.
+In 2017, China witnessed stable economic
+growth, growing corporate profit, ongoing
+industry upgrade, new momentum and the
+brisk economy. The stock market rose amid
+volatile trading and mixed performance.
+Yields in the bond market rose on monetary
+policies, financial regulations and other
+factors. Adhering to the philosophies of value
+investing and prudent investment, Ping An
+Asset Management identifies and creates
+value for investors, and maximizes investment
+returns with controlled risks. In the new era,
+Ping An Asset Management will fully leverage
+its core capabilities in asset allocation and
+long-duration fund management. On the
+back of its platform advantages, Ping An
+Asset Management will provide investors with
+more comprehensive and professional asset
+management services. As always, Ping An will
+follow national strategies and support the real
+economy.
+In 2017, Ping An Asset Management grew
+steadily. It posted net profit of RMB2,581 million,
+up 16.2% year on year; its AUM rose by 18.1%
+from the start of 2017 to nearly RMB2.67 trillion.
+(in RMB million)
+Administrative
+(36.6)
+(14.3)
+(27.6)
+2,054
+(in RMB million)
+2017, Lufax had over 33 million registered users
+on its platform, up 19.2% from the beginning of
+2017. AUM hit RMB461,699 million, up 5.3% from
+the beginning of 2017.
+In consumer finance, Lufax Holding provides
+diverse financing solutions to salary earners
+and micro and small business owners, thanks to
+its quicker information processing and precise
+risk pricing models. As at the end of 2017, loans
+granted via Lufax's platform totaled RMB615,833
+million, including unsecured loans of RMB398,764
+million and secured loans of RMB217,069 million.
+Loans under management grew by 96.7% from
+the beginning of 2017 to RMB288,434 million.
+In institutional trading, Lufax Holding provides
+excellent matching services to facilitate asset
+transfers among financial institutions. In 2017,
+the institutional trading volume via Lufax's
+platform rose by 28.1% year on year to RMB5.38
+trillion. Lufax Holding proactively explored
+ways of applying fintech to fiscal management.
+In June 2017, Lufax Holding launched the Smart
+Cloud Platform for Public Asset and Liability
+Management in cooperation with Nanning
+Government. By the end of 2017, the platform
+had saved the local government RMB37 million,
+effectively assisting the government in fiscal
+management and cost saving.
+(1) KYP/KYR/KYC refers to Know Your Product/Risk/Customer.
+Ping An Insurance (Group) Company of China, Ltd. 51
+MANAGEMENT DISCUSSION AND ANALYSIS
+52
+Business Analysis
+Fintech & Healthtech Business
+Lufax Holding
+December 31 December 31
+2017
+Change
+2016
+(%)
+Number of users
+(in million)
+Lufax's registered
+users
+33.83
+28.38
+19.2
+Active investor users (1)
+9.61
+Annual Report 2017
+In wealth management, Lufax Holding provides
+simple and convenient wealth management
+services through its online platforms, achieving
+product diversification and coverage of all
+customer segments. Leveraging robust KYP/
+KYR/KYC(1) tools and massive data, Lufax
+Holding can identify customer requirements
+more quickly and accurately, and improve its
+wealth management services. As at the end of
+As China's leading fintech company, Lufax
+Holding utilizes its technology-powered
+financial DNA to provide personalized financial
+services and make personal wealth and asset
+management more convenient, secure and
+efficient. Lufax Holding is China's leading online
+wealth management and personal lending
+technology platform, which serves the growing
+middle class and is a leader in providing
+financial institutions and local governments
+with financial solutions. In 2017, Lufax Holding
+maintained rapid growth in such major business
+segments as wealth management, consumer
+finance and institutional trading, and became
+profitable for the first time.
+LUFAX HOLDING
+December 31 December 31
+2017
+2016
+Change
+(%)
+Assets under
+management
+2,668,805
+2,259,435
+18.1
+Including: AUM of
+third-party asset
+management
+305,881
+280,035
+(8.1)
+9.2
+Ping An Asset Management has continuously
+improved its investment risk management
+system, and developed the liquidity emergency
+mechanism to effectively mitigate liquidity
+risk. It enhanced its risk response capability,
+and specified the response process and
+contingency mechanisms. The smart system for
+investment risk and performance management
+has greatly enhanced analysis in terms of
+scope and depth. Moreover, the system has
+realized timely sharing of data, improved risk
+management ability, and facilitated stable
+business development.
+Ping An Financial Leasing
+Ping An Financial Leasing was founded in
+September 2012. Thanks to synergy within the
+Group, Ping An Financial Leasing strives to
+become a leader with commercial vitality and
+resilience to provide small- and medium-sized
+enterprise (SME) customers and professional
+institutions with more diversified fund products
+and more comprehensive value-added services.
+At present, it has 19 business lines and 20
+offices across the country.
+Ping An Financial Leasing pioneered the
+"Innovative Leasing 2.0" concept. It focuses on
+individual consumer leasing, operating leasing,
+leasing+internet and industry leasing. Through
+innovations, it has developed seven innovative
+business lines, including micro leasing and
+health (check). Adopting the online and offline
+model, Ping An Financial Leasing has realized
+fast-track approvals (within 1.5 hours) for
+micro leasing. Following national policies and
+the Group's pan health care strategy, Ping
+An Financial Leasing established the Ping An
+Health (Check) Center, pioneered the "3-in-1"
+health check model combining image-based
+diagnosis, medical examination and precision
+physical examination. The first center has
+opened in Nanchang. In addition, Ping An
+Financial Leasing has strengthened its presence
+in the internet field through three apps, "Online
+Customers", "Online Employees" and "Online
+Resources", taking the lead in entering the
+mobile internet age.
+As at the end of December 2017, Ping An
+Financial Leasing's total assets reached
+RMB177,024 million, up 55.2% from the start
+of 2017. In 2017, its revenue reached RMB9,827
+million, up 44.2% year on year; and its net
+profit reached RMB1,990 million, up 47.2%
+year on year. Meanwhile, Ping An Financial
+Leasing maintained stable asset quality with a
+non-performing asset ratio of 0.91%, down 0.13
+pps from the start of 2017.
+50
+Ping An Insurance (Group) Company of China, Ltd.
+Business Analysis
+Fintech & Healthtech Business
+Lufax Holding maintained rapid growth in such business segments as
+wealth management, consumer finance and institutional trading. As at the
+end of 2017, Lufax had RMB461,699 million in assets under management
+(AUM), up 5.3% from the beginning of 2017. Loans under management
+soared by 96.7% from the beginning of 2017 to RMB288,434 million. In 2017,
+Lufax Holding became profitable for the first time.
+In its pre-IPO financing, Ping An Good Doctor raised USD400 million at a
+post-money valuation of USD5,400 million, and has filed an application with
+HKEx for IPO. It runs China's largest online healthcare platform, and has
+provided health management services for over 190 million users.
+OneConnect raised USD650 million by completing its first round of
+financing at a post-money valuation of USD7,400 million. Ping An
+Healthcare Technology raised USD1,150 million by completing its first
+round of financing at a post-money valuation of USD8,800 million.
+Autohome registered significant growth in media services, leads
+generation business and traffic by building an auto ecosystem.
+The Company conducts fintech & healthtech
+business via companies such as Lufax Holding,
+Ping An Good Doctor, OneConnect, Ping An
+Healthcare Technology and Autohome.
+Ping An Asset Management has always been
+leveraging technology to enhance its core
+competitiveness. It has adopted information
+technology, data technology and smart
+technology to boost its asset management
+business. With the efficient information
+platform, Ping An Asset Management's
+entire business process enables smart risk
+management and efficient trading management.
+The sophisticated data platform facilitates
+investment and risk analysis. Moreover, the
+smart platform based on big data and artificial
+intelligence (AI) helps to enhance efficiency in
+research and investment decision-making.
+business fee
+Assets management
+(2.6)
+30.3
+2,196
+1,131
+94.2
+8,961
+7,870
+13.9
+(3,632)
+(3,675)
+(1.2)
+Cost-to-income
+ratio (%)
+40.5
+46.7
+-6.2 pps
+Finance costs
+Other expenses
+Profit before tax
+Income tax
+(580)
+(514)
+12.8
+(2,170)
+(969)
+123.9
+2,579
+2,712
+28.2
+2,591
+3,321
+Total investment
+income (¹)
+Ping An Insurance (Group) Company of China, Ltd.
+2017
+2016
+Change (%)
+Fees and commission
+Market making of
+revenue
+4,255
+4,966
+(14.3)
+interest rate swaps
+(4.9)
+959,308
+66.7
+Fees and commission
+expenses
+(811)
+(818)
+(0.9)
+Net fees and
+commission revenue
+3,444
+4,148
+(17.0)
+575,639
+(456)
+(497)
+(8.2)
+commission rate (%)
+0.04
+0.05
+-0.01 pps
+Underwriting business
+revenue
+794
+1,178
+(32.6)
+Underwriting business
+size
+Brokerage
+103,488
+Underwriting
+commission rate (%)
+0.77
+0.82
+Assets management
+revenue
+445
+457
+Monthly average AUM
+246,254
+188,941
+143,003
+8.31
+9.3
+2,303
+4,984,455
+2,123
+2,215
+(4.2)
+Ping An Securities invested heavily in
+technology application. Ping An Securities
+improved customer experience and customer
+development through the "Ping An Securities"
+app. In 2017, Ping An Securities launched the
+"AI Smart Stock Investment" service based
+on big data, machine learning and artificial
+neural networks. By combining professional
+investment advisory services with AI, Al Smart
+Stock Investment has effectively boosted
+customer activity, increased the market share
+in trading volumes and the margin trading
+balance. Moreover, Ping An Securities launched
+the smart asset allocation service on its app to
+provide customers with customized product
+investment plans, which boosted product sales.
+As at the end of 2017, sales of products based
+on the app reached RMB84,018 million, up 43.0%
+from the start of 2017. Ping An Securities' app
+I was honored by Securities Times as one of the
+"Top 10 Apps of Securities Companies for 2017"
+(by comprehensive measure).
