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    Rick Chow

    Research Analyst at Morgan Stanley

    Rick Chow's questions to CHINA LIFE INSURANCE CO (CILJF) leadership

    Rick Chow's questions to CHINA LIFE INSURANCE CO (CILJF) leadership • Q1 2023

    Question

    Rick Chow from Morgan Stanley asked for a breakdown of the 5.1% growth in products with 10+ year payment durations, specifically questioning if critical illness (CI) products saw positive growth and the outlook for their recovery. He also requested more color on the drop in the net investment yield to 3.6% in Q1 from 4% in the prior year.

    Answer

    Grace Hou, Head of Investor Relations, clarified that while 10+ year duration products grew, the critical illness business still experienced negative growth, an industry-wide trend. She noted long-term potential for CI products remains. Regarding the net investment yield decrease to 3.62%, she attributed it to the different timing of dividend receipts from funds and the impact of declining interest rates on fixed-income assets. The company plans to counter this by increasing allocation to high-dividend stocks and stable alternative assets.

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    Rick Chow's questions to CHINA LIFE INSURANCE CO (CILJF) leadership • Q1 2023

    Question

    Rick Chow from Morgan Stanley asked for a breakdown of the 5.1% growth in products with a 10-year or longer payment duration, specifically between critical illness (CI) and long-term savings products. He also questioned the drop in net investment yield to 3.6% in Q1 from 4% in the prior year and sought more details on the interest rate outlook.

    Answer

    An Unknown Executive confirmed that while 10-year-plus premium products grew, the critical illness segment experienced negative growth, reflecting an industry-wide trend. Regarding investments, an Unknown Executive attributed the drop in net investment yield to 3.62% to the timing of dividend income and the declining interest rate environment in China. The company plans to counter this by enhancing its allocation to countercyclical and alternative assets.

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    Rick Chow's questions to CHINA LIFE INSURANCE CO (CILJF) leadership • Q1 2023

    Question

    Rick Chow from Morgan Stanley asked for a breakdown of the 5.1% growth in first-year regular premiums with a 10+ year duration, questioning if both critical illness (CI) and savings products grew. He also inquired about the drop in the net investment yield to 3.62% and the company's outlook on interest rates.

    Answer

    An unnamed executive confirmed that while 10-year+ premiums grew, new business from critical illness products saw a negative growth, an industry-wide issue. They expressed long-term optimism for CI products due to a growing insurable population. Regarding the net investment yield, an executive attributed the year-over-year decline to the timing of dividend income and the lower returns on new fixed-income assets in a declining rate environment. The company plans to counter this by increasing allocation to high-dividend stocks and stable alternative assets.

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