Taipei-based China Life Insurance Co (中國人壽) yesterday modestly raised its profitability outlook as its embedded value (the present value of future profits and adjusted asset value) rose 10.2 percent to NT$244.7 billion (US$8.18 billion) at the end of last year, or NT$64.62 per share.
That represented a 1.1 percent pickup from NT$63.94 per share one year earlier as the insurer seeks to sell more policies paid in installments and escape foreign-exchange volatility.
“The product migration will take a while, but has gained noticeable headway,” China Life president Stephanie Hwang (黃淑芬) told an investors’ conference.
Two-year annuity products dominated the market last year, but have increasingly given way to policies with longer payment schemes, she said.
Policies paid in installments provide better business stability and profitability for insurers.
Hedging costs stood at 1.95 percent last quarter, compared with 1.68 percent for the whole of last year, as the New Taiwan dollar gained against the US dollar, Hwang said.
Foreign debt totaled NT$896.4 billion as of March 31, accounting for 64.2 percent of overall assets, the company said.
Pre-hedging returns slowed to 3.38 percent from 3.45 percent a year earlier, it said.
China Life achieved NT$3.68 billion in net income between January and March, up from NT$30 million a year earlier, as first-year premiums grew 43 percent and renewal premiums grew 23 percent amid a stable economy.
In the first four months, cumulative profits soared 5.47 times to NT$4.21 billion from a year earlier, the company said.
The insurer said its assets will increase by NT$50.6 billion today, as it officially takes over 80,000 policies from Allianz Taiwan Life Insurance Co (安聯人壽), and that it plans to use the bulk of the funds to pursue overseas fixed income investments as the US Federal Reserve is poised for another interest rate hike next month.
China Life might also recognize 16 million yuan (US$2.51 million) of cash dividends for the first time later this year for its 19.9 percent stake in China’s CCB Life Insurance Co (建信人壽保險), vice chairwoman Kuo Yu-ling (郭瑜玲) said.
CCB Life, which posted 213 million yuan of net profit in the first quarter, has postponed the schedule to apply for primary listing in Hong Kong to 2020 as it prioritizes financial structure improvements, Kuo said.
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