IMD Case Study: Ping An's Rise as a Technology Giant Yields Key Business Lessons

HONG KONG and SHANGHAI, Nov. 24, 2020 /PRNewswire/ -- Ping An Insurance (Group) Company of China, Ltd. (hereafter "Ping An" or the "Group", HKEX: 02318; SSE: 601318) is the subject of a case study published today by the International Institute of Management Development (IMD) in Switzerland for the Group's transformation from a traditional insurer to a technology disrupter.

"In the Field with Ping An" by Professor Howard Yu and Research Associate Yunfei Feng, traces the evolution of Ping An from a property and casualty insurance company to a "tech giant" that now includes 11 technology companies and an ecosystem strategy that includes financial services, health care, auto and smart cities.

"Ping An Chairman Peter Ma had the foresight to invest in technology early," said Prof. Yu, the LEGO^® Professor of Management and Innovation at IMD. "He saw, before the rest of the traditional financial services industry, that the internet economy was affecting every aspect of people's lives and he seized the opportunity. Mr. Ma led Ping An to invest aggressively in cloud computing back in 2013, when it was still considered a fringe phenomenon, but the cloud allowed Ping An to develop advanced data analytics, which was an essential step to become the technology-driven company it is now."

Ping An is now the most valuable insurance group worldwide and ranks seventh in the Forbes Global 2000. The case study notes that its share price has surged by more than 400% between 2013 and 2019.

The case study highlighted five key lessons from Ping An:

• Harness technology capabilities - Ping An invests 1% of its annual revenue in technology research and development which enables it to stay ahead of competitors.
• Scale up innovation and connect with new partners - Ping An develops proprietary technology, then repackages solutions to sell in the marketplace. For example, OneConnect, its technology-as-a-service associate company, serves financial institutions.
• Diversify your management team - Ping An has an international leadership team, which includes many people with backgrounds outside traditional financial services. This diversity helped to drive exploration of different business models.
• Change the mindset - Look beyond short-term planning and guaranteed immediate returns to take risks on longer-term investments.
• Kill the "not invented here" syndrome - Ping An brought in outside capital, reducing capital constraints and lowering the investment risk for Ping An. This allows a longer payback period for its start-ups.

Ping An's strategy has been tested by the COVID-19 pandemic, but the diversity of its revenue streams have proven to be a significant advantage. For example, OneConnect added more than 50 new customers including banks and insurance companies that needed smart customer services, and during the peak of the epidemic, Ping An Good Doctor, the largest health care platform in China, was accessed over 1.11 billion times.

The businesses in the Ping An Group have also generated synergies on multiple fronts. For example, Autohome, an online car buying platform, offers relevant financial services, distributing 3,000 credit cards a day. The ecosystems create opportunities to attract clients from one business to another and to cross-sell: in 2019, 74 million customers had contracts with more than one Ping An company.

Download In the Field with Ping An