HONG KONG, Aug. 23, 2018 /PRNewswire/ -- China Life
Insurance Company Limited (SSE: 601628, SEHK: 2628, NYSE: LFC)
announces the unaudited consolidated results of the Company (China
Life Insurance Company Limited and its subsidiaries) for the six
months ended 30 June 2018 (the
"Reporting Period") prepared under the International Financial
Reporting Standards today.
Highlights
- As at the end of the Reporting Period, the Company's total
assets reached RMB3,043,178 million,
an increase of 5.0% from the end of 2017. The Company's embedded
value was RMB769,225 million, an
increase of 4.8% from the end of 2017.
- During the Reporting Period, the Company's total revenue was
RMB401,690 million, an increase of
1.4% year-on-year; the Company's gross written premiums were
RMB360,482 million, an increase of
4.2% year-on-year; the value of half year's sales for the six
months ended 30 June 2018 was
RMB28,166 million, a decrease of
23.7% year-on-year. The Company's market share in the first half of
2018 was approximately 22%, remaining the first place in the
industry.
- As at the end of the Reporting Period, the Company's investment
assets reached RMB2,709,971 million,
an increase of 4.6% from the end of 2017. During the Reporting
Period, the gross investment yield was 3.70%, the net investment
yield was 4.64%, and the gross investment yield including net share
of profit of associates and joint ventures was 3.78%. The
comprehensive investment yield taking into account the current net
fair value changes of available-for-sale securities recognized in
other comprehensive income was 3.52%.
- During the Reporting Period, net profit attributable to equity
holders of the Company was RMB16,423
million, an increase of 34.2% year-on-year.
- The Company will not declare an interim dividend of ordinary
shares for the Reporting Period.
Business Overview of the First Half of
2018
In the first half of 2018, the macro environment was complicated
and volatile, with the market competition increasingly intensified
and the transformation and upgrade of the industry deepened. Due to
the combined effect of multiple factors, the life insurance
industry developed under pressure. The Company, by firmly holding
the fundamental requirements of high-quality development, with its
strategic consistency and tactical flexibility, pushed forward the
five major tasks of "transforming sales management model, adjusting
business structure, revitalizing and taking lead in large- and
medium-sized cities, building technology-driven China Life and
preventing and controlling risks". During the first half of 2018,
the Company generally operated in a sound and stable manner, with
its business development pursuing an active and prudent strategy
and its sales force maintaining stable in both quantity and
quality. Its business value and profitability were consistently
enhanced, technological capability became prominent, service
capability was constantly improved, and risk prevention and control
was implemented in an effective manner. During the Reporting
Period, on the basis of a significant reduction of single premiums
of RMB51,247 million, the Company's
gross written premiums amounted to RMB360,482 million, an increase of 4.2%
year-on-year. The Company's market share was approximately 22%, an
increase of 2.3 percentage points from the end of 2017, remaining
the first place in the industry.
During the Reporting Period, the Company significantly reduced
single premiums to further improve the structure of premium
payments. The first-year regular business and renewal business
became major driving forces which substantially reinforced the
sustainable development of the Company. First-year regular premiums
amounted to RMB81,712 million (a
year-on-year increase of 5.1%) which accounted for 89.00% of the
long-term first-year premiums (a year-on-year increase of 33.12
percentage points). Single premiums were RMB10,103 million (a year-on-year decrease of
83.5%) which accounted for 11.00% of long-term first-year premiums
(a year-on-year decrease of 33.12 percentage points). Renewal
premiums amounted to RMB235,161
million (a year-on-year increase of 30.3%) which accounted
for 65.24% of the gross written premiums (a year-on-year increase
of 13.07 percentage points).
During the Reporting Period, net profit attributable to equity
holders of the Company was RMB16,423
million, an increase of 34.2% year-on-year. As at
30 June 2018, the embedded value of
the Company was RMB769,225 million,
an increase of 4.8% from the end of 2017. The value of half year's
sales was RMB28,166 million, a
decrease of 23.7% year-on-year. The number of in-force policies of
long-term insurance of the Company was 275 million, an increase of
2.6% from the end of 2017. The Policy Persistency Rates (14 months
and 26 months) reached 92.30% and 86.80% (year-on-year increases of
0.7 and 1.0 percentage point), respectively.
During the Reporting Period, gross written premiums from the
life insurance business of the Company amounted to RMB304,341 million (a year-on-year increase of
1.2%) which accounted for 84.43% of gross written premiums (a
year-on-year decrease of 2.53 percentage points). In particular,
first-year regular premiums were RMB76,918
million, an increase of 5.4% year-on-year, and the
percentage of first-year regular premiums in first-year premiums
was 88.40%, an increase of 34.07 percentage points year-on-year.
