Ping An Insurance of China : 2020 First Quarter Results Announcement

2020 First Quarter Results

April 2020

Cautionary Statements Regarding Forward-Looking Statements

To the extent any statements made in this report contain information that is not historical, these statements are essentially forward- looking. These forward-looking statements include but are not limited to projections, targets, estimates and business plans that the Company expects or anticipates will or may occur in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may be general or specific. Certain statements, such as those including the words or phrases "potential", "estimates", "expects", "anticipates", "objective", "intends", "plans", "believes", "will", "may", "should", and similar expressions or variations on such expressions may be considered forward-looking statements.

Readers should be cautioned that a variety of factors, many of which are beyond the Company's control, affect the performance, operations and results of the Company, and could cause actual results to differ materially from the expectations expressed in any of the Company's forward-looking statements. These factors include, but are not limited to, exchange rate fluctuations, market shares, industry competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions and other risks and factors beyond our control. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. In addition, the Company undertakes no obligation to publicly update or revise any forward-looking statement that is contained in this report as a result of new information, future events or otherwise. None of the Company, or any of its employees or affiliates is responsible for, or is making, any representations concerning the future performance of the Company.

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Contents

Overview

Retail Integrated Finance &

Insurance Business

Corporate Integrated Finance &

Banking Business

Technology Business

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Overview

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Challenging operating environment for 1Q 2020

Challenges & Impacts

• Business was impacted byCOVID-19：Core financial businesses were impacted as traditional offline operations were halted along with falling financing demands.
• Rising credit risk：As the operating environment became difficult, some enterprises faced solvency declines, rising credit risks, increasing bad debt losses, and asset quality pressures.
• Increased investment risk：Greater volatility of fair value gains and losses were driven by volatile equity markets, falling interest rates and the Company's implementation of the new accounting standards for financial instruments.

Measures

• Online measures: Utilizing strong technological capabilities, we promoted resumption of work, and strengthened both our product and service capabilities. We further developed innovative online operating models and accumulated customer resources to secure post-epidemic business growth.
• Strengthen credit risk management: Strengthened and enhanced the efficiency of our credit risk management on a pre/ during/ post investment basis with fintech.
• Asset allocation was optimized: The Company continued to focus on long-term value investments and lengthened asset duration to narrow the asset-liability duration gap. Moreover, the Company proactively seized investment opportunities arising from epidemic-induced market weakness.

Future prospects

Opportunities and challenges coexist in the medium- to long-term:

• Financial services：The demand for insurance and financing will accelerate. Ping An will accelerate technological transformations of the traditional financial businesses to meet customers' growing demand.
• Healthtech：Epidemic prevention and containment spurred technological application and spawning development opportunities for health services. Ping An will seize opportunities in the development of healthtech to strengthen cutting-edge advantages of its technology business with insurance services and health expertise.

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Business highlights for 1Q 2020

Group

Customer development

Life & Health insurance

Banking

Technology

• Despite market volatility and offline business interruptions brought on by the epidemic, operating profit attributable to shareholders of the parent company rose5.3%year on year to RMB35,914 million. Ping An ranked 9thon the Brand Finance Global 500 2020 list, joining the league of world's top ten for the first time.
• Retail customers continued to grow in 1Q to204 million. In the first three months of 2020, Ping An acquired 8.71 millionnew retail customers, of whom 34.7%were sourced from internet users within the Group's five ecosystems.
• Life & Health operating profit attributable to shareholders of the parent company rose23.7%year on year to RMB24,302 million. Amid the COVID-19 epidemic, the Company leveraged technologies to develop innovative online operating models and accumulate customer resources for post-epidemic business growth.
• Ping An Bank's revenue and net profit rose16.8%and 14.8%year on year respectively. The provision coverage ratio of non-performing loans was further strengthened by 17.23 ppsfrom the beginning of 2020.
• Amid theCOVID-19 epidemic, Ping An arranged for its nearly 400,000employees to work from home and hold online audio and video conferences with its strong technological capabilities. Ping An has won the first placein 52international contests in total. For example, OneConnect's information extraction technology toppedthe rankings in two sub-tasks at the 14th International Workshop on Semantic Evaluation (SemEval).

