The Ping An Insurance (Group) Company of China Ltd Tuesday posted a hefty rise in net profits for last year, reporting steady improvements in all major segments.

The Hong Kong-listed company, the second largest life insurer and third largest property and casualty insurer in China, saw its net profits grow by 34.3 percent over the previous year to 3.1 billion yuan (US$373 million), while earnings per share increased to 0.56 yuan (6 US cents) as compared to 0.47 yuan (5 US cents) in 2003, according to figures released by the firm.

Return on average equity was 15.1 percent, while total equity stood at 28.3 billion yuan (US$3.4 billion) at the end of last year as compared to 12.9 billion yuan (US$1.6 billion) a year earlier.

"We believe our success is attributable to our strengths, which include a good corporate governance structure, a strict risk-control system, an internationalized management team, a strong IT system platform and a nationwide distribution and service network," Ma Mingzhe, chairman of the group, said in a statement.

"These strengths are the key core competitive advantages for our rapid development and capability to operate with high standards," he added.

Although China's life insurance sector was adversely affected by business structure readjustments by insurance companies and an interest rate increase last year, Ping An said net profits earned from life insurance rose by 38.7 percent on a year-on-year basis to 2.7 billion yuan (US$325 million).

Gross written premiums from the company's property and casualty insurance segment increased by 25.4 percent to 10.1 billion yuan (US$1.2 billion) last year. The firm attributed that performance to trial reforms in the corporate structure of branches, an improved sales management system, as well as cross-selling to life insurance customers that jumped by 97.1 percent from 2003.

By strengthening investment management and risk controls, following long-term and prudent investment principles and taking advantage of the macroeconomic and market opportunities, Ping An also managed to improve its return on assets amid sluggish sentiments in the domestic capital market. Net investment yield was 4.1 percent, a robust performance among Chinese insurers last year.

Ma said China's continued economic growth and anticipated fast-paced growth in consumer spending this year will provide life insurers further momentum for increased leverage.

Ping An plans to further improve the structure of its life insurance business and the productivity of its sales team, while the property and casualty insurance business will fully leverage the group's customer base to increase operational efficiencies, he said.

Ma also said he expected the group's securities and trust businesses to enjoy further improvements in asset utilization and profitability this year, and said new businesses in annuity insurance and health insurance will commence business within the year.

Chinese insurers are facing growing competition from both domestic and foreign competitors. More than 10 new insurance firms won approval to be established last year, and restrictions on foreign insurers were further loosened near the end of last year.

(China Daily April 20, 2005)