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+Ping An comprehensively advanced its
+green finance initiative to support the
+sustainable development of society. Ping
+An's green investment and financing and
+green banking business totaled RMB224,580
+million and RMB89,813 million respectively
+as of December 31, 2021. Environmentally
+sustainable insurance premium income
+totaled RMB44,569 million in 2021. Moreover,
+Ping An cumulatively provided RMB41,850
+million for poverty alleviation and industrial
+revitalization as of December 31, 2021 by
+advancing the "Ping An Rural Communities
+Support." Ping An received the 11th "China
+Charity Award" and the 3rd "Capital
+Philanthropy Award" for these efforts.
+3,829
+3,957
+3,012
+2,598
+2,479
+229
+Securities business net profit
+Trust business net profit
+ASSET MANAGEMENT BUSINESS
+8.28
+8.54
+9.11
+8.69
+8.60
+Core tier 1 capital adequacy ratio (%)
+N/A
+141.24
+190.34
+219.78
+338.22
+overdue (%)
+Provision coverage ratio for loans more than 60 days
+1.70
+3,102
+2,376
+1,680
+2,123
+City
+Ecosystem
+Smart
+Auto
+Services
+Ecosystem
+Healthcare
+Ecosystem
+Financial
+Services
+Ecosystem
+Asset
+Management
+Insurance Banking
+Finance + Ecosystem
+Healthcare
+Finance + Technology
+Integrated Finance
+1.75
+Retail Financial Services Group
+Ping An strives to become a world-leading retail
+financial services group. Ping An actively responds to China's
+14th Five-Year Plan, and serves the real economy and national strategies
+including "Digital China” and “Healthy China" via financial services. Ping An
+advances the "integrated finance + healthcare" strategic upgrade, builds the
+"integrated finance + HMO managed care" service system, develops the "finance
++ eldercare" and "finance + healthcare" industry ecosystems, and provides
+professional "financial advisory, family doctor, and eldercare concierge" services.
+Ping An advances smart, digital transformation, and employs technologies to
+improve the quality and efficiency of its financial businesses and enhance risk
+management. Moreover, Ping An applies innovative technologies to "financial
+services, healthcare, auto services, and smart city" ecosystems. Ping An
+develops heartwarming products and services by leveraging fintech and its
+healthcare ecosystem. By doing so, Ping An empowers financial services with
+technologies, empowers ecosystems with technologies, and empowers financial
+services with ecosystems. Ping An continuously optimizes its integrated financial
+business model of "one customer, multiple products, and one-stop services,"
+leveraging local advantages while adhering to global standards for corporate
+governance and business management. Ping An provides diverse products
+and convenient services to over 227 million retail customers and over 647 million
+internet users. While remaining focused on retail business, Ping An extends its
+"1 + N" services model to its corporate business to meet customer demands
+for integrated financial services. In this way, Ping An increases the value of its
+corporate customers and the contribution of its corporate business.
+Introduction
+i
+Note: Some indicators have been disclosed for less than five years. Certain figures have been reclassified or restated to conform to
+relevant periods' presentation.
+5,488
+7,748
+4,661
+8,221
+9,448
+Operating profit
+TECHNOLOGY BUSINESS
+World-leading
+1.65
+1.18
+1.02
+22,808
+96.4
+99.1
+98.0
+16,159
+16,192
+234.1
+218.8
+231.6
+241.8
+230.4
+616,319
+12,274
+96.0
+786,633
+960,183
+940,733
+52,824
+71,345
+88,950
+93,666
+97,075
+67,357
+72,294
+75,945
+Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility
+for the contents of this announcement, make no representation as to its accuracy or completeness and expressly
+disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the
+contents of this announcement.
+918,416
+Annual Report 2021
+13,372
+278.4
+Non-performing loan ratio (%)
+29.89
+30.32
+29.61
+29.11
+28.30
+Cost-to-income ratio (%)
+2.37
+2.35
+2.95
+2.88
+96.2
+2.79
+23,189
+24,818
+28,195
+28,928
+36,336
+Net profit
+BANKING BUSINESS
+217.5
+223.8
+259.2
+241.4
+Net interest margin (%)
+Ping An Insurance (Group) Company of China, Ltd.
+1
+ABOUT US
+A claim investigator from Ping An P&C assisted a customer in
+handling a flooded vehicle in Zhengzhou, Henan Province on July
+20, 2021.
+爱国敬业
+富强民主
+自由平等
+4 Annual Report 2021
+Ping An's growth is based on its culture and
+strategies. In 2021, Ping An continued to improve
+the quality and efficiency of financial services in
+serving the real economy, delivered "heartwarming
+financial services," and maintained high-quality
+development under the "people-centric” philosophy.
+We proactively advanced Ping An's reform and
+transformation of its life business amid challenges
+and difficulties, and upgraded our core “integrated
+finance healthcare" strategy through digital
+empowerment and ongoing innovation. We
+strengthened financial business to support the real
+economy. We followed our original aspiration of
+serving the national welfare and people's livelihoods,
+and focused on key areas and weak points in
+economic and social development. We cumulatively
+invested more than RMB5.9 trillion as of December
+31, 2021, by leveraging financial resources including
+insurance funds, bank credits and assets under
+management, to support the real economy. We
+strengthened insurance protection to contribute
+to social stability. Giving play to insurance as a
+social "stabilizer," we quickly responded to frequent
+extreme natural disasters with innovative protection
+mechanisms and digital applications in 2021. We
+made rapid claim payments exceeding RMB3.1 billion
+in response to the "July 20" super rainstorm disaster
+in Henan Province. We have robust strategies and
+strong culture. Under the philosophies of "Expertise
+creates value" and "Expertise makes life simple,"
+in addition to the upgrade of our core "integrated
+finance + healthcare" strategy, we further developed
+our "finance + eldercare" and "finance + healthcare"
+industry ecosystems. In this way, we provided
+customers with professional “financial advisory,
+family doctor, and eldercare concierge❞ services,
+which gave them “worry-free, time-saving, and
+money-saving" financial and healthcare consumption
+experiences.
+Culture is the root of an enterprise. Ping An
+entered its fourth decade of development in 2021,
+embracing opportunities for the strategic upgrade
+of its core "integrated finance + healthcare"
+strategy. It is time for us to reflect on the past.
+Why did we set off? What twists and turns have
+we experienced? What can we learn from our
+success? What are our unshakable ideal and faith?
+Our new culture is built on our original aspiration.
+Deeper roots enable trees to thrive. In 2021, we
+took strategic upgrade and transformation as an
+opportunity to constantly reflect on and review our
+progress. We reviewed Ping An's value-oriented
+culture to remain true to our original aspiration and
+embark on a new journey to further Ping An's long-
+term development. Through this annual report, we
+are providing an update on our results for 2021 as
+well as our strategic upgrade and cultural renewal.
+Hard work from generation to generation
+contributes to Ping An's growth. As one of China's
+leading financial companies, Ping An has been
+adhering to its original aspiration of "being people-
+centric and contributing to national rejuvenation"
+since its founding in Shekou in 1988. With 33 years
+of hard work, Ping An has developed from scratch
+into a world-leading company in the financial
+services and insurance industry, riding on a wave of
+innovations.
+The year 2021 was the 100th anniversary of the
+founding of the great Communist Party of China
+(the "CPC"). Over the past 100 years, the CPC
+has adhered to a “people-centric" development
+philosophy and remained committed to its original
+aspiration and founding mission of seeking
+happiness for the Chinese people and rejuvenation
+for the Chinese nation.
+REMAINING TRUE TO OUR ORIGINAL ASPIRATION
+AND EMBARKING ON A NEW JOURNEY
+Chairman's Statement
+ABOUT US
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd. 3
+Ping An continued to strengthen its core
+technological capabilities. Ping An's
+technology patent applications increased by
+7,008 from the beginning of 2021 to 38,420 as
+of December 31, 2021, more than most other
+international financial institutions'. Ping An
+uses artificial intelligence ("AI") to develop its
+financial businesses. Sales realized by Al service
+representatives increased 66% year on year
+to approximately RMB275.8 billion in 2021. Al
+service representatives covered 2,158 scenarios
+as of December 31, 2021, and served customers
+approximately 2.07 billion times, accounting for
+84% of Ping An's total customer service volume
+in 2021. The 30-day loan recovery rate of Al
+collection stood at 77% in 2021.
+Technology businesses grew further. Ping
+An continued to explore innovative business
+models and accelerate business development.
+Total revenue of technology business rose
+9.8% year on year to RMB99,272 million in 2021.
+Ping An strategically upgraded its
+healthcare ecosystem. Ping An built a closed
+loop of supply, demand and payment by
+exploring an innovative "HMO + family doctor
++ 020" managed care model to provide
+customers with "worry-free, time-saving, and
+money-saving" healthcare services. Ping An
+Smart Healthcare benefited approximately
+1.32 million doctors at over 45,000 medical
+institutions in 187 cities as of December 31, 2021.
+10
+9
+Annual Report 2021
+Ping An Bank maintained stable business
+growth and asset quality, and strengthened
+risk provisions. Revenue grew 10.3% year on
+year to RMB169,383 million in 2021. Net profit
+rose 25.6% year on year to RMB36,336 million.
+Non-performing loan ratio improved by 0.16
+pps from the beginning of 2021 to 1.02%,
+and provision coverage ratio rose 87.02 pps
+from the beginning of 2021 to 288.42% as of
+December 31, 2021.
+Property & Casualty (the property and
+casualty insurance business) maintained
+strong business quality. Combined ratio
+improved by 1.1 pps year on year to 98.0%
+and underwriting profit grew 145.7% year on
+year to RMB5,136 million in 2021. Ping An P&C
+made every effort to fight a super rainstorm
+disaster in Henan Province by settling claims
+as rapidly as possible, with claim payments
+exceeding RMB3.1 billion.
+Life & Health (the life and health insurance
+business) advanced its reform and
+transformation. Ping An Life advanced
+its reform and promoted high-quality
+business development by implementing its
+two-pronged "channel + product" strategy.
+Ping An Life implemented tiered, refined
+management of sales agents. First-year
+premium (FYP) per agent grew more than
+22% year on year in 2021, indicating effective
+growth in productivity per agent. Leveraging
+the Group's healthcare ecosystem, Ping An
+launched innovative products and services
+including "insurance + health management,"
+"insurance + high-end eldercare," and
+"insurance + home-based eldercare" to
+improve customer experience.
+Customer development further progressed.
+Ping An's retail customers totaled over 227
+million as of December 31, 2021, among which
+39.3% held multiple contracts with different
+subsidiaries. New financing scale achieved
+through corporate business cross-selling
+increased 26.9% year on year in 2021.
+Profit and cash dividends continued
+to increase. Ping An achieved an 18.9%
+operating ROE in 2021, with operating
+profit attributable to shareholders of the
+parent company rising 6.1% year on year
+to RMB147,961 million. Ping An attaches
+importance to shareholder returns and
+the annual cash dividend per share grew
+8.2% year on year to RMB2.38, marking a
+continued increase in cash dividends.
+Brand value continued to increase. In
+2021, Ping An moved up five places from
+the previous year to 16th in the Fortune
+Global 500 list (2nd among global financial
+services companies), rose from 7th to 6th
+in the Forbes Global 2000 list, and ranked
+49th in the Brand ZTM Top 100 Most Valuable
+Global Brands list (1st among global banks
+and insurers for the first time, and 1st
+among global insurance brands for the sixth
+consecutive year).
+5
+The external environment was complex and
+development. However, we accelerated digital
+transformation to enhance our competitiveness
+Annual Report 2021
+6
+Ping An's smart agritech instrument connected with Satellite
+"PingAn-1" for around-the-clock monitoring of soil micro-elements,
+air and water quality, and data recorded and transmitted in a tea
+farm in Zijin, Heyuan, Guangdong Province. The instrument helps
+increase the efficiency of agricultural production and ensure the
+security of financial business.
+「智慧农业项目
+平安銀行村賞
+Ping An comprehensively advanced its green
+finance initiative to support sustainable
+development. Ping An actively contributes to
+the CPC's and the state's "30-60" carbon peak and
+neutrality goals by exploring practices in green
+insurance, green investment, green credit, green
+operations, and public welfare. Ping An's green
+investment and financing and green banking
+business totaled RMB224,580 million and RMB89,813
+million respectively as of December 31, 2021. Ping
+An's environmentally sustainable insurance premium
+income totaled RMB44,569 million in 2021. Moreover,
+Ping An cumulatively provided RMB41,850 million
+for poverty alleviation and industrial revitalization
+as of December 31, 2021, by advancing the "Ping
+An Rural Communities Support." Ping An received
+the 11th "China Charity Award" and the 3rd "Capital
+Philanthropy Award" for these efforts.
+Ping An continued to strengthen its core
+technological capabilities in adherence to the
+philosophy of innovation. Ping An continued to
+explore innovative business models to accelerate
+business development. Total revenue of technology
+business rose 9.8% year on year to RMB99,272 million
+in 2021. Ping An's technology patent applications
+increased by 7,008 from the beginning of 2021 to
+38,420 as of December 31, 2021, more than most
+other international financial institutions'. Ping An
+uses artificial intelligence ("AI") to empower its
+financial businesses. Sales realized by Al service
+representatives increased 66% year on year to
+approximately RMB275.8 billion in 2021. Al service
+representatives covered 2,158 scenarios as of
+December 31, 2021, with customer service volume
+reaching approximately 2.07 billion times, accounting
+for 84% of Ping An's total customer service
+volume in 2021. The 30-day loan recovery rate of Al
+collection stood at 77% in 2021.
+Ping An P&C maintained strong business quality
+by empowering main financial businesses through
+digitization. Combined ratio improved by 1.1 pps.
+year on year to 98.0% and underwriting profit grew
+145.7% year on year to RMB5,136 million in 2021.
+To fight the super rainstorm disaster in Henan
+Province, Ping An P&C provided front-line rescue
+workers with complimentary exclusive insurance
+and settled claims as rapidly as possible. Ping An
+Bank maintained stable business growth and asset
+quality, and strengthened risk provisions. Revenue
+grew 10.3% year on year to RMB169,383 million in
+2021. Net profit rose 25.6% year on year to RMB36,336
+million. Non-performing loan ratio improved by
+0.16 pps from the beginning of 2021 to 1.02%, and
+provision coverage ratio rose 87.02 pps from the
+beginning of 2021 to 288.42% as of December 31, 2021.
+Chairman's Statement
+ABOUT US
+Ping An Insurance (Group) Company of China, Ltd. 5
+severe in 2021, posing challenges to business
+Annual Report 2021
+We upgraded our healthcare strategy to build "a
+Chinese version of UnitedHealth." We built a closed
+loop of supply, demand and payment by exploring
+an innovative managed care model centering
+on "HMO + family doctor + O20," leveraging our
+years of operational experience in insurance and
+healthcare industries. We provide customers
+with the most cost-effective healthcare services
+throughout their life cycles, and strengthen our
+main financial businesses with this model. Nearly
+63% of Ping An's retail customers used services
+from the healthcare ecosystem in 2021. These
+customers held 3.3 contracts and RMB40,000 in AUM
+per capita respectively, 1.6 times and 3.0 times those
+held by customers who did not use these services
+respectively. Ping An Smart Healthcare maintained
+a leading position in technology, ranking first
+globally by the number of digital healthcare patent
+applications in 2021. Ping An Smart Healthcare
+empowered over 45,000 medical institutions in 187
+cities, and benefited approximately 1.32 million
+doctors and 10.48 million chronic-disease patients as
+of December 31, 2021.
+As a key part of channel reform, Ping An Life kicked off the pilot
+of Workplace 3.0 for Sales Agents at an outlet in Chegongmiao,
+Shenzhen on July 26, 2021.
+中国平安人员
+開圳分公司
+中国
+HEAR
+| 乔迁大喜 |
+乔迁大喜
+凝心聚力 固本强基
+金融、科技
+中国平安 PINGAN
+based on our integrated financial services platform.
+We made hard-won achievements in 2021 as we
+pursued steady development, and accelerated
+our transformation and upgrade. We maintained
+stable, healthy business performance in 2021, with
+growing cash dividends. Ping An achieved an 18.9%
+operating ROE, with operating profit attributable
+to shareholders of the parent company rising 6.1%
+year on year to RMB147,961 million in 2021. Ping An
+attaches importance to shareholder returns and
+will pay an annual dividend of RMB2.38 per share
+in cash, up 8.2% year on year, marking a continued
+increase in cash dividends. We provide customers
+with "worry-free, time-saving, and money-saving"
+experience through one-stop integrated financial
+services. We delivered strong results in customer
+development, and maintained world-leading brand
+value. Ping An's retail customers totaled over 227
+million as of December 31, 2021, of which 39.3% held
+multiple contracts with different subsidiaries. New
+financing scale achieved through corporate business
+cross-selling increased 26.9% year on year in 2021.
+Ping An ranked 16th in the Fortune Global 500 list
+(2nd among global financial services companies),
+rose to 6th in the Forbes Global 2000 list, and ranked
+49th in the Brand ZTM Top 100 Most Valuable Global
+Brands list (1st among global banks and insurers
+for the first time, and 1st among global insurance
+brands for the sixth consecutive year) in 2021.
+Ping An Life advanced its reform and
+transformation under the two-pronged "channel +
+product" strategy. Ping An Life advanced its reform
+and promoted high-quality business development.
+In respect of channel reform, Ping An Life improved
+outlet management through digital empowerment
+and conducted tiered, refined management of its
+agent force. First-year premium (FYP) per agent
+grew more than 22% year on year in 2021, indicating
+effective growth in agent productivity. In respect of
+product reform, leveraging the Group's healthcare
+ecosystem, Ping An Life constantly improved its
+product mix based on customers' new demands for
+health and eldercare services. Moreover, Ping An
+launched innovative products and services, including
+“insurance + health management,” “insurance +
+high-end eldercare," and "insurance + home-based
+eldercare" to meet customer needs and improve
+customer experience.
+PING AN
+3
+1
+Embedded Value of Life and Health Insurance
+Business (in RMB million)
+2021
+2020
+2019
+7.48
+7.89
+8.40
+2.05
+Dividend Per Share (1) (in RMB)
+2020
+139,470
+757,490
+2019
+Operating Profit Attributable to Shareholders of
+the Parent Company (in RMB million)
+2021
+Basic Operating EPS (in RMB)
+2020
+2019
+1,287,675
+1,273,091
+1,321,418
+Total Revenue (in RMB million)
+Financial Results of the Group
+Business Performance at a Glance
+132,955
+2
+824,574
+2019
+Top Ten Highlights
+Ping An Insurance (Group) Company of China, Ltd.
+This includes a final dividend of RMB1.50 per share pending
+approval at the 2021 Annual General Meeting.
+2021
+2020
+37,898
+49,575
+2021
+2.38(2)
+2021
+147,961
+876,490
+2019
+Annual Report 2021
+2
+(2)
+Dividend per share refers to the cash dividend per share,
+including the interim dividend and the final dividend.
+(1)
+December 31, 2021
+December 31, 2020
+December 31, 2019
+New Business Value (in RMB million)
+2020
+2.20
+75,945
+Finance Technology
+中国平安保险(集团)股份有限公司
+Ping An Insurance (Group) Company of China, Ltd.
+36.8
+34.3
+29.6
+Proportion of new customers sourced from the Group's
+internet user base (%)
+35.8
+36.0
+40.7
+34.4
+37.2
+THE GROUP
+Operating profit attributable to shareholders of the parent
+company
+38.0
+147,961
+132,955
+112,573
+94,708
+Operating ROE (%)
+18.9
+19.5
+21.7
+21.9
+22.0
+Basic operating earnings per share (in RMB)
+8.40
+139,470
+7.89
+39.3
+474.99
+2017/
+December
+31, 2017
+647.32
+598.04
+515.50
+443.59
+429.51
+Number of retail customers (in million)
+227.31
+218.43
+200.48
+Proportion of retail customers holding multiple contracts
+with different subsidiaries (%)
+180.22
+Number of contracts per customer (contract)
+2.81
+2.76
+2.64
+2.54
+2.38
+Operating profit per customer (in RMB)
+571.89
+563.00
+612.54
+542.28
+156.90
+December
+31, 2018
+7.48
+5.31
+214.9
+6,493,075
+5,905,158
+LIFE AND HEALTH INSURANCE BUSINESS
+Operating return on embedded value (%)
+Embedded value
+New business value
+Operating profit
+Residual margin
+Comprehensive solvency margin ratio of Ping An Life (%)
+PROPERTY AND CASUALTY INSURANCE BUSINESS
+216.4
+7,142,960
+6,459,317
+Net profit
+Comprehensive solvency margin ratio (%)
+11.1
+14.5
+25.0
+30.8
+35.5
+876,490
+824,574
+757,490
+613,223
+496,381
+Combined ratio (%)
+6.31
+8,222,929
+7,370,559
+236.4
+9,527,870
+8,539,965
+Dividend per share (in RMB)
+2.38
+2.20
+2.05
+1.72
+1.50
+Net profit attributable to shareholders of the parent
+company
+101,618
+143,099
+149,407
+107,404
+229.8
+89,088
+812,405
+762,560
+673,161
+556,508
+473,351
+Group comprehensive solvency margin ratio (%)
+233.5
+Total assets
+10,142,026
+Total liabilities
+9,064,303
+Equity attributable to shareholders of the parent company
+Ping An Insurance (Group) Company of China, Ltd.
+2018/
+2020/
+December
+31, 2020
+FINANCIAL STATEMENTS
+8
+14
+18
+20
+Business Analysis
+176
+Independent Auditor's Report
+20
+Performance Overview
+184
+173 Report of the Supervisory Committee
+Consolidated Income Statement
+Life and Health Insurance Business
+185
+34
+Property and Casualty Insurance Business
+Consolidated Statement of Comprehensive
+Income
+186
+40
+Investment Portfolio of Insurance Funds
+188
+46
+Banking Business
+24
+189
+154 Report of the Board of Directors and
+Significant Events
+Changes in the Share Capital and
+Shareholders' Profile
+(A joint stock limited company incorporated in the People's Republic of China with limited liability)
+(Stock Code: 2318)
+ANNOUNCEMENT OF AUDITED RESULTS
+FOR THE YEAR ENDED DECEMBER 31, 2021
+The board of directors (the "Board") of Ping An Insurance (Group) Company of China, Ltd. (“Ping
+An" or the "Company") hereby announces the audited results of the Company and its subsidiaries
+for the year ended December 31, 2021. This announcement, containing the full text of the 2021
+Annual Report of the Company, complies with the relevant requirements of the Rules Governing
+the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “HKEX”) in relation
+to the information to accompany preliminary announcements of annual results.
+Both the Chinese and English versions of this results announcement are available on the websites
+of the Company (www.pingan.cn) and the HKEX (www.hkexnews.hk). This results announcement
+is prepared in accordance with the International Financial Reporting Standards. The printed version
+of the Company's 2021 Annual Report will be delivered to the H shareholders of the Company
+and available for viewing on the websites of the HKEX (www.hkexnews.hk) and the Company
+(www.pingan.cn) before early April 2022.
+By order of the Board
+Ma Mingzhe
+Chairman
+Shenzhen, the PRC, March 17, 2022
+As at the date of this announcement, the executive directors of the Company are Ma Mingzhe,
+Xie Yonglin, Tan Sin Yin, Yao Jason Bo and Cai Fangfang; the non-executive directors of
+the Company are Soopakij Chearavanont, Yang Xiaoping and Huang Wei; the independent
+non-executive directors of the Company are Ouyang Hui, Ng Sing Yip, Chu Yiyun, Liu Hong, Ng
+Kong Ping Albert and Jin Li.
+Contents
+ABOUT US
+CORPORATE GOVERNANCE
+136 Directors, Supervisors, Senior Management
+and Employees
+114 Corporate Governance Report
+Five-Year Summary
+1
+Introduction
+133
+2
+4
+Business Performance at a Glance
+Chairman's Statement
+MANAGEMENT DISCUSSION AND ANALYSIS
+Customer Development
+Technology-Powered Business Transformation
+Healthcare as a New Driver of Value Growth
+i
+2019/
+December
+31, 2019
+54
+190
+At Nanhu began the CPC's magnificent centenary journey
+At Shekou began Ping An's three-decade development history
+In retrospect
+We remain true to our original aspiration and fulfill our duties as an insurer
+By providing customers with heartwarming services
+Today
+We help transform the real economy and support small and micro-businesses
+By channeling trillions of renminbi into the real economy
+So many years have passed
+China's carbon peak and neutrality initiatives, and the Ping An Rural
+Communities Support
+Building orchestrated ecosystems through high-quality development
+Being people-centric and customer-oriented
+Strengthening business through reform, and simplifying finance with technology
+new journey
+Finance + healthcare, a lighthouse for the future
+To become a century-old venture, Ping An focuses on the long run
+A long, long journey under the shining stars
+Ping An of China, for China's peace and security
+Strives for national rejuvenation in sync with the times and people
+Looking forward together
+To happy life, a new chapter of prosperity
+Five-Year Summary
+(in RMB million)
+CUSTOMER DEVELOPMENT
+Number of internet users (in million)
+2021/
+December
+31, 2021
+A broad road, bright and far-reaching
+Asset Management Business
+aspiration and embarking on a
+中国平安 PING AN
+Consolidated Statement of Financial Position
+Consolidated Statement of Changes in Equity
+Consolidated Statement of Cash Flows
+Notes to Consolidated Financial Statements
+60
+Technology Business
+66
+Analysis of Embedded Value
+OTHER INFORMATION
+76
+Liquidity and Capital Resources
+82
+Risk Management
+339
+Remaining true to our original
+Ping An Milestones
+Sustainability
+340
+Honors and Awards
+110 Prospects of Future Development
+341
+Glossary
+344
+Corporate Information
+Cautionary Statements Regarding Forward-Looking Statements
+To the extent any statements made in this Report contain information that is not historical, these statements are essentially forward-
+looking. These forward-looking statements include but are not limited to projections, targets, estimates and business plans that the
+Company expects or anticipates may or may not occur in the future. Words such as "potential", "estimates”, “expects", "anticipates",
+"objective", "intends", "plans", "believes", "will", "may", "should", variations of these words and similar expressions are intended to identify
+forward-looking statements.
+These forward-looking statements are subject to known and unknown risks and uncertainties that may be general or specific. Readers
+should be cautioned that a variety of factors, many of which are beyond the Company's control, affect the performance, operations and
+results of the Company, and could cause actual results to differ materially from the expectations expressed in any of the Company's
+forward-looking statements. These factors include, but are not limited to, exchange rate fluctuations, market shares, competition,
+environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions and
+other risks and factors beyond our control. 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. Neither the
+Company nor any of its employees or affiliates is responsible for, or is making, any representations concerning the future performance of
+the Company.
+96
+37,898
+49,575
+2020
+quantitative regulatory requirements, qualitative
+regulatory requirements, and market disciplinary
+mechanisms. C-ROSS enables insurers to strike a
+balance between risk prevention and value growth
+by embedding the philosophy of risk management in
+all dimensions of business development.
+In accordance with qualitative regulatory
+requirements, namely the second pillar of C-ROSS,
+the CBIRC conducts a Solvency Aligned Risk
+Management Requirements and Assessment
+("SARMRA") of an insurance company's solvency
+risk management capability and gives a score.
+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. Ping An Life's score was 85.58 for 2017
+and the result still applies as Ping An Life was
+not required by regulators to take the SARMRA
+assessment from 2018 to 2021, allowing its minimum
+capital requirement under C-ROSS to decrease by
+RMB13,035 million as of December 31, 2021. Ping An
+P&C's SARMRA score was 85.06 for 2021, allowing
+its minimum capital requirement under C-ROSS to
+decrease by RMB1,172 million as of December 31,
+2021.
+The Group manages its solvency through the
+following mechanisms and processes:
+The impacts on solvency must be evaluated
+when the Group develops key initiatives
+including strategies, business plans, investment
+decisions, and dividend distribution plans;
+The solvency target is a key indicator for
+the Company's risk management, and an
+emergency reporting and response mechanism
+is in place for significant changes in the
+solvency level to ensure the solvency is
+maintained at an appropriate level;
+The solvency indicator has been included as a
+KPI in performance appraisal at the Company
+level to be implemented in a top-down manner;
+The Group adopts a prudent asset and liability
+management policy, constantly enhances asset
+quality and business operations, strengthens
+capital management, and focuses on capital
+requirements arising from rapid business
+growth;
+94
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Since the former CIRC began to implement the
+China Risk Oriented Solvency System (hereinafter
+referred as "C-ROSS") six years ago, China's
+insurance industry has realized a smooth,
+substantive transition toward comprehensive risk
+management. C-ROSS has significantly helped to
+modernize insurance regulation, strengthen the
+industry's risk management, promote the industry's
+transformation and upgrade, and increase the
+global influence of China's insurance market.
+C-ROSS built and improved the three pillars, namely
+The Group conducts solvency assessments and
+dynamic solvency tests on a regular basis, and
+closely monitors changes in solvency; and
+The Group's solvency margin ratios met the
+applicable regulatory requirements as of December
+31, 2021. Below are the details:
+(in RMB million)
+Core capital
+December 31,
+December 31,
+2021
+Change (%)
+4.6
+6.0
+1,861,487
+1,779,640
+The Group conducts sensitivity and scenario
+stress testing to generate warnings about
+potential changes in solvency.
+Actual capital
+Solvency refers to the Group's ability to settle its
+liabilities. An insurance group's solvency is the
+consolidated solvency calculated by taking the
+insurance group's member companies 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.
+All the non-insurance member companies of
+the Group engage in specialized operations
+independently, and are supervised by their
+corresponding regulators. Through corporate
+governance and internal mechanisms, the Group
+ensures that all the non-insurance member
+companies are segregated from the insurance
+member companies in terms of assets and liquidity.
+misunderstanding.
+2.2 Organizational Structure Non-transparency Risk
+Organizational structure non-transparency risk
+refers to the risk of losses in the Group caused
+by the complexity or opaqueness of the Group's
+shareholding structure, management structure,
+operational processes, and business types.
+The Group has established a complete corporate
+governance structure in accordance with laws and
+regulations including the Company Law of the
+People's Republic of China and the Securities Law
+of the People's Republic of China, with international
+corporate governance norms and the Group's
+situations taken into account. The General Meetings
+of Shareholders, the Board of Directors, the
+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, while its member companies
+engage in various businesses including insurance,
+banking, asset management and technology. The
+Group manages its member companies through
+shareholding, but neither participates in nor
+intervenes in the member companies' routine
+business. The Group and its member companies
+have clearly defined roles and responsibilities of
+their respective functions, which are independently
+operated and well-coordinated subject to checks
+and balances. There is no overlap, lack, or
+overconcentration of powers and responsibilities.
+The Group has a comprehensive governance
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+structure, and a transparent management structure.
+The Group bans cross-shareholding and illegal
+subscription for capital instruments.
+2.3 Concentration Risk
+Concentration risk refers to the risk that member
+companies' single or combined risks, when
+aggregated at the Group level, may directly or
+indirectly threaten the Group's solvency position.
+The Group manages concentration risks from the
+perspectives of counterparties, investment assets,
+industries, regions, customers, and businesses.
+To manage the concentration risk from the
+perspectives of counterparties, the Group has
+followed the principle of reasonably controlling the
+concentration risk of counterparties. The Group
+has specified a set of risk limits for counterparties
+after considering the risk profiles of counterparties
+and the appetite and tolerance of the Group. The
+Group's set of risk limits cover major non-retail,
+non-trading counterparties in its investment and
+financing businesses. For a group of corporations
+and public institutions or interbank customers
+with control relationships among them, the
+Group includes them in the same group, and
+implements unified and combined concentration
+limit management. Moreover, by adopting advanced
+technology, the Group has been improving the
+breadth and depth of the concentration risk
+management, increasing its monitoring frequency
+effectively, and warning against counterparties with
+higher concentration risks promptly.
+To manage the concentration risk in investment
+assets, the Group has followed the principle of
+reasonably controlling the concentration risk in
+investment assets. The Group has set concentration
+risk limits for different asset classes and formed a
+concentration risk limit system for investment assets
+based on reasonable classification of investment
+assets. Moreover, the Group has regularly reviewed
+the concentration risk posed by investment assets
+at the subsidiary level to prevent any solvency risk
+and liquidity risk arising from overconcentration
+of investments in certain asset classes after
+consolidation.
+SOLVENCY MANAGEMENT
+To manage the concentration risk in industries,
+the Group has established industry-specific
+concentration risk limits based on the principle
+of reasonably controlling the concentration risk
+in industries. Moreover, the Group develops the
+high-risk industry management plans based on its
+To manage the concentration risk in regions, the
+insurance member companies have set the upper
+limits for the proportions of overseas investments
+and emerging market investments with insurance
+funds in accordance with the CBIRC's regulations for
+region-specific concentration risk limits.
+To manage the concentration risk in customers, the
+Group evaluates, analyzes, monitors and reports
+the overall customer concentration based on the
+CBIRC's requirements for the management of
+customer concentration risk. In this way, the Group
+prevents risks caused by the overconcentration of
+the Group's revenue from a single customer or the
+same group of customers, to avoid affecting the
+Group's operation stability and management quality.
+To manage the concentration risk in businesses, the
+Group evaluates, analyzes, monitors and reports
+the concentration of its businesses in accordance
+with the CBIRC's rules for concentration risk
+management of insurance groups' insurance and non-
+insurance businesses. Regarding the concentration
+of insurance business, the Group has enhanced
+the concentration management of the insurance
+business, the framework of concentration risk limits
+for reinsurance counterparties, and the framework
+for risk monitoring, analysis, reporting and warning.
+Regarding the concentration of non-insurance
+businesses, the Group has analyzed the structures
+and risk profiles of non-insurance businesses,
+specified the concentration risk indicators to be
+monitored, and included such indicators in the
+routine risk management framework. The Group has
+effectively prevented the concentration risk through
+regular evaluation, monitoring, and warning of the
+concentration risk in insurance and non-insurance
+businesses.
+2.4 Non-insurance Risk
+Non-insurance risk refers to the impact of the
+business activities of non-insurance member
+companies on the solvency of the Company and its
+insurance member companies.
+The Group is an integrated financial service group
+authorized by the State Council to engage in
+separate operations under a listed holding group
+subject to separate regulation. The Group improves
+its overall specialized capabilities and market
+competitiveness through its diversified business
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Risk Management
+presence in non-insurance sectors while focusing
+on main insurance businesses. The Group strictly
+manages its non-insurance member companies'
+strategic planning processes, and regularly evaluates
+and adjusts its diversification strategy.
+For equity investments in non-insurance businesses,
+the Group has developed rules, standards and
+limits, established investment decision-making and
+risk management processes as well as investment
+review, evaluation and reporting processes, and
+specified mechanisms for management before,
+during and after investment deals. Moreover, the
+Group regularly tracks and analyzes its investments,
+and evaluates the risk-return profiles of various
+businesses.
+macroeconomic and industry analysis every year to
+exercise total controls over high-risk industries and
+optimize the portfolio.
+1,899,989
+1,815,140
+4.7
+value of equity assets
+224.7%
+217.5%
+273.3%
+C-ROSS Phase II
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Ping An developed a set of ESG policy statements
+on the Group's core sustainability topics by refining
+its sustainable development philosophies and
+methods adopted for years. By doing so, Ping An
+fully integrated ESG-related requirements into the
+Group's operations management.
+ESG Policy Statements
+Sustainable Development Management
+Digitization is a basic project that promotes social
+progress and boosts productivity in the 21st century.
+Digitization is an advancement for human beings
+to improve their knowledge and capabilities by
+leaps and bounds. Ping An uses digital technology
+to build "ballast" for its sustainable development.
+Comprehensive digitization is one of Ping An's
+most important projects in Ping An's fourth decade.
+Digitization will bring about systemic changes
+in sustainable development in terms of strategy,
+organization, management, operations, talent, and
+services.
+A decrease of 30% in fair
+Moreover, Ping An supports the real economy with
+financial services, and empowers micro-, small and
+medium-sized enterprises to facilitate social and
+economic development in active response to the
+government's call. In respect of governance, Ping An
+continues to improve corporate governance and risk
+management to ensure steady development.
+Sustainable Development Philosophy
+Driven by the sustainability strategy, Ping An
+integrates the core philosophies and standards
+of ESG into corporate management, and builds a
+rational, professional sustainability management
+framework based on its business practices. Ping
+An is committed to providing "heartwarming
+financial services" and promoting "integrated
+finance healthcare" services. Under the brand
+promise of "Expertise makes life simple," Ping An
+creates value with expertise for its shareholders,
+customers, employees, communities, environments,
+and partners. Ping An seeks to boost both business
+values and social values, and realize people's dreams
+for a better life.
+PHILOSOPHY AND MANAGEMENT OF
+SUSTAINABLE DEVELOPMENT
+Ping An's responsible investment and financing amounted to nearly
+RMB1.22 trillion as of December 31, 2021, and Ping An developed 2,303
+sustainable insurance products.
+Ping An actively contributed to China's carbon peak and neutrality goals.
+Ping An comprehensively upgraded its green finance initiative, supporting
+China's green economic transformation and industry chain upgrade by
+leveraging the Group's integrated finance models and green finance.
+Ping An's green investment and financing totaled RMB224,580 million, and
+green banking business totaled RMB89,813 million as of December 31, 2021.
+Ping An's environmentally sustainable insurance premium income totaled
+RMB44,569 million in 2021.
+Ping An consolidated achievements in poverty alleviation and promoted
+rural revitalization by supporting industries, healthcare, and education.
+Since Ping An Rural Communities Support was launched in 2018,
+Ping An had provided RMB41,850 million as of December 31, 2021 for
+poverty alleviation and industrial revitalization, including RMB12,016
+million provided for industrial revitalization in 2021. Ping An offered 69
+events comprising mobile health checkups and complimentary medical
+consultations in rural areas, providing charitable healthcare services 9,483
+times. Ping An gave six Master of Scenarios live courses in urban and rural
+schools, with a total of over 63 million attendances.
+Sustainability
+96
+Ping An Insurance (Group) Company of China, Ltd. 95
+Annual Report 2021
+The C-ROSS Phase II Rules will require assessment
+of insurance groups' solvency risk management
+capability, strengthen insurance group-specific risk
+management requirements, and put forward higher
+requirements for insurance groups' solvency risk
+management. Being risk-oriented, the C-ROSS Phase
+Il Rules strengthens the capital quality of insurers,
+optimizes asset-liability management, and fully
+calibrates risk factors to reflect changes in risks
+across the insurance industry in time. Under the
+C-ROSS Phase II Rules, the core and comprehensive
+solvency margin ratios of the Group and its
+insurance subsidiaries are lower than those under
+the C-ROSS Phase I Rules, but still significantly
+above regulatory requirements. Solvency risk
+measurement is more prudential and rational under
+the C-ROSS Phase II Rules, with a positive impact on
+the Group's overall solvency margin assessment and
+management.
+The CBIRC promulgated the Regulatory Rules on
+Solvency of Insurance Companies (II) at the end
+of December 2021. The C-ROSS Phase II Rules
+aims to prompt insurers to focus on insurance
+protection and main business, enhance their ability
+to serve the real economy, prevent and resolve
+risks in the insurance industry, and implement the
+government's decision to expand the opening-up,
+strengthening the rationality, effectiveness and
+comprehensiveness of the solvency supervision
+regime. The promulgation of the C-ROSS Phase II
+Rules will be of great significance to the secure,
+stable operations of the insurance market, the high-
+quality development of the insurance industry, and
+the protection of insurance consumers' interests.
+Insurers will implement the C-ROSS Phase II Rules
+from their quarterly solvency reports for the first
+quarter of 2022. For insurers more exposed to the
+C-ROSS Phase II Rules, the CBIRC will consider their
+situations and determine a transition period that will
+allow such insurers to implement some regulatory
+rules in stages and complete full implementation no
+later than 2025.
+In respect of the environment, Ping An employs
+leading technologies to enable environmental
+protection and governance, facilitating an
+environment-friendly business ecosystem. In respect
+of society, Ping An comprehensively upgrades
+its green finance initiative in adherence to the
+philosophy of responsible investment. Relying on
+its integrated finance advantages, Ping An utilizes
+green insurance, green investment, and green credit
+to support green development and contribute
+to China's carbon peak and neutrality goals.
+279.4%
+214.7%
+225.9%
+Minimum capital
+813,781
+767,804
+Core solvency margin
+ratio (%)
+228.7
+231.8
+Comprehensive
+solvency margin
+ratio (%)
+233.5
+236.4
+-3.1 pps
+-2.9 pps
+Notes: (1) Core solvency margin ratio = core capital / minimum
+capital. Comprehensive solvency margin ratio = actual
+capital
+minimum capital.
+(2) The regulatory minimum requirements for the core
+solvency margin ratio and comprehensive solvency
+margin ratio are 50% and 100% respectively.
+The Group has 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 P&C as of December 31, 2021. Below are the
+results:
+Comprehensive solvency margin ratio
+Ping An
+Ping An
+Ping An
+Group
+Life
+P&C
+Base case
+233.5%
+230.4%
+278.4%
+A decline of 50 bps in
+interest rates
+and information disclosure, and strictly implemented
+them to ensure centralized and consistent brand
+management. In terms of brand asset management,
+the Group constantly improves its reputation
+risk management framework in accordance with
+applicable laws and regulations and regulatory
+requirements. The Group adheres to a reputation risk
+management philosophy centering on prevention,
+and conducts multi-level differentiated reputation
+risk management. The Group takes risk prevention
+and control, effective disposal, and image restoration
+as the ultimate standards for reputation risk
+management. In this way, the Group ensures rapid,
+coordinated responses to and efficient handling
+of reputation risk events, and promptly repairs
+its reputation and image. In terms of information
+disclosure, the Group subjects itself to public
+oversight, and has developed centralized interview
+and information release mechanisms to ensure
+timely and accurate information disclosure and
+prevent reputation risk arising from misreading or
+The Group has centralized the management
+of branding, communication, and information
+disclosure. The Group has developed robust policies,
+rules and procedures for brand asset management
+93
+services, comprehensive HR services, customer
+services, and audit services. The Group's members
+can outsource their business in accordance with
+their own operation and management requirements.
+The core business of insurance companies may
+not be outsourced. The member companies follow
+the principles of independent transactions and
+fair pricing for the outsourcing, and perform
+corresponding approval procedures in accordance
+with the applicable regulations and management
+rules for related party transactions. Moreover, the
+Group's members sign agreements setting out
+the service scope, the service terms, the charging
+methods, the reconciliation methods, the settlement
+frequencies, rights and obligations, and liability
+for breach of agreements. The transactions shall
+be reported and disclosed in accordance with
+applicable regulatory requirements. Moreover, the
+Group has also improved the outsourcing follow-
+up management, strengthened risk monitoring,
+and reviewed services and duty performance
+on a regular basis. The Group has established
+communication and service evaluation mechanisms
+for outsourcing. Service providers solicit feedback
+on satisfaction from beneficiaries on a regular basis,
+and conduct internal appraisals on the basis of such
+feedback to ensure constant service improvement.
+Market Risk - Foreign Exchange Risk
+Foreign currency-denominated assets held by the
+Group are exposed to foreign exchange risks. These
+assets include monetary assets such as deposits and
+bonds held in foreign currencies and non-monetary
+assets measured at fair value including stocks and
+funds held in foreign currencies. The Group's foreign
+currency-denominated liabilities are also exposed
+to risks as a result of fluctuations in exchange rates.
+These liabilities include monetary liabilities such as
+borrowings, customers' deposits and claim reserves
+denominated in foreign currencies, as well as non-
+monetary liabilities measured at fair value.
+The Group formulates its allocation strategies for
+assets including foreign exchange assets based
+on the Company's risk appetite, risk profiles of
+the asset class, and stress test results. Through
+measures including limits management and hedging,
+the Group keeps foreign exchange risk under
+control by continuing to optimize the aggregate
+foreign currency assets and liabilities as well as the
+structures, enhances overseas asset management,
+and regularly analyzes the sensitivity to foreign
+exchange risk.
+Annual Report 2021
+The Group has enhanced the management of
+integrated financial services. The Group's retail
+integrated financial service business mainly involves
+distribution of insurance products by concurrent
+agents. Such agents distribute products in an orderly
+manner under concurrent agency agreements in
+accordance with laws and regulations. If customers
+have demands for products beyond agents'
+offerings, customers may visit platforms of other
+member companies for information and purchase the
+products through online apps. The Group's corporate
+integrated financial business consists of the
+insurance business agency mechanism and the other
+business referral mechanism. The insurance business
+agency mechanism is managed in strict compliance
+with the agency rules and regulations. The business
+referral mechanism only involves facilitation of
+both parties' intentions to cooperate. Cooperation
+is conducted in strict accordance with market
+practices. All businesses are reviewed independently
+by each member company's risk management
+function in line with the firewall policies.
+88
+Risk Management
+The sensitivity to foreign exchange risk is
+calculated by assuming a simultaneous and uniform
+depreciation of 5% against the Renminbi of all
+foreign currency-denominated monetary assets
+and liabilities, as well as non-monetary assets and
+liabilities measured at fair value as illustrated in the
+table below:
+December 31, 2021
+(in RMB million)
+Net exposure to fluctuations in exchange
+rates assuming a simultaneous and
+uniform depreciation of 5% of all foreign
+currency denominated monetary assets
+and liabilities and non-monetary assets
+and liabilities measured at fair value
+against the Renminbi
+Decrease in
+equity
+before tax
+21,492
+4,931
+Market Risk - Real Estate Price Risk
+The Group is exposed to real estate price risk
+associated with its holding of investment properties.
+The Group tracks its exposure to property
+investment, monitors the movement of real estate
+prices in relevant regions, analyzes the impact of
+macro policies and regional economic development
+on real estate prices, has engaged independent
+valuers for the fair value assessment, and conducts
+stress tests on a regular basis.
+The fair value of the Group's holding of buildings
+under investment properties stood at RMB121,526
+million as of December 31, 2021.
+1.3 Credit Risk
+Credit risk refers to the risk of unexpected
+losses caused by the default of any debtors or
+counterparties or by the adverse changes in
+their credit conditions. The Group is exposed to
+credit risks primarily associated with its deposit
+arrangements with commercial banks, loans
+and advances to customers, bond investments,
+investments in debt schemes and debt wealth
+management products, reinsurance arrangements
+with reinsurers, policy loans, margin financing,
+financial guarantees, loan commitments, and so on.
+The Group manages credit risk through various
+measures, including:
+Continuing to improve the credit risk
+management mechanism with risk rating as its
+core methodology;
+Developing standardized policies, rules and
+procedures for credit risk management;
+Setting and continuously monitoring credit
+risk limits in multiple dimensions including
+customers and portfolios to manage high risk
+exposures;
+Continuing to strengthen the risk management
+system to standardize consolidated risk
+management; and
+If the above currencies appreciate by the same
+proportion, the appreciation will have an inverse
+effect of the same amount on equity before tax in
+the table.
+Strengthening the risk warning and monitoring,
+and enhancing post-investment management.
+Impact on equity
+Listed equity securities and
+MANAGEMENT DISCUSSION AND ANALYSIS
+1.2 Market Risk
+Market risks refer to the risks that cause unexpected
+losses to the Group due to unfavorable changes in
+interest rates, equity prices, foreign exchange rates,
+and real estate prices.
+The Group has continuously improved its market risk
+management framework, and enhanced the abilities
+to identify, evaluate, measure, analyze and report
+on market risks. The Group further strengthened
+its investment risk management system platform
+to raise the efficiency of market risk management.
+The Group improved the risk management reporting
+mechanism, and consolidated risk monitoring and
+management. The Group optimized stress testing to
+realize its decisional role in adherence to the bottom
+line of risk management. The Group improved its
+risk limit framework to monitor risks across the
+Group, member companies, and business lines.
+The Group enhanced the risk warning mechanism
+to ensure more targeted, forward-looking and
+thorough risk management.
+The main market risks to which the Group is
+exposed are interest rate risk, equity risk, foreign
+exchange risk, and real estate price risk.
+Market Risk - Interest Rate Risk
+Fixed maturity investments held by the Group are
+exposed to the interest rate risk. These investments
+are substantially represented by bond investments
+booked at fair value on the balance sheet. The
+Group uses various methods including sensitivity
+analysis and stress tests to evaluate the interest rate
+risk faced by such investments.
+The sensitivity of interest risk is assessed by
+assuming a 50 basis-point parallel shift of the
+government bond yield curve, the impacts of which
+are illustrated in the table below:
+December 31, 2021
+(in RMB million)
+Bond investments classified
+securities investment funds
+classified as financial assets
+carried at fair value through
+profit or loss and carried
+at fair value through other
+comprehensive income
+as financial assets carried
+Change in
+interest rate
+Decrease in
+profit
+before tax
+Decrease in
+equity
+before tax
++50 bps
+6,138
+13,700
+Market Risk - Equity Risk
+Listed equity investments held by the Group are
+exposed to market price risks. These investments
+are primarily listed equity securities and securities
+investment funds.
+The Group adopts the 10-day market price value-at-
+risk ("VaR") technique to estimate its risk exposure.
+The market price VaR measures a maximum loss
+in the value of an equity portfolio due to normal
+market fluctuation within a given confidence level
+(99%) and a specified timeframe (10 days).
+As of December 31, 2021, the VaR for listed equity
+securities and securities investment funds is as
+follows:
+December 31, 2021
+(in RMB million)
+at fair value through profit
+or loss and carried at fair
+value through other
+comprehensive income
+The Group is in strict compliance with the credit
+risk management guidelines issued by regulators.
+Under the guidance of the Board of Directors and
+the senior management, the Group carries out
+consolidated analysis, monitoring and management
+of the credit risk exposures of lending and
+investment businesses at the Group level. On this
+basis, the Group establishes and refines credit risk
+limits for different members and business lines to
+manage high risk exposures and risk concentration
+after consolidating the Group's financial statements.
+The Group also provides forward-looking insights
+into and analysis of potential credit risks and their
+impacts on the Group.
+Ping An Insurance (Group) Company of China, Ltd. 87
+Annual Report 2021
+1.7 Liquidity Risk
+For details of the Company's liquidity risk
+management, please refer to the section headed.
+"Liquidity and Capital Resources."
+92
+2. Group-level Risks
+The Group proactively strengthens risk management
+of its member companies, implements applicable
+regulatory requirements, and constantly enhances
+management of group-level risks including
+risk contagion, organizational structure non-
+transparency risk, the concentration risk, and risks in
+non-insurance areas.
+2.1 Risk Contagion
+Risk contagion refers to a situation where the risk
+created by a member of the Group spreads to
+another member of the Group by means of related
+party transactions or other activities, causing
+unexpected losses to such other member or the
+Group.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 91
+The Group has improved its approach to
+outsourcing management. The Group complies
+with applicable laws, regulations and regulatory
+documents to carry out outsourcing management.
+Currently, Ping An Technology and Ping An
+Financial Services provide the Group's members
+with outsourced services. The outsourced services
+provided by Ping An Technology include IT
+advisory services, development, application system
+operations and maintenance, call center services,
+office support and information security. The
+outsourced services provided by Ping An Financial
+Services include shared financial and treasury
+The Group has constantly improved the
+management of related party transactions. The
+Group and its member companies including
+the insurance companies, bank, trust company,
+securities company, fund management company,
+and asset management company constantly
+enhanced management of related party transactions
+in strict accordance with laws and regulations as
+well as the requirements of regulators on related
+party transactions. The Group's Related Party
+Transaction Control and Consumer Rights Protection
+Committee and the Related Party Transaction
+Management Office operate effectively. The
+Group has constantly optimized the management
+systems, structures and mechanisms, improved the
+management procedures, and enhanced related
+party transaction identification, review and fair
+value-based pricing to ensure compliant and fair
+pricing for related party transactions. The Group
+continued to increase transparency by disclosing
+and reporting related party transactions in strict
+accordance with regulatory rules. The Group has
+further improved system-based related party
+transaction management to empower governance
+of related party transactions. Furthermore, the
+Group has developed a culture of strong compliance
+awareness for related party transactions through
+constant training and education emphasizing every
+employee's responsibility for the management of
+related party transactions. The Group's related party
+transaction management systems and mechanisms
+have been strengthened and operating effectively.
+management among the Group and its member
+companies in accordance with applicable laws and
+regulations; ensuring that no employee performs
+incompatible roles with potential conflict of interests
+at the same post and time through appropriate duty
+segregation; and establishing rules for the avoidance
+of relatives and strengthening relevant day-to-day
+management.
+Annual Report 2021
+Fourthly, personnel management firewalls. The
+Company has established rational, effective
+personnel management firewalls. The Group and its
+member companies maintain mutually independent
+organizational structures, and have established
+respective independent personnel management
+rules and processes. Moreover, the Company
+ensures effective personnel segregation through
+an employee conflict of interest management
+framework by taking measures including:
+strictly restricting the double-jobbing of senior
+Thirdly, information firewalls. The Group has
+established the governance structure with
+three lines of defense for information security.
+Member companies have established information
+security departments to strictly implement
+the Group's information security policies for
+effective information segregation. Attaching great
+importance to customer information security, the
+security of its products, and the cybersecurity of
+its businesses, the Group strictly complies with
+laws and regulations including the Data Security
+Law of the People's Republic of China and the
+Personal Information Protection Law of the People's
+Republic of China, and has set up and effectively
+implemented the mechanism for comprehensive
+security monitoring to protect the security, integrity
+and availability of customer information.
+Secondly, finance and treasury firewalls. The
+finance and treasury frameworks and management
+policies of the Group and its members all
+meet the requirements of finance and treasury
+independence, including personnel independence,
+policy independence, account independence,
+accounting independence, treasury operation
+independence, and system authority independence,
+as detailed below: The Group and its members have
+respective independent finance functions, perform
+independent financial accounting, implement
+strict management segregation over the data of
+the financial and treasury information systems,
+ensure separate treasury management, and prohibit
+unauthorized fund borrowings and transfers
+between the Group and its member companies.
+The Group strictly restricts the cross-guarantee
+and other credit enhancement behaviors among
+the members through the well-established policies,
+and each member company formulates rules and
+requirements that meet its own needs.
+member companies carry out business activities
+independently, and are supervised by their
+corresponding regulators.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Firstly, legal-entity firewalls. The Group and its
+member companies have robust governance
+structures. The Group itself engages in no
+specific business activity. The Group manages
+its member companies through shareholding,
+but neither participates in nor intervenes in
+the member companies' routine business. The
+The Group carries out targeted measures to control
+specific credit risks and concentration risks in
+light of different characteristics and risk profiles
+of businesses such as insurance, banking and
+investment. For reinsurance credit risk associated
+with insurance business, namely, credit risk which
+occurs when a reinsurance company is unable
+to fulfill its obligations, the Group evaluates the
+credit of the reinsurers before entering into a
+reinsurance contract, and cooperates with selected
+reinsurance companies that have higher credit for
+The Group has built strict firewalls, including legal-
+entity firewalls, finance and treasury firewalls,
+information firewalls, and personnel management
+firewalls, between the Group and its member
+companies and among its member companies to
+prevent risk contagion.
+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 related party transactions,
+outsourcing and integrated financial services,
+and centralizing branding, communications and
+information disclosure. The management of risk
+contagion within the Group has been fully improved.
+and control, effective risk disposal, and image
+repair as the ultimate standards for reputation risk
+management. The Group has rational, reasonable,
+timely and efficient risk prevention, response and
+disposal mechanisms in place to rapidly respond
+to and efficiently handle reputation risk events in a
+coordinated manner so that its reputation and social
+image, if damaged, can be repaired in time.
+The Group constantly improves its reputation risk
+management system and conducts whole-process
+management in accordance with applicable laws,
+regulations and regulatory requirements. Measures
+include establishing and improving an ex ante
+evaluation mechanism for reputation risk, nipping
+reputation risk triggers in the bud, developing
+contingency plans on the basis of evaluation
+results, improving the in-the-process procedures
+for reputation risk management, carrying out
+hierarchical response and whole-process disposal,
+conducting ex post reviews and summarization, and
+carrying out appraisal and supervision on the basis
+of results. The Group adheres to a reputation risk
+management philosophy centering on prevention,
+and conducts multi-level and differentiated
+reputation risk management, taking risk prevention
+Reputation risk is the risk of the Company's brand
+being tarnished or operations of the Group and its
+member companies being affected due to negative
+comments of stakeholders, the public and media
+on the Company arising from actions of the Group
+and its member companies, their employees, and
+external events.
+Establishing and improving a comprehensive
+management approach covering the whole
+Group to identify, evaluate, monitor, control/
+mitigate, and report operational risks;
+mitigating credit risks. For credit risk associated
+with the banking business, the Group continuously
+improved the whole process management of credit
+risks and effectively enhanced the management
+of bank credit risks in line with changes in the
+financial and economic situation and macro-
+control policies as well as the requirements of
+regulatory authorities. The Group implemented
+the strategy of "technological empowerment,
+breakthroughs in retail banking, and enhancement
+of corporate banking" to continuously optimize the
+asset portfolio. The Group strengthened the early
+warning management to establish and continuously
+improve the automatic early warning system based
+on big data, strictly implemented post-lending
+management policies, and regularly reviewed
+customers' risk profiles and overall asset quality.
+Risk mitigation was strengthened in key areas to
+prevent the accumulation of credit risk from large
+exposures. The disposal of non-performing assets
+was enhanced by leveraging the Group's specialized
+strengths. For credit risk associated with the
+investment business, the Group assesses the credit
+of potential investment instruments in line with
+internal risk rating policies and procedures, strictly
+reviews the quality of counterparties through
+counterparty name lists and credit line management,
+chooses counterparties that have relatively high
+credit standing, and adopts a multi-dimensional
+approach for setting risk limits on investment
+portfolios to manage credit risks. Moreover, the
+Group optimized the risk warning and monitoring,
+screening public opinion for alert signals. Possible
+losses from risk events are minimized through early
+risk detection, response and disposal.
+December 31, 2021
+Low-risk financial assets measured
+at amortized cost held by the
+Group
+Risk Management
+As percentage of
+carrying value
+92.6%
+1.4 Operational Risk
+Operational risk refers to the risk of direct or
+indirect losses resulting from inadequate or flawed
+internal procedures, employees, information
+technology systems, and external events.
+The Group strictly follows applicable regulations
+and its operational risk management strategies. The
+Group uses the existing compliance management
+and internal control framework as the basis to
+integrate domestic and foreign regulators' advanced
+standards, methods, and tools for operational risk
+management. The Group optimizes the structure
+and policies for operational risk management, and
+strengthens collaboration and cooperation between
+departments. The Group has established daily
+monitoring and reporting mechanisms to provide
+regular reports to the management on the overall
+operational risk situation. Moreover, the Group
+develops rules and standards for operational risk
+management and strengthens system development
+to constantly improve the effectiveness of
+operational risk management.
+The Group manages operational risks primarily
+through the following mechanisms and measures:
+1.6 Reputation Risk
+Constantly optimizing the operational risk
+policies, frameworks, workflows, systems,
+and tools to enhance overall operational risk
+management;
+Stepping up the use of operational risk
+management tools among member companies,
+including the Risk and Control Self-Assessment
+(RCSA), Key Risk Indicator (KRI), and Loss Data
+Collection (LDC);
+Pushing forward the operational risk capital
+measurement according to regulatory
+requirements and management requirements;
+and
+Promoting a culture of operational risk
+management through targeted training.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 89
+90
+Risk Management
+1.5 Strategic Risk
+Strategic risks refer to the risks of a mismatch
+between strategies and the market environment as
+well as the Company's capabilities due to ineffective
+processes of developing or implementing strategies
+or changes in the business environment.
+With a robust strategic risk management framework
+and relevant procedures, the Group studies
+macroeconomic conditions in China and abroad,
+impacts of the regulatory landscape, and market
+competition dynamics to conduct thorough
+evaluation and research of the Group's general
+strategies and development plans. The Group
+coordinates and regularly formulates its general
+strategies and annual business plans, sets out
+strategic priorities for the Group and its member
+companies, and ensures not only the consistency
+between member companies' and the Group's
+strategic goals, but also the coordination between
+member companies' strategic goals. Furthermore,
+the Group oversees and evaluates member
+companies' implementation of strategic plans and
+annual plans to ensure effective implementation
+of the Group's general strategic plans. The
+Group effectively implemented relevant plans in
+accordance with the strategic risk management
+rules in 2021.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Social
+Insurance (2)
+Inclusive
+Insurance (3)
+Product Responsibility and Customer Protection
+Responsible Products
+453,813
+Ping An has established a policy regime governing
+all products and services, including the Consumer
+Rights Protection Management Measures of Ping An
+Group, the Product Sales Management Measures, the
+Product Development and Design Standards, and
+the Red, Yellow, and Blue Card Penalty System. In
+this way, the Company manages all products and
+services throughout their entire life cycles to avoid
+potential violation of laws and regulations.
+As an integrated financial services group, Ping
+An offers a wide range of products and services
+covering insurance, banking, asset management,
+and technology. The Company undertakes that all
+its products and services are offered in accordance
+with the principles of environmental protection,
+fairness and compliance. The Company will not
+get involved in infringement of legitimate rights
+and interests, violation of the freedom of speech,
+or political repression. The Company will not
+get involved in high emissions, high pollution,
+ecological destruction, or animal rights violations.
+The Company will not engage in monopoly, unfair
+competition, pyramid sales, or terrorism. Moreover,
+the Company will make every effort to prevent
+violation of laws, regulations, and codes of ethics.
+Environmental
+Insurance(¹)
+Ping An has clear ethical goals for data use,
+algorithm development, and industry application,
+and constantly improves its Al governance
+framework. Internally, Ping An has established the
+Al Ethics Management Committee. The Al Ethics
+Management Committee is responsible for steering
+the macro direction of Ping An's Al ethics policy,
+and ensuring fairness and justice for products under
+development. The Al Ethics Management Committee
+oversees information security and privacy
+protection during the provision of services and
+products, and optimizes management to address
+ethical issues involving Al during the implementation
+of projects. Externally, Ping An proactively
+engaged in global Al governance and strengthened
+exchanges with peers and academia. For instance,
+Ping An took part in standard making for the A/
+Risk Management Evaluation Model under China
+Electronics Standardization Institute, contributing to
+the standardization of Al governance.
+Ping An formulated Ping An Group's Policy on
+Al Ethics Governance in line with the five ethical
+principles of “human-oriented, human autonomous,
+secure and controllable, fair and just, and open and
+transparent." Ping An undertakes to oversee the
+development and application of Al in a reasonable
+manner, and is committed to keeping technology
+and financial services under ethical review.
+Al Governance
+Information Security and Privacy Protection
+Ping An constantly improves its information security
+management system to ensure the confidentiality,
+integrity, and availability of information. Ping An
+has formulated rules including the Procedure for
+Information Security Management of Ping An
+Group. In addition, Ping An has established a data
+security governance model centering on customer
+data protection to ensure whole-process security
+management. Ping An regularly conducts internal
+and external audits of its information security
+management and data privacy protection. Moreover,
+Ping An has passed the ISO 27001 information
+security management system certification for
+consecutive years, ensuring the effective and
+stable operations of the information security
+system. Ping An Group respects and protects every
+customer's privacy. Ping An has developed rules
+including the Privacy Protection Policy of Ping An
+Group to ensure that personal data is captured,
+transmitted, stored, and used in a compliant, safe
+manner. Moreover, Ping An puts the collection, use,
+and protection of privacy information under strict
+control, and undertakes to protect privacy rights of
+customers and employees in business activities.
+Information Security and Al Governance
+Ping An always strictly implements its information
+security policies in line with the highest standards
+to support informatization. Ping An focuses on
+improving its ethical system, with an Al Ethics
+Management Committee at the Group level
+overseeing the development and application of Al in
+a comprehensive and rational manner.
+Sustainability
+103
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+(3) Inclusive insurance includes agriculture insurance,
+insurance for rural areas, insurance for farmers,
+insurance for vulnerable groups, and insurance for small
+and micro-business operations.
+(2) Social insurance includes liability insurance (including
+workplace safety insurance and food safety insurance),
+medical insurance, and critical illness insurance.
+Notes: (1) Environmental insurance refers to insurance products
+provided by insurers for energy conservation,
+environmental protection, clean energy, and a green,
+low-carbon lifestyle to support response to climate
+change, environmental improvement, saving and
+efficient utilization of resources, and ecological
+protection.
+23,403
+13,582,444
+478,323,675
+44,569
+40,160,077
+Premium income
+Insured amount
+Ping An is committed to embedding ESG criteria
+into the insurance business, and constantly amends
+the Policies for Sustainable Insurance System of
+Ping An Group to integrate sustainability into the
+design of insurance products and develop itself into
+a trustworthy insurance company.
+Inclusive
+financing (3)
+104
+331
+11,506
+56,630
+300,667
+432,610
+Social investment
+and financing (4)
+193,582
+(in RMB million)
+Notes: (1) Responsible investment and financing data covers all
+financial products of which the Group (excluding Ping
+An Bank) acts as a fund provider or product issuer.
+(2) Green investment and financing include projects
+recommended by the Green Investment Guidelines
+(Trial) issued by the Asset Management Association of
+China, including green financing, green mutual funds,
+green building and green assets.
+(4) Social investment and financing include infrastructure,
+eldercare and healthcare, education and culture.
+As a financial conglomerate, Ping An uses credit to
+support sustainable economic development. Ping
+An's balance of green credit was RMB72,974 million
+and balance of inclusive loans was RMB382,159
+million as of December 31, 2021.
+Sustainable Insurance
+Risk Management of Insurance Products
+Ping An continues to research and monitor
+global climate change risks and social change
+risks to ensure reasonable ESG risk pricing of
+insurance products, and manage and prevent
+risks. Moreover, Ping An has formulated a rational,
+consistent insurance risk management system
+to manage and control the ESG risk exposure of
+its insurance products. All insurance subsidiaries
+have established and implemented insurance risk
+management measures and processes covering
+product development, underwriting, claims, product
+management, reserve evaluation, and reinsurance
+management, and have taken specific ESG risk
+management measures.
+Sustainable Insurance Product Portfolio
+Ping An continues to improve and diversify its
+sustainable insurance portfolio through further
+integration of ESG factors in product development,
+design and evaluation as well as greater product
+innovation. In response to China's Carbon Neutrality
+strategy, Ping An further developed green insurance
+products and services in 2021. Ping An launched
+preferential insurance policies for green enterprises
+or green projects.
+Ping An P&C had 815 sustainable insurance products
+as of December 31, 2021. They are: 1) environment
+and ecosystem related products, including
+environmental liability insurance, catastrophe
+insurance, and wildlife protection insurance; 2)
+society and livelihood related products, including
+engineering insurance for large projects, food safety
+insurance, and medical malpractice insurance; and
+3) inclusive insurance targeting small and micro-
+businesses, agricultural workers, and other groups
+with special needs.
+Moreover, Ping An continues to watch health trends
+in China and changes in insurance market demand
+brought about by enhanced insurance awareness,
+and promote the development of protection-
+oriented products. Ping An Life, Ping An Annuity,
+and Ping An Health Insurance had 1,488 sustainable
+insurance products including medical insurance,
+critical illness insurance, and old-age insurance as of
+December 31, 2021.
+Ping An had 2,303 sustainable insurance products
+as of December 31, 2021. The premium income of
+sustainable insurance reached RMB521,785 million,
+with a total insured amount of nearly RMB532.07
+trillion in 2021.
+The performance of the Company's sustainable
+insurance product portfolio in 2021 was as follows:
+investment and
+(3) Inclusive investment and financing include small and
+micro-business support, support for agriculture, farmers
+and rural areas, rural revitalization, and shanty area
+reconstruction.
+Annual Report 2021
+Execution Matrix
+MANAGEMENT DISCUSSION AND ANALYSIS
+within and outside the
+Group
+Group ESG Office
+- Coordinating ESG work
+- Execution
+- Performance Assessment
+Policy Statement on Community Impact
+Policy Statement on Agent Welfare and Management
+Policy Statement on Biodiversity
+Policy Statement on Employee Rights
+Policy Statement on Responsible Product Management
+Policy Statement on Sustainable Supply Chains
+Ping An Group's ESG policy statements
+Policy Statement on Responsible Investment
+Policy Statement on Coal Related Business
+Policy Statement on Sustainable Insurance
+Policy Statement on Information Security
+Policy Statement on Privacy Protection
+Policy Statement on Al Ethics Governance
+ESG Task Forces (CSR/IR/PR/Group Functional Representatives)
+Transparent Corporate Governance
+Staff and Agent Development and Protection
+Product Liability and Customer Protection
+Sustainable Supply Chain
+Information Security and Al Governance
+Sustainable Insurance
+Responsible Investment
+Topics
+Ping An's ESG policy statements as of December 31, 2021 are as follows:
+67,520
+Investor Relations Management Committee
+Annual Report 2021
+Community and Environment Impact
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Life advanced high-quality transformation
+of the agent team and improved team structure
+under the sustainable development strategy,
+aiming to build a team of "high-competence, high-
+performing, and high-quality" agents.
+Consumer Rights Protection
+Ping An is committed to providing "heartwarming
+financial services" under a customer-centric
+approach. Led by the Related Party Transaction
+Control and Consumer Rights Protection
+Committee under the Board of Directors, Ping An
+actively implements consumer rights protection
+requirements and incorporates consumer rights
+protection in corporate governance.
+With respect to the improvement of systems and
+mechanisms, Ping An implemented regulatory
+requirements on consumer rights protection through
+the comprehensive performance assessment and a
+sophisticated review mechanism. The Company had
+conducted group-wide remediation of complaints
+since May 2021 to enhance complaint management.
+For key member companies and key issues, Ping
+An established an accountability system to clarify
+responsibilities at each level, strengthened consumer
+rights protection throughout the service cycle,
+improved ex ante risk management, and enhanced
+the ability to resolve complaints.
+With respect to cultural development, Ping An
+raised the awareness and ideas of consumer
+rights protection culture featuring fairness and
+integrity among employees internally. A daily
+report mechanism has been set up to update the
+management on consumer rights protection trends
+and news. Management members hold seminars
+regularly to promote the philosophy of consumer
+rights protection. Ping An offers online consumer
+rights protection courses to promote a correct
+philosophy of consumer rights protection. Over
+300,000 employees have completed the online
+courses as of December 31, 2021. Externally, Ping
+An supports the efforts of the People's Bank of
+China, the China Banking and Insurance Regulatory
+Commission, the Office of the Central Cyberspace
+Affairs Commission, and the Ministry of Public
+Security in financial consumer rights protection
+by spreading basic financial knowledge, improving
+consumers' financial literacy, and calling for being
+good financial cybercitizens via its "March 15"
+communication campaign.
+With respect to the improvement of customer
+experience and protection of consumer rights, Ping
+An cares for elderly users through technological
+innovations and services. Senior citizens aged over
+60 can directly speak to a customer service agent at
+one click after dialing our hotline of 95511. Regarding
+complaint acceptance, Ping An Life diversified its
+customer complaint channels including the Group's
+and Ping An Life's official websites as well as
+Ping An Life's channels including the sales system
+and renewal system. Ping An Life also launched a
+function on the business development app for its
+agents (Pocket E) to allow agents to file complaints
+on behalf of their customers. Moreover, Ping An
+Life launched the customer protection helpline at
+4001666333 to swiftly handle consumer consultations
+and complaints as well as provide consumers
+with 24/7 professional, efficient services through
+specialized customer service staff. A total of 256,000
+inbound calls were answered as of December 31,
+2021, with an average of 1,111 calls per day and a
+connection rate of 99%. Ping An P&C developed
+the remote service model to resolve common pain
+points of the industry. For customers suffering from
+minor losses without a need for on-site services,
+Ping An P&C provides one-to-one online claims
+settlement services to streamline the claims process,
+and provide customers with convenient, efficient
+services. Auto insurance claims were settled in a
+minimum of 70 seconds. Up to 92.2% of insurance
+claims were settled via "One-click Claims Services,"
+and 95.78% of customers spoke highly of this
+function as it enabled customers to complete claim
+reporting through only four interactions. In 2021, 80%
+of inquiries and complaints to Ping An P&C were
+settled within one hour, with a settlement rate of
+nearly 99%.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+105
+55
+106
+Ping An Life launched the "Talent +” program to
+attract and screen high-quality talents. Ping An
+Life supported and empowered agents through
+training, protection of rights and interests, and
+business development support to meet their career
+development needs and enhance their sense of
+belonging and acceptance of insurance business. By
+doing so, Ping An Life constantly improved agents'
+service capabilities and professional skills.
+Sustainability
+Ping An has established the Sustainable Supply
+Chain Policy of Ping An Group, integrating ESG
+requirements into supply chain management that
+covers supplier selection, cooperation approval,
+process management, tracking and feedback. Ping
+An attaches great importance to suppliers' ESG
+performance. The Company has also included ESG
+requirements into existing supplier contracts, setting
+out articles on anti-bribery, information security
+and privacy protection, low-carbon and green
+technological transformation and development,
+labor rights protection, and employee development,
+and urging suppliers to actively undertake and fulfill
+corporate social responsibilities and obligations.
+Ping An also provides partners with training
+programs on product quality, work skills, compliance
+management, and employee rights protection to
+improve suppliers' sustainability performance.
+Development and Protection of Employees and
+Agents
+Development and Protection of Employees
+Ping An undertakes to protect the legitimate rights
+and interests of employees. Ping An released anti-
+discrimination rules to eliminate unfair treatment.
+Ping An ensures equal pay for equal work, and
+prohibits all forms of discrimination. Ping An is
+against any use of child labor and forced labor.
+Moreover, Ping An does not interfere with the
+right of employees to participate in or form any
+legitimate association. Please refer to the Ping An
+Group's Policy Statement on Employee Rights.
+Ping An always upholds fair, just and transparent
+salary and performance management, and
+constantly reviews the competitiveness of employee
+salaries. Ping An conducts rational performance-
+based salary management on the principle of fair
+and equitable distribution according to work to
+motivate employees to improve skills and grow with
+the Company. To retain key employees and establish
+long-term incentive and restraint mechanisms,
+Ping An has implemented the Key Employee Share
+Purchase Plan and the Long-term Service Plan.
+Ping An has established robust, diverse channels
+for feedback, complaints and whistle-blowing,
+and formulated the Whistle-blowing Management
+Procedure to guarantee employees' freedom of
+expression and protect their legitimate rights and
+interests.
+Annual Report 2021
+Ping An has been continuously diversifying and
+optimizing its talent standards and systems. Ping An
+organizes talent reviews of key positions each year
+from multiple dimensions including performance,
+skill sets, and potential, to ensure fair and efficient
+talent selection.
+Ping An provides every employee with access to
+various forms of training, and continuously develops
+a high-quality curriculum. Ping An helps employees
+enhance sales performance and efficiency
+through the "Best Practice Extraction Plan" and
+the "Best Practice Application Contest." Ping An
+also develops online learning and offers highly
+personalized courses to precisely empower talent
+identification and development. Moreover, Ping An
+empowers enterprise digital transformation and
+business development with the "T Plan" that upskills
+managers.
+To accomplish the mission of "making a career
+plan for a prosperous and contented life," Ping
+An provides employees with benefits, including
+commercial insurance, high-end health insurance,
+and health checkup packages for family members,
+ensuring that each employee can realize his/
+her value in a highly satisfactory environment. In
+addition, Ping An maintains a health management
+platform where employees can directly conduct
+online consultations and hospital registration.
+Ping An provides regular health checkups for
+employees. Moreover, Ping An launched the Ping
+An Employee Assistance Program (EAP) to assist
+employees in dealing with personal difficulties. Ping
+An has developed HR-X, a smart human resources
+mobile app, to provide employees with a series of
+convenient services. Ping An respects and cares for
+female employees, and provides nursing rooms and
+necessary facilities in the workplace.
+Development and Protection of Agents
+Sustainable Supply Chain
+89,801
+L2
+and financing (2)
+Risks in compliance
+Risks in brand reputation
+1
+Centralized ESG
+Collaborative Control
+The ESG management system
+The AI-ESG smart management
+platform
+- ESG Oversight
+- Strategic Planning
+- Risk Management
+- Policy Making
+Strategy and Investment Committee
+Group Executive Committee
+L1
+67,259
+Identification of ESG
+- Planning
+- Goal Setting
+Investment
+Banking
+Technology
+L3
+Group Functional Units
+& PR Office
+Branding Board HR Finance Planning Management Control
+Asset Internal Procurement Others
+L4
+Ping An Group Execution Matrix
+ESG Governance Structure
+Risks and Opportunities
+Note: (1) The TCFD was established by the Financial Stability
+Board ("FSB") in 2015 to provide investors, lenders and
+insurers with information needed to properly assess and
+price climate-related risks and opportunities.
+Risks in asset quality
+Risks in liquidity
+5"
+companies
+Insurance
+Business Code of Conduct
+Employee Code of Conduct
+ESG Governance Structure
+Having integrated sustainability into its development strategy, Ping An builds and practices a rational,
+professional corporate sustainability management framework and a clear, transparent ESG governance
+structure to continuously instruct all the functional centers and member companies of the Group to
+enhance corporate governance and business sustainability systematically.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 97
+MANAGEMENT DISCUSSION AND ANALYSIS
+96
+98
+Sustainability
+Five Major Risk
+Categories Integrated with
+ESG Risks
+Level 1 (L1): The Board of Directors and its Strategy
+and Investment Committee oversee all ESG issues,
+in charge of the Company's ESG strategic planning,
+risk management, and policy making.
+Level 3 (L3): The Group ESG Office and other
+functional centers of the Group act as task forces to
+coordinate ESG work within and outside the Group.
+Level 4 (L4): A matrix consisting of the Group's
+functional units and member companies is
+responsible for ESG execution.
+Ping An's overall ESG work plan aims at
+continuously improving the management of ESG
+issues and risks by developing clear management
+objectives, responsibilities and appraisal
+mechanisms. Regular reporting to directors and
+senior executives on ESG risk management,
+objectives, plans, implementation and progress
+ensures the effectiveness of ESG management.
+Board of Directors
+Comprehensive Risk Management for ESG
+As a financial conglomerate, Ping An has taken
+the lead in the practice of ESG risk integration,
+integrating core theories and standards of ESG into
+the Group's "2-5-1" risk management system at the
+deepest level. Moreover, Ping An supplemented the
+existing comprehensive financial risk management
+system with ESG risk management requirements to
+further improve risk governance capabilities, and
+realize long-term sustainable development.
+Paying much attention to climate change on the
+Company's business, Ping An regards climate
+change-related risks as an important factor for risk
+management. As suggested by the Task Force on
+Climate-related Financial Disclosure ("TCFD")(1),
+Ping An developed the risk identification framework
+for climate change-related risks, and applied risk
+identification results to the insurance and investment
+screening process to reduce risks associated with
+climate change.
+2
+ESG Organization and
+Management
+The Group
+Member companies
+Dual control of the Group
+and member companies
+Level 2 (L2): The Group Executive Committee and
+its Investor Relations Management Committee
+are responsible for identifying relevant ESG risks
+and opportunities, setting concrete objectives,
+formulating plans, and appraising performance.
+Ping An Insurance (Group) Company of China, Ltd.
+Risks in information security
+Ping An's achievements in sustainability have been
+widely recognized by the international community.
+Ping An had been selected as a constituent of the
+FTSE4Good Index Series, the Hang Seng Corporate
+Sustainability Benchmark Index ("HSSUSB") and
+the Hang Seng China Enterprises Index ESG Index
+("HSCEESG") as of December 31, 2021. Ping An was
+rated as low-risk in Sustainalytics' ESG Risk Ratings
+in 2021, indicating a leading position in China. Ping
+An was rated BBB in the MSCI ESG Ratings, a
+leading position in China's insurance industry. Ping
+An was rated A- in the Carbon Disclosure Project
+(CDP), which is the highest rating obtained by a
+Chinese mainland-based financial company.
+101
+MANAGEMENT DISCUSSION AND ANALYSIS
+Sustainability
+Green Operations
+Ping An strictly abides by applicable laws and
+regulations including the Environmental Protection
+Law of the PRC. Ping An has incorporated
+environmental protection in its business
+development plans and adhered to energy
+conservation and transformation, smart offices,
+and electronic business processes in business
+operations. Ping An Group has advanced green
+operations since 2021, upgrading the previous goal
+of low carbon operations to new goals on workplace
+operation improvement, emission reduction, and
+carbon elimination during business processes. Ping
+An strives to achieve comprehensive emission
+reduction and aims to realize carbon neutrality in
+operations by 2030.
+At present, Ping An is looking for ways to achieve
+carbon neutrality in operations by 2030 in line with
+the international Science Based Targets initiative
+(SBTI) and other frameworks. Ping An undertakes
+to adopt a carbon neutral strategy in line with
+international best practices. Ping An prioritizes
+internal emission reduction measures, and then
+looks at external ways to further reduce emissions,
+including purchasing external green power. After
+all emission reduction measures are performed
+duly, Ping An will achieve carbon neutrality through
+multiple approaches, including buying carbon
+credits.
+KEY INITIATIVES FOR SUSTAINABLE DEVELOPMENT
+Responsible Investment
+Ping An promotes the integration and development
+of responsible investment in various aspects
+including the organizational structure and policies as
+well as investment practices. Under the supervision
+of the Group IR Management Committee, a
+responsible investment expert panel jointly formed
+by the Group ESG Office, the Group's relevant
+functions, and pilot member companies continuously
+advances the application and implementation of
+the Group's responsible investment policies, and
+integrates ESG elements into investment and
+business decisions.
+Ping An's five principles for responsible investment
+are ESG Integration, Active Ownership, Thematic
+Investing, Prudence, and Information Transparency.
+Ping An vigorously promoted the Active
+Ownership at the ESG investment management
+level in 2021, implemented active, diligent post-
+investment management, and supported the healthy
+development of investee companies through
+communication and coaching.
+Ping An constantly amends the Responsible
+Investment Policy of Ping An Group. Adhering to
+the responsible investment principles, Ping An
+made full use of the AI-ESG smart management
+platform to integrate ESG risk management into the
+Group's investment risk management system. Ping
+An established a responsible investment product
+framework, which covers equities, bonds, financial
+products, and so on.
+102
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+(in RMB million)
+Financial
+products
+Equities
+Bonds
+Thematic investment
+and financing
+261,172
+401,974
+556,760
+Including:
+Sustainable Development Recognition and Industry
+Exchange
+Green investment
+Ping An's responsible investment and financing (1)
+totaled nearly RMB1.22 trillion as of December 31,
+2021. Details are as follows:
+Annual Report 2021
+Annual Report 2021
+In addition, Ping An launched China's first "carbon
+neutrality" charity trust plan on December 24, 2021
+to increase its social impact through green public
+welfare projects, contributing to China's carbon
+peak and neutrality goals. Moreover, Ping An
+actively uses green technology to enable carbon
+neutrality with precise statistics.
+Ping An is committed to strengthening industry
+exchange, actively joining domestic and
+international sustainable development organizations,
+and participating in joint efforts to build a
+sustainable industry ecosystem. Ping An adheres
+to the United Nations Principles for Responsible
+Investment (UNPRI) and relevant guidelines
+issued by Chinese regulators. Ping An is the first
+company in China to sign the UNPRI, the Climate
+Action 100+ and the Green Investment Principles
+for the Belt and Road as an asset owner. Ping An
+is the first company in the Chinese mainland to
+sign the Principles for Sustainable Insurance (PSI)
+established by the United Nations Environment
+Programme Finance Initiative. Ping An is also a
+member of the Green Finance Committee of the
+China Society for Finance and Banking.
+Ping An's green investment and financing totaled
+RMB224,580 million, and green banking business
+reached RMB89,813 million as of December 31, 2021.
+Moreover, Ping An's environmentally sustainable
+insurance premium income amounted to RMB44,569
+million in 2021.
+Ping An gives full play to its advantages in
+integrated finance, healthcare, and innovative
+technologies to implement China's sustainable
+development, rural revitalization and green
+development strategies. Ping An has built a role
+model for "blood making-based" common prosperity
+under the "Ping An Rural Communities Support"
+on the basis of successful poverty alleviation,
+and comprehensively upgraded its green finance
+initiative to make new achievements in rural
+revitalization, common prosperity, and green
+finance.
+Focusing on Rural Revitalization and Promoting
+Common Prosperity
+Ping An Rural Communities Support
+Ping An promotes rural revitalization by promoting
+industries, healthcare, and education. Since Ping
+An Rural Communities Support was launched in
+2018, Ping An had provided RMB41,850 million as
+of December 31, 2021 for poverty alleviation and
+industrial revitalization, including RMB12,016 million
+provided for industrial revitalization in 2021. Ping
+An offered 69 events comprising mobile health
+checkups and complimentary medical consultations
+in rural areas, providing charitable healthcare
+services 9,483 times. Moreover, Ping An gave six
+Master of Scenarios live courses in urban and rural
+schools, with a total of over 63 million attendances.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+99
+99
+MANAGEMENT DISCUSSION AND ANALYSIS
+Sustainability
+Ping An promotes rural industries through the
+Village Officer Program. Ping An continues to
+underpin the sustainable mechanism covering entire
+industry cycles through a closed loop of integrated
+financial services. Under this mechanism, Ping An
+provides rural residents with training and education,
+brings new vigor to rural industries, and helps rural
+enterprises to expand production and sales. Ping
+An worked with a number of institutions to carry
+out public welfare projects such as "Ping An Puhui
+Huinongjin Interest-free Loans," "Poverty Alleviation
+for New Farmers," and "Mom's Needlework." These
+projects helped small and micro-enterprises in
+rural areas seek innovations, start businesses, and
+increase incomes, achieving targeted support and
+rural revitalization. Ping An continued to promote
+innovation in financial products by underwriting a
+"rural revitalization" bond and working with China
+UnionPay to launch the first rural revitalization
+debit card ever issued by a joint-stock commercial
+bank. Ping An Bank issued more than 20,000 rural
+revitalization cards in 2021.
+Ping An improves rural healthcare through the
+Village Doctor Program. Ping An integrated
+premium medical resources to further the "Ping
+An Health Protection Initiative” in 2021. Under the
+initiative, Ping An provided complimentary health
+checkups and medical consultations for rural
+residents, trained village doctors, and upgraded
+village clinics in multiple provinces. Ping An,
+Shanghai Academy of Social Sciences, and China
+Financial Information Center jointly issued the Rural
+Health Poverty Alleviation Report for 2018-2020. Ping
+An and the Chinese Aging Well Association jointly
+launched the "Healthy China: Living with Health"
+project to provide education and services to regions
+and people lacking medical resources and health
+management knowledge.
+RESPONDING TO CHINA'S SUSTAINABLE
+DEVELOPMENT STRATEGY
+In the insurance field, Ping An increases
+offerings of green insurance products and
+services, and launches preferential policies for
+green insurance customers.
+Ping An supports rural education through the
+Village Teacher Program. Ping An recruited 175
+batches of 875 volunteers, who provided over
+20,000 hours of online and offline teaching services
+at 127 Ping An Hope Primary Schools in 2021.
+Ping An helped build 119 Ping An Hope Primary
+Schools (three of which are to be completed)
+as of December 31, 2021. Ping An has recruited
+nearly 10,000 volunteers who have provided about
+370,000 hours of teaching services over the past 15
+years since the launch of the volunteer teaching
+program. Ping An furthered the Juvenile Science
+and Technology Literacy Enhancement Program
+to rejuvenate the country through science and
+technology. Ping An invited renowned scholars to
+give lessons in rural areas, and invited students
+from Ping An Smart Primary Schools to a popular
+science camp in Beijing. Since the Juvenile Science
+and Technology Literacy Enhancement Program
+was launched, Ping An has provided full curriculum
+services to 1,039 primary schools in 27 provinces
+(municipalities and autonomous regions) across
+China, trained more than 10,000 rural teachers, and
+benefited more than 310,000 rural students.
+In the credit field, Ping An is reducing financing
+support for high-pollution, high-emission, and
+excess-capacity industries, reducing loans
+granted to companies subject to emission
+controls, and increasing support for green
+financing.
+In the investment field, Ping An encourages
+innovation in green financial products by
+increasing investment in green projects, and
+forms divestment or exit plans for high-
+pollution and high-emission industries.
+Green Development for Sustainable Future
+Ping An actively contributes to China's carbon
+peak and neutrality goals, stipulating that the
+scale of green investment and green credit will
+reach RMB400 billion, and total green insurance
+premiums will reach RMB250 billion by 2025. Ping
+An is also committed to achieving operational
+carbon neutrality by 2030. Ping An upgraded its
+green finance initiative in 2021 to explore innovative
+practices in green insurance, green investment
+and financing, green credit, green operations,
+and public welfare. In this way, Ping An makes
+contributions to ecological sustainability. Moreover,
+Ping An is reducing the proportion of brown
+assets by increasing green assets during business
+development, seizing green opportunities, and
+managing risks in transformation.
+Ping An attaches great importance to the healthy
+growth of children. The "Ping An Youth" public
+welfare program jointly initiated by the China
+Children and Teenagers' Fund and Ping An held
+a donation and kick-off ceremony in Shenzhen
+in October 2021. The "Ping An Youth" program
+decided to conduct pilot projects in 180 primary
+and secondary schools and kindergartens, offering
+RMB10 million to carry out a series of student care
+and support activities. The program focuses on
+the development of children's healthy personality,
+a mental health education system for teenagers
+and children, and counseling and rehabilitation for
+students with psychological problems.
+Leveraging its expertise, Ping An provided 24/7
+complimentary online medical consultations to
+people who suffered super rainstorms in Henan
+Province in July 2021, and produced videos
+offering self-rescue guidance. Ping An also set up
+a hotline to provide disaster-stricken people with
+psychological crisis intervention and counseling
+services.
+Annual Report 2021
+100
+Ping An has carried out "Reunion with Love," a
+public welfare project targeting left-behind children
+and migrant workers, for seven consecutive years.
+Ping An, together with the China Social Assistance
+Foundation and the Shenzhen Charity Federation,
+launched a series of online-merge-offline public
+welfare events near the Chinese New Year in 2021,
+sending warmth to migrant workers as they stayed
+put for the Chinese New Year. The "Reunion with
+Love" project collected heartwarming stories from
+over 1,800 migrant workers across the country, and
+granted a reunion subsidy of RMB1,500 to each
+migrant worker whose application materials passed
+the review.
+Other Public Welfare Activities
+Ping An Insurance (Group) Company of China, Ltd.
+In matching assets and liabilities related to
+climate change risks, Ping An assesses the
+impact of climate change risks on its assets
+and liabilities to ensure that they are matched
+in terms of maturities, incomes, and costs and
+make comprehensive plans for future asset
+allocation.
+For the insurance business, the "Healthy China"
+initiative has raised people's awareness of
+healthcare and eldercare, presenting long-
+term opportunities to the insurance industry.
+Life insurers will embrace a vast market as
+healthcare reforms continue, new policies
+on people's livelihoods, welfare and security
+are implemented, and people's insurance
+awareness is continuously raised by COVID-19.
+For property and casualty insurers, business
+operations will become more specialized,
+refined, and intensive with a more balanced mix
+of auto and non-auto insurance products and
+significantly higher efficiency for the industry,
+as the auto insurance pricing reform gradually
+deepens and new regulations on sub-types of
+insurance roll out.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+110
+For the banking business, new technological
+trends, business models and ecosystems will
+constantly emerge, and the advancement in
+new development directions will present new
+opportunities and challenges to the banking
+industry. The Company will stay attuned
+to macroeconomic development, market
+changes and customer demand, further digital
+operations across the board, strengthen
+financial risk prevention, and continue to serve
+the real economy with financial services.
+Ping An Insurance (Group) Company of China, Ltd. 109
+Amidst profound changes in the domestic and
+foreign economic environments, the rising downside
+pressure on the Chinese economy will weigh on
+consumption growth in the short run, posing
+challenges to the Company's business development.
+Moreover, as credit risk increases, asset quality
+will remain under pressure. However, it also
+indicates new long-term opportunities for business
+development. On one hand, consumer demands for
+insurance and health management will be gradually
+generated due to stronger health awareness and
+needs for medical management and eldercare
+services, which creates huge potential for the
+Company's financial and insurance businesses. On
+the other hand, as demand for digital transformation
+grows stronger driven by policies and technological
+advancement, Ping An is accelerating innovation
+of its financial and healthcare business models to
+empower business growth.
+Faced with the complexity of increasing risks and
+challenges in China and abroad in 2021, China got
+off to a good start with the 14th Five-Year Plan,
+maintained world-leading economic growth, and
+made new achievements in high-quality economic
+development and economic structure upgrade.
+However, global conditions remain complicated
+and severe with many instabilities and uncertainties
+as COVID-19 continues to spread worldwide. More
+effort is required to maintain steady economic
+recovery because of periodic and structural
+development issues in China.
+MAJOR INDUSTRY TRENDS, MARKET LANDSCAPE,
+AND RISKS
+Annual Report 2021
+Prospects of Future Development
+MANAGEMENT DISCUSSION AND ANALYSIS
+•
+MANAGEMENT DISCUSSION AND ANALYSIS
+Prospects of Future Development
+For technology application, next-generation
+information technologies including cloud
+computing, big data, blockchain and Al
+propelled the transformation and upgrade of
+traditional sectors, made industries "smarter,"
+and spawned emerging industries and new
+growth drivers. Empowered by technologies,
+the Company has become a more efficient
+organization. Going forward, the Company
+will continuously promote technological R&D
+and empower its core businesses with new
+technologies to improve operational efficiency
+and customer services.
+In response to the CPC and government's call,
+Ping An will fulfill its mission to "serve the country,
+society, and public” by supporting the real economy,
+managing financial risks, and contributing to social
+and economic development.
+DEVELOPMENT STRATEGY AND BUSINESS PLAN
+Facing severe challenges in internal and external
+business environments, the Company took multiple
+measures to provide “heartwarming financial
+services" by leveraging its resources and advantages
+in finance, healthcare and technology in a forward-
+looking manner in 2021. In addition, the Company
+fulfilled its insurance mission and corporate social
+responsibilities to fully support the real economy
+and China's "dual circulation" strategy. Ping An
+achieved business goals for 2021 by adopting various
+measures including strengthening risk management,
+advancing reforms, rebuilding its culture of "original
+aspirations, wholeheartedness, and perseverance"
+and promoting digitization. The Company
+empowered financial services with technologies,
+empowered ecosystems with technologies, and
+empowered financial services with ecosystems by
+advocating innovation in fintech and healthtech,
+building the “integrated finance + HMO managed
+care” services system, and enhancing the integrated
+financial business model of "one customer, multiple
+products, and one-stop services." The Company
+enhanced retail customer and user development,
+boosted the value of retail businesses, and
+improved the operational management of corporate
+business to build a benchmark for integrated
+financial services. The Company maintained stable
+profitability as well as healthy, sustainable growth
+of its insurance, banking, asset management and
+technology businesses.
+Ping An Insurance (Group) Company of China, Ltd.
+111
+The Company will continue to transform toward
+smart, digital operations, sustain business growth,
+and strive to become a world-leading integrated
+financial and healthcare services provider in 2022.
+Being customer-centric, Ping An will provide
+customers with one-stop integrated financial
+service solutions through technological
+innovations, continue to improve customer
+experience and offer heartwarming financial
+services. The Company will boost the value
+of retail customers through sustainable
+development of integrated finance. In corporate
+business, Ping An focuses on boosting its
+shared and own values under the "1 + N"
+services model (one customer + N products).
+Moreover, Ping An will use technologies to
+improve customer experience, reduce service
+costs, and support the real economy and
+financial inclusion under its integrated financial
+business model.
+For the insurance business, Life & Health will
+pursue high-quality development by executing
+the two-pronged "channel + product” strategy
+and advancing Ping An Life's reform. Through
+technological empowerment, Life & Health
+will realize long-term sustainable growth by
+continuously transforming channels, offering
+"heartwarming insurance," and improving
+business quality. Ping An Property & Casualty
+will continue to transform toward digital
+operations and promote insurance product
+innovation to provide refined, high-quality
+services for customers and build differentiated
+advantages.
+Ping An's banking business will continue to
+follow national strategies and the "customer-
+centric" approach, and advance the strategic
+transformation. Ping An Bank will make every
+effort to build the "five-in-one" new model for
+the retail business, play "five cards" for the
+corporate business, and establish the "five
+business cards" for the interbank business.
+Ping An Bank will continue to advance
+its comprehensive digital operations, and
+make contribution to the dual-circulation
+development pattern which takes the domestic
+market as the mainstay while letting foreign
+and domestic markets reinforce each other.
+Ping An's asset management business is
+committed to building an industry-leading
+investment management platform. Being
+customer-centric, Ping An will adhere to the
+philosophies of value investing and long-
+term investing, and pursue steady growth in
+investment income. Ping An will strengthen
+product innovation, and develop flagship
+products and brand reputation in line with the
+times. Regarding the investment of insurance
+funds, Ping An always takes risk prevention
+as top priority, improves asset and liability
+management capabilities, pursues prudent
+investment, and increases support for the real
+economy.
+112
+Annual Report 2021
+For the asset management business, 2021
+marked the end of the transition period for the
+new asset management regulation. Through
+three years' transformation and reforms, the
+regulatory system for the asset management
+industry has been further improved, and
+business models have been focused on serving
+the real economy. This marks a new stage
+for the asset management industry. Ping An
+will strictly comply with national policies and
+maintain robust risk management. Empowered
+by technologies, Ping An will continue to
+improve its investment capability, leverage
+expertise to serve the real economy, and
+continue to support major national strategies
+and projects in key areas.
+In respect of anti-bribery, corruption, and fraud,
+employees and partners may not engage in any
+illegal or improper activities in exchange for
+personal benefits or damage the Company's
+legitimate economic interests and reputation.
+Once a fraudulent action is confirmed, the
+relevant employees will be subject to penalties
+and punishments.
+Pursuing transformation to a team of “high-
+competence, high-performing, and high-
+In respect of information management and
+social media management, employees are
+required to strictly follow the requirements of
+customer information security management
+to actively protect customer information from
+being leaked. Official accounts and employee
+accounts on social media may not divulge trade
+secrets or spread illegal information.
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+quality" agents, Ping An Life adopts three core
+strategies, namely a classified approach to branch
+development, tiered management of its agent force,
+and digital empowerment. Ping An Life applies
+differentiated development strategies according
+to economic development levels and competition
+trends in different cities and regions. Ping An Life
+designs different development models for new
+agents, high-productivity agents, and supervisors
+by offering exclusive development projects
+and support. Ping An Life enables the routine
+management, recruitment, training, and activity
+management of the agent team through a series of
+digital tools.
+Ping An has formulated the Ping An Group's Policy
+Statement on Agent Welfare and Management
+to safeguard the fairness and justice and prohibit
+discrimination in agent recruitment. In addition,
+Ping An guarantees agents' freedom of expression
+and protects their legitimate rights and interests
+by establishing a communication channel for them
+to express opinions and make requests. Ping An
+bolsters agents' acceptance of insurance business
+and a sense of belonging by creating a feeling of
+care and warmth. Ping An provides a wide range of
+medical care, injury, death, and eldercare benefits,
+including four basic benefits, pensions, long-term
+service bonuses, value-added services, and health
+check-ups. Ping An Life upgraded remunerations,
+care, and management from 2020 to 2021. In terms
+of remunerations, Ping An Life strengthened
+support for new agents, high-productivity
+agents, and supervisors. In terms of care, Ping
+An Life introduced special care for elderly outlet
+managers and four exclusive value-added services
+for supervisors and high-productivity agents,
+namely consultation with specialists, VIP hospital
+registration, second medical opinions on critical
+illnesses, and hospitalization arrangement.
+Community Impact
+The Ping An Volunteers Association has set up
+27 branches nationwide since its establishment
+in 2018, covering 30 member companies. Ping An
+fully upgraded the "Ping An Guardian Initiative" in
+2021 and organized over 30,000 "Ping An Guardian
+Initiative" public welfare events. On the one hand,
+Ping An promoted the general public's financial
+literacy, consumer rights awareness, and safety
+literacy, so that public welfare events can enter
+the community and benefit the people. On the
+other hand, Ping An gave full play to insurance as
+a social "stabilizer" in supporting the fight against
+COVID-19 and earthquake and disaster relief. The
+"San Cun Hui" public welfare platform had 3.33
+million registered users, including approximately
+550,000 employees and sales agents of Ping An as
+of December 31, 2021; 3,858 “Beside You” public
+welfare initiatives were sponsored on the platform,
+attracting 3.6324 million participants from Ping An's
+employees and agents in 2021.
+Ping An is committed to becoming a heartwarming
+financial institution providing caring, personalized,
+and meticulous services. Ping An Bank provided
+heartwarming financial services for the elderly
+by launching a large-font version of the "Ping An
+Pocket Bank” app with simpler interfaces and easier
+operations. Ping An Bank issued nearly 780,000 Smart
+Old-age Care Identity Cards in Shenzhen as of
+December 31, 2021, covering 91.46% of senior citizens
+domiciled in Shenzhen and meeting the financial life
+demands of most senior users.
+Business Code of Conduct
+Ping An formulated the Business Code of Conduct
+of Ping An Group and the Employee's Code
+of Conduct of Ping An Group, setting out its
+commitments to the corporate business ethics
+and employee code of conduct, and continued to
+standardize its management.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+107
+Sustainability
+Corporate Business Ethics
+In accordance with applicable laws and regulations,
+the Company formulated procedures which apply to
+all of its member companies, suppliers and partners,
+and pledges the following:
+In respect of tax policies, the Company
+complies with all applicable laws and
+regulations, proactively cooperates with
+governments in implementing tax policies, duly
+performs tax duties, discloses tax information
+as required by law, declares and pays taxes on
+time, and prevents tax dodging and evasion.
+In respect of anti-monopoly and fair trade, the
+Company complies with anti-monopoly laws
+and regulations, strictly scrutinizes all merger
+and acquisition deals, and meets all disclosure
+requirements.
+In respect of anti-money laundering, anti-
+terrorist financing, and sanctions compliance,
+the Company prevents, identifies, and monitors
+financial crimes in accordance with local
+applicable laws and regulations as well as
+relevant internal rules. The Company has built
+a robust anti-money laundering framework, and
+has incorporated it into its comprehensive risk
+management framework.
+In respect of fairness and protection of
+employees' rights and interests, the Company
+protects legitimate rights and interests
+of all employees. The Company opposes
+discrimination, and prohibits the use of child
+labor and forced labor. The Company has
+in place relevant procedures including the
+Procurement Supplier Management Procedure
+to ensure that suppliers' commitments to
+employee rights and welfare are met.
+In respect of petitioning and reporting
+management, the Company has formulated the
+Whistle-blowing Management Procedure. The
+Company has set up a dedicated petitioning
+and reporting hotline (0755-22625145) and an
+email box (lzxfjb@pingan.com.cn) to receive
+non-consumer customer service complaints
+against the Company, its employees or agents
+from internal and external complainants
+(including but not limited to the Company's
+employees, customers, providers, government,
+and regulatory authorities). The Company's
+petitioning unit deals with letters and calls in
+a lawful, objective, fair, and timely manner,
+and coordinates the joint investigation and
+handling by relevant units, to promote the
+effective and proper proceeding of petitions.