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Financial Review

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Financial performance for 1Q 2020

(in RMB)

Operating profit(1)	Net profit(1)
35,914 million	26,063 million
+5.3%	-42.7%
NBV	NBV margin
16,453 million	33.4%
-24.0%	-3.4 pps

Notes: (1) Both the operating profit and the net profit are attributable to shareholders of the parent company.

(2) The computation of NBV and margin is based on the 11.0% risk discount rate.

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Operating profit excludes non-operating items to reflect underlying performance

Operating Profit =Net Profit -Short-term Investment Variance -Discount Rate Change Impact -One-off Material Non-operating Items

(in RMB million)

8,001	1,935	40,270
	35,914
30,334		(4,356)

Net profit	Short-term	L&H discount rate	Operating profit	Operating profit	Operating profit attributable
for 1Q 2020	investment variance	change impact	for 1Q 2020	attributable to non-	to shareholders of the parent
	of L&H(1)			controlling interests	company for 1Q 2020

Notes: (1) Short-term investment variance of L&H is the variance between the actual investment return of the life and health insurance business and the investment return calculated based on the EV ultimate investment return assumption (5%), net of the associated impact on insurance and investment contract liability.

(2) There was no one-off material non-operating item during the Reporting Period.

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Group operating profit rose 5.3% YoY

	1Q 2020	Proportion (%)	1Q 2019	YoY Change (%)
(in RMB million)
Life & health insurance	24,302	67.7	19,652	23.7
Property & casualty insurance	4,421	12.3	5,767	(23.3)
Banking	4,954	13.8	4,319	14.7
Trust	902	2.5	994	(9.3)
Securities	803	2.2	648	23.9
Other asset management(1)	752	2.1	3,189	(76.4)
Technology(2)	1,290	3.6	1,402	(8.0)
Others & elimination	(1,510)	(4.2)	(1,852)	(18.5)
Group	35,914	100.0	34,119	5.3

Notes: (1) The other asset management business represents results of companies that engage in asset management business including Ping An Asset Management, Ping An Financial Leasing, and Ping An Overseas Holdings.

1. The technology business represents results of companies that engage in technology business including Lufax Holding, OneConnect, Ping An Good Doctor, Ping An HealthKonnect, and Autohome.
2. Operating profit refers to the operating profit attributable to shareholders of the parent company.

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Strong capital adequacy position

Comprehensive solvency margin ratios remained strong

234.1%

218.8%

231.6%

225.2%

259.2%261.6%

217.5%223.8%

Dec 31, 2017

Dec 31, 2018

Dec 31, 2019

Mar 31, 2020

Ping An Life

(regulatory requirement:

Core solvency margin ratio≥50%,

Comprehensive solvency margin ratio≥100%)

Ping An P&C

(regulatory requirement:

Core solvency margin ratio≥50%,

Comprehensive solvency margin ratio≥100%)

Core tier 1 capital adequacy ratio comfortably above regulatory minimum

9.11%	9.20%

8.28%	8.54%	Ping An Bank
	(regulatory requirement ≥7.5%)

Dec 31, 2017

Dec 31, 2018

Dec 31, 2019

Mar 31, 2020

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Retail Integrated Finance and Insurance Business

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Retail Integrated Finance

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Retail customers and cross-sell penetration grew

Significant potential to further penetrate our 534 million internet users

				516	534
		430	444
	346
242				200	204
		157	180
	131
109
Dec 31, 2015	Dec 31, 2016	Dec 31, 2017	Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

Cross-selling penetration ratio has increased along with growth in retail customers

			34.3%	36.8%	37.0%
		29.6%
	24.0%		74	76
19.0%		62
	46
	32
21
Dec 31, 2015	Dec 31, 2016	Dec 31, 2017	Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

(million persons)

Retail customers

Internet users

(million persons)

Proportion of retail customers holding multiple contracts with different subsidiaries

Retail customers holding multiple contracts with different subsidiaries

Note: Figures may not match the calculation due to rounding.

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Insurance Business

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Life & Health NBV declined by 24% YoY largely due to

COVID-19

(in RMB million)

FYP used to

calculate NBV

-16.3%

NBV margin

The NBV margin declined as Ping An's traditional offline

-3.4ppsoperations and high- value protection business were affected by the COVID-19 epidemic.

