Ping An Insurance Group Co of China Ltd (中國平安保險集團) is aiming for a possible fivefold increase in overseas investments and has not been put off Britain by its vote to leave the EU, its group chief financial officer told reporters yesterday.
Ping An plans to gradually increase its overseas investments to 5 to 10 percent of total insurance assets if it can find appropriate targets, Jason Yao (姚波) said in an interview.
It currently invests about 2 percent of its total assets abroad, well below the 15 percent cap imposed by China’s insurance regulator, giving it ample room to splurge.
“That could even happen in the next three to five years, as the world is changing very fast,” Yao said, naming the US, Britain and Europe as the key investment markets the company is targeting.
Britain’s vote on the EU was not an issue, he said.
“There will be investment opportunities in the UK... Britain’s stock market and currency have gradually stabilized [since the vote]. We’ve been watching that very closely,” he said.
Based on Ping An Group’s current insurance assets, the company’s total overseas investments could reach as much as US$27.5 billion from about US$5.5 billion currently, according to calculations by Reuters.
Yao said possible investments included property, logistics-related real estate and private equity funds.
Ping An bought London office property Tower Place for ￡327 million (US$427 million) in January last year and Lloyds Building in the city’s financial district for ￡260 million in July 2013.
Ping An, China’s second-largest insurer by market value, posted an 18 percent rise in first-half net profit, led by a one-off gain in its Internet finance business.
Yao said it was a “reatively big challenge” to stem the slide in investment income in the second half of this year after investment returns fell 54 percent in the first half, hit by falling interest rates and the stock market downturn.
That increases the impetus to diversify its asset allocation and expand its footprint abroad.
However, steady growth in its life insurance and banking businesses helped the rise in profit, in contrast to the declines forecast by rivals.
Ping An’s overseas ambitions mirror those of other Chinese firms, including Anbang Insurance Group (安邦保險集團) and Fosun International Ltd (復星國際), which are spending billions on overseas acquisitions in a bid to reduce their dependence on the slowing Chinese economy and weakening yuan.
Yao said the parent company would push ahead with its plans to list its Ping An Securities (平安證券) arm in Hong Kong by the end of this year at the earliest.
He declined to specify the size of the initial public offering, but IFR, a Thomson Reuters publication, has reported it could be as large as US$1 billion.
As for Lufax (中國平安陸金所), a Ping An Group-backed Chinese online lending platform, Yao said a dual listing was still a possibility and could happen next year.
Lufax serves as a trading platform for a wide variety of financial products between institutional and individual investors, including wealth-management products and peer-to-peer loans.
Lufax raised US$1.2 billion in its last round of fund raising, valuing the company at US$18.5 billion, but Yao said there were no plans to raise more capital ahead of any IPO.
Years of breakneck growth for China’s top insurers has been partly fueled by a splurge on risky investment products that could punch multibillion-dollar holes in their balance sheets if the slowing economy triggers heavy debt defaults.
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