78
China Taiping Insurance Holdings Company Limited Investor/Analyst Open Day 23 June, 2015
China Taiping Insurance
Holdings Company Limited
Investor/Analyst Open Day
23 June, 2015
23 June, 2015
China Taiping Group
– Introduction to Business Management
Delivered Good Quality and Sustainable Overall
Operational Results in the First 5 Months of 2015
Premium growth beats the market
Net profit keeps growing
Quality of business remains strong and keeps improving
Overall strength continues to improve
Operational Highlights
2/19
Operational Highlights (Cont’d)
Mainland Insurance Businesses Developed Rapidly, Quality of
Business and Operating Efficiency Have Been Steadily Improved
Gross premiums of life insurance increased by 28.9% for the first 5 months of 2015
compared to the same period of last year
Monthly production per agent achieved RMB 22,700, with 68% increase in gross
premium of new policies which ranked 4th in the industry; Outstanding agents(regular
premium > RMB 300’000) increase by 70% YoY
Persistency ratios of agents & Bancassurance continued to be stable at the forefront
of the industry; The loss ratio of short-term group insurance kept in a satisfactory
range
TPI’s gross premium increased by 20.9% on YoY basis
Balance of pension assets under management was over RMB 96.1 billion
3/19
Overseas Insurance Businesses Recorded Steady Growth,
Quality of Business Stays Good
The premium of CTPI (HK) increased by 19.2% YoY, ranked number 4 in the
industry
TP Macau continued to be No.1 in the market with excellent underwriting result
The premium of TP UK increased by 19.3% YoY
The premium of TP Indonesia increased by 34.8% YoY
The premium of TP reinsurance for property insurance increased by 7.9% YoY; The
premium of TP reinsurance for life insurance realized a 220% growth, with HK$2.1
billion premium in total.
Operational Highlights (Cont’d)
4/19
Successful Implementation of Strategic Cooperation and Cross-selling Initiatives with Large Clients
During the first five months of 2015, China Taiping signed Group Strategic
Cooperation Agreements with 4 large clients, including Sinopec, Fosun Group, Poly
Group and CEFC China. By the end of May 2015, China Taiping had established
strategic cooperation relationships with 52 large clients
Our cross-selling initiatives achieved HK$1.29 billion of insurance sales, including
HK$1.04 billion of property insurance sales through TPL, HK$180 million of pension
sales through TPL, and HK$40 million of property insurance sales through TPP
We have made a major breakthrough in the Sinopec gas station program. By the end
of May 2015, 2,188 outlets had been stationed, with insurance sales of nearly
HK$130 million
Operational Highlights (Cont’d)
5/19
The following figures are the results of TPL from its operations, before intra-group eliminations.
• TPL
Life Insurance Business Review
Note: In November 2013, the equity interest at TPL owned by the Group increased to 75.1% from 50.05%.
6/19
Life Insurance：Strong leading indicators of value creation
Agency headcount has hit its half-year target with 150k in mid-June. It is
increasing ahead of our expectation. Outstanding agents increased by 70% YoY
during the first five months of 2015
The growth rate of new policies from our core business beats the market in both
Agency & Bancassurance channels. The structure of new policies keeps
optimizing . The proportion of health insurance keeps increasing
Persistency ratio leads the industry
2015 NBV margin expects to be stable and growing in 3 years in the future
7/19
Life Insurance: Premiums Growth above the Industry-Average, Market
Share Increased, Solvency Margin increased
Gross Premiums Written Market Share
Regulatory Solvency Margin Ratio
35,998 44,689
Accumulated to May 2014Accumulated to May 2015
RMB million
5.1%
5.6%
At 31 Dec 2014 At 30 Apr 2015
268% Over 350%
At 31 Dec 2014 At 31 May 2015
8/19
61.4% 54.7%
37.0% 43.9%
1.6% 1.4%
Accumulated to May2014
Accumulated to May2015
RMB million
Other Channels *
Individual
Bancassurance
35,998 44,689
Life Insurance: Structure of Gross Premiums
– By Distribution Channels
Jan-May
2014
Jan-May
2015
577 658
13,329 18,478
22,093 25,553
Rising Proportion of Individual Agency Business
* Other Channels comprise mainly telemarketing products 9/19
and Group
Life Insurance: The Proportion Of Health Premium Increased
The Proportion Of Health Premium Nearly 10%
Premium Composition In Agency:9.9% Premium Composition In Banc:3.9%
Accumulatedto May 2014 Accumulated
to May 2015
2.6% 2.0%
89.9% 88.2%
7.5% 9.9%
Health Life Accident
Accumulated toMay 2014 Accumulated to
May 2015
0.1% 0.0%
99.5% 96.1%
0.4% 3.9%
Health Life Accident10/19
Life Insurance : Agency headcounts achieved target, Monthly production
per agent significantly improve, Outstanding agents keeps growing
Monthly Production Per Agent
Number of Outstanding Agents – Regular Premium
Number of Agents
134,000
145,000
At 31 Dec 2014 At 31 May 2015
More than
140,000
17,682 22,658
At 31 Dec 2014 At 31 May 2015
RMB
396 1,006
1,970
745
1,824
3,361
RMB1 Million Elite RMB500,000 Elite RMB300,000 Elite
At 31 Dec 2014 At 31 May 2015
11/19
Life Insurance: Persistency Ratios at the Forefront of the Industry
- #2 in Agency and #1 in Bancassurance in terms of 13M Persistency
ratio
Agency Bancassurance
92.3% 91.1% 90.4%
89.6% 88.5%
86.3%
At 31 Dec 2013 At 31 Dec 2014 At 31 May 2015
Persistency ratio - 13th month
Persistency ratio - 25th month
92.9% 92.6% 92.5%
88.4% 88.7% 87.7%
At 31 Dec 2013 At 31 Dec 2014 At 31 May 2015
Persistency ratio - 13th month
Persistency ratio - 25th month
12/19
The following figures are the results of TPI from its operations, before intra-group eliminations.
