Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

Commission File Number 001-31914

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

October 26, 2023

 

 

China Life Insurance Company Limited

(Translation of registrant’s name into English)

 

 

16 Financial Street

Xicheng District

Beijing 100033, China

Tel: [phone]

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F ☒   Form 40-F ☐

 

 

 

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Commission File Number 001-31914

 

China Life Insurance Company Limited issued its 2023 Third Quarter Report on October 26, 2023, a copy of which is attached as Exhibit 99.1 hereto.

Certain statements contained in this report may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission, or SEC, on April 21, 2023 and in the Company’s other filings with the SEC. You should not place undue reliance on these forward-looking statements. All information provided in this report is as of the date of this report, unless otherwise stated, and we undertake no duty to update such information, except as required under applicable law. Unless otherwise indicated, the Chinese insurance market information set forth in this report is based on public information released by the National Administration of Financial Regulation.

EXHIBIT LIST

 

Exhibit		Description
99.1		2023 Third Quarter Report, dated October 26, 2023

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Commission File Number 001-31914

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

						China Life Insurance Company Limited
						(Registrant)
				By:		/s/ Li Mingguang
						(Signature)
October 26, 2023				Name: Title:		Li Mingguang Principal Executive Officer and Executive Director

EXHIBIT 99.1

Commission File Number 001-31914

 

CHINA LIFE INSURANCE COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 2628)

2023 THIRD QUARTER REPORT

This announcement is made by China Life Insurance Company Limited (the “Company”) pursuant to the inside information provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rules 13.09(2) and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

IMPORTANT NOTICE

 

•

The Company’s Board of Directors, the Board of Supervisors, its Directors, Supervisors and Senior Management warrant that the information in the 2023 third quarter report is true, accurate and complete and contains no false representations, misleading statements or material omissions, and accept legal responsibility.

 

•

The financial data for the 2023 third quarter report of the Company have been prepared in accordance with the China Accounting Standards for Business Enterprises and are unaudited.

 

•

Mr. Bai Tao, Chairman of the Board of the Company, Ms. Hu Jin, Person in Charge of Finance and Head of the Financial Department, and Ms. Hou Jin, temporary chief actuary, confirm that the financial statements in the 2023 third quarter report are true, accurate and complete.

 

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1.	MAJOR FINANCIAL DATA

 

1.1

Major Accounting Data and Financial Indicators

Currency: RMB  

Items		As at 30 September 2023				As at 31 December 2022																								Increase/ (decrease) compared to 31 December 2022
Total assets (million)			5,759,367				5,251,984																								9.7	%
Equity attributable to equity holders of the Company (million)			441,878				436,169																								1.3	%
Items		For the Reporting Period (from July to September)				For the corresponding period of 2022								Increase/ (decrease) compared to the corresponding period of 2022				For the nine months ended 30 September 2023				For the corresponding period of 2022								Increase/ (decrease) compared to the corresponding period of 2022
						After restatement				Before restatement				After restatement								After restatement				Before restatement				After restatement
Operating income (million)			155,738				172,716				172,714				-9.8	%			709,333				701,018				701,012				1.2	%
Net profit attributable to equity holders of the Company (million)			53				5,669				5,701				-99.1	%			16,209				31,025				31,117				-47.8	%
Net profit attributable to equity holders of the Company after deducting non-recurring items (million)			111				5,703				5,735				-98.1	%			16,353				31,090				31,182				-47.4	%
Net cash flows from operating activities (million)			N/A				N/A				N/A				N/A				339,383				288,829				288,755				17.5	%
Earnings per share (basic and diluted) (RMB per share)			—				0.20				0.20				-99.1	%			0.57				1.10				1.10				-47.8	%
Weighted average ROE (%)			0.01				1.21				1.22				A decrease of 1.20 percentage points				3.67				6.61				6.63				A decrease of 2.94 percentage points

Notes:

 

1.

The financial data for the first three quarters of 2022 in this report have been restated due to a business combination under common control in 2022.

2.

In calculating the percentage change of “Earnings per share (basic and diluted)”, the tail differences of the basic figures have been taken into account.

 

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1.2

Non-recurring Items and Amounts

RMB million

Non-recurring items		For the Reporting Period (from July to September)				For the nine months ended 30 September 2023
Gains/(losses) on disposal of non-current assets			7				19
Government subsidies recognised in current gains/(losses)			14				61
External donations			—				(1	)
Net non-operating income and expenses other than those mentioned above			(95	)			(255	)
Effect of income tax			18				44
Attributable to non-controlling interests			(2	)			(12	)
Total			(58	)			(144	)

 

Note:

The Company is an insurance company and investment (application of insurance fund) is one of its major businesses. Therefore, the non-recurring items do not include fair value gains/(losses) from financial assets at fair value through profit or loss and financial liabilities at fair value through profit or loss, as well as investment income from the disposal of financial assets at fair value through profit or loss and financial liabilities at fair value through profit or loss and available-for-sale financial assets.