+Ping An Securities has leveraged technologies
+to improve its information systems, and
+established its proprietary real-time Pilot
+system. Based on message middleware,
+the Pilot system provides distributed
+real-time technology services for transaction
+management, and one-stop solutions to satisfy
+business needs of the front office, the middle
+office and the back office. China Computer
+Users Association awarded Ping An Securities
+the Eagle Prize for 2017. Based on the Pilot
+platform, Ping An Securities increased R&D
+investments in innovative areas, such as
+market making and risk management. It has
+developed systems based on plug-ins, including
+the electronic marketing making system, the
+operations process monitoring system, the fund
+research management system and the credit
+risk management system, greatly improving
+efficiency, reducing operational risks and
+enhancing market competitiveness.
+Revenue
+Administrative
+expenses
+Net profit
+(1) Total investment income includes investment income
+and share of profits and losses of associates and
+jointly controlled entities under the segmented income
+statement. Investment income excludes impairment
+loss of investment assets and rents from investment
+properties.
+(2) Other revenue includes other revenues and other
+gains and foreign exchange gains or losses under the
+segmented income statement. Other revenue and other
+gains exclude non-operating income.
+In 2017, Ping An Securities pursued
+tech-powered transformation, seized market
+opportunities, and built up its competitive
+advantages. Its net profit dropped 4.2%,
+stronger than the market average.
+2.6
+48
+Ping An Insurance (Group) Company of China, Ltd.
+Fees and commission revenue
+2017
+2016
+Change (%)
+(in RMB million)
+Brokerage business
+revenue
+2,364
+Brokerage volumes
+5,449,417
+Annual Report 2017
+15.6
+Annual Report 2017
+borrowers
+Change
+(%)
+29.4
+637,703
+825,173
+Accumulated
+/December
+31 2016
+/December
+31 2017
+(in RMB million)
+2016
+2017
+KEY DATA SUMMARY
+Jin Peng, Actuary
+March 20, 2018
+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 2017 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 2017 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.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+54
+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 2017 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.
+Review the operating profit of the Company, source of earning and residual margin related data of the
+life and health insurance business (L&H).
+Operating Return on EV (Operating ROEV) of the Group
+26.7%
+21.0%
+5.7 pps
+454,705
+616,319
+Residual margin of L&H
+29.7
+40,206
+52,128
+shareholders of the parent company
+L&H operating profit after tax attributable to
+32.6
+50,805
+67,357
+•
+Value of one year's new business after cost of capital (NBEV)
+27.0%
+35.5%
+Operating ROEV of L&H
+38.8
+37.8
+360,312
+496,381
+EV of L&H
+68,252
+94,708
+shareholders of the parent company
+Group operating profit after tax attributable to
+8.5 pps
+Review the embedded value movement analysis, and
+•
+Review the sensitivity analysis of the embedded value and NBEV;
+318
+468
+banks
+Number of partner
+(%)
+2016
+Change
+December 31 December 31
+2017
+158.6
+360
+931
+47.2
+(million)
+Number of credit
+894.4
+1.07
+10.64
+(in RMB trillion)
+volume
+Change (%)
+2016
+2017
+Interbank trading
+and 1,890 non-bank financial institutions. In
+2017, over 900 million credit inquiries and
+an interbank trading volume of over RMB10
+trillion were processed via OneConnect. In
+May 2017, the open platform Fintech Space
+Station launched 21 products relating to app
+self-service plug-ins, big data application and
+smart financial services. Besides, OneConnect
+established the Internet Finance Alliance for
+Small and Medium-size Banks, which now has
+230 plus members with total assets of over
+RMB35 trillion.
+inquiries
+35.5
+Number of partner
+institutions
+Review the embedded value, value of new business and interest margin of the Company as at
+December 31, 2017;
+We have reviewed the methodology and assumptions used in preparing the EV and Operating Profit
+results, including:
+The Company prepared the embedded value and NBEV 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 at December 31, 2017. The EV and Operating Profit results
+include embedded value, value of one year's new business after cost of capital ("NBEV"), 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
+Operating profit after tax attributable to shareholders of the parent
+company of 2017 was RMB94,708 million, up by 38.8%.
+NBEV of life and health insurance business of 2017 was RMB67,357 million,
+up by 32.6%.
+As at December 31, 2017, the embedded value of the Company was
+RMB825,173 million, and the operating ROEV of the Group was 26.7%.
+Analysis of Embedded Value and
+Operating Profit
+non-bank financial
+MANAGEMENT DISCUSSION AND ANALYSIS
+Annual Report 2017
+Autohome has also developed other
+competitive business. At the end of October
+2017, Autohome launched big data products to
+optimize the auto ecosystem by creating highly
+differentiated value for customers. Meanwhile,
+Autohome's financial business progressed
+well, as its diverse products and services have
+covered consumer and dealer finance, financial
+leasing and insurance.
+In 2017, thanks to development of the auto
+ecosystem, media services and leads generation
+services as the core business of Autohome
+grew markedly, with total revenue rising 33.7%
+year on year. While upgrading and optimizing
+user experience, Autohome recorded steady
+growth in traffic. By the end of 2017, Autohome
+had over 58 million registered users. In the
+fourth quarter of 2017, the daily average visits
+of unique users on mobiles increased 25.0%
+year on year. These achievements have further
+solidified Autohome's leading role among auto
+service apps in China. Autohome improved
+user engagement and loyalty by providing
+customized contents and recommendations
+to users. Applications of new technologies
+such as Virtual Reality (VR) and Augmented
+Reality (AR) increased users' interaction with
+automobile manufacturers and dealers.
+Autohome, a leading internet auto service
+platform in China, has forged an auto
+ecosystem under the strategy of “auto media,
+auto e-commerce, auto finance and auto
+lifestyle". Autohome provides auto consumers
+with diverse products and services via
+autohome.com.cn, che168.com, mobile websites
+and mobile applications.
+AUTOHOME
+the service platform. Ping An Healthcare
+Technology has built a personal health risk
+profiling model by combining its pioneering
+Ping An Grouper, a tool for grouping diseases,
+with advanced neural network algorithms.
+The model has a world-leading accuracy rate
+of 99.7% in forecasting overall medical costs.
+For consumers, the "City OneConnect” app
+developed by Ping An Healthcare Technology
+has covered 26 cities. By integrating social
+health insurance, private insurers, hospitals
+and pharmacies, "City OneConnect" app is
+developing a closed loop of life scenarios
+centering on health. Ping An Healthcare
+Technology launched innovative online social
+security services in Shenzhen, such as "facial
+recognition for survival certification of pension
+withdrawal," "mobile payment of social health
+insurance" and "personal account activation."
+In social health insurance, the smart expense
+control and handling services of Ping An
+Healthcare Technology have covered a
+population of 800 million in over 200 cities
+across China. In private insurance, Ping An
+Healthcare Technology provides private
+insurers with automated operation services
+such as online underwriting, loss assessment,
+payment/settlement, and data channels.
+Over 2,000 hospitals have connected with
+PING AN HEALTHCARE TECHNOLOGY
+Ping An Healthcare Technology is committed
+to building China's best tech-powered managed
+care service platform. Through efficient
+connection and effective collaboration with
+healthcare service participants, Ping An
+Healthcare Technology provides comprehensive
+smart solutions for upstream and downstream
+service providers of social health insurance,
+private insurance and healthcare, and even
+for consumers of such services. Ping An
+Healthcare Technology raised USD1,150 million
+by completing its first round of financing at
+a post-money valuation of USD8,800 million in
+early 2018.
+66.5
+1,135
+1,890
+Ping An Insurance (Group) Company of China, Ltd. 53
+Ultimate investment return rate
+EV of the Group
+5.0%
+11.0%
+131.50
+46.6
+Trading volume
+(in RMB million)
+Wealth management 2,117,485
+New loans
+Institutional trading
+343,792
+5,382,081
+1,535,163
+172,919
+4,199,925
+37.9
+98.8
+28.1
+(1) Active investor users refer to users who made an
+investment or had a positive account balance in the past
+12 months.
+PING AN GOOD DOCTOR
+Ping An Good Doctor is committed to building
+the world's largest health care ecosystem and
+using technologies to make people healthier.
+Focusing on users' medical demands and health
+management demands, Ping An Good Doctor
+provides online family doctor services via its in-
+house medical team and Al Assistant. Besides,
+Ping An Good Doctor provides various offline
+services via a health partnership network. To
+help users embrace healthy lifestyles, Ping
+An Good Doctor provides extensive health
+management products and services as well as
+personalized health management plans. In its
+pre-IPO financing, Ping An Good Doctor raised
+USD400 million at a post-money valuation of
+USD5,400 million. It has filed an IPO application.
+with the HKEX.
+Ping An Good Doctor has built a nationwide
+health partnership network comprised of
+doctors, hospitals, third-party health managers,
+and pharmacies. As at December 31, 2017,
+Ping An Good Doctor had a team of 888 in-
+house medical staff members and about 2,100
+contracted external doctors who provide online
+medical consultation services. All the external
+ONECONNECT
+OneConnect is committed to building a world-
+leading, strategically-empowering fintech
+platform to help small- and medium-sized
+financial institutions to address five pain
+points: customer acquisition, products, risk
+management, operations, and technology.
+OneConnect charges fees on the basis of
+performance to achieve win-win results.
+OneConnect completed its first round of
+financing to raise USD650 million at a post-
+money valuation of USD7,400 million in early
+2018.
+So far, OneConnect has launched leading
+technologies such as Smart Banking Cloud,
+Smart Insurance Cloud, and Smart Investment
+Cloud. Smart Banking Cloud helps banks to
+develop customers and transform retail banking
+in areas of lending, daily-life scenarios, payment
+integration, and wealth management products.
+Smart Insurance Cloud exports leading
+technological solutions in areas of claims and
+operations to help small- and medium-sized
+insurers to improve efficiency and services.
