HONG KONG, March 27, 2019 /PRNewswire/ -- China Life
Insurance Company Limited (SSE: 601628, SEHK: 2628, NYSE: LFC)
announces the audited consolidated results of the Company (China
Life Insurance Company Limited and its subsidiaries) for the year
ended 31 December 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 RMB3,254,403 million,
an increase of 12.3% from the end of 2017. The Company's embedded
value was RMB795,052 million, an
increase of 8.3% year-on-year.
- During the Reporting Period, the Company's total revenue was
RMB627,419 million, a decrease of
2.5% year-on-year; the Company's gross written premiums were
RMB535,826 million, an increase of
4.7% year-on-year; the value of one year's sales was RMB49,511 million, a decrease of 17.6%
year-on-year. The Company's market share in 2018 was approximately
20.4%, maintaining the first place in life insurance industry in
China.
- As at the end of the Reporting Period, the Company's investment
assets reached RMB3,104,014 million,
an increase of 12.7% from the end of 2017. During the Reporting
Period, the gross investment yield was 3.29%, the net investment
yield was 4.64%. The comprehensive investment yield taking into
account the current net fair value changes of available-for-sale
securities recognized in other comprehensive income was 3.10%.
- During the Reporting Period, net profit attributable to equity
holders of the Company was RMB11,395
million, a decrease of 64.7% year-on-year.
- The board of directors of the Company recommended the payment
of a final dividend of RMB0.16 per
share (inclusive of tax). The foregoing profit distribution plan is
subject to the approval by the 2018 Annual General Meeting to be
held on 30 May 2019 (Thursday).
Business Overview of
2018
In 2018, the macro environment was complicated and volatile, and
the restructuring of the insurance sector exceeded expectation in
terms of both the depth and the breadth. Due to the combined
effects of multiple factors, the development of the Chinese life
insurance industry was under pressure. The Company adhered to the
overall keynote of making progress with stability, implemented the
"new development" concepts, made efforts to meet the requirements
of high-quality development, and overcame obstacles and forged
ahead with concerted efforts. The Company continued to maintain the
value-oriented principle, pushed forward various tasks and achieved
a steady momentum of development. During the Reporting Period, the
Company's gross written premiums amounted to RMB535,826 million, an increase of 4.7%
year-on-year. The Company's market share, remaining the first place
in the industry, was approximately 20.4%, an increase of 0.7
percentage point from the end of 2017. As at 31 December 2018, the embedded value of the
Company reached RMB795,052 million,
an increase of 8.3% from the end of 2017.
In 2018, the Chinese economy slowed down slightly, with interest
rate trending down in the bond market and a decline in the stock
market second only to that in 2008. The Company continued to
implement its investment strategies of making long-term investment,
value investment and prudent investment, and maintained a stable
net investment yield by seizing the opportunity of the relatively
high interest rates at certain stages and increasing allocation in
long-term fixed-income assets. However, due to a significant
decrease in the equity market, both the spread income and the fair
value through profit or loss of stocks and funds were negative,
which caused a significant year-on-year decline of the gross
investment yield of the Company.
During the Reporting Period, the Company continued to optimize
its premiums payment structure and product mix. By significantly
reducing single premiums from the bancassurance channel, first-year
regular premiums amounted to RMB104,419
million, which accounted for 90.16% in long-term first-year
premiums, an increase of 26.17 percentage points from 2017; single
premiums were RMB11,399 million, a
decrease of 82.1% year-on-year, and the percentage of single
premiums in long-term first-year premiums was reduced to 9.84% from
36.01% of 2017. Renewal premiums amounted to RMB364,678 million (an increase of 26.6%
year-on-year) and accounted for 68.06% of the gross written
premiums (an increase of 11.79 percentage points from 2017).
Renewal premiums became a more important driving factor for
business growth. The Company continued to push forward
diversification of its products, through which the percentage of
premiums of the top-five products in long-term first-year premiums
decreased by 17.86 percentage points from 2017. The
protection-oriented businesses developed rapidly and the percentage
of premiums from designated protection-oriented products in
first-year regular premiums increased by 6.73 percentage points
from 2017.
During the Reporting Period, net profit attributable to equity
holders of the Company was RMB11,395
million, a decrease of 64.7% year-on-year resulting from a
significant decrease in the income from open market equity
investments of the Company due to the overall volatility and
downward trend of the equity market. As at 31 December 2018, the embedded value of the
Company was RMB795,052 million, an
increase of 8.3% from the end of 2017. The value of one year's
sales was RMB49,511 million, a
decrease of 17.6% from 2017, the year-on-year decline of which was
narrowed by 6.02 percentage points compared to the first half of
2018 and the new business margin of one year's sales was enhanced
from 2017. The number of in-force policies of long-term insurance
of the Company was 285 million, an increase of 6.3% from the end of
2017. The Policy Persistency Rates (14 months and 26 months)
reached 91.10% and 86.00%, an increase of 0.20 and 0.30 percentage
point compared to 2017, respectively.
