Last week, China Life Insurance reported its net profits having risen 92.6% year-on-year during the first quarter of 2019, according to the state press agency Xinhua.
The statement filed with the Shanghai Stock Exchange revealed the insurer's net profits to be CNY26.03bn ($3.88bn) which was attributed to rising incomes from its investments in the Chinese 'bull market'.
At the same time, China Life's premium income increased by 11.9% year-on-year to CNY272.4bn. Shares in the company closed 0.71% lower at CNY29.49 on 25 April.
Established in June 2003, China Life Insurance was formerly the domestic life insurance arm of People's Insurance Company of China and is said to have the largest market share in China. The insurer is listed on the HKEX, SHEX and NYSE making it the first Chinese insurer to be triple-listed in the three markets.
As of 31 December 2018, China Life reported total revenues of CNY627.4bn and gross written premiums of CNY535.8bn. The insurer was assigned an ‘A1’ IFS rating with a ‘stable’ outlook from Moody’s; ‘A+’ IFS rating with a ‘stable’ outlook from Fitch Ratings; and ‘A+’ long-term insurer financial strength and issuer credit ratings with a ‘stable’ outlook from Standard & Poor’s.
In December, China’s insurance regulator noted that the sector had demonstrated a stronger capacity to forestall risks as its overall leverage has gradually dropped and business structure improved.
However, Fitch Ratings expects the rate of premium growth to slow down from the pace recorded in 2015-2017 as Chinese life insurers continue to restructure their product mix by shifting from short-term savings-type products to regular-premium protection products favoured by the regulator.
Fitch expects the capital positions of life insurers to remain moderate, amid rising capital requirements as well as domestic interest rates which are steady and remain low.
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