china taiping 2014 open day · 2013 1st quarter 2013 2nd quarter 2013 3rd quarter 2013 4th quarter...

China Taiping 2014 Open Day

June 23, 2014

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2014 China Taiping Open Day

Taiping Life– Individual Agency Force Insurance

June 23, 2014

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Status of Business Development

Key Performance Indicators

Agency Force Development Since July 2013

Reasons for Success and Future Planning

Contents

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Status of Business DevelopmentBy the end of 2012, the number of agents reached 58,000 with RMB3.86 billion in gross premium and RMB3.11 billion in standardized premium. By the end of 2013, the number of agents reached 113,000, with RMB8.75 billion yuan in gross premium and RMB5.56 billion in standardized premium. As of June 2014, the number of agents was approximately 110,000, with RMB5.14 billion in grosspremium and RMB3.857 billion in standardized premium.

In 2012, Taiping Life ranked 7th in terms of first year gross premium for the agency force business. In 2013, it was in 5th place, higher than that in 2012. By the end of May 2014, TPL ranked #7.

2012 2013 June 2014

Number of Agents 58,000 113,000 109,000

Gross Premium RMB3.86 billion RMB8.75 billion RMB5.12 billion

Standardized Premium RMB3.11 billion RMB5.56 billion RMB3.79 billion

4

Agency Force Business Results Since 2013

June 2013 was the first peak for the number of agents, reaching 109,000, and was followed by a consolidation period. As of June 2014, the number of agents reached 110,000, which was maintained during this period.

The monthly performance of the agents has risen meaningfully from RMB458 million in the second half of 2013 to RMB698 million in 2014, representing an increase of 52%.

Standardized premium acceptance Unit: RMB10,000

Agents at the endof the month

59872

108880112300

106016

40000

50000

60000

70000

80000

90000

100000

110000

120000

0

20000

40000

60000

80000

100000

120000

January February March April May June July August September October November December January February March April May

Accepted�standard�premiumPersons

Average monthly performance: 458 million

Average monthlyperformance: 698 million

20142013

Accepted standardized premiumNumber of agents

5





Contents

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Key Performance Indicators for the Agency Force

2011 2012 2013 2014

Six Month Retention Rate 55.1% 65.7% 77.9% 78.9%

Thirteen Month Retention Rate 29.3% 36.9% 49.1% 54.9%

Eighteen Month Retention Rate 19.2% 24.5% 31.8% 37.8%

Retention rates

Personnel Statistics for Each Team and Department

2011 2012 2013 June 2014

Avg. Number of Peoplefor each Team 3.1 3.4 5.8 6.2

Avg. Number of Peoplefor each Dept. 12.1 14.3 29.3 27.9

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Key Productivity Indicators (annually)

2012 2013 January to Mayin 2014

Per capita cases for each month 1.7 1.3 1.2

Per capita production for each month 8,750 10,093 15,614

Average activity rate for each month 62.2% 61% 57.5%

Persons with monthly average of over 10,000

yuan7,025 10,868 15,022

Persons with over 1,000,000 yuan for a year 187 523 256

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Key Productivity Indicators (quarterly)

20131st quarter

20132nd quarter

20133rd quarter

20134th quarter

20141st

quarter

2014April-May

Per capita cases for each month 1.4 1.2 1.3 1.2 1.6 0.8

Per capita production for each month

10,495 14,021 8,238 8,697 16,636 13,905

Monthly averageactivity rate 63% 59% 64% 58% 61% 54%

3-month totalactivity rate 82% 78% 81% 83% 81% 81%

Persons with monthly average of over 10,000

yuan

8,870 9,855 12,573 12,171 16,431 14,029

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Contents

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In July 2013, the number of agents reached 108,000. As of June 18, 2014, the number of agents reached 110,000. With no major increase in quantity, the structure has constantly been improved and optimized.

1. Since July 2013, the Basic Law has been strcitly implemented for assessments, based on which all of our branches must dismiss persons with zero premium revenue over a 3-month period.

2. The entire system is based on a quarterly basis. In the first month, the focus in on business; in the second month, the focus is on adding people; in the third month, the focus in on assessments. For each quarter, the additions and dismissals have evened out.

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Optimizing the Team Structure

June 2013 May 2014

In June 2013 and May 2014, the agent numbers have held steady at around 108,000, but the team structure has changed:

1. The number of people at the formal professional level increased by 5,000, with the percentage increased from 28% to 33%, in which there was frequent changes in new persons.

