CPIC Announces 2019 Annual Results

HONG KONG, Mar 25, 2020 - (JCN Newswire) - 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.




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