(Yicai Global) Feb. 4 -- Shares of Ping An Insurance Group gained despite China’s biggest insurer by market value reporting its first decline in annual profit in 12 years as the result was better than expected. 

Ping An Insurance [SHA: 601318] closed 4 percent higher in Shanghai today at CNY79.62 (USD12.32), after earlier jumping as much as 4.9 percent. Its Hong Kong shares [HKG: 2318] added 2.3 percent to HKD91.90 (USD11.86), pulling back from a 4.2 percent gain.

Net profit fell 4 percent to CNY143.1 billion (USD22.2 billion) in the 12 months ended Dec. 31, compared with CNY149.4 billion a year earlier, the Shenzhen-based company’s earnings report showed yesterday. That was the first decline since 2008, but topped the CNY133.5 billion that analysts surveyed by Refinitiv had predicted. Revenue rose 4.2 percent to CNY121.83 billion.

“The year 2020 was extraordinary,” Ping An Insurance said. “We were challenged by Covid-19 and the economic fallout from the pandemic.”

Though the pandemic hampered in-person meetings by the company’s sales agents, the insurer said profit was buoyed by a retail customer development strategy that brought strong results. Their numbers rose 9 percent over the year to more than 218 million.

Ping An Insurance will pay a year-end dividend of CNY1.40 (USD0.22) per share, it said. The total annual payout, which includes the mid-year dividend, was CNY2.20, a 7.3 percent increase from a year earlier.

Fintech, Healthcare Inputs

The company’s tech business, which includes financial services platform Lufax Holding, mobile healthcare site Ping An Good Doctor and online car sales firm Autohome, contributed CNY7.9 billion (USD1.2 billion) to profit, more than double that in 2019. Together they reported a 10 percent jump in revenue to CNY90.4 billion. Beijing-based Autohome did particularly well, logging a 62 percent surge in net profit to CNY3.6 billion.

Its main insurance arm Ping An Property and Casualty Insurance logged income of CNY285.9 billion from original premiums, a year on year gain of 5.5 percent. Its combined ratio, which is the sum of losses and expenses divided by the premium earned, rose 2.7 percentage points to 99.1 percent. This was partly due to higher costs in auto insurance due to national reforms, the firms said.

Ping An Insurance raked in CNY16.35 billion from investments. Its investment portfolio swelled to CNY3.74 trillion (USD579.1 billion), a gain of 16.6 percent from the start of last year.

Editor: Kim Taylor