Insurers Ping An, China Life vow to further develop online sales after coronavirus pandemic eats into first-half earnings

Ping An’s net profit declined 30 per cent, while China Life’s net profit dropped 19 per cent in the six-month period

Further development of online sales by two of China’s largest insurance companies could change the sector forever, analyst says

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Shanghai’s financial district. Social distancing measures made it difficult for millions of insurance agents to meet clients and sell policies in the first half of the year, according to China’s two largest insurers. Photo: EPA-EFE

Published: 8:15pm, 27 Aug 2020Updated: 10:33pm, 27 Aug 2020

Ping An Insurance (Group) and China Life Insurance, two of the mainland’s largest insurers, have vowed to step up the development of online sales after their first half earnings were hit by the coronavirus pandemic.

Their results were marred by social distancing measures that made it difficult for millions of their agents to meet clients and sell policies, while returns on investments were hit hard by market uncertainties. Moreover, both companies benefited from a tax rule change last year, a one-off boost that will not be repeated this year.

The further development of online sales by two of China’s largest insurance companies could change the sector forever, with companies spending more on the development of apps and other online services instead of hiring more sales people.

“Other insurers will follow suit. The trend will have a positive impact to the industry as a whole, as insurers will be able to sell products at a lower cost and provide better services,” said Kenny Ng Lai-yin, a securities strategist at Everbright Sun Hung Kai.

Ping An, China’s largest insurer by market capitalisation, said on Thursday its net profit for the six months ending on June 30 had declined 29.7 per cent year on year to 68.7 billion yuan (US$9.9 billion), better than a 33.5 per cent fall forecast by analysts polled by Bloomberg. Its revenue declined 1 per cent to 683.28 billion yuan, compared with 690.25 billion yuan a year earlier.

“So far, 2020 has been challenging, having witnessed a complex fast-changing macro environment, the dramatic impact of Covid-19 and highly volatile global markets,” Peter Ma Mingzhe, Ping An’s chairman, said in a results announcement to the Hong Kong stock exchange.