Pioneering Ping An Life leads way in China
AsianInvestor’s second annual Institutional Excellence Awards were introduced to highlight best practice, with awards handed out in 17 categories. Ping An Life scoops the award for insurance company (general account) this year for its pioneering approach to overseas and alternative investments.
The winners were announced on October 30 and received their awards at an exclusive ceremony and dinner on December at The South Beach hotel in Singapore.
We thank all those who contributed their thoughts to these awards. The full list of write-ups appears in the December issue of AsianInvestor magazine, and more details of our decision-making process can be found here.
INSURANCE COMPANY (GENERAL ACCOUNT)
Ping An Life
China’s second largest life insurer, with $220 billion under management, Ping An Life plays a powerful leadership role among its peers thanks to its disciplined investment approach and long-term focus – key portfolio planks for a liability-driven investor.
Instituting international best practice, the firm has strengthened its own internal capabilities and risk management process as it strives to expand its allocation to overseas assets within a government-imposed 15% cap on foreign exposure.
Areas it has bolstered include research, portfolio management and execution. Its investment team now stands at 50-strong and has a reputation for efficiency, having enjoyed zero turnover among senior staff over the past three years.
Ping An Life has Rmb40 billion ($6.25 billion) allocated overseas (2.9% of its portfolio), and is targeting an increase. It allocates a small percentage of its assets to external managers, and has sought to spur greater competition for mandates by incorporating affiliated firms under Ping An group into the mix.
Domestically the insurer’s investment team has become considerably more cautious in an environment of slowing growth, low inflation and low interest rates, increasing its focus on liquidity risk and credit risk.
That is not easy in China, where the equity market is immature and volatile and bond yields are compressing, and where investment instruments are limited to begin with. It also partly explains its move into overseas securities and alternative assets over the past three years, as it seeks to diversify its portfolio and target stable returns.
Ping An can be considered among China’s cross-border pioneers. With its Hong Kong asset management unit, established in 2006, it was the first mainland insurer to reach overseas and move from property into alternatives. Its partners highlight Ping An Life’s smart use of technology, which has been incorporated in the design of its asset allocation model, and evaluation of performance and risk management.
For its early move into alternatives, the strengthening of its internal structure and intelligent use of technology – all with a view to improving its long-term allocation – Ping An joins our roster of winners.
Winners previously unveiled:
Reserves manager: Monetary Authority of Singapore