Chinese insurance titan Ping An to take on internet giants as it evolves into a tech powerhouse
Ping An Technology tasked with driving transformation as it focuses on R&D and incubates new businesses
Ping An Insurance (Group) is gearing up to take on mainland China’s internet giants, while pursuing international expansion, under its audacious plan to become a full-fledged technology company.
“Our chairman, Peter Ma Mingzhe, wants to transform the entire group ... into a technology company within 10 years,” Ericson Chan, the chief executive at subsidiary Ping An Technology, told the South China Morning Post.
“Things are happening quite fast, as we’re investing a lot on financial technologies and [other] information technology.”
Ping An Group was founded in Shenzhen in 1988 as the first joint-stock insurance company on the mainland. It has 138 million customers and operates 28 subsidiaries, including China Ping An Life Insurance – the country’s second-largest life insurer by premium size.
In 2008, the group established Ping An Technology as an in-house provider of information technology services for all its operations.
That role has quickly evolved over the past few years, according to Chan. He said Ping An Technology has become increasingly involved in research and development, with the group spending about 8 billion yuan (US$1.2 billion) every year, and in incubating new businesses.
Ping An Technology provides financial technology solutions and cloud computing services to the group, as well as about 150 external customers, including small domestic financial services providers and some foreign companies doing business on the mainland.
Chan indicated that Ping An Technology, which has about 6,500 staff, is now the engine driving the group’s envisioned structural transformation, as it ensures all subsidiaries become self-sufficient in terms of technology.
“Some of the artificial intelligence projects we have, for instance, will run across the entire group, so we can quickly scale up,” he said.
He added that the group’s transformation will gain further momentum through the US$1-billion Ping An Global Voyager Fund, which is tasked to invest in so-called fintech and health-tech opportunities outside of China.
Ping An Group chief innovation officer Jonathan Larsen, who serves as the fund’s chief executive, said the search for investment targets is being conducted in the United States, Israel and Singapore, according to a Reuters report.
The group’s strategy, according to Chan, is to follow and meet the financial needs of its retail and corporate customers abroad.
“There are no real equivalents to Ping An in the industry in terms of its ambitions outside of China,” said Paul Haswell, a partner at international law firm Pinsent Masons.
Internet giants Baidu, Tencent Holdings and Alibaba Group Holding, which owns the Post, have expanded into financial services in recent years, but have mainly focused their efforts in the domestic market.
Haswell pointed out that Ping An’s “western counterparts have to contend with much more competitive and highly regulated markets, so the appetite for technological innovation is tempered by a fear of losing market share or upsetting a regulator”.
“Ping An, like Tencent’s [social media platform] WeChat, is able to take advantage of a Chinese consumer base that is less concerned with data privacy and more willing to embrace the convenience of new technologies,” he said.
“I don’t think Ping An will transform into a tech company in 10 years’ time. When you look at what the group is doing in 2017, it already is one.”
Since 2015, Ping An Technology’s artificial intelligence laboratory initiatives have led to the launch of dozens of projects involving facial recognition across the group. These cover credit approval, internet account registration, credit card batch comparison, banking business identity verification, account log in, insurance and underwriting.
Over the past decade, the group has expanded into online activities like Lufax, which runs the mainland’s biggest peer-to-peer lender and a growing wealth management platform. Lufax, which was valued at US$18.5 billion in a January fundraising, is planning an initial public offering in Hong Kong.
Ping An Group’s Hong Kong-traded shares rose 2.46 per cent to finish at more than a two-year high of HK$56.20 on Thursday. It was the highest close for the company’s shares since reaching HK$57.45 on June 12, 2015.