HONG KONG, Aug. 26, 2020
/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 2020 (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
RMB3,966,033 million, an increase of 6.4% from the end of 2019. The
Company's embedded value was RMB1,015,856 million, an increase of
7.8% from the end of 2019.
- During the
Reporting Period, the Company's total revenue was RMB504,431
million, an increase of 12.5% year on year; the Company's gross
written premiums were RMB427,367 million, an increase of 13.1%
year on year, maintaining the leading position in the industry; the
value of half year's sales for the six months ended 30 June 2020
was RMB36,889 million, an increase of 6.7% year on
year.
- As at the end of
the Reporting Period, the Company's investment assets reached
RMB3,781,024 million, an increase of 5.8% from the end of 2019.
During the Reporting Period, the gross investment yield was 5.34%,
the net investment yield was 4.29%. The comprehensive investment
yield taking into account the current net fair value changes of
available-for-sale securities recognized in other comprehensive
income was 5.40%.
- During the
Reporting Period, net profit attributable to equity holders of the
Company was RMB30,535 million, a decrease of 18.8% 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
2020
2020 is the crucial year when the strategic deployment of China
Life Revitalization advanced to a critical stage of breakthrough.
In the first half of the year, facing various challenges from the
COVID-19 pandemic and economic downturn, the Company pursued the
fundamental requirements of high-quality development, adhered to
the strategic core of "centering on customers and basic operational
units, focusing on business value and individual agent business
sector" ("Dual Centers and Dual Focuses"), and concentrated on the
operational guideline of "prioritizing business value,
strengthening sales force, achieving stable growth, upgrading
technology, optimizing customer services and guarding against
risks". The Company proceeded well with both the pandemic control
and business development, and realized a stable growth of its core
business, a continuous optimization of its business structure and a
steady increase in its new business value. The Company accelerated
optimization and adjustments in asset-liability management,
technological innovation, operations and services, risk management
and control, and withstood the tests by the pandemic. With steady
and healthy development of the Company's businesses in various
aspects, its leading industry position was consolidated.
During the Reporting Period, the Company's gross written
premiums amounted to RMB427,367
million, an increase of 13.1% year on year. As at the end of
the Reporting Period, the embedded value of the Company reached
RMB1,015,856 million, an increase of
7.8% from the end of 2019. The value of half year's sales was
RMB36,889 million, an increase of
6.7% year on year. During the Reporting Period, the Company
continued to enhance the asset-liability management, and its gross
investment income reached RMB96,134
million, an increase of 8.1% from the corresponding period
of 2019. Due to the combined impact of the update of discount rate
assumptions for reserves of traditional insurance contracts, the
adjustment of the pre-tax deduction policy of underwriting and
policy acquisition costs adopted in the corresponding period of
2019 and the change in gross investment income, net profit
attributable to equity holders of the Company was RMB30,535 million, a decrease of 18.8% year on
year. As at the end of the Reporting Period, the core solvency
ratio and the comprehensive solvency ratio were 258.24% and
267.31%, respectively.
During the Reporting Period, the Company maintained its
strategic focus, concentrated on developing long-term regular
business and achieved a continuous increase in its new business
value. First-year regular premiums amounted to RMB94,170 million (a year-on-year increase of
13.3%), which accounted for 99.03% in long-term first-year
premiums, increasing by 0.24 percentage point year on year. In
particular, first-year regular premiums with a payment duration of
ten years or longer were RMB39,502
million, an increase of 3.7% year on year. The Company
adhered to the diversified product strategy and vigorously
developed protection-oriented businesses. Out of the top ten
insurance products by the first-year regular premiums, six were
protection-oriented products. The percentage of premiums from
designated protection-oriented products in the first-year regular
premiums rose by 3.4 percentage points year on year, with an
increase in both the number of protection-oriented insurance
policies and average premiums per policy. The value of half year's
sales was RMB36,889 million, an
increase of 6.7% year on year. As at the end of the Reporting
Period, the embedded value of the Company reached RMB1,015,856 million, increasing by 7.8% from the
end of 2019. The number of long-term in-force policies was 312
million, an increase of 3.0% from the end of 2019. During the
Reporting Period, the surrender rate was 0.61%, a decrease of 0.82
percentage point year on year.
