China Life Insurance Company Limited operates as a life insurance company in the People’s Republic of China (China or PRC, excluding, Hong Kong, Macau and Taiwan. References to ‘Hong Kong’ mean the Hong Kong Special Administrative Region, references to ‘Macau’ mean the Macau Special Administrative Region and references to ‘Taiwan’ mean Taiwan area). The company is a subsidiary of China Life Insurance (Group) Company (CLIC).
The company provides a range of insurance products, including individua...
China Life Insurance Company Limited operates as a life insurance company in the People’s Republic of China (China or PRC, excluding, Hong Kong, Macau and Taiwan. References to ‘Hong Kong’ mean the Hong Kong Special Administrative Region, references to ‘Macau’ mean the Macau Special Administrative Region and references to ‘Taiwan’ mean Taiwan area). The company is a subsidiary of China Life Insurance (Group) Company (CLIC).
The company provides a range of insurance products, including individual and group life insurance, annuity, health insurance and accident insurance products. As of December 31, 2021, the company had approximately 323 million insurance policies in force, including individual and group life insurance policies, annuity contracts, health insurance and accident insurance policies.
Life Insurance
The company offers life insurance and annuity products to individuals and groups. It markets its individual life insurance and annuity products primarily through a distribution force of approximately 820,000 exclusive agents operating in approximately 15,000 field offices throughout China, as well as other non-dedicated agencies located at branch offices of banks and other organizations. The company offers group life insurance and annuity products to the employees of companies and institutions through approximately 45,000 direct sales representatives, as well as insurance agencies and insurance brokerage companies.
Products
The company offers various life insurance and annuity products to individuals, providing a range of coverage for the whole length of a policyholder’s life. Its individual life insurance products consist of whole life and term life insurance and endowment insurance. The company also offers group annuity products and term life insurance products to enterprises and institutions. The company markets these products as an important part of its group customers’ overall employee benefit plans.
The company offers both non-participating and participating products. There were approximately 270 million non-participating policies and 53.1 million participating policies as of December 31, 2021, among which approximately 165 million non-participating policies and 32.95 million participating policies were sold to individuals.
Whole Life and Term Life Insurance
Non-Participating Whole Life and Term Life Insurance
The company offers non-participating whole life and term life insurance products. Non-participating whole life insurance products provide a guaranteed benefit, pre-determined by the contract, upon the death of the insured, in return for the periodic payment of fixed premiums over a pre-determined period. Premium payments might be required for the length of the contract period, to a specified age or for a specified period, and are level throughout the period. Non-participating term life insurance products provide a guaranteed benefit upon the death of the insured within a specified time period in return for the periodic payment of fixed premiums. Specified coverage periods range from 5 to 30 years or expire at specified ages. Death benefits and premiums are set at a level amount over the coverage period. Term life insurance products are referred to as pure protection products, in that there are normally little or no savings or investment elements. Unlike endowment products, term life insurance policies expire without maturity benefits.
Participating Whole Life Insurance
The company also offers participating whole life insurance products, which, in addition to the benefit payment of traditional whole life insurance policies, also provide a participation feature in the form of dividends. The policyholder is entitled to share a portion of the distributable earnings from participating products, as determined by the company based on formulas prescribed by the China Insurance Regulatory Commission (CIRC). Under guidelines issued by the CIRC, the dividends must be no less than 70% of the distributable earnings from participating products. The company offers participating whole life insurance products only to individual customers.
Endowment
Non-Participating Endowment Products
Non-participating endowment products provide to the insured various guaranteed benefits if the insured survives specified maturity dates or periods stated in the policy, and provide to a beneficiary guaranteed benefits upon the death of the insured within the coverage period, in return for the periodic payment of premiums. Specified coverage periods range from 5 to 30 years or end at specified ages. Premiums are at a level amount for the coverage period.
Participating Endowment Products
The company also offers participating endowment products, which are endowment policies that also provide a participation feature in the form of dividends. Policyholders are entitled to share a portion of the distributable earnings from participating products, as determined by the company based on formulas prescribed by the CIRC. The company offers endowment products only to individual customers.
Annuities
Annuities are used for both asset accumulation and asset distribution needs. Annuitants pay premiums into its accounts, and receive payments of benefits during the payoff period as specified in the contracts. The company offers both non-participating and participating annuities. For non-participating annuity products, risks associated with the underlying investments are borne entirely by the company. A significant portion of the company’s non-participating annuity products imposes charges upon surrender.
Participating annuity products are annuities that provide a participation feature in the form of dividends in addition to the guaranteed annuity benefits. The dividends are determined by the company in the same manner as its life insurance policies. Like non-participating annuities, a significant portion of its participating annuity products imposes charges upon surrender.
Universal Insurance Products
Universal insurance products are insurance policies with flexible premium and sum insured, as well as transparency on costs. For each universal insurance policy, the company establishes a separate account and determine the interest credit rate, mortality and expense charges specifically for the account. The benefits of universal insurance products are linked to the account value of each separate account.
Personal Tax-deferred Pension Insurance Products
In 2018, the Chinese government permitted trial sales of personal tax-deferred pension insurance products in Shanghai, the Fujian province (including Xiamen) and Suzhou Industrial Park, and the company commenced its personal tax-deferred pension insurance business.
