CHINA LIFE INSURANCE COMPANY LIMITED ANNOUNCES 2022 ANNUAL RESULTS (H SHARES)
HONG KONG,March 29,2023 --China Life Insurance Company Limited (SSE: 601628,SEHK: 2628) announces the audited consolidated results of the Company (China Life Insurance Company Limited and its subsidiaries) for the year ended 31 December 2022 (the "Reporting Period") prepared under the International Financial Reporting Standards today.
Financial Summary
As at the end of the Reporting Period,the Company's total assets reached RMB5,251,988 million,an increase of 7.3% from the end of 2021. The Company's embedded value reached RMB1,230,519 million,an increase of 2.3% from the end of 2021,and the business value of the Company continued to lead the industry.
During the Reporting Period,the Company's total revenues were RMB804,388 million; the Company's gross written premiums were RMB615,190 million,retaining the industry leadership position; the value of one year's sales was RMB36,004 million.
As at the end of the Reporting Period,the Company's investment assets reached RMB5,064,991 million,an increase of 7.4% from the end of 2021. During the Reporting Period,the Company's gross investment income was RMB187,751 million. The gross investment yield was 3.94%,and the net investment yield was 4.00%.
During the Reporting Period,net profit attributable to equity holders of the Company was RMB32,082 million.
The Board of Directors of the Company recommended the payment of a final dividend of RMB0.49 per share (inclusive of tax). The foregoing profit distribution plan is subject to the approval by the 2022 Annual General Meeting to be held on 28 June 2023 (Wednesday).
Review of Business Operations in 2022
In 2022,with increased complexity,severity and uncertainty of the domestic environment for economic development,the life insurance industry was still undergoing profound adjustment and transformation,and the growth of premium income of the industry slowed down further. By adhering to the guideline of seeking progress while maintaining stability,and sticking to the original function of insurance,the Company constantly deepened supply-side reforms and firmly pursued high-quality development. As a result,its overall business operations achieved a steady performance with sound momentum,and its business scale and value continued to lead the industry.
Pursuing high-quality development,comprehensive strengths were consolidated further. Pursuing high-quality development and securing its development fundamentals,the Company further consolidated its comprehensive strengths in 2022. As at the end of the Reporting Period,the Company's total assets and investment assets both exceeded RMB5 trillion,of which total assets reached RMB5.25 trillion,and investment assets reached RMB5.06 trillion. During the Reporting Period,the Company continued to strengthen its asset-liability interaction,with its gross investment income reaching RMB187,751 million,and net profit attributable to equity holders of the Company was RMB32,082 million. As at the end of the Reporting Period,the comprehensive solvency ratio and core solvency ratio continued to maintain at relatively high levels,which were 206.78% and 143.59% respectively. The number of in-force policies of long-term insurance held by the Company was 325 million.
Prioritizing business value,key performance indicators remained stable. During the Reporting Period,the Company's gross written premiums amounted to RMB615,retaining the industry leadership position. Premiums from new policies reached RMB184,767 million,a year-on-year increase of 5.1%. Its first-year regular premiums were RMB96,426 million,decreasing by 2.0% year on year,but the business structure was optimized to some extent with the first-year regular premiums with a payment duration of ten years or longer reaching RMB41,821 million,and registering a year-on-year increase of 0.3%. The business value of the Company continued to lead the industry as its value of one year's sales was RMB36,004 million,and its embedded value reached RMB1,a year-on-year increase of 2.3% from the end of 2021. The surrender rate was 0.95%,decreasing by 0.25 percentage point year on year.
Promoting reforms and innovation with great efforts,transformation effects gradually emerged. The Company consistently deepened reforms and innovation and focused on transformation and upgrading in key business areas,so as to inject new driving forces for high-quality development in a constant manner. It proceeded further with the construction of the sales system,and accelerated the optimization of its agent recruitment and development. The structure and quality of its sales force were gradually improved and the productivity per agent increased significantly. Product innovation and supply capacities were constantly enhanced. The Company was among the first batch of companies launching the third-pillar private pension insurance products,and consistently expanded provision of insurance products and services for new business forms and new urban residents. The innovation of business operations and services as well as the centralized business operation were continuously deepened. It realised nationwide promotion of sharing for operations in policy administration and underwriting,which significantly improved the service experience. Digital transformation reached a new level. It took the lead in data management capability in the industry and was the first company awarded the highest level certification for the sophistication of data management capability in the industry.