2. In the next step, the formal professional level will be focused on to improve the retention rate of the core team.

Trial personnel

Downgraded trial personnel

Formal professionals

Business manager

Senior manager or above

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Increasing Numbers of 10,000-Yuan Agents After the increase at the end of 2012, the percentage of 10,000-Yuan agents decreased. When the numbers

reached 100,000 in June 2013, the percentage of 10,000-Yuan agents was around 12%. In the first quarter of 2014, the 10,000-Yuan agents accounted for 16%, with an average of 16,000 persons for each month. The total number of 10,000-Yuan agents and their percentages have continued to rise.

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Increasing Numbers of High Performance Agents

Note: High performance agents refer to those with over 50,000 yuan in accumulated standardizedpremium from January to May.

From January to May 2014, there were in all 15,311 agents with accumulative standardized premium reaching over 50,000 yuan, representing a year-on-year increase of 58%, which indicates that the numbers of high performance agents have continued to grow while adjustments are being made for existing and new agents

Date of Joining TPL Number of Persons PercentagesComparison with Previous Year

Number of Persons Percentages

2014 1,090 7% 1,270 13%

Second half of 2013 2,200 14% 1,590 16%

First half of 2013 2,457 16% 781 8%

2012 1,680 11% 926 10%

Before 2012 7,884 51% 5,144 53%

Total 15,311 9,711





Contents

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Main Reasons for Success and Future Planning (1/5)

(I) Business team with strong foundation of agency force sales

Before the "3-Year Rebuilding” initiative, the agency force team focused on incentives for the high performance agents and team leaders, thus achieving strong team sales capabilities and highly effective training capabilities. This has been the basis for the rapid growth of agents since 2012.

Per capita production for each month

Business manager Senior manager Regional CEO

1st quarter of 2014 25,000 55,000 161,000

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(II) Enhancing institution building

1. TPL has encouraged the vigorous development of agency force institutions and has enhanced the differentiated management of institutions.

In 2013, the Company launched the institution upgrading schemes of the "third level upgrading to the second level" and the "fourth level upgrading to the third level". By now the former involves 7 institutions and the latter 32 institutions. In the future, the upgrading of the third level and fourth level institutions will be maintained.

2. Enhance support for institution building and reducing the ratio of weak institutions.

In 2013, 264 weak agency force institutions were restructured and improved, with 187 of them reaching the standard, accounting for 71% of the total. In the future, the management and examination of the existing institutions will be intensified, the number of weak institutions will be reduced, and newly established institutions will be guided to avoid becoming new weak institutions.


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(III) Developing the team according to the Basic Law

To meet the requirements for organization development and maximize the function of the Basic Law in the promotion of business, the new Basic Law was implemented for the agency force in July 2013, significantly boosting the promotion of team leaders. From the second half of 2013 to now, 217 senior managers, 59 CEOs and 16 regional CEOs have been appointed. In the first decade since the commencement of business, a total of 1,175 senior managers, 94 CEOs and 8 regional CEOs have been appointed.

In the Business Unit Operations Fund Management Rules, clear standards have been emphasized for standard departments, excellent departments and outstandingdepartments. Excellent teams will be given operating funds to promote the independent operations of the business department.


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1. The adjusted Basic Law is more likely to promote the development of the organization.

2. When the team becomes mature and the ratio of new persons becomes stable, the overall costs will be lowered in line with decreases in costs relating to the new agents, and will then trend to a stable level.

3. The adjustment of profits as regulated in the Basic Law is in line with the strategic purpose of the company, and satisfactory results have been achieved. The overall agency force sales costs will be diluted along with the improvement of agent productivity.

(III) Developing the team according to the Basic Law


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(IV) Product operation

Develop and sell different products by professionals at different levels. The individual agency force department will carry out research with the product market department to break the one dimensional approach of product sales in the past decade. Dedicatedproducts will be developed for new agents, normal agents and agents with high performance. The integrated development of products will be utilized to expand the business of the new agents and to increase retention so as to stimulate their enthusiasm in marketing.

Meanwhile, product development will be accelerated, and differentiated products will be developed to meet the requirements of different customers. TPL will establish the product promotion theme of "support the business platform with health insurance and make breakthroughs with participating insurance". With the maturing of the agency force team, the overall agency force insurance product structure will also be optimized, and the profit margins of the products are expected to grow steadily in the future years to a stable level.


