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China Life Insurance raises dividend as FY'17 profit rises YOY

Beijing-headquartered China Life Insurance Co. Ltd. reported a year-over-year jump in net profit for the year ended Dec. 31, 2017.

The insurer said consolidated net profit attributable to equity holders surged to 32.25 billion yuan, or 1.13 yuan per share, from 19.13 billion yuan, or 66 fen per share, in 2016.

The S&P Capital IQ consensus GAAP and normalized EPS estimates for the company's Hong Kong-listed shares were 1.14 yuan, while the GAAP and normalized EPS estimates for the Shanghai-listed shares were 1.15 yuan and 1.14 yuan, respectively.

The results were in line with the insurer's guidance disclosed in January. China Life Insurance attributed the gain in 2017 net profit to a rapid increase in investment income and the impact from a change in the discount rate assumption of reserves of traditional insurance contracts.

Gross written premiums increased year over year to 511.97 billion yuan from 430.50 billion yuan. After excluding premiums ceded to reinsurers, the insurer's net written premiums climbed to 508.31 billion yuan from 428.74 billion yuan. Net premiums earned jumped to 506.91 billion yuan from 426.23 billion yuan in the prior year, the insurer added.

Meanwhile, investment income rose to 122.73 billion yuan from 109.15 billion yuan.

Expenses related to life insurance benefits including death benefits increased up to 259.71 billion yuan from 253.16 billion yuan in 2016. Insurance contract liabilities also increased year over year, to 172.52 billion yuan from 126.62 billion yuan. As a result, the insurer's total claims and expenses increased to 608.83 billion yuan from 522.79 billion yuan.

China Life Insurance said its board proposed a final dividend of 40 fen per share for 2017, up from the prior year's dividend of 24 fen per share. Subject to shareholders' approval, the dividend is expected to be paid Aug. 9.

As of March 21, US$1 was equivalent to 6.33 Chinese yuan.