At the end of 2022,the Company launched the "Eight Reform Programs" which aims to drive its future development and focuses on innovation and breakthroughs in the aspects of Party building as the guide,mechanism optimization,sales system reforms,resources integration,management innovation and ecological driving forces,etc. With the "Party Building Foundation Program" as the guiding principle,the "Talent Development Program" as the support,the "Sales Channel Strengthening Program",the "Integrated Sales Synergy Program",the "Client Resources Management Program",the "People-centered Government-corporate Collaboration Program" and the "Healthcare and Aged-care Ecosystem Program" as the mainstay,and taking the "FinTech and Digitalization Program" as the solid foundation,the Company will deeply implement the fundamental restructuring and tackle key problems,proactively target new customers,new business models and new capabilities,to comprehensively upgrade its driving forces,and accelerate changes in quality,efficiency and growth drivers.
Insurance Business
During the Reporting Period,gross written premiums from the life insurance business ofthe Company amounted to RMB485,642 million,a year-on-year increase of 0.9%,grosswritten premiums from the health insurance business were RMB115,329 million,a year-on-year decrease of 4.4%,and gross written premiums from accident insurance businesswere RMB14,219 million,a year-on-year decrease of 13.3%.
In 2022,the life insurance industry was still undergoing profound transformation,and its overall development was under pressure. The Company insisted on pursuing high-quality development,and achieved steady progress in its insurance businesses with its industry leading advantages consolidated further. It firmly proceeded with the construction of the sales system,comprehensively upgraded its fundamental agent force management rule,and the size of its sales force was gradually stabilized with optimized structure and enhanced quality. As at the end of the Reporting Period,the number of its total sales force was approximately 729,000.
Individual Agent Business Sector
The individual agent business sector strived to make progress while maintaining stability,consistently deepened business channel restructuring and achieved stable progress of business development. During the Reporting Period,gross written premiums from the sector were RMB492,439 million,a decrease of 3.3% year on year. In particular,renewal premiums were RMB392,849 million,a decrease of 3.7% year on year. First-year regular premiums were RMB81,508 million,generally stable compared with the previous year. First-year regular premiums with a payment duration of ten years or longer were RMB41,796 million,an increase of 0.5% year on year,and its proportion in the first-year regular premiums was 51.28%,an increase of 0.73 percentage point year on year. In 2022,the value of one year's sales of the sector was RMB33,333 million,a decrease of 22.4% year on year,and new business margin by annual premium equivalent was 33.0%,a decrease of 9.2 percentage points year on year.
The Company continued to drive insurance business through productive agents,upheld the sales force strategy of "stabilizing headcount while seeking for higher productivity" and steadily improved the quality of its sales force with improved productivity. In 2022,the monthly average first-year regular premiums per agent increased by 51.7% year on year. During the Reporting Period,the Company implemented a series of major reform projects to lead the transformation and upgrading of the individual agent business sector. The "Zhongxin Project" was rolled out,specifically for establishing a specialized and professional agent team at a faster speed. The fundamental agent force management rules were comprehensively upgraded to focus on newly recruited agents,agent managers and high-performance agents. The quality management of business operation and services were also consolidated,which effectively stimulated vitality of sales team and further solidify the team's foundation. As at the end of the Reporting Period,the number of agents of the sector was 668,000,including 430,000 agents from the general sales team and 238,000 agents from the upsales team,and the proportion of high-performance agents remained stable.
Diversified Business Sector
With high-quality development as the guidance,the diversified business sector concentrated on specialized business operation,and insisted on transformation and upgrading as well as enhancing quality and efficiency. The sector coordinated well with the individual agent business sector,actively developed the bancassurance,group insurance and health insurance businesses,and achieved quality business development.