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(V) Training system construction

• A training curriculum and system which covers all is to be first established. The curriculum involves the programs related to personal growth and team development, including sales, new staff recruitment, instruction, team operation and management for all the stages of a career, such as the time before the professional enters the company, a half year since he enters the company, one year since he enters the company, the time for his promotion, and the time before or after his promotion.

• Continue implementing the standard training system, and urge the branches to establish and complete the training KPI examination and assessment system.

• Improve the independent management ability of the team leaders for field work, and complete the promotion and coverage of the five system operating skills of the business department.

• Enhance training and management of the supervisory personnel team. As of June 2014, there were 1,274 supervisory persons in the individual agency force line, in which 959 enjoyed employment subsidies and nearly 130 assumed management posts.


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Future Development of Individual Agency ForceThe continuous growth and development of our people is the guarantee in becoming large, strong and healthy in our individual agency force. The individual agency force will continue to maintain its advantages in retention. Once our number of agents reach the pre-determined goal for this year, the business focus will be adjusted from "seasonal rotation" to "intensifying monthly actions" in order to improve the monthly activity rate.

In terms of products, market research will be emphasized, product strategies will be adjusted in a timelyfashion, popular products will be launched into the market, and regional and differentiated products will be developed to meet the requirements of different regions and professionals at different levels.

2014 2015

Per capita cases 1.4 1.7

Per capita production 18,000 20,000

Activity rate for each month 60% 65%

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Thank you!

1


Taiping Life – Bancassurance

June 23, 2014

2

Overview of Bancasssurance Market in First Half Year

Status of TPL's Regular Premium Bancassurance Business

Strategies for Developing Bancasurance Regular Premium

Contents

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Bancassurance Market is Recovering Rapidly, However Regular Premiumin General is Still Slow

Since the beginning of this year, the bancassurance market has reversed the previous declining trends for premium. According to our estimates, the major insurers have achieved year-over-year increases in first year premium, indicating the meaningful recovery of the market.

However, the regular premium business, which is the main contributor to bancassurance value, is still slow, and has had a year-over-year decrease in premium in the first half year.

Year-over-year increase Year-over-year decrease

Gross Premium of Nine Major Insurers

Regular Premium of Nine Major Insurers

(Prediction)First half of 2013 First half of 2014

(Estimated)First half of 2013 First half of 2014

(Estimated)

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Massive Potential of Regular Premium Market

At the beginning of this year, the China Insurance Regulatory Commission issued the “No. 3 Document”, requiring bancassurance to have no less than 20% in long-term insurance business, and as a policy guiding bancssurance to develop towards long-term regular premium business.

Note: Premium data are sourced from market communications.

Regulations

Banks Banks are paying more attention to regular premium. Due to the fast fall in single premium scale

in the second quarter, banks are relying more on regular premium business to increase the insurance premium business revenue.

Insurancecompanies

The “white hot” competition in the single premium market has resulted in narrow profit marginsfor the single premium. Major insurers are now paying more attention to the profit contributionsof the regular premium, especially the long-term, high-value regular premium products. Thesemajor insurers are turning to regular premium business, greatly increasing the ratio of first yearregular premium to first year total premium in the second quarter.

Customers Banks have abundant customer resources and powerful capabilities in reaching customers. The

bancassurance regular premium market has strong potential for growth due to the improving recognition and increasing demand of customers for regular premium products.

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Contents

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TPL's Bancassurance Regular Premiums Have Produced Positive Growth, Consistently Outperforming the Market

As of May 31, TPL has produced single premium of 15.52 billion yuan, representing a year-over-year increase of 21.5%. TPL has also achieved regular premium of 6.57 billion yuan, representing a year-over-year increase of 12.6%.

For first year regular premium, TPL's increase has been higher than market averages for six consecutive months. Since the second quarter, TPL's regular premium has been ranked third place in the market for three consecutive months, “outperforming and leading the market".

Month Market Ranking Year-over-Year Increase

January 6th 30%

February 6th 22%

March 6th 53%

April 3rd 37%

May 3rd 22%

Total 6th 37%

Note: Data is sourced from market communications. Market ranking refers to the ranking among the nine major insurers, and the market average refers to the increase of the nine major insurers.

Higher than M

arket Average

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Substantial Improvements in Major Year-over-Year KPI indicators

From January to May of this year, the per capita productivity, network average productivity, and large-value sales capability of the teams experienced significant year-over-year increases.

