China Life Insurance : 2019 First Quarter Report (PDF)

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中 國 人 壽 保 險 股 份 有 限 公 司

CHINA LIFE INSURANCE COMPANY LIMITED

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2628)

2019 FIRST QUARTER REPORT

This announcement is made by China Life Insurance Company Limited (the "Company") pursuant to the inside information provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rules 13.09(2) and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The financial data of the Company for the first quarter of 2019 have been prepared in accordance with the China Accounting Standards for Business Enterprises and are unaudited. Net profit attributable to equity holders of the Company and equity attributable to equity holders of the Company in the consolidated financial statements have no difference from the relevant data under International Financial Reporting Standards.

1.Important Notice

1.1The Company's Board of Directors, the Board of Supervisors, its Directors, Supervisors and Senior Management warrant that the information in this quarterly report is true, accurate and complete and contains no false representations, misleading statements or material omissions, and jointly and severally accept full legal responsibility.

1.2On 25 April 2019, the 2019 First Quarter Report of the Company was considered and approved at the thirteenth meeting of the sixth session of the Board of Directors of the Company. Of the ten Directors of the Company, eight attended the Board Meeting. Chairman and Executive Director Wang Bin, Executive Director Su Hengxuan, Non-executive Directors Yuan Changqing and Yin Zhaojun, and Independent Non-executive Directors Chang Tso Tung Stephen, Robinson Drake Pike, Tang Xin and Leung Oi-Sie Elsie attended the meeting. Executive Director Xu Haifeng and Non-executive Director Liu Huimin could not attend the meeting due to other business, and gave written authorization to Executive Director Su Hengxuan and Non-executive Director Yin Zhaojun, respectively, to act as proxy to attend and vote at the meeting.

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1.3The Company's 2019 first quarter financial report is unaudited.

1.4Mr. Wang Bin, Chairman of the Company, Mr. Zhao Lijun, Vice President in charge of accounting affairs, Mr. Li Mingguang, Chief Actuary and Ms. Hu Jin, Head of the Accounting Department, confirm that the financial reports in this 2019 first quarter report are true, accurate and complete.

2.The Company's Basic Information

2.1Major financial data

			Currency: RMB
			Increase/(decrease)
	As at	As at	compared to
	31 March 2019	31 December 2018	31 December 2018
Total assets (million)	3,373,287	3,254,403	3.7%
Total equity holders' equity
(million)	364,356	318,371	14.4%
Ordinary share holders' equity
per share (RMB per share)	12.62	10.99	14.8%
			Increase/(decrease)
	For the three months	For the three months	compared to the same
	ended 31 March 2019	ended 31 March 2018	period of 2018
Net cash flows from operating
activities (million)	111,765	22,782	390.6%
Net cash flows from operating
activities per share
(RMB per share)	3.95	0.81	390.6%
Operating income (million)	312,226	264,892	17.9%
Net profit attributable to equity
holders of the Company
(million)	26,034	13,518	92.6%
Net profit attributable to equity
holders of the Company after
deducting non-recurring items
(million)	26,045	13,589	91.7%
Earnings per share (basic and
diluted) (RMB per share)	0.92	0.48	93.2%
Basic earnings per share after
deducting non-recurring items
(RMB per share)	0.92	0.48	92.2%
Weighted average ROE (%)			An increase of
	7.74	4.19	3.55 percentage points
Weighted average ROE after
deducting non-recurring items			An increase of
(%)	7.75	4.21	3.54 percentage points

Note: In calculating the percentage changes of "Ordinary share holders' equity per share", "Net cash flows from operating activities per share", "Earnings per share (basic and diluted)" and "Basic earnings per share after deducting non-recurring items", the tail differences of the basic figures have been taken into account.

