Ping An Insurance Group, the world’s second-largest insurer by value, is adding a network of medical clinics in mainland China to its range of services, part of a strategy to create a one-stop financial supermarket to serve a customer’s every need from car insurance to banking and securities. Ping An has signed 10,000 clinics to its Wanjia Clinics platform since July to serve the 110 million users of its Ping An Doctor health portal, said Lee Yuansiong, executive director of the Shenzhen-based company. “Our model is like a 7-Eleven for financial services,” Lee said in an interview with the South China Morning Post in Hong Kong. “Every client now buys two of our financial products on average. We’re aiming to grow that number.” China’s current network of 200,000 private clinics could more than double to half a million over the next decade amid a government overhaul of the nation’s overburdened public hospital system. The world’s most populous nation is also rapidly greying, with the number of people older than 60 expected to surge from 209.2 million in 2015 to 492.5 million by the end of 2050, according to the United Nation’s World Population Prospects report. Chinese citizens are already spending 4 trillion yuan (US$590 billion) every year on healthcare, according to government data. That’s likely to more than double over the next decade to 10 trillion yuan, according to Lee. I expect it to take five to 10 years to see their effect on Ping An’s bottom line Jerry Li Wenbing, China Merchants Securities Ping An Doctor, a closely held unit of the Hong Kong-traded Ping An, is valued at US$3 billion after its A-round financing, Lee said. “The patients that Ping An Doctor receives a day equals the size of 50 large hospitals now. We are now aiming to have 300 to 500 million users at Ping An Doctor,” Lee said. Apart from the patient-side of the business, the insurer provides management services, such as fee auditing, to local institutions under China’s medical insurance system. These services will help bolster Ping An’s health insurance business and lead to further growth of life insurance products, Lee said. Ping An’s range of businesses has diversified its income sources, helping it unseat China Life Insurance Co as biggest insurer in the country. Ping An’s revenue growth has outpaced China Life over the last decade, increasing eightfold to 693.2 billion yuan in the period from 2006 to the end of 2015. Ping An overtook China Life in total revenue in 2013. It reported profit of 56.51 billion yuan in the first nine months, a rise of 17.1 per cent on year, with its life insurance new business value (NBV) rising 48.1 per cent on year to 35.35 billion yuan. “We have over 120 million financial-services clients in China, and the number is growing at more than 15 per cent a year. The net growth of such clients has been larger than the whole population of Hong Kong,” Lee said. Jerry Li Wenbing, China Merchants Securities analyst, said the Ping An Doctor and Wanjia Clinics were very long term strategies. “I expect it to take five to 10 years to see their effect on Ping An’s bottom line,” he added. Some users at Ping An Doctor will buy the health insurance products, but the amount will still be small compared with the huge base of Ping An’s NBV from life insurance which was mainly generated from agents, Li said. “The growth potential is huge, and when it starts to reap the rewards, the amount will be formidable,” he said. In addition to health care, Ping An said it will focus on financial services, real estate finance, and automotive financing as core business units. Lee added that Ping An was unlikely to benefit from UnionPay’s decision to tighten rules on mainland Chinese purchasing Hong Kong insurance products over its network. “We were not affected by the outbound purchases in the past, and I don’t think the ban will help us much,” he said. Lee said the insurance products sold in Hong Kong via UnionPay were relatively small compared with the size of the mainland market, adding that the mainland is the world’s bestinsurance consumption market due to its large population, rapid growth of household income and sizable deposits. He added that Ping An’s Shenzhen office was one of the best performing among its nationwide branch network with a 60 per cent market share in the southern Chinese city. Lee said that Ping An’s Hong Kong-listed shares were significantly undervalued in light of the company’s underlying business and growing demand for insurance services. He noted that the insurer had 100,000 high net-worth clients in China, with each using an average of roughly 10 insurance or investment products from Ping An. The tradition among Chinese consumers is to develop a relationship and work with one financial services company over time, unlike in western countries where consumers often work with several financial services providers.