 

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1.3

Particulars of and Reasons for Changes in Major Accounting Data and Financial Indicators

Currency: RMB

Items		For the Reporting Period (from July to September)				For the corresponding period of 2022 (after restatement)				Increase/ (decrease) compared to the corresponding period of 2022 (after restatement)				For the nine months ended 30 September 2023				For the corresponding period of 2022 (after restatement)				Increase/ (decrease) compared to the corresponding period of 2022 (after restatement)				Main reasons
Net profit attributable to equity holders of the Company (million)			53				5,669				-99.1	%			16,209				31,025				-47.8	%		Due to the impact of the equity market staying at the low level, the investment income declined year on year
Net profit attributable to equity holders of the Company after deducting non-recurring items (million)			111				5,703				-98.1	%			16,353				31,090				-47.4	%
Earnings per share (basic and diluted) (RMB per share)			—				0.20				-99.1	%			0.57				1.10				-47.8	%		A year-on-year decrease in net profit attributable to equity holders of the Company
Weighted average ROE (%)			0.01				1.21				A decrease of 1.20 percentage points				3.67				6.61				A decrease of 2.94 percentage points

 

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2.	INFORMATION ON SHAREHOLDERS

Total Number of Ordinary Share Shareholders and the Particulars of Top Ten Shareholders as at the End of the Reporting Period

 

Total number of shareholders as at the end of the Reporting Period		Number of A Share shareholders: 86,541
		Number of H Share shareholders: 24,491
Particulars of top ten shareholders of the Company													Unit: Share
Name of shareholders		Nature of shareholder		Percentage of shareholding				Total number of shares held as at the end of the Reporting Period				Number of shares subject to selling restrictions				Number of shares pledged or frozen
China Life Insurance (Group) Company		State-owned legal person			68.37	%			19,323,530,000				—				—
HKSCC Nominees Limited		Overseas legal person			25.93	%			7,327,868,382				—				—
China Securities Finance Corporation Limited		State-owned legal person			2.51	%			708,240,246				—				—
Central Huijin Asset Management Limited		State-owned legal person			0.41	%			117,165,585				—				—
Hong Kong Securities Clearing Company Limited		Overseas legal person			0.13	%			37,261,949				—				—
Industrial and Commercial Bank of China Limited – SSE 50 Exchange Traded Index Securities Investment Fund		Other			0.06	%			15,977,103				—				—
Guosen Securities Co., Ltd. – Founder Fubon CSI Insurance Theme Index Securities Investment Fund		Other			0.05	%			13,226,012				—				—
National Social Security Fund Portfolio 114		Other			0.04	%			12,000,000				—				—
Industrial and Commercial Bank of China Limited – Huatai-PineBridge CSI 300 Exchange Traded Index Securities Investment Fund		Other			0.04	%			10,748,933				—				—
China International Television Corporation		State-owned legal person			0.04	%			10,000,000				—				—

Notes:

 

1.

HKSCC Nominees Limited is a company that holds shares on behalf of the clients of the Hong Kong stock brokers and other participants of the CCASS system. The relevant regulations of The Stock Exchange of Hong Kong Limited do not require such persons to declare whether their shareholdings are pledged or frozen. Hence, HKSCC Nominees Limited is unable to calculate or provide the number of shares that are pledged or frozen.

2.

Both Industrial and Commercial Bank of China Limited – SSE 50 Exchange Traded Index Securities Investment Fund and Industrial and Commercial Bank of China Limited – Huatai-PineBridge CSI 300 Exchange Traded Index Securities Investment Fund have Industrial and Commercial Bank of China Limited as their fund depositary. Save as above, the Company was not aware of any connected relationship and concerted parties as defined by the “Measures for the Administration of the Takeover of Listed Companies” among the top ten shareholders of the Company.

 

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3.	QUARTERLY BUSINESS OVERVIEW