+In September 2017, Smart Insurance Cloud
+launched "Smart Certification" and "Smart
+Quick Claim". Smart Insurance Cloud has
+signed the cooperation agreements with 14
+insurers. Smart Investment Cloud provides
+trust companies, private equity investors, fund
+managers, and securities firms with corporate
+risk profiling in different industries.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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 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 life and health
+insurance business is assumed to be 11.0%.
+2.
+192.84
+Registered users
+(in million)
+Change (%)
+2016
+7.49
+3.77
+98.7
+Assets under
+management
+(in RMB million)
+Assets under
+management
+461,699
+438,379
+5.3
+1. Risk discount rate
+Balance of loans
+288,434
+146,640
+96.7
+doctors are associate chief physicians or high-
+level medical professionals at 3A hospitals.
+Ping An Good Doctor's Health Mall offers
+24/7 1-hour drug delivery in 14 Chinese cities
+including Beijing, Shanghai, Guangzhou, and
+Shenzhen.
+To improve customer experience, Ping An Good
+Doctor constantly develops key technologies
+such as Al. Al Assistant has been applied to
+online advisory services to effectively increase
+efficiency and accuracy of the in-house medical
+team.
+As at December 31, 2017, Ping An Good Doctor
+had over 190 million registered users.
+Risk discount rate
+Change
+2016
+(%)
+2017
+under management
+The assumptions used in the embedded value calculation in 2017 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:
+December 31 December 31
+2017
+The adjusted net asset value of 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.
+129,949
+183,920
+Including: Adjusted net asset value of L&H
+407,340
+512,713
+Adjusted net asset value
+2016
+2017
+(in RMB million)
+December 31
+December 31
+Value of in-force insurance business written prior to June 1999
+Value of in-force insurance business written since June 1999
+Cost of capital
+Components of Economic Value
+56
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 55
+Annual Report 2017
+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, 2017.
+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 adjusted for the cost of holding the required
+capital. The embedded value excludes the value of future new business.
+ANALYSIS OF EMBEDDED VALUE
+11.0%
+Key Assumptions
+5.0%
+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 2017 in accordance with the Standards.
+16,758
+Analysis of Embedded Value and
+Operating Profit
+335,610
+50,805
+16,515
+67,357
+(15,516)
+66,321
+85,512
+(18,156)
+2016
+December 31
+December 31
+Value of one year's new business after cost of capital
+Cost of capital
+Value of one year's new business
+2017
+Note: Figures may not match totals due to rounding.
+249,382
+(in RMB million)
+(35,535)
+EV of the Group
+(39,909)
+Including: EV of L&H
+637,703
+496,381
+360,312
+825,173
+278
+330
+18.6
+15.7
+Total for L&H
+171,547
+(2) "PPP" stands for Premium Payment Period.
+26.4
+67,357
+32.6
+(3) Long-term protection products cover whole-life, term life, critical illness and long term accident insurance. Saving products
+(short-PPP) cover endowment and annuity products with PPP below 10 years. Saving products (long-PPP) cover endowment
+and annuity products with PPP of 10 years and above.
+25,216
+Note: (1) Figures may not match totals due to rounding.
+135,722
+50,805
+3,800
+Group business
+Tele, internet and others
+37.2
+(4) Tele, internet and others includes telemarketing, internet marketing and Ping An Health's retail business.
+13,071
+8,837
+47.9
+5,524
+45.4
+Bancassurance
+7,492
+11,311
+(33.8)
+716
+314
+128.4
+29,186
+(5) The differences between FYP used to calculate value of new business and FYP disclosed in MD&A are explained in the
+appendix
+53.8%
+Retail business
+50.7%
+49.9%
+51.4%
+51.9%
+87.6%
+82.9%
+49.4%
+87.9%
+15.6%
+15.3%
+16.9%
+17.1%
+1,683
+37.3%
+83.2%
+45.7%
+47.1%
+2016
+Agency
+Long-term protection
+Saving (short-PPP)
+Saving (long-PPP)
+Short-term
+Tele, internet and others
+Bancassurance
+Group business
+[4]
+Total for L&H
+By FYP
+By ANP
+2017
+2016
+2017
+The profit margin of new business by segment:
+2,309
+(758)
+6,193
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 57
+MANAGEMENT DISCUSSION AND ANALYSIS
+Analysis of Embedded Value and
+Operating Profit
+Value of New Business
+First year premium (FYP) and new business value by segment are as follows:
+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.
+FYP used to calculate value of
+new business
+(in RMB million)
+2017
+2016 Change (%)
+2017
+2016
+Change (%)
+Value of new business
+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
+31.0%
+3.
+4.
+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 be increased by 2%
+annually up to 16%.
+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 for
+the grant period have been based on 60% and 50% of China Life Annuity (2000-2003) table for male and
+female respectively.
+5.
+6.
+Other incident rates
+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.
+Discontinuance
+Policy discontinuance rates have been based on the Company's recent experience studies. The
+discontinuance rates are pricing interest rate and product type specific.
+7.
+8.
+Retail business
+15.7
+142,361
+28.8
+32,158
+61.2
+8,113
+4,905
+65.4
+Saving (long-PPP)
+51,842
+9,204
+44.5
+3,431
+1,977
+73.6
+Short-term
+7,163
+6,370
+Saving (short-PPP)
+24.0
+37,848
+67,027
+50,527
+32.7
+Agency
+121,798
+90,357
+34.8
+60,786
+46,413
+31.0
+Long-term protection
+53,588
+45,637
+17.4
+46,933
+110,506
+39.4%
+Business written in the year of 2017
+Cost of capital calculated at policy level
+Diversification effects within NB lower
+cost of capital
+32.2%
+Favored lapse experience
+14,811
+20,357
+[5]
+Operating variance and others
+(38,202)
+(49,811)
+[4]
+Release of residual margin
+17,391
+22,642
+[3]
+Expected interest growth
+129,860
+168,426
+[2]
+Contribution from new business
+330,846
+454,705
+[1]
+Opening residual margin
+Note
+2016
+2017
+(in RMB million)
+Closing residual margin
+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, 2017,
+residual margin of life and health insurance business was RMB616,319 million, up 35.5% from 2016 due to
+strong new business growth. The movement of L&H residual margin has been illustrated below:
+[6]=[1]+...+[5]
+454,705
+63
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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
+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
+(9,151)
+180,698
+171,547
+Total for L&H
+8,934
+20,252
+29,186
+Group business
+(18,085)
+160,446
+142,361
+Reasons
+Difference
+in MD&A
+FYP disclosed
+FYP used to
+calculate value of
+new business
+Retail business
+(in RMB million)
+The differences between FYP used to calculate value of new business and FYP disclosed in MD&A are
+explained below.
+33.5%
+616,319
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+ultimate investment return
+Note
+2016
+2017
+Spread income
+[2]
+Return on net worth
+[1]
+Release of residual margin
+(in RMB million)
+The breakdown by source of earning of life and health insurance business operating profit is shown below.
+Source of Earning and Residual Margin Analysis of Life and Health Insurance Business
+(3) The one-off material non-operating item in 2017 mainly referred to the restructuring of Ping An Good Doctor, while it mainly
+referred to the restructuring of Puhui Business in 2016.
+(2) The short-term investment variance and impact of discount rate change of life and health insurance business listed above are
+net of tax.
+Note: (1) Figures may not match totals due to rounding.
+312
+40,206
+52,128
+696
+10,104
+11,101
+68,252
+94,708
+Non-controlling interests
+Owners of the parent
+Attributable to:
+40,518
+49,811
+7,357
+assumption (5%) higher than
+interest required on liability
+Favored operating experiences
+38,202
+[3]
+backing liability based on EV
+Investment return from assets
+investment return assumption (5%)
+Investment return on shareholder
+equity based on EV ultimate
+Annual Report 2017
+62
+Note: Figures may not match totals due to rounding.
+40,518
+52,824
+[7]=[5]+[6]
+Operating profit after tax
+(13,365)
+(20,088)
+[6]
+Income tax
+53,882
+72,912
+[5]=[1+2+3+4]
+Operating profit before tax
+6,317
+10,108
+[4]
+Operating variance and others
+3,715
+5,637
+5,648
+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, 2017, the solvency of the Group was adequate.
+2014
+15 years
+2011
+3.85%
+10,000
+Tier-2 capital bonds
+Ping An Bank
+6.80%
+9,000
+Tier-2 capital bonds
+Ping An Bank
+6.50%
+6,000
+Tier-2 capital bonds
+Ping An Bank
+instrument
+7.50%
+3,650
+Hybrid capital debt
+Ping An Bank
+(if not redeemed)
+Next 5 years: 8.70%
+15 years
+2009
+First 10 years: 5.70%
+10 years
+1,500
+2014
+2016
+(45.5)
+(14,142)
+(7,702)
+90.9
+(10,054)
+(19,194)
+(9.7)
+28,474
+25,711
+30.3
+27,291
+35,570
+(%)
+2016
+2017
+Change
+Ending balance of free cash
+Capital injection into subsidiaries
+Others
+Dividend out to shareholders
+Dividend from subsidiaries
+Beginning balance of free cash
+(in RMB million)
+The free cash of the Company include 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, 2017, the Company's free cash amounted to RMB38,332
+million, up by RMB2,762 million compared with the beginning of this year.
+FREE CASH OF THE HOLDING COMPANY
+10 years
+10 years
+Hybrid capital debt
+instrument
+Ping An Bank
+(if not redeemed)
+Ping An Life
+10 years
+2014
+First 5 years: 5.90%
+Next 5 years: 7.90%
+(if not redeemed)
+8,000
+Subordinated
+bonds
+Ping An Life
+Maturity
+Issued year
+Coupon rate
+(in RMB million)
+Туре
+Issuer
+Par value
+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 2017:
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+64
+The Group's long-term capital stability stems
+from the profit continuously generated by
+its various businesses. Further, based on
+the capital plan, the Group ensures capital
+adequacy by using capital market and debt
+market instruments, 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, 2017, the Group's equity attributable to
+shareholders of the parent company was
+RMB473,351 million, an increase of 23.4%
+compared with the beginning of 2017. The
+parent company's capital mainly comprised
+contributions from shareholders as well as
+proceeds from issuance of A shares and H
+shares.
