Ping An, BoCom Cooperate in Bancassurance

Ping An Insurance (Group) Company of China Limited (Ping An, 601318.SH, 2318.HK) and Bank of Communications (BoCom, 601328.SH) days ago disclosed in a joint announcement that they will establish the strategic cooperation in bancassurance.

Based in the southern boomtown Shenzhen, Ping An is China's second largest insurance group by premium revenue and market share. Based in the financial center Shanghai, BoCom is the fifth biggest listed commercial bank of China's Mainland.

Each OTO Fortune outlet of BoCom is to sell the new bancassurance product of the insurer and the bank. As the upscale wealth management service, OTO Fortune will not sell the products of other insurance companies. Currently, BoCom operates 400 such wealth management outlets in 32 provinces and cities across the country.

According to industry insiders, the participating insurance is expected to contribute more premium revenues to Ping An in the following months. The vice president of BoCom said that the lender will boost the sales of this new product without any limitation on the scale and time of sales.

During the previous two years, actually, Ping An put heavier focus on universal insurance. Under the new accounting standards, however, the company has to shift more sights into participating insurance. Once the integration of Ping An Bank and Shenzhen Development Bank is completed, the premium growth of Ping An is expected to be strong via the cross sales between Ping An and Shenzhen Development Bank.

China's biggest life insurance company Beijing-based China Life Insurance Co. (China Life, 601628.SH, 2628.HK) from this January to July made primary premium revenues of CNY 204.6 billion under the new accounting standards, according to an announcement of the company. Without considering the new accounting policy, the life insurer realized premium revenues of CNY 214.7 billion during the first seven months of this year, compared to CNY 191.1 billion during the first seven months of last year. This July, the Beijing-based insurer gained single-month premiums of CNY 21 billion, up 14.13% year on year but down 26.83% month on month.

Shenzhen-based Ping An achieved premiums of CNY 138.82 billion in the period from this January to July, with life insurance premiums of CNY 101 billion. Under new accounting standards, Ping An in the seven months harvested original premiums of CNY 95.8 billion, shrinking much compared to that without considering the new accounting standards.