HONG KONG, March 25, 2021 /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 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 RMB4,252,410 million,
an increase of 14.1% from the end of 2019. The Company's embedded
value was RMB1,072,140 million, an
increase of 13.8% from the end of 2019.
- During the Reporting Period, the Company's total revenue was
RMB804,961 million, an increase of
10.3% year on year; the Company's gross written premiums were
RMB612,265 million, an increase of
8.0% year on year, maintaining its industry leadership position;
the value of one year's sales was RMB58,373
million, basically remaining stable from 2019.
- As at the end of the Reporting Period, the Company's investment
assets reached RMB4,095,454 million,
an increase of 14.6% from the end of 2019. During the Reporting
Period, the gross investment yield was 5.30%, the net investment
yield was 4.34%. The comprehensive investment yield taking into
account the current net fair value changes of available-for-sale
securities recognized in other comprehensive income was 6.33%.
- During the Reporting Period, net profit attributable to equity
holders of the Company was RMB50,268
million.
- The board of directors of the Company recommended the payment
of a final dividend of RMB0.64 per
share (inclusive of tax). The foregoing profit distribution plan is
subject to the approval by the 2020 Annual General Meeting to be
held on 30 June 2021
(Wednesday).
Business Overview of
2020
In 2020, the unexpected outbreak of the COVID-19 pandemic posed
great challenges to the development of the insurance industry. On
the one hand, as the macro economy slowed down significantly,
demands for insurance was difficult to be fully released; on the
other hand, the onsite insurance operation activities were
restricted, affecting both the business development and agent
team-building. Under the combined influence of multiple factors,
the growth of the life insurance industry for the year
declined.
Despite a tough and complicated external environment, the
Company pushed forward high-quality development, adhered to the
strategic core of "Three Major Transformations, Dual Centers and
Dual Focuses, Asset-liability Interaction", and upheld 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 the reform and development, and realized a steady and sound
growth of its key performance indicators, such as embedded value
and premium income. During the Reporting Period, the Company
achieved the coordinated growth of business scale and value, pushed
forward the asset-liability interaction, accelerated the
implementation of technological achievements, improved both the
quality and efficiency of operations and services, and achieved
remarkable results for the Company's high-quality development.
During the Reporting Period, despite the impact of the
pandemic, the Company demonstrated development resilience with key
business indicators reaching their record high. In 2020, the
Company's gross written premiums amounted to RMB612,265 million, exceeding RMB600 billion for the first time, an increase of
8.0% year on year, maintaining its industry leadership position. As
at the end of the Reporting Period, the embedded value of the
Company exceeded RMB1 trillion,
reaching RMB1,072,140 million, an
increase of 13.8% from the end of 2019.
During the Reporting Period, the Company continued to
prioritize business value, and its business structure was further
optimized. Premiums from new policies amounted to RMB193,939 million, an increase of 7.0% year on
year. In particular, first-year regular premiums amounted to
RMB115,421 million (a year-on-year
increase of 5.5%), which accounted for 97.96% of long-term
first-year premiums. The percentage of premiums from designated
protection-oriented products in the first-year regular premiums
rose by 0.6 percentage point year on year, with a continuous
increase in the average premiums per policy. Renewal premiums
amounted to RMB418,326 million (a
year-on-year increase of 8.4%), which accounted for 68.32% of the
gross written premiums (a year-on-year increase of 0.29 percentage
point). Facing a complicated external environment in 2020,
first-year regular premiums with a payment duration of ten years or
longer reached RMB56,398 million, a
decrease of 4.7% year on year. In 2020, the value of one year's
sales of the Company was RMB58,373
million, a decrease of 0.6% year on year, basically
remaining stable. As for the end of the Reporting Period, the
number of long-term in-force policies was 317 million, an increase
of 4.6% from the end of 2019. During the Reporting Period, the
surrender rate was 1.09%, a decrease of 0.80 percentage point year
on year.