• TPI
Mainland P&C Insurance Business Review
Note: In November 2013, the equity interest at TPI owned by the Group increased to 100% from 61.21%.
13/19
Mainland P&C Insurance:
Premiums Growth above the Industry-average
Gross Premiums Written Regulatory Solvency Ratio
At 31 Dec 2014At 31 May 2015
174%
Over 200%
Jan-May 2014
Jan-May 2015
5,238
6,312
HK$ million
14/19
The following figures are the results of the respective companies from their respective operations,
before intra-group eliminations.
Overseas P&C Insurance and Reinsurance
Businesses Review
HK & Macau
• CTPI (HK)
• TP Macau
Overseas
• TP Singapore
• TP UK
• TP Indonesia
Reinsurance
• TPRe
15/19
Overseas P&C Insurance and Reinsurance:
Premiums steadily increased
Overseas P&C Insurance Reinsurance
659
2,097 1,571
1,694
Jan-May 2014 Jan-May 2015
HK$ million
Life Non-Life
3,791
2,230
Life Insurance achieved
sustainable and rapid growth
1,190
415
1,376
423
HK & Macau Overseas
HK$ million
Jan-May 2014 Jan-May 2015
16/19
The following figures are the results of TPP from its operations, before intra-group eliminations.
• TPP
Pension and Group Life Insurance Businesses Review
Note: In November 2013, the equity interest at TPP owned by the Group increased to 100% from 96%.
17/19
Pension and Group Life Insurance Businesses
Strong Business Growth, Scale Expanding, Annuities Growing
Annuity Invested Assets Gross Premium
Annuity Entrusted Assets
34,664 47,226
At 31 Dec 2014 At 31 May 2015
RMB million
33,413 43,562
At 31 Dec 2014 At 31 May 2015
RMB million
896 804
347 560
293 296
Accumulated to May2014
Accumulated to May2015
RMB million
Short Term Non-health Short Term Health
Long Term
1,535 1,661
1.1%
61.6%
-10.2%
18/19
Thank you!
19/19
1
23 June 2015
Taiping Life
– Agency Channel Development
Introduction
Contents
Business Development
KPIs of Agent Force and Business
Development Strategy of 2015
2/21
Business Development
Agent force and premium grew steadily
In 2014, number of agents climbed to 132,000 and gross written premium was
RMB 12.76 billion. As of the end of May 2015, number of agents was 145,000
and gross written premium was significantly increased compared to May 2014.
As of June 17th 2015, number of agent was 151,000
TPL raked the 5th in the market in 2013, the 4th in 2014, and remained the 4th as
of the end of May 2015
Unit ’000 May 2014 May 2015 Growth rate
Number of Agents 106 145 36.8%
3/21
10.9
13.4
14.5
10.0
11.0
12.0
13.0
14.0
15.0
16.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Number of agents was 109,000 at the beginning of 2014 and climbed to 134,000 at the end of 2014, which was increased by 23%
Due to the dismissal in accordance with the “Sales Performance Appraisal & Remuneration Measures”, number of agents slightly dropped in Q1 2015. Through the promotion of agent recruitment in Q2, as of the end of May, number of agents increased to 145,000, representing a growth of 9% compared to that of the beginning of the year
2014 2015
Trend of Agent Force since 2014
4/21
Unit: ’000
Contents
Business Development
KPIs of Agent Force and Business
Development Strategy of 2015
5/21
KPIs of Agent Force
2014 Jan-May 2015
6th Month Retention Rate 82.3% 83.8%
13th Month Retention Rate 53.2% 53.1%
18th Month Retention Rate 39.7% 31%
Retention Ratio
Number of Agents per Agent Section & per Agent Department
2014 May 2015
Number of Agents per Agent Section 7.2 7.9
Number of Agents per Agent Department 33.0 37.5
6/21
Annual KPIs of Business
2014 Jan-May
2015
Number of Policies per Agent per Month 1.03 1.04
FYP per Agent per Month 17,682 22,658
Average Monthly Activity Ratio 54.3% 55.7%
Accumulative Activity Ratio
per 3 Consecutive Months 77.1% 82.3%
Number of Agents Contribute at least 10,000 FYP per Month
(Regular Premium) 16,173 28,690
Number of Agents Contribute at least 1 Million FYP in the
year (Regular Premium) 396 746
7/21
Be well-prepared from both aspects of team foundation and recruitment time for
the next round of agent recruitment
1. Since 2014, the Head Office and branches have been strictly implementing the
standards of performance appraisal in accordance with the “Sales Performance
Appraisal & Remuneration Measures”. Because the branches initiatively dismiss
unqualified agents, the number of agents decreased a little in Feb 2015, while the
activity ratio increased c ompared to last year. H owever, the good business
performance at the Year Beginning Campaign of 2015 won the time and room for the
agent force development during the 40 days after the Chinese Spring Festival.
