China Life Jan-Aug Premium Fell 6.44%

The premium revenue China Life Insurance Co., Ltd. (NYSE: LFC, SEHK: 2628, and SSE: 601628) gained in the first eight months of this year reached CNY 210.7 billion, down 6.44 percent from a year ago, according to statistics the biggest Chinese life insurer released on September 16.

It is the sixth consecutive month for the company to suffer negative premium revenue growth this year and available data shows that its premium revenue fell 13.3 percent, 15 percent, 16.5 percent, 11.4 percent and 5.8 percent in March, April, May, June and July, respectively. The negative growth should be mainly attributed to rising importance it attaches to adjusting business structure and the situation is expected to be changed in the fourth quarter of the year, Wan Feng, president of the company, said in an interview recently.

The company's premium revenue rose sharply driven by bancassurance business last year. On the call of the China Insurance Regulatory Commission, it slowed down such business this year and pays more attention to the sales of long-term installment insurance and personal insurance instead. As a result, the premium revenue it gained from universal life insurance and investment-linked insurance dropped to a large extent, which dragged its aggregate premium revenue in turn.

However, quality of its insurance policies rises amid the premium revenue fall. Statistics show that the premium revenue it gained from risk insurance policies in the first half of this year went up by 11.2 percent year on year while that from investment insurance policies slid 15.3 percent in the meantime. The proportion of installment insurance sold this year rose to 22.15 percent from previously 18.34 percent and that of installment insurance with terms not shorter than 10 years increased by 15 percentage points to 46.3 percent. All those figures indicate that it has achieved a lot in business structure adjustment, pointed out Su Hengxuan, vice president of the company.

China Pacific Insurance (Group) Co., Ltd. (CPIC and SHSE: 610601) has experienced negative premium revenue growth for 11 consecutive months due to business structure adjustment from last September. The premium revenue growth it suffered in the first eight months of this year stood at about one percent, which indicates that its premium revenue fall will be brought to an end soon.