Tag: China Pacific Insurance

The First Shanghai, Hong Kong and London Listed Chinese Insurance Company, CPIC’s GDR Trading Debut on the Shanghai Segment of the Main Market of London Stock Exchange

At London time 9 a.m of June 17th, China Pacific Insurance (Group) Co., Ltd. (hereinafter referred to as “China Pacific Insurance” or “Company”, stock ticker: CPIC) was successfully listed and commenced trading on the Shanghai Segment of the Main Market of London Stock Exchange (“LSE”), with an issue price of USD$17.60. China Pacific Insurance officially becomes the first Chinese insurance company to issue GDRs and the first ever A+H+G (Shanghai, Hong Kong, London) listed insurance company.

China Pacific Insurance’s GDR issuance has achieved a number of innovative breakthroughs under the Shanghai-London Stock Connect, being the first GDR to adopt Chinese Accounting Standards, to introduce cornerstone investor mechanism, to receive public float waiver as an non-Europe company, and to adopt online “virtual listing ceremony” between Shanghai and London. Mr. Kong Qingwei, chairman of the Board of Directors and executive Director of China Pacific Insurance said, “The successful issuance and admission of CPIC GDR in London Stock Exchange will not only serve as a milestone in the company’s history, but also become a symbolic event of “mutual trust, support, connect and interaction” between eastern and western capital markets. Chinese insurers need to learn from international peers, while China, given its prosperity and stability, is a perfect choice for global investors”.

Since its establishment 29 years ago, China Pacific Insurance has undergone milestones and key changes such as A+H listing, and industry leading transformations. The Company focuses on insurance business as its core, and promoted balanced growth across business segments with full range of insurance licenses. China Pacific Insurance strives to build competitive insurance expertise, and grow into a large composite insurance group with robust capital position, strong value creation capability, and excellent risk control level.

As one of the most influential insurance companies, the issuance of GDR is a strategic decision for the Company to support the country’s opening up of its financial market. It is an important step to strengthen Shanghai’s status as an international financial center. The successful issuance of GDR allowed China Pacific Insurance to further improve its corporate governance, deepen its business reform, and enhance its core competitiveness as well as its position in the capital market. It marked an important milestone for the bilateral opening of China and the UK’s capital markets. Industry experts commented that China Pacific Insurance’s GDR issuance has benefited from China’s financial reform and opening up. The Company is expected to provide a valuable example for A-share listed or insurance listco to embrace the core global capital market through Shanghai-London Stock Connect.

China Pacific Insurance Obtained The Approval of the GDR Prospectus, The First GDR Issuance of the Insurance Industry Has Entered Into the Countdown

The GDR issuance of China Pacific Insurance (Group) Co., Ltd. (hereinafter referred to as “China Pacific Insurance” or “the Company”), has attracted tremendous market attention as it makes progress on its London Stock Exchange listing. On June 13, China Pacific Insurance announced on three major platforms; the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the London Stock Exchange, that the prospectus of the Issuance (the “GDR Prospectus”) was approved by the UK Financial Conduct Authority on 12 June 2020 (London time). Prior to this, the Company announced on 2 June that the GDR issuance was approved by the China Securities Regulatory Commission and the Company entered into a cornerstone investment agreement with Swiss Re Principal Investments Company Asia Pte. Ltd (“Swiss Re”). On 10 June, the Company announced the intention to float on the London Stock Exchange. Following the successful GDR issuance on London Stock Exchange, China Pacific Insurance will become the first Chinese insurance company to issue GDRs and the first A+H+G (Shanghai, Hong Kong, London) listed insurance company.

