China Life Insurance gears up to tackle slowing market

PUBLISHED : Thursday, 27 March, 2014, 12:58am
UPDATED : Thursday, 27 March, 2014, 12:58am

China Life Insurance, the mainland's largest insurer, hopes to secure better profit margins by boosting longer-term premium growth and improving sales channels amid an expected slowdown in the business.

New company president Lin Dairen said yesterday it would prioritise value for its business and target stable volume growth.

"The life insurance business will see slower growth in the coming decade," Lin said, adding that transformation and adjustment of China Life's product mix would be needed.

China Life said on Tuesday profit rose 124 per cent to 24.8 billion yuan (HK$30.9 billion) last year on a 93 per cent jump in investment income. Net premium growth slowed to 0.8 per cent, after growing 8.7 per cent in the first half. A 2.2 per cent growth in new business value also lagged behind industry rivals.

Chairman Yang Mingsheng said the firm would continue its efforts to boost longer-term regular premium income, which offered higher margins.

The agent sales channel would aim to boost growth in longer-term regular premium business with a payment period of 10 years or longer, while the bancassurance sales channel would focus on sales of five-year or longer regular premium products.

Yang said the capital market would be volatile this year, and China Life would diversify its investment portfolio to include pension, property, non-listed equities and local government financing platforms that offered stable, long-term returns.

The company would also look for investment opportunities in overseas equities markets, chief financial officer Yang Zheng said, adding that fixed-income investment would remain a major part of the portfolio.

The firm was not under capital pressure, he said.