Ping An Announces Interim Results for the 6 Months Ending June 30, 2004

Financial Highlights

• Operating profit increased 26.3% to RMB1,842 million (RMB1,458 million in 1H2003)
• Net profit attributable to shareholders increased 25.8% to RMB1,504 million (RMB1,196 million in 1H2003)
• Earnings per share (based on weighted average number of shares) RMB0.30 (RMB0.24 in 1H03)
• Gross written premiums and policy fees for life insurance business decreased 12.6% to RMB27,161 million (RMB31,080 million in 1H2003)
• Gross written premiums and policy fees for property and casualty insurance business increased 15.0% to RMB5,136 million (RMB4,468 million in 1H2003)
• 88.5% 13-month life insurance persistency ratio and 80.8% 25-month life insurance persistency ratio (85.7% and 79.6% as in 2003)
• 72.6% property and casualty insurance loss ratio ( 73.7% in 1H2003)
• 4.1% net investment income yield (4.3% in 1H03)
  

(Hong Kong, 25 August 2004) Ping An Insurance (Group) Company of China, Ltd. ("Ping An" or "the Company"), (HKSE: 2318) today announced its 2004 interim results. The Company registered a profit attributable to shareholders of RMB1,504 million, an increase of 25.8% compared to the first half of 2003. Earnings per share was RMB0.30. Mr. Ma Mingzhe, Ping An Chairman and Chief Executive Officer, commented: "I am pleased with our performance during the first half of 2004, especially following our successful listing on the Stock Exchange of Hong Kong. We achieved steady development in every sector of our business, as planned, and made significant improvements in the quality of our services. We were particularly successful in enhancing the overall profitability of our insurance business and increasing our cross-selling among our insurance customers. "

The strong growth in the Company's profits was mainly attributable to the shift towards more profitable regular premium individual life insurance products, the improvement in the persistency ratio, effective cost controls and the improvement in profitability in the property and casualty insurance segment.

Gross written premiums and policy fees decreased 9.1% to RMB32,297 million in the first half of 2004. This was mainly due to management's efforts to optimize the product mix and enhance profit margins. Moreover, the efforts to improve customer service helped increase the 13-month and 25-month persistency ratios for individual life insurance customers to 88.5% and 80.8% in the first half of 2004. The Company also focused on disciplined underwriting and careful selection of risk exposures for the property and casualty insurance segment, which helped bring down the loss ratio to 72.6% in the first half of 2004(73.7% in the fist half of 2003).

Key Financial Performance
Written Premiums and Policy Fees

Gross written premiums and policy fees for the life insurance business, after excluding amounts allocated to separate account (investment-linked) assets as well as business tax and surcharges,decreased 12.6% to RMB27,161 million in the first half of 2004. This was primarily due to the Company's strategy to manage the growth of the lower-margin bancassurance and group insurance business. Gross written premiums and policy fees attributable to individual life insurance products increased 4.6% to RMB18,595 million. Such increase was primarily due to the Company's continued focus on the higher-margin regular premium products and an increase in the policy persistency level.

Gross written premiums and policy fees for the property and casualty insurance business, excluding business tax and surcharges, increased 15.0% to RMB5,136 million in the first half of 2004. The continued increase in car ownership in the PRC and the stabilization of automobile insurance premium rates helped grow the automobile insurance premiums by 13.2% to RMB3,007 million in the first half of 2004. Gross written premiums and policy fees attributable to the non-automobile products increased 9.9% to RMB1,958 million. The accident and health insurance premiums also surged from RMB31 million in the first half of 2003 to RMB171 million in the first half of 2004. These increases were mainly due to the Company's continued focus on developing these two product lines and the continued economic growth in China.

Cross Selling

The Company was able to leverage its broad customer base and sophisticated information technology to make substantial progress in cross-selling its insurance products in the first half of 2004. As a result, gross written premiums from cross-selling activities increased 85.2% to RMB787 million in the six months ended June 30, 2004.

Investment Income

During the first half of 2004, the Company continued to improve the asset mix and lengthen the asset duration of its investment portfolio. Bond investments as a percentage of total investment assets increased to 47.7% as of June 30, 2004 from 43.7% as of December 31, 2003. As a result,net investment income, including interest income and dividend income, increased 23.2% to RMB3,448 million during this period. Net investment income yield slightly decreased to 4.1% compared to 4.3% in the first half of 2003.

Claims, Surrenders, Annuities and Maturities

The Company's claims, surrenders, annuities and maturities increased 7.6% to RMB7,002 million in the first half of 2004. The increase was primarily due to an increase in payments made on annuities and upon the maturity of insurance policies, the surrender of insurance policies and death and other benefits paid for the life insurance business.

Commission Expenses

Commission expenses as a percentage of gross written premiums and policy fees for the life insurance business decreased to 8.3% in the first half of 2004 from 8.9% in the first half of 2003.The fall was mainly a result of the general decline in first year premiums from the life insurance products.

Commission expenses for the property and casualty insurance business fell from 6.8% of the gross written premiums and policy fees in the first half of 2003 to 6.4% in the first half of 2004.This largely reflected a fall in the commission rates to the Company's agents and brokers.

General and Administrative Expenses

Increasing economies of scale and the implementation of cost control initiatives helped lower the general and administrative expenses for the life insurance business by 16.6% to RMB1,690 million. This represented 6.2% of the gross written premiums and policy fees, a decrease from 6.5% over the same period of 2003.

General and administrative expenses for the property and casualty insurance business increased 21.6% to RMB957 million. The increase was mainly due to the increase in gross written premiums.

Operating Profit and Net Profit

Operating profit increased 26.3% to RMB1,842 million in the first half of 2004 from RMB1,458 million in the same period in 2003.

Meanwhile, the net profit increased 25.8% to RMB1,504 million in the first half of 2004 from RMB1,196 million in the same period in 2003. The effective tax rate decreased to 17.1% in the first half of 2004 from 17.6% in the same period in 2003. The decrease was a result of an increasing portion of investment income that was derived from dividend income from equity investment funds and interest income from government bonds, which are entitled to tax exemptions.

Looking Forward

For the second half of 2004, the Company will continue its efforts to:

• Reform its core insurance business by adjusting product mix, improving the productivity
  of the sales team and enhancing the overall profitability of its life and property and
  casualty business lines.
• Centralize back-office support and reinforce risk management procedures.
• Improve customer service and product offerings in order to provide effective solutions to
  the needs of its customers.
• Leverage its extensive customer base and diversified product range to reinforce the cross-selling of products among its customers.

"These efforts will all be made with one objective in mind - to capture the fast-growing demand for products and services in the Chinese insurance market." commented Chairman Ma, adding "In the light of the results of the first half of the year, we are confident that the Company will achieve its net profit forecast of not less than RMB2,760 million for the year ending December 31, 2004 as stated in the prospectus of the Company."

About Ping An Insurance (Group) Company of China, Ltd.

Ping An Insurance (Group) Company of China, Ltd. "Ping An") was founded in 1988 with the headquarters in Shenzhen. Since its establishment, Ping An has developed into one of the
nation's leading insurance groups with the ability to provide multiple financial services and
products - with a focus on life, property and casualty insurance products - under a single brand and through the multi-channel distribution network.
Ping An has developed an extensive customer base in the PRC with over 27 million life
insurance and 4 million property and casualty insurance customers as of December 31, 2003. It has also developed one of the largest distribution networks in the PRC.