+CAPITAL STRUCTURE
+All operating, investing and financing activities
+should follow the requirements of liquidity
+management. Ping An Group and its insurance
+subsidiaries implement separate management
+of their operating cash inflows and outflows.
+Through the pooling of cash inflows and
+outflows, 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 2017,
+the Group maintained net cash inflows in its
+operating cash flows.
+The 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 its 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.
+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. In addition, as
+the Group's liquidity management execution
+unit, the Treasury Division is responsible for the
+Group's management of cash, liquidity, funding
+and capital and so forth.
+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 properly
+refining its financial resources allocation and
+capital structure to maximize shareholder
+return with the best financial resources
+allocation and capital structure.
+GENERAL PRINCIPLES
+Capital supplement
+bonds
+5,000
+First 5 years: 3.90%
+2015
+Next 5 years: 6.10%
+10 years
+2017
+First 5 years: 5.10%
+3,500
+Capital supplement
+bonds
+Ping An Property &
+Casualty
+(if not redeemed)
+Next 5 years: 5.79%
+10 years
+2015
+First 5 years: 4.79%
+52,824
+5,000
+Ping An Property &
+Casualty
+(if not redeemed)
+Next 5 years: 4.82%
+10 years
+2016
+First 5 years: 3.82%
+10,000
+Capital supplement
+bonds
+Ping An Life
+(if not redeemed)
+Next 5 years: 4.90%
+10 years
+Capital supplement
+bonds
+78,355
+105,809
+[5]=[1-2-3-4]
+The Company has investigated the effect, on the embedded value of the Group, embedded value of 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:
+27.0%
+35.5%
+[15]=[6]/[1]
+21.0%
+26.7%
+[14]=[13]/([1]+[11])
+87,795
+127,989
+[6]
+115,848
+170,569
+[13]=[6]+[12]
+Sensitivity Analysis
+Operating ROEV of L&H
+Operating ROEV of the Group
+EV operating profit of L&H
+EV operating profit of the Group
+2016
+2017
+(in RMB million)
+EV operating profit of the Group of 2017 is RMB170,569 million, which is comprised of RMB127,989 million of
+EV operating profit of L&H and RMB42,580 million of net profit of other business. The main source of EV
+operating profit of L&H is NBEV and expected return on opening EV.
+Operating Profit
+Analysis of Embedded Value and
+MANAGEMENT DISCUSSION AND ANALYSIS
+•
+Ping An Insurance (Group) Company of China, Ltd. 59
+Investment return and risk discount rate
+A 10% increase in mortality, morbidity, and accident rates.
+786,592
+797,356
+813,303
+825,173
+838,039
+849,805
+863,596
+878,560
+11.5%
+11.0%
+10.5%
+Sensitivity of EV of L&H to investment return and risk discount rate
+Investment return decreased by 50bps per annum
+Central case
+Investment return increased by 50bps per annum
+(in RMB million)
+Risk discount rate
+Sensitivity of EV of the Group to investment return and risk discount rate
+A 10% decrease in 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
+Assumptions and model used in 2016
+45.14
+825,173
+328,792
+496,381
+Closing EV of L&H
+638
+(17,356)
+152,787
+[10]=[6]+...+[9]
+Shareholder dividends
+Capital injection
+EV profit of L&H
+Actual investment return calculated on
+the basis of comprehensive income is
+higher than the assumed return
+(5,415) Change in market value during
+reporting period
+30,212
+[9]
+Investment return variance
+[8]
+Market value adjustment
+[7]
+Economic assumptions changes
+127,989
+[6]=[2]+...+[5]
+EV operating profit of L&H
+Favoured operating experience
+8,886
+[5]
+Operating variance and others
+model changes
+Opening ANA of other business
+[11]
+277,391
+Operating profit of other business
+Dividends paid by the Company to
+shareholders
+(19,194)
+Capital injection to Ping An Health
+(638)
+Dividends paid by Ping An Life to the
+Company
+17,356
+Restructuring of Ping An Good Doctor
+resulted in RMB10,850 million increase
+in net profit
+Capital injection to Ping An Health
+Dividends paid by Ping An Life to the
+Company
+331,268
+447
+Annual Report 2017
+Note: Figures may not match totals due to rounding.
+776,649
+EV per share (in RMB)
+Closing ANA of other business
+Dividends payout
+Capital injection
+Dividends received
+before capital changes
+Closing ANA of other business
+variances
+Market value adjustment and other
+10,850
+Non-Operating profit of other
+business
+42,580
+[12]
+Closing EV
+3,947
+Risk discount rate
+10.5%
+2016
+2017
+(In RMB million)
+L&H business
+Group
+Analysis of Embedded Value and
+Operating Profit
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 61
+Annual Report 2017
+The Group's operating profit after tax attributable to shareholders of the parent company in 2017 is
+RMB94,708 million, which is up by 38.8% from 2016.
+It is believed that the operating profit after tax which excludes fluctuations of above non-operating related
+items could provide a clearer and more objective representation of business performance and trend.
+Impact of one-off non-operating items are material items that management considered to be
+non-operating incomes and expenses.
+Impact of discount rate change is the effect on insurance contract liability of life and health insurance
+business due to change in discount rate;
+Short-term investment variance, which is the variance between actual investment return of 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 life and health
+insurance business is locked at 5% 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 introduced 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, which include:
+Group Operating Profit
+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, 2017.
+ANALYSIS OF OPERATING PROFIT
+N/A
+481,420
+806,282
+66,353
+488,353
+817,146
+5% increase in the policyholders' dividend payout ratio
+10% decrease in fair value of equity assets
+2017
+66,739
+2016
+[1]
+Operating profit after tax
+9,497
+10,850
+[4]
+non-operating items
+Impact of one-off material
+(17,652)
+(21,213)
+(17,652)
+(21,213)
+[3]
+L&H
+Impact of discount rate change of
+2,168
+4,532
+2,168
+4,532
+[2]
+L&H
+Short-term investment variance of
+Excluding:
+25,033
+36,143
+72,368
+99,978
+Net profit
+493,626
+822,419
+10% increase in maintenance expenses
+11.0%
+10.5%
+Risk discount rate
+Investment return decreased by 50bps per annum
+Central case
+Investment return increased by 50bps per annum
+(in RMB million)
+Sensitivity of NBEV to investment return and risk discount rate
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+60
+447,857
+457,800
+468,563
+Investment return decreased by 50bps per annum
+484,511
+496,381
+509,247
+Central case
+521,012
+534,804
+549,768
+Investment return increased by 50bps per annum
+11.5%
+11.0%
+11.5%
+78,011
+73,840
+69,971
+64,469
+488,516
+817,309
+10% increase in policy discontinuance rates
+62,016
+480,801
+809,593
+10% increase in mortality, morbidity and accident rates
+67,190
+497,585
+826,378
+Assumptions and model used in 2016
+(in RMB million)
+67,357
+825,173
+Central case
+NBEV
+EV of L&H
+EV of the Group
+Sensitivity to other assumptions (in RMB million)
+57,724
+60,845
+64,195
+63,861
+67,357
+71,117
+496,381
+38,332
+Appendix:
+(1.3)
+Ping An Insurance (Group) Company of China, Ltd.
+Embedded Value Movement
+The table below shows how the Company's embedded value changes from the opening balance of
+RMB637,703 million to RMB825,173 million as at December 31, 2017.
+(in RMB million)
+2017
+Note
+Opening EV of L&H
+[1]
+360,312
+Expected return on opening EV
+[2]
+NBEV post-risk diversified
+[3]
+31,745
+88,117
+Expected embedded value growth
+Including: NBEV pre-risk diversified
+67,357
+Diversification effects
+9,345
+within new business
+Diversification effects
+11,416
+with in-force
+Diversification effects between NB and
+in-force lower cost of capital
+Operating assumptions and
+Annual Report 2017
+58
+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.
+63.8%
+74.9%
+36.2%
+25.1%
+Including: Long-term protection
+Life and Health Insurance Business
+Other margins
+as % of NBEV
+Interest margin
+as % of NBEV
+The interest margin and other margins (include mortality margin and expense margin) as percentages of
+value of one year's new business after cost of capital are shown below:
+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.
+43.5%
+43.3%
+37.4%
+39.3%
+1.6%
+Ping An Insurance (Group) Company of China, Ltd.
+1.6%
+1.1%
+8.1%
+13.8%
+2.8%
+9.6%
+40.8%
+41.7%
+43.0%
+42.3%
+27.3%
+32.4%
+27.2%
+1.1%
+Annual Report 2017
+4,001
+35,570
+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, 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 subsidiary levels.
+2017
+In view of the increasing performance and confidence in the Company's prospects, the Board of
+Directors suggested raising the cash dividend ratio to 30.8%, which drives the dividend per share
+for 2017 up by 100.0% year on year to RMB1.50.
+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
+profit of the Company (namely profit after tax of the Company after covering the losses and
+making contributions to the revenue reserve) are positive in value and such distributions 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. 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
+Liquidity and Capital Resources
+66
+MANAGEMENT DISCUSSION AND ANALYSIS
+65
+Ping An Insurance (Group) Company of China, Ltd.
+25,711
+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
+1,480
+2016
+2,500
+17,356
+2017
+Annual Report 2017
+Total
+Ping An Bank
+Ping An Asset Management
+Ping An Trust
+Ping An Property & Casualty
+Ping An Life
+(in RMB million)
+The major cash outflows were dividend to A and H shareholders of RMB19,194 million and
+capital injection into subsidiaries of RMB7,702 million. The major cash inflow was dividend from
+subsidiaries of RMB25,711 million which is illustrated below:
+7.8
+3,030
+2015
+1,345
+1.50
+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.