Therefore, after the first round of promotion of agent force development in Mar-Apr,
the number of agents increased to 145,000
2. In May-Jun 2015, TPL is mainly digesting new recruited agents, as well as
conducting mid-year business sprint. It is planned to promote the second round of
agent recruitment in Q3, and the target number of agent force at the end of Q3 is
160,000
Agent Force Growth of 2015
8/21
4,859 2,625
19,313 16,201
6,732
-13,794
-4,582 -3,121
-8631 -6,663
-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
Jan Feb Mar Apr May
New Recruited Agents
Agents Turnover
Agent Recruitment and Turnover of 2015
In Jan-May 2015, the accumulated number of new recruited agents were 49,730,
while the turnover number of agents was 36,791
9/21
Growth of Top Agents with Structure Optimization
In Jan-May 2015, there were 15,113 agents who contributed regular premium of at least RMB20,000 Yuan per month, representing an increase of 20% y-o-y, in which the proportion of new recruited agents in 2015 was 11%
The number of top agents recruited before 2013 increased to 6,588 in 2015 from 5,935 in 2014 with the growth rate of 11%. The top agents amongst new recruited agents and old agents grew together
Recruitment
Year
Number of Top
Agents Proportion
Compared to Top Agents of 2014
Number of Top Agents Proportion
2015 1,697 11% 4,338 35%
2014 4,537 30% 2,297 18%
2013 2,311 15% 849 7%
Before 2013 6,588 44% 5,086 40%
Total 15,113 12,570
Note: Top Agents in the above table refers to agents who contribute regular premium of at least
RMB20,000 Yuan per month. 10/21
Stead Growth of Monthly Business Platform To satisfy the market demands of Year Beginning Campaign, TPL launched periodical
financial management products towards high-end target market in Jan 2015, as well as
mainly promote high NBV health insurance in Q2. Average monthly regular premium
platform of agency channel of Jan-May was RMB1.3 billion, increasing by 49% compared to
that of 2H 2014
NBV of agency channel exceeded the annual budget target with a steady growth. In the next
3 years, agency channel will still pay attention to the growth of business scale, as well as
maintain stable NBV ratio growth and h igh-speed NBV growth through continuous
optimization of product structure
Regular Premium Per Month 1H 2H
2013 6.2 4.8
2014 8.3 8.7
Jan-May 2015 13.0 -
Unit: One Hundred Million
11/21
Contents
Business Development
KPIs of Agent Force and Business
Development Strategy of 2015
12/21
I. Agent Recruitment Procedures under New Regulatory Policies of CIRC According to related spirit of “Decision of the Standing Committee of the National
People’s Congress on revising ‘The Metrology Law Of The People’s Republic Of China’
and other 4 laws” to revise “Insurance Law”, agent qualification examination was
stopped since 12th Jun by some CIRC Bureaus. To ensure the quality of agents and
actually take the management responsibility of training of insurance agents, TPL has
adjusted the agent recruitment procedures as follows:
1. Each branches is responsible for the organization of internal training and qualification
examination
2. Agents who participate training and pass the qualification examination can be recorded in
the system of Insurance Association of China and apply for Practice License
3. Without a effective Practice License, the agent cannot obtain policy underwritten and
issuance in the business system
4. Other related administration measures of local CIRC Bureaus, if there are, should be strictly
implemented
13/21
For agent training, TPL insists on the principle of “regular training to consolidate
foundation, special training to improve capability”, mainly promote the effective
implementation of regular training in each level, as well as constantly operate special
training to accelerate the coordinated development of top agents and agency groups
with outstanding performance:
1. Formulate executive requirements of each-level training, specify appraisal standards of
training KPIs and person in charge of each level, as well as promote the full implementation
and strict execution of regular training through feedback and supervision system
2. Design special training in accordance with the growth demands of each-level agents
For new agents: arrange “New Agent Qualification” Training and “135 New Agent Growth
Day” activities to help new agents learn about the industry regulations and set up clear goals;
For agent team managers: arrange quarterly round of training to improve their operational
capability of agent sections;
For senior agent team managers and beyond: introduce the LIMRA training and related
practical courses of professional operation of agent departments to improve the operational
capability of agent team from aspects of both theory recognition and practice
II. Strengthen Effective Training for Agents
14/21
2012 2013 2014 Jan-May 2015
2012 and Before 9,952 14,785 23,584 39,683
2013 6,839 10,089 18,224
