At the 2026 interim results conference held on August 28, China Life's President Assistant and Chief Actuary Hou Jin addressed market fluctuations and performance metrics, outlining how the company's public equity investments are categorized under accounting standards. He explained that one category, whose value changes do not flow into current-period profits but instead are recorded in other comprehensive income on the balance sheet, typically includes high-quality blue-chip stocks with stable earnings and attractive dividend yields. The second category, whose returns and market value volatility directly impact current-period earnings, generally encompasses growth-oriented enterprises and entities within the new quality productive forces sector.
Hou Jin noted that as the company intensifies its investment focus on innovation-driven and high-quality development areas, particularly in support of new quality productive forces, this naturally introduces a degree of volatility in accounting profits. He emphasized that life insurance capital represents quintessential long-term and patient capital, and the company's increased allocation to technology innovation and green development sectors is both a strategic move to serve the nation's innovation-driven development strategy and facilitate economic momentum transformation, as well as a choice to share in the country's long-term growth dividends and create enduring value for stakeholders. Consequently, short-term fluctuations are viewed as a periodic measurement characteristic during the company's journey to serve the broader national agenda and cultivate long-term value, for which the company maintains well-managed expectations.
Furthermore, Hou Jin stated that China Life consistently adheres to integrated long-term asset-liability management. Thanks to robust management performance and ample solvency, the company possesses sufficient confidence to withstand short-term reporting volatility while pursuing long-term value creation. He underscored that the life insurance industry operates on a long-term and cross-cyclical basis, recommending that report users assess the company's operational achievements from a long-term perspective rather than overemphasizing transient market movements.
To illustrate, Hou Jin cited that from a comprehensive life insurance asset-liability management cycle viewpoint, embedded value encapsulates not only historical operational outcomes but also expectations of future profitability. It also incorporates considerations of risk capital encountered during the company's coordinated management of liabilities, assets, and payout linkage, thereby offering a more holistic evaluation framework. As of the 2026 interim period, China Life's embedded value exceeded RMB 1.6 trillion, reflecting a 10% growth. During the first half of the year, new business value surpassed RMB 38.1 billion, marking a 33.7% increase and positioning the company at the forefront of the industry.
Comments