During the Reporting Period, the Company continued to enhance
the asset-liability management and flexibly adjusted its investment
allocation strategy, so as to actively address the pressure from
both assets and liabilities. By closely following the market
changes while flexibly adjusting the pace of asset allocation and
investment tactics, the Company achieved a gross investment income
of RMB96,134 million, an increase of
8.1% year on year. Due to the combined impact of the update of
discount rate assumptions for reserves of traditional insurance
contracts, the adjustment of the pre-tax deduction policy of
underwriting and policy acquisition costs adopted in the
corresponding period of 2019 and the change in gross investment
income, net profit attributable to equity holders of the Company
was RMB30,535 million, decreasing by
18.8% year on year.
In the first half of 2020, guided by the strategic deployment of
"China Life Revitalization", the Company further implemented the
"Dingxin Project" to effectively strengthen capacity in various
fields and boost high-quality development. In terms of sales
management, the Company greatly pushed forward the development
system of "Yi Ti Duo Yuan", accelerated integration of two sales
teams of the individual agent business sector, promoted
standardized management of basic operational units, and further
consolidated the foundation of sales management. The Company also
advanced the transformation and upgrade in the diversified business
sector. The bancassurance channel refocused on business
transformation, and the group and health insurance channel
emphasized specialization and capability building. In terms of
investment management, the Company improved the investment
management system with a market-oriented approach, coordinated
asset allocation and entrusted investment management at account
level, and bolstered its investment capability through research of
asset classes and optimization of investment strategies. In
terms of operations and services, the Company continued to
improve refined management, enhanced the entire Internet-based and
intelligent operational process, increased operational efficiency
through integration, and built a mechanism for continuous tracking
and optimization of its customer experiences. In terms of
technology support, the Company rebuilt the technical product
development team according to the principle of flattening, greatly
increasing the vitality and responsiveness of the team. In terms
of risk control, the Company strengthened the
informationization and intellectualization of risk management, and
delved into a centralized risk management model to enhance the
efficiency in risk management and control, and firmly held onto the
bottom line of risks.
Insurance Business
During the Reporting Period, gross written premiums from the
life insurance business of the Company amounted to RMB346,137 million, a year-on-year increase of
12.6%. Gross written premiums from the health insurance business
amounted to RMB72,264 million, a
year-on-year increase of 15.8%. Gross written premiums from the
accident insurance business amounted to RMB8,966 million, a year-on-year increase of
10.7%.
In the first half of 2020, the Company focused on business value
growth, and sped up transformation and upgrade. After the
organizational restructuring of "Yi Ti Duo Yuan", the individual
agent business sector achieved a significant result in business
value creation and the core business indicators saw a steady growth
despite the unfavourable market conditions. The diversified
business sector focused on business transformation and its
positioning was clearly defined. As at the end of the Reporting
Period, the Company's total sales force reached approximately 1.8
million, which remained stable with its quality being improved. The
sales management was further transformed and upgraded.
Individual agent business sector
In the first half of the year, the individual agent business
sector adhered to the priority of business value and the return to
protection type of business, deepened transformation and upgrade of
its sales management, and realized the continuous growth of both
business value and scale despite the unfavourable market
conditions. During the Reporting Period, gross written premiums
from the sector amounted to RMB356,075
million, an increase of 10.1% year on year. First-year
regular premiums were RMB82,239
million, an increase of 10.7% year on year. In particular,
first-year regular premiums with a payment duration of ten years or
longer were RMB39,389 million (a
year-on-year increase of 6.4%), which accounted for 47.90% in the
first-year regular premiums. The designated protection-oriented
business grew rapidly, with an increase in both the number of
protection-oriented insurance policies and average premiums per
policy. Renewal premiums amounted to RMB263,363 million, an increase of 9.5% year on
year. In the first half of the year, the capability of the
individual agent business sector in value creation was prominent.
The value of half year's sales of the sector was RMB36,559 million, accounting for 99.11% of the
value of half year's sales as a whole. New business margin of half
year's sales of the sector reached 39.3%, which remained stable
compared to the corresponding period of 2019.