+Moreover, the Company requires special
+protection and confidentiality of the petitioners
+to protect their legitimate interests and prevent
+retaliation.
+In respect of intellectual property protection,
+the Company protects its own intellectual
+property rights in practical business operations,
+strictly prohibits its employees from being
+involved in activities that violate intellectual
+property right laws, and requires them not to
+infringe others' intellectual property rights.
+108
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Employee Code of Conduct
+The Company has developed systematic
+management rules and procedures covering full-
+time and part-time employees, including the
+Employee Interest Conflict Management Policy and
+the Anti-fraud Procedure. Systematic training is
+conducted for employees on a half-yearly basis.
+Ping An has formulated its employee code of
+conduct covering the following aspects:
+In respect of conflicts of interests, transfer
+of benefits, and management of confidential
+information, employees are required to
+understand and comply with the Company's
+rules and procedures on conflicts of interest.
+The Company prevents and punishes transfer
+of benefits in line with the principles of "risk
+coverage, self-declaration, conflict avoidance,
+and zero tolerance." Employees are responsible
+for maintaining the confidentiality of inside
+information and may not divulge it.
+For the technology business, Ping An will
+continue to implement its strategies and
+proactively encourage fintech and healthtech
+innovations. The Company will employ cutting-
+edge technologies to support its core financial
+businesses. By doing so, the Company will
+provide customers with high-quality products
+and excellent service experiences, and advance
+the industry ecosystem and technologies.
+Moreover, Ping An will upgrade the healthcare
+ecosystem strategy by developing the
+healthcare ecosystem, building the "HMO
+managed care model," and integrating its
+customer base and resources.
+Ping An leverages its advantages in finance,
+technology, and healthcare to promote volunteerism
+and advocate civilization in a new era. Ping An
+has made solid progress in volunteering for rural
+revitalization, emergency response, and children
+services.
+Annual Report 2021
+The Company proactively communicates with the market through various means and channels, including
+but not limited to roadshows, videos, conference calls and corporate open days, to improve communication
+effectiveness and facilitate value recognition. All these efforts have helped to deepen the capital market's
+understanding of the Company. Besides maintaining good communication with institutional investors,
+the Company has also established diverse channels to communicate with minority investors to provide
+better investor services and protect their interests, including but not limited to corporate websites, email
+and hotlines. Moreover, the Company is committed to strengthening the analysis and reporting of capital
+market situations and the collection of shareholders' information, paying special attention to addressing
+investors' concerns and advice in order to further enhance the operations, management and corporate
+governance of the Company. We constantly improve internal workflows and system construction to
+provide investors with more convenient services precisely and efficiently.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+115
+CORPORATE GOVERNANCE
+Corporate Governance Report
+Independence of the Company from the Controlling Shareholders on Assets, Staff, Finance,
+Organization, and Business
+The shareholding structure of the Company is scattered and there is no controlling shareholder or de facto
+controlling party. As an integrated financial group, the Company maintains full independence in terms
+of assets, staff, finance, organization and business under the supervision of the CBIRC. The Company is
+an independent corporation responsible for its own profits and losses, runs independent and complete
+business and is capable of independent business operations. During the Reporting Period, no controlling
+shareholders or other related parties misappropriated the Company's funds, as confirmed by Ernst &
+Young Hua Ming LLP in its specific report in this respect. The Company did not provide any controlling
+shareholder or de facto controlling party with any undisclosed information.
+BOARD AND DIRECTORS
+Corporate Governance Functions of the Board
+The Board is responsible for the management of the Company and accountable to the shareholders for
+their entrusted assets and resources. The Board represents and owes a duty to act in the interests of
+the shareholders as a whole. The Board recognizes its responsibility to prepare the Company's financial
+statements. The principal responsibilities of the Board and the types of decisions that can be made by the
+Board include:
+•
+The "Investor Relations" section on the Company's website (www.pingan.cn) serves as a platform
+for communication with investors on the Company's updates including but not limited to business
+development and operations, financial information and corporate governance practices. Investors are
+also welcomed to write directly to the Company's IR team or via email to IR@pingan.com.cn for further
+inquiries, which will be appropriately dealt with by the Company.
+formulating the Group's overall direction, objectives and strategies, business plans and investment
+proposals as well as monitoring and supervising the management's performance;
+formulating plans for mergers or disposals and deciding on major investments, asset mortgage and
+other forms of guarantee in accordance with the mandate at general meetings;
+formulating proposals for any change in the Company's registered capital, the issuance of corporate
+bonds or other securities and listing plans;
+appointing or dismissing the senior management of the Company, and determining their remuneration,
+award and punishment; and
+performing the corporate governance function, monitoring, evaluating and ensuring the effectiveness
+of the Company's internal control systems and compliance with relevant laws and regulations.
+On the other hand, responsibilities, functions and types of decisions delegated to the management include:
+•
+implementation of the Company's overall direction, objectives and strategies, business plans and
+investment proposals as determined by the Board from time to time; and
+the day-to-day management of the Company's business.
+116
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+In response to the ever-changing economic
+landscape and market conditions, the Company will
+conduct in-depth research on the macroeconomic
+situation. Moreover, the Company will implement the
+14th Five-Year Plan by upholding the compliance
+philosophy of "Regulations + 1," strengthening
+risk management, and improving operations. The
+Company will advance the "integrated finance +
+healthcare" strategic upgrade under the customer-
+centric approach. Moreover, the Company will
+develop the "finance + eldercare" and "finance +
+healthcare" industry ecosystems, and build the
+"integrated finance + HMO managed care" services
+system with Chinese characteristics on the basis of
+diverse high-quality, efficient integrated financial
+services. In this way, Ping An will strive to become
+a world-leading integrated financial and healthcare
+services provider. Ping An will actively fulfill its
+social responsibilities, and create steadily growing
+value for customers, shareholders, and society.
+Ping An will make unremitting efforts to realize
+people's aspiration for a better life and the common
+prosperity of society.
+formulating the Company's profit distribution and loss recovery proposals;
+The Company adheres to the principles of compliance, objectiveness, consistency, timeliness, interactivity
+and fairness in providing services proactively, passionately and efficiently to institutional and individual
+investors in China and abroad, facilitating the understanding between the Company and its investors,
+enhancing corporate governance and realizing the fair corporate value of the Company.
+formulating the Company's annual budgets, financial statements and monitoring the Company's
+performance;
+Information Disclosure and Investor Relations
+Ping An Insurance (Group) Company of China, Ltd. 113
+During the Reporting Period, the Company disclosed all material information in a truthful, accurate,
+complete, timely and impartial manner in accordance with the applicable laws and regulations and the
+Articles of Association, making sure that information was disseminated to every shareholder equally, and
+there was no breach of information disclosure regulations.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Corporate Governance Report
+Ping An continues to adopt global best practices in corporate governance, and
+has established and kept improving its corporate governance structure which
+is built on both local advantages and international standards. The board of
+directors of the Company (the "Board" or "Board of Directors") hereby reports
+to the shareholders on the corporate governance of the Company for the year
+ended December 31, 2021 (the “Reporting Period”).
+CORPORATE GOVERNANCE STRUCTURE
+During the Reporting Period, the Company implemented corporate governance measures taking into
+account practical concerns and in strict accordance with the applicable laws, including the Company Law
+of the People's Republic of China and the Securities Law of the People's Republic of China, the applicable
+regulations issued by regulators, and the principles set out in the Corporate Governance Code. The
+general meetings of shareholders ("General Meetings"), the Board of Directors, the supervisory committee
+("Supervisory Committee”) and the executive committee ("Executive Committee”) of the Company
+exercised their rights and performed their obligations conferred by the Articles of Association respectively.
+Corporate Governance Structure of Ping An
+Nomination and
+Remuneration Committee
+Audit and Risk
+Management Committee
+Related Party Transaction
+Control and Consumer
+Rights Protection Committee
+Strategy and
+Investment Committee
+Board
+General Meetings
+Supervisory
+Committee
+In addition, shareholder(s) individually or collectively holding 3% or more of the Company's shares may
+submit an interim proposal in writing to the convener 10 days before the date of the general meeting
+pursuant to Article 75 of the Articles of Association.
+Extraordinary general meetings may be convened on written request of shareholder(s) individually or
+collectively holding 10% or more of the Company's shares pursuant to Article 72(3) of the Articles of
+Association. Such request shall state clearly the matters to be deliberated at the general meetings and
+shall be signed by the requester(s) and submitted to the Board in writing. Shareholders 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
+deliberated at the general meetings on each material issue, including the election of individual directors,
+for shareholders' consideration and voting. All resolutions put forward at the general meetings are voted
+by poll and the poll results are posted on the websites of SSE, HKEX and the Company after the relevant
+general meetings.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Shareholders' Rights
+The Annual General Meeting of the Company for 2020 held on March 25, 2021 deliberated and approved
+twelve proposals including the Report of the Board of Directors of the Company for 2020, the Report of
+the Supervisory Committee of the Company for 2020, the Annual Report of the Company for 2020 and
+Its Summary, the Report on Final Accounts of the Company for 2020, the Profit Distribution Plan of the
+Company for 2020 and the Appointment of Auditors of the Company for 2021. The resolutions of the above
+general meeting have also been published on the websites of SSE (www.sse.com.cn) and HKEX
+(www.hkexnews.hk).
+The general meeting established and expanded effective channels for communication between the
+Company and the shareholders, and through listening to their opinions and advice, shareholders'
+information rights, participation rights and voting rights on significant events of the Company were
+assured. During the Reporting Period, the notice, convocation and procedures for convening and voting
+at the general meeting were in accordance with the requirements of the Company Law of the People's
+Republic of China and the Articles of Association.
+GENERAL MEETINGS AND SHAREHOLDERS
+General Meetings
+Executive
+Committee
+114
+Shareholders may put forward any enquiries as set out in Article 58(5) of the Articles of Association in
+accordance with applicable laws and regulations, and 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 written identification documents pursuant
+to laws, regulations, and the Articles of Association. The Company shall provide the information after
+verification.
+121
+Members
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Ouyang Hui (Chairman),
+Ng Sing Yip,
+Chu Yiyun,
+Liu Hong,
+Jin Li
+Independent Non-Executive
+Directors
+The Board has established four specialized committees, namely the Nomination and Remuneration
+Committee, the Audit and Risk Management Committee, the Related Party Transaction Control and
+Consumer Rights Protection Committee, and the Strategy and Investment Committee. Details of the roles,
+functions and the composition of each of these specialized committees are set out below.
+The primary duties of the Nomination and Remuneration Committee are
+to provide recommendations on the size and composition of the Board
+of Directors (including skills, knowledge and experience), study the
+selection criteria and procedures for Directors and senior management,
+select qualified candidates and make recommendations to the Board.
+The Nomination and Remuneration Committee studies and reviews the
+remuneration policies, programs and structures of all Directors and
+senior management of the Company, and advises the Board in relation
+to establishing a formal and transparent procedure for developing
+remuneration policies. The Nomination and Remuneration Committee also
+reviews the criteria for appraisal of Directors and senior management,
+conduct appraisals and make recommendations to the Board, and reviews
+and approves senior management's remuneration proposals in line with
+the corporate policies and objectives set by the Board.
+Nomination and Remuneration Committee
+During the reporting period, the Independent Non-executive Directors of the Company conscientiously
+exercised their powers conferred by the Articles of Association, promptly learned the key operational
+information of the Company, paid close attention to the Company's development and actively attended the
+Board meetings during the Reporting Period. The Independent Non-executive Directors of the Company
+have conscientiously reviewed and provided independent opinions agreeing on the matters including
+profit distribution, changes in accounting estimates, A Share repurchase plan, remuneration of the
+Company's senior management, recommendation of Director candidates, appointment of the Company's
+senior management and major related party transactions, which were deliberated by the Board during the
+Reporting Period.
+SPECIALIZED COMMITTEES UNDER THE BOARD
+CORPORATE GOVERNANCE
+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 business activities, assets and management
+portfolios. The Nomination and Remuneration Committee is delegated with
+the task of fully considering the Company's needs for Directors and senior
+management, reviewing the criteria and procedures for selecting Directors
+and senior management. After considering and identifying appropriate
+candidates, the Nomination and Remuneration 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 and Remuneration Committee are
+to ensure that there remains a dedicated, professional and accountable
+Board to serve the Company and its shareholders.
+Corporate Governance Report
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Remuneration of Ms. Zhang Xiaolu.
+In 2021, the Nomination and Remuneration Committee held six meetings, which were convened in
+accordance with the Articles of Association and the Charter of the Nomination and Remuneration
+Committee of the Board. All of the members' opinions and suggestions were adopted by the Company. The
+attendance records of each member of the Nomination and Remuneration Committee are set out in the
+part headed "Attendance Record of Directors” of this section.
+Ping An Insurance (Group) Company of China, Ltd.
+The meeting deliberated and approved the Proposal on Recommending Director
+Candidates.
+The meeting deliberated and approved proposals including the Proposal on
+Recommending Ji Guangheng as the Vice President of the Company.
+The meeting deliberated and approved the Proposal on Recommending the
+Compliance Officer of the Company.
+December 9, 2021
+October 27, 2021
+The Nomination and Remuneration Committee also developed and followed the Board Diversity Policy to
+ensure a balance of Board members in terms of skills, experience and diversified perspectives, and thus to
+elevate the efficiency of the Board and maintain a high level of corporate governance. A summary of the
+Company's Nomination and Remuneration Committee diversity policy is as follows: All appointments under
+the Board are based on merits with due regard for the benefits of a diverse Board. Selection of candidates
+is 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 contributions that the selected candidates will make to the Board. In 2021, to
+further improve the Company's governance structure and the Board's professional decision-making ability,
+the Nomination and Remuneration Committee recommended four Director candidates with extensive
+managerial experience to the Board.
+August 26, 2021
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Report on the Participation in the 2021 Key Employee Share Purchase
+Plan.
+The meeting deliberated and approved proposals including the Proposal on
+Recommending the Chairman of the 12th Board.
+Contents of the Meeting
+April 22, 2021
+March 25, 2021
+Date
+April 30, 2021
+Annual Report 2021
+4/4
+Performance of Duties by Independent Non-Executive Directors
+July 17, 2019
+====
+1/1
+7/7
+6/6
+122
+3/3
+1/1
+7/7
+6/6
+4/4
+4/4
+1/1
+7/7
+6/6
+4/4
+1/1
+In 2021, all the Directors of the Company attended professional training with topics covering corporate
+governance, regulations, and the Company's businesses, and training courses organized by the Insurance
+Association of China regarding Theoretical Basis of Corporate Governance in Insurance Industry, and Digital
+Finance and so on. In addition, Mr. Ouyang Hui, Mr. Chu Yiyun and Mr. Liu Hong attended the 2021 follow-up
+training courses for independent directors of listed companies.
+2/2
+2/3
+3/3
+August 20, 2021
+Jin Li(¹)
+The 12th Board includes six Independent Non-executive Directors, exceeding one-third of the total number
+of the members of the Board, which complies with the relevant regulatory requirements of the Company's
+listing jurisdictions. All the Independent Non-executive Directors of the Company are professionals with
+extensive experience in their respective fields, including finance, accounting, law and technology, and thus
+crucial to the Company's sustainable development. All the Independent Non-executive Directors meet
+the specific independence guidelines as set out in the relevant regulatory rules of the Company's listing
+jurisdictions, and have presented to the Company their annual confirmations on independence, as disclosed
+in the Company's circular dated March 4, 2021. Therefore, the Company continues to believe that they
+are independent. The Independent Non-executive Directors owe fiduciary duties to the Company and its
+shareholders, and are especially responsible for protecting the interests of minority shareholders. They play
+a significant check-and-balance role in the decision-making of the Board and a key part in the corporate
+governance of the Company.
+2/2
+3/3
+August 20, 2021
+Ng Kong Ping Albert(1)
+4/4
+6/6
+7/7
+2/2
+Annual Report 2021
+Other assurance services
+Audit and Risk Management Committee
+Members
+Independent Non-Executive
+Directors
+Ng Sing Yip (Chairman),
+Ng Kong Ping Albert,
+Related Party Transaction Control and Consumer Rights Protection Committee
+The primary duties of the Related Party Transaction Control and Consumer
+Rights Protection Committee are to coordinate the management of related
+party transactions of the Company and the protection of consumer rights,
+including determining the overall objectives, basic policies and systems
+in respect of the management of related party transactions, reviewing
+material related party transactions, ensuring compliance and fairness
+of the Company's related party transactions, guarding against risks
+arising from such transactions, studying the major topics and policies of
+consumer rights protection, and guiding and supervising the establishment
+and promotion of the management system for consumers' legal rights.
+In 2021, the Related Party Transaction Control and Consumer Rights
+Protection Committee held four meetings, which were convened in
+accordance with the Articles of Association and the Charter of the Related
+Party Transaction Control and Consumer Rights Protection Committee of
+the Board. All of the members' opinions and suggestions were adopted
+by the Company. The attendance records of each member of the Related
+Party Transaction Control and Consumer Rights Protection Committee
+are set out in the part headed "Attendance Record of Directors" of this
+section.
+Jin Li
+Executive Directors
+Tan Sin Yin,
+Yao Jason Bo
+Date
+March 25, 2021
+April 22, 2021
+August 25, 2021
+October 27, 2021
+124
+Annual Report 2021
+130
+Contents of the Meeting
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the List of Related Parties of the Company under the Terms of the
+CBIRC in the First Half of 2021.
+The meeting deliberated and approved the Proposal on Reviewing the Report on
+the Consumer Rights Protection for the First Half of 2021.
+The meeting deliberated and approved proposals including the Proposal on the
+Material Related Party Transaction of Capital Injection into Ping An Annuity.
+Ping An Insurance (Group) Company of China, Ltd.
+Strategy and Investment Committee
+The primary duties of the Strategy and Investment Committee are
+to conduct research and provide suggestions to the Board for their
+consideration in relation to major investments, property transactions,
+financing, major capital operations, asset management projects,
+production and operation projects and so on, and also to promptly
+monitor and track the investment projects approved by the General
+Meetings and the Board, and promptly notify all the Directors of any
+significant progress or changes in process.
+In 2021, the Strategy and Investment Committee held four meetings, which
+were convened in accordance with the Articles of Association and the
+Charter of the Strategy and Investment Committee of the Board. All of
+the members' opinions and suggestions were adopted by the Company.
+The attendance records of each member of the Strategy and Investment
+Committee are set out in the part headed "Attendance Record of
+Directors" of this section.
+Date
+February 3, 2021
+April 22, 2021
+Contents of the Meeting
+Members
+Executive Director
+Ma Mingzhe (Chairman)
+The meeting deliberated and approved the Proposal on Reviewing the Framework
+Agreements on Material Related Party Transactions for Non-Financial Subsidiaries.
+44
+12
+6
+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 external auditors. In addition, the
+Audit and Risk Management Committee examines the effectiveness of
+the Company's internal controls through regular reviews of the internal
+controls over various corporate structures and business processes, while
+taking into account respective potential risks and levels of urgency to
+ensure the effectiveness of the Company's business operations and the
+realization of its corporate objectives and strategies. Such examinations
+and reviews cover finance, operations, compliance and risk management.
+The Audit and Risk Management Committee also reviews the Company's
+internal audit plans and submits relevant reports and recommendations to
+the Board on a regular basis.
+Members
+Independent Non-Executive
+Directors
+Ng Kong Ping Albert
+(Chairman),
+Ouyang Hui,
+Ng Sing Yip,
+Chu Yiyun
+Non-Executive Director
+Yang Xiaoping
+In 2021, the Audit and Risk Management Committee held four meetings, which were all convened
+in accordance with the Articles of Association and the Charter of the Audit and Risk Management
+Committee of the Board. All of the members' opinions and suggestions were adopted by the Company.
+Furthermore, the Audit and Risk Management Committee convened a meeting to review the unaudited
+financial report for the year 2021 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, 2021
+at the first meeting in 2022 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 each member of the
+Audit and Risk Management Committee are set out in the part headed "Attendance Record of Directors" of
+this section.
+Date
+February 2, 2021
+April 22, 2021
+August 25, 2021
+October 27, 2021
+Contents of the Meeting
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Annual Report of the Company for 2020 and Its Summary and the
+Report on Final Accounts of the Company for 2020.
+The meeting deliberated and approved proposals including the 2021 First Quarter
+Report of the Company and the Unaudited Results for the Three Months Ended
+March 31, 2021.
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Interim Report of the Company for 2021 and Its Summary.
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the 2021 Third Quarter Internal Audit Report of the Company.
+Further, in order to help the Committee members better evaluate the Company's financial reporting
+systems and internal control procedures, the Committee met with the Company's external auditors
+separately twice during the year.
+68
+Fees payable
+Total
+Non-assurance services
+Liu Hong
+Audit services for financial statements audits, reviews and agreed-upon procedures
+Audit services for internal controls
+Ping An Insurance (Group) Company of China, Ltd.
+(in RMB million)
+Corporate Governance Report
+CORPORATE GOVERNANCE
+123
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+The Audit and Risk Management Committee also reviewed and was satisfied with the performance,
+independence and objectiveness of the Company's auditors.
+According to the resolution of the Company's 2020 Annual General Meeting, the Company appointed Ernst
+& Young Hua Ming LLP and Ernst & Young (hereinafter refer to as "E&Y") as the auditors of the Company's
+financial statements under CAS and IFRS respectively for the year 2021. 2021 was the first year for which
+E&Y acted as the auditors of the Company. During the Reporting Period, the remuneration payable to E&Y
+is set out as follows:
+July 17, 2019
+June 17, 2013
+July 17, 2019
+CORPORATE GOVERNANCE
+Corporate Governance Report
+Convening of Board of Directors Meetings
+Session of the Board Meeting
+Date
+The 20th meeting of the
+11th session of the Board
+The 1st meeting of the
+12th session of the Board
+February 3, 2021
+March 25, 2021
+The 2nd meeting of the
+April 22, 2021
+12th session of the Board
+117
+Resolutions of the Board Meeting
+The Board Meeting deliberated and approved proposals
+including the Proposal on Reviewing the Establishment of
+the Board Committees of the 12th Board and the Terms of
+Reference and Modus Operandi of Each Committee, and
+the Proposal on Electing the Chairman for the 12th Board.
+The Board Meeting deliberated and approved proposals
+including the 2021 First Quarter Report of the Company
+and the Unaudited Results for the Three Months Ended
+March 31, 2021 and the Proposal on Reviewing the Report
+on the Participation in the 2021 Key Employee Share
+Purchase Plan.
+The 3rd meeting of the
+12th session of the Board
+April 30, 2021
+The 4th meeting of the
+12th session of the Board
+August 26, 2021
+The 5th meeting of the
+October 27, 2021
+12th session of the Board
+The 6th meeting of the
+December 9, 2021
+12th session of the Board
+The Board Meeting deliberated and approved the Proposal
+on Appointing the Compliance Officer of the Company and
+the Proposal on Concluding the Restructuring Investment
+Agreement Relating to the Founder Group.
+The Board Meeting deliberated and approved proposals
+including the Proposal on Reviewing the 2021 Interim
+Results Report of the Company and Its Summary, the
+Proposal on Distributing Interim Dividend for 2021, and the
+Proposal on Reviewing the A Share Repurchase.
+The Board Meeting deliberated and approved proposals
+including the Proposal to Deliberate the Annual Report
+of the Company for 2020 and Its Summary, the Report
+on Final Accounts of the Company for 2020, the Profit
+Distribution Plan of the Company for 2020 and the Proposal
+on Recommending Director Candidates for the 12th Board.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Note: As of December 31, 2021.
+Board Diversity
+As of December 31, 2021, the Board consisted of 14 members, namely five Executive Directors, three Non-
+executive Directors and six Independent Non-executive Directors, and the profile of each Director is set out
+in the section headed "Directors, Supervisors, Senior Management and Employees" of this Report. As far as
+is known to the Company, there is no relationship between the members of the Board in terms of finance,
+business, family members, or other major related aspects. The number of Directors and the composition
+of the Board follow all the applicable legal and regulatory requirements, and provisions of the Articles of
+Association. As provided in the Articles of Association, Directors shall be elected at the general meeting
+with a term of three years, and are eligible for re-election upon expiry of such term. However, Independent
+Non-executive Directors shall not hold office cumulatively for more than six years. The term of office of the
+12th Board is from March 2021 to the date of the 2023 Annual General Meeting.
+Directors with diversified background provide professional support for
+effective decision-making of the Board of Directors
+Age Group
+3 Directors
+50 and below
+Directorship
+with Ping An
+(Number of Years)
+Categories
+5 Directors
+Less than 2
+4 Directors
+51-55
+4 Directors
+2-5
+4 Directors
+56-60
+3 Directors
+61 and above
+3 Directors
+6-9
+Insurance, actuarial, technology, banking, investment, accounting, law, management, engineering and so on.
+and skills
+Expertise
+Male
+12 Directors
+Female
+The Board Meeting deliberated and approved proposals
+including the 2021 Third Quarter Report of the Company,
+the Unaudited Results for the Nine Months Ended
+September 30, 2021 and the Proposal on Reviewing the
+Asset Management Plan for 2022 of the Company.
+2 Directors
+5 Directors
+Executive Directors
+3 Directors
+Non-executive Directors
+Independent Non-executive Directors
+6 Directors
+10 and above
+2 Directors
+Gender Group
+The Board Meeting deliberated and approved the Proposal
+on Recommending Director Candidates.
+118
+Annual Report 2021
+Non-executive Directors
+Soopakij Chearavanont
+Yang Xiaoping
+Huang Wei (1)
+Wang Yongjian (Resigned)(1)
+Independent Non-Executive
+Directors
+June 17, 2013
+1/1
+August 20, 2021
+July 13, 2018
+1/1
+mm'm
+1/1
+7734
+7/7
+7/7
+3/3
+Ng Sing Yip
+August 6, 2017
+Ouyang Hui
+Directors
+Independent Non-executive
+3/3
+7/7
+4/4
+| | |
+4/4
+4/4
+Strategy and
+Investment
+Committee
+Related Party
+Transaction
+Control and
+Consumer
+Rights
+Protection
+Committee(3)
+4/4
+4/4
+Chu Yiyun
+1/1
+Cai Fangfang
+Ping An Insurance (Group) Company of China, Ltd.
+Performance of Duties by Directors
+Attendance Record of Directors
+During the Reporting Period, the Directors endeavored to attend the general meetings and the meetings
+of the Board and specialized committees under the Board in person, as well as to make prudent decisions
+based on their in-depth knowledge of the relevant circumstances. All the Directors have strictly fulfilled
+their duties and are committed to protecting the interests of the Company and its shareholders as a whole.
+The attendance records of each Director at the meetings are as follows:
+Members
+Meetings attended in person (4)/Meetings required to attend
+Nomination
+and
+Date of Appointment
+as Directors
+General
+Meetings
+Board
+Remuneration
+Committee(2)
+Audit and Risk
+Management
+Committee
+Executive Directors
+Ma Mingzhe (Chairman)
+March 21, 1988
+7/7
+1/1
+June 9, 2009
+Yao Jason Bo
+7/7
+1/1
+July 2, 2014
+April 3, 2020
+7/7
+1/1
+April 3, 2020
+Xie Yonglin
+7/7
+1/1
+Tan Sin Yin
+Ouyang Hui,
+Annual Report 2021
+Non-Executive Director
+Yang Xiaoping
+June 30, 2015
+1/1
+4/4
+2/2
+2/2
+1/1
+Notes: (1) Details of new appointments and departures of Directors of the Company during the Reporting Period are set out in the
+section headed "Directors, Supervisors, Senior Management and Employees" of the report.
+(2) The original Nomination Committee and the original Remuneration Committee were merged into the Nomination and
+Remuneration Committee on March 25, 2021. Before the merger, each of the original Nomination Committee and the original
+Remuneration Committee held a meeting in the Reporting Period, and all the then members attended in person.
+(3) The original Related Party Transaction Control Committee and the original Consumer Rights Protection Committee were
+merged into the Related Party Transaction Control and Consumer Rights Protection Committee on March 25, 2021. Before
+the merger, each of the original Related Party Transaction Control Committee and the original Consumer Rights Protection
+Committee held a meeting in the Reporting Period, and all the then members attended in person.
+(4) Some Directors failed to attend certain meetings in person due to business scheduling conflicts.
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 119
+120
+Corporate Governance Report
+Objections of Directors on Relevant Matters of the Company
+During the Reporting Period, none of the Directors objected to the resolutions at the Board meetings and
+other matters that were not submitted to the Company's Board meetings.
+Adoption of Directors' Suggestions on the Company
+During the Reporting Period, Directors put forward constructive advice and suggestions in respect of the
+shareholders and the Company as a whole, including but not limited to corporate governance, reform and
+development, business operations, risk management and internal controls and consumer rights protection.
+Particular attention was paid to the legitimate rights and interests of the minority shareholders in the
+Independent Non-executive Directors' decision-making process. All of their opinions and suggestions were
+adopted by the Company.
+During the Reporting Period, all the Directors of the Company actively participated in continuous
+professional training by attending external training or seminars and in-house training or reading materials
+on various topics, to develop and refresh their knowledge and skills, which ensure that they have
+comprehensive and required information to make contributions to the Board. All Directors have provided
+their records of training to the Company.
+The Company also continually provides information including updates on statutory and regulatory
+requirements and the business and market changes to all Directors to facilitate the performance of their
+responsibilities and obligations under the listing rules and relevant statutory requirements.
+Continuous Professional Development of the Directors
+All the 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 Company and their responsibilities and obligations under the listing rules and relevant regulatory
+requirements. The Service Manual for the Performance of Duties is updated regularly.
+Liu Hong
+Ge Ming (Retired)(1)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+26
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the Company's 2020 Annual Plan Implementation Evaluation Report.
+126
+The meeting deliberated and approved the Proposal on Reviewing the Company's
+2021 Annual Plan.
+April 30, 2021
+August 26, 2021
+The meeting deliberated and approved the Proposal on Concluding the
+Restructuring Investment Agreement Relating to the Founder Group.
+The meeting deliberated and approved proposals including the Proposal on
+Reviewing the A Share Repurchase.
+SUPERVISORY COMMITTEE AND SUPERVISORS
+THE EXECUTIVE 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 resource allocation plans. The Executive Committee is also responsible
+for making management decisions and promoting significant matters including strategic planning of
+the Company, compliance/risk management, capital allocation and fund operations, human resource
+synergy and brand management. In addition, the Executive Committee is responsible for reviewing the
+business plans of the subsidiaries of the Company and evaluating the subsidiaries' financial performance.
+The Company has also established several management committees under the Executive Committee,
+including the Strategy and Budget Management committee, the Investment Management Committee, the
+Risk Management Executive Committee, the Investor Relations Management Committee, the Technology
+Development Committee and other committees.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+The composition of the Supervisory Committee and the profile of each Supervisor are set out in the section
+headed "Directors, Supervisors, Senior Management and Employees" of this Report. The details of the duty
+performance of the Supervisory Committee are set out in the section headed "Report of the Supervisory
+Committee."
+According to Code Provision C.3.2 of the Corporate Governance Code, a former partner of the issuer's
+existing auditing firm should be prohibited from acting as a member of its audit committee for a period of
+two years from the date of the person ceasing to be a partner of the auditing firm.
+CORPORATE GOVERNANCE
+Corporate Governance Report
+OTHER MATTERS REGARDING CORPORATE GOVERNANCE IN THE REPORTING PERIOD
+Amendments Made to the Articles of Association
+A proposal was made and approved to amend the Articles of Association at the Company's 2020 Annual
+General Meeting. The amendments have been approved by the relevant regulatory authorities and became
+effective during the Reporting Period. The revised Articles of Association incorporating the amendments
+was published on the website of HKEX on June 17, 2021 and the website of SSE on June 18, 2021. The
+Company will further improve its Articles of Association on the basis of findings from the self-inspections
+of listed-company governance and relevant suggestions in accordance with applicable laws, regulations,
+and other rules.
+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.
+None of the Directors is aware of any information that would reasonably indicate that the Company did not
+meet the applicable Code Provisions set out in the Corporate Governance Code any time from January 1,
+2021 to December 31, 2021 save as disclosed below.
+125
+Auditors of the Company for 2021 are Ernst & Young Hua Ming LLP and Ernst & Young. Mr. Ng Kong Ping
+Albert was appointed as an Independent Non-executive Director and the Chairman of the Audit and
+Risk Management Committee of the Company on August 20, 2021. Mr. Ng retired from Ernst & Young and
+resigned all his posts including China Chairman of Ernst & Young on June 30, 2020. Therefore, the effective
+date of Mr. Ng's appointment was more than one year but less than two years after his retirement from
+Ernst & Young.
+Subtotal
+III. Total number of shares
+18,280,241,410
+100.00
+There was no issuance of securities during the Reporting Period.
+100.00
+Security Issuance and Listing
+Security Issuance of the Company
+4. Others
+18,280,241,410
+40.74
+Changes during the Reporting Period
+Transfer
+Bonus issue from reserve
+3. Overseas listed foreign shares
+2. Domestically listed foreign shares
+59.26
+10,832,664,498
+II. Selling-unrestricted circulating shares
+1. RMB ordinary shares
+Percentage (%)
+Number of shares
+Sub-total
+Others
+December 31, 2021
+Staff Shares
+7,447,576,912
+As at the end of the Reporting Period, the Company had no staff shares.
+Nature of shareholder(¹)
+Number of Shareholders and Their Shareholdings
+(%)
+Issue of
+new shares
+Name of shareholder
+Shareholding
+percentage
+Shareholdings of Top Ten Shareholders as at the End of the Reporting Period
+Changes in the Share Capital and
+Shareholders' Profile
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 133
+Annual Report 2021
+1,208,057 (including 1,203,791
+domestic shareholders)
+1,269,156 (including 1,264,882
+domestic shareholders)
+SHAREHOLDERS' INFORMATION
+February 28, 2022
+100.00
+18,280,241,410
+100.00
+18,280,241,410
+40.74
+7,447,576,912
+59.26
+10,832,664,498
+Total number of shareholders
+Unit: Shareholder
+Number of Shareholders
+December 31, 2021
+Number of shares Percentage (%)
+For details of the Company's internal controls, please refer to the Internal Control Assessment Report of
+Ping An for 2021 and the Internal Control Audit Report on Ping An for 2021 released on the same date as
+this Report on the website of SSE (www.sse.com.cn).
+Selling-restricted shares
+Regarding money laundering and terrorist financing risk management, the Company adhered to a
+"risk-based" approach and took various measures to improve work effectiveness. Firstly, the Company
+continuously optimized and upgraded anti-money laundering and anti-terrorist financing management
+frameworks in line with the orientation of the Group's reform to delegate powers, streamline administration,
+and optimize services. Under the Group's supervision and guidance, the Company promoted duty
+performance of its member companies, and explored the best anti-money laundering practices for
+insurance groups. Secondly, the Company closely followed the industry regulatory focus and proactively
+responded to national strategy. The Company hosted the first Guangdong-Hong Kong-Macao Greater Bay
+Area Anti-money Laundering Summit, bringing together anti-money laundering experts from governments,
+enterprises, academia, and research institutes across Guangdong, Hong Kong and Macao. At the Summit,
+experts centered their discussions on "One Country, Two Systems, and Win-win of Three Regions" and
+offered advice on how to exploit regulatory synergies and improve the effectiveness of anti-money
+laundering across the Greater Bay Area. Thirdly, the Company strengthened information security protection
+by keeping its money laundering risk management strategies, policies and procedures up to date with
+new regulations and exploring cross-scenario application of money laundering risk self-assessment.
+The Company improved the effectiveness of anti-money laundering work in its member companies by
+developing an independent testing and inspection system under the philosophy of enhancing management
+via inspections. Fourthly, the Company rode the wave of fintech to enhance the application of Al, machine
+learning, big data, blockchain and other innovative technologies to anti-money laundering. By applying
+technologies to financial crime risk monitoring and crackdowns, the Company established a closed loop
+that enables dynamic monitoring, warning, and management of risks. The Company conducted targeted
+reviews and inspections to crack down on various money-laundering crimes in coordination with competent
+authorities and fulfilled its corporate social responsibilities in maintaining financial security and stability.
+Regarding the management framework for internal audit and supervision, the Company established a
+highly independent, vertical audit and supervision framework. The Company established the Group's Audit
+and Risk Management Committee in accordance with applicable laws and regulations concerning the
+corporate governance structure and internal rules including the Articles of Association. The committee
+comprises two thirds or more of the Independent Non-executive Directors, and is responsible for
+reviewing and supervising financial reports and internal audit and control procedures of the Company. The
+Group's Person-in-charge of Auditing is responsible for assisting the Group's Audit and Risk Management
+Committee in establishing and improving the audit and supervision framework of the Company. The
+Group's Audit and Supervision Department is responsible for formulating audit and supervision policies
+as well as supervising the specific and effective implementation of such policies. The Group's Audit
+and Supervision Project Center and regional audit and supervision functions are responsible for the full
+implementation of audit and supervision projects. Audit and supervision departments at all levels are
+independent of business operation and management departments and are in the charge of the Person-
+in-charge of Auditing. Audit and supervision departments report to the Board of Directors through
+the Audit and Risk Management Committee, and are appraised and supervised by the Audit and Risk
+Management Committee. To ensure objectivity and fairness, audit and supervision are independent of
+business operations and management, and audit and supervision departments are not directly involved in
+or responsible for the design and implementation of risk management and internal control frameworks as
+well as auditees' business activities, and business decision-making and execution.
+Corporate Governance Report
+CORPORATE GOVERNANCE
+129
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Regarding internal control operations and assessment, the Company strictly complied with the applicable
+laws and regulations in 2021. In accordance with the CBIRC's Circular on "Year of Improving Internal
+Control and Compliance Management" for Banking and Insurance Sectors, the Company continuously
+optimized its governance structure, strengthened internal control management mechanisms, refined rules
+and procedures, strengthened the management of employees' behavioral standards, reviewed business
+processes, identified internal control weaknesses, and optimized internal control measures for business
+processes. First, the Company further optimized the rule management system, and implemented whole-
+process management requirements on rules. By strengthening rules, the Company laid a solid foundation
+for its internal controls, ensuring that all its internal control measures are in accordance with the applicable
+rules and regulations. The Company converted regulations into internal rules in a timely and dynamic
+manner, and regarded compliance review as a necessary procedure for formulating or amending the
+Company's important internal rules and contract templates. Moreover, the Company strengthened the
+internal control philosophy of rule-based management, procedure-based rules, and information-based
+procedures. Second, the Company has built up a system to manage employees' behavioral standards and
+formulated the Guidelines for Employees' Behavioral Standards. The Company took "regulated behavior,
+proper constraint, strong supervision, and effective evaluation" as its core philosophy, and “dare not,
+cannot, or reluctant to violate rules" as its management objective. The Company supervised its employees'
+implementation of internal control and compliance requirements by improving management framework,
+rules, specifications, mechanisms and standards, strengthening risk monitoring, building management
+platforms, and encouraging employees to take internal control requirements to heart and implement them
+in daily practice. Third, the Company has established and improved a group-wide internal controls and
+compliance framework in line with the Measures for the Supervision and Administration of Insurance Group
+Companies. Moreover, the Company optimized resource allocation, strengthened corporate governance
+capabilities, and performed the coordination and management functions to improve the overall operating
+efficiency and risk prevention. Fourth, the Company launched the "Year of Improving Internal Control and
+Compliance Management," and established a leadership group to oversee the fulfillment of responsibilities
+under the philosophy of “internal controls and compliance first.” The Company aimed for a more robust
+internal control framework, more effective internal controls, stronger compliance awareness, and deeper
+compliance culture. To this end, the Company proactively organized relevant departments to conduct self-
+examinations and self-corrections, and carry out general and specific rectifications of recurrent findings.
+Fifth, the Company organized training and publicity campaigns on internal controls and compliance,
+and upheld a top-down compliance culture requiring the management to lead by example. Moreover,
+the Company strengthened employees' legal education, business training, and work ethics management
+through training, electronic posters, emails, mobile office platforms, and video broadcasts in offices and
+elevators. The Company continued to optimize appraisal indicators for internal controls and compliance,
+emphasized the “bottom line of compliance” and “limitation to employee behaviors," and constantly
+enhanced employees' compliance awareness, sense of responsibility, and service awareness.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Regarding the management framework and rules 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 its business and risk management needs. The Board is
+responsible for the establishment, improvement and implementation of internal controls. The Audit and Risk
+Management Committee under the Board monitors and assesses the implementation of internal controls,
+and coordinates the audits of internal controls and other relevant work. The Supervisory Committee
+supervises the establishment and implementation of internal controls by the Board. The Risk Management
+Executive Committee under the Group's Executive Committee (the management) sets risk management
+targets, basic policies and work procedures, guides the establishment and perfection of risk management
+rules, and supervises the risk management systems of member companies or business lines. The Company
+has established robust internal control policies and procedures, and has set out clear internal control
+targets, responsibilities and procedures to provide guidelines for business activities and operations.
+The Company is committed to establishing internal controls in line with international standards and
+regulatory requirements, and improving internal controls in response to changes in risks and environments.
+With its local advantages, the Company implements corporate governance in line with international
+standards, upholds the compliance philosophy of "Regulations + 1," and constantly enhances its risk
+management to ensure that the Group and its member companies 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 the sustainable growth of the Group.
+130
+Establishment and Perfection of the Internal Control System
+Compliance with the Model Code
+Corporate Governance Report
+28
+128
+CORPORATE GOVERNANCE
+127
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+(ii) Mr. Ng has over 30 years of professional experience in the accounting industry in Hong Kong and the
+Chinese mainland, and is a member of Hong Kong Institute of Certified Public Accountants, Chartered
+Accountants Australia and New Zealand, CPA Australia, and Association of Chartered Certified
+Accountants.
+(i) Mr. Ng confirmed to the Company at the time of his appointment that he was not involved in the
+business and operations of the Company in the two years immediately prior to his appointment,
+took no part in any negotiations or interaction between the Company and E&Y in respect of the
+appointment of E&Y as auditors of the Company for the year 2021, and he did not and will not receive
+any benefits (whether monetary or non-monetary in nature) in relation to the appointment of E&Y.
+However, after considering the relevant principles under Code Provision C.3.2 of the Corporate Governance
+Code and reviewing the Company's management structure, and taking into account the following, the
+Company believes that the past position Mr. Ng Kong Ping Albert held in Ernst & Young has no influence
+on his independence, he has the necessary qualifications, expertise, and experience to serve as the
+Chairman of the Audit and Risk Management Committee, and he can exercise professional judgment fairly
+and independently and use his extensive knowledge to bring benefits to the Company and shareholders
+(especially independent shareholders) on the following basis:
+In August 2007, the Company adopted a code of conduct regarding securities transactions by Directors and
+Supervisors of the Company ("Code of Conduct"), which was amended in October 2018, on terms no less
+exacting than the required standards as set out in the Model Code. Specific enquiries have been made to all
+the Directors and Supervisors of the Company, who have confirmed that they complied with the required
+standards set out in the Model Code and the Code of Conduct from January 1, 2021 to December 31, 2021.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+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, 2021 (the “Reporting Period”).
+Statement of changes in share capital
+CHANGES IN SHARE CAPITAL
+Changes in the Share Capital and
+Shareholders' Profile
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+132
+March 17, 2022
+Shenzhen, PRC
+Chairman
+Ma Mingzhe
+By order of the Board
+As disclosed above, the Audit and Risk Management Committee held four meetings in the Reporting
+Period to review the Group's risk management and internal control systems. Through the Audit and Risk
+Management Committee, the Board has conducted an annual review of the effectiveness of the Group's
+risk management and internal control systems for the year ended December 31, 2021, covering all material
+financial, operational and compliance controls, and has considered the Group's risk management and
+internal control systems to be effective and adequate.
+The Company manages 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 efficient and
+consistent.
+The Board acknowledges its responsibility for overseeing the Group's risk management and internal
+control systems and reviews their effectiveness at least annually through the Audit and Risk Management
+Committee. The Audit and Risk Management Committee assists the Board in fulfilling its oversight and
+corporate governance functions in the Group's finance, operations, compliance and risk management and
+internal controls, as well as its role in monitoring and governing finance and internal audits.
+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 internal controls systems can only
+provide reasonable but not absolute assurance against material misstatement or loss, as they are designed
+to manage, rather than eliminate the risk of failure to achieve business objectives.
+Corporate Governance Report
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 131
+For details of the Company's risk management, please refer to the section headed "Risk Management” in
+this Report.
+The Company has always taken risk management as a core part of its operation and management as
+well as business activities. The Company takes steady steps to build a comprehensive risk management
+system that is aligned with the strategies and business characteristics of the Company. The Company
+keeps optimizing its risk management framework and standardizing its risk management procedures,
+while adopting both qualitative and quantitative risk management methodologies to identify, evaluate and
+mitigate risks and facilitate sustainable and healthy business development of the Company, provided that
+the risk is controllable.
+RISK MANAGEMENT
+Total number of
+shares held
+In 2021, the Company's internal control assessments covered the following: corporate governance,
+organizational structures, development strategies, human resources, corporate culture, social
+responsibilities, sales management, fund operations and management, actuarial management, investment
+and financing management, anti-money laundering management, related party transaction management,
+legal and compliance management, risk management, operations management, financial management,
+asset management, document and seal management, inquiries, complaints and customer surveys,
+information system management, information and communication, internal supervision, and consumer
+rights protection. The Company paid close attention to the following high-risk areas: corporate governance,
+sales management, fund operations and management, actuarial management, investment and financing
+management, anti-money laundering, related party transaction management, risk management, operations
+management, financial management, and information system management. 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 in 2021. The Internal Control Assessment
+Report on Ping An for 2021 has been approved by the Board of Directors. The Company has engaged Ernst
+& Young Hua Ming LLP to audit the effectiveness of internal controls over financial reporting, issue the
+Internal Control Audit Report, and pay attention to the effectiveness of internal controls over non-financial
+reporting matters.
+January 1, 2021
+Hong Kong Securities Clearing Company
+Nominees Limited (2)
+2.99
+37.01
+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 controlling party of
+shareholders holding more than 5% of equity interest of the Company:
+As of December 31, 2021, CP Group Ltd. indirectly held 1,243,259,627 H shares of the Company in total,
+representing 6.80% of the total share capital of the Company; Shenzhen Investment Holdings Co., Ltd. held
+962,719,102 A Shares of the Company, representing 5.27% of the total share capital of the Company.
+Information on Shareholders Holding More Than 5% of Equity Interest of the Company
+The shareholding structure of the Company is relatively scattered. There is neither controlling shareholder
+nor de facto controlling party.
+Particulars of Controlling Shareholder and De Facto Controlling Party
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+134
+100%
+The Company is not aware of any voting delegation, delegated voting right or waiver of voting right
+regarding the above-mentioned shareholders.
+Save as disclosed above, the Company is not aware of any connected relationship or acting-in-concert
+relationship among the above-mentioned shareholders.
+Business Fortune Holdings Limited and Plenty Ace Investments (SPV) Limited are indirect wholly-owned
+subsidiaries of CP Group Ltd., and they are presumed to be acting in concert with each other since they
+are under the common control of CP Group Ltd. CP Group Ltd. indirectly held 1,243,259,627 H shares of the
+Company, representing approximately 6.80% of the total share capital of the Company as of December 31,
+2021, through the above two companies and other subsidiaries.
+Explanation of the connected relationship or acting-in-concert relationship among the above shareholders:
+(4) The shares held by Hong Kong Securities Clearing Company Limited refer to the shares held by non-registered shareholders of
+the Northbound Trading of the Shanghai-Hong Kong Stock Connect Program.
+(3) Business Fortune Holdings Limited and Plenty Ace Investments (SPV) Limited are indirect wholly-owned subsidiaries of CP
+Group Ltd., and the shares owned by these two companies have been registered under the name of HKSCC Nominees Limited.
+In order to avoid double counting, the shares owned by the above two companies have been deducted from the shares held
+by HKSCC Nominees Limited.
+(2) Hong Kong Securities Clearing Company Nominees Limited ("HKSCC Nominees Limited") is the nominee holder of the shares
+held by non-registered H shareholders of the Company.
+Notes: (1) Nature of the holders of A shares represents the nature of accounts held by the holders of A shares registered on the
+Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
+Management Plan
+- Huaxia Zhongzheng Financial Asset
+A share
+199,511,462
+Voting delegation, delegated voting right or waiver of voting right regarding the top ten shareholders:
+Business Fortune
+Holdings Limited
+Plenty Ace
+Investments
+Others
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Huang Baoxin
+Annual Report 2021
+Ms. Cai Fangfang Mr. Yao Jason Bo Mr. Xie Yonglin Mr. Ma Mingzhe
+From left to right:
+Directors, Supervisors, Senior
+Management and Employees
+36
+136
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 135
+Annual Report 2021
+Established in 2004, Shenzhen Investment Holdings Co., Ltd. is a solely state-owned limited liability
+company, and its legal representative is He Jianfeng. Shenzhen Investment Holdings Co., Ltd. mainly
+engages in TechFin, science parks, and the technology industry. Based on Shenzhen's urban development
+strategy, Shenzhen Investment Holdings focuses on technological innovation and industrial cultivation,
+and strives to create three major industrial clusters of "TechFin, science parks, and the technology
+industry." The company develops a full life cycle industry ecosystem in which TechFin is "sunshine, rain
+and dew," science parks are "soil," and the technology industry is "seeds, seedlings and trees." By doing
+so, the company helps Shenzhen improve the whole-process innovative ecochain of “basic research +
+technological breakthroughs + achievement industrialization + TechFin + talent support," and develop into
+a modern, international and innovative city at an accelerated pace.
+Charoen Pokphand Group Co., Ltd., the flagship company of CP Group, was established on September 23, 1976
+in Thailand with Mr. Dhanin Chearavanont as its Senior Chairman. CP Group operates across many industries
+ranging from industrial to service sectors, which are categorized into 8 business lines covering 14 business
+groups including agro-industrial and food, retail and distribution, media and telecommunications, e-commerce
+and digital technology, property development, automotive and industrial products, pharmaceuticals and finance
+and investment.
+53.99%
+Ping An Insurance (Group) Company of China, Ltd.
+5.27%
+33.94%
+3.17%
+1.20%
+2.43%
+Other A
+shareholders
+Holdings Co., Ltd.
+(SPV) Limited
+Shenzhen Investment
+Other H
+shareholders
+1.09
+Overseas legal person
+Others
+-
+State-owned legal person
+Central Huijin Asset Management Ltd.
+A share
+-78
+547,459,258
+Others
+China Securities Finance Corporation Limited
+A share
+-131,486,618
+666,993,666
+3.65
+Others
+Hong Kong Securities Clearing Company
+Limited (4)
+341,740,000
+pledged shares
+Unknown
+Number of
+pledged, marked
+or frozen shares
+A share
+962,719,102
+5.27
+State-owned legal person
+Shenzhen Investment Holdings Co., Ltd.
+Number of
+selling-restricted
+shares held
+Type of shares
+H share
+Changes
+during the
+Reporting Period
++273,475,218
+6,764,835,056 (3)
+Huaxia Fund Agricultural Bank of China
+470,302,252
+2.57
+A share
+Management Plan
+Dacheng Zhongzheng Financial Asset
+A share
+201,948,582
+1.10
+Others
+Dacheng Fund Agricultural Bank of China
+H share
++72,421,439
+219,127,694
+1.20
+-13,499,348
+Overseas legal person
+A share
+257,728,008
+1.41
+State-owned legal person
+Shum Yip Group Limited
+269,768,865
+pledged shares
+H share
+-96,090,762
+443,639,264
+2.43
+Overseas legal person
+Business Fortune Holdings Limited
+Plenty Ace Investments (SPV) Limited
+Ms. Tan Sin Yin
+Past offices
+Mr. Sheng served as the Assistant to the General Manager, Deputy General
+Manager, and General Manager of the Company's Branding Department
+from August 2002 to January 2014.
+Mr. Sheng serves as the Brand Director and spokesperson of the Company.
+Bachelor of Arts degree from Nanjing University
+Mr. Ng served as the Chairman of Ernst & Young China, Managing
+Partner of Ernst & Young in Greater China and a member of The EY
+Global Executive. He has over 30 years of professional experience in the
+accounting industry in Hong Kong and the Chinese mainland. Before
+joining Ernst & Young, Mr. Ng was the partner-in-charge of Arthur
+Andersen LLP in Greater China, the partner-in-charge of China business
+of PricewaterhouseCoopers and the Managing Director of Citigroup China
+Investment Banking. Mr. Ng served as a member of the First and Second
+Accounting Standards Advisory Committee of the Ministry of Finance of
+the PRC.
+Educational background and qualifications
+Bachelor's degree and Master's degree in Business Administration from The
+Chinese University of Hong Kong.
+Member of HKICPA, CA ANZ, CPAA and ACCA
+Mr. Jin Li
+Independent Non-executive Director
+Aged 51
+Director since August 2021
+Other major offices
+Mr. Jin is currently a Chair Professor of Finance at Guanghua School of
+Management, Peking University, a member of the Committee for Economic
+Affairs of the 13th CPPCC National Committee, a member of the Central
+Committee of Jiusan Society, a member of the Board of Directors and the
+Academic Committee of the Global Corporate Governance Forum, and
+the vice chairman of China Management Science Society. Mr. Jin is also
+an independent non-executive director of S.F. Holding Co., Ltd., Da Cheng
+Fund Management Co., Ltd. and CITIC aiBank Corporation Limited.
+Past offices
+Mr. Jin was an Associate Dean of Guanghua School of Management,
+Peking University, a tenured professor and a doctoral supervisor in the
+Department of Finance at Oxford University's Saïd Business School, and
+an associate professor of the Department of Finance at Harvard Business
+School. He was also an independent non-executive director of Yingda
+International Trust Company Limited and Beijing Financial Holdings Group.
+Educational background and qualifications
+Ph.D. in Finance, Massachusetts Institute of Technology, USA
+Past offices
+Annual Report 2021
+143
+CORPORATE GOVERNANCE
+144
+Directors, Supervisors, Senior
+Management and Employees
+Supervisors
+Mr. Sun Jianyi
+Chairman of Supervisory
+Committee (Employee
+Representative Supervisor)
+Aged 69
+Joined the Company in 1990
+Supervisor since August 2020
+Other major offices
+Mr. Sun is a Non-executive Director of China Insurance Security Fund Co.,
+Ltd.
+Past offices
+Since joining the Company in July 1990, Mr. Sun has been the General
+Manager of the Management Department, Vice President, Executive Vice
+President, Vice Chief Executive Officer and Vice Chairman of the Company,
+and the Chairman of the board of directors of Ping An Bank.
+Prior to joining the Company, Mr. Sun was the Head of the Wuhan Branch
+of the People's Bank of China, the Deputy General Manager of the Wuhan
+Branch of the People's Insurance Company of China and the General
+Manager of Wuhan Securities Company.
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Sun was also a Non-executive Director of China Vanke Co., Ltd. and an
+Independent Non-Executive Director of Haichang Ocean Park Holdings Ltd.
+Mr. Ng is currently the President of the Hong Kong China Chamber of
+Commerce, an Honorary Advisor of the Hong Kong Business Accountants
+Association and a member of the Advisory Board of the School of
+Accountancy of The Chinese University of Hong Kong. Mr. Ng is a member
+of the Audit Committee of The Chinese University of Hong Kong, Shenzhen
+and a Council Member of the Education Foundation of The Chinese
+University of Hong Kong, Shenzhen. Mr. Ng is also an Independent Non-
+executive Director of Beijing Airdoc Technology Co., Ltd.
+Director since August 2021
+Ping An Insurance (Group) Company of China, Ltd.
+141
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+Mr. Chu Yiyun
+Independent Non-executive Director
+Aged 57
+Director since July 2019
+Other major offices
+Mr. Chu's former name was Chu Yiyun (). He is a professor and
+doctoral supervisor of the School of Accountancy of Shanghai University
+of Finance and Economics, a full-time researcher of the Accounting
+and Finance Research Institute of Shanghai University of Finance and
+Economics, a Key Research Institute of Humanities and Social Sciences
+of the Ministry of Education, the Executive Secretary-General of the
+Accounting Education Branch of the Accounting Society of China, a
+Director of the Eighth Council of the Accounting Society of China and a
+member of the "Accounting Master Project of the Ministry of Finance."
+Mr. Chu is an Independent Non-executive Director of Universal Scientific
+Industrial (Shanghai) Co., Ltd., Bank of Jiaxing Co., Ltd. and Bank of Hebei
+Co., Ltd.
+Past offices
+Mr. Chu served as an Independent Supervisor of Ping An Bank, and an
+Independent Non-executive Director of Ping An Bank, Shanghai Jinfeng
+Wine Co., Ltd., China Jushi Co., Ltd., Shanghai Tongji Science & Technology
+Industrial Co., Ltd. and Tellhow Sci-Tech Co., Ltd. Mr. Chu served as a
+member of the First Accounting Standards Advisory Committee of the
+Ministry of Finance.
+Educational background and qualifications
+Ph.D. in Management (Accounting) from Shanghai University of Finance
+and Economics
+Other major offices
+Mr. Liu Hong
+Director since July 2019
+Other major offices
+Mr. Liu is currently a professor and doctoral supervisor of Peking
+University as well as the Vice President of Chinese Association for
+Artificial Intelligence. Mr. Liu is a member of the leading expert group of
+"Intelligent Robots" in the National “13th Five-Year Plan" Key Research and
+Development Plan and one of the first group of experts under the "National
+High-level Talent Special Support Plan."
+Past offices
+Mr. Liu served as an Independent Non-executive Director of Shenzhen
+JingQuanHua Electronics Co., Ltd.
+Educational background and qualifications
+Ph.D. in Mechanical Electronics and Automation from Harbin Institute of
+Technology
+Completed postdoctoral research in Peking University
+142
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Ng Kong Ping Albert
+Independent Non-executive Director
+Aged 64
+Independent Non-executive Director
+Aged 54
+Educational background and qualifications
+Diploma in Finance from Zhongnan University of Economics and Law
+(previously Zhongnan University of Economics)
+Mr. Gu Liji
+Mr. Wang is the Administrative Director and the Director of General Office
+of the Group as well as the Chairman of Ping An Financial Leasing.
+Past offices
+Mr. Wang served as the Deputy General Manager of the Group's Head
+Office in Shanghai and the Deputy Director of the Group's General Office,
+and served in the Administration Department of Tianjin Branch of Ping An
+Life.
+Educational background and qualifications
+Bachelor's degree in Economic Information Management from Tianjin
+University of Finance and Economics (previously known as Tianjin Institute
+of Finance and Economics)
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 145
+CORPORATE GOVERNANCE
+Directors, Supervisors, Senior
+Management and Employees
+Senior Management
+For the work experience and concurrent positions of Mr. Ma Mingzhe, Mr. Xie Yonglin, Ms. Tan Sin Yin, Mr.
+Yao Jason Bo and Ms. Cai Fangfang, please refer to "Directors" in this section.
+Mr. Huang Baoxin
+Senior Vice President
+Aged 57
+Educational background and qualifications
+Joined the Company in 2015
+Term of office: April
+2020-present
+Mr. Huang is the General Manager of the Beijing Head Office of the Group.
+Past offices
+Prior to joining the Company, Mr. Huang served as the Deputy Division
+Director of the Industrial Transportation Department of the Ministry of
+Finance of the PRC, the Deputy Director General of the Second Secretary
+Bureau of the General Office of the State Council of the PRC, the Deputy
+Director General and then Director General of the Supervisory Bureau of
+the General Office of the State Council of the PRC, and the deputy head of
+the discipline inspection team of the Publicity Department of the Central
+Committee of the CPC accredited by the Central Commission for Discipline
+Inspection of the CPC.
+Educational background and qualifications
+Bachelor's degree in Finance from Zhongnan University of Economics and
+Law (previously known as Zhongnan University of Economics)
+Master's degree in Political Economics from Renmin University of China
+Doctorate degree in Public Finance from the Chinese Academy of Fiscal
+Sciences (previously known as Research Institute for Fiscal Science,
+Ministry of Finance of the PRC)
+Mr. Sheng Ruisheng
+Secretary of the Board of
+Directors, Joint Company
+Secretary
+Aged 52
+Joined the Company in 1997
+Term of office: April
+2017-present
+Other positions held within the Group
+Other positions held within the Group
+Joined the Company in 2002
+Supervisor since August 2017
+Aged 42
+Mr. Wang Zhiliang
+Employee Representative
+Supervisor
+Independent Supervisor
+Aged 73
+Supervisor since June 2009
+Other major offices
+Mr. Gu is a member of Shenzhen FinTech Ethics Committee and an expert
+on applied electronics of Shenzhen Expert Association.
+Past offices
+Mr. Gu was a Distinguished Professor of the Graduate School at Shenzhen,
+Tsinghua University, a Non-executive Director of Xiangtan Electric
+Manufacturing Group Co., Ltd., an Independent Non-executive Director of
+Bosera Asset Management Co., Ltd., Shenzhen Changhong Technology Co.,
+Ltd. and Maxphotonics Co., Ltd., a Director of ERGO China Life Insurance
+Co., Ltd., and an Executive Director of China Merchants Technology
+Holdings Co., Ltd. and China Merchants Technology Investment Co., Ltd.
+(Shenzhen). Before retirement in October 2008, Mr. Gu served as the
+Managing Director of China International Marine Containers Co., Ltd., the
+Chairman and President of China Merchants Shekou Port Service Co.,
+Ltd., the Vice Chairman of the Company, a Director of China Merchants
+Bank and China Merchants Group Ltd., the Managing Director of China
+Merchants Shekou Industrial Zone Co., Ltd., Hoi Tung Marine Machinery
+Suppliers Limited (Hong Kong) and China Merchants Technology Group,
+and the Chairman of China Merchants Technology Holdings Co., Ltd.
+Educational background and qualifications
+Bachelor of Engineering degree from Tsinghua University
+Master's degree in Engineering from the Management Science Department
+of University of Science and Technology of China
+Advanced Management Program AMP (151) certificate from Harvard
+Business School
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Huang Baokui
+Independent Supervisor
+Aged 79
+Supervisor since June 2016
+Past offices
+Mr. Huang was the Deputy Party Committee Secretary and Disciplinary
+Committee Secretary of China Merchants Shekou Industrial Zone Co., Ltd.
+Mr. Huang was the Deputy General Manager of Shenzhen Huada Electronic
+Co., Ltd. and held the position of Supervisor in various companies including
+China Merchants Shekou Industrial Zone Co., Ltd., Shenzhen Shekou Anda
+Industry Co., Ltd., Shenzhen Shekou Telecom Co., Ltd., China Merchants
+Petrochemical Co., Ltd. (Shenzhen) and China Merchants Logistics Co., Ltd.
+Educational background and qualifications
+Bachelor's degree in Physics from Jilin University
+Senior political practitioner
+Ms. Zhang Wangjin
+Shareholder Representative
+Supervisor
+Aged 42
+Supervisor since June 2013
+Other major offices
+Ms. Zhang is the Managing Director of CPG Overseas Company Limited
+(Hong Kong).
+Past offices
+Before joining CPG Overseas Company Limited (Hong Kong), Ms. Zhang
+worked in the Audit Department of PricewaterhouseCoopers LLP and
+the M&A and Restructuring Department of Deloitte & Touche Financial
+Advisory Services Limited.
+Educational background and qualifications
+Bachelor's degree in Economics from University of International Business
+and Economics
+EMBA degree from Guanghua School of Management of Peking University
+Member of CPA Australia
+Annual Report 2021
+Solicitor to the supreme courts of England, Hong Kong and Victoria,
+Australia
+Other Positions held within the Group
+Bachelor's degree and Master's degree in Laws (L.L.B. and L.L.M.) from the
+University of London
+Directors, Supervisors, Senior
+Management and Employees
+Ms. Tan Sin Yin
+Executive Director, Co-CEO,
+and Executive Vice President
+Aged 44
+Joined the Company in 2013
+Director since April 2020
+Other positions held within the Group
+Ms. Tan is a Director of a number of controlled subsidiaries of the
+Company including Ping An Bank, Ping An Property & Casualty, Ping An
+Life, and Ping An Asset Management.
+Other major offices
+Ms. Tan is a Non-executive Director of OneConnect, Ping An Health and
+HealthKonnect Medical and Health Technology Management Company
+Limited.
+Past offices
+Ms. Tan served as the Chief Information Officer of the Company from
+January 2013 to November 2019, the Chief Operating Officer of the
+Company from December 2013 to February 2021, a Vice President of
+the Company from June 2015 to December 2015, and the Deputy Chief
+Executive Officer of the Company from October 2017 to November 2018.
+Prior to joining the Company, Ms. Tan was a Global Partner of McKinsey &
+Company.
+Educational background and qualifications
+38
+Bachelor's degrees in Electrical Engineering and Economics from the
+Master's degree in Electrical Engineering and Computer Science from MIT
+Mr. Yao Jason Bo
+Executive Director, Co-CEO,
+Executive Vice President, Chief
+Financial Officer
+Aged 51
+Joined the Company in 2001
+Director since June 2009
+Other positions held within the Group
+Mr. Yao is a Director of a number of controlled subsidiaries of the
+Company including Ping An Bank, Ping An Life, Ping An Property &
+Casualty and Ping An Asset Management.
+Past offices
+Mr. Yao served as a Vice President of the Company from June 2009 to
+January 2016, and the Chief Actuary of the Company from October 2012 to
+March 2021. Prior to that, Mr. Yao successively held positions of the Deputy
+General Manager of the Product Center, the Deputy Chief Actuary, the
+General Manager of the Planning Department, the Deputy Financial Officer
+and Financial Director of the Company.
+Prior to joining the Company, Mr. Yao served at Deloitte Touche Tohmatsu
+as a consulting actuary and a senior manager.
+Educational background and qualifications
+MBA degree from New York University
+Fellow of the Society of Actuaries (FSA)
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Massachusetts Institute of Technology (MIT)
+Ms. Cai Fangfang
+138
+137
+MBA degree from the Chinese University of Hong Kong
+146
+Bachelor's degree in Laws (L.L.B.) from Peking University
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Directors
+MAJOR WORK EXPERIENCE AND CONCURRENT POSITIONS OF DIRECTORS, SUPERVISORS, SENIOR
+MANAGEMENT AND KEY PERSONNEL
+Work experience
+Mr. Ma Mingzhe
+Founder of the Company
+Chairman (Executive Director)
+Aged 66
+Director since March 1988
+Since the establishment of the Company, Mr. Ma had been fully involved in
+the operations and management of the Company until June 2020 when he
+ceased to act as the CEO. He now plays a core leadership role, in charge
+of decision-making on the Company's strategies, human resources, culture
+and major issues. Mr. Ma successively served as the President, a Director,
+and the Chairman and CEO of the Company.
+CORPORATE GOVERNANCE
+Prior to founding the Company, Mr. Ma was the Deputy Manager of China
+Merchants Shekou Industrial Zone Social Insurance Company.
+Mr. Xie Yonglin
+Executive Director, President and
+Co-CEO
+Aged 53
+Joined the Company in 1994
+Director since April 2020
+Other positions held within the Group
+Mr. Xie is the Chairman of Ping An Bank and a Director of Ping An
+Financial Leasing.
+Past offices
+Mr. Xie was the Deputy Director of the Company's Strategic Development
+& Reform Center from June 2005 to March 2006. He held positions of the
+Operations Director, the Human Resources Director, and a Vice President
+of Ping An Bank from March 2006 to November 2013, and served as the
+Special Assistant to the Chairman, the President and the CEO, and the
+Chairman of Ping An Securities from November 2013 to November 2016
+consecutively. He was a Vice President of the Company from September
+2016 to December 2019. Previously, Mr. Xie served as the Deputy General
+Manager of Ping An Property & Casualty's sub-branches, the Deputy
+General Manager and then the General Manager of Ping An Life's branches,
+and the General Manager of Ping An Life's Marketing Department.
+Educational background and qualifications
+Master's degree in Science from Nanjing University
+Ph.D. in Corporate Management from Nanjing University
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Ph.D. in Money and Banking from Zhongnan University of Economics and
+Law (previously known as Zhongnan University of Economics)
+Executive Director,
+Educational background and qualifications
+Resources Officer
+Aged 48
+Mr. Huang Wei
+Non-executive Director
+Aged 51
+Director since August 2021
+Other major offices
+Mr. Huang is the Party Committee Secretary and Chairman of Shenzhen
+Agricultural Products Group Co., Ltd, a director and the president of
+Shum Yip Group Limited, and an executive director and the president of
+Shenzhen Investment Limited.
+Past offices
+Mr. Huang served as a director, the Deputy Party Committee Secretary and
+the General Manager of Shum Yip Holdings Company Limited, the Deputy
+Secretary of the CPC Working Committee, the Deputy Director of the
+Management Committee and a Director of the Social Working Committee
+of Shenzhen Dapeng New District, as well as a member of the Standing
+Committee, Director of the Office of the District Party Committee (district
+government), a member of the Party Leadership Group and Secretary of
+the Youth League Committee of Longgang District.
+Educational background and qualifications
+MBA degree from Guanghua School of Management of Peking University
+140
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Mr. Ouyang Hui
+Independent Non-executive Director
+Aged 59
+Certificate for completing a doctoral program in Tsinghua University
+Director since August 2017
+Mr. Ouyang is an Associate Dean and the Dean's Distinguished Chair
+Professor in Finance at Cheung Kong Graduate School of Business. Mr.
+Ouyang is also an Independent Non-executive Director of Aegon-Industrial
+Fund Management Co., Ltd., Peak Reinsurance Limited and Duiba Group
+Limited.
+Past offices
+Mr. Ouyang served as an Associate Professor of Finance at Duke
+University, Managing Director of UBS AG, Managing Director of
+Nomura Securities, Senior Vice President and Managing Director of
+Lehman Brothers and Independent Non-executive Director of Hytera
+Communications Corporation Limited.
+Educational background and qualifications
+Mr. Ng Sing Yip
+Independent Non-executive Director
+Aged 71
+Director since July 2019
+Other major offices
+Mr. Ng currently serves as the Vice Chairman of the Legal Committee
+of the Hong Kong General Chamber of Commerce, a member of the
+Professional Advisory Board of Asian Institute of International Financial
+Law of University of Hong Kong, the Chairman of the Board of Supervisors
+of HSBC Bank Vietnam Limited, an Independent Non-executive Director of
+HSBC Bank Australia Limited, and a Non-executive Director of Hang Seng
+Bank Limited.
+Educational background and qualifications
+Vice President, Chief Human
+Mr. Ng served as a Crown Counsel in the Attorney General's Chambers in
+Hong Kong before going into private practice. Mr. Ng joined HSBC in June
+1987 as an Assistant Group Legal Consultant, and was later appointed as
+a Deputy Head of the Legal and Compliance Department, and the Head
+of Legal and Compliance in Asia Pacific, and served as a Non-executive
+Director of HSBC Bank (China) Limited.
+Past offices
+Other major offices
+Experience of studying in Japan
+Ph.D. in Finance from the University of California, Berkeley
+Ph.D. in Chemical Physics from Tulane University
+Educational background and qualifications
+Ms. Cai is a Director of a number of controlled subsidiaries of the Company
+including Ping An Bank, Ping An Life, Ping An Property & Casualty and
+Ping An Asset Management.
+Other positions held within the Group
+Past offices
+Bachelor's degree from Nanchang University (previously known as Jiangxi
+Polytechnic College)
+Joined the Company in 2007
+Director since July 2014
+Ms. Cai successively held the positions of the Vice General Manager and
+the General Manager of the Remuneration Planning and Management
+Department of the Human Resources Center of the Company from
+October 2009 to February 2012, served as the Vice Chief Financial Officer
+and General Manager of the Planning Department of the Company from
+February 2012 to September 2013, and served as the Vice Chief Human
+Resources Officer of the Company from September 2013 to March 2015.
+Prior to joining the Company, Ms. Cai served as the consulting director of
+Watson Wyatt Consultancy (Shanghai) Ltd. and the audit director on the
+financial industry of British Standards Institution Management Systems
+Certification Co., Ltd.
+Master's degree in Accounting from The University of New South Wales
+Mr. Soopakij Chearavanont
+Non-executive Director
+Aged 58
+Director since June 2013
+Other major offices
+Mr. Chearavanont is the chairman of CP Group, an Executive Director and
+the chairman of C.P. Lotus Corporation, a Non-executive Director and
+the chairman of Chia Tai Enterprises International Limited, an Executive
+Director and the chairman of C.P. Pokphand Co., Ltd. and the chairman
+of CT Bright Holdings Limited. Mr. Chearavanont is also the chairman of
+CP ALL Public Company Limited and Charoen Pokphand Foods Public
+Company Limited (both listed in Thailand).
+Past offices
+Educational background and qualifications
+Mr. Yang Xiaoping
+Director since June 2013
+Past offices
+Mr. Chearavanont served as a Director of True Corporation Public
+Company Limited (listed in Thailand).
+Non-executive Director
+Aged 58
+Other major offices
+Mr. Yang was a member of the Twelfth National Committee of the Chinese
+People's Political Consultative Conference, and served as the Manager for
+China Division and the Chief Representative of Beijing Office of Nichiyo
+Co., Ltd. Mr. Yang was a Non-executive Director of Tianjin Binhai Teda
+Logistics (Group) Corporation Limited.
+9
+Mr. Yang is the Senior Vice Chairman of CP Group, the Vice Chairman
+and CEO of CPG Overseas, an Executive Director and the Vice Chairman
+of C.P. Lotus Corporation, the CEO of CT Bright Holdings Limited, the
+Vice Chairman of the board of directors of China Minsheng Investment
+Group, and a Non-executive Director of CITIC Limited, Honma Golf Limited
+and Chery Holding Co., Ltd. Mr. Yang is an Associate Dean of the China
+Institute for Rural Studies of Tsinghua University, an Associate Dean of the
+Institute of Global Development of Tsinghua University, the President of
+Beijing Association of Enterprises with Foreign Investment and an Adviser
+on Foreign Investment to the Beijing Municipal Government.
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 139
+Annual Report 2021
+Bachelor's degree in Science from the College of Business and Public
+Administration of New York University
+Educational background and qualifications
+Directors, Supervisors, Senior
+Management and Employees
+Yes
+95.9
+524.1
+Yang Xiaoping
+Yes
+91.1
+508.9
+Soopakij Chearavanont
+7,131.5
+Hu Jianfeng
+790.0
+1,538.9
+No
+889.3
+1,814.7
+Wang Zhiliang
+No
+Wang Yongjian
+5,432.9
+No
+317.8
+100.7
+Yes
+122.4
+Zhang Xiaolu
+487.6
+Liu Hong
+Yes
+129.6
+510.4
+Chu Yiyun
+Yes
+91.1
+79.3
+508.9
+539.3
+Yes
+85.3
+336.9
+Yes
+50.8
+188.6
+Ng Sing Yip
+Ge Ming
+Ouyang Hui
+Huang Wei
+Yes
+No
+4,079.5
+4,627.4
+No
+3,361.0
+4,618.4
+Xie Yonglin
+Sun Jianyi
+Ma Mingzhe
+Name
+Whether received any
+remuneration from
+related parties of
+the Company during
+the Reporting Period
+remunerations
+received from
+the Company during
+the Reporting Period
+(in RMB thousand)
+Individual income
+tax payable on total
+Total after-tax
+remunerations
+received from
+the Company during
+the Reporting Period
+(in RMB thousand)
+REMUNERATIONS OF DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND KEY PERSONNEL
+Directors, Supervisors, Senior
+Management and Employees
+CORPORATE GOVERNANCE
+Ping An Insurance (Group) Company of China, Ltd. 151
+Annual Report 2021
+The Executive Directors' and senior management's remunerations are determined according to the
+Company's remuneration policy and their administrative positions within the Company. The Non-executive
+Directors' emoluments are determined as per the standards approved at the Company's General Meetings.
+The Company's appraisal schemes for senior management are determined by the Company in line with
+business plans, risk management and compliance requirements, and social responsibility requirements.
+Appraisal results are linked to senior management's performance-based remunerations and so on.
+Moreover, the Company has established a performance-based remuneration clawback mechanism for senior
+management and key personnel to give full play to the guiding role of performance-based remunerations
+in the Company's operations and management, ensure that remuneration incentives match risk-adjusted
+performance, prevent aggressive business behaviors and violations of laws and regulations, and promote
+prudent operations and sustainable development.
+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, motivate performances, respond to the market, and keep costs
+reasonable. The remuneration package for the Company's employees includes base salaries, performance-
+based salaries, benefits, and allowances. Base salaries are determined according to the post value, market
+levels, and so on. Performance-based salaries are linked to the Company's overall business results,
+personal performance, and so on. Benefits and allowances are determined in accordance with government
+regulations and industry standards. The specific structure and strategic arrangement of a remuneration
+package is adjusted and optimized according to market situations and the Company's business
+development needs.
+THE ASSESSMENT & EVALUATION AND REMUNERATION SYSTEMS OF THE COMPANY
+Save as disclosed above, as of December 31, 2021, 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's associated corporations (as defined in the SFO), which shall have been notified to the
+Company and the HKEX pursuant to Divisions 7 and 8 of Part XV of the SFO, or are recorded in the register
+required to be kept under Section 352 of the SFO, or are otherwise required to be notified by the Directors,
+Supervisors and chief executives to the Company and the HKEX pursuant to the Model Code.
+Yes
+2,929.8
+No
+5,132.8
+3,626.3
+Chan Tak Yin
+No
+1,874.9
+3,002.5
+Sheng Ruisheng
+No
+2,900.1
+4,212.3
+Huang Baoxin
+No
+3,389.3
+3,126.6
+Cai Fangfang
+No
+6,334.2
+7,965.9
+Yao Jason Bo
+No
+7,328.7
+9,675.0
+Tan Sin Yin
+No
+4,529.2
+Ng Kong Ping Albert
+Implementation of Profit Distribution Plans
+40.2
+The above plan will be implemented upon deliberation and approval at the 2021 Annual General Meeting.
+The profit distribution plan is in line with the Articles of Association and the relevant deliberation
+procedures. The Company's annual cash dividend for 2021 is slightly above the Company's established
+plan for shareholder returns. However, the Company maintains the continuity and stability of its profit
+distribution policy, and fully protects the legitimate interests of all its shareholders including minority
+shareholders. All the Independent Non-executive Directors of the Company have expressed independent
+opinions of their agreement on the profit distribution plan.
+Report of the Board of Directors
+and Significant Events
+CORPORATE GOVERNANCE
+155
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+The Company distributed the 2021 interim dividend of RMB0.88 per share (tax inclusive) in cash, which
+amounted to RMB15,974,953,573.04 (tax inclusive). The Board of Directors proposed to distribute the 2021
+final dividend of RMB1.50 per share (tax inclusive) in cash to the shareholders of the Company. Pursuant
+to the Shanghai Stock Exchange's Guidelines for Self-regulation of Listed Companies No.7-Repurchase of
+Shares and other applicable regulations, the Company's A shares in the Company's repurchased securities
+account after trading hours on the record date of A shareholders for the final dividend will not be entitled
+to the final dividend distribution. The actual total amount of final dividend payment is subject to the total
+number of shares that will be entitled to the dividend distribution on the record date of A shareholders.
+The total amount of the final dividend payment for 2021 is RMB27,198,704,275.50 (tax inclusive) based on the
+total share capital of 18,280,241,410 shares less the 147,771,893 A shares of the Company in the repurchased
+securities account as of December 31, 2021. The final dividend payment will have no material impact on
+the Group's solvency margin ratios. After the final dividend payment, the Group's solvency margin ratios
+will still meet the relevant regulatory requirements. The remaining undistributed profit of the Company
+will be carried forward to 2022. The undistributed profit of the Company is mainly for the purpose of its
+organic capital accumulation to maintain reasonable solvency margin ratios as well as provide funding for
+subsidiaries to support subsidiaries' business development for stable shareholder returns and maintain
+subsidiaries' solvency margin or capital adequacy ratios at reasonable levels.
+As stated in the 2021 audited consolidated financial statements of the Group prepared under CAS and IFRS
+respectively, the net profit attributable to shareholders of the parent company was RMB101,618 million and
+the net profit of the parent company was RMB29,731 million. Pursuant to the Articles of Association and
+other relevant requirements, the Company shall make an appropriation to the statutory surplus reserve
+based on 10% of the net profit of the parent company as shown in the financial statements under CAS
+before determining the profit available for distribution to shareholders. Appropriation to the statutory
+surplus reserve may cease to apply if the balance of the statutory surplus reserve has reached 50% or
+more of the registered capital of the Company. After making the above profit distribution and carrying
+forward the retained profit from the previous year, in accordance with the Articles of Association and other
+applicable requirements, the profit available for distribution to shareholders of the Company based on
+undistributed profit in financial statements of the parent company under CAS or IFRS (whichever is lower)
+was RMB108,854 million.
+The Group's business results for 2021 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 ratios were clear. The above profit distribution plans were in line with
+the Articles of Association and the relevant deliberation procedures, which fully protected the legitimate
+interests of the minority shareholders. All the Independent Non-executive Directors of the Company have
+expressed independent opinions of their agreement on the above profit distribution plans. The above profit
+distribution plans have been implemented.
+The 2021 interim profit distribution plan of the Company was deliberated and approved at the 4th meeting
+of the 12th session of the Board of Directors held on August 26, 2021, pursuant to which the Company paid
+in cash the 2021 interim dividend of RMB0.88 per share (tax inclusive), totaling RMB15,974,953,573.04 (tax
+inclusive) based on 18,153,356,333 shares, the actual number of shares entitled to the dividend distribution
+(exclusive of A shares of the Company in the repurchased securities account).
+The 2020 profit distribution plan of the Company was deliberated and approved at the 2020 Annual General
+Meeting, pursuant to which the Company paid in cash the 2020 final dividend of RMB1.40 per share (tax
+inclusive), totaling RMB25,494,328,449.80 (tax inclusive) based on 18,210,234,607 shares, the actual number
+of shares entitled to the dividend distribution (exclusive of A shares of the Company in the repurchased
+securities account).
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+154
+Where an adjustment to our profit distribution policy is required due to the applicable laws and regulations
+and new rules promulgated by the CSRC regarding profit distribution policies of listed companies or
+significant changes in the external business environment and/or operating situations of the Company,
+the adjustment shall be done for the purpose of safeguarding the shareholders' interests and in strict
+compliance with the decision-making procedures. To this end, the Board of Directors shall draft an
+adjustment plan based on the operating situations of the Company and the relevant regulations of the
+CSRC, and then submit the adjustment plan to the general meeting for deliberation. Implementation of the
+adjustment plan is conditional upon approval by shareholders (including their proxies) holding at least two
+thirds of voting rights present at the general meeting.
+In preparing a profit distribution plan, the Board of Directors shall fully listen to and take into account
+views and advice from shareholders (in particular the minority shareholders), independent directors,
+and independent supervisors in various ways. 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 responses shall be given to any issues the minority shareholders
+are concerned about.
+According to Article 216 of the Articles of Association, the Company shall attach importance to the
+reasonable investment returns for investors in its profit distribution. The profit distribution policy shall
+maintain its continuity and stability. The accumulated profit to be distributed in cash for the recent three
+years shall not be less than 30% of the average annual distributable profit realized in the recent three years,
+provided that the annual distributable profit of the Company (namely the 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 margin ratios. In determining a specific cash dividend payout ratio, the Company
+shall consider its profit, cash flow, solvency, and operational and business development requirements. The
+Board of Directors is responsible for formulating and implementing a distribution plan in accordance with
+the provisions of the Articles of Association.
+Cash Dividend Policy
+REPORTING PERIOD
+For dividend payouts of the Company over the past three years, please refer to the section headed
+"Liquidity and Capital Resources."
+IMPLEMENTATION OF CASH DIVIDEND POLICY AND PROFIT DISTRIBUTION PLANS DURING THE
+DISTRIBUTABLE RESERVES
+USE OF PROCEEDS
+0.00222
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+156
+Details of changes in the property and equipment and investment properties of the Group during 2021 are
+set out in Notes 34 and 33 to the financial statements respectively.
+PROPERTY AND EQUIPMENT AND INVESTMENT PROPERTIES
+The change in the share capital of the Company in 2021 and the share capital structure of the Company as
+of December 31, 2021 are set out in the section headed "Changes in the Share Capital and Shareholders'
+Profile."
+SHARE CAPITAL
+The Company plans to
+use the funds for the
+intended purposes
+within one year, and
+the specific timetable
+will be adjusted
+according to the
+Company's business
+strategy and actual
+situation.
+balance in the specific fund-
+raising account
+Utilization plan for the
+HKD116,179,628.19
+HKD3,981,742,342.12
+Proceeds used Balance in the specific
+during the fund-raising account
+Reporting Period as at December 31, 2021
+To develop the
+Company's main
+businesses and
+replenish its equity
+and working capital
+Intended use of
+the proceeds as
+previously disclosed
+HKD3,981,742,342.12
+Balance of
+unutilized proceeds as
+at January 1, 2021
+HKD36,831,472,000
+Total proceeds
+raised from
+the issue
+An aggregate of 594,056,000 new H shares were successfully allotted and issued by the Company under the
+general mandate on December 8, 2014 and the gross proceeds raised amounted to HKD36,831,472,000. Out
+of this amount, HKD3,981,742,342.12 was used in 2021, including RMB1,950,260,000.00 for capital injection into
+the Company's subsidiaries (capital contributions have been completed by the Company, now pending
+regulatory approval) and the rest for replenishment of the Company's working capital. The use of the
+proceeds in 2021 is in line with the intended purposes previously disclosed by the Company (i.e. to develop
+the Company's main businesses and replenish its equity and working capital). As of December 31, 2021, all
+of the proceeds had been used, and the balance of HKD116,179,628.19 in the specific fund-raising account
+was interest income from and foreign exchange gains or losses on the proceeds. The Company plans to use
+the balance for the above-mentioned intended purposes within one year, and the specific timetable will be
+adjusted according to the Company's business strategy and actual situation. Below are the details of the
+use of the proceeds in 2021:
+As of December 31, 2021, the Company's distributable reserves totaled RMB108,854 million. The Company has
+proposed to distribute the 2021 final dividend of RMB1.50 per share (tax inclusive) in cash. After deduction
+of the 2021 final dividend, the remaining distributable reserves will be carried forward to 2022. Moreover, the
+Company's capital reserve and surplus reserve amounted to RMB140,901 million, which can be distributed in
+a future capital issue.
+Revenue from the Group's five largest customers accounted for less than 1% of the total revenue for 2021.
+MAJOR CUSTOMERS
+The principal activities of the Company and its subsidiaries (the “Group") comprise the provision of a
+wide range of financial products and services with a focus on the businesses of insurance, banking, asset
+management, and technology. There were no significant changes in the nature of the Group's principal
+activities during 2021.
+No
+1,911.1
+2,865.1
+Chen Kexiang
+Yes
+93.5
+516.5
+Zhang Wangjin
+No
+129.6
+510.4
+Huang Baokui
+No
+132.0
+518.0
+Gu Liji
+Yes
+50.8
+188.6
+Jin Li
+Yes
+Ip So Lan
+1,297.9
+720.5
+No
+PRINCIPAL ACTIVITIES
+Report of the Board of Directors
+and Significant Events
+CORPORATE GOVERNANCE
+153
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Training Center continued to explore innovative ways of talent development as the Group pursues smart
+and digital transformation. Training Center launched an empowerment program named "Becoming
+Pioneers in the Digital Age" for senior and higher-level managers to boost digital transformation in member
+companies. For mid-level and junior employees, Training Center launched the "Best Practice Program,"
+in which over 1,800 best practices were taught to help new recruits adapt to their positions and more
+employees improve performance. For managers of training, Training Center launched the "T Plan," which
+explores talent training solutions from the organizational, HR, business, and training perspectives to
+support business growth amid digital transformation.
+Training Center proactively optimized the talent training system, which covers all employees and
+executives. Training Center continuously provides numerous high-quality courses, and develops teams of
+highly competent lecturers. Training Center conducts dynamic online-merge-offline training to meet staff's
+growth needs via face-to-face classes, livestreaming sessions, and special training camps on a smart online
+learning platform. Training Center offered 66,000 internal and external high-quality online courses as of
+December 31, 2021. Over 37.5 million trainees attended online training sessions for nearly 9.761 million hours
+in 2021, with monthly activity rates up to 96.0%. An aggregate of 32,000 trainees attended a total of 1,047
+face-to-face training sessions across the country, including 67.3% of the Group's senior and higher-level
+managers. Training Center offered a total of 58 livestreaming sessions, in which more than 34,000 trainees
+studied for nearly 50,000 hours. Training Center launched seven special training camps on professional
+competency, covering nearly 2,000 trainees.
+Ping An School of Financial Management (which will be renamed "Ping An (Shenzhen) Financial Education
+and Training Center," and is hereinafter referred to as "Training Center”) supports the Group's strategy and
+provides the best training by optimizing the smart learning platform, diversifying courses and lecturers,
+launching multi-dimensional special training, and building case libraries for all positions. Working closely
+with the Group's member companies, Training Center provides comprehensive training for employees to
+build competitive teams and support the Group's long-term growth.
+STAFF TRAINING PROGRAMS
+199.1
+Doctorate or master's degree 7.7%
+Bachelor's degree 54.2%
+•College education 33.8%
+⚫ Others 4.3%
+● Insurance personnel 53.2%
+By education
+As of December 31, 2021, the Company had 355,982 current employees, of whom 249,966 were in the parent
+company and major subsidiaries, as well as 85 retired employees for whom the parent company and major
+subsidiaries needed to bear costs. By profession, 189,305 of the current employees were in the insurance
+business, 40,651 were in the banking business, 12,838 were in the asset management business, and 113,188
+were in the technology business. By education, 27,512 of the current employees held a doctorate or
+master's degree, 192,912 held a bachelor's degree, 120,153 attained college education, and 15,405 had other
+educational backgrounds.
+NUMBER OF EMPLOYEES BY PROFESSION AND EDUCATIONAL BACKGROUND
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+152
+(3) The final remunerations of the Company's full-time Directors, Supervisors, senior management and key personnel are being
+recognized in accordance with applicable rules, and more information will be disclosed after review and recognition.
+(2) Parts of the performance-based remunerations of the Company's senior management and key personnel will be deferred and
+paid over a period of 3 years in accordance with the Code of Corporate Governance of Banking and Insurance Institutions and
+the Guidelines for Insurance Companies' Remuneration Management (Trial) issued by the CBIRC. The deferred, unpaid parts
+are included in the total remunerations received by the Company's senior management and key personnel from the Company
+during the Reporting Period.
+Notes: (1) The remunerations of Directors, Supervisors, senior management and key personnel are calculated on their respective periods
+in office during the Reporting Period.
+● Banking personnel 11.4%
+Asset management personnel 3.6%
+Technology personnel 31.8%
+0.00014
+By profession
+total issued shares
+As of December 31, 2021, the interests of the current Directors, Supervisors and Senior Management of the
+Company and those who vacated office during the Reporting Period in the shares of the Company which
+shall be disclosed pursuant to the Standard No. 2 Concerning the Contents and Formats of Information
+Disclosed by Listed Companies - The Contents and Formats of Annual Report issued by the CSRC, were as
+follows:
+H/A
+Number of
+shares held
+at the
+beginning of
+Number of
+shares held
+Name
+Capacity
+shares
+the period
+at the
+end of
+the period
+Ma Mingzhe
+Beneficial owner
+A
+1,584,026
+2,011,161
+Change
+(shares)
++427,135
+Sun Jianyi
+Beneficial owner
+A
+4,774,873
+4,991,340
++216,467
+SHAREHOLDINGS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Change in the Number of Shares Held in the Company
+Xie Yonglin
+Directors, Supervisors, Senior
+Management and Employees
+149
+Male
+64
+Ip So Lan (7)
+Resigned Senior Management
+Female
+65
+January 2007 December 2021
+March 2008 June 2021
+Notes: (1) Mr. Huang Wei took office as a Non-executive Director of the Company on August 20, 2021, and tendered his resignation on
+November 19, 2021 due to the change of his personal work arrangements. The resignation shall take effect upon the approval
+of the qualification of a new Director, who will be appointed to fill Mr. Huang's vacancy, from the China Banking and Insurance
+Regulatory Commission being obtained.
+(2) Mr. Ng Kong Ping Albert and Mr. Jin Li took office as Independent Non-executive Directors of the Company on August 20, 2021.
+Mr. Ge Ming retired as an Independent Non-executive Director of the Company on August 20, 2021 because his six-year term of
+office expired.
+(3) Mr. Wang Yongjian resigned as a Non-executive Director of the Company on August 23, 2021 due to the change of his personal
+work arrangements.
+(4) Ms. Zhang Xiaolu took office as Compliance Officer of the Company on June 11, 2021.
+(5) Mr. Hu Jianfeng took office as Person-in-charge of Auditing of the Company on January 27, 2021.
+(6) Mr. Chen Kexiang resigned as a Senior Vice President of the Company on December 31, 2021 due to work arrangements.
+(7) Ms. Ip So Lan resigned as Person-in-charge of Auditing, Senior Vice President, and Compliance Officer of the Company due to
+personal reasons on January 27, 2021, March 25, 2021 and June 11, 2021 respectively.
+CHANGES IN INFORMATION OF DIRECTORS AND SUPERVISORS
+Mr. Liu Hong, an Independent Non-executive Director of the Company, ceased to be an Independent Non-
+executive Director of Shenzhen JingQuanHua Electronics Co., Ltd. in January 2022.
+Save as disclosed above, there is no other information required to be disclosed pursuant to Rule 13.51B(1)
+of the HKEX Listing Rules.
+PENALTIES IMPOSED ON THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT BY SECURITIES
+REGULATORY AUTHORITIES IN THE LAST THREE YEARS
+The current Directors, Supervisors and senior management of the Company and those who vacated office
+during the Reporting Period were not subject to any punishment by securities regulatory authorities over
+the past three years.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+CORPORATE GOVERNANCE
+Beneficial owner
+A
+303,508
+0.00253
+Long position
+0.00387
+0.00230
+Long position
+0.00054
+0.00022
+Long position
+0.00530
+0.00314
+Beneficial owner
+H
+24,000
+24,000
+Long position
+0.00032
+0.00013
+Cai Fangfang
+Beneficial owner
+A
+228,629
+0.00427
+Long position
+0.02730
+0.04608
+463,055
++159,547
+Tan Sin Yin
+Beneficial owner
+A
+301,528
+Beneficial owner
+H
+Yao Jason Bo
+Beneficial owner
+Resigned Senior Management
+A
+419,628
+40,000
+573,947
++118,100
++40,000
++108,515
+Reason for the change
+Purchase, Key Employee Share
+Purchase Plan
+Purchase, Key Employee Share
+Purchase Plan
+Purchase, Key Employee Share
+Purchase Plan
+Key Employee Share Purchase Plan
+Purchase
+Key Employee Share Purchase Plan
+Nature of
+interest
+Long position
+Percentage of
+total issued
+H/A shares (%)
+Percentage
+of total issued
+shares (%)
+0.01857
+0.01100
+Long position
+465,432
+Chen Kexiang (6)
+Since January 2021
+45
+147
+CORPORATE GOVERNANCE
+148
+Directors, Supervisors, Senior
+Management and Employees
+Key Personnel
+Mr. Chan Tak Yin
+Chief Investment Officer
+Aged 61
+Joined the Company in 2005
+Other positions held within the Group
+Mr. Chan serves as a Director of Ping An Life.
+Past offices
+Mr. Chan served successively as the Deputy Chief Investment Officer of the
+Company, the Chairman and CEO of Ping An Asset Management, and the
+Chairman of Ping An of China Asset Management (Hong Kong) Company
+Limited. From December 2008 to May 2017, Mr. Chan acted as a Non-
+executive Director of Yunnan Baiyao Group Co., Ltd.
+Prior to joining the Company, Mr. Chan worked successively as a 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.
+Educational background and qualifications
+Bachelor's degree in Arts from the University of Hong Kong
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+POSITIONS HELD IN CORPORATE SHAREHOLDERS BY DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT
+Period of engagement
+Name
+Name of corporate shareholder
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Certified Financial Risk Manager (CFRM)
+Certified Internal Auditor (CIA)
+in associated
+corporation (%)
+Ms. Zhang Xiaolu
+Compliance Officer, Chief Risk
+Officer
+Aged 54
+Joined the Company in 2019
+Term of office: June
+2021-present
+Past offices
+Ms. Zhang served as the Chief Operating Officer of the Company from
+February 2021 to October 2021 and a Special Assistant to the President of
+Ping An Bank from June 2019 to August 2020.
+Prior to joining the Company, Ms. Zhang served as a Managing Partner of
+Advisory Service (CEO of Advisory) at Ernst & Young Greater China,
+and the General Manager of Consulting Service in Insurance Industry at
+IBM.
+Position
+Educational background and qualifications
+Mr. Hu Jianfeng
+Person-in-charge of Auditing
+Aged 45
+Joined the Company in 2000
+Term of office: January
+2021-present
+Other positions held within the Group
+Mr. Hu serves as the General Manager of the Group's Audit and Supervision
+Department.
+Past offices
+From April 2007 to March 2017, Mr. Hu successively served as the Assistant
+to General Manager of the Shanghai Division of the Company's Audit
+and Supervision Department, the Deputy General Manager and then the
+General Manager of the Shanghai Division of the Audit and Supervision
+Project Center of Ping An Processing & Technology (Shenzhen) Co., Ltd.,
+and the Deputy General Manager of the Company's Audit and Supervision
+Department.
+Educational background and qualifications
+Bachelor's degree in International Finance from Fudan University
+Certified Anti-Money Laundering Specialist (CAMS)
+MBA degree from Massey University, New Zealand
+300,395
+Soopakij Chearavanont
+Yang Xiaoping
+Chairman
+51
+Since August 2021
+Ge Ming (2)
+Retired Independent Non-executive Director
+Male
+70
+June 2015 August 2021
+Wang Yongjian (3)
+Resigned Non-executive Director
+Male
+57
+-
+July 2018 August 2021
+Zhang Xiaolu (4)
+Newly-appointed Senior Management
+Female
+54
+Since June 2021
+Hu Jianfeng (5)
+Newly-appointed Senior Management
+Male
+Male
+Newly-appointed Independent Non-executive Director
+Jin Li(2)
+Since August 2021
+CP Group
+Senior Vice Chairman
+Huang Wei
+Shum Yip Holdings Company Limited
+Deputy Secretary of the Party Committee
+and General Manager
+Since January 2017
+Since January 2017
+June 2015 August 2021
+-
+APPOINTMENT OR REMOVAL OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
+Name
+CP Group
+Position
+Age
+Period of appointment
+Huang Wei (1)
+Newly-appointed Non-executive Director
+Male
+51
+Since August 2021
+Ng Kong Ping Albert (2) Newly-appointed Independent Non-executive Director
+Male
+64
+Gender
++71,766
+0.00425
+Long position
+Tan Sin Yin
+Others(1)
+A
+376,699
+582,367
++205,668
++205,668
+Others(1)
+Long position
+0.00538
+0.00319
+Others(1)
+Long position
+0.00538
+0.00319
+Yao Jason Bo
+Interest of his spouse
+H
+64,000
+64,000
+Long position
+0.00086
+582,367
+376,699
+A
+Others(1)
+total issued
+H/A shares (%)
+shares (%)
+0.00027
+0.00011
+Others(1)
+A
+502,266
+776,490
++274,224
+0.00035
+Others(1)
+0.00717
+Sun Jianyi
+Others(1)
+A
+126,381
+126,381
+Long position
+0.00117
+0.00069
+Xie Yonglin
+Long position
+Percentage of
+Others(¹)
+251,133
+Change in the Number of Shares Held in Associated Corporations of the Company
+Interests held
+Name
+Associated
+corporation
+Capacity
+at the beginning
+of the period
+(shares)
+Interests held
+at the end of
+the period
+(shares)
+Change
+(shares)
+Reason for
+the change
+Nature of
+interest
+Xie Yonglin
+Tan Sin Yin
+Ping An Bank
+OneConnect
+Beneficial owner
+Beneficial owner
+26,700
+26,000
++26,700
++26,000
+Purchase Long position
+Purchase Long position
+Purchase, Key Employee Share
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+150
+Conditional interests that can be vested in future under the Long-term Service Plan, subject to terms and conditions in the
+Long-term Service Plan of Ping An Insurance (Group) Company of China, Ltd.
+388,245
+Cai Fangfang
+Wang Zhiliang
+Others(1)
+A
+251,133
+Others(1)
+A
+31,350
+388,245
+45,335
++137,112
++137,112
++13,985
+A
+Others(1)
+0.00358
+0.00212
+Others(1)
+Others(1)
+Long position
+0.00358
+0.00212
+Long position
+0.00042
+0.00025
+Note: (1)
+Long position
+Percentage of
+total issued
+Percentage of
+Reason for
+the change
++27,674
+Purchase, Key Employee Share
+Long position
+0.00084
+0.00050
+Purchase Plan
+Sheng Ruisheng
+Beneficial owner
+A
+249,098
+314,539
+Zhang Xiaolu
+Beneficial owner
+H
+10,000
++65,441
++10,000
+Wang Zhiliang
+Beneficial owner
+A
+45,073
+61,571
+91,186
+63,512
+Beneficial owner
+Huang Baoxin
+Nature of
+interest
+Long position
+0.00277
+0.00164
+Purchase Plan
+Gu Liji
+Beneficial owner
+A
+25,000
++25,000
+Purchase
++16,498
+Long position
+0.00014
+Zhang Wangjin
+Beneficial owner
+H
+20,000
++20,000
+Purchase
+Long position
+0.00027
+0.00011
+0.00023
+Hu Jianfeng
+A
+A
+Long position
+0.00055
+0.00032
+Long position
+0.00461
+0.00273
+Long position
+0.00481
+0.00285
+Save as disclosed above, as of December 31, 2021, the interests and short positions of the Directors,
+Supervisors and chief executives of the Company in the shares, underlying shares and debentures of the
+Company which shall have been notified to the Company and the HKEX pursuant to Divisions 7 and 8 of
+Part XV of the SFO (including interests and short positions which the Directors or chief executives of
+the Company are taken as or deemed to have under such provisions of the SFO), or are recorded in the
+register required to be kept by the Company pursuant to Section 352 of the SFO, or are otherwise required
+to be notified by the Directors, Supervisors and chief executives to the Company and the HKEX pursuant
+to the Model Code, were as follows:
+0.00034
+Name
+H/A
+shares
+Interests held
+at the beginning
+of the period
+(shares)
+Interests held
+Ma Mingzhe
+Interest of his spouse
+H
+20,000
+Beneficial owner
+Change
+(shares)
+at the end
+of the period
+(shares)
+20,000
+Capacity
+0.00057
+Note: During the Reporting Period, there were no share options held by or restricted shares granted to the current Directors, Supervisors
+and Senior Management of the Company and those who vacated office during the Reporting Period.
