China Life Insurance, the country's leading life insurer, says it may face keener competition in the market after posting a better than expected first-half net profit.
Earnings at the state-owned insurer fell 31.99 per cent to 15.84 billion yuan (HK$18.05 billion), hurt by a hefty loss on investments and higher catastrophe claims.
Still, the result was slightly higher than average analyst expectations of an 11.7 billion yuan net profit, according to estimates compiled by Reuters.
'Competition in the life insurance industry will become more intensive and there will still be uncertainties in the capital markets,' the Beijing-based company said in a statement filed with the Hong Kong stock exchange. 'These factors may have a certain impact on the company's development of insurance business and investment income.'
Ping An Insurance (Group), the nation's second-largest insurer, reported on August 15 a first-half net profit of 9.7 billion yuan, a 2 per cent decline from a year earlier, as strong premium growth helped offset lower investment returns.
China Life said investment income fell 47.41 per cent as the tumbling stock market led to 6.49 billion yuan in unrealised losses for its equity investments.
In view of the tightening credit environment, China Life had 'timely adjusted its investment strategy' and 'further optimised the investment portfolio', the statement said.