+Cash dividend
+paid per share
+(in RMB)
+LIQUIDITY RISK MANAGEMENT
+Under 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) explore new businesses, seize new growth drivers and opportunities, and
+realize sustainable growth in the future.
+CAPITAL ALLOCATION
+(3) Except the 2017 final dividend pending approval at the 2017 Annual General Meeting, the profit distribution for other years
+has been completed during the relevant years.
+(2) Cash dividend paid per share is based on the then share capital. For 2015, it is the number after the conversion of capital
+reserve to share capital.
+17.9
+22.0
+62,394
+30.8
+89,088
+(%)
+54,203
+Net profit
+attributable to
+shareholders of
+the parent
+company
+(in RMB million)
+0.75
+0.53
+The ratio of
+distribution of
+cash dividend
+༢
+Cash dividend
+amount
+(including tax)
+(%) (in RMB million)
+100.0
+41.5
+Growth of
+cash dividend
+per share
+(1) Cash dividends include interim dividend and final dividend of the year.
+27,420
+13,710
+9,688
+41.3
+1.1. Insurance Risk
+Surrender rate
+accident rates, etc(1)
+2.2 Organizational Structure
+Non-transparency Risk
+1.2. Market Risk
+32,477
++10%
+Mortality, morbidity,
+investment yield
+2.1. Risk Contagion
+5,093
+RISK ANALYSIS
+Discount rate/
+investment yield
+(4,957)
++10bps
+Discount rate/
+2. Group-level Risks
+1.General Risks
+Change in
+assumptions
+Impact on insurance
+liability reserve (after
+reinsurance) increase/
+(decrease)
+December 31 2017
+(in RMB million)
+Sensitivity analysis of long-term life insurance
+contracts' insurance liability reserve
+The Group has categorized all risks to ensure
+they are well defined and managed. Below are
+major risks and their definition.
+-10bps
++10%
+casualty insurance
+Short-term life
+insurance
+Policy maintenance
+Risk Management
++5%
+Property and
+Change in average
+claim cost
+December 31 2017
+(in RMB million)
+Sensitivity analysis of property and casualty
+insurance and short-term life insurance
+contracts' outstanding claims reserves
+For long term life and health insurance contracts
+where future insurance benefits are not affected by the
+investment return of the underlying asset portfolio, with
+consideration of the Cai Kuai [2017] No.637 issued by
+the 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.
+Change in mortality, morbidity, and accident rates 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).
+(2)
+The Group assesses and monitors insurance
+risks with sensitivity analysis, stress testing
+and so on. It mainly evaluates 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 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.
+10,391
+1.1 Insurance Risk
+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
+1. General Risks
+1.6. Reputation Risk
+1.5. Strategic Risk
+2.4 Non-insurance Risk
+1.4. Operational Risk
+(1)
+expense ratio
+2.3 Concentration Risk
+1.3. Credit Risk
+2,563
++5%
+risk.
+MANAGEMENT DISCUSSION AND ANALYSIS
+MANAGEMENT DISCUSSION AND ANALYSIS
+Annual Report 2017
+Risk assessments for major decisions and
+solutions to significant risk;
+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 overall 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
+the effectiveness of the risk management
+framework, and making recommendations to
+the Board of Directors after deliberations on
+the following matters:
+Asset Risk Management
+Department of
+subsidiaries
+Branding Department of
+subsidiaries
+IT Operations/
+Information Security
+Department of
+subsidiaries
+Group Asset
+Management Center
+Chief Investment Officer
+of the Group
+Branding Department of
+the Group
+of the Group
+Brand Director
+Annual risk assessment reports.
+Committee
+Management
+Committee
+Committee
+Investment Management
+Investor Relations
+of subsidiaries
+Finance & Planning
+Department
+Risk Management/
+Compliance/Internal
+Audit Department of
+subsidiaries
+Information Security &
+Operations Department,
+User Experience
+Department of the Group
+Finance & Planning
+Center of the Group
+Internal Control
+Management Center of
+the Group
+Chief Information
+Officer/Chief Operating
+Officer of the Group
+Group Risk Management
+Executive Committee
+Chairman: Group Chief Risk
+Officer
+Informatization
+Ping An Insurance (Group) Company of China, Ltd. 71
+The Group Executive Committee leads all
+aspects of the Group's risk management,
+comprising nine committees, such as 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 Informatization 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
+Ping An Insurance (Group) Company of China, Ltd. 69
+The Group manages risks of its subsidiaries
+through integrated management, risk
+management capabilities evaluation and
+improved risk measurement. Subsidiaries
+were instructed to apply big data and
+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.
+The Group has carried out studies and
+practice of asset-liability risk management,
+and consolidated risk monitoring. Big data
+and artificial intelligence were effectively
+applied to the entire risk management
+cycle to enhance risk management
+capabilities and support the Company's
+"finance + technology" strategy.
+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 established an effective risk
+warning mechanism, providing timely and
+effective alerts on industry developments,
+regulatory information or risk events,
+effectively guarding against potential
+risks. The Group has also improved its risk
+emergency management mechanism.
+to improve the Group's overall capability
+of risk management for its integrated
+financial service business.
+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,
+system building and risk reporting, so as
+subsidiaries.
+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
+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.
+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
+implement risk management responsibility. 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, as well as to enhance the overall risk
+management capabilities for the balanced
+development of core finance and fintech &
+healthtech businesses.
+to routine risk monitoring and early warning,
+so as to support business decision-making and
+strike a balance between risk management and
+business development.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+Annual Report 2017
+A risk appetite system is central to Ping
+An's overall strategy and enterprise 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 strategies, and combined risk
+appetites with management decisions as well
+as business development to promote healthy
+growth of the Group and subsidiaries.
+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
+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 risk
+management.
+manner, and applied big data and artificial
+intelligence to ensure that all risks are
+effectively controlled and managed on a timely
+basis.
+In 2017, the Group closely followed domestic
+and foreign regulatory trends such as G-SIIs,
+the New Basel Capital Accord and C-ROSS.
+It continued to strengthen its enterprise risk
+management framework, upgraded the risk
+governance and risk management policies
+of the Group and its subsidiaries, developed
+a Group-subsidiary risk management
+structure covering all risks and a centralized
+management platform to create synergy for
+enhanced risk management capabilities of
+the Group. The Group also improved its risk
+appetite system, developed risk management
+guidelines, evaluated risk management
+capabilities, 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
+mechanisms. Through the Risk Dashboard,
+the Group and its subsidiaries have identified,
+classified and evaluated risks in a systematic
+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, Brand Director
+and Chief Investment Officer as vice chairmans.
+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.
+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
+risk 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
+subsidiary or business line, and promoting a
+culture of comprehensive risk management
+across the Group.
+Risk Management
+70
++5%
+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
+subsidiaries in specifying their unique risk
+appetite dimensions according to their business
+features and demand, broken down risk
+appetites and tolerance into risk limits under
+different categories, and applied the risk limits
+Impact on outstanding
+claims reserve (after
+reinsurance) increase/
+(decrease)
+Ping An Insurance (Group) Company of China, Ltd. 73
+268
+Risk Management
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 75
+On the basis of 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 adopted
+advanced capital management methods and
+continuously improved credit structure in line
+with changes in the economic and financial
+situation, macroeconomic policies and the
+requirements of regulatory authorities. Credit
+risk limits were set on portfolios in multiple
+dimensions. The Group conducts thorough
+and stringent credit assessments to potential
+borrowers before granting credit facilities
+and reviews 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 include obtaining
+The Group is in strict compliance with the
+credit risk management guidelines. Under
+the guidance of the Board of Directors
+and the management, the Group carries
+out consolidated analysis, monitoring and
+management of the credit exposures of
+lending and investment businesses at the
+group level. The Group specifies and refines
+credit risk limits for different accounts and
+products to manage high risk exposures and
+the concentration of risk after consolidating the
+Group's financial statements. It also provides
+forward-looking insights and analysis of
+potential credit risks and their impacts on the
+Group.
+Monitoring credit risk through a risk
+management system.
+Defining credit risk limits in multiple
+dimensions for investment and credit
+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 various
+measures, including:
+Annual Report 2017
+Credit risk is the risk of unexpected losses
+resulting from the default of any debtors
+or counterparties because of their failure of
+timely performance 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.
+1.3 Credit Risk
+As at December 31, 2017, the fair value of the
+Group's holding of buildings under investment
+properties stood at RMB67,532 million.
+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 to conduct the fair value
+assessment.
+-
+In the case above, if the currencies appreciate
+by the same proportion, the appreciation will
+have an inverse effect of the same amount on
+equity in the table.
+2,956
+Net exposure to fluctuations in exchange
+rates assuming a simultaneous and
+uniform 5% depreciation rate of all foreign
+currency denominated monetary assets
+and liabilities and non-monetary assets and
+liabilities measured at fair value against the
+Renminbi
+(in RMB million)
+December 31 2017
+Decrease in
+equity
+The sensitivity to 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:
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+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, and usually receive
+performance deposits to mitigate credit risk.
+The credit quality of the off-balance sheet
+business is good. The Group continued to step
+up its efforts in credit risk monitoring and
+precautions, enhancing its capability to provide
+early warning of risks and make prompt
+responses. It also actively dealt with changes in
+the market environment and conducted regular
+analysis of trends and changes of credit risk,
+taking precautionary measures to control risk.
+Furthermore, for credit risk associated with
+the investment business, the Group makes
+credit assessments on potential 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 fulfill its obligations, the Group
+I 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.
+December 31 2017
+The ratio to total
+corporate debts/
+financial debts
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+76
+market environments and the Company's
+capabilities due to ineffective development and
+implementation of the strategy or changes in
+the business environments.
+Company's strategy not matching the
+Strategic risk refers to the risk of the
+1.5 Strategic Risk
+Promoting a culture of operational risk
+management through operational risk
+management training.