Bancassurance Channel The bancassurance channel continuously deepened its cooperation with banks,and the scale of its premiums and business value increased rapidly. During the Reporting Period,gross written premiums from the channel amounted to RMB63,415 million,an increase of 28.6% year on year. First-year regular premiums were RMB14,879 million,a decrease of 7.6% year on year. The business structure continued to be optimized. First-year regular premiums with a payment duration of five years or longer were RMB6,451 million,with its proportion in the first-year regular premiums rising by 1.50 percentage points year on year to 43.36%. Renewal premiums amounted to RMB36,200 million (a year-on-year increase of 10.4%),accounting for 57.08% of gross written premiums from the channel. The bancassurance channel constantly enhanced the professional and technological capabilities of its account manager team,the quality of which was improved steadily. As at the end of the Reporting Period,the number of account managers of the bancassurance channel reached 21,and the quarterly average active managers remained stable with the productivity per account manager increasing by 9.1% year on year.
Group Insurance Channel The group insurance channel coordinated business scale and profitability and pushed forward stable development in all business lines. During the Reporting Period,gross written premiums from the channel were RMB27,a decrease of 6.3% year on year. In particular,short-term insurance premiums from the channel were RMB24,059 million,a decrease of 6.4% year on year. As at the end of the Reporting Period,the number of direct sales representatives was approximately 40,among which the proportion of high-performance personnel rose by 7 percentage points from the end of 2021.
Other Channels In 2022,gross written premiums from other channels were RMB32,003 million,an increase of 5.4% year on year. The Company proactively participated in a variety of government-sponsored health insurance businesses and supported the construction of a multi-tiered medical insurance system. As at the end of the Reporting Period,the Company carried out over 200 supplementary major medical expenses insurance programs,covering nearly 350 million people. It also undertook approximately 60 policy-oriented long-term care insurance programs,providing services to more than 27 million people. Meanwhile,it implemented over 100 city-customized commercial medical insurance projects,covering more than 22 million people. The Company actively participated in social governance related to medical insurance and continued to undertake over 500 health care entrusted programs,covering more than 100 million people.
Online Insurance Business
The Company greatly developed the online insurance business and provided customers with a quality service experience through integrated online-to-offline sales and online direct sales. In 2022,the Company's digital sales capability was further strengthened,and its online insurance business grew rapidly. Total premiums under the regulatory caliber were RMB62,896 million,an increase of 88.3% year on year. The Company consistently optimized its online insurance business operation system featuring centralized operation and unified management,and gave full play to the advantages of fast access,wide coverage and high efficiency of the Internet,to actively promote the development of its online insurance business. It released its first long-term online life insurance product,established its proprietary online platform,the "Guo Xi Bao China Life Insurance Mall",and realised the launch of the China Life Ant Insurance Operation Platform.
Integrated Financial Business
The Company fully leveraged the advantages of the integrated operation of China Life Insurance (Group) Company and actively engaged in the construction of a "Life Insurance Plus" integrated financial ecosystem,with a view to empowering the Company's high-quality development. In 2022,premiums of China Life Property and Casualty Insurance Company Limited ("CLP&C") cross-sold by the Company were RMB22,383 million,with the number of insurance policies increasing by 9.0% year on year. Through the cross-sale of property insurance products,the Company diversified its client contacts and facilitated its sales team to meet sales targets,maintain its size and secure a higher commission income. Additional first-year receipts of enterprise annuity funds and pension products of China Life Pension Company Limited ("Pension Company") cross-sold by the Company through collaboration were RMB15,729 million. The Company entrusted China Guangfa Bank Co.,Ltd. ("CGB") to sell its bancassurance products,with the first-year regular premiums recording a generally stable growth. The Company also actively explored the synergy between insurance and investment business,deepened the cooperation with fellow members,such as China Life Asset Management Company Limited,and conducted close collaboration in investment project promotion and joint customer exploration,etc.,creating a new business-investment interactive model. Meanwhile,in order to satisfy the diverse needs of its customers,the Company has set up an integrated business platform widely covering its customer groups,and carried out various collaborative operation activities by co-working with CLP&C,Pension Company and CGB,so as to provide customers with a one-stop,all-round and quality financial and insurance services.