In the first three quarters of 2023, as the momentum of economic upturn in China continued to consolidate, the recovery of the life insurance industry has sustained, but there were still uncertainties and complexities. During the Reporting Period, the Company continued to pursue high-quality development and achieved a steady business performance with improved business quality, which further enhanced its comprehensive strengths and solidified its market leading position in the industry. Firstly, the growth momentum was sustained with steady improvement in business quality. In the first three quarters of 2023, the Company achieved a rapid growth in its insurance businesses. Its revenues from insurance businesses¹ were RMB578,799 million, an increase of 4.5% year on year. Premiums from new policies were RMB196,656 million, an increase of 14.8% year on year. In particular, first-year regular premiums amounted to RMB105,982 million, an increase of 16.0% year on year. Both the scale and growth rate of revenues from insurance businesses, premiums from new policies and first-year regular premiums hit record highs for the corresponding period of the past three years. The Company realised a rapid growth in premiums from new policies with its business structure continuously optimised. First-year regular premiums with a payment duration of ten years or longer were RMB44,639 million, an increase of 15.4% year on year, and its proportion in the first-year regular premiums was 42.12%, rising by 2.13 percentage points from the first half of 2023. The value of new business for the first three quarters of 2023 continued to grow, recording a year-on-year increase of 14.0%. Renewal premiums were RMB382,143 million, which generally remained stable. Short-term insurance premiums amounted to RMB69,319 million, an increase of 3.4% year on year. The surrender rate² was 0.88%, an increase of 0.14 percentage point year on year. Secondly, the sales force of the Company was further stabilised and its quality was steadily improved. Focusing on the “Eight Reform Programs” and implementation of the “Sales Channel Strengthening Program”, the Company continued to drive business growth through productive agents, proceeded with the sales system reforms in greater depth, and reinforced agent recruitment and development, so as to push forward the transformation of the sales team to be more specialised and professional. As at the end of the Reporting Period, the Company’s total sales force was 0.72 million, of which the number of agents of the individual agent business sector was 0.66 million, further stabilising and solidifying the scale of its sales team. In the meantime, the quality of the sales team continued to optimise and its productivity was significantly improved, with the monthly average first-year regular premiums per agent increasing by 28.6% year on year. Thirdly, the Company remained under pressure in terms of investment income due to the complicated and severe capital market environment. In the third quarter of 2023, the coupon rate of domestic bonds was volatile at the low level with the neutral weight edging further downwards, which created a persistent pressure on the allocation of fixed-income assets. The stock market continued to fluctuate at the low level, severely affecting the investment income from open market equity investment. Affected by the above factors, in the first three quarters of 2023, the Company achieved gross investment income³ of RMB109,997

 

1	Revenues from insurance businesses is consistent with Premium Income in the attached consolidated income statement.

2	Surrender Rate = Surrender payment/(Opening balance of life insurance reserves and long-term health insurance reserves + Premiums from life insurance and long-term health insurance)

3	Gross investment income = Net investment income + Net realised gains on investment assets + Fair value gains/losses – Impairment losses of investment assets

 

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million and gross investment yield⁴ was 2.81%. The net investment income⁵ was RMB148,340 million and the net investment yield⁶ was 3.81%. Fourthly, the solvency ratios of the Company continued to maintain at high levels. As at the end of the Reporting Period, the Company’s core solvency ratio and comprehensive solvency ratio were 161.25% and 232.68%, respectively, the increase of 17.66 percentage points and 25.90 percentage points from the end of 2022, respectively. The strong solvency ratios provide solid capital foundation for the development of the Company.

As at the end of the Reporting Period, the Company’s total assets and investment assets were RMB5,759,367 million and RMB5,519,950 million, respectively. In the first three quarters of 2023, due to the impact of the equity market staying at the low level, the investment income of the Company declined year on year and net profit attributable to equity holders of the Company was RMB16,209 million, a decrease of 47.8% year on year.

The Company will continue to pursue the guideline of making progress while maintaining stability, firmly implement the business strategy of “achieving stable growth, prioritising business value, optimising business structure, strengthening sales force, promoting reforms and guarding against risks”, properly coordinate its business development with team building, facilitate in-depth reforms on key areas, push forward the sales system reforms in great depth, and properly proceed with the empowerment and implementation of healthcare and senior-care ecosystem. It will also endeavour to improve capabilities in customer services and management, strengthen the supporting role of digital iteration, further enhance the protection of consumers’ rights and interests, and reinforce the bottom line of risk prevention and control, with the goal of promoting the high-quality development of the Company with stable and sustainable growth.

 

4

Gross investment yield = [(Gross investment income – Interest paid for financial assets sold under agreements to repurchase)/ ((Investment assets at the end of the previous year – Financial assets sold under agreements to repurchase at the end of the previous year + Investment assets at the end of the period – Financial assets sold under agreements to repurchase at the end of the period)/2)]/273×365

5	Net investment income mainly includes interest income, dividend and bonus from all types of financial assets, net income from investment properties, and income from investments in associates and joint ventures, etc.