+on operational risk capital provision
+measurement according to regulatory
+requirements and management
+requirements;
+Conducting research and planning
+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;
+74
+Constantly optimizing the operational risk
+policy, framework, workflow, system and
+tools, enhancing overall operational risk
+measures:
+The Group manages operational risk primarily
+through the following mechanisms and
+risk management of domestic and foreign
+regulators, optimizes the operational risk
+management structure and the operational risk
+management policies, strengthens collaboration
+and cooperation between departments,
+established daily monitoring and reporting
+mechanisms, provides regular reports to the
+management on the overall operational risk
+situation, developed a set of professional
+rules and standards for operational risk
+management, strengthens the system platform,
+and constantly raises the effectiveness of
+operational risk management.
+standards, methods and tools of operational
+The Group strictly follows applicable
+regulations and its operational risk
+management strategies. It uses existing
+compliance management and internal control
+systems as the basis to integrate the advanced
+resulting from inadequate or flawed internal
+procedures, employees, information technology
+systems and external events.
+99.98%
+99.34%
+Operational risk refers to the risk of losses
+1.4 Operational Risk
+Financial bonds held by the Group with
+the domestic credit rating of A or
+above
+Corporate bonds held by the Group with
+the domestic credit rating of AA and
+A-1 or above
+Establishing a robust and comprehensive
+management system covering the
+whole Group which identifies, evaluates,
+monitors, controls/mitigates, and reports
+operational risks;
+3,821
+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.
+9,455
+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 Company's tolerance.
+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;
+A multi-layered risk limit system was
+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;
+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;
+Market risks are managed in a top-
+down manner by the RMEC, the Group's
+Investment Management Committee
+and the risk management committees of
+subsidiaries;
+•
+The Group adopts the following mechanism and
+procedures to manage market risks:
+reinforced the foundation of risk management
+and enhanced risk management efficiency.
+Besides, it improved the risk management
+reporting mechanism, and consolidated risk
+monitoring and management. Stress testing
+was optimized to realize its decisional
+value in risk bottom line control. A risk
+limit management system was launched to
+monitor risks in the Group, subsidiaries and
+business lines. The Group also reinforced the
+risk early warning system, which led to more
+targeted, forward-looking and thorough risk
+management.
+The Group has continuously strengthened
+its market risk management system, and
+reinforced its ability to identify, evaluate,
+measure, analyze and report on market risks
+at multiple levels. It further strengthened its
+investment risk management platform, which
+Market risk refers to the risk of unexpected
+losses arising from unfavorable movements in
+interest rates, equity prices, foreign exchange
+rates and real estate prices.
+1.2 Market Risk
+With effective reinsurance management
+procedures, properly set self-retained risk
+limits, use reinsurance as an effective risk
+transfer tool to transfer the excess risks
+to reinsurers with a high level of solvency,
+and control insurance risks.
+Evaluate unearned premium reserves and
+outstanding claims reserves using effective
+reserve assessment procedures and
+methods, and assess the reserve adequacy
+on a regular basis;
+With effective product management
+procedures, carry out experience and
+trend analysis with the latest and the most
+accurate and reliable data, well manage
+the product mix and control insurance
+risks;
+With strict claim investigation and
+settlement procedures, identify and
+prevent questionable and fraudulent
+claims;
+Implement prudent underwriting policies,
+establish relevant guidelines for policy
+contracting and underwriting, effectively
+control and reduce adverse selection risks;
+Implement effective product development
+and management policies, 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;
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+72
+indicators, closely monitor them, analyze
+abnormal changes and take management
+measures;
+Develop a set of key insurance risk
+Develop insurance risk policies and a
+scientific and consistent insurance risk
+management framework within the Group;
+The mechanism and procedures adopted by the
+Group to manage insurance risks are as follows:
+Annual Report 2017
+MANAGEMENT DISCUSSION AND ANALYSIS
+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.
+Group Executive
+Committee
+Impact on
+4,026
+101
++50 bps
+profit or loss and available-for-sale
+financial assets
+or loss and available-
+for-sale financial
+assets
+assets carried at fair value through
+investment funds classified as financial
+Listed equity securities and securities
+(in RMB million)
+December 31 2017
+The interest rate re-pricing and duration
+mismatch's impacts on yields in banking
+business are mainly assessed through a
+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
+policies on benchmark interest rates of the
+PBOC.
+equity
+value through profit
+classified as financial
+assets carried at fair
+Bond investments
+(in RMB million)
+December 31 2017
+As at December 31, 2017, the VaR for listed
+equity securities and securities 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 normal market
+fluctuation 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 securities investment funds.
+Market Risk - Equity Risk
+The sensitivity of interest risk is assessed by
+assuming a 50 basis-point parallel shift of the
+government bond yield curve.
+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
+tools such as sensitivity analysis and stress
+tests to evaluate the interest rate risk of such
+investments.
+Market Risk - Interest Rate Risk
+Change in Decrease in Decrease in
+interest rate
+profit
+equity
+Comprehensive solvency margin ratio
+Ping An
+Property &
+impact on the financial market has been
+limited. The RRP including LRMP for 2017
+has been approved by executive directors
+authorized by the Board of Directors, and
+has been approved by the CIRC. Ping An also
+cooperated with regulators in the Resolvability
+Assessment Process (RAP) for 2017 centering
+on feasibility and credibility, which proved that
+the potential systemic impact of the Group was
+extremely limited, and the Group was capable
+of managing internal and external risks and
+maintaining continuity of critical functions
+without harm to public interests. In addition
+to meeting the G-SII and the China Risk
+Oriented Solvency System (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 its integrated financial
+business with strong risk protection, safeguards
+the rapid development of its innovative
+business, and acts as a stabilizer of financial
+markets to make greater contributions to
+China's financial innovation and development.
+223.8%
+206.9%
+value of equity assets
+30% decrease in fair
+7,229
+217.8%
+222.2%
+interest rate
+58,766
+93,008
+13,185
+Bonds to mature within 3 months
+reverse repo agreements to
+mature within 3 months
+50bps decline in
+Financial assets purchased under
+217.5%
+234.1%
+214.9%
+Central case
+301,557
+202,471
+Casualty
+Ping An
+Life
+Ping An
+Group
+Cash
+(in RMB million)
+213.4%
+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, 2017 are disclosed below:
+Total cash and cash equivalents
+367,552
+Group Board of Directors
+Chief Financial Officer
+of the Group
+Budget Management
+Committee
+Group Chief Risk
+Officer/Chief Audit
+Officer/Compliance
+Officer
+Subsidiaries
+Group
+Transaction
+Management
+Committee
+Connected-party
+Global Systemically
+Important Insurer
+Management Committee
+Audit and Risk
+Management Committee
+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.
+RISK MANAGEMENT ORGANIZATIONAL STRUCTURE
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+Amid evolving regulations in the changing
+domestic and global economic environments,
+Ping An has diversified its offerings under
+the "finance + technology" 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 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
+actively 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. In
+2017, 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
+group".
+For nearly 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 personal financial services
+RISK MANAGEMENT OBJECTIVES
+We strive to develop Ping An into a "world-leading technology-powered
+personal financial services group". To achieve this goal, we continuously
+optimize the risk control system and facilitate development of 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 of the Group.
+Risk Management
+68
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 67
+Annual Report 2017
+308,664
+A stable solvency position ensures that the
+Company meets capital requirements specified
+by external institutions such as regulators and
+rating agencies, and supports the Company
+in developing business and creating value for
+shareholders.
+207.9%
+2016
+2016 Change (%)
+2017
+20.6
+442,729
+533,775
+Minimum capital
+23.3
+929,883
+25.3
+889,883
+1,115,365
+1,146,865
+Core capital
+Actual capital
+(%)
+2016
+Change
+December 31
+Note: Core solvency margin ratio =core capital/minimum
+capital; comprehensive solvency margin ratio actual
+capital/minimum capital.
+(in RMB million)
+The related solvency data under C-ROSS of the
+Group are as follows:
+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.
+GROUP SOLVENCY MARGIN
+The Company believes that the liquid assets
+currently held, together with net cash
+generated from future operations and the
+availability of short-term borrowings, will be
+sufficient to meet the foreseeable liquidity
+requirements of the Group.
+Cash Flow Analysis
+(in RMB million)
+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;
+meanwhile, the Group and its major subsidiaries
+have developed robust liquidity contingency
+plans for handling any significant liquidity
+events. In 2017, in order to keep improving the
+Company's liquidity risk management ability,
+the Group and its subsidiaries formulated
+the liquidity emergency mechanism for the
+money market. Moreover, the Group organized
+emergency response drills to check whether
+contingency plans of the Group and its
+subsidiaries are effective and efficient against
+a complicated and ever-changing backdrop. In
+addition, the Group has set up internal firewalls
+to prevent intra-group contagion of the
+liquidity risk.
+flows, and carry out forward-looking analysis
+on the liquidity risk for a certain period in the
+future to identify the potential liquidity risk and
+take measures to control liquidity gaps.
+Core solvency margin
+Net cash flows from
+December 31
+2017
+121,283
+operating activities
+December 31 December 31
+2017
+Cash and Cash Equivalents
+Net cash inflows from financing activities
+increased by 34.3% year on year. This was
+mainly due to the increase in cash inflows from
+financing activities of subsidiaries such as Ping
+An Life.
+Net cash outflows from investing activities
+increased by 7.3% year on year. This was mainly
+due to the expansion of investment scale
+caused by business development.
+Net cash inflows from operating activities
+decreased by 46.8% year on year mainly due to
+the decreases in cash inflows in Ping An Bank's
+deposit and interbank businesses.
+210.0%
+214.9%
+requirement>=100%)
+34.3
+133,004
+178,588
+ratio (regulatory
+4.9pps
+7.3
+solvency margin
+(46.8)
+ratio (regulatory
+requirement >=50%)
+209.0%
+227,821
+8.0pps
+201.0%
+Net cash flows from
+investing activities
+Net cash flows from
+financing activities
+Comprehensive
+(354,767)
+(330,616)
+442,729
+II. Selling-unrestricted circulating
+shares
+533,775
+1.
