China Life Insurance Company reported that its net profit for the first half of 2018 rose by 34% year-on-year.
The country’s second-biggest insurer by market value said on Thursday that its net profit for January to June 2018 reached RMB16.42 billion (US$2.39 billion), up from RMB12.24 billion (US$1.78 billion) during the same period last year, Reuters reported.
The increase in profit came despite a drop in investment income. China Life’s gross investment income decreased by 14% to RMB48.8 billion (US$7.09 billion) from RMB56.66 billion (US$8.24 billion) a year ago.
Total revenue was RMB401.69 billion (US$58.4 billion), an increase of 1.4% year-on-year, while its gross written premiums were RMB360.48 billion (US$52.41 billion), an increase of 4.2%. Total assets have breached the RMB3 trillion mark.
China Life, like other large insurers in the market, is benefiting from the government crackdown on the insurance industry, which hurt smaller insurers. These smaller firms relied more on high-yield, high-risk insurance products to compete with larger rivals.
The agency channel of China Life received considerable investment following the launch of Sheng Shi Zhen Pin, a product with short payment terms, high cash value, and attractive returns, a report by Daiwa Capital Markets said.
“We understand that China Life saw positive QoQ (quarter-on-quarter) agent headcount expansion in 2Q18, helped by improved agent income and retention from the new product launch and increased expenses in agency channel,” Daiwa said.