+Long position
+41,768
+59,343
+Chen Kexiang
+Beneficial owner
+A
+401,967
+499,034
++97,067
+Ip So Lan
+Beneficial owner
+A
++17,575
+520,760
++108,515
+Key Employee Share Purchase Plan
+Purchase
+Purchase, Key Employee Share
+Purchase Plan
+Purchase, Key Employee Share
+Purchase Plan
+Purchase, Key Employee Share
+Purchase Plan
+Key Employee Share Purchase Plan
+Long position
+0.00290
+0.00172
+Long position
+0.00005
+0.00013
+412,245
+445,132
+Balance
+as at
+January 1,
+2021
+Exercise price
+(per Shanghai
+Jahwa Share,
+RMB)
+Exercise period
+Canceled
+The general meeting held by the Company on May 23, 2018 deliberated and approved the Shanghai Jahwa
+Share Incentive Scheme, involving the grant of options ("Shanghai Jahwa Options") to, or for the benefit
+of, specified participants to subscribe for ordinary shares of Shanghai Jahwa ("Shanghai Jahwa Shares").
+As the conditions for the exercise of Shanghai Jahwa Options were not met within the agreed period,
+Shanghai Jahwa held board meetings to deliberate and approve the cancellation of Shanghai Jahwa
+Options during the Reporting Period.
+Type of
+grantees
+As of December 31, 2021, the details and changes of the Shanghai Jahwa Share Incentive Scheme in relation
+to the Shanghai Jahwa Options were as follows:
+SHARE INCENTIVE SCHEME OF SHANGHAI JAHWA OF 2018 ("SHANGHAI JAHWA SHARE INCENTIVE
+SCHEME")
+2,088,512
+Employees
+Granted
+during the
+Reporting
+Period
+2,205,000
+2,205,000
+Number of Options
+Lapsed
+during the
+Reporting
+Period
+Exercised
+during the
+Reporting
+Period
+Balance
+as at
+December 31,
+2021
+For details of the value of Shanghai Jahwa Options and related accounting policies, please refer to the
+announcement published by Shanghai Jahwa on the website of SSE (www.sse.com.cn) dated July 25, 2018.
+For details of the cancellation of Shanghai Jahwa Options, please refer to the announcements published by
+Shanghai Jahwa on the website of SSE (www.sse.com.cn) dated April 23, 2020 and February 3, 2021.
+163
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+None
+921,084
+The total number of Autohome Shares which may be issued upon exercise of all Autohome Options to be
+granted under the Autohome 2016 Share Incentive Plan and any other share option schemes of Autohome
+must not in aggregate exceed 10% of the issued and outstanding Autohome Shares as of June 16, 2017,
+on which the shareholders of the Company approved the Autohome 2016 Share Incentive Plan, unless
+further approval from the shareholders of Autohome and the Company has been obtained. According to
+the Autohome 2016 Share Incentive Plan, the maximum aggregate number of Autohome Shares issuable is
+19,560,000 (reflecting the 4-for-1 share split effective on February 5, 2021), representing approximately 3.87%
+of the total issued and outstanding Autohome Shares as at December 31, 2021. Unless approved by the
+shareholders of Autohome and the Company in the manner set out in the Autohome 2016 Share Incentive
+Plan, the total number of Autohome Shares issued and to be issued upon the exercise of the Autohome
+Options granted and to be granted to any participant (including both exercised and outstanding Autohome
+Options) in any 12-month period up to and including the date of grant shall not exceed 1% of the issued
+and outstanding Autohome Shares as at the date of grant.
+1,914,248
+CORPORATE GOVERNANCE
+The purpose of the Autohome 2016 Share Incentive Plan is to provide the relevant participants with an
+incentive for outstanding performance to generate superior returns to Autohome's shareholders. The
+Autohome 2016 Share Incentive Plan is also intended to provide flexibility to Autohome in its ability to
+motivate, attract, and retain its directors, employees, and consultants upon whose judgment, interest, and
+special effort the successful operation of Autohome is largely dependent.
+Pursuant to the terms of the Autohome 2016 Share Incentive Plan, Autohome's board of directors or
+its compensation committee authorized by the board of directors ("Autohome Committee”) may grant
+Autohome incentive awards to eligible participants, including the employees, consultants and all the
+directors of Autohome, based on their past, present and expected commitment and contribution to
+Autohome and/or the related entities, as the Autohome Committee may determine.
+The exercise price per Autohome Share subject to an Autohome Option shall be determined by the
+Autohome Committee and set forth in the award agreement. This price 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 and secondary-listed on the Hong
+Kong Stock Exchange, files its annual financial results with the U.S. Securities and Exchange Commission
+and will publish its financial results with the annual reports on the website of the Hong Kong Stock
+Exchange under the relevant regulatory rules of the U.S. and Hong Kong, respectively. To ensure the
+consistency of information, 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.
+162
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+The Autohome Committee has the discretion to fix any minimum period(s) for which an Autohome Option
+or any part thereof has to be held before the exercise of the subscription rights attaching thereto. The
+Autohome 2016 Share Incentive Plan will expire on the tenth anniversary of the effective date, being March
+21, 2027.
+As of December 31, 2021, the Autohome Options granted pursuant to the Autohome 2016 Share Incentive
+Plan are as follows:
+Type of
+grantees
+Employees
+Exercise period
+Not exceeding
+10 years from the
+date of grant
+Number of Options
+Exercise price
+(per Autohome
+Share, US$)
+Balance
+as at
+January 1,
+2021
+Granted
+during the
+Reporting
+Period
+Lapsed
+during the
+Reporting
+Period
+Exercised
+during the
+Reporting
+Period
+Balance
+as at
+December 31,
+2021
+5.55-24.61
+1,540,480
+164
+Pursuant to the applicable tax laws and regulations of the Chinese mainland, the individual resident
+shareholders outside the Chinese mainland shall pay individual income tax upon their receipt of the
+distributed dividends in respect of the shares issued by domestic non-foreign investment enterprises in
+Hong Kong, which shall be withheld by the Company on behalf of such individual shareholders at the
+tax rate of 10% in general. However, if the tax laws and regulations and relevant tax agreements state
+otherwise, the Company will withhold and pay the individual income tax based on the amount of the
+dividend at the relevant tax rate and in accordance with the procedures as stipulated.
+MATERIAL CONTRACTS AND THEIR PERFORMANCE
+During the Reporting Period, the Company did not provide any guarantee to its controlling
+shareholder or other related parties in which the Company holds less than 50% shares, or any non-
+legal-person entities or individuals;
+During the Reporting Period, the total guarantee withdrawal provided by the Company and its
+subsidiaries amounted to RMB15,724 million. The total guarantee balance of the Company and its
+subsidiaries was RMB36,652 million as of December 31, 2021, representing 4.5% of the Company's net
+assets. The balance did not exceed 50% of the net assets as stated in the financial statements of the
+latest fiscal year of the Company;
+During the Reporting Period, 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 non-compliant external guarantee;
+During the Reporting Period, 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.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+ENTRUSTMENT, UNDERWRITING, LEASE, ENTRUSTED ASSET MANAGEMENT, ENTRUSTED LENDING 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.
+INCOME TAX AND TAX CONCESSIONS
+Enterprise Income Tax of Overseas Non-Resident Enterprises
+Pursuant to the tax laws and regulations of the Chinese mainland, the Company is required to withhold
+10% enterprise income tax when it distributes dividend to non-resident enterprise holders of H shares as
+listed on the Company's register of members on the record date, including Hong Kong Securities Clearing
+Company Nominees Limited.
+If any resident enterprise (as defined in the Enterprise Income Tax Law of the People's Republic of China)
+listed on the Company's register of members of H shares on the record date which is duly incorporated in
+the Chinese mainland or under the laws of an overseas country (or region) but with a Chinese mainland-
+based de facto management body does not want the Company to withhold the said enterprise income
+tax, it shall submit to Computershare Hong Kong Investor Services Limited a legal opinion, at or before
+4:30 p.m. one business day before closure of register of the H shareholders for the dividend, issued by a
+lawyer qualified to practice law in the Chinese mainland and inscribed with the seal of the applicable law
+firm, that verifies its resident enterprise status. The legal opinion shall be submitted by the Company to
+the applicable tax authorities for approval, and then excess portions of the tax amounts withheld can be
+refunded.
+Ping An Insurance (Group) Company of China, Ltd. 165
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+and Significant Events
+Individual Income Tax of Overseas Individual Shareholders
+The general meeting held by the Company on June 16, 2017 deliberated and approved the Autohome
+2016 Share Incentive Plan with respect to the grant of options ("Autohome Options") to the directors,
+consultants, and employees of Autohome to purchase Class A ordinary shares of Autohome (re-designated
+and combined with Class B ordinary shares of Autohome into one single class of ordinary shares
+("Autohome Shares") as a result of the share re-designation effective on February 5, 2021), restricted shares
+or restricted stock units and share appreciation rights.
+Those individual resident shareholders outside the Chinese mainland who hold the shares issued by
+domestic non-foreign investment enterprises in Hong Kong may enjoy preferential treatments (if any) in
+accordance with the provisions of applicable tax agreements signed between the countries or regions
+where they belong by virtue of residential identification and the People's Republic of China as well as the
+tax arrangements made between the Chinese mainland and Hong Kong (Macau). Qualified shareholders
+are required to submit to Computershare Hong Kong Investor Services Limited a written authorization and
+relevant evidencing documents, at or before 4:30 p.m. one business day before closure of register of the H
+shareholders for the dividend, which shall be submitted by the Company to the applicable tax authorities
+for approval, and then excess portions of the tax amounts withheld can be refunded.
+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 laws and regulations of the Chinese mainland.
+166
+Annual Report 2021
+4.
+Report of the Board of Directors
+and Significant Events
+3.
+1.
+Guarantee
+(in RMB million)
+External guarantee of the Company and its subsidiaries
+(excluding the guarantee in favor of its subsidiaries)
+Total external guarantee incurred during the Reporting Period
+Total external guarantee balance as at the end of the Reporting Period
+Guarantee of the Company and its subsidiaries in favor of its subsidiaries
+Total guarantee in favor of its subsidiaries incurred during the Reporting Period
+Total guarantee balance in favor of its subsidiaries as at the end of the Reporting Period
+(18,138)
+36,652
+Total guarantee of the Company (including the guarantee in favor of its subsidiaries)
+Total guarantee
+Total guarantee as a percentage of the Company's net assets (%)
+Including: Direct or indirect guarantee for the companies with a total liabilities to total
+assets ratio over 70% (as of December 31, 2021)
+The amount by which the total guarantee balance of the Company and
+its subsidiaries exceeded 50% of the Company's net assets
+36,652
+4.5
+32,888
+Notes: (1) The data set out in the table above does not include those arising from financial guarantee businesses conducted by the
+Company's controlled subsidiaries including Ping An Bank in strict compliance with the scope of business approved by
+regulatory authorities.
+(2) During the Reporting Period, the total guarantee incurred was the guarantee withdrawal of RMB15,724 million less the
+guarantee repayment of RMB33,862 million.
+INDEPENDENT OPINIONS OF INDEPENDENT NON-EXECUTIVE DIRECTORS ON EXTERNAL GUARANTEE
+OF THE COMPANY
+According to the Guidelines for Supervision of Listed Companies No.8-Regulatory Requirements for Fund
+Transactions and External Guarantees of Listed Companies issued by the CSRC, the Independent Non-
+executive Directors of the Company conducted a prudent review of the Company's external guarantees in
+2021. Their specific statements and independent opinions are set out as follows:
+2.
+AMENDED AND RESTATED 2016 SHARE INCENTIVE PLAN OF AUTOHOME ("AUTOHOME 2016 SHARE
+INCENTIVE PLAN")
+Details of the Company's financial instruments measured at fair value are set out in Note 54 to the financial
+statements.
+IMPLEMENTATION OF SHARE INCENTIVE SCHEME OF THE COMPANY AND ITS EFFECTS
+SUFFICIENCY OF PUBLIC FLOAT
+Based on the information that is publicly available to the Company and within the knowledge of the
+Directors as at the latest practicable date prior to the issue of this Report, being March 17, 2022, at all times
+during the year ended December 31, 2021, 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.
+DIRECTORS' AND SUPERVISORS' SERVICE CONTRACTS AND REMUNERATIONS
+The Company entered into service contracts with all the Directors and Supervisors in office. As of
+December 31, 2021, no Directors or Supervisors had a service contract with the Company or any of its.
+subsidiaries which requires the Company to pay compensation (except statutory compensation) if the
+Company terminates the contract within one year.
+Details of remunerations for the Directors and Supervisors for the year ended December 31, 2021 are set out
+in Note 58 to the financial statements.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+157
+CORPORATE GOVERNANCE
+158
+58
+Report of the Board of Directors
+and Significant Events
+DIRECTORS' AND SUPERVISORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF
+SIGNIFICANCE
+In 2021, 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.
+DIRECTORS' AND SUPERVISORS' RIGHTS TO ACQUIRE SHARES
+In 2021, no right to acquire benefits by means of acquisition of shares or debentures of the Company
+was granted to or exercised by any Directors, Supervisors or their respective spouse or minor children,
+and neither the Company nor any of its subsidiaries was a party to any arrangement which enables the
+Directors or Supervisors to acquire any such rights in any other legal entity.
+DIRECTORS' AND SUPERVISORS' INTERESTS IN A COMPETING BUSINESS
+As far as the Directors are aware, none of the 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.
+PERMITTED INDEMNITY PROVISION
+The Company has arranged appropriate insurance cover for possible legal actions against its Directors and
+senior management arising out of corporate activities, which was in force during the Reporting Period and
+up to the date of this Report.
+POST BALANCE SHEET EVENTS
+Details of the post balance sheet events are set out in Note 64 to the financial statements.
+AUDITORS
+Save as disclosed above, neither the Company nor any of its subsidiaries purchased, sold or redeemed any
+of the Company's listed securities from January 1, 2021 to December 31, 2021.
+According to the resolution passed at the Company's 2020 Annual General Meeting, the Company engaged
+Ernst & Young Hua Ming LLP and Ernst & Young as the auditors of the Company's financial statements
+under CAS and IFRS respectively for the year 2021, and engaged Ernst & Young Hua Ming LLP as the
+auditor of the Company's internal controls.
+732,979,264.24
+48.18
+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
+In view of the Company's confidence in its sustainable development and recognition of intrinsic investment
+value, and to safeguard the interests of investors, further establish and improve the long-term incentive
+mechanism and pursue a long-term and sustainable value for shareholders, the Resolution regarding Share
+Repurchase (the "Repurchase") was deliberated and approved at the 4th meeting of the 12th session
+of the Board of Directors held by the Company on August 26, 2021. The total amount of funds for the
+Repurchase is not less than RMB5 billion and not more than RMB10 billion (both figures included). Based
+on the maximum funds of RMB10 billion and the maximum price of RMB82.56 per share for the A share
+repurchase, the number of A shares to be repurchased by the Company is 121,124,031 shares, accounting
+for approximately 0.66% of the Company's current total share capital of 18,280,241,410 shares. The term for
+the Repurchase is up to 12 months from the date when the repurchase plan is deliberated and approved
+by the Company's Board of Directors. Under this resolution, a total of 77,765,090 A shares of the Company
+were repurchased by the Company by means of centralized bidding transaction via the system of the
+Shanghai Stock Exchange ("SSE"), representing approximately 0.42541% of the total share capital of the
+Company in 2021. The total amount of funds paid was RMB3,899,441,135.30 (exclusive of transaction costs)/
+RMB3,900,104,053.43 (inclusive of transaction costs). The lowest transaction price was RMB48.18 per share
+and the highest transaction price was RMB51.96 per share. The repurchased A shares of the Company will
+be reserved exclusively for the employee stock ownership plans of the Company, including but not limited
+to the Long-term Service Plan which has been deliberated and approved at the general meeting of the
+Company. The monthly breakdown of A Share repurchase made by the Company during 2021 is as follows:
+Month
+Shares
+repurchased
+33,165,822
+Ping An Insurance (Group) Company of China, Ltd.
+51.96
+Lowest
+transaction
+price per share
+(RMB)
+48.89
+Total amount
+of funds paid
+(RMB, exclusive of
+transaction cost)
+※ 111월
+August 2021
+September 2021
+October 2021
+November 2021
+23,712,452
+6,005,000
+14,881,816
+51.65
+50.23
+50.09
+48.38
+49.26
+1,659,293,682.20
+1,207,214,878.86
+299,953,310.00
+GENERAL ANALYSIS OF EXTERNAL INVESTMENT
+The Company is an integrated financial services group, and investment is one of its main businesses.
+The investment of insurance funds represents a majority of the investment of the Company. The using
+of insurance funds is subject to applicable laws and regulations. For details of the asset allocation of the
+Company's investment portfolio of insurance funds, please refer to the section headed “Business Analysis."
+Material Equity Investment
+Seven phases of the Key Employee Share Purchase Plan were implemented as of the end of the Reporting
+Period. Among them, all shares under the three phases for 2015-2017 were unlocked, and the four phases for
+2018-2021 were implemented as follows:
+There were 1,296 participants in the Key Employee Share Purchase Plan for 2018. A total of 9,666,900 A shares
+of the Company were purchased for a total amount of RMB592,698,901.19 (expenses inclusive), accounting
+for approximately 0.053% of the total share capital of the Company at that time. During the Reporting
+Period, the lock-up period in respect of one third of the shares under the Key Employee Share Purchase
+Plan for this phase expired and all such shares were vested in batches to 1,043 employees. As to the
+remaining 133 employees who did not qualify for the vesting, 315,704 shares were forfeited. All shares under
+the Key Employee Share Purchase Plan for this phase were unlocked.
+There were 1,267 participants in the Key Employee Share Purchase Plan for 2019. A total of 8,078,395 A shares
+of the Company were purchased for a total amount of RMB588,197,823.00 (expenses inclusive), accounting
+for approximately 0.044% of the total share capital of the Company at that time. During the Reporting
+Period, the lock-up period in respect of one third of the shares under the Key Employee Share Purchase
+Plan for this phase expired and all such shares were vested in batches to 1,077 employees. As to the
+remaining 130 employees who did not qualify for the vesting, 604,835 shares were forfeited.
+There were 1,522 participants in the Key Employee Share Purchase Plan for 2020. A total of 7,955,730 A shares
+of the Company were purchased for a total amount of RMB638,032,305.75 (expenses inclusive), accounting
+for approximately 0.044% of the total share capital of the Company at that time. During the Reporting
+Period, the lock-up period in respect of one third of the shares under the Key Employee Share Purchase
+Plan for this phase expired and all such shares were vested in batches to 1,298 employees. As to the
+remaining 224 employees who did not qualify for the vesting, 727,801 shares were forfeited.
+There were 1,754 participants in the Key Employee Share Purchase Plan for 2021. A total of 9,162,837 A shares
+of the Company were purchased for a total amount of RMB670,258,495.86 (expenses inclusive), accounting
+for approximately 0.050% 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 2021
+Key Employee Share Purchase Plan published by the Company on the websites of the HKEX and the SSE
+on April 30, 2021 and May 6, 2021 respectively. During the Reporting Period, no change was made in equity
+under the Key Employee Share Purchase Plan for 2021.
+During the Reporting Period, the manager of the Key Employee Share Purchase Plan was not changed.
+The key employees held 20,983,759 A shares of the Company in total through the Key Employee Share
+Purchase Plan as at the end of the Reporting Period, accounting for approximately 0.115% of the total share
+capital of the Company.
+160
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+The Long-term Service Plan
+The Company has implemented the Long-term Service Plan since 2019 as deliberated at the third meeting
+of the eleventh Board of Directors held on October 29, 2018 and approved at the second extraordinary
+general meeting for 2018 held on December 14, 2018. Participants in the Long-term Service Plan of
+the Company are the employees of the Company and its subsidiaries including directors, employee
+representative supervisors, and senior management. The source of funding is the remunerations payable to
+employees.
+Three phases of the Long-term Service Plan were implemented as of the end of the Reporting Period:
+There were 31,026 participants in the Long-term Service Plan for 2019. A total of 54,294,720 A shares of the
+Company were purchased for a total amount of RMB4,296,112,202.60 (expenses inclusive), accounting for
+approximately 0.297% of the total share capital of the Company at that time. During the Reporting Period,
+in accordance with the Long-term Service Plan and applicable agreed rules, 19 employees were qualified
+and applied for vesting, and their shares were vested; 2,723 employees were disqualified due to reasons
+including their resignation; 5,901,602 shares were forfeited due to reasons including employees' resignation
+or failure to meet performance targets.
+There were 32,022 participants in the Long-term Service Plan for 2020. A total of 49,759,305 A shares of the
+Company were purchased for a total amount of RMB3,988,648,517.41 (expenses inclusive), accounting for
+approximately 0.272% of the total share capital of the Company at that time. During the Reporting Period,
+in accordance with the Long-term Service Plan and applicable agreed rules, 11 employees were qualified
+and applied for vesting, and their shares were vested; 3,367 employees were disqualified due to reasons
+including their resignation; 6,098,447 shares were forfeited due to reasons including employees' resignation
+or failure to meet performance targets.
+There were 90,960 participants in the Long-term Service Plan for 2021. A total of 57,368,981 A shares of
+the Company were purchased for a total amount of RMB4,184,093,674.69 (expenses inclusive), accounting
+for approximately 0.314% of the total share capital of the Company at that time. For details of the share
+purchase, please refer to the Announcement on Completion of Share Purchase under the 2021 Long-term
+Service Plan published by the Company on the websites of the HKEX and the SSE on April 30, 2021 and
+May 6, 2021 respectively. During the Reporting Period, in accordance with the Long-term Service Plan and
+applicable agreed rules, 6 employees were qualified and applied for vesting, and their shares were vested;
+7,607 employees were disqualified due to reasons including their resignation; 4,666,872 shares were forfeited
+due to reasons including employees' resignation or failure to meet performance targets.
+During the Reporting Period, the manager of the Long-term Service Plan was not changed.
+The Long-term Service Plan held a total of 161,376,466 A shares of the Company as at the end of the
+Reporting Period, accounting for approximately 0.883% of the total share capital of the Company.
+The Company has operated stably and healthily since the implementation of the Key Employee Share
+Purchase Plan and the Long-term Service Plan. The shareholders, the Company, and the employees have
+shared benefits and risks, providing a strong foundation for further improving the Company's governance
+structure, establishing and strengthening long-term incentive and restraint mechanisms, and facilitating the
+long-term, sustainable and healthy development of the Company.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+161
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+and Significant Events
+As deliberated at the 16th meeting of the ninth Board of Directors held on October 28, 2014 and approved
+at the first extraordinary general meeting for 2015 held on February 5, 2015, the Key Employee Share
+Purchase Plan of the Company has been officially implemented since 2015. For the Key Employee Share
+Purchase Plan of the Company, the participants are key employees of the Company and its subsidiaries
+including the directors, employee representative supervisors, and senior management. The sources of
+funding are legitimate incomes and performance bonuses of the employees.
+Key Employee Share Purchase Plan
+IMPLEMENTATION OF SHARE PURCHASE PLANS OF THE COMPANY
+and Significant Events
+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 Measured at Fair Value
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+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.
+Material Acquisitions and Disposals of Subsidiaries, Joint Ventures or Associates
+On January 29, 2021 and April 30, 2021 respectively, the Company announced that the consortium formed
+by Zhuhai Huafa Group Co., Ltd. (representing the state-owned enterprises of Zhuhai Municipality), the
+Company and Shenzhen SDG Co., Ltd. will participate in the substantive consolidated restructuring (the
+"Founder Group Restructuring") of Peking University Founder Group Company Limited, Peking University
+Founder Information Industry Group Co., Ltd., PKU Healthcare Industry Group Co., Ltd., Peking University
+Resources Group Limited and Founder Industry Holdings Co., Ltd. (the "Restructuring Entities"). Authorized
+by the Company, Ping An Life participated in the substantive consolidated restructuring and entered
+into the restructuring investment agreement of the Founder Group Restructuring ("the Restructuring
+Investment Agreement").
+On July 5, 2021, the Company announced that, the Restructuring Plan (Draft) of Five Companies
+Including Peking University Founder Group Company Limited, which was formulated on the basis of the
+Restructuring Investment Agreement, was resolved and approved at the creditors' meeting held by the
+Restructuring Entities, and was approved by the civil order of the First Intermediate People's Court of
+Beijing Municipality and came into effect on June 28, 2021.
+During the Reporting Period, the Company did not implement any share incentive scheme based on the
+Company's shares.
+On January 31, 2022, the Company announced that, Ping An Life received the Approval of Ping An Life
+Insurance Company of China, Ltd.'s Equity Investment in New Founder Group from the CBIRC (Yin Bao
+Jian Fu [2022] No.81) on January 30, 2022, and the CBIRC approved Ping An Life's investment in New
+Founder Group. Ping An Life has fulfilled the fundamental condition for participating in the Founder
+Group Restructuring, and will promptly carry forward the relevant subsequent work as agreed under the
+Restructuring Investment Agreement and the restructuring plan of the Founder Group Restructuring with
+the relevant parties.
+MAJOR SUBSIDIARIES AND ASSOCIATES OF THE COMPANY
+Details of major subsidiaries and associates of the Company are set out in Note 4.(1) and Note 31 to the
+financial statements respectively.
+STRUCTURED ENTITIES CONTROLLED BY THE COMPANY
+Details of structured entities controlled by the Company are set out in Note 4.(2) to the financial
+statements.
+CONNECTED TRANSACTIONS
+In respect of connected transactions, the Company has complied with requirements under the HKEX Listing
+Rules as amended from time to time. During the Reporting Period, the Company had no material connected
+transaction that was required to be disclosed under the HKEX Listing Rules. The Company's connected
+transactions stated in accordance with the accounting standards used in the preparation of financial
+statements for the year ended December 31, 2021 are presented in Note 60 to the financial statements.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+159
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+For more information, please refer to the announcements published by the Company on the websites of
+SSE (www.sse.com.cn) and HKEX (www.hkexnews.hk).
+Highest
+transaction
+price per share
+(RMB)
+During the Reporting Period, the Company did not engage in any entrusted asset management or entrusted
+lending outside its ordinary business scope. For details of the Company's entrusted asset management and
+entrusted lending, refer to the “Notes to Consolidated Financial Statements.”
+in issue
+INDEPENDENT OPINIONS ON RELEVANT ISSUES FROM THE SUPERVISORY COMMITTEE
+Lawful Operations
+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.
+Authenticity of the Financial Statements
+Ernst & Young Hua Ming LLP and Ernst & Young have issued the standard unqualified auditor's reports
+in accordance with the PRC and international auditing standards respectively, on the Company's financial
+statements for 2021. The financial statements truly, objectively and accurately reflect the financial status
+and operating results of the Company.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+173
+CORPORATE GOVERNANCE
+In September 2021, certain members of the Supervisory Committee conducted on-site inspections and
+reviews at branches of subsidiaries including Ping An Life, Ping An Property & Casualty, Ping An Bank
+and Ping An Securities in Dalian and Harbin. Opinions collected from employees were consolidated and
+an investigation report was submitted to the management of the Company. The management paid close
+attention to relevant issues, tackled each of them, and submitted a feedback report to all the Directors and
+Supervisors.
+Report of the Supervisory
+Committee
+Detailed information about the use of proceeds is set out in the section headed "Report of the Board of
+Directors and Significant Events” of this Report.
+Related Party Transactions
+The Supervisory Committee considered the related party transactions of the Company to be fair and
+reasonable during the Reporting Period, and did not find any harm against the interests of the shareholders
+and the Company.
+Internal Control System
+During the Reporting Period, the Supervisory Committee reviewed the Assessment and Evaluation Report
+on Internal Control of the Company and the Work Report on the Internal Control of the Company, and was
+of the opinion that the Company had set up a complete, reasonable and effective internal control system.
+Performance of the Board of Directors and Senior Management in Reputation Risk Management
+Members of the Supervisory Committee, by attending the Board meetings and reviewing reports, heard the
+reports made by the senior management on the Company's reputation risk management, and supervised
+the performance of the Board in reputation risk management.
+Implementation of the Resolutions Approved by the General Meetings
+Members of the Supervisory Committee attended the Board meetings 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 monitored the implementation of the
+resolutions approved by the General Meetings, and was of the opinion that the Board of Directors could
+duly implement the resolutions approved by the General Meetings.
+Implementation of the Cash Dividend Policy
+Use of Proceeds
+The Supervisory Committee acknowledges that the Board of Directors strictly carried out the cash dividend
+policy, performed relevant decision-making procedures for cash dividends in strict compliance, and
+disclosed the cash dividend policy and its implementation truly, accurately and completely. The Company's
+annual cash dividend for 2021 is slightly above the Company's established plan for shareholder returns.
+However, the Company maintains the continuity and stability of its profit distribution policy, and delivers
+sustained, stable and rational returns to all its shareholders.
+INSPECTIONS AND REVIEWS AT BRANCHES OF SUBSIDIARIES
+1/1
+Independent Supervisors
+Gu Liji
+Huang Baokui
+Shareholder Representative Supervisor
+Zhang Wangjin
+Meetings attended in person/
+Meetings required to attend
+General Meetings
+Supervisory
+Committee Meetings
+==
+5/5
+1/1
+5/5
+5/5
+June 3, 2009
+1/1
+5/5
+June 28, 2016
+1/1
+5/5
+June 17, 2013
+1/1
+Evaluation of Directors' Performance of Duties
+All Supervisors evaluated the composition of the Board of Directors, Directors' meeting attendance
+records, participation in training sessions, and provision of opinions and concluded unanimously that all
+the Directors of the Company performed their duties and responsibilities as stipulated under relevant laws,
+regulations and the Articles of Association in a sincere, loyal, diligent and conscientious manner in 2021.
+Specialized committees of the Board of Directors fully performed their duties and provided professional
+opinions and advice for the Board of Directors' decision-making processes. All supervisors agree that the
+performance evaluation results of all the Company's Directors for 2021 are "competent."
+Appraisal of Senior Management's Performance of Duties
+176
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+26,435,270
+6,254,230
+7,855,500
+9,945,381
+Number of H shares
+Short position
+16
+Long position
+Long position
+Short position
+Long position
+Nature of interest
+(5)
+Cash settled
+Unlisted derivatives -
+Physically settled
+Unlisted derivatives -
+Short position
+We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAS") issued by
+the Hong Kong Institute of Certified Public Accountants ("HKICPA"). Our responsibilities under those
+standards are further described in the Auditor's responsibilities for the audit of the consolidated financial
+statements section of our report. We are independent of the Group in accordance with the HKICPA's Code
+of Ethics for Professional Accountants (the "Code"), and we have fulfilled our other ethical responsibilities
+in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
+appropriate to provide a basis for our opinion.
+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 2021, and of its consolidated financial performance and its
+consolidated cash flows for the year then ended in accordance with International Financial Reporting
+Standards ("IFRSS") issued by the International Accounting Standards Board ("IASB") and have been
+properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.
+BASIS FOR OPINION
+We have audited the consolidated financial statements of Ping An Insurance (Group) Company of China,
+Ltd. (the "Company") and its subsidiaries (the "Group") set out on pages 184 to 338, which comprise
+the consolidated statement of financial position as at 31 December 2021, and the consolidated income
+statement, the consolidated statement of comprehensive income, the consolidated statement of changes in
+equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated
+financial statements, including a summary of significant accounting policies.
+During the Reporting Period, the Company's management strictly abided by the Articles of Association and
+carried out business management in a lawful and compliant manner under the leadership of the Company's
+Party Committee and the guidance of the Board of Directors; all the senior management of the Company
+duly performed their duties and responsibilities in accordance with relevant requirements including loyalty
+and diligence obligations.
+Number of
+H/A shares
+During the Reporting Period, the Supervisory Committee supervised the Company's information disclosure,
+reviewed the Company's regular reports and put forward written review opinions. No violation of laws and
+regulations was found in the Company's information disclosure throughout the year.
+174
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+SUMMARY AND OUTLOOK
+In accordance with the Rules for Appraisal of Supervisors' Performance of Duties, the Supervisory
+Committee organized and conducted the appraisal of Supervisors' performance of duties for 2021.
+After comprehensive evaluation, in 2021 all the Supervisors of the Company performed their duties and
+responsibilities as stipulated under relevant laws, regulations and the Articles of Association in a sincere,
+loyal, diligent and conscientious manner, obtaining "competent" in their performance evaluation.
+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 Company Law of the People's Republic of China, the
+Articles of Association, and the listing rules. The Supervisory Committee will adhere to the principle of
+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
+Sun Jianyi
+Chairman of the Supervisory Committee
+Shenzhen, PRC
+March 17, 2022
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+175
+CORPORATE GOVERNANCE
+Independent Auditor's Report
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+OPINION
+August 6, 2017
+August 28, 2020
+as Supervisors
+Date of
+Appointment
+During the Reporting Period, the Company had neither failure to abide by any effective judicial ruling, nor
+default on any substantial debt due.
+RELATIONSHIPS WITH CUSTOMERS
+The Group aims to provide high-quality financial services to its customers. Adhering to a "customer-
+centric" business philosophy, the Group has embedded consumer rights protection in its corporate
+governance, corporate culture, and development strategy.
+As required by the CBIRC, the Group has set up the Related Party Transaction Control and Consumer
+Rights Protection Committee under the Board of Directors. The Committee oversees the protection of
+consumer rights, optimizes the consumer rights protection structure, determines the responsibilities
+for consumer rights protection, improves the consumer rights protection framework, strengthens the
+implementation and oversight of decisions on consumer rights protection, enhances the consumer rights
+protection culture, ensures the effective execution of policies and the achievement of goals for consumer
+rights protection, and constantly enhances consumer rights protection capabilities.
+There was no material and serious dispute between the Group and its customers in 2021.
+MANAGEMENT AND CONTROL OVER SUBSIDIARIES
+The Company implemented the Measures for the Supervision and Administration of Insurance Group
+Companies and managed the Group's human resources, finance and accounting, data governance,
+information systems, fund operations, branding, and corporate culture. The Company instructed its
+subsidiaries to establish standard corporate governance structures, and continued to improve the group-
+wide risk management, internal control, compliance and internal audit frameworks that cover the entire
+Group. Moreover, the Company organized its subsidiaries to monitor and assess the effectiveness of
+internal controls system in accordance with the Basic Norms for Internal Controls of Enterprises and the
+Basic Principles for Internal Controls of Insurers, continuously improving the Group's operational efficiency
+and risk prevention capability. For the matters covered, high-risk areas and conclusions of the internal
+control assessments over subsidiaries, please refer to the section headed "Establishment and Perfection of
+the Internal Control System" in this Report.
+COMPLIANCE WITH LAWS AND REGULATIONS
+During the Reporting Period, the Group maintained compliance with relevant laws and regulations that
+have significant impacts on operations of the Group.
+INTEGRITY CONDITIONS OF THE COMPANY
+MATERIAL LITIGATION AND ARBITRATION
+168
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+PENALTIES AND RECTIFICATION
+During the Reporting Period, neither the Company nor the Directors, the Supervisors, or the senior
+management of the Company were investigated or subjected to coercive measures by competent
+authorities, detained by disciplinary inspection and supervisory authorities, transferred to judicial
+authorities or held accountable for criminal liabilities, investigated or subjected to administrative
+punishment by the CSRC, subjected to major administrative punishment by other competent authorities, or
+subjected to disciplinary action by any securities exchanges.
+FULFILLMENTS OF UNDERTAKINGS
+Undertakings in Respect of the Major Asset Restructuring with Shenzhen Development Bank
+(1) The Company undertakes that, after the completion of the major asset restructuring with Shenzhen
+Development Bank, and during the period when the Company remains as the controlling shareholder
+of Shenzhen Development Bank, and in respect of the businesses or commercial opportunities similar
+to those of Shenzhen Development Bank that the Company and 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.
+During the Reporting Period, the Company had no material litigations or arbitrations that were required to
+be disclosed.
+During the Reporting Period, the Company had no event of seizure, distrainment or freeze of major assets
+that was required to be disclosed.
+SEIZURE, DISTRAINMENT OR FREEZE OF MAJOR ASSETS
+and Significant Events
+in issue
+Income Tax of H Shareholders via the Hong Kong Stock Connect Program
+For the Chinese mainland investors (including enterprises and individuals) investing in the Company's H
+shares via the Hong Kong Stock Connect Program, China Securities Depository and Clearing Corporation
+Limited, as the nominee holding H shares for investors via the Hong Kong Stock Connect Program, will
+receive the dividend distributed by the Company and distribute such dividend to the relevant investors
+through its depositary and clearing system. The dividend to be distributed to the investors via the Hong
+Kong Stock Connect Program will be paid in RMB. Pursuant to the applicable tax laws and regulations of
+the Chinese mainland:
+•
+For the Chinese mainland individual investors who invest in the 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 dividend. Individual investors may, by producing valid tax payment proofs,
+apply to the competent tax authority of China Securities Depository and Clearing Corporation Limited
+for tax refund relating to the withholding tax already paid abroad.
+For the Chinese mainland securities investment funds that invest in the H shares of the Company
+via the Hong Kong Stock Connect Program, the Company will withhold individual income tax in the
+distribution of the dividend pursuant to the above provisions.
+For the Chinese 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
+dividend, and such investors shall declare and pay the tax on their own.
+Income Tax of A Shareholders via the Shanghai Stock Connect Program
+For Hong Kong investors (including enterprises and individuals) investing in the Company's A shares
+via the Shanghai Stock Connect Program, pursuant to the applicable tax laws and regulations of the
+Chinese mainland, the dividend will be paid in RMB by the Company through the Shanghai Branch of
+China Securities Depository and Clearing Corporation Limited to Hong Kong Securities Clearing Company
+Limited, and the Company will withhold income tax at the rate of 10%.
+For investors via the Shanghai Stock Connect Program who are tax residents of other countries or regions
+(excluding Hong Kong) which have entered into a tax treaty with the Chinese mainland stipulating a
+dividend tax rate of less than 10%, those enterprises or individuals may, or may 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.
+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
+Chinese mainland, Hong Kong and other countries and regions.
+ENVIRONMENTAL PROTECTION
+The Company is not a key pollutant discharging unit announced by the environmental protection
+department. For more information on environmental protection, please refer to the Company's 2021
+Sustainability Report.
+No administrative penalty was imposed on the Company due to environmental problems during the
+Reporting Period.
+CHARITABLE AND OTHER DONATIONS
+Charitable donations made by the Group in 2021 totaled RMB221 million.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+167
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+(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 related 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 make
+Shenzhen Development Bank undertake any illicit obligations through the transactions with Shenzhen
+Development Bank.
+Physically settled
+(3) The Company undertakes that, after the completion of the major asset restructuring and during the
+period when the Company remains as the controlling shareholder of Shenzhen Development Bank,
+the Company shall maintain its independence from 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.
+Ping An Insurance (Group) Company of China, Ltd. 169
+643,539
+Convertible instruments
+Figures for the percentage of H shares held have been rounded down to the nearest second decimal place, so they may not add up
+to the totals due to rounding. The percentage figures are based on the number of shares of the Company as of December 31, 2021.
+Save as disclosed above, to the best knowledge of the Directors and Supervisors, as of December 31, 2021,
+no person (other than the Directors, Supervisors and chief executives of the Company) had any interest
+or short position in the shares and 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 under Section 336 of the SFO.
+By order of the Board of Directors
+Ma Mingzhe
+Chairman
+Shenzhen, PRC
+March 17, 2022
+Number of H shares
+1,970,000
+437,000
+172
+Ping An Insurance (Group) Company of China, Ltd.
+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 Company Law of the People's Republic of China and the Articles of Association.
+ATTENDANCE RECORD OF SUPERVISORS
+During the Reporting Period, the Supervisors endeavored to participate in the general meetings and the
+meetings of the Supervisory Committee in person, as well as to attend the Board meetings as non-voting
+participants. There was no objection to any of the matters put forward for consideration at the meetings.
+The attendance records of each Supervisor at the meetings are as follows:
+Members
+Employee Representative Supervisors
+Sun Jianyi (Chairman)
+Wang Zhiliang
+Annual Report 2021
+Long position
+Long position
+Short position
+Nature of interest
+CORPORATE GOVERNANCE
+Report of the Board of Directors
+and Significant Events
+SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN SHARES
+AND UNDERLYING SHARES OF THE COMPANY
+As far as is known to any Directors or Supervisors of the Company, as of December 31, 2021, the following
+persons (other than the Directors, Supervisors and chief executives 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 under Section 336 of the SFO:
+Percentage
+of total
+number of
+H/A shares
+Percentage
+of total
+shares
+H/A
+Name of substantial shareholder
+shares
+Capacity
+Notes
+3,337,844
+11,106,943
+According to the disclosure form filed by BlackRock, Inc. on December 29, 2021, BlackRock, Inc. was deemed to be interested
+in a total of 417,279,083 H shares (long position) and 794,000 H shares (short position) of the Company by virtue of its controlled
+corporations.
+The entire interests and short positions of BlackRock, Inc. in the Company included 2,613,539 H shares (long position) and 437,000 H
+shares (short position) were held through derivatives as follows:
+Derivatives
+Unlisted derivatives -
+Cash settled
+Listed derivatives -
+As of December 31, 2021, the above undertakings were still being performed and there was no breach of the
+above undertakings.
+Listed derivatives -
+Implementation of the Management of the Company' Information Disclosure
+(4) According to the disclosure form filed by Citigroup Inc. on January 4, 2022, Citigroup Inc. was deemed to be interested in a total of
+515,858,652 H shares (long position) and 46,319,229 H shares (short position) of the Company by virtue of its controlled corporations.
+The entire interests and short positions of Citigroup Inc. in the Company included a lending pool of 457,520,015 H shares (long
+position). In addition, 19,537,455 H shares (long position) and 45,397,713 H shares (short position) were held through derivatives as
+follows:
+46,319,229
+(4)
+Interest of controlled
+2.82
+6.92
+515,858,652
+(4)
+Total:
+2.50
+6.14
+457,520,015 Lending pool
+(4)
+Approved lending agent
+Short position
+corporations
+0.78
+Long position
+58,338,637
+(4)
+Interest of controlled
+H
+Citigroup Inc.
+corporations
+1.72
+4.24
+Short position
+315,833,159
+(3)
+0.31
+Interest of controlled
+0.62
+corporations
+Notes:
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+170
+Holdings Co., Ltd.
+5.27
+8.89
+962,719,102 Long position
+Beneficial owner
+A
+Shenzhen Investment
+corporations
+0.25
+0.00
+Short position
+794,000
+(5)
+Interest of controlled
+corporations
+2.28
+5.60
+Long position
+417,279,083
+(5)
+Interest of controlled
+H
+BlackRock, Inc.
+0.01
+4.12
+10.13
+754,611,511
+(2)
+Interest of controlled
+corporations
+corporations
+4.45
+10.93
+Long position
+814,582,357
+Interest of controlled
+H
+UBS Group AG
+0.09
+0.22
+Short position
+484,490,855
+16,814,571
+Interest of controlled
+corporations
+6.89
+16.91
+Long position
+1,260,074,198
+(1)
+Interest of controlled
+corporations
+H
+CP Group Ltd.
+(%)
+(%)
+Derivatives
+Nature of interest
+(1)
+Short position
+6.50
+2.65
+Total:
+1.50
+3.68
+Lending pool
+274,282,862
+Approved lending agent
+0.00
+0.00
+Long position
+10,446
+interest in shares
+0.00
+0.00
+Long position
+734,408
+Person having a security
+0.74
+1.83
+Long position
+136,858,345
+Investment manager
+corporations
+1.87
+4.60
+Long position
+342,725,450
+Interest of controlled
+H
+JPMorgan Chase & Co.
+(1)
+(2)
+Trustee
+According to the disclosure form filed by CP Group Ltd. on September 9, 2021, CP Group Ltd. was deemed to be interested in a total
+of 1,260,074,198 H shares (long position) and 16,814,571 H shares (short position) of the Company by virtue of its control over several
+wholly owned corporations.
+Unlisted derivatives -
+Nature of interest
+Long position
+Short position
+Physically settled
+Long position
+Short position
+Unlisted derivatives -
+Long position
+Cash settled
+Short position
+Listed derivatives -
+Convertible instruments
+Short position
+Number of H shares
+Report of the Board of Directors
+and Significant Events
+CORPORATE GOVERNANCE
+48,260,000
+128,933,500
+468,500
+9,711,400
+229,982,101
+86,226,779
+17,081,363
+21,674,430
+876,485
+914,728
+Ping An Insurance (Group) Company of China, Ltd.
+171
+Long position
+(3)
+Cash settled
+Listed derivatives -
+Long position
+Short position
+Derivatives
+The entire interests and short positions of CP Group Ltd. in the Company included 16,814,571 H shares (short position) held through
+unlisted derivatives which are physically settled.
+According to the disclosure form filed by UBS Group AG on December 31, 2021, UBS Group AG was deemed to be interested in
+a total of 814,582,357 H shares (long position) and 484,490,855 H shares (short position) of the Company by virtue of its controlled
+corporations.
+The entire interests and short positions of UBS Group AG in the Company included 512,584,520 H shares (long position) and
+382,093,702 H shares (short position) were held through derivatives as follows:
+Derivatives
+Listed derivatives -
+Physically settled
+Listed derivatives -
+Cash settled
+Unlisted derivatives -
+Listed derivatives -
+Physically settled
+Unlisted derivatives -
+Cash settled
+Nature of interest
+Long position
+Short position
+Long position
+Physically settled
+Long position
+Short position
+91,167,846
+60,395,094
+According to the disclosure form filed by JPMorgan Chase & Co. on November 9, 2021, JPMorgan Chase & Co. was deemed to be
+interested in a total of 754,611,511 H shares (long position) and 315,833,159 H shares (short position) of the Company by virtue of its
+controlled corporations.
+394,677,675
+319,027
+4,913,087
+261,711,769
+Number of H shares
+Short position
+Long position
+The entire interests and short positions of JPMorgan Chase & Co. in the Company included a lending pool of 274,282,862 H shares
+(long position). In addition, 296,668,449 H shares (long position) and 247,460,837 H shares (short position) were held through
+derivatives as follows:
+Short position
+57,192,724
+24,301,000
+9
+(9,940)
+(12,216)
+Net impairment losses on financial assets
+13
+(2,416)
+(77,042)
+Net impairment losses on other assets
+14
+(14,548)
+Fees and commission expenses on non-insurance operations
+Foreign exchange gains/(losses)
+(90,494)
+(86,371)
+16,845
+7
+10
+78,039
+106,232
+Share of profits and losses of associates and joint ventures
+Other revenues and other gains/(losses)
+7,346
+General and administrative expenses
+11
+66,012
+64,819
+Total revenue
+1,287,675
+1,321,418
+(92,071)
+Gross claims and policyholders' benefits
+(638,866)
+(627,612)
+Less: Reinsurers' share of claims and policyholders' benefits
+12
+Claims and policyholders' benefits
+20,204
+(618,662)
+12,861
+(614,751)
+Commission expenses on insurance operations
+(80,711)
+(102,021)
+Interest expenses on banking operations
+12
+1,267
+(177,061)
+Owners of the parent
+(181,166)
+Basic
+Diluted
+184
+Annual Report 2021
+RMB
+18
+5.77
+RMB
+8.10
+18
+5.72
+8.04
+Ping An Insurance (Group) Company of China, Ltd.
+Consolidated Statement of Comprehensive Income
+For the year ended 31 December 2021
+(in RMB million)
+Profit for the year
+Other comprehensive income
+Items that may be reclassified subsequently to profit or loss:
+Changes in the fair value of debt instruments at
+fair value through other comprehensive income
+2021
+2020
+121,802
+159,359
+2,094
+(3,415)
+Credit risks provision of debt instruments at
+fair value through other comprehensive income
+Shadow accounting adjustments
+holders of the parent:
+2,219
+Earnings per share attributable to ordinary equity
+121,802
+Interest expenses on non-banking operations
+(28,082)
+(26,436)
+Other expenses
+(37,793)
+(33,454)
+Total expenses
+(1,148,095)
+(1,133,654)
+Profit before tax
+15
+139,580
+187,764
+Income tax
+16
+(17,778)
+(28,405)
+Profit for the year
+121,802
+159,359
+Attributable to:
+Investment income
+Non-controlling interests
+101,618
+143,099
+20,184
+16,260
+159,359
+50,158
+Change in unearned premium reserves
+9
+2,076
+OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Evaluated the overall reasonableness of the
+insurance contract liabilities by performing
+movement analysis and assessing the impact of
+changes in assumptions.
+Tested the completeness and accuracy of
+the underlying data used in the valuation of
+insurance contract liabilities.
+Assessed the appropriateness of the actuarial
+valuation methodologies adopted by the
+Group. Independently built models to perform
+recalculation on insurance contract liabilities
+of selected typical life insurance products; and
+performed independent recalculation on non-life
+insurance contract liabilities, and compared our
+results to the management record.
+Assessed key actuarial assumptions by
+comparing them to historical experience of the
+Group and industry data.
+Evaluated and tested the design and operating
+effectiveness of key controls over the valuation
+of insurance contract liabilities.
+With the support of our internal experts, we
+performed the following audit procedures:
+Relevant disclosures are included in Note 2.(2),
+Note 2.(30), Note 3.(4), Note 48 and Note 53.(1) to
+the consolidated financial statements.
+The valuation of insurance contract liabilities
+involves significant judgement over uncertain
+future cash flows. Complex actuarial models and
+actuarial assumptions with highly judgemental
+nature are used to support the valuation of
+insurance contract liabilities. Key assumptions
+include mortality, morbidity, lapse rates, discount
+rates, expenses and loss ratios, etc.
+As at 31 December 2021, the Group's significant
+life insurance contract liabilities (long-term life
+insurance policyholders' reserves) and non-life
+insurance contract liabilities (unearned premium
+reserves and claim reserves) amounted to
+RMB2,473,134 million, representing 27% of total
+liabilities. We identified the valuation of insurance
+contract liabilities as a key audit matter, as it
+requires significant estimates and judgements, and
+could be significantly impacted by the changes in
+actuarial assumptions.
+How our audit addressed the key audit matter
+Valuation of insurance contract liabilities
+Key audit matter
+KEY AUDIT MATTERS (CONTINUED)
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+Independent Auditor's Report
+180
+FINANCIAL STATEMENTS
+179
+The directors of the Company are responsible for the other information. The other information comprises
+the information included in the Annual Report, other than the consolidated financial statements and our
+auditor's report thereon.
+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 THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL
+STATEMENTS
+We also provide the Audit and Risk Management Committee with a statement that we have complied with
+relevant ethical requirements regarding independence and to communicate with them all relationships and
+other matters that may reasonably be thought to bear on our independence, and where applicable, actions
+taken to eliminate threats or safeguards applied.
+We communicate with the Audit and Risk Management Committee regarding, among other matters, the
+planned scope and timing of the audit and significant audit findings, including any significant deficiencies in
+internal control that we identify during our audit.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+182
+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.
+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.
+Conclude on the appropriateness of the directors' use of the going concern basis of accounting and,
+based on the audit evidence obtained, whether a material uncertainty exists related to events or
+conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we
+conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
+the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
+to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
+auditor's report. However, future events or conditions may cause the Group to cease to continue as a
+going concern.
+Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
+estimates and related disclosures made by the directors.
+Obtain an understanding of internal control relevant to the audit in order to design audit procedures
+that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
+effectiveness of the Group's internal control.
+Ping An Insurance (Group) Company of China, Ltd.
+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.
+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.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
+a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
+that includes our opinion. Our report is made solely to you, as a body, and for no other purpose. We do not
+assume responsibility towards or accept liability to any other person for the contents of this report.
+AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
+FINANCIAL STATEMENTS
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+Independent Auditor's Report
+FINANCIAL STATEMENTS
+181
+Ping An Insurance (Group) Company of China, Ltd.
+The directors of the Company are assisted by the Audit and Risk Management Committee in discharging
+their responsibilities for overseeing the Group's financial reporting process.
+In preparing the consolidated financial statements, the directors of the Company are responsible for
+assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to
+going concern and using the going concern basis of accounting unless the directors of the Company either
+intend to liquidate the Group or to cease operations or have no realistic alternative but to do so.
+The directors of the Company are responsible for the preparation of the consolidated financial statements
+that give a true and fair view in accordance with IFRSS issued by the IASB and the disclosure requirements
+of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is
+necessary to enable the preparation of consolidated financial statements that are free from material
+misstatement, whether due to fraud or error.
+As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain
+professional scepticism throughout the audit. We also:
+Annual Report 2021
+We evaluated and tested the design and operating
+effectiveness of internal controls related to
+disclosures of credit risk and impairment allowance.
+Evaluated and tested key controls over expected
+credit loss models, including approval of
+model changes, ongoing monitoring of model
+performance, model validation and parameter
+calibration.
+760,843
+(30,208)
+6
+730,635
+9,298
+2020
+797,880
+(23,077)
+774,803
+(17,204)
+Net earned premiums
+6
+739,933
+5,908
+6,356
+Interest revenue from banking operations
+7
+213,439
+200,595
+Interest revenue from non-banking operations
+8
+125,474
+118,814
+Fees and commission revenue from non-insurance operations
+757,599
+51,524
+2021
+Reinsurance commission revenue
+Evaluated and tested the data and processes
+used to determine expected credit losses,
+including business data, internal credit rating
+data, macroeconomic data, as well as impairment
+system computational logic, inputs and interfaces
+among relevant systems.
+Design and operating effectiveness of key
+controls:
+2)
+How our audit addressed the key audit matter
+Relevant disclosures are included in Note 2.(12),
+Note 3.(3), Note 26, Note 28 and Note 53.(3) to the
+consolidated financial statements.
+Individual impairment assessment -
+Identifying credit impaired "loans and
+advances to customers" and "financial assets
+at amortized cost" requires consideration of
+a range of factors, and individual impairment
+assessments are dependent upon estimates
+of future cash flows.
+Forward-looking information - Expert
+judgement is used to create macroeconomic
+forecasts and to consider the impact on
+expected credit losses under multiple
+economic scenarios given different weights.
+Impairment assessment of loans and advances
+to customers and financial assets at amortized
+cost (continued)
+Key audit matter
+From the matters communicated with the Audit and Risk Management Committee, we determine those
+matters that were of most significance in the audit of the consolidated financial statements of the current
+period and are therefore the key audit matters. We describe these matters in our auditor's report unless
+law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
+we determine that a matter should not be communicated in our report because the adverse consequences
+of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Benny Bing Yin
+Cheung.
+Ernst & Young
+Notes
+Certified Public Accountants
+17 March 2022
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+183
+FINANCIAL STATEMENTS
+Consolidated Income Statement
+For the year ended 31 December 2021
+(in RMB million)
+Gross written premiums
+Less: Premiums ceded to reinsurers
+Net written premiums
+Hong Kong
+225
+428,530
+501
+38
+4,155
+4,263
+Total assets
+10,142,026
+9,527,870
+Equity and liabilities
+Equity
+Share capital
+39
+18,280
+18,280
+Reserves
+40
+234,186
+228,271
+Treasury shares
+43
+(9,895)
+(5,995)
+Retained profits
+40
+569,834
+investment contracts
+Policyholder account assets in respect of
+48,796
+31,847
+32
+12,606
+12,561
+33
+86,041
+43,385
+34
+49,758
+46,286
+35
+68,462
+522,004
+64,290
+14,185
+16,172
+50
+65,360
+61,901
+37
+154,117
+186,098
+Policyholder account assets in respect of
+insurance contracts
+38
+36
+Equity attributable to owners of the parent
+Non-controlling interests
+812,405
+762,560
+FINANCIAL STATEMENTS
+177
+Ping An Insurance (Group) Company of China, Ltd.
+We evaluated the design of SPPI testing logic and
+re-performed SPPI testing on a sampling basis by
+examining the contracts of these debt instruments.
+We evaluated the appropriateness of business model
+assessment for managing these debt instruments, and
+tested the supporting evidence.
+We evaluated and tested the design and operating
+effectiveness of key controls over SPPI testing.
+We reviewed the Group's accounting policies in
+relation to the classification of financial assets
+at amortized cost, and understood the Group's
+methodologies and processes of business model
+assessment and SPPI testing.
+How our audit addressed the key audit matter
+Relevant disclosures are included in Note 2.(12),
+Note 3.(2) and Note 28 to the consolidated
+financial statements.
+Solely payments of principal and interest
+("SPPI") testing.
+Business model assessment: determining the
+Group's business model for managing these
+debt instruments.
+178
+As at 31 December 2021, the Group's "financial
+assets at amortized cost" amounted to
+RMB2,768,995 million, representing 27% of total
+assets. We identified the classification of these
+debt instruments as a key audit matter as it
+requires complex management judgement in:
+Key audit matter
+We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the
+consolidated financial statements section of our report, including in relation to these matters. Accordingly,
+our audit included the performance of procedures designed to respond to our assessment of the risks
+of material misstatement of the consolidated financial statements. The results of our audit procedures,
+including the procedures performed to address the matters below, provide the basis for our audit opinion
+on the accompanying consolidated financial statements.
+Key audit matters are those matters that, in our professional judgement, were of most significance in
+our audit of the consolidated financial statements of the current period. These matters were addressed
+in the context of our audit of the consolidated financial statements as a whole, and in forming our
+opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our
+description of how our audit addressed the matter is provided in that context.
+KEY AUDIT MATTERS
+Annual Report 2021
+Total equity
+1,077,723
+987,905
+186
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Classification of financial assets at amortized cost
+267,819
+Independent Auditor's Report
+KEY AUDIT MATTERS (CONTINUED)
+40
+265,318
+225,345
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+assessment and analysed the amount, timing and
+likelihood of management's estimated future cash
+flows, especially cash flows from collateral.
+assumptions used in individual impairment
+Evaluated the models and the related
+Assessed the forward-looking information
+management used to determine expected credit
+losses, including the forecasts of macroeconomic
+variables and the assumptions and weightings of
+multiple macroeconomic scenarios.
+In response to the macroeconomic changes, we
+assessed the reasonableness of the expected
+credit loss model methodology and related
+parameters, including probability of default, loss
+given default, exposure at default, and significant
+increase in credit risk.
+Expected credit loss model:
+To the shareholders of Ping An Insurance (Group) Company of China, Ltd.
+(Incorporated in the People's Republic of China with limited liability)
+1)
+We adopted a risk-based sampling approach in our
+credit review procedures on "loans and advances
+to customers" and "financial assets at amortized
+cost". We assessed the debtors' repayment capacity
+and evaluated the Group's credit rating, taking into
+consideration post lending or investing investigation
+reports, debtors' financial information, collateral
+valuation reports and other available information.
+We evaluated and tested the design and operating
+effectiveness of key controls over the approval
+process, post approval credit management, credit
+rating system, collateral monitoring, deferred
+principal and interest payments as well as impairment
+assessment of “loans and advances to customers" and
+"financial assets at amortized cost", including relevant
+data quality and information systems.
+Models and parameters Inherently complex
+models are used to measure expected credit
+losses. Modelled parameters have numerous
+inputs and the parameter estimation involves
+many judgements and assumptions.
+-
+Significant increase in credit risk - The
+selection of criteria for identifying significant
+increase in credit risk is highly dependent on
+judgement and may have a significant impact
+on the expected credit losses for "loans and
+advances to customers" and "financial assets
+at amortized cost" with longer remaining
+periods to maturity.
+The Group uses a number of models and
+assumptions in the measurement of expected
+credit losses, for example:
+We identified the impairment assessment of "loans
+and advances to customers" and "financial assets
+at amortized cost" as a key audit matter, as it
+involves significant management judgements and
+assumptions.
+As at 31 December 2021, the Group's "loans and
+advances to customers" and "financial assets at
+amortized cost" represented 29% and 27% of total
+assets and the amounts of expected credit loss
+provision for "loans and advances to customers"
+and "financial assets at amortized cost" were
+RMB90,202 million and RMB33,642 million,
+respectively.
+How our audit addressed the key audit matter
+Impairment assessment of loans and advances
+to customers and financial assets at amortized
+cost
+Key audit matter
+With the support of our internal experts, we
+evaluated and tested the important parameters of the
+expected credit loss model, management's significant
+judgements and related assumptions, mainly focusing
+on the following aspects.
+(1,432)
+284,061
+268,215
+20,445
+15,298
+119,726
+138,109
+Ping An Insurance (Group) Company of China, Ltd.
+185
+FINANCIAL STATEMENTS
+Consolidated Statement of Financial Position
+As at 31 December 2021
+(in RMB million)
+Assets
+Cash and amounts due from banks and
+Notes
+31 December 2021
+31 December 2020
+other financial institutions
+19
+584,995
+587,391
+Balances with the Central Bank
+20
+308,348
+280,177
+122,811
+99,281
+Annual Report 2021
+Non-controlling interests
+Reserve from cash flow hedging instruments
+(341)
+164
+Exchange differences on translation of foreign operations
+(1,275)
+(2,414)
+Share of other comprehensive income of associates and
+joint ventures
+Others
+117
+(171)
+(45)
+171
+Items that will not be reclassified to profit or loss:
+Changes in the fair value of equity instruments at
+fair value through other comprehensive income
+Shadow accounting adjustments
+Financial assets purchased under reverse repurchase
+(6,257)
+4,256
+Share of other comprehensive income of associates
+and joint ventures
+(1,143)
+1,700
+Other comprehensive income for the year, net of tax
+(2,076)
+(21,250)
+Total comprehensive income for the year
+119,726
+138,109
+Attributable to:
+Owners of the parent
+(45,729)
+27,592
+agreements
+21
+61,429
+27
+1,426,677
+1,231,331
+Financial assets at amortized cost
+28
+2,768,995
+2,624,848
+Debt financial assets at fair value through
+other comprehensive income
+29
+KEY AUDIT MATTERS (CONTINUED)
+Financial assets at fair value through profit or loss
+511,386
+other comprehensive income
+Investments in associates and joint ventures
+Statutory deposits for insurance operations
+Investment properties
+Property and equipment
+Intangible assets
+Right-of-use assets
+Deferred tax assets
+Other assets
+wi www wwww
+30
+Equity financial assets at fair value through
+277,401
+2,599,510
+26
+122,765
+Premium receivables
+22
+79,834
+94,003
+Accounts receivable
+26,628
+26,176
+Derivative financial assets
+23
+30,957
+2,980,975
+37,661
+24
+26,852
+20,219
+Policy loans
+178,298
+161,381
+Finance lease receivable
+25
+200,701
+202,050
+Loans and advances to customers
+Reinsurers' share of insurance liabilities
+Ping An Insurance (Group) Company of China, Ltd.
+81.66
+16
+2.76
+December 31, 2020
+2.81 +1.8%
+December 31, 2021
+Operating profit
+per customer
++6.1%
+147,961
+2021
+Unit: contract per customer
+Unit: RMB per customer
+customer
+122,977
+2020
+129,996 +5.7%
+2021
+Unit: RMB million
+Group operating
+profit
+37.02
+2020
+218
+Contracts per
+2020
+139,470
+Corporate and other
+operating profit
+Accounts. The financial master accounts
+address customers' payment needs in daily
+life scenarios, effectively improving customer
+acquisition, customer retention, and asset
+retention. Assets under management ("AUM")
+in financial master accounts grew 132.2% from
+the beginning of 2021 to RMB321,602 million as
+of December 31, 2021.
+Ping An delivered excellent customer experience
+and enabled business growth by enhancing its basic
+capabilities in accounts, data, products, benefits, and
+a unified intelligent marketing services platform and
+further integrating business scenarios of member
+companies.
+Retail Customers and Internet Users Increased
+Steadily
+Ping An's retail operating profit increased 5.7% year
+on year to RMB129,996 million in 2021, accounting
+for 87.9% of its operating profit attributable to
+shareholders of the parent company.
+Retail Operating Profit
+RETAIL CUSTOMER DEVELOPMENT
+Retail Customer Development Strategy
+Ping An adopts the business model of "one
+customer, multiple products, and one-stop
+services" for developing its retail business and
+gains precise insights into customer demands by
+advancing customer demand-related projects. Ping
+An matches products with scenarios, and realizes
+efficient customer conversion through financial
+master accounts on the basis of data, products,
+benefits and a unified intelligent marketing services
+platform. Ping An provides heartwarming financial
+services and "worry-free, time-saving, and money-
+saving" customer experience through financial
+service advisers and one-stop integrated financial
+services solutions. The continuously expanding
+retail customer base, steadily increasing contracts
+per customer, and stable product profitability have
+become the drivers of Ping An's sustained retail
+business growth.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+8
+Note: The above operating profits are the operating profits attributable to the shareholders of the parent company. Figures may not
+match the calculation due to rounding.
+2020 16,493
+17,965 +8.9%
+2021
+Unit: RMB million
+profitability
+Product
+563.00
+2020
+571.89 +1.6%
+2021
+December 31, 2020
+32.40 -12.5%
+2021
+227 +4.1%
+598.04
+8.2
+% of total retail customers
+Technology companies
+431.11
+421.73
+2.2
+Core financial companies
+473.74
+9.6
+Notes: (1) The number of yearly active users refers to the number
+of active users in the 12 months to the end of the
+Reporting Period.
+Unit: million
+36.8%
+38.0%
+39.3%
+34.3%
+29.6%
+24.0%
+19.0%
+89.26
+83.08
+At a new starting point in a new year, we are on
+a new journey with new ideas. We will still face
+severe challenges and daunting tasks of reform and
+innovation in 2022, in an increasingly complex and
+uncertain external environment under the threat of
+global COVID-19 resurgence. The year 2022 will be
+crucial for Ping An to upgrade its value-oriented
+culture. We will further clarify our strategic vision
+of becoming a world-leading integrated financial
+and healthcare services provider, while practicing
+the people-centric philosophy and striving for
+national rejuvenation. With our new value-oriented
+culture, we will revitalize Ping An by upgrading
+its strategies, empowering business management,
+building team consensus, and enhancing our core
+competitiveness.
+Data. Ping An developed customer profiles in
+a compliant manner on the basis of protecting
+consumer rights and improving customer
+experience. Through refined management, Ping
+An precisely identified customer needs, and
+matched products and services with scenarios
+to empower business.
+In 2022, under the new value-oriented culture, we
+will work together to implement the policy of
+"focusing on financial services, advancing reform
+and innovation, boosting revenues, cutting costs,
+and ensuring compliance.” In strategic innovation,
+we will steadfastly promote various reform projects
+by furthering "finance + technology" and promoting
+“finance + healthcare" under the philosophy of
+high-quality development. We will actively advance
+the rural revitalization plan of "bringing financial
+services, insurance, and healthcare to rural areas,"
+and promote society ecological sustainability by
+continuously upgrading our green finance initiative.
+In business management, we will unswervingly
+pursue digital operations under a customer-oriented
+philosophy. We will empower “integrated finance
++ healthcare" service scenarios with world-leading
+technologies to improve the quality and efficiency
+of serving the real economy and seek new paths for
+growth. In cultural development, we will practice
+the core philosophy of "Expertise makes life simple"
+and maximize the value we create for “society,
+shareholders, clients and employees," which grows
+sustainably through effective education, promotion,
+training and implementation of our new value-
+oriented culture. Ping An strives to become a global
+leader that secures social recognition and industry
+leadership, and that stays atop customers' minds
+In the endless time of history, spirit will be passed
+on from generation to generation. We said in
+Shekou more than 30 years ago that how far Ping
+An can go depends on how far and how long the
+genes of Ping An's culture are passed on. Chinese
+Dream is the common aspiration of every Chinese.
+Similarly, Ping An people share the same Ping
+An Dream. We firmly believe that China's rise is
+an indisputable fact, and there must be a group of
+outstanding domestic enterprises behind it. Ping
+An aspires to be one of them. With the lighthouse
+guiding the voyage, all great achievements are the
+result of continuous struggles and explorations.
+Facing the opportunity of a new round of
+digital economic development and industrial
+transformation, Ping An's value-oriented culture will
+be passed down from generation to generation and
+keep pace with the times. Under the value-oriented
+culture, we will embark on a new journey and forge
+ahead for the great rejuvenation of the Chinese
+nation!
+December 31, 2021
+Unit: million
+Unit: million
+New customers
+Retail customers
+Unit: RMB million
+Retail operating
+profit
+Core Drivers of the Group's Operating Profit Growth
+Notes: (1) Retail customers refer to retail customers holding valid financial products with the core financial companies of the Group.
+(2) Internet users refer to unique registered users with accounts on the internet services platforms (including webpage platforms
+and mobile apps) of the Group's member companies including technology companies and core financial companies.
+Ping An has been dedicated to the development of both retail and corporate customers under a
+customer-centric philosophy and the integrated finance strategy. Ping An adopts the business model
+of "one customer, multiple products, and one-stop services" for developing its retail business. Under a
+heartwarming financial services brand, Ping An provides one-stop integrated financial services solutions
+by leveraging advantages in its ecosystems. Under a "1 + N" services model of the corporate business (one
+customer + N products), Ping An focuses on tiered development of strategic customers, micro-, small and
+medium-sized enterprises, and financial institutions.
+CUSTOMER DEVELOPMENT STRATEGY
+Corporate customer development yielded significant results in 2021,
+with improved services and continued growth in business scale. Written
+premium of the corporate channel achieved through cross-selling rose
+19.9% year on year. New financing scale achieved through corporate
+business cross-selling expanded 26.9% year on year.
+The Group had over 227 million retail customers (1) as of December 31,
+2021, up 4.1% from the beginning of 2021. Of the 32.40 million new retail
+customers acquired in 2021, 35.8% were sourced from the Group's internet
+user base(2). As the Group's retail cross-selling continued to deepen, 39.3%
+of retail customers held multiple contracts with different subsidiaries, up
+1.3 pps from the beginning of 2021.
+Ping An's retail operating profit increased 5.7% year on year to RMB129,996
+million in 2021, accounting for 87.9% of its operating profit attributable to
+shareholders of the parent company.
+Customer Development
+ABOUT US
+Ping An Insurance (Group) Company of China, Ltd. 7
+Annual Report 2021
+Shenzhen, PRC
+March 17, 2022
+Chairman
+अभी
+and makes its employees proud. We will build
+a complete framework of Ping An's new value-
+oriented culture. We will form a complete closed
+loop from the corporate mission and philosophy
+to corporate and personal values, and from the
+strategic vision, strategy implementation and
+policies to mechanisms and the code of conduct,
+to enable top-down learning and application. In the
+new year, the new value-oriented culture will be
+embedded in every daily-work scenario for every
+Ping An employee and agent in every Ping An
+business unit. Uniting the spirit of millions of our
+colleagues and agents makes our culture a unity
+of "knowledge, actions and results," laying a solid
+foundation for strong annual performance and long-
+term sustainable development of the Company.
+Products. Ping An established new marketing
+paths by customer segment, upgraded
+products and models, and expanded ecosystem
+scenarios to cover full customer and user life
+cycles. For instance, Ping An upgraded its
+insurance trust products by combining them
+with eldercare programs or whole life insurance
+to improve customer experience. With these
+products, Ping An has built a strong brand
+image in this area as a market leader in terms
+of the scale and growth of product sales.
+The insurance trust products helped Ping An
+increase AUM and acquire high net worth
+individuals (HNWIS) while empowering the
+agent force. New insurance trust product sales
+amounted to RMB29,284 million in 2021, up 95.0%
+year on year.
+Benefits. Ping An established an integrated
+financial benefit system for its retail customers,
+allowing customers to experience heartwarming
+financial services. Moreover, Ping An actively
+developed strategic cooperation with external
+partners, explored new auto-services scenarios
+around the auto services ecosystem, and
+upgraded products and services. Ping An
+provided over five million auto owners with
+refueling benefits in 2021. Ping An has built an
+online-merge-offline closed-loop process for
+auto viewing, purchase, use, and replacement
+to meet auto owners' demands for one-stop
+integrated financial services.
+A unified intelligent marketing services
+platform. The member companies of the Group
+were highly coordinated, and launched seasonal
+marketing campaigns with the same themes
+based on business development pace to drive
+cross migration and product sales. Ping An has
+built its brand for the "Singles' Day" shopping
+spree in the financial industry. While continuing
+the "Ping An January 8 Marketing Campaign,"
+Ping An also held seasonal marketing
+campaigns including the "August 18 Auto
+Owner Festival" and the "Ping An September 9
+Health Festival" in 2021. Total transaction value
+exceeded RMB9 trillion during the seasonal
+marketing campaigns in 2021.
+99
+194
+206
+174
+148
+127
+4.1
+218.43
+227.31
+The Group
+109 184
+131
+157
+180
+13.4
+64.89
+73.57
+218
+200
+247
+Others (2)
+December 31,
+227
+2015
+December 31,
+2017
+December 31,
+2019
+December 31,
+2020
+December 31,
+2021
+Notes: (1) The numbers of insurance companies' customers are
+based on holders of in-force policies rather than policy
+beneficiaries.
+(2) Others include other investments, lending and insurance
+products.
+(3) Retail customers of separate business lines do not add
+up to the total due to the removal of duplicates.
+(4) The number of customers as of December 31, 2021 is not
+equal to the sum of customers as of December 31, 2020
+and new customers acquired in the Reporting Period
+due to customer attrition.
+Ping An provides users with one-stop services,
+constantly improves online user experience, and
+aligns services more closely with user needs. The
+Group had over 647 million internet users as of
+December 31, 2021, up 8.2% from the beginning
+of 2021. Six of Ping An's portfolio of apps have
+accumulated more than 100 million registered
+users each. On average, each internet user used
+2.07 service items. Moreover, yearly active users (1)
+reached over 345 million as user activity and
+stickiness increased due to efficient internet user
+development.
+Notes: (1) Figures may not match the calculation due to rounding.
+(2) We tightened the definition of retail customers by
+removing customers with complimentary insurance only
+at the end of 2019, and restated data for the comparable
+periods of 2017 and 2018.
+(3) We tightened the definition of internet users by
+removing unique users of suspended internet platforms
+at the end of 2019, and restated data for the comparable
+periods of 2017 and 2018.
+Retail Cross-selling Continued to Deepen
+As Ping An advanced its integrated financial
+business strategy, cross-selling continued to
+deepen. Nearly 33.01 million customer migrations
+occurred between the Group's core financial
+companies in 2021. Despite an expanding customer
+base, 89.26 million or 39.3% of retail customers held
+multiple contracts with different subsidiaries as of
+December 31, 2021, up 1.3 pps from the beginning
+of 2021. Contracts per customer grew 1.8% from the
+beginning of 2021 to 2.81.
+Number of retail customers holding multiple
+contracts with different subsidiaries
+Internet users
+December 31, December 31,
+Change
+(in million)
+2021
+2020
+(%)
+Number of internet users (2)
+647.32
+December 31,
+2018
+December 31,
+2016
+73.71
+404
+296
+Internet users who were not yet retail customers
+(2.7)
+65.29
+63.52
+Life insurance (1)
+Internet users who were retail customers
+Unit: million
+Retail customers
+(%)
+2020
+Change
+December 31, December 31,
+2021
+(in million)
+Retail customer and internet user structure
+Ping An continues to convert internet users into
+retail customers. Retail customers who were also
+internet users increased by 6.2% from the beginning
+of 2021 to nearly 206 million as of December 31, 2021.
+Retail customer mix
+The Group had over 227 million retail customers as
+of December 31, 2021, up 4.1% from the beginning
+of 2021. Of the 32.40 million new retail customers
+acquired in 2021, 35.8% were sourced from the
+Group's internet user base.
+Customer Development
+9
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+647
+303
+Auto insurance (1)
+53.09
+242
+342
+(0.3)
+55.84
+55.66
+Securities, fund and trust
+346
+442
+9.7
+61.87
+67.85
+Credit card
+444
+430
+12.9
+77.00
+86.93
+Retail banking
+516
+598
+6.4
+56.50
+Annual Report 2021
+61.79
+46.47
+5,920
+4,938
+19.9
+638,998
+503,495
+26.9
+Notes: (1) The underlying assets invested by insurance funds
+sourced from corporate business refer to the assets
+sourced by the Group's core financial companies,
+including Ping An Asset Management, Ping An
+Securities, and Ping An Trust, for the allocation of the
+Group's insurance funds.
+(2) The corporate premiums achieved through cross-selling
+refer to written premiums of insurance policies sold
+by the Group to corporate customers through cross-
+selling.
+(3) The written premium of the corporate channel refers to
+the corporate premiums achieved through cross-selling
+less that achieved by Ping An Life.
+New financing scale
+achieved through
+corporate business
+cross-selling (4)
+(4) The new financing scale achieved through corporate
+business cross-selling refers to the scale of new
+financing projects achieved by the Group's member
+companies through cross-selling.
+As the "engine" of the Group's corporate business,
+Ping An Bank has advantageous distribution
+channels. The premiums and financing referred by
+Ping An Bank rose 20.7% and 16.8% year on year
+respectively in 2021.
+2021
+2020
+Change (%)
+(in RMB million)
+Premiums referred by
+Ping An Bank(1)
+Financing referred by
+Ping An Bank (2)
+3,259
+2,701
+20.7
+Performance of integrated finance realized through
+Ping An Bank
+channel (3)
+corporate
+premium of the
+Ping An makes financing more accessible to
+customers by reshaping supply chain finance and
+innovating credit enhancement with technologies
+including the Internet of Things (IoT) and
+blockchain. In business management, Ping An
+develops relationships with micro-, small and
+medium-sized enterprises under the simple standard
+model. As their financial needs are standard,
+Ping An facilitates precise flow attraction based
+on customer profiling through platform-based
+operations. By offering standardized products
+directly to customers without intermediaries,
+Ping An acquires and activates large numbers of
+customers at low costs, continuously expands its
+market share, and seeks rapid growth in financial
+business. Ping An leveraged the "Ping An Bank
+Digital Pocket" platform to develop the Group's
+centralized business portal for micro-, small and
+medium-sized enterprises in 2021. Ping An converted
+1.06 million customers into Ping An Bank's users of
+the "Ping An Bank Digital Pocket" platform through
+the collaboration of member companies as of
+December 31, 2021, and continued to convert users
+into Ping An Bank's customers through platform
+services and specific scenarios.
+12
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Collaboration with financial institution customers
+to improve service efficiency
+Ping An exports its technological capabilities and
+strives to build a service alliance between the Group
+and financial institution customers. In business
+management, Ping An develops financial institution
+customers under a trading collaboration model.
+As pilot entities for integrated financial services,
+Ping An's member companies built an internal
+bond business ecosystem with the Group's bond
+investment system in 2021. On one hand, Ping An
+enables member companies to make investment
+decisions, boost trading returns, and reduce
+investment risks via unified strategic research,
+performance appraisal, and risk warning. On the
+other hand, by connecting the trading collaboration
+model with the sophisticated investment and
+financing model, Ping An strengthens the
+communication of funding needs among strategic,
+large and medium-sized, and financial institution
+customers, helps customers increase financing and
+investment efficiency, and provides more effective
+customer services.
+Significant Results of Corporate Customer
+Development, with Steady Increases in Value
+Contributions
+As a source of premium customers and assets,
+corporate business contributed to the steady
+growth of retail business, and sourced assets for
+the investment of insurance funds. The outstanding
+balance of retail assets referred by corporate
+business grew 5.6% from the beginning of 2021
+to RMB1.28 trillion as of December 31, 2021. The
+underlying assets invested by insurance funds
+sourced from corporate business (1) increased by
+RMB171,226 million or 20.3% from the beginning of
+2021 to RMB624,553 million as of December 31, 2021.
+Corporate customer development yielded significant
+results in 2021, with improving customer services and
+a constantly expanding business scale. Corporate
+premiums achieved through cross-selling grew
+7.3% year on year to RMB18,236 million, in which
+written premium of the corporate channel increased
+19.9% year on year in 2021. The new financing scale
+achieved through corporate business cross-selling
+increased 26.9% year on year to RMB638,998 million in
+2021.
+Performance of corporate integrated finance
+(in RMB million)
+2021
+2020
+Change (%)
+Corporate premiums
+achieved through
+cross-selling (2)
+18,236
+17,001
+7.3
+Including: Written
+473,407
+405,208
+Notes: (1) Premiums referred by Ping An Bank refer to the
+premiums of Ping An's group insurance products
+distributed through Ping An Bank.
+16.8
+From the perspective of transforming and
+upgrading Ping An's main businesses, technology
+benefits are reflected in larger sales, higher
+business efficiency, and stronger risk management.
+In sales promotion, Ping An accelerates the
+application of new technologies in business
+scenarios including life insurance to improve
+productivity and efficiency. Ping An Life continued
+to promote its online-merge-offline sales model.
+The "Al Customer Visit Assistant” enabled agents
+to conduct simultaneous online interactions among
+300 persons at large online product presentation/
+entrepreneurship seminars. Ping An Life's
+proprietary Al Short Video Maker enabled agents
+to create high-quality short videos about insurance
+knowledge, wealth management, and healthy
+lifestyles, diversifying their business development
+practices. Under such unconventional business
+development approaches, the "Al Customer Visit
+Assistant" facilitated a monthly average of over
+150,000 hours of interactions with existing and
+potential customers in 2021, more than triple that in
+2020.
+In efficiency improvement, Ping An leverages
+technologies to optimize business processes, boost
+operational efficiency, and improve customer
+experience. Ping An empowers human service
+representatives with AI. The amount of services
+provided by Al service representatives (1) grew 7%
+year on year to approximately 2.07 billion times in
+2021, representing 84% of Ping An's total customer
+service volume. Sales realized by Al service
+representatives (2) increased 66% year on year to
+approximately RMB275.8 billion in 2021, accounting
+for 29.3% of the total sales volume of all service
+representatives, up 0.2 pps year on year. Ping An's
+Al service representatives covered 2,158 scenarios
+as of December 31, 2021, offering services covering
+lending, credit cards, and insurance.
+Notes: (1) The amount of services provided by Al service
+representatives refers to the total number of times of
+inbound and outbound call services provided by speech
+robots and text robots for lending, credit card, and
+insurance business lines.
+(2) Due to business adjustments, sales realized by AI
+service representatives in the Reporting Period exclude
+sales contributed by Ping An Bank and Lufax Holding.
+Relevant metrics and data for the comparable period
+have been restated accordingly.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+15
+Technology-Powered Business
+Transformation
+In risk management, Ping An employs cutting-
+edge analytics engines to enhance the quality and
+efficiency of risk management. Ping An Life applies
+technologies including optical character recognition
+(OCR), natural language processing (NLP) and
+machine learning to information identification and
+case review in the underwriting and claims review
+processes. With these engines and technologies,
+Ping An Life can identify underwriting risks related
+to nearly 1,600 diseases, and review medical
+insurance claims against more than 1,500 diseases. In
+comparison with the traditional model, underwriting
+efficiency increased nearly 30%, and claim efficiency
+rose nearly 20%. Al collected 28.9% of overdue loans,
+and the 30-day recovery rate of Al collection stood
+at 77% in 2021.
+EMPOWERING FINANCIAL SERVICES ECOSYSTEM
+WITH TECHNOLOGIES
+Ping An's financial services ecosystem provides
+diverse financial services including insurance,
+banking, and investment to facilitate seamless
+connection and closed-loop transactions in various
+financial service scenarios. Ping An has built
+multiple financial innovation platforms including
+Lufax Holding, OneConnect, and E-wallet to satisfy
+customers' comprehensive financial demands,
+linking assets to funds online through "open
+platforms + open marketplaces."
+In services for financial institutions, OneConnect
+had 796 premium customers, up by 202 year on year,
+including 212 premium plus customers, up by 44
+year on year in 2021. Ping An continuously provides
+customers with diverse, innovative products and
+technology services.
+In services for retail customers and merchants,
+E-wallet provided over 360 million retail users with
+financial and consumer services including wealth
+management, shopping, payment, and loyalty point
+management as of December 31, 2021. Moreover,
+E-wallet empowered 2.17 million business customers
+with solutions for payment and customer loyalty
+management.
+EMPOWERING AUTO SERVICES ECOSYSTEM WITH
+TECHNOLOGIES
+Ping An has built a comprehensive auto services
+ecosystem covering "auto viewing, purchase, use,
+and replacement.” Ping An serves auto owners
+and empowers auto service providers including
+automakers, auto dealers, and auto repair shops
+through companies including Autohome, Ping An
+P&C, Ping An Bank, and Ping An Financial Leasing.
+As to retail customers, Autohome had 46.90 million
+average daily active users on mobile devices (1) in
+December 2021, up 11.4% year on year. Ping An
+P&C's "Ping An Auto Owner" app had over 150
+million registered users as of December 31, 2021, with
+over 37 million monthly active users in December.
+Ping An Bank focused on auto owner credit cards to
+advance ecosystem-based customer development
+among auto owners.
+As to corporate customers, Autohome has built
+a software-as-a-service platform that covers the
+entire life cycle of automobiles, offering industry-
+leading digital services. Ping An Financial Leasing's
+auto leasing business volume amounted to
+RMB62,565 million in 2021.
+Note: (1) Average daily active users on mobile devices include
+those on mobile webpages, mobile apps, and mini-
+programs.
+WITH TECHNOLOGIES
+A technology-empowered centralized business
+portal for micro-, small and medium-sized
+businesses
+EMPOWERING MAIN FINANCIAL BUSINESSES
+In digital healthcare, Ping An ranked first in the
+multi-answer summarization task at MEDIQA
+2021, a medical question-and-answer contest
+in biological text processing hosted by the
+Association for Computational Linguistics
+(ACL) in April 2021.
+(2) Financing referred by Ping An Bank refers to the scale
+of financing projects referred by Ping An Bank for other
+member companies of the Group through cross-selling.
+Going forward, Ping An's corporate customer
+development will remain focused on tiered customer
+development. By enhancing the "1 + N❞ services
+model, Ping An will improve customer services,
+strengthen risk management, continuously advance
+corporate customer development, and create
+greater value for customers.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+13
+14
+Technology-Powered Business
+Transformation
+Ping An continues to focus on developing core technologies to build
+leading technological capabilities and empower its ecosystems. Ping An's
+technology patent applications increased by 7,008 from the beginning of
+2021 to 38,420 as of December 31, 2021. Ping An moved up from the third
+place to the first in the global ranking list by the number of Al patent
+applications. Ping An also ranked first globally by the number of fintech
+and digital healthcare patent applications. Ping An cumulatively won
+over 70 international championships in technology contests. In Al, Ping
+An topped the rankings in four tasks at the International Workshop on
+Semantic Evaluation (SemEval) in March 2021.
+Technological strength underpins the Group's business development. Ping
+An empowers human service representatives with Al. Ping An's Al service
+representatives covered 2,158 scenarios as of December 31, 2021, offering
+services covering lending, credit cards, and insurance. The amount of
+services provided by Al service representatives was approximately 2.07
+billion times in 2021, representing 84% of Ping An's total customer service
+volume. Sales realized by Al service representatives was approximately
+RMB275.8 billion in 2021, accounting for 29.3% of the total sales volume of all
+service representatives.
+THE GROUP CONTINUES TO EXECUTE ITS
+STRATEGIES
+Ping An continues to invest in R&D to build leading
+technological capabilities, which have been widely
+utilized to empower its main financial businesses
+and accelerate the development of its ecosystems.
+Ping An promotes technological empowerment in
+diverse business scenarios to increase efficiency, cut
+costs, enhance risk management, develop excellent
+products, and strengthen customer acquisition.
+Moreover, Ping An develops industry ecosystems
+with advanced technologies by exporting leading
+innovative products and services to external entities.
+Ping An boosts customer stickiness, retention,
+and value through diverse products and services
+by broadening scenario coverage and deepening
+scenario mining through ecosystems. The Group
+had over 647 million internet users as of December
+31, 2021. The Group acquired 32.40 million new retail
+customers in 2021, 35.8% of whom were sourced from
+its internet user base. Moreover, retail customers
+who used services in the Group's ecosystems
+held 3.0 contracts and RMB33,000 in AUM per
+capita respectively, 2.3 times and 4.1 times those
+held by customers who did not use such services
+respectively.
+Ping An continues to focus on developing core
+technologies and securing proprietary intellectual
+property rights. Ping An had a first-class technology
+team of over 110,000 technology business staffers,
+including over 4,500 scientists, as of December
+31, 2021. Moreover, Ping An cooperated with top
+universities and leading research institutes including
+Peking University, Tsinghua University, and Fudan
+University to pursue technological breakthroughs.
+Ping An's technology patent applications increased
+by 7,008 from the beginning of 2021 to 38,420 as of
+December 31, 2021, which is more than most other
+international financial institutions'. Of the technology
+patent applications, over 95% were for inventions,
+and 8,897 were made under the Patent Cooperation
+Treaty (PCT) and abroad. Ping An moved up from
+the third place to the first in the global ranking list
+by the number of Al patent applications. Ping An
+also ranked first globally by the number of fintech
+and digital healthcare patent applications (1).
+Note:
+(1) The ranking by the number of Al patent applications
+is from the Al Patent Composite Index Report 2021
+released by PatSnap Innovation Research Center. The
+ranking by the number of fintech patent applications
+is from the Global Fintech Patent Quality Top Ten 2021
+released by 01 Caijing's 01 Think Tank. The ranking by
+the number of digital healthcare patent applications
+is from the Digital Healthcare Patent Composite Index
+Report 2021 released by PatSnap Innovation Research
+Center.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An has been internationally recognized for
+technological breakthroughs in terms of global
+contests and academic papers.
+In respect of global contests, Ping An cumulatively
+won over 70 international championships, including
+ten garnered in 2021.
+In Al, Ping An topped the rankings in four
+out of twelve tasks, including "Reading
+Comprehension of Abstract Meaning" and
+"Detecting and Rating Humor and Offense," at
+SemEval, a contest with great industrial and
+academic influence, in March 2021. Ping An won
+one championship in the "Number Recognition"
+task and ranked second by total score at
+the authoritative international contest Visual
+Question Answering Challenge in July 2021.
+In respect of academic papers, Ping An cumulatively
+published over 250 papers in internationally
+renowned journals covering healthtech, Al and other
+fields, including over 110 published in 2021. Ping
+An published a paper as the first author in Nature
+Communications in February 2021. Ping An published
+research results in Briefings in Bioinformatics, a top-
+notch international computational biology journal,
+in May 2021. In addition, Ping An promoted the
+application of scientific research results to boost
+business development.
+Regarding deleveraging, Ping An's deleveraging
+business reached RMB43.1 billion in 2021 as it
+helped customers via equity investments and
+mezzanine funds. Ping An provided RMB3.5
+billion as a mezzanine fund for a state-owned
+industry leader in storage and logistics, and
+provided the customer with integrated services
+including asset revitalization. By doing so, Ping
+An served the real economy.
+Regarding infrastructure, Ping An gave full
+play to its unique advantages of the integrated
+model of "investment, finance, construction and
+transportation." Ping An won the bid for a large
+public-private partnership subway project (with
+a total project scale of over RMB30 billion),
+and promoted subsequent deals including
+syndicated loans.
+Ping An actively responds to the state's
+strategic call by focusing on the next-generation
+infrastructure and supporting the real economy.
+Leveraging the Group's ecosystems, Ping An
+provides customers with tailor-made solutions.
+Regarding business management, Ping An made
+breakthroughs in key business areas including
+infrastructure and deleveraging by leveraging its
+advantages in investment of insurance funds under
+the sophisticated investment and financing model.
+Ping An's corporate investment and financing
+business brought RMB541.8 billion of bank deposits
+in 2021. Moreover, Ping An builds a bond business
+ecosystem covering the whole process from
+contracting to handling, underwriting, investing,
+and trading. In this way, Ping An facilitates mutual
+empowerment of resource input and customer
+development, and contributes to the capital market
+transformation toward direct financing.
+2.81
+Figures may not match the calculation due to rounding.
+Cross-selling between insurance businesses
+continued to make contributions. In particular, Ping
+An Health Insurance's premium income from cross-
+selling by Ping An Life's agents rose 21.6% year on
+year in 2021.
+Premium income from cross-selling by Ping An
+Life's agents
+2021
+2020
+HNWIS
+0.22
+(0.1%)
+Channel contribution
+Percentage
+Channel contribution
+Percentage
+(in RMB million)
+Amount
+(%)
+Amount
+(%)
+74.5%
+Affluent
+87.47
+(38.5%)
+Ping An Property &
+Casualty
+42,229
+15.6
+227.31
+45,947
+1.92
+2.45
+31.50
+20.78
+10
+Annual Report 2021
+December 31, December 31, December 31, December 31, December 31, December 31, December 31,
+2015
+2017
+2018
+2016
+2019
+2020
+2021
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An gained a deeper understanding of
+its customers through long-term customer
+development. The wealthier customers are, the more
+contracts they hold, and the more valuable they are.
+Middle-class and above customers reached over 169
+million persons as of December 31, 2021, accounting
+for 74.5% of total customers. HNWIs held 14.72
+contracts per customer, much more than affluent
+customers. The longer customers have been with
+Ping An, the more contracts they hold, and the more
+valuable they are. Ping An had nearly 132 million
+customers who had been with it for five or more
+years as of December 31, 2021, with contracts per
+customer being 3.21, far more than the average of
+1.92 contracts held by customers who had been with
+Ping An for less than two years.
+Retail customer wealth structure and proportion
+Unit: million
+Retail customers and contracts per customer by
+years with Ping An
+5 or more years
+2-5 years
+Less than 2 years
+The Group
+Note:
+December 31, 2021
+Number of customers
+(in million)
+Contracts per
+customer
+131.97
+3.21
+62.72
+32.62
+(2) Internet users include the users of technology
+companies and core financial companies, excluding
+duplicates.
+16.1
+81.66
+customer
+0.22
+14.72
+87.47
+3.81
+2.42
+57.96
+1.82
+227.31
+2.81
+Notes: (1) Mass customers are those with annual income
+below RMB100,000, middle-class customers between
+RMB100,000 and RMB240,000, and affluent customers
+above RMB240,000. HNWIs have personal assets of
+RMB10 million or more.
+(2) Figures may not match the calculation due to rounding.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 11
+MANAGEMENT DISCUSSION AND ANALYSIS
+Customer Development
+CORPORATE BUSINESS DEVELOPMENT
+Corporate Business Value
+In corporate business, Ping An creates value by
+boosting its shared and own values under the "1 +
+N" integrated financial services model. In boosting
+its shared value, the corporate business provides
+high-quality assets for insurance fund allocation
+and retail business, facilitating the achievement of
+the Group's development targets for retail financial
+business. In boosting its own value, the corporate
+business promotes synergies among the Group's
+member companies, tiered customer development,
+and cross-selling under the customer-centric
+philosophy to increase each corporate customer's
+value.
+Corporate Customer Development Strategy
+Ping An's corporate business strategy focuses
+on tiered development of strategic customers,
+micro-, small and medium-sized enterprises, and
+financial institutions. Ping An provides differentiated
+services to satisfy customer needs through three
+models, namely a sophisticated investment and
+financing model, a simple standard model, and a
+trading collaboration model. Moreover, in corporate
+business, Ping An uses technological capabilities
+to improve customer experience, reduce service
+costs, serve the real economy, and promote financial
+inclusion.
+Integrated finance-driven tailor-made and
+scenario-based service solutions for strategic
+customers
+(in million)
+Short-term insurance
+Contracts per
+December 31, 2021
+(35.9%)
+business of Ping An
+Annuity
+8,858
+41.1
+9,055
+43.1
+Ping An Health Insurance
+7,615
+67.8
+6,262
+68.2
+Middle-class
+Mass
+57.96
+(25.5%)
+Retail customers and contracts per customer by
+segment
+Going forward, Ping An will remain customer-
+centric, strengthen technological capabilities, and
+use innovative products and better services to
+improve customer experience. In this way, Ping An
+will boost both retail customer value and enterprise
+value.
+HNWIS
+Affluent
+Middle-class
+Mass
+The Group
+Number of customers
+432.15
+Profit for the year
+16,247
+(2,338)
+27,956 1,913
+(962) (21,250)
+(2,338)
+27,956 1,913
+(47,819)
+(47,819)
+16,260 159,359
+179,209 852,370
+(5,001) 433,971
+143,099
+1,976
+equity
+Total
+Non-
+controlling
+interests
+profits
+shares
+143,099 15,298 138,109
+(38,241)
+(38,241)
+16,825
+31,456 31,456
+(994)
+(994)
+(3,698)
+(3,698)
+(16)
+(16)
+operations
+746
+(17)
+1,873
+2,157
+(284)
+(4,867)
+(4,867)
+(16,825)
+763
+1,329 11,167
+Treasury Retained
+reserve General
+funds reserves
+12,164 71,964
+18,280 111,598 (36,413)
+7,068
+7,068
+(3,900)
+(3,900)
+(3,890)
+(170)
+3,583
+2,844
+3,085 2,056
+(3,890)
+(170)
+739
+(1,029)
+13,621 13,621
+283
+25,957 21,345
+(1,638) (1,355)
+12,164 101,108
+(1,573) (9,895) 569,834 265,318 1,077,723
+adjustments Others
+(4,809) 19,122
+13,896
+111,598
+18,280
+reserves
+premium
+capital
+of foreign
+on translation
+Shadow
+Exchange
+differences
+Financial
+assets at
+FVOCI accounting
+Share
+Share
+Reserves
+For the year ended 31 December 2020
+Surplus
+9,838
+18,280 111,598
+(33,923)
+(Decrease)/increase in assets sold under agreements to
+993,850
+1,252,176
+Proceeds from bonds issued
+37,223
+14,383
+Capital injected into subsidiaries by non-controlling interests
+Cash flows from financing activities
+Net cash flows from/(used in) investing activities
+Increase in policy loans, net
+Rentals received
+(447,138)
+27,933
+(21,947)
+3,146
+repurchase of insurance operations, net
+(169,860)
+99,242
+Proceeds from borrowings
+(3,900)
+Payment of acquisition of shares
+300
+4,300
+other financial institutions, net
+Increase in insurance placements from banks and
+(43,074)
+4,620
+(16,356)
+(46,942)
+(41,937)
+Interest paid
+(954,298)
+(1,335,187)
+Repayment of borrowings
+183,876
+197,965
+Dividends paid
+54,815
+60,234
+167,123
+Disposal of subsidiaries, net
+Acquisition of subsidiaries, net
+Purchases of investments
+property and equipment and intangible assets, net
+Proceeds from disposal of investments
+Proceeds from disposal of investment properties,
+Purchases of investment properties, property and
+equipment and intangible assets
+Net cash flows from operating activities
+Cash flows from investing activities
+Interest received
+(in RMB million)
+Consolidated Statement of Cash Flows
+Ping An Insurance (Group) Company of China, Ltd.
+(362) (5,995) 522,004 225,345 987,905
+88,789
+12,164
+26,858
+23,147
+For the year ended 31 December 2021
+(5,452) (5,452)
+Dividends received
+2021
+168,173
+1,776
+5,234
+(978)
+(366)
+2,039,192
+(2,680,660)
+(2,198,579)
+Notes
+2,016,480
+679
+(9,995)
+(12,186)
+312,075
+90,116
+57
+2020
+390
+(994)
+(12,319)
+(41,469)
+19,267
+13,605
+50
+Deferred tax liabilities
+15,620
+14,208
+36
+Lease liabilities
+67,581
+72,839
+49
+Investment contract liabilities for policyholders
+2,972,460
+3,261,354
+48
+Other liabilities
+51
+344,224
+321,581
+FINANCIAL STATEMENTS
+187
+Ping An Insurance (Group) Company of China, Ltd.
+Director
+YAO Jason Bo
+XIE Yonglin
+Director
+Director
+Insurance contract liabilities
+MA Mingzhe
+The financial statements on pages 184 to 338 were approved and authorized for issue by the Board of
+Directors on 17 March 2022 and were signed on its behalf.
+9,527,870
+10,142,026
+Total equity and liabilities
+8,539,965
+9,064,303
+Total liabilities
+Annual Report 2021
+Consolidated Statement of Changes in Equity
+901,285
+47
+48,579
+35,049
+23
+Derivative financial liabilities
+37,217
+960,175
+797,646
+57,376
+Financial liabilities at fair value through profit or loss.
+44
+Due to banks and other financial institutions
+Liabilities
+31 December 2020
+31 December 2021
+Notes
+(in RMB million)
+Assets sold under agreements to repurchase
+45
+127,477
+276,602
+Bonds payable
+2,693,833
+3,002,049
+46
+Customer deposits and payables to brokerage customers
+63,806
+67,276
+1,097,523
+Policyholder dividend payable
+150,767
+Insurance payables
+17,283
+Income tax payable
+5,148
+6,663
+Accounts payable
+139,528
+For the year ended 31 December 2021
+(in RMB million)
+As at 1 January
+shares
+Total
+controlling
+Retained
+Treasury
+Non-
+operations
+on translation
+of foreign
+Exchange
+differences
+General
+reserves
+funds
+adjustments Others
+reserve
+accounting
+FVOCI
+reserves
+profits
+interests
+equity
+18,280 111,598 (33,923)
+(41,469)
+20,445 119,726
+101,618
+(1,211)
+2,810 (1,446)
+(2,490)
+-
+Share
+261 (2,076)
+2,810 (1,446)
+(2,490)
+101,618 20,184 121,802
+(362) (5,995) 522,004 225,345 987,905
+88,789
+12,164
+23,147 26,858
+(1,211)
+Share
+capital premium
+Surplus
+Shadow
+(in RMB million)
+As at 31 December
+Others
+Other equity instruments issued/redeemed by
+subsidiaries
+Acquisition of shares (Note 43)
+Long-term Service Plan (Note 42)
+Key Employee Share Purchase Plan (Note 41)
+As at 1 January
+Contributions from non-controlling interests
+Acquisition of subsidiaries
+Dividend paid to non-controlling interests
+Appropriations to general reserves
+Dividends declared (Note 17)
+Total comprehensive income for the year
+Other comprehensive income for the year
+Profit for the year
+Equity transactions with non- controlling interests
+12,319
+Other comprehensive income for the year
+Dividends declared (Note 17)
+assets at
+Financial
+Reserves
+For the year ended 31 December 2021
+Annual Report 2021
+188
+As at 31 December
+Total comprehensive income for the year
+Others
+Acquisition of shares
+Long-term Service Plan (Note 42)
+Key Employee Share Purchase Plan (Note 41)
+Contributions from non-controlling interests
+Equity transactions with non-controlling interests
+Dividend paid to non-controlling interests
+Appropriations to general reserves
+Other equity instruments issued/redeemed by
+subsidiaries
+Payment of shares purchased for Long-term Service Plan
+(45,887)
+(3,989)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(8) ASSOCIATES (CONTINUED)
+The financial statements of the associates are prepared for the same reporting period as the Group. Where
+necessary, adjustments are made to bring the accounting policies in line with those of the Group.
+Upon application of the equity method, the Group determines whether it is necessary to recognize
+additional impairment losses on the Group's investments in its associates. The Group determines at each
+reporting date whether there is any objective evidence that the investment in the associate is impaired. If
+this is the case, the Group calculates the amount of impairment as the difference between the recoverable
+amount of the associate and its carrying value and recognizes the amount in the income statement.
+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.
+The results of associates are included in the Group's income statement to the extent of dividends received
+and receivable. The Group's investments in associates are treated as non-current assets and are stated at
+cost less any impairment losses.
+For the year ended 31 December 2021
+(9) JOINT VENTURES
+(10) 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 income statement.
+Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
+the exchange rates as at the dates of initial transactions. Non-monetary items measured at fair value in a
+foreign currency are translated using the exchange rates at the date when the fair value was determined.
+The gain or loss on change arising on translation of a non-monetary item measured at fair value is treated
+in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation difference
+on the item whose fair value gain or loss is recognized in other comprehensive income or profit or loss is
+also recognized in profit or loss and other comprehensive income, respectively).