+RMB ordinary shares
+Selling-restricted shares
+January 1 2017
+Percentage (%)
+December 31 2017
+Number of
+shares
+Issue of
+new shares
+Bonus issue
+Minimum capital
+Others
+Transfer
+from reserve
+Changes during the Reporting Period
+929,883
+Annual Report 2017
+Actual capital
+Sub-total
+The Group manages its solvency through the
+following mechanisms and processes:
+The impacts on solvency must be
+evaluated when we develop key initiatives
+such as 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;
+The solvency indicator has been included
+as a KPI in performance appraisal at the
+Company level to be implemented in a
+top-down manner;
+80
+60
+Ping An Insurance (Group) Company of China, Ltd.
+1,146,865
+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;
+We conduct sensitivity and scenario
+stress testing to generate warnings about
+potential changes in solvency.
+As at December 31, 2017, the Group's solvency
+margin ratio met regulatory requirements under
+C-ROSS. Below are the details:
+(in RMB million)
+Core capital
+December 31 December 31
+2017
+2016
+Change (%)
+1,115,365
+889,883
+We conduct solvency assessments and
+dynamic solvency tests on a regular basis,
+and closely monitor changes in solvency;
+Number of
+shares
+Annual central
+procurement amount
+10,832,664,498
+Total number of shareholders
+86
+98
+Annual Report 2017
+10,832,664,498
+59.26
+7,447,576,912
+40.74
+Unit: Shareholder
+18,280,241,410
+18,280,241,410
+100.00
+December 31 2017
+February 28 2018
+401,158 (including 396,674
+domestic shareholders)
+461,043 (including 456,543
+domestic shareholders)
+Ping An Insurance (Group) Company of China, Ltd.
+Qualitative supervisory requirements, as the
+second pillar of C-ROSS, are mainly based on
+the CIRC'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. As per the SARMRA results for
+2017 unveiled by the CIRC, Ping An Life scored
+85.58. The score allowed Ping An Life's minimum
+capital requirement under C-ROSS to reduce by
+RMB8,623 million as at December 31, 2017. Ping
+An Property & Casualty scored 84.10. Because
+of the score, Ping An Property & Casualty's
+minimum capital requirement under C-ROSS
+reduced by RMB756 million as at December 31,
+2017.
+100.00
+Percentage (%)
+Number of shareholders
+Shareholders' Information
+59.26
+2. Domestically listed foreign
+shares
+3. Overseas listed foreign shares 7,447,576,912
+40.74
+4.
+Others
+Subtotal
+Number of shareholders and their shareholdings
+18,280,241,410
+III. Total number of shares
+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.
+100.00
+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.
+Since the CIRC began to implement the China
+Risk Oriented Solvency System (C-ROSS)
+two 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 capital requirements,
+qualitative regulatory requirements, and market
+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.
+1,397
+Vendors
+99.6%
+Ping An P&C's auto
+claims payment ratio
+25.3
+23.3
+20.6
+Core solvency margin
+ratio (regulatory
+requirement >=50%)
+209.0%
+201.0%
++8.0 pps
+Comprehensive
+solvency margin
+ratio (regulatory
+requirement >=100%)
+214.9%
+210.0%
++4.9 pps
+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, 2017. Below are the results:
+Comprehensive solvency margin ratio
+Ping An
+suppliers
+Ping An
+remuneration
+RMB48,271
+Scope 1 carbon emissions:
+172,981
+properties
+tons
+51,871
+in carbon emission
+Annual tech-based reduction Carbon emission by own
+8.11
+hours/year
+Face-to-face and online training
+per employee
+44.2%
+Puhui Business's proportion of
+micro business loans:
+14.1%
+Ping An Bank's proportion of
+micro business loans:
+million
+80,839
+RMB
+Total green lines of credit
+1,150,000 books
+Books collected under the
+Mu Tian Book Donation program
+Society and environment
+million
+Total corporate Total
+annuity
+RMB553
+million
+3,774 tco,e
+Ping An
+Life
+Annual input to targeted poverty alleviation
+over RMB 40 million
+Employee development
+Employee headcount
+342.6
+thousand persons
+Training budget
+RMB 854
+million
+Investor relations
+4 online and offline result releases
+55
+domestic and overseas roadshows
+Customer experience
+Net Promoter Score (NPS) based on better
+customer experience
+Ping An Life's overall
+customer satisfaction
+degree
+94.2%
+Partners
+OneConnect's
+partners
+36%
+2,358 institutions
+Poverty alleviation
+Group
+million
+We are dedicated to honoring our social commitment, fulfilling our duty to
+shareholders, living up to the trust of our customers, supporting our employees,
+and contributing to society with gratitude.
+P&C
+Central case
+214.9%
+234.1%
+217.5%
+A decline of 50 bps in
+interest rates
+207.9%
+222.2%
+217.8%
+A decrease of 30% in
+fair value of equity
+asset
+206.9%
+223.8%
+213.4%
+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 CIRC,
+Ping An has actively worked with the IAIS to
+develop solvency regulations for G-SIIs. With
+better understanding of China's insurance
+industry and Ping An's situations, the IAIS
+is able to reflect such understanding in the
+regulations. Positive progress has been made
+with Ping An's participation.
+Note: Core solvency margin ratio = core capital/minimum
+capital; comprehensive solvency margin ratio = actual
+capital/minimum capital
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd. 81
+MANAGEMENT DISCUSSION AND ANALYSIS
+Corporate Social Responsibility
+As Ping An turns 30, we continue to fulfill our social responsibility and commitment to poverty alleviation
+by supporting rural finance, education and industries in targeted areas. As we continue to create value for
+shareholders, employees and customers, we pursue fintech and healthtech innovations under a strategy
+of “finance + technology" to strengthen our traditional financial businesses. We have carried out a service
+campaign called "Ping An by Your Side" to improve customer experience. Through technological innovations,
+we have made our offerings more convenient. We have brought financial services and health care to
+underdeveloped areas to help local people become wealthier and healthier. For years, we have engaged in
+charitable causes such as education support, environmental protection, disaster relief, and poverty alleviation.
+We have established an Educational Charity Board, used online platforms to upgrade education support
+initiatives, and called on our employees, agents, customers and the public to participate. In recognition of
+such efforts, Ping An has been honored as the "Most Respected Enterprise in China" for 16 consecutive years,
+won the "International Carbon-Value Award" for five consecutive year, and received the "Award for Best
+Contribution to Poverty Alleviation", the "Best Campus Talent Strategy Award" and the "Award for Best
+Employer of the Year in China".
+Scope 2 carbon emissions:
+123,860 tco,e
+Scope 3 carbon emissions:
+The Group has enhanced the management of
+cross-selling. Retail cross-selling businesses
+are 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 applications 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 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
+services, development, application system
+operations, call centre 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.
+The Group has constantly improved the
+management of CPTs. In 2017, domestic
+regulators further tightened regulation of
+CPTs by promulgating stricter regulatory
+standards. 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 and prevent improper
+transfer of benefits. 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.
+and effective operations. 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, administrative regulations
+and the CIRC).
+Risk Management
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 77
+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, 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. It
+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.
+Subsidiaries 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 the mechanism for comprehensive in-the-
+process monitoring since the Cybersecurity
+Law of the People's Republic of China was
+promulgated in 2017. Moreover, the Group
+adopted cutting-edge technologies, such as
+big data and artificial intelligence (AI), 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's information
+security system boasts ongoing improvement
+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.
+Annual Report 2017
+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.
+2.1 Risk Contagion
+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.
+2. Group-level Risk
+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 the business lines with potential risks
+and external factors to identify risk events
+and give warnings, follows up on the risk
+warnings, and minimizes the risk and chance of
+reputation crisis through effective control and
+remediation.
+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.
+1.6 Reputation Risk
+The Group has established a sound strategic
+risk management framework and procedures.
+By closely watching macroeconomic conditions
+both at home and abroad, regulatory landscape
+and market movement, the Group developed
+high-level plans and strategies to ensure
+consistency between the strategic goals of
+subsidiaries and the strategic plans of the
+Group and synergies between strategic goals
+of subsidiaries. The Group formulated medium-
+term and long-term strategic plans and annual
+business plans, clarifying strategic focuses
+of the Group and its subsidiaries to ensure
+further implementation of the strategic plans.
+Moreover, the Group oversaw and evaluated
+subsidiaries' implementation of strategic
+plans, and reviewed and adjusted strategic
+plans of subsidiaries to ensure successful
+implementation of the Group's high-level
+strategic plans.
+I.
+Unit: Shares
+There was no change in the total number of shares and shareholding structure of the Company during the
+12 months ended December 31, 2017 (the “Reporting Period").
+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.
+Statement of changes in share capital
+2.2 Organizational Structure Non-transparency
+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.
+SOLVENCY MANAGEMENT
+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.
+Risk Management
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 79
+Annual Report 2017
+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.
+As an integrated financial service group
+authorized by the State Council to engage
+2.4 Non-insurance Risk
+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 CIRC'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.
+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.
+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
+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' 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.
+and non-insurance business management.
+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,
+2.3 Concentration Risk
+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.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+78
+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 internet. All the subsidiaries have clear
+shareholding structures; none of them have
+cross-shareholding or illegal subscription for
+capital instruments.
+Risk
+Changes in Share Capital
+INFORMATION DISCLOSED UNDER A SHARES REGULATORY REQUIREMENTS
+Changes in the Share Capital and
+Shareholders' Profile
+In 2017, the Company was committed to propelling
+its business plans, enhancing development of
+retail customers and improving the value of retail
+business. We implemented the strategy of "finance
++ technology" to achieve technology-driven reform.
+The four pillar businesses - insurance, banking, asset
+management and fintech & healthtech maintained
+sound operations and sustainable growth. The
+Company's profitability improved steadily, and the
+performance targets of all business plans set out
+last year were achieved.
