HONG KONG, Aug. 25, 2021
/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 2021 (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 RMB4,652,793 million,
an increase of 9.4% from the end of 2020. The Company's embedded
value was RMB1,142,811 million, an
increase of 6.6% from the end of 2020.
- During the Reporting Period, the Company's total revenue was
RMB537,105 million, an increase of
6.5% year on year; the Company's gross written premiums were
RMB442,299 million, an increase
of 3.5% year on year on the high base, further consolidating its
industry leadership; the value of half year's sales for the six
months ended 30 June 2021 was
RMB29,867 million.
- As at the end of the Reporting Period, the Company's investment
assets reached RMB4,457,269 million,
an increase of 8.8% from the end of 2020. During the Reporting
Period, the gross investment yield was 5.69%, the net investment
yield was 4.33%. The comprehensive investment yield taking into
account the current net fair value changes of available-for-sale
securities recognised in other comprehensive income was 5.61%.
- During the Reporting Period, net profit attributable to equity
holders of the Company was RMB40,975
million, an increase of 34.2% year on year.
- The Company will not declare an interim dividend of ordinary
shares for the Reporting Period.
Review of Business Operations in the First Half of
2021
In the first half of 2021, with the worldwide COVID-19 pandemic
continuing to evolve and the domestic economy recovery remaining
unsteady and imbalanced, the demands for insurance consumption were
difficult to be fully released and the scale of insurance sales
force declined, which resulted in new premiums growth pressure for
the life insurance industry. Despite a challenging and complicated
external environment, the Company adhered to high-quality
development and 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". By vigorously pushing forward the reforms for development
while proceeding with regular pandemic prevention and control, the
Company forged ahead with steady progress in all aspects, and
further solidified its comprehensive strengths and competitive
advantages.
With a focus on the "China Life Revitalization" initiative, the
Company consolidated the achievements of reforms under the "Dingxin
Project" and advanced the optimization and implementation of new
business models and operation mechanisms. The customer-centric
sales deployment of "Yi Ti Duo Yuan" moved from an adjustment
period to a period of coordinated advancement, and continued
progress was made in transformation and upgrade. The
market-oriented investment management system was pushed forward
consistently, and the investment value chain operated smoothly,
which further enhanced the Company's capability in deploying and
allocating assets. Operations and services of the Company became
more automated and internet-based, and the Shared Service Center
was put into operation in phases. The Company constantly
strengthened its technologies in terms of the support capability,
responsiveness and stability, which kept on empowering its business
development. Intelligent risk management was developed at a faster
speed, and the Company's capacity and efficiency of management and
control over key risks were further enhanced. The classified and
hierarchical management system for its branches was performed with
greater efficiency, enhancing effectiveness in resource allocation
as well as the guiding role of the system.
During the Reporting Period, in the circumstances where new
premiums of the life insurance industry was under pressure and the
growth of total premiums slowed down, the Company firmly pushed
forward transformation and upgrade, prioritized business value, and
achieved stable development in terms of its key business
indicators. In the first half of 2021, the Company's gross
written premiums amounted to RMB442,299
million, an increase of 3.5% year on year on the high base,
further consolidating its industry leadership. Due to the impact of
the COVID-19 pandemic and the slowdown in the release of demands
for insurance consumption, premiums from new policies were
RMB133,914 million, a decrease of
8.4% year on year. First-year regular premiums were RMB80,674 million, a decrease of 14.3% year on
year, which accounted for 98.91% of long-term first-year premiums.
In particular, first-year regular premiums with a payment duration
of ten years or longer were RMB28,940
million, a decrease of 26.7% year on year. Renewal premiums
amounted to RMB308,385 million, an
increase of 9.7% year on year, which accounted for 69.72% of the
gross written premiums, rising by 3.93 percentage points year on
year. In the first half of 2021, the value of half year's sales of
the Company was RMB29,867 million, a
decrease of 19.0% year on year. As at the end of the Reporting
Period, the embedded value of the Company increased by 6.6% from
the end of 2020 to RMB1,142,811
million, maintaining the leading market position. The number
of long-term in-force policies was 322 million, an increase of 1.6%
from the end of 2020. During the Reporting Period, surrender rate
was 0.67%, rising by 0.06 percentage point year on year.
