Ping An Profit Rises Nearly 7% as Market Recovery Bolsters Returns

Ping An Insurance (Group) Co. said profit rose nearly 7% in the first half, after a stock-market recovery helped bolster investment returns at China’s second-largest insurer by market value.

Net income climbed to 74.6 billion yuan ($10.5 billion) in the six months ended June 30, from 69.8 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Thursday. That reversed a 4.3% profit decline in the first quarter.

Operating profit, which the insurer says better reflects performance by stripping out short-term investment volatility and one-time items, dropped 0.6%.

China’s CSI 300 Index eked out a 0.9% gain in the first half after recovering from a meltdown early in the year, underpinning the performance of insurers’ equity holdings. Ping An’s new business value benefited from improved margins of life policies as bancassurance fees tightened and it sold more protection-type products, Bloomberg Intelligence said before the results were released.

“The overall operating results remained solid, demonstrating resilience,” Ping An said in a statement.

Investment income jumped 65% to 65.8 billion yuan, according to the filing. Net impairment losses on financial assets dropped 26% to 26.5 billion yuan.

New business value, which gauges the profitability of new life policies sold, grew 11% in the first half, slowing from a 21% gain in the first quarter. A three-year reform at the main life unit lifted agent productivity.

All listed Chinese insurers likely saw earnings improve in the first half compared with the first quarter, Morgan Stanley analysts wrote in a July 25 report. They expect life insurers to report “sound” new business value growth helped by higher margin and agent productivity.

Ping An rose almost 1% to HK$34.30 in Hong Kong trading before the announcement. That trimmed this year’s decline to 3%.