2020 Annual Report Contents ABOUT US CORPORATE GOVERNANCE i Five-Year Summary 116 Corporate Governance Report 1 Introduction 131 Changes in the Share Capital and ’ 2 Business Performance at a Glance Shareholders Profile Directors, Supervisors, Senior Management 4 Chairman’s Statement 134 and Employees 152 Report of the Board of Directors and MANAGEMENT DISCUSSION AND ANALYSIS Significant Events 170 Report of the Supervisory Committee 8 Customer Development 14 Technology-Powered Business Transformation FINANCIAL STATEMENTS 20 Business Analysis 20 Performance Overview 172 Independent Auditor’s Report 23 Life and Health Insurance Business 179 Consolidated Income Statement 32 Property and Casualty Insurance Business 180 Consolidated Statement of Comprehensive 38 Investment Portfolio of Insurance Funds Income 181 Consolidated Statement of Financial Position 44 Banking Business 183 Consolidated Statement of Changes In Equity 54 Asset Management Business 184 Consolidated Statement of Cash Flows 60 Technology Business 185 Notes to Consolidated Financial Statements 68 Analysis of Embedded Value 79 Liquidity and Capital Resources 85 Risk Management OTHER INFORMATION 100 Sustainability 327 Ping An Milestones 113 Prospects of Future Development 328 Honors and Awards 329 Glossary 332 Corporate Information Cautionary Statements Regarding Forward-Looking Statements To the extent any statements made in this Report contain information that is not historical, these statements are essentially forward- looking. These forward-looking statements include but are not limited to projections, targets, estimates and business plans that the Company expects or anticipates may or may not occur in the future. Words such as “potential”, “estimates”, “expects”, “anticipates”, “objective”, “intends”, “plans”, “believes”, “will”, “may”, “should”, variations of these words and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may be general or specific. Readers should be cautioned that a variety of factors, many of which are beyond the Company’s control, affect the performance, operations and results of the Company, and could cause actual results to differ materially from the expectations expressed in any of the Company’s forward-looking statements. These factors include, but are not limited to, exchange rate fluctuations, market shares, competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions and other risks and factors beyond our control. These and other factors should be considered carefully and readers should not place undue reliance on the Company’s forward-looking statements. In addition, the Company undertakes no obligation to publicly update or revise any forward-looking statement that is contained in this Report as a result of new information, future events or otherwise. Neither the Company nor any of its employees or affiliates is responsible for, or is making, any representations concerning the future performance of the Company. Journey to a Boundless World We journeyed through 2020 At Ping An of China Leaving footprints on the sands of time With prayers, expectations And our sincerest hope Hand in hand, shoulder to shoulder We fight COVID-19 with finance, tech and charity Volunteering services in Rural Communities Support Working hard in a hard time Keeping our hope in mind We run all the way forward Serving the real economy and people’s livelihoods Advancing Ping An Life’s reform and digitization Building smart cities and a healthcare ecosystem Embracing the sky by launching Satellite “PingAn-1” You and I, we are together More than a million people at Ping An Numerous families and households Hand in hand in a new era On a journey to a boundless world Five-Year Summary 2020/ 2019/ 2018/ 2017/ 2016/ December December December December December (in RMB million) 31, 2020 31, 2019 31, 2018 31, 2017 31, 2016 CUSTOMER DEVELOPMENT Number of internet users (in million) 598.04 515.50 443.59 429.51 346.30 Number of retail customers (in million) 218.43 200.48 180.22 156.90 131.07 Number of contracts per customer (contract) 2.76 2.64 2.54 2.38 2.21 Operating profit per customer (in RMB) 563.00 612.54 542.28 474.99 N/A Proportion of retail customers holding multiple contracts with different subsidiaries (%) 38.0 36.8 34.3 29.6 24.0 Proportion of new customers sourced from Group’ s internet user base (%) 36.0 40.7 34.4 37.2 22.3 THE GROUP Operating profit attributable to shareholders of the parent company 139,470 132,955 112,573 94,708 68,252 Operating ROE (%) 19.5 21.7 21.9 22.0 19.0 Basic operating earnings per share (in RMB) 7.89 7.48 6.31 5.31 3.82 Dividend