China Life Insurance Co Ltd, the nation's biggest life insurer, plans to cut its stock holdings this year due to financial market turmoil.
"We will try to reduce the percentage of stocks and stock-related assets in our portfolio because we think the Chinese and global stock markets will be choppy this year," Liu Lefei, China Life's chief investment officer, said yesterday.
The insurer said that given the financial market climate, it will invest more in bonds this year, which account for half of its total assets.
China Life's profit soared 94.8 percent in 2007 from a year earlier to 38.88 billion yuan, while net investment income was 44.02 billion yuan, up 76.5 percent from a year earlier.
Earnings per share were 1.38 yuan, up 0.63 yuan on the previous year, with a proposed annual dividend of 0.42 yuan per share.
"The current stock market turmoil and tightened monetary policy is a good time for the insurance sector. China Life will seek more opportunities to develop new insurance products, while continuing to focus on sales of traditional and participating products," Wan Feng, president of China Life, said.
"Revenue from sales of traditional and participating products accounted for 73 percent of total insurance revenue, and there's plenty of room for new products," Wan said.
China Life said it expects increased competition from securities, funds and other financial bodies after cross-sector rules were relaxed recently.
It plans to develop insurance products for rural and emerging areas like employer annuities.
"In the long term, we are optimistic about investment opportunities," Liu said.
China Life Chairman Yang Chao said earlier the insurer is keen to take a stake in China Development Bank and Agricultural Bank of China, and plans to buy into foreign banks.
China Life invested $300 million in last week's initial public offering by credit card giant Visa Inc, but the insurer said it was a financial investment rather than a strategic cooperation bid.
"We set up an investment strategy planning team in July 2007, which looked into investment opportunities We saw it (the IPO) as a good chance to invest in Visa," Liu said.
"We're not familiar with overseas markets, so we'll cautiously explore investment possibilities abroad. We're in no hurry to go overseas," Liu said.
(China Daily March 27, 2008)