During the Reporting Period, the Company accumulated assets
with long durations by effectively seizing the opportunity of
allocating to the fixed income assets, and kept close pace with
fluctuations in the equity market so as to realize investment gains
flexibly. In the first half of 2021, the Company registered a
gross investment income of RMB117,638
million, an increase of 22.4% year on year. The gross
investment yield was 5.69%, rising by 35 basis points from the
corresponding period of 2020.
During the Reporting Period, the Company continued to
strengthen the asset-liability interaction and the profitability
was effectively enhanced. Due to the combined impact of the
change in gross investment income and the update of discount rate
assumptions for reserves of traditional insurance contracts, net
profit attributable to equity holders of the Company was
RMB40,975 million, an increase of
34.2% year on year.
Insurance Business
During the Reporting Period, gross written premiums from the
life insurance business of the Company amounted to RMB356,897 million, a year-on-year increase of
3.1%. Gross written premiums from the health insurance business
amounted to RMB76,372 million, a
year-on-year increase of 5.7%. Gross written premiums from the
accident insurance business amounted to RMB9,030 million, a year-on-year increase of
0.7%.
In the first half of 2021, the Company prioritized business
value and further implemented the customer-centric sales deployment
of "Yi Ti Duo Yuan". With the in-depth transformation as the main
objective, the individual agent business sector focused on the
individual customer market and frontline operational units, and
proceeded with the standardized and professional business
management and market-oriented incentive mechanism on an ongoing
basis. The diversified business sector concentrated on professional
operation and efficiency improvement and made coordinated
advancement with the individual agent business sector, which saw
steady progress in various business lines. As at the end of the
Reporting Period, the Company's total sales force was approximately
1.223 million.
Individual Agent Business Sector
In the first half of 2021, despite the continued impacts of the
COVID-19 pandemic and the challenging and complicated market
situations, the individual agent business sector emphasized
business value, deepened the reforms under the "Dingxin Project",
and achieved a relatively stable development. During the Reporting
Period, the gross written premiums from the sector amounted to
RMB363,822 million, an increase of
2.2% year on year. First-year regular premiums were RMB68,648 million, a decrease of 16.5% year on
year. In particular, first-year regular premiums with a payment
duration of ten years or longer were RMB28,866 million, a decrease of 26.7% year on
year. Renewal premiums amounted to RMB285,006 million, an increase of 8.2% year on
year. In the first half of 2021, the value of half year's sales of
the sector was RMB28,969 million, a
decrease of 20.8% year on year. New business margin of half year's
sales of the sector was 36.2%, a decline of 3.1 percentage points
year on year.
In the first half of 2021, as the life insurance industry saw
fluctuation in the size of sales force to a certain extent, the
Company firmly adhered to the team development strategy of
enhancing quality while stabilizing quantity and further tightened
the agent recruitment and retention. As at the end of the Reporting
Period, the number of agents of the sector was 1.15 million,
including 0.719 million agents from the general sales team and
0.431 million agents from the upsales team. Although the number of
monthly average productive agents of the sector decreased on a
year-on-year basis, the number of high-performance agents was
stable, and the foundation of the sales force generally remained
solid. The Company pursued high-quality development and the
strategy of business development driven by productive sales force,
and rolled out the 4.0 version of the regular agent management
system, aiming for higher specialization and professionalism of the
sales force, so as to provide a long-lasting impetus to the new
paradigm for high-quality development of the Company.