Inclusive Healthcare and Integrated Aged-Care Business
Being customer-centric,the Company continued to implement the Healthy China strategy and the national strategy of proactively responding to population aging by further promoting the deployment of the healthcare and aged-care business,and helped to amplify a multi-tier social security system. In 2022,the Company established a high-quality and efficient health management and service system with coordination between the Company's headquarter and its local branches. As at the end of the Reporting Period,more than a hundred types of services were available on the China Life Inclusive Healthcare Service Platform,and the accumulated registered users of the platform increased by over 21% from the end of 2021,ranking among the top of the industry. The Company implemented the national strategy of proactively responding to population aging,fully leveraged the advantage of the long-term nature of insurance funds and strengthened investments and professional operations in the aged-care sector by relying on the professional investment platform within China Life group,so as to develop an aged-care service system and improve its capability of service supply. In 2022,the Company accelerated the consolidation of health resources within China Life group by setting up the China Life Integrated Aged Care Fund and continued to proceed with aged-care projects of residential aged-care services and community-based aged-care services,in strategic regions such as Beijing-Tianjin-Hebei,the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area. To accelerate its industrial layout in the healthcare and aged-care sector,the Company has launched the "Healthcare and Aged-care Ecosystem Program" and will spare no effort in building a healthcare and aged-care ecosystem with China Life characteristics,with diverse scenarios and service supplies,advanced management and controllable risks,so as to create a new growth driver for development and promote high-quality development of its insurance businesses.
Insurance Products
Actively implementing national strategies and adhering to the customer-centric product development concept,the Company carried out in-depth market research and constantly strengthened its product-development and response capabilities. In 2022,the Company newly developed and upgraded a total of 88 products covering a full spectrum of life insurance,annuity,health insurance and accident insurance,and continued to create a product system with a variety of product forms,prominent protection features and strong brand influences.
The Company actively served the Healthy China strategy by vigorously promoting innovative development of health insurance products with respect to diseases,medical health and care and introduced health insurance products such as "Zun Xiang Fu" and "Ai Yi Kang Yue" to constantly enrich the health insurance product system. In terms of serving the national strategy of proactively responding to population aging,the Company launched age-friendly insurance products such as accidental injury and disease insurances tailored to the elderly. At the same time,the third-pillar private pension insurance business was launched successfully,and "China Life Xin Xiang Bao Exclusive Commercial Pension Insurance" was selected into the first batch of third-pillar private pension insurance products in the industry. In respect of boosting the rural revitalization strategy,the Company continued to improve its exclusive series of products for rural revitalization and provided broader insurance protection for relevant groups of people. It launched exclusive accident protection products for new business forms and new urban residents. The Company also steadily promoted its exclusive online insurance products and launched new insurance products such as "Shou Hu Xing" to better meet the insurance needs of young customers.
Investment Business
In 2022,the complex and severe domestic and international environment continuously contributed to the turbulence of the capital market,domestic bond yields were at historical lows and the A-share market once experienced deep pullback. With the gradual introduction of policies for stable growth and an improved international environment,the risk-free interest rate rose at the end of the year 2022,and the A-share market rebounded marginally. Amid the ups and downs of the market,the Company adhered to its strategic consistency,firmly served the major national strategies and supported the real economy,consistently implemented its medium- to long-term strategic plan of asset allocation and adopted multiple measures concurrently to stabilize investment income. On the basis of dynamic market research and evaluation,it made steady allocation to the fixed-income products with a view to stabilizing coupon income and the asset durations; actively seized the opportunities for allocation in long-term assets during the equity market corrections,adjusted equity asset allocations towards neutral weight; and also strengthened the innovation in alternative investment product models,and positioned for high-quality alternative assets through equity plans,asset-backed plans,equity funds and other forms to ensure a stabilized allocation scale and expand the source of excess returns.
