Ping An Announces 2009 Interim Results

Premium income sharply increased; net income in line with expectation; capital strength further enhanced
Gross written premiums, policy fees and premium deposits grew 33.9% to a total of RMB92,685 million (1H 2008: RMB69,228million)
Total assets rose 17.3% to RMB885,419 million as at June 30, 2009 (as at December 31, 2008: RMB754,718 million)
Net assets grew 18.8% to RMB101,793 million as at June 30, 2009 from RMB85,696 million as at December 31, 2008
Embedded value per share grew 16.1% to RMB19.42 as at June 30, 2009 from RMB16.73 as at December 31, 2008)
Financial strength further enhanced, Group solvency margin ratio at 325.8%, life insurance unit s solvency margin ratio at 220.6%
Total income grew 24.8% to RMB79,439 million (1H 2008: RMB63,633 million). Net profit at RMB5,441 million (1H 2008: RMB9,719 million). Given the high base in the same period last year, this year s first half figures are in line with expectation
Earnings per share were RMB0.71 (1H 2008: RMB1.29)
Interim dividend of RMB0.15 per share recommended (1H 2008: RMB0.20)
Rapid expansion across core businesses; integrated strengths further enhanced
Market share of life insurance and property & casualty business increased to 16.8% and 11.8%, respectively
First-year premium income from individual life insurance grew 35.7%, far exceeded market average; one-year new business value of Life increased by 19.8% from December 31, 2008
Continued growth in life business sales force and productivity, number of agents reaches 394,000.
Annuity business remained an industry leader, assets under trust and asset under investment management grew 39.0% and 41.5%, respectively, from December 31, 2008

Total investment yield improved to 4.8%; net investment yield remained steady
Ping An Securities underwrote six corporate bond issuances, its best performance to date
Assets under the management of Ping An Trust reached RMB81,267 million, representing a significant increase of 67.5% as compared to the end of 2008

Total assets of banking unit grew 35.3% to about RMB200 billion
Accumulated number of credit cards in circulation exceeded 2 million; cross-selling contributed 66.6% of new cards issued in the first half of 2009
The investment in Shenzhen Development Bank represents a new opportunity for integrated financial buiness development

Hong Kong/Shanghai, August 14 2009 - Ping An Insurance (Group) Company of China, Ltd. ( Ping An or the Group , HKEx: 2318; SSE: 601318) today announced its financial results for the first half of 2009. The Chinese economy showed signs of recovery in the first half of 2009. All of Ping An s core businesses experienced strong growth during the period.

Insurance premium growth rate far exceeded the market average. The value of new life insurance business rose significantly along with the value of net assets of the Company. The growth in business and the advancement in core competences have paved the way for the future expansion of Ping An. Leveraging the opportunities brought about by the strategic investment in Shenzhen Development Bank (SDB), Ping An has made a significant step in implementing integrated financial strategies.

Sharp growth in premium income, embedded value; solvency ratio further enhanced

For the six months ended June 30, 2009, gross written premiums, policy fees and premium deposits totaled RMB92,685 million, up 33.9% from RMB69,228 million over the same period last year under IFRS. Total investment income from investment portfolio of insurance funds rose 50.8% to RMB13,924 million from RMB9,235 million in the first half of 2008.

Total investment yield grew to 4.8% from 3.6%. Net profit decreased 44.0% to RMB5,441 million (1H 2008: RMB9,719 million ). The decrease was due to less direct profit contribution from realized equity investments gains and lower dividend income compared to the same period last year. A sharp increase in first-year premium income from life insurance also affected near-term profitability, in addition to tax provisions recorded during the period.

