Ping An, China’s biggest insurance group and one of the world’s largest by assets, has suffered a Rmb18.2bn ($2.8bn) hit from its exposure to a troubled property developer, taking a slice off its first-quarter profits.

China’s recovery from the coronavirus crisis helped the Shenzhen-based financial services group — which includes banking and asset management operations — report a 4.5 per jump in net profits, with earnings reaching Rmb27.2bn.

The performance marked a bounceback from 2020, when Ping An suffered its first fall in annual net profit since 2008.

But the company also made impairment provisions and valuation adjustments with respect to China Fortune Land Development, which defaulted on $530m of dollar-denominated debt in March this year. The first-quarter impact on Ping An from the Fortune Land adjustments was Rmb10bn at a post-tax level.

The developer specialises in industrial parks and has suffered from delays in payments from regional governments. Its default came against a backdrop of greater scrutiny of China’s property sector from Beijing, which has sought to constrain leverage.

The provisions related to both equity and debt, a spokesperson said. The insurer owned a quarter of the company’s ordinary shares at the end of last year.

Ping An in February said it had Rmb54bn in total exposure to China Fortune Land across debt and equity, and that it was leading a creditor committee that was dealing with the company’s borrowings.

The insurer’s life and health division grew its new business value, a key metric, by 15 per cent year-on-year in the first quarter.

The property and casualty insurance business, meanwhile, saw premium income decline 9 per cent from the first quarter of 2020. One contributor was a fall in car insurance rates that Ping An attributed to a government reform of the sector.

But the overall combined ratio for the P&C business — claims and expenses as a proportion of income — came in at 95.2 per cent, a 1.3 percentage point year-on-year improvement.

At the group level, a fall in premiums was offset by a rise in investment income and interest revenues from both banking and non-banking operations.

Ping An’s retail customer base grew 1 per cent over the past 12 months to more than 220m people.