This is the narrative of Ping An ’ south transformation from general insurance company to a technology-powered, ecosystem-driven integrated fiscal services group .
Through the 1990s, Ping An expanded into non-insurance fiscal businesses. It got a significant rise in 2002 from HSBC, one of the largest fiscal services groups in the world at the time, with strong ties to China .
1990s: Expansion into investment and banking
Ping An launched in 1988 in general insurance, from marine hull to property insurance. In the early 1990s the caller entered the liveliness business. The first base decade saw Ping An evolve into a full-fledged indemnity caller. In the next decade, Ping An transformed to reach beyond insurance.
competition in the fiscal market competition in China became more and more aggressive as newly players entered. It was getting more unmanageable to win new customers to maintain growth and scale, and the price of customer skill was becoming more expensive. Ping An needed a raw way to attract customers to the indemnity caller. Ping An needed to give customers a wider spectrum of fiscal services beyond insurance, and it needed to keep things bare .
On ease, Sun Jianyi, the Senior Vice Chairman, said, “ Regardless of bank, policy, securities, or trust, the clients ‘ learning cost was constantly very high. however, we could build an integrated fiscal platform to provide a one-stop solution to retain our clients. In this means, we could basically save on client learning costs. ”
Ping An realized the integrated finance model was the main driver for competitive, cost-efficient growth. And indeed, another phase of the Ping An transformation story began. With the advice from McKinsey, Ping An know that wealth management was a critical emergence business. in concert with the promotion of technology, Ping An was able to pursue an integrated finance model .
Establishment of Ping An’s Securities and Trust divisions
Ping An ’ south inaugural goal was a securities license. It applied for the securities license in 1990 and set up its securities class the follow year, subsequently expanding its securities business to the respite of China, including Shanghai, Tianjin, and early cities. In 1995, it made a breakthrough in the non-insurance fiscal business by establishing Ping An Securities Co., Limited .
In 1996, it acquired ICBC Pearl River Delta Financial Trust Joint Company, which became the Ping An Trust and Investment Company. Its capital increased from RMB50 million to RMB150 million .
In 2001, Ping An became the inaugural company in China to introduce bancassurance, selling policy through banking channels. Within three years, bancassurance made up more than 10 % of the company ’ s life premium .
This series of developments entering into securities and wealth management was a significant challenge for Ping An ’ south top management. Ping An needed help. It came in from one of the oldest and largest bank groups in the populace .
In 2002, the then 137-year-old HSBC Group acquired a 10 % venture in the 14 years old Ping An, becoming its largest stockholder. The London headquartered HSBC itself had solid links with China being founded in Hong Kong and Shanghai in 1865. HSBC became the one-third external stockholder after Goldman Sachs and Morgan Stanley increased Ping An ‘s net asset rate to RMB 120 billion. Three years late, the global banking group doubled its holding to 19.9 per penny by acquiring the shares owned by Goldman Sachs and Morgan Stanley for US $ 1.1bn ( originally purchased in 1994 for US $ 100m ). It was the largest alien investment made in a chinese insurance company.
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At the like time, Ping An signed a strategic cooperation and technical digest agreement with the british multinational bank. HSBC would be offering accompaniment to Ping An’s finance and insurance sectors .
HSBC ‘s support to Ping An was key to the policy elephantine ‘s development into an integrated fiscal conglomerate. Ping An needed a strategic investor with solid bank and integrate finance experience. HSBC ‘s acquisition and partnership was timely. The stallion commercialize could see Ping An ‘s commitment in its pursuit of the integrated finance model as it welcomed HSBC as its stockholder. HSBC ’ s strategic holding besides gave Ping An access to invaluable expertness to improve its corporate government, overseeing a new committee structure covering audit, compensation, nominating speech and risk management activities .
On Feb. 14, 2003, 15 years after Ping An was founded, Ping An Insurance ( Group ) company of China, Ltd., was established, which became the holding group legal entity for the initiation of a in full integrated fiscal services platform .
It was a identify measure in Ping An ’ second transformation narrative. It positioned itself as a pilot company for integrated operations in China ‘s fiscal industry .
however, founder Peter Ma had another mistreat to take to realize his vision. There was hush a key piece missing in the puzzle .
Approval of banking license
Since 1990, Ping An wanted a license for establishing a bank. The opportunity arise in 2003 with Fujian Asia Bank ‘s acquisition, what was to become Ping An Bank .
Fujian Asia Bank was one of the first seven banks jointly owned in mainland China, and it merely had a one arm in Fuzhou, the capital of Fujian Province. Fujian Asia Bank was acquired by the Hong Kong auxiliary of the HSBC Group and Ping An Trust Company, each holding 50 % shares initially. Ping An Trust Company subsequently injected USD23 million, diluting HSBC ‘s shares to 27 %, making Ping An the majority stockholder .
Ping An Bank was allowed to operate a comprehensive foreign exchange occupation, a license that allowed it to serve Chinese-funded enterprises, foreign-funded enterprises, residents and non-resident foreigners.
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Although Ping An Bank was modest initially, it was the last part of the perplex for Ping An ‘s expansion to become an desegregate fiscal pudding stone. This trust license was a dream come truthful for Ping An .
Chapter 5 Ping An’s Debut on the World Stage
The begin of twenty-first hundred saw the establish of Ping An Insurance ( Group ) ship’s company of China, a navigate of integrate fiscal services. The Group ’ s initial public offerings on the Hong Kong and Shanghai exchanges set records .