The Group s total assets reached RMB885,419 million as at June 30, 2009 (RMB754,718 million as at December 31, 2008). Net assets grew 18.8% to RMB101,793 million from December 31, 2008. Embedded value grew 16.1% to RMB142,628 million (RMB122,859 million as at December 31, 2008). Embedded value per share grew 16.1% to RMB19.42. The Board of Directors recommended an interim dividend of RMB0.15 per share for 2009. The Group s capital strength and solvency ratio were further enhanced. As at June 30, 2009, the Group s solvency ratio stood at 325.8%.
Under PRC GAAP, the Group's premium income for the first six months of 2009 reached RMB92,685 million, grew 33.9% from RMB69,228 million over the same period last year. Net profit decreased 37.6% to RMB4,558 million (1H 2008: RMB7,310 million).
During the period, Ping An was able to take advantage of recent market rallies to optimize its asset allocation and achieve a remarkable performance for corporate bonds underwriting business and asset management in trust business. Total assets of the banking unit grew to almost RMB200 billion as the business continued to experience rapid growth. The accumulated number of credit cards in circulation reached new heights thanks to the Group s cross-selling capability.
Commenting on the 2009 interim results, Ping An Chairman and CEO Ma Mingzhe said: Our three major businesses maintained a remarkable development trend. Our market share of insurance business increased. The scale and quality of our bank s asset improved. Investment assets under management continued to grow. The extent and depth of cross-selling further enhanced. Furthermore, we captured the rare opportunity to make strategic investment in SDB and received full support from our shareholders. This will enable us to take a firm step forward in executing our integrated financial strategy.
Insurance: market share increased for both life and property & casualty businesses
Life Insurance
Gross written premiums, policy fees and premium deposits in the six months ended June 30, 2009 reached RMB73,921 million, rose 35.5% from the same period last year (1H 2008: RMB54,557 million). Net profit from life insurance reduced 44.2% to RMB4,642 million in the first half of 2009 from RMB8,325 million in the same period in 2008.
By expanding sales channels of both individual life insurance and bancassurance, first-year premium from individual life insurance business grew a healthy 35.7% to RMB17,055 million during the period. One-year new business value of Life increases by 19.8% from December 31, 2008. Gross written premiums, policy fees and premium deposits from bancassurance rose to RMB16,299million.
The Group proactively developed its life insurance sales force. The number of insurance agents grew steadily to about 394,000, up 10.6% compared to the end of 2008. The Group continued to lift the productivity and professionalism of its sales agents and enhance service quality through training. As at June 30, 2009, the Company had approximately 38.31 million individual customers and 0.52 million corporate customers. The 13-month and 25-month persistency ratios for our individual life insurance customers were maintained at satisfactory levels of above 90% and 85% respectively.
Property and Casualty Insurance
As a result of the global financial crisis, China s domestic economy slowed down and the property & casualty insurance market was adversely affected. Still, driven by the principle of Surpassing Targets Healthily , Ping An Property & Casualty continued to implement its development strategy vigorously and was able to maintain its premium income growth momentum. In the six months ended June 30, 2009, the business of Ping An Property & Casualty grew rapidly. Gross written premium grew 27.9% to RMB18,764 million in the first half of 2009. Market share increased from10.9% as at December 31, 2008 to 11.8% as at June 30, 2009.

All three principal segments of the Group s property and casualty insurance business recorded steady growth. Continued demand for automobiles in China led to an increase in gross written premiums in the automobile insurance business by 30.8% to RMB13,378 million in the first half of 2009. Gross written premiums from non-automobile insurance business also posted growth of 21.

0% to RMB4,418 million as a result of increased sales in commercial property insurance, liability insurance and construction all risks insurance. As a result of stronger promotion, gross written premiums attributable to the accident and health insurance business increased21.6% to RMB968 million.

While the property & casualty insurance business experienced rapid growth in the first half of 2009, the Group also took care to ensure the growth is healthy and service quality remain high. Combined ratio for the six months ended June 30, 2009 was100.0%, representing a decrease of 2.0 percentage points compared to the year 2008.
Banking: total assets near RMB200 billion; cross-selling accounts for 67% of new card issuance
In the first half of 2009, Ping An Bank achieved rapid steady growth in its business. In PRC banking sector, Ping An Bank continues to be one of the best in asset quality, and an innovator in service, distribution channels and product offering. Total assets rose 35.3% to RMB197,603 million from the year end of 2008. Total deposits and loans increased 30.1% and 43.7% respectively from the year end of 2008, exceeding industry averages.

