Executives at China Life Insurance Co. said Tuesday that they do not plan to change their strategy of focusing on strong premium growth and a high market share as competitors play down expansion in favor of profitability, according to Dow Jones Newswire.
Growth in China's life insurance market has slowed from the 30%-plus levels of previous years; industry premiums were up just 6% in the first half. China Life, the market leader, reported premium growth of 15% under Chinese accounting standards, or 37% under the Hong Kong standards it uses for reporting its results.
Analysts said that rising competition from other types of investment products and a shift in focus to writing more profitable policies have contributed to the market slowdown. A competitor, Ping An Insurance (Group) Co. of China, which reported 26% profit growth in the first half despite a decline in market share, has explicitly said it is pursuing long-term profitability rather than premium growth.
China Life, however, said it is confident it can manage a transition to more profitable types of products while continuing to grow. Its market share exceeded 50% in the first half, up from 45% in 2003, and the company said it should be able to achieve its goal of 20% premium growth this year.
"In the next three to five years our market share could decline," executive director Miao Fuchun told reporters. "The share can fluctuate, and some decline is normal. But we will maintain a leading position, with market share of above 40%."
