On Mar 27, 2014, we issued an updated research report on
China Life Insurance Co. Ltd.
). The company's full-year 2013 earnings significantly beat the
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FIDELITY&GUARNT (FGL): Free Stock Analysis
CHINA LIFE INS (LFC): Free Stock Analysis
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China Life's strong market position, growth in premiums and
investment income are expected to offset higher expenses and
declining cash flow, as reflected in its 2013 results.
China Life has the most extensive distribution and service
network among all insurance companies operating in China, making
it one of the largest brands in China. To cater to its huge
clientele, the company has established a strong customer service
network with dedicated customer service representatives. Also,
the company constantly upgrades its existing services.
China Life is experiencing an increase in net premiums earned
aided by strong premium growth in the Individual Life insurance
business. As a leading life insurance company with a strong brand
value, China Life is benefiting from this opportunity. Moreover,
diversification of business has reduced the company's operational
The investment income of China Life has also shown substantial
improvement over the past few years primarily due to increased
volumes. With the improvement in the economic scenario,
investment income is expected to increase.
However, with government supporting more new establishments of
health insurance companies to improve healthcare in China, China
life is facing increasing competition risk as the company is
largely dependent on the domestic market. Alongside, substantial
interest rate and currency risks pose direct threat to long-term
China Life presently carries a Zacks Rank #4 (Sell). Some
better-ranked stocks in the life insurance industry worth
Fidelity & Guaranty Life Common
). While Aviva sports a Zacks Rank #1 (Strong Buy), Fidelity
& Guaranty Life and Primerica carry a Zacks Rank #2 (Buy).