China Life Insurance, Their Vision for 2011

China Life Insurance Building in TaiwanOne of China’s largest providers of life insurance, China Life Insurance Co., stated today that it will continue to focus on their fixed-income investments throughout this year. The announcement comes amidst a series of rate hikes occurring within the industry. China Life Vice President, Liu Jiade, has said that the insurer’s fixed-income products will account for approximately 78% of the company’s investment portfolio in 2011.

Last Tuesday, China Life reported that their net profits for last year did not meet expectations. While profits rose by 2.3%, the insurer had a much higher aim. The insurer’s solvency ratio, the measure of their ability to meet long-term obligations, was at 212%, well over the mandated 150% minimum but a sharp contrast to their 304% solvency rate from last year.

Liu has said that, despite the falling solvency ratio, China Life has no plans to raise fund to replenish its capital. China Life will be raising premiums by some 10% over the course of this year, but Liu asserts that the increase is to keep up with competition and increases in administrative costs.

China Life had recently reported that it expected an 8% decline in fourth-quarter profits as a result of a stock market slump that forced the company to lower the value of its securities holdings. The decline meets the company’s forecasts and has no plans at present to conduct any fund raising efforts.

China Life expects that gross investment yields will be higher in 2011 than they had been in 2010.

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