Ping An Profit Rises 32% as Higher Premiums Offset Stock Market Slump

October 28, 2015

Ping An Insurance (Group) Co., China’s second-largest insurer, said third-quarter profit rose 32 percent as higher premium income and banking revenue helped offset the impact of a stock market rout on investment returns.

Net income climbed to 13.6 billion yuan, or 0.75 yuan a share, from 10.3 billion yuan, or 0.65 yuan, a year earlier, the company said in a statement to the Shanghai stock exchange on Tuesday.

A 23 percent expansion in premiums and a 9 percent increase in banking income supported Ping An’s earnings as falling stocks hurt investment returns. The benchmark Shanghai Composite Index slumped almost 30 percent in the three months ended Sept. 30, wiping returns off insurers’ portfolios.

Investment income rose 12 percent to 22.4 billion yuan, the Shenzhen-based insurer said. Fair-value losses from investments jumped almost 50 times to 435 million yuan, while impairments climbed 53 percent, according to the statement.

Chinese insurers’ profits fell 71 percent in the third quarter, bringing the nine-month income growth to less than half of the 204 percent surge recorded in the first half, according to Hong Kong-based Bloomberg Intelligence analyst Steven Lam’s calculations based on industry data. The Shanghai index jumped 60 percent this year through a peak on June 12 amid speculation the government will unleash more stimulus to stem an economic slowdown.

Ping An rose 0.7 percent in Hong Kong, extending this year’s gain to 12 percent.

–With assistance from Alfred Cang in Shanghai.

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