Case | HBS Case Collection | June 2011 (Revised November 2011)

The Expansion of Ping An

by Robert C. Pozen and Nina Yang

Abstract

In June 2010, Mingzhe Ma, chairman and chief executive officer of Ping An Insurance (Group) Company of China ("Ping An" or "the Company"), sat down with Sun Jianyi, vice chief executive officer and executive vice president at Ping An, to discuss the future direction of the Company. They would have to answer questions at the upcoming shareholder meeting about Ping An's financial strategy for diversification within China and globally. Ping An had been founded by Ma in 1988 and had since grown into China's second largest life insurer. While Ping An had achieved past success in insurance, it looked to expand its business going forward. Ping An's ambition was to transform itself into a global financial conglomerate, with banking and investment, as well as insurance operations. Ping An's recent efforts at globalization and diversification had been challenging. In a highly publicized transaction, Ping An made an untimely investment in Fortis, a large European bank which failed in the global financial crisis in 2008. Ping An spent close to 24 billion Chinese Yuan (RMB) or 3.4 billion U.S. dollars ($) on Fortis. In the aftermath of the Fortis acquisition, Ping An had halted overseas expansion and focused on opportunities at home in mainland China.

Keywords: Acquisition; Business Conglomerates; Conferences; Banks and Banking; Financial Strategy; Insurance; Global Strategy; Leadership Style; Strategic Planning; Opportunities; Diversification; Expansion; China;

Citation:

Pozen, Robert C., and Nina Yang. "The Expansion of Ping An." Harvard Business School Case 311-133, June 2011. (Revised November 2011.)