KPI indicators Average from January to May in 2014

Average from January to May in 2013 Increase

Per capita standardized regular premium 35.6 thousand 20.4 thousand 75%

Per capita regular premium cases 2.69 2.25 20%

Average standardized regular premium per

case13.3 thousand 9.2 thousand 45%

Network average standardized premium

productivity29.6 thousand 9.6 thousand 208%

Large-value premium above 100 thousand

yuan (total)324.25 million 172.61 million 88%

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Clear Optimization of Team Structure

In the first half of the year, the team structure has been continuously optimized through TPL's internal and incentive system, the “Fortune 500” Continuous Promotion of Excellence in Performance. The year-over-year increase was 54.1% for the professionals who generated over 100 thousand yuan of monthly average standardized premium, and 21.2%for those between 50 thousand yuan to 100 thousand yuan. The year-over-year decrease was 22.2% for professionals between 20 thousand yuan and 50 thousand yuan, and a decrease of 29.2% for those below 20 thousand yuan.

Strictly control the team quality, dismiss poor performers, increase the per capita productivity, and continuously optimize the input-output ratio of the costs of human resources.

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Contents

10

Overall Strategies

Through the sales of single premium,TPL is able to obtain channel recognition

and support, gain more network resources, and through this platform achieve the

development of regular premium. Through the bancassurance platform, TPL is

able to focus on its operating model, team building, customer development,

personnel assessments, basic management, and channel innovation, etc., to

achieve long-term, sustainable growth of the regular premium business.

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1. Continuously Promote the Transformation of theRegular Premium Operating Model

Since the issuance of the “No. 90 document”, channel and regional differences have become more apparent. Bancassurance has transformed from the traditional stationary model to multiple operating models.

In accordance with differentiated sales models for channels, teams, products and customers and in compliance with regular branch operations, appointed visits by telephone, wealth management salons and various theme-based marketing activities, TPL has promoted its business based on the conditions in different regions, and has provided better experience and services for its customers.

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2. Strengthen Team Building, Create High Performance Teams

Continuously train and attract high performance talents, dismiss poor performers, establish a systematic and professional team training system, improve team and branch operations and customer service abilities, and increase team productivity.

Continue promoting the “Fortune 500” honor and incentive system, promote the growth of high performing individuals and teams, and achieve the stable growth of team members, continuous improvement of per capita productivity, and the continuous optimization of the team structure.

Note: “Fortune 500” is the top honors system in the bancassurance line of business, which includes the top 500 individuals and teams according to their rankings based on regular premium performance.

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3. Meet the Different Demands of Different Customers

Combining the Mid-Range, High-End and Low-End Customers

1. Mid-Range and High-End Customers:Provide mid-range and high-end customers with dedicated services relating to pensions, health and education, and match them with high-value products such as “Jinshenghengying”,“Xingfuyisheng”, and “Caifuyikang” to meet their requirements.2. Mid-Range and Low-End Customers:Focus on the mid-range and low-end market, sell simple regular premium products, fill in the gaps in the existing products, and improve the ratio of the channel's regular premiums.

Combining Customer Flows and Existing Customers

1. New Customer Flows:

Carry out usual operations for new

customer flows in banks, develop linkages

with banks.

2. Existing Customers:

Carry out wealth management salons and

telephone appointments, etc. to attract

existing customers of banks.

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4. Value-Oriented Transformation Focused on Regular Premium for Personnel Assessment

Establish value assessment system with core focus on regular premium, increase

weighting of regular premium in assessments, and make more policies and incentive

schemes in favor of regular premium.

Office Work Assessment

Field Work Assessment

Apply basic methods to guide teams to sell more regular premium, have regular

premium as the key performance indicator for assessing teams, and effectively

optimize the costs of human resources.

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5. Optimize the Basic Management System and Promote the Regular Premium Business

Carry out differentiated training forprofessionals at different levels:High performance professionals: training on attracting high-end customers and AFP/CFPNormal professionals: training on customer operationsPoor Performers: training on branch operations and skill improvements

Basic management system

Attendance records, number of

account openings, number of

referrals, application amounts,

and number of successes in

promotion, etc.

Field System: field coordination and guidance, appointment of supervisory personnelOff-Site System: regular and special conferences, work reports

Fortune 500, High End Conferences

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6. Accelerate Channel Innovation and Explore New Fields for Business Cooperation

Up to now, Taiping Group has established strategic cooperation agreements with CCB, ABC, Bank of China, Bank of Communications, Pudong Development Bank, Minsheng Bank, and China Merchants Bank; such head office to head office cooperation will help deepen the cooperation on the regular premium business.