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 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. During the Reporting Period, gross
written premiums from the diversified business sector amounted to
RMB78,477 million, an increase of
10.1% 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 RMB34,441 million, an increase of 20.7% year on
year. First-year regular premiums were RMB11,993 million, an increase of 1.1% year on
year. Renewal premiums amounted to RMB22,261
million (a year-on-year increase of 35.2%), accounting for
64.64% of the gross written premiums from the channel (a
year-on-year increase of 6.96 percentage points). The bancassurance
channel constantly strengthened the professional level of sales
team, and its quality was improved steadily. As at the end of the
Reporting Period, the number of the channel's account managers was
26,000, the quarterly average active managers remained stable, and
the production capacity per manager increased substantially.
Group Insurance Channel. The group insurance channel
continued to deepen diversified development, reinforced the
expansion of key business sectors, and achieved steady development
in various business fields. During the Reporting Period, gross
written premiums from the channel were RMB16,690 million, an increase of 1.2% year on
year. Short-term insurance premiums from the channel were
RMB14,821 million, an increase of
3.0% year on year. As at the end of the Reporting Period, the
number of direct sales representatives was 47,000, among which the
number of high-performance personnels increased by 14.7% from the
end of 2020.
Other Channels. In the first half of 2021, gross written
premiums from other channels reached RMB27,346 million, an increase of 4.2% year on
year. The Company actively developed government-sponsored health
insurance businesses. As at the end of the Reporting Period, the
Company carried out over 220 supplementary major medical expenses
insurance programs, providing services to nearly 360 million
people. It also undertook over 300 health care entrusted programs,
covering more than 100 million people; 57 long-term care insurance
programs in 16 provinces and cities, covering 19 million people;
and 88 supplementary medical insurance programs in 19 provinces and
cities, covering 50 million people.
In the first half of 2021, the Company fully complied with the
new regulations of the China Banking and Insurance Regulatory
Commission with respect to the Internet insurance business, and its
Internet insurance business witnessed steady development. The
Company consistently optimized the Internet insurance product
system, stepped up its efforts in launching new products,
satisfying demands from more online scenarios and diversified
customer needs through continuous product segmentation, and it saw
a rapid growth in premiums from the Internet insurance
business.
"Inclusive Healthcare", "Integrated Aged-care" and
Integrated Financial Sector
The Company consistently pursued the strategy of "Inclusive
Healthcare" and "Integrated Aged-care", actively participated in
the Healthy China program, and established a healthcare ecosystem
covering full life cycles by integrating resources of healthcare
and medical services, which constantly improved its health service
capability, strengthened the health service management and explored
the way of boosting the development of the Company's principal
business through health services. China Life Inclusive Healthcare
Service Platform continued to diversify its services while
upgrading its system functions on an ongoing basis. As at the end
of the Reporting Period, more than a hundred types of services were
available on the platform, and the size of the accumulated
registered users of the platform led the industry. The Company
continued to extend the deployment of China Life aged care, and
invested in the construction of several large retirement
communities in Suzhou, Hainan and
Chengdu, etc. The Company set up
the China Life Integrated Aged Care Fund, focused on real assets
such as continuing care retirement communities, medical care
complexes in urban core areas and boutique retirement apartments,
and deployed high-quality resources in the aged care industry such
as rehabilitation, medical care, hospital, health care big data and
health industrial parks. In the first half of 2021, the China Life
Integrated Aged Care Fund reserved a batch of pension and
retirement projects that could meet the diversified and multi-level
demands of customers in the strategic regions such as Beijing-Tianjin-Hebei, the Yangtze River Economic Belt and
Guangdong-Hong Kong-Macao Greater
Bay Area.
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 the
first half of 2021, due to the impact of the comprehensive reform
on auto insurance and the restriction on its growth, premiums from
property insurance cross-sold by the Company were RMB10,080 million and the number of insurance
policies increased by 11.1% year on year. Additional first-year
receipts of enterprise annuity funds and pension security products
of China Life Pension Company Limited cross-sold by the Company
were RMB19,620 million. The number of
new debit cards and credit cards jointly issued by the Company and
China Guangfa Bank Co., Ltd. ("CGB") reached 596,000. The Company
entrusted CGB to sell its bancassurance products, with the
first-year regular premiums recording a relatively stable growth.
