Ping An Insurance (Group) Co will focus on its China business after its ill-fated investment in Fortis, senior executives said Thursday.
The Shenzhen-based insurer is smarting from its thwarted attempts to expand overseas as it has made a 22.79-billion-yuan (US$3.34 billion) impairment charge on the Fortis investment, which pushed the insurer to post two straight quarterly losses in the second half of last year.
Ping An President Louis Cheung said yesterday in Hong Kong that the insurer will focus on its China business rather than expanding overseas, after its ill-timed investment in Fortis amid the worst financial crisis since the Great Depression. He added the worst time for the insurer is over.
"Going forward, we remain very optimistic about maintaining our growth momentum, and we should be seeing better investment results in the future as the markets begin to stabilize," Cheung said.
Chairman Peter Ma said in Shanghai yesterday that the global financial crisis was to blame for the failed investment as the Chinese insurer "hasn't expected a global and systemic financial crisis" after making enough due diligence on Fortis in a region where markets were traditionally seen as stable.
Ping An, the world's second-biggest insurer by market value, initially bought into Fortis in October 2007, paying 23.87 billion yuan in a deal meant to pave the way for an acquisition of Fortis' asset management unit. It paid an average price of 19 euros (US$25) per Fortis share then. Fortis traded at about 1.50 euros recently in Europe.
Timothy Chan, the insurer's deputy chief investment officer, said the company's stock investments could reach up to 12 percent of its overall portfolio this year.
(Shanghai Daily April 10, 2009)
