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HONG KONG (XFN-ASIA) - Ping An Insurance (Group) Co of China said it is looking at expanding into the mainland's rural counties in order to increase its market share.

Chief insurance business officer Dominic Leung told a media briefing that while the company's focus is still on major cities such as Shanghai and Beijing, it sees huge potential in rural areas.

'It is the right time to expand our insurance business in rural counties as the central cities will have limited growth...We will develop our life insurance first in these areas step by step,' Leung said, adding that expansion will help to further enhance the company's market share.

He pointed out that the company's premium income saw satisfactory growth in the first quarter to March and he also expects stronger premium income this year.

Seperately, chairman Peter Ma said the company is planning to have its insurance, banking and asset management businesses become its three pillars within the next ten years and for them to develop at the same balanced pace.

He said the company expects to have life insurance and property and casualty (P&C) insurance as the core profit drivers during the next five years in the first stage.

In the third and final phase, consumer finance, annuity, health insurance, new distribution channels and third party asset management are to be profit contributors within five to 15 years.

Ma noted that the company will also consider merger and acquisition (M&A) opportunities provided that any such move will enhance shareholder returns, but said that the company currently does not have any concrete plans.

Ping An reported earlier that its 2006 net profit rose 85.5 pct year-on-year to 7.84 bln yuan under international accounting standards, driven mainly by premium income growth and strong investment income.

For the period, the company recorded total investment income of 21.87 bln hkd, up 127 pct from 9.66 bln hkd a year earlier, while the net investment yield rose to 4.6 pct from 4.2 pct a year earlier.

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