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First-half net profit fell to 15.8 billion yuan (1.6 billion euros), from 23.3 billion yuan in the same period in 2007. China Life and its subsidiaries recorded gross written premiums and policy fees of 79.3 billion yuan, up 24.4%.
Capital-market weakness led to a net fair-value loss on invested assets of 6.5 billion yuan, compared with a profit of 10.8 billion yuan a year earlier.
The company said it will not declare an interim dividend for the six months ended June 30, while the dividend a year earlier was 0.42 yuan a share.
To offset the negative impact on the company's business, China Life said it adjusted its investment strategy and further optimized the investment portfolio by reducing the proportion of equity investments and increasing investment in fixed-income assets. As at June 30, the company reduced the percentage of investment assets in equity securities 22.95% to 13.28%, while increased the percentage of debt securities 52.13% to 58.57%.
In the first half, China Life said it continued to actively explore new distribution channels by establishing an "E-business Department" to conduct telephone and online sales on a trial basis, and launched its first tele-sales product.
As of June 30, China Life had 676,000 exclusive agents, while its direct sales team has 13,000 representatives. The company had more than 92,000 intermediary bancassurance outlets, including outlets of commercial bank branches, postal savings bank and cooperative savings institutions.
It also boosted its client service managers force by 25% in the bancassurance channel from the end of 2007, to 22,500 in the first half of 2008. The number of financial advisers rose 14% from the end of 2007 to more than 6,100. The company had a total of 96,879 employees.
Looking ahead, China Life said it believes its insurance business will see steady growth in the second half of 2008. "We believe that the Chinese government measures for containing rising inflation will continue to show effect, and there will be considerable opportunities for the development of the life insurance industry," said Chairman Yang Chao in a statement.
China Life also said intense market competition will drive the company to further strengthen its risk management system to deal with uncertainties in the capital markets and any unexpected impact on its development of insurance business and investment income.
According to the China Insurance Regulatory Commission, China Life's market share in the first half of 2008 was 42.8%, up 3.1% from year-end 2007.
(By Rebecca Ng, Hong Kong news editor: Rebecca.Ng@ambest.com)
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