Enhance the business cooperation with CCB, China Merchants Bank, and Bank of Communications in the private banking sector, open the private banking entry threshold through service and product innovation, and provide dedicated products and services for high-end customers.

We have launched the first co-branded banking-insurance chip card with ICBC in China, and will strive to enhance the cooperation with ICBC and China Merchants Bank in the co-branded card sector, achieve “One-Card” financial services for the banking and insurance industries, and broaden the space for innovating service models in the banking and insurance industries.

Work with banks to explore the E-banking sales model, decrease the costs of human resources through E-banking sales, and partially give back profits to customers and banks to achieve a win-win-win result.

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Thank you!

1/28


June 23,2014

China Taiping Group– Investment Process & Performance

2/28

Main Contents

1. Overview of Investments

2. Adhering to Our Advantages & Continuous Innovations

3. Internal Controls & Risk Management

4. Regulations & Policy Outlook

3/28

Assets Under Taiping Group's Management Reached RMB300 Billion

Group's internal assets exceed RMB200 billion, external assets exceed RMB100 billion

From 2006, assets under management have grown by 4.4 times, among which

external assets have grown by 6.2 times.

4/28

4

Strict Implementation of Annual Asset Allocation Plan

In 2014, the asset allocation strategy is to enhance debt and other fixed

income investments (credit schemes, etc.)

Increase fixed income investment to stabilize investment volatility

Selectively invest in four new financial vehicles

Avoid equity market risks by reducing equity investments

Traditional�Investments:�Revitalize�existing�bonds�and�increase�high�

yield�corporate�bonds

Reduce�Treasuries�and�financial�bonds�while�increasing�

corporate�bonds

Reduce�AFS�bonds�while�

increasing�HTM�bonds

Alternative�Investments:�Focus�on�infrastructure�debt�investments,�and�selectively�pick�good�collective-trust�

schemes,�bank�financial�products�and�ABS.

Increase�infrastructure�debt�

plans�and�real�estate�related�debt�

plans�in�first-tier�cities�

Selectively�invest�in�high�yield�

alternative�financial�products�

guaranteed�by�state-owned�corporations

5/28

Strong Investment Returns in the First Half of 201412 Out of 13 Variable Universal Life Products Rank Top 1/3

Among Peers YTD

Product Ranking�YTD

Percentage�Ranking� Product Ranking�

YTDPercentage�

RankingValue Pioneer 1/59 2% Blue-chip

Growth 10/59 17%

Stable Hedge 1/40 3% Stable

Secure 7/40 18%

Strategy Growth 4/59 7% Balanced

Income 7/39 18%

Secure Hedge 3/40 8%

Individual Momentum Growth

12/59 20%

Selection Balance 5/39 13%

Individual Balanced Stable

6/20 30%

Group Fidelity Surety

3/20 15%Group Momentum Growth

19/59 32%

Average Ranking 15% 15%

Thus far this year：

Investment return is well ahead of schedule

Investment return of variable universal life

accounts ranks high among peers

Return from equity accounts surpasses market

benchmark (CSI 300)

New fixed income investments exceed 7%

annual return

5/30

TPAM’s Equity Return Surpasses CSI 300 Index 22.2 billion New Fixed Income Investment with High Yield YTD

New FundsNew Fund Investment Yield

CSI300Total Return

6/28

Group Investment Return Has Remained Above Industry Averages Since 2006

Investment Return of Taiping Group vs. Industry Averages

Market Average Investment Return

Investment Return of TaipingGroup

7/28

Main Contents





8/28

Sophisticated Investment Management Structure after Group's Restructuring

Board of Directors

Strategy and Investment Committee

Management Teams

Equity Project Evaluation Committee

Debt Project Evaluation Committee

Real Estate Project Evaluation Committee

Taiping Asset Management

Taiping Financial Holdings

Taiping Investment Holdings

Taiping Senior Living

Investments

Assets and Liabilities Management Committee

9/28

Form A Cross-Boarder Unified Financial Investment Platform

Taiping Asset Management

Taiping Pension

Strategic Goals ：To build a leading financial insurance

group with multinational collaborative services

Offshore Funds• Insurance�Premium• RQFII�Fund• MPF Fund• Private�Equity�Fund

Onshore Funds• Insurance�Premium• QDIIFund• Insurance�Asset�Management�• Alternative�Investment�Products• Others