+194
+Annual Report 2021
+The Group has assessed the nature of its joint ventures and determined them to be joint ventures. The
+Group has rights to the net assets of these joint ventures. The Group's investments in its joint ventures are
+accounted for using the equity method of accounting, less any impairment losses. Refer to Note 2.(8) for
+details of the equity method of accounting.
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 193
+192
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(6) SUBSIDIARIES
+A subsidiary is an entity (including structured entities) over which the Company has control. The Company
+controls an entity when the Company has power over an entity, is exposed to, or has rights to, variable
+returns from its involvement with the entity and has the ability to affect these returns through its power
+over the entity. The results of subsidiaries are included in the Company's income statement to the extent
+of dividends received and receivable. The Company's investments in subsidiaries are stated at cost less any
+impairment losses.
+(7) STRUCTURED ENTITIES
+A structured entity is an entity that has been designed so that voting or similar rights are not the dominant
+factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks
+only, and the relevant activities are directed by means of contractual or related arrangements.
+The Group determines whether it is an agent or a principal in relation to those structured entities in which
+the Group acts as an asset manager 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.
+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.
+(8) ASSOCIATES
+An associate is an entity, not being a subsidiary or a joint venture, in which the Group has a long-term
+interest of generally not less than 20% of the equity voting rights and over which it is in a position to
+exercise significant influence.
+The Group's investments in associates are stated in the consolidated statement of financial position at
+the Group's share of net assets under the equity method of accounting, less any impairment losses. The
+Group's share of post-acquisition profit or loss is recognized in the income statement, and its share of
+post-acquisition movements in other comprehensive income is recognized in other comprehensive income
+with a corresponding adjustment to the carrying amount of the investment. When the Group's share
+of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
+receivables, the Group does not recognize further losses, unless it has incurred legal or constructive
+obligations or made payments on behalf of the associate. Unrealized gains and losses resulting from
+transactions between the Group and its associates are eliminated to the extent of the Group's investments
+in the associates, except where unrealized losses provide evidence of an impairment of the asset
+transferred. Goodwill arising from the acquisition of associates is included in the carrying amount of the
+investment and is neither amortized nor individually tested for impairment.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Reclassifies the Group's share of components previously recognized in other comprehensive income to
+profit or loss or retained earnings, as appropriate.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+The functional currency of most of overseas subsidiaries is the Hong Kong dollar. At the end of the
+reporting period, the assets and liabilities of these overseas subsidiaries are translated into the presentation
+currency of the Company at the exchange rates prevailing at the end of the reporting period and their
+income statements are translated into RMB at the average exchange rate for the year. The resulting
+exchange differences are recognized in other comprehensive income and accumulated in the exchange
+differences on translation of foreign operations reserve. On disposal of a foreign operation, the component
+of other comprehensive income relating to that particular foreign operation is recognized in the income
+statement.
+(12) FINANCIAL ASSETS (CONTINUED)
+Classification and measurement (continued)
+Debt instruments
+Debt instruments are those instruments that meet the definition of a financial liability from the issuer's
+perspective, such as loans, government and corporate bonds, etc. Subsequent measurement of
+debt instruments depends on the Group's business model for managing the asset and the cash flow
+characteristics of the asset. There are three measurement categories into which the Group classifies its
+debt instruments:
+Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows.
+represent solely payments of principal and interest, and that are not designated at FVPL are measured
+at amortized cost. Interest income from these financial assets is included in the interest revenue
+using the effective interest rate method. Any gain or loss arising from derecognition or impairment is
+recognized directly in profit or loss. Such assets held by the Group mainly include cash and amounts
+due from banks and other financial institution, balances with the Central Bank, accounts receivable,
+finance lease receivable, financial assets at AC, loans and advances to customers measured at AC, etc.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
+where the assets' cash flows represent solely payments of principal and interest, and that are not
+designated at FVPL are measured at FVOCI. Movements in the carrying amount are taken through
+other comprehensive income, except for the recognition of impairment gains or losses, interest income
+and foreign exchange gains and losses on the instrument's amortized cost which are recognized
+in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously
+recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income
+from these financial assets is included in the interest revenue using the effective interest rate method.
+Such assets held by the Group mainly include debt financial assets at FVOCI and loans and advances
+to customers measured at FVOCI, etc.
+Equity instruments
+The Group subsequently measures all equity investments at fair value. Where the Group's management has
+elected to present fair value gains and losses on equity investments in other comprehensive income, there
+is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition
+of the investment. Dividends, representing a return on such investments, continue to be recognized in
+profit or loss when the Group's right to receive payments is established.
+196
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+(4,184)
+FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. The
+gains or losses from fair value changes on the debt investments measured at FVPL are recognized
+in profit or loss. The Group also irrevocably designate financial assets at fair value through profit or
+loss if doing so significantly reduces or eliminates a mismatch created by assets and liabilities being
+measured on different bases.
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are
+translated into RMB at the exchange rates for their functional and currencies ruling at the dates of the
+cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are
+translated into RMB at the weighted average exchange rate for the year.
+(11) CASH AND CASH EQUIVALENTS
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on
+hand, demand deposits, current accounts with the Central Bank and short term highly liquid investments
+including assets purchased under reverse repurchase agreements and others which are readily convertible
+into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short
+maturity of generally within three months when acquired.
+(12) FINANCIAL ASSETS
+Recognition
+The Group shall recognize a financial asset or a financial liability in its statement of financial position when,
+and only when, it becomes a party to the contractual provisions of the instrument.
+At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
+asset not at fair value through profit or loss, transaction costs that are incremental and directly attributable
+to the acquisition or issue of the financial asset. Transaction costs of financial assets carried at fair value
+through profit or loss are expensed in profit or loss.
+The Group classifies its financial assets in the following measurement categories, which depends on the
+Group's business model for managing the financial assets and the contractual terms of the cash flows:
+those to be measured at amortized cost ("AC");
+those to be measured at fair value through other comprehensive income ("FVOCI"); or
+those to be measured at fair value through profit or loss ("FVPL").
+The Group determines the classification of debt investments according to its business model and the
+contractual cash flow characteristics of the financial assets. The debt investments shall be classified as
+FVPL if the cash flows characteristics cannot pass the test on solely payments of principal and interest on
+the principal amount. Otherwise, the classification of debt investments will depend on the business model
+provided the fair value option is not elected. Investments in equity instruments are classified as FVPL in
+general, except those designated as at FVOCI.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+195
+(10) FOREIGN CURRENCIES (CONTINUED)
+Recognizes any surplus or deficit in profit or loss; and
+Classification and measurement
+Recognizes the fair value of the consideration received;
+(4,296)
+303,466
+56
+403,125
+424,748
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+424,748
+189
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+1. CORPORATE INFORMATION
+Ping An Insurance (Group) Company of China, Ltd. (the "Company") was registered in Shenzhen, the
+People's Republic of China (the “PRC") on 21 March 1988. The business scope of the Company includes
+investing in financial and insurance enterprises, as well as supervising and managing various domestic and
+overseas businesses of subsidiaries, and controlled funds. The Company and its subsidiaries are collectively
+referred to as the Group. The Group mainly provides integrated financial products and services and is
+engaged in life insurance, property and casualty insurance, trust, securities, banking and other businesses.
+The registered office address of the Company is 47th, 48th, 109th, 110th, 111th and 112th Floors, Ping An
+Finance Centre, No. 5033 Yitian Road, Futian District, Shenzhen, Guangdong Province, China.
+These consolidated financial statements are presented in millions of Renminbi ("RMB") unless otherwise
+stated.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+FINANCIAL STATEMENTS
+(1) BASIS OF PREPARATION
+Cash and cash equivalents at the beginning of the year
+Cash and cash equivalents at the end of the year
+125,578
+Repayment of lease liabilities
+Recognizes the fair value of any investment retained;
+(7,634)
+(7,806)
+Payment of redemption for other equity instruments
+by subsidiaries
+(3,051)
+(3,260)
+(5,000)
+11,409
+3,248
+Net cash flows (used in)/from financing activities
+(136,412)
+260,641
+(18,363)
+Others
+These consolidated financial statements have been prepared in accordance with International Financial
+Reporting Standards ("IFRSS"), amendments to IFRSs and interpretations issued by the International
+Accounting Standards Board ("IASB"), also comply with the applicable disclosure provisions of the Rules
+Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the applicable
+disclosure requirements of the Hong Kong Companies Ordinance. They have been prepared under the
+historical cost convention, except for some financial instruments and insurance contract liabilities.
+Net (decrease)/increase in cash and cash equivalents
+Net foreign exchange differences
+To the extent that a topic is not covered explicitly by IFRSS, the IFRSS 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.
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(4) BUSINESS COMBINATIONS AND GOODWILL (CONTINUED)
+Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of
+cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating
+unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognized. An
+impairment loss recognized for goodwill is not reversed in subsequent periods.
+Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and
+part of the operation within that unit is disposed of, the goodwill associated with the operation disposed
+of is included in the carrying amount of the operation when determining the gain or loss on the disposal.
+Goodwill disposed of in these circumstances is measured based on the relative value of the operation
+disposed of and the portion of the cash-generating unit retained.
+(5) BASIS OF CONSOLIDATION
+The consolidated financial statements comprise the financial statements of the Company and its
+subsidiaries as at 31 December 2021 and for the year then ended.
+Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
+control, and continue to be consolidated until the date when such control ceases. The financial statements
+of the subsidiaries are prepared for the same reporting period as the parent company, using consistent
+accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from
+intra-group transactions and dividends, are eliminated on consolidation in full, unless the transaction
+provides evidence of an impairment of the transferred asset.
+Total comprehensive income within a subsidiary is still attributed to the non-controlling interest even if it
+results in a deficit balance. If the Group loses control over a subsidiary, it:
+Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
+The preparation of financial statements in conformity with IFRSS requires the use of certain critical
+accounting estimates. It also requires management to exercise its judgement in the process of applying
+the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas.
+where assumptions and estimates are significant to the consolidated financial statements are disclosed in
+Note 3.
+Derecognizes the carrying amount of any non-controlling interest;
+Derecognizes the cumulative translation differences recorded in equity;
+191
+Ping An Insurance (Group) Company of China, Ltd.
+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 the amount recognized for non-controlling interests and any fair value of the Group's
+previously held equity interests in the acquiree is lower than the fair value of the net assets acquired, the
+difference is, after reassessment, recognized in profit or loss as a gain on bargain purchase.
+Significant judgement is required in determining the economic assumptions, e.g., discount rates/
+investment return, and non-economic assumptions, e.g., mortality, morbidity, lapse rates, policy dividend,
+and expenses, used in the measurement of insurance contract liabilities for the long-term life insurance
+contracts. Such assumptions should be determined based on current information available at the end of the
+reporting period. The Group has changed the above assumptions based on current information available
+as at 31 December 2021 (mainly due to change of the benchmarking yield curve for the measurement of
+insurance contract liabilities and adjustments of non-economic assumptions based on the latest experience
+and trends), and updated the estimate of future cash flows, with the result of changes in the long-term life
+insurance contract liabilities being recognized in profit or loss. Consequently, the long-term life insurance
+policyholders' reserves were increased by RMB22,566 million as at 31 December 2021 and the profit before
+tax for the year ended 31 December 2021 was decreased by RMB22,566 million (the long-term life insurance
+policyholders' reserves were increased by RMB19,141 million as at 31 December 2020 and the profit before
+tax for the year ended 31 December 2020 was decreased by RMB19,141 million).
+Changes in accounting estimates
+Annual Report 2021
+190
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Except for IFRS 17, there are no amendments to IFRSS or IFRIC interpretations that are not yet effective
+that would be expected to have a material impact on the Group.
+(3) ISSUED BUT NOT YET EFFECTIVE STANDARDS, AMENDMENTS AND INTERPRETATIONS
+The Group has not applied the following new standards, which have been issued but are not yet effective.
+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. In June 2020, the IASB published the revised version
+of IFRS 17, stating that IFRS 17 is effective for financial years beginning on or after 1 January 2023. On
+9 December 2021, the IASB amended IFRS 17 to add a transition option for a "classification overlay" to
+address possible accounting mismatches between financial assets and insurance contract liabilities in the
+comparative information presented on initial application of IFRS 17. The Group is currently assessing the
+impact of IFRS 17.
+(4) BUSINESS COMBINATIONS AND GOODWILL
+Business combinations that are not under common control are accounted for using the acquisition method.
+The cost of an acquisition is measured at the acquisition date fair value which is the sum of the acquisition
+date fair values of assets transferred by the Group, liabilities assumed by the Group to the former owners
+of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For
+each business combination, the Group elects whether to measure the non-controlling interests in the
+acquiree that are present ownership interests and entitle their holders to a proportionate share of net
+assets in the event of liquidation at fair value or at the proportionate share of the acquiree's identifiable
+net assets. All other components of non-controlling interests are measured at fair value. Acquisition-related
+costs are expensed as incurred.
+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.
+(2) CHANGES IN ACCOUNTING POLICIES AND ESTIMATES
+If the business combination is achieved in stages, the previously held equity interest is remeasured at its
+acquisition date fair value and any resulting gain or loss is recognized in profit or loss.
+Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition
+date. Contingent consideration classified as an asset or a liability that is a financial instrument and within
+the scope of IFRS 9 is measured at fair value with changes in fair value either recognized in profit or loss or
+as a change to other comprehensive income. If the contingent consideration is not within the scope of IFRS
+9, it is measured in accordance with the appropriate IFRSs. Contingent consideration that is classified as
+equity is not remeasured and subsequent settlement is accounted for within equity.
+Financial liabilities at fair value through profit or loss include financial liabilities held for trading and other
+financial liabilities designated as such at initial recognition. Financial liabilities held for trading are the
+financial liabilities that:
+Ping An Insurance (Group) Company of China, Ltd.
+(b) on initial recognition are part of a portfolio of identified financial instruments that are managed
+together and for which there is evidence of a recent actual pattern of short-term profit-taking;
+Financial liabilities at fair value through profit or loss
+(13) FINANCIAL LIABILITIES (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(a) are incurred principally for the purpose of repurchasing in the near term;
+Annual Report 2021
+When the equity financial assets measured at FVOCI are derecognized, the cumulative gain or loss
+previously recognized in other comprehensive income is reclassified from equity to retained profits. When
+the other financial assets are derecognized, the cumulative gain or loss previously recognized in other
+comprehensive income is reclassified from equity to profit or loss.
+When a financial liability (or part of it) is extinguished, the Group derecognizes the financial liability (or
+part of it). The difference between the carrying amount of the derecognized liability and the consideration
+is recognized in profit or loss.
+At initial recognition, the Group classifies a financial liability at fair value through profit or loss or other
+financial liabilities. The Group measures a financial liability at its fair value plus, in the case of a financial
+liability not at fair value through profit or loss, transaction costs that are incremental and directly
+attributable to the acquisition or issue of the financial liability. Transaction costs of financial liabilities
+carried at FVPL are expensed in profit or loss.
+(13) FINANCIAL LIABILITIES
+The Group writes off financial assets, in whole or in part, when it has exhausted all practical recovery
+efforts and has concluded there is no expectation of recovery. Indicators that there is no reasonable
+expectation of recovery include (i) ceasing enforcement activity and (ii) where the Group's recovery
+method is foreclosing on collateral and the value of the collateral is such that there is no reasonable
+expectation of recovering in full.
+(c) they have been transferred and the Group neither transfers nor retains substantially all the risks and
+rewards of ownership and the Group has not retained control.
+(b) they have been transferred and the Group transfers substantially all the risks and rewards of
+ownership;
+Derecognition
+(c) are derivatives (except for a derivative that is a designated and effective hedging instrument or a
+financial guarantee contract).
+(a) the contractual rights to receive the cash flows from the financial assets have expired;
+Financial assets are derecognized when:
+198
+The above financial liabilities are subsequently measured at fair value. All the realized and unrealized gains/
+(losses) are recognized in profit or loss.
+Financial guarantee contracts issued by the Group are those contracts that require a payment to be made
+to reimburse the holder for a loss, which incurs because the specified debtor fails to make a payment
+when due in accordance with the terms of a debt instrument. The Group initially measures such contracts
+at fair value. The fair value at inception is likely to equal the premium received. This amount is recognized
+rateably over the period of the contract in fees and commission income. Subsequently, the liabilities
+arising from the financial guarantee contracts are measured at the higher of premium received on the
+initial recognition less income recognized in accordance with the principles of IFRS 15, and the amount of
+impairment provision calculated as described in Note 2.(12) - impairment.
+(a) it eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
+arise from measuring assets or liabilities or recognizing the gains and losses on them on different
+bases;
+a.
+For loan commitments' the loss allowance is recognized as a provision. However, for contracts that include
+both a loan and an undrawn commitment and the Group cannot separately identify the expected credit
+losses on the undrawn commitment component from those on the loan component, the expected credit
+losses on the undrawn commitment are recognized together with the loss allowance for the loan. To
+the extent that the combined expected credit losses exceed the gross carrying amount of the loan, the
+expected credit losses are recognized as a provision.
+If a hybrid contract contains a host that is not an asset within the scope of IFRS 9, an embedded derivative
+shall be separated from the host and accounted for as a derivative if, and only if:
+An embedded derivative is a component of a hybrid contract that also includes a non-derivative
+host with the effect that some of the cash flows of the combined instrument vary in a way similar to a
+stand-alone derivative.
+The gains or losses from fair value changes of derivatives are recognized in profit or loss.
+The Group's derivative financial instruments mainly include interest rate swaps, forward currency contracts
+and swap transaction, credit swap and stock index futures, etc. Such derivative financial instruments are
+initially recognized at fair value on the date of which the related derivative contracts are entered into and
+are subsequently measured at fair value. All derivatives are carried as assets when the fair value is positive
+and as liabilities when the fair value is negative.
+(14) DERIVATIVE FINANCIAL INSTRUMENTS
+Apart from the above financial guarantee contracts issued by the Group's banking operations which are
+accounted for under IFRS 9, the Group has also regarded certain financial guarantee contracts as insurance
+contracts and has elected to apply IFRS 4 to such financial guarantee contracts.
+Financial guarantee contracts
+(13) FINANCIAL LIABILITIES (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 199
+Annual Report 2021
+The Group measures other financial liabilities subsequently at amortized cost, using the effective interest
+method. Other financial liabilities of the Group mainly include customer deposits and payables to brokerage
+customers, short-term borrowings, long-term borrowings and bonds payable, etc.
+Other financial liabilities
+Once designated as financial liabilities at fair value through profit or loss at initial recognition, the financial
+liabilities shall not be reclassified to other financial liabilities in subsequent periods. Financial liabilities
+designated at FVPL are subsequently measured at fair value. Any changes in fair value are recognized in
+profit or loss, except for changes in fair value arising from changes in the Group's own credit risk which are
+recognized in other comprehensive income. Changes in fair value due to changes in the Group's own credit
+risk are not subsequently reclassified to profit or loss upon derecognition of the liabilities.
+(c) a contract contains one or more embedded derivatives, with the host being not an asset within the
+scope of IFRS 9, and the embedded derivative(s) do(es) significantly modify the cash flows.
+(b) a group of financial liabilities is managed and its performance is evaluated on a fair value basis, in
+accordance with a documented risk management or investment strategy, and information about the
+group is provided internally on that basis to the entity's key management personnel;
+The Group may, at initial recognition, designate a financial liability as at fair value through profit or loss.
+when one of the following criteria is met:
+For account receivables, the Group refers to historical experience of credit loss, combines with current
+situation and forward-looking information, formulate the lifetime expected credit loss of the financial
+assets.
+(27) INSURANCE GUARANTEE FUND
+(12) FINANCIAL ASSETS (CONTINUED)
+The consideration received and premium income used in the calculation of the insurance guarantee fund is
+the amount agreed in the insurance policies.
+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 Insurance")
+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.
+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.
+0.8% of the premium income for short-term health insurance, and 0.15% of the premium income for
+long-term health insurance; and
+0.15% 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 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;
+According to the Administrative Regulations on the Insurance Guarantee Fund (CIRC [2008] No.2), the
+Group calculates the insurance guarantee fund as follows:
+Intangible assets with indefinite useful lives are tested for impairment annually at each year end either
+individually or at the cash-generating unit level, as appropriate.
+For non-financial assets other than goodwill, an assessment is made at each reporting date as to whether
+there is any indication that previously recognized impairment losses may no longer exist or may have
+decreased. If such an indication exists, the Group makes an estimate of the recoverable amount. A
+previously recognized impairment loss is reversed only if there has been a change in the estimates used to
+determine the asset's recoverable amount since the last impairment loss was recognized. If that is the case,
+the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
+exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
+been recognized for the asset in prior years. Such a reversal is recognized in the income statement.
+Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances
+indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable
+amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. The
+recoverable amount is the higher of its fair value less costs to disposal and its value-in-use, determined
+on an individual asset (or cash-generating unit) basis, unless the individual asset (or cash-generating unit)
+does not generate cash flows that are largely independent from those of other assets or groups of assets
+(or groups of cash-generating units). Impairment losses recognized in relation to goodwill are not reversed
+for subsequent increases in its recoverable amount.
+206
+(26) IMPAIRMENT OF NON-FINANCIAL ASSETS (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 205
+Annual Report 2021
+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.
+(26) IMPAIRMENT OF NON-FINANCIAL ASSETS
+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.
+the economic characteristics and risks of the embedded derivative are not closely related to the
+economic characteristics and risks of the host;
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+197
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+The Group recognizes or reverses the impairment provision through profit or loss. For debt instruments
+measured at FVOCI, impairment gains or losses are included in the net impairment losses on financial
+instruments and correspondingly reduce the accumulated changes in fair value included in the other
+comprehensive income reserves of equity.
+For the financial assets at Stage 1 and Stage 2, the interest income is calculated based on its gross
+carrying amount (i.e., amortized cost) before adjusting for impairment provision using the effective interest
+method. For the financial assets at Stage 3, the interest income is calculated based on the carrying amount
+of the asset, net of the impairment provision, using the effective interest method. Financial assets that
+are originated or purchased credit impaired are financial assets that are impaired at the time of initial
+recognition, and the impairment provision for these assets is the expected credit loss for the entire lifetime
+since initial recognition as purchased or originated credit-impaired financial assets.
+Stage 3: If the financial instrument is credit-impaired, the financial instrument is then moved to "Stage 3".
+The impairment provisions are measured based on expected credit losses on lifetime basis.
+Stage 2: If a significant increase in credit risk ("SICR”) since initial recognition is identified, the financial
+instrument is moved to "Stage 2" but is not yet deemed to be credit-impaired. The impairment
+provisions are measured based on expected credit losses on a lifetime basis;
+Stage 1: A financial instrument that is not credit-impaired on initial recognition is classified in "Stage 1" and
+has its credit risk continuously monitored by the Group. The impairment provisions are measured
+at an amount equal to the 12-month expected credit losses for the financial assets which are not
+considered to have significantly increased in credit risk since initial recognition;
+iii) Establishing the number and relative weightings of forward-looking scenarios for the associated ECL.
+For the financial instruments subject to ECL measurement, the Group assesses the significant increase in
+credit risk since initial recognition or whether an instrument is considered to be credit impaired, outlines a
+"three-stage" model expected credit loss models are established and staging definition are set for each of
+these financial assets class. Incorporating forward-looking information, expected credit losses for financial
+assets are recognized into the different stages and measured the impairment provisions respectively.
+Determining criteria for significant increase in credit risk;
+Choosing appropriate models and assumptions for the measurement of ECL including exposure at
+default (EAD), probability of default (PD), loss given default (LGD), etc.;
+ii)
+The Group assesses on a forward-looking basis the expected credit losses associated with its debt
+instruments carried at amortized cost and FVOCI, and with the exposure arising from loan commitments
+and financial guarantee contracts that are not accounted for as “insurance contracts". A number of
+significant judgements are required in measuring the expected credit loss ("ECL"), such as:
+Expected credit loss refers to the weighted average amount of credit loss of financial instruments based
+on the probability of default. Credit loss refers to the difference between all contractual cash flows that are
+due to the entity in accordance with the contract and all the cash flows that the entity expects to receive,
+discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or
+originated credit-impaired financial assets).
+Impairment
+(12) FINANCIAL ASSETS (CONTINUED)
+Impairment (Continued)
+b.
+(c) Prepaid land premiums
+a separate instrument with the same terms as the embedded derivative would meet the definition of a
+derivative; and
+Expenditures on acquiring the expressway operating rights are capitalized as intangible assets and
+subsequently amortized on the straight-line basis over the contract terms.
+(b) Expressway operating rights
+Core deposits are accounts that a financial institution expects to maintain for an extended period of time
+due to ongoing business relationships. The intangible asset value associated with core deposits reflects
+the present value of additional cash flow resulted from the use of the deposits at a lower cost alternative
+source of funding in the future periods.
+(a) Core deposits
+Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
+cash-generating unit level. Such intangible assets are not amortized. The useful life of an intangible asset
+with an indefinite life is reviewed annually to determine whether the indefinite life assessment continues to
+be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for on
+a prospective basis.
+Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible
+assets acquired in a business combination is the fair value as at the date of acquisition. The useful
+lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
+are subsequently amortized on the straight-line basis over the useful economic life and assessed for
+impairment whenever there is an indication that the intangible asset may be impaired. The amortization
+period and the amortization method for an intangible asset with a finite useful life are reviewed at least at
+each financial year end.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(23) INTANGIBLE ASSETS (OTHER THAN GOODWILL)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+Prepaid land premiums are prepayments for land under PRC law for fixed periods. Prepaid land premiums
+are initially stated at cost and subsequently amortized on the straight-line basis over the lease terms. All
+lands related to the Group's prepaid land premiums are located in Mainland China.
+FINANCIAL STATEMENTS
+Annual Report 2021
+No provision for depreciation is made on construction in progress until such time the relevant assets are
+completed and ready for use.
+Construction in progress mainly represents costs incurred in the construction of building premises, as well
+as the cost of equipment pending installation, less any impairment losses.
+(22) CONSTRUCTION IN PROGRESS
+Fully depreciated assets are retained in the financial statements until they are no longer in use and no
+further charge for depreciation is made in respect of these assets.
+The useful lives and depreciation methods are reviewed periodically to ensure that the method and period
+of depreciation are consistent with the expected pattern of economic benefits from the items of property
+and equipment.
+25 years
+4
+Over the shorter of economic
+useful lives and terms of the leases
+15 40 years
+3 15 years
+Ping An Insurance (Group) Company of China, Ltd. 203
+(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:
+Inventory impairment provisions should be accrued when the cost of individual inventory item is higher
+than its net realizable value.
+The Group's inventories comprise raw materials, product in progress, finished goods, other supplemental
+materials, etc. and lands purchased for property development by real estate subsidiaries. Inventory is
+initially measured at cost which includes purchasing cost, processing cost and other costs which made the
+inventory to the present place and condition.
+(25) INVENTORIES
+Foreclosed assets are initially recognized at fair value. The difference between the initial fair value and the
+sum of the related loan principal, interest receivable and impairment provision is taken into the income
+statement. At the end of the reporting period, the foreclosed assets are measured at the lower of their
+carrying value and net recoverable amount. When the carrying value of the foreclosed assets is higher
+than the net recoverable amount, a provision for the decline in value of foreclosed assets is recognized as
+impairment losses in the income statement.
+(24) FORECLOSED ASSETS
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+204
+2 25 years
+10 40 years,
+indefinite
+20 years
+50 years,
+indefinite
+30
+20 - 30 years
+Estimated useful lives
+Software and others (including patents and know-how, customer relationships and
+contract rights, etc.)
+Trademarks
+Core deposits
+Prepaid land premiums
+Expressway operating rights
+C.
+1% - 10%
+0% - 10%
+1% - 15%
+Estimated useful lives
+Equipment, furniture and fixtures
+Motor vehicles
+The actual cost of inventory is priced based on moving weighted average method.
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 201
+Annual Report 2021
+Sale of assets under repurchase agreements and purchase of assets under reverse repurchase agreements
+conducted in the bank and securities businesses are included in the operating activities of consolidated
+statement of cash flows and sale of assets under repurchase agreements and purchase of assets under
+reverse repurchase agreements conducted in the insurance business are included in the financing and
+investing activities of consolidated statement of cash flows.
+The amounts advanced under these agreements are recognized and presented as “financial assets
+purchased under reverse repurchase agreements". The Group may not take physical possession of assets
+purchased under such agreements. In the event of default by the counterparty to repurchase the assets,
+the Group has the right to the underlying assets. The difference between the purchasing price and reselling
+price is recognized as interest income over the term of the agreement using the effective interest method.
+Assets sold under repurchase agreements continue to be recognized but a liability is recognized and
+presented as "assets sold under agreements to repurchase" for the proceeds from selling such assets. The
+Group may be required to provide additional collateral based on the fair value of the underlying assets and
+such non-cash collateral assets continue to be recognized on the balance sheet. The difference between
+the selling price and repurchasing price is recognized as interest expense over the term of the agreement
+using the effective interest method.
+(17) ASSETS PURCHASED UNDER REVERSE REPURCHASE AGREEMENTS AND ASSETS SOLD
+UNDER REPURCHASE AGREEMENTS
+Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
+statement of financial position when there is a legally enforceable right to offset the recognized
+amounts and there is an intention to settle on a net basis or realize the assets and settle the liabilities
+simultaneously. The legally enforceable right must not be contingent on future events and must be
+enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the
+Group or the counterparty.
+(16) OFFSETTING OF FINANCIAL INSTRUMENTS
+Determining whether to classify financial instruments into level 3 of the fair value hierarchy is generally
+based on the significance of the unobservable factors involved in valuation methodologies.
+Such techniques include using recent prices in arm's length transactions, reference to the current
+market value of another instrument which is substantially the same, discounted cash flow analysis and/
+or option pricing models. For discounted cash flow techniques, estimated future cash flows are based on
+management's best estimates and the discount rate used is a market rate for similar instruments. Certain
+financial instruments, including derivative financial instruments, are valued using pricing models that
+consider, among other factors, contractual and market prices, correlation, time value of money, credit risk,
+yield curve volatility factors and/or prepayment rates of the underlying positions. The use of different
+pricing models and assumptions could produce materially different estimates of fair values.
+For financial instruments where there is active market, the fair value is determined by quoted prices in
+active markets. For financial instruments where there is no active market, the fair value is determined
+by using valuation techniques. Such techniques should be appropriate in the circumstances for which
+sufficient data is available, and the inputs should be consistent with the objective of estimating the price at
+which an orderly transaction to sell the asset or to transfer the liability would take place between market
+participants at the measurement date under current market conditions, and maximize the use of relevant
+observable inputs and minimize the use of unobservable inputs.
+(15) FAIR VALUE OF FINANCIAL INSTRUMENTS
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+200
+For the above assets, the Group may bifurcate the embedded derivative and measured it at fair value
+through profit or loss, or designate the entire hybrid instrument to be measured at fair value through profit
+or loss.
+the hybrid contract is not measured at fair value with changes in fair value recognized in profit or loss
+(i.e., a derivative that is embedded in the hybrid contract at fair value through profit or loss is not
+separated).
+For the year ended 31 December 2021
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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.
+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.
+Depreciation is calculated on the straight-line basis to write off the cost of each item of property and
+equipment to its residual value over its estimated useful life. The principal assumptions used for this
+purpose are as follows:
+The cost of an item of property and equipment comprises its purchase price and any directly attributable
+costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred
+after items of property and equipment have been put into operation, such as repairs and maintenance,
+is normally charged to the income statement in the year in which it is incurred. In situations where it can
+be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits
+expected to be obtained from the use of an item of property and equipment, and where the cost of the
+item can be measured reliably, the expenditure is capitalized as an additional cost of that asset or as a
+replacement.
+Property and equipment, other than construction in progress, are stated at cost less accumulated
+depreciation and any impairment losses. An item of property and equipment is derecognized upon disposal
+or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal
+or retirement recognized in the income statement in the year the asset is derecognized is the difference
+between the net sales proceeds and the carrying amount of the relevant asset.
+(21) PROPERTY AND EQUIPMENT
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+202
+Estimated residual values
+Leasehold improvements
+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.
+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 15 to 40 years.
+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.
+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.
+(20) INVESTMENT PROPERTIES
+The Group's precious metals represent gold and other precious metals. Precious metals that are not related
+to the Group's precious metals trading activities are initially measured at acquisition cost and subsequently
+measured at the lower of cost and net recoverable amount. Precious metals acquired by the Group for
+trading purposes are initially measured at fair value and subsequent changes in fair value are recorded in
+income statement.
+(19) PRECIOUS METALS
+The impairment provision measurement and derecognition of finance lease receivable are complied with
+the basic accounting policy of the financial assets (Note 2.(12)). The Group incorporates forward looking
+information in estimating the expected credit loss for finance lease receivable. The Group derecognizes
+finance lease receivables when the rights to receive cash flows from the finance lease have expired or have
+been transferred and the Group has transferred substantially all the risks and rewards of ownership. Refer
+to Note 13 and Note 25 for details.
+A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of
+the leased asset to the lessee. At the commencement of the lease term, the Group recognizes the minimum
+lease payments receivable by the Group, the initial direct costs and the unguaranteed residual value in
+the finance lease receivable. The difference between (a) the aggregate of the minimum lease payments,
+the unguaranteed residual value and the initial direct costs and (b) the aggregate of their present values
+is recognized as unearned finance lease income. Finance lease receivable net of unearned finance lease
+income which represents the Group's net investment in the finance lease is presented as finance lease
+receivable in the consolidated statement of financial position. Unearned finance lease income is allocated
+over the lease term based on a pattern reflecting a constant periodic return on the Group's net investment
+in the finance lease, and is recognized as "other revenues and other gains/(losses)".
+(18) FINANCE LEASE RECEIVABLE AND UNEARNED FINANCE INCOME
+The useful life and depreciation methods are reviewed periodically to ensure that the method and period of
+depreciation are consistent with the expected pattern of economic benefits from the individual investment
+properties.
+Buildings
+(28) INSURANCE CONTRACTS
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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.
+Long-term life insurance policyholders' reserves
+210
+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 53.
+The individual investment-linked contracts of the Group contain significant insurance risks and are
+classified as insurance contracts. These policies also contain both insurance components and deposit
+components. The deposit components are unbundled from these hybrid insurance contracts. The rest of
+the contracts are accounted for as insurance contracts. The Group investment-linked contracts of the
+Group that do not contain significant insurance risks are classified as investment contracts.
+(33) INVESTMENT-LINKED BUSINESS
+Charges including policy administration fees are recognized as other income during the period of
+service provided.
+Premium receipts are recognized not as premium income, but rather as liabilities, presented as
+investment contract liabilities. For those non-life investment type policies without guaranteed
+benefits, the related contract liabilities are measured at fair value and the related transaction costs are
+recognized in the income statement. For other investment contracts, the related liabilities are initially
+measured at fair value and subsequently measured at amortized cost. Commissions, net of receipts
+from initial charges that are meant to compensate such costs, are recognized as transaction costs in
+the initial amount of the liabilities.
+Insurance policies that are not considered insurance contracts under IFRS 4 are classified as investment
+contracts. These policies do not contain significant insurance risk.
+(32) INVESTMENT CONTRACTS
+A shadow accounting adjustment is applied to recognize the change in surplus in other comprehensive
+income to the extent that such change is derived from unrealized gains or losses on supporting assets
+recognized directly in other comprehensive income.
+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.
+(31) DISCRETIONARY PARTICIPATION FEATURES IN LONG-TERM LIFE INSURANCE
+CONTRACTS AND INVESTMENT CONTRACTS
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 209
+Annual Report 2021
+Annual Report 2021
+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 is charged in the income statement. Otherwise, no adjustment is made for the
+respective insurance contract liabilities.
+Annual Report 2021
+(33) INVESTMENT-LINKED BUSINESS (CONTINUED)
+Except for contingent considerations deriving from or contingent liabilities assumed in business
+combinations and the provision recognized for the loss allowance of off-balance sheet credit exposure,
+contingent liabilities are recognized as provisions if the following conditions are met:
+A 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.
+(35) PROVISIONS
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 211
+Fair value changes on financial assets at FVOCI related to the universal life insurance portfolio are
+recognized in other comprehensive income. Changes in the insurance liabilities for the universal life
+insurance portfolio is also recognized in other comprehensive income to the extent that such change
+is derived from fair value changes on financial assets at FVOCI related to the universal life insurance
+portfolio attributable to policyholders.
+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.
+The deposit components separated from the above universal life insurance contracts are accounted for as
+follows:
+The universal life contracts of the Group contain significant insurance risks are classified as insurance
+contracts. These policies also contain both insurance components and deposit components. The deposit
+components are separated from these hybrid insurance contracts. The rest of the contracts are accounted
+for as insurance contracts as described in Note 2.(30).
+(34) UNIVERSAL LIFE BUSINESS
+Assets of investment-linked contracts are initially measured and subsequently carried at fair value,
+presented as policyholder account assets.
+Charges including account management fees and surrender charges are calculated at a fixed amount
+or certain percentage of policy account liabilities. Account management fees are recognized as other
+income during the period of service provided and surrender charges are recognized as other income
+as incurred.
+Premium receipts are recognized not as premium income, but rather as liabilities, presented in
+policyholder account liabilities. These liabilities are initially measured and subsequently carried at fair
+value. Commissions, net of receipts from initial charges that are meant to compensate such costs, are
+recognized as transaction costs in the income statement.
+The Group investment-linked contracts and the deposit component unbundled from the above individual
+investment-linked insurance contracts are accounted for as follows:
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Liability adequacy test
+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
+income statement.
+The Group determines risk margins of the long-term life insurance policyholders' reserves using the
+scenario comparison method. The unfavourable scenarios are determined according to the uncertainty and
+impact of expected net cash outflows.
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 207
+Annual Report 2021
+A reasonable estimate of expected future net cash flows is determined based on information currently
+available as at the end of the reporting period.
+Expected future cash inflows represent cash inflows arising from assuming liabilities under the
+insurance contracts, including premium income and other charges.
+Reasonable expenses necessary for policy administration and claims handling, including policy
+maintenance expenses, claim expenses, etc.
+Non-guaranteed benefits under the insurance contracts arising from constructive obligations,
+including policyholder dividends, etc.;
+Guaranteed benefits under the insurance contracts, including claims, mortality benefits, disability
+benefits, morbidity benefits, survival benefits and maturity benefits;
+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:
+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.
+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.
+The insurance contract liabilities of the Group include long-term life insurance policyholders' reserves,
+unearned premium reserves and claim reserves.
+(30) INSURANCE CONTRACT LIABILITIES
+Insurance contracts are those contracts under which the Group has accepted 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) SIGNIFICANT INSURANCE RISK TESTING
+For other insurance contracts issued by the Group, tests are performed to determine if the contracts
+contain significant insurance risk, and contracts of similar nature are grouped together for this purpose.
+When performing the significant insurance risk test, the Group makes judgements in sequence as to
+whether the contract transfers insurance risk, whether the contract has commercial substance, and whether
+the transferred insurance risk is significant.
+For the year ended 31 December 2021
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(30) INSURANCE CONTRACT LIABILITIES (CONTINUED)
+Margins are considered and separately measured in determining insurance contract liabilities. Margins are
+released in the income statement over the insurance coverage period using systematic and reasonable
+methods. Margins include risk margin and residual margin.
+Long-term life insurance policyholders' reserves are insurance contract liabilities provided for long-term life
+and health insurance contracts.
+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.
+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.
+Incurred and reported reserves are measured at amounts not higher than the sum insured of the insurance
+contracts, using the case-by-case estimate method and average claim per case method, based on a
+reasonable estimate of ultimate claim amounts as well as margins.
+Claim 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.
+Claim reserves
+(30) INSURANCE CONTRACT LIABILITIES (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+An entity has a present obligation as a result of a past event;
+Ping An Insurance (Group) Company of China, Ltd.
+208
+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.
+The unearned premium reserves are provided for unexpired insurance obligations of property and casualty
+and short-term life insurance contracts.
+Unearned premium reserves
+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.
+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.
+At inception of an insurance contract, any “day-one" gain is not recognized in the income statement,
+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 income statement. 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.
+Risk margin represents provision for the uncertainty and the degree of impact 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 unfavourable scenarios are determined according
+to the uncertainty and impact of expected net cash outflows.
+Annual Report 2021
+It is probable that an outflow of resources embodying economic benefits will be required to settle the
+obligation; and
+Ping An Insurance (Group) Company of China, Ltd.
+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.
+(c) Medical benefits
+The employees of the Group are entitled to participate in various government-sponsored housing funds.
+The Group contributes on a monthly basis to these funds based on certain percentages of the salaries of
+the employees. The Group's liability in respect of these funds is limited to the contributions payable in each
+period.
+(b) Housing benefits
+The employees of the Group are mainly covered by various defined contribution pension plans. The Group
+makes and accrues contributions on a monthly basis to the pension plans, which are mainly sponsored by
+the related government authorities that are responsible for the pension liability to retired employees. Under
+such plans, the Group has no other significant legal or constructive obligations for retirement benefits
+beyond the said contributions, which are expensed as incurred. Certain employees are also provided with
+group life insurance but the amounts involved are insignificant.
+(a) Pension obligations
+(40) EMPLOYEE BENEFITS
+Right-of-use assets are initial measured at cost comprising the amount of the initial measurement of lease
+liability, any lease payments made at or before the commencement date less any lease incentives received,
+any initial direct costs and deduct any lease incentives receivable. The right-of-use asset is depreciated
+over the asset's useful life on a straight-line basis if the Group can reasonably determine the ownership of
+the assets at the end of the lease term; The right-of-use asset is depreciated over the shorter of the asset's
+useful life and the lease term if the ownership of the assets is uncertain at the end of the lease term. When
+the recoverable amount is lower than the carrying amount of the right-of-use asset, the Group reduces its
+carrying amount to the recoverable amount.
+The Group mainly leases buildings as right-of-use assets. The Group applies the lease recognition
+exemption to short-term leases and leases of low-value assets, and does not recognize the right-of-
+use assets and lease liabilities. Lease payments on short-term leases and leases of low-value assets are
+recognized as costs of asset or expenses on a straight-line basis over the lease term. Except for lease
+applying lease recognition exemption, leases are recognized as a right-of-use asset at the date at which the
+lease begins, lease liabilities are initial measured at the present value of the lease payments that have not
+been paid. Lease payments include fixed payments, variable lease payment based on an index or a rate, the
+exercise price of a purchase option if the lessee is reasonably certain to exercise that option and payments
+of penalties for terminating the lease, etc. The variable lease payments determined on a certain percentage
+of sales are not included in the lease payments and are recognized in profit or loss when incurred.
+Group as a lessee
+Where the Group is the lessor, assets leased by the Group under operating leases are included in
+investment properties and rentals receivable under such operating leases are credited to the income
+statement on the straight-line basis over the lease terms. Contingent rents are recognized as profit or loss
+in the period in which they are earned.
+As lessor of operating leases
+Leases refer to a contract in which the lessor transfers the right to use the assets to the lessee for a
+certain period of time to obtain the consideration. Leases where substantially all the rewards and risks of
+ownership of assets remain with the lessor are accounted for as operating leases.
+(39) LEASES
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+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.
+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.
+A reliable estimate can be made of the amount of the obligation.
+Ping An Insurance (Group) Company of China, Ltd. 215
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+216
+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 income statement, or in
+other comprehensive income or in equity if it relates to items that are recognized in the same or a different
+period directly in other comprehensive income or in equity.
+(43) TAX
+The Group's subsidiaries consolidated certain asset management schemes that were managed by third
+parties. These asset management schemes invested in the insurance index shares which included the
+Company's shares. As such the Group indirectly hold the Company's shares. The 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".
+(38) POLICYHOLDER DIVIDENDS
+(42) SHARES HELD BY CONSOLIDATED STRUCTURED ENTITIES
+At the end of each reporting period, the Group revises its estimates of the number of options and awarded
+shares that are expected to vest based on the non-marketing performance and service conditions.
+It recognizes the impact of the revision to original estimates, if any, in the income statement, with a
+corresponding adjustment to equity.
+The total amount to be expensed is determined by reference to the fair value of the shares granted, which
+includes the impact of market performance conditions (for example, an entity's share price) but excludes
+the impact of any service and non-market performance vesting conditions (for example, profitability,
+sales growth targets and remaining an employee of the entity over a specified time period) and includes
+the impact of any non-vesting conditions (for example, the requirement for employees to save or holding
+shares for a specified period of time). The Group estimates the number of total shares expected to vest
+taking into consideration of service and non-market performance conditions. Based on number of shares
+expected to vest, related cost or expense is recognized over the vesting period according to fair value of
+the shares granted on granted date.
+The Group operates an equity-settled, share-based compensation plan, under which the Group receives
+services from employees as consideration for equity instruments.
+Equity-settled share-based payment transactions
+(41) SHARE-BASED PAYMENT
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+The Company settles with the awardees under the share purchase scheme upon vesting.
+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.
+Annual Report 2021
+Inward reinsurance business
+The fees and commission income of non-insurance operations from a diverse range of services it provides
+to its customers are recognized when the control of services is transferred to customers. Fee income can
+be divided into the following main categories:
+(d) Fees and commission income of non-insurance operations
+Interest income for interest bearing financial instruments, is recognized in the income statement using the
+effective interest rate method. When a financial asset is impaired, the Group reduces the carrying amount
+to its recoverable amount, being the estimated future cash flow discounted at the original effective interest
+rate of the instrument, and continues unwinding the discount as interest income.
+(c) Interest income
+(36) REVENUE RECOGNITION (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+Annual Report 2021
+212
+Fee income earned from services that are provided over a certain period of time
+Revenues from investment contracts issued by the Group are fees charged 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 policyholders'
+balance. The fees are recognized when, or as, the control of services is transferred to customers unless the
+related services still need to be provided in the future periods, in which fees should be recognized over
+the period of the contract by reference to the progress towards complete satisfaction of that performance
+obligation. Initiation and other front-end fees are charged for certain investment contracts recorded at
+amortized cost and are recognized through an adjustment to the effective yield.
+Reinsurance premiums are recognized as revenue in accordance with the terms stated in the reinsurance
+contracts. Accounting policies for reinsurance contracts are described in Note 2.(37).
+Premiums from long-term life insurance contracts with instalment 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.
+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
+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.
+The Group's main revenue is recognized on the following bases:
+The Group incorporates forward looking information in estimating the expected credit loss for loan
+commitments and financial guarantee contracts. Refer to Note 13 and Note 51 for details.
+(36) REVENUE RECOGNITION
+(b) Income from investment contracts
+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.
+Ping An Insurance (Group) Company of China, Ltd.
+Notes to Consolidated Financial Statements
+Fee income from providing transaction services
+Outward reinsurance arrangements do not relieve the Group from its obligations to policyholders.
+When recognizing premium income from insurance contracts, the Group determines the amount of
+premium ceded and reinsurers' share of expenses and recognize them through profit or loss according to
+reinsurance contracts. 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 received from the reinsurers. When calculating unearned premium reserves, claim
+reserves and long-term life insurance 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 determines 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 determines 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.
+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.
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+(37) REINSURANCE
+For the year ended 31 December 2021
+214
+FINANCIAL STATEMENTS
+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 income statement the income derived from reinsurance
+contracts and the expenses incurred for insurance contracts separately instead of offsetting the income
+and expenses.
+Ping An Insurance (Group) Company of China, Ltd. 213
+The amount of revenue from the sale of goods shall be measured by the transaction price, which is
+allocated to each performance obligation. The transaction price is the amount of consideration to be
+entitled in exchange for transferring promised goods to a customer. The Group considers the terms of the
+contract and its customary business practices to determine the transaction price. When determining the
+transaction price, the Group considers the effects of variable consideration, the existence of a significant
+financing component in the contract, non-cash consideration and consideration payable to a customer.
+The part with unconditional rights is recognized as a receivable by the Group, while the rest is recognized
+as contracts assets. And the impairment provisions of receivables and contracts assets are recognized
+based on ECL. If the consideration received or receivable from the contract exceeds the performance
+completed, the excess part would be recognized as contracts liabilities. The Group presents the net amount
+by the offsetting between contracts assets and contracts liabilities under one contact.
+Revenue from the sale of goods is recognized when control of the goods has been transferred. Control
+of goods or services refers to the ability to direct the use of, and obtain substantially all of the remaining
+benefits from, the goods or services.
+Expressway toll fee income is recognized upon the completion of the performance obligation of services.
+(g) Sale of goods
+(f) Expressway toll fee income
+Dividend income is recognized when the right to receive dividend payment is established.
+(e) Dividend income
+Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such
+as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses,
+are recognized on the completion of the underlying transaction and the control of services is transferred
+to customers. Fees or components of fees that are linked to a certain performance are recognized after
+fulfilling the corresponding criteria. These fees may include underwriting fees, corporate finance fees and
+brokerage fees. Loan syndication fees are recognized in the income statement when the syndication has
+been completed and the Group retains no part of the loans for itself or retains part at the same effective
+interest rate as for the other participants.
+Annual Report 2021
+Outward reinsurance business
+5,310,315,757
+Shenzhen Ping An Financial Services
+Co., Ltd.
+Shenzhen, Corporation
+Property management and
+100.00%
+100.00%
+598,583,070
+IT and business process
+outsourcing services,
+Shenzhen
+62.34%
+20,000,000,000
+37.66%
+IT services,
+Shenzhen
+Shenzhen, Corporation
+Ping An Technology (Shenzhen)
+Co., Ltd. (iii)
+Shenzhen
+investment management,
+100.00%
+99.60%
+Ping An E-wallet Electronic
+Commerce Company Limited
+("Ping An E-wallet")
+Shenzhen, Corporation
+Shenzhen, Corporation
+Shenzhen, Corporation
+77.14%
+Property Investment Co., Ltd.
+("Ping An Commercial Property
+Investment")
+Ping An Real Estate Co., Ltd.
+("Ping An Real Estate")
+1,567,000,000
+99.99%
+99.50%
+Property leasing and
+Shenzhen Ping An Commercial
+200,000,000
+100.00%
+77.14%
+Custom loyalty service,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Wanlitong Network
+Information Technology Co., Ltd.
+HKD25,124,600
+100.00%
+99.89%
+E-commerce trade,
+Hong Kong
+Hong Kong, Corporation
+eLink Commerce Company Limited
+1,000,000,000
+78.63%
+Internet service,
+Shenzhen
+Shanghai
+50,000,000
+100.00%
+100.00%
+99.88%
+Investment holding,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Ping An Innovation Capital
+Investment Co., Ltd.
+100.00% HKD345,000,000
+100.00%
+Hong Kong, Corporation Asset management,
+Hong Kong
+Ping An of China Asset Management
+(Hong Kong) Company Limited
+4,000,000,000
+("Ping An Financial Leasing")
+30.56%
+69.44%
+Finance leasing,
+Shanghai
+Shanghai, Corporation
+Ping An International Financial
+Leasing Co., Ltd.
+insurance, Hong Kong
+(Hong Kong) Company Limited
+100.00% HKD490,000,000
+property management,
+Shenzhen
+100.00% 14,500,000,000
+224
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+99.75%
+Investment consulting,
+Shanghai, Corporation
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+ordinary shares
+indirectly held by
+the Company (%)
+the Company (%)
+place of operation
+directly held by
+Principal activities and
+Place of incorporation and
+kind of legal entity
+Ping An Trendwin Capital
+Management Co., Ltd.
+Name
+ordinary shares
+Proportion of
+Proportion of
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+100,000,000
+Ping An Futures Co., Ltd. (iii)
+6,688,870,000
+Futures brokerage,
+Shenzhen
+Shenzhen, Corporation
+Ping An Fund Management
+Company Limited
+800,000,000
+100.00%
+68.11%
+Asset management,
+Shenzhen
+Shenzhen, Corporation
+Ping An Wealthtone Investment
+Management Co., Ltd.
+1,930,000,000
+Fund raising and
+100.00%
+Property agency,
+Shanghai
+E-commerce Co., Ltd.
+Shanghai, Corporation
+Pingan Haofang (Shanghai)
+50,000,000
+67.00%
+66.92%
+Currency brokerage,
+Shenzhen
+Shenzhen, Corporation
+86.37%
+Ping An Tradition International Money
+Broking Company Ltd.
+68.11%
+1,300,000,000
+100.00%
+99.54%
+Guangzhou, Corporation Insurance agent,
+Ping An Chuang Zhan Insurance
+Sales & Service Co., Ltd
+Shenzhen
+515,000,000
+75.10%
+75.10%
+Sales agency of insurance,
+68.19%
+Shenzhen, Corporation
+Shenzhen
+property management,
+100.00%
+100.00%
+99.51%
+Property leasing and
+Shenzhen, Corporation
+Shenzhen Ping An Financial Center
+Development Company Ltd.
+distribution, Shenzhen
+Ping An Insurance Sales Services
+Co., Ltd.
+Shenzhen
+advisory services,
+30,406,000,000
+100.00%
+99.51%
+Project investment,
+British Virgin Islands,
+Corporation
+Ansheng Investment Company Limited
+9,130,500,000
+100.00%
+99.51%
+Investment management,
+Shanghai
+USD50,000
+Shanghai, Corporation
+1,310,000,000
+100.00%
+100.00%
+Real estate investment,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Ping An Real Estate
+Investment Co., Ltd.
+721,716,042
+100.00%
+96.66%
+Shanghai Pingpu Investment Co., Ltd.
+British Virgin Islands
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 225
+100.00%
+100.00%
+Corporation management
+Shenzhen, Corporation
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+ordinary shares
+directly held by
+the Company (%)
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Shenzhen Ping An Financial
+Technology Consulting Co., Ltd.
+("Ping An Financial Technology")
+Name
+Proportion of
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Shenzhen, Corporation
+Hong Kong, Corporation Property and casualty
+(5) CLASSIFICATION AND UNBUNDLING/SEPARATION OF INSURANCE CONTRACTS AND
+SIGNIFICANT INSURANCE RISK TESTS (CONTINUED)
+100.00% HKD7,085,000,000
+Establishing groups of similar financial assets for the purposes of measuring ECL.
+Establishing the number and relative weightings of forward-looking scenarios for each type of
+product/market and the associated ECL; and
+Choosing appropriate models and assumptions for the measurement of ECL;
+Determining criteria for significant increase in credit risk;
+A number of significant judgements are also required in applying the accounting requirements for
+measuring ECL, such as:
+The measurement of the expected credit losses for financial assets measured at amortized cost and FVOCI
+is an area that requires the use of complex models and significant assumptions about future economic
+conditions and credit behaviour. Explanation of the inputs, assumptions and estimation techniques used in
+measuring ECL is further detailed in Note 53.
+(3) MEASUREMENT OF THE EXPECTED CREDIT LOSSES
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2021
+(4) MEASUREMENT UNIT AND VALUATION OF INSURANCE CONTRACT LIABILITIES
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 219
+Annual Report 2021
+The contractual cash flows characteristics of financial assets refer to the cash flow attributes of the
+financial assets reflecting the economic characteristics of the relevant financial assets (i.e., whether the
+contractual cash flows generated by the relevant financial assets on a specified date solely represents the
+payments of principal and interest). The principal amount refers to the fair value of the financial asset at
+initial recognition. The principal amount may change throughout the lifetime of the financial assets due
+to prepayment or other reasons. The interest includes the time value of money, the credit risk associated
+with the outstanding principal amount for a specific period, other basic lending credit risks, and the
+consideration of costs and profits.
+An entity's business model refers to how an entity manages its financial assets in order to generate cash
+flows. That is, the entity's business model determines whether cash flows are arising from collecting
+contractual cash flows, selling financial assets or both. The business model of managing financial assets
+is not determined by a single factor or activity. Instead, the entity should consider all relevant evidence
+available when making the assessment. Relevant evidence mainly includes, but not limited to, how the cash
+flow of the group of assets is collected, how the performance of the group of assets is reported to key
+management personnel, and how the risk of group of assets is being assessed and managed.
+The judgements in determining the classification of financial assets include the analysis of business models
+and the contractual cash flows characteristics.
+(2) CLASSIFICATION OF FINANCIAL ASSETS
+Using different valuation techniques and parameter assumptions may lead to significant difference of fair
+value estimation.
+When using valuation techniques to determine the fair value of financial instruments, the Group would
+choose the input value in consistent with market participants, considering the transactions of related assets
+and liabilities. All related observable market parameters are considered in priority, including interest rate,
+foreign exchange rate, commodity prices and share prices or index. When related observable parameters
+are unavailable or inaccessible, the Group uses unobservable parameters and makes estimates for credit
+risk, market volatility and liquidity adjustments.
+Fair value, in the absence of an active market, is estimated by using valuation techniques, applying
+currently applicable and sufficiently available data, and the valuation techniques supported by other
+information, mainly include market approach and income approach, reference to the recent arm's length
+transactions, current market value of another instrument which is substantially the same, and by using the
+discounted cash flow analysis and option pricing models.
+FINANCIAL STATEMENTS
+(1) FAIR VALUE OF FINANCIAL INSTRUMENTS DETERMINED USING VALUATION
+TECHNIQUES
+The Group makes significant judgements 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.
+At the end of the reporting period, the Group shall make an estimate of the assumptions used in the
+measurement of insurance contract liabilities. Such assumptions shall be determined based on information
+currently available at the end of the reporting period. To determine these assumptions, the Group selects
+proper risk margins according to both uncertainties and degree of impact of expected future cash
+outflows. Refer to Note 2.(2) for the changes in accounting policies and estimates.
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 221
+Annual Report 2021
+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 industrial benchmark, the Group's
+assumptions used in product pricing, experience data of morbidity rates, and estimates of current and
+future expectation as well as the risk margin.
+The assumption of mortality rates is based on the Group's prior experience data on mortality rates,
+estimates of current and future expectations, the industrial benchmark, the understanding of the
+China insurance market as well as the risk margin. The assumption of mortality rates is presented as a
+percentage of China Life Insurance Mortality Table (2010-2013), which is the industry standard for life
+insurance in China.
+The 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.
+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.
+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 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 2021 ranged from 4.75%-5.00% (31 December 2020:
+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 the CCDC.
+For long-term life insurance contracts where the future insurance benefits are not affected by
+investment return of the underlying asset portfolio, with consideration of the Cai Kuai [2017] No.637
+issued by the former 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 the
+China Central Depository & Clearing Co., Ltd. ("CCDC"), with consideration of the impact of the tax
+and liquidity premium. The current discount rate assumption for the measurement as at 31 December
+2021 ranged from 2.83%-4.60% (31 December 2020: 3.01%-4.60%).
+The main assumptions used in the measurement of insurance contract liabilities are as follows:
+(4) MEASUREMENT UNIT AND VALUATION OF INSURANCE CONTRACT LIABILITIES
+(CONTINUED)
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+220
+For short-term insurance contracts liabilities whose duration is within one year, the future cash flows
+are not discounted.
+In the process of applying the Group's accounting policies, management has made the following
+judgements and accounting estimation, which have the significant effect on the amounts recognized in the
+financial statements.
+The Group makes estimates and judgements that affect the reported amounts of revenues, expenses,
+assets and liabilities and the disclosure of contingent liabilities in these financial statements. Estimates
+and judgements are continually assessed based on historical experience and other factors, including
+expectations of future events that are believed to be reasonable under the circumstances.
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES
+(45) RELATED PARTIES
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 217
+Annual Report 2021
+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.
+A party is considered to be related to the Group if:
+(44) DIVIDENDS
+Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
+when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
+enacted or substantively enacted at the end of the reporting period.
+The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
+to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
+part of the deferred tax asset to be utilized. Conversely, previously unrecognized deferred tax assets are
+reassessed by the end of each reporting period and are recognized to the extent that it is probable that
+sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
+in respect of deductible temporary differences associated with investments in subsidiaries, associates
+and interests in joint ventures, deferred tax assets are only recognized to the extent that it is probable
+that the temporary differences will reverse in the foreseeable future and taxable profit will be available
+against which the temporary differences can be utilized.
+when the deferred tax asset relating to the deductible temporary differences arises from the initial
+recognition of an asset or liability in a transaction that is not a business combination and, at the time
+of the transaction, affects neither the accounting profit nor taxable profit or loss; and
+in respect of taxable temporary differences associated with investments in subsidiaries, associates
+and interests in joint ventures, when the timing of the reversal of the temporary differences can be
+controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
+Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused
+tax credits and any unused tax losses, to the extent that it is probable that taxable profit will be available
+against which the deductible temporary differences, and the carry-forward of unused tax credits and
+unused tax losses can be utilized, except:
+when the deferred tax 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:
+(43) TAX (CONTINUED)
+2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
+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.
+(a) the party is a person or a close member of that person's family and that person:
+Or
+(i) has control or joint control over the Group;
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+218
+Two or more operating segments can be merged as one if they have similar characteristics and satisfy
+certain conditions.
+(c) The Group is able to obtain the accounting information such as the financial position, operating results
+and cash flows of the component.
+(b) The management of the Company regularly assesses the operating results of its business units for the
+purpose of making decisions about resources allocations and performance assessment;
+(a) The component produces income and expenses in its daily operation;
+Operating segments refer to the Group's component that satisfies the following conditions:
+For management purposes, the Group is organized into operating segments based on the internal
+organization structure, management requirements and internal reporting. The reportable segments are
+determined and disclosed based on operating segments and the presentation is consistent with the
+information reported to the Board of Directors.
+(46) SEGMENT REPORTING
+(vii) a person identified in (a) (i) has significant influence over the entity or is a member of the key
+management personnel of the entity (or of a parent of the entity).
+(vi) the entity is controlled or jointly controlled by a person identified in (a); and
+(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
+an entity related to the Group;
+(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;
+one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
+subsidiary of the other entity);
+(ii)
+(i) the entity and the Group are members of the same Group;
+(b) the party is an entity where any of the following conditions applies:
+(iii) is a member of the key management personnel of the Group or of a parent of the Group;
+(ii) has significant influence over the Group; or
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+(4) MEASUREMENT UNIT AND VALUATION OF INSURANCE CONTRACT LIABILITIES
+(CONTINUED)
+The Group uses reasonable estimates, based on actual experience and future development trends, in
+deriving lapse rate assumptions.
+The assumptions of lapse rates are determined by reference to different pricing interest rates, product
+categories and sales channels.
+96.62%
+55.59%
+40.96%
+Securities investment and
+brokerage, Shenzhen
+Shenzhen, Corporation
+Ping An Securities Co., Ltd.
+("Ping An Securities")
+13,000,000,000
+99.88%
+99.88%
+13,800,000,000
+Investment and trust,
+Shenzhen
+Ping An Trust Co., Ltd.
+19,405,918,198
+58.00%
+8.40%
+49.56%
+Banking,
+Shenzhen
+Shenzhen, Corporation
+Ping An Bank Co., Ltd. (ii)
+("Ping An Bank")
+21,000,000,000
+Shenzhen, Corporation
+Ping An Annuity
+Shanghai, Corporation
+Annuity insurance,
+Shanghai
+100.00%
+Hong Kong, Corporation Investment holding,
+Hong Kong
+China Ping An Insurance Overseas
+(Holdings) Limited
+2,016,577,790
+75.01%
+1.55%
+73.45%
+Health insurance,
+Shanghai
+Shanghai, Corporation
+Ping An Health Insurance
+1,500,000,000
+100.00%
+1.33%
+98.67%
+Asset management,
+Shanghai
+Shanghai, Corporation
+Ping An Asset Management Co., Ltd.
+4,860,000,000
+100.00%
+13.82%
+86.11%
+99.54%
+China Ping An Insurance
+99.54%
+Shenzhen, Corporation
+(6) DETERMINATION OF CONTROL OVER THE STRUCTURED ENTITIES
+The unbundling/separation and classification of insurance contracts would affect the Group's revenue
+recognition, liability measurement and financial statement presentation.
+When performing significant insurance risk testing, the Group would group all policies of the same product
+with similar risk characteristics into the same portfolio. The Group would then select sufficient and
+representative policy samples from each policy portfolio to perform individual testing.
+When determining whether a reinsurance policy transfers significant insurance risks, judgement 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.
+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.
+If the insurance risk ratio of a non-annuity policy is equal or greater than 5% at one or more points in
+time during the policy coverage period, the Group classifies it as an insurance contract. The insurance
+risk ratio of a direct insurance policy is the percentage of the benefits to be paid when the insured
+event occurs divided by the amounts to be paid when the insured event does not occur minus 100%;
+Annuity policies where the longevity risk is transferred are classified as insurance contracts;
+When determining whether the policies transfer a significant insurance risk, the Group makes the following
+judgements for different policies:
+3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+To determine whether the Group controls the structured entities of which the Group acts as an asset
+manager, management applies judgement based on all relevant fact and circumstance to determine
+whether the Group is acting as the principal or agent for the structured entities. If the Group is acting as
+the principal, it has control over the structured entities. In assessing whether the Group is acting as the
+principal, the Group considers factors such as scope of the asset manager's decision-making authority,
+rights held by other parties, remuneration to which it is entitled, and exposure to variable returns results
+from its additional involvement with structured entities. The Group will perform reassessment once the fact
+and circumstance changes leading to changes in above factors.
+Annual Report 2021
+The Group makes significant judgements 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 judgement affects the classification of insurance contracts.
+The Group makes significant judgements 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 judgement
+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 experience and claims paid, with consideration of
+adjustments to company policies like underwriting policies, level of premium rates, claim management and
+the changing trends of external environment such as macroeconomic, regulations, and legislation. In the
+measurement of claim reserves, the Group applies the cost of capital approach and considers insurance
+industry guideline ranged from 2.5% to 5.5% to determine risk margins.
+In the measurement of unearned premium reserves for the property and casualty insurance and
+short-term life insurance business, the Group applies the cost of capital approach and considers the
+insurance industry guideline ranged from 3% to 6% to determine risk margins.
+The assumption of participating insurance accounts is affected by the above factors, and hence bears
+uncertainty. The future assumption of life and participating insurance with a risk margin is based on a
+dividend rate of 85%.
+The Group uses reasonable estimates, based on expected investment returns of participating insurance
+accounts, participating dividend policy, policyholders' reasonable expectations, etc. in deriving policy
+dividend assumptions.
+The expense assumptions include assumptions of acquisition costs and maintenance costs. The
+assumption of maintenance costs also has a risk margin.
+The Group uses reasonable estimates, based on an expense study and future development trends, in
+deriving expense assumptions. If the future expense level becomes sensitive to inflation, the Group will
+consider the inflation factor as well in determining expense assumptions.
+222
+For further disclosure in respect of the maximum risk exposure of unconsolidated structured entities of the
+Group, see Note 53.(8).
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 223
+Ping An Property & Casualty
+33,800,000,000
+99.51%
+99.51%
+Life insurance,
+Shenzhen
+Shenzhen, Corporation
+(RMB unless
+otherwise stated)
+authorized capital
+Registered/
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Proportion of
+ordinary shares
+directly held by
+the Company (%)
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Ping An Life
+Name
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Property and casualty
+insurance, Shenzhen
+Shenzhen
+100.00%
+Jade Reach Investment
+Reach Success International
+Company Limited
+Ping An Insurance (Group) Company of China, Ltd.
+226
+Jiaxing
+500,000,000
+100.00%
+99.60%
+Investment management,
+Tongxiang Ping An Investment Co., Ltd. Jiaxing, Corporation
+investment management,
+Shenyang
+419,000,000
+100.00%
+99.51%
+Property management and
+Annual Report 2021
+Shenyang Shengping Investment
+Management Co., Ltd.
+British Virgin Islands,
+Corporation
+Shenyang, Corporation
+99.51%
+100.00%
+USD50,000
+British Virgin Islands
+Project investment,
+British Virgin Islands,
+Corporation
+Project investment,
+99.51%
+100.00%
+British Virgin Islands
+USD50,000
+Company Limited
+1,000,000,000
+Ping An Fortune Management Co., Ltd.
+Shanghai, Corporation
+Consulting services,
+Shanghai
+100.00%
+100,000,000
+Shenzhen Dingshuntong Investment
+Shenzhen, Corporation
+99.00%
+Co., Ltd. ("Dingshuntong Investment")
+100.00%
+97.99%
+99.70%
+Ping An Infrastructure Investment Fund Shenzhen, Corporation
+Management Co., Ltd
+Jiaxing
+Management Co., Ltd.
+300,000,000
+100.00%
+Investment management,
+Jiaxing, Corporation
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+Investment consulting,
+Shenzhen
+Investment management,
+Shenzhen
+100.00%
+Shenzhen Anpu Development Co., Ltd.
+100,000,000
+Insurance broker,
+Shanghai
+Shanghai, Corporation
+Shanghai Tianhe Insurance Brokerage
+Co., Ltd.
+HKD10,000,000
+100.00%
+96.55%
+Hong Kong, Corporation Asset management,
+Hong Kong
+China PA Asset Management
+(Hong Kong) Company Limited
+5,625,000,000
+80.00%
+79.61%
+Logistics and warehousing,
+Shenzhen
+100.00%
+Shenzhen, Corporation
+10,400,000,000
+100.00%
+100.00%
+Financial leasing,
+Tianjin
+Ping An International Financial Leasing Tianjin, Corporation
+(Tianjin) Co., Ltd.
+("Evergreen Investment Development")
+Shenzhen
+1,500,100,000
+100.00%
+100.00%
+Investment consulting,
+Shenzhen Ping An Evergreen Investment Shenzhen, Corporation
+Development Holding Co., Ltd.
+ordinary shares
+indirectly held by
+the Company (%)
+the Company (%)
+FINANCIAL STATEMENTS
+directly held by
+100.00%
+Hong Kong, Corporation Investment management
+and investment
+An Ke Technology Company Limited
+1,800,000,000
+100.00%
+100.00%
+Financial leasing,
+Shenzhen
+Shenzhen, Corporation
+Ping An International Financial Leasing
+(Shenzhen) Co., Ltd.
+Guangzhou
+600,000,000
+100.00%
+100.00%
+100.00%
+Guangzhou Ping An Good Loan
+Microfinance Co., Ltd.
+300,000,000
+100.00%
+100.00%
+Micro loan,
+Zhuhai
+Zhuhai, Corporation
+Zhuhai Hengqin Ping An Money
+Micro Loan Co., Ltd.
+Shenzhen
+Crowdfunding & Trading Co., Ltd.
+100,000,000
+100.00%
+100.00%
+Guangzhou, Corporation Micro loan,
+USD582,996,000
+consulting, Hong Kong
+Ping An Pay Technology Service
+Co., Ltd.
+Principal activities and
+Place of incorporation and
+kind of legal entity
+Tongxiang Anhao Investment
+Name
+ordinary shares
+Proportion of
+Proportion of
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+40.68%
+Ping An Insurance (Group) Company of China, Ltd. 229
+Annual Report 2021
+489,580,000
+100.00%
+77.14%
+Internet service,
+Shanghai
+Shanghai, Corporation
+Ping An Pay Electronic Payment
+Co., Ltd.
+Shenzhen
+680,000,000
+100.00%
+77.14%
+Internet service,
+Shenzhen, Corporation
+place of operation
+100.00%
+IT services,
+Shenzhen
+Helios P.A. Company Limited
+Asset management,
+Shenzhen
+Shenzhen, Corporation
+Ping An Wealth Management Co., Ltd.
+consulting, Shenzhen
+and investment
+2,270,000,000
+100.00%
+99.90%
+Investment management
+Shenzhen, Corporation
+Shenzhen Qianhai Jinxuan Investment
+Co., Ltd.
+Jiaxing
+57.96%
+1,000,000
+99.51%
+Investment management,
+Jiaxing, Corporation
+Jiaxing Ping An Cornerstone | Equity
+Investment Management Co., Ltd.
+United Kingdom
+GBP1,154,873
+100.00%
+51.30%
+Infant products,
+United Kingdom,
+Corporation
+Mayborn Group Limited
+platform, Beijing
+100.00%
+USD1,273,469
+100.00%
+TTP Car Inc. (iii)
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 231
+Annual Report 2021
+5,000,000
+100.00%
+99.70%
+Investment platform,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Pingjia Investment
+Management Co., Ltd.
+100.00% USD4,724,570,300
+100.00%
+5,000,000,000
+Investment holding,
+Cayman Islands
+Overseas W.H. Investment
+Company Limited
+5,000,000
+100.00%
+99.70%
+Investment management,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Shengjun Investment
+Management Co., Ltd.
+USD15,753
+51.00%
+20.75%
+Second-hand car platform,
+Shanghai
+Cayman Islands,
+Corporation
+Cayman Islands,
+Corporation
+50,000,000
+40.88%
+Automotive internet
+Place of incorporation and
+kind of legal entity
+Name
+ordinary shares
+Proportion of
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+230
+50,000,000
+100.00%
+Principal activities and
+place of operation
+79.21%
+Shenzhen, Corporation
+Ping An Urban-Tech (Shenzhen)
+Co., Ltd.
+British Virgin Islands
+USD50,000
+100.00%
+100.00%
+Project investment,
+British Virgin Islands,
+Corporation
+Value Success International Limited
+100.00% USD677,161,910
+99.51%
+Hong Kong, Corporation Project investment,
+Hong Kong
+Private equity financing,
+40.68%
+directly held by
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+Cayman Islands,
+Corporation
+Autohome Inc. (iii)
+("Lianxin Investment") (iii)
+5,100,000,000
+100.00%
+99.70%
+Investment management,
+Shenzhen
+Management Co., Ltd.
+Shenzhen, Corporation
+Lianxin (Shenzhen) Investment
+100,000,000
+100.00%
+the Company (%)
+99.70%
+Shenzhen, Corporation
+Shenzhen Anchuang Investment
+Management Co., Ltd.
+Management Co., Ltd.
+100,000,000
+100.00%
+99.80%
+Investment management,
+Shenzhen
+Shenzhen Ping An Chuangke Investment Shenzhen, Corporation
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+Investment management,
+Shenzhen
+Shenzhen, Corporation
+Shanghai, Corporation
+2,536,129,600
+840,000,000
+100.00%
+99.51%
+Real estate investment,
+Chengdu, Corporation
+Chengdu Ping An Property Investment
+Co., Ltd.
+256,323,143
+100.00%
+99.51%
+Property leasing,
+Beijing
+Beijing, Corporation
+Beijing Shuangronghui Investment
+Co., Ltd.
+Chengdu
+service, Shanghai
+100.00%
+100.00%
+Insurance brokerage
+Shanghai, Corporation
+20,000,000
+100.00%
+100.00%
+Fund sales,
+Shanghai
+Shanghai, Corporation
+Shanghai Lufax Fund Sales Co., Ltd.
+HKD440,000,000
+100.00%
+50,000,000
+96.55%
+Hangzhou Pingjiang Investment Co., Ltd. Hangzhou, Corporation
+99.51%
+Beijing, Corporation
+Beijing Jingxinlize Investment Co., Ltd.
+(RMB unless
+otherwise stated)
+Proportion of
+votes (%) (i)
+authorized capital
+Registered/
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+the Company (%)
+directly held by
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Name
+Real estate development
+ordinary shares
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 227
+Annual Report 2021
+Hangzhou
+and management,
+1,430,000,000
+100.00%
+Proportion of
+Investment management,
+Beijing
+Hong Kong, Corporation Securities investment and
+brokerage, Hong Kong
+HKD20,000,000
+Shanxi Changjin Expressway Co., Ltd.
+Shanghai
+700,000,000
+100.00%
+100.00%
+Commercial factoring,
+Shanghai, Corporation
+(RMB unless
+otherwise stated)
+authorized capital
+Registered/
+Proportion of
+votes (%) (i)
+ordinary shares
+indirectly held by
+the Company (%)
+Taiyuan, Corporation
+the Company (%)
+kind of legal entity
+Ping An Commercial Factoring
+Co., Ltd.
+Name
+directly held by
+Principal activities and
+Place of incorporation and
+ordinary shares
+Proportion of
+Proportion of
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+place of operation
+China PA Securities (Hong Kong)
+Company Limited
+Expressway operation,
+Taiyuan
+60.00%
+100.00%
+96.55%
+Hong Kong, Corporation Investment management,
+Hong Kong
+Ping An of China Capital (Hong Kong)
+Company Limited
+Hong Kong
+HKD20,000,000
+100.00%
+96.55%
+HKD663,514,734
+100.00%
+96.55%
+Ping An of China Futures (Hong Kong) Hong Kong, Corporation Futures brokerage,
+Company Limited
+59.71%
+Hong Kong
+600,000,000
+100.00%
+96.55%
+Equity investment,
+Shenzhen
+Ping An Caizhi Investment Management Shenzhen, Corporation
+Company Limited
+504,000,000
+60.00%
+59.71%
+Expressway operation,
+Taiyuan
+Taiyuan, Corporation
+Shanxi Jinjiao Expressway Co., Ltd.
+750,000,000
+Ping An of China Securities (Hong Kong) Hong Kong, Corporation Investment holding,
+Company Limited
+99.51%
+100.00%
+1,160,000,000
+Registered/
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+the Company (%)
+directly held by
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Name
+ordinary shares
+Proportion of
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+authorized capital
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+63,330,000
+94.74%
+94.74%
+Annual Report 2021
+228
+E-commerce,
+Shanghai
+E-commerce Co., Ltd.
+Shanghai, Corporation
+Shanghai Pingan Automobile
+100.00% USD143,954,940
+99.52%
+Logistics and real estate,
+USA
+Ping An Insurance (Group) Company of China, Ltd.
+USA, Corporation
+(RMB unless
+otherwise stated)
+Real estate development
+100.00%
+99.60%
+Hong Kong, Corporation Investment platform,
+Hong Kong
+Pingan Real Estate Capital Limited
+345,075,000
+100.00%
+100.00%
+Credit Information services,
+Shenzhen
+Shenzhen Qianhai Credit Service Centre Shenzhen, Corporation
+Co., Ltd.
+1,010,000,000
+100.00%
+100.00%
+Shanghai Gezhouba Yangming Property Shanghai, Corporation
+Co., Ltd.
+Asset management,
+Shanghai
+Shanghai Pingxin Asset Management
+Co., Ltd.
+Shanghai
+1,290,000,000
+100.00%
+99.05%
+Investment management,
+Shanghai Jinyao Investment Management Shanghai, Corporation
+Co., Ltd.
+Shanghai
+and management,
+20,000,000
+100.00%
+99.51%
+For the year ended 31 December 2021
+PA Dragon LLC
+4,810,000,000
+100.00%
+99.51%
+Property leasing,
+Beijing
+Beijing, Corporation
+Beijing Jingping Shangdi Investment
+Co., Ltd.
+5,092,341,943
+100.00%
+100.00%
+Management consulting,
+Shenzhen
+Shenzhen Pingke Information Consulting Shenzhen, Corporation
+Co., Ltd. (iii)
+equity investment,
+Shenzhen
+1,000,000,000
+100.00%
+100.00%
+96.55%
+Shenzhen, Corporation
+Ping An Pioneer Capital Co., Ltd.
+GBP133,000,000
+100.00%
+99.51%
+Hong Kong, Corporation Real estate investment,
+United Kingdom
+Talent Bronze Limited
+GBP90,000,160
+100.00%
+99.51%
+Hong Kong, Corporation Real estate investment,
+United Kingdom
+Anbon Allied Investment Company
+Limited.
+Financial products and
+45,000,000
+Guangzhou Xinping Property Investment Guangzhou, Corporation Property leasing,
+Co., Ltd.
+99.51%
+99.51%
+Asset management,
+Shanghai
+Shanghai Zean Investment Management Shanghai, Corporation
+Company Limited
+British Virgin Islands
+USD50,000
+100.00%
+99.51%
+Investment management,
+British Virgin Islands,
+Corporation
+Falcon Vision Global Limited
+Shanghai
+679,634,461
+51.55%
+51.30%
+Industry,
+Shanghai, Corporation
+Shanghai Jahwa United Co., Ltd. (iii)
+Shanghai
+consumer chemicals,
+5,268,261,234
+100.00%
+99.51%
+Production and sale of
+Shanghai Jahwa (Group) Company Ltd. Shanghai, Corporation
+("Shanghai Jahwa")
+Guangzhou
+50,000,000
+100.00%
+Shenzhen Qianhai Inclusive
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Fuer Insurance Broker Co., Ltd.
+(continued)
+(1,120)
+(570)
+(882)
+(859)
+(41,567)
+Including: Impairment losses on
+receivables and others
+(45)
+(1,055) (1,162)
+(26)
+(4)
+(1,546)
+(174)
+(56)
+(4,068)
+Foreign exchange gains/(losses)
+7
+(52) 1,320
+(1)
+(3)
+(61)
+7
+50
+1,267
+Investment expenses
+(4,281)
+(345)
+4,490
+(136)
+(441) (13,248)
+Including: taxes and surcharges on
+(24,447)
+Including: Impairment losses on
+Trust Securities management
+business
+and
+elimination
+Total
+203
+(618,662)
+(52,277) (32,039)
+3,605
+(80,711)
+(93,200)
+1,129 (92,071)
+Fees and commission expenses on
+non-insurance operations
+(7,128)
+(366)
+(2,570)
+(100)
+224 (9,940)
+Net impairment losses on financial assets
+and other assets
+(24,492)
+(1,496)
+(73,817)
+(1,146)
+(574)
+(2,428)
+(1,033)
+(56) (105,042)
+Including: Loan impairment losses, net
+(59,407)
+(59,407)
+investment assets
+investment operations
+(120)
+Administrative expenses
+(74)
+(465)
+(264)
+288
+(2,816)
+Profit before tax
+60,285
+Income tax
+18
+18,696 45,879
+(2,504) (9,543)
+963
+(734)
+(932)
+(5,454) (11,665)
+(18,223) (48,057)
+4,603 14,596
+(774) (4,702)
+(6)
+(35) (3,900)
+(5,428)
+12,009
+(37,793)
+(21,433)
+32,263 (1,148,095)
+(945)
+488
+(4,497) 139,580
+(27) (17,778)
+Profit for the year
+60,303
+16,192 36,336
+229
+3,829
+9,894
+(457) (4,524) 121,802
+(400)
+(2,453)
+(26,814)
+(604,649) (262,510) (222,670)
+Total expenses
+Other expenses
+(48,177)
+(16)
+(52,018) (49,581)
+(136)
+(5,819) (12,439) (14,449)
+7,001
+(176,925)
+Including: Taxes and surcharges on
+insurance operations
+(1,051)
+(1,091)
+(2,142)
+Interest expenses on non-banking
+operations
+(4,519) (1,326)
+Banking
+(148) (3,803) (21,364)
+3,608
+(28,082)
+Including: Financial costs
+(2,066)
+(926)
+(74) (2,871) (21,358)
+(530)
+3,643
+(24,182)
+Including: Interest expenses on assets
+sold under agreements to
+repurchase and placements
+from banks and other
+financial institutions
+(530)
+Other asset Technology
+Other
+businesses
+Property
+health and casualty
+insurance insurance
+(3,267)
+Interest revenue from non-banking
+operations
+98,317
+7,372
+614
+5,857
+15,621
+439
+(2,746) 125,474
+Including: Inter-segment interest revenue
+from non banking operations
+176
+76
+18
+369
+Investment income
+57,835
+5,896
+14,380
+(998)
+1,978
+2,761
+12,320
+67 (3,467)
+(9,866) (3,506)
+78,039
+Including: Inter-segment investment
+income
+2,339
+135
+17
+122
+57
+312
+2,776
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+reserves
+1,590
+7,701
+7
+9,298
+Net earned premiums
+479,195 260,490
+248
+739,933
+Reinsurance commission revenue
+2,749
+4,527
+(1,368)
+4
+5,908
+Interest revenue from banking operations
+non-insurance operations
+213,536
+(97)
+213,439
+40,190
+3,611
+9,309
+1,726
+(3,312)
+51,524
+Including: Inter-segment fees and
+commission revenue from
+non-insurance operations
+Fees and commission revenue from
+- Attributable to owners of the parent
+237
+(2,766)
+165
+158
+5,076
+10
+6,801
+(22,264)
+25
+3
+579
+Total revenue
+664,934
+281,206
+268,549
+3,779 22,826
+62,653
+20,488
+(36,760) 1,287,675
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 235
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2021 and for the year then ended is as follows (continued):
+Life and
+(in RMB million)
+Claims and policyholders' benefits
+Commission expenses on insurance
+operations
+Interest expenses on banking operations
+(444,096) (174,769)
+218
+Including: Non-operating gains
+22
+31
+Including: Operating lease income from
+investment properties
+5,744
+205
+57
+3
+140
+(1,529)
+4,620
+Share of profits and losses of associates
+and joint ventures
+2,034
+1,696
+Other revenues and other gains/(losses)
+24,804
+34
+1,225
+480
+283
+72
+(22)
+(117) 7,351
+(3,668)
+7,346
+5,704
+33,103
+22,564
+(22,311)
+66,012
+Including: Inter-segment other revenues
+10,334
+443
+59,468
+(1,443)
+229
+The proportion of ordinary shares, as shown in the above table, is the sum product of direct holding by the Company and indirect
+holding by a multiplication of the proportion of shares held in each holding layer. The proportion of votes is the sum product of the
+proportion of votes held directly by the Company and indirectly via subsidiaries controlled by the Company.
+(iii)
+(ii)
+(i)
+Notes:
+(continued)
+(1) Particulars of the Company's principal subsidiaries as at 31 December 2021 are set out below:
+4. SCOPE OF CONSOLIDATION (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+232
+property management,
+Ningbo
+800,000,000
+70.00%
+69.66%
+Property leasing and
+Ningbo Xinyin Property Development Ningbo, Corporation
+Co., Ltd. (iv, v)
+property management,
+Hangzhou
+70.00% USD299,740,000
+69.66%
+Property leasing and
+Hangzhou, Corporation
+Raffles City (Hangzhou) Real Estate
+Development Co., Ltd. (iv, v)
+property management,
+Chengdu
+70.00% USD217,700,000
+16,117 21,060
+Property leasing and
+Chengdu Raffles City Industry Co., Ltd. Chengdu, Corporation
+(iv, v)
+property management,
+Beijing
+For the year ended 31 December 2021, Ping An Bank's profit attributable to its non-controlling interest was RMB15,276 million (2020:
+RMB12,162 million), the dividend paid to its non-controlling interest was RMB3,809 million (2020: RMB2,964 million). As at 31 December
+2021, Ping An Bank's equity attributable to its non-controlling interest was RMB195,231 million (2020: RMB182,064 million). Ping An
+Bank's summarized financial information is disclosed in "segment reporting" under the "Banking" segment.
+The registered capitals of these subsidiaries were changed in 2021.
+(iv) The subsidiaries were incorporated into the scope of consolidation in 2021.
+(V)
+1,620,000,000
+99.54%
+Ping An Asset Xinxiang No.5 Assets
+Management
+Investment in wealth
+management products
+7,449,913,531
+99.51%
+Ping An Asset Xinxiang No.19 Assets
+Management
+Investment in debt schemes
+9,500,000,000
+99.52%
+Investment in debt schemes
+Investment in wealth
+management products
+12,000,000,000
+98.86%
+USD24,500,000
+21,806,684,511
+(RMB)
+Paid-in capital
+99.51%
+interest
+Attributable equity
+Fund Trust Scheme
+Shanghai Trust Huarong Aggregated
+Trust Scheme
+Huabao East Aggregated Fund
+Ping An Asset Xinxiang No.28 Assets
+Management
+Name
+(2) As at 31 December 2021, the Group consolidated the following principal structured entities:
+The Company and its subsidiaries are subject to the Company Law as well as various listing requirements,
+where applicable. Capital or asset transactions between the Company and its subsidiaries might be
+subject to regulatory requirements. Certain of the Company's subsidiaries are subject to regulatory capital
+requirements. As such, there are restrictions on the Group's ability to access or use the assets of these
+subsidiaries or use them to settle the liabilities of these subsidiaries. Please refer to Note 53.(7) for detailed
+disclosure on the relevant regulatory capital requirements.
+The six subsidiaries mentioned above are project companies that invest in Raffles City commercial office real estate, hereinafter
+referred to as "Raffles Project".
+Principal activities
+70.00%
+69.66%
+Property leasing and
+100.00%
+99.60%
+Investment platform,
+Shenzhen
+Shenzhen, Corporation
+Shenzhen Hengchuang Investment
+Management Co., Ltd.
+10,000,000
+100.00%
+99.51%
+Investment management,
+Hangzhou
+Cornerstone II Equity Investment
+Co., Ltd.
+Hangzhou, Corporation
+Hangzhou Xiaoshan Ping An
+12,537,286,000
+100.00%
+5,000,000
+99.51%
+Chongqing, Corporation
+(RMB unless
+otherwise stated)
+authorized capital
+Registered/
+Proportion of
+votes (%) (i)
+Proportion of
+ordinary shares
+indirectly held by
+the Company (%)
+the Company (%)
+directly held by
+Principal activities and
+place of operation
+Place of incorporation and
+kind of legal entity
+Chongqing Youshengda Real
+Estate Consulting Co., Ltd.
+Name
+ordinary shares
+Proportion of
+Real estate consulting,
+Chongqing
+Investment in wealth
+management products
+Global Voyager Fund (HK)
+Company Limited
+100.00%
+Beijing Xinjie Real Estate Development Beijing, Corporation
+Co., Ltd. (iv, v)
+Shanghai
+property management,
+USD30,000,000
+60.00%
+59.71%
+Property leasing and
+Shanghai, Corporation
+Shanghai Huaqing Real Estate
+Management Co., Ltd. (iv, v)
+property management,
+Shanghai
+2,208,601,418
+70.00%
+69.66%
+Property leasing and
+Hong Kong, Corporation Asset management,
+Hong Kong
+Shanghai, Corporation
+1,000,000,000
+100.00%
+96.66%
+Commodity trade,
+Shenzhen
+Shenzhen, Corporation
+Ping An Commodities Trading
+Co., Ltd.
+service, Hong Kong
+HKD1,000,000
+100.00%
+96.55%
+Hong Kong, Corporation Insurance brokerage
+China PA Wealth Management
+(Hong Kong) Company Limited
+USD14,794,701
+100.00%
+Shanghai Orient Overseas Kaixuan
+Real Estate Co., Ltd. (iv, v)
+FINANCIAL STATEMENTS
+69.66%
+99.51%
+business
+Securities management
+Trust
+Banking
+insurance
+insurance
+(in RMB million)
+Other
+businesses
+and
+elimination
+Technology
+Property
+and casualty
+Life and
+health
+The segment analysis as at 31 December 2021 and for the year then ended is as follows:
+5. SEGMENT REPORTING (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+234
+Other asset
+During 2021 and 2020, revenue from the Group's top five customers accounted for less than 1% of the total
+revenue for the year.
+Total
+494,011
+3,614
+8,378
+(1,957)
+Ping An Asset Xinxiang No.20 Assets
+Management
+236
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Gross written premiums
+Change in unearned premium
+3,522
+(17,324)
+(16,406)
+Less: Premiums ceded to reinsurers
+760,843
+(3,281)
+270,113
+(30,208)
+Transfer prices between operating segments are based on the amount stated in the contracts agreed by
+the both sides.
+(5,291) 101,618
+Except for the above business segments, the other segments did not have a material impact on the Group's
+operating outcome, and as such are not separately presented.
+4,551,171,317
+99.51%
+Ping An Asset Xinxiang No.14 Assets
+Management
+management products
+7,139,468,987
+99.51%
+Ping An Asset Xinxiang No.10 Assets
+Management
+Investment in wealth
+management products
+6,730,552,460
+6,508,823,782
+99.51%
+Ping An Asset Xinxiang No.18 Assets
+Management
+management products
+Investment in wealth
+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 key performance indicators.
+Investment in wealth
+management products
+Investment in wealth
+99.51%
+The technology business segment provides various financial and daily-life services through internet
+platforms such as financial transaction information service platform, health care service platform,
+reflecting performance summary of the technology business subsidiaries, associates and joint ventures.
+The other asset management segment provides investment management services, finance lease
+business and other asset management services, reflecting performance summary of asset management
+and finance lease and the other asset management subsidiaries;
+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 auto insurance, non-auto insurance, accident and health insurance,
+reflecting performance of property and casualty insurance subsidiary;
+Ping An Asset Xinxiang No.11 Assets
+Management
+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 technology business segment
+and the other businesses, based on the products and service offerings. The insurance segment is divided
+into the life and health insurance and the property and casualty insurance segment which are in line with
+the nature of products, risk and asset portfolios. The types of products and services from which reportable
+segments derive revenue are listed below:
+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;
+management products
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 233
+2,781,690,208
+Annual Report 2021
+5. SEGMENT REPORTING
+Investment in wealth
+2021
+2020
+24,776
+24,443
+889
+704
+16,876
+10,213
+12. CLAIMS AND POLICYHOLDERS' BENEFITS
+683
+11,098
+11,168
+17,192
+1,844
+Others
+46
+Management fee and consulting fee income
+- Wealth management investments, debt schemes and
+other investments
+(6,964)
+5,666
+Financial liabilities at fair value through profit or loss
+Derivative financial instruments
+(1,571)
+161
+108
+(22,613)
+Finance lease income
+(4,770)
+Ping An Insurance (Group) Company of China, Ltd. 243
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+11. OTHER REVENUES AND OTHER GAINS/(LOSSES)
+(in RMB million)
+Sales revenue
+Expressway toll fee
+Annuity management fee
+Annual Report 2021
+66,012
+52,931
+2021
+Interest credited to policyholder contract deposits
+30,861
+30,861
+638,866
+(20,204)
+618,662
+2020
+(in RMB million)
+Gross
+257,490
+Reinsurers' share
+Claims and claim adjustment expenses
+216,734
+(12,237)
+204,497
+Surrenders
+36,914
+36,914
+Annuities
+6,940
+Net
+(342)
+257,832
+reserves
+(in RMB million)
+Claims and claim adjustment expenses
+Surrenders
+Annuities
+Maturities and survival benefits
+Gross
+Reinsurers' share
+Net
+243,970
+(19,862)
+224,108
+52,931
+(10,742)
+7,887
+7,887
+25,980
+25,980
+Policyholder dividends
+19,405
+19,405
+Increase in long-term life insurance policyholders'
+64,819
+(15,052)
+(209)
+1,108
+Realized gains from disposal
+Unrealized gains/(losses)
+Total investment income
+2021
+2020
+74,985
+64,020
+25,667
+Net investment income
+46,982
+(4,770)
+78,039
+106,232
+(1) NET INVESTMENT INCOME
+(in RMB million)
+2021
+2020
+Financial assets at fair value through profit or loss
+(22,613)
+(in RMB million)
+10. INVESTMENT INCOME
+Ping An Insurance (Group) Company of China, Ltd.
+Financial assets at fair value through profit or loss
+6,940
+Fees and commission expenses on non-insurance operations
+Brokerage commission
+2,466
+1,924
+Fees and commission on the banking business
+7,128
+9,815
+Others
+346
+477
+Subtotal
+9,940
+12,216
+Net fees and commission income from non-insurance operations
+41,584
+37,942
+242
+Annual Report 2021
+55,742
+49,180
+Equity financial assets at fair value through
+other comprehensive income
+14,623
+1,884
+1,414
+Precious metal transactions investment gains/(losses)
+121
+Investment in subsidiaries, associates and joint ventures
+6,045
+1,423
+25,667
+46,982
+(3) UNREALIZED GAINS/(LOSSES)
+(in RMB million)
+Financial assets at fair value through profit or loss
+2021
+2020
+- Bonds
+3,220
+(1,009)
+- Funds
+(2,354)
+Gain on disposals of loans and advances at fair value through
+other comprehensive income
+Stocks
+(222)
+Derivative financial instruments
+11,694
+Operating lease income from investment properties
+4,620
+3,146
+74,985
+64,020
+(2) REALIZED GAINS FROM DISPOSAL
+(in RMB million)
+2021
+2020
+18,495
+42,400
+Debt financial assets at fair value through
+other comprehensive income
+(159)
+2,045
+Financial assets at amortized cost
+(363)
+131
+(356)
+Maturities and survival benefits
+25
+25,257
+- Attributable to owners of the parent
+296,877 113,898 200,217
+24,918
+42,577
+36,003
+26,388 219,693 24,694
+210,791 667,028 30,898
+78,945 118,887
+54,922 100,697
+(20,733)
+480,709
+(130,086) 9,064,303
+(17,030) 1,077,723
+(15,127) 812,405
+Other segment information:
+Capital expenditures
+24,947
+6,198
+8,583
+18
+782
+2,081
+1,334
+(491) 19,887
+Depreciation and amortization
+7,053
+1,612
+6,416
+74
+1,382
+319,320 114,629 395,448
+Segment equity
+6,778
+13,996
+-
+2,990,518
+73,134
+823,934
+68,818 161,124
+(61,603) 3,002,049
+8,986 1,097,523
+Insurance contract liabilities
+2,995,147
+267,128
+(921) 3,261,354
+Investment contract liabilities for
+policyholders
+72,820
+19
+72,839
+Policyholder dividend payable
+67,276
+67,276
+Others
+57,161
+28,638 138,090
+6,778
+Segment liabilities
+3,397,184 355,778 4,525,932
+415
+20,665
+835
+(684) 17,879
+Total
+Gross written premiums
+514,513
+285,911
+(2,544)
+797,880
+Less: Premiums ceded to reinsurers
+(9,167)
+(16,714)
+2,804
+(23,077)
+and
+elimination
+Change in unearned premium
+(1,020)
+(16,180)
+(4)
+(17,204)
+Net earned premiums
+504,326
+253,017
+256
+757,599
+Reinsurance commission revenue
+2,239
+reserves
+business
+Technology
+Other asset
+management
+Total other non-cash expenses charged to
+consolidated results
+24,492
+1,496 73,817
+1,146
+574
+2,428
+1,033
+56
+105,042
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 237
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2020 and for the year then ended is as follows:
+Life and
+health
+(in RMB million)
+insurance
+Property
+and casualty
+insurance
+Other
+businesses
+Banking
+Trust
+Securities
+2,158
+5,473
+Bonds payable
+Customer deposits and payables to
+2,019
+7
+Finance lease receivable
+5
+8
+320,954
+22,971
+200,701
+2,571
+(940)
+26,628
+-
+Accounts receivable
+200,701
+-
+2,984,753
+(3,778) 2,980,975
+Financial assets at fair value through
+profit or loss
+709,874
+Financial assets at amortized cost
+1,771,695
+119,501 389,703
+113,333 738,166
+14,639
+6,625
+50,824
+Loans and advances to customers
+308,348
+4,300
+8,293
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2021 and for the year then ended is as follows (continued):
+(in RMB million)
+Life and
+health
+insurance
+Property
+and casualty
+insurance
+Other
+businesses
+Other asset
+Technology
+Banking
+Trust
+Securities management
+business
+and
+elimination
+Total
+Cash and amounts due from banks and
+other financial institutions
+207,013
+59,110 176,373
+6,439
+89,483
+59,855
+23,067
+(36,345)
+584,995
+Balances with the Central Bank and statutory
+deposits for insurance operations
+108,277
+brokerage customers
+18,245
+60
+institutions
+32,020
+3,978 525,687
+4,895 277,712
+5,149
+(51,795) 797,646
+Assets sold under agreements to
+repurchase
+27,300
+9,484 47,703
+37,556
+Due to banks and other financial
+4,921
+2,632
+288
+3,578
+1,055
+Insurance payables
+122,163
+32,247
+-
+513 127,477
+(890) 6,663
+(3,643) 150,767
+Accounts payable
+(8,434) 851,295
+(147,116) 10,142,026
+149,785
+253,368 745,973
+179,522
+777
+(41,183) 2,768,995
+Financial assets at fair value through
+other comprehensive income
+447,189
+25,502 155,020
+14
+Investments in associates and joint ventures
+134,856
+25,789
+1,046
+Others
+435,565
+122,865 169,017
+2,962
+87,752
+158 86,150 77,387
+25,091 76,706 27,523
+11,791
+210
+(30,733) 696,745
+(41,325) 284,061
+Segment assets
+3,716,504
+470,407 4,921,380
+31,725
+15,614 1,426,677
+(1,356) 6,356
+Interest revenue from banking operations
+201,007
+54
+(54)
+Placements with banks and other financial institutions
+1,811
+1,013
+Finance lease receivable
+31,121
+23,144
+Financial assets at amortized cost
+792
+2,399
+Loan commitments
+other comprehensive income
+43,148
+59,407
+Loans and advances to customers
+417
+242
+Accounts receivable
+2020
+2021
+(in RMB million)
+13. NET IMPAIRMENT LOSSES ON FINANCIAL ASSETS
+614,751
+Debt financial assets at fair value through
+3,027
+(820)
+Due from banks and other financial institutions
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 245
+Annual Report 2021
+2,416
+14,548
+2,391
+2,288
+50,158
+12,260
+2021
+2020
+Net impairment losses on other assets
+joint ventures
+Impairment losses on investments in associates and
+(in RMB million)
+14. NET IMPAIRMENT LOSSES ON OTHER ASSETS
+77,042
+90,494
+702
+1,379
+Others
+(183)
+(63)
+(12,861)
+15. PROFIT BEFORE TAX
+627,612
+(7,392)
+Long-term life insurance contract benefits
+(in RMB million)
+Property and casualty insurance claims
+Short-term life insurance claims
+Long-term life insurance contract benefits
+(in RMB million)
+12. CLAIMS AND POLICYHOLDERS' BENEFITS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+244
+614,751
+Short-term life insurance claims
+(12,861)
+30,650
+30,650
+Interest credited to policyholder contract deposits
+291,492
+(624)
+292,116
+policyholders' reserves
+Increase in long-term life insurance
+19,001
+19,001
+Policyholder dividends
+627,612
+Property and casualty insurance claims
+2021
+Gross
+160,749
+23,204
+(3,015)
+26,219
+438,190
+(2,454)
+440,644
+Net
+Reinsurers' share
+Gross
+2020
+618,662
+(20,204)
+638,866
+174,945
+(10,650)
+185,595
+15,659
+(6,227)
+21,886
+428,058
+(3,327)
+431,385
+Net
+Reinsurers' share
+153,357
+(1) PROFIT BEFORE TAX IS ARRIVED AT AFTER CHARGING THE FOLLOWING ITEMS:
+(in RMB million)
+Employee costs (Note 15.(2))
+118,814
+Including: Inter-segment interest revenue
+from non-banking operations
+206
+70
+Investment income
+83,061
+9,203
+9,350
+189
+283
+23
+(2,883)
+1,405
+2,547
+81
+(3,227)
+3,993
+1,821
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+246
+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 2021 was 25%.
