Ping An Announces 2009 Annual Results-Net Profit up 786%, Synergies from Integrated Financial Model Increasingly Visible

Hong Kong, Shanghai, April 16, 2010 - Ping An Insurance (Group) Company of China, Ltd. ("Ping An" or "the Group", HKEX: 2318，SSE 601318) announced its 2009 annual results today. In 2009, though suffering from the impact of the global financial crisis and facing complexities at home and abroad, Ping An resolutely sought business opportunities and achieved rapid, healthy and sustainable development in all of its three core businesses - insurance, banking and investment. The integrated financial platform progressed smoothly; the cross-selling strategy makes synergies from integrated financial model increasingly visible. Overall profitability largely improved: the Group realized a net profit of RMB14.5 billion for the year, representing a significant increase of 786% over 2008, exceeding market expectations. Earnings per share were RMB1.89 (2008: RMB0.19). The Board of Directors recommends a final dividend payment of RMB0.30 per share.

Summary of 2009 Results:

Note: According to relevant regulations such as "No.2 Interpretation of Accounting Standards for Business Enterprises"  issued by the Ministry of Finance and the CIRC, Ping An has changed certain accounting policies when preparing its 2009 A share and H share financial statements. The financial data in 2008 have been adjusted retrospectively. After the changes of accounting policies, there is no  difference between the major financial data in its A share and H share financial statements.

Core Businesses Maintained Healthy Growth on Strengthening Integrated Platform

Mr. Ma Mingzhe, Ping An Chairman and Chief Executive Officer, said: "2009 was a year full of challenges. Facing the serious impact of the global financial crisis and complex internal and external environment, Ping An resolutely sought business opportunities and achieved rapid, healthy and sustainable development in all three of its core businesses - insurance, banking and investment."

"Our insurance business maintained strong growth momentum. Market share of both the life insurance business and the property and casualty insurance business increased. Our life insurance business achieved total written premiums of RMB134,503 million, an increase of 31.4% compared to the previous year. Market share increased 2.5 percentage points compared to 2008. Premium income for our property and casualty insurance business reached the unprecedented level of RMB30 billion, with market share at 12.9%, putting us in 2^nd place in the market. Combined ratio for our property and casualty insurance business improved by 5.1 percentage points to 98.9% compared to the previous year. Our annuity business also progressed smoothly, with three major indicators-- annuity payments received, assets entrusted and assets under investment management-- all ranking high compared to peer professional annuity companies."

"Banking business grew rapidly and solidly. As of the end of 2009, the total assets of Ping An Bank exceeded RMB220 billion, with deposit and loan balances increased by 39.6% and 48.4% respectively year-over-year. The number of accumulated credit cards in circulation exceeded 3.4 million, with the total transaction amount above RMB36 billion."

"Our investment business dealt skillfully with capital market volatility, optimizing asset allocation, and achieving excellent results in our securities investment backing and trust asset management businesses.  Ping An Asset Management strengthened its macroeconomic research capability and grasped market opportunities which resulted in a total investment yield of 6.4% in 2009. The investment banking division of Ping An Securities' maintained its leading position among small and medium-sized enterprises (SMEs) market and in the Growth Enterprises Market (GEM), acting as a lead underwriter. Assets held in trust under the management of Ping An Trust amounted to RMB 130,551 million, representing year -on-year growth of more than 100%,"

"Meanwhile, the construction of our integrated financial platform progressed smoothly, and our cross-selling strategy captured synergies across our businesses. In particular, 56.5% of newly issued credit cards and 14.5% of premium income for the property and casualty insurance business came from cross-selling. The first phase of our back office centralization project has been completed. In August 2009, the Group officially launched the Ping An One Account Management Services. At the end of December 2009, Ping An One Account Management Services had 4 million registered accounts."