According to the related announcement, China Pacific Insurance intends to base offer no more than 102,873,300 GDRs, each of which represents 5 A-shares of the Company. In addition, the stabilisation manager can exercise the over-allotment option with no more than 10,287,300 additional GDRs, which do not exceed 10% of the base offering. The price range of the GDRs under the Issuance is preliminarily set between US$17.60 and US$19.00 per GDR. The offer period of the GDRs under the Issuance is from 12 June 2020 to 16 June 2020 (London time). Assuming the maximum number of GDRs of the proposed Issuance is achieved and the over-allotment option is fully exercised, the gross proceeds of the GDR Issuance will amount to between US$1.99 billion and US$2.15 billion. According to the regulatory rules, the GDRs issued cannot be converted into underlying A shares within 120 days from the date of listing.

The approval of the GDR Prospectus indicates that China Pacific Insurance’s GDR issuance has entered into the final stage of the process. China Pacific Insurance believes that the issuance of GDRs will provide global investors with the opportunity to participate in the growth potential of China’s booming insurance sector, which has increasingly been opening up in recent years. This Offering will broaden the Company’s access to global capital market as well as further one of its core strategies, Transformation 2.0. According to the issuance plan stated in the announcement, China Pacific Insurance hopes the issuance of GDRs will expand its high-quality investors worldwide, diversify its shareholder structure and continue to enhance its corporate governance. The issuance price range is determined according to the Company’s fundamentals and the evaluation of investors, the Shanghai-London Connect regulatory requirements, the domestic and foreign capital market conditions and the issuance risks.

Founded in 1991, China Pacific Insurance is going to celebrate its 30th Anniversary in 2021. As a leading insurance group in China with one of the most prestigious brands in the industry, China Pacific Insurance continues to showcase its outstanding performance. According to China Pacific Insurance’s first quarter financial report for 2020, the Company achieved operating revenue of RMB138.211 billion, representing a year-on-year increase of 3.8% and realized net profit attributable to equity holders of the Parent Company of RMB8.388 billion, up 53.1% on year-on-year basis. Recently, China Pacific Insurance published its 2019 annual dividend payment implementation announcement, which declared distribution of its annual cash dividend of 1.2 yuan (tax included) per share. According to professional research institutions, the China Pacific Insurance’s GDR issuance is expected to improve the Company’s corporate governance as well as help attract investors with potential strategic synergies or business cooperation. Meanwhile, the GDR listing will help the Company build an offshore US dollar fundraising platform and enhance the Company’s international layout focusing on the insurance industry value chain. The listing will also introduce Swiss Re, who has a long-term cooperative relationship with China Pacific Insurance, as a cornerstone investor and create favourable conditions for building a stronger partnership between the two parties. With the UK regarded as the birthplace of the modern insurance industry, China Pacific Insurance is honoured to be listing in the London capital markets for its 30th anniversary. The Company is looking forward to a bright future and to impress the world with its continued market expansion.

The first A+H+G insurance company is ready to embark on its journey: CPIC discloses intention to float at the London Stock Exchange

After successively obtaining approval from the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission, China Pacific Insurance (Group) Co., Ltd. (hereinafter referred to as “China Pacific Insurance”, stock code: SH601601; HK02601) announced on June 10, 2020 that it had issued the Intention to Float (“ITF”) to list Global Depositary Receipts (GDR) on the London Stock Exchange. The issuance of the ITF implies that China Pacific Insurance has received greenlight from both domestic and overseas regulatory authorities for the GDR issuance, and has taken a major step towards listing. Post the completion of the issuance, China Pacific Insurance will be the first Chinese insurer to list simultaneously in Shanghai, Hong Kong and London. Meanwhile, the GDR issuance of China Pacific Insurance will become the second westbound issuance under the Shanghai-London Stock Connect, marking a material advancement in the bilateral cooperation of the China’s and UK’s capital markets, and another milestone in the globalization of China’s capital market.

According to the Intention to Float, China Pacific Insurance intends to issue up to 113,160,600 GDRs with each GDR representing 5 A shares of the company. The GDR issued is expected to be listed in the UK and traded on the Shanghai-London Stock Connect segment of the Main Market of the London Stock Exchange. Since the subscription of GDR issued is limited to qualified investors under relevant domestic and foreign regulatory rules, the Intention to Float is not published for domestic investors. UBS AG London Branch and Huatai Financial Holdings (Hong Kong) Limited are acting as Joint Global Co-ordinators and Joint Bookrunners for this issuance.