In the first half of the year, the general agent team and
upsales team of the individual agent business sector developed in a
coordinated manner. The Company implemented the new Agent
Management and Compensation System, through which the benefits from
system upgrading were released, major day-to-day sales force
management indicators were steadily improved, and the quality of
the sales force enhanced with a stable size. As at the end of the
Reporting Period, the number of agents of the individual agent
business sector was 1.69 million, including 1,007,000 agents from
the general agent team and 683,000 agents from the upsales team,
and the monthly average productive agents increased by 40.4% year
on year.
Diversified business sector
The transformation and upgrade under "Dingxin Project" was
carried out in the diversified business sector in great depth. By
concentrating on the development philosophy of "professional
operation, enhancement of quality and efficiency, transformation
and innovation, and legal compliance", the diversified business
sector coordinated well with the individual agent business sector,
and focused on the development of bancassurance, group insurance
and health insurance. During the Reporting Period, gross written
premiums from the diversified business sector amounted to
RMB71,292 million, an increase of
30.6% year on year.
Bancassurance Channel. The bancassurance channel
repositioned to focus on bank agency business, with equal emphasis
on business scale and value, and kicked off the business
transformation smoothly. During the Reporting Period, gross written
premiums from the channel amounted to RMB28,542 million, an increase of 70.4% year on
year. First-year regular premiums were RMB11,867 million, an increase of 43.9% year on
year. Renewal premiums amounted to RMB16,464
million (a year-on-year increase of 99.3%), accounting for
57.68% of the gross written premiums from the channel (a
year-on-year increase of 8.34 percentage points). The bancassurance
channel constantly strengthened sales team management, and the
quality of the sales force was improved steadily. As at the end of
the Reporting Period, the number of bancassurance channel account
managers was 31,000 and the quarterly average active managers
increased substantially.
Group Insurance Channel. The group insurance
channel continued to deepen diversified development and improve
business profitability, strengthened the expansion of key
businesses, and achieved steady development. During the Reporting
Period, gross written premiums from the channel were RMB16,500 million, a decrease of 1.8% year on
year. Short-term insurance premiums from the channel were
RMB14,390 million, an increase of
3.0% year on year. As at the end of the Reporting Period, the
number of direct sales representatives was 53,000. In particular,
the number of high-performance personnels increased by 15.9% from
the end of 2019.
Other Channels. In the first half of 2020, gross written
premiums from other channels reached RMB26,250 million, an increase of 24.8% year on
year. The Company actively developed government-sponsored health
insurance businesses, including supplementary major medical
expenses insurance, supplementary medical insurance and long-term
care insurance, and led the market consistently. As at the end of
the Reporting Period, the Company carried out over 220
supplementary major medical expenses insurance programs, providing
services to nearly 400 million people in 31 branches at the
provincial level. It also provided supplementary medical insurance
in 17 branches at the provincial level, serving more than 33
million people, undertook over 600 health protection entrusted
programs, covering more than 100 million people, and offered
long-term care insurance protection to more than 15 million
people.
In the first half of the year, there were greater development
opportunities for the online insurance business due to the impact
of the COVID-19 pandemic, and a rapid growth was seen in the online
sales business. The Company continued to diversify its online
insurance product mix, offered various types of online insurance
products during the pandemic, and consistently improved internet
application functions such as China Life Insurance APP and China
Life e-Store. A sales framework for the Company's online insurance
business was established, with the integration of online and
offline sales as the core, and direct sales on official website and
sales by external platforms as supplement. The Company constantly
reinforced its online insurance operations to provide more
convenient, efficient and diversified online services to its
customers.
The Company actively consolidated internal and external
ecological resources, steadily pushed forward its coordinated
business development with other subsidiaries of China Life
Insurance (Group) Company, and expanded the market and customer
base under the strategy of "One Customer, One-stop Service". In the
first half of 2020, premiums from property insurance cross-sold by
the Company increased by 24.6% year on year, whereas new bids of
enterprise annuity funds and pension security products of Pension
Company cross-sold by the Company grew by 22.1% year on year.
Meanwhile, the Company entrusted China Guangfa Bank Co., Ltd.
("CGB") to sell bancassurance products, with first-year regular
premiums for the first half of 2020 increasing by 18.7% year on
year. The number of new debit cards and credit cards jointly issued
by the Company and CGB during the first half of the year exceeded
500,000, thus fostering a sound environment for achieving
coordinated development, positive interaction and mutual
benefits.
