Ping An Insurance of China : Interim Report 2020

2020 Interim Report

Contents

ABOUT US	CORPORATE GOVERNANCE
1	Introduction	92	Changes in the Share Capital and
4	Chairman's Statement		Shareholders' Profile
94	Directors, Supervisors and Senior Management
8	Financial Highlights
96	Significant Events
MANAGEMENT DISCUSSION AND ANALYSIS	FINANCIAL STATEMENTS
9	Customer Development	114	Report on Review of Interim Condensed
14	Technology-Powered Business Transformation
	Consolidated Financial Information
20	Business Analysis
115	Interim Consolidated Income Statement
20	Performance Overview
116	Interim Consolidated Statement of
	Life and Health Insurance Business
24		Comprehensive Income
32	Property and Casualty Insurance Business	117	Interim Consolidated Statement of
38	Investment Portfolio of Insurance Funds		Financial Position
119	Interim Consolidated Statement of
43	Banking Business
	Changes in Equity
52	Asset Management Business
121	Interim Consolidated Statement of Cash Flows
58	Technology Business
122	Notes to the Interim Condensed
64	Analysis of Embedded Value		Consolidated Financial Information

74 Liquidity and Capital Resources

79 Sustainability	OTHER INFORMATION
	173	Glossary
	176	Corporate Information

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 may or may not occur in the future. Words such as "potential", "estimates", "expects", "anticipates", "objective", "intends", "plans", "believes", "will", "may", "should", variations of these words and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are subject to known and unknown risks and uncertainties that may be general or specific. 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, 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.

Interim Report 2020

Ping An Insurance (Group) Company of China, Ltd. 1

Introduction

About us

Ping An strives to become a world-leading technology-poweredretail financial services group. Ping An continues to develop "finance + technology" as its core businesses. While ensuring steady growth in its main financial businesses, Ping An increases its investments in technology and accelerates "finance + ecosystem" empowerment to transform and upgrade its main businesses. Ping An employs technologies to drive revenue growth, improve efficiency, enhance risk management, and cut operating costs of its financial businesses. Moreover, Ping An leverages a broad array of innovative technologies to develop its five ecosystems, namely financial services, health care, auto services, real estate services, and smart city services, to optimize customer acquisition and promote integrated financial services. The core of Ping An's integrated financial business model is "one customer, multiple products, and one-stop services." Ping An leverages its local advantages while adhering to global corporate governance and business management standards. By empowering financial services with technologies, empowering ecosystems with technologies, and empowering financial services with ecosystems, Ping An provides financial products and services for 210 million retail customers and 560 million internet users. While remaining focused on retail business, Ping An extends its "1+N" philosophy to its corporate business to tap synergies among Ping An's multiple corporate-facing business units. Capitalizing on these synergies, Ping An seeks to strengthen the customer value and contributions of its corporate business by implementing an innovative corporate integrated financial business model.

Interim Report 2020

Ping An Insurance (Group) Company of China, Ltd. 1

Introduction

Ping An achieved steady business results. Ping An accelerated its transformation toward online operations and enhanced risk management to minimize the impact of COVID-19. In the first half of 2020, operating profit attributable to shareholders of the parent company rose by 1.2% year on year to RMB74,310 million, culminating in a 21.6% annualized operating ROE.

Ping An continues to pay dividends to shareholders. Despite the short- term adverse impact on economic growth, Ping An attaches importance to shareholder returns and will pay an interim dividend of RMB0.80 per share in cash, up 6.7% year on year.

Retail customer development continued to yield strong results. As of June 30, 2020, retail customers increased by 4.6% from the beginning of 2020 to 210 million. In the first half of 2020, Ping An acquired 18.09 million new customers, of whom 35.4% were sourced from internet users within the Group's five ecosystems. Contracts per customer rose by 1.9% from the beginning of 2020 to 2.69.

Value contributions from corporate business cross-sellinggrew steadily. Ping An continued to extend its "1+N" integrated financial business model to the corporate business and took a segmented approach to customer development, providing strategic customers with integrated "commercial banking + investment banking + investment" services while serving small and micro-business customers online. In the first half of 2020, the new financing scale achieved through corporate business cross- selling climbed by 170.2% year on year. The written premium of the corporate channel achieved through cross-selling grew by 168.4% year on year.

Ping An Life proactively utilized technology to minimize the impact of COVID-19 and advance its reform. In quick response to the epidemic, Ping An Life established an industry- leading online operations model. Ping An Life's sales agents recovered in the second quarter of 2020, with the number of sales agents increasing by

1.2% from March 31, 2020. In the first half of 2020, operating profit after tax of the life and health insurance business rose by 6.4% year on year to RMB51,535 million. Meanwhile, Ping An Life steadily advanced multiple reform projects to ensure sustainable, high-quality, and healthy growth.

The property and casualty insurance business grew steadily. In the first half of 2020, Ping An Property & Casualty's premium income grew by 10.5%

year on year despite the COVID-19 epidemic. Ping An Property & Casualty maintained better-than-industry business quality, with a combined ratio of 98.1%. As of June 30, 2020, the "Ping An Auto Owner" app had over 109 million registered users, up 17.8% year to date. In June 2020, the app had over 27 million monthly active users.

Ping An Bank maintained stable business operations and strengthened provisions. Amid the COVID-19 epidemic, Ping An Bank quickly resumed business by advancing online digital operations. In the first half of 2020, revenue increased by 15.5% year on year to RMB78,328 million. As of June 30, 2020, the provision coverage ratio rose by 31.81 pps to 214.93% from the beginning of 2020.

Revenue of online health care services surged. During the peak of the COVID-19 epidemic, Ping An Good Doctor's online platform was accessed over 1.11 billion times. In the first half of 2020, Ping An Good Doctor's revenue of online health care services grew strongly by 106.8% year on year to RMB695 million.

2 Interim Report 2020

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