Ping An Bank s network expansion achieved a further breakthrough with the successful opening of branches in Guangzhou and Hangzhou. The number of credit card in circulation exceeded 2 million, with about 67% of new card issuance contributed by cross-selling in the first half of 2009. Continuous development and innovation have been achieved in respect of service, channels and products.

For credit card issuance, the bank launched a number of new credit card products such as the Car-owner s Credit Card and Insurance Credit Card. In May, the bank further expanded the card issuance channels by launching a program in Beijing where credit cards were issued without a physical branch presence.

For corporate business, the bank launched Ping An Listing Express and established the first corporate customer service centre in Shenzhen, providing innovative services such as the online 6S service for corporate customers.

Ping An Bank s loan quality continued to improve in the first half of 2009. Non-performing loan ratio decreased to 0.46% as at June 30, 2009 from 0.54% as at December 31, 2008. Ping An Bank s capital adequacy ratio (CAR) and Core CAR were well above regulatory requirement level of 8% and 4%, at 11.2% and 8.4% as at June 30, 2009, respectively. Ping An Bank successfully issued RMB3 billion subordinated debts in June 2009, resulting in increased supplementary capital, and also improving its CAR.
Investment Business: capitalized on market recovery; total investment yield enhanced remarkably
During the first half of 2009, the domestic A-share market saw substantial gains with turnover in the secondary market increasing sharply compared to the same period last year. The total investment income from the investment portfolio of insurance funds reached RMB13,924 million in the six months ended June 30, 2009, total investment yield was 4.8% in the period.

Ping An Trust continued to sustain rapid growth during the reporting period while enhancing its products, channels and platform construction. Assets under management reached RMB81,267 million, up 67.5% from the level of the end of 2008. While product line enriched, the progressing sales channel has been further expanded. With the growth of its investment team and perfection of investment platform, Ping An Trust s noncapital market investment has fared well. All investment projects are progressing steadily, and should contribute to the Group s overall profit growth in near future.

For its securities and brokerage business, Ping An took advantage of the favorable situation to strengthen its management platform, implemented profit model switch, and to expanded its sales network while obtaining approvals for the establishment of two branches. Ping An Securities underwrote six corporate bond, its best performance to date.

Investment banking business actively dealt with the adverse impact arising from the temporary freeze in IPO activity in the first half of the year, focusing on existing projects and building high quality professional team in preparation for the reopening of the IPO market and Growth Enterprise Market board.

Meanwhile, the unit continued to gain recognition for its work. During the period, it was named Best Sponsor of the Small & Medium Enterprises Board by the Shenzhen Stock Exchange.

As at June 30, 2009, investment assets under Ping An Asset Management totaled approximately RMB520 billion, marking a slight increase compared to the end of 2008. The growth was primarily due to an increase in investable assets as a result of a steady growth in the Group s insurance business, as well as an increase in fair value of assets as a result of the substantial rise of the A-share market in the first half of the year.
Outlook: enhance competitive advantages; accelerate execution of integrated financial strategy
Going forward, Ping An will continue to focus on improving its competitiveness across all business segments and achieving steady growth in its insurance businesses. The Group also intends to drive rapid growth in its banking and investment businesses and strengthen the integrated financial services platform via deepened cross selling initiatives to achieve greater synergies. Ping An will maintain its strategy of building an integrated financial services platform. The investment in SDB will help create further value for the Group in the long run.

Ma said: Looking forward, the long term trend of economic growth of China will continue, and the growth potential in the financial sector of China is huge. We firmly believe that integrated financial service is an irreversible development trend. Through years of cumulative experience, we possessed the pre-requisites for integrated financial services.

We will execute our strategy and create more value to our stakeholders through two strategic initiatives: increasing the number of customers and generate more profit from each customer. Based upon these, we will completely push ahead the implementation of the company s integrated financial strategy to create more value for shareholders, customers and the society.