Single premiums from the life insurance business were RMB10,089 million (a year-on-year decrease of
83.6%) which accounted for 11.60% of first-year premiums (a
year-on-year decrease of 34.07 percentage points). Renewal premiums
from the life insurance business were RMB217,334 million (a year-on-year increase of
30.5%) which accounted for 71.41% of gross written premiums from
the life insurance business (a year-on-year increase of 16.05
percentage points). Gross written premiums from the health
insurance business amounted to RMB48,090
million ( a year-on-year increase of 28.8%) which accounted
for 13.34% of gross written premiums of the Company (a year-on-year
increase of 2.55 percentage points). Gross written premiums from
the accident insurance business amounted to RMB8,051 million (a year-on-year increase of
3.4%) which accounted for 2.23% of gross written premiums of the
Company (a year-on-year decrease of 0.02 percentage point).
In the first half of 2018, under significant changes in the
external situation, the Company maintained strategic consistency
and tactical flexibility, actively adjusted business structure and
sped up the development of first-year regular business and
short-term insurance business. As a result, the business of the
exclusive individual agent channel grew rapidly, the value
contributed by bancassurance channel increased constantly, the
development of group insurance channel became more diversified, and
other business channels showed a sound development momentum.
Exclusive Individual Agent
Channel. During the Reporting Period, with
emphasis on business value, the exclusive individual agent channel
made efforts on sales model transformation and upgrade, and
strengthened the coordinated development among business, sales
force and day-to-day management, so as to achieve continuous fast
growth. During the Reporting Period, gross written premiums from
the exclusive individual agent channel amounted to RMB272,233 million, an increase of 19.7%
year-on-year. First-year regular premiums from the exclusive
individual agent channel were RMB61,442
million which accounted for 99.80% of long-term first-year
premiums (a year-on-year increase of 0.04 percentage point). In
particular, the percentages of first-year regular premiums with
five years or longer payment duration and first-year regular
premiums with ten years or longer payment duration in first-year
regular premiums were 51.65% and 32.60%, respectively. Renewal
premiums increased by 28.3% year-on-year, and renewal business
exerted prominent effects on premiums growth of the channel. In the
first half of 2018, the sales force of the exclusive individual
agent channel maintained a stable quality, notwithstanding the
higher standards of selection and management. The Company continued
to improve the quality and expand the size of its sales force on
the one hand, and further raised the criteria for recruitment on
the other hand, especially reinforced the recruitment of younger
sales agents with high competence, improved the structure of sales
team, strengthened management and dismissed agents with
unsatisfactory performance. As at the end of the Reporting Period,
the number of exclusive individual agents was 1.441 million.
Although average productive agents on a quarterly basis reduced
slightly by 5.6% from the end of 2017 due to the decline in the
total number of sales force, the overall scale remained stable. The
Company also accelerated new agents development and agent managers
cultivation in order to enhance efficiency in management, and the
sales force for long-term protection-oriented insurance products
increased by 31% year-on-year, showing a remarkable result of
returning to the protection function of insurance.
Bancassurance Channel. In the first half of
2018, the bancassurance channel put more efforts in its business
structural adjustment, vigoriously reduced single premiums,
strengthened the development of regular premium business,
constantly improved the quality of sales force, and the value
contribution of the bancassurance channel increased consistently.
During the Reporting Period, single premiums substantially reduced
to RMB8,638 million from RMB59,667 million of the first half of 2017, a
decrease of 85.5% year-on-year. Due to such effect, gross written
premiums from the bancassurance channel were RMB55,998 million, a decrease of 39.7%
year-on-year. First-year regular premiums were RMB18,819 million (a year-on-year increase of
40.6%) which accounted for 68.54% of long-term first-year business
(a year-on-year increase of 50.21 percentage points). Renewal
premiums were RMB27,974 million (a
year-on-year increase of 44.1%) which accounted for 49.96% of the
gross written premiums from this channel (a year-on-year increase
of 29.05 percentage points). The value of half year's sales of
bancassurance channel increased by 31.0% year-on-year, which
contributed 13.80% to total new business value (a year-on-year
increase of 5.76 percentage points). As at the end of the Reporting
Period, the number of sales representatives in the bancassurance
channel reached 302,000. In particular, the average active
insurance planners for long-term business on a monthly basis in the
bancassurance channel increased by 29% year-on-year.