+28,405
+17,778
+4005
+1
+291
+15,285
+(412)
+200,595
+Fees and commission revenue from
+non-insurance operations
+39,476
+4,335
+8,175
+1,576
+(3,404) 50,158
+Including: Inter-segment fees and
+commission revenue from
+non-insurance operations
+2,648
+615
+119
+19
+99
+99
+(3,481)
+Interest revenue from non-banking
+operations
+93,779
+7,369
+256
+4,717
+36,923
+1,638
+(10,156)
+(9,038)
+228
+- Adjustments in respect of current income tax of previous years
+Deferred income tax
+90,494
+7,234
+6,364
+2,470
+2,564
+6,537
+6,895
+1,341
+1,620
+30,650
+30,861
+75,164
+78,859
+2020
+2021
+(2) EMPLOYEE COSTS
+Auditors' remuneration
+Cost of sales
+Net impairment losses on other assets
+Net impairment losses on financial assets
+Depreciation of right-of-use assets
+Depreciation of property and equipment
+Amortization of intangible assets
+Depreciation of investment properties
+investment contract reserves
+Interest expenses on policyholder contract deposits and
+77,042
+25,257
+14,548
+12,763
+26,588
+- Charge for the year
+Current income tax
+2020
+2021
+(in RMB million)
+16. INCOME TAX
+75,164
+78,859
+2,409
+2,089
+Others
+11,376
+15,561
+welfare benefits
+Retirement benefits, social security contributions and
+61,379
+61,209
+Wages, salaries and bonuses
+(in RMB million)
+2020
+2021
+98
+88
+11,202
+2,416
+51,524
+10,945
+2,882
+22,620
+Accident and health insurance
+72,928
+58,943
+Non-automobile insurance
+196,335
+188,990
+17,090
+Automobile insurance
+511,527
+490,290
+23,433
+20,076
+488,094
+470,214
+2020
+Property and casualty insurance
+2021
+270,553
+Gross written premiums
+Property and casualty insurance
+505,346
+477,605
+22,892
+13,260
+Group business
+482,454
+286,353
+464,345
+Life insurance
+Net of reinsurance premiums ceded
+2020
+2021
+(in RMB million)
+797,880
+760,843
+Individual business
+Automobile insurance
+Group business
+Life insurance
+(84,801)
+(73,931)
+Premium deposits separated out from universal life and
+investment-linked products
+(3,145)
+(3,060)
+Less: Premium deposits of policies without significant insurance risk
+transfer
+885,826
+Gross written premiums
+837,834
+2020
+2021
+(in RMB million)
+6. GROSS AND NET WRITTEN PREMIUMS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+240
+Gross written premiums and premium deposits
+Individual business
+760,843
+(in RMB million)
+Gross written premiums
+(in RMB million)
+797,880
+760,843
+Gross written premiums
+286,353
+270,553
+797,880
+Property and casualty business gross written premiums
+36,239
+Short-term life business gross written premiums
+468,782
+454,051
+Long-term life business gross written premiums
+2020
+2021
+42,745
+79,458
+182,567
+Non-automobile insurance
+22,339
+3,524
+(1,401)
+26,176
+Finance lease receivable
+202,050
+202,050
+292,738
+Loans and advances to customers
+(11,331) 2,599,510
+Financial assets at fair value through
+profit or loss
+587,173
+118,599
+311,270
+14,951
+2,610,841
+36,191
+8
+1,714
+Cash and amounts due from banks and
+other financial institutions
+224,480
+58,935
+180,975
+7,490
+73,701
+51,582
+5
+18,858
+587,391
+Balances with the Central Bank and statutory
+deposits for insurance operations
+Accounts receivable
+8,267
+4,281
+280,177
+(28,630)
+188,969
+118,735
+Financial assets at amortized cost
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+Subtotal
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 241
+Annual Report 2021
+774,803
+7. NET INTEREST INCOME FROM BANKING OPERATIONS
+730,635
+269,457
+253,030
+16,703
+22,166
+Accident and health insurance
+63,785
+48,297
+Net written premiums
+30,084
+(in RMB million)
+2021
+1,724,256
+2,550
+Subtotal
+31,536
+31,360
+Financial investments
+157,830
+Interest revenue from banking operations
+171,231
+7,850
+7,253
+Due from financial institutions
+3,379
+3,595
+Due from the Central Bank
+2020
+Loans and advances to customers
+Total
+212
+5,519
+Investment contract liabilities for
+policyholders
+67,562
+19
+67,581
+Policyholder dividend payable
+63,806
+2,972,460
+63,806
+75,137
+24,918 126,126
+8,717
+19,630
+210,816
+28,617
+(34,414) 459,547
+Others
+Segment liabilities
+10,124 901,285
+(547)
+2,710,089
+28,566
+(3,039)
+139,528
+Customer deposits and payables to
+brokerage customers
+2,695,935
+59,472
+262,918
+(61,574)
+Bonds payable
+34,137
+13,927
+611,865
+51,776
+179,456
+Insurance contract liabilities
+2,693,833
+114,001
+3,291,037 349,370 4,104,383
+165,477
+Capital expenditures
+7,095
+2,124
+5,888
+8
+374
+1,720
+Other segment information:
+2,306
+Depreciation and amortization
+6,670
+1,647
+5,662
+46
+399
+714
+(1,197) 18,318
+8,717
+(5,243) 762,560
+32,346
+723,862
+37,007
+(139,888) 8,539,965
+Segment equity
+281,524
+103,471 364,131
+23,503
+49,240 104,523
+33,806
+116,811
+(6,160) 987,905
+- Attributable to owners of the parent
+273,161
+102,991
+182,067
+23,475
+70,819
+218
+Insurance payables
+(1,454)
+198,722
+14
+73,170
+9,679
+49
+(42,793)
+788,787
+29,365
+Investments in associates and joint ventures
+13,799
+1,126
+91
+64,659
+71,932
+(25,994) 267,819
+Others
+142,206
+363,884
+520,581
+Financial assets at fair value through
+779
+155
+55
+70,418
+1,423
+734
+Total other non-cash expenses charged to
+consolidated results
+other comprehensive income
+17,181
+633,619
+5,930
+213
+202,132
+1,012
+14,328
+(43,423) 2,624,848
+1,231,331
+101,109
+5,148
+126,753
+2,709
+(49,193)
+960,175
+Assets sold under agreements to
+repurchase
+187,846
+13,807
+35,286
+7,378
+34,295
+209
+276,602
+Accounts payable
+2,169
+20
+3,401
+1,012
+5,159
+252,910
+304 325,030
+5,195
+15,917
+123,505
+28,354
+(6,812)
+907,220
+Segment assets
+3,572,561
+635,171
+452,841 4,468,514
+199,283
+794,681
+153,818
+(146,048) 9,527,870
+Due to banks and other financial
+institutions
+36,290
+32,220
+and
+elimination
+(507)
+Technology
+(35)
+(3,224)
+(785)
+(33)
+(26,578)
+213
+(535)
+(213)
+investment assets
+(43,148)
+(43,148)
+Including: Loan impairment losses, net
+(79,458)
+(212)
+(218)
+(5,519)
+Including: Impairment losses on
+(779)
+(31,190)
+receivables and others
+384
+(8)
+(3)
+762
+(7)
+1,123
+Foreign exchange gains/(losses)
+Including: Impairment losses on
+(5,120)
+(183)
+(2,295)
+6
+(122)
+(692)
+(1,636)
+(199)
+1
+(22)
+(155)
+(1,423)
+Total
+and
+elimination
+business
+Securities management
+Trust
+Banking
+Other asset Technology
+(461,753) (153,177)
+Other
+businesses
+Life and
+health
+insurance
+Commission expenses on insurance
+operations
+(in RMB million)
+The segment analysis as at 31 December 2020 and for the year then ended is as follows (continued):
+5. SEGMENT REPORTING (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Property
+and casualty
+insurance
+(70,418)
+179
+(65,156)
+(734)
+Net impairment losses on financial assets
+and other assets
+(12,216)
+241
+(174)
+(2,017)
+(451)
+(614,751)
+(9,815)
+(86,371)
+1,166
+(87,537)
+Interest expenses on banking operations
+(102,021)
+3,839
+(40,704)
+Fees and commission expenses on
+non-insurance operations
+238
+(10)
+Investment expenses
+(3)
+(232)
+(443)
+(25,634)
+(610,689) (258,258) (213,455)
+Total expenses
+Other expenses
+(4,441)
+(4,063)
+(71)
+(751)
+(61)
+(296)
+(3,247)
+financial institutions
+from banks and other
+repurchase and placements
+(15)
+sold under agreements to
+(10,309)
+13,038
+(3,921) 187,764
+9,954
+11,114
+3,884
+3,216
+business
+36,754
+(5,808)
+107,134 19,629
+(11,062) (3,470) (7,826)
+Profit before tax
+33,923 (1,133,654)
+(22,526)
+(45,709)
+(14,606)
+(2,334)
+(33,454)
+Income tax
+2,219
+Including: Interest expenses on assets
+2,954
+(15,795)
+(4,893) (11,860)
+(1,475)
+(46,215)
+(60,883)
+(49,057)
+Administrative expenses
+9,183
+(171)
+(163)
+investment operations
+Including: Taxes and surcharges on
+(171)
+3,616
+(329)
+(3,458)
+(8)
+(21,995)
+(180,995)
+insurance operations
+(683)
+(18,216)
+(2,095)
+(186)
+(2,773) (996)
+Including: Financial costs
+2,883 (26,436)
+Including: Taxes and surcharges on
+(683)
+(1,292)
+(6,020)
+operations
+Interest expenses on non-banking
+(2,287)
+(1,400)
+(887)
+(247) (2,846) (18,231)
+1,321,418
+Claims and policyholders' benefits
+32,480
+Fees and commission revenue from non-insurance operations
+Brokerage commission
+7,440
+5,828
+Underwriting commission
+914
+1,146
+2020
+Trust service fees
+3,474
+Fees and commission from the banking business
+37,414
+36,828
+Others
+2,826
+(782)
+2,930
+(4,403)
+2021
+9. NET FEES AND COMMISSION INCOME FROM NON-INSURANCE
+OPERATIONS
+86,371
+121,368
+114,224
+Net interest income from banking operations
+(37,844)
+(in RMB million)
+Financial assets at amortized cost
+(in RMB million)
+Debt financial assets at fair value through
+other comprehensive income
+2020
+113,708
+107,201
+11,766
+11,613
+125,474
+118,814
+2021
+92,071
+(451)
+Profit for the year
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+5. SEGMENT REPORTING (CONTINUED)
+The segment analysis as at 31 December 2020 and for the year then ended is as follows (continued):
+Other
+businesses
+Ping An Insurance (Group) Company of China, Ltd. 239
+Life and
+health
+(in RMB million)
+insurance
+insurance
+Banking
+Trust
+Securities
+Other asset
+management
+Property
+and casualty
+326 (28,405)
+Annual Report 2021
+(3,876)
+96,072
+16,159
+28,928
+2,479
+3,102
+6,711
+9,503
+143,099
+(3,595) 159,359
+95,018
+16,083
+16,766
+2,476
+2,959
+5,737
+7,936
+- Attributable to owners of the parent
+110
+8. INTEREST REVENUE FROM NON-BANKING OPERATIONS
+21,905
+78
+12,335
+Including: Inter-segment other revenues
+64,819
+25,176 (24,837)
+33,284
+4,208
+7
+722
+944
+15,909
+Other revenues and other gains/(losses)
+(2,418) 16,845
+5,192
+2,685
+(15)
+376
+48
+4,295
+(25,043)
+56,823
+18,490
+5,550
+250,209
+(737)
+277,887
+717,823
+8,328
+Total revenue
+2
+15
+31
+77
+82
+172
+Including: Non-operating gains
+379
+1,881
+24,946
+and joint ventures
+213,439
+200,595
+Interest expenses on banking operations
+Due to the Central Bank
+9,472
+Customer deposits
+Bonds payable
+Others
+Subtotal
+3,664
+3,745
+9,535
+10,437
+56,967
+56,170
+(2,790)
+106,232
+Due to financial institutions
+2,389
+Share of profits and losses of associates
+3,146
+Including: Inter-segment investment
+income
+140
+3
+43
+169
+4,413
+10 (1,632)
+(2,691)
+21
+88
+98
+48
+48
+135
+Including: Operating lease income from
+investment properties
+10,561
+(89,256)
+3,059,670
+249,264
+237,016
+Others
+1,604,940
+1,910,321
+Construction
+42,568
+48,073
+166,000
+212,943
+256
+2,980,975
+Individual customers
+2,599,510
+1,258,615
+203,818
+7,365
+(62,821)
+946
+(55)
+548
+453
+398
+As at 31 December
+398
+As at 31 December
+As at 1 January
+Measured at fair value through other comprehensive income
+62,821
+89,256
+As at 31 December
+(183)
+Charge/(reversal) for the year
+(119)
+90,202
+Annual Report 2021
+Unlisted equity investments
+Preferred shares
+Stocks
+Funds
+Corporate bonds
+Finance bonds
+63,219
+Government bonds
+(in RMB million)
+27. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 255
+Bonds
+Others
+(260)
+(109)
+100.00%
+3,059,670
+0.29%
+7,604
+0.50%
+15,128
+2,654,966
+34.74%
+36.46%
+1,115,419
+15.21%
+403,723
+14.76%
+451,643
+922,455
+100.00%
+10,561
+(89,256)
+Unwinding of discount of impairment provisions recognized
+as interest income
+15,888
+Recovery of loans written off previously
+(62,598)
+58,859
+Charge for the year
+69,560
+62,821
+As at 1 January
+Measured at amortized cost
+2020
+2021
+2,599,510
+2,980,975
+7,365
+(62,821)
+Debt schemes
+9.20%
+Wealth management investments
+Total
+149,595
+Other investments
+287,441
+327,717
+Wealth management investments
+119,002
+159,228
+136,654
+92,680
+77,606
+Corporate bonds
+1,608,135
+374,262
+1,804,351
+306,714
+Finance bonds
+Debt schemes
+31 December 2020
+Gross
+2,640,748
+2,624,848
+2,768,995
+2,318,245
+2,442,669
+Unlisted
+306,603
+2,802,637
+326,326
+2,624,848
+2,768,995
+Net
+(15,900)
+(33,642)
+Less: Provisions for impairment losses
+Listed
+31 December 2021
+1,231,331
+1,426,677
+66,112
+80,011
+122,563
+171,644
+139,209
+167,688
+351,183
+31 December 2020
+Government bonds
+Bonds
+(in RMB million)
+28. FINANCIAL ASSETS AT AMORTIZED COST
+Unlisted
+Listed
+31 December 2021
+252,719
+100,485
+131,991
+1,014,347
+216,984
+185,601
+1,241,076
+1,231,331
+1,426,677
+100,895
+89,973
+239,483
+245,208
+44,658
+62,164
+99,779
+125,363
+33,922
+32,958
+Other investments
+2,654,966
+244,223
+280,397
+35,195
+438
+1,224
+196
+853
+11,123
+22,410
+1,920
+266
+Total
+1 to 3 years
+to 1 year
+Within 3 months
+More than
+3 months
+31 December 2021
+3 years
+Guaranteed
+3,235
+Secured by mortgages
+714
+1,681
+20,293
+34,815
+873
+10
+Secured by collateral
+35
+Pledged loan
+18,200
+10
+251
+8,282
+9,657
+828
+Unsecured
+(in RMB million)
+2,599,510
+Gross
+Discounted bills
+Subtotal
+Secured by monetary assets
+Secured by mortgages
+Secured by collateral
+Add: Interest receivable
+Guaranteed
+(in RMB million)
+(3) ANALYSED BY TYPE OF COLLATERAL HELD
+Carrying amount
+Less: Provision for impairment losses
+Add: Interest receivable
+Gross
+Unsecured
+Less: Provision for impairment losses
+Carrying amount
+(4) AGING ANALYSIS OF PAST DUE LOANS BY PASS DUE DAYS
+7,365
+(62,821)
+10,561
+(89,256)
+2,980,975
+2,654,966
+112,633
+2,542,333
+272,193
+983,796
+1,089,759
+196,585
+31 December 2020
+3,059,670
+154,653
+2,905,017
+287,646
+1,154,938
+31 December 2021
+57,503
+9.16%
+254
+Ping An Insurance (Group) Company of China, Ltd.
+Add: Interest receivable
+Gross
+Overseas
+Head office
+Northern
+Western
+Less: Loan allowance
+Southern
+(in RMB million)
+(5) ANALYSED BY REGION
+Past due loans refer to the loans with either principal or interest being past due by one day or more.
+43,052
+414
+5,064
+Eastern
+18,063
+Carrying amount
+(in RMB million)
+21.10%
+560,237
+19.59%
+599,433
+19.46%
+516,724
+(6) LOAN IMPAIRMENT PROVISION
+19.53%
+%
+Amount
+%
+Amount
+31 December 2020
+31 December 2021
+597,650
+19,511
+6,396
+50
+3 years
+1 to 3 years
+More than
+3 months
+to 1 year
+Within 3 months
+31 December 2020
+Total
+Pledged loan
+Secured by collateral
+Guaranteed
+Unsecured
+(in RMB million)
+(4) AGING ANALYSIS OF PAST DUE LOANS BY PASS DUE DAYS (CONTINUED)
+26. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+Secured by mortgages
+10,143
+10,638
+1,376
+1,890
+1,839
+2,617
+11,250
+141
+778
+4,251
+6,080
+3,211
+185
+1,020
+1,335
+671
+22,195
+38
+Annual Report 2021
+13,099
+13,477
+271,963
+Measured at fair value through other comprehensive income:
+Placements with other financial institutions
+31 December 2021
+31 December 2020
+59,142
+25,145
+52,788
+5,055
+84,287
+57,843
+(72)
+(70)
+84,215
+57,773
+11,228
+95,443
+13,223
+70,996
+Total
+As at 31 December 2021, the provision for impairment losses of placements with banks and other financial
+institutions measured at fair value through other comprehensive income is RMB170 million (31 December
+2020: RMB228 million).
+As at 31 December 2021, cash and amounts due from banks and other financial institutions of RMB11,579
+million (31 December 2020: RMB9,654 million) were restricted from use.
+As at 31 December 2021, cash and amounts due from overseas amounted to RMB29,474 million (31 December
+2020: RMB57,169 million).
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 249
+FINANCIAL STATEMENTS
+Net
+Notes to Consolidated Financial Statements
+Less: Provision for impairment losses
+Placements with other financial institutions
+Ping An Insurance (Group) Company of China, Ltd.
+19. CASH AND AMOUNTS DUE FROM BANKS AND OTHER FINANCIAL
+INSTITUTIONS
+(in RMB million)
+Cash on hand
+Term deposits
+Due from banks and other financial institutions
+Placements with banks and other financial institutions
+31 December 2021
+31 December 2020
+3,686
+3,814
+258,176
+332,812
+227,690
+179,769
+95,443
+70,996
+584,995
+587,391
+Details of placements with banks and other financial institutions are as follows:
+(in RMB million)
+Measured at amortized cost:
+Placements with banks
+Gross
+Annual Report 2021
+For the year ended 31 December 2021
+(in RMB million)
+Annual Report 2021
+31 December 2021
+31 December 2020
+55,662
+116,885
+6,091
+6,137
+61,753
+123,022
+(324)
+61,429
+(257)
+122,765
+Ping An Insurance (Group) Company of China, Ltd.
+22. PREMIUM RECEIVABLES
+(in RMB million)
+Premium receivables
+Less: Provision for doubtful receivables
+Premium receivables, net
+Life insurance
+Property and casualty insurance
+Premium receivables, net
+31 December 2021
+84,742
+250
+20. BALANCES WITH THE CENTRAL BANK
+Net
+Gross
+Statutory reserve deposits with the Central Bank for banking
+operations
+31 December 2021
+31 December 2020
+221,619
+217,320
+Statutory reserve deposits with the Central Bank for banking
+operations-RMB
+211,488
+210,297
+- Statutory reserve deposits with the Central Bank for banking
+operations-foreign currencies
+Surplus reserve deposits with the Central Bank
+Fiscal deposits with the Central Bank
+10,131
+84,057
+7,023
+61,996
+2,672
+861
+308,348
+280,177
+In accordance with relevant regulations, subsidiaries of the Group engaged in bank operations are required
+to place mandatory reserve deposits with the People's Bank of China (the 'PBC') for customer deposits in
+both local currency and foreign currencies. As at 31 December 2021, the mandatory deposits are calculated
+at 8.0% (31 December 2020: 9.0%) of customer deposits denominated in RMB and 9.0% (31 December 2020:
+5.0%) of customer deposits denominated in foreign currencies. Mandatory reserve deposits are not available
+for use by the Group in its day-to-day operations.
+21. FINANCIAL ASSETS PURCHASED UNDER REVERSE REPURCHASE
+AGREEMENTS
+Classified by collateral:
+(in RMB million)
+Bonds
+Stocks and others
+Less: Provision for impairment losses
+248
+8.04
+5.72
+17. DIVIDENDS
+(in RMB million)
+2020 final dividend declared in 2021 - RMB1.40 (2019 final dividend
+declared in 2020 - RMB1.30) per ordinary share (i)
+2021 interim dividend
+-
+RMB0.88 (2020 interim dividend -RMB0.80)
+per ordinary share (ii)
+(i)
+2021
+2020
+25,494
+23,673
+15,975
+14,568
+(ii)
+(iii)
+On 3 February 2021, the Board of Directors of the Company approved the Resolution of the Profit Appropriation Plan for 2020,
+agreeing to declare a cash dividend in the amount of RMB1.40 (tax inclusive) per share. The total amount of the cash dividend for
+2020 was RMB25,494 million (tax inclusive).
+On 25 March 2021, the above profit appropriation plan was approved by the shareholders of the Company at the annual general
+meeting.
+On 26 August 2021, the Board of Directors of the Company approved the Resolution of the Profit Appropriation Plan for Interim
+Dividend of 2021, and declared an interim cash dividend of RMB0.88 (tax inclusive) per share. The total amount of the cash dividend
+was RMB15,975 million (tax inclusive).
+On 17 March 2022, the Board of Directors of the Company approved the Resolution of the Profit Distribution Plan for 2021, and
+declared a final cash dividend of 2021 in the amount of RMB1.50 (tax inclusive) per share. Pursuant to the Shanghai Stock Exchange's
+Guidelines for Self-regulation of Listed Companies No.7-Repurchase of Shares and other applicable regulations, the Company's
+A shares in the Company's repurchased securities account after trading hours on the record date of A shareholders for the final
+dividend will not be entitled to the final dividend distribution. The actual total amount of final dividend payment is subject to the
+total number of shares that will be entitled to the dividend distribution on the record date of A shareholders. The total amount of
+the final dividend payment for 2021 is RMB27,198,704,275.50 (tax inclusive) based on the total share capital of 18,280,241,410 shares less
+the 147,771,893 A shares of the Company in the repurchased securities account as at 31 December 2021, which was not recognized as
+a liability as at 31 December 2021.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 247
+Taxes for taxable income attained from outside of the PRC are measured at the tax rates under local and
+PRC law, regulations and conventions. The income tax credited by the Group is verified by official tax
+bureau.
+FINANCIAL STATEMENTS
+28,405
+Income tax per consolidated income statement
+Annual Report 2021
+(48,084)
+Reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax
+rate of 25% (2020: 25%) is as follows:
+(in RMB million)
+Profit before tax
+Tax at the applicable tax rate of 25% (2020: 25%)
+2021
+2020
+139,580
+187,764
+34,895
+46,941
+Expenses not deductible for tax
+4,073
+2,603
+Income not subject to tax
+(25,500)
+(24,253)
+Adjustments in respect of current income tax of previous years
+Others
+228
+1,638
+4,082
+1,476
+17,778
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+18. EARNINGS PER SHARE
+17,607
+17,675
+(i) As at 31 December 2021, 417 million (31 December 2020: 417 million) shares were held by the consolidated assets management
+scheme.
+(2) DILUTED
+Diluted earnings per share was computed by dividing the adjusted profit attributable to the equity holders
+of the Company based on assuming conversion of all dilutive potential shares for the year by the adjusted
+weighted average number of ordinary shares in issue. The shares granted by the Company under the Key
+Employee Share Purchase Plan (Note 41) and Long-term Service Plan (Note 42) have a potential dilutive
+effect on the earnings per share.
+2021
+2020
+Earnings (in RMB million)
+Profit attributable to owners of the parent
+Weighted average number of ordinary shares (million shares)
+Weighted average number of ordinary shares in issue
+Adjustments for:
+101,618
+143,099
+17,607
+17,675
+-
+Assumed vesting of Key Employee Share Purchase Plan
+- Assumed vesting of Long-term Service Plan
+21
+143
+23
+97
+Weighted average number of ordinary shares for diluted earnings
+per share in issue (million shares)
+17,771
+17,795
+Diluted earnings per share (in RMB)
+(68)
+(92)
+Weighted average number of shares held by the treasury share
+Weighted average number of ordinary shares in issue
+(417)
+(1) BASIC
+Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the
+weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased
+by the Group.
+Profit attributable to owners of the parent (in RMB million)
+Weighted average number of ordinary shares in issue (million shares)
+Basic earnings per share (in RMB)
+2021
+2020
+101,618
+17,607
+143,099
+17,675
+5.77
+8.10
+Weighted average number of ordinary shares in issue (million shares)
+31 December 2020
+2021
+Issued ordinary shares as at 1 January
+18,280
+18,280
+Weighted average number of shares held by the Key Employee
+Share Purchase Plan
+(21)
+(23)
+Weighted average number of shares held by the Long-term
+Service Plan
+(143)
+(97)
+Weighted average number of shares held by the consolidated
+assets management scheme (i)
+(417)
+2020
+98,366
+(4,908)
+(4,363)
+Loans
+901,295
+847,939
+Individual customers
+Xinyidai
+158,981
+146,293
+Credit card receivables
+621,448
+529,251
+Mortgage loans and licensed mortgage loans
+654,870
+528,384
+Auto loans
+301,229
+246,416
+Others
+Gross
+173,793
+154,596
+2,811,616
+2,452,879
+Add: Interest receivable
+Corporate customers
+10,561
+31 December 2020
+Measured at amortized cost
+8,408
+Reinsurers' share of claim reserves
+9,863
+Reinsurers' share of long-term life insurance policyholders' reserves
+2,291
+1,948
+26,852
+20,219
+25. FINANCE LEASE RECEIVABLE
+(in RMB million)
+31 December 2021
+31 December 2020
+Finance lease receivables, net of unrealized financial gains
+Less: Provision for impairment losses
+205,907
+(5,206)
+207,053
+(5,003)
+200,701
+202,050
+The Group's long-term receivables are finance lease receivables to offset the net unrealized financial gains.
+252
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+26. LOANS AND ADVANCES TO CUSTOMERS
+(1) ANALYSED BY CORPORATE AND INDIVIDUAL
+(in RMB million)
+31 December 2021
+7,365
+Less: Provision for impairment losses.
+(89,256)
+Loans and advances to customers
+Agriculture, husbandry and fishery
+Mining
+Manufacturing
+Energy
+31 December 2021
+31 December 2020
+4,416
+3,087
+22,099
+24,448
+157,027
+145,939
+26,037
+20,856
+Transportation and communication
+49,031
+51,644
+Wholesaling and retailing
+103,784
+74,257
+Real estate
+288,923
+(in RMB million)
+(2) ANALYSED BY INDUSTRY
+26. LOANS AND ADVANCES TO CUSTOMERS (CONTINUED)
+For the year ended 31 December 2021
+(62,821)
+Net
+2,732,921
+2,397,423
+Measured at fair value through other comprehensive income
+Corporate customers
+Loans
+Discounted bills
+Subtotal
+Carrying amount
+93,401
+11,084
+89,454
+112,633
+248,054
+202,087
+2,980,975
+2,599,510
+As at 31 December 2021, discounted bills with a carrying amount of RMB2,841 million (31 December 2020:
+RMB7,302 million) were pledged for amounts due to the Central Bank.
+As at 31 December 2021, the provision for impairment losses of loans and advances to customers measured
+at fair value through other comprehensive income was RMB946 million (31 December 2020: RMB398 million),
+refer to Note 26.(6).
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 253
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+154,653
+Social service, technology, culture and sanitary industries
+Reinsurers' share of unearned premium reserves
+31 December 2021
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+23. DERIVATIVE FINANCIAL INSTRUMENTS
+(in RMB million)
+Interest rate swaps
+Currency forwards and swaps
+Gold derivative instruments
+Stock index options
+Stock index swaps
+Others
+31 December 2021
+Assets
+Liabilities
+Nominal amount
+Fair value Nominal amount
+Fair value
+3,538,229
+14,164
+2,773,780
+13,237
+1,047,646
+15,687
+1,023,471
+FINANCIAL STATEMENTS
+15,855
+Ping An Insurance (Group) Company of China, Ltd. 251
+98,366
+79,834
+94,003
+17,482
+18,826
+62,352
+75,177
+79,834
+94,003
+The credit terms of premium receivables granted are generally from one to six months, and non-interest
+bearing.
+An aging analysis of premium receivables is as follows:
+(in RMB million)
+Within 3 months
+Over 3 months but within 1 year.
+Over 1 year
+31 December 2021
+31 December 2020
+76,279
+91,007
+3,509
+3,356
+4,954
+4,003
+84,742
+Annual Report 2021
+33,424
+567
+26,865
+622,991
+17.154
+Gold derivative instruments
+Stock index options
+Stock index swaps
+Others
+39,500
+1,761
+60,243
+7,032
+302
+1
+2,455
+137
+3,695
+1,153
+5,164,295
+37,661
+10,514
+3,977,889
+6,506
+48,579
+24. REINSURERS' SHARE OF INSURANCE LIABILITIES
+(in RMB million)
+16,246
+17,887
+3,284,141
+18,363
+2,779
+79
+3
+5,782
+19
+2,249
+75
+1,923
+461
+4,623,550
+30,957
+31 December 2020
+23,254
+3,853,152
+31 December 2020
+Assets
+Liabilities
+(in RMB million)
+Interest rate swaps
+Currency forwards and swaps
+Nominal amount
+4,435,630
+682,713
+Fair value
+Nominal amount
+Fair value
+3,159
+35,049
+Ping An Insurance (Group) Company of China, Ltd.
+16. INCOME TAX (CONTINUED)
+Write-off and transfer during the year
+43,203
+(839)
+(2,039)
+(227)
+(624)
+Disposals
+(262)
+(3)
+(3)
+(251)
+(5)
+Disposals of subsidiaries
+128
+213
+(85)
+Transfer from/(to) investment properties, net
+(70)
+(3,799)
+As at 31 December
+11,653
+70
+2
+68
+Acquisitions of subsidiaries
+27,412
+1,337
+9,810
+(1,161)
+9,737
+As at 1 January
+Accumulated depreciation
+77,564
+3,118
+1,811
+23,256
+37,726
+6,528
+235
+28
+898
+Total
+in progress
+Construction
+Motor
+vehicles
+Equipment,
+furniture and
+fixtures
+Buildings
+Leasehold
+improvements
+Cost
+2020
+34. PROPERTY AND EQUIPMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+262
+46,286
+3,118
+597
+(in RMB million)
+Charge for the year
+As at 1 January
+37,985
+Transfer from/(to) construction in progress
+6,918
+1,896
+157
+4,054
+276
+535
+10,849
+Additions
+3
+79
+Acquisitions of subsidiaries
+74,497
+2,240
+2,493
+20,930
+82
+1,057
+1,260
+3,537
+264
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 263
+Annual Report 2021
+The Group was still in the process of applying for title certificates for its buildings with a carrying amount
+of RMB21 million as at 31 December 2021 (31 December 2020: RMB129 million).
+46,971
+2,240
+Notes to Consolidated Financial Statements
+1,127
+28,163
+46,286
+3,118
+597
+11,303
+26,831
+4,437
+4,321
+11,120
+118
+For the year ended 31 December 2021
+(in RMB million)
+Goodwill (i) operating rights
+Expressway
+2021
+Impairment losses
+As at 31 December
+Disposals
+Charge for the year
+35. INTANGIBLE ASSETS
+Acquisitions of subsidiaries
+Accumulated amortization
+As at 31 December
+Disposals
+Additions
+Acquisitions of subsidiaries
+As at 1 January
+Cost
+As at 1 January
+11,303
+35
+9
+As at 31 December
+(2,323)
+(358)
+(1,460)
+(140)
+(365)
+Disposals
+7,216
+(33)
+(4)
+Disposals of subsidiaries
+(20)
+(20)
+Transfer to investment properties, net
+6,054
+200
+(25)
+(3)
+10,812
+1,179
+9
+114
+29
+83
+2
+85
+As at 1 January
+11,953
+As at 31 December
+As at 31 December
+Disposals
+Transfer to investment properties, net
+Charge for the year
+As at 1 January
+Impairment losses
+31,160
+Net book value
+26,831
+4,437
+As at 1 January
+3,299
+-
+Acquisitions of subsidiaries
+77,564
+3,118
+1,811
+23,256
+2
+37,726
+As at 1 January
+Cost
+Total
+in progress
+Construction
+Motor
+vehicles
+fixtures
+11,653
+Buildings
+557
+3,892
+1,511
+-
+1,511
+Transfer from investment properties, net
+(2,148)
+131
+1,343
+34
+674
+7,021
+2,184
+510
+3,326
+558
+443
+Additions
+Transfer from/(to) construction in progress
+Disposals of subsidiaries
+Equipment,
+furniture and
+Leasehold
+improvements
+2
+4
+Fair value as at 31 December
+As at 1 January
+As at 31 December
+Net book value
+As at 31 December
+2
+Transfer from property and equipment, net
+Impairment losses
+10,350
+(13)
+16,121
+(5)
+As at 31 December
+Disposals
+As at 1 January
+2021
+4
+86,041
+(in RMB million)
+34. PROPERTY AND EQUIPMENT
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 261
+Annual Report 2021
+4
+The Group was still in the process of applying for title certificates for certain investment properties with
+a carrying amount of RMB991 million as at 31 December 2021 (31 December 2020: RMB307 million).
+The rental income arising from investment properties for the year 2021 amounted to RMB4,620 million (2020:
+RMB3,146 million), which is included in net investment income.
+The fair value of the investment properties as at 31 December 2021 were estimated by the Group, based on
+valuation performed by independent valuers. It falls under level 3 in the fair value hierarchy.
+79,678
+39,848
+43,385
+121,526
+43,385
+As at 31 December 2021, investment properties with a carrying amount of RMB23,229 million (31 December
+2020: RMB12,223 million) were pledged as collateral for long-term borrowings with a carrying amount of
+RMB10,729 million (31 December 2020: RMB7,440 million).
+Prepaid land
+premiums
+(4)
+Disposals
+35
+As at 31 December
+Disposals
+Charge for the year
+83
+As at 1 January
+Impairment losses
+118
+36,081
+13,832
+12,150
+8,550
+As at 31 December
+(2,804)
+(145)
+(1,829)
+1,549
+(795)
+-
+4
+49,758
+3,169
+1,071
+10,304
+31,279
+3,935
+As at 31 December
+66
+Net book value
+37
+66
+81
+(4)
+(2)
+(2)
+70
+184
+(4)
+(35)
+(3)
+7,216
+As at 1 January
+Accumulated depreciation
+86,023
+3,169
+2,657
+24,202
+10,812
+43,510
+As at 31 December
+(3,961)
+(19)
+(221)
+(2,509)
+(927)
+(285)
+12,485
+Disposals
+11,953
+31,160
+(3)
+Disposals of subsidiaries
+110
+110
+Transfer from investment properties, net
+6,718
+178
+1,179
+3,709
+1,369
+Charge for the year
+900
+337
+2
+561
+Acquisitions of subsidiaries
+1,462
+Software
+Core deposits
+Trademarks
+66
+328
+1,838
+2,502
+8,761
+Increase
+1 January
+134
+As at
+Autohome Inc.
+Ping An E-wallet
+Shanghai Gezhouba Yangming Property
+Co., Ltd.
+Beijing Shuangronghui Investment Co., Ltd.
+Ping An Commercial Property Investment
+Ping An Securities
+10,842
+TTP Car Inc.
+Shanghai Jahwa
+As at
+31 December
+2,438
+267
+2,171
+5,265
+5,265
+1,073
+1,073
+Decrease
+241
+134
+66
+328
+1,749
+(89)
+2,502
+8,761
+241
+Other
+Ping An Bank
+2021
+9,328
+7,950
+17,708
+2,167
+23,031
+27
+12
+4,106
+15
+8,594
+680
+7,132
+1,628
+2,962
+(63)
+(61)
+20,996
+(in RMB million)
+64,290
+2,356
+(1) GOODWILL
+35. INTANGIBLE ASSETS (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 265
+Annual Report 2021
+20,927
+The Group was still in the process of applying for its prepaid land premiums with a carrying amount of
+RMB1,992 million as at 31 December 2021 (31 December 2020: RMB33 million).
+As at 31 December 2021, prepaid land premiums with a carrying amount of RMB1,547 million (31 December
+2020: RMB2,159 million) were pledged as collateral for long-term borrowings amounting to
+63,333
+As at 31 December 2021, expressway operating rights with a carrying amount of RMB1,715 million (31
+December 2020: RMB2,168 million) were pledged as collateral for long-term borrowings amounting to
+RMB368 million (31 December 2020: RMB525 million).
+4,577
+9,332
+8,704
+17,437
+RMB896 million (31 December 2020: RMB1,509 million).
+(3)
+679
+676
+679
+(8)
+687
+Other
+2,171
+2,171
+TTP Car Inc.
+Total
+5,265
+Autohome Inc.
+1,073
+1,073
+Ping An E-wallet
+241
+241
+Shanghai Gezhouba Yangming Property Co.,
+Ltd.
+5,265
+134
+20,942
+(55)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+266
+The Group's right-of-use assets include the above prepaid land premiums and right-of-use assets disclosed
+in Note 36.
+Fair value is based on the fair value of stocks issued in the public market. The present value of future cash
+flows is 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 10% to 17% (2020: 11% to 17%) and growth
+rates, where applicable, range from 2% to 31% (2020: 2% to 41%).
+When assessing the impairment of goodwill, the main valuation technique used to determine the
+recoverable amount of the groups of assets (or groups of cash-generating units) are Fair Value Less Cost
+to Sale and The Present Value of Future Cash Flows.
+23,031
+2,171
+(55)
+20,927
+Net book value
+(27)
+(12)
+(15)
+Less: Impairment losses
+23,058
+2,159
+(3)
+66
+1,838
+(in RMB million)
+As at
+2020
+(58)
+23,175
+(92)
+236
+23,031
+Ping An Bank
+Net book value
+(27)
+Less: Impairment losses
+23,233
+(92)
+267
+23,058
+Total
+(31)
+328
+1 January
+8,761
+(47)
+2,502
+8,761
+31 December
+Decrease
+As at
+134
+Increase
+Beijing Shuangronghui Investment Co., Ltd.
+Ping An Commercial Property Investment
+328
+Ping An Securities
+1,885
+Mayborn Group Limited
+2,502
+Shanghai Jahwa
+66
+(13)
+(1)
+1,554
+31
+Additions
+27
+As at 1 January
+24,739
+10,039
+783
+As at 31 December
+7,886
+3,146
+(194)
+(24)
+-
+(170)
+-
+3,024
+2,885
+1,469
+58
+11
+9,328
+3,521
+9,204
+7,196
+7,950
+17,708
+2,167
+23,031
+27
+As at 1 January
+1,983
+23,175
+As at 31 December
+Net book value
+69
+11
+42
+23,383
+4,106
+103
+514
+(92)
+4,654
+1,187
+3,200
+267
+4,501
+4,501
+(769)
+85,313
+10,008
+15,082
+19,336
+5,129
+23,058
+Total
+and others
+12,700
+754
+(21)
+(1,198)
+184
+913
+913
+20,996
+8,594
+680
+7,132
+(316)
+1,628
+93,270
+13,571
+9,987
+15,082
+26,268
+5,129
+23,233
+2,962
+2,811
+68,462
+64,290
+Ping An Insurance (Group) Company of China, Ltd.
+As at 1 January
+Impairment losses
+As at 31 December
+Disposals
+Disposals of subsidiaries
+Charge for the year
+Acquisitions of subsidiaries
+15
+As at 1 January
+85,313
+12,700
+10,008
+15,082
+19,336
+5,129
+23,058
+Accumulated amortization
+As at 31 December
+Additions
+As at 31 December
+98
+754
+216
+189
+20
+20
+18,231
+12
+7,103
+6,378
+1,393
+2,773
+As at 1 January
+As at 31 December
+Net book value
+27
+584
+Annual Report 2021
+(629)
+(13)
+18,830
+5,129
+20,942
+As at 1 January
+Cost
+Total
+and others
+15,082
+Trademarks
+Software
+Prepaid land
+premiums
+Goodwill (i) operating rights
+Expressway
+(in RMB million)
+2020
+35. INTANGIBLE ASSETS (CONTINUED)
+Core deposits
+(400)
+9,916
+81,579
+(161)
+(55)
+Disposals/decrease
+(596)
+(594)
+Disposals of subsidiaries
+3,633
+11,680
+1,025
+2,171
+Additions
+1,326
+397
+105
+824
+Acquisitions of subsidiaries
+437
+-
+Investment Scheme ("Beijing-Shanghai Railway")
+20
+41.80%
+13,345
+74
+13,278
+Shanghai Yibin Property Co., Ltd.
+29.85%
+9,217
+Guangzhou Futures Exchange Co., Ltd.
+(271)
+Vivid Synergy Limited
+30.00%
+1,330
+(101)
+1,431
+("Ping An Consumer Finance")
+Ping An Consumer Finance Co., Ltd.
+9,488
+14.02%
+450
+15.00%
+3,530
+(12,260)
+(13,323)
+186,822
+(26,134)
+7,447
+205,509
+450
+Subtotal
+(880)
+(1,520)
+35,633
+(15,408)
+6,923
+44,118
+Others
+1,788
+Joint ventures
+384
+(1,558)
+15,684
+415
+15,269
+China Yangtze Power Co., Ltd.
+39.18%
+128
+1,830
+693
+105
+Beijing Beiqi Penglong Automobile Service Co., Ltd.
+10.21%
+1,735
+126
+1,609
+("ZhongAn Online")
+Zhong An Online P&C Insurance Co., Ltd.
+1,725
+(1,558)
+4.32%
+2,583
+7,137
+(743)
+7,880
+China Jinmao Holding Group Co., Ltd.
+25.02%
+(9,822)
+(9,822)
+China Traditional Chinese Medicine Holdings Co., Ltd.
+3,621
+19,331
+("China Fortune")
+China Fortune Land Development Co., Ltd.
+11.94%
+33
+2,797
+214
+(15,710)
+38.81%
+Yunnan Kunyu Highway Development Co., Ltd.
+("Kunyu Highway")
+(79)
+136
+203
+304
+Veolia Liuzhou
+Veolia Yellow River
+Veolia Kunming
+Associates
+Shanxi Taichang
+(in RMB million)
+Proportion of
+ordinary
+shares held by
+Cash
+dividends in
+current Year
+current Year
+Change of
+provision in
+as at
+31 December
+As at
+31 December
+balance
+the Group (%)
+Increase/
+(Decrease) in
+current year
+850
+8,006
+57
+(22)
+143
+48.76%
+(379)
+179
+(24)
+Beijing-Shanghai Railway
+23.88%
+(35)
+280
+(24)
+ཝུཊྛ––ཙྪཱ
+1,018
+Massive Idea Investments Limited
+2,836
+13
+841
+Additional
+investment
+Provision
+482
+(5)
+487
+Wuhan DAJT Property Development Co., Ltd.
+Others
+20
+1,632
+(62)
+381
+1,694
+(2,186)
+2,186
+Co., Ltd.
+Nanjing Mingwan Property Development
+49.94%
+151
+762
+Beijing Zhaotai Property Development Co., Ltd.
+As at
+1 January
+26
+24.95%
+49.80%
+2020
+The Group's investments in the principal associates and joint ventures as at 31 December 2020 are as
+follows:
+31. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+258
+7,232
+-
+(13,323) (12,260)
+3,144
+94,363
+1,193
+36,068
+62,310 36,068 (1,139) 97,239
+267,819 43,515 (27,273) 284,061
+Investments in associates and joint ventures
+Subtotal
+57,102
+3,702
+44.78%
+69
+1,570
+1,924
+268,215
+277,401
+For the equity investments which are not held for trading but for long-term investments, the Group has
+irrevocably elected to recognize them in this category at initial recognition.
+There is no material disposal of equity financial assets at fair value through other comprehensive income in
+the current year.
+The dividends income of equity financial assets at fair value through other comprehensive income
+recognized during the year are disclosed in Note 10.
+Annual Report 2021
+2,559
+Ping An Insurance (Group) Company of China, Ltd. 257
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+31. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
+The Group's investments in the principal associates and joint ventures as at 31 December 2021 are as
+follows:
+(in RMB million)
+2021
+Provision
+FINANCIAL STATEMENTS
+As at 1 January
+Unlisted
+265,656
+(in RMB million)
+Stocks
+Preferred shares
+31 December 2021
+31 December 2020
+189,541
+198,025
+275,477
+76,115
+Unlisted equity investments
+2,559
+1,924
+Total
+Listed
+268,215
+277,401
+77,452
+Equity financial assets at fair value through other comprehensive income comprise the following individual
+investments:
+Additional
+investment
+balance
+Veolia Water (Liuzhou) Investment Co., Ltd.
+("Veolia Liuzhou")
+143
+(50)
+93
+(21)
+5
+48.76%
+44.78%
+861
+12
+873
+85
+29.85%
+Beijing-Shanghai High-Speed Railway Equity
+Disposals of subsidiaries
+Shanxi Taichang Expressway Co., Ltd. ("Shanxi Taichang")
+Increase/
+(Decrease) in
+current year
+(368)
+(21)
+As at
+31 December
+as at
+31 December
+Change of
+provision in
+current year
+Cash
+dividends in
+current year
+Proportion of
+ordinary
+shares held by
+the Group (%) (¹)
+Associates
+158
+Veolia Water (Kunming) Investment Co., Ltd.
+("Veolia Kunming")
+(8)
+272
+(34)
+23.88%
+Veolia Water (Yellow River) Investment Co., Ltd.
+("Veolia Yellow River")
+179
+280
+104
+30. EQUITY FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
+COMPREHENSIVE INCOME
+511,386
+Ping An Healthcare and Technology Co., Ltd.
+41.50%
+51,564
+8,254
+43,310
+Lufax Holding Ltd. ("Lufax Holding")
+7.91%
+("Ping An Health")
+253
+99
+4,237
+Xuhui Holdings Co., Ltd.
+39.92%
+701
+40
+661
+4,336
+Guangzhou Jinglun Property Development Co., Ltd.
+19,481
+18,922
+118
+1,452
+Management Co., Ltd.
+Shenzhen China Merchants-Ping An Asset
+30.43%
+2,259
+(977)
+(559)
+3,236
+29.55%
+2,903
+(130)
+3,033
+Company Limited ("Ping An HealthKonnect")
+HealthKonnect Medical and Health Technology Management
+38.43%
+OneConnect Financial Technology Co., Ltd. ("OneConnect")
+As at 31 December 2021, the total provision for impairment losses recognized in debt financial assets
+at fair value through other comprehensive income is RMB4,821 million (31 December 2020: RMB2,533 million).
+36.65%
+(8)
+236,286
+96,784
+97,747
+43,347
+64,337
+54,253
+45,054
+188,185
+45,961
+428,530
+511,386
+37,830
+66,887
+390,700
+444,499
+428,530
+67,962
+1,074
+31 December 2020
+Unlisted
+1,082
+Massive Idea Investments Limited
+39.19%
+57
+9,318
+(1,524)
+29. DEBT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
+COMPREHENSIVE INCOME
+31 December 2021
+(in RMB million)
+Government bonds
+Finance bonds
+Corporate bonds
+Margin accounts receivable
+Wealth management investments
+Total
+Listed
+Bonds
+861
+Mayborn Group Limited
+29.85%
+Cayman
+China
+Ping An Health
+OneConnect
+(loss) in
+current year()
+revenue in
+current year
+as at
+31 December
+31 December
+Online health care
+operation
+Net profit/
+Total
+Total
+liabilities
+Total assets
+as at
+Significant to
+the Group's
+Place of
+incorporation
+Place of
+business
+Principal activities
+(in RMB million)
+Associates
+Yes
+2,707
+Financial technology
+Cayman
+China
+Lufax Holding
+financial institutions
+cloud platform for
+(1,354)
+18,563
+3,312
+10,885
+Yes
+Technology-as-a-service
+Cayman
+China
+(948)
+6,866
+5,600
+Yes
+The financial information summary of the Group's principal associates and joint ventures as at year end of
+2020 are as follows:
+61,835
+Cayman
+China
+Ping An Health
+(loss) in
+current year(ii)
+Net profit/
+Total
+revenue in
+current year
+as at
+31 December
+OneConnect
+31 December
+Total assets
+as at
+Significant to
+the Group's
+operation
+Principal activities
+Place of
+incorporation
+Place of
+business
+(in RMB million)
+Associates
+The financial information summary of the Group's principal associates and joint ventures as at year end of
+2021 are as follows:
+Total
+liabilities
+16,804
+China
+Online health care
+Technology-as-a-service Yes
+cloud platform for
+360,433 265,874
+Yes
+Financial technology
+Cayman
+China
+Lufax Holding
+financial institutions
+Cayman
+(1,282)
+5,506
+9,341
+(1,538)
+7,334
+3,795
+17,881
+Yes
+4,132
+31. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (CONTINUED)
+248,890
+52,046
+(9)
+Disposals of subsidiaries
+(128)
+(1,511)
+Transfer to property and equipment, net
+1,587
+2,755
+(83)
+Additions
+47,614
+48,324
+53,739
+2020
+2021
+As at 1 January
+Cost
+5,267
+(in RMB million)
+Disposals
+(422)
+(110)
+93
+Transfer (to)/from property and equipment, net
+1,341
+1,620
+Charge for the year
+541
+As at 31 December
+4,266
+8,474
+10,350
+As at 1 January
+Accumulated depreciation
+53,739
+102,166
+(1,228)
+Acquisition of subsidiaries
+165,739
+33. INVESTMENT PROPERTIES
+Annual Report 2021
+31 December 2021
+Total
+Add: Interest receivable
+Less: Provision for impairment losses
+Subtotal
+Others
+Ping An Health Insurance
+31 December 2020
+Ping An Annuity
+Ping An Life
+(in RMB million)
+32. STATUTORY DEPOSITS FOR INSURANCE OPERATIONS
+Note ii: Net profit/(loss) refers to the net profit/(loss) attributable to shareholders of the parent company of Ping An Health, OneConnect
+and Lufax Holding respectively.
+Note : The proportion of ordinary shares, as shown in the above table, is the multiplication of the proportion of shares held in each
+holding layer.
+The Group has no significant contingent liabilities relating to the associates and joint ventures listed above.
+12,354
+Ping An Property & Casualty
+Ping An Insurance (Group) Company of China, Ltd.
+6,760
+4,200
+Statutory deposits for insurance operations are placed with PRC national commercial banks in accordance
+with the relevant regulations issued by the China Banking and Insurance Regulatory Commission (the
+"CBIRC") based on 20% of the registered capital for the insurance company subsidiaries and 5% of the
+registered capital for insurance sales agency subsidiaries within the Group, respectively. Statutory deposits
+for insurance operations can only be utilized to settle liabilities during liquidation of insurance companies,
+insurance sales agency companies and insurance brokerage companies.
+12,561
+12,606
+204
+238
+(8)
+(4)
+6,760
+12,365
+19
+20
+414
+420
+972
+972
+4,200
+12,372
+For the year ended 31 December 2021
+Acquisition of subsidiaries
+260
+7
+1,452
+178
+ཎྜ ➢ ཎྜ F ➢ སྐྲ
+7,650
+China Jinmao Holding Group Co., Ltd.
+19,627
+38.81%
+China Fortune
+China Traditional Chinese Medicine Holdings Co., Ltd.
+14,494
+China Yangtze Power Co., Ltd.
+1,551
+Beijing Beiqi Penglong Automobile Service Co., Ltd.
+1,597
+Zhong An Online
+2,406
+1,274
+12
+10.21%
+7,880
+230
+25.02%
+1,135
+19,331
+(296)
+11.94%
+1,609
+26
+177
+4.34%
+673
+15,269
+775
+39.18%
+1,725
+2,583
+366
+Management Co., Ltd.
+34.33%
+192
+4,237
+3,827
+Xuhui Holdings Co., Ltd.
+39.92%
+412
+661
+9.02%
+(291)
+Guangzhou Jinglun Property Development Co., Ltd.
+36.65%
+1,082
+39.19%
+Notes to Consolidated Financial Statements
+10,842
+96
+952
+Shenzhen China Merchants-Ping An Asset
+28,226
+43,310
+3,236
+40
+3,196
+OneConnect
+29.55%
+3,033
+(1,189)
+15,084
+4,222
+38.43%
+19,481
+1,048
+49
+18,384
+Ping An Health
+38.57%
+Ping An HealthKonnect
+13.96%
+Lufax Holding
+1,500
+15,484
+43,132
+Others
+289
+(1,198)
+1,198
+Xi'an Languang Meidu Enterprise Management Service Ltd.
+(1,514)
+49.80%
+487
+(381)
+868
+Wuhan DAJT Property Development Co., Ltd.
+24.95%
+63
+1,694
+353
+201
+57,102
+Subtotal
+Ping An Insurance (Group) Company of China, Ltd. 259
+Annual Report 2021
+Ping An Consumer Finance
+FINANCIAL STATEMENTS
+9,987
+(25)
+(1,237)
+1,516
+267,819
+49,847
+Investments in associates and joint ventures
+2,221
+62,310
+(2,821)
+15,484
+49,647
+13,837
+1,493
+204,135
+48.90%
+(801)
+44,118
+(2,495)
+10,048
+36,565
+Others
+41.80%
+13,278
+13,278
+29.85%
+9,488
+9,488
+(69)
+1,431
+Beijing Zhaotai Property Development Co., Ltd.
+Vivid Synergy Limited
+30.00%
+(25)
+4,696
+Shanghai Yibin Property Co., Lid.
+154,488
+2,186
+23
+2,163
+Subtotal
+49.94%
+841
+48
+793
+Kunyu Highway
+Nanjing Mingwan Property Development Co., Ltd.
+Joint ventures
+205,509
+16,658
+34,363
+(1,237)
+7,766
+(25)
+(if not redeemed)
+1,033
+Ping An Property & Casualty Capital
+Next 5 years:6.10%
+None
+10 years
+fifth year
+End of the
+10,000
+2019
+Fixed
+First 5 years: 4.64%
+10,434
+Ping An Securities
+5.30%
+Ping An Securities
+supplement
+bonds
+Private corporate None
+bonds
+Corporate bonds None
+fifth year
+Next 5 years:5.64%
+(if not redeemed)
+3 years
+None
+1,000
+2018
+Fixed
+5 years
+supplement
+bonds
+10,384
+3,543
+20,665
+First 5 years: 5.10%
+3,280
+2016
+End of the
+Fixed
+2.88%
+3,312
+bonds
+Ping An Life
+Capital
+None
+10 years
+End of the
+20,000
+2020
+Fixed
+First 5 years: 3.58%
+20,567
+supplement
+fifth year
+Next 5 years: 4.58%
+bonds
+(if not redeemed)
+Ping An Property & Casualty Capital
+None
+10 years
+End of the
+3,500
+2017
+Fixed
+3,562
+100
+End of the
+Fixed
+5 years
+2,000
+2019
+Fixed
+3.70%
+2,062
+2,061
+third year
+Ping An Securities
+Corporate bonds
+None
+5 years
+End of the
+None
+2,700
+Fixed
+3.75%
+2,774
+2,774
+third year
+Ping An Securities
+Corporate bonds
+None
+5 years
+End of the
+2,300
+None
+2019
+2019
+Corporate bonds
+Ping An Securities
+2020
+3.00%
+100
+3,017
+third year
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 275
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+47. BONDS PAYABLE (CONTINUED)
+Early
+redemption/
+Par value
+Selling back
+(in RMB
+Issued
+Coupon rate
+31 December
+31 December
+Issuer
+Type
+Guarantee
+Maturity
+option
+million)
+year
+Interest type
+(per annum)
+2021
+2018
+5 years
+2016
+Offshore USD
+third year
+Ping An Bank
+Hybrid capital
+None
+15 years
+End of the
+3,650
+2011
+Fixed
+7.50%
+3,835
+debt instrument
+tenth year
+1,728
+Ping An Bank
+None
+10 years
+End of the
+10,000
+Fixed 3.85%
+10,280
+bonds
+fifth year
+Ping An Bank
+Financial bonds
+None
+3 years
+None
+Tier-2 Capital
+Fixed 3.89%-4.08%
+2021
+1,700
+Fixed
+4.10%-4.18%
+2,745
+2,745
+second year
+None
+5 years
+End of the
+2,500
+2019
+Fixed
+4.98%-5.00%
+2,541
+2,542
+third year
+None
+2-4 years
+End of the
+3,100
+2021
+Fixed
+3.60%-4.05%
+3,151
+second year
+Ping An Financial Leasing
+Corporate bonds
+None
+3-5 years
+End of the
+35,000
+2018
+Fixed
+3.79%
+20,631
+Ping An Bank
+Tier-2 Capital
+None
+10 years
+End of the
+30,000
+2021
+Fixed
+3.69%
+30,149
+bonds
+fifth year
+Ping An Life
+Capital
+None
+10 years
+End of the
+10,000
+2016
+Fixed
+First 5 years: 3.82%
+10,258
+supplement
+fifth year
+Next 5 years:4.82%
+bonds
+(if not redeemed)
+Ping An Life
+Fixed 3.45%
+None
+2021
+None
+35,042
+Ping An Bank
+Tier-2 Capital
+None
+10 years
+End of the
+30,000
+2019
+Fixed
+4.55%
+30,910
+30,910
+bonds
+fifth year
+Ping An Bank
+Financial bonds
+None
+3 years
+None
+30,000
+2020
+Fixed
+2.30%
+30,416
+30,416
+Ping An Bank
+Financial bonds
+None
+3 years
+20,000
+3.73%
+Ping An Securities
+2,350
+1,221
+Ping An Securities
+Ping An Securities
+Corporate bonds
+None
+2 years
+None
+2,000
+2021
+Fixed
+3.35%
+2,034
+Corporate bonds
+None
+3.50%
+3 years
+1,800
+2021
+Fixed 3.25%
+1,825
+Ping An Securities
+Corporate bonds None
+1 year
+None
+2,000
+2021
+Fixed
+2.77%
+2,024
+None
+Fixed
+2021
+1,200
+None
+3,000
+2021
+Fixed
+3.40%
+3,059
+Ping An Securities
+Corporate bonds
+None
+549 days
+None
+2,000
+2021
+Fixed 3.05%
+2,035
+Ping An Securities
+Corporate bonds
+None
+3 years
+None
+2,400
+2021
+Fixed 3.48%
+2,444
+Fixed
+Corporate bonds
+None
+3 years
+None
+Ping An Securities
+Corporate bonds None
+1 year
+None
+Corporate bonds
+None
+1 year
+None
+2,000
+2021
+Fixed 2.75%
+2,015
+Ping An Securities
+Ping An Securities
+Private corporate
+bonds
+Private corporate None
+bonds
+None
+2 years
+None
+2,000
+2021
+Fixed
+3.25%
+2,009
+2 years
+None
+1,500
+2021
+Fixed
+3.20%
+1,500
+276
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Ping An Securities
+3 years
+2,615
+2021
+2,000
+2021
+Fixed 2.67%
+2,018
+Ping An Securities
+Corporate bonds
+None
+3 years
+None
+3,000
+2021
+Fixed 3.05%
+3,033
+Ping An Securities
+Corporate bonds
+None
+5 years
+None
+2,000
+2021
+Fixed
+3.47%
+2,024
+Ping An Securities
+Corporate bonds
+None
+3 years
+None
+2,600
+Fixed 3.37%
+2,350
+None
+3.50%
+None
+1 year
+None
+1,000
+2020
+Fixed 2.86%
+1,024
+Ping An Securities
+Private corporate None
+bonds
+3 years
+None
+3,000
+2020
+Private
+corporate
+bonds
+Fixed
+3,077
+3,077
+Ping An Securities
+Corporate bonds
+None
+3 years
+None
+4,000
+2020
+Fixed
+3.58%
+4,061
+4,060
+3.19%
+Ping An Securities
+third year
+1,547
+third year
+Ping An Securities
+Ping An Securities
+Ping An Securities
+Private corporate None
+bonds
+Private corporate None
+bonds
+Corporate bonds
+3 years
+None
+3,500
+2019
+Fixed
+4.05%
+3,612
+3,612
+3 years
+None
+2,000
+2019
+Fixed
+4.20%
+2,058
+2,058
+None
+5 years
+End of the
+1,500
+2020
+Fixed
+3.40%
+1,547
+Ping An Securities
+Corporate bonds
+None
+457 days
+3.70%
+2,565
+2,564
+Ping An Securities
+Corporate bonds
+None
+547 days
+None
+2,450
+2020
+Fixed
+3.44%
+2,536
+2,451
+Ping An Securities
+Ping An Securities
+Ping An Securities
+Private corporate
+bonds
+Private corporate None
+bonds
+Corporate bonds
+None
+18 months None
+1,500
+2021
+Fixed
+3.70%
+1,547
+18 months None
+1,500
+2021
+Fixed
+Fixed
+1,541
+2020
+None
+None
+3,000
+2020
+Fixed 3.10%
+3,037
+Ping An Securities
+Corporate bonds
+None
+2 years
+End of the
+2,000
+2020
+Fixed
+2.95%
+2,020
+first year
+Ping An Securities
+Corporate bonds
+None
+487 days
+None
+1,000
+2020
+Fixed 3.07%
+1,010
+Ping An Securities
+Corporate bonds
+None
+3 years
+2,550
+2019
+43. TREASURY SHARES
+End of the
+Precious metals held for trading
+Others
+Net
+(24)
+(20)
+(1,895)
+(1,271)
+(251)
+(351)
+(1,543)
+(613)
+154,117
+186,098
+Foreclosed assets
+268
+Ping An Insurance (Group) Company of China, Ltd.
+38. POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE/
+INVESTMENT CONTRACTS
+(1) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INSURANCE CONTRACTS
+(in RMB million)
+Cash and amounts due from banks and other financial institutions
+Financial assets at fair value through profit or loss
+31 December 2021
+31 December 2020
+6,284
+7,927
+Bonds
+Funds
+Stocks
+759
+Annual Report 2021
+Due from reinsurers
+(4,175)
+(4,531)
+118,454
+16,300
+11,860
+Foreclosed assets
+2,345
+3,700
+Prepayments
+4,114
+3,950
+Precious metals held for trading.
+18,071
+31,691
+Dividends receivable
+469
+2,616
+Amounts in the processing clearance and settlement
+30,107
+7,666
+Others
+16,310
+12,591
+Gross
+162,361
+192,528
+Less: Impairment provisions
+(8,244)
+(6,430)
+Including:
+Other receivables
+1,414
+74,645
+20,322
+4,211
+Ping An Insurance (Group) Company of China, Ltd. 269
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+39. SHARE CAPITAL
+(million shares)
+1 January 2021
+31 December 2021
+Domestic listed
+A shares, par value
+RMB1.00 per share
+10,832
+10,832
+Overseas listed
+H shares, par value
+RMB1.00 per share
+Total
+Annual Report 2021
+7,448
+7,448
+18,280
+40. RESERVES, RETAINED PROFITS AND NON-CONTROLLING INTERESTS
+In accordance with the relevant regulations, general reserves should be set aside to cover catastrophic
+or other losses as incurred by companies operating in the insurance, banking, trust, securities, futures
+and fund businesses. The Group's respective entities engaged in such businesses would need to make
+appropriations for such reserves based on their respective year-end profit or risk assets, the companies
+operating in insurance should make appropriations for general reserves based on 10% of net profit, the
+company operating in banking should make appropriations based on 1.5% of risk assets, the company
+operating in securities should make appropriations based on 10% of net profit, the companies operating in
+trust should make appropriations based on 5% of trust claim reserves, the companies operating in futures
+should make appropriation based on 10% of net profit, and the companies operating in fund should make
+appropriation based on 10% of fund management fees as determined in accordance with PRC Accounting
+Standards, and based on the applicable PRC financial regulations, in their annual financial statements. Such
+reserves are not available for dividend distribution or transfer to share capital.
+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.
+270
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+41. KEY EMPLOYEE SHARE PURCHASE PLAN
+The Company has adopted a Key Employee Share Purchase Plan for the key employees (including
+executive directors and senior management) of the Company and its subsidiaries. Shares shall be vested
+and awarded to the key employees approved for participation in the plan, subject to the achievement of
+certain performance targets.
+Movement of reserves relating to the Key Employee Share Purchase Plan is as follows:
+(in RMB million)
+As at 1 January 2021
+Purchased (i)
+18,280
+4,263
+4,155
+44
+4,248
+Other investments
+183
+514
+Financial assets purchased under reverse repurchase agreements
+Other assets
+49
+39
+31,847
+48,796
+(2) POLICYHOLDER ACCOUNT ASSETS IN RESPECT OF INVESTMENT CONTRACTS
+(in RMB million)
+31 December 2021
+31 December 2020
+Cash and amounts due from banks and other financial institutions
+Financial assets at fair value through profit or loss
+870
+938
+Bonds
+1,167
+1,458
+Funds
+1,343
+1,376
+Other investments
+647
+423
+Financial assets purchased under reverse repurchase agreements
+Other assets
+105
+24
+23
+34,658
+31 December 2020
+31 December 2021
+Due from reinsurers
+6,520
+Disposals
+As at 31 December
+Impairment provision
+As at 1 January
+As at 31 December
+(5,593)
+(24)
+(5,617)
+10,568
+3
+10,571
+Net book value
+2
+As at 31 December
+As at 1 January
+16,171
+(in RMB million)
+Cost
+1
+14,185
+1
+16,172
+2020
+Buildings
+Others
+Total
+As at 1 January
+14,184
+6,518
+Additions
+9,668
+36. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
+RIGHT-OF-USE ASSETS
+(in RMB million)
+Cost
+2021
+Buildings
+Others
+Total
+As at 1 January
+25,814
+26
+25,840
+Additions
+5,725
+Disposals
+(6,787)
+སཙྩཾ
+2
+5,727
+(24)
+(6,811)
+As at 31 December
+24,752
+4
+24,756
+Accumulated depreciation and amortization
+As at 1 January
+9,643
+25
+23,517
+25
+23,542
+Additions
+As at 1 January
+16,171
+16,548
+1
+16,172
+5
+16,553
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 267
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+36. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED)
+RIGHT-OF-USE ASSETS (CONTINUED)
+The Group's right-of-use assets include the above assets and prepaid land premiums disclosed in Note 35.
+The amount recognized in the Consolidated Income Statement and the Consolidated Statement of Cash
+Flows for the year relating to the lease contracts are as follows:
+(in RMB million)
+Interest expense on lease liabilities
+2021
+2020
+602
+641
+Expense relating to leases of low-value assets and short-term leases
+applied the simplified approach
+760
+724
+Total cash outflows for lease
+8,265
+8,491
+37. OTHER ASSETS
+(in RMB million)
+Other receivables
+As at 31 December
+Share-based compensation expenses (ii)
+Net book value
+9,668
+8,403
+2
+8,405
+Disposals
+(6,106)
+(1)
+(6,107)
+As at 31 December
+25,814
+26
+25,840
+Accumulated depreciation and amortization
+As at 1 January
+6,969
+20
+6,989
+Additions
+7,359
+6
+7,365
+Disposals
+As at 31 December
+Impairment provision
+As at 1 January
+(4,685)
+(1)
+(4,686)
+9,643
+25
+As at 31 December
+Exercised
+Expired
+As at 31 December 2021
+446,344
+2,929,121
+2,634,361
+54,285
+49,959
+18,643
+9,513
+72,928
+59,472
+3,002,049
+2,693,833
+As at 31 December 2021, bonds classified as financial assets carried at amortized costs with a carrying
+amount of RMB20,245 million (31 December 2020: RMB14,263 million) were pledged as main collaterals for
+term deposit with the Central Bank.
+Annual Report 2021
+538,863
+Ping An Insurance (Group) Company of China, Ltd.
+The information of the Group's main bonds payable is as follows:
+Issuer
+Туре
+Guarantee
+Maturity
+Early
+redemption/
+Selling back
+option
+Par value
+(in RMB
+Issued
+Coupon rate
+31 December
+31 December
+million)
+47. BONDS PAYABLE
+1,140,123
+1,319,315
+245,477
+127,477
+276,602
+As at 31 December 2021, bonds with a carrying amount of RMB95,158 million (31 December 2020: RMB157,581
+million) were pledged as collateral for financial assets sold under agreements to repurchase resulted from
+repurchase transactions entered into by the Group in the inter-bank market. The collaterals are restricted
+from trading during the period of the repurchase transactions.
+As at 31 December 2021, the carrying amount of bonds deposited in the collateral pool was RMB284,423
+million (31 December 2020: RMB285,107 million). The collaterals are restricted from trading during the period
+of the repurchase transactions. The Group can withdraw the exchange-traded bonds from the collateral
+pool in short time provided that the value of the bonds is no less than the balance of related repurchase
+transactions.
+For bonds repurchase transactions through stock exchange, the Group is required to deposit certain
+exchange traded bonds and/or bonds transferred under new pledged repurchase transactions with fair
+value converted at a standard rate pursuant to stock exchange's regulation no less than the balance of
+related repurchase transactions into a collateral pool.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 273
+FINANCIAL STATEMENTS
+274
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+46. CUSTOMER DEPOSITS AND PAYABLES TO BROKERAGE CUSTOMERS
+(in RMB million)
+Current and savings accounts
+Corporate customers
+- Individual customers
+Term deposits
+- Corporate customers
+- Individual customers
+Subtotal
+Payables to brokerage customers
+- Individual customers
+- Corporate customers
+Subtotal
+Total
+31 December 2021
+31 December 2020
+828,389
+242,554
+802,417
+year
+Interest type
+(per annum)
+2021
+2,795
+2,796
+third year
+Ping An Financial Leasing
+Private corporate None
+bonds
+5 years
+End of the
+2,710
+2018
+Fixed
+4.20%-4.30%
+2,755
+2,756
+third year
+Ping An Financial Leasing
+Ping An Financial Leasing
+Ping An Financial Leasing
+Ping An Financial Leasing
+Private corporate None
+bonds
+Private corporate None
+bonds
+Private corporate
+bonds
+Corporate bonds
+3 years
+End of the
+600
+2019
+Fixed
+3.95%
+410
+610
+610
+second year
+4 years
+3.88%-4.02%
+31 December 2020
+Fixed
+2,750
+2020
+Ping An Financial Leasing
+Corporate bonds
+None
+5 years
+End of the
+3,600
+2019
+Fixed
+3.84%-4.30%
+3,659
+3,661
+third year
+Ping An Financial Leasing
+Ping An Financial Leasing
+Corporate bonds
+None
+4 years
+End of the
+2,500
+2020
+Fixed
+3.65%-3.85%
+2,541
+2,542
+second year
+Corporate bonds
+None
+5 years
+End of the
+2020
+2,700
+31 December 2021
+(in RMB million)
+503
+(503)
+57
+57
+(1,595)
+1,310
+(285)
+During the period from 26 April 2021 to 29 April 2021, 9,162,837 ordinary A shares were purchased from the market. The average price
+of shares purchased was RMB73.13 per share. The total purchasing cost was RMB670 million (transaction expenses included).
+During the period from 24 February 2020 to 27 February 2020, 7,955,730 ordinary A shares were purchased from the market. The
+average price of shares purchased was RMB80.17 per share. The total purchasing cost was RMB638 million (transaction expenses
+included).
+The share-based compensation expenses of the Key Employee Share Purchase Plan and the total value of employee services were
+RMB378 million during 2021 (2020: RMB565 million).
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 271
+FINANCIAL STATEMENTS
+565
+Notes to Consolidated Financial Statements
+42. LONG-TERM SERVICE PLAN
+The Company has adopted a Long-term Service Plan for the employees of the Company and its
+subsidiaries. Shares shall be vested and awarded to the employees participated in the Long-term Service
+Plan, subject to the confirmation of their applications made when they retire from the Company.
+Movement of reserves relating to the Long-term Service Plan is as follows:
+(in RMB million)
+As at 1 January 2021
+Purchased (i)
+Share-based compensation expenses (ii)
+Exercised
+As at 31 December 2021
+Cost of shares held for
+Long-term Service Plan
+Value of
+employee services
+Total
+For the year ended 31 December 2021
+565
+(269)
+(638)
+1,248
+Cost of shares held for
+share purchase plan
+(1,595)
+(670)
+Value of
+employee services
+Total
+1,310
+-
+(285)
+(670)
+378
+378
+704
+(704)
+122
+122
+(1,439)
+984
+(455)
+(in RMB million)
+As at 1 January 2020
+Purchased (i)
+Share-based compensation expenses (ii)
+Exercised
+Expired
+As at 31 December 2020
+(i)
+(ii)
+Cost of shares held for
+share purchase plan
+Value of
+employee services
+Total
+(1,517)
+(638)
+(8,284)
+(4,184)
+371
+(7,913)
+-
+272
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+(in RMB million)
+Treasury shares
+31 December 2020
+Additions
+Disposals 31 December 2021
+5,995
+3,900
+9,895
+As at 31 December 2021, 147,771,893 A shares had been purchased from the Shanghai Stock Exchange by
+centralized bidding. The total repurchasing cost was RMB9,895 million (transaction expenses included).
+44. DUE TO BANKS AND OTHER FINANCIAL INSTITUTIONS
+(in RMB million)
+Deposits from other banks and financial institutions
+Due to the Central Bank
+Short-term borrowings
+31 December 2021
+31 December 2020
+361,700
+495,011
+148,162
+124,587
+116,102
+134,753
+171,682
+205,824
+797,646
+960,175
+45. ASSETS SOLD UNDER AGREEMENTS TO REPURCHASE
+Long-term borrowings
+The share-based compensation expense and the total value of employee services of the Long-term Service Plan were RMB294
+million during 2021 (2020: RMB291 million).
+Bonds
+From 24 February 2020 to 28 February 2020, 49,759,305 ordinary A shares were purchased from the market. The average price of shares
+purchased was RMB80.15 per share. The total purchasing cost was RMB3,989 million (transaction expenses included).
+From 26 April 2021 to 29 April 2021, 57,368,981 ordinary A shares were purchased from the market. The average price of shares
+purchased was RMB72.92 per share. The total purchasing cost was RMB4, 184 million (transaction expenses included).
+-
+(4,184)
+294
+3
+(12,465)
+294
+(3)
+662
+(11,803)
+(in RMB million)
+As at 1 January 2020
+Purchased (i)
+Share-based compensation expenses (ii)
+Exercised
+As at 31 December 2020
+Cost of shares held for
+Long-term Service Plan
+Value of
+employee services
+Total
+(4,296)
+81
+(3,989)
+291
+(4,215)
+(3,989)
+291
+1
+(1)
+(8,284)
+371
+(7,913)
+(i)
+(ii)
+35
+47. BONDS PAYABLE (CONTINUED)
+Issuer
+5 years
+End of the
+3,000
+2020
+Fixed
+3.80%
+3,062
+3,061
+bonds
+third year
+Private corporate None
+bonds
+3 years
+Private corporate None
+End of the
+2020
+Fixed 4.19%
+2,014
+2,013
+second year
+Dingshuntong Investment
+Evergreen Investment
+Development
+Evergreen Investment
+Development
+Private corporate None
+bonds
+Private corporate None
+bonds
+Private corporate
+bonds
+2 years
+Yes
+272
+2020
+2,000
+Fixed
+Ping An Financial
+Technology
+Ping An Financial
+Technology
+Dingshuntong Investment
+2,045
+244
+2016
+Fixed
+3.28%
+265
+4,052
+fifth year
+Ping An Financial
+Technology
+Ping An Financial
+Technology
+Private corporate
+bonds
+None
+5 years
+End of the
+third year
+3,000
+Fixed 4.30%
+3,017
+3,017
+third year
+Private corporate None
+bonds
+5 years
+End of the
+2,000
+2020
+Fixed
+3.40%
+2,045
+2019
+End of the
+6.74%
+381
+3 years
+Yes
+23
+273
+2019
+Fixed
+6.74%
+280
+Estate Investment
+bonds
+Co., Ltd.
+.
+None
+80
+Shenzhen Ping An Real
+Convertible
+None
+1 year
+Yes
+Туре
+311
+2020
+Fixed 6.59%
+326
+Estate Investment
+bonds
+391
+278
+Convertible
+3,007
+2 years
+Yes
+240
+440
+2020
+Fixed 6.74%
+445
+245
+269
+Yes
+2 years
+Yes
+Shenzhen Ping An Real
+3,000
+Fixed
+4.30%
+3,029
+3,027
+Private corporate
+bonds
+Yes
+2 years
+Yes
+3,000
+2020
+Fixed 4.50%
+'
+2020
+7 years
+None
+Corporate bonds
+Net
+share
+Gross
+Net
+share
+Gross
+(in RMB million)
+Reinsurers'
+Reinsurers'
+2020
+2021
+The claim reserves of short-term life insurance are analysed as follows:
+As at 1 January
+Guarantee
+Early
+redemption/
+Selling back
+option
+Par value
+(in RMB
+Issued
+Coupon rate
+31 December
+31 December
+million)
+year
+Interest type
+(per annum)
+2021
+Maturity
+2020
+12,689
+11,450
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+280
+11,450
+12,689
+8,536
+(2,252)
+10,788
+As at 31 December
+(16,570)
+5,015
+(21,585)
+(1,239)
+(15,471)
+(23,487)
+Decrease
+19,966
+(5,574)
+25,540
+12,557
+(9,029)
+21,586
+Increase
+8,054
+(680)
+8,734
+8,016
+Ping An Real Estate
+Corporate bonds
+None
+Fixed 4.30%
+955
+954
+fifth year
+Ping An Real Estate
+Corporate bonds
+None
+5 years
+End of the
+1,500
+2018
+Fixed
+2019
+5.00%
+third year
+Ping An Real Estate
+Corporate bonds
+None
+5 years
+End of the
+14
+2017
+Fixed 2.38%
+14
+third year
+Ping An Real Estate
+1,555
+40
+940
+End of the
+5 years
+End of the
+710
+10
+2019
+Fixed
+3.70%
+720
+20
+719
+third year
+Ping An Real Estate
+Corporate bonds
+None
+7 years
+End of the
+750
+2019
+Fixed
+4.40%
+764
+763
+fifth year
+Ping An Real Estate
+Corporate bonds
+None
+7 years
+Co., Ltd.
+Shenzhen Ping An Real
+Convertible
+None
+1,665,080
+403,536
+406,692
+(96,804)
+(54,823)
+(91,685)
+(49,361)
+856
+297
+2,183,788
+1,931,023
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 279
+1,931,023
+FINANCIAL STATEMENTS
+For the year ended 31 December 2021
+48. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+(1) LONG-TERM LIFE INSURANCE CONTRACTS (CONTINUED)
+The policyholder contract deposits are analysed as follows:
+(in RMB million)
+As at 1 January
+Policyholder principal increased
+Accretion of investment income
+Liabilities released for benefits paid
+Policy administration fees and risk premiums deducted
+As at 31 December
+(2) SHORT-TERM LIFE INSURANCE CONTRACTS
+(in RMB million)
+Notes to Consolidated Financial Statements
+Unearned premium reserves
+2020
+As at 31 December
+31 December 2021
+31 December 2020
+(67,907)
+19,851
+166,017
+(91,220)
+22,058
+148,159
+3,039,915
+2,776,696
+1,550
+101,928
+3,261,354
+1,110
+115,657
+2,972,460
+31 December 2021
+31 December 2020
+2021
+2,183,788
+1,931,023
+705,657
+48,796
+31,847
+2,685,476
+The long-term life insurance policyholders' reserves are analysed as follows:
+2,972,008
+(in RMB million)
+As at 1 January
+Increase during the year
+Decrease during the year
+Claims and benefits paid
+Surrender
+Others
+756,373
+Claim reserves
+2021
+2020
+Net
+Gross
+share
+Net
+10,479
+(747)
+9,732
+9,419
+(706)
+8,713
+35,423
+(35,289)
+(13,619)
+11,893
+share
+21,804
+(8,822)
+31,801
+(23,396)
+(39,563)
+8,781
+(30,782)
+10,613
+(2,473)
+8,140
+10,479
+(747)
+9,732
+40,623
+Gross
+Reinsurers'
+Reinsurers'
+705,657
+648,514
+86,519
+96,523
+33,327
+20,561
+(55,763)
+(46,091)
+(13,367)
+(13,850)
+756,373
+705,657
+31 December 2021
+31 December 2020
+10,613
+10,788
+10,479
+12,689
+21,401
+23,168
+The unearned premium reserves of short-term life insurance are analysed as follows:
+(in RMB million)
+As at 1 January
+Increase
+Decrease
+As at 31 December
+2021
+2020
+2,952,241
+48. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+(20,219)
+(16,284)
+4.50%
+1,031
+second year
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 277
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+47. BONDS PAYABLE (CONTINUED)
+As at 31 December 2021, the original term of interbank certificates of deposit issued by Ping An Bank, but
+unmatured was from 3 months to 1 year, and the annual interest rate was from 0.27% to 3.18% (31 December
+2020: the original term was from 1 month to 1 year, and the annual interest rate was from 0.63% to 3.35%).
+The carrying amount was RMB711,828 million (31 December 2020: RMB501,383 million).
+As at 31 December 2021, the original term of short-term financial bonds issued by Ping An Securities, but
+unmatured was from 92 days to 365 days, and the annual interest rate was from 2.70% to 2.79% (31 December
+2020: the original term was from 90 days to 91 days, and the annual interest rate was from 2.98% to 3.23%).
+The carrying amount was RMB6,929 million (31 December 2020: RMB9,040 million).
+As at 31 December 2021, the original term of short-term financial bonds issued by Ping An Financial Leasing,
+but unmatured was from 150 days to 365 days, and the annual interest rate was from 2.78% to 4.00% (31
+December 2020: the original term was from 105 days to 1 year, and the annual interest rate was from 2.05%
+to 3.47%). The carrying amount was RMB12,097 million (31 December 2020: RMB9,253 million).
+Fixed
+As at 31 December 2021, the original term of short-term financial bonds issued by Ping An Real Estate,
+but unmatured was from 268 days to 270 days, and the annual interest rate was from 3.08% to 3.20% (31
+December 2020: the original term was 6 months, and the annual interest rate was 2.90%). The carrying
+amount was RMB2,532 million (31 December 2020: RMB1,712 million).
+48. INSURANCE CONTRACT LIABILITIES
+(in RMB million)
+Long-term life insurance policyholders' reserves
+Policyholder contract deposits
+Policyholder account liabilities in respect of insurance contracts
+Unearned premium reserves
+Claim reserves
+Total
+31 December 2021
+31 December 2020
+1,931,023
+2,183,788
+As at 31 December 2021, the original term of income certificates issued by Ping An Securities, but
+unmatured was from 14 days to 240 days, and the annual interest rate was from 3.65% to 5.20% (31 December
+2020: the original term was from 14 days to 365 days, and the annual interest rate was from 2.85% to 11.00%).
+The carrying amount was RMB2,201 million (31 December 2020: RMB5,040 million).
+705,657
+2021
+End of the
+2 years
+Yes
+289
+2020
+Fixed 6.69%
+302
+403
+403
+Estate Investment
+bonds
+Co., Ltd.
+Lianxin Investment
+1,000
+Private corporate
+bonds
+5 years
+End of the
+2,000
+2020
+Fixed
+5.40%
+2,004
+2,005
+third year
+Lianxin Investment
+Private corporate None
+bonds
+3 years
+None
+756,373
+31,847
+48,796
+Current portion*
+Long-term life
+Short-term life
+Property and casualty
+Non-current portion
+Long-term life
+Short-term life
+Property and casualty
+Insurance
+contract liabilities
+2,685,476
+23,168
+263,816
+(in RMB million)
+2,972,460
+Estimated net cash flows within 12 months from the end of the reporting period.
+(1) LONG-TERM LIFE INSURANCE CONTRACTS
+(in RMB million)
+Long-term life insurance policyholders' reserves
+Policyholder contract deposits
+Policyholder account liabilities in respect of insurance contracts
+Reinsurers' share
+Net
+(1,947)
+2,683,529
+(1,988)
+21,180
+Total
+Property and casualty insurance contracts
+Short-term life insurance contracts
+Long-term life insurance contracts.
+170,420
+177,041
+118,926
+109,943
+2,972,460
+3,261,354
+(in RMB million)
+Long-term life insurance contracts
+Short-term life insurance contracts
+Property and casualty insurance contracts
+31 December 2021
+Insurance
+contract liabilities
+Reinsurers' share
+Net
+2,972,008
+21,401
+267,945
+3,261,354
+(2,291)
+(4,725)
+2,969,717
+(19,836)
+(26,852)
+16,676
+248,109
+3,234,502
+278
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+48. INSURANCE CONTRACT LIABILITIES (CONTINUED)
+31 December 2020
+(in RMB million)
+247,532
+(3) PROPERTY AND CASUALTY INSURANCE CONTRACTS
+(1,239)
+Unearned premium reserves
+(2,176)
+Intangible assets-core deposits
+3,052
+(763)
+(16)
+4,780
+(8)
+(5,519)
+comprehensive income
+instruments at fair value through other
+Fair value adjustments on financial
+51,976
+189
+(12,994)
+1,551
+(14,627)
+Fair value adjustments on financial assets
+and liabilities carried at fair value through
+profit or loss
+31 December
+as at
+As at
+31 December
+Other
+changes
+Charged to
+equity
+Charged to
+profit or loss
+1 January
+(in RMB million)
+As at
+82
+Temporary
+difference
+(1,987)
+Intangible assets evaluation premium from
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+284
+110,020
+(27,505)
+143
+2,344
+980
+(30,972)
+24,720
+(6,180)
+77
+7,948
+(2,436)
+(3,032)
+Others
+14,460
+(3,615)
+(3,615)
+subsidiaries
+Assets evaluation premium from disposal of
+7,864
+(1,966)
+37
+(2,003)
+acquisition of Autohome Inc.
+(789)
+2020
+106,728
+(26,682)
+94
+(763)
+comprehensive income
+instruments at fair value through other
+40,572
+(10,143)
+18
+2,833
+(12,994)
+Temporary
+difference
+as at
+31 December
+As at
+31 December
+Other
+changes
+(4)
+Charged to
+equity
+1 January
+As at
+Fair value adjustments on financial
+Fair value adjustments on financial assets
+and liabilities carried at fair value through
+profit or loss
+(in RMB million)
+2021
+The deferred tax liabilities are analysed as follows:
+(in RMB million)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 283
+Annual Report 2021
+Charged to
+profit or loss
+(673)
+2,692
+Intangible assets-core deposits
+(245)
+247
+821
+(27,505)
+34,116
+(8,529)
+(259)
+153
+(2,243)
+(6,180)
+Others
+14,460
+(3,615)
+(3,615)
+subsidiaries
+Assets evaluation premium from disposal of
+7,692
+(1,923)
+1
+43
+(1,966)
+acquisition of Autohome Inc.
+Intangible assets evaluation premium from
+7,196
+(1,799)
+188
+(1,987)
+50. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+(280,556)
+As at 31 December 2021, unrecognized tax losses of the Group were RMB24,847 million (31 December 2020:
+RMB23,468 million).
+(in RMB million)
+53. RISK AND CAPITAL MANAGEMENT
+Entrusted investments of banking operations
+Entrusted loans of banking operations
+Assets under asset management schemes
+Assets under annuity investments and annuity schemes
+Assets under trust schemes
+(in RMB million)
+52. FIDUCIARY ACTIVITIES
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 285
+(1) INSURANCE RISK
+321,581
+16,505
+18,270
+20,779
+19,297
+4,456
+5,179
+1,778
+1,661
+10,523
+9,599
+8,702
+6,569
+344,224
+1,008
+31 December 2021
+444,454
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+286
+These risks currently do not vary significantly in relation to the location of the risk insured by the Group
+whilst undue concentration by amounts could have an impact on the severity of benefit payments on a
+portfolio basis.
+The insurance business of the Group mainly comprises long-term life insurance contracts, property
+and casualty and short-term life insurance contracts. For contracts where death is the insured risk, the
+significant factors that could increase the overall frequency of claims are epidemics, widespread changes
+in lifestyles and natural disasters, resulting in earlier or more claims than expected. For contracts where
+survival is the insured risk, the most significant factor is continuing improvement in medical science and
+social conditions that would increase longevity. For property and casualty insurance contracts, claims are
+often affected by natural disasters, calamities, terrorist attacks, etc.
+The variability of risks is improved by diversification of risk of loss to a large portfolio of insurance
+contracts as a more diversified portfolio is less likely to be affected across the board by change in any
+subset of the portfolio. The variability of risks is also improved by careful selection and implementation of
+underwriting strategies and guidelines.
+Development risk - the possibility that changes may occur in the amount of an insurer's obligation at
+the end of the contract period.
+the possibility that the cost of the events will differ from those expected.
+the possibility that the number of insured events will differ from those expected.
+-
+-
+Severity risk
+31 December 2020
+Occurrence risk
+Type of insurance risk
+3,011,379
+3,938,563
+648,185
+872,066
+191,133
+190,853
+1,169,897
+1,719,031
+627,150
+712,159
+375,014
+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:
+804
+1,002
+4,026
+Other payables
+(in RMB million)
+51. OTHER LIABILITIES
+Deferred tax liabilities
+Deferred tax assets
+(in RMB million)
+The net amounts of deferred tax assets and liabilities after offsetting are as follows:
+23,468
+24,847
+8,487
+8,994
+7,689
+Payables to non-controlling interests of
+6,535
+4,253
+2,032
+2,161
+1,054
+1,525
+31 December 2020
+31 December 2021
+2025
+2026
+2024
+2023
+2022
+2021
+5,585
+consolidated structured entities
+Salaries and welfare payable
+Other tax payable
+8,777
+9,668
+43,495
+45,759
+31,862
+31,815
+172,694
+191,577
+31 December 2020
+31 December 2021
+61,901
+(19,267)
+Net
+(8,238)
+8,238
+31 December 2020
+Offsetting
+65,360
+(13,605)
+(13,077)
+13,077
+Net
+31 December 2021
+Offsetting
+Annual Report 2021
+Others
+Finance lease deposits
+Contract liabilities
+Deferred income
+Accruals
+Provision payables
+Insurance guarantee fund
+Contingency provision
+The following table shows unrecognized tax losses based on its expected expiry date:
+70,139
+50. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
+2,176
+88,630
+(8,624)
+97,254
+(145,701)
+7,234
+(152,935)
+(166,656)
+96,913
+8,124
+(11,225)
+108,138
+As at 31 December
+(174,780)
+Decrease
+Annual Report 2021
+153,367
+160,776
+174,939
+(10,725)
+185,664
+Increase
+80,964
+(8,449)
+89,413
+88,630
+(8,624)
+97,254
+As at 1 January
+(7,409)
+Net
+Ping An Insurance (Group) Company of China, Ltd. 281
+Notes to Consolidated Financial Statements
+14,209
+57,489
+67,581
+2020
+(204)
+67,581
+72,839
+63,318
+68,684
+4,263
+4,155
+31 December 2020
+FINANCIAL STATEMENTS
+31 December 2021
+Others
+Policy administration fees and risk premiums deducted
+Liabilities released for benefits paid
+Accretion of investment income
+Policyholder principal increased
+As at 1 January
+(in RMB million)
+The investment contract liabilities are analysed as follows:
+Policyholder account liabilities in respect of investment contracts
+Investment contract reserves
+(in RMB million)
+49. INVESTMENT CONTRACT LIABILITIES FOR POLICYHOLDERS
+For the year ended 31 December 2021
+As at 31 December
+18,999
+share
+Net
+(7,661)
+166,562
+Net
+Reinsurers'
+share
+Gross
+Net
+share
+Gross
+Reinsurers'
+2020
+2021
+As at 31 December
+158,901
+Decrease
+As at 1 January
+(in RMB million)
+The unearned premium reserves of property and casualty insurance are analysed as follows:
+263,816
+267,945
+97,254
+108,138
+166,562
+159,807
+31 December 2020
+31 December 2021
+Claim reserves
+Increase
+Gross
+149,261
+142,717
+share
+Gross
+(in RMB million)
+Reinsurers'
+Reinsurers'
+2020
+2021
+The claim reserves of property and casualty insurance are analysed as follows:
+158,901
+(7,661)
+166,562
+151,196
+(6,544)
+(8,611)
+(211,968)
+10,550
+(222,518)
+(226,516)
+11,904
+(238,420)
+228,152
+(11,667)
+239,819
+218,811
+(12,854)
+231,665
+159,807
+2,412
+2021
+(11,270)
+255
+Fair value adjustments on financial assets
+and liabilities carried at fair value through
+profit or loss
+31 December
+as at
+Temporary
+difference
+As at
+31 December
+Other
+changes
+equity
+Charged to
+Charged to
+profit or loss
+1 January
+(in RMB million)
+(92)
+As at
+(313,748)
+78,437
+329
+(248)
+8,217
+70,139
+(32,044)
+2,646
+368
+57
+414
+7,172
+2020
+(197,640)
+163
+Fair value adjustments on financial assets
+9,176
+58,991
+(28,688)
+7,172
+(192)
+6
+760
+6,598
+(167,232)
+41,808
+(12)
+(75)
+(652)
+4,389
+Others
+Impairment provisions
+(34,980)
+8,745
+(49,004)
+12,251
+11,671
+(9,426)
+4,119
+14,052
+Insurance contract liabilities
+580
+at fair value through other comprehensive
+income
+37,506
+49,410
+8,011
+(702)
+31 December 2021
+2021
+Others
+Impairment provisions
+(45)
+at fair value through other comprehensive
+income
+Fair value adjustments on financial assets
+Fair value adjustments on financial assets
+and liabilities carried at fair value through
+profit or loss
+(in RMB million)
+The deferred tax assets are analysed as follows:
+Net
+Deferred tax liabilities
+65,360
+(13,605)
+Deferred tax assets
+50. DEFERRED TAX ASSETS AND LIABILITIES
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+282
+As at 31 December 2021 and 2020, all reinsurance contracts of the Group transferred significant insurance
+risks.
+67,581
+72,839
+(295)
+(25)
+(62)
+(68)
+(11,196)
+(in RMB million)
+51,755
+Insurance contract liabilities
+61,901
+(19,267)
+8,349
+41,808
+(25,632)
+6,408
+(942)
+(1,395)
+31 December 2020
+(54,360)
+13,590
+1,339
+12,251
+(4,072)
+1,018
+8,745
+31 December
+6
+As at
+1 January
+Charged to
+profit or loss
+Charged to
+equity
+Other
+changes
+42,634
+31 December
+163
+849
+Temporary
+difference
+as at
+As at
+Change (%)
+(41.4)
+Notes: (1) Activity rate of agents = annual total of monthly agents
+who issued policies/ annual total of monthly agents on
+board.
+(2) Figures may not match the calculation due to rounding.
+Bancassurance channel. The bancassurance
+channel upheld value-driven operations
+and focused on the professional operations
+framework of "channel + product + technology"
+to enhance value contribution. Ping An Life
+deepened cooperation with Ping An Bank to
+build a new talent team that provides Ping
+An Bank's customers with better personalized
+private wealth management services. More
+than 300 elite wealth managers have been
+recruited for the team, nearly all of whom
+have a bachelor's degree or above. Moreover,
+Ping An Life deepened cooperation with major
+external channels and increased expertise
+in sales assistance to empower banks. A full
+range of one-stop products and services are
+offered to meet the bancassurance channel's
+customer demands for annuity insurance, whole
+life insurance, and long-term health insurance.
+In addition, Ping An Life empowered its
+business with technologies to improve business
+processes and customer experience.
+Other channels. Ping An Life diversified
+its channels and actively developed the
+Community Grid channel, whereby the high-
+In respect of products, with the philosophy of
+developing "heartwarming insurance,” Ping An
+Life explores product innovation revolving around
+customers' differentiated insurance demands
+through the healthcare ecosystem, which is an
+important part of the high-quality development-
+oriented transformation. Ping An Life continuously
+optimizes protection and savings product offerings
+by increasing the supply of competitive products
+and providing customers with more secure and
+heartwarming protection. Furthermore, Ping An Life
+continuously builds a multi-level service system by
+improving the “insurance + health management"
+service framework, the "insurance + high-end
+eldercare" and "insurance + home-based eldercare"
+service models. All these efforts enabled Ping An
+Life to deliver heartwarming insurance services to
+customers.
+Ping An Life provides customers with life
+insurance products through its nationwide
+service network of 35 branches, seven
+telemarketing centers and over 3,250 business
+outlets.
+26
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+1,023,836
+quality and grid-based specialists dig deep
+into local communities like “farmers" under
+a high-quality, sustainable online-merge-
+offline service model. In Shanghai, Shenzhen
+and Shenyang, Ping An Life has piloted the
+model, and established online-merge-offline
+service processes, covering renewal premium
+collection, concurrent agents' cross-selling
+and upselling. In respect of the telemarketing
+channel, Ping An Life continued to enhance
+the long-term customer development model
+of "services before sales" under a customer-
+centric approach. Through technological
+empowerment, service interactions, and precise
+conversion, Ping An Life optimized its business
+portfolio and maintained an industry-leading
+market share. In respect of the internet channel,
+Ping An Life improved user experience by
+optimizing platform functions, and boosted
+business by strengthening platform operations.
+In addition, Ping An Life continued to explore
+innovative development models for the lower-
+tier channel in combination with the insurance
+consumption scenarios in lower-tier markets.
+Innovative channels including bancassurance,
+telemarketing, internet, and other channels
+accounted for 15.1% of Ping An Life's NBV in
+2021, up 3.8 pps year on year.
+600,345
+Life and
+December
+31, 2021
+Operating profit attributable
+to shareholders of the parent
+company
+95,906
+16,117 21,060
+229
+3,614
+8,378
+7,948
+(5,291) 147,961
+Operating profit attributable to
+non-controlling interests
+1,169
+(4,524) 168,479
+75
+215
+1,516
+1,500
+767
+20,518
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 21
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Performance Overview
+(in RMB million)
+Net profit attributable to
+15,276
+shareholders of the parent
+9,448
+3,829
+Net profit (A)
+60,303
+16,192 36,336
+229
+3,829
+9,894
+(457) (4,524)
+121,802
+Excluding:
+Short-term investment
+variance (B)
+9,894
+(23,491)
+change (C)
+(13,281)
+(23,491)
+(13,281)
+Impact of one-off material
+non-operating items and
+others (D)
+(9,905)
+(9,905)
+Operating profit (E=A-B-C-D)
+97,075
+16,192 36,336
+229
+Impact of discount rate
+2020
+Property
+health and casualty
+3
+143
+974
+1,567
+281
+16,260
+Net profit (A)
+96,072
+16,159
+28,928
+2,479
+12,162
+3,102
+9,503
+(3,595)
+159,359
+Excluding:
+Short-term investment
+variance (B)
+10,308
+Impact of discount rate
+change (C)
+(7,902)
+10,308
+6,711
+76
+1,054
+non-controlling interests
+Other asset
+Other
+businesses
+insurance
+business
+insurance
+business
+Banking
+business
+Trust
+business
+Securities
+business
+management
+business
+Technology
+business
+and
+elimination
+The Group
+company
+95,018
+16,083
+16,766
+2,959
+5,737
+7,936
+(3,876)
+143,099
+Net profit attributable to
+767 20,184
+(7,902)
+1,500
+215
+Annual Report 2021
+In respect of O2O services, Ping An has integrated
+internal and external resources through platforms.
+to provide online, in-store and home-delivered
+services, covering four major scenarios, namely
+health management, disease management, chronic
+disease management, and eldercare management.
+Ping An had over 40,000 in-house doctors and
+contracted external doctors, and partnered with
+over 10,000 hospitals (including 99% of 3A hospitals
+and all the top 100 hospitals), about 96,000 healthcare
+management institutions and 202,000 pharmacies
+(about 34% of all pharmacies) in China as of
+December 31, 2021. Moreover, Ping An partnered
+with over 1,000 overseas medical institutions in
+16 countries across the world as of December 31,
+2021. In addition, Ping An effectively supports 020
+services by investing in businesses including general
+hospitals, checkup centers, and imaging centers, and
+had 14 health management centers as of December
+31, 2021. Ping An opened its first high-end health
+management centers in Beijing and Shenzhen in
+October 2021. Going forward, Ping An will enhance
+its strategic presence in the healthcare industry by
+combining PKU Healthcare's excellent resources
+with Ping An's integrated finance and healthtech.
+Ping An will develop flagship facilities in Southern
+China and Northern China through Peking University
+International Hospital and Ping An Longhua General
+Hospital to provide customers with "heartwarming
+services.” Ping An has provided information-based
+services apart from active healthcare resources
+integration, empowering “disease management,"
+"medical institution management," and "medical
+worker management” by building smart public
+health regulation platforms. Ping An Smart
+Healthcare benefited approximately 1.32 million
+doctors and 10.48 million chronic-disease patients
+at over 45,000 medical institutions in 187 cities as
+of December 31, 2021, covering over 2,500 diseases.
+Ping An won a bid to build China's first provincial-
+level public health emergency decision-making and
+steering system in 2021, which will set an example
+for the development of public health emergency
+systems.
+In addition, Ping An continues to advance its
+healthtech research and development. Ping An
+ranked first globally by the number of digital
+healthcare patent applications, and proactively
+built leading healthcare databases and a remote
+consultation and treatment platform. In addition to
+self-building and co-building healthcare platforms,
+Ping An has invested in healthcare-related
+companies in China and abroad, covering fields
+including disease early screening and diagnostics as
+well as advanced treatment technologies. Ping An
+effectively supports the sustainable development of
+the healthcare ecosystem by building technological
+capabilities in a forward-looking manner.
+Ping An Insurance (Group) Company of China, Ltd.
+19
+Business Analysis
+Performance Overview
+Ping An delivered an operating ROE of 18.9% with operating profit
+attributable to shareholders of the parent company rising 6.1% year on
+year to RMB147,961 million in 2021.
+Ping An's basic operating earnings per share rose 6.5% year on year to
+RMB8.40 in 2021. Ping An continues to increase cash dividends, and plans
+to pay a final cash dividend of RMB1.50 per share, implying an annual cash
+dividend of RMB2.38 per share for 2021, up 8.2% year on year, marking a
+continued increase in cash dividends.
+CONSOLIDATED RESULTS
+Ping An provides a wide range of financial products
+and services via multiple distribution channels
+under a uniform brand. Ping An engages in financial
+business through subsidiaries including Ping An
+Life, Ping An P&C, Ping An Annuity, Ping An Health
+Insurance, Ping An Bank, Ping An Trust, Ping An
+Securities, Ping An Asset Management, and Ping An
+Financial Leasing. Ping An engages in technology
+business through subsidiaries, associates and
+joint ventures including Autohome, Lufax Holding,
+OneConnect, and Ping An Health.
+(in RMB million)
+services.
+Operating profit
+shareholders of the
+2021
+2020 Change (%)
+8.40
+7.89
+6.5
+18.9
+19.5
+-0.6 pps
+2.38
+2.20
+attributable to
+8.2
+In respect of family doctors, Ping An has built
+strong medical service capabilities thanks to the
+in-house team of nearly 2,000 full-time doctors and
+proprietary Al-based medical system. Ping An has
+built an end-to-end management pathway from
+portals to payments by connecting online services
+with offline ones and relying on its health-record
+platform. Ping An has built its competitive moat by
+providing corporate and retail customers with 24/7
+comprehensive, multi-layered, one-stop healthcare
+Regarding corporate customer services, the
+Company provides customers with an employee
+health management service system which
+offers comprehensive, high-quality, and cost-
+effective services under the "insurance + trust
++ services" model. About 40,000 enterprises and
+their 20 million employees were covered as of
+December 31, 2021.