During the Reporting Period, due to a significant decrease in
single premiums and the proactive restructuring of the insurance
industry, gross written premiums from the life insurance business
of the Company amounted to RMB437,540
million, an increase of 1.8% year-on-year. The Company made
great efforts in the development of protection-oriented insurance
businesses. In particular, gross written premiums from the health
insurance business amounted to RMB83,614
million, an increase of 23.5% year-on-year, and gross
written premiums from the accident insurance business were
RMB14,672 million, an increase of
1.6% year-on-year.
In 2018, economic and financial situations at home and abroad
were complicated and challenging, and the insurance industry
underwent proactive restructuring. The Company adhered to the
operating guideline of "prioritizing value, strengthening sales
force, optimizing business structure, achieving stable growth and
safeguarding against risks", proactively adjusted its business
structure and pushed forward product diversification, and made
great efforts on developing the designated protection-oriented
businesses and short-term insurance business. The Company
continually implemented the sales force development strategy of
quality improvement and size expansion by focusing on quality
improvement. The Company continued to optimize the structure of
sales force by raising recruitment standards, tightening
performance assessment, improving management and reinforcing
dismissal of low-performance agents. As at the end of the Reporting
Period, the total number of sales force from all channels amounted
to 1.722 million and the quality of sales force was effectively
improved.
Exclusive Individual Agent Channel. In 2018, the
exclusive individual agent channel achieved continuous and steady
growth and further optimized the business structure by focusing on
business value, making efforts on sales management transformation
and upgrade, strengthening the coordinated development among
business, sales force and day-to-day management. During the
Reporting Period, gross written premiums from the exclusive
individual agent channel amounted to RMB408,278 million, an increase of 15.4%
year-on-year. First-year regular premiums were RMB79,241 million, which accounted for 99.66% of
long-term first-year premiums. In particular, the percentages of
first-year regular premiums with a payment duration of five years
or longer and first-year regular premiums with a payment duration
of ten years or longer in first-year regular premiums were 61.65%
and 46.35%, respectively. Renewal premiums amounted to RMB316,930 million, an increase of 25.0%
year-on-year, which significantly drove the growth of gross written
premiums from this channel. The new business margin of one year's
sales of the channel in the second half of 2018 increased by 15.27
percentage points compared with the same period of 2017, which
narrowed the year-on-year decline in the value of one year's sales
compared with the first half of 2018. As at the end of the
Reporting Period, the number of exclusive individual agents was
1.439 million. The monthly average productive agents increased by
2.6% year-on-year. Besides, the Company accelerated the systematic
operation of new agent development and agent manager cultivation in
order to enhance management efficiency, and actively accelerated
the development of the protection-oriented business. The monthly
average number of agents selling designated protection-oriented
insurance products increased by 43.4% year-on-year.
Bancassurance Channel. In 2018, the bancassurance channel
made more efforts in its business restructuring, significantly
reduced single premiums, focused on the development of regular
premium business, constantly improved the quality of sales force,
and the new business margin of one year's sales of the channel
enhanced consistently. During the Reporting Period, single premiums
from the channel were significantly reduced to RMB8,642 million from RMB59,777 million of 2017, a decrease of 85.5%
year-on-year. Accordingly, gross written premiums were RMB76,841 million, a decrease of 32.3%
year-on-year. First-year regular premiums were RMB23,239 million (a year-on-year increase of
10.9%) which accounted for 72.89% of long-term first-year business
(an increase of 46.93 percentage points from 2017). Renewal
premiums were RMB43,785 million (a
year-on-year increase of 37.3%), which accounted for 56.98% of the
gross written premiums (a year-on-year increase of 28.89 percentage
points). The new business margin of one year's sales of the channel
increased by 10.74 percentage points from 2017. As at the end of
the Reporting Period, the number of sales representatives in the
bancassurance channel was 0.245 million. In particular, the monthly
average active insurance planners for long-term business in the
bancassurance channel increased by 34.5% year-on-year.
Group Insurance Channel. In 2018, the group insurance
channel further pushed forward diversified business development,
strengthened structural optimization and achieved stable
development of various businesses. During the Reporting Period,
gross written premiums from the group insurance channel were
RMB26,404 million, an increase of
0.8% year-on-year. Short-term insurance premiums from the group
insurance channel were RMB21,268
million, an increase of 2.1% year-on-year. The Company
actively launched the pilot program of tax deferred individual
pension insurance business and constantly promoted the
tax-advantaged health insurance business. As at the end of the
Reporting Period, the number of direct sales representatives
reached 83,000. In particular, the number of direct sales
representatives with high performance reached 54,000, an increase
of 4.3% year-on-year.
