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Ping An Becomes the World’s Most Valuable Insurance Brand

25 April 2017
This article is more than 4 years old.

Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. The 100 most valuable insurance brands are featured in the Brand Finance Insurance 100.

In yet another coup for Chinese brands in 2017, Ping An has overtaken Allianz to become the world’s most valuable insurance brand. Ping An reported net profit of U$9 billion in 2016, its largest since 2003. A number of factors underpin this success. Despite a slowdown, its core market of China is far more dynamic than the US and Western Europe, where the other leading brands are based.

However Ping An is more than a passive beneficiary of macro-economics. It has been extremely successful at cross-selling based on excellent core products. The firm offers a limited number of free products and services to potential customers via its online platform. This has generated goodwill and significantly expanded Ping An’s user base, creating a platform for cross-selling. It is just as focused on its brand as its revenues; Ping An is the first Chinese financial firm to deploy a Net Promoter Score (NPS) model to track customer feedback and brand loyalty. This commitment to tracking and tweaking the brand is paying off, with very high customer equity scores on Brand Finance’s Brand Strength Index.

Brand Finance’s CEO David Haigh comments, “Ping An has lofty ambitions, aiming to become the world’s leading provider of personal finance. Based on this evidence, in the long term it may not be an unrealistic goal.”

Chubb is the fastest growing brand in the list with a brand value growth of 180% to US$5.6 billion which sees its rank jump from 36th to 11th. Chubb is performing strongly, however its rapid brand value growth this year is primarily the result of the rebrand of Ace under the Chubb name after the mega-merger of the two firms, creating one of the biggest publicly traded property and casualty (P&C) insurance business in the world. Even with elevated natural catastrophe losses and soft P&C market conditions globally, the combination of improving profitability and the much broader application of the Chubb brand sees brand value soar.

Allianz has dropped to 2nd place after brand value fell 7% to US$15 billion. Revenues were hit by higher damage claims resulting from from a series of floods and storms in Europe. Meanwhile a loss on the sale of its South Korean business and a weaker investment performance hit profits. The most significant factor behind the decline was historically low interest rates limiting the German brand’s capacity to earn higher returns. Despite this gloomy picture, Allianz reported strong full year results due, in part, to increased demand for its retirement products. Europe’s ageing population may well have long-term benefits for the well-established brand.

America’s largest life insurer, MetLife, saw third-quarter profit tumble 52% on derivative losses and costs tied to the spinoff of its US retail business. Like Allianz, it has been affected by low interest rates, which have reduced revenue generated on a bond-dominated investment portfolio. Brand value is down 12% to US$6.6 billion, which sees Metlife fall from 5th to 9th. Metlife is undergoing a rebrand, with a change to its logo and the phasing out of Snoopy after a 30-year association. Metlife will be hoping a return to a more serious, sober approach will resonate better with potential customers as it attempts to turn its fortunes around.

NN Group struggled with low interest rates and market volatility, contributing to a fourth quarter net profit decline of 60%. NN Group is this year’s fastest falling brand, with brand value dropping 48% to US$650 million.

ENDS

Note to Editors

For more definitions of key terms, methodology and more stories, please consult the Brand Finance Insurance 100 report document.

Brand values are reported in USD. For conversions into local currency, please consult the hover over the ‘i’ button on the web version of the table and select.

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Konrad Jagodzinski
Communications Director
Brand Finance
Florina Cormack-Loyd
Associate Communications Director
Brand Finance

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.

Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.

Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.

Methodology

Definition of Brand

Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.

Brand Strength

Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.

Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach

Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.

The steps in this process are as follows:

1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.

2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.

3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.

4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.

5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.

6 Apply the royalty rate to the forecast revenues to derive brand revenues.

7 Discount post-tax brand revenues to a net present value which equals the brand value.

Disclaimer

Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.

The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.

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