2014 11,076 16,868
2015 8,788
Average 9,952 11,290 17,682 22,658
III. Continuously Improve the Productivity of Current Team
FYP per Month
Since “Three-Year Recreation”, the regular premium productivity per agent of
agency channel has risen steadily; if future, combined with product strategy and
training, the productivity per agent will be further enhanced:
1. The longer the agents stay in TPL, the higher productivity they achieve
2. Productivity per agent increased steadily year by year
Recruitment Year
15/21
IV. Improve Product Line to Liberate Productivity
（1/2）
1. Improve product line, develop suitable products for agents of each level
Take the products for new agents as an example, the premium of
“Baiwanjianianhua” product has reached RMB510 million with 379,000
policies in 2015, of which 57.1% policies are sold by agents who joined
TPL within 12 months. The Wechat products (“Aichuandi”, etc.) have been
sold 20,000 policies, of which 78% are sold by agents who joined TPL
within 12 months. These can help new agents to exploit the market and
accumulate customers
Break through the development bottleneck with periodical innovative, short-
term and financial management product
16/21
IV. Improve Product Line to Liberate Productivity
（2/2）
2. Use health insurance to further promote sales of financial management products
Based on the analysis of previous sales data, most customers of financial management
products and pension products first purchase health insurance. For example, 75%
customers of “Yuexiangjinsheng” product have bought health insurance
As of the end of May 2015, the health insurance accounted for 20.3% of the total premium of
the same period (calculated based on the business statistical standards of 2014, the
proportion of health insurance of Jan-May 2015 was 46.3% of the total premium of the same
period, and that of Jan-May 2014 was 31.7% )
Regular Premium of Health Insurance Proportion
Jan-May 2015 RMB1,320 million 20.3%
Jan-May 2014 RMB850 million 21.7%
Note: The above data is business statistics, which is regular gross premium (single
premium * 0.1), and the business is health insurance mix (including main
insurance & additional insurance ).
17/21
V. Develop Mobile Office Platform to Facilitate Sales Management (1/2)
1. According to the agents’ business expansion and management
needs, develop marketing mobile office tools
Above 90% policies of agency channel is completed in the electronic policy
issuance system called “Libaotong”, the paper insurance slip has almost
been abandoned, and return visit in form of electronic tools within the areas
which are allowed by CIRC is gradually expand, thus work efficiency has
been improved and operating cost has been saved
Expand the functions of business marketing system (Benchi system), thus
the agents can do sales practice such as customer management , activity
management, team management, make advice letter, etc., as well as get
information of the policy underwritten progress, pre-warning of commission
assessment in free time through the APP called “E Lutaiping”
18/21
2. Develop marketing management platform for employees to improve the work
efficiency of agency channel
Through the marketing management platform, the employees can check the
business progress, do data analysis, meeting management, new agents
management and training management, and combined with Benchi system to
promote marketing, such as health insurance upgrade and credits exchange.
3. Expand customer communication and service channel
Following the ICBC co-branded card, Bocom co-branded card, Taiping online
business hall, the “95589” WeChat public number is promoted to be focused,
through the WeChat products to expand the customer exploration way for agents.
At present, the number of customers paying attention to “95589” has increased
from 50,000 at the beginning of March to 230,000.
19/21
V. Develop Mobile Office Platform to Facilitate Sales Management (2/2)
Attachment: Electronic Office Platform
20/21
Thank You！
21/21
China Taiping Group
– Introduction to
Investment Management
Contents
I. Group Investment Profile in Q1 2015
II. Innovation and Develop Distinct Offerings
III. Stick to Risk Management Standard for
Alternative Investments
IV. Fundamental Approach to Investment and Assets
Management for 2015
2/37
Strategic assets allocation plan for 2015
For 2015, the Group’s main strategy for strategic asset allocation is to: raise equity allocation from
underweight to normal weight, and reduce the growth of allocation scale and optimize investment
structure for alternative investments
Traditional Investment
Enhance equity and bond investment
capabilities with improved timing and
securities selection
Alternative investment
Control total amount, adjust
structure, mitigate risks, increase
income
Increase equities
allocation to
industry average
3/37
Alternative Investment
Control total amount, adjust structure,
mitigate risks, increase income
