China Life Insurance Co., the nation’s largest insurer, said net income in the first half of the year may fall as much as 70 percent from a year earlier as stock-market declines dragged down investment returns.
The Beijing-based company attributed the forecast, which is based on unaudited numbers, to lower investment income and changes in discount-rate assumptions in reserves for traditional insurance contracts, according to a filing with the Hong Kong stock exchange on Friday. The insurer is scheduled to report first-half results Aug. 25.
Insurers’ combined profits slumped 54.1 percent in the period from a year earlier, largely due to share-market declines and higher expenses, the China Insurance Regulatory Commission said Thursday. Returns from equities totaled 24.1 billion yuan during the period, down by 261.2 billion yuan from a year earlier, data from the regulator showed.
China Life shares fell 1.7 percent to HK$17.68 in Hong Kong trading, extending this year’s loss to 29 percent. Its forecast came after markets shut Friday.
China Taiping separately projected a first-half profit drop of 45 percent to 50 percent, also in a statement after the market closed. Profit is expected to be lower as the company had bigger gains from equity investments in the first half of 2015, it said.
Source: Bloomberg