China Life Insurance Company Limited is the largest life insurer in the People’s Republic of China. The company offers individual life insurance, group life, accident insurance, and health insurance policies. China Life commands 45 percent of that market, and holds the number one position in 29 of the country’s 31 major markets–only Shanghai and Beijing, where the company nonetheless is number two, escape its dominance. The company’s nearly 67,000 employees are complemented by a network of 650,000 exclusive independent sales agents.
- By comparison, 10 hedge funds held shares or bullish call options in LFC a year ago.
- The company’s head start allowed it to build quickly into a leading insurance provider not only across the Chinese mainland, but throughout much of the Asian region.
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- The company offers individual life insurance, group life, accident insurance, and health insurance policies.
PICC began offering life insurance policies again in 1982, targeting the small but growing numbers of middle-class and wealthy Chinese, as well as government officials. Heading into the third quarter of 2019, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in LFC a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
China Life third-quarter net profit rises 22%
Despite the restructuring, PICC Group was somewhat hampered in its growth. The arrival of AIG had introduced a new tied-agency system into the market, encouraging the development of branch networks. Yet PICC Group, as a state-owned enterprise, was initially barred from developing its own network of branch offices and tied agents. As a result, the company was forced to cede the leadership spot in two of the country’s most important markets, Beijing, captured by Ping An, and Shanghai, taken by China Pacific. The opening of China to the West in the early years of the 20th century led to a variety of new business opportunities. By the end of World War I, China, and especially Shanghai, had become a major center for international trade, although dominated by foreign interests.
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- The company is undergoing a business transformation toward the sale of long-term protection products and away from short-term and single-premium products.
- Tai Ping’s leadership fled to Taiwan in 1950, reestablishing the company’s operations there.
- This puts Yang Mingsheng in the bottom 25% of approval ratings compared to other CEOs of publicly-traded companies.
- Following the revolution, the Mao government set up the People’s Insurance Company of China (PICC), which took over all insurance interests on the mainland.
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In that year, PICC began offering general (i.e., non-life) insurance policies. As the first insurer to report monthly premium growth, the performance generally tracks our expectations. The year-on-year contraction in September premium narrowed to 7% from 10% in August on low base in the year-ago period. We expect slowing sales for other Chinese life insurers in September and October due to weakened product demands after the last-batch sales of 3.5% guaranteed rate savings products in July.
Morningstar‘s Stock Analysis 02628
The increasingly competitive environment led to a need to change PICC’s structure. In 1996, the company reorganized as a holding company, called PICC Group. Its operations were then broken up into three subsidiaries, PICC Life, PICC Property, and PICC Reinsurance. PICC Group vantage fx initially operated under the control of the People’s Bank of China. Other Chinese insurers are open to U.S. investors via the over-the-counter market, including Ping An Insurance (Group) Co. of China Ltd., Zhong An Group Ltd. and China Pacific Insurance (Group) Co.
Ping An Insurance (Group) Co. of China Ltd Class A
With headquarters in Beijing and commanding about 20% market share, China Life Insurance is the largest life insurance company in China. The firm offers group and individual life insurance through exclusive agents, bancassurance, and other marketing platforms. While the bulk of profits stem from life insurance policies, additional operations include short-term policies such as accident and health insurance. The company is undergoing a business transformation toward the sale of long-term protection products and away from short-term and single-premium products. The success of its IPO encouraged China Life to begin eyeing expansion into new markets in 2004.
In order to make its IPO more attractive, the parent holding transferred only long- and medium-term policies issued on or after June 10, 1999, to China Life. This move was made in order to avoid launching China Life with the burden of a large number of loss-making policies issued at return rates as high as 6.5 percent. The June 10, 1999 date corresponded to an emergency ruling by the CIRC, which lowered return rates to just 2.5 percent. By the mid-1930s, Tai Ping had grown sufficiently large to become a member of the Shanghai Insurance Association, the only Chinese-owned company to be included in what had previously been an exclusive club for foreign insurers. Tai Ping’s fortunes began to dwindle after the start of the Sino-Japanese War in 1937, and especially with the Mao-led Communist revolution in 1949. Waterdrop executives during a Sept. 9 earnings conference call were bullish about the insurtech’s long-term prospects, saying that China’s aging population means the demand for insurance will increase in the years ahead.
FAQs for China Life Insurance Co Ltd Class H Stock
They rarely distribute dividends to shareholders, opting for reinvestment in their businesses. More value-oriented stocks tend to represent financial services, utilities, and energy stocks. Following the revolution, the Mao government set up the People’s Insurance Company of China (PICC), which took over all insurance interests on the mainland. Tai Ping’s leadership fled to Taiwan in 1950, reestablishing the company’s operations there.
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In June, Tian Ruixiang said Nasdaq had notified the company that it was “not in compliance with the minimum bid price requirement” of $1 per share. Ltd.’s decision to depart the New York Stock Exchange amid an ongoing standoff between Beijing and Washington, the performance of some remaining U.S.-listed Chinese insurance players suggests investors would not mourn additional such departures. MarketBeat has just released its list of 20 stocks that Wall Street analysts hate. These companies may appear to have good fundamentals, but top analysts smell something seriously rotten.
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Following the reform, PICC was converted into a department of the government’s central bank. The life insurance business can be a great place to invest as interest rates normalize. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings review the physician philosopher’s guide to personal finance that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. High-growth stocks tend to represent the technology, healthcare, and communications sectors.
In 2000, China Life announced its intention to diversify its own shareholding in advance of a future public offering. In the meantime, the company continued to build up its business across China, solidifying its dominant position in 29 of the country’s 30 major markets. China Life also was helped by the government’s rule for foreign corporations beaxy exchange review operating in China, which stipulated that all employees in these companies must be covered by unified insurance policies. In response, China Life concentrated its unified insurance operations at its Guangdong Branch, close to the rapidly expanding free-trade zone, in which the majority of foreign enterprises had set up their Chinese operations.
