CPIC Announces 2020 Annual Results
Focused on Long-term & High-quality Development
Delivered Solid Performance in Core Business
HONG KONG, March 29, 2021 /PRNewswire/ — China Pacific Insurance (Group) Co., Ltd. (the "CPIC" or the "Group"; Stock code: 2601.HK, 601601.SH, CPIC.LSE) is pleased to announce the annual results of the Group for the year ended 31 December 2020 (the "Year").
In 2020, in the face of the global spread of COVID-19, cyclical shifts of the insurance sector and other increasing uncertainties, CPIC moved ahead in the right direction, and achieved an "extraordinary" year for CPIC. The Board, with KPIs in mind, focused on delivery and rallied efforts on the operation of the core business of insurance. Group operating income exceeded RMB400 billion, with rapid growth of net operating profits (OPAT) and embedded value (EV), and steady increase in assets under management (AuM), marking a step-up in the company’s development.
The core business segments maintained healthy momentum of growth. On the life insurance side, in the face of COVID-19, we accelerated on-line and off-line integration, enhanced the "role-model" effect of high-performing agents, pushed for the integration of products and health management, elderly care and wealth management services. As for property and casualty insurance, the Company pro-actively responded to the challenges of the pandemic and the comprehensive reform of automobile insurance, and successfully fostered renewal business as its key growth driver. On the other hand, non-auto insurance business vigorously supported China’s effort to resume work and business, focused on emerging business lines, with agricultural insurance maintaining rapid growth. In investment, the Company adhered to value, long-term and prudent investing, stepped up system-building for a Group-integrated investment middle platform, enhanced investment management capabilities, and delivered sound investment results for the year.
The Company achieved a number of milestones in reform and change in 2020. The issuance of GDR (Global Depositary Receipts, GDR) on the LSE made us the first insurer listed in Shanghai, Hong Kong and London. The optimisation of ownership structure paved the way for improvement in governance and strategies. The new board consists of leading experts in various areas, and these new members, with advanced philosophies and an international vision, will contribute to a more professional, market-oriented and international board.
The Company is always committed to ensure that our shareholders can share in the growth of the Company. In 2020, in spite of formidable challenges, the Board recommended annual cash dividend of RMB1.2 per share and 30th Anniversary Special Dividend of RMB0.1 per share(note1), with a pay-out ratio of 50.9%. Since our listing more than a decade ago, the annual average pay-out ratio reached 47.6%.
Looking ahead to the next 30 years, the Company aspire to be "a long-race runner" of the insurance industry, and that calls for a long-term view in our business strategies, long-term commitments in customer services and long-term effort in reform and transformation. At the recent board meeting, the Company initiated top-level design centring on new development philosophies. The board special committees were reshuffled, with the establishment of a Strategic and Investment Decision-Making & ESG Committee. The Company will emulate best practices of ESG in China and overseas, incorporate philosophies of sustainable development into business operation to boost high-quality development in environment, society and governance. What the Company is doing will instill new vitality into our business philosophy, our culture and our DNA, and stimulate long-term growth.
Appendix 1: Key performance indicators of the core businesses
Life business NBV growth under pressure, with steady growth of OPAT and residual margin.
- CPIC Life realised RMB17.841 billion in NBV, down by 27.5%, with an NBV margin of 38.9%, down by 4.4pt. Given the focus on business quality, the NBV margin of the individual customer business stood at 54.9%.
- OPAT of life insurance reached RMB25.875 billion, up by 16.7%; the residual margin of life insurance amounted to RMB351.077 billion, a growth of 6.5% from the end of 2019.
- CPIC Life GWPs amounted to RMB211.952 billion, down by 0.3%. Of which, renewal business realised a growth of 5.5%.
Property and casualty business(note2) maintained underwriting profitability, with top-line growth leading in industry.
- The combined ratio was 99.0%, up by 0.6pt. Of this, loss ratio stood at 61.5%, up by 1.1pt, and expense ratio 37.5%, down by 0.5pt.
- GWPs amounted to RMB149.722 billion, an increase of 11.2%. Of this, non-auto business grew by 29.9% and accounted for 35.9% of total property and casualty insurance GWPs, up by 5.2pt.
- Automobile insurance enhanced customer retention to push for a shift of growth drivers. Emerging business lines such as health, agricultural and liability insurance maintained rapid development. Of this, agricultural business realised RMB9.442 billion in direct business premiums(note3), a growth of 39.3%, with a fast increase in market share.
Persisted in asset allocation through economic cycles and based on profiles of liabilities, with solid investment results.
- The share of fixed income investments stood at 78.3%, down by 2.1pt from the end of 2019; that of equity investments 18.8%, up by 3.1pt, and of this, core equity investments(note4) accounted for 10.2% of total investment assets, an increase of 1.9pt from the end of 2019.
- With continued effort to extend asset duration, enhance investment research capabilities and the Tactical Asset Allocation (TAA) process, Growth rate of Group investments’ net asset value reached 7.5%, up by 0.2pt from 2019. Total investment yield was 5.9%, up by 0.5pt, with net investment yield of 4.7%, down by 0.2pt.
- Group AuM amounted to RMB2,436.080 billion, an increase of 19.2% from the end of 2019. Of this, third-party AuM amounted to RMB788.073 billion, an increase of 26.3%.
1. Subject to SGM approval.
2. Consolidated data of CPIC P/C, CPIC Anxin Agricultural and CPIC HK.
3. Based on direct business premiums, excluding premium from reinsurance assumed, with consolidation of CPIC P/C and CPIC Anxin Agricultural.
4. Stocks and equity funds included.
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