Chinese insurer PICC P&C's first-half profit rises 16.8pc on underwriting
Stronger-than-expected underwriting profits and investment income lifted the first-half earnings of PICC Property and Casualty (PICC P&C) 16.8 per cent year on year but the outlook for the mainland's non-life insurance sector remains challenging.
PICC P&C, the mainland's largest non-life insurer, said its net profit in the six months to June totalled 7.6 billion yuan (HK$9.7 billion), according to a Hong Kong stock exchange filing yesterday. That beat expectations for a 34 per cent profit drop.
Turnover in the period increased 14.3 per cent year-on-year to 115.6 billion yuan. Underwriting profit rose to 5.63 billion yuan from 5.61 billion yuan a year ago. The firm's underwriting profit ratio dipped 1.2 percentage points to 6.4 per cent.
Investment income swung to a net realised gain of 277 million yuan from a net realised loss of 400 million yuan last year. An interim dividend of 24.3 fen was declared.
The firm's combined ratio rose to 93.6 per cent from 92.4 per cent in the same period of last year. A combined ratio less than 100 per cent indicates an insurer is receiving more in premiums than it is paying out in claims. It recorded a combined ratio of 97.6 per cent in the second half of last year.
CCB International analyst Kenneth Yue said: "[PICC P&C's] operating environment remains unchanged. Non-life insurers are still under profitability pressure amid rising competition and costs of claims."
People's Insurance Company (Group) of China (PICC), the parent company of PICC P&C, said its first-half profit rose 53.2 per cent to 7.5 billion yuan, boosted by earnings from the P&C business and a narrower loss from its health insurance business.