+Our operations remain consistent and stable as no
+major changes have been made to our long-term
+operating objectives compared with those
+announced last year.
+BUSINESS PLAN FOR 2018
+MANAGEMENT DISCUSSION AND ANALYSIS
+Prospects of Future Development
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+82
+Note: Above is a summary. For complete date, refer to the Corporate Social Responsibility Report for 2017.
+Ping An's Social Health Insurance business: over
+6,000 persons
+200 cities
+Over
+Migrant workers sent home in the Reunion with
+Love program during Spring Festival
+140,432 hour
+tons
+Cities that have signed contracts with
+RMB 4,343,000
+Ping An Hope Primary Schools
+Scholarships/stipends for
+Volunteer teaching at Ping An Hope Primary Schools
+45,347 tco,e
+In 2018, the Company will resolutely forge ahead
+with the plans formulated by the Board of Directors.
+With expertise, we strive to create greater value
+for customers and lift the Group's value. We will
+pursue “finance + technology” and explore “finance
++ ecosystem". Our goal is to become a world-
+leading technology-powered personal financial
+services group. Focusing on two major industries
+of pan financial assets and pan health care, we will
+create new growth drivers by applying innovative
+technologies to traditional finance and five
+ecosystems: financial services, health care, auto
+services, real estate services, and smart city services.
+In insurance business, the Company will
+enhance technology application for better
+performance. Keeping customer development
+as a focus, Ping An Life will leverage "product
++” and “technology +” platform operations to
+create optimum customer experience, unleash
+new growth momentum, and achieve sustained,
+healthy and steady growth in its embedded
+value and business size. Ping An Property &
+Casualty will speed up its transformation into
+a business driven by technology innovation,
+strengthen its differentiation advantage and
+provide customers with better products
+and experience. Committed to becoming a
+"professional pension asset manager" and a
+"professional provider of livelihood benefits",
+Ping An Annuity is vigorously developing
+pension asset management business centering
+on corporate annuities, and group insurance
+business centering on health care, accident
+coverage and old-age care. Through these
+efforts Ping An Annuity aims to contribute
+to the vision that "elders have access to
+good care, patients have access to medical
+treatment, and the poor have access to
+assistance". Ping An Health will strengthen
+the integration of health insurance and
+health management, and apply cutting-edge
+technologies to expedite product innovation
+and upgrade, so as to forge the No.1 brand of
+health insurance and services in China.
+In banking business, the Company will continue
+to pursue the strategic transformation, namely,
+making technology-driven breakthroughs in
+retail banking and enhancement of corporate
+banking. Ping An Bank will facilitate strategy
+implementation to become "China's best and
+a world-leading retail bank”. In technology
+innovation and application, Ping An Bank will
+keep track of cutting-edge technologies like Al
+and biotechnology, and scale up technological
+input to optimize customer experience. In
+retail banking, more resources will be allocated
+to such key business segments as Ping An
+Pocket Bank app, wealth management, credit
+cards, consumer finance and auto finance to
+build a smart retail bank. In corporate banking,
+Ping An Bank will promote capital-light and
+asset-light operations to forge a boutique
+corporate bank. Meanwhile, it will keep
+operating risks under strict control, intensify
+recovery and disposal of non-performing
+assets, and enhance compliance in operations
+and management to sustain healthy
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 85
+In 2018, China's economy will continue
+to stabilize with signs of recovery, while
+the society and the economy will steadily
+march towards a stage of high-quality
+development. Besides, fast-developing new
+technologies represented by Al will release
+new economic momentum continuously.
+Against this backdrop, Ping An will continue
+to pursue diversified development, pursue
+"finance + technology" and explore "finance +
+ecosystem". It will center on "one customer,
+multiple products and one-stop services" for
+integrated finance and life services, and make
+unremitting efforts to become a world-leading
+technology-powered personal financial services.
+group. In 2018, Ping An will celebrate its 30th
+anniversary. Turning 30, Ping An understands
+customers better and provides excellent
+offerings. Moreover, we will continue to answer
+the Party Central Committee's call to alleviate
+poverty by launching the Three-village Project,
+to reward the nation and the society through
+practical actions.
+In 2017, new technologies represented by
+Al and blockchains were booming. Al + and
+cloud computing stayed in the spotlight of
+the society and were converted into business
+practices, having wide-ranging and deep-going
+impacts on business operations. On one hand,
+these technologies improved the operating
+efficiency of traditional finance, saved them
+resources and optimized user experience. On
+the other, the integration of technology and
+finance gave birth to new business segments
+to better meet needs and facilitate social
+development. Undoubtedly technologies will
+continue to influence business operations and
+development. Thus, the Company will scale up
+input in technology research and development
+to make technology a major driving force of
+business reform.
+In 2017, due to tightened regulation China's
+asset management industry began to slow
+down and enter a stage of transformation and
+correction after rapid growth in recent years,
+and gradually retrieved its original mission
+of asset management. In 2018, through more
+efforts in risk management, deleveraging and
+centralized regulation, asset management
+industry will achieve more healthy and orderly
+development. This will improve the efficiency
+of financial resources allocation and boost the
+real economy. The Company will continue its
+active response to national policies and macro
+strategies. Adhering to value investing and
+prudent investment, the Company will make
+good use of its integrated financial advantages
+to enhance its investment capabilities and
+enterprise risk management framework, forge
+a leading asset management platform in China,
+spare no effort to bolster the real economy and
+create value for the society.
+Annual Report 2017
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2017
+84
+In 2017, the Central Economic Work Conference
+called for more efforts in "major risk prevention
+and resolution, targeted poverty alleviation and
+pollution control". Preventing and resolving
+financial risks was regarded as a priority,
+covering such major areas as internet finance,
+local debts and shadow banking. In 2018,
+domestic economic restructuring, tightening
+regulation and financial deleveraging will bring
+new challenges to the banking industry. On one
+hand, we need to enhance risk prevention and
+control, resolving financial risks by tightening
+regulation, rectifying disorder and deleveraging,
+and ensure there is no systemic financial risk.
+On the other, financial institutions should
+retrieve their original aspiration of serving
+the real economy, prevent useless money
+circulation, and support SMEs' development,
+industry upgrade and strategic transformation.
+Meanwhile, banks will also need strategic
+transformation, and the market landscape
+is to change. Firstly, banks will speed up
+development of technology-powered finance
+and transformation. Secondly, attention should
+be paid to liability and liquidity management.
+Thirdly, banks should ensure compliance
+and act in strict accordance with regulatory
+policies and requirements. Internal training and
+promotion should be intensified to raise the
+staff's compliance awareness, while compliance
+and internal control mechanisms, rules and
+processes should be enhanced.
+RMB 7,323
+technologies including Al and blockchains
+were widely used by insurers to improve
+business quality and efficiency. In 2017, China's
+insurance industry recorded total premium
+income of RMB3.66 trillion, up 18.2% year on
+year, consisting of RMB2,145,557 million from life.
+insurance, RMB983,466 million from property and
+casualty insurance, and RMB438,946 million from
+health insurance. Assets of insurers totaled
+RMB16.75 trillion, up 10.8% from the beginning
+of 2017. By premium income, both Ping An
+Life and Ping An Property & Casualty ranked
+2nd among peers in China. In 2018, along with
+tightening regulation and deepening reform,
+the insurance industry will play a better role in
+risk management and protection and achieve
+steady and healthy development.
+MAJOR INDUSTRY TRENDS AND THE MARKET
+LANDSCAPE
+We expect the Company to maintain stable,
+healthy business growth in 2018, including
+stable, healthy growth of insurance business,
+continued strategic transformation of
+banking business, more diverse incomes
+in asset management business and rapid
+growth of fintech & healthtech business. The
+Company will adapt to changes in the macro
+environment, the competition landscape and
+the investment market by adjusting its business
+targets in a timely manner, thus reinforcing its
+competitive edge.
+products and services, optimize experience
+and promote migration, conversion and
+cross-selling.
+Remaining customer-centric, the Company
+will enhance retail customer development
+and identify more customer requirements
+through technology innovation. To
+increase the value of retail customers
+steadily, we will diversify financial
+To meet customer requirements in
+fintech & healthtech business, the
+Company will develop the ecosystems
+of financial services, health care, auto
+services, real estate services and smart
+city by leveraging technologies such as
+Al, blockchains, cloud computing, big
+data, and security. Customers will be
+provided with more diverse, convenient
+and customized financial products and
+services.
+Prospects of Future Development
+Ping An Insurance (Group) Company of China, Ltd. 83
+Annual Report 2017
+In asset management business, the Company
+will continue its efforts to develop a
+leading investment management platform
+providing comprehensive services like wealth
+management, securities brokerage, equity and
+debt financing, financial consulting and asset
+management for better customer experience.
+Besides, the Company will facilitate product
+innovation and strengthen the capability
+of serving the real economy to promote
+co-prosperity of social capital and the real
+economy. In investment with insurance funds,
+we will continue to prioritize risk prevention
+and improve investment risk management
+mechanisms.
+development.
+In 2017, guided by the Xi Jinping Thought on
+Socialism with Chinese Characteristics for a
+New Era, the insurance industry conscientiously
+implemented the spirit of the 19th CPC
+National Congress and the National Financial
+Work Conference. Enabled by the CIRC's
+"1+4" documents, insurers strove to prevent
+and control risks and retrieve their original
+aspiration. The C-ROSS Phase II project was
+launched while the reform of commercial
+auto insurance premium rates was deepened,
+indicating improved insurance market rules in
+China. Insurers facilitated poverty relief and
+participated in development of a multi-layered
+old-age care system, indicating their
+strengthened capability of serving the society
+and the economy. Meanwhile, cutting-edge
+Going forward, we will continue to answer the CPC Central Committee's call to engage in targeted poverty
+alleviation. From 2018, Ping An will implement an RMB10 billion “Three-village Project” to help village officers,
+doctors and teachers strengthen industries, health care and education in rural areas for a better future.