Ping An unphased by Discovery investment
Ping An unphased by Discovery investment
08:28, December 03, 2009 
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Discovery Holdings agreed to buy a nearly 25 percent stake in Ping An Insurance's health unit Tuesday, but analysts said Wednesday that the deal would have minimal impact on China's No. 2 insurer.
Shanghai-listed A shares of Ping An gained 1.12 percent to 57.73 yuan ($8.46) Wednesday. Its Hong Kong-listed stock dipped 0.34 percent to HK$73.05 ($9.43).
Ping An said Discovery's advanced new health insurance expertise coupled with traditional insurance and health management will boost its health insurance business. Discovery and Ping An will share their huge sales networks and customer resources under the deal.
Xu Liping, insurance analyst with China Galaxy Securities, however, said it isn't a big deal for Ping An because the transaction value is small and health insurance accounts for only a tiny slice of the company's overall business.
Adrian Gore, chief executive officer of Discovery, South Africa's largest health insurer, was quoted by the Wall Street Journal as saying the total price might be less than 900 million rand ($121.5 million), which is quite small compared with Ping An's consolidated total assets – 885.419 billion yuan ($129.69 billion).
Ping An set up its health unit in 2005, whose services include health insurance, accident insurance, governmental health insurance management and health consulting.
Income from premiums has been rising steadily from 3 million yuan ($439,409) in 2007 to 33 million yuan ($ 4.83 million) in 2008.
But the premium income is quite small compared with Ping An's other three insurance arms. It reached 70.84 million yuan ($10.38 million) in the first 10 months of year, compared with 112 billion yuan ($16.41 billion) from life, 31.8 billion yuan ($4.66 billion) from property & casualty and 1.53 billion yuan ($224.13 million) from annuities.
Xu said Discovery might get more from the deal than Ping An, adding China's health insurance market is still developing but will become huge in the long run in view of the country's large population.
Wang Xiaogang, insurance analyst with Orient Securities, said health insurance accounted for only five percent of the country's health expenditure, compared with 40 percent in Western countries. Domestic sales are expected to reach 300 billion yuan ($43.95 billion) in 2013.
The deal will be complete only after approval from the regulators of both countries.
Source: Global Times
Shanghai-listed A shares of Ping An gained 1.12 percent to 57.73 yuan ($8.46) Wednesday. Its Hong Kong-listed stock dipped 0.34 percent to HK$73.05 ($9.43).
Ping An said Discovery's advanced new health insurance expertise coupled with traditional insurance and health management will boost its health insurance business. Discovery and Ping An will share their huge sales networks and customer resources under the deal.
Xu Liping, insurance analyst with China Galaxy Securities, however, said it isn't a big deal for Ping An because the transaction value is small and health insurance accounts for only a tiny slice of the company's overall business.
Adrian Gore, chief executive officer of Discovery, South Africa's largest health insurer, was quoted by the Wall Street Journal as saying the total price might be less than 900 million rand ($121.5 million), which is quite small compared with Ping An's consolidated total assets – 885.419 billion yuan ($129.69 billion).
Ping An set up its health unit in 2005, whose services include health insurance, accident insurance, governmental health insurance management and health consulting.
Income from premiums has been rising steadily from 3 million yuan ($439,409) in 2007 to 33 million yuan ($ 4.83 million) in 2008.
But the premium income is quite small compared with Ping An's other three insurance arms. It reached 70.84 million yuan ($10.38 million) in the first 10 months of year, compared with 112 billion yuan ($16.41 billion) from life, 31.8 billion yuan ($4.66 billion) from property & casualty and 1.53 billion yuan ($224.13 million) from annuities.
Xu said Discovery might get more from the deal than Ping An, adding China's health insurance market is still developing but will become huge in the long run in view of the country's large population.
Wang Xiaogang, insurance analyst with Orient Securities, said health insurance accounted for only five percent of the country's health expenditure, compared with 40 percent in Western countries. Domestic sales are expected to reach 300 billion yuan ($43.95 billion) in 2013.
The deal will be complete only after approval from the regulators of both countries.
Source: Global Times
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