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In the first quarter of 2019, facing the complicated and severe external environment, the Company steadily proceeded with all tasks by closely adhering to the strategic deployment of "China Life Revitalization", and achieved the coordinated development of scale and value. The Company continuously maintained its leading market position with a good momentum for China Life Revitalization. Firstly, the Company recorded a relatively rapid growth in its core businesses. In the first quarter of 2019, the Company achieved revenues from insurance business1 of RMB272,353 million, an increase of 11.9% year-on-year.First-year regular premiums amounted to RMB66,780 million, an increase of 9.1% year-on-year. Renewal premiums amounted to RMB178,401 million, an increase of 13.5% year-on-year.Short-term insurance premiums amounted to RMB26,479 million, an increase of 68.5% year-on-year.Secondly, the premium structure was further optimized. During the reporting period, the percentage of first-year regular premiums in premiums from long-term insurance of new policies was 98.97%, an increase of 12.23 percentage points from the corresponding period of 2018. The percentage of renewal premiums in total premiums was 65.50%, a slight increase from the corresponding period of 2018. The protection-oriented business developed rapidly. In the first quarter of 2019, the surrender rate of the Company was 0.62%, a decrease of 3.34 percentage points year-on-year.Thirdly, the sales forces expanded with enhanced quality. As at the end of the reporting period, the total number of sales forces from all channels of the Company was approximately 1.89 million. In particular, the number of exclusive individual agents was 1.537 million, and the number of sales representatives in the bancassurance channel was 0.276 million. The monthly average productive agents from the exclusive individual agent channel increased by 37.9% year-on-year, the monthly average number of agents selling protection- oriented insurance products rose by 59.8% year-on-year, and the monthly average active insurance planners for long-term business in the bancassurance channel grew by 58.7% year-

on-year. Fourthly, the Company proactively took advantage of investment opportunities

and investment income was improved significantly year-on-year.As at 31 March 2019, the Company's investment assets reached RMB3,189,483 million, an increase of 2.7% from the end of 2018. The Company continued to adhere to its investment strategies of making long- term investment, value-orientedinvestment and prudent investment, and flexibly paced its fixed-incomeinvestments by studying and assessing the interest rate movements in the market. For equity investments, stock positions were maintained at a reasonable level. The Company carried out active trading operations and optimized investment portfolios by seizing the market opportunities in the first quarter, as a result of which, income from equity investments increased significantly year-on-year.In the first quarter of 2019, the gross investment income2 of the Company was RMB50,888 million. The annualized gross investment yield3 was 6.71%, an increase of 2.79 percentage points year-on-year.The annualized net investment yield4 was 4.31%, a decrease of 0.05 percentage point year-on-year.

Revenues from insurance business is consistent with Premium Income in the attached income statement.

Gross investment income = Net investment income + Net realized gains on investment assets + Fair value gains/losses - Impairment losses of investment assets

Net investment income includes interest income from debt investments, interest income from deposits, dividends and bonus from equity investments, interest income from loans, net income from investment properties, and net income from share of profit of associates and joint ventures, etc.

Gross investment yield = {[(Gross investment income - Interest paid for financial assets sold under agreements to repurchase)/((Investment assets at the beginning of the period - Financial assets sold under agreements to repurchase at the beginning the period - Derivative financial liabilities at the beginning of the period + Investment assets at the end of the period - Financial assets sold under agreements to repurchase at the end of the period - Derivative financial liabilities at the end of the period)/2)]/90}×365. Figures of previous years were adjusted on the same basis.

Net investment yield = {[(Net investment income - Interest paid for financial assets sold under agreements to repurchase)/((Investment assets at the beginning of the period - Financial assets sold under agreements to repurchase at the beginning of the period + Investment assets at the end of the period - Financial assets sold under agreements to repurchase at the end of the period)/2]/90}×365. Figures of previous years were adjusted on the same basis.

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During the reporting period, net profit attributable to equity holders of the Company was RMB26,034 million, an increase of 92.6% year-on-year; the value of new business for the first quarter grew by 28.3% year-on-year. The core solvency ratio and comprehensive solvency ratio of the Company were 252.03% and 262.58%, respectively.