6

Net investment yield = [(Net investment income – Interest paid for financial assets sold under agreements to repurchase)/ ((Investment assets at the end of the previous year – Financial assets sold under agreements to repurchase at the end of the previous year + Investment assets at the end of the period – Financial assets sold under agreements to repurchase at the end of the period)/2)]/273×365

 

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4.	QUARTERLY FINANCIAL STATEMENTS

Balance sheet as at 30 September 2023 (unaudited)

 

						RMB million (Unless otherwise stated)
ASSETS		As at 30 September 2023 Group				As at 31 December 2022 Group				As at 30 September 2023 Company				As at 31 December 2022 Company
Assets
Cash fund			158,633				128,953				142,621				119,033
Financial assets at fair value through profit or loss			250,104				223,782				113,334				93,649
Securities purchased under agreements to resell			23,177				38,533				19,065				35,816
Interest receivables			57,363				52,309				53,811				49,833
Premiums receivables			41,721				19,697				41,721				19,697
Receivables from reinsurers			1,809				1,433				1,809				1,433
Unearned premium reserves receivable from reinsurers			839				774				839				774
Claim reserves receivable from reinsurers			756				736				756				736
Reserves for life insurance receivables from reinsurers			729				603				729				603
Reserves for long-term health insurance receivables from reinsurers			4,544				4,294				4,544				4,294
Other receivables			25,486				13,409				28,778				16,964
Loans			597,618				596,490				580,818				578,963
Term deposits			429,846				485,567				346,638				442,690
Available-for-sale financial assets			2,043,774				1,738,108				1,932,742				1,644,704
Held-to-maturity investments			1,740,750				1,574,204				1,738,353				1,571,892
Long-term equity investments			258,339				261,179				513,859				466,875
Statutory deposits			6,333				6,333				5,653				5,653
Investment properties			12,844				13,193				6,113				6,266
Constructions in progress			5,513				5,025				4,604				4,293
Fixed assets			47,602				49,052				43,642				45,088
Right-of-use assets			1,480				1,810				1,295				1,595
Intangible assets			8,340				8,532				7,256				7,406
Deferred tax assets			33,925				22,307				33,833				22,120
Other assets			5,551				5,654				5,127				5,410
Separate account assets			2,291				7				7				7
Total assets			5,759,367				5,251,984				5,627,947				5,145,794

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

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Balance sheet as at 30 September 2023 (unaudited) (continued)

 

						RMB million (Unless otherwise stated)
LIABILITIES AND EQUITY		As at 30 September 2023 Group				As at 31 December 2022 Group				As at 30 September 2023 Company				As at 31 December 2022 Company
Liabilities
Financial liabilities at fair value through profit or loss			5,488				3,344				—				—
Securities sold under agreements to repurchase			154,614				148,954				138,343				140,587
Premiums received in advance			38,370				50,830				38,370				50,830
Brokerage and commission payable			4,190				4,664				4,188				4,660
Reinsurance payable			1,460				998				1,460				998
Salary and welfare payable			8,724				12,075				7,585				10,758
Taxes payable			992				942				673				509
Dividends payable			10				—				—				—
Claims payable			66,623				60,819				66,623				60,819
Policyholder dividends payable			92,458				96,682				92,458				96,682
Other payable			15,066				18,974				13,052				16,964
Policyholder deposits			473,253				374,742				473,253				374,742
Unearned premium reserves			25,411				13,108				25,411				13,108
Claim reserves			26,757				26,153				26,757				26,153
Reserves for life insurance			3,967,017				3,607,236				3,967,017				3,607,236
Reserves for long-term health insurance			260,010				233,663				260,010				233,663
Long-term borrowings			12,636				12,774				—				—
Bonds payable			34,999				34,997				34,999				34,997
Lease liabilities			1,280				1,569				1,091				1,342
Deferred tax liabilities			647				272				—				—
Other liabilities			115,603				104,060				31,254				29,921
Separate account liabilities			2,291				7				7				7
Total liabilities			5,307,899				4,806,863				5,182,551				4,703,976
Equity
Share capital			28,265				28,265				28,265				28,265
Capital reserve			53,940				53,554				52,479				52,410
Accumulated other comprehensive income			(1,963	)			(4,927	)			(4,223	)			(6,103	)
Surplus reserve			109,092				105,160				109,044				105,112
General reserve			52,500				52,429				51,341				51,341
Retained earnings			200,044				201,688				208,490				210,793
Attributable to equity holders of the Company			441,878				436,169
Non-controlling interests			9,590				8,952
Total equity			451,468				445,121				445,396				441,818
Total liabilities and equity			5,759,367				5,251,984				5,627,947				5,145,794

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

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Income statement for the third quarter of 2023 (unaudited)

 

