QUOTE AND NEWS
Market Intelligence Center  Nov 19  Comment 
After closing Tuesday at $43.92, China Life Insurance Co Ltd (LFC) presents an attractive opportunity to get a 2.36% return in just 59 days, which is an annualized return of 14.60% (for comparison purposes only). To enter this trade, sell one Jan....
Market Intelligence Center  Oct 31  Comment 
China Life Insurance Co Ltd (LFC) presents a trading opportunity that offers a 2.68% return in just 78 days. A covered call on China LIfe Insurance at the $42.50 level expiring on Jan. '15 offers an assigned return rate of 2.68% or 12.55%...
Market Intelligence Center  Oct 28  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with China Life Insurance Co Ltd (LFC) that should provide a 2.70% return in just 81 days. Sell one Jan. '15 call at the $40.00 level for each 100...
Market Intelligence Center  Oct 21  Comment 
After Monday’s trading in China Life Insurance Co Ltd (LFC) the algorithms behind MarketIntelligenceCenter.com's Artifical Intelligence Center picked out a trade that offers a 2.83% or 11.73% (for comparison purposes only), while providing 7.05%...
Market Intelligence Center  Oct 1  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered-call trade on China Life Insurance Co Ltd (LFC) that includes 7.43% downside protection. Sell one...
Market Intelligence Center  Aug 27  Comment 
China Life Insurance Co Ltd (LFC) traded between $44.42 and $44.81 before closing at $44.69 Tuesday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Jan. '15 $42.50 covered...
Market Intelligence Center  Aug 13  Comment 
MarketIntelligenceCenter.com's option-trade picking algorithms have identified an attractive covered-call trade on China Life Insurance Co Ltd (LFC). Look at the Jan. '15 $42.50 covered call for a net debit in the $40.79 area. This trade has a...
Market Intelligence Center  Jul 15  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center are highlighting two trades on China Life Insurance Co Ltd (LFC) today after it closed at $40.60 on Monday. For more conservative...
Market Intelligence Center  Jun 10  Comment 
After closing Monday at $41.50, China Life Insurance Co Ltd (LFC) presents an attractive opportunity to get a 3.90% return in just 130 days, which is an annualized return of 10.94% (for comparison purposes only). To enter this trade, sell one Oct....
The Hindu Business Line  Apr 10  Comment 
We have a big crop of pictures in response to last week’s Faking It piece. V Sriram sent us this picture of LFC (Labbaik Fried Chicken) from Coimbatore. No prizes for guessing what it resembles! Ot...




 
TOP CONTRIBUTORS

China Life Insurance Company (China Life) is the leading insurance company in the People's Republic of China. Its products and services include individual life insurance, group life insurance, accident and health insurance. As of 2006, the Company had over 86 million individual and group life policies and annuities, and long-term health insurance policies in force. It also provides both individual and group accident, and short-term health insurance policies. Through its controlling shareholding in China Life Insurance Assets Management Co., Ltd. (AMC), the Company is an insurance asset management company, and an institutional investor in China.

China Life's market value of $129 billion is only behind American International Group's $186 billion, making it the world's second largest insurer.

The company's stock is traded in both Hong Kong and Shanghai, with ADR (LFC) listed on NYSE.

History of the Company

China Life traces its root from the privitization of the state-owned insurance operation. The following describes this complicated history [1].

On October 20, 1949, the People’s Insurance Company of China, or PICC, was established by the Chinese government as a nationwide wholly state-owned insurance company offering various types of insurance services. PICC achieved monopoly status in China’s insurance market by the mid-1950s, by which time all foreign insurance companies had withdrawn operations from China. The Chinese government suspended virtually all of PICC’s domestic insurance business, however, in 1958, lasting until the advent of economic reform in 1979, when PICC’s domestic property and casualty insurance business was resuscitated. PICC’s life insurance business resumed operations in 1982, with PICC being the only life insurance provider in China.

In 1996, PICC was reorganized as a holding company. The business of PICC was transferred to its four subsidiary companies: Zhongbao Property Insurance Company Limited, or PICC Property; Zhongbao Life Insurance Company Limited, or PICC Life; Zhongbao Reinsurance Company Limited, or PICC Reinsurance; and China Insurance H.K. (Holdings) Company Limited, or China Insurance H.K.

In January 1999, the holding structure of the PICC group of companies was dissolved. After this restructuring the original PICC Property inherited the PICC brand and was renamed People’s Insurance Company of China; the original PICC Life was renamed China Life Insurance Company; the original PICC Reinsurance was renamed China Reinsurance Company, which was recently restructured into China Reinsurance (Group) Company, China Property & Casualty Reinsurance Co, Ltd., China Life Reinsurance Company and China Continent Property & Casualty Insurance Company Ltd.; and all overseas business institutions and operations owned by the former PICC group of companies were allocated to, and administered by, China Insurance H.K. After 1999 and prior to the restructuring described below, CLIC was the only wholly state-owned insurance company licensed to operate life insurance business in China.

CLIC has experienced rapid development in recent years. In 2002, its total insurance premiums represented 57% of the total life insurance premiums in China. A joint stock company pursuant to the PRC company law on June 30, 2003 was formed under the corporate name of China Life Insurance in connection with the restructuring.

On November 23, 2003, an asset management joint venture was established with our predecessor, CLIC, in connection with the restructuring. The asset management joint venture manages China Life's investment assets and, separately, substantially all of those of CLIC.

Industry and Competitions

As of 2006, the number of working people with basic endowment insurance in China was 141 million, accounting for 18.5% of the total employed population. Calculated at the average growth pace of 6% in the recent 4 years, plus the increase of employed population, the coverage rate of basic endowment insurance can not reach 100% in 30 years [2].

The majority of the income of Chinese citizens is deposited in banks, but not used to buy insurance. In 2005, the saving deposits amounted to over $1.8 trillion USD, while the insurance premium revenue was just $39.6 billion USD, equal to 2.2% of the newly-increased bank deposits.

Generally, the annual compounded growth rate of China life insurance industry will be ~16% from 2007 to 2010, the life insurance scale will reach RMB 767.6 billion in 2010, and RMB 2 trillion in 2020, but the figure is still small compared to the current saving deposit scale of RMB 17 trillion.

The growth rate of China life insurance industry is among the highest among the main countries in the world. ~16% figure is comparable to India, more than twice of Korea and much higher than the 2.5% of the US.

The market shares of the top 3 insurance providers in China are:

China Life competes fiercely with Ping An for the top spot in China insurance industry. Product percentage comparison between China Life Insurance and Ping An Insurance in 2005, is shown below:

Image:Lfc_rev.bmp





Footnotes

  1. 2003 Annual Report
  2. China Life Insurance Market Report, 2006-2007, ResearchInChina
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