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 customer access activities to provide customers with
diversified and personalized services, thus fostering a sound
synergy and mutual benefits.
Investment Business
In the first half of 2021, the external environment was
complicated and challenging and the recovery of domestic economy
remained unsteady and imbalanced. The interest rate of the bond
market trended downwards after a slight increase at the beginning
of 2021, whereas the stock market sustained with structural
features. The Company adhered to the implementation of the medium-
and long-term asset strategic allocation plan and adjusted tactics
in response to the market changes. Firstly, the Company made
allocation to government bonds with long durations by taking
advantage of interest rate hikes, and selected experienced managers
to invest in senior credit bonds; secondly, the Company closely
kept pace with equity market fluctuations, optimized its investment
strategies and position structure, and seized the opportunity to
realize investment gains; thirdly, according to the decline in the
supply of appropriate non-standard assets, the Company explored the
new strategy for alternative investments and optimized the
entrustment mode of alternative investment management for creating
an alternative investment portfolio with prime prospects.
As at the end of the Reporting Period, the Company's investment
assets reached RMB4,457,269 million,
an increase of 8.8% from the end of 2020. Among the major types of
investments, the percentage of investment in bonds rose to 44.23%
from 41.97% as at the end of 2020, the percentage of term deposits
changed to 12.45% from 13.32% as at the end of 2020, the percentage
of investment in debt-type financial products changed to 10.44%
from 11.08% as at the end of 2020, and the percentage of investment
in stocks and funds (excluding money market funds) changed to 9.88%
from 11.31% as at the end of 2020.
In the first half of 2021, the Company's net investment income
was RMB89,764 million, an increase of
RMB12,373 million from the
corresponding period of 2020, rising by 16.0% year on year. Since
the Company consistently increased its allocation in bonds with
long durations in recent years and continued to diversify the type
of fixed income products, net investment yield was 4.33% for the
first half of 2021, up by 4 basis points from the corresponding
period of 2020, remaining relatively stable. The Company seized the
market opportunities to flexibly adjust the pace of realizing gains
from equity products, so as to achieve steady contribution to the
profits. Gross investment income of the Company reached
RMB117,638 million, an increase of
RMB21,504 million from the
corresponding period of 2020. The gross investment yield was 5.69%,
up by 35 basis points from the corresponding period of 2020. The
comprehensive investment yield taking into account the current net
fair value changes of available-for-sale securities recognised in
other comprehensive income was 5.61%, up by 21 basis points from
the corresponding period of 2020.
Outlook
2021 is the beginning of the 14th Five-Year Plan period and also
the first year of China's new
journey toward fully building a modern socialist country.
High-quality development is the theme of China's economic and social development for
the 14th Five-Year Plan or even a longer period of time. Based on
the new stage of development, along with the progress of the
Healthy China program and the national strategy of actively coping
with the aging population, we firmly believe that a vast "blue sea"
will be opened up for the life insurance industry. In the
meanwhile, industry restructuring is taking place at a faster
speed, new development modes are taking shape, and new growth
drivers are evolving rapidly, which further demonstrate the
importance and urgency of transformation and upgrade.
All good principles should adapt to changing time to remain
relevant, so we should keep abreast of the new development trend of
times. Being customer-centric, the Company will stick to the
protection role of insurance, resolutely push forward the update of
business model, accelerate digital transformation, optimize the
product and service system, deeply implement the strategy of
"Inclusive Healthcare" and "Integrated Aged-care", consistently
optimize the market-oriented system and mechanism, and improve the
long-term risk prevention and control mechanism, with a view to
making a greater achievement in high-quality development and
rewarding the 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 30 June 2021, the Company had approximately 322
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 2020
filed with the U.S. Securities and Exchange Commission, or SEC, on
29 April 2021; 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 (Overseas) Company Limited