China Life Insurance Co (中國人壽) yesterday estimated that it had embedded value of NT$34.8 billion (US$1.06 billion), or NT$26.76 per share, at the end of June, company executives said yesterday.
Embedded value refers to the present value of insurance firms, while appraisal value incorporates expected profits.
That was up from the estimated embedded value of NT$26.6 billion, or NT$22.74 per share, at the end of last year when the life insurer’s net worth was negatively affected by the recent financial crisis, company chairman & CEO Alan Wang (王銘陽) told a media briefing yesterday.
Shares of the life insurer closed yesterday at NT$19.1, down 5.7 percent from Monday.
The Taipei-based life insurer saw rosy after-tax earnings of NT$1.26 billion for the first half of the year, up 151.6 percent year-on-year, or NT$1.01 per share.
Premium income totaled NT$31.2 billion, including NT$19.9 billion in first-year premiums for the first six months of the year, Wang said.
After completing a refinancing plan in March, the insurer’s capitalization jumped from NT$11.7 billion at the end of last year to NT$13 billion in June, with its net worth growing from NT$4.3 billion to NT$14 billion, or NT$10.78 per share, the company said.
Wang said he expected the life insurer to further benefit from the recent stock rally and the distribution of cash dividends this quarter after posting an annualized 4.02 percent return on investment (ROI) for the first half of the year.
China Life is expecting a cash dividend income of between NT$700 million and NT$800 million this quarter, he added.
The life insurer plans to increase investment in the local equity and property markets out of its NT$450 billion capital pool, though Wang refused to elaborate on this for fear of hiking up prices.
Wang added that the firm was in talks with potential Chinese non-insurance partners to expand its presence in markets there.
In mid-June, China Life completed its acquisition of the assets and liabilities of PCA Life Assurance Co (保誠人壽), a local arm of Prudential Plc, excluding its bancassurance and telephone marketing businesses, for the nominal sum of NT$1.
With its sales agents greatly boosted from 3,500 to 13,000, China Life’s premium income via agents accounts for 20 percent of the total income from new contracts last month, up from a meager 4 percent before the acquisition in May.
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