Choose bonds
with longer
duration to cope
with falling
interest rate
Strictly control the
proportion of real
estate assets
Gradually
increase equity
investments
Group investment yields exceed whole year target with significant YoY
increase
• As of end of March, the Group recorded a book yield of 2.3% (non-annualized), with a mark-to-
market yield of 3.0% (non-annualized), higher than industry average of 2.2% published by CIRC
• Mark-to-market yield continues to rise steadily on the basis of Q1 performance, expected to exceed
the whole year target
Year-to-Year Yield Comparison
March
2014
March
2015
Book Yield Mark-to-Market Yield 4/37
Own and third-party entrusted investment assets grow strongly
404
1,602 1,917
2,507 2,694
0
1,000
2,000
3,000
2006年底 2012年底 2013年底 2014年底 2015年3月
集团内保险资产管理规模
• As of end of March, insurance assets under management within the Group amounted to RMB269.4bn, up
26% YoY; third-party entrusted assets amounted to over RMB143.1bn, up 52% YoY
• Rapid growth of third-party entrusted investment assets led to an increase in management fees. Take
subsidiary Taiping Asset as example, its management fees for January to March 2015 were RMB114mn,
with 66.7% derived from third-party entrusted assets
Group Insurance AuM Third-Party Entrusted Assets
Year-End
2006
203 year-
end
5/37
Year-End
2012
Year-End
2013
Year-End
2014
March
2015 Year-End
2006
203 year-
end Year-End
2012
Year-End
2013
Year-End
2014
March
2015
Increase weighting of equity investments from underweighted position, with equity and bond investments substantially outperforming market indices
• Allocation in equity and securities funds increases by about 6 percentage points from beginning of the year, close to industry average
• Equity investment yield substantially outperformed the market, with domestic equity investments generating a yield of 72.3%, representing 35 percentage points higher than CSI300 Index, and 5 percentage points higher than the overall index of equity funds, during the same period
• Trading bond investments performed stable with a yield exceeding the bond index by 7 percentage points
Taiping Assets' equity investments beat CSI300 Taiping Assets' bond investments beat bond index
ChinaBond Full
Price index
Trading bond
portfolio Equity
portfolio
Jan
CSI300 Total Return
Index
Feb Mar Apr May Jan Feb Mar Apr May
6/37
Control the growth of alternative investments with lower share of
other investments
In Q1, other investment assets accounted for 22.5% of Taiping Group’s total assets, down by 0.9
percentage points from the beginning of year
In Q1, other investment assets accounted for 22.1% of total assets within the industry, up by 0.6
percentage points from the beginning of year
Excluding the South-to-North Water Diversion investment of about RMB14.5bn, other investment assets
as a percentage of Taiping Group’s total assets decreased to 18.7%, lower than the industry average
Change in percentage of other investment assets from 2013 to Q1 2015
Note 1: Percentage of other investment assets defined by CIRC = All investment assets excluding bank deposits, bonds, equities and
securities investment funds, divided by the balance of investment funds
Note 2: About RMB17.5bn in wealth management products from banks with maturities of less than one year deemed to be cash assets
End of Q1 2015
China Taiping Insurance industry
7/37
2013 2014
Contents
I. Group Investment Profile in Q1 2015
II. Innovation and Develop Distinct Offerings
III. Stick to Risk Management Standard for Alternative
Investments
IV. Fundamental Approach to Investment and Assets
Management for 2015
8/37
Explore overseas investment projects, innovate investment model, and
invest in emerging industries on robust basis
Explore overseas investments
Innovate debt investments
• New York Tribeca 111
project
• ABS assets securitization
for CUCC
Equity investments in emerging industries
• Health 100
• Lakala
• Uber
Establish senior living investment platform
• Establish a senior living
management company to
consolidate resources
within the Group and
coordinate and plan for
senior living communities
Alternative investments Real estate
and senior living communities
Overseas investments
Financial leasing
Traditional investments
9/37
Invest in overseas equity fund for the New York Tribeca 111 Project, starting a new
model of overseas investment
Join Kaiyuan Urban Development Fund and Hopu
Investment Management in establishing and sponsoring
overseas investment fund
Co-invest in New York Tribeca 111 Project, downtown
Manhattan, with the most renowned developer in New
York, funded by loans from Blackstone Group
A new way has been identified for innovative overseas
application of insurance funds and obtaining excess
returns on investments by carrying out overseas project
investments in the form of equity investment funds by
making contributions with stakeholders, which allows for
risk diversification and huge returns on equity.