Other Channels. During the Reporting Period, gross
written premiums from other channels reached RMB24,303 million, a rapid growth of 30.8%
year-on-year. The Company actively developed the policy-oriented
health insurance businesses, including supplementary major medical
expenses insurance and long-term care insurance, which maintained
leading positions in the market. As at the end of the Reporting
Period, the Company carried out over 240 supplementary major
medical expenses insurance projects, providing services for over
400 million urban and rural residents in 28 provinces, and
undertook 22 long-term care insurance projects on a cumulative
basis. The Company actively pushed forward the transformation and
upgrade of its tele-sales channel and put great efforts in the
development of online sales from the internet-sales channel.
In 2018, the global economic growth was differentiated, the
growth rate of major economies other than that of the United States slowed down significantly
and the global stock markets saw a widespread decline. The
endogenetic driving force for the growth of the Chinese economy
remained to be enhanced, the marginal pulling effects from external
demands decreased, and the economic growth decelerated. The
interest rate of domestic bond market declined in general, and the
stock market plummeted. In respect of the allocation of general
categories of assets, the Company continued to increase its
allocation in long-term fixed-income assets at high interest rates
to optimize the asset-liability matching; selected high-quality
debt-type financial products and strictly controlled credit risk;
and pushed forward structural adjustment of open market equity
portfolio by selecting stocks with low valuations and high
dividends. As at the end of the Reporting Period, the Company's
investment assets reached RMB3,104,014
million, an increase of 12.7% 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
42.20% from 43.17% as at the end of 2017, the percentage of term
deposits increased to 18.02% from 16.32% as at the end of 2017, the
percentage of investment in stocks and funds (excluding money
market funds) changed to 9.03% from 9.73% as at the end of 2017,
and the percentage of investment in debt-type financial products
increased to 11.32% from 10.96% 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 scale. In 2018, the Company's net investment income was
RMB133,017 million, an increase of
RMB3,078 million from 2017 and a
year-on-year increase of 2.4%. In particular, the yield-to-maturity
of new fixed income investments increased significantly compared to
the existing allocation, however, due to the impact of a decrease
in dividends from funds, the net investment yield was 4.64%, a
decrease of 0.28 percentage point from 2017. Due to the effect of a
significant decline in stock market, the gross investment income of
the Company was RMB95,148 million, a
decrease of RMB41,016 million from
2017, and the gross investment yield was 3.29%, a decrease of 1.87
percentage points from 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 3.10%, a decrease of 1.47 percentage points from
2017.
2019 Outlook
Time and tide wait for no man. With confidence and expectations,
we have entered a new era when the Chinese economy has transformed
from high-speed growth to high-quality development, and the
transformation and upgrading of the insurance sector is moving to a
deeper level; customer demands diversify further and FinTech is
reshaping the insurance landscape. Now that the relay baton is in
our hands, how can we navigate China Life, an ocean liner, to ride
the wind and waves to lead in the new era? How can we maintain the
undertaking for which generations of China Life employees have
devoted their efforts and keep it everlasting? Facing new
situations and requirements for development, we have set a
strategic target on "China Life Revitalization" based on the
Company's actual reality. Not long ago, on the "China Life 2019
Open Day", the new session of the Company's management released and
interpreted the overall strategic planning of "China Life
Revitalization". In the future, centering on the target of "China
Life Revitalization", we will continue to focus on business value,
strengthen sales force, maintain stable growth, upgrade
technologies, improve customer services and safeguard against
risks, and make great efforts to complete three transformations:
the transformation from being sales-oriented to attaching equal
importance to sales and services, the transformation from being
human-driven to being human- and technology-driven, and the
transformation from being scale-oriented to the coordination of
scale and value. We will continue to build the four driving engines
of "Talent, Mechanism, Innovation and Integration" to improve our
development quality, enhance our urban market competence, expand
and strengthen the sales force, reinforce the brand image and boost
the spirit of China Life. This is the inheritance and development
of the original aspiration and mission of the Company which is to
protect the good life and strive to become a world-class life
insurance company, and also the mission and responsibility of the
new session of the Board and the management; more importantly, it
is the solemn commitment of China Life to its investors,
shareholders, customers and employees.
The year 2019 marks the beginning
of "China Life Revitalization", in which we will lay firm steps in
market-oriented reforms, customer experience improvement, stronger
competence in the large- and medium-sized cities and sales force
transformations. Furthermore, we will strengthen the management of
assets and liabilities, push forward the construction of a
comprehensive risk management system and incorporate the compliance
concept in the whole process of operations so as to lay a sound
foundation for the development of a world-class life insurance
company.
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 the 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 becomes 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 31 December 2018, the Company had approximately
285 million long-term individual and group life insurance policies,
annuity contracts, and long-term health insurance policies in
force. We also provide 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