+EMPOWERING SMART CITY ECOSYSTEM WITH
+TECHNOLOGIES
+Ping An's smart city business offers
+comprehensive, integrated smart city solutions
+centering on government services, enterprise
+development, and citizen services to fulfill its
+mission of serving the country, real economy, and
+society. Ping An's smart city business leverages
+technologies to empower city governance,
+support industries, advance people's livelihoods,
+and facilitate digital government, digital
+economy, and digital society. Ping An's smart
+city business cumulatively served 165 cities, 1.74
+million enterprises, and 140 million citizens as of
+December 31, 2021.
+In digital government services, Ping An helps local
+governments enhance governance capabilities,
+modernize governance practices and improve
+citizen service experience at an accelerated pace
+through its leading proprietary technologies
+including Al, blockchain, and cloud computing. In
+citizen services, the "iCity" platform built by Ping An
+had been accessed over five billion times by over
+51 million users in nearly 30 cities as of December
+31, 2021. The platform supports online processing
+of over 17,500 service items on mobile devices, and
+24/7 Al-enabled instant filing and approval of over
+3,800 service items. In government services, Ping An
+leverages its big data analysis capabilities to help
+local governments conduct smart administration of
+over 42 million business entities and over 14.1 million
+enterprises.
+In promoting the digital economy, Ping An helped
+governments and businesses pursue digitization
+and smart business decision-making, aiming to
+provide comprehensive services for businesses
+and optimize the urban business environment. In
+urban economic development, Ping An helped
+local governments analyze more than 430 themes
+and over 15,000 metrics covering macroeconomic
+conditions and industries. In smart human resources
+services, the “HR-X" app was used by nearly 30 large
+and super large enterprises, serving nearly 2.7 million
+users as of December 31, 2021. The “HR-X" app was
+accessed over 4.3 billion times by users, with over
+3,000 functions available as of December 31, 2021. The
+number of average daily active users has exceeded
+500,000 since the "HR-X" app went live.
+In digital citizen services, Ping An promotes the
+long-term development of vocational education
+and corporate training. In vocational education,
+Ping An cumulatively served over 56 million users,
+with courses broadcast about 480 million times. In
+corporate training, Ping An cumulatively served.
+over 1,800 government and corporate customers,
+facilitating over 1.68 billion attendances at online
+conferences and business training.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+17
+MANAGEMENT DISCUSSION AND ANALYSIS
+Healthcare as a New Driver of Value
+Growth
+Ping An upgraded its strategy by exploring an innovative managed care
+model centering on "HMO + family doctor + O20," leveraging its years
+of operational and managerial experience in insurance and healthcare
+industries.
+Regarding retail customer services, Ping An
+focuses on developing products related to
+"insurance + healthcare services" to provide
+customers with "heartwarming services." Ping
+An Life launched the Ping An Zhen Xiang
+RUN Health Services Plan ("Ping An Zhen
+Xiang RUN") in 2021 to provide 12 key health
+management service items covering scenarios
+including health management, chronic disease
+management, and disease diagnosis/treatment.
+Ping An Zhen Xiang RUN covered more than
+20 million critical illness insurance customers
+of Ping An Life as of December 31, 2021.
+Moreover, the healthcare ecosystem generates
+greater synergies for the Group's main financial
+businesses. About 65% of Ping An's over 647
+million internet users used services from the
+healthcare ecosystem as of December 31, 2021.
+Nearly 63% of Ping An's over 227 million retail
+customers used services from the healthcare
+ecosystem, and these customers held 3.3.
+contracts and RMB40,000 in AUM per capita
+respectively, 1.6 times and 3.0 times those held
+by customers who did not use these services
+respectively. The up-selling rate per capita of
+customers using online consultation was 15.1%,
+2.4 times that of customers not using online
+consultation.
+Synergies between Ping An's healthcare ecosystem and main financial
+businesses are emerging. In customer acquisition and retention, nearly
+63% of Ping An's over 227 million retail customers used services from the
+healthcare ecosystem. These customers held 3.3 contracts and RMB40,000
+in AUM per capita respectively, 1.6 times and 3.0 times those held by
+customers who did not use these services respectively.
+"HEALTHCARE ECOSYSTEM" STRATEGY
+Ping An continues to execute its healthcare
+ecosystem strategy. The healthcare market has
+huge growth potential as people's healthcare
+awareness has increased rapidly and their demands
+for exclusive medical services, including family
+doctors, have not been satisfied. Seizing market
+opportunities, Ping An strives to enhance its
+comprehensive strengths in serving the "Healthy
+China" strategy and develop the healthcare
+ecosystem. Meanwhile, the close combination of
+the healthcare ecosystem strategy with Ping An's
+main financial businesses is starting to generate
+significant synergies.
+Ping An upgraded the strategy by leveraging its
+years of operational and managerial experience
+in insurance and healthcare industries. Ping An
+explored an innovative managed care model
+centering on "HMO + family doctor + 020" by
+virtue of its four unique advantages in experience,
+resources, expertise, and platforms.
+HMO: Ping An developed an innovative
+"insurance + healthcare services" model by
+leveraging its differentiation advantages in the
+healthcare ecosystem and insurance payment.
+Ping An provides high-quality, cost-effective,
+and full-lifecycle healthcare services for
+retail and corporate customers by combining
+healthcare services with insurance and building
+a closed loop of supply, demand and payment.
+Family doctor: the Company designates an
+exclusive family doctor for each customer
+as his/her "doctor + navigator + customer
+manager," providing an end-to-end healthcare
+management pathway covering consultation,
+diagnosis, treatment and services.
+020 services: Ping An provides customers
+with online-merge-offline "worry-free, time-
+saving, and money-saving" services by
+actively integrating resources of high-quality
+healthcare service providers in its healthcare
+ecosystem and social network. The Company's
+020 services cover four scenarios, namely
+health management, disease management,
+chronic disease management, and eldercare
+management.
+18
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+"HEALTHCARE ECOSYSTEM" PROGRESS
+In respect of HMO, Ping An made significant
+progress in both corporate and retail customer
+services by effectively coordinating insurance and
+healthcare services and constantly upgrading its
+business model. In relation to healthcare, the Group
+had nearly 100 million paying retail customers and
+approximately 40,000 paying corporate customers
+as of December 31, 2021. The Group achieved over
+RMB140 billion in health insurance premium income
+in 2021.
+Ping An Smart Healthcare served over 45,000 medical institutions in 187
+cities as of December 31, 2021. Ping An had over 40,000 in-house doctors
+and contracted external doctors, and partnered with over 10,000 hospitals,
+about 96,000 healthcare management institutions and 202,000 pharmacies
+as of December 31, 2021. Going forward, Ping An will enhance its strategic
+presence in the healthcare industry by combining PKU Healthcare's
+excellent resources with Ping An's integrated finance and healthtech. Ping
+An will develop flagship facilities in Southern China and Northern China
+through Peking University International Hospital and Ping An Longhua
+General Hospital to provide customers with "heartwarming services."
+parent company
+147,961
+139,470
+Property
+health and casualty
+(in RMB million)
+insurance
+business
+insurance
+business
+Banking
+business
+Trust
+business
+Other asset
+Securities management
+business
+business
+Other
+businesses
+Technology
+business
+and
+elimination The Group
+Life and
+Net profit attributable to
+shareholders of the parent
+company
+16,117
+21,060
+229
+3,614
+8,378 (1,957)
+(5,291) 101,618
+Net profit attributable to
+non-controlling interests
+835
+75
+15,276
+59,468
+2021
+The Group made adjustments including impairment provisions, valuation adjustments, and equity method
+adjustments totaling RMB43.2 billion to investments related to China Fortune in 2021, including RMB15.9
+billion for equity investments and RMB27.3 billion for debt investments. The impacts on net profit after
+tax attributable to shareholders of the parent company and operating profit after tax attributable to
+shareholders of the parent company were negative RMB24.3 billion and negative RMB7.3 billion respectively.
+The Group's operating profit attributable to shareholders of the parent company rose 6.1% year on year to
+RMB147,961 million in 2021. Basic operating earnings per share rose 6.5% year on year to RMB8.40. Net profit
+attributable to shareholders of the parent company decreased 29.0% year on year to RMB101,618 million
+mainly because the Company made adjustments including impairment provisions to investments related to
+China Fortune Land Development Co., Ltd. ("China Fortune").
+6.1
+Basic operating earnings
+per share (in RMB)
+Operating ROE (%)
+Dividend per share
+(in RMB)
+Net profit attributable
+to shareholders of the
+parent company
+101,618
+ROE (%)
+13.0
+143,099
+20.0
+(29.0)
+-7.0 pps
+OPERATING PROFIT OF THE GROUP
+Operating profit is a meaningful business
+performance evaluation metric given the long-
+term nature of our major life and health insurance
+business. We define operating profit after tax as
+reported net profit excluding the following items
+which are of short-term, volatile or one-off nature:
+Short-term investment variance, which is the
+variance between the actual investment return
+of the life and health insurance business and
+the EV long-run investment return assumption,
+net of the associated impact on insurance and
+investment contract liability. The investment
+return of the life and health insurance business
+is locked at 5% after excluding the short-term
+investment variance;
+The impact of discount rate (1) change is the
+effect on insurance contract liability of the life.
+and health insurance business due to changes
+in the discount rate; and
+The impact of one-off material non-operating
+items and others is the impact of material
+items that management considered to be non-
+operating incomes and expenses, which in 2021
+and 2020 refer to the revaluation gain or loss on
+the convertible bonds issued by Lufax Holding
+to the Group.
+Note: (1) Refer to the significant accounting policies in the
+notes of the Company's 2021 Annual Report for the
+information about the discount rate.
+20
+20
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+The operating profit after tax which excludes the fluctuations of the above non-operating items can
+provide a clearer and more objective representation of the Company's business performance and trend.
+The Chinese economy continued to recover in 2021 in a pace faster than most major economies due to
+prudent and flexible monetary policies and proactive fiscal policies. Nevertheless, the downward pressure
+on economic growth increased against the backdrop of a complicated international environment and
+sporadic COVID-19 outbreaks in China. Household consumption recovery still faced many challenges,
+affecting the long-term protection insurance business of Ping An. Facing challenges in China and
+abroad, Ping An upheld the compliance philosophy and strengthened risk management while adopting
+various forward-looking measures. Ping An pressed firmly ahead with Ping An Life's quality-oriented
+reform and transformation, improved the integrated finance model, and built the “HMO managed care
+model.” Moreover, Ping An laid a solid foundation for long-term sustainable, healthy growth by delivering
+"heartwarming financial services" and providing customers with "worry-free, time-saving, and money-
+saving" experience.
+1,516
+Impact of one-off material
+non-operating items and
+others (D)
+1,282
+1,282
+(in RMB million)
+NBV
+Change (%)
+2021/
+December
+31, 2021
+2020/
+December
+31, 2020
+NBV margin (%)
+37,898
+27.8
+49,575
+33.3
+(23.6)
+-5.5 pps
+FYP used to calculate NBV
+Key Indicators
+136,290
+Embedded value
+876,490
+824,574
+Operating ROEV (%)
+11.1
+14.5
+-3.4 pps
+Operating profit after tax
+97,075
+93,666
+3.6
+148,915
+Operating ROE (%)
+also resulting in an impact on business. Nonetheless,
+the team structure will be gradually optimized in the
+long term, laying a solid foundation for sustainable
+development. The agent channel's NBV per agent
+amounted to over RMB39,000 and FYP per agent
+grew more than 22% year on year in 2021.
+2021 was a tough year for the Chinese life insurance
+industry. Amid complex and severe macroeconomic
+situations around the world and continued impact
+of COVID-19, the Chinese life insurance industry
+faced multiple challenges from the market and the
+agent force. Transformation has become an industry
+norm. Ping An Life, which had a material head
+start in transformation, improved the structure of
+agent force and the quality of business via its two-
+pronged "channel + product" strategy to provide
+customers with "heartwarming insurance" and
+considerate service experience.
+16.4
+11.9
+4.5
+Technology business
+8.0
+7.8
+0.2
+Other businesses and elimination
+N/A
+N/A
+N/A
+New business value ("NBV") of Life & Health
+dropped 23.6% year on year to RMB37,898 million in
+2021. Without considering the impact of changes in
+assumptions, NBV of Life & Health dropped 18.6%
+year on year, mainly because a higher proportion
+of savings products produced a lower NBV margin
+and the agent force transformation under a high-
+quality strategy drove the number of agents lower,
+The Group
+19.5
+(0.6)
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 23
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Life and Health Insurance Business
+Ping An Life continued to advance the "channel + product" reform. In
+respect of channels, Ping An Life promoted high-quality development
+of multiple channels by transforming its agent channel, strengthening
+cooperation with Ping An Bank, and exploring innovative channels
+including Community Grid and the lower-tier channel. In respect of
+products, Ping An Life created differentiated advantages with "insurance
++ health management," "insurance + high-end eldercare," and "insurance
++ home-based eldercare" service models by leveraging the Group's
+healthcare ecosystem.
+Transformation of the agent channel made steady progress under a high-
+quality strategy. Ping An Life implemented tiered, refined management of
+sales agents to constantly improve the structure of its agent force. First-
+year premium ("FYP") per agent of Ping An Life grew more than 22% year
+on year in 2021, indicating effective growth in productivity per agent.
+BUSINESS OVERVIEW
+The Company conducts its life and health insurance
+business through Ping An Life, Ping An Annuity, and
+Ping An Health Insurance.
+18.9
+Net profit
+32.3
+60,303
+35.0
+1,055
+(24.5)
+NBV per agent (RMB per
+agent per year)
+39,031
+40,688
+Activity rate of agents (1) (%)
+47.0
+49.3
+(4.1)
+-2.3 pps
+Agent income (RMB per
+796
+agent per month)
+5,793
+(0.6)
+Including: Income from
+Ping An Life's products
+(RMB per agent per
+month)
+4,651
+4,629
+0.5
+Number of individual life
+insurance sales agents
+(person)
+5,758
+per month (in thousand)
+Average number of agents
+(27.6)
+-2.7 pps
+96,072
+(37.2)
+Note: Figures may not match the calculation due to rounding.
+(8.5)
+6.3
+24
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+PING AN LIFE'S REFORM AND TRANSFORMATION
+Traditional life insurance industry in China faced
+an array of internal and external challenges.
+Resurgence of COVID-19 has led to changes in
+customer demands and increased caution over
+consumption, making critical illness insurance
+products harder to sell. Moreover, the extensive
+labor-driven development model once adopted by
+the life insurance industry is difficult to sustain with
+the emergence of a gig economy as well as waning
+demographic dividends, which calls for immediate
+reform and transformation. These challenges,
+however, do not change the fact that the Chinese
+residents' demand for insurance protection is still
+strong in the long run. The life insurance market
+remains underserved as an aging population and
+accumulating household wealth present vast
+healthcare and eldercare insurance demands.
+Furthermore, Hui Min Bao and internet insurance
+products help boost the traditional life insurance
+industry by raising insurance awareness of residents
+and helping the Company dig deeper into consumer
+demands for protection. In addition, regulators are
+steadfastly promoting the transformation of life.
+insurance industry toward high-quality development.
+Ping An Life continued to implement the "channel
++ product" reform strategy in 2021. In respect
+of channels, Ping An Life promoted high-quality
+development of multiple channels by transforming
+its agent channel, strengthening cooperation with
+Ping An Bank, and exploring innovative channels
+including Community Grid and the lower-tier
+channel. In respect of products, Ping An Life created
+differentiated advantages with three core services
+namely "insurance + health management," "insurance
++ high-end eldercare," and "insurance + home-based
+eldercare" by leveraging the Group's healthcare
+ecosystem.
+In respect of channels, Ping An Life continued to
+promote the high-quality development of multiple
+channels.
+Agent channel. Pursuing high-quality growth,
+Ping An Life carried out tiered, refined
+management of its agent force. Ping An Life
+optimized the team structure toward an "olive-
+shaped" one through digital empowerment.
+The proportion of agents with a college
+education background and above increased
+by 2.4 pps from the beginning of the year as of
+December 31, 2021. FYP per agent grew more
+than 22% year on year, indicating effective
+growth in productivity in 2021. In respect of
+Diamond Agents, FYP per Diamond Agent was
+four-to-six times the average of all agents,
+and income per Diamond Agent was about
+four-to-five times the social average salary in
+2021. Going forward, Ping An Life will increase
+the number of Diamond Agents and boost
+their productivity by recognizing excellently-
+managed, high-potential business outlets and
+providing high-end customers with exclusive
+products. In respect of new agents, Ping An
+Life will implement "Talent +" to upgrade and
+tighten agent recruitment, aiming to raise the
+proportion of high-quality new agents gradually
+through high-quality existing ones. Ping An
+Life also implemented new agent development
+projects to boost new agent retention through
+training upgrade, preferential policies, and
+organizational support. Going forward, Ping An
+Life will continue to promote the pilot reform
+of the digital business outlets, and gradually
+expand the pilot on the premise of ensuring
+quality.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 25
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Life and Health Insurance Business
+(in RMB million)
+Agent productivity and
+2021
+2020 Change (%)
+income
+Agent channel NBV
+31,076
+42,913
+Other asset management business
+1.2
+9.5
+10.7
+281
+16,200
+Notes: (1) Life & Health business represents the results of three subsidiaries, namely Ping An Life, Ping An Annuity, and Ping An Health
+Insurance. Property & Casualty business represents the results of Ping An P&C. The banking business represents the results
+of Ping An Bank. The trust business represents the results of Ping An Trust and Ping An New Capital. The securities business
+represents the results of Ping An Securities. The other asset management business represents the results of other subsidiaries
+that engage in asset management business including Ping An Asset Management, Ping An Financial Leasing, and Ping An
+Overseas Holdings. The technology business represents the results of subsidiaries, associates and joint ventures that engage in
+technology business including Autohome, Lufax Holding, OneConnect, and Ping An Health. Eliminations include offsets against
+shareholding among business lines.
+(2) Figures may not match the calculation due to rounding.
+22
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY
+December
+December
+Change
+(in RMB million)
+1,567
+31, 2021
+(%)
+Life and health insurance business
+296,877
+273,161
+8.7
+Property and casualty insurance business
+113,898
+102,991
+10.6
+Banking business
+200,217
+31, 2020
+974
+143
+3
+Operating profit (E=A-B-C-D)
+93,666
+16,159
+28,928
+2,479
+3,102
+6,711
+8,221
+(3,595)
+155,670
+Operating profit attributable
+to shareholders of the parent
+company
+92,672
+16,083
+16,766
+2,476
+2,959
+5,737
+6,654
+(3,876)
+139,470
+Operating profit attributable to
+non-controlling interests
+994
+76
+12,162
+182,067
+December
+31, 2020
+10.0
+115,843
+2021
+2020
+(pps)
+Life and health insurance business
+32.3
+35.0
+(2.7)
+Property and casualty insurance business
+14.8
+16.4
+(1.6)
+(%)
+Banking business
+9.6
+1.3
+Asset management business
+11.3
+11.0
+0.3
+Including: Trust business
+0.9
+11.8
+(10.9)
+Securities business
+10.9
+Change
+OPERATING ROE
+6.5
+105,061
+10.3
+Including: Trust business
+24,918
+23,475
+6.1
+Securities business
+36,003
+32,346
+11.3
+Other asset management business
+54,922
+49,240
+11.5
+Technology business
+100,697
+104,523
+(3.7)
+Other businesses and elimination
+(15,127)
+(5,243)
+188.5
+The Group
+812,405
+762,560
+Asset management business
+2,476
+Ping An Insurance (Group) Company of China, Ltd.
+reverse repurchase agreements
+12,685
+Two years later
+24,707
+21,157
+15,917
+12,779
+One year later
+25,963
+15,986
+26,858
+16,879
+13,341
+As at the end of current year
+claims paid:
+Estimated cumulative
+Total
+2021
+2020
+21,107
+20,478
+Three years later
+12,691
+10,395
+Subtotal
+(89,212)
+(17,370)
+(23,063)
+(20,328)
+(15,794)
+(12,657)
+Cumulative claims paid
+99,607
+25,963
+24,707
+20,478
+15,802
+12,657
+Estimated cumulative claims
+12,657
+Four years later
+15,802
+2019
+2018
+2017
+(in RMB million)
+Estimated cumulative claims
+88,502
+Four years later
+113,193
+92,359
+Three years later
+134,343
+116,721
+96,274
+Two years later
+183,409
+158,308
+152,791
+138,059
+121,579
+101,879
+One year later
+141,982
+125,966
+104,195
+88,502
+Prior year adjustments,
+Cumulative claims paid
+113,193
+(109,824)
+Reproduced below is an exhibit that shows the development of gross claim reserves of short-term life
+insurance by the accident year:
+(b) Property and casualty and short-term life insurance contracts (continued)
+Sensitivities (continued)
+Assumptions and sensitivities (continued)
+(1) INSURANCE RISK (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+290
+96,913
+8,477
+Outstanding claim reserves
+expenses, discount and risk
+margin
+unallocated loss adjustment
+Prior year adjustments,
+88,436
+Subtotal
+672,238
+(583,802)
+152,791 183,409
+(135,569) (124,102)
+134,343
+(128,399)
+(85,908)
+As at the end of current year
+unallocated loss adjustment
+393
+Average claim costs
+(in RMB million)
+To illustrate the sensitivities of ultimate claims costs, for example, a respective percentage change in the
+average claim costs alone results in a similar percentage change in claim reserves:
+(b) Property and casualty and short-term life insurance contracts (continued)
+Sensitivities (continued)
+Assumptions and sensitivities (continued)
+(1) INSURANCE RISK (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2021
+Property and casualty insurance
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 291
+8,536
+331
+Annual Report 2021
+Outstanding claim reserves
+expenses and risk margin
+unallocated loss adjustment
+Prior year adjustments,
+FINANCIAL STATEMENTS
+Short-term life insurance
+(in RMB million)
+Average claim costs
+Impact on gross
+claim reserves
+increase
+(427)
+(4,846)
+(4,846)
+(427)
+4,846
+427
+before tax
+decrease
+decrease
+before tax
+Impact on profit Impact on equity
+31 December 2021
+Impact on net
+claim reserves
+increase
+Change in
+assumptions
+5,407
+561
++5%
++5%
+Impact on gross
+claim reserves
+increase
+Change in
+assumptions
+(c) Reinsurance
+Short-term life insurance
+Property and casualty insurance
+8,205
+Subtotal
+(77,469)
+85,674
+One year later
+18,842
+24,258
+19,146
+15,809
+12,779
+As at the end of current year
+claims paid:
+Estimated cumulative
+Total
+2021
+2020
+2019
+2018
+2017
+(in RMB million)
+Reproduced below is an exhibit that shows the development of net claim reserves of short-term life
+insurance by the accident year:
+Outstanding claim reserves
+10,788
+12,191
+expenses and risk margin
+14,760
+21,819
+18,842
+(12,125)
+21,819
+(20,487)
+(18,053)
+(14,656)
+(12,148)
+Cumulative claims paid
+18,202
+14,663
+12,148
+Estimated cumulative claims
+12,148
+Four years later
+14,663
+12,182
+Three years later
+18,202
+14,849
+12,175
+Two years later
+18,997
+Estimated cumulative claims paid:
+Total
+2021
+(4,122)
+(4,122)
+4,122
+4,122
++5%
+(16,693)
+(16,693)
+16,693
+Note: For long-term life and health insurance contracts where the future insurance benefits are not affected by investment return of the
+underlying asset portfolio, the amounts above represent the results of sensitivity analysis calculated by the discount rates when the
+benchmarking yield curve for the measurement of insurance contract liabilities increases or decreases 10bps, with consideration of
+the Cai Kuai [2017] No.637 issued by the former CIRC and other relevant regulations.
+16,694
+(66,207)
+(66,207)
+66,207
+66,256
++10%
+(13,461)
+(13,461)
+13,461
++10%
+(in RMB million)
+Discount rate/investment return
+Discount rate/investment return
+Mortality, morbidity, accident
+(10,854)
+(10,852)
++10bps
+Increase/(decrease)
+Change in
+assumptions
+Impact on equity
+before tax
+Increase/(decrease)
+Impact on profit
+before tax
+Increase/(decrease)
+reserves
+31 December 2020
+Impact on net
+long-term
+life insurance
+policyholders'
+Increase/(decrease)
+life insurance
+policyholders'
+reserves
+Impact on gross
+long-term
+Annual Report 2021
+288
+Maintenance expense rates
+Policy lapse rates
+rates and etc.
+13,142
+13,142
+(13,142)
+(13,141)
+13,460
+Ping An Insurance (Group) Company of China, Ltd. 287
+Annual Report 2021
+a 5% increase in maintenance expense rates.
+a 10% increase in policy lapse rates; and
+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);
+discount rate/investment return assumption decreased by 10 basis points;
+discount rate/investment return assumption increased by 10 basis points;
+The Group has measured the impact on long-term life insurance contract liabilities using sensitivity analysis,
+of varying independently certain assumptions under reasonable and possible circumstances. The following
+changes in assumptions have been considered:
+Sensitivities
+Significant judgement 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.
+Assumptions
+(a) Long-term life insurance contracts
+Assumptions and sensitivities
+The Group's concentration of insurance risk is reflected by its major lines of business as analysed by
+insurance contract liabilities in Note 48.
+The Group runs its insurance business primarily within the PRC. Hence the geographical insurance risk is
+concentrated primarily within the PRC.
+Concentration of insurance risks
+Insurance risk is also affected by the policyholders' rights to terminate the contract, pay reduced
+premiums, refuse to pay premiums or exercise annuity conversion option, etc. Thus, the resultant insurance
+risk is subject to policyholders' behaviour and decisions.
+There would be no significant mitigating terms and conditions that reduce the insured risk accepted for
+contracts with fixed and guaranteed benefits and fixed future premiums. However, for contracts with
+discretionary participation features, the participating nature of these contracts results in a significant
+portion of the insurance risk being shared with the insured party.
+Type of insurance risk (Continued)
+FINANCIAL STATEMENTS
+10,854
+Notes to Consolidated Financial Statements
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+-10bps
++10bps
+assumptions Increase/(decrease) Increase/(decrease) Increase/(decrease) Increase/(decrease)
+Impact on equity
+before tax
+Impact on profit
+before tax
+reserves
+life insurance
+policyholders'
+31 December 2021
+Impact on net
+long-term
+reserves
+Impact on gross
+long-term
+life insurance
+policyholders'
+Change in
+Maintenance expense rates
+Policy lapse rates
+Mortality, morbidity, accident
+rates and etc.
+Discount rate/investment return
+Discount rate/investment return
+(in RMB million)
+(a) Long-term life insurance contracts (Continued)
+Assumptions and sensitivities (Continued)
+(1) INSURANCE RISK (CONTINUED)
+For the year ended 31 December 2021
+10,854
+-10bps
+11,139
+714,675
+(615,906)
+161,174 194,826
+(141,924) (129,234)
+142,235
+(135,184)
+120,933
+(116,905)
+(92,659)
+Cumulative claims paid
+95,507
+Estimated cumulative claims
+95,507
+Four years later
+120,933
+99,514
+Three years later
+142,235
+124,672
+103,639
+Two years later
+194,826
+166,997
+161,174
+Subtotal
+146,275
+98,769
+unallocated loss adjustment
+2020
+2019
+2018
+2017
+(in RMB million)
+Reproduced below is an exhibit that shows the development of net claim reserves of property and casualty
+insurance by the accident year:
+(b) Property and casualty and short-term life insurance contracts (continued)
+Sensitivities (continued)
+Assumptions and sensitivities (continued)
+(1) INSURANCE RISK (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 289
+Annual Report 2021
+108,138
+9,369
+Outstanding claim reserves
+expenses, discount and risk
+margin
+Prior year adjustments,
+31 December 2020
+Impact on net
+claim reserves
+increase
+129,907
+One year later
+Ping An Insurance (Group) Company of China, Ltd.
+(4,130)
+(4,130)
+4,130
+4,130
++5%
+(17,431)
+(17,431)
+17,431
+17,429
++10%
+(63,580)
+(63,580)
+63,580
+63,623
++10%
+(11,140)
+(11,140)
+11,140
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+109,867
+(1) INSURANCE RISK (CONTINUED)
+(b) Property and casualty and short-term life insurance contracts
+150,592
+134,483
+112,013
+As at the end of current year
+Estimated cumulative claims paid:
+Total
+2021
+2020
+2019
+2018
+2017
+(in RMB million)
+Reproduced below is an exhibit that shows the development of gross claim reserves of property and
+casualty insurance by the accident year:
+The property and casualty and short-term life insurance claim reserves are sensitive to the above key
+assumptions. The sensitivity of certain variables including legislative change, uncertainty in the estimation
+process, etc., is not possible to quantify. Furthermore, because of delays that arise between the occurrence
+of a claim and its subsequent notification and eventual settlement, the outstanding claim reserves are not
+known with certainty at the end of the reporting period.
+Sensitivities
+63,781
+Other key assumptions include delays in settlement, etc.
+The principal assumption underlying the estimates includes assumptions in respect of average claim
+costs, claims handling costs, claims inflation factors and claim numbers for each accident year which are
+determined based on the Group's past claim experiences. Judgement is used to assess the extent to which
+external factors such as judicial decisions and government legislation affect the estimates.
+Assumptions
+Assumptions and sensitivities (Continued)
+Impact on profit
+before tax
+decrease
+Impact on equity
+before tax
+Annual Report 2021
+294
+98,617
+1,561,207
+7,561
+1,126
+30,485
+1,522,035
+Off-balance sheet credit commitments
+Ping An Insurance (Group) Company of China, Ltd.
+18,473
+51,182
+235
+98,382
+(17,433)
+(10,112)
+27,780
+35,906
+39,074
+28,962
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(a) Foreign currency risk (continued)
+statutory deposits for insurance operations
+Balances with the Central Bank and
+587,391
+7,132
+10,154
+95,030
+475,075
+Cash and amounts due from banks
+and other financial institutions
+RMB
+total
+equivalent)
+equivalent
+(RMB
+Others
+HKD
+(RMB
+equivalent)
+USD
+(RMB
+equivalent)
+RMB
+31 December 2020
+Assets
+(in RMB million)
+23,402
+Net position of foreign currency
+Notional amount of foreign exchange
+derivative financial instruments
+8,868,579
+14,298
+1,064,171
+Bonds payable
+2,724,575
+brokerage customers
+Customer deposits and payables to
+67,276
+2
+25
+67,249
+Policyholder dividend payable
+150,767
+3
+67
+947
+149,750
+Insurance payables
+6,663
+-
+6,663
+Insurance contract liabilities
+284,392
+3,256,611
+17,133
+20,789
+391,080
+8,442,412
+72,839
+227,609
+23
+1,074
+6
+3,469
+223,043
+Other liabilities
+72,833
+policyholders
+Investment contract liabilities for
+3,261,354
+16
+890
+1,097,523
+727
+3,002,049
+6,953
+253,388
+32,625
+3,837
+7,915
+429
+2
+53,813
+55,051
+398,019
+8,381,462
+137,146
+82
+277,401
+5,630
+723
+3,697
+132,644
+Other assets
+754
+271,017
+through other comprehensive income
+Equity financial assets at fair value
+511,386
+421
+19,482
+491,483
+8,888,345
+through other comprehensive income
+Liabilities
+843,981
+81
+804
+138,640
+Insurance payables
+1
+5,147
+Accounts payable
+37,217
+276,602
+4,806
+271,796
+Assets sold under agreements to repurchase
+1,001
+36,216
+through profit or loss
+Financial liabilities at fair value
+960,175
+23,416
+2,943
+89,835
+Due to banks and other financial institutions
+Accounts payable
+Debt financial assets at fair value
+1,287
+476
+1,191
+18,552
+Reinsurers' share of insurance liabilities
+26,176
+85
+2
+26,089
+Accounts receivable
+94,003
+69
+1,555
+92,379
+Premium receivables
+122,765
+122,765
+repurchase agreements
+Financial assets purchased under reverse
+292,738
+20,219
+2,624,848
+Policy loans
+161,381
+2,312
+36,657
+2,584,592
+Financial assets at amortized cost
+1,231,331
+19,503
+20,969
+107,936
+1,082,923
+Financial assets at fair value through
+profit or loss
+2,599,510
+25,722
+13,868
+123,800
+2,436,120
+Loans and advances to customers
+202,050
+202,050
+Finance lease receivable
+161,381
+(1) INSURANCE RISK (CONTINUED)
+127,477
+122,577
+(924)
+(591)
+-5%
+Other currencies
+(1,446)
+(1,147)
+(1,448)
+(898)
+(497)
+-5%
+(2,523)
+(774)
+(2,559)
+(823)
+-5%
+USD
+4,792
+2,418
+HKD
+(823)
+(2,312)
+(4,931)
+total
+equivalent)
+RMB
+equivalent
+(RMB
+Others
+HKD
+(RMB
+equivalent)
+USD
+(RMB
+equivalent)
+RMB
+31 December 2021
+The main monetary assets and liabilities of the Group (excluding balances of investment-linked contracts)
+and non-monetary assets and liabilities measured at fair value are analysed as follows by currency:
+(a) Foreign currency risk (continued)
+(2) MARKET RISK (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 293
+(4,792)
+(2,418)
+4,931
+2,312
+823
+497
+Change in
+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 sets
+limitation to its position of foreign currency, monitors the size of foreign currency position, and limits the
+foreign currency position within the threshold set by utilizing hedging strategy.
+(a) Foreign currency risk
+Market risk is the risk of changes in fair value of financial instruments and future cash flows from
+fluctuation of market prices, which includes three types of risks from volatility of foreign exchange rates
+(foreign currency risk), market interest rates (interest rate risk) and market prices (price risk).
+(2) MARKET RISK
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+292
+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.
+(4,432)
+(573)
+(4,432)
+(573)
+4,432
+573
+4,863
+634
++5%
++5%
+decrease
+(in RMB million)
+(in RMB million)
+variables
+31 December 2021
+924
+591
++5%
+Other currencies
+1,446
+1,147
+1,448
+898
++5%
+HKD
+2,523
+774
+2,559
+823
++5%
+USD
+Increase/
+(decrease) in
+equity before tax
+31 December 2020
+Increase/
+(decrease) in
+profit before tax
+Increase/
+(decrease) in
+equity before tax
+Increase/
+(decrease) in
+profit before tax
+Assets
+Cash and amounts due from banks and
+other financial institutions
+481,286
+268,215
+5,212
+620
+262,383
+through other comprehensive income
+Other assets
+Equity financial assets at fair value
+428,530
+1,082
+28,977
+398,471
+through other comprehensive income
+Debt financial assets at fair value
+2,768,995
+1,132
+2,123
+38,392
+2,727,348
+Financial assets at amortized cost
+1,426,677
+111,060
+20,363
+6,008
+135
+Assets sold under agreements to repurchase
+57,376
+90
+2,548
+54,738
+through profit or loss
+Financial liabilities at fair value
+797,646
+6,484
+1,625
+89,335
+700,202
+Due to banks and other financial institutions
+Liabilities
+118,165
+9,471,248
+50,204
+59,863
+414,482
+8,946,699
+962
+4,900
+17,460
+1,287,033
+79,834
+51
+1,861
+77,922
+Premium receivables
+61,429
+61,429
+Policyholder dividend payable
+Financial assets purchased under
+320,954
+560
+10,171
+310,223
+statutory deposits for insurance operations
+Balances with the Central Bank and
+584,995
+5,926
+15,764
+82,019
+Accounts receivable
+101,821
+26,541
+86
+Financial assets at fair value through
+profit or loss
+2,980,975
+22,562
+16,221
+142,393
+2,799,799
+Loans and advances to customers
+200,701
+200,701
+Finance lease receivable
+178,298
+178,298
+Policy loans
+26,852
+428
+2,219
+24,205
+Reinsurers' share of insurance liabilities
+26,628
+1
+3
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+2
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 295
+Annual Report 2021
+95,847
+1,242,864
+5,669
+25
+For the year ended 31 December 2021
+24,285
+Off-balance sheet credit commitments
+16,467
+28,914
+50,466
+(20,417)
+(4,933)
+(5,700)
+1,212,885
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(b) Price risk
+23
+Annual Report 2021
+296
+The Group expects that current listed stocks and equity investments funds will not lose more than
+RMB21,492 million due to market price movements in a 10-trading-day holding period on 99% of occasions.
+42,168
+21,492
+31 December 2020
+31 December 2021
+Listed stocks and security investment funds
+(in RMB million)
+The analysis below is the estimated impact for listed stocks and security investment funds with 10-day
+reasonable market fluctuation in using the VaR model in the normal market.
+In practice, the actual trading results will differ from the VaR calculation and, in particular, the calculation
+does not provide a meaningful indication of profits and losses in stressed market conditions.
+The use of VaR has limitations because it is based on historical correlations and volatilities in market prices
+and assumes that future price movements will follow a statistical distribution. Due to the fact that VaR
+relies heavily on historical data to provide information and may not clearly predict future changes and
+modifications of the risk factors, the probability of large market moves may be underestimated if changes
+in risk factors fail to align with the normal distribution assumption. The VaR may also be under or over
+estimated due to the assumption placed on risk factors and the relationship between such factors for
+specific instruments. Even though positions may change throughout the day, the VaR only represents the
+risk of the portfolios at the close of each business day, and it does not account for any losses that may
+occur beyond the 99% confidence interval.
+The Group uses a 10-day market price value-at-risk ("VaR”) technique to estimate its risk exposure for
+listed equity securities and equity investments funds. The Group adopts 10-day as the holding period on
+the assumption that not all the investments can be sold on the same day. Moreover, the VaR calculation is
+made based on normal market conditions and a 99% confidence interval.
+The Group manages price risks by diversification of investments, setting limits for investments in different
+securities, etc.
+The above investments are exposed to price risk because of changes in market prices, where changes are
+caused by factors specific to the individual financial instruments or their issuers, or factors affecting all
+similar financial instruments traded in the market.
+The Group's price risk exposure relates to financial assets and liabilities whose values will fluctuate as a
+result of changes in market prices (other than those arising from interest rate risk or foreign currency risk),
+which mainly include listed equity securities and security investment funds classified as financial assets at
+fair value through other comprehensive income and financial assets at fair value through profit or loss.
+(9,784)
+116,264
+5,148
+139,528
+34,614
+972
+2,689
+2,968,782
+Insurance contract liabilities
+2,793
+3,245
+871,407
+Bonds payable
+2,693,833
+6,174
+12,216
+204,665
+2,470,778
+brokerage customers
+Customer deposits and payables to
+63,806
+21,400
+17
+901,285
+2,972,460
+23,840
+policyholders
+60,250
+Investment contract liabilities for
+8,301,991
+32,413
+20,437
+337,769
+7,911,372
+184,356
+7
+Net position of foreign currency
+Notional amount of foreign exchange
+derivative financial instruments
+10,099
+67,574
+173,270
+Other liabilities
+67,581
+1
+6
+980
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+The following tables explain the changes in the gross carrying amount and impairment provision of the
+main financial assets between the beginning and the end of the annual period due to these factors:
+Stages transfers
+2021
+Transfer
+Transfer
+Transfer
+Gross carrying amount
+Stage
+Ping An Insurance (Group) Company of China, Ltd. 305
+(in RMB million)
+Annual Report 2021
+115
+The Group closely monitors collateral of credit-impaired financial assets.
+1 January
+278
+123,901
+Subtotal
+7,012,267
+48,517
+29,981
+7,090,765
+Off-balance sheet
+Total
+1,277,993
+8,290,260
+2,123
+615
+1,280,731
+50,640
+30,596
+8,371,496
+As at 31 December 2021, the fair value of collateral of credit-impaired loans and advances to customers
+is RMB22,808 million (31 December 2020: RMB21,160 million). The fair value of collateral of credit-impaired
+financial assets at amortized cost is RMB9,641 million (31 December 2020: RMB8,108 million).
+Net increase/
+(decrease)
+(Note)
+Stage 3
+Stage 1
+and Stage 2
+2,000
+(50,286)
+50,286
+(40,418)
+44,549
+33,672
+Subtotal
+2,662,331
+448,318
+-
+-
+(40,418) 3,070,231
+Financial assets
+Stage 1
+2,601,200
+160,574
+(17,214) (6,377)
+-
+-
+between
+(13,111)
+123,508
+between
+Stage 1
+between
+Stage 2
+and Stage 3
+and Stage 3
+Write-offs 31 December
+Loans and advances
+to customers
+Stage 1
+34,915
+2,590,183
+Stage 2
+37,233
+(21,965)
+(79,567)
+79,567
+(2,000)
+-
+2,992,010
+483,394
+Other assets
+196,267
+317
+99,806
+100
+819
+Subtotal
+7,383,765
+Off-balance sheet
+Total
+Other assets
+1,569,949
+8,953,714
+38,733
+100,725
+7,473,932
+99
+1,572,213
+38,832
+9,046,145
+31 December 2020
+51,434
+2,165
+53,599
+Carrying amount (in RMB million)
+428,530
+2,871
+Finance lease receivable
+195,123
+5,023
+555
+200,701
+Loans and advances to customers
+2,939,619
+926
+34,512
+2,730,744
+8,838
+6,844
+29,413
+2,980,975
+2,768,995
+Debt financial assets at fair value through other
+comprehensive income
+424,733
+Financial assets at amortized cost
+Stage 1
+Stage 2
+Stage 3
+889
+26,176
+202,050
+Loans and advances to customers
+2,558,863
+29,369
+11,278
+2,599,510
+4,894
+Financial assets at amortized cost
+11,772
+16,904
+2,624,848
+Debt financial assets at fair value through other
+comprehensive income
+508,948
+2,121
+2,596,172
+at amortized cost
+Finance lease receivable
+28
+Maximum credit
+risk exposure
+Cash and amounts due from banks and other
+financial institutions
+587,391
+587,391
+Balances with the Central Bank and statutory
+deposits for insurance operations
+292,738
+292,738
+Financial assets purchased under reverse
+repurchase agreements
+122,478
+287
+122,765
+Accounts receivable
+25,902
+246
+511,386
+Stage 2
+Stage 1
+7,025
+1,562
+1,489
+1,054
+(4,404)
+1,237
+Stage 3
+9,336
+1,536
+2,579
+296
+4,404
+(8,038)
+24,966
+Subtotal
+15,900
+6,259
+16,389
+Stage 2
+at amortized cost
+7,439
+(38)
+15,201
+(40,418)
+26,829
+Subtotal
+63,219
+18,354
+49,047
+(40,418)
+90,202
+Financial assets
+Stage 1
+5,028
+2,118
+1,643
+(1,054)
+(296)
+19,521
+27,535
+-
+(8,038)
+(460)
+714
+23
+2,016
+-
+3,427
+Subtotal
+1,134
+2,534
+2,720
+4,821
+Note 1: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+Note 2: Changes in PDs, EADS, and LGDs in the current year, arising from regular update of inputs to models.
+306
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+(433)
+Stage 3
+other comprehensive income
+221
+33,642
+Debt financial assets
+Stage 1
+1,155
+66
+94
+(119)
+(23)
+1,173
+at fair value through
+Stage 2
+245
+(39)
+1,912
+119
+-
+(2,016)
+-
+13,308
+912
+Stage 3
+Stage 3
+2,121
+317
+Subtotal
+511,386
+(81,310) (2,851)
+(1,278)
+(268)
+(82,856)
+(54)
+424,733
+other comprehensive income
+2,851
+2,871
+54
+823
+926
+428,530
+Note: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+(in RMB million)
+(823)
+Stage 2
+at fair value through
+508,948
+17,214
+(27,472)
+-
+2,738,183
+10,075
+Stage 3
+26,240
+2,328
+-
+6,377
+27,472
+(8,038) 54,379
+Subtotal
+2,640,748
+169,927
+(8,038) 2,802,637
+Debt financial assets
+26,628
+2021
+23,637
+Stages transfers
+Charge/
+(recover)
+Stage 1
+31,718
+18,662
+7,077
+(4,210)
+38
+53,285
+Loans and advances
+to customers
+7,864
+(1,220)
+14,435
+4,210
+-
+(15,201)
+10,088
+Stage 2
+31 December
+Write-offs
+and Stage 3
+Transfer
+Transfer
+Transfer
+between
+between
+between
+(decrease)
+for the year
+Impairment provision
+Stage
+1 January
+(Note 1)
+(Note 2)
+Stage 1
+and Stage 2
+Stage 1
+Stage 2
+and Stage 3
+Net increase/
+9
+Maximum credit
+26,529
+(in RMB million)
+Fixed interest rate
+Less than 3 months (including 3 months)
+3 months to 1 year (including 1 year)
+1-2 years (including 2 years)
+2-3 years (including 3 years)
+3-4 years (including 4 years)
+The following table sets out the Group's bonds, debt schemes, wealth management investments and other
+debt financial assets (excluding balances of investment-linked contracts) by maturity or repricing date
+(whichever is the earlier):
+4-5 years (including 5 years)
+(in RMB million)
+Fixed interest rate
+Less than 3 months (including 3 months)
+3 months to 1 year (including 1 year)
+1-2 years (including 2 years)
+2-3 years (including 3 years)
+3-4 years (including 4 years)
+More than 5 years
+Floating interest rate
+4-5 years (including 5 years)
+(c) Interest rate risk (continued)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+93,516
+47,126
+34,586
+83,554
+51,287
+74,583
+83,281
+(2) MARKET RISK (CONTINUED)
+2,848
+18,425
+4,641
+260
+1,369
+252,915
+327,696
+Ping An Insurance (Group) Company of China, Ltd.
+59,016
+More than 5 years
+Floating interest rate
+Financial assets
+54,212
+75,273
+291,391
+144,917
+37,432
+49,617
+231,966
+161,906
+84,264
+64,033
+179,879
+1,681,658
+109,244
+166,251
+1,957,153
+65,501
+2,736,775
+31,582
+356,896
+83,964
+61,068
+at amortized
+cost
+31 December 2021
+Debt financial
+assets at
+fair value
+through other
+comprehensive
+income
+Financial assets
+at fair value
+through
+profit or loss
+Total
+96,649
+30,269
+19,153
+146,071
+290,016
+93,510
+140,411
+523,937
+211,864
+26,119
+31 December 2020
+31 December 2021
+Annual Report 2021
+4,377
++50 bps
+(6,138)
+(13,700)
+(4,377)
+(14,384)
+Ping An Insurance (Group) Company of China, Ltd. 297
+13,700
+FINANCIAL STATEMENTS
+For the year ended 31 December 2021
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(2) MARKET RISK (CONTINUED)
+(c) Interest rate risk (continued)
+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.
+Change in
+(in RMB million)
+Notes to Consolidated Financial Statements
+6,138
+-50 bps
+Increase/
+(decrease)
+in equity
+before tax
+53. 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 bonds carried at fair value through profit or loss) and equity (fair value change on bonds
+carried at fair value through profit or loss and bonds carried at fair value through other comprehensive
+income).
+(in RMB million)
+Bonds carried at fair value through
+profit or loss and through other
+comprehensive income
+Bonds carried at fair value through
+profit or loss and through other
+comprehensive income
+Annual Report 2021
+31 December 2021
+Increase/
+(decrease)
+Change in
+interest rate
+in profit
+before tax
+Increase/
+(decrease)
+in equity
+before tax
+31 December 2020
+Increase/
+(decrease)
+in profit
+before tax
+interest rate
+5,942
+423,259
+31 December 2021
+Increase/
+(decrease)
+in equity
+before tax
+(44)
+Loans and advances to customers
+-50 bps
+(7,873)
+(7,873)
+(7,017)
+(7,017)
+(44)
+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):
+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
+298
+(in RMB million)
+(79)
+(79)
+-50 bps
+31 December 2020
+Increase/
+(decrease)
+Increase/
+(decrease)
+in equity
+before tax
+in profit
+before tax
+Floating interest rate bonds
++50 bps
+79
+79
+44
+44
+Loans and advances to customers
++50 bps
+7,873
+7,873
+7,017
+7,017
+Floating interest rate bonds.
+Increase/
+(decrease)
+in profit
+before tax
+90
+13,389
+84,832
+3,772,125
+Ping An Insurance (Group) Company of China, Ltd.
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+Forward-looking information and management overlay
+The determinations of 12 months and the lifetime EAD, PD and LGD also incorporates forward-looking
+information. The Group has performed historical data analysis and identified the key macroeconomic
+variables associated with credit risk and expected credit losses for each portfolio. The Group has
+developed macroeconomic forward looking adjustment model by establishing a pool of macro-economic
+indicators, preparing data, filtering model factors and adjusting forward-looking elements, and the
+indicators include gross domestic product (GDP) quarter on quarter percentage change, customer price
+index (CPI) year on year percentage change, purchasing manager's index (PMI) and other macroeconomic
+variables. Through regression analysis, the relationship among these economic indicators in history with
+EAD, PD and LGD is determined, and the EAD, PD, LGD are then determined through forecasting economic
+indicator.
+During the reporting period, the Group adjusted the predicted values of forward-looking economic
+indicators by statistical analysis and also considered the range of possible outcomes represented by each
+scenario, to determine the final macroeconomic scenarios and weights for measuring the relevant expected
+credit loss. The impact of these economic indicators on PD and LGD varies to different businesses. The
+Group comprehensively considers internal and external data, expert forecasts and statistical analysis to
+determine the relationship between these economic indicators with PD and LGD. The Group evaluates
+and forecasts these economic indicators at least annually, provides the best estimates for the future, and
+regularly evaluates the results. Similar to other economic forecasts, the estimates of economic indicators
+have high inherent uncertainties, actual results may have significant difference with estimates. The Group
+considered the estimates above represented the optimal estimation of possible outcomes.
+Annual Report 2021
+In 2021, the key macroeconomic assumptions used by the Group to estimate expected credit losses in
+different macroeconomic scenarios include GDP quarter on quarter percentage change, CPI year on year
+percentage change and PMI. For the GDP quarter on quarter percentage change, the average predictive
+value in the base scenario in year 2022 is about 5.71%, and is 0.49 percentage upper in the upside scenario
+while 0.52 percentage lower in the downside scenario. The average predictive value in the base scenario in
+year 2023 is about 5.54%, and is 0.42 percentage upper in the upside scenario while 0.37 percentage lower in
+the downside scenario.
+Expected credit losses are sensitive to the parameters used in the model, the macroeconomic variables of
+the forward-looking forecast, the weight probabilities in the three scenarios, and other factors considered
+in the application of expert judgement. Changes in these input parameters, assumptions, models, and
+judgements will have an impact on the significant increase in credit risk and the measurement of expected
+credit losses.
+The Group has the highest weight of the base scenario, and the weight of the base scenario is slightly
+higher than the sum of the weight of other base scenarios. The banking business of the Group assumed
+that if the weight of the upside scenario increased by 10% and the weight of the base scenario reduced by
+10%, the Group's ECL impairment provision on 31 December 2021 would be reduced by RMB1,161 million (31
+December 2020: RMB741 million); if the weight of the downside scenario increased by 10% and the weight of
+the base scenarios reduced by 10%, the Group's ECL impairment provision would be increased by RMB1,883
+million (31 December 2020: RMB1,327 million).
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 303
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+Sensitivity analysis
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+302
+The active market for financial assets disappears
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+Judgement of significant increase in credit risk ("SICR")
+The credit impairment of financial assets may be caused by the joint effects of multiple events, and may
+not be caused by separately identifiable events.
+Under IFRS 9, when considering the impairment stages for financial assets, the Group evaluates the credit
+risk at initial recognition and also whether there is any significant increase in credit risk for each reporting
+period. The Group considers various reasonable supporting information to judge if there is significant
+increase in credit risk, including the forward-looking information, when determining the ECL staging for
+financial assets. Major factor being considered include regulatory and operating environment, internal and
+external credit ratings, solvency, and operational capabilities. The Group could base on individual financial
+instruments or portfolios of financial instruments with similar credit risk characteristics to determine
+ECL staging by comparing the credit risks of the financial instruments at the reporting date with initial
+recognition.
+The definition of credit-impaired assets
+Under IFRS 9, in order to determine whether credit impairment occurs, the defined standards adopted by
+the Group are consistent with the internal credit risk management objectives for relevant financial assets,
+while considering quantitative and qualitative indicators. When the Group assesses whether the debtor has
+credit impairment, the following factors are mainly considered:
+•
+The debtor has overdue more than 90 days after the contract payment date;
+Internal credit rating is default grade;
+The lender gives the debtor concessions for economic or contractual reasons due to the debtor's
+financial difficulties, where such concessions are normally reluctant to be made by the lender;
+The debtor has significant financial difficulties;
+The debtor is likely to go bankrupt or other financial restructuring;
+The Group set quantitative and qualitative criteria to judge whether the credit risk has SICR after initial
+recognition. The judgement criteria mainly include the PD changes of the debtors, changes of credit
+risk categories and other indicators of SICR, etc. In the judgement of whether the financial instruments
+have SICR after initial recognition, the Group considers the 30 days past due as one of criteria of SICR, in
+accordance with the standard.
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss (continued)
+Credit exposure
+Stage 1
+Stage 2
+Stage 3
+risk exposure
+Cash and amounts due from banks and other
+financial institutions
+584,995
+584,995
+Carrying amount (in RMB million)
+Balances with the Central Bank and statutory
+deposits for insurance operations
+320,954
+Financial assets purchased under reverse
+repurchase agreements
+61,262
+167
+61,429
+Accounts receivable
+320,954
+31 December 2021
+The following table presents the credit risk exposure of the financial assets under the scope of expected
+credit loss. Without considering guarantee or any other credit enhancement measures, for on-balance sheet
+assets, the maximum credit risk exposure is presented as the net carrying amount of the financial assets:
+(b) Expected credit loss (continued)
+Please refer to Note 26.(2) and (5) for an analysis of concentration of loans and advances by industry and
+geographical region.
+Collateral and other credit enhancements
+The amount and type of collateral required depends on an assessment of the credit risk of the
+counterparty. Policies are established regarding to the selection of types of collateral and valuation
+parameters.
+The main types of collateral obtained are as follows:
+for policy loans, collaterals are cash value of policies;
+for reverse repurchase transactions, collaterals are quoted securities;
+for commercial loans, collaterals are real estate properties, inventories, equity investments and trade
+receivables, etc.;
+for retail lending loans to individuals, collaterals are residential properties mortgages.
+Management monitors the market value of the collateral, and requires additional collateral when needed
+according to contracts, when assessing the adequacy of impairment.
+It is the Group's policy to dispose collateral orderly. The proceeds are used to repay all or part of the
+outstanding balance. Generally, the Group would not use the collateralised assets for business purpose.
+Restructured loans and advances to customers
+Restructured loans and advances to customers are those loans and advances to customers for which the
+Group has renegotiated the contract terms with borrowers as a result of the deterioration in their financial
+position or of their inability to make payments when due. Concessions are given by the Group that would
+not otherwise be granted to these borrowers for economic or legal reasons relating to their financial
+difficulties. As at 31 December 2021, the Group's restructured loans and advances to customers was
+RMB11,417 million (31 December 2020: RMB15,627 million).
+304
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd. 301
+Annual Report 2021
+The Lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity profile
+looks at how defaults develop on a portfolio from the point of initial recognition throughout the Lifetime.
+The maturity profile is based on historical observed data and is assumed to be the same across all assets
+within a portfolio and credit grading band. This is supported by historical analysis.
+Loss Given Default (LGD): LGD represents the Group's expectation of the extent of loss on a defaulted
+exposure. LGD varies by type of counterparty, type and seniority of claim and availability of collateral
+or other credit support.
+155,166
+67,178
+44,865
+267,209
+117,113
+33,871
+38,216
+435,201
+189,200
+42,565
+40,450
+220,733
+1,514,351
+169,222
+116,623
+1,800,196
+137,718
+105,275
+71,321
+258,605
+Financial assets
+at amortized
+cost
+31 December 2020
+Debt financial
+assets at
+fair value
+through other
+comprehensive
+income
+Financial assets
+at fair value
+through
+profit or loss
+Total
+83,599
+32,438
+41,467
+245,798
+84,501
+92,181
+157,504
+422,480
+80,648
+2,592,998
+612,091
+3,871
+114,535
+The limits of policy loans are based on the cash values of valid insurance policies, with appropriate
+discounts, and the validity periods of policy loans are within the validity periods of insurance policies. The
+credit risk associated with policy loans did not have material impact on the Group's consolidated financial
+statements.
+300
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+(b) Expected credit loss
+The Group evaluated the credit rating of the reinsurance companies before signing the reinsurance
+contracts, and chose the reinsurance companies with higher credit quality to reduce the credit risk.
+The Group formulates the credit losses of financial assets at amortized cost, debt financial assets at FVOCI,
+finance lease receivable and other financial assets, as well as loan commitment and financial guarantee
+contracts using expected credit loss models according to IFRS 9 requirements.
+The parameters and assumptions involved in ECL model are described below.
+The Group considers the credit risk characteristics of different financial instruments when determining if
+there is significant increase in credit risk. For financial instruments with or without significant increase in
+credit risk, 12-month or lifetime expected credit losses are provided respectively. The expected credit loss
+is the result of discounting the product of EAD, PD and LGD.
+i)
+ii)
+iii)
+Exposure at Default (EAD): EAD is based on the amounts the Group expects to be owed at the time of
+default, over the next 12 months or over the remaining lifetime.
+Probability of Default (PD): The PD represents the likelihood of a borrower defaulting on its financial
+obligation, either over the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the
+obligation.
+Parameters of ECL model
+Credit risk of insurance business
+The Group's debt investment mainly includes domestic government bonds, the Central Bank bills, financial
+institution bonds, corporate bonds and debt investment schemes, wealth management investments, etc.
+The Group manages the credit risk for these investments mainly through controlling the investment scales,
+selecting counterparties within the financial institutions with appropriate credit quality prudently, balancing
+the credit risks and rate of return of investment and considering the internal and external credit rating
+information comprehensively.
+As to debt investment, the Group rates these investments by internal credit rating policies, selects
+counterparties with high credit quality and sets strict entry criteria.
+504,967
+509,093
+3,607,058
+Interest rates on floating rate term deposits and floating rate bonds are repriced at intervals of less than
+one year. Interest rates on fixed rate term deposits and fixed rate bonds are fixed before maturity.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 299
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK
+Credit risks refer to the risk of losses incurred by the inabilities of debtors or counterparties to fulfill their
+contractual obligations or by the adverse changes in their credit conditions. The Group is exposed to
+credit risks primarily associated with its deposit arrangements with commercial banks, loans and advances
+to customers, financial assets at amortized cost and debt financial assets at fair value through other
+comprehensive income, reinsurance arrangement with reinsurers, policy loans, margin financing, financial
+guarantee contracts and loan commitments, etc. The Group uses a variety of controls to identify, measure,
+monitor and report credit risk.
+(a) Credit risk management
+Credit risk of banking business
+The banking business of the Group has formulated a set of credit management processes and internal
+control mechanisms, so as to carry out the whole process management of credit business. Credit
+management procedures for its corporate and retail loans of comprise credit origination, credit review,
+credit approval, disbursement, post credit monitoring and collection. In addition, the banking business of
+the Group has formulated procedure manuals for credit management, which clarifies the duties of each part
+in the credit management processes, effectively monitoring credit risk and enhancing credit compliance.
+Credit risks arising from financial guarantees and loan commitments are similar to those of loans and
+advances. Therefore, financial guarantees and loan commitments are also subject to the same application,
+post crediting monitoring and collateral requirements as loan and advances business.
+Credit risk of investment business
+30,016
+Without considering the impact of collateral and other credit enhancements, for on-balance sheet assets,
+the maximum exposures are based on net carrying amounts as reported in the consolidated financial
+statements. The Group also assumes credit risk due to credit commitments and financial guarantee
+contracts. The details are disclosed in Note 61.(2).
+14,384
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(Note 2)
+(Note 1)
+1 January
+Stage
+Impairment provision
+for the year
+(decrease)
+between
+between
+between
+Transfer
+Transfer
+Transfer
+Charge/
+(recover)
+Net increase/
+Stages transfers
+2020
+(in RMB million)
+Note: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+511,386
+(450)
+53,671
+458,165
+Subtotal
+317
+Stage 1
+and Stage 2
+(450)
+Stage 1
+Stage 2
+and Stage 3
+Subtotal
+23,637
+(59,360)
+15,425
+(399)
+42,510
+(6,255)
+31,716
+Stage 3
+7,864
+(15,425)
+3,428
+14,001
+(2,029)
+7,889
+Stage 2
+31,718
+399
+(3,428)
+(5,855)
+10,194
+30,408
+Loans and advances to customers Stage 1
+31 December
+Write-offs
+and Stage 3
+445
+(527)
+849
+Stage 2
+2,601,200
+(379)
+(18,483)
+356,948
+2,263,114
+Stage 1
+Financial assets at amortized cost
+2,662,331
+(59,360)
+411,735
+2,309,956
+Subtotal
+34,915
+(59,360)
+53,919
+1,115
+(7,887)
+47,128
+Stage 3
+37,233
+(53,919)
+72,212
+(30,425)
+49,365
+2,433
+(365) 18,483
+(7,243)
+13,308
+Stage 3
+2,121
+(445)
+3,116
+(798)
+248
+Stage 2
+through other comprehensive
+income
+508,948
+(3,116)
+54,996
+457,068
+70,013
+Stage 1
+2,640,748
+(31,473)
+374,277
+2,297,944
+Subtotal
+26,240
+(31,473)
+7,243
+379
+17,694
+32,397
+Stage 3
+Debt financial assets at fair value
+Stage 2
+1,910
+(59,360)
+High risk
+1,616,181
+1,372,933
+9,164
+1,363,769
+280
+1,615,901
+Total
+Stage 3
+Lifetime ECL
+31 December 2021
+Stage 2
+Lifetime ECL
+Stage 1
+12-month ECL
+Medium risk
+Low risk
+Credit grade
+(in RMB million)
+Loans and advances to customers:
+The following table contains an analysis of the credit risk grading of loans and advances to customers
+and financial assets at amortized cost. The carrying amount of financial assets below also represents the
+Group's maximum exposure to credit risk on these assets.
+The Group internally grades the financial instruments based on the credit quality and risk characteristics.
+The credit rating of the financial instruments could further be classified as "low risk", "medium risk", "high
+risk" and "default" according to the internal rating scale. "Low risk” means that the asset quality is good,
+there is sufficient evidence to show that the asset is not expected to have default, or there is no reason
+to suspect that the asset had incurred default. "Medium risk" means that the asset quality is acceptable or
+there are factors revealing potential negative impact on the asset quality, but there is no sufficient reason
+to suspect that the asset had incurred default. "High risk” means that there are factors revealing significant
+adverse impact on the asset quality, but there is no event indicating incurred default. The criteria of
+"default" are consistent with those of "credit-impaired".
+(b) Expected credit loss (continued)
+(3) CREDIT RISK (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 307
+Annual Report 2021
+12,340
+Note 2: Changes in PDS, EADS, and LGDs in the current year, arising from regular update of inputs to models.
+35,105
+Default
+Total
+Stage 3
+Lifetime ECL
+Stage 2
+Lifetime ECL
+12-month ECL
+Stage 1
+31 December 2020
+Low risk
+Credit grade
+(in RMB million)
+(89,256)
+2,980,975
+6,844
+34,512
+2,939,619
+Carrying amount
+(26,828)
+(10,037)
+(52,391)
+Loss allowance
+3,070,231
+33,672
+44,549
+2,992,010
+Gross carrying amount
+33,672
+33,672
+47,445
+Note 1: Changes in current year due to purchase, purchased credit-impaired or derecognition except write-offs.
+2,534
+(450)
+16,719
+Subtotal
+9,336
+(31,473)
+1,726
+120
+7,646
+18,715
+12,602
+Stage 3
+1,536
+(1,726)
+1,989
+1,121
+(156)
+308
+Stage 2
+5,028
+(120)
+(1,989)
+(389)
+3,717
+3,809
+Financial assets at amortized cost Stage 1
+63,219
+22,276
+8,378
+(31,473)
+15,900
+907
+(257)
+2,334
+Subtotal
+1,134
+(450)
+68
+681
+(412)
+1,247
+Stage 3
+income
+50,656
+245
+66
+228
+(23)
+42
+Stage 2
+through other comprehensive
+1,155
+(66)
+(2)
+178
+1,045
+Debt financial assets at fair value Stage 1
+(68)
+2,590,183
+(1,115)
+(72,212)
+1,899,989
+112,277
+Ping An
+Property &
+Casualty
+Ping An Life
+1,026,410
+1,861,487
+The Group
+31 December 2021
+Comprehensive solvency margin ratio
+Core solvency margin ratio
+Minimum capital
+Actual capital
+Core capital
+Comprehensive solvency margin ratio
+Core solvency margin ratio
+Minimum capital
+Actual capital
+Core capital
+The table below summarizes the minimum regulatory capital for the Group and its major insurance
+subsidiaries and the regulatory capital held against each of them.
+The Group has formally implemented the China Risk Oriented Solvency System issued by the former CIRC
+since 1 January 2016 by reference to the Notice on the Formal Implementation of China Risk Oriented
+Solvency System by CIRC. The Group adjusted the objective, policy and process of capital management
+accordingly. As at 31 December 2021, the Group was compliant with the CBIRC's requirements for solvency
+margin ratios. In addition, pursuant to the Notice on the Implementation of Regulatory Rules on Solvency
+of Insurance Companies (II) issued by the CBIRC, the Group will compute solvency margin ratios and
+recognize, assess and manage related risks from 2022 in accordance with the Regulatory Rules on Solvency
+of Insurance Companies (II).
+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.
+(7) CAPITAL MANAGEMENT (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+1,046,410
+Ping An Insurance (Group) Company of China, Ltd. 313
+125,777
+454,175
+241.4%
+241.8%
+236.4%
+213.5%
+236.8%
+231.8%
+48,418
+442,031
+767,804
+116,877
+1,068,787
+1,815,140
+103,377
+1,779,640
+Ping An
+Property &
+Casualty
+Ping An Life
+1,046,787
+31 December 2020
+The Group
+278.4%
+230.4%
+233.5%
+248.6%
+226.0%
+228.7%
+45,171
+813,781
+Annual Report 2021
+The Group's capital requirements are primarily dependent on the scale, products of insurance business,
+and the type of business that it undertakes, as well as the industry and geographic location in which it
+operates. The primary objectives of the Group's capital management are to ensure that the Group complies
+with externally imposed capital requirements and to maintain healthy capital ratios in order to support its
+business and to maximize shareholders' value.
+(7) CAPITAL MANAGEMENT
+Ping An Insurance (Group) Company of China, Ltd.
+3 1,394,831
+(9) (1,409,327)
+(6) (14,496)
+626,930 48,922
+(631,860) (51,088)
+(4,930) (2,166)
+14,811 704,165
+(20,378) (705,992)
+(1,827)
+(5,567)
+460
+(2)
+(913)
+616
+806
+Annual Report 2021
+312
+· Cash outflow
+-
+Cash inflow
+-
+Derivative financial instruments settled
+on a gross basis
+(47)
+on a net basis
+Derivative financial instruments settled
+Derivative cash flows
+12,877,359
+7,347,068
+1,094,826
+1,314,185
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(4) LIQUIDITY RISK (CONTINUED)
+The table below summarizes the remaining contractual maturity profile of the credit commitments of the
+Group:
+(in RMB million)
+Operational risk is the risk of loss resulting from inadequate or failure of proper internal controls on
+business processes, employees and systems or from uncontrollable external events. Operational risk in this
+context includes legal risk, but does not include strategic risk and reputational risk. The Group is exposed
+to many types of operational risks in the conduct of its business. The Group manages operational risk by
+establishing and continuously improving risk management framework, formalizing policies and standards,
+using management tools and reporting mechanism, strengthening staff education and training.
+(6) OPERATIONAL RISK
+The objective of the Group's asset and liability management is to match the maturity and interest rates of
+assets and liabilities. Under the current constraints of the shortage of long-term interest rate bond market,
+however, the Group does not have sufficient long-duration assets for investment to match the duration of
+insurance and investment contract liabilities. As permitted by law regulations and market conditions, the
+Group actively invest in preferred stocks and other broad-term duration assets, and continuously improves
+the allocation of long-duration assets, considering the requirements for asset-liability duration matching
+and revenue-cost matching.
+(5) MISMATCHING RISK OF ASSETS AND LIABILITIES
+The assets and liabilities related to investment-linked contracts which are regarded as insurance contracts
+are presented as policyholder account assets and liabilities in respect of insurance contracts. The assets
+and liabilities related to investment-linked contracts which are regarded as investment contracts are
+presented as policyholder account assets and liabilities in respect of investment contracts. The assets and
+liabilities of each investment-linked fund are segregated from each other and from the rest of the Group's
+invested assets for record keeping purposes. As the investment risks of investment-linked contracts were
+fully borne by policyholders, the assets and liabilities related to investment-linked contracts were not
+included in the analysis of risk management. The Group manages liquidity risk related to the investment-
+linked contracts by investing mainly in assets with high liquidity, as disclosed in Note 38.
+Management expects the credit commitments will not be entirely used during the commitment period.
+1,281,570
+298,478
+448,760
+311,071
+155,831
+67,430
+The Group's solvency ratio is calculated based on the relevant regulations promulgated by the former CIRC,
+which is an indicator of the overall solvency position of a financial conglomerate.
+1,561,207
+517,234
+456,632
+164,186
+97,420
+Credit commitments
+31 December 2020
+Credit commitments
+31 December 2021
+Total
+Over 5 years
+1 to 5 years
+Less than 1 month 1 to 3 months 3 to 12 months
+325,735
+The banking business subsidiary measures the capital adequacy ratio in accordance with the Capital Rules
+for Commercial Banks (Provisional) issued by the former 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.
+314
+Annual Report 2021
+The unconsolidated structured entities held by the Group included the trust plans consolidated by Lufax
+Holding.
+The Group's interests in unconsolidated structured entities are recorded as wealth management
+investments under FVPL, FVOCI and AC, and beneficial right under trust schemes under assets purchased
+under reverse repurchase agreements.
+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.
+9,664
+9,664
+Note 1
+Investment income
+and service fee
+Investment income
+3,509
+3,509
+648,185
+346,509
+346,509
+Note 1
+and service fee
+Investment income
+195,595
+195,595
+1,740,506
+Investment income
+Investment income
+and service fee
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties.
+Wealth management products
+managed by affiliated entities
+Wealth management products
+managed by third parties
+4,947
+4,947
+72,393
+Interest held by the Group
+The Group's
+maximum
+exposure
+316
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+(3) CREDIT RISK (CONTINUED)
+450,047
+2,213,463
+Stage 1
+Loans and advances to customers
+31 December
+Write-offs
+between
+Stage 2
+and Stage 3
+and Stage 3
+Stage 1
+Stage 1
+and Stage 2
+(Note)
+1 January
+Carrying amount
+Stage
+(decrease)
+between
+between
+Net increase/
+Transfer
+Transfer
+Transfer
+Stages transfers
+2020
+(in RMB million)
+The following tables explain the changes in the gross carrying amount and impairment provision of
+the main financial assets between the beginning and the end of the annual period due to these factors
+(continued):
+(b) Expected credit loss (continued)
+Gross carrying amount
+1,484,219
+Size
+Securitization
+Unconsolidated structured entities
+Wealth management products
+managed by third parties
+Assets management products
+managed by affiliated entities
+Assets management products
+managed by third parties
+Wealth management products
+managed by affiliated entities
+Securitization
+(in RMB million)
+31 December 2021
+The size of unconsolidated structured entities and the Group's funding and maximum exposure are shown
+below:
+The following table also shows the size, the Group's funding and the Group's maximum exposure to
+the unconsolidated structured entities representing the Group's maximum possible risk exposure that
+could occur as a result of the Group's arrangements with structured entities. The maximum exposure is
+contingent in nature and approximates the sum of direct investments made by the Group.
+The Group uses structured entities in the normal course of business for a number of purposes, for example,
+structured transactions for customers, to provide finance to public and private sector infrastructure
+projects, and to generate fees from managing assets on behalf of third-party investors. These structured
+entities are financed through the issue of beneficiary notes or trust units to investors. Refer to Note 3.(6)
+for the Group's consolidation consideration related to structured entities.
+(8) THE GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES
+13.29%
+13.34%
+10.91%
+10.56%
+8.69%
+8.60%
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+Core Tier 1 capital adequacy ratio
+31 December 2020
+31 December 2021
+The banking operation's core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio and capital
+adequacy ratio are shown below:
+(7) CAPITAL MANAGEMENT (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Size
+Carrying amount
+The Group's
+maximum
+exposure
+Interest held by the Group
+(in RMB million)
+31 December 2020
+(8) THE GROUP'S MAXIMUM EXPOSURE TO STRUCTURED ENTITIES (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 315
+Annual Report 2021
+8,844
+8,844
+Note 1
+Unconsolidated structured entities
+7,995
+872,066
+333,527
+333,527
+Note 1
+253,973
+253,973
+2,417,458
+5,848
+5,848
+57,756
+Investment income
+and service fee
+Investment income
+Investment income
+and service fee
+Investment income
+and service fee
+Investment income
+7,995
+1,483,792 1,636,652
+368
+1,098,640
+62,938
+217,239
+reverse repurchase agreements
+Financial assets purchased under
+insurance operations
+statutory deposits for
+604,819
+1,376
+215,099
+85,256
+98,272
+204,816
+Total
+Over
+5 years
+1 to 5
+years
+3 to 12
+months
+31 December 2020
+Less than
+3 months
+Repayable
+on demand
+Undated
+Balances with the Central Bank and
+Cash and amounts due from banks and
+other financial institutions
+(in RMB million)
+(4) LIQUIDITY RISK (CONTINUED)
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+126
+For the year ended 31 December 2021
+1,566
+293,987
+25,476
+1,749
+Finance lease receivable
+161,381
+21,163
+137,192
+3,026
+Policy Loans
+28,101
+8,473
+11,184
+8,177
+267
+Accounts receivable
+94,003
+198
+60,589
+5,661
+19,586
+7,969
+Premium receivables
+123,434
+4,643
+118,446
+345
+12,118
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 311
+306
+Other liabilities
+Lease liabilities
+2,731
+liabilities for policyholders
+619,866
+2,356 3,073,393
+232,199 46,949 1,139,600
+132,243 7,364,210 7,575,284
+671,502 605,122
+314,135 546,317
+6,957 71,874
+1,174,547
+-
+Customer deposits and payables to
+67,276
+-
+67,276
+Insurance and investment contract
+Insurance contract liability
+Bonds payable
+brokerage customers
+Policyholder dividend payable
+6,663
+106,983
+38
+406
+1,178
+3,260
+16,128
+86,379
+Insurance payables
+212
+1,559
+27,050 43,261
+1,613,914 1,458,068
+7,781
+4,428
+75,829
+1,556,035
+33,565
+9,223
+108,426
+85,139
+15,912
+267,511
+1,234,015 7,472,770 13,335,108
+(4,996)
+(290)
+(608)
+405 2,146,937
+(695) (2,151,933)
+51,767
+(52,375)
+851,252
+(853,207)
+(1,955)
+(340)
+(1,803)
+8,108 1,235,405
+(9,911) (1,235,745)
+(2,093)
+(2)
+(2,142)
+73,538
+(104)
+(36)
+Annual Report 2021
+· Cash outflow
+-
+Cash inflow
+-
+on a gross basis
+Derivative financial instruments settled
+on a net basis
+Derivative financial instruments settled
+Derivative cash flows
+41,062
+490
+12,945
+191
+4,762
+124,896
+227,561
+258,013
+Bonds payable
+544,294
+431,200
+746,543
+1,010,863
+brokerage customers
+Customer deposits and payables to
+63,806
+63,806
+Policyholder dividend payable
+91,086
+1,319
+4,485
+9,587
+75,695
+Insurance payables
+5,815
+140
+3,906
+1,288
+481
+Accounts payable
+276,721
+3
+428,833
+276,718
+205,040
+1,086
+3,587
+140,076
+78,435
+52,911
+56,958
+Other liabilities
+19,126
+1,359
+10,568
+5,127
+1,814
+258
+Lease liabilities
+80,171
+43,356
+30,244
+4,262
+2,309
+liabilities for policyholders
+Insurance and investment contract
+944,213
+2,759,923
+27,023
+52,327
+7,209,264 7,283,313
+30,581
+42,382
+Insurance contract liability
+repurchase
+Assets sold under agreements to
+37,516
+100,011
+38,428
+68
+through other comprehensive income
+Debt financial assets at fair value
+144,329 1,305,662
+2,688,280 4,196,943
+287,242
+1,019,279
+356,148
+103,579
+29,657
+Financial assets at amortized cost
+171,670
+49,535
+8,610
+331,967
+644,276
+profit or loss
+Financial assets at fair value through
+3,057,875
+688,633
+870,030
+762,808
+723,593
+12,811
+Loans and advances to customers
+256,213
+215,113
+609,833
+Equity financial assets at fair value
+1,745
+299
+33,417
+1,219
+836
+through profit or loss
+Financial liabilities at fair value
+983,702
+10,152
+130,819
+315,253
+252,966
+1,902
+274,512
+145,655
+11,126,656
+3,740,401
+570
+6,575
+2,860,514
+66,621
+1,660,269
+46,841
+1,369,251
+357,304
+1,138,917
+25,048
+277,402
+277,402
+through other comprehensive income
+Other assets
+Due to banks and other financial
+institutions
+1,103
+392
+Accounts payable
+Default
+16,173
+107,060
+2,491,275
+12,103
+4,070
+1,151
+54
+107,006
+2,490,124
+High risk
+Medium risk
+Total
+Stage 3
+Lifetime ECL
+Stage 2
+Lifetime ECL
+12-month ECL
+Stage 1
+31 December 2020
+Low risk
+Credit grade
+(in RMB million)
+(33,642)
+2,768,995
+(24,966)
+29,413
+8,838
+(1,237)
+(7,439)
+2,730,744
+26,240
+Carrying amount
+26,240
+2,601,200
+Annual Report 2021
+310
+The banking business of the Group is exposed to potential liquidity risk. The Group utilizes multiple
+regulatory methods, establish comprehensive liquidity risk management framework, effectively recognize,
+measure, monitor and control liquidity risk, maintain sufficient liquidity level to satisfy various funds
+requirement and to face adverse market status. In case of monitoring liquidity risks effectively, the Group
+pays attention to the funds resources and diversified utilization, 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, 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 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.
+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.
+(4) LIQUIDITY RISK
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 309
+Annual Report 2021
+2,624,848
+16,904
+11,772
+2,596,172
+Carrying amount
+(15,900)
+(9,336)
+(1,536)
+(5,028)
+Impairment provision
+2,640,748
+26,240
+13,308
+Gross carrying amount
+Impairment provision
+2,802,637
+54,379
+308
+2,599,510
+11,278
+29,369
+2,558,863
+Carrying amount
+(62,821)
+(23,637)
+(7,864)
+(31,320)
+Loss allowance
+2,662,331
+34,915
+37,233
+2,590,183
+Gross carrying amount
+34,915
+34,915
+Default
+34,096
+26,772
+7,324
+High risk
+1,484,587
+1,108,733
+10,093
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(3) CREDIT RISK (CONTINUED)
+10,075
+2,738,183
+Gross carrying amount
+54,379
+54,379
+Default
+29,203
+155,836
+2,563,219
+6,786
+22,417
+High risk
+Ping An Insurance (Group) Company of China, Ltd.
+3,289
+2,563,219
+Medium risk
+Low risk
+Credit grade
+(in RMB million)
+Total
+Stage 3
+Lifetime ECL
+31 December 2021
+Stage 2
+Lifetime ECL
+12-month ECL
+Stage 1
+Financial assets at amortized cost:
+(b) Expected credit loss (continued)
+152,547
+53. RISK AND CAPITAL MANAGEMENT (CONTINUED)
+(4) LIQUIDITY RISK (CONTINUED)
+The table below summarizes the remaining contractual maturity profile of the financial assets, financial
+liabilities and insurance contract liabilities of the Group (excluding balances of investment-linked contracts)
+based on undiscounted contractual cash flows/expected cash flows.
+140,368
+215,534
+105,046
+38,092
+185
+through other comprehensive income
+Debt financial assets at fair value
+4,388,074
+1,518,669
+349,522 188,359
+968,013 2,877,915
+189,183
+397,929
+124,892
+19,325
+Financial assets at amortized cost
+39,362
+11,841
+740,402
+through profit or loss
+3,509,104
+826,218
+1,023,335
+896,148
+743,780
+19,623
+224,240
+499,225
+Equity financial assets at fair value
+through other comprehensive income
+Other assets
+268,215
+127,502
+127,502
+repurchase
+Assets sold under agreements to
+57,423
+3,553
+465
+51,732
+1,367
+306
+Financial liabilities at fair value through
+profit or loss
+812,422
+736
+4,720
+236,197
+221,458
+256,691
+Due to banks and other financial
+institutions
+4,035,323 11,800,459
+130,799
+1,247
+5,326
+2,920,887
+40,460
+1,922,586
+47,514 36,252
+392,928 1,298,572
+1,230,163
+268,215
+93,356
+Medium risk
+109,958
+31,094
+4,085
+2,455
+86,804
+221,546
+insurance operations
+statutory deposits for
+Balances with the Central Bank and
+592,412
+260
+187,780
+83,917
+127,027
+193,428
+Cash and amounts due from banks and
+other financial institutions
+Total
+5 years
+Over
+1 to 5
+years
+3 to 12
+months
+Less than
+3 months
+on demand
+Undated
+(in RMB million)
+Repayable
+31 December 2021
+6,981
+321,871
+Financial assets purchased under
+reverse repurchase agreements
+1,675
+178,298
+101,828
+72,867
+3,603
+28,061
+8,190
+13,036
+6,713
+122
+79,834
+220
+80,777
+46,248
+19,448
+8,380
+61,657
+4,639
+56,590
+428
+Financial assets at fair value
+Loans and advances to customers
+Finance lease receivable
+Policy loans
+Accounts receivable
+Premium receivables
+5,538
+836
+2,693,833
+901,285
+214,987
+326
+35,049
+5,957
+5,957
+15,855
+15,855
+13,237
+13,237
+Others
+35,049
+Currency forwards and swaps
+Derivative financial liabilities
+Financial liabilities
+2,413,661
+263,173
+1,639,633
+510,855
+Total financial assets
+248,054
+Interest rate swaps
+Financial liabilities at fair value through profit or loss
+11,976
+42,438
+Bonds
+Financial assets at fair value through profit or loss
+Financial assets
+Level 3 Total fair value
+31 December 2020
+Level 2
+Level 1
+(in RMB million)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments recorded at fair value by level of the fair
+value hierarchy (continued):
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+320
+92,425
+2,962
+77,487
+11,976
+Total financial liabilities
+57,376
+2,962
+248,054
+fair value through other comprehensive income
+Loans and advances to customers measured at
+11,228
+58,657
+41,557
+debt schemes and other investments
+Wealth management investments,
+328,316
+856
+315,344
+12,116
+30,957
+69
+30,888
+1,106
+69
+1,037
+15,687
+-
+15,687
+14,164
+14,164
+100,214
+10,247
+12,116
+59,513
+11,228
+institutions measured at fair value through
+other comprehensive income
+Placements with banks and other financial
+268,215
+2,559
+76,116
+189,540
+2,559
+2,559
+76,115
+189,541
+Unlisted equity investments
+76,115
+Preferred shares
+1
+189,540
+Stocks
+Equity financial assets at fair value through
+other comprehensive income
+428,530
+356,901
+317,382
+255
+327,884
+Loans and advances to customers measured at
+13,223
+13,223
+institutions measured at fair value through
+other comprehensive income
+Placements with banks and other financial
+277,401
+1,924
+77,453
+198,024
+1,924
+1,924
+198,025
+77,452
+Unlisted equity investments
+77,452
+Preferred shares
+1
+198,024
+Stocks
+Equity financial assets at fair value through
+other comprehensive income
+fair value through other comprehensive income
+511,386
+Total financial assets
+1,343,429
+568
+29,471
+7,178
+Financial liabilities at fair value through profit or loss
+Total financial liabilities
+48,579
+48,579
+13,538
+13,538
+17,154
+17,154
+17,887
+17,887
+Others
+Currency forwards and swaps
+Interest rate swaps
+Derivative financial liabilities
+Financial liabilities
+202,088
+2,273,090
+202,088
+450,576
+479,085
+Debt financial assets at fair value through
+other comprehensive income
+Bonds
+47,652
+19,477
+Derivative financial assets
+1,231,331
+198,912
+770,835
+261,584
+518,737
+194,637
+323,103
+997
+Wealth management investments, debt schemes
+and other investments
+131,991
+4,065
+127,926
+Stocks
+252,719
+4,020
+126,285
+122,414
+Funds
+Interest rate swaps
+444,257
+Currency forwards and swaps
+Debt financial assets at fair value through
+113,016
+47,557
+65,459
+398,370
+95
+378,798
+19,477
+debt schemes and other investments
+Wealth management investments,
+Bonds
+other comprehensive income
+37,661
+3,052
+16,246
+18,363
+37,661
+3,052
+16,246
+18,363
+Others
+37,217
+Others
+Interest rate swaps
+202,050
+Loans and advances to customers
+2,980,975
+2,599,510
+2,980,975
+2,599,510
+Financial assets at fair value through profit or loss
+1,426,677
+200,701
+1,231,331
+1,231,331
+Financial assets at amortized cost
+2,768,995
+2,624,848
+2,919,483
+2,680,106
+Debt financial assets at fair value through
+other comprehensive income
+1,426,677
+202,050
+200,701
+Finance lease receivable
+292,738
+320,954
+292,738
+Financial assets purchased under reverse
+repurchase agreements
+61,429
+122,765
+61,429
+122,765
+Accounts receivable
+26,628
+26,176
+26,628
+26,176
+Derivative financial assets
+30,957
+37,661
+30,957
+37,661
+428,530
+511,386
+428,530
+511,386
+35,049
+48,579
+35,049
+48,579
+Assets sold under agreements to repurchase
+127,477
+276,602
+127,477
+276,602
+Accounts payable
+6,663
+5,148
+6,663
+5,148
+Customer deposits and payables to
+brokerage customers
+Bonds payable
+Other liabilities
+3,002,049
+1,097,523
+271,853
+Derivative financial liabilities
+320,954
+37,217
+37,217
+Equity financial assets at fair value through
+other comprehensive income
+268,215
+277,401
+268,215
+277,401
+Other assets
+100,725
+123,901
+100,725
+123,901
+Financial liabilities
+Due to banks and other financial institutions
+797,646
+960,175
+797,646
+960,175
+Financial liabilities at fair value through profit or loss
+57,376
+57,376
+deposits for insurance operations
+Balances with the Central Bank and statutory
+587,391
+Bonds
+Financial assets at fair value through profit or loss
+Financial assets
+Level 3 Total fair value
+31 December 2021
+Level 2
+Level 1
+(in RMB million)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments recorded at fair value by level of the fair
+value hierarchy:
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 319
+Annual Report 2021
+For Level 3 financial instruments, the consideration of being classified as Level 3 is mainly based on the
+significance of the unobservable factors to the overall fair value measurement.
+For Level 2 financial instruments, valuations are generally using observable market inputs, or recent quoted
+market prices. The valuation providers typically gather, analyse and interpret information related to market
+transactions and other key valuation model inputs from multiple sources, and through the use of widely
+accepted internal valuation models, provide a theoretical quote on various securities. Debt securities are
+classified as Level 2 when they are valued at recent quoted price from Chinese interbank market or from
+public valuation service providers. The fair value of debt investments denominated in RMB is determined
+based upon the valuation results by the CCDC. All significant inputs are observable in the market.
+Valuation methods for Level 2 and Level 3 financial instruments
+The level of fair value measurement is determined by the lowest level input that is significant to the
+entire measurement. As such, the significance of a particular input should be considered from an overall
+perspective in the fair value measurement.
+Level 3: inputs which are based on parameters other than observable market data (unobservable inputs).
+8,862
+Level 2: either directly (such as price) or indirectly (such as calculated based on price) other than quoted
+prices included within Level 1 that are observable for the asset or liability. This valuation method maximizes
+the use of observable market data and minimizes the use of company's own parameters;
+410,261
+202,292
+Derivative financial assets
+1,426,677
+201,032
+916,446
+309,199
+555,666
+196,744
+358,843
+79
+debt schemes and other investments
+Wealth management investments,
+100,485
+2,519
+97,966
+Stocks
+351,183
+419,343
+220
+4,068
+144,823
+Funds
+Currency forwards and swaps
+Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. A market is regarded
+as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry
+group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring
+market transactions on an arm's length basis. The main quoted market price used for financial assets held
+by the Group is the current closing price. Financial instruments included in Level 1 comprise primarily
+equity investments, fund investments and bond investments traded on stock exchanges and open-ended
+mutual funds;
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY
+The Group's financial instruments mainly consist of cash and amounts due from banks and other financial
+institutions, term deposits, bonds, funds, stocks, loans, borrowings, deposits from other banks and financial
+institutions, customer deposits and payables to brokerage customers, etc.
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS
+The following table sets out the carrying value and fair value of the Group's major financial instruments by
+classification:
+(in RMB million)
+Financial assets
+Carrying value
+Fair value
+31 December
+31 December
+31 December
+31 December
+2021
+2020
+2021
+2020
+Cash and amounts due from banks and
+other financial institutions
+584,995
+587,391
+584,995
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+The Group uses the following hierarchy for determining and disclosing the fair value of financial
+instruments by valuation techniques:
+2,693,833
+214,987
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+318
+The fair value of fixed rate financial assets and liabilities carried at amortized cost is estimated by
+comparing market interest rates when they were first recognized with current market rates for similar
+financial instruments. The estimated fair value of fixed interest-bearing deposits is based on discounted
+cash flows using prevailing money market interest rates for financial products with similar credit risk and
+maturity. For quoted debts issued, the fair values are determined based on quoted market prices. For those
+debts issued where quoted market prices are not available, a discounted cash flow model is used based on
+a current interest rate yield curve appropriate for the remaining term to maturity and credit spreads.
+Fixed rate financial instruments
+Floating rate loans and advances to customers of the Group are repriced each year, and the interest
+rates are adjusted according to the loan prime rate announced by the PBC. Thus, the carrying amounts
+approximate to their fair value.
+For financial assets and financial liabilities that have a short-term maturity (less than three months), it is
+assumed that the carrying amounts approximate to their fair value. This assumption is also applied to term
+deposits, and savings accounts without a specific maturity. For other variable rate instruments, adjustment
+is also made to reflect the subsequent changes in the market rate after initial recognition.
+Financial assets and liabilities for which fair value approximates to carrying value
+The following describes the methodologies and assumptions used to determine fair value for those
+financial instruments which are not recorded at fair value in the financial statements, i.e., financial assets at
+amortized costs and loans and receivables.
+Fair value of financial assets and liabilities not carried at fair value
+(1) CLASSIFICATION OF FINANCIAL INSTRUMENTS (CONTINUED)
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 317
+Annual Report 2021
+The assets and liabilities of the investment-linked business are not included in the above financial assets
+and liabilities.
+899,911
+3,002,049
+1,098,380
+271,853
+7,178
+568
+116,936
+55,037
+Subtotal
+115,363
+54,672
+Financial assets purchased under reverse repurchase agreements
+1,573
+365
+Total
+Bonds
+307,812
+348,088
+61,973
+84,028
+43,390
+70,821
+165,988
+174,345
+Cash equivalents
+403,125
+424,748
+Annual Report 2021
+1,620
+Amortization of long-term deferred expenses
+Depreciation of right-of-use assets
+Depreciation of property and equipment
+Amortization of intangible assets
+Depreciation of investment properties
+187,764
+2020
+Adjustments for:
+139,580
+2021
+Profit before tax
+(in RMB million)
+(1) RECONCILIATION OF PROFIT BEFORE TAX TO NET CASH FLOWS FROM OPERATING
+ACTIVITIES:
+57. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 325
+32,647
+15,208
+3,814
+3,686
+56. CASH AND CASH EQUIVALENTS
+Assets securitization
+Repurchase transactions
+(in RMB million)
+The following table analyses the carrying amount of the above-mentioned financial assets transferred to
+third parties that did not qualify for derecognition or continuing involvement and their associated financial
+liabilities:
+Other transferred financial assets that do not qualify for derecognition mainly include debt securities
+held by counterparties as collateral under repurchase agreements. The counterparties are allowed to sell
+or repledge those securities sold under repurchase agreements in the absence of default by the Group,
+but has an obligation to return the securities at the maturity of the contract. If the securities increase or
+decrease in value, the Group may in certain circumstances require the counterparties to provide additional
+or return collateral. The Group has determined that it retains substantially all the risks and rewards of these
+securities and therefore has not derecognized them.
+55. TRANSFERRED FINANCIAL ASSETS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+324
+The Group's subsidiaries, Ping An Bank and Ping An Financial Leasing, entered into loan securitization
+transactions. The Group may retain risks or rewards in the securitization business which would give rise to
+the Group's continuing involvement in the transferred assets. Those financial assets are recognized on the
+statement of financial position to the extent of the Group's continuing involvement, otherwise the financial
+assets are derecognized.
+The Group enters into transactions in the normal course of business by which it transfers recognized
+financial assets to third parties or to structured entities. When the Group has neither transferred nor
+retained substantially all the risks and rewards of the financial asset and retained control of the asset, the
+Group continues to recognize the financial asset to the extent of the Group's continuing involvement, in
+which case, the Group also recognizes an associated liability. In other cases where the transferred financial
+assets do not qualify for derecognition as the Group has retained substantially all the risks and rewards of
+these financial assets, the Group continued to recognize the transferred financial assets.
+55. TRANSFERRED FINANCIAL ASSETS
+For the year ended 31 December 2021 and the year ended 31 December 2020, there were no significant
+transfers between Level 1 and Level 2 fair value measurements.
+Transfers
+15,660
+5,496
+10,164
+6,978
+31 December 2021
+1,341
+Carrying amount
+Carrying amount
+of associated
+liabilities
+Subtotal
+Balances with the Central Bank
+Placements with banks and other financial institutions
+Due from banks and other financial institutions
+Term deposits
+31 December
+2020
+2021
+31 December
+Cash and amounts due from banks and other financial institutions
+Cash on hand
+Cash
+(in RMB million)
+2,390
+2,237
+2,390
+2,132
+Carrying amount
+of associated
+liabilities
+Carrying amount
+of transferred
+or continuing
+involvement
+financial assets
+31 December 2020
+2,819
+2,581
+2,923
+2,581
+of transferred
+or continuing
+involvement
+financial assets
+6,718
+6,054
+3,024
+260,088
+Changes in insurance contract liabilities
+13,273
+11,238
+Changes in insurance payables
+240,766
+294,760
+Changes in customer deposits and payables to brokerage customers
+129,636
+(114,037)
+Changes in due to banks and other financial institutions
+(83,382)
+(101,248)
+Changes in other assets
+1,136
+(221)
+Changes in assets purchased under agreements to resell of
+banking and securities business
+(413,452)
+(454,989)
+296,100
+Changes in loans and advances to customers
+Changes in investment contract liabilities for policyholders
+67,339
+5,219
+312,075
+(145)
+90,116
+Net cash flows from operating activities
+Changes in income tax payable
+(38,561)
+(26,816)
+Less: Current income tax charged for the year
+345,417
+117,077
+Cash generated from operations
+(372)
+43,859
+Changes in other liabilities
+11,198
+16,037
+Changes in assets sold under agreements to repurchase of
+banking and securities business
+4,724
+3,470
+Changes in policyholder dividend payable
+56,082
+6,978
+(2,516)
+Changes in reinsurers' share of insurance liabilities
+26,436
+28,082
+Interest expenses on non-banking operations
+4,770
+22,613
+Fair value losses/(gains) on investments at fair value through
+profit or loss
+(254,526)
+(224,411)
+non-banking operations
+Investment income and interest revenue from
+(7)
+(14)
+equipment, intangible assets and other long-term assets
+Gains on disposal of investment properties, property and
+740
+539
+7,365
+6,520
+2,811
+Foreign exchange gains/(losses)
+(6,633)
+(1,267)
+Net impairment losses of financial assets and other assets
+2,251
+(1,169)
+Changes in inventories
+2,405
+(694)
+Changes in account receivable
+30,555
+(11,587)
+13,540
+Changes in premium receivables
+15,105
+(2,644)
+(6,157)
+Changes in balances with the Central Bank and statutory deposits
+Changes in amounts due from banks and other financial institutions
+Changes in operating assets and liabilities:
+59,987
+88,046
+Operating profit before working capital changes
+79,458
+105,042
+(2,219)
+78,050
+Loans and advances to customers at fair value
+through other comprehensive income
+1,399
+Transfers from Level 3
+Transfers into Level 3
+Disposals
+Additions
+As at 1 January
+2020
+2021
+(in RMB million)
+Total gains/losses
+Financial assets at fair value through profit or loss
+Financial assets and liabilities for which fair value approximates carrying value are not included in the
+above disclosure.
+899,911
+1,770
+874,817
+899,911
+1,770
+874,817
+23,324
+23,324
+Reconciliation of movements in Level 3 financial instruments measured at fair value is as follows:
+Gains through loss or profit
+As at 31 December
+198,912
+(in RMB million)
+Debt financial assets at fair value through
+other comprehensive income
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+Reconciliation of movements in Level 3 financial instruments measured at fair value is as follows (continued):
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+322
+198,912
+201,032
+7,283
+6,560
+(21,910)
+255
+5,112
+(1,231)
+(190,034)
+(193,205)
+256,778
+184,884
+146,540
+Total
+Bonds payable
+Financial liabilities
+2,680,106
+145,590
+145,590
+Level 3 Total fair value
+31 December 2021
+Level 2
+Level 1
+Total
+Bonds payable
+Financial liabilities
+Total
+Financial assets at amortized cost
+Financial assets
+(in RMB million)
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The following table shows an analysis of financial instruments not recorded at fair value but for which fair
+value is disclosed by level of the fair value hierarchy:
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 321
+Annual Report 2021
+85,796
+2,622,420
+2,622,420
+As at 1 January
+151,473
+16,765
+16,765
+2,680,106
+159,621
+159,621
+2,385,775
+134,710
+Total
+2,385,775
+134,710
+Financial assets at amortized cost
+Financial assets
+Total fair value
+Level 3
+Level 2
+Level 1
+31 December 2020
+(in RMB million)
+1,098,380
+1,098,380
+1,105
+1,105
+1,080,510
+1,080,510
+2,919,483
+151,473 2,919,483
+Purchase
+Disposals
+Issue
+Financial assets at fair value through profit or loss
+Debt financial assets at fair value through
+other comprehensive income
+(in RMB million)
+2021
+(2) DETERMINATION OF FAIR VALUE AND THE FAIR VALUE HIERARCHY (CONTINUED)
+The gains or losses of level 3 financial instruments included in the income statement for the year are
+presented as follows:
+54. CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS
+(CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 323
+Annual Report 2021
+202,088
+-
+6,978
+4,000
+(3,632,495)
+156,485
+3,671,120
+202,088
+2,481,850
+(2,687,938)
+2020
+2021
+Realized gains
+7,204
+Loans and advances to customers at fair value
+through other comprehensive income
+Unrealized gains
+(644)
+7,283
+5,496
+1,787
+Financial assets at fair value through profit or loss
+Debt financial assets at fair value through
+other comprehensive income
+Total
+Unrealized gains
+Realized gains
+(in RMB million)
+2020
+13,210
+(924)
+14,134
+4,000
+4,000
+Loans and advances to customers at fair value
+through other comprehensive income
+2,650
+(280)
+2,930
+6,560
+Total
+1,399
+(607)
+1,924
+2020
+As at 31 December
+Gains through profit or loss
+Total gains/losses
+Disposals
+Additions
+As at 1 January
+(in RMB million)
+As at 31 December
+Gains/losses through other comprehensive income
+Total gains/losses
+Disposals
+Additions
+As at 1 January
+(in RMB million)
+As at 31 December
+Gains through profit or loss
+Total gains/losses
+Transfers into Level 3
+Settlement
+2021
+2,082
+449
+2020
+25,223
+2,559
+5
+(2)
+632
+1,924
+2021
+Equity financial assets at fair value through
+other comprehensive income
+1,399
+47,652
+2,650
+59,513
+106
+965
+(519,209)
+(686,779)
+539,094
+696,323
+(25,688)
+(33,667)
+26,727
+32,369
+47,652
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+SIHC
+4,088
+906
+28
+39
+5,708
+3,913
+18
+Yao Jason Bo
+5,563
+2,353
+14
+Cai Fangfang (vi)
+2,997
+1,407
+28
+36
+23356
+72
+5,133
+3,361
+3,626
+4,618
+7
+receivable in
+of the affairs of
+respect of
+the Company or
+accepting office
+its subsidiary
+Individual
+as director
+undertaking
+Total
+income tax
+(in RMB thousand)
+Directors
+Ma Mingzhe (iii)
+Xie Yonglin (iv)
+Tan Sin Yin (v)
+2,850
+1,759
+2
+-
+received or with the management
+9,675
+7,966
+Other expenses to
+Other revenues from
+Interest expenses to
+Ping An Health
+1,828
+4,880
+Other expenses to
+3,627
+3,360
+Other revenues from
+378
+827
+Interest expenses to
+Lufax Holding
+Claims expenses to
+1
+66
+48
+1
+Ping An HealthKonnect
+7,329
+Interest expenses to
+192
+6,334
+61
+4,529
+3,127
+16
+Interest revenue from
+OneConnect
+Other expenses to
+345
+178
+399
+448
+24
+23
+2,302
+2,587
+515
+361
+159
+Other revenues from
+21
+in connection
+respect of director's
+Other non-cash movements
+Balance as at 31 December 2021
+Short-term
+borrowings
+Long-term
+borrowings
+Bonds payable
+Total
+99,482
+(4,805)
+(186)
+132,907
+(43,983)
+(338)
+894,990
+163,742
+1,127,379
+114,954
+(382)
+(906)
+15,930
+15,930
+94,491
+88,586
+1,074,280
+1,257,357
+Foreign exchange adjustments
+58. COMPENSATION OF KEY MANAGEMENT PERSONNEL
+Cash flows
+(in RMB million)
+FOLLOWS:
+(3) THE SUMMARY OF BALANCES OF THE GROUP WITH MAJOR RELATED PARTIES IS AS
+60. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+332
+1,587
+2,325
+Other expenses to
+1,558
+1,795
+Other revenues from
+28
+12
+Interest expenses to
+32
+57. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
+(CONTINUED)
+(2) NET DEBT RECONCILIATION:
+This section sets out an analysis of net debt and movements in net debt of current year.
