Ping An Insurance, China’s largest insurer by market capitalization, reported its 2023 earnings, revealing a 23% year-on-year decline in net profit to 85.67 billion yuan (US$11.9 billion). This marks the company’s lowest earnings in five years, according to revised data reflecting new accounting standards.

Despite the drop in net profit, Ping An’s core insurance business remained solid. The value of new business in life and health insurance, a key indicator of future growth, rose 36% to 39.26 billion yuan. This increase can be attributed to stronger sales of savings products, fueled by a resurgence in agent activity following the easing of COVID-19 restrictions.

However, strong sales in the core business were offset by losses in other sectors. Ping An’s asset management business suffered a net loss of 19.52 billion yuan, compared to a gain of 3.8 billion yuan in 2022. Similarly, operating profit from its technology businesses fell by 56% to 2.98 billion yuan.

Ping An’s core insurance business remains solid

Tom Chan Pak-lam

Analysts believe the main culprit behind the decline was the poor performance of China’s stock markets. “Ping An’s core insurance business remains solid,” said Tom Chan Pak-lam, a financial expert, “but its investment and asset-management businesses were hit hard.”

Despite the challenges, analysts remain optimistic about Ping An’s future. “Ping An has a diversified business model with a wide range of businesses in insurance, banking, fintech and healthcare,” said Chan. “While the stock market downturn impacted last year’s results, the mainland investment markets have improved thanks to government policies, and Ping An is well-positioned for a rebound in 2024.”

Looking ahead, Ping An chairman Peter Ma Mingzhe emphasized a commitment to “high-quality development” despite the current difficulties. He expressed confidence in China’s long-term economic growth and Ping An’s ability to thrive through its diversified business model. The company’s continued development in healthcare services, a sector with immense potential due to China’s aging population, is seen as a key driver of future growth.

While Ping An’s overall profit dipped in 2023, the company’s strong showing in its core insurance business and its diversified portfolio offer promising signs for the future. Analysts remain confident that Ping An can overcome current challenges and achieve continued success in the years to come.