China Life's Revenues Grow on Premiums, Higher Costs Hurt

An image of a stock chart displayed on a tablet
Credit: Shutterstock photo

China Life Insurance Co. LtdLFC continues to benefit from revenue growth backed by surging level of premiums, especially in its Life Insurance business.

The recent interest rate hikes have aided China Life along with other companies like The Hartford Financial Services Group, Inc HIG , CNO Financial Group, Inc CNO , Renaissance Holdings, Inc RNR by boosting their investment results. In the first half of 2017, on the back of interest rate hikes, China Life increased its allocation in fixed income assets and increased equity investments.

The company has the most extensive distribution and service network among all insurance companies operating in China. This helps China Life to better serve its customer through an operationally efficient value chain.

In addition, constant product upgrades and new launches continue to help in sharpening its competitive edge.

However, the company's rising level of expenses continues to hurt its bottom line. The increasing expenses ares primarily due to rise in costs associated with health insurance, accident insurance business, investment contracts, higher policyholder dividends, underwriting and policy acquisition costs, finance costs and administrative expenses. The same trend continued in the first half of 2017 as well.

Moreover, as most of the company's investments are limited to China, it is highly exposed to market risks stemming from the economic downturn in the Chinese economy. Further, the investments outside the country are also exposed to foreign exchange risks and volatility in concerned markets.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

China Life Insurance Company Limited (LFC): Free Stock Analysis Report

Hartford Financial Services Group, Inc. (The) (HIG): Free Stock Analysis Report

CNO Financial Group, Inc. (CNO): Free Stock Analysis Report

RenaissanceRe Holdings Ltd. (RNR): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos