China Pacific Insurance Net Income Rises on Premiums Growth, Cost Cutting
China Pacific Insurance (Group) Co., the nation’s third-biggest insurer, said profit rose in the first half as premiums expanded and the company curbed costs.
Net income climbed to 4.02 billion yuan ($591 million), or 0.47 yuan a share, from 2.41 billion yuan a year earlier, the company said in a statement to the Hong Kong stock exchange.
Chairman Gao Guofu boosted premiums by 48 percent to defend the company’s position as China’s third-biggest life insurer, partly offsetting the impact of a stock-market rout on earnings. Shanghai-based Pacific Insurance also improved profitability at its property and casualty unit, which was overtaken last year by Ping An Insurance (Group) Co. as the nation’s second-largest non-life operator.
“Pacific Insurance’s premium growth was fairly rapid as it boosted sales through bank outlets” partly due to concerns about its market share , said Tong Chengdun, a Shenzhen-based analyst at Guosen Securities Co. before the announcement. “There should be some unrealized profit from bond holdings, and that can partially offset losses from stocks.”
Net investment income, mainly dividends and bond yields, was 8.96 billion yuan, according to the statement. Net realized and unrealized investment gains were 151 million yuan.
The benchmark Shanghai Composite Index dropped 27 percent in the first half of 2010 amid concerns that curbs on bank lending and a crackdown on real-estate speculation will strain economic growth. The gauge is up 8.3 percent since July 1 as investors speculate that policies may be eased to counter a slowdown.
Pacific Insurance fell 0.8 percent to HK$30.05 in Hong Kong trading Aug. 27, extending this year’s loss to 2.8 percent. The company and the state pension fund raised HK$24.1 billion in December in the second-largest public share sale in Hong Kong.
China Life Insurance Co., the nation’s biggest insurer, said Aug. 25 first-year profit rose 7.4 percent, while net income at Ping An climbed 29 percent.
Pacific Insurance’s gross premiums are trailing those at New China Life Insurance Co. through June this year, according to China Insurance Regulatory Commission data, putting the company at risk of losing its long-standing position as the nation’s third-biggest life insurer.
China Pacific’s net premiums earned were 46.9 billion, according to the statement.
The non-life unit’s combined ratio, which measures claims and expenses as a percentage of premiums earned, dropped to 94.5 percent from 97.5 percent a year earlier.
--Zhang Dingmin. Editors: Andreea Papuc
To contact the Bloomberg News staff for this story: Zhang Dingmin in Beijing at Dzhang14@bloomberg.net
Rate These Stories
Rate this Page