China Life, laggard in nation’s assurance industry, is expected to catch up in the second half
Listed life insurers to see solid growth after regulators crack down on competitors selling short-term policies
China Life, the country’s largest life insurer, is due to announce interim results on Thursday and although the group has lagged behind peers in growth in recent reporting periods, analysts expect a solid performance for the first six months.
China’s life insurers are expected to prove good growth as their product mix improves, and listed players are capturing market share after platform insurers like Anbang and Foresea faced curbs by regulators for selling aggressive short-term policies, said HSBC analysts in a note issued on Tuesday.
The analysts estimate China Life’s net profit to shareholders to reach 12.7 billion yuan (US$1.9 billion) for the first six months, up 21.8 per cent year on year, driven by 20.7 per cent growth in new business value.
“Ping An and CPIC (China Pacific Insurance) continue to deliver sector-leading growth, China Life and PICC Group are lagging, but listed names should deliver decent life new business value growth due to improving business mix,” they wrote in the note.
Ping An Insurance announced on Thursday that net profit to shareholders had risen 6.5 per cent in the first half to 43.4 billion yuan. When excluding a 9.5 billion yuan gain from internal restructuring in the first half of 2016, profit growth was 38.8 per cent year on year.
Analysts with JP Morgan were more bullish about China Life, estimating a 41 per cent growth to boost net profit to 14.6 billion yuan, according to a recent report.
