China Life’s profit jumps almost three fold in first nine months on investment gains

Net income for the first three quarters jumped 190 per cent from a year ago to 57.7 billion yuan (US$8.2 billion) based on the Chinese accounting standard, the insurer said in an exchange statement. The value of new business, a gauge of future profitability, grew by 20 per cent in the period, it said. China Life did not provide data for the third quarter alone in the report.

A turnaround on China’s Shanghai Composite Index significantly boosted profits of insurance companies, which are allowed to invest as much as 30 per cent of their assets in equities. The benchmark has risen 18 per cent so far this year, reversing an annual loss of 25 per cent in 2018, as policymakers loosen policies to offset the fallout of the China-US trade war and foreign inflows accelerate.

China Life’s investment yield was 5.72 per cent in the nine-month period, an increase of 2.31 percentage points from a year earlier, it said in the quarterly report. Premium incomes increased 6.1 per cent from a year ago to 497 billion yuan and the number of sales people rose by 10 per cent, to 1.95 million, it said.

Shares of China Life have surged 51 per cent this year in Shanghai and its Hong Kong-traded stock has risen 19 per cent.