Taiping Financial Holdings

Wealth Management Stock Brokerage Investment Banking Services

10/28

Division of Work under Insurance Services Business

Non-TraditionalInvestments

Property Construction

and Management

Pension Community Investments

Financial Leasing

TraditionalInvestments

Insurance Business

Taiping Asset ManagementTaiping Financial Holdings

Taiping investment Holdings

Asset�management,wealth�management,�stock�brokerage,�and�investment�banking�services

Construction,�leasing,�and�property�management

Taiping SeniorLiving Investments

Pension�industry�investment,�pension�community�operation,�endowment�insurance�valued�added�services

Taiping Sinopec Financial Leasing (pending)

Petro�related�equipment�manufacturing,�transportation,�and�energy-saving

11/28

Investment in High-End Office Buildings in the CBD of Major CitiesTaiping Group has been using various financial instruments and managing properties professionally and effectively, which has created a stable and high investment return from the investments in office buildings located in high-valued districts,.

1990s Start building experience

2008 Capture opportunities for corporate transformation

2013 Prepare for further expansion

1 32 874 65

2

5

1 TP Group has numerous high-quality properties

Shanghai Taiping Financial Tower（Lujiazui） Back�Office�Shared�Services�Centre（Shanghai）

Shenzhen Taiping Financial Tower（Shenzhen CBD）

Beijing Taiping Financial Tower

Suzhou、Nanning�Taiping�Financial�Tower�(City�CDB)

Jing Hui Building（Beijing CBD）

Back�Office�Shared�Services�Centre（Wuhan）

12/28

As the First Mover Investing in Debts Projects in the Insurance Industry, TPL has Accumulated Valuable and Remarkable Experience

Set industry examples with distinctiveBy the end of May this year, 27 alternative investment projects have been launched, up to RMB58.37 billion in total funds have been raised projectsDebt investment project “South-to-North Water Diversion Project” won the first Shanghai Innovative Financial Product Prize

The�first�port�construction�project--Yantian�Port�Debt�Project

4

The�biggest�in�size�with�highest�level�of�credit�protection�in�the�industry--South-to-North�Water�Diversion�Debt�Project�

1

The�first�nuclear�power�project�in�the�industry--Debt�Investment�plan�in�CGNPC

2

The�first�rural�urban�integration��project--Suzhou�Industrial�Rural�Town�Integration�Project

3

Set industry examples with distinctive projects

13/28

Entering the Pension Industry as Population Aging Intensifies in China

Establish high-end pension community as an industry model; strategic planning and layout; diverse capital and operations, and collaborative development cross the Group.

2011The Zhoupu-Shanghai Pension Community

Centre Project was initiated

2014The Wuxi and Wenjiang Pension Community Projects have recently been approved by the authorities and are waiting for construction.

2017 2020

Zhoupu-Shanghai�Senior�Community�（Flagship）

Wuxi�and�Wenjiang�Community�Projects

On April 24, 2014, Taiping Life launched a new whole life participating

insurance product named Taiping Yuexiangjinsheng:

The performance of Taiping Yuexiangjinsheng up to June 20th :

Advanced premium: RMB4,610 million

Standardized premium：RMB3,450 million

Gross premium：RMB2,930 million

Number of Insurance products：67,810 products

14/28

Capture Opportunities and Develop Cross-Border Businesses by Starting a New Subsidiary in the Free Trade Zone

To expand entrusted fund size to up to RMB20 billion within 3 years

To expand entrusted fund size to up to RMB50 billion after 5 years, and to develop

profitability up to a leading position in the industry

Short-term Strategy

Foreign�funds�investing�in�domestic�equities�

Foreign�funds�investing�in�domestic�bonds�

Foreign�funds�investing�in�preferred�stocks�

Domestic�funds�investing�in�foreign�equities�

Mid to Long-term Strategy

Domestic�funds�investing�in�foreign�securities�and�derivatives�

Issue�offshore�debt�investment�plans

Explore�investmennts�in�nternational�markets�

Participate�in�financial�leasing�business�

Seeking foreign and domestic

investment synergies

15/28

Taking Advantage of the Opportunities in the Four Main Trends of Urbanization, Reform of State-Owned Enterprises, Internet Finance, and Emerging Industry

In 2014, the focus will be on the eastern coastal areas for innovative investments. From 2015 to 2016, the successful models for investment will be expanded to other areas.

For large state-owned enterprises with large scale and assets and stable income, aim to understand their capital requirements and design investment products which match their yield and maturity requirements and expand the investment scale further in order to promote the insurance business

Taking full advantages of the strategic cooperation with large enterprises, local governments and banks, strengthening cooperation, understanding customer demands,aiming to carry out signature alternative investment projects in which the value is over RMB1 billion.