Investment Business
In the first half of 2020, due to the impact of the pandemic,
the global economy experienced a notable downturn, with the trend
of deglobalization being intensified. Despite a significant decline
in China's economic growth,
recovery was seen in the second quarter of the year. The interest
rate of the domestic bond market rebounded after a rapid decline,
and the volatility of the stock market escalated. The Company
continued to enhance the asset-liability management, closely
followed market movement, and flexibly adjusted its investment
tactics. In respect of fixed income investment, the Company seized
the opportunity of market fluctuation during the significant
downturn of interest rate, timely adjusted allocation to government
bonds with long duration, and controlled interest rate risk while
maintaining the asset duration. In respect of open market equity
investment, the Company adhered to its established allocation
strategy and arrangement under the complicated market environment
and continued to adjust internal asset structure, thus stabilizing
its investment yield. As at the end of the Reporting Period, the
Company's investment assets reached RMB3,781,024 million, an increase of 5.8% from
the end of 2019.
As at the end of the Reporting Period, among the major types of
investments, the percentage of investment in bonds changed to
38.53% from 39.48% as at the end of 2019, the percentage of term
deposits changed to 14.18% from 14.98% as at the end of 2019, the
percentage of investment in debt-type financial products changed to
11.34% from 11.62% as at the end of 2019, and the percentage of
investment in stocks and funds (excluding money market funds)
changed to 10.66% from 11.00 % as at the end of 2019.
The Company's debt-type financial products mainly concentrated
on the sectors such as transportation, public utilities and energy,
and the financing entities were primarily large central-owned
enterprises and state-owned enterprises. As at the end of the
Reporting Period, over 99% of the debt-type financial products were
rated AAA or above by the external rating institutions. In general,
the quality of the Company's debt-type investment assets was in
good condition and the debt risks were well controlled.
In the first half of 2020, the Company's net investment income
was RMB77,391 million, an increase of
RMB5,361 million from the
corresponding period of 2019, rising by 7.4% year on year. Due to
the effect of a significant decline in interest rate and the delay
in dividend payment from some listed stocks in the portfolio, the
net investment yield was 4.29%, down by 37 basic points from the
corresponding period of 2019. By grasping market opportunities, the
Company optimized the structure of investment mix and portfolio
strategy in its equity investment, rebalanced tactical allocations
as appropriate, and controlled risk exposure in a prudent manner to
maintain the stability of investment income. The gross investment
income of the Company reached RMB96,134
million, an increase of RMB7,211
million from the corresponding period of 2019. The gross
investment yield was 5.34%, down by 44 basic points from the
corresponding period of 2019. The comprehensive investment yield
taking into account the current net fair value changes of
available-for-sale securities recognized in other comprehensive
income was 5.40%, down by 285 basic points from the corresponding
period of 2019.
Outlook
The year of 2020 is a crucial year for us to make breakthroughs
for "China Life Revitalization". Despite instabilities and
uncertainties in the external environment, we will remain steadfast
to our strategic deployment of "China Life Revitalization", seize
the new development opportunities of the industry, properly carry
out the regular pandemic control, enhance business value, and
improve the quality of our business and sales force. We will deepen
reform and innovation and carry out the "Dingxin Project" with
great efforts, speed up digital transformation to reinforce
technological and service empowerment, strengthen asset-liability
management, attach great importance to the prevention and
mitigation of major financial risk, and enhance our comprehensive
governance capability.
We are setting sail to lead the trend and working hard to open
the door of the opportunity. On the journey of building a
world-class life insurance company, we will stick to our original
aspiration and forge ahead, with a view to rewarding the
shareholders and people from all walks of life with satisfactory
operating performance.
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 30 June 2020, the Company had approximately 312
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" as defined by Section 27A of the
U.S. Securities Act of 1933 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 mean that the actual performance, financial condition or
results of operations of the Company could 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 2019
filed with the U.S. Securities and Exchange Commission, or SEC, on
29 April 2020; and in the Company's
other filings with the SEC. You should not place undue reliance on
these forward-looking statements. Unless otherwise stated, all
information provided in this press release is as of the date of
this press release, and the Company undertakes 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 China Banking and Insurance Regulatory
Commission.
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SOURCE China Life Insurance Company Limited