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China Life, the country's flagship life insurer, is gearing up to further its product restructuring.
The move is expected to lift the insurer's profit margins and boost its leading position in the highly competitive domestic market.
Top priority is being given to development of risk-type products, followed by other group and individual accident and healthcare products to generate more profit, according to senior officials of the firm.
"China Life will aim to consolidate its leading position in China's life insurance market and continue to focus on its key objectives of increasing investment income and further strengthening risk controls," said Wang Xianzhang, chairman and president of China Life, a Fortune 500 company listed in both Hong Kong and New York since last December.
Wang said yesterday the assets under his firm's management could jump to 500 billion yuan (US$60.38 billion) by the year end from the current 340 billion yuan (US$41.06 billion).
"We will adopt a two-wheeled strategy to further cement our financial strength in the second half of the year," said Wang, referring to increasing sales of risk-type premium products and better management of its investments pools.
The company announced last week that its unaudited consolidated total revenues in the first six months amounted to 38.945 billion yuan (US$4.70 billion), representing a 32.8 per cent increase over the corresponding period of the previous year.
And if judged by Chinese accounting standards, its total premiums jumped to 100.9 billion yuan (US$12.18 billion) in the first seven months of the year.
The rosy performance saw it take over half of the total life stakes in the market, after its market share stood at 45 per cent at the end of last year.
As of today, China is home to 23 life insurers, including domestic companies and branches of or joint ventures with foreign companies.
But its unaudited consolidated net profit was 2.812 billion yuan (US$339.61 million), a 10.1 per cent decrease over the corresponding period of the previous year, primarily due to "significant unrealized losses in investment income."
"This is largely related to the sluggishness and volatility of the domestic capital market in the first half of the year," said Liu Jiade, vice-president of China Life.
Talking about the ongoing talks with 19 overseas insurers for stake takeovers, Miao Fuchun, vice-president of the company, said the talks were still at a very preliminary stage, and there were many thorny issues to be reviewed before a final agreement could be inked.
Foreign media have reported China Life is now in talks with 19 overseas insurers, including the American International Group, about stake takeovers.
(China Daily September 3, 2004)
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