Ping An announces plan for internet insurance

Group teams up with Web giants Alibaba and Tencent to test online finance industry

PUBLISHED : Saturday, 25 August, 2012, 12:00am
UPDATED : Saturday, 25 August, 2012, 2:10am

Ping An, Tencent and Alibaba plan to develop an online insurance business together, Ping An Insurance chief executive Ma Mingzhe said at the announcement of his company's interim results yesterday.

Mainland business news website Caixin reported early yesterday that the "three Mas" had established a company in Shanghai to test the "internet finance" industry by selling insurance online. Caixin quoted a source as saying Ping An would hold a 15 per cent stake in the venture.

The "three Mas" refers to Jack Ma Yun, chairman of mainland e-commerce giant Alibaba Group, Ma Huateng, chairman of the country's largest internet company Tencent Holdings, and Ma Mingzhe.

Ma Mingzhe confirmed the news and said that because the group was waiting for official approval, he could not disclose too many details.

"Virtual values do exist on the internet," he said. "It's an innovative approach. We can combine Alibaba and Tencent's advantages in internet and online customers with Ping An's advantage in insurance." He said the project would "take a long time" to develop but would "not require too much investment" at the early stages.

According to Yao Bo, an executive director of Ping An, the insurer was waiting for regulatory approval to sell 26 billion yuan (HK$31.8 billion) of convertible bonds, and the process could be completed this year.

Bo said that once the bonds were converted into stock, Ping An's solvency margin ratio, a measure of an issuer's ability to settle claims, would jump 24 percentage points to reach 200 per cent, and that the amount would meet the group's capital need for the next two to three years.

Ping An's solvency margin ratio stood at 176.7 per cent at the end of June, up 10 percentage points from a year earlier.

Driven by its banking business, the group posted a 9.4 per cent rise in net profit to 13.96 billion yuan for the first half, compared with a year earlier.

The banking business generated a net profit of 6.73 billion yuan, up nearly 181 per cent from a year earlier, of which 3.47 billion yuan became group profit.

The group declared an interim dividend of 15 fen per share, unchanged from a year earlier.

Ping An's shares dropped 1.58 per cent yesterday to close at HK$59.10, while the benchmark Hang Seng Index lost 1.25 per cent.