During the Reporting Period, the Company continued to enhance
the asset-liability management and the asset-liability interaction
created synergy on two ends. With enhanced emphasis on
asset-liability management, the Company strengthened its
asset-liability matching, established a management system with
clear rights and responsibilities as well as orderly operation, and
improved relevant systems and processes. To fully implement the
asset-liability management philosophy, the Company effectively
coordinated various processes, including business planning,
operations and services, product development and investment
management. In 2020, the Company adhered to the market-oriented
approach, achieved significant improvement in its asset allocation
capability and realized a stable increase in its investment income.
The gross investment income reached RMB198,596 million, an increase of 17.5% 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 policy on pre-tax deduction of underwriting and
policy acquisition costs adopted in 2019 and the change in gross
investment income, net profit attributable to equity holders of the
Company was RMB50,268 million, a
decrease of 13.8% year on year.
Insurance Business
During the Reporting Period, gross written premiums from the
life insurance business of the Company amounted to RMB480,593 million, rising by 7.6% year on year;
gross written premiums from the health insurance business reached
RMB115,089 million, rising by 9.0%
year on year, and gross written premiums from accident insurance
business were RMB16,583 million,
rising by 11.0% year on year.
In 2020, the Company continued to push forward the
customer-centric sales deployment of "Yi Ti Duo Yuan". The
individual agent business sector focused on the individual customer
market and the capability in value creation was prominent. The
diversified business sector targeted institutional customers and
its business positioning was clearly defined, which saw effective
improvement in its professional operation capability. With emphasis
on business development driven by productive sales force, the
structure of its sales force was further optimized. As at the end
of the Reporting Period, the Company's total sales force was
approximately 1.458 million, maintaining the leading position in
the industry.
Individual Agent Business Sector
In 2020, facing the severe impact of the pandemic on the
economic and social development as well as the insurance industry,
the individual agent business sector adhered to the priority of
business value, pushed forward transformation and upgrade of its
sales management, continued to optimize its business structure, and
realized continuous growth in both business scale and value against
unfavourable market conditions. During the Reporting Period, the
gross written premiums from the sector amounted to RMB511,044 million, an increase of 5.5% year on
year. First-year regular premiums were RMB99,555 million, an increase of 3.7% year on
year. The designated protection-oriented business continued to
grow, with its first-year regular premiums and the average premiums
per policy rising significantly year on year. As affected by the
pandemic, first-year regular premiums with a payment duration of
ten years or longer in the sector were RMB56,183 million, a decrease of 2.2% year on
year. Renewal premiums amounted to RMB391,272 million, an increase of 5.4% year on
year. The capability of the individual agent business sector in
value creation was prominent. The value of one year's sales of the
sector was RMB57,669 million, an
increase of 1.2% year on year. New business margin of one year's
sales of the sector was 47.9%, which remained stable compared to
2019.
In 2020, the individual agent business sector firmly implemented
the strategy of business development driven by productive sales
force, and fully upgraded the Agent Management and Compensation
System in line with the deployment of "Dingxin Project" to enhance
the quality of the sales force. Despite certain fluctuation in the
size of the sales force due to the impact of the pandemic, the
Company firmly adhered to high-quality development by further
tightening the agent recruitment, strengthening sales force
management and optimizing the structure of the sales force. As at
the end of the Reporting Period, the number of agents of the sector
was 1,378,000, including 841,000 agents from the general agent team
and 537,000 agents from the upsales team, and the monthly average
productive agents increased by 9.7% year on year.
Diversified Business Sector
In 2020, 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 regulatory 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 business. Although business
development was generally affected by the pandemic, the diversified
business sector consolidated its advantages, and demonstrated an
upward trend in business development. During the Reporting Period,
gross written premiums from the sector amounted to RMB101,221 million, an increase of 22.6% year on
year.
Bancassurance Channel. With equal emphasis on business
scale and value as its long-term goal, the bancassurance channel
focused on bank agency business and steadily pushed forward the
business transformation. During the Reporting Period, gross written
premiums from the channel amounted to RMB41,240 million, an increase of 62.1% year on
year. First-year regular premiums amounted to RMB15,748 million, an increase of 26.1% year on
year. Renewal premiums amounted to RMB25,109
million (a year-on-year increase of 100.6%), accounting for
60.89% of the gross written premiums from the channel (a
year-on-year increase of 11.69 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 29,000, and both the
quarterly average active managers and the production capacity per
manager increased substantially.