As at the end of the Reporting Period,an increase of 7.4% from the end of 2021. Among the major types of investments,the percentage of investment in bonds rose to 48.54% from 48.20% as at the end of 2021,the percentage of term deposits changed to 9.59% from 11.23% as at the end of 2021,the percentage of investment in debt-type financial products changed to 8.98% from 9.41% as at the end of 2021,and the percentage of investment in stocks and funds (excluding money market funds) rose to 11.34% from 8.75% as at the end of 2021.
In 2022,the Company's net investment income was RMB190,344 million,rising by 0.8% year on year,an increase of RMB1,574 million from 2021. Due to the impact of the downward trend of interest rates,the net investment yield was 4.00% in 2022,down by 38 basis points from 2021. Affected by a significant decline in equity market and the year-on-year decrease in spread income of equity investment products,the Company registered a gross investment income of RMB187,751 million in 2022,down by 12.3% year on year,a decrease of RMB26,306 million from 2021. Gross investment yield was 3.94%,down by 104 basis points from 2021. The comprehensive investment yield taking into account the current net fair value changes of available-for-sale securities recognised in other comprehensive income was 1.92%,down by 295 basis points from 2021.
Outlook
2023 is the opening year for fully implementing the guidelines of the 20th CPC NationalCongress,the critical year for further promoting the "14th Five-Year Plan",and also the 20th anniversary forChina Life's shareholding reform and public listing. Wewill actively integrate ourselves into the historicalprocess of Chinese-style modernization,act around the modern financial system and the multi-tiered socialsecurity system,and continue to deepen our understanding on the laws of promoting high-quality development.We will firmly maintain our strategic consistency,fully advance supply-side structural reforms,and strive toenhance abilities such as business deployment,asset allocation,digital transformation,resource integrationand risk management and control,thus laying a solid foundation for high-quality development,creatinggreater value for our shareholders and sharing the achievements of business development with the society.
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About China Life Insurance Company Limited
China Life Insurance Company Limited is a life insurance company established in Beijing,China on 30 June 2003 according to the "Company Law of the People's Republic of China" and the "Insurance Law of the People's Republic of China". The Company was successfully listed overseas in December 2003 and returned to be an A-share listed Company in January 2007. The Company's registered capital is RMB28,264,705,000.
The Company is a leading life insurance company in China and possesses an extensive distribution network comprising exclusive agents,direct sales representatives,and dedicated and non-dedicated agencies. The Company is one of the largest institutional investors in China,and becomes one of the largest insurance asset management companies in China through its controlling shareholding in China Life Asset Management Company Limited. The Company also has controlling shareholding in China Life Pension Company Limited.
Our products and services include individual life insurance,group life insurance,and accident and health insurance. The Company is a leading provider of individual and group life insurance,annuity products and accident and health insurance in China. As at 31 December 2022,the Company had approximately 325 million long-term individual and group life insurance policies,annuity contracts,and long-term health insurance policies in force. We also provide both individual and group accident and short-term health insurance policies and services.
The 2022 consolidated financial statements of the Company prepared in accordance with the International Financial Reporting Standards have been audited by PricewaterhouseCoopers based on the International Standards on Auditing and PricewaterhouseCoopers has issued standard unqualified opinions on the 2022 consolidated financial statements.
Forward-looking statements
Certain statements contained in this press release may be viewed as "forward-looking statements" as defined by Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934,as amended. Such forward-looking statements involve known and unknown risks,uncertainties and other factors,which may mean that the actual performance,financial condition or results of operations of the Company could be materially different from any future performance,financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks,uncertainties and other factors is included in the Company's Annual Report on Form 20-F for the fiscal year ended 31 December 2021 filed with the U.S. Securities and Exchange Commission,or SEC,on 29 April 2022; and in the Company's other filings with the SEC. You should not place undue reliance on these forward-looking statements. Unless otherwise stated,all information provided in this press release is as of the date of this press release,and the Company undertakes no duty to update such information,except as required under applicable law.
Unless otherwise indicated,the Chinese insurance market information set forth in this press release is based on public information released by China Banking and Insurance Regulatory Commission.
