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China Life Returns to Profit as Stock Rally Boosts Investments

China Life Insurance Co. (2628), the nation’s biggest insurer, returned to profit in the third quarter from a year ago as a stock-market rally boosted investment returns.

Net income was 7.5 billion yuan ($1.23 billion), or 0.27 yuan a share, in the three months ended Sept. 30, compared to a 2.2 billion yuan loss a year earlier, the company said in a statement to the Shanghai stock exchange. Nine-month profit rose to 23.7 billion yuan compared with 7.4 billion yuan a year earlier, it said.

The benchmark Shanghai Composite Index (SHCOMP) climbed 9.9 percent in the three months ended Sept. 30 as China’s economic growth accelerated for the first time in three quarters, boosting the value of China Life’s equity holdings. Net premiums earned were 73.2 billion yuan in the third quarter, the company said.

Investment income rose 20.5 percent to 23 billion yuan, the Beijing-based company said. Impairment losses from investments, which jumped 140 percent last year, were 43 million yuan, according to the statement.

Third-quarter profits at Chinese insurers traded on mainland exchanges may have grown an average 80 percent because of a low base from a year earlier and the stock-market rally that offsets fair-value losses on their portfolios, Guotai Junan Securities Co.’s Shanghai-based analysts led by Peng Yulong wrote in an Oct. 20 report.

They forecast a 3.8 billion yuan profit for China Life and a 164 percent jump in the net income of China Pacific Insurance Group Co., which is scheduled to report earnings next week.

To contact the reporter on this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net

To contact the editors responsible for this story: Nathaniel Espino at nespino@bloomberg.net; Andreea Papuc at apapuc1@bloomberg.net

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