"2009 was also a year demonstrating Ping An's full commitment to Corporate Social Responsibility. Several campaigns were successfully launched to support Ping An's commitment to customer service, setting several industry precedents. Ping An Property & Casualty pledged to abide by ‘claim reimbursement within 3 days for claims below RMB10,000 when submitted with complete documentation'. Ping An Life launched ‘let us help you find reasons to claim'. For Credit Card business, Ping An introduced ‘72-hours protection in the event of card loss'. Ping An Bank offered its customers ‘free global ATM withdrawal and online remittance, E-banking security' campaign. One year lapsed, the devastating May 12, 2008 earthquake in Wenchuan, Sichuan province was still in our mind, therefore, we donated a first tranche of RMB10 million to establish the China Ping An Hope Scholarship. So far, Ping An has established 52 Ping An Hope Primary Schools in poverty areas across China. In December 2009, the Company contributed RMB5 million to ‘China Ping An Encouragement Fund' to be administered by the China Youth Development Foundation, which was widely acknowledged by the public for its corporate social practices."

Life Insurance - Market Share Expanded Rapidly and Business Quality Improved

In 2009, China's life insurance industry saw an incessant growth trend with premiums increasing by 11.0% compared with the previous year. Ping An enhanced new business development while paying close attention to operational compliance and risk prevention. Market share expanded rapidly and business quality improved throughout the year. The life insurance business accounted for approximately 16.5% of the total written premiums received by the PRC life insurance companies. The number is calculated in accordance with the PRC insurance industry data published by the CIRC.

In 2009, Ping An Life continued to enhance its business performance by executing the "Reaching New Heights" and "Two-Tier Market Development" strategies, and continued to focus on regular premium individual life insurance products that provide a stable revenue stream and generate sustainable long-term profits. In 2009, the written premiums attributable to the individual life insurance business amounted to RMB99,863 million, representing an increase of 26.2% from the previous year. Meanwhile, Ping An Life strengthened its effort in expanding bancassurance business, recording an increase of 87.4% in written premiums. In addition, the value of one year's new business of our life insurance business in 2009 was RMB11,805 million, representing an increase of 38.2% compared to last year.

Ping An Life is committed to improving its customer service. As at December 31, 2009, Ping An Life had approximately 40.74 million individual customers and 560 thousand corporate customers. The 13-month and 25-month persistency ratios for the individual life insurance customers were maintained at a satisfactory level of above 90% and 85% respectively in 2009.

While actively building up its individual life insurance sales agent team, Ping An Life enhanced the team's productivity and professionalism through continuous refinement of training programs. The first year written premiums generated by life insurance sales agents has increased remarkably. The number of individual life insurance sales agents increased to approximately 417 thousand in 2009.

The following table highlights key financial and operating data in Ping An's life insurance business:

Property and Casualty Insurance: Market Share Increased to 12.9%, Historically Ranking the No.2 in the Industry

In 2009, premium income for property and casualty insurance business increased by 43.5% to RMB38,774 million and market share rose by 2 percentage points to 12.9%, ranking 2^nd in the industry. Combined ratio improved to 98.9% with rapid business growth. In 2009, an additional capital of RMB2 billion was injected into Ping An Property & Casualty. As at December 31, 2009, Ping An Property & Casualty had a paid-up capital of RMB6 billion.

Driven by the rapid growth in automobile and third party liability insurance businesses due to a surge in automobile sales, the property and casualty insurance industry in China achieved 22.3% growth in premium income in 2009. Taking advantage of this great opportunity marked by market resilience and rapid development in automobile insurance business, Ping An Property & Casualty leveraged its specialized sales channels and strengthened its efforts in business promotion, thereby achieving a steady increase in market share. In 2009, Ping An Property & Casualty accounted for approximately 12.9% of the total premium income received by property and casualty insurance companies in China. The number is calculated in accordance with the PRC insurance industry data published by the CIRC.

While maintaining its rapid business development, Ping An Property & Casualty also focused on reducing operational costs and enhancing profitability through constantly enhancing risk screening capacity, strengthening claims management and promoting transformation of operational processes. The combined ratio improved to 98.9% in 2009 from 104.0% in 2008.

The following table highlights key financial and operating data in Ping An's Property and Casualty insurance business

Banking Business: Grew Rapidly and Solidly

In 2009, Ping An Bank achieved rapid, healthy and sustained business growth. As at December 31, 2009, Ping An Bank saw its registered capital amounted to RMB8,623 million, net assets to RMB14,315 million and total assets to RMB220,681 million.

