China Life Insurance Co (中國人壽), the nation’s fifth-largest life insurer by assets, posted NT$1.48 billion (US$50.24 million) in net income last quarter, down 25.63 percent from the same period last year, as provisions and other costs dampened cash dividend benefits, senior executives said yesterday.
The softening performance came even though the Taipei-based insurer more than doubled its first-year premiums to NT$33.23 billion in the period from July to last month, compared with NT$16.02 billion a year earlier, company data showed.
“Due to the fast growth in first-year premiums, the company had to set aside more reserve funds,” China Life senior vice president Winnie Huang (黃之寧) said by telephone.
Huang declined to comment on net worth changes caused by market or currency volatility, saying that a breakdown of the details is not available.
The New Taiwan dollar appreciated 1.49 percent last quarter against the US dollar, which may have weakened the company’s assets denominated in greenback.
In addition, prices for foreign bond holdings may have dropped — at variance with bond yields — after the US Federal Reserve signaled plans to taper quantitative easing.
“However, the rise in bond yields will boost investment returns in the long run,” Huang said.
Provisional and other expenses sapped cash dividend incomes sized at NT$2.2 billion last quarter, from NT$2 billion a year earlier, she said.
In the three months ending last month, dividend incomes underpinned a 131 percent jump in net profit from NT$640 million a quarter ago, company data showed.
For the first nine months, China Life reported net income of NT$4.2 billion, or earnings per share (EPS) of NT$1.54.
EPS would have reached NT$1.64, if the insurer had not put aside NT$320 million in special reserves to buffer losses linked to foreign exchanges, it said.
As of last month, China Life’s total first-year premiums were NT$66.23 billion, rising 30 percent annually and bucking the sector’s 18.3 percent retreat, Huang said.
She attributed the advance to the company’s continued focus on protection-type insurance policies.
Meanwhile, Jian Xin Life Insurance Co (建信人壽), a subsidiary of China Construction Bank Corp (中國建設銀行) in which China Life owns a 20 percent stake, posted 92.6 million yuan (US$15.19 million) in profit for the first nine months, already surpassing the 49.6 million yuan it recorded over the whole of last year, China Life said.