2007'02.01.Thu
China Life Insurance Company Limited Announces 2005 Annual Results
April 19, 2006
HONG KONG, April 19 /Xinhua-PRNewswire/ -- China Life
Insurance Company Limited (SEHK: 2628; NYSE: LFC) today
announced the consolidated audited results of the Company
and its subsidiaries ("China Life" or the
"Company") for the full year ended 31 December
2005.
Key Highlights
-- Net profit attributable to shareholders of the
Company for the year
amounted to RMB 9,306 million, up 29.77% from 2004.
-- Basic and fully diluted earnings per share were RMB
0.35.
-- Total revenues for the year reached RMB 98,212
million, up 27.87% from
2004.
-- Gross written premiums and policy fees reached RMB
81,022 million, up
22.28% from 2004.
-- As at 31 December 2005, the Company's embedded value
was RMB 113,954
million, up
-- 26.51% from 2004, and the value of one year's sales
was RMB 7,489
million, up 15.14% from 2004.
-- As at 31 December 2005, the Company's total assets
were RMB 559,219
million. Investment assets were RMB 494,356 million,
while investment
yield (on investment assets that include financial
assets and cash and
cash equivalents but exclude accrued investment
income) was 3.86%, up
37 basis points from 2004.
-- The Company continued to maintain its leading
position in the life
insurance market in China, with a market share of
44.07%.
-- The Board of Directors recommended the payment of a
final dividend of
RMB0.05 per share for the year to the shareholders
whose names are on
the register of shareholders on 17 May 2006.
In year 2005, the Company achieved record levels of net
profit, total revenues and total assets. For the year ended
31 December 2005, China Life's net profit attributable to
shareholders of the Company amounted to RMB 9,306 million,
an increase of 29.77% from 2004, primarily driven by
adjustments in the structure of the business, improvement
in investment income and enhancement of management
practices. Basic and fully diluted earnings per share were
RMB 0.35. The Company's total revenues amounted to RMB
98,212 million, a 27.87% increase over the previous year.
As at 31 December 2005, the Company's total assets were RMB
559,219 million. The Board of Directors recommended the
payment of a final dividend of RMB 0.05 per share for the
year to the shareholders whose names are on the register of
shareholders on 17 May 2006.
Commenting on the annual results of the Company for the
financial year 2005, Mr Yang Chao, Chairman of the Board of
China Life, said: "I am pleased to report encouraging
progresses in terms of reforms and business development by
the Company in 2005. The Company has made adjustments to
its Board of Directors and senior management in its
continuing effort to improve corporate governance. As the
core member of the China Life Insurance Group Company
("the Group"), China Life has adopted the Group's
new development strategy of transforming itself into a major
international financial and insurance group with rational
resource allocation, clear strategic advantages, strong
core businesses, appropriately diversified operations and
the respect of the community and the industry. The Group
will be characterised by a high embedded value, strong core
competitiveness and highly sustainable development. China
Life has integrated this Group strategy into its business
objectives, namely, to establish the Company as a
world-class life insurance Company with advanced corporate
governance, a well-established management system, stringent
internal controls, leading technologies, a first-class team,
superior service and an outstanding brand. The Company will
uphold the guiding principle of scientific development and
contribute to the rapid development and improvement of the
mainland insurance industry. The Company is committed to
expanding and strengthening its business to enhance
shareholder value."
Mr. Wu Yan, President of China Life, said: "During
the year, the Company adhered to a prudent development
strategy, resulting in steady business growth, continuous
improvement in business structure, and substantial increase
in investment income. In addition to continuous growth in
operating profits, the Company also achieved further
improvement in management as well as greater influence in
the society, and maintained our leading position in PRC
life insurance market. All staff members of the Company
share the same vision, and are determined to fulfil the
mission of `Focusing on people, Caring for life, Creating
value, Serving society'."
Strong growth in business, leading position in the
market
In 2005, the Company's total revenues were RMB 98,212
million, up 27.87% from 2004. Gross written premiums and
policy fees reached RMB 81,022 million, up 22.28% from
2004. Net profit attributable to shareholders of the
Company reached RMB 9,306 million, up 29.77% from 2004.
According to figures released by the China Insurance
Regulatory Commission ("CIRC"), the Company
continued to maintain its leading position of China's life
insurance market, with a market share of 44.07% in 2005.
Business structure further optimized, embedded value
further increased
In 2005, leveraging on the positive effects of total
budget management and cost management, the Company
continued to adjust its business structure with a view to
achieving a balanced business growth.
In 2005, gross written premiums were RMB 74,939
million, representing a 22.72% increase from 2004.