				RMB million (Unless otherwise stated)
				For the nine months ended 30 September								For the nine months ended 30 September
				2023				2022				2023				2022
ITEMS				Group				Group				Company				Company
								(Restated)
1		Operating income			709,333				701,018				703,483				699,558
		Premiums earned			560,227				536,679				560,227				536,679
		Premium income			578,799				554,105				578,799				554,105
		Including: Reinsurance premium income			—				—				—				—
		Less: Premiums ceded to reinsurers			(6,334	)			(6,897	)			(6,334	)			(6,897	)
		Change in unearned premium reserves			(12,238	)			(10,529	)			(12,238	)			(10,529	)
		Investment income			140,630				165,354				138,446				164,412
		Including: Share of profit of associates and joint ventures			6,900				6,352				6,605				7,840
		Other gains			129				148				79				88
		Fair value gains/(losses)			1,821				(8,104	)			1,009				(5,702	)
		Foreign exchange gains/(losses)			(195	)			214				323				1,020
		Other operating income			6,689				6,657				3,368				2,991
		Gains/(losses) on disposal of assets			32				70				31				70
2		Operating expenses			(703,106	)			(672,930	)			(699,974	)			(670,087	)
		Surrenders			(38,468	)			(28,693	)			(38,468	)			(28,693	)
		Claims expense			(139,116	)			(107,736	)			(139,116	)			(107,736	)
		Less: Claims recoverable from reinsurers			5,307				5,045				5,307				5,045
		Increase in insurance contracts reserve			(386,725	)			(415,129	)			(386,725	)			(415,129	)
		Less: Insurance reserves recoverable from reinsurers			396				672				396				672
		Policyholder dividends resulting from participation in profits			(6,244	)			(17,285	)			(6,244	)			(17,285	)
		Tax and surcharges			(796	)			(789	)			(663	)			(676	)
		Underwriting and policy acquisition costs			(53,962	)			(45,713	)			(53,934	)			(45,712	)
		Administrative expenses			(29,537	)			(28,656	)			(27,326	)			(26,492	)
		Less: Expenses recoverable from reinsurers			525				1,050				525				1,050
		Other operating expenses			(21,917	)			(20,921	)			(20,632	)			(19,828	)
		Impairment losses			(32,569	)			(14,775	)			(33,094	)			(15,303	)

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

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Income statement for the third quarter of 2023 (unaudited) (continued)

 

				RMB million (Unless otherwise stated)
				For the nine months ended 30 September								For the nine months ended 30 September
				2023				2022				2023				2022
ITEMS				Group				Group				Company				Company
								(Restated)
3		Operating profit			6,227				28,088				3,509				29,471
		Add: Non-operating income			32				59				28				55
		Less: Non-operating expenses			(298	)			(286	)			(296	)			(285	)
4		Net profit before income tax			5,961				27,861				3,241				29,241
		Less: Income tax expenses			11,341				4,315				12,238				5,369
5		Net profit			17,302				32,176				15,479				34,610
		According to operating continuity:
		– Net profit from continuing operations			17,302				32,176				15,479				34,610
		According to ownership of the company:
		– Equity holders of the Company			16,209				31,025
		– Non-controlling interests			1,093				1,151
6		Earnings per share
		Basic earnings per share			RMB0.57				RMB1.10
		Diluted earnings per share			RMB0.57				RMB1.10

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

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Income statement for the third quarter of 2023 (unaudited) (continued)

 

RMB million (Unless otherwise stated)

 

		For the nine months ended 30 September								For the nine months ended 30 September
		2023				2022				2023				2022
ITEMS		Group				Group				Company				Company
						(Restated)
7   Other comprehensive income			2,927				(37,752	)			1,880				(38,450	)
Other comprehensive income attributable to equity holders of the Company (net of tax)			2,964				(37,649	)
Other comprehensive income that may be reclassified to profit or loss			2,088				(37,473	)			1,012				(38,188	)
Fair value gains/(losses) on available-for-sale financial assets			(22,473	)			(45,538	)			(23,505	)			(46,455	)
Less: Amount transferred to net profit from other comprehensive income			29,976				(5,551	)			29,992				(5,409	)
Portion of fair value changes on available-for-sale financial assets attributable to participating policyholders			(4,940	)			14,691				(4,940	)			14,691
Other comprehensive income that may be transferred to profit or loss under the equity method			(1,072	)			(1,723	)			(573	)			(1,035	)
Exchanges differences on translating foreign operations			597				648				38				20
Other comprehensive income that will not be reclassified to profit or loss			876				(176	)			868				(262	)
Other comprehensive income that may not be transferred to profit or loss under the equity method			876				(176	)			868				(262	)
Other comprehensive income attributable to non-controlling interests (net of tax)			(37	)			(103	)
8   Total comprehensive income			20,229				(5,576	)			17,359				(3,840	)
– Attributable to equity holders of the Company			19,173				(6,624	)
– Attributable to non-controlling interests			1,056				1,048

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

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Cash flow statement for the third quarter of 2023 (unaudited)

RMB million (Unless otherwise stated)

 

