Brokers: China Life's July premium growth beats expectation

Thu. August 14, 2008; Posted: 04:28 AM

BEIJING, Aug 14, 2008 (Xinhua via COMTEX) -- LFC | Quote | Chart | News | PowerRating -- China Life (601628.SH; 2628.HK; LFC.NYSE) announced Thursday that its premiums in the first seven months of this year reached 203 billion yuan, increasing 53.9 percent year-on-year. The figure for July alone stood at 20.9 billion yuan, soaring 98.3 percent on year.

The July premium growth beats analysts' earlier expectation.

Brokers widely believe that weak stock market environment restored demands for safer insurance products sold both by the company itself and by banks on agency. China Life has expanded its sale of insurance products done by banks on agency, developed universal life insurance products and issued investment-linked products at appropriate time, which ensured its relative competitive edge in China.

However, analysts also worry about China Life's sustainability of strong premium growth. Haitong Securities said that the company's interest rate for settlement decreased to 4.5 percent in July from 5. 85 percent in May, which might affect the sale of insurance products via banks. Taking July as an example, its premium jumped 98.3 percent on year, but dived 31 percent on month.

Haitong Securities maintains "Neutral" rating, Ping'an Securities keeps "Recommend" rating and Credit Suisse keeps "Outperform" rating on China Life.

China Life A-share saw flat performance on Thursday upon announcement of the premium data, dipping 0.04 percent to end at 23. 72 yuan.

For full details on China Life Insurance Company Limited ADS (LFC) click here. China Life Insurance Company Limited ADS (LFC) has Short Term PowerRatings of 6. Details on China Life Insurance Company Limited ADS (LFC) Short Term PowerRatings is available at This Link.

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