China Life looks to new technology to boost insurance sales as interim profit misses forecasts
The company remains positive about the long-term outlook for its business
China Life Insurance, the nation’s largest insurer in terms of premium income, is looking to new technology to boost sales and efficiency after reporting half-year profit that missed forecasts.
The company has already teamed up with Chinese internet search giant Baidu to invest US$1 billion in artificial intelligence, blockchain and other start-ups, and wants to use the new technology to boost sales to remote areas, cut down usage of paper documents and help manage risks.
“We are very keen on the digitalisation of our sales and claims channels. We believe digitalisation will enhance our service quality and turnover,” said China Life president Lin Dairen, in a post results briefing in Hong Kong on Friday.
Earlier this week its closest rival, Ping An Insurance, also said it would push into the development of new technology. Its technology business made up 7 per cent of operating profit in the first half, the first time the business became a key profit contributor.
China Life has 1.65 million sales agents registered with its electronic platform, China Life e-Bao, while turnover on the platform in the first half rose by 49.2 per cent year on year.
China Life shares fell 1.6 per cent on Friday to HK$18.40. The company had on Thursday night announced an interim net profit growth of 34 per cent to 16.42 billion yuan (US$2.38 billion), below a forecast of 21.4 billion yuan or 75 per cent growth estimated by analysts polled by Bloomberg.
The company saw its investment income yield decrease to 3.7 per cent in the first half from 4.62 per cent in the same period a year earlier, after a downturn in Chinese stock markets. Vice-president Zhao Lijin said the company would keep a reasonable level of stock investment but would focus more on stocks offering long-term returns. It would also continue to invest in long-term fixed income products.
Lin added that he was positive about the outlook for the company despite volatile financial markets worldwide.
“Although overseas markets have a lot of uncertainty, China’s fundamentals remain positive. We have restructured our products to focus more on their protection function and we believe demand for insurance products will increase with the economic growth of China,” Lin said.