(Xinhua)
Updated: 2008-03-20 20:10

Ping An Insurance Group, China's second biggest life insurer, said its net profit jumped 140 percent last year on record premium revenues, a strengthened banking unit and strong investment returns.

Related readings: Ping An to buy 50% stake in Fortis Unit Ping An's refinancing plan largely supported Ping An to stick to issue plan Ping An rakes in hefty premiums

Net income rose to 18.7 billion yuan ($2.6 billion) or 2.61 yuan per share in 2007 under international accounting standards, from 7.8 billion yuan or 1.27 yuan a year earlier, according to the Shenzhen-based company.

Under Chinese standards, the 2007 figure was 15.1 billion yuan, up from 7.3 billion yuan in 2006.

China's fast economic growth, steady increase in investment and consumer spending created a favorable environment for the insurance industry, Ping An said in a statement to the Shanghai Stock Exchange.

The company saw its insurance revenues grow 18.2 percent to a record 100.9 billion yuan last year, compared with 196.6 billion yuan of China Life, the nation's largest insurer. Ping An held 16 percent of the Chinese life insurance market and 10 percent of the property insurance market.

"China is the world's fastest growing insurance market, while insurance is one of China's fastest growing industries," it said. The country's total premium revenues rose 24.7 percent to 703.6 billion yuan last year,ninth highest in the world, according to government data.

Ping An also reported its banking unit would become a "nuclear source" of profit in the future. The company acquired 89 percent of Shenzhen Commercial Bank for 4.9 billion yuan in 2006 and the newly-named Shenzhen Ping An Bank contributed 9.9 percent to the insurer's net profit last year.

Investment returns jumped 135.4 percent to 51.4 billion last year, thanks to the strong performance of the domestic stock market, it said. The yield rate was 14.1 percent last year, compared with 7.7 percent in 2006.

Ping An planned to increase its investment in infrastructure construction this year and "steadily step up overseas investment to spread risks and boost returns," it said.

On Wednesday, the company agreed to buy half of the Belgian financial service provider Fortis Asset Management for 2.15 billion euros ($3.4 billion).

The Chinese insurer bought 4.18 percent of Fortis from the stock markets for 1.81 billion euros in November. It currently owns 4.99 percent of the company.

The new deal, which is yet to be signed and submitted for government approval, aimed to help Ping An establish a global platform for asset management. It will also help Fortis accelerate its Asia business expansion.

Ping An listed in Hong Kong in 2004 and in Shanghai last year.