The decision to issue GDR on the London Stock Exchange marks a key step for China Pacific Insurance to execute “Transformation 2.0” strategy, enabling it to further optimise its shareholding structure, corporate governance, and expand its international presence. The GDR issuance will not only be an important milestone at China Pacific Insurance’s 29th anniversary, but will also effectively promote economic and trade cooperation between China and the UK, and fully demonstrate the opening up of China’s capital market to the world.

CPIC Announces 2019 Annual Results

Gave priority to business quality; Delivered solid business results; Sustained increase in overall strength

China Pacific Insurance (Group) Co., Ltd. (the “CPIC” or the “Group”; Stock code: 2601.HK, 601601.SH) is pleased to announce the annual results of the Group for 2019.

The year 2019 was special in many ways. It marked the 70th anniversary of the founding of the People’s Republic of China, represented a critical period in China’s effort to build itself into an all-around moderately prosperous society, and marked the 3rd fiscal year of the 8th Board of Directors of CPIC. In the past 3 years, the board demonstrated the resolve to pursue transformation, the readiness to embrace changes and the focus on delivery. Under its leadership, and with the hard work of all our employees, CPIC embarked on a new journey of development.

Focused on transformation and have never slackened in our steps.
In the past 3 years, we adhered to high-quality development, vigorously pursued transformation and delivered steady growth of business results. We were listed on the Fortune Global 500 for the 9th consecutive year, ranking 199th. CPIC Life and CPIC P/C won the top AA rating for the 3rd successive year in the regulatory evaluation of customer service.

– Group gross written premiums (GWPs) increased from RMB234.018 billion in 2016 to RMB347.517 billion.
– Group net profits1 amounted to RMB27.741 billion, a sharp increase of 54.0% from 2018 and doubling the level 3 years ago.
– Group total assets grew by 14.4% on an annual compound basis in the past 3 years, amounting to RMB1,528.333 billion.
– Group embedded value reached RMB395.987 billion, with embedded value per share rising from RMB27.14 three years ago to RMB43.70 in 2019.
– Group comprehensive solvency margin ratio stood at 295%, maintaining a strong capital position.
– Number of Group customers climbed to 139 million, adding over 10 million annually for the 4th year on end.

Pressed ahead with change and have never felt complacent.
The new model of “products + services” achieved breakthroughs. We pushed forward the model to help drive the development of individual customer business of CPIC Life. “CPIC Home”, the high-end retirement communities, was gaining traction, with locations in Chengdu, Dali, Hangzhou, Shanghai, Nanjing and Xiamen, evenly distributed across the country. “CPIC Blue Passport”, a program at the core of our health management service system, gradually expanded into health counselling, green channel for critical illnesses, on-line diagnosis and high-end medical service.

Property and casualty business2 delivered high-quality development. While improving the combined ratio in the last 3 years, the business segment achieved a top-line growth higher than the industry, with GWPs increasing to RMB134.650 billion in 2019 from less than RMB100 billion 3 years ago. Automobile insurance enhanced customer retention, and renewed business has become the key growth driver. Emerging business lines such as agricultural insurance, guarantee insurance and liability insurance maintained rapid development, with the share of non-auto business increasing considerably to 30.7%.

Asset management stayed focused on serving the insurance business. We persisted in prudent, value and long-term investing. Based on profiles of liabilities, we continuously optimized asset allocation, seized market opportunities and reported solid investment performance. In 2019, the growth rate of Group investments’ net asset value reached 7.3%, up 2.2pt. Group assets under management (AuM) continued to grow, with faster growth of third-party AuM, pointing to increased market competitiveness.

