China Life Insurance (2628) said its profit for the first nine months is expected to increase as much as 185 percent, buoyed by investment returns.
The country's largest life insurer forecasts that net income will reach between 101.1 billion yuan (HK$110.5 billion) and 108.8 billion yuan, a surge between 165 percent and 185 percent from a year earlier. The increase is due to improvement in investment returns underpinned by a stock rally in the third quarter, it said in an exchange filing yesterday.
China's CSI 300 Index rose 17 percent in the first nine months after the government's stimulus package spurred a strong rally in September, bolstering the value of insurers' stock investments.
Chinese insurers' profits have the potential to double on average this year if their equity and fund holdings can appreciate 20 percent, even though bond yields have fallen, according to Bloomberg Intelligence analyst Steven Lam.
China Life's profit is set for a record high this year and is expected to reach 115 billion yuan, as the company reprices savings products, Lam said. It's among insurers that will benefit most from the rally due to their higher exposure to equities, he said.
Bloomberg