10/37
Engage in equity investments in emerging industries, focusing on healthcare industry
and Internet commerce
Debt investments Equity and
real estate investments
Traditional investments
As China’s biggest professional provider for health check
services, Health 100 succeeded in getting its A shares
listed through back-door listing
The investment has generated considerable financial
returns, plus good synergies with the Group’s insurance
and investment businesses
China’s leading integrated Internet finance company, one of China’s
first holders of third-party payment and consumer credit
investigation license, and the biggest offline convenient payment
company in the country
Leverage on synergies between insurance group and Internet
finance to carry out in-depth cooperations in areas like Internet
insurance, Internet wealth management and Internet asset
management
Taiping Asset, Taiping P&C and Uber had signed a strategic
cooperation agreement for them to exchange and cooperate in
insurance business, financing business, management information
sharing and business training etc by capitalizing on their respective
advantages in specialized areas, in order for the parties to grow
jointly through resource sharing and complementary advantages 11/37
Innovative businesses become new growth driver for the Company
Increase exposure to public funds
management through acquisitions
Public funds business helps to grow AuM and
broaden profit sources
Successful completion of registration and other
related works for the fund management
company
About RMB3.2bn pipeline projects in areas like
SOE reforms by introducing diverse investors,
industry M&As and consolidations (horizontal
and vertical M&As along industry chains), M&A
financing and private placements for listed
companies
Taiping Petrochemical Financial
Leasing
12/37
Acquisition of public fund
management companies
As of end of May, the Company had leased
assets of RMB10.2bn, up 153.96% from the
end of last year
Both ROE and ROA exceeded targets set at
the beginning of the year
Taiping SIDVC Urban Development
Fund Global M&A Funds
First-round fund raising completed for
Wuzhong Urban Development Industry Sub-
fund
To be used in the comprehensive
improvement project around Taihu Lake in the
Taihu Lakeside New District, Suzhou
Domestic investments with Oversea funds • Completed RMB1.1bn RQFII
investments • Plan to establish RQFII public
funds • Plan to establish Oversea
equity investment funds • Cross-border loans and equity
financing
Oversea investments with domestic
funds
• RMB2.4bn in QDII quota under
mandates within the Group
• RMB3.3bn in QDII quota under
mandates from third parties
• RMB400mn in investments entrusted
under policies denominated in dual
currencies in SFTZ
Taiping
Financial
Holdings
Oversea investment
management platform
Domestic investment
management platform
Continue to develop cross-border financial services to capitalize the Group’s
geographical advantages while demonstrating business features
Oversea investment management platform integrates various financial services including securities,
asset management, trust, futures, financing and funds to offer a full suit of services
Domestic investm/ent management platform vigorously develops third-party asset management
business and innovative business with consistent superior performance 13/37
• Insurance funds
• QDII funds
• Insurance asset
management products
• Alternative
investments
• Mandates from other
companiesz
• Insurance funds
• QFII funds
• MPF
• Public funds
• Private equity funds
Taiping Asset
Taiping Pension
Taiping Investment Holdings
Taiping & Sinopec Financial Leasing
Main funding sources for senior living
investment:
Insurance funds, mainly used in developing
senior housing communities owned and operated
by the Group in mid- to long-term
Social and industrial funds, raised from the
public through establishing senior living
investment funds etc
Securitization of developed senior housing
real estate, to obtain funds for subsequent
development of senior housing communities
Establish senior living investment platform company to consolidate and
use funds from various resources to develop the industry
Change the preliminary model of forming a single project company to invest in senior living communities by
establishing Taiping Senior Living Management Company Limited, with a view to making an overall plan for capital
deployment in senior living industry, introducing external funds, and focusing on building a brand for senior housing
community services
Insurance
funds from
Group
Development of
senior living
industry
Proceeds
from asset
securitization
External
investment
funds
14/37
Six indicators:
• Total population of the city
• Population of the elderlys
• Total GDP of the city
• Average home price
• Per capita disposable
income
• Healthcare spending
According to the “5H” (home, hotel, holiday, hospital,
happiness) criteria, formulate qualitative and quantative
“5 in 1” evaluation rules for selecting 16 key development
cities from the Bohai Rim, Yangtze River Delta, Pan Pearl
River Delta, and Middle and West China areas, to invest in
and develop mid- to high-end senior housing
communities, while shaping a preliminary strategic
deployment in senior housing communities owned by the
Group across China, so as to effectively meet various needs
of aged people for senior housing such as “migrant-style”,
“recuperation-style”, “resort-style” and long-term residence
Six factors:
• Economy
• Culture
• Climate
• Environment
• Geography
• Ecology
Build mid- to high-end senior housing communities to high standard with
forward-looking senior living plans
15/37
I. Group Investment Profile in Q1 2015
II. Innovation and Develop Distinct Offerings
III. Stick to Risk Management Standard for Alternative
Investments
IV. Fundamental Approach to Investment and Assets
Management for 2015
16/37
Contents
Multi-dimensional risk management - Enhanced risk controls for alternative investments
Multi-level
authorization
Assessment
system
Risk
management
Establish a decision-
making mechanism
with multi-level
authorization which
are the board of
directors of the
Group, Group
management, and
specialized
subsidiaries, to
optimize and
improve the
decision-making
process for
alternative
investments
Optimize the
performance
assessment for
alternative
investments and