NBV

-24.0%

58,783		36.8%	33.4%
	49,188
1Q 2019	1Q 2020	1Q 2019	1Q 2020

21,642
			16,453
1Q 2019	1Q 2020

Note: Figures may not match the calculation due to rounding.

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P&C: operating profit fell 23.3% YoY due to decreased investment income, but still with a better-than-industry combined ratio

(in RMB million)

Premium income

Combined ratio

Operating profit

4.9%

-0.5 pps

-23.3%

69,220

72,589

97.0%	5,795

Non-Auto20.7%

insurance 21,392

25,822

96.5%

4,443

Auto			47,828	-2.2%
46,767
insurance

1Q 2019

1Q 2020

1Q 2019

1Q 2020

1Q 2019

1Q 2020

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Investment portfolio of insurance funds grew by 5.3% from the beginning of 2020

Investment assets

(in RMB trillion)

	5.3%
3.21	3.38
Dec 31, 2019	Mar 31, 2020

Annualized net investment yield

	-0.3 pps
3.9%	3.6%
1Q 2019	1Q 2020

Note: In computing annualized net investment yield, only interest income from deposits and debt financial assets as well as operating lease income from investment properties were annualized, while interest income from financial assets purchased under reverse repurchase agreements, interest expenses on assets sold under agreements to repurchase and placements from banks and other financial institutions, and dividend income were not annualized.

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Corporate Integrated Finance and Banking Business

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Corporate Integrated Finance

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Corporate integrated finance business model strengthened

"1+N" corporate business model

Customer

development

Optimization and

collaboration

• Established akey customer development team to review customer relationships and identify business opportunities, and focused on industries that

Strategiccontribute significantly to people's livelihoods and customerslong-term economic development.

• Directlyinvolve product managers of insurance subsidiaries, and effectivelyremove sales intermediaries to improve the efficiency of product

Teamsinception.

• Established anSME customer development team led by Ping An Bank to share information within the Group

SME	on key customersin terms of products.
customers

• Established a model management teamfor in-depth

joint management and joint decision-making

• Strengthened business models including simple

Mechanisms	model,complex investment and financing model,
andtrading model.

Technological empowerment

	• Empower teams and business by building a system			• Refined information on corporate customers of the
	platform based on the business models to deliver			Group, built business scenarios for simple models,
	online management of trading models, and end-			and realizedend-to-end online pooling, sorting
Systems	to-end sales support.		Data	and dispatch of business leads.

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Rising corporate business volume

	(in RMB million)
Corporate premiums achieved through	New financing scale achieved through
cross-selling rose 28%	corporate business cross-selling rose 92%

		28.4%
			3,537
Written	2,755	173.2%	1,347
premium of	493
the corporate
channel
	1Q 2019		1Q 2020

	92.2%
	95,748
49,825
1Q 2019	1Q 2020

Notes: (1) Corporate premiums achieved through cross-selling refer to written premiums of insurance policies sold by the Group to corporate customers through cross-selling.

1. Written premium of the corporate channel refers to the written premium of the integrated financial business less that of the life insurance channel.
2. New financing scale achieved through corporate businesscross-selling refers to the scale of new financing projects achieved by the Group's member companies through cross-selling.

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Banking Business

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Growing profitability and 14.8% YoY increase in net profit

Increased revenue

15.9%	16.8%
	32,476	37,926
28,026
1Q 2018	1Q 2019	1Q 2020

Stable proportion of net

non-interest revenue

33.3%	36.0%	34.7%
	11,702	13,156
9,339
1Q 2018	1Q 2019	1Q 2020

Net non-interest revenue		Net non-interest revenue
	as % of total revenue

(in RMB million)

Increased net profit

12.9%	14.8%
	7,446	8,548
6,595
1Q 2018	1Q 2019	1Q 2020

	Annualized NIM and NIS
	both higher YoY
2.53%	2.71%	2.62%	2.62%	2.60%
2.44%	2.63%	2.55%	2.51%	2.49%
1Q 2019	2Q 2019	3Q 2019	4Q 2019	1Q 2020
Net interest margin	Net interest spread

