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. Tech turbocharges China’s access to health insurance amid coronavirus – for the price of a Starbucks coffee “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. “History shows that turbulence leads to great change, and crisis breeds opportunities,” he said, adding that the insurer will carry out more reforms to address these challenges, including digitising its life insurance business. Ping An said an increase in online sales had helped mitigate some of the challenges posed by the pandemic. The company said 560 million customers used its online platforms to buy insurance, wealth management and health care products as of the end of June, an increase of 8.7 per cent over the start of the year. Ping An’s Lu offers two zero-commission months on Hong Kong launch, may ignite price war The insurer’s profit declined partly because of a one-time gain last year of 10.45 billion yuan from tax incentives on its life and property insurance businesses. Moreover, it is also HSBC’s second-largest shareholder, with a 7 per cent stake. The London-based bank said this year that it would not declare any dividend payments for at least a year starting with the last quarter of 2019 to meet a regulatory requirement in the United Kingdom. Ping An’s operating profit – a better reflection of performance as it removes one-off items – rose 1.2 per cent to 74.3 billion yuan, the company said. Its core life insurance business’s operating profit rose 6.4 per cent to 51.4 billion yuan. However, the value of new business in the first half, another important performance indicator, dropped 24 per cent to 31 billion yuan. Ping An’s shares fell 0.9 per cent to close at HK$83.4 in Hong Kong on Thursday before its earnings were announced. New virtual lender Ping An OneConnect, HSBC ease banking processes in battle for SME sector China Life , the country’s second-largest insurer, meanwhile, reported a 19 per cent decline in net profit for the first half of 2020 to 30.5 billion yuan on Wednesday night. Its stock dropped 0.3 per cent to close at HK$18.78 on Thursday. The insurer’s net investment yield was 4.3 per cent in the first half, down by 37 basis points from a year earlier, following a drop in interest rate and a delay in dividend payments from some stocks in its portfolio. The company said the pandemic had contributed to more new sales on its online platform, and that it would continue to diversify its online insurance products offering in addition to its 1.6 million sales agents.