		For the nine months ended 30 September								For the nine months ended 30 September
		2023				2022				2023				2022
ITEMS		Group				Group				Company				Company
						(Restated)
1   Cash flows from operating activities
Premiums received			541,748				494,458				541,748				494,458
Net increase in policyholder deposits			85,282				38,442				85,282				38,442
Net cash received from financial assets at fair value through profit or loss			—				—				—				15,414
Net cash received from financial liabilities at fair value through profit or loss			—				1,865				—				—
Cash received from other operating activities			9,521				13,037				4,343				7,492
Sub-total of cash inflows from operating activities			636,551				547,802				631,373				555,806
Cash paid for claims			(171,719	)			(133,065	)			(171,719	)			(133,065	)
Net cash paid for reinsurance business			(416	)			(1,057	)			(416	)			(1,057	)
Cash paid for brokerage and commission fees			(54,486	)			(46,369	)			(54,457	)			(46,366	)
Cash paid for policyholder dividends			(16,139	)			(17,803	)			(16,137	)			(17,803	)
Cash paid to and for employees			(19,798	)			(20,209	)			(18,207	)			(18,510	)
Cash paid for taxes and surcharges			(4,894	)			(5,482	)			(3,072	)			(3,477	)
Net cash paid for financial assets at fair value through profit or loss			(15,090	)			(15,456	)			(16,849	)			—
Net cash paid for financial liabilities at fair value through profit or loss			(1,090	)			—				—				—
Cash paid for other operating activities			(13,536	)			(19,532	)			(14,070	)			(18,986	)
Sub-total of cash outflows from operating activities			(297,168	)			(258,973	)			(294,927	)			(239,264	)
Net cash flows from operating activities			339,383				288,829				336,446				316,542

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

- 13 -

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Cash flow statement for the third quarter of 2023 (unaudited) (continued)

 

RMB million (Unless otherwise stated)

 

		For the nine months ended 30 September								For the nine months ended 30 September
		2023				2022				2023				2022
ITEMS		Group				Group				Company				Company
						(Restated)
2   Cash flows from investing activities
Cash received from sales and redemption of investments			963,796				930,542				889,576				823,882
Cash received from investment income			136,780				134,495				134,998				131,863
Net cash received from disposals of fixed assets, intangible assets and other long-term assets			85				148				85				147
Net cash received from securities purchased under agreements to resell			16,139				—				16,751				—
Net cash received from the disposal of subsidiaries and other business units			—				255				34				2,263
Sub-total of cash inflows from investing activities			1,116,800				1,065,440				1,041,444				958,155
Cash paid for investments			(1,401,820	)			(1,080,431	)			(1,288,048	)			(1,015,918	)
Net increase in policy loans			(14,401	)			(12,922	)			(14,401	)			(12,922	)
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets			(1,967	)			(1,720	)			(1,473	)			(1,358	)
Net cash paid from securities purchased under agreements to resell			—				(12,867	)			—				(11,507	)
Net cash paid for the acquisition of subsidiaries and other business units			(11,006	)			(12,117	)			(30,598	)			(12,513	)
Cash paid for other investing activities			(198	)			—				—				—
Sub-total of cash outflows from investing activities			(1,429,392	)			(1,120,057	)			(1,334,520	)			(1,054,218	)
Net cash flows from investing activities			(312,592	)			(54,617	)			(293,076	)			(96,063	)

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

- 14 -

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Cash flow statement for the third quarter of 2023 (unaudited) (continued)

 

RMB million (Unless otherwise stated)

 

		For the nine months ended 30 September								For the nine months ended 30 September
		2023				2022				2023				2022
ITEMS		Group				Group				Company				Company
						(Restated)
3   Cash flows from financing activities
Cash received from investment			17,889				3,241				—				—
Including: Cash received from the investment of non-controlling interests by subsidiaries			17,889				3,241
Cash received from borrowings			18				—				—				—
Net cash received for securities sold under agreements to repurchase			5,482				—				—				—
Cash received from other financing activities			750				—				—				—
Sub-total of cash inflows from financing activities			24,139				3,241				—				—
Cash repaid to lenders			(563	)			(97	)			—				—
Cash paid for dividends and interests and repaid for lenders			(20,139	)			(24,429	)			(17,016	)			(21,825	)
Net cash paid for securities sold under agreements to repurchase			—				(151,849	)			(2,244	)			(157,334	)
Cash paid for other financing activities			(761	)			(1,228	)			(621	)			(760	)
Sub-total of cash outflows from financing activities			(21,463	)			(177,603	)			(19,881	)			(179,919	)
Net cash flows from financing activities			2,676				(174,362	)			(19,881	)			(179,919	)
4   Effect of changes in foreign exchange rate on cash and cash equivalents			107				228				99				189
5   Net increase in cash and cash equivalents			29,574				60,078				23,588				40,749
Add: Opening balance of cash and cash equivalents			127,594				60,459				119,036				53,593
6   Closing balance of cash and cash equivalents			157,168				120,537				142,624				94,342

