Thursday, March 28, 2024
 
Columnist
Martin Hennecke
 
CHINA TAIPING
HKEx Stock Code : 00966 
 
Corporate Profile
The principal activities are the underwriting of direct life insurance business in the PRC, direct property and casualty insurance business in the PRC and Hong Kong and all classes of global reinsurance business. The Group also carries on operations in pension and group life business, assets management, E-commerce for insurance and insurance intermediaries.

Business Review - For the year ended December 31, 2012

2012 was a challenging year for the insurance industries of China. With the global economy's sluggish recovery and China's slow, yet stable, economic growth, the insurance market continued to be caught in a slow growth environment. In such difficult and complicated economic conditions, CTIH was able to deliver solid growth in value for its shareholders during the Year.

Profitability and shareholders' equity

¡ENet profit attributable to the shareholders increased by 71.0% to HK$936.56 million, representing HK$0.550 per share.

¡EShareholders' equity increased by 19.4% to HK$13,836.77 million, representing HK$8.111 per share.

Value Creation

¡EShareholders' group embedded value increased by 28.7% to HK$22,171.96 million, representing HK$12.997 per share.

¡EGross premiums written increased by 20.1% to HK$59,915.31 million. In respect of the first year regular life insurance premium, products with payment term of 10 years or above constituting most of the business.

¡ENew business value of the life insurance business increased by 2.7% to HK$2,304 million, representing a CAGR of 30.7% over the past five years.

¡EEmbedded value of the life insurance business increased by 35.7% to HK$29,286 million, representing a CAGR of 33.6% over the past five years.

Improvement in operations

¡EMarket share of the life insurance business increased by 0.4pt to 3.7%, ranking as the seventh largest life insurer in the PRC.

¡EMarket share of the property and casualty insurance business in the PRC increased by 0.2pt to 1.4%, ranking as the ninth largest property and casualty insurer in the PRC.

¡ENumber of agents in the individual channel of the life insurance business increased by 25.6%.

¡EOverall persistency ratios of the life insurance business were maintained at very satisfactory levels, while the persistency ratios of the individual channel further improved.

¡ECombined ratio of the property and casualty insurance business in the PRC continued to improve for the fifth consecutive year to 99.8% and combined ratio of the property and casualty insurance business in HK improved meaningfully by 1.2pts to 97.7%.

¡ETPeC was formed and commenced operations. TPeC is a unified e-business platform mainly providing management services for the e-distribution channels of TPL and TPI.

Business Outlook - For the year ended December 31, 2012

CTIH will continue to strive for its strategic objective of ¡§building a new Taiping in three years¡¨, with the financial goals of ¡§doubling total premium, total assets and net profit, while maintaining quality, efficiency and risks at an acceptable level¡¨.

¡ELong Term Capital Raising and Funding

The Group is exploring various proposals and measures to further enhance the financial capacity and capital management efficiency of the Group in order to support the business development of its subsidiaries. Among others, such proposals include increasing the Company's shareholding in its non-wholly owned subsidiaries with the support of its controlling shareholder (including the possible acquisition of a 25.05% equity interest in TPL from TPG) and/or making other strategic investments, to be funded by the issuance of new equity as consideration. The Group will look into the feasibility of the various proposals.

¡ELife Insurance Business ¡V TPL

The Group is cautiously optimistic about the prospects of the life insurance business in 2013. In 2013, TPL will continue to focus on building its agency force, in both quantitative (number of agents) and qualitative (productivity) terms. In the bancassurance channel, TPL will spend considerable efforts and resources in working with its bank partners in finding operating models which will increase the value of its product sales. Already in the first two months of 2013, sales through the bank channel have greatly improved, which paved a solid foundation for the future bancassurance cooperation.

¡EProperty and Casualty Insurance Business in the PRC ¡V TPI

Having now benefited from strong fundamentals and a positive pricing cycle for several years, pricing in the PRC property and casualty insurance sector are now showing signs of pressure. TPI in particular will continue to focus on improving its combined ratio, especially in the area of expenses, as the property and casualty insurance business in the PRC continues to gain economies of scale. The Group, however, continue to be cautiously optimistic about the operation's prospects for 2013, and believe that positive and satisfactory underwriting and earning results will be achieved.

¡EProperty and Casualty Insurance Business in Hong Kong ¡V CTPI (HK)

CTPI (HK) will continue to be cautious and conservative in running its operations and believes that it will continue to maintain its current market position in Hong Kong, and that satisfactory underwriting and operating results are achievable in 2013.

¡EReinsurance Business ¡V TPRe

Barring any unforeseen or significant adverse events in the coming year, TPRe expects to achieve overall positive operating results in 2013.

Source: China Taiping (00966) Annual Results Announcement
Chairman WANG Bin Issued Capital (shares) 1,706M
Par Value HKD 0.05 Market Capitalisation (HKD) 18,492M
 
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