Group Insurance Channel. In the
first half of 2018, the group insurance channel further pushed
forward the diversified business development and strengthened
structural optimization, which brought out the stable development
of various businesses. During the Reporting Period, gross written
premiums from the group insurance channel were RMB14,986 million, an increase of 2.0%
year-on-year. Short-term insurance premiums from the group
insurance channel were RMB11,744
million, a decrease of 1.9% year-on-year due to the effect
of external policies and structural adjustment. The Company
constantly promoted the tax-advantaged health insurance business,
and successfully launched the pilot program of tax deferred pension
insurance business. As at the end of the Reporting Period, the
number of direct sales representatives reached 97,000.
Other Business
Channels. During the Reporting Period,
gross written premiums from other channels were RMB17,265 million, a rapid growth of 56.6%
year-on-year. The Company actively developed the policy-oriented
medical insurance businesses, such as supplementary major medical
expenses insurance business, long-term care insurance business and
basic medical insurance administration entrusted by the local
governments, realizing a rapid growth and maintaining its leading
position in the market. In the first half of 2018, the Company won
the bids for 33 projects, including supplementary major medical
expenses insurance projects which were open for re-bidding upon
maturity and new projects in blank markets; the Company obtained 23
new projects for basic medical insurance administration, which
covered an additional population of 7.15 million; and the Company
won the bids for 8 new projects for the pilot long-term care
insurance business, which covered an additional population of 3.24
million. The Company also actively carried out online sales, with
the premiums and number of policies from internet sales increasing
rapidly from the corresponding period of 2017.
Since 2018, the global economy has continued to recover and move
in a positive direction but factors such as trade friction and
geopolitics have caused greater volatility of the global market.
The Chinese economy maintained a stable growth, with the structural
deleveraging continuously promoted. The monetary policy remained
prudent and moderate. The interest rate of the bond market
fluctuated downward and the credit risk intensified; the stock
market suffered a significant decline with greater volatility. In
the first half of 2018, the Company seized the opportunity of
interest rate hike and increased its allocation in fixed income
assets with long duration to optimize the asset-liability matching.
The Company maintained equity investment position in the open
market at a reasonable level, selected high-quality debt-type
financial products and strictly controlled credit risk. As at the
end of the Reporting Period, the Company's investment assets
reached RMB2,709,971 million, an
increase of 4.6% from the end of 2017.
As at the end of the Reporting Period, among the major types of
investments, the percentage of investment in bonds changed to
47.23% from 45.86% as at the end of 2017, the percentage of term
deposits changed to 16.58% from 17.34% as at the end of 2017, the
percentage of investment in stocks and funds (excluding money
market funds) changed to 10.21% from 10.33% as at the end of 2017,
and the percentage of investment in debt-type financial products
increased to 11.71% from 11.65% as at the end of 2017.
The balances of the Company's fixed income investment and equity
investment increased along with the continuous expansion of its
investment assets. In the first half of 2018, the interest income
from investment portfolios grew steadily. Due to the effect of a
significant decline in the A Share market, the gross investment
income decreased by 13.9% from the corresponding period of 2017.
During the Reporting Period, the Company's net investment income
was RMB60,693 million, an increase of
RMB2,961 million from the
corresponding period of 2017, a year-on-year increase of 5.1%. In
particular, the yield to maturity of new fixed income investments
increased significantly compared to the existing allocation,
however, due to a decrease in dividends from funds, the net
investment yield was 4.64%, a decrease of 0.07 percentage point
from the corresponding period of 2017. Affected by the significant
decrease in the A Share market, the gross investment income was
RMB48,801 million, a decrease of
RMB7,862 million from the
corresponding period of 2017, and the gross investment yield was
3.70%, a decrease of 0.92 percentage point from the corresponding
period of 2017. The gross investment yield including net share of
profit of associates and joint ventures was 3.78%, a decrease of
0.91 percentage point from the corresponding period of 2017. The
comprehensive investment yield taking into account the current net
fair value changes of available-for-sale securities recognized in
other comprehensive income was 3.52%, a decrease of 1.06 percentage
points from the corresponding period of 2017.
Outlook
In the first half of 2018, despite severe external environment,
the Company forged ahead to overcome obstacles and spared no
efforts for further business development. As a result, our business
developed in a sound and stable manner. For the next step, the
Company will stick to the general keynote of making progress while
maintaining stability, with strategic consistency and tactical
flexibility, further focus on value, and make efforts to enhance
business value and achieve better operating results, so as to
facilitate the Company's progress in all aspects with high-quality
development.