 

Bai Tao		Hu Jin		Hou Jin		Hu Jin
Legal Representative		Person in charge of Accounting Affairs		Temporary Chief Actuary		Head of Financial Department

 

- 15 -

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Notes:

Under Accounting Standards for Business Enterprises (“ASBE”), the Company adopts the transition plan for the new accounting standards for insurance contracts, namely: From 1 January 2023 to 31 December 2025, the Company will continue to apply ASBE No. 25 – Direct Insurance Contracts (Caikuai [2006] No. 3), ASBE No. 26 – Reinsurance Contracts (Caikuai [2006] No. 3), Regulations regarding the Accounting Treatment of Insurance Contracts (Caikuai [2009] No. 15), ASBE No. 22 – Recognition and Measurement of Financial Instruments (Caikuai [2006] No. 3), ASBE No. 23 – Transfer of Financial Assets (Caikuai [2006] No. 3), ASBE No. 24 – Hedging (Caikuai [2006] No. 3), ASBE No. 37 – Presentation of Financial Instruments (Caikuai [2014] No. 23) and other relevant accounting standards.

The following additional disclosures are related financial information prepared in accordance with ASBE No. 25 – Insurance Contracts (Caikuai [2020] No. 20), ASBE No. 22 – Recognition and Measurement of Financial Instruments (Caikuai [2017] No. 7), ASBE No. 23 – Transfer of Financial Assets (Caikuai [2017] No. 8), ASBE No. 24 – Hedge Accounting (Caikuai [2017] No. 9) and ASBE No. 37 – Presentation of Financial Instruments (Caikuai [2017] No. 14) (the “new standards”) by the Company for the third quarter of 2023. The Company has restated and presented the comparative information associated with insurance contracts in accordance with ASBE No. 25 – Insurance Contracts (Caikuai [2020] No. 20), and there is no need to restate and present any comparative information associated with financial instruments in accordance with ASBE No. 22 – Recognition and Measurement of Financial Instruments (Caikuai [2017] No. 7).

Balance sheet under the new standards as at 30 September 2023 (unaudited)

RMB million (Unless otherwise stated)

 

ASSETS		As at 30 September 2023 Group				As at 31 December 2022 Group
						(Restated)
Assets
Cash fund			159,230				128,956
Financial assets at fair value through profit or loss			N/A				223,790
Financial assets purchased under agreements to resell			23,179				38,533
Interest receivables			N/A				49,438
Term deposits			439,715				485,567
Held-for-trading financial assets			1,613,360				N/A
Financial assets at amortised cost			208,386				N/A
Debt financial assets at fair value through other comprehensive income			2,643,797				N/A
Equity financial assets at fair value through other comprehensive income			132,518				N/A
Loans			N/A				342,083
Available-for-sale financial assets			N/A				1,738,108
Held-to-maturity investments			N/A				1,574,204
Reinsurance contract assets			25,095				24,096
Long-term equity investments			259,650				262,488
Statutory deposits			6,466				6,333
Investment properties			12,844				13,193
Fixed assets			47,602				49,052
Constructions in progress			5,513				5,025
Right-of-use assets			1,480				1,810
Intangible assets			8,340				8,532
Deferred tax assets			23,289				46,126
Other assets			29,897				12,734
Total assets			5,640,361				5,010,068

 

- 16 -

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Balance sheet under the new standards as at 30 September 2023 (unaudited) (continued)

 

RMB million (Unless otherwise stated)

 

LIABILITIES AND EQUITY		As at 30 September 2023 Group				As at 31 December 2022 Group
						(Restated)
Liabilities
Financial liabilities at fair value through profit or loss			N/A				3,344
Held-for-trading financial liabilities			5,488				N/A
Financial assets sold under agreements to repurchase			154,645				148,958
Premiums received in advance			37,239				49,654
Salary and welfare payable			8,724				12,075
Taxes payable			961				942
Long-term borrowings			12,653				12,774
Bonds payable			35,789				34,997
Insurance contract liabilities			4,785,095				4,266,947
Reinsurance contract liabilities			169				160
Lease liabilities			1,280				1,569
Deferred tax liabilities			—				272
Other liabilities			113,978				103,403
Total liabilities			5,156,021				4,635,095
Equity
Share capital			28,265				28,265
Capital reserve			53,940				53,554
Accumulated other comprehensive income			(64,821	)			(112,110	)
Surplus reserve			109,092				105,160
General reserve			52,500				52,429
Retained earnings			295,763				238,723
Attributable to equity holders of the Company			474,739				366,021
Non-controlling interests			9,601				8,952
Total equity			484,340				374,973
Total liabilities and equity			5,640,361				5,010,068