establish an incentive
and restriction
mechanism to align
the interest of
investment teams to
that of the Group
Establish a risk
tolerance and risk
limit framework for
credit, market,
liquidity and
operational risks,
while enhancing the
management of
concentration risk
Post-investment
management
Track risk
exposures on a
monthly basis,
focusing on trusts
and local
government
financing vehicles
Five-level
classification
Establish a five-
level classification
system for risk
management
regarding insurance
assets, which
dynamically reflects
quality of alternative
investment assets
17/37
The proportion of Group’s total alternative investments to total assets
close to industry average
• As at the end of Q1, the Group’s total alternative investments amounted to RMB85.9bn, accounting
for 22.5% of total assets
• or 18.7% if excluding the South-to-North Water Diversion debt investment of RMB14.5bn (central
government credit), which is 3.4 percentage points lower than industry average, or 14.0% if further
excluding 3- to 12-month wealth management products from banks of RMB17.5bn, which is 8.1
percentage points lower than industry average
Carrying amount (RMB in
100 millions) Percentage of total assets
at the end of Q4 Remarks
Investment in equity financial products
65 1. 7% Equity investment programs and
equity investment funds
Investment in debt financial products
471 12. 3% Domestic and Oversea debt
financial products
Investment in other four types of new products
201 5. 3%
100% equity asset management products,
short-term deposits and deposit similar assets
Investment properties 122 3. 2%
Total 859 22. 5% 18/37
• 99.4% of investments in debt financial products were with fixed rates or floating rates with a floor,
which can mitigate the risk of falling interest rates
• Fixed rate products accounted for 53%, 5 percentage points higher than the end of last year
• For the remaining maturities of investment in debt financial products, the weighted average
maturity was about 5 years
Interest type of debt financial products
Fixed rate
Floating rate (with floor)
Floating rate
19/37
Large proportion of fixed rate debt financial products to mitigate the risk of
falling interest rates
Debt financial products are highly rated
• As at the end of Q1 2015, AAA products accounted for 84.1%, AA+ and AA products accounted for
9.4%
• Based on credit rating classification applicable in Greater China, projects rated cnBBB+ or above
accounted for 92%, of which 62% were rated cnAAA, 20% rated cnAA+ and 10% rated cnAA and
cnAA-
Ratings of the Group's debt financial products
N/A
N/A
Greater China credit ratings
20/37
Debt financial products are in general having good credit
enhancements
• For credit enhancements, 72% investments were secured
by quasi-central government bonds, banks, major SOEs
and enterprises
• 9% had credit enhancements in form of collateral/pledge;
4% had credit enhancements in seniority; In Q1, there was
a new project exempted by CIRC from having credit
enhancements, which accounted for 2% of total
investments. The counterparty was one of the four major
state-owned asset management companies in China
• Other credit enhancements include: requirement for
debtors to repurchase assets under securities brokerage
business as a premium, and for parent to provide liquidity
guarantee as credit enhancement to Oversea asset
management assets
Credit enhancements
Secured by quasi-central
government bonds/banks Secured by major enterprises
Collateral/pledge
Seniority arrangement
Exempted from credit
enhancements Others
Non-bank guarantee and
collateral/pledge
21/37
Share of local government debts decreases with adequate credit enhancements
• As at the end of Q1, local government related investments in debt financial products amounted to RMB9.5bn,
representing 2.5% of total assets, a decrease of 0.2 percentage point from the end of last year
• 98% of these projects were sponsored and established within the Group with good understanding of project
particulars and sound overall risk controls
• For credit enhancements, 67% of the funds were invested in projects secured by banks and large enterprises, 17%
invested in projects pledged by costs, and 16% invested in projects with seniority arrangement and repurchase
commitment from substantial shareholder of counterparties to increase credit enhancements
(Note: local government debt refers to debts with repayments to be made directly or indirectly or secured by local
governments. As such, the Group adopts a more stringent approach to calculating local government debts than
that adopted by regulators)
Local govt debts as percentage of total assets
Q2 2014 Q3 2014
Q4 2014 Q1 2015
Credit enhancements for local govt debts
Major enterprises
Seniority
arrangement
Collateral/Pledge
Bank guarantee
22/37
Share of debt investment in real estate goes down with improved credit enhancements
• At the end of Q1, investments of the Group in debt financial products from the property development
industry amounted to RMB13.62bn, representing 3.5% of total assets, a decrease of 0.4 percentage point
from the end of last year
• 85% of the funds were invested in AAA and AAA+ products
• 73% of the projects were secured by quasi-central government bonds/banks or major enterprises, while the
remaining 27% were secured by land collateral and pledge over costs recovered from the projects
• 25.1% of the projects were even secured in a mixed way with guarantees from major enterprises plus
collateral/pledge as dual credit enhancements to protect funds invested
Investment rating Credit enhancements
Collateral/pledge
Quasi-central govt bonds/bank guarantee
Major enterprises and Collateral/pledge
Mezzanine
financing
23/37
Major enterprises
Share of investments in externally purchased products reduces with
focus on AAA rated products
• As of Q1 2015, the Group’s externally purchased debt financial products amounted to RMB6.27bn, representing
1.6% of total assets, a decrease of 0.1 percentage point from the end of last year
• Among all externally purchased products during the year, the majority was trust programs which accounted for
88%, followed by debt programs which accounted for 10%
• The Group select externally purchased products with higher ratings, of which 90% were AAA products and the
remaining 10% were AA products
Distribution of externally purchased products Rating of externally purchased products