+Balance as at 1 January 2021
+other services
+(1) KEY MANAGEMENT PERSONNEL COMPRISE THE COMPANY'S DIRECTORS, SUPERVISORS,
+SENIOR OFFICERS AND KEY PERSONNEL
+(in RMB million)
+58. 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 2021:
+2021
+Discretionary
+Housing
+Fees
+Salaries
+bonuses (ii)
+allowance
+Other
+employee
+benefits
+Employer's
+contribution to
+a retirement
+benefit scheme
+Emoluments
+received or
+receivable in
+Remunerations
+For the year ended 31 December 2021
+The summary of compensation of key management personnel for the year is as follows:
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 327
+Salaries and other short-term employee benefits after tax
+Individual income tax
+2021
+2020
+68
+46
+71
+48
+The estimated amount of total compensation has been provided in the Group's 2021 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.
+Parts of the performance-based remunerations of the Company's key management personnel will be
+deferred and paid over a period of 3 years in accordance with the Code of Corporate Governance of
+Banking and Insurance Institutions and the Guidelines for Insurance Companies' Remuneration Management
+(Trial) issued by the CBIRC. The deferred, unpaid parts are included in the total remunerations received by
+the Company's key management personnel from the Company during the Reporting Period.
+(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
+2021
+2020
+25
+25
+17
+18
+Annual Report 2021
+FINANCIAL STATEMENTS
+3
+9
+2
+759
+668
+1
+Wang Zhiliang
+946
+565
+214
+34
+Pan Zhongwu (xii)
+478
+278
+16
+15
+68
+35
+168
+40,501
+27,592
+1,431
+Sun Jianyi (xii)
+983
+Supervisors
+57
+SUN Jianyi
+CAI Fangfang
+YAO Jason Bo
+TAN Sin Yin
+XIE Yonglin
+MA Mingzhe
+Name
+(vi)
+(v)
+(iv)
+125
+Liu Hong
+488
+488
+122
+Subtotal
+4,254
+21,726
+14,209
+87
+WANG Zhiliang
+30
+889
+2,448
+Total
+5,791
+23,909
+15,720
+288
+139
+231
+46,078
+30,040
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 329
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+58. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+(i)
+Other non-monetary benefits include share purchase scheme and Long-Term Service Plan, in 2015, the Company has adopted an
+employee share purchase scheme for the key employees of the Company and its subsidiaries. In 2021, the vesting condition of the
+shares granted during the year 2018, 2019 and 2020 for attribution part of year 2021 was fulfilled. As at 11 May 2021, the shares of
+MA Mingzhe, XIE Yonglin, TAN Sin Yin, YAO Jason Bo, CAI Fangfang, SUN Jianyi and WANG Zhiliang were allocated to personal
+accounts at respective employee's request and the closing price was RMB70.28 per share and the vested shares net of tax are
+summarised as follows:
+5,577
+1,789
+63
+231
+33
+820
+223
+Zhang Wangjin
+524
+524
+96
+Gu Liji
+510
+510
+130
+Huang Baokui
+503
+503
+127
+Subtotal
+1,537
+2,183
+1,511
+52
+Shares
+219,135
+149,747
+(2) THE SUMMARY OF SIGNIFICANT MAJOR RELATED PARTY TRANSACTIONS IS AS
+60. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+Ping An Insurance (Group) Company of China, Ltd. 331
+FINANCIAL STATEMENTS
+Annual Report 2021
+As at 31 December 2021, CP Group indirectly held 6.80% (31 December 2020: 7.85%) equity interests in the
+Company and is the largest shareholder of the Company.
+Parent of shareholders
+Shareholder
+Relationship with the Company
+Charoen Pokphand Group Co., Ltd. ("CP Group")
+Shenzhen Investment Holdings Co., Ltd. (“SIHC”)
+Name of related parties
+BELOW:
+(1) SHAREHOLDERS HOLDING MORE THAN 5% OF THE COMPANY'S SHARE ARE AS SET OUT
+60. SIGNIFICANT RELATED PARTY TRANSACTIONS
+The five highest paid individuals in the Group pay individual income tax in strict accordance with the local
+tax rules. The tax rate is between 15% and 45%.
+RMB30,000,001 RMB35,000,000
+RMB35,000,001 - RMB40,000,000
+21-21
+INTI-21
+FOLLOWS:
+2020
+(in RMB million)
+Premiums income from
+10
+11
+25
+29
+10
+9
+42
+29
+22
+2020
+2021
+Rental revenue from
+Interest expenses to
+Interest revenue from
+Premiums income from
+SIHC
+Interest revenue from
+Goods sold from
+Rental revenue from
+Claims expenses to
+CP Group
+110
+2020
+2021
+(xii) PAN Zhongwu resigned as Employee Representative Supervisor on 28 August 2020, took over by SUN Jianyi and SUN Jianyi was
+appointed as the Chairman of Supervisory Committee of the Company on the same day.
+(xi) Jin Li was appointed as Independent Non-executive Director of the Company on 20 August 2021.
+(x) Ng Kong Ping Albert was appointed as Independent Non-executive Director of the Company on 20 August 2021.
+Ge Ming resigned as Independent Non-executive Director of the Company on 20 August 2021 because his six-year term of office
+expired.
+(ix)
+(viii) Huang Wei was appointed as Non-Executive Director of the Company on 20 August 2021, and tendered his resignation on 19
+November 2021 due to the change of his personal work arrangements. The resignation shall take effect upon the approval of the
+qualification of a new Director, who will be appointed to fill Mr. Huang's vacancy, from the CBIRC being obtained.
+(vii) Wang Yongjian resigned as Non-Executive Director of the Company on 23 August 2021.
+The long-term benefits attributed to year 2017 for CAI Fangfang were paid in 2020 as the required payment conditions had been
+fulfilled. The amount after tax paid to CAI Fangfang were RMB550 thousand respectively and was disclosed in the Announcement
+regarding the Resolutions of the Board of Directors of the Company dated 27 August 2020.
+TAN Sin Yin was appointed as Executive Director of the Company on 3 April 2020.
+The long-term benefits attributed to year 2017 for TAN Sin Yin were paid in 2020 as the required payment conditions had been
+fulfilled. The amount after tax paid to TAN Sin Yin were RMB825 thousand respectively and was disclosed in the Announcement
+regarding the Resolutions of the Board of Directors of the Company dated 27 August 2020.
+XIE Yonglin was appointed as Executive Director of the Company on 3 April 2020.
+MA Mingzhe is the Founder, Chairman (Executive Director) of the Company.
+Discretionary bonuses are determined on the achievement of targeted profit of the Company, the personal performance and
+approved by the board of directors.
+In 2018, the Company adopted the Long-Term Service Plan for the key employees of the Company and its subsidiaries. By the end of
+the reporting period, it has been implemented thrice, and shares of Director or Supervisor has not been vested during the years.
+6,498
+116,467
+69,766
+108,515
+118,100
+(xiii) The long-term benefits attributed to year 2017 for LEE Yuansiong were paid in 2020 as the required payment conditions had been
+fulfilled. The amount after tax paid to LEE Yuansiong were RMB605 thousand respectively and was disclosed in the Announcement
+regarding the Resolutions of the Board of Directors of the Company dated 27 August 2020.
+LEE Yuansiong resigned as Executive Director, Co-CEO and the Executive Vice President of the Company on 1 February 2020.
+(xiv) REN Huichuan resigned as Executive Director and Vice Chairman of the Company on 16 March 2020.
+(xv) LIU Chong resigned as Non-Executive Director of the Company on 15 June 2020.
+330
+RMB30,000,000
+-
+RMB25,000,001
+-
+RMB20,000,001 RMB25,000,000
+RMB15,000,001 RMB20,000,000
+RMB15,000,000
+-
+RMB10,000,001
+(in RMB million)
+RMB5,000,001 - RMB10,000,000
+106
+2021
+Salaries and other short-term employee benefits after tax
+(in RMB million)
+The total emoluments of the five highest paid individuals in the Group are as follows:
+The five individuals whose emoluments were the highest in the Group were not included in the key
+management personnel whose emoluments were reflected in Note 58.
+59. FIVE HIGHEST PAID INDIVIDUALS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+The number of five highest paid individuals in the Group whose emoluments after tax fell within the
+following bands is as follows:
+(ii)
+(iii)
+Loans and advances to customers
+employee
+benefits
+allowance
+bonuses (ii)
+Salaries
+Fees
+Housing
+Discretionary
+the Company or
+accepting
+a retirement
+Other
+of the affairs of
+in respect of
+Employer's
+contribution to
+with the management
+in connection
+received or
+receivable in
+respect of director's
+other services
+Remunerations
+received or
+receivable
+Emoluments
+benefit
+2020
+scheme
+its subsidiary
+29
+25
+1,594
+4,110
+7
+2
+1,968
+2.850
+Cai Fangfang (vi)
+Yao Jason Bo
+Tan Sin Yin (v)
+Xie Yonglin (iv)
+Ma Mingzhe (iii)
+Directors
+(in RMB thousand)
+income tax
+Total
+undertaking
+Individual
+office as
+director
+5,708
+For the year ended 31 December 2020:
+58. COMPENSATION OF KEY MANAGEMENT PERSONNEL (CONTINUED)
+510
+Huang Baokui
+94
+517
+517
+Zhang Wangjin
+132
+518
+518
+Gu Liji
+889
+1,815
+66
+18
+20
+220
+565
+946
+Wang Zhiliang
+510
+(3) DIRECTORS' AND SUPERVISORS' EMOLUMENTS (CONTINUED)
+130
+1,545
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+328
+28,889
+43,672
+271
+140
+280
+12,843
+24,282
+5,856
+Total
+4,175
+7,440
+66
+26
+222
+2,505
+3,076
+Subtotal
+5,041
+10
+5,158
+62. EMPLOYEE BENEFITS (CONTINUED)
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+334
+495
+495
+Chu Yiyun
+125
+495
+495
+Ge Ming (ix)
+96
+524
+524
+Ouyang Hui
+91
+509
+509
+Ng Sing Yip
+(4) KEY EMPLOYEE SHARE PURCHASE PLAN
+122
+The Group has adopted a Key Employee Share Purchase Plan for the key employees of the Company and
+its subsidiaries. Refer to Note 41 for more details.
+The Company has adopted a Long-term Service Plan for the employees of the Company and its
+subsidiaries. Refer to Note 42 for more details.
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+336
+Certain comparative figures have been reclassified or restated to conform to the current year's
+presentation.
+66. COMPARATIVE FIGURES
+(2) The Group has made accounting treatment on provision for impairment on assets, adjustment to
+the valuation of investments and equity method adjustment with respect to the investment assets
+related to China Fortune as of 31 December 2021. The Group made adjustments including impairment
+provisions, valuation adjustments, and equity method adjustments totaling RMB43.2 billion to
+investments related to China Fortune in 2021, including RMB15.9 billion for equity investments and
+RMB27.3 billion for debt investments.
+(1) On 29 January 2021 and 30 April 2021 respectively, the Company announced that a consortium formed
+by the Company, Zhuhai Huafa Group Co., Ltd. (representing the state-owned enterprises of Zhuhai
+Municipality) and Shenzhen SDG Co., Ltd. will participate in the substantive consolidated restructuring
+(the “Founder Group Restructuring") of Peking University Founder Group Company Limited,
+Peking University Founder Information Industry Group Co., Ltd., PKU Healthcare Industry Group
+Co., Ltd., Peking University Resources Group Limited and Founder Industry Holdings Co., Ltd. (the
+"Restructuring Entities"). Authorized by the Company, Ping An Life, participated in the substantive
+consolidated restructuring and entered into the restructuring investment agreement of the Founder
+Group Restructuring ("the Restructuring Investment Agreement"). On 5 July 2021, the Company
+announced that, The Restructuring Plan (Draft) of Five Companies including Peking University
+Founder Group Company Limited, was resolved and approved at the creditors' meeting held by the
+Restructuring Entities, and was approved by the civil order of the Court and has come into effect. On
+31 January 2022, the Company announced that, Ping An Life received the Approval in relation to Ping
+An Life Insurance Company of China, Ltd. Equity Investment in New Founder Group from the CBIRC
+(Yin Bao Jian Fu [2022] No.81) on 30 January 2022, and the CBIRC approved Ping An Life's investment
+in New Founder Group. In accordance with the terms of the Restructuring Investment Agreement
+and the selection of the debt repayment plan by the creditors of the Restructuring Entities, Ping An
+Life shall pay a consideration of approximately RMB48.2 billion to acquire approximately 66.51% equity
+interest in New Founder Holding Development Company Limited.
+65. OTHER SIGNIFICANT EVENTS
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 335
+Annual Report 2021
+On 17 March 2022, the Board of Directors of the Company approved the Resolution of the Profit Distribution
+Plan for 2021, and declared a final cash dividend of 2021 in the amount of RMB1.50 (tax inclusive) per share
+as disclosed in Note 17.
+(1) PROFIT DISTRIBUTION
+64. EVENTS AFTER THE REPORTING PERIOD
+No provision has been made for pending assessments, lawsuits or possible violations of contracts when
+the outcome cannot be reasonably estimated or management believes the probability is low or remote. For
+pending lawsuits, management also believes that any resulting liabilities will not have a material adverse
+effect on the financial position or operating results of the Group or any of its subsidiaries.
+Owing to the nature of the insurance, bank and other 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.
+63. CONTINGENT LIABILITIES
+(5) LONG-TERM SERVICE PLAN
+488
+488
+Wang Yongjian (vii)
+10,783
+4,167
+5,817
+59
+3,532
+4,827
+1222431
+5
+5
+497
+Ren Huichuan (xiv)
+384
+Lee Yuansiong (xiii)
+28
+25
+1,665
+3,019
+8
+3,941
+8,251
+25
+9,132
+6,901
+56
+229
+229
+Liu Chong (xv)
+91
+509
+509
+Soopakij Chearavanont
+93
+2,930
+517
+Yang Xiaoping
+221
+517
+10
+283
+387
+3,316
+4,784
+47
+517
+Customer deposits
+4,080
+2
+Authorized, but not contracted for
+Contracted, but not provided for (i)
+(in RMB million)
+The Group had the following capital commitments relating to investments and property development
+projects.
+(1) CAPITAL COMMITMENTS
+61. COMMITMENTS
+In addition to transactions and balances stated above, the Group transferred 100% shareholding of Gem
+Alliance Limited to Lufax Holding, which issued convertible bonds amounting to USD1,953.8 million to the
+Group as the consideration in 2016, and pay interest to the Group every six months at an annual rate of
+0.7375%. As at 31 December 2021, the Group still held these convertible bonds.
+487
+1,173
+844
+1,617
+166
+191
+705
+301
+2,002
+1,132
+Accounts receivable and other receivables
+Accounts payable and other payables
+31 December 2021
+Derivative financial assets
+31 December 2020
+7,445
+Unused limit of credit cards
+Subtotal
+Others
+Letters of credit issued
+Guarantees issued
+Bank acceptances
+(in RMB million)
+(2) CREDIT COMMITMENTS
+61. COMMITMENTS (CONTINUED)
+For the year ended 31 December 2021
+Notes to Consolidated Financial Statements
+FINANCIAL STATEMENTS
+Ping An Insurance (Group) Company of China, Ltd. 333
+Annual Report 2021
+The contracted capital commitments include investment commitment to New Founder Group, refer to Note 65 for more details.
+(i)
+11,941
+66,171
+4,496
+59,273
+6,898
+Total
+Loans and advances to customers
+OneConnect
+9,216
+8,714
+Accounts payable and other payables
+38
+Derivative financial liabilities
+548
+26
+Derivative financial assets
+14,354
+9,798
+280
+1,271
+2,127
+2020
+2021
+31 December
+31 December
+Customer deposits
+Lufax Holding
+Accounts receivable and other receivables
+Customer deposits
+661
+Ping An Health
+7,097
+6,780
+Accounts receivable and other receivables
+1,796
+232
+Accounts payable and other payables
+420
+851
+Customer deposits
+Ping An HealthKonnect
+48
+66
+Accounts receivable and other receivables
+3,903
+3,465
+Accounts payable and other payables
+7,299
+4,075
+Customer deposits
+1,374
+8
+Credit risk weighted amounts of credit commitments
+31 December 2020
+510
+Chu Yiyun
+91
+509
+509
+Ng Sing Yip
+101
+539
+539
+Ouyang Hui
+40
+199
+199
+Ng Kong Ping Albert (x)
+85
+337
+337
+Ge Ming (ix)
+51
+510
+189
+130
+488
+1,940
+2,130
+Sun Jianyi (xii)
+Supervisors
+24,714
+36,232
+205
+114
+58
+10,338
+21,206
+4,311
+Subtotal
+51
+189
+189
+Jin Li (xi)
+122
+488
+Liu Hong
+31 December 2021
+189
+79
+(in RMB million)
+The Group's investment commitments to joint ventures are as follows:
+(3) INVESTMENT COMMITMENTS
+Credit commitments disclosed in the table above do not include the financial guarantees accounted for as
+insurance contracts by the Group.
+348,043
+431,405
+1,242,864
+1,561,207
+689,305
+818,628
+553,559
+742,579
+341
+61,644
+82,616
+66,869
+99,355
+408,958
+576,355
+Contracted but not provided for
+Huang Wei (viii)
+31 December 2021
+15,810
+318
+318
+Wang Yongjian (vii)
+96
+524
+524
+Yang Xiaoping
+91
+509
+31 December 2020
+509
+The Group makes monthly contributions for medical benefits to the local authorities in accordance with
+relevant local regulations for the employees. The Group's liability in respect of employee medical benefits is
+limited to the contributions payable in each period.
+(3) MEDICAL BENEFITS
+The employees of the Group are entitled to participate in and make contributions to various government
+sponsored funds for housing purposes. The Group contributes on a monthly basis to these funds based
+on certain percentages of the salaries of the employees. The Group's liability in respect of these funds is
+limited to the contributions payable in each period.
+(2) HOUSING BENEFITS
+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
+62. EMPLOYEE BENEFITS
+66,759
+Soopakij Chearavanont
+LOCATION OF REGULAR REPORTS AVAILABLE
+FOR INSPECTION
+Board Office of the Company
+Quarry Bay, Hong Kong
+(1) STATEMENT OF FINANCIAL POSITION OF THE COMPANY:
+Ping An Bank Co., Ltd., a subsidiary of the Company
+Shenzhen Development Bank Co., Ltd., an associate of the Company
+since May 2010, became a subsidiary of the Company in July 2011. It
+was renamed "Ping An Bank Co., Ltd." on July 27, 2012.
+Ping An Trust Co., Ltd., a subsidiary of the Company
+Shenzhen Ping An New Capital Investment Co., Ltd., a subsidiary of
+Ping An Trust
+Ping An Securities Co., Ltd., a subsidiary of Ping An Trust
+Ping An Futures Co., Ltd., a subsidiary of Ping An Securities
+Ping An Caizhi Investment Management Company Limited, a
+subsidiary of Ping An Securities
+Ping An Pioneer Capital Co., Ltd., a subsidiary of Ping An Securities
+Ping An International Financial Leasing Co., Ltd., a subsidiary of the
+Company
+Ping An Asset Management Co., Ltd., a subsidiary of the Company
+China Ping An Insurance Overseas (Holdings) Limited, a subsidiary
+of the Company
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 341
+OTHER INFORMATION
+Glossary
+Ping An Technology
+Ping An Financial Services
+Lufax Holding
+Lufax
+E-wallet
+Ping An Health
+OneConnect
+Autohome
+Ping An Property & Casualty Insurance Company of China, Ltd., a
+subsidiary of the Company
+Ping An Annuity Insurance Company of China, Ltd., a subsidiary of
+the Company
+Ping An Health Insurance Company of China, Ltd., a subsidiary of the
+Company
+Ping An Life Insurance Company of China, Ltd., a subsidiary of the
+Company
+264,895
+120,592
+395
+2
+(38,241)
+108
+12,164
+2,826
+181
+108
+2
+128,737
+(38,241)
+Shanghai Jahwa
+27
+9
+58,680
+244,319
+67. STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE
+COMPANY
+Ping An Futures
+Ping An Caizhi
+Ping An Pioneer Capital
+Ping An Financial Leasing
+Ping An Asset Management
+Ping An Overseas Holdings
+Ping An Insurance (Group) Company of China, Ltd.
+18
+CP Group Ltd.
+RMB
+CAS
+Model Code
+Articles of Association
+PBC
+Ministry of Finance
+CBIRC
+CSRC
+The Stock Exchange of Hong Kong Limited
+The Rules Governing the Listing of Securities on The Stock Exchange
+of Hong Kong Limited
+Shanghai Stock Exchange
+The Rules Governing the Listing of Stocks on Shanghai Stock
+Exchange
+The Corporate Governance Code as contained in Appendix 14 to the
+HKEX Listing Rules
+SFO
+The Securities and Futures Ordinance (Chapter 571 of the Laws of
+Hong Kong)
+The Articles of Association of Ping An Insurance (Group) Company
+of China, Ltd.
+The People's Bank of China
+The Ministry of Finance of the People's Republic of China
+China Banking and Insurance Regulatory Commission
+China Securities Regulatory Commission
+Ping An Insurance (Group) Company of China, Ltd. 343
+OTHER INFORMATION
+Corporate Information
+REGISTERED NAMES
+Full name of the Company (Chinese/English)
+中國平安保險(集團)股份有限公司
+Ping An Insurance (Group) Company of China, Ltd.
+The Model Code for Securities Transactions by Directors of Listed
+Companies as contained in Appendix 10 to the HKEX Listing Rules
+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.
+Corporate Governance Code
+SSE
+IFRS
+Written premium
+Shenzhen Ping An Financial Technology Consulting Co., Ltd., a
+subsidiary of the Company
+Ping An Technology (Shenzhen) Co., Ltd., a subsidiary of Ping An
+Financial Technology
+Shenzhen Ping An Financial Services Co., Ltd., a subsidiary of Ping
+An Financial Technology
+Lufax Holding Ltd., an associate of Ping An Financial Technology
+Shanghai Lufax Information Technology Co., Ltd., a subsidiary of
+Lufax Holding
+Ping An E-wallet Electronic Commerce Co., Ltd., a subsidiary of Ping
+An Financial Technology
+Ping An Healthcare and Technology Company Limited, an associate
+of Ping An Financial Technology
+OneConnect Financial Technology Co., Ltd., an associate of Ping An
+Financial Technology
+Autohome Inc., a subsidiary of the Company
+SSE Listing Rules
+Shanghai Jahwa United Co., Ltd., a subsidiary of Ping An Life
+Chinese Renminbi unless otherwise specified
+The Accounting Standards for Business Enterprises and other
+relevant regulations issued by the Ministry of Finance of the People's
+Republic of China
+International Financial Reporting Standards issued by the
+International Accounting Standards Board
+Ping An Securities
+All premiums received from the polices underwritten by the
+Company, which are prior to the significant insurance risk testing
+and separating of hybrid risk contracts
+342
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+HKEX
+HKEX Listing Rules
+Charoen Pokphand Group Company Limited, the flagship company
+of CP Group
+Short name of the Company (Chinese/English)
+中國平安
+In accordance with the relevant regulations, the net profit after tax of the Company for profit distribution
+is deemed to be the lower of (i) the retained profits determined in accordance with PRC Accounting
+Standards and (ii) the retained profits determined in accordance with IFRSS.
+Annual Report 2021
+The 11th China Charity Award
+CORPORATE SOCIAL RESPONSIBILITY
+■Ministry of Civil Affairs
+Directors Of The Year Award in the Category
+of Listed Companies Executive Directors - Ma
+Mingzhe
+Directors Of The Year Award in the Category of
+Listed Companies Boards
+The Hong Kong Institute of Directors
+Most Outstanding Company in China - Insurance
+Sector
+■ Asiamoney
+Best CEO Xie Yonglin, Tan Sin Yin and Yao
+Jason Bo
+Best ESG
+Best IR Program
+Most Respected Enterprise in Asia
+■Institutional Investor
+CORPORATE GOVERNANCE
+Ranked No. 6 on the Forbes Global 2000 list, again
+No. 1 among global insurance conglomerates, and
+again No. 1 among Chinese insurers
+■ Forbes
+Ranked No. 4 on the Fortune China 500 list, again.
+No. 1 among Chinese insurers, and again No. 1
+among Chinese non-state-owned enterprises
+■ Fortune China
+Ranked No. 16 on the Fortune Global 500 list, and
+No. 2 among global financial services companies
+■ Fortune
+CORPORATE STRENGTH
+In 2021, Ping An maintained its leading brand value, received
+wide recognition and praise, and won various honors and
+awards from domestic and foreign rating agencies and
+media in respect of comprehensive strength, corporate
+governance, corporate social responsibility, and so on.
+Honors and Awards
+OTHER INFORMATION
+■Capital Philanthropy Federation
+The 3rd Capital Philanthropy Award
+■The Asset
+Insurance Company of the Year, ESG, China
+■ The Economic Observer
+CONSULTING ACTUARIES
+Ping An New Capital
+Ping An Trust
+SDB, Shenzhen Development Bank
+Ping An Bank
+Ping An Property & Casualty
+Ping An Annuity
+Ping An Health Insurance
+Ping An Life
+Ping An, Company, the Company,
+Group, the Group, Ping An Group
+In this Report, unless the context otherwise indicates, the following expressions shall have the following
+meanings:
+Ping An Insurance (Group) Company of China, Ltd. 339
+Glossary
+Annual Report 2021
+340
+Ranked No. 1 on the Brand Finance Insurance 100
+2021 list
+Brand Finance
+Ranked No. 6 on the Brand ZTM Top 100 Most
+Valuable Chinese Brands list, again No. 1 among
+Chinese insurance brands
+Ranked No. 49 on the Brand ZTM Top 100 Most
+Valuable Global Brands list, again No. 1 among
+global insurance brands
+■Millward Brown & WPP
+BRAND
+Best CSR Report of the Year
+■Southern Weekly
+Most Respected Enterprise in China for 20
+consecutive years
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Ping An built a closed loop of supply, demand and payment by exploring an
+innovative "HMO + family doctor + 020" managed care model to provide
+customers with "worry-free, time-saving, and money-saving" healthcare services.
+Implementing healthcare
+ecosystem strategy
+H-share listing
+2004
+Founding of
+the Group
+2003
+Stake acquired
+by HSBC
+2002
++
+1996
+1995
+Foreign investors
+1994
+2007
+Expanding
+nationwide
+Founding of the
+Company
+1988
+Ping An acquired ICBC Pearl River Delta Financial Trust Joint Company, which
+was then renamed Ping An Trust & Investment Company.
+Ping An made a breakthrough in non-insurance financial business by
+establishing Ping An Securities Co., Ltd.
+Founding of Ping An
+Trust & Investment
+Founding of
+Ping An Securities
+Ping An brought on board Morgan Stanley and Goldman Sachs as its
+shareholders, becoming the first financial institution in China to have foreign
+investors.
+The Company was renamed Ping An Insurance Company of China,
+becoming a national insurance company.
+Ping An Insurance Company was established as the first joint-stock insurance
+company in China.
+Ping An Milestones
+Ping An Insurance (Group) Company of China, Ltd.
+1992
+338
+A-share listing
+Acquiring SDB
+2021
+Ping An fought the global pandemic COVID-19 promptly by providing insurance
+protection, healthtech, and charitable donations.
+Fighting COVID-19
+2020
+OneConnect completed its initial public offering on the New York Stock
+Exchange, being the first U.S.-listed technology company incubated by Ping An.
+OneConnect's listing
+2019
+In response to the government's call for poverty alleviation, Ping An launched
+the Ping An Rural Communities Support (covering village officers, doctors and
+teachers) in nine provinces or autonomous regions across China at its 30th
+anniversary.
+Ping An Rural
+Communities Support
+2018 +
+Ping An hit a record high with a market cap of over RMB1 trillion, ranking first
+among insurance groups and becoming one of the top 10 financial services
+groups across the world. Ping An's brand value ranked first in the global
+insurance industry in several international ratings.
+2011
+Market cap exceeded
+RMB1 trillion
+Lufax was established as Ping An began to build its technology business.
+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.
+Ping An Group was listed on the Shanghai Stock Exchange, which was the
+world's largest IPO of an insurance company by then.
+Ping An Group enhanced its capital strength by going public in Hong Kong,
+which was the largest IPO in Hong Kong that year.
+Ping An Insurance (Group) Company of China, Ltd. was established, becoming
+a pilot company for integrated operations in China's financial industry.
+HSBC Group took a stake in Ping An, becoming its single largest shareholder.
+2017
+Record high
+premium
+2016
+Lufax
+2012
+Ping An Life's written premium exceeded RMB300 billion, and new business
+premium exceeded RMB100 billion.
+Ping An
+Ping An Financial Technology
+Ma Mingzhe
+108,854
+120,592
+261,722
+277,180
+Retained profits
+Total equity
+Liabilities
+Due to banks and other financial institutions
+Assets sold under agreements to repurchase
+Income tax payable
+Lease liabilities
+(5,995)
+Other liabilities
+Total equity and liabilities
+17,081
+12,725
+210
+28
+25
+91
+183
+1,159
+1,035
+18,359
+Total liabilities
+14,178
+(9,895)
+144,483
+31 December 2020
+32,706
+28,159
+4,786
+70
+6,460
+9,638
+1,036
+2,903
+219,972
+926
+144,303
+38
+87
+10,165
+280,081
+6,525
+219,175
+108,854 253,337
+603
+44
+1,010
+179
+25,955
+291,358
+18,280
+18,280
+1,002
+280,081
+291,358
+The statement of financial position of the Company was approved by the Board of Directors on 17 March
+2022 and was signed on its behalf.
+For the year ended 31 December 2021
+Financial
+assets at
+Share
+premium
+FVOCI
+reserves
+Others
+Surplus
+reserve
+fund
+General
+reserve
+Retained
+profits
+Total
+128,737
+181
+As at 31 December
+2,826
+395
+120,592
+29,731
+30
+5
+(41,469)
+144
+1
+395
+1
+264,895
+29,731
+35
+(41,469)
+144
+12,164
+2,976
+12,164
+Others
+Employee Share Purchase Plan
+Dividend declared
+MA Mingzhe
+Director
+XIE Yonglin
+Director
+YAO Jason Bo
+Director
+LEGAL REPRESENTATIVE
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 337
+FINANCIAL STATEMENTS
+Notes to Consolidated Financial Statements
+For the year ended 31 December 2021
+67. STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE
+COMPANY (CONTINUED)
+(2) RESERVE MOVEMENT OF THE COMPANY:
+(in RMB million)
+As at 1 January
+Profit for the year
+Other comprehensive income
+Dividend declared
+Employee Share Purchase Plan
+Others
+As at 31 December
+(in RMB million)
+As at 1 January
+Profit for the year
+Other comprehensive income
+31 December 2021
+Treasury shares
+Reserves
+Share capital
+No.5033 Yitian Road
+Futian District
+Shenzhen
+PLACE OF BUSINESS
+47th, 48th, 108th, 109th, 110th, 111th, 112th Floors
+Ping An Finance Center
+No.5033 Yitian Road
+Futian District
+Shenzhen
+POSTAL CODE
+518033
+Ping An Finance Center
+COMPANY WEBSITE
+DESIGNATED MEDIA FOR A-SHARE INFORMATION
+DISCLOSURE
+China Securities Journal
+Shanghai Securities News
+Securities Times and Securities Daily
+WEBSITES FOR PUBLICATION OF REGULAR
+REPORTS
+www.sse.com.cn
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+344
+The Bank of New York Mellon
+www.pingan.cn
+47th, 48th, 109th, 110th, 111th, 112th Floors
+REGISTERED ADDRESS
+PR@pingan.com.cn
+TYPES OF SECURITIES AND LISTING PLACES
+A share The Shanghai Stock Exchange
+H share The Stock Exchange of Hong Kong Limited
+STOCK SHORT NAMES AND CODES
+A share 中國平安
+H share
+Ping An
+601318
+2318
+AUTHORIZED REPRESENTATIVES
+Yao Jason Bo
+Sheng Ruisheng
+SECRETARY OF THE BOARD OF DIRECTORS
+Sheng Ruisheng
+JOINT COMPANY SECRETARIES
+Sheng Ruisheng
+Kan Ka Ho Danny
+REPRESENTATIVE OF SECURITIES AFFAIRS
+Shen Xiaoxiao
+TELEPHONE
++86 400 8866 338
+FAX
++86 755 8243 1029
+E-MAIL
+IR@pingan.com.cn
+AMERICAN DEPOSITARY SHARES REGISTRAR
+211
+Wan Chai, Hong Kong
+17M Floor, Hopewell Centre
+183 Queen's Road East
+General
+reserve
+Surplus
+reserve
+fund
+Others
+FVOCI
+reserves
+Share
+premium
+Financial
+assets at
+For the year ended 31 December 2020
+Cash and amounts due from banks and other financial institutions
+Financial assets purchased under reverse repurchase agreements
+Financial assets at fair value through profit or loss
+Financial assets at amortized cost
+Debt financial assets at fair value through other
+comprehensive income
+Investments in subsidiaries and associates
+Investment properties
+Property and equipment
+Intangible assets
+Right-of-use assets
+Other assets
+Total assets
+Equity and liabilities
+Equity
+Total
+128,737
+Retained
+profits
+2,698
+Computershare Hong Kong Investor Services Limited
+H SHARE REGISTRAR
+Central, Hong Kong
+8 Connaught Place
+25th Floor, Three Exchange Square
+DLA Piper Hong Kong
+LEGAL ADVISOR
+(in RMB million)
+Assets
+www.hkexnews.hk
+979 King's Road
+27/F, One Taikoo Place
+Ernst & Young
+International Auditor
+172
+128,737
+Names of Certified Public Accountants
+HUANG YUEDONG
+WU Cuirong
+Dongcheng District, Beijing, P.R. China
+Level 16, Ernst & Young Tower, Oriental Plaza,
+No.1 East Changan Avenue,
+Ernst & Young Hua Ming LLP
+AUDITORS AND PLACES OF BUSINESS
+Domestic Auditor
+Ernst & Young (China) Advisory Limited
+100,153
+58,680
+395
+12,164
+Notes: (1) Return on net worth is the investment return on
+shareholder equity based on the EV long-run
+investment return assumption (5%).
+1.1
+(81,583)
+(82,488)
+Lapse variances and others
+Closing residual margin
+(29,373)
+2.7
+1,808.4
+2021
+Retail business
+New business
+(in RMB million)
+The written premium of Life & Health is analyzed
+below by policyholder type and channel:
+Written Premium
+2021
+(in RMB million)
+Life & Health's net profit for 2021 decreased 37.2%
+year on year mainly due to impairment provisions,
+valuation adjustments, and other equity adjustments
+made to investment assets, slower new business
+growth, and fluctuating policy persistency ratios.
+Income Statement of Life & Health
+INFORMATION
+OTHER MAJOR FINANCIAL AND REGULATORY
+599,432
+2020
+2020
+567,281
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+50
+30
+(5) Figures may not match the calculation due to rounding.
+(4) For details of the Regulatory Rules on Solvency of Insurance Companies (II), please refer to the section headed "Liquidity and
+Capital Resources."
+(3) For details of subsidiaries' solvency margin, please visit the Company's website (www.pingan.cn).
+(2) The minimum regulatory requirements for the core solvency margin ratio and comprehensive solvency margin ratio are 50%
+and 100% respectively.
+Notes: (1) Core solvency margin ratio = core capital / minimum capital. Comprehensive solvency margin ratio = actual capital / minimum
+capital.
+-3.8 pps
+209.2
+205.4
+Written premium
+-42.7 pps
+544,790
+127,776
+Release of residual margin
+out from universal life
+8,004
+10,493
+Including: Regular premium
+Less: Premium deposits separated
+(3,144)
+(3,060)
+insurance risk transfer
+23,408
+24,976
+others
+Telemarketing, internet and
+573,607
+policies without significant
+7,949
+7,956
+Including: Regular premium
+9,197
+9,291
+Bancassurance channel
+82,279
+77,926
+Including: Regular premium
+99,417
+93,509
+Agent channel
+132,022
+Less: Premium deposits of
+(1,539)
+237.0
+-11.4 pps
+4,307
+(11.8)
+13,119
+11,568
+(1.9)
+1,046,787
+1,026,410
+Core capital
+Change (%)
+Ping An Health Insurance
+December December
+31, 2020
+31, 2021
+Change (%)
+Ping An Annuity
+December
+31, 2020
+3,070
+December
+31, 2021
+Ping An Life
+December
+31, 2020
+31, 2021
+(in RMB million)
+December
+Solvency margin ratios of Ping An Life, Ping An Annuity, and Ping An Health Insurance met regulatory
+requirements as of December 31, 2021. The solvency margin ratios of Ping An Life, Ping An Annuity,
+and Ping An Health Insurance changed from the beginning of 2021 mainly due to net profit, dividend
+distribution, and business development.
+SOLVENCY MARGIN
+(3) Figures may not match the calculation due to rounding.
+Figures may not match the calculation due to rounding.
+Note:
+(2) Spread income is the expected investment return from
+assets backing contract liability based on the EV long-
+run investment return assumption (5%) exceeding the
+interest required on contract liability.
+(2.0)
+960,183
+940,733
+Change (%)
+194.3
+40.3
+Minimum capital
+241.8
+230.4
+ratio (%)
+Comprehensive solvency margin
+-3.8 pps
+209.2
+205.4
+-42.7 pps
+237.0
+194.3
+-10.8 pps
+236.8
+226.0
+Actual capital
+Core solvency margin ratio (%)
+1,467
+2,097
+7.6
+5,535
+5,955
+40.3
+3,070
+4,307
+(11.8)
+13,119
+11,568
+(2.1)
+1,046,410 1,068,787
+454,175 442,031
+42.9
+(37.2)
+Agents,
+60,303
+bancassurance
+17,782
+185
+Agents,
+bancassurance
+16,509
+558
+Renewed business
+bancassurance
+16,339
+149
+Agents,
+bancassurance
+16,019
+Agents,
+420
+bancassurance
+14,743
+428
+28
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+TECHNOLOGY-DRIVEN TRANSFORMATION
+Ping An Life advanced its digital transformation
+and innovative technology application solutions
+in marketing, services, and risk management to
+empower business development.
+In respect of digital marketing, Ping An Life
+created the innovative "Al Customer Visit
+Assistant" online-merge-offline sales model.
+The online customer visit function, which
+enabled agents to conduct simultaneous online
+interactions among 300 persons, facilitated
+more than 70,000 online product presentation/
+entrepreneurship seminars in 2021. The offline
+customer visit function enabled Al-assisted
+audio and video explanations as well as
+insurance and disease tips. The "Al Customer
+Visit Assistant" facilitated a monthly average of
+over 150,000 hours of interactions with existing
+and potential customers, more than triple that
+in 2020. Over 120,000 policies were issued with
+the assistance of Al. Moreover, Ping An Life
+launched the AI Short Video Maker to assist
+agents in creating personal IPs and operating
+private domain traffic. More than 500,000
+short videos were produced in 2021, covering
+topics related to insurance knowledge, wealth
+management, and healthy lifestyles. In addition,
+Ping An Life rolled out smart morning briefing
+management in branches across the country,
+improving the efficiency of agent management
+through facial recognition-based, Al-enabled
+attendance management.
+In respect of digital services, Ping An Life
+continued to improve services by leveraging
+big data, Al and other technologies. Ping An
+Life's "Jin Guan Jia" app had nearly 270 million
+registered users as of December 31, 2021.
+Leveraging big data-based precise profiling,
+Ping An Life provided over 17.60 million
+customers with personalized benefit services
+over 57 million times in 2021. The Al Video
+Robot facilitated nearly 80% of surveys on new
+contracts, up 20 pps year on year. The "Smart
+Advance Claims Payment" service relieved the
+financial pressure on eligible customers by
+paying over RMB1.7 billion for over 42,000 cases
+in advance in 2021.
+In respect of digital risk management, Ping
+An Life applied technologies including OCR,
+NLP and machine learning to information
+identification and case review in the
+underwriting and claims review processes. With
+these engines and technologies, Ping An Life
+can identify underwriting risks related to nearly
+1,600 common diseases, and review medical
+insurance claims against over 1,500 diseases.
+The underwriting efficiency has increased
+nearly 30%, and the claim settlement efficiency
+has risen nearly 20%, compared with the
+traditional model.
+ANALYSIS OF OPERATING PROFIT AND PROFIT
+SOURCES
+Operating profit is a meaningful business
+performance evaluation metric given the long-
+term nature of our major life and health insurance
+business. We define operating profit after tax as
+reported net profit excluding the following items
+which are of short-term, volatile or one-off nature:
+Note:
+Agents,
+income Surrender
+Premium
+Sales channel
+Annual Report 2021
+MANAGEMENT DISCUSSION AND ANALYSIS
+Protection products: Ping An Life rebuilt its
+critical illness insurance offerings by taking the
+opportunity of critical illness definition revision,
+and offered products in areas including whole
+life insurance and other protection products.
+Regarding critical illness insurance, Ping
+An Life rolled out new products that meet
+diverse customer demands. For high-end
+customers, Ping An Life launched "Yu Xiang
+Fu," a modularized high-end critical illness
+insurance product. For mid-range and high-
+end customers, Ping An Life launched "Ping
+An Liu Fu," a critical illness insurance product
+allowing multiple claims settlements, and
+"Sheng Shi Fu" which offers enhanced benefits.
+For mass customers, Ping An Life launched
+"
+'Jia Hu Critical Illness," a term critical illness
+insurance product meeting mass customers'
+demand for cost-effective insurance. Regarding
+other protections, Ping An Life promoted "Yi
+Xiang Shi Jia," a whole life insurance product
+targeting high-end customers' demand for
+wealth inheritance, and upgraded "An Yue Ding
+Shou," a term life insurance product meeting
+younger customers' demand for large sums
+insured in certain periods.
+Savings products: Ping An Life diversified
+its savings product mix to meet the
+demand for savings products. Customers'
+increasing demand for stable and safe wealth
+management products after the pandemic
+highlighted the safety of insurance products.
+Responding to this, Ping An Life launched mid-
+range savings products that cover a wide range
+of customer segments. In the context of aging,
+Ping An Life constantly optimized the design
+of annuity products and further expanded the
+elderly customer base by developing targeted
+pension products, providing elderly customers
+with better savings product solutions.
+Moreover, Ping An Life designed and launched
+an innovative "dual insureds" product to extend
+wealth growth and realize smarter wealth
+inheritance.
+Services: Ping An Life capitalized on the
+Group's healthcare ecosystem to offer
+heartwarming services to insurance customers.
+Services brought more customers to Ping An
+Life and helped improve customer retention.
+"Insurance + health management": Ping An
+provided a comprehensive health management
+solution that incorporates front-end health
+management, mid-end professional protection,
+and back-end effective problem solving
+based on customer needs, setting a new
+industry benchmark. Ping An Life launched
+Ping An Zhen Xiang RUN in February 2021
+and has embedded the plan in major critical
+illness products to provide customers with
+12 comprehensive, heartwarming core health
+management service items covering scenarios
+including health management, chronic disease
+management, and disease diagnosis/treatment.
+Ping An Zhen Xiang RUN contains three
+different levels of services, namely Le Xiang
+RUN, Zun Xiang RUN, and Zun Xiang RUN
+PLUS, to meet diverse customer demands. Ping
+An Life further upgraded Ping An Zhen Xiang
+RUN in the third quarter of 2021 to provide
+customers with "worry-free, time-saving, and
+money-saving" health service experience. Ping
+An Zhen Xiang RUN covered over 20 million
+critical illness insurance customers of Ping An
+Life as of December 31, 2021.
+"Insurance + high-end eldercare": Ping An
+is committed to developing the high-end
+eldercare market and realizing "Expertise
+brings premium eldercare." Ping An launched
+the "Ping An High-end Eldercare 2.0" with
+a refreshed service system and targeted
+eldercare solutions in the third quarter of 2021
+to address common customer pain points in
+eldercare. Going forward, Ping An aims to fully
+satisfy the needs of the elderly and meet their
+demands for high-quality eldercare services by
+providing "prime life, exclusive services, and
+respectful care."
+Ping An Insurance (Group) Company of China, Ltd. 27
+Business Analysis
+Life and Health Insurance Business
+"Insurance + home-based eldercare": The
+Chinese people are increasingly aware of health
+management and life quality due to China's
+aging population, presenting a huge home-
+based eldercare market and great development
+opportunities for home-based eldercare
+services. By leveraging the Group's "finance +
+healthcare" ecosystem, Ping An will speed up
+the consolidation of ten eldercare scenarios
+including medical care, nursing, wealth
+management, and health preservation to build.
+the No. 1 home-based eldercare brand in China.
+Ping An will create a closed loop of online-
+merge-offline "lifelong concierge + eldercare
+services" through a one-stop service platform
+covering the entire life cycles of customers.
+Ping An provides customers with home-based
+eldercare services featuring "comfortable old
+people, worry-free offspring, and whole-hearted
+concierges."
+Healthcare services bring customers to Ping
+An Life and increase customer retention. The
+number of Ping An Life's active healthcare
+service users was around 49.80 million as of
+December 31, 2021, 37% of whom had become
+Ping An Life's customers, showing a steadily
+growing scale. Nearly 30% of Ping An Life's
+customers acquired in 2021 were from active
+healthcare service users, and the proportion
+has increased year by year. Moreover, Ping
+An enhanced customer retention and value
+through its healthcare services. Nearly 30%
+of Ping An Life's customers have used Ping
+An's healthcare services, and the proportion
+has increased year by year. The premium and
+up-selling rate per capita of customers who
+actively used the healthcare services were 1.4
+times and 2.4 times those of customers who did
+not use these services respectively, indicating
+significant contributions to customer value.
+Note: Active healthcare service users are those of the registered
+users of Ping An Life's "Jin Guan Jia" app who also used
+healthcare services. Ping An Life's customers are based on
+holders of in-force policies rather than policy beneficiaries.
+13-month persistency ratio improved by 0.8 pps year
+on year to 86.3% in 2021. Going forward, Ping An
+Life will continue to leverage technology to provide
+ex ante services for customers facing difficulties
+in policy renewal, and offer precise policy renewal
+services to enhance the efficiency of renewal
+premium collection.
+2021
+Insurance
+Ping An Caifu
+Jinrui (20)
+Annuity
+Insurance
+Ping An Jinrui
+Rensheng
+(20) Annuity
+Insurance
+Ping An Jinrui
+Rensheng
+(2021) Annuity
+Insurance
+Ping An Jinrui
+Rensheng
+Annuity
+Insurance
+Ping An Caifu
+Jinrui (2021)
+Annuity
+(in RMB million)
+Operation information of insurance products
+The following table lists the top five insurance
+products of Ping An Life by premium income in 2021.
+(2.8)
+80.9
+Short-term investment variance, which is the
+variance between the actual investment return
+of Life & Health and the EV long-run investment
+return assumption, net of the associated impact
+on insurance and investment contract liability.
+The investment return of Life & Health is locked
+at 5% after excluding the short-term investment
+variance;
+78.1
+85.5
+86.3
+13-month persistency ratio (%)
+25-month persistency ratio (%)
+Ping An Life
+Change
+(pps)
+2020
+0.8
+96,072
+The impact of discount rate (1) change is the
+effect on insurance contract liability of Life &
+Health due to changes in the discount rate; and
+(1) Refer to the significant accounting policies in the
+notes of the Company's 2021 Annual Report for the
+information about the discount rate.
+Residual margin of Life & Health was RMB940,733
+million as of December 31, 2021, down 2.0% from
+the beginning of 2021, mainly due to adverse lapse
+variance arising from the gradual lapse of customers
+who stopped paying premiums.
+variance (H)
+(23,491)
+10,308
+N/A
+(in RMB million)
+2021
+2020
+Change (%)
+Impact of discount rate change
+(I)
+(13,281)
+(7,902)
+68.1
+Operating variances and others increased 61.4%
+year on year, largely because the increase of long-
+term life insurance policyholders' reserve reduced
+the year-on-year base for operating variances and
+others as the result of significant adjustments of
+non-economic assumptions in 2020. The positive
+operating variances and others in 2021 reflected the
+better-than-assumed operating experience.
+Impact of one-off material
+960,183
+918,416
+4.5
+non-operating items and
+others (J)
+business
+55,905
+88,571
+(36.9)
+N/A
+Expected interest growth
+36,505
+36,319
+0.5
+Net profit (K=G+H+I+J)
+Opening residual margin
+Contribution from new
+Short-term investment
+3.6
+93,666
+The operating profit after tax which excludes
+fluctuations of the above non-operating items can
+provide a clearer and more objective representation
+of the Company's business performance and trend.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 29
+Business Analysis
+Life and Health Insurance Business
+(in RMB million)
+2021
+2020 Change (%)
+Release of residual margin (A)
+82,488
+81,583
+Return on net worth (1) (B)
+14,567
+13,170
+Spread income (2) (C)
+4,823
+4,565
+97,075
+(G=E+F)
+Operating profit after tax
+5.2
+19.3
+109,314 103,926
+(12,239) (10,260)
+Income tax (F)
+The impact of one-off material non-operating
+items and others is the impact of material
+items that management considered to be non-
+operating incomes and expenses.
+(E=A+B+C+D)
+61.4
+4,607
+7,436
+others (D)
+Operating variances and
+1.1
+10.6
+5.6
+Operating profit before tax
+417,014
+gradual nationwide unification of urban and rural
+standards for personal injury benefits. Ping An
+P&C took targeted measures to manage risks. The
+combined ratio of Ping An P&C's liability insurance
+business stood at 105.1% in 2021. Going forward,
+supported by technologies, Ping An P&C will
+pursue healthy development of liability insurance
+by optimizing business processes, improving risk
+management, and strengthening risk screening.
+and investment-linked
+assets
+(24,447)
+(535)
+Taxes and surcharges
+1,171
+1,050
+Impairment losses on receivables
+and others
+Total investment income
+131,286
+182,530
+45
+199
+Total
+48,342
+49,419
+Net investment yield (3)(%)
+Total investment yield (³) (%)
+4.6
+5.1
+4.0
+6.2
+Total Investment Income
+Life & Health's investment yield decreased in 2021
+due to volatile capital markets, falling interest
+rates, and increased impairment provisions. The net
+investment yield was 4.6%, and the total investment
+yield was 4.0%.
+Notes: (1) Net investment income includes interest revenue from
+deposits and debt financial assets, dividend income
+from equity financial assets, operating lease income
+from investment properties, and the share of profits
+and losses of associates and joint ventures.
+Impairment losses on investment
+48,170
+47,126
+Operating expenses
+65,156
+Note:
+(1) Surrender rate = surrender / (opening balance of life
+insurance reserve + opening balance of long-term
+health insurance reserve + long-term insurance premium
+income).
+32
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Administrative Expenses
+Administrative expenses for 2021 decreased 2.2%
+year on year.
+(in RMB million)
+2021
+(2) Realized gains include realized capital gains from
+securities investments.
+2020
+151,454
+148,990
+Realized gains (2)
+14,594
+40,583
+(in RMB million)
+2021
+2020
+Fair value gains or losses
+(10,315)
+(6,508)
+Net investment income (1)
+(3) Average investment assets used as the denominator are
+computed in line with principles of the Modified Dietz
+method.
+Income Tax
+Income tax declined year on year largely due to the
+combined impact of taxable income and deferred
+income tax.
+(5.5)
+253,017
+3.0
+Claim expenses
+Commission expenses of
+insurance operations
+Administrative expenses (1)
+Reinsurance commission
+(174,663) (153,302)
+13.9
+(32,039) (40,704)
+(21.3)
+(53,179)
+(62,394)
+(14.8)
+285,854
+4,527
+(17.3)
+Underwriting profit
+5,136
+2,090
+145.7
+Key Indicators
+Combined ratio (%)
+98.0
+99.1
+-1.1 pps
+(in RMB million)
+5,473
+52,277
+270,043
+260,490
+2020
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 33
+MANAGEMENT DISCUSSION AND ANALYSIS
+34
+Business Analysis
+Property and Casualty Insurance Business
+Ping An Property & Casualty ("Ping An P&C") continued to improve its
+strong business quality. Overall combined ratio improved by 1.1 pps year
+on year to 98.0% in 2021 as Ping An P&C further optimized its customer mix
+and enhanced risk screening. Underwriting profit grew 145.7% year on year
+to RMB5,136 million.
+Ping An P&C continued to apply technologies to data-driven online
+customer development and build the auto services ecosystem. "Ping An
+Auto Owner," the largest automotive service app in China, had over 150
+million registered users as of December 31, 2021. Over 95 million vehicles
+had been linked with the app. Monthly active users exceeded 37 million in
+December 2021.
+Ping An P&C's leading online claims services offer superior user experience.
+Ping An P&C pioneered voice-based and instant messaging-based claim
+reporting for auto insurance. Ping An P&C offers differentiated claim
+settlement services by introducing a precise claim settlement decision engine
+capable of precise customer profiling. 92.2% of Ping An P&C's family auto
+insurance claims were processed via "One-click Claims Services” in 2021.
+BUSINESS OVERVIEW
+We conduct our property and casualty insurance
+business mainly through Ping An P&C. The
+business scope of Ping An P&C covers all lawful
+property and casualty insurance business lines
+including auto, corporate property and casualty,
+engineering, cargo, liability, guarantee, credit,
+home contents, and accident & health, as well
+as international reinsurance business. Ping An
+P&C's main distribution channels include in-house
+sales representatives, insurance agents, brokers,
+telemarketing, online marketing, and cross-selling.
+Ping An P&C has been honored as the "No.1 Brand"
+in China's auto insurance and property and casualty
+insurance markets for 11 consecutive years.
+Change (%)
+In active response to regulatory requirements, Ping
+An P&C advanced the auto insurance pricing reform,
+which led to lower auto insurance premium rates.
+Moreover, Ping An P&C constantly optimized its
+customer mix and enhanced risk screening. Ping An
+P&C's premium income decreased 5.5% year on year
+to RMB270,043 million in 2021. Ping An P&C remained
+the second largest property and casualty insurance
+company in China by premium income. Ping An P&C
+continued to improve its strong business quality.
+Overall combined ratio improved by 1.1 pps year
+on year to 98.0% in 2021. Underwriting profit grew
+Ping An P&C uses data to drive online customer
+development and builds the auto services ecosystem
+by improving its user data system covering pricing,
+marketing, services, claims, platform operations
+and other aspects and promoting full application
+of data models on distribution platforms. "Ping An
+Auto Owner," the largest automotive service app
+in China, had over 150 million registered users as of
+December 31, 2021. Over 95 million vehicles had been
+linked with the app. Monthly active users exceeded
+37 million in December 2021. Moreover, Ping An P&C
+launched the "Ping An Qi Ye Bao" app and mini-
+program to provide small and micro-businesses with
+timely, efficient, convenient, and comprehensive
+online insurance services and value-added services.
+Capitalizing on the Group's integrated financial
+business model, Ping An P&C worked with other
+member companies of the Group to provide small
+and micro-businesses with risk protection and
+credit facilitation services. In this way, Ping An P&C
+eased the burdens on small and micro-businesses to
+support the real economy.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An P&C fulfilled its industry mission and
+corporate social responsibilities by settling claims
+as rapidly as possible. To fight the super rainstorm
+disaster in Henan Province, Ping An P&C launched
+fast tracks for claims, with rainstorm claim payments
+exceeding RMB3.1 billion, and provided front-
+line rescue workers with complimentary exclusive
+insurance. Moreover, Ping An P&C has established
+a natural disaster response team and a natural
+disaster risk management system for "defense,
+monitoring, rescue, and claim settlement," trying to
+play a greater role in disaster response.
+Analysis of Profit Sources
+(in RMB million)
+Premium income
+Net earned premiums
+revenue
+2021
+145.7% year on year to RMB5, 136 million. Despite the
+impacts of the super rainstorm disaster in Henan
+Province and the decline in investment income,
+Ping An P&C achieved an annual operating profit of
+RMB16,192 million for 2021, similar to that for 2020.
+2021
+Total
+444,096
+35,597
+35,389
+Shandong
+34,868
+36,343
+Jiangsu
+32,928
+33,945
+Zhejiang
+29,586
+30,966
+Subtotal
+231,948
+241,919
+Total
+567,281
+599,432
+Claims and Policyholders' Benefits
+(in RMB million)
+Surrender
+Surrender rate (¹) (%)
+2021
+52,931
+Beijing
+105,276
+98,969
+Guangdong
+(3) Other net revenue and expenses include the reinsurance
+commission revenue, other revenues and other gains
+or losses, foreign exchange gains or losses, investment
+expenses net of taxes and surcharges on investment
+operations, financial costs, and other expenses under
+the segmented income statement.
+Long-term health insurance
+117,305
+115,826
+Accident & short-term health
+insurance
+47,127
+51,968
+Annuity
+112,801
+82,211
+Investment-linked insurance
+36,914
+640
+Total
+567,281
+599,432
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 31
+Business Analysis
+Life and Health Insurance Business
+The written premium of Life & Health is analyzed
+below by region:
+(in RMB million)
+2021
+1,234
+2.23
+1.74
+Claim expenses of insurance
+Net increase in insurance reserves decreased 13.7%
+year on year mainly due to decreased business scale
+and increased surrender and claim expenses.
+Commission Expenses of Insurance Operations
+Commission expenses of the insurance operations
+(mainly paid to the Company's sales agents) for 2021
+decreased 19.8% year on year mainly due to changes
+in the business scale and product portfolio.
+Policyholder dividends
+19,405
+Net increase in insurance reserves
+254,573
+19,001
+294,890
+(in RMB million)
+2021
+2020
+Health insurance
+Reinsurer's share of claim expenses of insurance
+contracts grew 81.9% year on year mainly due to a
+higher ceding proportion in 2021.
+22,089
+Interest credited to policyholder
+contract deposits
+30,861
+30,650
+Accident insurance
+2,481
+3,207
+Life insurance and others
+27,707
+33,157
+Total
+28,792
+461,753
+Death, injury and medical care benefits increased
+18.0% year on year mainly due to relatively fewer
+insurance claims in 2020 as a result of COVID-19.
+Claims paid rose 13.3% year on year mainly due to
+relatively fewer short-term health insurance claims
+in 2020 as a result of COVID-19.
+contracts
+95,604
+85,400
+Claims paid
+25,233
+22,264
+Annuities
+7,887
+6,940
+Maturities and survival benefits
+25,980
+Annuities increased 13.6% year on year mainly
+because some products saw higher survival benefits
+in 2021 due to the insurance underwriting pace.
+25,257
+benefits
+36,504
+30,939
+Reinsurer's share of claim
+expenses of insurance
+contracts
+(9,278)
+(5,102)
+2020
+2020
+Surrender grew 43.4% year on year and the
+surrender rate rose mainly due to the gradual lapse
+of customers who stopped paying premiums.
+Death, injury and medical care
+441,585
+2020 Change (%)
+14,123
+8,412
+36
+36
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+115,738
+Traditional life insurance
+96,072
+60,303
+Net profit
+101,779
+90,233
+Universal insurance
+(11,062)
+18
+Income tax
+129,096
+83,437
+Participating insurance
+107,134
+60,285
+Profit before tax
+2020
+92.9%
+322
+2,529
+4,510
+9,510
+(820)
+105.1%
+17,604
+Guarantee insurance
+341,228
+18,098
+32,104
+22,600
+2,810
+91.2%
+2021
+50,203
+1,534,436,650
+17,204
+16,194
+5,373
+1,012
+93.8%
+11,102
+Corporate property and
+casualty insurance
+19,534,144
+7,691
+Accidental injury insurance
+(in RMB million)
+(3,394)
+(5,481)
+494,011
+Gross written premiums
+25,825
+22,491
+Group business
+3,026
+3,721
+Reinsurance premium income
+35,936
+34,934
+others
+514,513
+Telemarketing, internet and
+490,290
+Premium income
+12,833
+15,414
+Bancassurance channel
+(84,801)
+(73,931)
+products
+392,816
+366,666
+Agent channel
+511,487
+16,142
+New business
+25,676
+Other net revenue and expenses (3)
+The written premium of Life & Health is analyzed
+below by product type:
+182,530
+131,286
+Total investment income (2)
+(49,419)
+(48,342)
+Administrative expenses (1)
+(65,156)
+(52,277)
+insurance operations
+22,298
+Commission expenses of
+567,281
+Total
+(461,753)
+(444,096)
+Claims and policyholders' benefits
+149
+193
+Renewed business
+504,326
+479,195
+Net earned premiums
+599,432
+Total investment income (2)
+19,875
+Liability insurance
+38.6
+-7.6 pps
+Profit before tax
+Loss ratio (2) (%)
+67.0
+60.5
+6.5 pps
+Income tax
+18,696 19,629
+(2,504) (3,470)
+(4.8)
+(27.8)
+Premium income
+270,043
+285,854
+(5.5)
+Net profit
+16,192
+16,159
+0.2
+Including:
+Auto insurance
+188,838
+196,151
+31.0
+Expense ratio (1) (%)
+(32.3)
+(831)
+18,370
+(23.1)
+Operating profit
+16,192
+16,159
+0.2
+Operating ROE (%)
+14.8
+16.4
+-1.6 pps
+Combined ratio (%)
+(3.7)
+98.0
+-1.1 pps
+Average investment assets
+Total investment yield (%)
+Other net revenue and
+325,515
+298,708
+9.0
+4.3
+6.1
+-1.8 pps
+Including:
+expenses
+(563)
+99.1
+Operating profit
+16,192
+16,159
+Premium income of Ping An P&C's auto insurance
+business decreased 3.7% year on year in 2021,
+affected by the auto insurance pricing reform
+and intensified competition. But the business
+has gradually resumed growth, with a year-on-
+year increase of 8.7% in premium income in the
+fourth quarter of 2021. Auto insurance industry
+suffered losses due to the impacts of the super
+rainstorm disaster in Henan Province. Ping An P&C
+responded proactively to changes in the external
+environment by optimizing expenses, strengthening
+risk screening, and improving premium customer
+retention. The combined ratio of Ping An P&C's auto
+insurance business stood at 98.9% in 2021. Ping An
+P&C will advance product and service innovation,
+and develop exclusive new energy vehicle insurance
+products and services to meet diverse customer
+needs and drive healthy auto insurance business
+development.
+Liability Insurance
+Ping An P&C's liability insurance premium income
+grew 29.8% year on year in 2021. The liability
+insurance industry suffered losses due to the
+Guarantee Insurance
+Claim payments of Ping An P&C's guarantee
+insurance business continued to improve, thanks
+to China's economic recovery and Ping An P&C's
+enhanced risk screening and optimized customer
+mix. The combined ratio of the guarantee insurance
+business improved by 19.8 pps year on year to
+91.2% in 2021. While adhering to the principles
+of "compliance with laws and regulations, small
+amounts and diversification, and risks under
+control," Ping An P&C will continue to enhance its
+risk management capabilities and ensure robust
+operations to steadily boost the operating results of
+guarantee insurance business.
+(in RMB million)
+Insured
+amount
+Premium
+income
+Net earned
+premiums
+Claim
+expenses
+Auto Insurance
+Underwriting
+profit
+Reserve
+ratio
+liabilities
+Auto insurance
+139,654,915
+188,838
+178,694
+127,567
+2,047
+98.9%
+159,339
+Combined
+1,875,867,384
+Property and Casualty Insurance Business
+35
+0.2
+Non-auto insurance
+58,590
+72,648
+(19.4)
+Accident and health
+insurance
+22,615
+Market share(3) (%)
+19.7
+17,055
+21.0
+Business Analysis
+32.6
+-1.3 pps
+Auto insurance (%)
+24.3
+23.8
+0.5 pps
+Notes: (1) Administrative expenses include administrative
+expenses, impairment losses on receivables and others,
+and so on under the segmented income statement.
+(2) Total investment income includes interest revenue
+from non-banking operations, investment income,
+share of profits and losses of associates and joint
+ventures, impairment losses on investment assets, and
+interest expenses on assets sold under agreements
+to repurchase and placements from banks and other
+financial institutions under the segmented income
+statement.
+Notes: (1) Expense ratio = (commission expenses of insurance
+business administrative expenses - reinsurance
+commission revenue) / net earned premiums.
+(2) Loss ratio = claim expenses / net earned premiums.
+(3) The market share was calculated on the basis of the
+insurance industry data of the People's Republic of
+China (the "PRC") published by the CBIRC.
+OPERATING DATA BY PRODUCT TYPE
+Among all the insurance products offered by Ping
+An P&C in 2021, the top five sources of premium
+income were auto insurance, liability insurance,
+guarantee insurance, accidental injury insurance, and
+corporate property and casualty insurance which
+collectively accounted for 93.2% of Ping An P&C's
+total premium income for 2021.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Including:
+Notes: (1) Administrative expenses include the administrative
+expenses, taxes and surcharges on investment
+operations, and impairment losses on receivables and
+others under the segmented income statement.
+(2) Total investment income includes interest revenue
+from non-banking operations, investment income,
+share of profits and losses of associates and joint
+ventures, impairment losses on investment assets, and
+interest expenses on assets sold under agreements
+to repurchase and placements from banks and other
+financial institutions under the segmented income
+statement.
+117,318
+1,877,465
+Financial assets carried at fair value through
+other comprehensive income
+451,686
+11.5
+513,703
+13.7
+3.4
+Financial assets measured at amortized cost
+Others(1)
+60.6
+2,301,869
+61.5
+261,913
+6.7
+219,252
+2,373,438
+5.9
+123,536
+141,006
+13.1
+398,101
+10.6
+Stocks
+83,395
+2.1
+3.7
+117,099
+Equity funds
+91,263
+2.3
+67,021
+1.8
+Other equity financial assets
+3.1
+513,711
+Total investments
+100.0
+Change (%)
+166,851
+163,462
+2.1
+14,443
+43,429
+2020
+(66.7)
+(6,933)
+77.7
+(24,888)
+(322)
+7,629.2
+144,086
+(12,320)
+3,916,412
+2021
+Net investment yield (3) (%)
+3,740,581
+100.0
+Notes: (1) Others include long-term equity stakes, investment properties, and derivative financial assets.
+(2) Figures may not match the calculation due to rounding.
+42
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Total investment yield (3) (%)
+INVESTMENT INCOME
+(in RMB million)
+Net investment income (1)
+Realized gains (2)
+Fair value gains or losses
+Impairment losses on investment assets
+Total investment income
+Investment yields on the Company's investment portfolio of insurance funds decreased in 2021 due to
+volatile capital markets, falling interest rates, and increased impairment provisions. The net investment yield
+was 4.6%, and the total investment yield was 4.0%.
+Fixed income
+18.9
+705,757
+315,103
+8.4
+Equity funds
+91,263
+2.3
+67,021
+7.0
+1.8
+32,893
+0.8
+39,298
+1.1
+Unlisted equities
+108,088
+Wealth management products(¹)
+2.8
+272,597
+Equity financial assets
+178,298
+4.6
+161,381
+4.3
+Debt schemes
+196,542
+Stocks
+5.0
+4.3
+Wealth management products (1)
+263,605
+6.7
+251,638
+6.7
+161,047
+82,406
+2.2
+Long-term equity stakes
+Notes: (1) Wealth management products include trust plans from trust companies, products from insurance asset management
+companies, and wealth management products from commercial banks.
+(2) Other investments mainly include statutory deposits for insurance operations, three-month or longer-term financial assets
+purchased under reverse repurchase agreements, and derivative financial assets.
+(3) Figures may not match the calculation due to rounding.
+INVESTMENT PORTFOLIO (BY ACCOUNTING MEASUREMENT)
+The Company has implemented IFRS 9 for financial instruments since January 1, 2018. The Company's
+insurance fund portfolio's investment in financial assets carried at fair value through profit or loss
+accounted for 21.2% of the total investment assets as of December 31, 2021.
+December 31, 2021
+December 31, 2020
+100.0
+(in RMB million)
+Percentage (%)
+Carrying value
+Percentage (%)
+Financial assets carried at fair value through
+profit or loss
+829,375
+21.2
+Carrying value
+3,740,581
+100.0
+3,916,412
+160,645
+4.1
+156,004
+4.2
+Investment properties
+100,647
+2.6
+63,238
+1.7
+Other investments (2)
+24,143
+0.6
+29,567
+0.8
+Total investments
+199,636
+(27.8)
+4.6
+5.1
+Currently, the Company pays close attention to market credit situations to ensure the overall risks of debt
+schemes and debt wealth management products held by Ping An in its investment portfolio of insurance
+funds are controllable. In terms of credit ratings, over 95.5% of the debt schemes and trust plans held by
+Ping An had AAA external ratings, and about 1.6% had AA+ external ratings. Debt schemes and debt wealth
+management products in the Company's investment portfolio of insurance funds had good credit ratings.
+Aside from some high-credit entities which do not need credit enhancement for their financing, most of the
+assets the Company holds have guarantees or collateral. In terms of industry and geographic distribution,
+Ping An avoids high-risk industries and regions. Ping An's target assets are mainly in the non-banking
+financial services, real estate, and expressway industries in developed and coastal areas including Beijing,
+Shanghai, and Guangdong. In terms of investment timing and returns, Ping An seized time windows of large
+supplies of high-quality assets to boost overall portfolio yields.
+EQUITY WEALTH MANAGEMENT PRODUCTS
+Equity wealth management products in the Company's investment portfolio of insurance funds totaled
+RMB32,893 million as of December 31, 2021, accounting for 0.8% of the total investment assets. The majority
+of equity wealth management products held by Ping An are from insurance asset managers. The underlying
+assets of these products are mainly tradable shares of domestic and foreign high-quality companies in the
+secondary market, indicating no significant liquidity risk. Private equity funds account for a tiny proportion;
+their underlying assets are mainly equities in central and local governments' partnerships, with risks under
+stringent control.
+REAL ESTATE INVESTMENTS
+The balance of real estate investments in the Company's investment portfolio of insurance funds was
+RMB216,138 million as of December 31, 2021, accounting for 5.5% of the total investment assets, including
+RMB100,647 million in physical properties, RMB56,863 million in equity types of investments, and RMB58,628
+million in fixed-income types of investments respectively. The physical properties held in the portfolio
+were primarily commercial and office properties for lease with sustained returns, which is in line with the
+principle of allocating insurance funds to long-duration assets to match liabilities. The equity and fixed-
+income types of investments were mainly financial investments aimed to earn dividends, interest, and
+capital gains, including real estate-related listed companies' stocks, corporate bonds and real estate debt
+schemes. Going forward, the Company will improve asset quality and contain investment risks by analyzing
+and predicting internal and external risks carefully and managing real estate investments prudently.
+Annual Report 2021
+(4) Some industries have been grouped into "others" as they account for small proportions.
+(5) Figures may not match the calculation due to rounding.
+Ping An Insurance (Group) Company of China, Ltd. 45
+Business Analysis
+Banking Business
+Ping An Bank maintained stable business growth. Revenue grew 10.3% year
+on year in 2021. Net profit for 2021 rose 25.6% year on year.
+Ping An Bank kept asset quality stable and strengthened risk provisions.
+Non-performing loan ratio fell 0.16 pps from the beginning of 2021 to 1.02%
+and provision coverage ratio rose 87.02 pps from the beginning of 2021 to
+288.42% as of December 31, 2021.
+Ping An Bank continued to make breakthroughs in retail banking, and
+maintained steady growth across businesses. Retail AUM rose 21.3% from
+the beginning of 2021 to RMB3, 182.634 billion as of December 31, 2021. The
+balance of retail loans reached RMB1,910.321 billion as of December 31, 2021,
+up 19.0% from the beginning of 2021. Monthly active users of the "Ping An
+Pocket Bank" app exceeded 48.2264 million, up 19.6% from the beginning of
+2021.
+BUSINESS OVERVIEW
+Ping An Bank adhered to its mission to be "China's
+most outstanding, world-leading smart retail bank"
+under the strategy of "technological empowerment,
+breakthroughs in retail banking, and enhancement
+of corporate banking." Positioned as "a digital
+bank, an ecosystem-based bank, and a platform-
+based bank," Ping An Bank furthered its strategic
+transformation, upgraded the operation strategies
+for retail, corporate and interbank businesses, and
+pushed forward comprehensive digital operations to
+reshape asset-liability operations.
+MANAGEMENT DISCUSSION AND ANALYSIS
+In response to China's national strategies, Ping
+An Bank continued to increase support for
+private companies, small and micro-enterprises,
+and manufacturing and technology companies
+in 2021. Ping An Bank vigorously supported rural
+revitalization, implemented green finance, enhanced
+its capability of serving the real economy, and
+strengthened comprehensive risk management,
+maintaining steady business growth.
+(3) The real estate industry is broadly defined as comprising: real estate debt schemes with funds directly invested in real estate
+projects; and trust schemes, infrastructure investment schemes, project funding schemes, and so on with funds used indirectly
+in connection with real estate enterprises.
+Notes: (1) The debt schemes and debt wealth management products were classified by industry in line with Shenyin Wanguo's industry
+classification.
+4.24
+2.10
+0.6
+5.85
+9.29
+2.25
+(2) Non-banking financial services refer to financial institutions other than banks, including insurers, asset management companies,
+and financial leasing companies.
+20.6
+6.30
+3.88
+100.0
+5.31
+6.47
+3.54
+5.11
+Ping An Bank continued to make its outlets smarter
+and improved their geographic distribution. Ping
+An Bank (excluding Ping An Wealth Management)
+had 109 branches (including Hong Kong Branch) and
+1,177 business outlets as of December 31, 2021.
+KEY INDICATORS
+Ping An Bank's revenue grew 10.3% year on year to
+RMB169,383 million in 2021. Net profit for 2021 rose
+25.6% year on year to RMB36,336 million.
+0.08 pps
+Weighted average ROE (%)
+Net interest margin (2) (%)
+10.85
+9.58
+1.27 pps
+2.79
+0.69
+2.88
+Notes: (1) Cost-to-income ratio = general and administrative
+expenses/revenue.
+(2) The revenue from credit card installment services
+was reclassified from fee and commission revenue to
+interest revenue in accordance with the Circular on
+Strictly Implementing the Accounting Standards for
+Business Enterprises and Effectively Strengthening
+the Work on the 2020 Annual Reports of Enterprises
+(Cai Kuai [2021] No.2) jointly issued by the Ministry
+of Finance and related commissions of the PRC on
+February 5, 2021. Corresponding financial indicators
+including the net interest revenue, net non-interest
+revenue, and net interest margin for the comparable
+period have been restated accordingly.
+46
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+50.2
+-0.09 pps
+0.77
+assets (%)
+Average return on total
+(in RMB million)
+2021
+2020 Change (%)
+Operating results
+Revenue
+169,383
+153,542
+Net profit
+36,336
+28,928
+10.3
+25.6
+Cost-to-income ratio (¹) (%)
+28.30
+29.11
+-0.81 pps
+5.40
+Policy loans
+21.4
+6.22
+Investment Portfolio of Insurance Funds
+CORPORATE BONDS
+The Company held RMB87,395 million worth of corporate bonds as of December 31, 2021, which accounted
+for 2.2% of the total investment assets, down 0.7 pps from the beginning of 2021 and down 1.8 pps from the
+beginning of 2020. Corporate bonds in the Company's investment portfolio of insurance funds had good
+credit ratings. About 98.9% of the corporate bonds had AA and higher external ratings and about 85.7% had
+AAA external ratings. In terms of credit losses, the corporate bonds in the Company's investment portfolio
+of insurance funds were quite secure as their risks were under control. For risk management of corporate
+bonds, the Company ensured end-to-end assessment and management of investment risks through asset
+allocation, admission management, and dynamic review. The Company established an internal credit rating
+team in 2003. Since then, the team has conducted admission management of corporate bond investments
+in strict accordance with internal credit ratings, and reviewed and adjusted credit ratings to ensure they
+reasonably reflect bond issuers' credit standings. Moreover, the Company carried out ex ante monitoring
+of potential risks in corporate bonds on the basis of a bond issuer list and a rapid response mechanism
+that deals with negative public opinions. The Company effectively managed the review and reporting of
+corporate bonds to enhance the efficiency of risk warning and management.
+DEBT SCHEMES AND DEBT WEALTH MANAGEMENT PRODUCTS
+Debt schemes and debt wealth management products include debt investment schemes undertaken by
+insurance asset management companies, debt trust plans issued by trust companies, and fixed-income
+wealth management products issued by commercial banks. The insurance fund portfolio's investment in
+debt schemes and debt wealth management products totaled RMB460,147 million as of December 31, 2021,
+accounting for 11.7% of the total investment assets.
+The Company manages risks in debt schemes and debt wealth management products at three levels. The
+first level is asset allocation. The Company has developed a set of effective, robust asset allocation models.
+While keeping the overall risks within the risk appetite, the Company formulates a strategic asset allocation
+plan for each account, and sets upper and lower limits on the proportions of asset allocation. In tactical
+asset allocation, the Company gives opinions on capital allocation to debt schemes and debt wealth
+management products according to the funding level in each account, the return and liquidity demands,
+and similar assets' relative attractiveness. The second level is asset selection. When selecting assets, the
+Company prefers projects located in developed areas and industry leaders in line with China's industry
+policies. All debt schemes and debt wealth management product investments have to be approved by
+relevant investment committees. Rating standards applied by the Company's internal credit rating team to
+debt schemes are as stringent as those to corporate bonds. The third level is post-investment management.
+The Company closely monitors its investments and has established a multi-dimensional risk warning
+framework covering all the investment areas, assets and instruments to ensure overall investment risks are
+adequately assessed and controllable.
+Business Analysis
+44
+Ping An Insurance (Group) Company of China, Ltd.
+Structure and yield distribution of debt schemes and debt wealth management products
+Investment
+Nominal yield
+Maturity
+Industry
+Annual Report 2021
+proportion (%)
+MANAGEMENT DISCUSSION AND ANALYSIS
+Annual Report 2021
+-0.5 pps
+4.0
+6.2
+-2.2 pps
+Notes: (1) Net investment income includes interest income from deposits and debt financial assets, dividend income from equity financial
+assets, operating lease income from investment properties, and the share of profits and losses of associates and joint ventures.
+(2) Realized gains include capital gains from securities investments.
+(3) Average investment assets used as the denominator are computed in line with principles of the Modified Dietz method.
+Ping An Insurance (Group) Company of China, Ltd. 43
+Average annual investment yields on the Company's investment portfolio of insurance funds for the past
+ten years were above the 5% long-term investment return assumption.
+Average total investment yield (%)
+Average comprehensive investment yield (%)
+2012-2021
+5.3
+5.3
+5.7
+Average net investment yield (%)
+(%)
+(year)
+Remaining
+maturity (year)
+5.30
+Others (water supply, environmental
+protection, railway, and so on)
+Non-banking financial services (2)
+Real estate industry (3)
+Coal mining
+7.64
+Others
+11.0
+5.17
+7.74
+3.99
+19.8
+5.48
+Total
+5.65
+8.7
+Infrastructure and development zones
+Infrastructure
+37.6
+5.27
+7.92
+4.45
+Expressway
+11.4
+5.34
+8.27
+3.83
+Electric power
+6.5
+4.84
+7.97
+5.21
+3.06
+1.4
+5.3
+1.5
+(151)
+15,736
+16,720
+Net investment income (1)
+Realized gains(2)
+2020
+2021
+2,846
+(in RMB million)
+Commission Expenses of Insurance Operations
+Commission expenses of insurance operations
+decreased 21.3% year on year in 2021. The proportion
+of such expenses to premium income fell 2.3 pps
+year on year, mainly due to decreased market
+commission rates and premium income after the
+auto insurance pricing reform.
+153,302
+174,663
+Total
+5,199
+7,259
+Total Investment Income
+Ping An P&C's investment yields decreased due
+to volatile capital markets, falling market interest
+rates, and increased impairment provisions in 2021.
+Net and total investment yields were 5.1% and 4.3%
+respectively.
+Accident and health insurance
+(in RMB million)
+2020
+5,924
+7,575
+Accident and health insurance
+213
+(441)
+(425)
+2021
+(2,005)
+7,235
+7,692
+Non-auto insurance
+27,545
+16,772
+Auto insurance
+Fair value gains or losses
+Impairment losses on investment
+assets
+62,394
+53,179
+Total
+2021
+(in RMB million)
+Administrative expenses decreased 14.8% year on
+year in 2021, mainly due to Ping An P&C's expense
+optimization measures including cost refinement.
+Administrative Expenses
+(in RMB million)
+Claim expenses increased 13.9% year on year in 2021
+as auto claim expenses gradually normalized due
+to the mitigation of COVID-19, and claim payments
+increased year on year due to expanded coverage
+after the auto insurance pricing reform as well as
+the super rainstorm disaster in Henan Province.
+2020
+Claim Expenses
+Annual Report 2021
+38
+100.0
+100.0 285,854
+270,043
+Total
+Ping An Insurance (Group) Company of China, Ltd.
+Operating expenses
+51,033
+59,358
+38,972
+39,837
+Non-auto insurance
+1,636
+1,055
+receivables and others
+109,131
+127,567
+Auto insurance
+Impairment losses on
+1,400
+1,091
+Taxes and surcharges
+2020
+2021
+Total investment income
+8.6
+18,370
+32,039
+Preferred stocks
+Bond funds
+Bond investments
+Debt financial assets
+Term deposits
+Cash and cash equivalents
+Perpetual bonds
+(in RMB million)
+Investment Portfolio of Insurance Funds
+Business Analysis
+Ping An Insurance (Group) Company of China, Ltd. 41
+Annual Report 2021
+The Company keeps a close eye on the market
+credit situations, and strengthens research and
+forward-looking analysis on credit risk. The
+Company upgrades its risk monitoring framework
+and risk management information system, and
+improves its risk management databases. In this
+way, the Company ensures systematic management
+of risks in asset-liability matching and investment
+portfolios.
+The Company constantly strengthens its post-
+investment capability and upgrades its post-
+investment management system. The Company has
+established and improved a three-tier management
+framework of "a post-investment management
+committee + a post-investment middle office +
+project post-investment teams." In line with its
+top-level strategy, the Company conducts in-
+depth, meticulous, and strong post-investment
+management of portfolio companies' operations,
+promoting cultural integration with portfolio
+companies based on a deep understanding of
+industry trends and cycles. The Company conducts
+overall management of post-investment mechanisms
+on the basis of compliance and full respect for the
+independent operations of member companies. By
+doing so, the Company ensures pre-investment
+participation, post-investment tracking, risk warning,
+and operational empowerment to enhance its post-
+investment capability and maximize the value of its
+investments.
+INVESTMENT PORTFOLIO (BY CATEGORY)
+The Company strengthens risk management in
+addition to meeting regulatory requirements
+concerning investment concentration. The
+Company improves policies and procedures for
+the management of investment concentration in a
+prudent, comprehensive, dynamic, and independent
+manner. The Company optimizes the Group's and
+its member companies' investment concentration
+limits. Moreover, the Company enhances the setting,
+using, warning, and adjustment of credit limits for
+major clients and the monitoring and management
+of risks in key sectors and risk areas. In this way,
+the Company prevents the risk of investment
+overconcentration in certain counterparty(ies),
+sector(s), region(s), and asset class(es), which
+may indirectly threaten the Company's solvency,
+liquidity, profitability, or reputation.
+December 31, 2021
+Carrying value
+53,733
+48.6
+1,904,366
+6.1
+226,922
+90,052
+December 31, 2020
+208,417
+87,201
+2.8
+110,762
+Percentage (%)
+Carrying value
+Percentage (%)
+2.3
+The Company has further strengthened investment
+rules and processes. To optimize end-to-end risk
+management, the Company has standardized
+its business processes, improved its investment
+risk management framework, and enhanced key
+processes including admission strategies, credit
+rating, counterparty and issuer credit facility
+management, concentration management, risk
+monitoring, and emergency management. The
+Company applies technologies to key post-
+investment matters. The Company continued
+to upgrade its risk warning platform to monitor
+six categories of risk signals including market
+fluctuations, negative public opinions, and financial
+changes, covering over 300 risk labels. By using
+smart analytics models, the Company can identify
+risks more rapidly, make timely decisions, and
+take action in advance. The Company upholds
+the principles of "well-defined responsibilities,
+timely follow-up, and sound management," and is
+hence able to "monitor risks closely, identify risks
+accurately, and avoid risks promptly." In this way,
+the Company integrates risk management with value
+creation.
+The Company attaches great importance to risk
+management in matching costs and returns, and
+established a risk appetite framework in which the
+matching of costs and returns is a key quantitative
+indicator. The Company conducts regular reviews
+and strict stress tests which are embedded in
+the asset allocation process with ex ante risk
+management. In the event of increased market
+volatility, the Company would carry out intensified
+and more frequent stress tests to ensure the
+soundness of the portfolio even under extreme
+market conditions.
+INVESTMENT RISK MANAGEMENT
+(2) Realized gains include capital gains from securities
+investments.
+Notes: (1) Net investment income includes interest income from
+deposits and debt financial assets, dividend income
+from equity financial assets, operating lease income
+from investment properties, and the share of profits
+and losses of associates and joint ventures.
+14.2
+11.9
+income (%)
+percentage of premium
+(3) Average investment assets used as the denominator
+are computed in line with the principles of the Modified
+Dietz method.
+6.1
+Total investment yield (3) (%)
+Commission expenses as a
+5.3
+5.1
+Net investment yield (3) (%)
+40,704
+4.3
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 39
+MANAGEMENT DISCUSSION AND ANALYSIS
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+40
+The Company adhered to prudent risk appetite
+and continued to optimize the matching of assets
+and liabilities, accumulate high-quality assets,
+and implement disciplined, flexible and robust
+investment operations. In response to challenges
+brought by lower interest rate and rising credit
+risk, the Company adhered to high-quality asset-
+liability management by continuing to increase
+allocation to tax-exempt bonds including central
+and local government bonds as well as long-
+duration low-risk bonds including financial bonds
+issued by policy banks. The Company has greatly
+mitigated re-investment risk amid low interest rates
+by maintaining a narrow duration gap between
+assets and liabilities. The Company also actively
+increased investment in high-quality alternative
+assets, especially rent-collecting assets with stable
+cash flow, and actively participated in the piloting
+of infrastructure real estate investment trusts
+("REITS") in response to national policy. In addition,
+the Company maintained flexible asset-liability
+management mechanisms, controlled reasonable
+guaranteed interest rates on liabilities, and
+optimized the interest rate matching of assets and
+liabilities.
+ASSET-LIABILITY MANAGEMENT
+the year. Sectors continued to diverge. Hong Kong
+stocks fell, with a decline of 14.1% in the Hang
+Seng Index in 2021, as affected by factors such as
+COVID-19 and geopolitics. Investment yields on the
+Company's investment portfolio of insurance funds
+declined year on year due to factors including the
+volatile capital markets, falling interest rates, and
+increased impairment provisions.
+The overseas equity market generally rose in 2021.
+However, market volatility also increased with the
+U.S. Federal Reserve's preparations for monetary
+policy normalization and the rising expectation of
+interest rate hikes. On-shore stock market stabilized
+after experiencing high volatility in the first half
+of the year. The CSI 300 index fell 5.2% in 2021, but
+the market was less volatile in the second half of
+The global economy gradually recovered and
+inflation rose significantly due to the continued
+quantitative easing and the gradual retreat of
+COVID-19 in 2021. However, problems such as
+extreme tensions in global supply chains and labor
+shortage in developed countries caused by the
+epidemic resurgence remained unmitigated. In
+China, the domestic economy continued to recover,
+the monetary policy was generally stable and
+flexible, and the fiscal policy remained proactive and
+paid more attention to practical results. However,
+China's macroeconomic and industrial structure
+was still adjusting. There were long-term structural
+issues including demography and debt leverage.
+Moreover, industrial product prices rose due to
+imported inflation and energy structure adjustment.
+As a result, China was under more pressure of
+economic slowdowns, rising prices, and falling
+market interest rates.
+The Company's investment portfolio of insurance
+funds is comprised of investable funds from
+Life & Health and Property & Casualty insurance
+businesses.
+INVESTMENT PORTFOLIO OVERVIEW
+The Company continued to manage the duration gap between assets and
+liabilities despite a market-wide shortage of long-duration assets. The
+Company further improved investment risk management by strengthening
+risk review, refining risk limits, and tightening concentration risk
+management and post-investment management.
+The Company's investment portfolio of insurance funds grew 4.7% from the
+beginning of 2021 to nearly RMB3.92 trillion as of December 31, 2021.
+Investment Portfolio of Insurance Funds
+Business Analysis
+Total
+24,677
+14,123
+26,674
+15,592
+Shanghai
+7.6
+116,877
+125,777
+Actual capital
+15,980
+18,148
+Zhejiang
+8.6
+103,377
+112,277
+Core capital
+20,520
+17,959
+Jiangsu
+Minimum capital
+48,418
+Total
+Comprehensive solvency
+35.1 pps
+213.5
+248.6
+(%)
+45,171
+114,710
+Subtotal
+Core solvency margin ratio
+14,971
+14,735
+Sichuan
+(6.7)
+112,639
+45,091
+44,426
+Guangdong
+In respect of risk management, Ping An
+P&C developed an integrated agricultural
+risk management solution by leveraging
+technologies including satellite remote sensing,
+unmanned aerial vehicles, and meteorological
+early warning and disaster monitoring. Ping An
+P&C helps prevent disasters and reduce losses
+by applying the technologies to agricultural
+insurance bidding, climate early warning, and
+survey and loss assessment. In this way, Ping
+An P&C promotes high-quality development
+of agricultural insurance in terms of quality,
+scale and ability. Ping An P&C supported bids
+for plant insurance contracts, and assisted
+in survey and loss assessment for significant
+cases including rice pests and diseases in Hubei
+Province and the super rainstorm disaster in
+Henan Province.
+In respect of Al, Ping An P&C's intelligent
+document recognition technology stayed
+ahead in the industry. Ping An P&C's OCR
+technology for key documents delivered an
+average accuracy rate of over 98.2% as of
+December 31, 2021, and was widely used in
+auto/non-auto insurance policy issuance,
+claims materials collection, and liability/loss
+assessment, saving 1.52 million hours for manual
+reviews in 2021, significantly reducing user
+waiting time. Ping An P&C strengthened the
+interaction capabilities of its robot assistants,
+which answered questions 24/7 online nearly 262
+million times with a 97.4% accuracy rate in 2021.
+Ping An P&C continued to execute a comprehensive
+data-driven operations strategy. Ping An P&C
+improved user experience and promoted business
+development by applying innovative technologies
+including Al and knowledge graphs in various
+scenarios and constantly upgrading technological
+capabilities.
+TECHNOLOGY-DRIVEN TRANSFORMATION
+MANAGEMENT DISCUSSION AND ANALYSIS
+2.3
+In respect of auto insurance, Ping An P&C
+provided one-stop auto use services and
+diverse auto aftermarket services via the "Ping
+An Auto Owner” app. Of Ping An P&C's new
+customers acquired in 2021, 2.33 million were
+converted from registered users of the "Ping
+An Auto Owner" app. Ping An P&C shortened
+the claim reporting process for auto insurance
+to only four interactions with pioneering
+voice-based and instant messaging-based
+tools. Ping An P&C introduced a precise claim
+settlement decision engine capable of precise
+customer profiling to provide differentiated
+claims services. In addition, Ping An P&C
+developed smart claims robots that provide
+whole-process services including consultation,
+drop-out reminders, smart inquiries, and simple
+operations to improve customers' claims
+experience. 92.2% of Ping An P&C's family auto
+insurance claims were processed via "One-click
+Claims Services" in 2021.
+49,806
+116,749
+3.0
+118,751
+57,345
+10.0
+3.2
+1.3
+In respect of property and casualty insurance,
+Ping An P&C offered diverse risk management
+services under an innovative online-merge-
+offline risk management service model via
+the natural disaster risk platform, the "Ping
+An Qi Ye Bao" app, and a professional risk
+management team. Ping An P&C participated
+in online and offline risk screening regarding
+natural disasters, fires, and accidents over
+230,000 times, and provided 60,000 corporate
+customers and key engineering projects with
+disaster and loss prevention services in 2021.
+Ping An P&C explored new models to serve
+small and micro-businesses. Ping An P&C
+completed over 2.66 million insurance policy
+modifications online, and processed over 2.24
+million insurance claims filed by over 230,000
+customers online in 2021. Third-party platform-
+based claims were settled within a minimum of
+one second, and others within a minimum of 179
+seconds.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 37
+(%)
+31, 2020
+31, 2021
+(in RMB million)
+Change
+December
+December
+2020
+2021
+(in RMB million)
+Below is a breakdown of the premium income from
+the Company's property and casualty insurance
+business by region:
+Ping An P&C's core and comprehensive solvency
+margins were significantly above the regulatory
+requirements as of December 31, 2021.
+SOLVENCY MARGIN
+Property and Casualty Insurance Business
+Business Analysis
+270,043
+285,854
+19,927
+41,390
+24.7
+70,555
+26.6
+71,893
+Agencies
+57
+70
+70
+24.6
+70,423
+27.0
+72,916
+Car dealers
+354
+Inward reinsurance premium
+57
+Cross-selling
+42,229
+Others
+14.5
+margin ratio (%)
+7.5
+20,386
+online channels
+Telemarketing and
+11.5
+32,862
+13.3
+35,945
+Direct selling
+16.1
+45,947
+15.6
+453
+Accident and health insurance
+Non-auto insurance
+37.0 pps
+2021
+(in RMB million)
+Ping An P&C adheres to a prudent approach to
+its reinsurance business to scale up underwriting,
+diversify business risks, and ensure healthy business
+growth and stable operating results. Ping An P&C
+maintains close long-standing relationships with the
+world's major reinsurance brokers and reinsurers,
+actively sharing experience in business development
+and empowering reinsurance with technologies. Ping
+An P&C has partnered with nearly 100 reinsurers
+and reinsurance brokers worldwide, including
+China Property & Casualty Re, Swiss Re, SCOR, and
+Munich Re.
+Reinsurance Arrangement
+Premium Income
+INFORMATION
+2020
+OTHER FINANCIAL AND REGULATORY
+(3) For details of Ping An P&C's solvency margin, please
+refer to the Company's website (www.pingan.cn).
+(2) The minimum regulatory requirements for the core
+solvency margin ratio and comprehensive solvency
+margin ratio in the above table are 50% and 100%
+respectively.
+Notes: (1) Core solvency margin ratio = core capital / minimum
+capital. Comprehensive solvency margin ratio = actual
+capital minimum capital.
+(%)
+241.4
+278.4
+(4) For details of the Regulatory Rules on Solvency of
+Insurance Companies (II), please refer to the section
+headed "Liquidity and Capital Resources."
+Ceded premium
+Below is a breakdown of the premium income from
+the Company's property and casualty insurance
+business by channel:
+16,714
+Amount
+(%)
+17,324
+(in RMB million)
+9,045
+10,491
+Non-auto insurance
+Percentage
+Amount
+7,315
+6,380
+Auto insurance
+2020
+2021
+Percentage
+2018
+Credit card receivables
+0.19
+0.19
+0.36
+0.29
+Xinyidai unsecured loans
+0.15
+0.15
+0.35
+0.17
+Auto loans
+0.35
+2019
+0.15
+2020
+(0.02)
+Loan granting period
+0.28
+Provision coverage ratio for
+loans more than 90 days
+overdue (%)
+397.40
+268.74 128.66 pps
+(%)
+Notes: (1) Ping An Bank revised the definitions of special mention
+credit card loans, retail mortgages, and collateral
+mortgage loans, effective from the fourth quarter
+of 2021 as per regulatory requirements. As a result,
+the percentage of special mention loans increased
+compared with the beginning of 2021. Excluding such
+revisions, the percentage of special mention loans
+dropped 0.02 pps from the beginning of 2021.
+(3) Deviation of loans more than 90 days overdue = balance
+of loans more than 90 days overdue / balance of non-
+performing loans.
+52
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+The percentage of loans more than 30 days
+overdue as at the end of the 6-month vintage
+period
+2021
+(2) Deviation of loans more than 60 days overdue = balance
+of loans more than 60 days overdue / balance of non-
+performing loans.
+0.17
+In respect of corporate asset quality, Ping An Bank
+focused on key industries, regions and customers,
+selected industries with weak cyclicality, stable
+growth and high asset quality, and reduced
+exposure to high-risk customers. As a result, asset
+quality continued to improve. Ping An Bank's
+corporate non-performing loan ratio was 0.71%
+as of December 31, 2021, down 0.53 pps from the
+beginning of 2021.
+(2) The data of the 2021 vintage analysis only reflect the
+quality of loans granted from January to July in 2021.
+Loans granted from August to December 2021 will be
+included in analysis when the vintages of these loans
+reach six months.
+3,566,465
+3,151,764
+13.2
+8.60
+8.69
+-0.09 pps
+Total risk weighted assets
+Core tier 1 capital adequacy
+ratio (%)
+Tier 1 capital adequacy ratio
+(%)
+Capital adequacy ratio (%)
+10.91
+-0.35 pps
+13.34
+13.29
+0.05 pps
+0.75
+10.56
+13.6
+418,767
+475,844
+CAPITAL ADEQUACY
+Ping An Bank refined its capital management by
+continuously optimizing its on- and off-balance-
+sheet asset portfolios and proactively reducing
+inefficient and ineffective capital utilization in 2021.
+Apart from retained earnings as a source of capital,
+Ping An Bank sought external channels to replenish
+capital and pressed ahead with the issuance of
+capital instruments. Ping An Bank issued RMB30
+billion of tier 2 capital bonds in the China Interbank
+Bond Market in November 2021. The proceeds were
+used to replenish Ping An Bank's tier 2 capital,
+improve its capital adequacy, and consolidate its
+capital strength.
+(in RMB million)
+December
+31, 2021
+December
+Change
+31, 2020
+(%)
+Capital adequacy ratio
+Net core tier 1 capital
+Net tier 1 capital
+Net capital
+306,549
+273,791
+12.0
+376,493
+343,735
+9.5
+Notes: (1) Vintage analysis, also known as static pool analysis
+of default rates, is a method of evaluating the credit
+quality of account holders by monitoring credit assets
+in accounts opened in different periods and analyzing
+the vintages. The percentage of loans more than 30
+days overdue as at the end of the 6-month vintage
+period the balance of current-year new loans or credit
+card receivables more than 30 days overdue as at the
+end of the 6-month vintage period / the balance of
+current-year new loans or credit card receivables that
+have been on books for 6 months.
+0.73
+Non-performing loans
+Deviation of loans more than
+5,914
+11,243
+24.4%
+-47.4%
+Total loans and advances
+3,063,448
+Non-performing loan ratio (%)
+Loss
+1.02
+Percentage of special
+mention loans (%)
+1.42
+Impairment provision balance
+(90,202)
+Provision coverage ratio (%)
+2,666,297
+1.18
+5,942
+7,390
+Doubtful
+Notes: (1) Capital requirements regarding credit risk, market risk,
+and operational risk are measured by the weighted
+method, standard method, and basic indicator method
+respectively.
+1.24
+-0.53 pps
+31,275
+31,390
+-0.4%
+Total loans and advances
+1.02
+1.18
+-0.16 pps
+Including:
+Sub-standard
+17,971
+14,205
+26.5%
+288.42
+90 days overdue (3)
+Provision to loan ratio (%)
+1.11
+(63,219)
+201.40
+2.37
+days overdue
+22,698
+23,524
+-3.5%
+Percentage of loans more
+14.9%
+-0.16 pps
+Balance of loans more than 90
+0.31 pps
+42.7%
+87.02 pps
+0.57 pps
+-0.21 pps
+In respect of retail asset quality, Ping An Bank's
+retail non-performing loan ratio was 1.21% as of
+December 31, 2021, up 0.08 pps from the beginning of
+2021, driven by higher risks in auto finance business
+due to external macroeconomic conditions. Ping
+An Bank has optimized its retail lending business.
+portfolio by gradually increasing the proportions
+of unsecured loans to high-quality white-collar
+customers and secured loans since 2018. Ping An
+Bank has enhanced its ability to withstand risks
+by using industry-leading technologies and risk
+models to improve customer risk identification
+and implementing differentiated risk management
+policies. Ping An Bank upgraded the organizational
+structure of its retail risk middle office and built a
+unified customer-level risk management system in
+2021. In this way, Ping An Bank can rapidly support
+the front office in retail business development and
+share risk management capabilities through an open
+bank. In addition, Ping An Bank strictly controlled
+the admission of new customers, and strengthened
+the review of customers' ability and willingness to
+repay, keeping the overall quality of new customers
+at a historically high level.
+than 90 days overdue (%)
+0.74
+0.88
+-0.14 pps
+-7.3%
+219.78 118.44 pps
+338.22
+overdue (%)
+Balance of loans more than 60
+days overdue
+26,670
+28,765
+Percentage of loans more
+than 60 days overdue (%)
+0.87
+1.08
+Deviation of loans more than
+60 days overdue(2)
+0.85
+0.92
+(0.07)
+Provision coverage ratio for
+loans more than 60 days
+2.94
+(2) Ping An Bank and its wholly-owned subsidiary Ping An
+Wealth Management are included in the computation
+of the above capital adequacy ratios in accordance
+with the Administrative Measures for the Capital of
+Commercial Banks (Trial) issued by the former China
+Banking Regulatory Commission on June 7, 2012. The
+minimum regulatory requirements for the core tier 1
+capital adequacy ratio, tier 1 capital adequacy ratio,
+and capital adequacy ratio are 7.5%, 8.5%, and 10.5%
+respectively.
+Ping An Trust had RMB22,081 million in net capital as
+of December 31, 2021. The ratio of net capital to total
+risk capital was 317.6% and the ratio of net capital
+to net assets was 80.8%, both meeting regulatory
+requirements (100% and 40% respectively).
+Ping An Insurance (Group) Company of China, Ltd. 53
+4,603
+3,884
+18.5
+Income tax
+(774)
+(782)
+Profit before tax
+(1.0)
+3,829
+3,102
+23.4
+Notes: (1) Total investment income includes interest revenue from
+non-banking operations, investment income, and share
+of profits and losses of associates and joint ventures
+under the segmented income statement. Investment
+income excludes operating lease income from
+investment properties.
+(2) Other revenue includes other revenues and other
+gains or losses, foreign exchange gains or losses, and
+operating lease income from investment properties
+under the segmented income statement. Other
+revenues and other gains or losses exclude non-
+operating gains.
+Net profit
+24.2
+(5,599)
+(6,956)
+Revenue
+20,253
+16,465
+23.0
+Administrative expenses (3)
+(5,823)
+(4,887)
+Cost-to-income ratio (4) (%)
+43.8
+45.0
+Finance costs
+(2,871)
+(2,095)
+19.2
+-1.2 pps
+37.0
+Other expenses (5)
+(3) Administrative expenses include administrative
+expenses and impairment losses on receivables and
+others under the segmented income statement.
+(4) Cost-to-income ratio = administrative expenses/
+(revenue other expenses).
+35.7
+(5) Other expenses include interest expenses on assets
+sold under agreements to repurchase and placements
+from banks and other financial institutions, other
+expenses, impairment losses on investment assets,
+and non-operating gains under the segmented income
+Fees and Commission Revenue
+614
+(41.5)
+Total
+9,309
+8,175
+13.9
+359
+Ping An Trust focused on industrial investment as
+well as product & financial service trusts in light of
+the market environment and regulatory guidelines.
+Being industry- and customer-centric, Ping An
+Trust vigorously developed its core trust businesses
+to support high-quality development of the real
+economy and improve people's livelihoods.
+Product and financial service trusts: Ping An
+Trust gave full play to its role as a trustee on
+the strength of its license and capabilities.