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Asset quality risks under control

Stable NPL ratio		Provision coverage ratio
	now over 200%

1.70%	1.75%					183.12%	200.35%
1.65%	1.65%
			155.24%
				151.08%
Dec 31,	Dec 31,	Dec 31,	Mar 31,	Dec 31,	Dec 31,	Dec 31,	Mar 31,
2017	2018	2019	2020	2017	2018	2019	2020

Decreased percentage of loans		Increased provision coverage ratio
60+ days overdue		for loans 60+ days overdue
1.92%				190.34%	218.90%
1.58%
1.51%	141.24%

Dec 31,	Dec 31,	Mar 31,	Dec 31,	Dec 31,	Mar 31,
2018	2019	2020	2018	2019	2020

SML ratio improved

3.70%

2.73%

2.01% 1.93%

Dec 31,	Dec 31,	Dec 31,	Mar 31,
2017	2018	2019	2020

Decreased deviation of loans

60+ days overdue

110%

96% 92%

Dec 31,	Dec 31,	Mar 31,
2018	2019	2020

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Retail business transformation was upgraded; COVID-19 had a short-term impact on retail asset quality

(in RMB million)

Retail AUM rose 7.8% YTD

	7.8%
39.9%	1,982,721	2,136,931
1,416,796
Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

Retail customers grew 1.6% YTD despite challenging environment

(million persons)

15.7%	1.6%	98.64
97.08
83.90
Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

Balance of retail deposits	Retail NPL ratio adversely
continued to grow	impacted by COVID-19

	9.8%
26.4%	583,673	641,114
461,591
Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

0.33 pps

0.12 pps		1.52%
1.07%	1.19%
Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

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Corporate banking and interbank business grew

Ping An Bank continued to enhance corporate banking

(in RMB million)

Balance of corporate deposits rose 3.9% YTD

	3.9%
11.2%		1,925,743
	1,853,262
1,666,966
Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

Corporate loans grew YTD with continued focus on risk controls

	11.4%	1,075,978
14.5%
965,984
843,516
Dec 31, 2018	Dec 31, 2019	Mar 31, 2020

• Ping An Bank upgraded the interbank business

Net revenue from	Interbank institutional	Bond trading volume
trading	sales volume
RMB3,077 million	RMB212,446 million	RMB1.46 trillion
+209.5%YoY	+63.4%YoY	+161.0%YoY

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Overview	Retail Integrated Finance	Corporate Integrated Finance	Technology Business
and Insurance Business	and Banking Business

Technology Business

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Technological innovations: upgrading core financial services with cutting-edge technologies

Tech patent applications

• 23,933technology patent applications so far
• Including5,567filed under the Patent Cooperation Treaty (PCT) or abroad

Awards & certifications

• Ping An wonthe first placein 52international contests in total
• OneConnecttoppedthe rankings in two sub-tasks at International Workshop on Semantic Evaluation (SemEval)
• Ping An Technology wastop-rankedin Stanford Question Answering Dataset 2.0 (SQuAD 2.0) for the third time, and scored the highestin 11 sub-tasks of the General Language Understanding Evaluation (GLUE) benchmark

Medical papers

• Published about40top medical papers
• Including the one published with Jinling Hospital inEbioMedicine, a sub-journal of The Lancet, and
• The one on endoscopic image quality published inScientific Reports, a sub-journal of Nature

		We have applied AI to recruitment interviews of Ping An Life's sales agents as well as
	Sales	training and sales support for them:
	• Since its go-live, AI interview robot has completed 7.20 millioninterviews, saving
		the Company 830,000 hoursof in-person interviews. In the first three months of
		2020, the robot completed 1.2 millioninterviews, up 28%year on year.
		• Through profiling of life insurance sales agents, Ping An analyzes the agents' life
		cycles and provides customized career development plans.

Operations• Ping An Property & Casualty leverages technologies including robots and OCR to

pursue robotic process automation gradually across China.

• For Ping An Property & Casualty's main product lines, 99.3%of transactions are

processed online and 99.8%of transactions are paperless.