First-year gross written premiums from long-term
traditional insurance contracts amounted to RMB 20,425
million, up 1.14% from 2004. First-year regular gross
written premiums reached RMB 18,529 million, up 6.44% from
2004. First-year regular gross written premiums accounted
for 90.72% of first-year gross written premiums from
long-term traditional insurance contracts.
As at 31 December 2005, the Company's embedded value
was RMB 113,954 million, an increase of 26.51% from 2004.
The value of one year's sales for the year ended 31
December 2005 was RMB 7,489 million, up 15.14% from 2004.
Embedded value is an actuarially determined estimate of the
economic value of life insurance business of an insurance
Company, excluding the economic value of future new
business. The value of one year's sales provides an
indication of the value being created for investors by new
business activity and hence the potential of the business.
Optimized asset structure, increased investment income
In 2005, the Company adhered to prudent principles and
adjusted its investment strategies according to changes in
the capital markets. During the year, the Company
increased the proportion of bond investments with longer
maturities and lowered the proportion of term deposits. In
addition, the Company adopted a proactive and yet prudent
approach to equity investments and optimized the structure
of its foreign exchange assets. The Company also extended
the durations of its assets, improved asset-liability match
and effectively increased investment income. As at 31
December 2005, the Company's total investment assets
(including financial assets and cash and cash equivalents
but excluding accrued investment income) amounted to RMB
494,356 million. Investment yield was 3.86%, up 37 basis
points from 2004.
Stringent cost control, strong financial positions
In 2005, the Company strived to achieve the realization
of business development, structural adjustment and earnings
growth, and highlighted core significance of financial
management in the Company's overall business management.
While ensuring continuous business development, the Company
further implemented total budget management to stringently
control costs. In 2005, the consolidated cost control
ratio was 17.2%, down 1.4 percentage points from 2004.
As at 31 December 2005, the Company's total assets were
RMB 559,219 million. Shareholders' equity was RMB 80,378
million. The Company's solvency level was approximately
2.73 times the minimum regulatory requirement. A strong
financial position and an adequate solvency level have
enabled the Company to expand its business at a rapid pace.
Broadened sales channel, enhanced service quality
The Company has the largest sales team in China's life
insurance industry, with the broadest geographic coverage.
In 2005, the Company continued to maintain its leading sales
capabilities by continuously expanding sales channels and
scope of cooperation, as well as stepping up efforts in
sales staff training and management. As at 31 December
2005, the Company has approximately 640,000 individual
agents, 12,000 direct sales staff, and a network of more
than 89,000 cooperating bank branches and post saving
offices that have established bancassurance business
relationships.
In 2005, the Company continued to strive to improve
underwriting and claims management as well as customer
service standards. The Company formulated and revised a
series of policies and management rules, adjusted and
optimized business flows, strengthened controls on business
risks, improved its service and upgraded its effectiveness
and quality of business processing. The centralized service
platform "95519" Call Center was awarded the Best
Performing Call Centre in China 2005 by the Customer
Relationship Management Professional Committee of the
Alliance for Promotion of Informationalization under the
Ministry of Information Industry. China Life was the only
life insurance Company to receive such award in China.
This was also the second consecutive year the Company was
granted with this award.
Further improvement in corporate governance and
internal control
In order to satisfy regulatory requirements at which
the Company is listed in a more effective manner, and to
further enhance its corporate governance standards, China
Life introduced a series of enhancement initiatives in this
area. The Company made changes and enhancements to the
Board of Directors and its special committees to further
emphasise the roles of independent directors. According to
the requirements of the Code on Corporate Governance
Practices of the Stock Exchange of Hong Kong, the roles of
the Chairman and the President were also separated. In
addition, the Company further optimizes its vertically led
and centrally managed audit system, with the internal audit
team further strengthened and a series of internal auditing
systems and guidelines formulated and revised. The Company
also allocates sufficient resources and continues to
optimize internal control systems and is preparing itself
for compliance with the Sarbanes-Oxley Act Section 404.
Since its listing, the Company has placed strong
emphasis on the supervision and management on three types
of risks: financial, investment and operational. The
Company also continuously improved its information
disclosure system. The supervisory and control system for
internal control and risk management is comprised of the
Board of Directors and its Audit Committee and Risk
Management Committee, the Company's Supervisory Committee,
the Internal Control and Risk Management Committee under
the Management, as well as departments exercising internal
control and supervisory roles for the Company, including
the newly established Internal Control and Compliance
Department, as well as the Legal Affairs Department and
Audit Department. Continuous improvement in internal
control facilitates prevention and management of business
risks, which will result in better protection of interests
of customers and shareholders.
