Ping An’s Financial Empire
Honesty, trust, enterprising and success: these are the values at the base of Ping An, which means “peace and safe”. An international environment of confidence and expertise that belongs to the Chinese leader as insurer and the 29th widest corporation of the world as annual revenue and profits (according to the 2019 Fortune Global 500 ranking).
Ping An Group is a holding conglomerate that focuses on three core businesses: insurance, commercial & investment banking and asset management. With a broad range of clients, which account for 184 million retail customers and 538 million online users, it is one of the largest financial service companies of the globe.
With the effort of its subsidiaries, investors and associated companies, Ping An operates in several ecosystems by providing services in the Health Care, Finance, Real Estate, Smart City and Auto areas.
History
Ping An was founded in 1988 as the first joint-stock insurance company in China by a consortium of the state-owned Industrial & Commercial Bank of China (ICBC), the conglomerate China Merchants Holdings and China Ocean Shipping.
The birth of the company is associated with a period of changes: China passed from austerity to an opening up policy phase. Government policies and regulations were still influential on market systems and the insurance market was in a monopolistic state.
But soon the situation twisted: the establishment of Ping An and its rapid growth marked a revolution in the Chinese people’s perception, who initially did not have a clear idea about the insurance world. With effort, determination and the contribution of young and willing talents, the company expanded from a 400-square-meteres office to a nationwide insurer. Gradually by breaking the insurance regulation and policies, Ping An conquered the primate in China.
A peculiar aspect of Ping An’s culture is the openness to internationality. In addition to hiring foreign talents from all over the world, the company introduced international strategic investors.
In 1994 Morgan Stanley and Goldman Sachs made the first foreign private equity investment in China by purchasing a combined stake of 10% in the insurance company. Thanks to this event, Ping An had enough capital to expand and establish risk control and investment committees.
Some years later, in 2002 HSBC became the largest shareholder by building a 15.6% stake. Then, in 2004, Ping An Group was listed on Hong Kong Stock Exchange. This event marked the first public offering of the company.
M&A
To invigorate its presence on the financial sector Ping An, as time passed, had been the protagonist of several merger and acquisition operations.
In 1996 acquired ICBC Pearl River Delta Financial Trust Joint Company and renamed it Ping An Trust Investment Company.
Then, in 2003, through a joint acquisition with HSBC, became the owner of Fujian Asia Bank, therefore started acting in the banking sector. The bank was renamed Ping An Bank after the increase of the stake to 73%.
Later, after the purchase of Shenzen Commercial Bank in 2006, the two banks, both under control of Ping An, merged to a single institute. The operation strengthened its banking business and expand it nationwide presence through the power of a unified brand.
Lufax
In 2012 Ping An created Lufax to affirm its presence in the internet finance business. The platform offers Peer-to-Peer investment and wealth management products.
The collaboration between the companies creates a relevant synergy in terms of client attractions. The online platform, indeed, acts as an information intermediary, trading facilitator and financial advisor. In this way, through the exploitation of the platform, Ping An gained customers for the insurance and asset management activities.
iCapital Network
On March 23, 2020 Ping An Global Voyager Fund — followed by other investors such as Goldman Sachs, Affiliated Managers Group, Hamilton Lane and WestCap — contributed to the capital raise of iCapital Network. This way the Chinese subsidiary joined a previous partnership (between BlackRock, UBS, Blackstone and BNY Mellon) with a financial technology platform that offers alternative investment solutions. Especially, iCapital’s target is to make more accessible private equity and hedge funds to high-net-worth investors and their advisors. The collaboration will help Ping An managing its private market activity by leveraging the technology platform services.
Technology
As Ping An is holding its prime as a Chinese insurer, the group invests 1% of its revenues in R&D with the scope of improving the effectiveness of its presence in its ecosystems (health care, finance, real estate, auto, smart city). The business development regards mainly three technologies: Blockchain, Artificial Intelligence and Cloud Computing.
Blockchain
Thanks to the association with OneConnect, a cutting-edge platform that provides financial services, Ping An Technology has built a trusted environment in which transaction and information transfer can take place anonymously and securely.
OneConnect team developed Fimax, a blockchain architecture that permits participants to encrypt and upload their data on the chain without facing privacy problems, information sharing and ownership right. Fimax, integrates a cryptography protocol (Zero-knowledge Proof) that consent a party to prove the trueness of a certain statement to the other one without giving information to support it.
OneConnect benefits from the blockchain not only for security reasons but also to help find the parties of exchange through an intelligent matching scheme. The blockchain has also been implemented in financial services and smart city services.
As concerns the first business, in 2019 Ping An’s OneConnect, collaborating with UBX, launched a program consisting of enabling blockchain in the Philippines. To promote the growth of SMEs (small and medium enterprises) of the country, OneConnect’s Blockchain-as-a-Service (BaaS) platform is being deployed. The aim is to be found in releasing paperless contracts, verifying compliance and make transferrable e-payment undertakings.
Lastly, about the Smart City ecosystem, the Chinese group is engaged in helping local government programs. The intent is to increase efficiency in managing taxation, performances, policies and the environment by introducing a smart platform for governments. For example, the chain can record the energy consumption of each user and so administer resources more efficiently.
Closely connected to smart city services, Ping An operates also in the real estate field by serving governments with smart management in building construction process. The system foresees processing house transactions, tax payments, and real estate registration.
Artificial Intelligence
Ping An exploits the Artificial Intelligence on three different levels: prediction, cognition and decision making.
The forecast level is linked to the health care environment: in particular, the traditional insurance system has been taking over by smart systems that predict influenza, diabetes, and other diseases. This system made Ping An won an award in an international medical championship for disease prevention.
In the cognitive area, Ping An Technology has built an intelligent cognition model based not only on facial and voiceprint recognition but also on a medical image AI reading, animal recognition, and multimodal biometrics. The project aims to ensure the protection of sensitive customers’ material. For instance, Ping An Smart Voice is a product that, by recognizing voiceprints and recording, guarantees clients from financial fraud, information or time loss. By the same token, Ping An Brain has designed Ping An Robot: a device that improves business efficiency and guarantees information security through an automatic audio and video recording.
Ping An Brain is an AI technology platform that succeeds in elaborating decisions in many sectors such as financial risk management of enterprises, public health, and financial stores. The decision-making system of this smart engine includes deep learning, data mining, and biometrics. For example, via deep learning technology, clients can calculate car accident damage by taking and uploading pictures.
Cloud Computing
Ping An provides enterprises with a wide range of cloud services including platforms, infrastructures, and software. Moreover, the company serves technical support to clients by elaborating on reliable business scenarios to drive them during investment choices.
Author:
Sources:
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