Ping An's Overseas Expansion: Financial Uncertainties and Risk Management

By 2007, China's Ping An Insurance Co. (Ping An) had grown into the second-largest life insurer in China. Its goal was to become a universal financial services provider by expanding into asset management and banking. These three businesses were the foundation of Ping An's three-pillar strategy. It had already made two domestic banking acquisitions, but none in asset management. In November 2007, Ping An acquired a 4.2% stake in Fortis, the Belgo-Dutch financial conglomerate, and planned to buy half of Fortis's asset management business, which would be a big step towards reaching its goal. Yet this ambitious overseas expansion plan was crushed by the adverse effects of the US subprime problem and the global financial crisis. The company needs to address important lessons, re-evaluate its overseas investment strategy and learn how to implement risk management in the future.