Trust
Debt programs
Asset
management
products
24/37
Real estate investments highlight our exquisite strategy centered on core cities and
locations with manageable risk
• The Group concentrates its property investments in tier one
core cities. Developed properties on lease include the
Shanghai Taiping Finance Tower, China Taiping Tower in
Hong Kong, Jinghui Mansion in Beijing and Shenzhen
Taiping Finance Tower
• Bespoken project Beijing Guang’anmen Taiping Finance
Tower and projects under development including Suzhou
Taiping Finance Tower and Nanning Taiping Finance Tower
are in good progress as planned
Projects Occupancy rate Rent (RMB/sq m/day)
Shanghai Taiping Finance Tower 100% 8. 9
China Taiping Tower in Hong Kong 100% 13. 1
Jinghui Mansion in Beijing 70% 10. 30
Shanghai Taiping Finance Tower 75% 8. 7
Note: Jinghui Mansion was subject to renewal of lease with major lessees. A new lease contract has been signed
with occupancy rate expected to increase to 80% in August.Shenzhen Taiping Finance Tower was newly
completed and still for lease. 25/37
I. Group Investment Profile in Q1 2015
II. Innovation and Develop Distinct Offerings
III. Stick to Risk Control Management for Alternative Investments
IV. Fundamental Approach to Investment and Assets Management for 2015
26/37
Contents
External environment for insurance fund investment:
Macroeconomics, Financial Market, Regulation
Financial Market
Macro Economics Regulations
External Environment for Insurance Fund Investment
27/37
Cope with lack of investment demand domestically, and explore
international investment opportunities in align with the “Belt and Rope”
initiative
Weak investment demand
domestically
New demand from the
“Belt and Rope”
• Shanghai Silk Road economic belt
• 21st-Century Maritime Silk Road • Policy coordination, facilities
connectivity, unimpeded trade, financial integration and people-to-people bonds
• Property sales improves，yet investment still weak
• Manufacture investment stables, yet difficult to turn around
• Restrained local debt lowers infrastructure investment
28/37
Falling interest rate and finance marketization reduce the spread between
investment return and liability
Falling
interest rate Interest rate
liberalization
Returns on treasury bond and other
benchmark-interest rate linked non-standard assets
decrease
Returns on Debt and Non-standard new
assets decrease
Liability costs of the investment insurance
products are high
29/37
Insurance Regulation: Libralize the front, Manage the back
3. Insurance regulation：
“Liberalize the front ”—— decrease limitation on investment
“Manage the back”—— ‘Five-level classification system’ and ‘Solvency 2’ to form a multi-dimensional
regulation system
Increase financing cost
Marketization of universal
life insurance rate
Marketization of
participating insurance
rate
Marketization of
automobile insurance
rate
Regulate non-standard
credit risk
With regards to the assets
other than available for
sales/trading, they are
divided into five categories:
normal, special mention,
sub-prime, doubtful and
loss. We will explore the
establishment of reserve
withdrawal system.
Increase capital
rating dimension
return、risk
+
Capital consumption
(More capital will be
needed for businesses
with high volatility, non-
transparent basic asset
and high relevance)
Five-level classification
system Solvency 2 Interest rate libralisation
30/37
Fundamental approach to investment and asset management for 2015
Optimize
domestic
Assets
allocation
Carry out
Integrated
Financial
services
Multi-dimensional
risk management
Leverage
advantages of
domestic and
Oversea
latforms
31/37
Fundamental approach: Optimize domestic assets allocation – equity
investments
Early equity
Investments
have great results
Focus on
risk control
at current level
Long-term
equity investments
1. Overweight in equities
during H1 achieved
material results
2. Return on equity
investments was well
ahead of time schedule
3. Significant
realized/unrealized
floating profits
1. Optimize structure of
current holdings,
focusing on securities
selection
2. Emphasize risk
management to
prevent fluctuations
1. Explore long-term
equity investments
from the perspective
of strategic synergies
2. Obtain stable income
insulated from market
value fluctuations
32/37
Fundamental approach: Optimize domestic assets allocation – debt
investments
Fully consider reinvestment risk in the context of falling interest rates to
allocate bond assets for the longer run by investing in assets with longer
maturities and higher yields where possible
Prefer fixed rate debts and require floating rate debt investments to carry
higher floor interest rate
Increase asset
duration
and floor rate
Purchase high-
quality bonds
Control the
proportion of
alternative
investments
Payment guarantees will fail sooner or later in the context of interest rate
liberalization, likely cause risk premiums to rise
Based on international experience, interest rate linked bonds and high
rating credit bonds will generally outperform lower rating bonds in this
process
Excluding the South-to-North Water Diversion investment of RMB14.5bn
which represents State credit, the Company’s alternative investment
proportion was lower than the industry average
Enhance risk control requirements for alternative investments
33/37
Fundamental approach: Leverage advantages in domestic and overseas
investment platform
QDII
QFII RQFII Free trade
zone QFLP
Overseas
investment
Domestic
investment
Establish professional equity
investment company
Build cross-border investment channel through domestic
and overseas asset management platform
34/37
Fundamental approach: Actively carry out integrated financial services
Domestic
integrated
financial
services
Oversea
integrated
financial
services
Taiping & Sinopec
Financial Leasing
Securities
Wealth
Management
center
Trust
Asset
management
Financial
management
Asset
management
Futures
Controlled
public fund
35/37
Fundamental approach: Multi-dimensional risk management – Invest according to
Solvency II requirements
Investment return Risk control
Capital consumption
Diversified assets allocation
Global assets allocation
Real estate and local government financing risk
Reinvestment risk arising from asset-liability mismatching
Asset class will affect risk capital
Asset quality will affect solvency
36/37
Thank you!
37/37