For the next stage, the Company will continue to adhere to the strategic deployment of "China Life Revitalization", uphold the core strategy of "centering on customers and focusing on basic operational units; focusing on business value and emphasizing on broader individual insurance business", and stick to the operating guideline of "prioritizing business value, strengthening sales force, achieving stable growth, upgrading technology, optimizing services and guarding against risks" to accelerate the development of its protection-oriented business, continue to strengthen the sales force, enhance competence in the large- and medium-sized cities, and step up efforts in risk prevention and control, so as to boost the high-quality business development of the Company.

Non-recurring Items and Amounts

	RMB million
	For the Reporting Period
Non-recurring items	(from January to March)
Gains/(losses) on disposal of non-current assets	-
Government subsidies recognized in current gains/(losses)	20
Net non-recurring items other than those mentioned above	(35)
Effect of income tax	4
Attributable to non-controlling interests	-
Total	(11)

Note: As an insurance company, investment (utilization of insurance funds) is one of the major businesses of the Company. Therefore, the non-recurring items do not include fair value gains/(losses) from financial assets at fair value through profit or loss and financial liabilities at fair value through profit or loss, as well as investment income from the disposal of financial assets at fair value through profit or loss and financial liabilities at fair value through profit or loss and available-for-sale financial assets.

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2.2Total number of shareholders and the particulars of top ten shareholders as at the end of the reporting period

The total number of shareholders as at		Number of A Share shareholders:117,981
the end of the Reporting Period		Number of H Share shareholders: 27,744
		Particulars of the top ten shareholders				Unit: Share
					Number of shares
			Percentage of	Total number of	subject to selling	Number of shares
Name of shareholders	Nature of shareholder		shareholding	shares	restrictions	pledged or frozen
China Life Insurance (Group) Company	State-owned legal person		68.37%	19,323,530,000	-	-
HKSCC Nominees Limited	Overseas legal person		25.90%	7,320,393,311	-	-
China Securities Finance Corporation Limited	State-owned legal person		2.56%	723,937,634	-	-
Central Huijin Asset Management Limited	State-owned legal person		0.42%	119,719,900	-	-
Hong Kong Securities Clearing Company Limited	Overseas legal person		0.16%	44,719,118	-	-
China International Television Corporation	State-owned Legal person		0.07%	18,452,300	-	-
China Universal Asset Management Co., Ltd - Industrial	Other		0.05%	15,015,845	-	-
and Commercial Bank of China Limited - China
Universal - Tianfu Bull No. 53 Asset Management Plan
Industrial and Commercial Bank of China Limited - SSE	Other		0.05%	14,391,874	-	-
50 Exchange Traded Securities Investment Fund
China National Nuclear Corporation	State-owned legal person		0.04%	12,400,000	-	-
Industrial and Commercial Bank of China Limited -	Other		0.03%	9,885,584	-	-
Guangfa Jufeng Blend Securities Investment Fund
	1.	HKSCC Nominees Limited is a company that holds shares on behalf of the clients of the Hong Kong stock brokers
		and other participants of the CCASS system. The relevant regulations of the HKSE do not require such persons
		to declare whether their shareholdings are pledged or frozen. Hence, HKSCC Nominees Limited is unable to
		calculate or provide the number of shares that are pledged or frozen.
	2.	China Universal Asset Management Co., Ltd - Industrial and Commercial Bank of China Limited - China
Details of shareholders		Universal - Tianfu Bull No. 53 Asset Management Plan has Industrial and Commercial Bank of China Limited
		as its asset trustee. Both Industrial and Commercial Bank of China Limited - SSE 50 Exchange Traded Index
		Securities Investment Fund and Industrial and Commercial Bank of China Limited - Guangfa Jufeng Blend
		Securities Investment Fund have Industrial and Commercial Bank of China Limited as their fund depositary.
		Save as above, the Company was not aware of any connected relationship and concerted parties as defined by the
		"Measures for the Administration of the Takeover of Listed Companies" among the top ten shareholders of the
		Company.

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