China Life Adjusted Investment Structure in Q1

During the first three months of this year, Beijing-based China Life Insurance Co. (601628.SH, 2628.HK) raised the proportion of bond investment and money funds.

According to the first-quarter financial report of the listed insurer, China Life in the reporting period realized the 1.11% rate of return on investment. Tradable financial assets of the company were CNY 16.5 billion, a year-on-year increase of 69.9%, with the bonds for trading accounting for the most. In the same period, the firm saw the money funds go up 72.6%.

In the future, China Life vows to further optimize the investment structure. The equity investment will be made according to the change of market; and the fixed-income instruments will still be the most important part in the company's assets allocation.

During the three months ended March 31, the financial report showed that China Life earned net profits of CNY 7.97 billion, reducing 22% compared with the corresponding period in the previous year. The company explained that less investment yields resulted in the decrease of net profits.

As for the premiums from this January to March, the figure reached CNY 123 billion, rising 11.5% year on year. Still, such a growth rate was slower compared with last year; but two other listed insurance companies of China's Mainland also suffered the slowdown in the premium growth.

During the reporting period, it achieved a growth of higher than 30% in the new personal insurance policies. Because the regular-premium products have a higher commission rate, China Life's commission payments were up 15% in the first quarter, about four percentage points higher than the premium growth in the period.

As the country's biggest life insurer, China Life in 2010 gained the net profits of CNY 33.7 billion, a growth of 2.27% from the previous year. Over the past year, China Life Property and Casualty Insurance Company Limited realized the net profits of CNY 613 million, a year-on-year leap of 666%. China Life Insurance Asset Management Co. (China Life AMC) saw the net profits hike 20.24% year on year to CNY 493 million in the whole year of 2010. China Life Pension Company Limited, however, suffered losses of CNY 194 million in 2010. Currently, China Life has a 40% stake, a 60% stake and an 87.4% stake in China Life Property and Casualty, China Life AMC and China Life Pension respectively.