Ping An sets sights on expansion in Hong Kong and Greater Bay Area – report
Ping An sets sights on expansion in Hong Kong and Greater Bay Area – report | Insurance Business Asia
Insurance News
Ping An sets sights on expansion in Hong Kong and Greater Bay Area – report
Insurance boss unveils strategic blueprint
Insurance News
By
Roxanne Libatique
Michael Guo Xiaotao, the co-CEO who recently ascended to leadership at Chinese insurance giant Ping An, has unveiled the corporation’s blueprint for expansion across Hong Kong and the Greater Bay Area (GBA).
In an interview with SCMP, Guo identified the GBA, encompassing Hong Kong, as a critical hub for future wealth generation, underscoring its importance to Ping An’s growth trajectory, particularly within the financial services arena.
“It is the focus area for future growth, especially in the financial services industry,” he said. “After the COVID-19 restrictions were removed, we saw a strong flow of mainland Chinese visitors coming to Hong Kong to buy life insurance products and policies. We definitely took note of that trend and are exploring different ways of capturing these opportunities.”
Increased life insurance demand in Hong Kong
This strategic pivot comes on the heels of a noticeable uptick in mainland Chinese clientele flocking to Hong Kong for life insurance solutions following the easing of COVID-19 restrictions
Despite Ping An’s comprehensive suite of offerings in Hong Kong – which includes services ranging from property and casualty insurance to asset management, securities trading, and even a digital banking venture – the firm has yet to introduce its life insurance arm into the market.
While specific details of Ping An’s strategic foray into Hong Kong remain under wraps, Guo shared that the company is exploring all avenues to ensure the viability and success of its ambitious plans.
“Any major business decision will have to weigh potential outputs and potential investment costs,” he told SCMP. “We have to look at different scenarios to see what is the best way forward to capturing growth opportunities in the Greater Bay Area and in Hong Kong.”
According to the latest figures from the Insurance Authority, expenditure by mainland visitors on Hong Kong insurance policies surged to HK$59 billion (US$7.6 billion) last year, claiming about 33% of the sector’s total sales volume.
Ping An’s financial performance
Ping An reported a 23% dip in net profits year-over-year, marking its most modest earnings in half a decade at 85.67 billion yuan (US$11.9 billion). This downturn initially led to an almost 8% slide in Ping An’s stock value, which later moderated to a 6% decrease, with shares ultimately settling at HK$33.4.
Despite these financial headwinds, Guo’s outlook for Ping An’s future prospects remains bullish, buoyed by the solid performance of its foundational insurance and healthcare divisions. The firm witnessed a 36% leap in the value of new business sales last year, bolstered by a burgeoning client base of affluent customers.
“The investment market was tough last year, but we are a life insurance company, so we should not focus too much on short-term market volatility, but more on achieving long-term investment returns,” Guo said.
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