The Company shall adhere to the "due role of insurance in
protection" to enhance our business capability in creating
value. With new business value growth as guidance, the
Company shall implement the strategy of diversified products,
further accelerate the development of protection-oriented business,
actively expand the "Integrated Age-care and Inclusive Healthcare
Service" sector so as to satisfy the demands for health and
aged-care services of general consumers.
The Company shall carry out the transformation of sales model
in great depth to enhance our sales force capability in creating
value. The Company shall put more efforts in the
transformation of sales model, strengthen the construction of sales
force, reinforce the day-to-day management, further enhance the
integration between sales, education and training, and strive to
improve the quality of sales force, with an aim to increase its
productivity and income level.
The Company shall strengthen the management of assets and
liabilities to enhance our investment capability in creating
value. The Company shall strike a balance between the
long-term strategic allocation and the short-term objective of
investment income. Based on the characteristics of
liabilities and with reference to risk preference, the Company
shall take advantage of market cycles to optimize allocations, and
strengthen the capability of investment in a bid to maintain the
stability of investment income level in long run.
The Company shall implement a digital strategy in all aspects
to enhance our technological capability in creating
value. By capitalizing on our digital platform, the
Company shall strive to create the "Internet +" ecological system
that is fully integrated with external related industries to
achieve a win-win situation, and fully optimize the digital system
of customer services to provide a powerful platform, resources and
support for sales representatives and offer a whole-length digital
journey for customers with all channels and full value.
The Company shall constantly improve the construction of the
internal control system to enhance our risk control capability in
creating value. In order to adapt to the development of
risk management and control under a new regulatory regime, the
Company shall consistently carry out the construction of the
internal control system in great depth, put more efforts in
enhancing our risk control capability and standards, and integrate
compliance requirements into the entire process of business
management, so as to stand firm on our risk bottom line.
The Company is well positioned to embark on a journey filled up
with opportunities. 2018 marks the
beginning of the high-quality development of China Life. Marching
towards the high-quality development is a road that has been rarely
traversed. The Company shall go ahead with courage and persistent
efforts in a fast and stable manner so as to reward customers,
shareholders and the society with better products, excellent
services and more sustainable value.
About China Life Insurance Company Limited
China Life Insurance Company Limited is a life insurance company
established in Beijing, China on
30 June 2003 according to the
"Company Law of People's Republic of
China" and the "Insurance Law of the People's Republic of China". The Company
was successfully listed on the New York Stock Exchange, the Hong
Kong Stock Exchange and the Shanghai Stock Exchange on 17 and
18 December 2003, and 9 January 2007, respectively. The Company's
registered capital is RMB28,264,705,000.
The Company is a leading life insurance company in China and possesses an extensive distribution
network comprising exclusive agents, direct sales representatives,
and dedicated and non-dedicated agencies. The Company is one of the
largest institutional investors in China, and one of the largest insurance asset
management companies in China
through its controlling shareholding in China Life Asset Management Company Limited.
The Company also has controlling shareholding in China Life Pension Company Limited.
Our products and services include individual life insurance,
group life insurance, and accident and health insurance. The
Company is a leading provider of individual and group life
insurance, annuity products and accident and health insurance in
China. As at 30 June 2018, the Company had approximately 275
million long-term individual and group life insurance policies,
annuity contracts, and long-term health insurance policies in
force. The Company also provides both individual and group accident
and short-term health insurance policies and services.
Forward-looking statements
Certain statements contained in this press release may be viewed
as "forward-looking statements" within the meaning of Section 27A
of the U.S. Securities Act of 1933, as amended, and Section 21E of
the U.S. Securities Exchange Act of 1934, as amended. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual
performance, financial condition or results of operations of the
Company to be materially different from any future performance,
financial condition or results of operations implied by such
forward-looking statements. Further information regarding these
risks, uncertainties and other factors is included in the Company's
Annual Report on Form 20-F for the fiscal year ended 31 December 2017 filed with the U.S. Securities
and Exchange Commission, or SEC, on 25 April
2018 and in the Company's other filings with the SEC. You
should not place undue reliance on these forward-looking
statements. All information provided in this press release is as of
the date of this press release, unless otherwise stated, and we
undertake no duty to update such information, except as required
under applicable law. Unless otherwise indicated, the Chinese
insurance market information set forth in this press release is
based on public information released by the China Banking and
Insurance Regulatory Commission.
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SOURCE China Life Insurance Company Limited