Country life: to make firm advancement of overseas fusions and acquisitions

Insurance companies in 2008 the first annual report released yesterday, revenue has shrunk substantially. March 26, China Life was held in Beijing in 2008 the operating results of the annual conference, in Hong Kong accounting standards-based performance report showed that as at December 31, 2008, China Life’s total investment income of 30.24 billion yuan more than 2007 was down 61.4 percent; net profit of 21.28 billion yuan, representing a 45.3 percent decline in 2007. Solvency in 2007 from 525% to 310%.

Decline in net profit affected by many factors

Not perfect but for as early as the anticipated profitability of, China Life Chairman Yang Chao said in the seminar, as a outcome of the first half of the homeland in 2008 for the South skilled a catastrophe and iced rainfall and snowfall “5.12″ Wen chun large earthquakes, and are seldom glimpsed in the second half of the worldwide economic urgent position, making the procedure of the development of China Life is opposite unprecedented challenges. As of the end of 2008, China Life Insurance to pay a total of 11.916 million yuan reimbursement snowstorm, earthquake to pay a total of about 153 million claims; At the identical time, change of monetary and borrowing principle, exchange rates, alterations in interest rates, the cost of component charges conveyed about by alterations to their varying qualifications of impact.

As for the sharp decline in solvency, vice president of China Life Insurance Analysis Tak Liu pointed out that the depth of capital markets led to lower investment asset values have dropped sharply recognized and the rapid development of the company’s business is the main reason for the decline in solvency.

It was also introduced in 2008 a huge shock to international capital markets, China Life Insurance is not investment, and sub-loan crisis is directly related to the offshore bonds, equities and derivatives.

Modest financial endeavour in overseas

As can be observed from the report in 2008, China Life’s financial endeavour portfolio has modified highly, which allegations financial endeavour statements for 61.4% equity financial endeavour in 2007 from 23% to 8%. In the face of fiscal critical purpose, the nation life in time to acclimatise the financial endeavour strategy. Germany, as showed by Liu, the 2008 increment of the principle assets in fixed-income portion of species, embracing infrastructure strategies, for instance allegations, but in addition to award some of the privileges and welfare of timely financial endeavour wages group, but in addition slice interest rates before the advance of bank bank deposits and bond-type configuration. Nevertheless, the total financial endeavour wages was only 3.4%, and in 2007 was as high as 10.24%.

Investment scheme for 2009, Liu said Germany would adhere to the fixed-income assets founded buying into scheme, at the identical time will more nearly oversee the administration of the new buying into passages open to find, for example buying into in infrastructure, invest in unsecured bonds, genuine land parcel buying into, personal equity buying into possibilities for the new configuration. “We will search a better grade of buying into earnings to make up for in 2009 will face force on profits.”

Tak Liu notified reporters that China Life would grab the new “Insurance Law” to expand buying into passages of protection businesses this beneficial opening, particularly for genuine land parcel buying into and infrastructure buying into is very welcome.

The report referred that in the overseas financial endeavour, will energetically force frontwards the sound of overseas fusions and acquisitions and equity investments. Prior to this, China Life Insurance has advertised it was deserting a offer for AIG assets in Asia, Yang Chao in reply to a reporter’s query, said that overseas financial endeavour is the financial endeavour firm China Life Insurance main purpose, cease the AIA (AIA), does not intend that overseas financial endeavour is no longer China Life will do a good job in the in the household market on the foundation of an advantageous financial endeavour overseas. Has now amassed many of financial endeavour ventures, the ongoing examine in depth. At the matching time, the registered financial gathering China Life has yet to strategic investors, promising to find symmetric Yang Chao global strategic investors, but in addition demand time and careful.

Unexpected advance in premiums

Sharp fall contrasted to a earnings of China Life in 2008 premium development was unforeseen, particularly in the Bancassurance conduit growth.

The report presentations that in 2008 the primary indemnity bond premiums of 295.579 billion yuan of wages than the matching interval in 2007 developed 50.33%. “This expansion rate highly exceeded the allocation of the Board of Directors distributed last year, the objective is 8% -10%.” Chao said such expansion, chiefly in the Banking and Insurance paths due to the every part of market surroundings impact. He accommodated that for such combined effects, because the bulk of profits is bright wholesale indemnity to pay, not wholly in retaining with the development approach of China Life location, but can not cease the channel.

Therefore, China Life has been directed at in 2009 in rank to realise a flat scale of enterprise expansion, modification of enterprise structure, to guard against operational threats to tenacity business-oriented development strategy. Pay alertness to the enterprise to deduce long-term interval, risk-based enterprise, as well as private indemnity guidelines chiefly to pay the operational point in time dispersion. According to the briefing, the company’s indemnity universal minimal moratorium on the sale in 2009, and the cast rudimentally did not even dangerous.