 

- 17 -

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Income statement under the new standards for the third quarter of 2023 (unaudited)

RMB million (Unless otherwise stated)

 

ITEMS		For the nine months ended 30 September 2023 Group				For the nine months ended 30 September 2022 Group
						(Restated)
1   Operating income			244,990				292,967
Insurance revenue			136,439				137,385
Interest income			92,036				N/A
Investment income			22,578				156,921
Including: Share of profit of associates and joint ventures			6,719				6,468
Other gains			129				148
Fair value gains/(losses)			(12,089	)			(8,104	)
Foreign exchange gains/(losses)			(195	)			214
Other operating income			6,060				6,333
Gains/(losses) on disposal of assets			32				70
2   Operating expenses			(213,333	)			(232,317	)
Insurance service expenses			(99,171	)			(95,987	)
Allocation of reinsurance premiums paid			(4,226	)			(3,552	)
Less: Amounts recovered from reinsurers			3,774				5,168
Insurance finance income/(expenses) from insurance contracts issued			(101,029	)			(109,899	)
Less: Reinsurance finance income/(expenses) from reinsurance contracts held			465				436
Interest expenses			(3,563	)			N/A
Underwriting and policy acquisition costs			(1,167	)			(1,052	)
Tax and surcharges			(795	)			(770	)
Administrative expenses			(4,454	)			(4,371	)
Expected credit losses			935				N/A
Impairment losses			N/A				(14,807	)
Other operating expenses			(4,102	)			(7,483	)

 

- 18 -

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Income statement under the new standards for the third quarter of 2023 (unaudited) (continued)

 

RMB million (Unless otherwise stated)

 

ITEMS		For the nine months ended 30 September 2023 Group				For the nine months ended 30 September 2022 Group
						(Restated)
3   Operating profit			31,657				60,650
Add: Non-operating income			32				59
Less: Non-operating expenses			(298	)			(286	)
4   Profit before income tax			31,391				60,423
Less: Income tax expenses			5,168				(3,758	)
5   Net profit			36,559				56,665
According to operating continuity:
– Net profit from continuing operations			36,559				56,665
According to ownership of the company:
– Equity holders of the Company			35,541				55,514
– Non-controlling interests			1,018				1,151
6   Earnings per share
Basic earnings per share			RMB1.26				RMB1.96
Diluted earnings per share			RMB1.26				RMB1.96

 

- 19 -

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Income statement under the new standards for the third quarter of 2023 (unaudited) (continued)

 

RMB million (Unless otherwise stated)
ITEMS		For the nine months ended 30 September 2023 Group				For the nine months ended 30 September 2022 Group
						(Restated)
7   Other comprehensive income			(13,421	)			(62,905	)
Other comprehensive income attributable to equity holders of the Company (net of tax)			(13,461	)			(62,802	)
Other comprehensive income that may be reclassified to profit or loss			(14,562	)			(62,626	)
Other comprehensive income that may be reclassified to profit or loss under the equity method			(813	)			(1,738	)
Changes in fair value of debt financial assets at fair value through other comprehensive income			48,006				N/A
Allowance for credit losses on debt financial assets at fair value through other comprehensive income			(479	)			N/A
Exchanges differences on translating foreign operations			597				648
Insurance finance income/(expenses) from insurance contracts issued			(62,288	)			(11,057	)
Reinsurance finance income/(expenses) from reinsurance contracts held			415				610
Fair value gains/(losses) on available-for-sale financial assets			N/A				(45,538	)
Less: Amount transferred to net profit from other comprehensive income			N/A				(5,551	)
Other comprehensive income that will not be reclassified to profit or loss			1,101				(176	)
Other comprehensive income that may not be transferred to profit or loss under the equity method			804				(176	)
Changes in fair value of equity financial assets at fair value through other comprehensive income			787				N/A
Insurance finance income/(expenses) from insurance contracts issued			(490	)			—
Other comprehensive income attributable to non-controlling interests (net of tax)			40				(103	)
8   Total comprehensive income			23,138				(6,240	)
– Attributable to equity holders of the Company			22,080				(7,288	)
– Attributable to non-controlling interests			1,058				1,048

 

- 20 -

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This announcement is published in both Chinese and English. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail.

 

By Order of the Board

China Life Insurance Company Limited Heng Victor Ja Wei

Company Secretary

As at the date of this announcement, the Board of Directors of the Company comprises:

 

Executive Directors:		Bai Tao, Li Mingguang
Non-executive Directors:		Wang Junhui, Zhuo Meijuan
Independent Non-executive Directors:		Lam Chi Kuen, Zhai Haitao, Huang Yiping, Chen Jie

Beijing, China

26 October 2023

 

- 21 -

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