In February 2006, the Company was awarded "The
Most Trusted Life Insurance Company" in the 2005
Financial Entities Election in China, a major online
election in the country. According to the ranking
announced by Forbes in April 2006, the Company was ranked
297th among the Top 2000 Global Listed Companies, and was
ranked seventh among the companies based in Greater China
(including Hong Kong Special Administrative Region, Macau
Special Administrative Region and the Taiwan Region). In
April 2006, the Company was named "The 2005 Leader in
Insurance Industry" in the "2005 Chinese Service
Industry Leaders Awards" organized by a number of
market research institutes including the Horizon Research
Consultancy Group.
2006 Outlook
In 2006, further development of the country's economy
and the expansion of investment channels for insurance
funds will bring about more development opportunities for
the Company. On the other hand, keen competition in the
industry and uncertainties in the capital markets will
bring challenges. The Company will adopt a development
strategy that is both proactive and balanced. It will
further improve corporate governance and enhance its
internal control, risk management and business management
capabilities. By integrating sales resources, China Life
will establish an efficient and effective sales system and
back-office support system. The Company will strengthen
its market leading position and continue to restructure its
business, optimize asset allocation, and strengthen cost
control to further enhance profitability.
Forward-looking statements
Certain statements contained in this announcement may
be viewed as "forward-looking statements" within
the meaning of Section 21E of the US. Securities Exchange
Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks, uncertainties and other
factors, which may cause the actual performance, financial
condition or results of operations of the Company to 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 Registration Statement on Form F-1 for its
initial public offering (333-110615) and in the Company's
other filings with the SEC.
About China Life Insurance Company Limited
China Life Insurance Company Limited (the
"Company") (SEHK: 2628; NYSE: LFC) was
established in Beijing on 30 June 2003. On 17 and 18
December 2003, the Company successfully listed on the New
York Stock Exchange and the Stock Exchange of Hong Kong
respectively.
The Company is the leading life insurance Company in
the insurance market of China (referring to the People's
Republic of China for this press release, excluding the
Hong Kong Special Administrative Region, Macau Special
Administrative Region and the Taiwan Region). The Company
has the most extensive distribution network in China that
comprises exclusive agents, direct sales representatives
and dedicated and non-dedicated agencies.
The Company offers a series of products and services,
including individual and group life insurance, accident
insurance and health insurance. It is the largest life
insurance Company in China, and is the leading provider of
individual and group life insurance, annuities products,
accident insurance and health insurance. As at 31 December
2005, the Company had over 70 million individual and group
life insurance policies, annuities contracts and long-term
health insurance policies that are in force, and also
offers individual and group accident and short-term health
insurance policies. The Company also controls China Life
Asset Management Company Limited, and is the largest
insurance asset manager and one of the largest
institutional investors in China.
Appendix 1
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31
DECEMBER 2005
2005 2004
RMB
million RMB million
(Restated)
REVENUES
Gross written premiums and policy fees
(including gross written premiums and
policy fees from insurance contracts
2005: RMB 80,651 million, 2004:
RMB 65,878 million )
81,022 66,257
Less: premiums ceded to reinsurers
(769) (1,182)
Net written premiums and policy fees
80,253 65,075
Net change in unearned premium reserves
(215) (67)
Net premiums earned and policy fees
80,038 65,008
Net investment income
16,685 11,317
Net realised losses on financial assets
(510) --
Net realised losses on investments
-- (237)
Net fair value gains on assets at fair value
through income
260 --
Net unrealised losses on trading securities
-- (1,061)
Other income
1,739 1,779
Total revenues
98,212 76,806
BENEFITS, CLAIMS AND EXPENSES
Insurance benefits and claims
Life insurance death and other benefits
(8,311) (6,816)
Accident and health claims and claim
adjustment expenses
(6,847) (6,418)
Increase in long-term traditional insurance
contracts liabilities
(33,977) (25,361)
Interest credited to long-term investment
type insurance contracts
(4,894) (3,704)
Interest credited to investment contracts
(973) (616)
Increase in deferred income
(8,521) (7,793)
Policyholder dividends resulting from
participation in profits
(5,359) (2,048)