Capture the wave of Internet financial development and use Taiping E-Commerce as a platform. Innovate and develop Internet-related specialized insurance products. With the aid of the Internet platform,expand the sales of insurance and financial products

Seize the Opportunity of Urbanization

Continue to Strengthen Investment Cooperation with Strong State-Owned Companies

Focus on Comprehensive Cooperation with 43 strategic partners

Actively Promote Internet Financial Development

16/28

Explore Equity Related Investments,Involving Strategic Emerging Industries and Participating in Mixed Ownership Reforms

In the future, there are four major opportunities in the domestic M&A market

Reform of State-Owned Enterprises

Capital Markets

Innovation

Industry Mergers and Acquisitions

1 2 3 4Strategic Emerging Industries

Suzhou Guofa Venture Capital Fund

Shanghai Taiping Pufa City Construction

Equity Fund

Invested and Pending

Investments in Equity Funds

17/28

Main Contents




4. Regulations & Policy Uutlook

18/28

Taiping's Two Professional Asset Management Companies Have Established Comprehensive and Full-Process Risk Control Mechanisms

Antecedent Precaution(The First Defense Line)

Mid-Event Controls(The Second Defense

Line)

Subsequent Supervision(The Third Defense Line)

Continuous Tracking and Implementation

• Establishing and improving the institutions, processes, investment policy and systems functions

• Various risk indicators are embedded in business processes, enabling risk controls via process management and trading systems

• Conducting regular and special monitoring and assessments for the implementation of risk indicators and institutional processes, in order to adjust and improve the investment policies、institutional processes and system functions

• Continuously tracking and improving the various risk indicators,institutions,processes and systems

Establishing an Antecedent Precaution, Mid-Event Control, Subsequent Supervision,

Continuously Tracking and Implementing Risk Control Mechanism

19/28

Strict Implementation of a Hierarchical Alternative Investment Decision Authorization Process

Debt Project Evaluation CommitteeEquity Project Evaluation Committee

Real Estate Project Evaluation Committee

Risk Management DepartmentCredit Assessment Department

Companies Investment Committee

Project Initiation and Pre-Evaluation

Project Evaluation

Board Committee Decision Making

Shareholder Decision Making Shareholder/ Shareholders meeting

Alternative Investment DepartmentNorth Division

Project VotingSubsidiaries

Group Headquarters

Shareholder

20/28

Bond Investments — Bonds Held by the Group Have High Credit Ratings

The total market value of Treasury bonds、policy-related financial bonds、

AAA-rated bonds and high-quality short-term financial bonds constituted 97

percent of the total market value of bonds invested.

Distribution of Credit Ratings for All Bonds

TreasuryBonds

Policy-Related Financial Bonds

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Alternative Investments — Low Credit Risk Debt Investment Portfolio

Debt assets held by the Group overall have high credit ratings,86 percent of the total

are AAA-grade

Almost 50 percent of the total are Central Government credits or bank guaranteed

Non-bank guaranteed projects are mainly guaranteed by large State-Owned

Enterprises and Large Groups/Companies

Debt Investment in Projects Initiated Outside the Group

Distribution of Debt Investment Credit Enhancement Methods

Central Government Credit/Bank Guaranteed

Non-Bank Guaranteed

Mortgage/Pledge

Priority and Subordination

Non-Bank Guaranteed and Mortgage

Others

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Alternative Investments — Small Proportion of Investments in Local Government Debt Projects which Have Effective Credit Enhancement Methods

Local government debt projects accounted for only 2 percent of the Group's

total assets

100 percent of the local government debt projects are rated AAA

More then 95 percent of the local government debt projects are guaranteed

by large commercial banks.

These projects are located in first-tier and first-half-tier cities

Local Government Debt Project Credit Ratings Local Government Debt Projects/Total Assets

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Alternative Investments — Low Proportion of Investments in Purchased Trust Plans with High Credit Ratings

Purchased trust products accounted for only 2.3 percent of the Group's total

assets

98.5 percent of the purchased trust products are rated AAA

Only one of the purchased trust products is rated AA+, which is guaranteed by a

large asset management company under Central Government control.

