On April 23, Ping An Insurance (02318:HKEX) announced its first quarter financial results for 2020. According to the report, the total revenue of Ping An was CNY 355.26 billion (USD 50.28 billion), a YoY decrease of 11.97%. Net profit was CNY 26.06 billion (USD 3.69 billion), down 42.70% year-on-year. The total number of individual users is 204 million, and in the first quarter, 87.1 million new users joined.
Ping An's income mainly comes from four parts, namely health and life insurance, property insurance, asset investment and the fintech business. They together account for 96% of all net profits. Health and life insurance is the biggest profit section, occupying 48% totally. Until the end of March 31, the scale of the capital investment portfolio was CNY 3.38 trillion (USD 480 billion), an increase of nearly 5.30% from the beginning of the year. In the first quarter, the annual total investment return rate was 3.60%.
For the health and life insurance part, it attributed CNY 24.56 billion (USD 3.48), up 23% year-on-year. The company announced that, as the traditional sales channel of brokers stopped because of the COVID-19 outbreak, the company developed online channels to prepare for the business expansion after the epidemic ended.
For the property insurance part, this quarter realized the original insurance premium income of CNY 72.59 billion (USD 10.27 billion). While the insurance premium income increased by a little bit – 4.90% – the profit decreased by 23.30% and the comprehensive cost rate decreased by 0.50 percentage points. Moreover, the auto insurance income remains the biggest part of 64.40%, and the non-motor vehicle insurance income increased by 20.90%. Registered users for the 'Good Car Owner' app exceeded 100 million for the first time, of which about 53 million are Ping An car insurance customers.
For the fintech business, the total revenue of the technology business in the first quarter of 2020 was an income of CNY 19.84 billion (USD 2.81 billion), a year-on-year increase of 6.00%. This part of the business is positioned as technical support of Ping An's medical ecosystem, and 'Ping An Good Doctor' is a good example. Besides this medical platform, the famous fintech unicorns Lufax and OnConnect are also in this large ecosystem, taking advantage of technology and the firm's experience to provide financial service and technology support for both individuals and companies.
In the future, Ping An said that in the short term, the offline insurance business of the company was blocked, and the investment income declined significantly. However, in the medium and long term, opportunities and challenges coexist. On the one hand, the demand for insurance and finance will usher in a rebound; on the other hand, the prevention and control of the epidemic highlight the importance of technological empowerment and promotes the application of technology and medical treatment.