Digital empowerment improved responsiveness. The cloud-based core business systems considerably enhanced insurance policy issuance capacity, supporting response to up to hundreds of millions of customers. The data center in Luojing, Shanghai went into operation, marking the establishment of a technological support system underpinned by “3 centers in 2 locations”. The “CPIC App”, the integrated customer interface, achieved initial success in smart operation, supporting personalized recommendation of services, products and programs, binding over 30 million users. The “Jiayuan” individual customer account cumulatively responded real-time to over 100 million inquiries.

The concept of “Collaborative Development” resonated throughout the organization. Better governance framework and work mechanisms greatly enhanced our capability in collaboration. The share of automobile premiums from cross-sell by life insurance agents reached double digits for the first time; health premiums from cross-sell by life insurance agents grew by 105.5%, much higher than expected; we have signed agreements with 77 strategic clients, while entering into strategic partnerships with 63.8% of China’s provinces, municipalities and autonomous regions, capable of providing one-stop integrated services; Changjiang Pension, with the support of CPIC Life and CPIC P/C, successfully qualified as manager of occupational annuity of all the 30 provinces/municipalities which started the bidding.

Served the needs of national strategies and China’s real economy. We signed a strategic cooperation agreement with the Ministry of Industry and Information Technology to serve the high-end manufacturing industry, provided a total of over RMB500 billion in sum assured of comprehensive insurance coverage for the 2nd CIIE, supported the national initiatives of “Integration of the Yangtze River Delta Region” and “New Area of Shanghai Free Trade Zone”, and participated in the private placement of Shanghai Lingang. Our employees donated over RMB20 million for the afforestation effort in Sanjiangyuan, the origin of China’s main rivers. In the face of the coronavirus outbreak, we developed customized insurance solutions to help with resumption of business of medical supply manufacturers and pharmaceutical companies.

Deepened long-term mechanism for targeted poverty reduction. In 2019, our poverty reduction programs covered around 5.133 million impoverished people on the dossier and provided RMB2.32 trillion in sum assured to the poverty-stricken areas. We dispatched 255 staff members to 180 designated villages in 27 provinces of China to help with poverty reduction. CPIC P/C’s innovative “Fang Pin Bao” anti-poverty program provided a total of RMB2.77 trillion in protection to vulnerable people in 160 counties of 16 provinces, and won the Award in Organizational Innovations of the 2019 National Poverty Alleviation Awards, the top prize of its kind. We were also the only insurance company winning the award.

Continue to explore and plan for the future.
In 2020, Transformation 2.0 will enter an all-around overdrive before its accomplishment. CPIC, under the leadership of the Board of Directors, will unswervingly follow the path of high-quality development. On the one hand, we will adhere to the basics, i.e., fulfilling annual business objectives and stabilizing the fundamentals; on the other hand, we will continue with reform, namely, seeking new progress of transformation in key areas.

We will advance the upgrade of the agency force to re-balance our value growth drivers, persist in bench-marking against industry’s best to improve underwriting profitability, optimize asset allocation to strengthen investment capabilities in the face of lower long-term interest rates, increase digital empowerment to effectively support the company’s high-quality development, and deepen collaborative development based on our huge customer base to promote value creation.

We are now half-way through Transformation 2.0. We will not waver in our determination, or relent in our effort. We will work even harder towards the vision of “industry leadership for healthy and steady development”, and the objective of being the “best in customer experience, business quality and risk control capabilities”.

Appendix 1: Key performance indicators of the core businesses

Life insurance business maintained a stable NBV margin, with steady growth of residual margin.
– CPIC Life realized RMB24.597 billion in NBV, down by 9.3%, due to the impact of new business sales decline. The NBV margin stood at 43.3%, down by 0.4pt from 2018.
– The residual margin of life insurance amounted to RMB329.559 billion, a growth of 15.5% from the end of 2018. Life insurance OPAT reached RMB22.176 billion, a growth of 14.7%.
– CPIC Life reported renewed premium growth of 11.5%, driving a GWP growth of 5.0% for 2019, reaching RMB212.514 billion.

