China Taiping Insura : Profit Warning

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 966)

PROFIT WARNING

This announcement is made pursuant to Rule 13.09 of the Listing Rules.
The Board wishes to inform the shareholders of the Company and investors that TPRe, a wholly owned subsidiary of the Company, will report an operating loss for the year ended 31 December
2011. This loss will be the first time of TPRe making loss since its incorporation in 1980, and is
mainly due to significant claims relating to a few natural catastrophes occurring during 2011.
Subject to audit adjustment, it is estimated that the unaudited loss after tax of TPRe for the year ended 31 December 2011 will be approximately HK$94 million (2010: audited profit after tax of HK$373 million), which incorporates an estimated net retained loss of HK$480 million in relation to
the recent floods in Thailand. In addition, the investment income of the Group will be lower primarily due to substantial declines in the PRC and Hong Kong securities investment markets during the year. As such, it is expected that the Group's consolidated profit for the year ended 31
December 2011 will be substantially lower than that for the corresponding period in 2010.
As the Group's results for the year ended 31 December 2011 have not yet been finalized and audited, the Board is not in the position, at this stage, to quantify precisely the financial implications of the above-mentioned factors on the Group's overall consolidated results.
Shareholders of the Company and investors are advised to exercise caution when dealing in the shares of the Company.
This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the "Listing Rules").
The board of directors (the "Board") of China Taiping Insurance Holdings Company Limited (the "Company" and together with its subsidiaries, the "Group") wishes to inform the shareholders of the Company and investors that Taiping Reinsurance Company Limited ("TPRe"), a wholly owned subsidiary of the Company which operates a global reinsurance business, will report an operating loss for the year ended 31 December 2011. This loss will be the first time of TPRe making loss since its incorporation in 1980, and is mainly due to significant claims relating to a few natural catastrophes occurring during 2011. Subject to audit adjustment, it is estimated that the unaudited loss after tax of TPRe for the year ended 31 December 2011 will be approximately HK$94 million (2010: audited profit after tax of HK$373 million), which incorporates an estimated net retained loss of HK$480 million in relation to the recent floods in Thailand. In addition, the investment income of the Group will be lower primarily due to substantial declines in the PRC and Hong Kong securities investment markets during the year. As such, it is expected that the Group's consolidated profit for the year ended 31 December 2011 will be substantially lower than that for the corresponding period in 2010.
The Board believes that 2011 was a very unusual year in terms of the frequency of natural catastrophes and their geographical distribution. Having several, sequential and large natural catastrophes occurring in the same year is a very rare occurrence, and having sizable insured damage losses arising from the catastrophes concentrated mainly in Asia is also a very rare occurrence. With more than 70% of its gross written premium sourced from Asia, TPRe could not be immune from the losses arising from such natural catastrophes in the region. Despite the operating loss at the reinsurance business, the Board believes that the overall operations of TPRe and the Group as a whole remain sound and intact, and that the financial position of TPRe and the Group remains solid.
2011 has surpassed 2005 to become the worst year ever in terms of natural catastrophes for the global insurance industry. For business renewing before the end of 2011, the pricing as well as the terms and conditions for many lines of reinsurance across different geographical regions have increased or tightened as a result. The lowering of excess reinsurance capital and the uncertain investment outlook, have turned the global reinsurance market cycle into an upward phase. TPRe will take advantage of this trend in its 2012 business operations.
As the Group's results for the year ended 31 December 2011 have not yet been finalized and audited, the Board is not in the position, at this stage, to quantify precisely the financial implications of the above-mentioned factors on the Group's overall consolidated results. For more details, investors should read the announcement for the Group's annual results for the year ended 31 December 2011, which is expected to be published before the end of March 2012.
Shareholders of the Company and investors are advised to exercise caution when dealing in the shares of the Company.
By Order of the Board of
China Taiping Insurance Holdings Company Limited
NG Yu Lam Kenneth
Executive Director & Chief Executive Officer
Hong Kong, 12 January 2012

As at the date of this announcement, the board of the Company comprises 11 directors, of which Mr. LIN Fan, Mr. SONG Shuguang, Mr. XIE Yiqun, Mr. PENG Wei, Mr. NG Yu Lam Kenneth, Mr. SHEN Koping Michael and Mr. LAU Siu Mun Sammy are executive directors, Mr. LI Tao is a non-executive director and Dr. WU Jiesi, Mr. CHE Shujian and Mr. LEE Kong Wai Conway are independent non-executive directors.

This announcement is posted on the website of the Stock Exchange at www.hkexnews.hk and on the website of the

Company at www.ctih.cntaiping.com.