China Life Insurance (2628) saw its new business value last year fall 23 percent to 44.78 billion yuan (HK$55 billion) , with a lower-than-expected net profit.
The country's largest life insurer posted a 1.3 percent rise in net profit in 2021 to 50.92 billion yuan from an earlier year. That compared with the 57.5 billion yuan average estimate of analysts.
It proposed a final dividend of 0.65 yuan per share, also missing the market estimate of 0.71 yuan.
Net premiums earned over the same period grew 1.1 percent to 611.25 billion yuan.
Premiums from new policies decreased 9.3 percent to 175.86 billion yuan, due to the slowdown in the demand for insurance consumption and decline of sales force amid the pandemic, the company said.
As a result, new business value, which gauges the future profitability of such policies, dropped 23 percent for the full year, deepening from a 20 percent slump in the first nine months. The drop was also due to the high base from the previous year and the decline was within a reasonable range, it said.
China's cooling economy and lower interest rates have eroded demand for life insurance and hampered investment returns. China Life this year also needs to limit any impact from a probe of former Chairman Wang Bin, just as surging new Covid cases threaten to again disrupt its efforts since 2018 to refocus on higher-margin, long-term policies.
Wang resigned in February. He is "suspected of serious violations of discipline and law, and is currently undergoing disciplinary review and investigation," the China Central Commission for Discipline Inspection said in January, without elaborating.
By the end of last year, the company's total assets reached 4.89 trillion yuan, an increase of 15 percent from the end of 2020.
The core solvency ratio and the comprehensive solvency ratio were 253.70 percent and 262.41 percent, respectively, both falling by more than 6 percentage points year on year.
China Life shares fell 0.5 percent in Hong Kong, widening this year's loss to 5.1 percent.