Group Insurance Channel. The group insurance channel
continued to deepen its diversified business development and
improve profitability, reinforced the expansion of key business
sectors, and achieved steady development in different business
fields. During the Reporting Period, gross written premiums from
the channel were RMB28,872 million,
an increase of 0.1% year on year. Short-term insurance premiums
were RMB24,970 million, an increase
of 4.8% year on year. As at the end of the Reporting Period, the
number of direct sales representatives was 51,000, and the number
of high-performance personnel increased by 33.3% from the end of
2019.
Other Channels. In 2020, gross written premiums from
other channels reached RMB31,109
million, an increase of 10.0% year on year. The Company
actively participated in all kinds of government-sponsored health
insurance businesses, which maintained the leading market position.
As at the end of the Reporting Period, the Company carried out over
220 supplementary major medical expenses insurance programs,
providing services to 360 million people. It also undertook over
300 health care entrusted programs, covering 170 million people,
provided supplementary medical insurance to 54 million people, and
offered long-term care insurance protection to 15 million
people.
The Company pushed forward its online insurance business,
consistently increased the supply of online insurance products,
enhanced its online insurance operations and promoted integration
of online and offline sales to provide a more diversified and
convenient channel for customers seeking insurance products and
services. In 2020, the Company's online insurance business saw
greater development opportunities, which resulted in a rapid growth
of its development.
Being customer-centric, the Company fully leveraged the
collaborative advantages of the fellow members of China Life
Insurance (Group) Company and actively provided customers with a
series of quality financial and insurance service solutions. In
2020, premiums from property insurance cross-sold by the Company
exceeded RMB 20 billion for the first
time, an increase of 14.0% year on year, whereas new bids of
enterprise annuity funds and pension security products of China
Life Pension Company Limited cross-sold by the Company grew by
20.7% year on year. The Company entrusted China Guangfa Bank
Co. Ltd. ("CGB") to sell bancassurance products, with first-year
regular premiums increasing by 29.0% year on year. The number of
new debit cards and credit cards jointly issued by the Company and
CGB exceeded 1,150,000. Meanwhile, the Company gave full play to
the brand advantages on the comprehensive financial strength, and
worked with CGB and China Life Property and Casualty Insurance
Company Limited to carry out various operation activities to
provide customers with diversified and individualized services,
thus fostering a sound synergy and mutual benefits.
Investment Business
In 2020, the global economy was severely impacted by the
COVID-19 pandemic, which then started to recover as governments
around the world introduced macro hedging policies. By effectively
coordinating the pandemic prevention and control and the economic
and social development, and accelerating the formation of a new
development pattern of "dual circulation", China's economy was the first to pick up and
continued to recover from the impact of the pandemic, and
China was the world's only major
economy to achieve growth in 2020. Throughout the year, the
interest rate of the domestic bond market fluctuated greatly, which
rebounded significantly after falling to a historical low level in
early April and went higher than the level at the beginning of
2020; at the same time, the stock market also fluctuated upward
after falling to the lowest level of the whole year at the end of
March with an obvious structural market characteristics.
The Company actively responded to the complex and ever-changing
investment environment, adhered to the fundamental principle of
asset-liability interaction management, firmly implemented its
strategic allocation plan for assets with medium- and long-terms,
and made flexible tactical allocation based on market situations.
In 2020, the Company mainly allocated to three major asset types.
Firstly, in respect of the liability-matching portfolios, the
Company effectively seized the opportunity of interest rate
recovery and a supply increase in the second half of 2020, and
increased allocation mainly in government bonds with long duration
to further lengthen the duration of assets and narrow the duration
gap between assets and liabilities; secondly, in respect of
non-standard fixed income assets and quasi-fixed income assets with
stable cash flows and higher interest income, to which the Company
insisted on allocating as much as possible on the premise of
controlling credit risks by proactively dealing with the situation
of the decreasing financing demands and intensified market
competitions; thirdly, in respect of equity assets with potential
elastic return in the future, the Company continued to increase its
allocation to core assets under the structural market environment,
and optimized the tactical investment of equity assets to increase
the yields from the asset portfolios.
