China Life Announces $6 Billion Subordinated Debt Issuance

It was a corrosive year for China Life who’s overall profit fell nearly 46 percent. The large drop for the year was precipitated by the practice of Chinese insurance companies to invest 10 percent of their assets in equities, which were hit hard by a 22 percent slump in the domestic stock market.

Reflecting slower growth, China Life’s premium income in the first two months of the year fell 6.2 percent from the same period last year to 79.4 billion yuan. According to an analysis by Credit Suisse, China Life’s market share fell a third last year from a dominant 70 percent in 2000.

There are, however, reasons to be optimistic. China Life’s Vice President, Liu Jiade expects profitability to greatly improve throughout 2012 and China Life shares have gained over 7 percent during the last three months propelled by a growing global appetite for riskier assets. Shares rose 2.7 percent on Tuesday on the heels of the issuance announcement.