Property and casualty business2 maintained a stable combined ratio, with rapid top-line growth.
– Property and casualty business intensified control of expenses, and recorded a combined ratio of 98.4%, the same as that for 2018. Of this, loss ratio stood at 60.4%, up 4.1pt, and expense ratio 38.0%, down by 4.1pt.
– GWPs amounted to RMB134.650 billion, an increase of 12.9%. Of this, non-auto business grew by 32.6% and accounted for 30.7% of total property and casualty GWPs, up 4.5pt.
– Automobile insurance saw improved customer loyalty and in turn a shift of growth drivers. Emerging business lines such as agricultural and guarantee insurance maintained rapid development. Of this, agricultural business realized RMB6.778 billion in direct business premiums3, with a fast increase in market share.

Persisted in asset allocation based on profiles of liabilities, with solid investment results.
– The share of fixed income investments stood at 80.4%, down by 2.7pt from the end of 2018; that of equity investments 15.7%, up 3.2pt, and of this, core equity investments4 accounted for 8.3% of total investment assets, up 2.7pt.
– Group growth rate of investments’ net asset value reached 7.3%, up 2.2pt. Total investment yield was 5.4%, an increase of 0.8pt from 2018, with net investment yield of 4.9%, staying stable.
– Group AuM5 amounted to RMB2,043.078 billion, an increase of 22.7% from the end of 2018. Of this, third-party AuM5 amounted to RMB623.815 billion, an increase of 44.3%.

Notes:
1. Attributable to equity holders of the parent.
2. Including CPIC P/C, Anxin Agricultural and CPIC HK.
3. Based on direct business premiums, excluding premium income ceded-in, with consolidation of CPIC P/C and Anxin Agricultural.
4. Equity securities and equity funds included.
5. Numbers as of the end of last year were restated.

Appendix 2: Honors and awards
– CPIC Group was listed on Fortune Global 500 for the 9th consecutive year, ranking 199th, up 21 places from 2018.
– CPIC Group ranked 6th among the World’s 100 Most Valuable Insurance Brands in 2019 released by Brand Finance, with its brand value exceeding USD10 billion for the first time.
– CPIC P/C and CPIC Life both won the top A rating for the 4th consecutive year in the regulatory evaluation of business operation of insurance companies, and the top AA rating for the 3rd consecutive year in the regulatory evaluation of customer services.
– CPIC P/C’s “Fang Pin Bao” anti-poverty program won the Award in Organizational Innovation of the National Poverty Alleviation Awards by the Poverty Reduction Stewardship Panel of the State Council.
– The Pacific Elderly Care Investment Management Co. Ltd., a subsidiary of CPIC Life, received the 2019 Award in Model Innovation of Integration of Healthcare and Retirement Services for Insurance Companies at the 14th Innovation Award Gala of China’s Insurance Industry for its “CPIC Home” retirement communities.
– CPIC AMC won the 2019 Ark Awards in Categories of Insurance Asset Management Companies and Investment Teams at the 2019 China’s Insurance Asset Management Annual & 2019 Ark Awards Competition of China’s Insurance Companies hosted by the Securities Daily.
– CPIC Allianz Health was awarded the 2019 Customer Satisfaction Brand for March 15th the Consumer Rights Protection Day by China’s Foundation of Consumer Rights Protection.
– Changjiang Pension was honoured the Asian Pension Company of the Year 2019 at the 21st Century Ranking for Competitiveness of Asian Financial Firms.

About Company
China Pacific Insurance (Group) Co. Ltd. (referred to as CPIC hereafter) was an insurance group company formed on the basis of China Pacific Insurance Company Limited which was incorporated on May 13, 1991. Headquartered in Shanghai, it is a leading comprehensive insurance group in China listed in both Shanghai and Hong Kong, on 25 December 2007 and 23 December 2009 respectively, with a total share capital of 9.062 billion shares. CPIC is a leading comprehensive insurance group, the Company provides a broad range of risk solutions, financial planning and asset management services to over 100 million customers via its nationwide network of distribution and diversified services platforms.