Purchased Trust Products/Total Assets Purchased Trust Products Credit Ratings

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Alternative Investments – Real Estate Investment Risks are Under Control

Total amount of real estate related debt investment products are RMB11.6 billion, of which 99.5 percent are

rated AAA

52 percent of the total real estate investment projects are guaranteed by banks, mortgages/right to pledge

the proceeds

70 percent of the real estate property investments are located in first-tier cities in mainland China, the

property types include commercial properties,industrial plans and retirement properties

79 percent of the projects are in the operational stage which provides stable rental income

Shenzhen Taiping Building which is currently under construction, is expected to be finished by the end of this

year and has already signed lease contracts and MOUs covering 28 percent of the total external lease area

Stages of Real Estate Property Projects Real Estate Related Debt Projects Credit Enhancement Methods

Mortgage/PledgeEnterprise GuaranteedBank Guaranteed

Under ConstructionOperation

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Main Contents


2. Adhering to our Advantages & Continuous Innovations



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With Deepening Reforms, the Changing Environment of the Macoeconomy, Financial and Capital Markets are Having a Profound Impact on Insurance Asset Management

Policy Content Effects on Industry and Our Group

Several Opinions regarding Further Promotions of the Healthy Development of the Capital Markets (State�Council)

• Transform�from�indirect�financing�to�direct�financing�in�capital�markets

• Develop�mixed�ownership• Eliminate�the�stock�market�system�defects• Develop�private�and�other�multi-level�markets

• Long-term positive influence on stock market

• Expands the corporate bond market

• Broaden equity investment options

• Involved in multi-level capital markets

Notice on Regulating Financial Institution Interbank Businesses(People‘s Bank of China、

China’s Bank Regulatory Commission、China‘s Securities Regulatory Commission、the China Insurance Regulatory Commission、Foreign Exchange Bureau)

• Define�and�standardize�interbank�businesses�• Restrict�inter-bank�payment�and�repo�

transactions�of�financial�assets�which�lead�to�disguised�financing�

• Regulate�reviews�of�interbank�investment�risk• Requires�that�buying�back/resales of�financial�

asset�(sell�repos)�and�interbank�investment�business�should�not�be�explicitly�or�implicitly�guaranteed

• In favor of the bond market• Requirements on non-standard

assets are higher and the risk is expected to be lower

• Lowers the market interest rates, and promotes liquidity

Guidelines on RQFII Amount Management and Operation（Foreign Exchange Bureau )

• RQFII�amounts�are�divided�into�two�main�types�which�are�open-ended�funds�and�other�products,�the�amounts�of�open-ended�fund�products�can�be�shared�

• Relaxes�the�restriction�on�investment�principal�deposit�dates�

• Brings institutional opportunities to the expansion of cross-border funding

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Policy Content Effects on Industry and Our Group

Guidelines on Five Categories of Insurance Asset Risks（Drafted by the China Insurance Regulatory Commission）

• All�the�assets�besides�AFS�and�HF�are�categorized�into�normal,�attention,�substandard,�doubtful�and�loss

• Establish�asset�loss�reserves�extraction�system�in�accordance�with�prudent�accounting�principles�

• Asset�loss�reserve�provisions�will�effect�the�profit�of�insurance�companies�

• Dynamically�impacts�the�solvency�of�insurance�companies�

• Concentrate�on�the�underlying�assets,�which�requires�that�alternative�investment�transactions�are�as�clear�and�simple�as�possible

Notice on Insurance Funds Investing in Collective Trust Programs（China�Insurance�Regulatory�Commission〔2014〕No.38�）

• The�net�assets�of�trust�companies�which�act�as�trustee�should�not�be�less�then�RMB3�billion

• The�underlying�assets�invested�by�trusts�should�be�limited�to�financial�assets�and�non-listed�equity�assets�in�which�risks�are�controllable

• The�credit�rating�of�fixed-income�collective�trust�programs�should�be�not�lower�than�A-grade�by�domestic�credit�rating�agencies

• Positive�impact�on�risk�controls�of�insurance�companies�investing�in�trusts

Notice on the Clearing and Standardization of Investment Property Revaluation by Insurance Companies （China�Insurance�Regulatory�Commission〔2014〕No.81�)

• Investment�property�assets�which�were�measured�at�fair�value�should�use�the�carrying�amount�as�on�March�31,2014�as�the�benchmark�with�no�further�assessment�of�the�revaluation�appreciation�

• Investment�properties�which�used�cost�measurement�should�not�change�to�fair�value�measurement

• Impact�on�short-term�solvency

• Over�the�long�term�will�change�the�business�model�of�real�estate�investments�by�insurance�companies

With Deepening Reforms, the Changing Environment of the Macoeconomy, Financial and Capital Markets are Having a Profound Impact on Insurance Asset Management

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Thank You！

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