The Group mainly provides integrated financial products and services and is engaged in property and casualty (“P&C”) insurance, life and health insurance, asset management and other businesses.
The Group's profit attributable to shareholders for the 6 months ended 30-06-2019 amounted to RMB 15.48 billion, an increase of 54.1% compared with previous corresponding period. Basic earnings per share was RMB 0.35. No dividend declared. Net earned premium amounted to RMB 262.55 billion, an increase of 6.1% over the same period last year. (Announcement Date: 23 Aug 2019)
Business Review - For the six months ended June 30, 2019
The Group’s operating segments are presented in a manner consistent with the internal management
reporting provided to the management for deciding how to allocate resources and for assessing
For management purposes, the Group is organised into business units based on principal activities of subsidiaries and has the following operating and reportable segments:
• The non-life insurance segment offers a wide variety of insurance products to both personal and corporate customers including automobile insurance, agricultural, property and liabilities insurance;
• The life insurance segment offers a wide range of participating, endowments, annuity and universal life insurance products;
• The health insurance segment offers a wide range of health and medical insurance products;
• The asset management segment offers asset management services;
• The headquarters segment provides management and support for the Group’s business through its strategy, risk management, treasury, finance, legal, and human resources functions;
• The others segment comprises insurance agent business, reinsurance business and other operating business of the Group.
Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on the segment results.
As the revenue, net profit, assets and liabilities of operations outside Mainland China constitutes less than 1% of the consolidated amounts in these financial statements, geographical segmental information is not presented.
Inter-segment sales are transacted according to terms and conditions negotiated by the relevant parties within the Group.
During the reporting period, no direct written premiums from transactions with a single external customer amounted to 10% or more of the Group’s total direct written premiums.
Business Outlook - For the six months ended June 30, 2019
Since this year, China’s economy has been running smoothly in general, the pace of replacing old drivers of growth with new ones accelerated, and economic growth remained resilient. Looking forward to the second half of the year, the implementation of “Six Stabilization” policy will be sped up, and China’s economy will pay more attention to the enhancement of the quality of development and optimization of structure. China will emphasize on employment and residents’ income growth, and the economic fundamentals will remain stable and positive.
China’s insurance industry still faces a complex business environment, and opportunities and challenges coexist. The CBIRC will regulate the order of the market and strictly implement the “integration of implementation and execution”, which will create a good ecological environment for the development of motor vehicle insurance. The fiscal policy remains proactive, the strategy of rural revitalization is making extensive progress, and the modernization of state governance is accelerating, which will promote the rapid development of non-motor vehicle insurance. The increase in disposable income will accelerate life insurance business, especially protection life insurance. As the health awareness of residents is strengthened and the reform of medical and health system is continuously deepened, the commercial health insurance business will have new development opportunities. The wide application of modern technology will continuously promote the optimization and transformation of insurance business model. At the same time, the auto market has entered into a period of slackened growth while the reform in premium rate for commercial motor vehicle insurance is implemented extensively. This will bring dual pressure on the development and profitability of motor vehicle insurance. The development of the insurance industry is facing various uncertainties such as great uncertainties in the Sino-US trade friction and prominent supply-side structural conflicts. Cross-sector competition is increasingly intensified which will bring impact on the traditional business model of the insurance market.
With firm confidence, the Group will stay focused, take serving the real economy and people’s lives as the basis, speed up the insurance supply-side structural reform, push forward the implementation of the “3411 Project” of the Group, and accelerate the transition to high-quality development. In the second half of the year, we will focus on the following tasks: Firstly, we will improve benchmarking of our business models, address shortcomings and weaknesses and expand advantages. With “two integrations” at the center, we will insist on “dis-intermediary, lower costs, improve services and strengthen customer stickiness” and accelerate the implementation of “ten key points work” of PICC P&C. We will persist on advancing the comprehensive and deepening reform of PICC Health. In accordance with the requirements of “professional, capable, efficient and flattened”, we will put more efforts in developing the business of commercial health insurance and health management services. Focusing on “three changes”, we will emphasize on strengthening infrastructure of PICC Life. The investment segment will strengthen investment and research capability, and actively develop wealth management business while providing good services to its principal business. The emerging segments will strengthen the building up of professional capability and create boutique companies. Secondly, we will deepen reform. Taking organizational reform as the opportunity, we will establish a market-oriented organization, incentive and personnel selection mechanism. Thirdly, we will stick to the bottom line, properly prevent key risks and properly handle the relationship between stabilising growth, adjusting structure and preventing risk.
Source: PICC Group (01339) Interim Results Announcement