per share (in RMB) 2.20 2.05 1.72 1.50 0.75 Net profit attributable to shareholders of the parent company 143,099 149,407 107,404 89,088 62,394 Equity attributable to shareholders of the parent company 762,560 673,161 556,508 473,351 383,449 Group comprehensive solvency margin ratio (%) 236.4 229.8 216.4 214.9 210.0 Total assets 9,527,870 8,222,929 7,142,960 6,493,075 5,576,903 Total liabilities 8,539,965 7,370,559 6,459,317 5,905,158 5,090,442 LIFE AND HEALTH INSURANCE BUSINESS Operating return on embedded value (%) 14.5 25.0 30.8 35.5 27.0 Embedded value 824,574 757,490 613,223 496,381 360,312 New business value 49,575 75,945 72,294 67,357 50,805 Operating profit 93,666 88,950 71,345 52,824 40,518 Residual margin 960,183 918,416 786,633 616,319 454,705 Comprehensive solvency margin ratio of Ping An Life (%) 241.8 231.6 218.8 234.1 225.9 PROPERTY AND CASUALTY INSURANCE BUSINESS Net profit 16,159 22,808 12,274 13,372 12,700 Combined ratio (%) 99.1 96.4 96.0 96.2 95.9 Comprehensive solvency margin ratio (%) 241.4 259.2 223.8 217.5 267.3 BANKING BUSINESS Net profit 28,928 28,195 24,818 23,189 22,599 Net interest margin (%) 2.53 2.62 2.35 2.37 2.75 Cost-to-income ratio (%) 29.11 29.61 30.32 29.89 25.97 Non-performing loan ratio (%) 1.18 1.65 1.75 1.70 1.74 Provision coverage ratio for loans more than 60 days overdue (%) 219.78 190.34 141.24 N/A N/A Core tier 1 capital adequacy ratio (%) 8.69 9.11 8.54 8.28 8.36 ASSET MANAGEMENT BUSINESS Trust business net profit 2,479 2,598 3,012 3,957 2,322 Securities business net profit 3,102 2,376 1,680 2,123 2,215 TECHNOLOGY BUSINESS Operating profit 8,221 4,661 7,748 5,488 (3,575) Note: Some indicators have been disclosed for less than five years. Certain figures have been reclassified or restated to conform to relevant periods’ presentation. i Introduction ABOUT US ABOUT Ping An strives to become a world-leading technology-powered retail financial services group. In 2020, Ping An furthered its transformation toward smart, data-driven operations with a focus on “Pan Financial Assets” and “Pan Healthcare.” Ping An employs technologies to increase efficiency, improve customer acquisition, and enhance risk management of its financial businesses. While reducing operating costs, Ping An promotes innovation in fintech and healthtech, and applies innovative technologies to its ecosystems, namely financial services, healthcare, auto services, and smart city services. By doing so, Ping An empowers financial services with technologies, empowers ecosystems with technologies, and empowers financial services with ecosystems. Ping An continuously optimizes the integrated financial business model of “one customer, multiple products, and one-stop services,” exploiting local advantages while adhering to global standards for corporate governance and operations management. Ping An provides financial products and services to 218 million retail customers and 598 million internet users. While remaining focused on retail business, Ping An extends its “1+N” philosophy to its corporate business to create synergies among Ping An’s multiple corporate business units. Capitalizing on these synergies, Ping An seeks to increase the customer value and contribution of its corporate business. World-leading Technology- powered Retail Financial Services Group Pan Financial Assets Pan Healthcare Finance + Technology Finance + Ecosystem Financial Auto Smart Healthcare Asset Services Services City Insurance Banking Ecosystem Management Ecosystem Ecosystem Ecosystem Annual Report 2020 Ping An Insurance (Group) Company of China, Ltd. 1 Business Performance at a Glance Financial Results of the Group Total Revenue (in RMB million) Operating Profit Attributable to Shareholders of the Parent Company (in RMB million) 139,470 3.8% 1,321,418 132,955 4.9% 1,273,091 17.6% 18.1% 1,082,146 112,573 2018 2019 2020 2018 2019 2020 Basic Operating EPS (in RMB) Dividend Per Share(1) (in RMB) 7.89 7.48 5.5% 2.20(2) 7.3% 18.5% 2.05 6.31 1.72 19.2% 2018 2019 2020 2018 2019 2020 Embedded Value of Life and Health Insurance New Business Value (in RMB million) Business (in RMB million) 5.1% 75,945 72,294 8.9% 824,574 757,490 -34.7% 23.5% 613,223 49,575 December 31, 2018 December 31, 2019 December 31, 2020 2018 2019 2020 (1) Dividend per share refers to the cash dividend, including (2) This includes a final dividend of RMB1.40 per share pending the interim dividend and the final dividend. approval at the 2020 Annual General Meeting. 2 Annual Report 2020 Ping An Insurance (Group) Company of China, Ltd. ABOUT US ABOUT Top Ten Highlights Profit grew steadily.