Amortisation of deferred policy acquisition
costs
(7,766) (6,263)
Underwriting and policy acquisition costs
(1,845) (1,472)
Administrative expenses
(7,237) (6,585)
Other operating expenses
(798) (131)
Statutory insurance fund
(174) (96)
Total benefits, claims and expenses
(86,702) (67,303)
Net Profit before income tax expenses
11,510 9,503
Income tax expenses
(2,145) (2,280)
Net profit
9,365 7,223
Attributable to:
- shareholders of the Company
9,306 7,171
- minority interest
59 52
Basic and diluted earnings per share RMB
0.35 RMB 0.27
Dividends proposed after the balance sheet
date
1,338 Nil
Appendix 2
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2005
As at
As at
31
December 31 December
2005
2004
(Restated)
RMB
million RMB million
ASSETS
Property, plant and equipment
12,710 12,250
Deferred policy acquisition costs
37,741 32,787
Financial assets
Debt securities:
255,554 150,234
- held-to-maturity securities
146,297 79,603
- available-for-sale securities
96,425 --
- non-trading securities
-- 69,791
- financial assets at fair value
through income
12,832 --
- trading securities
-- 840
Equity securities:
39,548 17,271
- available-for-sale securities
26,261 --
- non-trading securities
-- 12,597
- financial assets at fair value
through income
13,287 --
- trading securities
-- 4,674
Term deposits
164,869 175,498
Statutory deposits-restricted
5,353 4,000
Policy loans
981 391
Securities purchased under agreements
to resell
-- 279
Accrued investment income
6,813 5,084
Premiums receivables
4,959 3,912
Reinsurance assets
1,182 1,297
Cash and cash equivalents
28,051 27,217
Other
1,458 3,451
Total Assets
559,219 433,671
LIABILITIES AND EQUITY
Liabilities
Insurance contracts
Short-term insurance contracts:
- reserves for claims and claim
adjustment expenses
1,784 1,215
- unearned premium reserves
5,147 5,212
Long-term traditional insurance
contracts
124,656 89,698
Long-term investment type insurance
contracts
237,001 191,885
Deferred income
34,631 27,603
Financial Liabilities
Investment contracts
- with discretionary participation
feature ("DPF")
42,230 32,476
- without DPF
1,872 1,635
Securities sold under agreements to
repurchase
4,731 --
Annuity and other insurance balances
payable
4,492 2,801
Premiums received in advance
2,951 2,447
Policyholder dividends payable
6,204 2,037
Other liabilities
4,106 4,922
Current income tax liabilities
525 38
Deferred tax liabilities
7,982 4,371
Statutory insurance fund
98 429
Total liabilities
478,410 366,769
Contingencies and commitments
-- --
Shareholders' equity
Share capital
26,765 26,765
Reserves
37,225 31,573
Retained earnings
16,388 8,192
Total shareholders' equity
80,378 66,530
Minority interest
431 372
Total equity
80,809 66,902
Total liabilities and equity
559,219 433,671
Appendix 3
GROSS WRITTEN PREMIUMS AND DEPOSITS
For the year ended 31 December 2005
2005
2004
RMB million
RMB million
Individual life insurance
Gross written premiums 63,205
50,113
First-year gross written
premiums 19,574
19,900
Single gross written premiums 1,085
2,526
First-year regular gross written 18,489
17,374
premiums
Renewal gross written premiums 43,631
30,213
Deposits 62,483
66,981
First-year deposits 49,144
54,662
Single deposits 46,061
52,343
First-year regular deposits 3,083
2,319
Renewal deposits 13,339
12,319
Group life insurance
Gross written premiums 867
344
First-year gross written
premiums 851
295
Single gross written premiums 811
261
First-year regular gross written
premiums 40
34
Renewal gross written premiums 16
49
Deposits 23,463
21,756
First-year deposits 23,452
21,738
Single deposits 23,401
21,726
First-year regular deposits 51
12
Renewal deposits 11
18
Accident and health insurance
Gross written premium 10,867
10,606
Short-term accident insurance
Gross written premiums 5,135
4,977
Short-term health insurance
Gross written premiums 5,732
5,629
Total gross written premiums 74,939
61,063
Total deposits 85,946
88,737
For further information, please contact:
Media Enquiries:
English / Mandarin
Mr. Bruce Shu
Citigate Dewe Rogerson
Tel: +852-9132-2906 or +852-2533-4607
Fax: +852-2524-5599
Email: bruce.shu@citigatedr-hk.com
English / Cantonese / Mandarin
Mr. Mill Seen
Citigate Dewe Rogerson
Tel: +852-9224-9240 or +852-2533-4612
Fax: +852-2524-5599
Email: mill.seen@citigatedr-hk.com
Mandarin
Ms. Liu Yang
Citigate Dewe Rogerson
Tel: +86-138-0110-4947 or +86-10-6505-2082
Fax: +86-10-6505-2080
Email: liu.yang@citigatedr-hk.com
Mr. Jason Qingyang Cao
China Life Insurance Company Limited
Tel: +852-9610-2760 (Tuesday, April 18)
Tel: +86-10-8565-9778 (Regular contact number)
Fax: +86-10-8525-2210
Email: caoqingyang@e-chinalife.com
Investor and Analyst Enquiries:
Mr. Jason Qingyang Cao
China Life Insurance Company Limited
Tel: +852-9610-2760 (Tuesday, April 18)
Tel: +86-10-8565-9778 (Regular contact number)
Fax: +86-10-8525-2210
Email: caoqingyang@e-chinalife.com
SOURCE China Life Insurance Company Limited
PR
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