+Ping An Trust vigorously developed its
+core businesses including family trust,
+insurance trust, and property rights trust, and
+differentiated its services to satisfy the diverse
+demands of corporate and retail customers.
+Ping An Trust continued to strengthen risk
+management to boost its business development.
+Ping An Trust continued to optimize its
+comprehensive risk management framework, and
+carried out risk management activities in an orderly
+manner by relying on clear division of responsibility
+and reporting lines for risk management. In business
+risk management, Ping An Trust implemented
+risk management mechanisms covering entire
+processes before, during and after investment
+under the philosophy of “risk management leads
+business development." Ping An Trust effectively
+monitored and managed various risks by leveraging
+four capabilities, namely “rigorous asset selection,
+professional review, efficient decision-making, and
+refined post-investment management."
+0.71
+56
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Industrial investment: Ping An Trust
+followed national strategies to focus on
+new infrastructure, new energy, high-end
+manufacturing and other sectors. Through
+the integration of finance and industrial
+development, Ping An Trust upgraded its
+investment model and increased investment to
+contribute to the upgrade of China's industrial
+structure.
+Others
+7.3
+478
+Fees and commission revenue of the securities
+business for 2021 rose 13.9% year on year, benefiting
+from a 27.7% year-on-year increase in brokerage fees
+and commission revenue due to increased turnover
+of brokerage business.
+(in RMB million)
+2021
+2020 Change (%)
+Fees and commission revenue
+Brokerage business
+7,440
+5,828
+27.7
+Underwriting business
+997
+1,255
+(20.6)
+Asset management business
+513
+statement.
+Annual Report 2021
+4,203
+Other revenue(2)
+23.4
+(90.8)
+Other asset management
+business
+9,894
+6,711
+47.4
+2,479
+Total
+12,292
+13.5
+SECURITIES BUSINESS
+The Company provides securities brokerage, futures
+brokerage, investment banking, asset management,
+and financial advisory services through Ping An
+Securities and its subsidiaries including Ping An
+Futures, Ping An Caizhi, and Ping An Pioneer
+Capital.
+Ping An Securities achieved steady growth
+by leveraging the Group's integrated financial
+business model and technological strengths. Ping
+An Securities vigorously implemented various
+strategic measures, embedding the philosophy of
+"Al Knows" and the value proposition of "principled,
+heartwarming, professional, and intelligent" in all
+services while promoting digital and platform-
+based operations in full scale. Net profit of Ping
+An Securities grew 23.4% year on year to RMB3,829
+million and core business indicators continued to
+improve in 2021.
+54
+13,952
+229
+Trust business
+3,102
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Asset Management Business
+Ping An Securities continuously transformed to become a smart securities
+services platform under Ping An's integrated finance strategy, boosting
+net profit by 23.4% year on year in 2021.
+Ping An Trust continued to improve its business portfolio. Total assets
+held in trust grew 18.0% from the beginning of 2021 to RMB461,312 million,
+in which the investment category expanded 117.7% from the beginning of
+2021 to RMB256,750 million as of December 31, 2021.
+Ping An Financial Leasing strengthened traditional leasing business and
+built presence in innovative business while serving the real economy. Net
+profit grew 13.4% year on year in 2021.
+Ping An Asset Management maintained steady business growth. AUM
+grew 11.7% from the beginning of 2021 to RMB4.05 trillion as of December
+31, 2021, including RMB512,072 million in third-party AUM, up 32.7% from the
+beginning of 2021.
+BUSINESS OVERVIEW
+The Company primarily conducts its asset
+management business through companies including
+Ping An Securities, Ping An Trust, Ping An Financial
+Leasing, and Ping An Asset Management. Net profit
+of the asset management business increased 13.5%
+year on year to RMB13,952 million in 2021.
+2021
+2020 Change (%)
+(in RMB million)
+Net profit
+Securities business
+3,829
+Annual Report 2021
+5,704
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Fees and commission
+expenses
+(2,570)
+(2,017)
+27.4
+Net fees and commission
+8,175
+revenue
+6,158
+9.4
+Total investment income (1)
+7,810
+6,104
+27.9
+6,739
+9,309
+Fees and commission revenue
+Change (%)
+Customers sourced in brokerage business
+increased steadily, and the revenue structure
+of wealth management business was further
+optimized. Ping An Securities continued to
+invest heavily in technologies to acquire
+customers through various channels and
+platforms, upgrade the "Ping An Securities"
+app, and explore innovative service models.
+Ping An Securities ranked 1st in the industry
+by number of retail customers (over 20 million),
+and among the top 3 securities firms by
+number of active app users as of December 31,
+2021. The market share of Ping An Securities
+in terms of equity and fund trading volume
+(excluding seat leasing) (1) expanded by 0.11 pps.
+year on year to 3.70% in 2021 thanks to ongoing
+customer acquisition and professional trading
+platforms. In addition, Ping An Securities
+comprehensively enhanced its core asset
+allocation capabilities, and improved customer
+experience by providing "Al + tele + offline"
+investment advisory services. As a result, the
+revenue structure of wealth management
+business was further diversified.
+Ping An Securities maintained its competitive
+edge in the bond business of investment
+banking and pressed ahead with product
+innovation. Ping An Securities stepped
+up efforts in key regions to serve the real
+economy. Ping An Securities ranked 1st in
+asset-backed securities volume and 7th in
+bonds (2) underwriting respectively in 2021. As a
+licensed underwriter in the interbank market,
+Ping An Securities optimized its product
+mix and gradually built presence in offshore
+bond markets to better serve customers.
+In addition, Ping An Securities promoted
+product innovation and executed key projects
+including "Ping An Guangzhou Transportation
+Investment Guangzhou-Heyuan Expressway
+REIT" (which ranked 1st by AUM among the
+first publicly offered REITs on Shenzhen Stock
+Exchange) and underwriting services for the
+first exchange-traded carbon-neutral green
+corporate bonds.
+Ping An Securities outperformed market
+benchmarks for investment yields, and ranked
+among top ten in the asset management
+industry by AUM. In proprietary trading
+business, Ping An Securities focused on
+proprietary bond trading, applied fintech
+to trading, and outperformed the market
+benchmark for investment yields in a narrowly
+fluctuating bond market. In asset management
+business, Ping An Securities tapped the
+demand of banks' wealth management
+subsidiaries, strengthened in-depth cooperation
+with retail channels, and launched new "fixed-
+income+" and "service +” products. Ping An
+Securities ranked 8th in the asses management
+industry by AUM.
+Notes: (1) The computation of the market share in terms of equity
+and fund trading volume (excluding seat leasing)
+excludes the Northbound Stock Connect market.
+(2) Asset-backed securities (ABS) refer to ABS products
+regulated by the CSRC, and bonds refer to corporate
+bonds and bonds issued by state-owned enterprises.
+Ping An Insurance (Group) Company of China, Ltd. 55
+Business Analysis
+Asset Management Business
+Analysis of Profit Sources
+TRUST BUSINESS
+13.9
+(in RMB million)
+2021
+2020
+Annual Report 2021
+Corporate loans
+Ping An Bank gave full play to the advantages of
+integrated finance and technological empowerment,
+and further implemented the "five-in-one" new
+model of an “open bank, Al bank, remote bank,
+offline bank, and comprehensive bank" in 2021.
+The new model enabled Ping An Bank to provide
+"heartwarming" financial services and create new
+growth momentum for retail business.
+29,703
+8.60
+8.69
+-0.09 pps
+Operating profit before
+Notes: (1) Total loans and advances, deposits, and their
+components are exclusive of interest receivable and
+payable.
+(2) Deviation of loans more than 60 days overdue = balance
+of loans more than 60 days overdue / balance of non-
+performing loans.
+ratio(3) (%)
+(3) The minimum regulatory requirement for the core tier 1
+capital adequacy ratio is 7.5%.
+119,802
+107,327
+11.6
+Impairment losses on credit
+and other assets
+(73,817)
+impairment losses on assets
+7.8
+(1,525)
+(1,644)
+60 days overdue(2)
+0.85
+0.92
+(0.07)
+expenses
+(47,937)
+(44,690)
+7.3
+Capital adequacy ratio
+Cost-to-income ratio (%)
+28.30
+29.11
+-0.81 pps
+Core tier 1 capital adequacy
+Taxes and surcharges
+(70,418)
+General and administrative
+4.8
+Loan impairment loss
+36,754
+24.8
+Income tax
+(9,543)
+(7,826)
+21.9
+45,879
+Net profit
+28,928
+25.6
+Notes: (1) Net interest margin = net interest revenue average
+balance of interest-earning assets.
+(2) Other net non-interest revenue includes investment
+income, fair value gains or losses, foreign exchange
+gains or losses, other business revenue, asset disposal
+gains or losses, and other income.
+(3) Credit cost = loan impairment losses / average balance
+of loans and advances (including discounted bills).
+Annual Report 2021
+36,336
+Profit before tax
+(31.6)
+(155)
+(59,407)
+(43,148)
+37.7
+Average balance of loans
+and advances (including
+discounted bills)
+2,853,155
+2,497,111
+14.3
+Credit cost (3) (%)
+2.08
+1.73
+0.35 pps
+Other expenses
+(106)
+Including:
+Ping An Insurance (Group) Company of China, Ltd. 47
+Deviation of loans more than
+153,542
+Including: Retail loans
+1,910,321
+1,604,940
+19.0%
+earning assets
+4,314,998
+Average balance of interest-
+Corporate loans
+1,061,357
+8.6%
+Net interest margin (1) (%)
+2.79
+3,944,430
+2.88
+9.4
+1,153,127
+14.9%
+2,666,297
+3,063,448
+December
+December
+Analysis of Profit Sources
+(in RMB million)
+Deposits and loans (1)
+31, 2020
+Change
+(in RMB million)
+2021
+2020 Change (%)
+Net interest revenue
+120,336
+113,470
+6.1
+Total loans and advances
+-0.09 pps
+10.3
+Deposits
+2,673,118
+Other net non-interest
+Non-performing loan ratio (%)
+1.02
+Provision coverage ratio (%)
+288.42
+1.18
+201.40
+Asset quality
+-0.16 pps
+15,985
+10,411
+53.5
+87.02 pps
+Revenue
+169,383
+revenue (2)
+11.5
+29,661
+33,062
+10.8%
+Net non-interest revenue
+49,047
+40,072
+22.4
+Including: Retail deposits
+770,365
+684,669
+12.5%
+Including:
+Net fee and commission
+Corporate deposits 2,191,454
+1,988,449
+10.2%
+revenue
+2,961,819
+46.2%
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Bank's net interest margin for 2021
+decreased 0.09 pps year on year to 2.79%. The
+average cost of liabilities for 2021 fell 0.11 pps year
+on year to 2.21%. The average cost of deposits for
+2021 dropped 0.19 pps year on year to 2.04%. Ping An
+Bank proactively reshaped asset-liability operations.
+Ping An Bank cut the cost of liabilities by optimizing
+the liability portfolio. Meanwhile, returns on assets
+declined as market interest rates fell and Ping An
+Bank supported the real economy. As a result, net
+interest margin slightly narrowed.
+Supply chain finance. Ping An Bank's supply
+chain financing reached RMB959,911 million in
+2021, up 33.7% year on year. The "Nebula-lot"
+platform connected over 11 million loT devices
+as of December 31, 2021, and supported over
+RMB300 billion in financing in 2021.
+Bill integration. Ping An Bank's direct bill
+discounting business totaled RMB616,475 million
+in 2021, up 37.3% year on year.
+Customer development platforms. The
+registered business users of the Ping An
+Digital Pocket amounted to 8.1394 million
+as of December 31, 2021, up 682.5% from the
+beginning of 2021. The corporate open bank
+served 30,305 corporate customers, up 154.7%
+from the beginning of 2021.
+Sophisticated investment and financing. Ping
+An Bank's sophisticated investment and
+financing reached RMB1,159.12 billion in 2021, up
+6.6% year on year, including RMB734,825 million
+in investment bank financing, up 7.8% year on
+year.
+Ecosystem-based cross-selling. Insurance
+premiums referred by Ping An Bank rose
+20.7% year on year to RMB3,259 million in 2021.
+Financing projects referred by Ping An Bank to
+other member companies of the Group grew
+16.8% year on year to RMB473,407 million.
+INTERBANK BUSINESS
+Ping An Bank leveraged technologies including Al,
+blockchain and the Internet of Things ("loT") to
+drive corporate business innovation by playing the
+following "five cards."
+Guided by the philosophy of "serving financial
+markets, interbank customers, and the real
+economy," Ping An Bank cultivated business
+characteristics and professionalism to establish "five
+golden business cards" in interbank business, and
+achieved high-quality development on the basis of
+steady growth.
+In respect of hedging services, the "Ping An
+Hedging" business leveraged the "trading
+capability + technological capability + service
+capability" to provide heartwarming hedging
+services for micro-, small and medium-sized
+enterprises. The "Ping An Hedging" foreign
+exchange and interest rate derivatives trading
+volume grew 95.7% year on year to USD29,004
+million in 2021.
+In respect of interbank business, Ping An Bank
+implemented the concept of "honeycomb
+customer development” to build a multi-entity
+win-win ecosystem, connecting interbank
+institutions with products. Ping An Bank's
+interbank institutional sales volume grew 84.0%
+year on year to RMB1,482.967 billion in 2021.
+In respect of asset custody, Ping An Bank
+advanced integrated investment, financing and
+custody services to improve its value-added
+services and satisfy customer demands. Net
+assets under custody increased 31.0% from
+the beginning of 2021 to RMB7.62 trillion as of
+December 31, 2021.
+50
+50
+Annual Report 2021
+In respect of financial trading, Ping An Bank
+played an active role in improving market
+liquidity and market pricing efficiency
+with its precise pricing technology, agile
+execution capabilities, and efficient real-time
+risk management capabilities. Market share
+measured by bond trading volume was 2.3%
+in 2021. Ping An Bank had served over 500
+financial institutions in sales transactions as of
+December 31, 2021.
+Ping An Bank, as an engine of the Group's "1 +
+N" corporate integrated financial business model,
+remained customer-centric and promoted balanced
+business development and retail transformation
+in 2021. Ping An Bank grew the corporate banking
+business steadily through accelerated digital
+operations by leveraging the Group's competitive
+edge of "finance + technology." The balances of
+corporate loans and corporate deposits grew 8.6%
+and 10.2% from the beginning of 2021 respectively as
+of December 31, 2021. The average cost of corporate
+deposits decreased 0.21 pps year on year to 1.96% in
+2021.
+CORPORATE BUSINESS
+Business Analysis
+Banking Business
+10.3
+1,099.8
+934.2
+17.7
+69.7
+57.3
+21.6
+3,182,634
+2,624,762
+21.3
+Notes: (1) Retail customers include debit and credit cardholders,
+with duplicates removed.
+(2) A qualified private banking customer refers to a
+customer who has over RMB6 million in average daily
+assets for any one of the past three months.
+In consumer finance, Ping An Bank strengthened
+digital development capabilities for credit cards and
+loan products, and promoted integrated customer
+development. Retail lending business continued
+to grow rapidly, with the business portfolio and
+customer mix further improving. The balance
+of retail loans reached RMB1,910.321 billion as of
+December 31, 2021, up 19.0% from the beginning of
+2021. The number of credit cards in circulation rose
+9.2% from the beginning of 2021 to approximately
+70.13 million. Total credit card transactions reached
+RMB3,791.41 billion in 2021, up 9.8% year on year.
+Newly granted Xinyidai unsecured loans and auto
+loans totaled RMB144,933 million and RMB254,334
+million respectively, up 37.7% and 15.0% year on year
+respectively.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 49
+Ping An Insurance (Group) Company of China, Ltd.
+107,149.3
+MANAGEMENT DISCUSSION AND ANALYSIS
+TECHNOLOGY-DRIVEN TRANSFORMATION
+Taking "technology-driven business" as the driving
+force for strategic transformation, Ping An Bank
+builds five leading technology capabilities, namely
+technology, data, agility, talent and innovation, to
+support digital operations. Ping An Bank's IT staff
+(including outsourced staff) exceeded 9,000 as
+of December 31, 2021. IT capital expenditure and
+expenses (excluding Ping An Wealth Management)
+grew 2.4% year on year to RMB7,383 million in 2021.
+Ping An Bank continuously increased technology
+investment and improved input-output efficiency
+through refined R&D management.
+31, 2020
+Change
+Loan quality
+Non-performing loan ratios
+Pass
+2,988,759
+31, 2021
+2,605,204
+Retail loans
+1.21
+1.13
+0.08 pps
+Special mention (1)
+43,414
+14.7%
+December
+December
+(%)
+Under the Group's comprehensive digital operations
+framework, Ping An Bank anticipates trends, makes
+timely decisions, and takes action ahead of others.
+In respect of operations, Ping An Bank increases
+profit, efficiency and productivity. In respect of
+management, Ping An Bank reduces costs, risks
+and labor. Ping An Bank fully integrates the above
+five leading technology capabilities into service
+marketing, risk containment, operations support,
+and management empowerment to improve quality
+and efficiency. Ping An Bank's cost-to-income ratio
+improved by 0.81 pps year on year to 28.30% in 2021.
+Ping An Bank empowered its digital business
+operations with technologies. In retail
+business, the OASIS project supported the
+implementation of the new "pocket banking"
+model to provide customers with interactive
+and full-cycle financial services. In corporate
+business, Ping An Digital Pocket facilitated
+the digital upgrade of corporate products and
+services through "Four Connects and One
+Platform" projects (Account Connect, Data
+Connect, Product Connect, Benefit Connect,
+and Marketing Platform).
+Ping An Bank developed a digital agile
+R&D framework. R&D efficiency was greatly
+improved through one-stop R&D collaboration
+and automation tools. Starlink, a digital
+integrated platform for development,
+operations and maintenance, was rolled
+out across Ping An Bank. Development
+requirements grew nearly 50% year on year
+in 2021, with the average delivery time down
+approximately 10% year on year.
+Ping An Bank developed proprietary new
+technologies. Leveraging cutting-edge
+distributed application architecture and
+domestic financial-level databases, Ping An
+Bank developed an industry-leading next-
+generation proprietary new core system of
+Credit Card A+. The system won the "Fintech
+Development First Prize" from the PBC and
+the CSRC in 2021 for its high performance,
+availability, and scalability.
+ASSET QUALITY
+China's economy steadily recovered in 2021, but
+recovery remained significantly imbalanced among
+regions and sectors, and some companies and
+individuals struggled to repay debts. Ping An
+Bank constantly enhanced comprehensive risk
+management, and its overall asset quality remained
+stable. Both the balance of non-performing loans
+and the non-performing loan ratio dropped
+compared with the beginning of 2021. In response
+to uncertainties presented by the macroeconomic
+conditions, Ping An Bank made high provisions
+for impairment losses on assets, further de-risked
+assets, and strengthened risk provisions.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 51
+Business Analysis
+Banking Business
+(in RMB million)
+December
+December
+31, 2021
+31, 2020
+Change
+In respect of asset management, Ping An
+Wealth Management Co., Ltd. ("Ping An Wealth
+Management"), a subsidiary wholly owned by
+Ping An Bank, drove the transformation and
+development of asset management business
+in a steady and orderly manner. Ping An Bank
+had RMB838,365 million of net asset value-type
+products in compliance with the new asset
+management regulations as of December
+31, 2021, up 80.9% from the beginning of 2021,
+accounting for 96.1% of the balance of non-
+principal guaranteed wealth management
+products, compared with 71.5% at the beginning
+of 2021.
+Business Analysis
+Banking Business
+118,212.0
+Change
+-4.2 pps
+Ping An Bank transferred the Inclusive Finance Business
+Unit to the retail business line in order to improve the
+management and marketing of inclusive finance business.
+for higher volumes, wider coverage, better quality,
+and lower costs. Data application-based and secured
+inclusive financial products have been included in retail
+business since the interim report for 2021, and data for the
+comparable period have been restated accordingly.
+The cross-selling channel made steady contributions
+to retail banking in 2021 as Ping An Bank continued
+to upgrade online cross-selling business models.
+Cross-selling channel's contributions
+to retail banking
+Newly acquired customers (in thousand)
+Net increase in retail AUM balance
+(in RMB million)
+63.4
+2021
+channel's
+Cross-selling
+contribution
+channel's
+contributions
+percentage
+(%)
+Cross-selling
+59.2
+Note:
+-1.0 pps
+17.3
+Ping An Bank's net non-interest revenue for 2021
+totaled RMB49,047 million, up 22.4% year on year,
+driven by increased net fee and commission revenue
+from wealth management business as well as
+increased investment income and fair value gains or
+losses from bond investment.
+RETAIL BUSINESS
+(in RMB million)
+2021
+2020 Change (%)
+8.4
+Retail banking operating
+results
+Revenue from retail banking
+Proportion of revenue from
+retail banking (%)
+98,237
+90,607
+58.0
+Net profit from retail banking
+Proportion of net profit from
+retail banking (%)
+21,498
+59.0
+18,327
+5,647.5
+(%)
+51.0
+56.2
+In respect of deposit business, Ping An Bank
+maintained steady growth, optimized the
+portfolio, strengthened the customer base,
+and controlled the cost of retail deposits. The
+balance of retail deposits increased 12.5% from
+the beginning of 2021 to RMB770,365 million as
+of December 31, 2021. The average cost of retail
+deposits for 2021 was 2.30%, down 0.12 pps year
+on year.
+In private banking & wealth management business,
+Ping An Bank upgraded its products, teams and
+specialized capabilities to boost private banking
+& wealth management business in an all-round
+way. The AUM of Ping An Bank's qualified private
+banking customers stood at RMB1,406.096 billion as
+of December 31, 2021, up 24.6% from the beginning of
+2021.
+In respect of product upgrade, Ping An Bank
+improved an open platform covering all
+product categories and actively promoted
+business innovation. AUM of non-money market
+mutual funds distributed by Ping An Bank grew
+65.8% from the beginning of 2021 to RMB150,325
+million as of December 31, 2021, and the number
+of customers holding such funds increased
+112.8% from the beginning of 2021. The AUM of
+Ping An Bank's new family trusts and insurance
+trusts amounted to RMB38,017 million in 2021, up
+88.6% year on year, remaining at an industry-
+leading level.
+In respect of team upgrade, Ping An Bank
+improved the professional skills and middle
+office empowerment of its teams. Moreover,
+Ping An Bank is building a "high-quality,
+high-productivity, and high-income" wealth
+management team who understands insurance
+well. In this way, Ping An Bank actively
+develops a new driver for the sustainable
+growth of private banking and wealth
+management business.
+In respect of professional capability upgrade,
+Ping An Bank advanced asset allocation
+transformation and built a buy-side investment
+advisory service model. Ping An Bank provided
+customers with professional asset allocation
+services and improved the health of customers'
+wealth by strengthening investment research,
+investment advisory and family office teams.
+Moreover, Ping An Bank empowered its
+frontline teams with technologies including Al,
+screen sharing and microservices to provide
+customers with long-term heartwarming full-
+cycle services.
+Number of retail customers(1)
+(in thousand)
+Including:
+MANAGEMENT DISCUSSION AND ANALYSIS
+Wealth management
+customers (in
+thousand)
+Qualified private
+banking customers (2)
+(in thousand)
+Retail AUM (in RMB million)
+December
+31, 2021
+December
+31, 2020
+Including:
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+48
+New credit cards issued (in thousand)
+Xinyidai unsecured loans granted (in
+RMB million)
+3,067.0
+25.9
+72,449
+50.0
+64,452
+25.3
+Auto loans granted (in RMB million).
+In basic retail banking, Ping An Bank continued
+to strengthen omni-channel customer acquisition
+and full-scenario business development. “Ping An
+Pocket Bank" app's registered users increased 19.2%
+from the beginning of 2021 to 134.9224 million as of
+December 31, 2021. Monthly active users grew 19.6%
+from the beginning of 2021 to 48.2264 million.
+•
+In respect of innovation in customer acquisition
+channels, Ping An Bank actively constructed an
+open bank, diversified cooperation scenarios,
+and pursued ecosystem-based development
+to drive large-scale customer acquisition.
+The retail open bank acquired approximately
+3.41 million customers through the internet
+channel (1) in 2021, accounting for about 30% of
+total retail customers acquired.
+In respect of innovation in operational models,
+Ping An Bank upgraded the "AI + T + Offline"
+(Al bank telebank + offline bank) model, and
+developed "pocket banking" services. Under the
+"AI + T + Offline" model, Ping An Bank launched
+over 1,400 application scenarios as of December
+31, 2021 and served over 31 million customers
+in 2021, increasing mass affluent customers (2)
+and mass RMB10,000-level customers (3) by 22.2%
+and 19.0% respectively from the beginning of
+2021, 1.6 and 1.3 times the growth rates for 2020
+respectively.
+Notes: (1) Customers acquired through the internet channel are
+new debit cardholders exclusive of the Group's cross-
+selling channel.
+(2) The standard for mass affluent customers is "RMB50,000
+the customer's average daily assets in any one of the
+past three months < RMB200,000."
+(3) The standard for mass RMB10,000-level customers is
+"RMB10,000 ≤ the customer's average daily assets in any
+one of the past three months < RMB50,000."
+313,574
+31, 2021
+6,189
+(734)
+Results of Operation
+(in RMB million)
+Net profit
+2021
+2020 Change (%)
+2,396
+3,152
+(24.0)
+Revenue from third-party
+asset management
+1,503
+2,130
+(29.4)
+(in RMB million)
+December
+31, 2021
+December
+31, 2020
+Change (%)
+Assets under management
+Including: Third-party AUM
+4,053,143
+512,072
+3,629,958
+385,795
+11.7
+32.7
+Ping An Insurance (Group) Company of China, Ltd. 59
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Technology Business
+In respect of alternative investment, Ping An Asset
+Management has remained an industry leader in
+investment scale. It achieved a record-breaking
+new alternative investment scale in 2021, capable
+of serving the real economy more effectively.
+By implementing the "Ping An-Yuzi Guangdian
+Infrastructure Perpetual Debt Investment Scheme,"
+Ping An Asset Management channeled insurance
+funds into major semiconductor projects to support
+China's strategic emerging industries.
+In respect of capital market investment, Ping An
+Asset Management has steady investment track
+records, industry-leading performance of multiple
+products, and extensive experience in serving
+institutional customers. Having served overseas
+institutions for more than ten years, Ping An
+Asset Management has wide experience in helping
+overseas top institutions manage asset allocation in
+China.
+Ping An Asset Management adheres to the
+philosophies of value investing and long-term
+investing. Ping An Asset Management is widely
+recognized in the market for its customer-centric
+approach and commitment to doing the right things
+in the long term. As one of the largest and most
+influential institutional investors in China, Ping An
+Asset Management has profound experience in asset
+management. Its AUM amounted to RMB4.05 trillion
+as of December 31, 2021, covering capital and non-
+capital instruments/markets such as stocks, bonds,
+funds, money markets, debts, and equities. Ping An
+Asset Management possesses capabilities of cross-
+market asset allocation and full-spectrum asset
+investment.
+Ping An Asset Management, entrusted with the
+insurance funds of the Company, is responsible for
+the domestic investment management business
+of the Company. Ping An Asset Management also
+provides investment products and third-party asset
+management services to other investors through
+various channels.
+Ping An Financial Leasing
+Since its establishment in 2013, Ping An Financial
+Leasing has maintained steady profit growth and
+strong asset quality. Ping An Financial Leasing
+has built presence in 15 industries, and is a market
+leader in mature business sectors including
+energy, metallurgy, education, culture, engineering,
+construction, manufacturing and processing. Ping
+An Financial Leasing has achieved rapid expansion
+in innovative business sectors represented by
+auto leasing and micro-leasing. With strategic
+transformation and upgrade, Ping An Financial
+Leasing put "expansion into frontiers, further
+promotion of direct lease, and breakthroughs in new
+models" at the heart of its strategy in 2021, focusing
+on "industrial leasing, digital leasing, platform-
+based leasing, and ecosystem-based leasing." Ping
+An Financial Leasing supports China's national
+strategies and green finance strategy by promoting
+product and service innovation to empower small
+and micro-businesses and provide better financial
+services for the real economy. Going forward, Ping
+An Financial Leasing will capitalize on the Group's
+integrated financial business model to seek new
+growth.
+Ping An Financial Leasing continued to strengthen
+risk management amid macroeconomic headwinds.
+The non-performing asset ratio decreased and
+sufficient provisions have been set aside as of
+December 31, 2021, indicating ample risk buffer.
+Moreover, Ping An Financial Leasing strengthened
+risk management by tightening entry requirements
+for new customers, enhancing risk assessment,
+business operations and asset monitoring,
+and dynamically adjusting differentiated asset
+management strategies for existing customers.
+For major projects, a "one customer, one
+strategy" approach was adopted to monitor risks.
+Furthermore, technology-enabled ex ante risk
+management and optimized asset management
+mechanisms ensured that business risks were under
+control.
+Results of Operation
+(in RMB million)
+2021
+2020
+Change (%)
+20,855
+4,311
+19,958
+4.5
+3,802
+13.4
+Ping An continued to explore innovative business models and accelerate
+business development. Total revenue of technology business (1) rose 9.8%
+year on year to RMB99,272 million in 2021.
+Revenue
+Net profit
+Total assets
+Non-performing asset ratio (%)
+December
+31, 2021
+December
+31, 2020
+273,954
+1.21
+277,961
+1.24
+Change (%)
+(1.4)
+-0.03 pps
+58
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+Ping An Asset Management
+(in RMB million)
+OTHER ASSET MANAGEMENT BUSINESS
+Other asset management business includes the
+results of companies including Ping An Financial
+Leasing, Ping An Asset Management, and Ping An
+Overseas Holdings.
+Lufax Holding (NYSE: LU) is one of the leading technology-empowered
+personal financial services platforms in China. Revenue and net profit grew
+18.8% and 36.0% year on year respectively in 2021. The balance of retail credit
+facilitated increased 21.3% from the beginning of 2021 as of December 31, 2021.
+OneConnect (NYSE: OCFT) is a technology-as-a-service provider for
+financial institutions. Revenue increased 24.8% year on year in 2021.
+OneConnect had 796 premium customers, up by 202 year on year, including
+212 premium plus customers, up by 44 year on year.
+Autohome (NYSE: ATHM; HKEX: 02518.HK) is China's leading online auto
+services platform. Autohome's revenue and net profit reached RMB7,237
+million and RMB2,582 million respectively in 2021.
+4,370
+602
+625.9
+Expense
+Net profit (4)
+(38,435)
+(34,136)
+12.6
+16,804
+12,354
+36.0
+In wealth management, Lufax Holding provides
+the middle class and affluent people with diverse,
+personalized products and services. Lufax Holding
+provided 15.52 million active investors with
+approximately 13,600 products and personalized
+financial service items through asset partnerships
+Notes: (1) Technology platform-based income comprises retail
+credit facilitation service fees and wealth management
+transaction and service fees.
+(2) Net interest income primarily comprises net interest
+income from microloans, consumer finance, and
+consolidated trusts.
+(3) Guarantee income primarily comprises the fees
+Lufax Holding charges its borrowers for the credit
+enhancement services provided by Lufax Holding on
+loan products.
+(4) Net profit refers to net profit attributable to Lufax
+Holding's shareholders of the parent company.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 61
+MANAGEMENT DISCUSSION AND ANALYSIS
+Business Analysis
+Technology Business
+Number of Users
+December
+(in million)
+31, 2021
+December
+31, 2020
+Change
+(%)
+82.9
+7,750
+14,174
+Net interest income (2)
+Guarantee income (3)
+BUSINESS OVERVIEW
+The Company conducts its technology business via
+subsidiaries, associates and joint ventures including
+Autohome, Lufax Holding, OneConnect, and Ping
+An Health. These companies also perform important
+roles within Ping An's broader ecosystems. The
+Company continues to explore innovative fintech
+and digital healthcare business models to accelerate
+business development, strengthen its main financial
+businesses, facilitate industrial upgrade, and serve
+the real economy. Total revenue of technology
+business (1) rose 9.8% year on year to RMB99,272
+million in 2021.
+Note: (1) Total revenue of the technology business is the sum of
+revenues of technology companies in our technology
+segment, without considering the shareholding
+proportions.
+LUFAX HOLDING
+Lufax Holding (NYSE: LU) is one of the leading
+technology-empowered personal financial services
+platforms in China. Lufax Holding is committed
+to addressing the huge unmet demand for loans
+among small and micro-business owners in China,
+and providing tailor-made wealth management
+solutions for China's fast-growing middle class and
+affluent population. Lufax Holding furthered its
+strategic transformation in 2021, following changes
+in financial regulations and the market environment.
+Lufax Holding maintained steady business growth,
+boosting its revenue by 18.8% year on year to
+RMB61,835 million and its net profit by 36.0% year on
+year to RMB16,804 million.
+60
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+In retail credit facilitation, Lufax Holding integrates
+high-quality resources in the financial services
+ecosystem as a leading technology-powered retail
+credit facilitation platform in China. With 17 years of
+experience in retail credit facilitation, Lufax Holding
+has facilitated loans for 16.84 million small and
+micro-business owners and retail customers with
+its offline-to-online (020) loan facilitation services
+from offline consultation to online application.
+In addition, Lufax Holding has promoted the
+application of technologies, and enabled 75 partner
+financial institutions to identify borrowers' risks via
+its increased application of Al in areas including
+borrower acquisition, customer risk identification,
+and loan management. Leveraging its O2O whole-
+process service model, Lufax Holding increased
+the balance of retail credit facilitated by 21.3%
+from the beginning of 2021 to RMB661,029 million
+as of December 31, 2021. Moreover, Lufax Holding
+proactively applied Al to post-lending services and
+repayment reminders. The ratio of loans more than
+30 days overdue (1) in the loan portfolio facilitated
+by Lufax Holding was 2.2% as of December 31, 2021.
+Asset quality remained strong, with risks under
+control.
+Note: (1) The ratio of loans more than 30 days overdue refers to
+the proportion of loans more than 30 days (inclusive)
+overdue to the balance of retail credit facilitated.
+with 470 institutions under its unique hub-and-spoke
+business model. Lufax Holding employs Al and
+machine learning to match products with customers
+in real time based on Know Your Customer (KYC),
+Know Your Product (KYP), and Know Your Intention
+(KYI) in diverse scenarios. By doing so, Lufax
+Holding recommends the right products to the right
+customers in the right way at the right time. On
+Lufax Holding's wealth management platform, client
+assets amounted to RMB432,656 million, 81% of which
+were from clients with assets of over RMB300,000, as
+of December 31, 2021. As per the government policy
+on transforming online lending platforms, Lufax
+Holding cleaned up all its peer-to-peer AUM held
+by retail customers by August 2021, achieving the
+target of winding up online lending business ahead
+of schedule.
+Financial Data
+Ping An Health (HKEX: 01833.HK; stock short name: PA GOODDOCTOR) is
+China's leading online healthcare services platform. Ping An Health spared
+no effort to develop the ecosystem, medical service capabilities, customer
+acquisition channels, service networks, and technological capabilities in
+2021, delivering RMB7,334 million in revenue.
+2021
+Change
+(%)
+61,835
+52,046
+18.8
+(in RMB million)
+Revenue
+Including:
+Technology platform-
+based income (1)
+38,294
+41,222
+(7.1)
+2020
+Asset Management Business
+Business Analysis
+MANAGEMENT DISCUSSION AND ANALYSIS
+Financing category
+108,904
+142,909
+(23.8)
+expenses
+(366)
+(451)
+(18.8)
+Administrative category(1)
+95,658
+130,232
+(26.5)
+Net fees and commission
+Total
+461,312
+391,052
+18.0
+revenue
+3,245
+3,884
+(16.5)
+Note:
+Administrative expenses (2)
+(1,469)
+(1,597)
+Fees and commission
+117.7
+117,911
+256,750
+Analysis of Profit Sources
+Conforming to regulatory guidance, Ping An Trust
+actively planned for transformation, focused on its
+core trust business, and continued to reduce assets
+held in trust within the financing category, leading
+to a year-on-year decrease in fees and commission
+revenue in 2021. Net profit of the trust business
+dropped 90.8% year on year due to changes in the
+value of assets in the investment category.
+Change (%)
+(16.7)
+Assets Held in Trust
+Ping An Trust improved its assets portfolio by
+reducing financing trust and conduit administrative
+trust businesses in an orderly manner while
+promoting trust business within the standard-asset
+investment and service categories as per regulatory
+requirements. Total assets held in trust grew 18.0%
+from the beginning of 2021 to RMB461,312 million,
+in which the investment category expanded 117.7%
+from the beginning of 2021 to RMB256,750 million as
+of December 31, 2021. The business continued to de-
+risk through business mix optimization.
+(in RMB million)
+2021
+2020
+Fees and commission revenue
+3,611
+4,335
+Monthly average assets
+(8.0)
+held in trust
+424,695
+1.0
+(in RMB million)
+December
+31, 2021
+December
+31, 2020
+Change (%)
+Fee rate of assets held in
+trust (¹) (%)
+0.84
+1.02
+-0.18 pps
+Investment category
+429,040
+Total investment income (3)
+(1,506)
+399
+1,919
+(19.2)
+1,896
+2,180
+(13.0)
+Administrative category
+165
+236
+(30.1)
+Fee rate of assets held in
+trust (%)
+0.84
+1.02
+1,550
+-0.18 pps
+0.85
+2.17
+-1.32 pps
+Financing category (%)
+1.43
+0.20 pps
+Administrative category (%)
+0.14
+0.15
+-0.01 pps
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 57
+Investment category (%)
+Registered users on
+(16.7)
+3,611
+N/A
+Other net revenue and
+expenses
+Profit before tax
+Income tax
+Net profit
+693
+530
+30.8
+963
+3,216
+(70.1)
+4,335
+(737)
+229
+2,479
+(90.8)
+(1) An administrative trust refers to a trust scheme under
+which a trust company, acting as the trustee, assumes
+the administrative function to provide the trustor
+(beneficiary) with administrative and executive services
+for specified purposes.
+Fees and Commission Revenue
+Fees and commission revenue of the trust business
+declined 16.7% year on year in 2021 mainly due to
+reduced financing trust business and decreased
+performance fees in the investment category.
+Notes: (1) Fee rate of assets held in trust = fees and commission
+revenue/ average monthly assets held in trust.
+(2) Administrative expenses include administrative
+expenses and impairment losses on receivables and
+others under the segmented income statement.
+(3) Total investment income includes interest revenue
+from non-banking operations, investment income,
+share of profits and losses of associates and joint
+ventures, impairment losses on investment assets, and
+interest expenses on assets sold under agreements
+to repurchase and placements from banks and other
+financial institutions under the segmented income
+statement.
+(in RMB million)
+2021
+2020 Change (%)
+Fees and commission revenue
+Investment category
+Financing category
+(0.4)
+wealth management
+1.23
+51.62
+Healthcare
+services (2)
+5,046
+4,747
+6.3
+(5,627)
+(5,002)
+12.5
+1,707
+1,864
+(8.5)
+(1,538)
+(948)
+62.2
+Cost
+Gross profit
+Net profit(3)
+Notes: (1) Medical services refer to health promotion services
+including care for life and disease diagnosis/treatment,
+as well as medicines and medical devices required for
+providing these services.
+(2) Healthcare services refer to ongoing comprehensive
+services of testing, assessing and intervening in an
+individual's or a group's health status and health risk
+factors.
+(3) Net profit refers to net profit attributable to Ping An
+Health's shareholders of the parent company.
+(4) Figures may not match the calculation due to rounding.
+64
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+MANAGEMENT DISCUSSION AND ANALYSIS
+AUTOHOME
+Autohome (NYSE: ATHM; HKEX: 02518.HK), China's
+leading online auto services platform, is committed
+to developing a smart auto ecosystem centering on
+data and technology. In the ecosystem, Autohome
+provides auto consumers with diverse products and
+services across the entire auto lifecycle. Autohome
+announced its "ecosystem strategy" on September
+15, 2021. By developing the dual ecosystem based
+on Autohome and Ping An's cooperation, Autohome
+will build its new business portfolio and provide
+comprehensive services to consumers, automakers
+and various players in the auto ecosystem.
+Autohome completed its secondary listing on HKEX
+in March 2021, and was included in the Hang Seng
+Composite Index in early June 2021.
+8.0
+The fluctuating production and sales of passenger
+vehicles in China due to chip supply shortages
+brought big challenges to Autohome's short-term
+business growth in 2021. Despite this, Autohome's
+business performance remained solid in 2021,
+as revenue reached RMB7,237 million. Moreover,
+Automakers' and auto dealers' demand for online
+marketing services increased, driven by changing
+marketing approaches and advancing digitization.
+In addition, Autohome enhanced its presence in
+the used car area by acquiring TTP Car Inc., a
+leading online used car auction platform in China.
+Autohome's revenue from the online marketplace
+and other business grew 11.6% year on year in
+2021, accounting for 30.9% of its total revenue.
+Autohome's net profit amounted to RMB2,582 million
+in 2021.
+2,119
+Including: Medical services (1)
+In respect of medical service capabilities,
+Ping An Health positions family doctors
+as "customer managers who understand
+healthcare.” Ping An Health reaches users,
+helps them generate exclusive healthcare
+records, and satisfies their pan-healthcare
+needs throughout their life cycles with timely,
+high-quality online medical services. Ping An
+Health's in-house doctors and contracted
+external doctors totaled over 40,000 as of
+December 31, 2021, with over 1,100 contracted
+domestic renowned doctors, providing online
+users with diverse medical and healthcare
+services.
+In respect of customer acquisition channels,
+Ping An Health targets the Group's over 227
+million retail customers to provide them with
+full-lifecycle medical and healthcare services
+through in-depth integration with the Group's
+main financial businesses. Moreover, Ping An
+Health extended its services to corporate
+customers by bringing its medical and
+healthcare service capabilities into full play.
+In respect of service networks, Ping An Health
+provides users with "online, in-store, and home-
+delivered" services by continuously broadening
+the coverage of medical and healthcare
+institutions and building a comprehensive
+provider management system. Ping An Health
+had over 3,600 partner hospitals, over 50% of
+which are 3A hospitals, and 202,000 partner
+pharmacies, which represent about 34% of all
+pharmacies across China. Moreover, Ping An
+Health's constantly improved service network
+covered over 1,700 checkup institutions
+and about 96,000 healthcare management
+institutions.
+In respect of technological capabilities, Ping An
+Health is committed to developing proprietary
+Al technology. Ping An Health has accumulated
+the data of over 1,269 million consultations
+based on the AskBob consultation/treatment
+assistant tool. The accuracy of Al-based
+medical case triage exceeded 99%.
+December
+31, 2021
+December
+Change
+31, 2020
+(%)
+Registered users (in million)
+Consultations (in million)
+422.94
+372.82
+13.4
+1,269.49
+1,004.25
+26.4
+Change
+(in RMB million)
+2021
+2020
+(%)
+Revenue
+7,334
+6,866
+6.8
+2,288
+Autohome strengthened its leading role among auto
+service apps in China through diverse channels and
+high-quality contents. The "Autohome" app was
+upgraded in June 2021, optimizing user experience
+to attract younger users. Autohome's average
+daily active users on mobile devices reached
+46.90 million in December 2021. For data products,
+Autohome is committed to promoting its data
+products to empower automakers and auto dealers
+in R&D, marketing, conversion, and aftersales by
+building a comprehensive software-as-a-service
+platform which covers the entire auto lifecycle. In
+the new energy vehicle (NEV) sector, Autohome
+offers a variety of products to meet the needs of
+different NEV makers. Revenue of the NEV business
+increased by 128% year on year in 2021. For auto
+transactions, Autohome promoted strategic synergy
+and integration with TTP Car Inc. Autohome and
+TTP Car Inc. jointly contributed about 17% of China's
+used passenger car transaction volume (2) through
+used car deal matching and auction services in 2021.
+For auto financing, Autohome proactively facilitated
+financial cooperation including lending and financial
+leasing services for consumers and dealers.
+(in RMB million)
+3,621
+(28.7)
+Cost
+Notes: (1) Net profit refers to adjusted net income attributable to
+Autohome Inc. (Non-GAAP).
+(2) The data on used passenger car transactions is from
+the China Automobile Dealers Association (CADA).
+(3) Figures may not match the calculation due to rounding.
+Ping An Insurance (Group) Company of China, Ltd. 65
+Analysis of Embedded Value
+Our life and health insurance business (L&H) embedded value (“EV") rose
+6.3% from the beginning of 2021 to RMB876,490 million as of December 31,
+2021, achieving an operating ROEV of 11.1%.
+Complex, severe economic situations across the world and resurgences of
+COVID-19 increased uncertainty in resident income expectations in 2021.
+This temporarily tempered consumer spending on long-term protection
+products. Moreover, Ping An's sales agents decreased. As a result, NBV of
+L&H dropped 23.6% year on year to RMB37,898 million.
+INDEPENDENT ACTUARIES REVIEW OPINION REPORT ON THE ANALYSIS OF EMBEDDED VALUE AND
+OPERATING PROFIT DISCLOSURES
+To the directors of
+Ping An Insurance (Group) Company of China, Ltd.
+We have reviewed the Analysis of Embedded Value and Operating Profit of Ping An Insurance (Group)
+Company of China, Ltd. (the “Company”) as of December 31, 2021. The EV and Operating Profit results
+include embedded value, new business value after cost of capital ("NBV"), valuation methodology
+and assumptions, first year premium of new business, profit margin of new business, embedded value
+movement, sensitivity analysis, operating profit, sources of earnings and residual margin related data as at
+December 31, 2021.
+The Company prepared the embedded value and NBV results in accordance with the Standards for
+Actuarial Practice: Valuation Standard for Embedded Value of Life Insurance (the "Standards") which was
+promulgated by the China Association of Actuaries in November 2016. Our responsibility, as independent
+actuaries, is to perform certain review procedures set out in our letter of engagement and, based on these
+procedures, conclude whether the embedded value methodology and assumptions are consistent with the
+Standards and available market information.
+We have reviewed the methodology and assumptions used in preparing the EV and Operating Profit
+results, including:
+Review the embedded value and NBV of the Company as of December 31, 2021;
+•
+•
+Review the embedded value movement analysis;
+Review the sensitivity analysis of the embedded value and NBV; and
+Review the operating profit of the Company, source of earnings and residual margin related data of
+L&H.
+66
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+platform
+2,582
+Net profit(1)
+(19.6)
+7,697
+Change
+2021
+2020
+Revenue
+7,237
+8,659
+(16.4)
+Including: Media services
+2,011
+3,455
+(41.8)
+Leads generation
+Business Analysis
+Technology Business
+services
+3,199
+(6.6)
+Online marketplace
+and other
+business
+2,237
+2,005
+11.6
+(1,048)
+(961)
+9.0
+Gross profit
+2,988
+63
+(%)
+Annual Report 2021
+407,220
+19,351
+6.2
+N/A
+Note: (1) Legacy products refer to products that ceased to
+be distributed by the wealth management business
+of Lufax Holding but still have outstanding balances,
+mainly comprising P2P products.
+ONECONNECT
+OneConnect (NYSE: OCFT) is a technology-as-a-
+service provider for financial institutions.
+OneConnect provides clients with integrated
+products featuring "horizontal integration" and
+"vertical full coverage," including Digital Banking,
+Digital Insurance, and Gamma Platform, which
+offers fintech infrastructure services. OneConnect
+announced an upgraded strategy of “One Body
+and Two Wings" in September 2021. One Connect
+facilitated the digital transformation of the financial
+services ecosystem, and provided governments,
+regulators, and enterprises with trade, credit, supply
+chain, data security, risk management, and other
+technological services. OneConnect also expanded
+its overseas market by exporting “technology +
+business" comprehensive solutions.
+Thanks to its deep insights into the business needs
+of financial institutions and through long-term
+cooperation, OneConnect has built an extensive
+and solid customer base comprising financial and
+governmental institutions. With diverse innovative
+products and solutions, operating performance
+continued to improve. Revenue grew 24.8% year on
+year to RMB4,132 million in 2021. Premium customers
+increased by 202 year on year to 796, including 212
+premium plus customers, up by 44 year on year.
+62
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+MANAGEMENT DISCUSSION AND ANALYSIS
+OneConnect remained focused on core technology
+research and technological innovation to better
+empower industry transformation. One Connect
+I was on the IDC FinTech Rankings Top 100 list
+and KPMG's China Leading Fintech 50 company
+list for the fourth consecutive year, and won the
+"2021 Wu Wenjun Al Science & Technology Award"
+for Technology Progress (Enterprise Technology
+Innovation Project).
+(in RMB million)
+Revenue
+Including: Implementation
+(%)
+Change
+2021
+2020
+4,132
+3,312
+24.8
+734
+852
+(13.9)
+432,656
+Legacy products (1)
+Including:
+21.3
+1.4
+46.16
+Ping An Insurance (Group) Company of China, Ltd.
+11.8
+Active investors (1)
+15.52
+14.88
+Accumulated borrowers
+16.84
+14.48
+4.3
+16.4
+Note: (1) Active investors refer to customers who made an
+investment or had a positive account balance in the
+past 12 months.
+(2) Figures may not match the calculation due to rounding.
+PING AN HEALTH
+Assets under Management
+December
+(in RMB million)
+31, 2021
+December
+31, 2020
+Change
+Balance of retail credit
+facilitated
+661,029
+545,145
+Client assets
+432,656
+426,571
+(%)
+Ping An Health (HKEX: 01833.HK; stock short
+name: PA GOODDOCTOR), China's leading online
+healthcare services platform, caters for the demand
+of industry players. Ping An Health focuses on the
+four major pain points of the healthcare industry,
+namely the unbalanced supply and demand,
+insufficient high-quality healthcare, low resource
+utilization efficiency, and fragmented market
+supply, under the value proposition of "worry-free,
+time-saving, and money-saving" user experience.
+As an integral part of the Group's "HMO managed
+care model," Ping An Health leverages its platform
+traffic and the B2C customer acquisition model
+to effectively reach potential users under the
+fees-based "basic benefit packages + individual
+value-added services" model. Starting with
+members' dedicated family doctors, Ping An Health
+covers five healthcare scenarios including health,
+sub-health, disease, chronic disease, and eldercare
+management. Capitalizing on its online-to-offline
+(020) service network, Ping An Health has
+developed an online-merge-offline "medical +
+healthcare" services platform to provide high-quality
+and more convenient healthcare services.
+Current products
+Business
+Gross profit margin (%)
+34.8
+Net profit (1)
+(1,282)
+1,243
+15.5
+37.5 -2.7 pps
+(1,354)
+(5.3)
+Ping An Health had a total of nearly 423 million
+registered users as of December 31, 2021. The
+number of cumulative paying users exceeded 38
+million in 2021. Revenue rose to RMB7,334 million, and
+gross profit margin reached 23.3% in 2021.
+Notes: (1) Net profit refers to net profit attributable to
+OneConnect's shareholders of the parent company.
+(2) Figures may not match the calculation due to rounding.
+Premium customers(1)
+customers (1)
+Note:
+2021
+2020
+Change
+(%)
+796
+594
+34.0
+212
+168
+26.2
+(1) The number of premium customers is the number of
+institutional customers that contribute annual revenue
+of at least RMB100,000 to One Connect, excluding Ping
+An Group and its subsidiaries. The number of premium
+plus customers is the number of institutional customers
+that contribute annual revenue of at least RMB1 million
+to OneConnect, excluding Ping An Group and its
+subsidiaries.
+revenue
+Ping An Health furthered its strategic upgrade,
+sparing no effort to develop the ecosystem, medical
+service capabilities, customer acquisition channels,
+service networks, and technological capabilities.
+In respect of ecosystem development, Ping
+An Health is the flagship platform of the
+Group's healthcare ecosystem and also an
+integral part of the Group's "HMO managed
+care model," Ping An Health created strong
+synergies with the Group's member companies
+in the healthcare ecosystem. The synergies
+enabled Ping An Health to accelerate the
+construction of the healthcare ecosystem.
+Leveraging the Group's high-quality resources
+including premium customers, product design,
+and technological capabilities, Ping An Health
+developed its medical and healthcare service
+capabilities to offer effective solutions for the
+pain points of the healthcare industry, namely
+the unbalanced supply and demand, insufficient
+high-quality healthcare, low resource utilization
+efficiency, and fragmented market supply.
+1,437
+Gross profit
+Including: Premium plus
+363
+services
+451
+128.7
+30.3
+606
+(25.6)
+Risk management
+services
+534
+47.3
+Operational
+support
+services
+1,098
+origination
+1,061
+116
+266
+Others
+Cost of revenue
+314
+234.1
+platform
+Cloud services
+3.4
+1,050
+(2,696) (2,069)
+Diversification within new business lowers cost of
+capital
+Diversification between new business and in-force
+lowers cost of capital
+Reported NBV based on a cost of capital calculated
+at policy level
+2,372
+3,490
+43,760
+Diversification effects
+37,898
+ANA return
+NBV post-risk diversification benefits [3]
+Including: NBV pre-risk diversified
+(5,876) Mainly due to adjustments of lapse and expense
+assumptions based on experience
+(16,730) Mainly due to the decline in new business growth
+and the fluctuation of policy persistency ratios
+11,335
+within new business
+[8]
+Economic assumptions changes
+with in-force
+Operating assumptions and model
+[4]
+changes
+Operating variances and others
+[5]
+L&H EV operating profit
+[6]=[2+...+5]
+91,518
+[7]
+7,339
+Market value adjustment
+In-force and NBV unwind at the 11% risk discount
+rate
+Diversification effects
+value
+2.1
+Including: Unwinding of in-force
+19.7
+Investment return variance
+21.8
+Group business
+1.5
+1.8
+2.9
+Total
+27.8
+33.3
+33.8
+41.9
+Notes: (1) ANP (annualized new premium) is calculated as the sum of 100 percent of annualized first year premiums and 10 percent of
+single premiums.
+(2) Figures may not match the calculation due to rounding.
+70
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Embedded Value Movement
+The table below shows how the Company's embedded value changed from the opening balance of
+RMB1,328,112 million as of December 31, 2020 to the closing balance of RMB1,395,509 million as of December
+31, 2021.
+(in RMB million)
+L&H Opening EV
+2021
+Note
+[1]
+824,574
+Expected return on opening EV
+[2]
+70,364
+59,029
+[9]
+•
+[10]
+(41,469) Dividends paid by the Company to shareholders
+(2,459) Long-term Service Plan and Key Employee Share
+Purchase Plan, as well as the offset effect for the
+amortization during the Reporting Period
+(3,900) Repurchase of A Shares of Ping An Group
+519,018
+Other business closing ANA
+Closing group EV
+Closing group EV per share (in RMB)
+1,395,509
+76.34
+Note: Figures may not match the calculation due to rounding.
+EV operating profit of L&H in 2021 was RMB91,518 million, mainly comprised of the NBV and expected return on opening
+EV.
+(in RMB million)
+2021
+L&H EV operating profit
+L&H operating ROEV (%)
+[6]
+[12]=[6]/[1]
+Note: Figures may not match the calculation due to rounding.
+SENSITIVITY ANALYSIS
+2020
+91,518
+11.1
+109,577
+14.5
+The Company has investigated the effect, on the embedded value of Group, embedded value of the life
+and health insurance business and the value of one year's new business, of certain independently varying
+assumptions regarding future experience. Specifically, the following changes in assumptions have been
+considered:
+Assumptions and model used in 2020
+•
+Investment return and risk discount rate
+•
+A 10% increase in mortality, morbidity and accident rates
+•
+17.7
+A 10% increase in policy discontinuance rates
+Dividends upstreamed from Ping An Life to the
+Company
+Non-operating one-off item and
+others
+Note
+2021
+L&H EV profit
+[11]=[6+...+10]
+73,968
+Shareholder dividends
+Employee stock ownership plan
+L&H Closing EV
+Change in market value adjustment of free surplus
+during the Reporting Period
+(24,889) Lower than assumed investment return
+(20,450) Dividends upstreamed from Ping An Life to the
+Company
+(1,601) L&H's Long-term Service Plan and Key Employee
+Share Purchase Plan, as well as the offset effect
+for the amortization during the Reporting Period
+876,490
+Other business opening ANA
+Operating profit of other business
+Non-operating profit of other business
+Market value adjustment and other
+variance
+503,538
+52,055
+(9,905) Value revaluation loss of the convertible bonds
+issued by Lufax Holding to the Group
+709
+Other business closing ANA before
+capital changes
+546,396
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 71
+MANAGEMENT DISCUSSION AND ANALYSIS
+Analysis of Embedded Value
+(in RMB million)
+Dividends received
+Dividends paid
+Employee stock ownership plan
+Shares repurchase
+20,450
+19.3
+102,808
+28.3
+Protection & Saving hybrid
+(long-PPP)
+15,926
+12,941
+23.1
+7,560
+7,195
+5.1
+Protection & Saving hybrid
+(short-PPP)
+36,715
+32,860
+11.7
+7,178
+6,187
+16.0
+Short-term
+5,062
+5,614
+(9.8)
+3,827
+3,775
+1.4
+Tele, internet and others
+15,919
+15,477
+2.9
+4,485
+4,234
+(51.4)
+5.9
+25,756
+(46.2)
+•
+are:
+The new business volumes measured by first year premium (FYP) and its new business value by segment
+New Business Value
+Analysis of Embedded Value
+FYP used to calculate New Business Value
+New Business Value
+(in RMB million)
+Retail business
+2021
+2020 Change (%)
+2021
+2020
+Change (%)
+97,202
+(5.5)
+37,330
+48,756
+(23.4)
+Agency
+72,131
+78,230
+(7.8)
+31,076
+42,913
+(27.6)
+Long-term protection.
+14,429
+26,815
+12,512
+Bancassurance
+Bancassurance
+9,100
+54.0
+43.1
+54.9
+50.6
+64.5
+Long-term protection
+86.7
+96.0
+87.3
+96.2
+Protection & Saving hybrid (long-PPP)
+47.5
+55.6
+47.4
+55.5
+Protection & Saving hybrid (short-PPP)
+19.5
+18.8
+27.1
+29.3
+Short-term
+75.6
+67.2
+79.9
+67.5
+Tele, internet and others
+28.2
+27.4
+28.3
+43.7
+9,152
+47.4
+Agency
+0.6
+1,769
+1,609
+9.9
+Group business
+39,088
+46,108
+(15.2)
+568
+820
+(30.8)
+Total
+136,290
+148,915
+(8.5)
+37,898
+49,575
+(23.6)
+Notes: (1) Figures may not match the calculation due to rounding.
+(2) "PPP" stands for Premium Payment Period.
+(3) Long-term protection products cover whole life, term life, critical illness and long-term accident insurance. Protection & Saving
+products (long-PPP) cover endowment and annuity products with PPP of 10 years and above. Protection & Saving products
+(short-PPP) cover endowment and annuity products with PPP below 10 years.
+(4) Tele, internet and others include telemarketing, internet marketing and Ping An Health Insurance's retail business.
+(5) The differences between FYP used to calculate value of new business and FYP disclosed in Management Discussion and
+Analysis (MD&A) are explained in the appendix.
+The NBV margin by segment:
+By FYP (%)
+By ANP (%)
+2021
+2020
+2021
+2020
+Retail business
+38.4
+A 10% increase in maintenance expenses
+MANAGEMENT DISCUSSION AND ANALYSIS
+A 5% increase in the policyholders' dividend payout ratio; and
+[5]=[1+2+3+4] 109,314 103,926
+(12,239) (10,260)
+97,075 93,666
+[6]
+L&H operating profit after tax
+[7]=[5]+[6]
+As the result of significant
+adjustments in non-economic
+assumptions in 2020, increase
+of long-term life insurance
+policyholders' reserve reduced the
+year-on-year base for operating
+variances and others. The positive
+"operating variances and others"
+in 2021 reflected the better-than-
+assumed operating experience
+Notes: (1) Return on net worth is the investment return on shareholder equity based on the EV long-run investment return assumption
+(5%).
+(2) Spread income is the expected investment return from assets backing contract liability based on the EV long-run investment
+return assumption (5%) exceeding the interest required on contract liability.
+(3) Figures may not match the calculation due to rounding.
+74
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+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 of December 31, 2021, the
+residual margin of life and health insurance business was RMB940,733 million, which dropped by 2.0% from
+the beginning of 2021 mainly due to adverse lapse variances. The movement of L&H residual margin has
+been presented below:
+(in RMB million)
+2021
+2020 Note
+Opening residual margin
+[1]
+960,183
+918,416
+Contribution from new business
+[2]
+55,905
+88,571
+Expected interest growth
+[3]
+36,505
+36,319
+Release of residual margin
+L&H operating profit before tax
+Income tax
+[4]
+4,607
+[4]
+Owners of the parent
+Non-controlling interests
+147,961
+20,518
+139,470
+16,200
+95,906
+92,672
+1,169
+994
+Notes: (1) The short-term investment variance, impact of discount rate change, and impact of one-off material non-operating items and
+others set out above are net of tax.
+(2) Figures may not match the calculation due to rounding.
+Source of Earning and Residual Margin Analysis of L&H
+The breakdown by source of earnings of L&H operating profit has been shown as below:
+(in RMB million)
+2021
+2020
+Note
+Release of residual margin
+[1]
+82,488 81,583
+Return on net worth (1)
+[2]
+14,567
+13,170
+Spread income (2)
+[3]
+4,823
+4,565
+Operating variances and others
+7,436
+Attributable to:
+(82,488)
+Lapse variances and others
+Ping An Insurance (Group) Company of China, Ltd. 75
+Ping An Insurance (Group) Company of China, Ltd. 69
+Liquidity and Capital Resources
+Ping An's comprehensive solvency margin ratio and core solvency margin
+ratio were 233.5% and 228.7% respectively as of December 31, 2021. Both
+were above current regulatory requirements and remained healthy under
+the China Risk Oriented Solvency System (C-ROSS) Phase II Rules.
+Free cash of the parent company was RMB41,581 million as of December
+31, 2021, remaining at a reasonable level.
+Ping An continues to increase cash dividends, and plans to pay a final
+dividend of RMB1.50 per share in cash for 2021. The full-year cash dividend
+will be RMB2.38 per share, up 8.2% year on year. The cash dividend payout
+ratio based on operating profit attributable to shareholders of the parent
+company (excluding share repurchases) is 29.2%. Ping An has grown its
+full-year cash dividend amount at a 25.8% compound annual growth rate
+(CAGR) over the past five years. The total amount of funds paid by the
+Company for share repurchases was RMB3,900 million in 2021.
+OVERVIEW
+The aim of the Group's liquidity management is to
+maximize shareholder returns by strictly enforcing
+liquidity risk limits, improving the efficiency of fund
+utilization, reducing funding costs, and optimizing
+the allocation of financial resources as well as the
+capital structure on the premise of security.
+The Company manages its liquidity and capital
+resources at the Group level. The Strategy
+and Budget Management Committee, the Risk
+Management Executive Committee, and the
+Investment Management Committee under the
+Group's Executive Committee oversee these
+essentials at the Group level. As the Group's
+liquidity management execution unit, the Treasury
+Department is responsible for the Group's treasury
+management functions including cash settlement
+management, cash flow management, funding
+management, and capital management.
+Liquidity management of the Group comprises
+capital management and cash flow management.
+The Group has put in place a comprehensive capital
+management and decision-making mechanism.
+The Group's subsidiaries put forward their capital
+demands based on their own business development
+needs. The parent company then submits its
+recommendations on the overall capital plan for
+the Group, based on the overall situation of the
+subsidiaries' business development. The Board
+of Directors of the Group then determines a final
+capital plan based on the strategic plan of the
+Group before allocating capital accordingly.
+All the operating, investing and financing activities
+of the Group should meet the requirements of
+liquidity management. The parent company and
+its subsidiaries implement separate management
+based on their operating cash inflows and outflows.
+Subsidiaries conduct centralized allocation and
+deployment of funds through the pooling of cash
+inflows and outflows. The parent company and its
+subsidiaries are therefore able to monitor cash flows
+on a day-to-day basis.
+(in RMB million)
+Total assets
+Total liabilities
+Total liabilities to total
+assets ratio (%)
+December 31,
+2021
+December 31,
+2020
+Change (%)
+10,142,026
+9,064,303
+9,527,870
+8,539,965
+6.4
+6.1
+89.4
+89.6
+-0.2 pps
+Note: Total liabilities to total assets ratio = total liabilities/total
+assets.
+CAPITAL STRUCTURE
+The Group's long-term capital stability stems from
+the profits continuously generated by its various
+businesses. Furthermore, in accordance with its
+capital plan, the Group ensures capital adequacy
+by issuing capital market instruments including
+equity securities, capital supplement bonds, tier 2
+capital bonds, undated capital bonds and perpetual
+subordinated bonds to raise capital. Adjustments
+are made to surplus capital through dividend
+distribution or by other means. The Group's equity
+attributable to shareholders of the parent company
+was RMB812,405 million as of December 31, 2021,
+up 6.5% from the beginning of 2021. The parent
+company's capital mainly comprises contributions
+from shareholders as well as proceeds from the
+issuance of A and H shares.
+76
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Annual Report 2021
+(81,583)
+Note: Figures may not match the calculation due to rounding.
+150,074
+[5]
+(29,373)
+(1,539) Adverse lapse variances mainly
+due to the gradual lapse
+Closing residual margin
+[6]=[1+...+5]
+940,733
+960,183
+Note: Figures may not match the calculation due to rounding.
+Appendix
+of customers who stopped
+paying premiums
+The differences between FYP used to calculate value of new business and FYP disclosed in MD&A are
+explained below.
+For the twelve months
+ended December 31, 2021
+(in RMB million)
+FYP used to
+calculate value
+of new business
+Retail business
+97,202
+FYP disclosed
+in MD&A
+Difference
+Reasons
+127,776
+Group business
+39,088
+22,298
+16,790
+Total of L&H
+136,290
+(30,574) Guaranteed renewal and other short-
+term products' renewal premiums
+are included in FYP disclosed in
+MD&A but not included in FYP used
+to calculate value of new business
+In compliance with current accounting
+standards, group investment
+contracts are not included in FYP
+disclosed in MD&A, but included in
+FYP used to calculate value of new
+business due to their contribution to
+value of new business
+(13,784)
+•
+93,666
+1,282
+155,670
+10% increase in maintenance expenses
+1,392,035
+873,017
+37,567
+5% increase in the policyholders' dividend payout ratio
+10% decrease in the fair value of equity assets
+1,386,111
+867,093
+37,835
+1,375,739
+862,159
+N/A
+ANALYSIS OF OPERATING PROFIT
+This section contains the Group Operating Profit and Source of Earning and Residual Margin Analysis of
+L&H. The Company has engaged Ernst & Young (China) Advisory Limited to review the reasonableness of
+the methodology and the calculation results of the Analysis of Operating Profit for 2021.
+Operating profit of the Group
+Operating profit is a meaningful business performance evaluation metric given the long-term nature of
+our major life and health insurance business. We define operating profit after tax as reported net profit
+excluding the following items which are of short-term, volatile or one-off nature:
+Short-term investment variance, which is the variance between actual investment return of the life and
+health insurance business and the EV long-run investment return assumption, net of the associated
+impact on insurance and investment contract liability. The investment return of the life and health
+insurance business is locked at 5% after excluding the short-term investment variance;
+The impact of discount rate (1) change is the effect on insurance contract liability of the life and health
+insurance business due to changes in the discount rate; and
+The impact of one-off material non-operating items and others is the impact of material items that
+management considered to be non-operating incomes and expenses, which in 2021 and 2020 refer to
+the revaluation gain or loss on the convertible bonds issued by Lufax Holding to the Group.
+Note: (1) Refer to the significant accounting policies in the notes of the Company's 2021 Annual Report for the information about the
+discount rate.
+The operating profit after tax which excludes fluctuations of the above non-operating items can provide a
+clearer and more objective representation of the Company's business performance and trend.
+The Group's operating profit after tax attributable to shareholders of the parent company in 2021 was
+RMB147,961 million, up 6.1% year on year. L&H operating profit after tax attributable to shareholders of the
+parent company was RMB95,906 million, up 3.5% year on year.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 73
+MANAGEMENT DISCUSSION AND ANALYSIS
+Analysis of Embedded Value
+Operating profit after tax attributable to shareholders of the parent company
+(in RMB million)
+2021
+2020
+Change (%)
+36,629
+Life and health insurance business
+869,230
+10% increase in policy discontinuance rates
+A 10% decrease in the fair value of equity assets
+72
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Sensitivity to key assumptions
+(in RMB million)
+Group EV
+L&H EV
+NBV
+Base case
+1,395,509
+876,490
+37,898
+Assumptions and model used in 2020
+1,402,542
+883,523
+40,370
+Investment return and risk discount rate increased by 50 bps
+per annum
+1,454,151
+935,133
+41,457
+Investment return and risk discount rate decreased by 50 bps
+per annum
+1,331,286
+812,268
+33,969
+10% increase in mortality, morbidity and accident rates
+1,370,349
+851,331
+34,214
+1,388,248
+97,075
+95,906
+3.5
+147,961
+139,470
+6.1
+Note: Figures may not match the calculation due to rounding.
+The Group
+(in RMB million)
+2021
+2020
+2021
+Net profit
+[1]
+121,802
+159,359
+60,303
+L&H business
+2020
+96,072
+Excluding:
+Short-term investment variance of L&H(1) [2]
+Impact of discount rate change of L&H(1) [3]
+(23,491)
+(13,281)
+10,308 (23,491)
+(7,902) (13,281)
+10,308
+(7,902)
+Impact of one-off material non-operating
+items and others (1)
+[4]
+(9,905)
+Operating profit after tax
+[5]=[1-2-3-4]
+168,479
+The Group
+92,672
+36.5
+(5,291)
+Property and casualty insurance business
+16,117
+16,083
+0.2
+Banking business
+21,060
+16,766
+25.6
+Asset management business
+12,221
+11,172
+9.4
+Including: Trust business
+229
+2,476
+(90.8)
+Securities business
+3,614
+2,959
+22.1
+Other asset management business
+8,378
+5,737
+46.0
+Technology business
+7,948
+6,654
+19.5
+Other businesses and elimination
+(3,876)
+Annual Report 2021
+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.
+Policyholder dividend
+6.3
+824,574
+14.5
+49,575
+37,898
+Value of one year's new business after cost of capital (NBV)
+Long-run investment return assumption (%)
+11.1
+L&H operating ROEV (%)
+876,490
+L&H EV
+Change (%)
+2020/
+December
+31, 2020
+-3.4 pps
+December
+31, 2021
+2021/
+Liang Yong Hua, Actuary
+March 17, 2022
+KEY INDICATORS
+Ernst & Young (China) Advisory Limited
+This report has been prepared for and only for the Board of Directors of the Company in accordance with
+our letter of engagement and for no other purpose. We do not accept or assume responsibility for any
+other purpose or to any other person whom this report is shown or in whose hands it may come save
+where expressly agreed by our prior consent in writing.
+We also confirm that the EV and Operating Profit results disclosed in the Analysis of Embedded Value
+chapter in the 2021 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 chapter in the 2021 annual report.
+The methodology and assumptions used in preparing the EV results are in compliance with the
+Standards and consistent with available market information;
+Based on our review procedures, we have concluded that:
+OPINION:
+(in RMB million)
+(23.6)
+5.0
+5.0
+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 2021 annual report, validating actuarial models on the basis of sample testing,
+and inspecting related documentation. In forming our conclusion, we have relied on the accuracy and
+completeness of the audited and unaudited data and information provided by the Company.
+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.
+December 31,
+2021
+Group EV
+Other business ANA
+L&H EV
+Cost of capital
+L&H adjusted net asset value (ANA)
+(in RMB million)
+Components of Economic Value
+The Standards for Actuarial Practice: Valuation Standard for Embedded Value of Life Insurance (the
+"Standards") issued by the China Association of Actuaries became effective in November 2016. The
+Company has disclosed the embedded value for 2021 in accordance with the Standards and China Risk
+Oriented Solvency System (C-ROSS).
+The calculation of the analysis of embedded value relies on a number of assumptions with respect to
+future experience. Future experience may vary from that assumed in the calculation, and these variations
+may be material. The market value of the Company is measured by the value of the Company's shares on
+any particular day. In valuing the Company's shares, investors take into account a variety of information
+available to them and their own investment criteria. Therefore, these calculated values should not be
+construed as a direct reflection of the actual market value.
+In accordance with the related provisions of the Rules for the Compilation of Information Disclosures by
+the Companies Offering Securities to the Public (No. 4) - Special Provisions on Information Disclosures by
+Insurance Companies, the Company has engaged Ernst & Young (China) Advisory Limited to review the
+reasonableness of the methodology, the assumptions and the calculation results of the Company's analysis
+of embedded value as of December 31, 2021.
+The Company has disclosed information regarding EV in this section in order to provide investors with an
+additional tool to understand our economic value and business performance results. The embedded value
+represents the shareholders' adjusted net asset value ("ANA") plus the value of the Company's in-force life
+and health insurance business adjusted for the cost of holding the required capital. The embedded value
+excludes the value of future new business.
+ANALYSIS OF EMBEDDED VALUE
+Analysis of Embedded Value
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd. 67
+Annual Report 2021
+Note: If assumption changes are not considered, NBV of Life & Health dropped 18.6% year on year.
+11.0
+11.0
+Risk discount rate (%)
+December 31,
+2020
+350,621
+Value of in-force insurance business before cost of capital
+579,695
+Key Assumptions
+The assumptions used in the embedded value calculation as at December 31, 2021 have been made on a
+"going concern" basis, assuming continuation of the economic and legal environment currently prevailing in
+China. The calculation is in line with the Standards and capital requirement under C-ROSS. Certain portfolio
+assumptions are based on the Company's own recent experience as well as considering the more general
+China market and other life insurance markets' experience. The principal bases and assumptions used in the
+calculation are described below:
+1. Risk discount rate
+2.
+3.
+4.
+The discount rate for calculating the value of in-force and the value of new business of the life and
+health insurance business is assumed to be 11.0%.
+Investment return
+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 investment-linked funds, future
+investment returns have been assumed to be slightly higher than the above non-investment-linked
+fund investment returns assumption. These returns have been derived by consideration of the current
+capital market conditions, the Company's current and expected future asset allocations and associated
+investment returns for a range of major asset classes.
+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 20%.
+Mortality
+The experience mortality rates have been based on the China Life Insurance Mortality Table (2010-2013)
+and the Company's most recent experience studies. They are tailored to be product specific and future
+mortality improvement has been taken into consideration for annuity products.
+5.
+Other incident rates
+6.
+Morbidity rate and accident rate assumptions have been based on the industry table or the Company's
+own pricing table. The trend of long-term morbidity deterioration has been taken into consideration.
+The loss ratios have been assumed to be within the range of 15% to 100% for short-term accident and
+health insurance businesses.
+Discontinuance
+7.
+8.
+298,289
+Expense
+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.
+MANAGEMENT DISCUSSION AND ANALYSIS
+Ping An Insurance (Group) Company of China, Ltd.
+Policy discontinuance rates have been based on the Company's recent experience studies. The
+discontinuance rates are pricing interest rate and product type specific.
+68
+(53,826)
+Annual Report 2021
+572,278
+876,490
+519,018
+503,538
+1,395,509
+1,328,112
+(in RMB million)
+Value of one year's new business
+Cost of capital
+824,574
+Note: Figures may not match the calculation due to rounding.
+The adjusted net asset value of the life and health insurance business is based on the unaudited
+shareholders' net asset value of the relevant life and health insurance business of the Company as
+measured in compliance with the Standards. This unaudited shareholders' net asset value is calculated
+based on the audited shareholders' net asset value in accordance with CAS by adjusting the relevant
+differences including 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 Insurance. The values placed on certain assets have been adjusted to the
+market value.
+49,575
+Value of one year's new business after cost of capital
+(10,262)
+(8,054)
+37,898
+(45,994)
+2021
+45,952
+2020
+59,837
+Cash dividend
+amount
+Cash dividend
+per share
+(in RMB)
+Growth of cash
+dividend per share
+(%)
+2.38
+8.2
+31,442
+7.3
+40,063
+2.05
+19.2
+37,340
+1.72
+14.7
+1.50
+Cash dividend
+payout ratio based
+on operating profit
+attributable to
+shareholders of the
+(in RMB million) parent company (%)
+43,174
+2.20
+2,467
+2018
+The major free cash outflows were the dividends of RMB41,469 million to A and H shareholders, the
+repurchase of RMB3,900 million worth of the Company's A shares, and the investments of RMB6,550 million
+in subsidiaries.
+100.0
+The major free cash inflows were the dividends of RMB50,681 million from subsidiaries as detailed below:
+Major free cash inflows
+(in RMB million)
+Ping An Life
+Ping An Property & Casualty
+Ping An Asset Management
+Ping An Bank
+Total
+2017
+2021
+4,181
+1,731
+50,681
+DIVIDEND DISTRIBUTION
+According to Article 216 of the Articles of Association, the Company shall attach importance to reasonable
+investment returns for investors in terms of profit distribution. The profit distribution policy of the
+Company shall maintain its continuity and stability. The accumulated profit to be distributed in cash for
+any three consecutive years shall not be less than 30% of the average yearly distributable profit realized
+in the three years, provided that the annual distributable profit of the Company (namely the profit after
+tax of the Company after covering losses and making contributions to the revenue reserve) is positive
+in value and such distributions are in compliance with the prevailing laws and regulations and the
+requirements of regulatory authorities for solvency margin ratios. In determining the specific cash dividend
+payout ratio, the Company shall consider its profitability, cash flows, solvency position, operational and
+business development needs. The Board of Directors of the Company is responsible for formulating and
+implementing a distribution plan in accordance with the Articles of Association. The Board of Directors will
+ensure the continuity and stability of the profit distribution policy so that the Group can seize opportunities
+for future growth while maintaining financial flexibility. Given the sustained operating profit growth and
+confidence in the Group's prospect, the Board of Directors proposed to pay a final dividend of RMB1.50 per
+share (tax inclusive) in cash for 2021. As the Group already paid an interim cash dividend of RMB0.88 per
+share (tax inclusive), the total cash dividend for 2021 is RMB2.38 per share (tax inclusive), up 8.2% year on
+year.
+Dividend payouts of the parent company are decided according to the increase in the Group's operating
+profit attributable to shareholders of the parent company. The Company's cash dividends and cash
+dividend payout ratios computed on the basis of operating profit attributable to shareholders of the parent
+company for the past five years are shown in the table below. Ping An has grown its full-year cash dividend
+amount at a 25.8% CAGR over the past five years.
+2021
+2020
+2019
+42,302
+27,420
+GROUP SOLVENCY MARGIN
+29.2
+(in RMB million)
+Core capital
+Actual capital
+Minimum capital
+Core solvency margin ratio (%)
+Comprehensive solvency margin ratio (%)
+December 31,
+December 31,
+2021
+2020
+Change (%)
+1,861,487
+1,899,989
+1,779,640
+1,815,140
+813,781
+767,804
+228.7
+233.5
+4.6
+Liquidity and Capital Resources
+The following table shows the solvency data of the Group under C-ROSS:
+The insurance group solvency margin represents the consolidated solvency margin calculated as if all
+the members of an insurance group were a single reporting entity. The group solvency margin ratios are
+important regulatory measures for assessing an insurance group's capital adequacy.
+When investing in subsidiaries, the Company strictly abides by laws, regulations, regulatory requirements
+and its internal decision-making procedures. In respect of capital allocation, the Company prioritizes
+supporting strategic development, ensuring steady growth in main financial businesses, and boosting
+capital efficiency. The Company invests its capital prudentially, encourages capital-light operations, and
+constantly optimizes returns on invested capital and asset-liability structures. The Company follows
+three core principles for capital allocation: 1) to ensure subsidiaries' capital adequacy meets regulatory
+requirements; 2) to support main businesses and constantly create value for Ping An; and 3) to constantly
+incubate new profit drivers, support innovative businesses, and realize the sustainable growth of Ping An.
+CAPITAL ALLOCATION
+3,900
+28.7
+994
+28.1
+5,001
+27.9
+29.0
+Cash dividend
+payout ratio based
+on net profit
+attributable to
+shareholders of the
+parent company
+(inclusive of share
+Share
+repurchase
+amount
+(in RMB million)
+repurchases, %)
+28.7
+28.3
+29.3
+30.8
+Notes: (1) Cash dividend per share includes the interim dividend and final dividend for the year. Pursuant to the Shanghai Stock
+Exchange's Guidelines for Self-regulation of Listed Companies No.7-Repurchase of Shares promulgated by the SSE, the
+Company's A shares in the Company's repurchased securities account are not entitled to dividend distribution.
+(2) Except for the 2021 final dividend pending approval at the 2021 Annual General Meeting, profit distributions for other years
+were completed in relevant years.
+78
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+46.3
+MANAGEMENT DISCUSSION AND ANALYSIS
+30,000
+Annual Report 2021
+First 5 years: 4.64%
+Next 5 years: 5.64%
+(If not redeemed)
+2019
+10 years
+Ping An Bank
+Tier 2 capital bonds
+30,000
+Fixed rate of 4.55%
+2019
+Ping An Bank
+Undated capital bonds
+20,000
+First 5 years: 4.10%
+2019
+10 years
+Undated
+Adjusted every 5 years
+Ping An Bank
+Undated capital bonds
+4.7
+First 5 years: 3.85%
+Adjusted every 5 years
+10,000
+Capital supplement bonds
+Ping An Property &
+Casualty
+10 years
+The following table shows the balances of capital bonds issued by the Group and main subsidiaries as of
+December 31, 2021:
+Par value
+Issuance
+Issuer
+Туре
+(in RMB million)
+Coupon rate
+year
+Maturity
+2020
+Ping An Life
+20,000
+First 5 years: 3.58%
+Next 5 years: 4.58%
+(If not redeemed)
+2020
+10 years
+Ping An Property &
+Casualty
+Capital supplement bonds
+3,500
+First 5 years: 5.10%
+Next 5 years: 6.10%
+(If not redeemed)
+2017
+Capital supplement bonds
+Undated
+Ping An Bank
+Ping An Securities
+45,068
+(5.2)
+50,681
+41,449
+22.3
+(41,469)
+(38,241)
+8.4
+(3,900)
+42,705
+(994)
+(6,550)
+N/A
+114
+(4,577)
+N/A
+41,581
+42,705
+(2.6)
+(1) Investments in subsidiaries in 2021 mainly comprised the parent company's capital injections into Ping An Annuity and Ping An
+Health Insurance, which are pending regulatory approval.
+292.4
+Ping An Insurance (Group) Company of China, Ltd. 77
+Change (%)
+2021
+Tier 2 capital bonds
+Perpetual subordinated
+bonds
+30,000
+Fixed rate of 3.69%
+2021
+10 years
+5,000
+First 5 years: 3.86%
+Adjusted every 5 years
+2021
+Undated
+2020
+FREE CASH OF THE PARENT COMPANY
+(in RMB million)
+Opening balance of free cash
+Dividend from subsidiaries
+Dividend paid out to shareholders
+Share repurchase
+Investments in subsidiaries (1)
+Others
+Closing balance of free cash
+Note:
+Free cash of the parent company includes bonds, equity securities, bank deposits and cash equivalents that
+the parent company holds. Free cash of the parent company is mainly invested in subsidiaries or used in
+daily operations or for dividend distribution. Free cash of the parent company was RMB41,581 million as of
+December 31, 2021, remaining at a reasonable level.
+6.0
+273.3%
+-3.1 pps
+The Group has improved the risk appetite
+framework in line with its business development
+strategy. The Group also optimizes risk
+management policies and standardizes risk
+management requirements for members;
+The Group strengthens consolidated risk
+monitoring, conducts holistic management
+of member companies' risks, carries out
+comprehensive assessment of risk management
+capabilities, and constantly improves the
+system of risk monitoring indicators;
+The Group has improved the risk management
+system on risk concentration and strengthened
+its ability to manage concentrated risks,
+covering policy formulation, risk limit
+management, system building, and risk
+reporting, so as to improve the Group's
+overall capabilities of risk management for its
+integrated financial service business;
+The Group utilizes tools and methods such as
+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 the risk
+bottom lines. Such measures enable the Group
+to plan ahead and take necessary precautions
+in a timely manner to prevent and mitigate
+risks;
+The Group has improved its risk warning
+mechanism, providing timely and effective
+alerts on industry developments, regulatory
+information and risk events, and effectively
+guarding against potential risks. The Group has
+also enhanced its risk emergency management
+mechanism; and
+Member companies are encouraged to employ
+technologies including artificial intelligence in
+risk management and effectively apply artificial
+intelligence to the entire risk management
+cycle to enhance risk management capabilities
+and execute the Company's strategies.
+RISK ANALYSIS
+The Group has categorized all risks to ensure they
+are well identified and systematically managed.
+Below are major risks and their definitions:
+1. General Risks
+2. Group-level Risks
+1.1 Insurance Risk
+2.1 Risk Contagion
+1.2 Market Risk
+1.3 Credit Risk
+2.2 Organizational Structure
+Non-transparency Risk
+2.3 Concentration Risk
+1.4 Operational Risk
+2.4 Non-insurance Risk
+1.5 Strategic Risk
+1.6 Reputation Risk
+1.7 Liquidity Risk
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 85
+Risk Management
+1. General Risks
+The Group has established an optimal risk
+governance framework and risk management
+reporting mechanism, and included risk
+indicators in the performance appraisal system
+which integrates risk management culture into
+its corporate culture. In this way, the Group has
+laid the foundation for healthy, sustainable and
+stable business development;
+The Group continues to strengthen its enterprise
+risk management system, improve its organizational
+structure, formulate risk management policies
+and guidelines, standardize risk management
+procedures, and fulfill risk management
+responsibilities. The Group adopts qualitative
+and quantitative risk management approaches
+to identify, evaluate and mitigate risks, so as to
+effectively prevent systemic risks associated with
+integrated finance, and enhance the overall risk
+management capabilities under an integrated model
+of various businesses.
+RISK MANAGEMENT METHODOLOGY
+MANAGEMENT DISCUSSION AND ANALYSIS
+The organizational structure and responsibilities
+of risk management;
+Risk assessments for major decisions and
+solutions to significant risks; and
+Annual risk assessment reports.
+The Company has set up the Related Party
+Transaction Control and Consumer Rights Protection
+Committee under the Board of Directors. The
+Related Party Transaction Control and Consumer
+Rights Protection Committee coordinates related
+party transactions management of the Company,
+ensures the compliance and fairness of the
+Company's related party transactions, and prevents
+risks from related party transactions. The Committee
+performs its duties as follows:
+To determine the overall targets, basic policies,
+and procedures for the management of related
+party transactions;
+To review material related party transactions,
+including but not limited to providing opinions
+on related party transactions and matters
+deliberated by the Company's Board of
+Directors according to regulatory requirements,
+submitting them to the Company's Board
+of Directors for review and approval, and
+giving opinions in writing on the compliance,
+fairness, and necessity of material related party
+transactions, and whether the interests of the
+Company and insurance consumers would be
+affected;
+To review annual reports on related party
+transactions;
+To regularly review the related party list under
+the Measures for the Administration of Related-
+party Transactions of Insurance Companies;
+and
+Other duties that shall be undertaken according
+to regulations and other tasks stipulated by
+the Charter of the Related Party Transaction
+Control and Consumer Rights Protection
+Committee and authorized by the Board of
+Directors.
+The Group Executive Committee leads all the
+aspects of the Group's risk management, comprising
+committees including the Risk Management
+Executive Committee (RMEC), the Investment
+Management Committee, the Strategy and
+Budget Management Committee, the Investor
+Relations Management Committee, and the
+Technology Development Committee. The RMEC,
+as a specialized committee, reports to the Group
+Executive Committee and holds the supreme
+leadership in the Group's risk management. The
+RMEC makes major decisions on risk management
+and is fully responsible for the Group's risk
+management results. Main duties of the RMEC
+include deliberating on the overall risk management
+goal, risk appetites, risk limits, basic policies and
+principles of risk management, giving instructions
+on developing risk management frameworks,
+deliberating on risk management related reports,
+risk assessment reports on major decisions and
+major risk matters and solutions, and supervising
+implementation of the risk management system
+in each member company or business line, and
+promoting a culture of enterprise risk management
+across the Group.
+An executive at the Group level in charge of risk
+management acts as the RMEC's chairman. Members
+of the RMEC are the executives in charge of
+different risk categories, each of whom has clearly-
+defined responsibilities for managing the asset
+quality risk, liquidity risk, information security risk,
+operational compliance risk, brand reputation risk,
+and so on.
+Annual Report 2021
+The Group attaches importance to effective
+management of subsidiaries' general risks. Following
+the requirements of internal management and
+external regulation, the Group has strengthened the
+active management of insurance risk, market risk,
+credit risk, operational risk, strategic risk, reputation
+risk, and liquidity risk.
+Ping An Insurance (Group) Company of China, Ltd. 83
+In 2021, the Group continued to optimize the
+enterprise risk management framework based
+on the latest regulatory requirements and
+internal management needs. By improving the
+risk management structure of the Group and its
+member companies as well as strengthening risk
+management mechanisms, the Group optimized the
+centralized management and control platform to
+enhance the overall risk management capabilities
+of the Group. Moreover, the Group further
+improved its risk appetite system, the enterprise
+risk management policies and the consolidated risk
+management platform, optimized the risk indicator
+system, and enhanced the risk monitoring, early
+warning and reporting mechanisms. The Group also
+applied artificial intelligence to risk management to
+ensure that all risks are effectively identified and
+managed on a timely basis. The Group continued
+to conduct risk reviews of business development
+and optimized the capital utilization to maintain a
+balance between business development and risk
+management.
+The Group fulfils domestic and international
+regulatory requirements related to systemic risk
+management with high standards, and continuously
+conducts assessment and analysis of systemic
+risk. According to a comprehensive review and
+assessment, Ping An's systemic impact on financial
+markets is limited and controllable. Moreover, in
+order to effectively supplement the daily emergency
+response mechanism, the Group continued to
+improve the early warning system and the recovery
+and resolution management mechanism in response
+to external market situations and the Group's
+business development, and established a multi-level
+crisis control mechanism that covers the Group
+and its member companies, boosting the prudent
+development of the Group.
+To meet regulatory requirements and support
+the Company's sustainable, healthy strategic and
+business development, the Group implemented a set
+of top-down and performance-linked risk appraisal
+metrics. Under the principle of "accountability
+and appraisal at each level," the Group specified
+appraisers, appraisees, and appraisal procedures
+for each level to closely link risk compliance with
+performance appraisal and raise the awareness of
+risk management.
+RISK MANAGEMENT CULTURE
+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 specialized committees
+to employees. This culture has facilitated the
+establishment of an effective and efficient approach
+that combines top-down management and bottom-
+up communication, which lays a solid foundation
+for the effective integration of risk management
+into the Group's daily operations. This in turn helps
+to protect shareholder equity, improves capital
+efficiency, supports management decisions, and
+ultimately creates value for the Group.
+RISK APPETITE SYSTEM
+A risk appetite system is central to Ping An's
+overall strategy and enterprise risk management.
+Considering the Group's overall strategy and
+members' development needs, the Group continued
+to improve the risk appetite system that matches
+its business strategies, and combined risk
+appetites with management decisions and business
+development to promote healthy growth of the
+Group and its members.
+The Group's risk appetite system has five core
+dimensions: capital adequacy, liquidity adequacy,
+sustainable and stable models of profit growth,
+a good reputation, and compliance. The Group
+has used these dimensions to guide its member
+companies in specifying their unique risk appetite
+dimensions according to their business features
+and demands. The Group has classified risk
+appetites and tolerance into risk limits under
+different risk categories, and applied the risk limits
+to routine risk monitoring and early warning, so as
+to support business decision-making and strike a
+balance between risk management and business
+development.
+84
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Risk Management
+Overall objectives of risk management, risk
+appetites and tolerance, and risk management
+policies and procedures;
+1.1 Insurance Risk
+The Group assesses and monitors insurance risks
+involved in insurance business through sensitivity
+analysis, stress testing, and so on. The Group mainly
+evaluates the impacts of actuarial assumptions,
+including the discount rate, investment yield,
+mortality rate, morbidity rate, surrender rate, and
+expense, on its insurance liability reserve, solvency,
+and profit in different scenarios.
+Impact on insurance
+liability reserve
+increase
+The mechanisms and procedures adopted by the
+Group to manage insurance risks are as follows:
+Develop insurance risk management policies
+and a scientific and consistent insurance risk
+management framework within the Group;
+Develop a set of key insurance risk indicators,
+monitor them on a regular basis, analyze
+abnormal changes, and take management
+measures;
+Establish model management policies,
+standardize actuarial models of the Group, and
+strictly control model risks;
+Implement effective product development
+policies to develop products with proper
+insurance coverage and fair pricing, and control
+product pricing risks;
+Implement prudent underwriting policies,
+establish guidelines for policy contracting
+and underwriting, and effectively prevent and
+reduce adverse selection risks;
+Maintain strict claim investigation and
+settlement procedures, identify and prevent
+questionable or fraudulent claims;
+Maintain effective product management
+procedures, analyze the experience and trends
+with the latest, accurate and reliable data,
+and carefully manage the product portfolio to
+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; and
+Maintain effective reinsurance management
+procedures, properly set retained risk limits,
+and use reinsurance as an effective risk transfer
+tool to transfer the excess risks to reinsurers
+with a high level of security to control
+insurance risks.
+December 31, 2021
+(in RMB million)
+Property and
+casualty insurance
++5%
+4,846
+Short-term life
+insurance
++5%
+427
+90
+86
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+claim costs
+average
+Change in
+Sensitivity analysis of property and casualty
+insurance and short-term life insurance contracts'
+outstanding claims reserves
+Sensitivity analysis of long-term life insurance
+contracts' insurance liability reserve
+Discount rate/
+Impact on insurance
+liability reserve
+(after reinsurance)
+increase/(decrease)
+December 31, 2021
+(in RMB million)
+Change in
+assumptions
+investment yield(1)
++10 bps
+(13,142)
+Discount rate/
+investment yield (1)
+Insurance risk refers to the risk of adverse
+deviation of the actual mortality rate, morbidity
+rate, loss ratio, expense, and surrender rate from
+expectations, which may cause losses to the Group.
+-10 bps
+Mortality, morbidity,
+and accident rates (2)
++10%
+Surrender rate
++10%
+66,207
+16,693
+Policy maintenance
+expense ratio
++5%
+4,122
+Notes: (1) For long-term life and health insurance contracts
+where future insurance benefits are not affected by
+the investment yield of the underlying asset portfolio,
+with consideration of the Cai Kuai [2017] No.637 issued
+by the former CIRC and other related regulatory
+requirements, the corresponding sensitivity results are
+prepared based on the benchmark yield curve for the
+measurement of insurance contract reserves increased
+or decreased by 10 basis points.
+(2) Change in mortality, morbidity, and accident rates
+refers to a 10% increase in the morbidity rate, mortality
+rate, accident rate, and other rates for life insurance
+policies (and a 10% increase before the payment period
+and a 10% decrease after the payment period in the
+mortality rate for annuity policies).
+13,461
+231.8
+The Audit and Risk Management Committee under
+the Board of Directors is responsible for having
+a thorough understanding of the Company's
+major risk exposures and management situations,
+monitoring effectiveness of the risk management
+framework, deliberating the following matters and
+making recommendations to the Board of Directors:
+MANAGEMENT DISCUSSION AND ANALYSIS
+LIQUIDITY RISK MANAGEMENT
+Liquidity risk refers to the risk of the Company being unable to obtain sufficient cash in time, or being
+unable to obtain sufficient cash in time at a reasonable cost, to repay debts that have become due or fulfill
+other payment obligations.
+In accordance with domestic and international regulatory requirements, the Group developed and regularly
+updated the Liquidity Risk Management Plan of Ping An Insurance (Group) Company of China, Ltd. (LRMP).
+The Group has also established a liquidity risk management framework and applicable policies covering
+risk appetites and limits, risk strategies, risk monitoring, stress testing, emergency management, and
+management assessment. Ping An has constantly improved its management mechanisms and processes for
+better identification, evaluation, and management of liquidity risk for the Group and its subsidiaries.
+Under the Group's principles and guidelines for liquidity risk management, subsidiaries have developed
+their own liquidity risk appetites, risk indicators, and risk limits in line with 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 mechanisms for adequate
+identification, accurate measurement, continuous monitoring, and effective control of liquidity risk in
+various business activities. The Group coordinates its subsidiaries to regularly evaluate liquid assets and
+maturing debts, conduct stress tests of cash flows, and carry out forward-looking analysis of liquidity risk
+for a certain period in the future to identify potential liquidity risk and take measures to control liquidity
+gaps.
+80
+60
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+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. Moreover, the Group and its subsidiaries have developed robust liquidity
+contingency plans for handling any significant liquidity events. The Group has set up internal firewalls to
+prevent the intra-group contagion of liquidity risk.
+CASH FLOW ANALYSIS
+(in RMB million)
+Net cash flows from operating activities
+Net cash flows from investing activities
+Net cash flows from financing activities
+2021
+2020
+Change (%)
+90,116
+27,933
+(136,412)
+312,075
+(447,138)
+(71.1)
+N/A
+260,641
+N/A
+Net cash inflows from operating activities decreased year on year mainly due to a year-on-year decrease
+in Ping An Bank's amounts due to banks and other financial institutions and a year-on-year increase in Ping
+An Bank's loans and advances to customers.
+Net cash inflows from investing activities increased year on year mainly due to a year-on-year decrease in
+cash outflows from the investing activities of Ping An Life.
+Net cash outflows from financing activities increased year on year mainly due to a year-on-year decrease in
+cash inflows from Ping An Life's sales of assets under agreements to repurchase.
+Under the C-ROSS Phase II Rules, the core and comprehensive solvency margin ratios of the Group and its
+insurance subsidiaries are lower than those under the C-ROSS Phase I Rules, but still significantly above
+the regulatory requirements. Solvency risk measurement is more prudential and rational under the C-ROSS
+Phase II Rules, with a positive impact on the Group's overall solvency margin assessment and management.
+manner.
+The CBIRC promulgated the Regulatory Rules on Solvency of Insurance Companies (II) (the "C-ROSS
+Phase II Rules") in December 2021, effective from the quarterly solvency reports for the first quarter of 2022.
+Insurers more exposed to the C-ROSS Phase II Rules may apply for a transition period, and shall complete
+full implementation by 2025. Being risk-oriented, the C-ROSS Phase II Rules aims to strengthen the capital
+of insurers and prompt insurers to focus on insurance protection and optimize asset-liability management.
+Risk factors have been fully calibrated to reflect changes in risks across the insurance industry in a timely
+C-ROSS PHASE II
+236.4
+-2.9 pps
+Notes: (1) Core solvency margin ratio = core capital / minimum capital. Comprehensive solvency margin ratio = actual capital / minimum
+capital.
+(2) The minimum regulatory requirements for the core solvency margin ratio and comprehensive solvency margin ratio in the above
+table are 50% and 100% respectively.
+Stable solvency margin ratios ensure that the Company meets capital requirements specified by external
+institutions including regulators and rating agencies, and support the Company in developing business and
+creating value for shareholders.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+79
+MANAGEMENT DISCUSSION AND ANALYSIS
+Liquidity and Capital Resources
+Test results showing the impacts of declines in interest rates and equity assets on solvency margin ratios of
+Ping An Group, Ping An Life, and Ping An P&C as at December 31, 2021 are disclosed below:
+Base case
+December 31,
+50 bps decline in interest rate
+Group
+Comprehensive solvency margin ratio
+Ping An
+Ping An
+Life
+Ping An
+P&C
+233.5%
+230.4%
+278.4%
+225.9%
+214.7%
+279.4%
+224.7%
+217.5%
+30% decrease in fair value of equity assets
+The Board of Directors is the highest
+decision-making authority for the Company's
+risk management and takes responsibility for the
+effectiveness of the enterprise risk management
+function.
+(in RMB million)
+Bonds of original maturities within 3 months
+Related Party Transaction
+Control and Consumer Rights
+Protection Committee
+Strategy and
+Budget
+Management
+Committee
+Investment
+Management
+Committee
+Risk Management Executive
+Committee
+Technology
+Development
+Committee
+Investor Relations
+Management
+Committee
+Legal & Compliance
+The Group Department, Internal
+Control Management
+Center of the Group
+Risk Management
+Department, Internal
+Control Management
+Center of the Group
+Technological
+Security Center
+of the Group
+Branding Department
+of the Group
+Finance & Planning
+Center of the Group
+Member
+Companies
+Legal & Compliance
+Department of
+member companies
+Risk Management
+Department of
+member companies
+Information Security
+Department of
+member companies
+Branding Department
+of member
+companies
+Finance & Planning
+Department of
+member companies
+82
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd.
+Group Executive
+Committee
+Audit and Risk
+Management Committee
+Board of Directors
+The Group proactively complies with risk governance requirements under the Company Law of the People's
+Republic of China and other applicable laws and regulations as well as the Articles of Association and
+other applicable company policies and procedures. Ping An has in place a comprehensive risk management
+organizational structure which holds the Board of Directors ultimately accountable, and which is directly
+upheld by the management. Supported closely by various committees and relevant functions, the
+framework covers risk management across all of the Group's members and business lines.
+2021
+December 31,
+2020
+Change (%)
+348,088
+365
+307,812
+1,573
+13.1
+(76.8)
+Financial assets purchased under reverse repurchase
+agreements of original maturities within 3 months
+54,672
+115,363
+(52.6)
+Cash
+Total
+424,748
+(5.1)
+The Company believes that the liquid assets currently held, together with net cash generated from future
+operations and the short-term borrowings available, will be sufficient to meet the foreseeable liquidity
+requirements of the Group.
+Annual Report 2021
+Ping An Insurance (Group) Company of China, Ltd. 81
+MANAGEMENT DISCUSSION AND ANALYSIS
+Risk Management
+Ping An strives to become a "world-leading integrated financial and
+healthcare services provider." To achieve this goal, the Group continuously
+optimizes the risk management system and develops the risk management
+platform. By identifying, evaluating and mitigating risks, Ping An achieves
+a balance between risks and returns, which ultimately contributes to the
+sustainable business growth.
+RISK MANAGEMENT OBJECTIVES
+For over 30 years since its establishment, Ping An has regarded risk management as an integral part of
+its operations and business activities. Ping An takes steady steps to build an enterprise risk management
+system aligned with its strategies and the nature of its business. Ping An continuously optimizes the
+risk management framework, standardizes risk management procedures, and adopts qualitative and
+quantitative risk management methodologies to identify, evaluate, and mitigate risks. Keeping risks under
+control, Ping An promotes sustainable business growth and builds itself into a "world-leading integrated
+financial and healthcare services provider."
+The Group continues to improve its robust compliance and internal control management mechanisms amid
+changing domestic and global economic conditions, evolving regulations, and diversifying businesses. The
+Group builds a rational, robust enterprise risk management framework in line with international standards
+centering on capital management, based on risk governance, oriented by risk appetites, and capitalizing
+on risk quantification tools and risk performance appraisals. The Group strikes a balance between risk
+management and business development by constantly enhancing its risk management and techniques as
+well as dynamically managing its single and accumulated risks.
+RISK MANAGEMENT ORGANIZATIONAL STRUCTURE
+403,125
+CASH AND CASH EQUIVALENTS