"Life Insurance King" profits double, laying out three new growth poles in pension, health, and wealth management

As the Year of the Snake approaches, China Life, the "king of life insurance," has released a performance forecast announcement.

On January 24, under the new standards, China Life's net profit attributable to shareholders for 2024 is expected to be approximately RMB 102.368 billion to RMB 112.605 billion, with a year-on-year growth rate in the range of 122% to 144%.

Looking at the overall performance for the year, the current round of performance growth for China Life mainly relies on the boost from investment income.

According to previously disclosed data, China Life's total premium income for 2024 is RMB 671.7 billion, ranking first among listed insurance companies in terms of life insurance business; the year-on-year growth rate reached 4.71%, placing it in the middle of the industry, which is significantly lower than the net profit growth rate.

Historically, the profit changes of China Life have always been closely linked to investment performance.

For example, in 2019, the net profit attributable to shareholders surged by 411.51%, mainly driven by an increase in total investment income and the favorable impact of the new commission policy 'tax reduction.'

At that time, China Life was a leading institution in the "shareholding wave," continuously increasing its holdings in Agricultural Bank of China H-shares and China General Nuclear Power H-shares throughout the year.

Zhang Di, Assistant President and Chief Investment Officer of China Life Pension Insurance Company, stated: "The company selects leading stocks that meet the requirements for long-term holding based on a series of criteria such as individual stock growth potential, value, and dividends. This strategy becomes more effective when the stock market is under pressure."

The significant shrinkage in net profit in 2023 was partly due to overly aggressive positioning during the equity market pullback in 2022.

Unfortunately, the low-level fluctuations continued into the following year, leading to price difference losses in the equity portfolio, which put pressure on investment income, resulting in a year-on-year decline of 1.26 percentage points in total investment yield.

Regarding the substantial increase in performance for 2024, China Life stated: "The company seizes market opportunities to carry out cross-cycle allocation. After a rapid rebound following the low-level fluctuations in the stock market in 2024, the company's total investment income is expected to increase significantly year-on-year."

As of the end of the third quarter, China Life's total assets and investment assets were RMB 6,481.554 billion and RMB 6,356.235 billion, respectively, growing by 11.7% and 12.3% compared to the beginning of the year; the total investment yield and net investment yield were 5.38% and 3.26%, respectively.

Recently, after the release of the "Implementation Plan for Promoting Medium- and Long-term Funds to Enter the Market," the topic of addressing the bottlenecks for insurance funds entering the market has sparked renewed discussion.

A relevant person in charge of the asset company under China Life Group told Wall Street News that they will adhere to the principles of long-term investment, value investment, and prudent investment, accelerating the construction of investment capabilities and innovation in investment models.

Specifically, first, improve the matching mechanism for patient capital, establishing an internal incentive constraint mechanism centered on long-term performance and an innovation error tolerance mechanism;

Second, strengthen investments in key areas, continuously optimize fund allocation, and expand investment fields;

Third, effectively leverage the value discovery function of institutional investors, continuously enhance core capabilities in investment research, and improve abilities in value analysis, accurate pricing, value enhancement, and risk control for investment targets.

In addition to enhancing investment capabilities, China Life has also made plans in the areas of pension, health, and wealth management.

Currently, China Life Group has held a work meeting for 2025, proposing a "333 strategy" to further deepen reforms and promote high-quality development, clarifying the development positioning, target tasks, and key measures for the next five years According to reports, the "333 Strategy" specifically includes: actively cultivating three new growth poles in pension, health, and wealth management; focusing on building three new listing platforms; and deeply implementing three major projects.

In 2024, China Life's cumulative new insurance amount in the domestic market will exceed 700 trillion yuan; the group's consolidated operating revenue will surpass 1.1 trillion yuan, and the scale of managed third-party assets will exceed 30 trillion yuan