China Pacific Insurance posts strong growth in 2017

China Pacific Insurance announced on Thursday that it has achieved all-around improvement and delivered solid business results in 2017, according to its latest annual report.

The insurer saw its gross written premiums (GWPs) jump by 20.4 percent annually to top 281.6 billion yuan (US$44.7 billion) in 2017, the highest in the past seven years. Net profit attributable to equity holders of the parent company reached 14.6 billion yuan, up 21.6 percent compared with a year before.

As of the end of 2017, the group’s embedded value — a common valuation measure of insurers — amounted to 286.1 billion yuan, rising 16.4 percent from the end of 2016. Of this, value of in-force business stood at 134.4 billion yuan, up around a third.

In the life insurance industry, value of in-force refers to the current worth of profits expected to emerge from a block of life insurance policies over time.

The group said that it persisted in protection as the central insurance value proposition, with its life operation, China Pacific Life Insurance, delivering growth of 34.5 percent in annualized first year premiums (FYPs) from long-term protection business.

During the reporting period, the new business value (NBV) margin of the subsidiary increased by 6.5 percent from 2016 to 39.4 percent, with NBV soaring 40.3 percent to 26.7 billion yuan.

China Pacific Property Insurance Co Ltd, the country’s third largest listed insurer in life,  property and casualty insurance space, achieved a combined ratio of 98.8 percent, down by 0.4 percentage points year on year, with non-automobile business turning underwriting profit for the first time in four years, the report said.

Combined ratio gauges how well insurance companies are performing in their daily operations as well as their profitability. A ratio below 100 percent indicates that the company is making underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums.

As for asset management business, China Pacific Insurance witnessed its in-house assets reach 1.08 trillion yuan, with the total investment yield up by 0.2 percent to 5.4 percent in 2017. Its net investment yield stood at 5.4 percent, the same as 2016.

The report said that third-party assets under management amounted to 337.1 billion yuan, an increase of 14.8 percent from the end of 2016, with management fee income growing by around one fifth.

In 2017, China’s insurance market registered a premium income of 3.66 trillion yuan, up by 18.2 percent from the previous year. Premiums from life insurance companies grew by 20 percent to 2.6 trillion yuan, while that from property and casualty insurers was up 13.8 percent to 1.05 trillion yuan.