In 2020, the Company reshaped its organizational structure
according to investment value chain and established a
market-oriented incentive and restraint mechanism, which resulted
in a significant improvement of its coordinated management
capability in asset allocation. In respect of entrusted management,
the Company introduced a competitive mechanism that compared
entrusted asset managers within and outside China Life, eliminating
bad performers through strict assessment. The constant optimization
of investment management system was expected to have long-term and
far-reaching effects on the Company's insurance fund
investment.
As at the end of the Reporting Period, the Company's investment
assets reached RMB4,095,454 million,
an increase of 14.6% from the end of 2019. Among the major types of
investments, the percentage of investment in bonds rose to 41.97%
from 39.48% as at the end of 2019, the percentage of term deposits
changed to 13.32% from 14.98% as at the end of 2019, the percentage
of investment in debt-type financial products changed to 11.08%
from 11.62% as at the end of 2019, and the percentage of investment
in stocks and funds (excluding money market funds) rose to 11.31%
from 11.00% as at the end of 2019.
During the Reporting Period, the Company's net investment income
was RMB162,783 million, an increase
of RMB13,674 million from 2019,
rising by 9.2% year on year. Due to the impact of an overall
decline in interest rate during 2020 as well as the maturity of the
existing investment assets, the net investment yield was 4.34%,
down by 27 base points from 2019. By closely keeping pace with
equity market fluctuations and paying constant attention to risk
exposures, the Company timely cashed-in spread income, continued to
optimize its position structure, and achieved stable investment
income. The gross investment income of the Company reached
RMB198,596 million, an increase of
RMB29,553 million from 2019. The
gross investment yield was 5.30%, up by 6 base points from 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 6.33%, down by 95 base points
from 2019.
The Company's debt-type financial products mainly concentrated
on the sectors such as transportation, finance, 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 external rating institutions.
In general, the quality of the Company's debt-type financial assets
was in good condition and the credit risks were well
controlled.
The Company insisted on the prudent investment philosophy and
carried out comprehensive risk management to prevent various
investment risks. Based on a disciplined and scientific internal
rating system and a multi-dimensional management mechanism of risk
limits, the Company scrutinized credit profiles of targets and risk
exposure concentration before investment in a prudent manner and
carried out ongoing tracking after investment, effectively
controlling credit risks through early detection, early warning and
early disposal. Under a market environment where credit default
events occurred frequently, no credit default event occurred for
the Company in 2020.
2021 Outlook
2021 is the beginning of the 14th Five-Year Plan and also a
critical year for the Company's high-quality development. We will
further push forward the "China Life Revitalization" initiative,
and continue to maintain high-quality development. We will also
fully engage in the new development pattern of "dual circulation"
and strive to achieve stable development, business quality
improvement, reform and innovation, and risk prevention and
control. We will take development as the top priority, emphasize
business value, and achieve business development driven by a
productive sales force; fully push forward the "Dingxin Project"
reforms, accelerate marketization, and further enhance internal
driving forces; continue to reinforce the technology and innovation
driven development, accelerate operational digitalization, and
provide customers with "convenient, quality and caring" services;
continue to strengthen asset-liability interaction, strictly
implement the regulatory requirements, continuously improve the
risk prevention and control system, strictly prevent key risks, and
enhance our corporate governance capability.
With a profound historical accumulation, China Life has always
played an important role of an explorer and pioneer of China's life insurance industry. Time goes by
with dreams ahead. In this new promising era, we will stick to our
original aspiration and forge ahead on the journey of building a
world-class life insurance company, with a view to rewarding our
shareholders and people from all walks of life with satisfactory
operating performances.
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 2020, the Company had approximately
317 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.
The 2020 consolidated financial statements of the Company
prepared in accordance with the International Financial Reporting
Standards have been audited by Ernst & Young based on the
International Standards on Auditing and Ernst & Young has
issued standard unqualified opinions on the 2020 consolidated
financial statements.
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