Total deposits and loans increased by 39.6% and 48.4% respectively from the end of 2008, among the fastest in the industry; total transaction amounts of credit cards exceeded RMB36 billion, with the market share leaping to 2.2% from 1.1% in 2008. Card issuance channels continued to expand. Ping An launched a pilot in Beijing where credit cards were issued without a physical branch presence, and the number of these cards exceeded 350,000 as at the end of 2009. Outlets continued to be expanded, with Guangzhou, Hangzhou and Dongguan branches being opened one after the other. Accumulated credit cards in circulation exceeded 3.4 million and 56.5% of the new credit cards issued was contributed by cross-selling.

In 2009, Ping An Bank gained rapid progress and both loan portfolio and risk management were further improved, with non-performing loan ratio kept at the industry leading level of 0.46% and provision coverage ratio at 156.0%. The core capital increased by RMB5 billion via a successful rights issue, while the supplementary capital increased RMB3 billion via subordinated debt issuance. CAR reached 13.0% at the end of 2009. These have laid a solid foundation for long-term stable growth of the banking business.

Largely due to squeezed net interest spread brought by consecutive PBOC rate cuts, continuous investment in strategic initiatives for the nationwide banking network and credit card business, and the one-off positive impact of deductible loss (totalling RMB300 million) as approved by the tax authority in 2008, net profit from banking business decreased by 25.2% to RMB1,080 million in 2009 from RMB1,444 million in 2008.

The following table highlights key financial and operating data in Ping An Bank:

⁽¹⁾ Income from other businesses includes exchange gains/(losses), other operating income, and non-operating income.

Investment Business: Skillfully Dealt With Capital Market Volatility, Achieved Excellent Results Across Businesses

In 2009, with an effective risk control program, Ping An Asset Management proactively seized investment opportunities in the domestic equity market. It selectively participated in investing in fixed income assets, improved its investment portfolio, and achieved a remarkable investment yield as a result. Total investment return from insurance funds achieved RMB30,728 million for the year, representing a yield of 6.4%. As at December 31, 2009, assets under the management of Ping An Asset Management amounted to RMB570,311 million, an increase of 26.2% over 2008.

Ping An Securities performed well in brokerage and investment bank businesses. Net profit rose 94.9% to RMB1.072 billion from RMB550 million in 2008. In 2009, China's domestic stock market saw significant surge in 2009, especially the trading volumes of the secondary market hit historical highs. By playing a role in these trading opportunities, Ping An Securities strengthened its management and transformed its business profitability model. We introduced the "E-point pass" platform and "An E Asset Management"services, At the same time, its business networks were expanded with the establishment of two sales offices in Beijing and Hefei.  The investment banking business maintained its leading position in SMEs and the GEM underwriting market, underwrote RMB60 billion in equity and debt issuance and ranked 2^nd in terms of number of deals.

As at December 31, 2009, through improvements in expanding its product range and distribution channels were made, and its operation platform was strengthened, assets held in trust of Ping An Trust amounted to RMB130,551 million, an increase of 169.1% over 2008 and a historical record that enable Ping An Trust to further secure its leading position in the industry. Net profit decreased 49.8% to RMB606 million in 2009 from RMB1,207 million in 2008. This was primarily due to that there were less realized investment gains from the disposal of equity investments in 2009 as compared with the year of 2008.

The following table highlights the investment income of insurance funds.

Outlook

Ping An has strived to become a "leading integrated financial services provider". The Group has been exploring this core strategy ever since its establishment. It is a strategy which comes naturally with Ping An's core competency and advantages that built up throughout its development. It is a strategy that forms the core part of its development in the next decade. It is a strategy that it chooses to cope with the mega trend in the development of financial industry of China, Mr Peter Ma, Ping An Chairman and Chief Executive Office, said: "In 2009, we made a good start, and in 2010, we will stay confidently on course, committed to enhancing our competitiveness on all fronts and to maintaining profitable, sustainable business growth, surpassing the market benchmark. We will deepen and widen our cross-selling efforts to further realize synergies of integrated finance. We will push forward the second phase in our back office centralization plan. We will continuously deepen reforms of the front and middle office, and realize more advantages from integration and resource sharing. Meanwhile, we are confident that we will steadily push on the execution of investment in Shenzhen Development Bank to support our integrated financial services strategy and enhance our long-term corporate value."