Services• Widely used in banking, insurance, and other areas, our speech robots provided services over 109 million timesin the first three months of 2020.

• The net promoter score (NPS) for March improved by1.62 ppsfrom the beginning of 2020.

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Healthtech business

Ping An Good Doctor(01833.HK)

Has built AI-aidedin-house medical teams, and provides users

with online-merge-offline services

by integrating offline health care networks

• As of March 31, 2020, Ping An Good Doctor had closely cooperated withover 50provincial and municipal governments to provide real-time online consultation services and free consultation hotlines. In addition, Ping An Good Doctor worked with over 30leading businesses and internet platforms to provide 24/7 online consultation services. Ping An Good Doctor invited renowned doctors and experts to give live interpretation of anti-epidemic knowledge.
• Amid the peak of the epidemic, Ping An Good Doctor provided 24/7 online consultation services, and it attractedover 1,000 million visitsto its online platform.
• Ping An Good Doctor will directly and continuously benefit from more positive and liberal policies by cooperating with local governments, municipal SHI bureaus, and hospitals.

Ping An HealthKonnect

Committed to becoming a smart technology company

fully empowering the health care ecosystem

• Ping An HealthKonnect has developedan integrated smart SHI platformbased on its smart SHI system. Starting from SHI, Ping An HealthKonnect provides integrated medical management solutionscovering hospitals, doctors, pharmacies, and insured members.
• As of March 31, Ping An Healthcare Diagnostics Center donatednearly RMB3 millionworth of 92,000pieces of medical supplies across the border in cooperation with its Japanese partners. Ping An Healthcare Diagnostics Center dispatched to Wuhan a vehicle equipped with a mobile CT scanner, which screened 5,304people. Moreover, Ping An Healthcare Diagnostics Center performed nucleic acid tests on a total of 33,113samples for COVID-19. Ping An HealthKonnect assisted the National Health Commission Capacity Building and Continuing Education Center in providing training on epidemic prevention and control, and helped municipal SHI bureaus to provide services through mobile devices.

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Fintech business

Lufax Holding

World-leading online wealth management and retail

lending technology platform

• Customer assets increased by2.3%from the beginning of 2020 to RMB354,848 milliondue to its business transformation in response to the latest regulatory requirements.
• In retail lending, Lufax Holding maintained steady growth. As of March 31, 2020, the balance of loans under management stood atRMB506,275 million, up 9.5%from the beginning of 2020.
• During theCOVID-19 epidemic, Lufax Holding made full use of AI to alleviate the manpower shortage and closely monitor the loan portfolio's quality. Lufax Holding also tided over customers by helping eligible borrowers defer principal and interest repayments in accordance with state policies.

OneConnect (OCFT US)

China's leading technology-as-a-service

cloud platform

• OneConnect'send-to-end technology applications and business services help financial institutions increase revenues, manage risks, improve efficiency, enhance service quality and reduce costs, thereby enabling digital transformations.
• Despite theshort-term adverse impact of COVID-19 on usage of some products, OneConnect increased the transaction volume facilitated in the first three months of 2020 by optimizing its business portfolio and vigorously developing third-party customers.
• The epidemic has driven up the financial sector's demand for cloud- based solutions and online products, bringinglong-term growth opportunities for the industry.

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Smart city: the platforms have gone live in more than 115 cities across China and some countries and regions involved in the Belt and Road Initiative

Daily life services	Health care services

• Ping An's smart city business helped the Shenzhen Municipal
  Government launch a series of "Shen i Nin" anti-epidemic services in the "i Shenzhen" app, and was highly recognized by citizens for supporting Shenzhen's anti-epidemic battle and resumption of work and production.
• As of March 31, 2020, "i Shenzhen" had nearly nine millionregistered users and more than six millionmonthly active users.

• The smart city business launched the "NationwideCOVID-19Real Time Dashboard" with authoritative organizations of the state. The dashboard went live on more than 300official platforms in 21provinces and 31cities across China, keeping the public updated on the latest development of the epidemic.
• Ping An's smart city business also providedAI-based image reading services for over 1,500medical facilities across China to identify COVID-19. It took only 15seconds to issue a single smart analysis, and over 20,000suspected infection cases were identified.

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Thank you!