On August 27, Ping An Insurance (Group) Company Of China, Ltd. (601318.SH) released its 2025 interim report. According to core data, in the first half of the year, Ping An achieved operating profit attributable to shareholders of 77.732 billion yuan, up 3.7% year-on-year; net profit attributable to shareholders of 68.047 billion yuan, down 8.8% year-on-year. The company will distribute an interim cash dividend of 0.95 yuan per share to shareholders, representing a 2.2% increase year-on-year. On the business front, new business value for life and health insurance increased significantly by 39.8% year-on-year in the first half of 2025; on the investment side, the insurance funds investment portfolio achieved a non-annualized comprehensive investment return rate of 3.1%, up 0.3 percentage points year-on-year.

At today's interim results presentation, Ping An's senior management attended and addressed market concerns regarding profit changes, new business value, investment allocation, and AI applications.

Regarding the year-on-year decline in net profit attributable to shareholders, Ping An's Deputy General Manager and CFO Fu Xin explained three underlying factors: First, the impairment impact from the consolidation of Ping An Good Doctor in the first quarter; second, the accounting treatment of Ping An's Hong Kong-listed convertible bonds, where rising stock prices paradoxically cause short-term declines in convertible bond valuations; third, approximately 60 billion yuan in unrealized gains from substantial stock allocations over the past two years, classified under OCI and not reflected in the profit statement. Excluding these factors, Ping An's net profit achieved double-digit growth in the first half.

**New Business Value Growth: Driven by Three Reform Dividends**

In the first half of 2025, Ping An's life and health insurance new business value grew 39.8% year-on-year, with new business value margin (by standard premium) rising 9% year-on-year; agent channel new business value increased 17% year-on-year, with per capita new business value up 21.6% year-on-year; bancassurance channel new business value surged 168.6% year-on-year.

Regarding the sustained growth in new business value, Ping An's Co-CEO and Deputy General Manager Guo Xiaotao explained the driving forces from two dimensions at the presentation: "First, in the current low interest rate environment, life insurance has entered a golden development period, becoming a cornerstone for wealth allocation among middle-class and above households. Life insurance products provide value to customers in three areas: wealth preservation and appreciation, medical health and accident protection, and value-added services."

Second, Guo further analyzed that Ping An's life insurance business has released reform dividends in products and channels, with three reform dividends continuously driving new business value growth.

Specifically, the first reform dividend comes from multi-channel strategy. Ping An evolved from early single agent channels to a diversified system encompassing agents, bancassurance channels, and community finance channels. Currently, both Ping An's bancassurance channels and community grid channels show substantial growth.

The second layer is the "product + service" model. Guo emphasized that the current financial industry, especially life insurance, is gradually entering a phase of homogeneous competition, where only value-added services can truly create differentiation. Ping An has proactively developed value-added services in "insurance + medical," "insurance + health," and "insurance + elderly care," driving sustained development in product sales through differentiated services.

The third reform dividend is based on Ping An's technology empowerment. Over the past few years, Ping An has invested substantial resources in empowering its sales force, utilizing AI and data analysis to help sales teams acquire customers and continuously improve conversion efficiency.

"We are very confident about this year's overall business development. Driven by industry trends and the gradual release of three reform dividends, we believe the healthy, sustained, and stable development of our life insurance business this year will deliver satisfactory results," Guo stated.

**Asset Allocation: Dynamic Matching Among High-Dividend Stocks, Value Stocks, and Growth Stocks**

In the first half of 2025, Ping An's insurance funds investment portfolio achieved a non-annualized comprehensive investment return rate of 3.1%, up 0.3 percentage points year-on-year; the average net investment return rate over the past 10 years was 5%; the average comprehensive investment return rate over the past 10 years was 5.1%.

Discussing investment strategy, Guo indicated that Ping An's investment core lies in asset-liability matching, requiring consideration of effective matching with front-end liability business, including duration matching, cost matching, cash flow matching, yield matching, and regulatory requirement matching.

"On the liability side, Ping An continuously promotes transformation from traditional insurance to participating insurance, effectively reducing liability costs while providing competitive settlement rates for participating insurance by controlling operating costs. This competitiveness stems from effective asset allocation on the asset side, helping Ping An improve investment returns and achieve favorable spreads between liability costs and investment returns."

Regarding Ping An's frequent investment activities in secondary markets, including strategic holdings in peer companies, Guo responded that Ping An's investments follow the "Three Reliables" principle, evaluating whether enterprises have "reliable operations, promising growth, and sustainable dividends" - the core criteria for determining long-term, stable holdings of company stocks.

Guo stated that with continuously declining liability costs, ongoing asset allocation optimization, and healthy, stable capital market development, Ping An will conduct further dynamic matching among high-dividend stocks, value stocks, and growth stocks, enabling asset allocation to effectively keep pace with capital market development and provide better investment returns for traditional insurance and participating insurance customers.

Notably, regarding investments, Fu Xin also introduced Ping An's current real estate investment situation, stating that Ping An's current real estate insurance fund exposure is only 3.3%, approximately 200 billion yuan, with over 82% being rental properties that provide stable rental cash flows. "This portion of assets is very safe. Moreover, Ping An uses cost method measurement for many assets, and its accounting measurement methods are very prudent."

**AI Layout: Ping An Has Vertical Domain Advantages with 67 Self-Developed Large Models**

Technology and AI were another key topic at Ping An's presentation. Guo responded that comprehensive digital transformation is one of Ping An's most important systematic projects, with Ping An continuously investing heavily in technology, digitalization, and AI over the past decade.

"The four core elements of technology are computing power, data, algorithms, and scenarios," based on which Guo introduced Ping An's strategic considerations in AI.

Ping An currently implements comprehensive AI-ization and comprehensive intelligentization. The "Five Intelligence" (intelligent marketing, intelligent service, intelligent operations, intelligent management, intelligent business) core logic is "AI in All." Guo stated, "We will use AI to completely redo the entire financial value chain from beginning to end, and completely redo the medical and elderly care value chain from beginning to end. This is our overall strategic thinking."

How are Ping An's advantages manifested? In Guo's view, based on AI's four major elements, Ping An's advantages are reflected in vertical domain advantages. "In algorithms, we use the most advanced large models from the open-source market at the foundation level, but in vertical domains, including underwriting, pricing, claims, operations, management, etc., Ping An owns self-developed large models. Ping An also has massive databases, and internal proprietary databases combined with self-developed large models together create powerful competitive advantages in vertical domains."

Taking auto insurance costs as an example, through intelligent agents and digital employee applications, costs are reduced by one percentage point across underwriting, claims, marketing, and operations levels.

According to reports, Ping An currently has 67 self-developed large models, adding 14 new ones this year. Ping An's intelligent agents are widely applied across the group, with over 20% of employees group-wide using intelligent agents to help handle daily tasks. "We also believe that with continued investment in AI technology and sustained innovation in AI empowerment, the 'Five Intelligence' will produce tremendous effects," Guo pointed out.