China Life reports slow increase of 1.3% in net profit in 2021

Growth was dragged by a decline in new business value and personnel challenges.

China’s biggest life insurer China Life Insurance has had a slow year, reporting only a 1.3% increase in net profit in 2021.

Profits were mostly dragged by new business value (NBV) which fell by 23% to $7.04b, implying a 31% decline in the second half of 2021 according to a report by OCBC Investment Research.

Individual agent NBV was also down 26% year-on-year (YoY) to $6.74b (accounting for about 96% of total NBV). The report identified that the decline of individual agent NBV was partly due to a smaller agent force, which fell 40% in 2021 due to continued challenges from the pandemic.

According to the analyst of the report, there the first half of 2022 has a challenging outlook with the recent resurgence of the pandemic in China to weigh in further on consumer sentiment and willingness to add longer-term protection products.

“Key issues we are keeping a watch on for the coming quarters include updates on the strategy of its new chairman, agency force recruitment trends as well as efforts on enhancing agency productivity and retention rate of its existing sales force,” the report said.

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