Exclusive Commercial Pension Insurance
In May 2021, the Chinese government permitted trial sales of exclusive commercial pension insurance products in the Zhejiang province (including Ningbo) and Chongqing, and the company commenced its exclusive commercial pension insurance business. Because such business is still at the trial stage and offline sales are limited geographically, its premium income from exclusive commercial pension insurance business accounts for a relatively small portion of the company’s total premium income.
Marketing and Distribution
Individual
The company has historically sold majority of its individual life insurance and annuity products to the mass market and would continue to actively serve this market. In addition, the company has been implementing a customer segmentation sales approach which targets different customers with different products, with these products in majority of cases supplemented by its individual accident and health products.
The company distributes its individual life and annuity products nationwide through multiple channels. Its primary distribution system includes approximately 820,000 exclusive agents in approximately 15,000 field offices throughout China. In addition, the company is implementing its customer-oriented market segmentation sales initiatives to all exclusive agents nationwide.
Group
The company targets its group life insurance and annuity products to large institutional customers in China, including branches of foreign companies, which have awareness of and need for group life insurance and annuity products. The company provides large group customers with products having flexible fee and dividend structures, as well as convenient customer service.
The company markets its group life insurance and annuity products primarily through its direct sales representatives. The company also markets its group life insurance and annuity products through commercial banks, insurance agency companies and insurance brokerage companies.
Health Insurance
The company offers an array of health insurance products and services to both individuals and groups, including medical insurance, care insurance, disease insurance and disability income insurance. Its health insurance business shares its nationwide life insurance sales force and distribution network of exclusive agents.
Products
The company offers health insurance products to both individuals and groups. The company classifies its health insurance products as short-term products, having policy terms of less than or up to one year, and long-term products, having policy terms longer than one year. The company offers both short-term and long-term defined health benefit plans, medical expense reimbursement plans, care insurance plans and disease-specific plans to individuals and groups.
Defined Health Benefit Plans
These plans provide a fixed payment based on the number of days of hospitalization resulting from diseases, injuries from accidents or surgical operations. Policyholders either pay premiums in a single payment or on a periodic basis.
Medical Expense Reimbursement Plans
These plans provide for the reimbursement of a portion of the participant’s outpatient or hospitalization treatment fees and expenses. Policyholders pay premiums either in a single payment or on a periodic basis or, for certain group medical expense reimbursement plans, irregularly as determined by the policyholder. The company also provides health care entrusted management services for the basic social medical insurance plans offered by local governments. The entrusted management services include checking and reimbursement of medical expenses and medical service investigations. As of December 31, 2021, the company had carried out approximately 400 health care entrusted programs in 32 provinces and cities, providing services to approximately 100 million people.
As of December 31, 2021, the company had undertaken approximately 200 supplementary major medical insurance programs, providing services to approximately 350 million people.
Care Insurance Plans
These plans provide individuals who have disabilities covered by the insurance contracts with a fixed allowance and reimbursement of expenses for their daily living and medical care. Premium payments are paid either in a single payment or on a periodic basis. As of December 31, 2021, the company had undertaken 61 long-term care insurance programs, providing services to over 23 million people.
Disease-Specific Plans
These plans provide a payment benefit for various diseases. Premium payments for disease-specific plans are paid either in a single payment or on a periodic basis.
Marketing and Distribution
The company offers its health insurance products to both individuals and groups through the same distribution channels it uses to market its life insurance products. The company markets its health insurance products either as primary products, as riders or as supplementary products packaged with its life, annuity or accident insurance products. The company conducts health insurance related training programs for its direct sales representatives and its exclusive agents.
Accident Insurance
The company operates as a major accident insurance provider in China. The company’s accident insurance gross written premiums totaled RMB16,407 million (US$2,575 million) for the year ended December 31, 2021.
Products
The company offers an array of accident insurance products to both individuals and groups.
Individual accident insurance
Individual accident insurance products provide a benefit in the event of death or disability of the insured as a result of an accident and, for certain products, a reimbursement of medical expenses to the insured in connection with an accident. A death benefit is paid if the insured dies as a result of the accident within 180 days of the accident, and a disability benefit is paid if the insured is disabled, with the benefit depending on the extent of the disability. The company offers an array of individual accident insurance products, such as insurance for students and infants against death and disability resulting from accidental injury and coverage against accidental injury. It also offers products to individuals requiring special protection, such as accidental death and disability insurance for commercial air travel passengers and automobile passengers and drivers.
Group Accident Insurance
The company offers various group accident insurance products and services to businesses, government agencies and other organizations of various sizes. It also offers group accident products targeted at specific groups, such as small-value group accident injury insurance to low-income people in rural areas.
Marketing and Distribution
The company markets its individual accident insurance products through its direct sales force and its exclusive agent sales force, as well as intermediaries, such as non-dedicated agencies located at outlets of commercial banks, savings cooperatives, travel agencies, hotels and airline sales counters and insurance agency and insurance brokerage companies. The company markets its group accident insurance products primarily through its direct sales representatives and the same intermediaries it uses to sell its individual accident products.
The company markets its accident insurance products either as primary products, as riders or as supplementary products packaged with its life, annuity or health products. Its direct sales representatives market its individual accident products to employees of its institutional customers.
Product Development
In 2021, in line with its general development strategy, the company developed and introduced 160 new products, including 53 long-term insurance products consisting of 12 life insurance products, eight annuity products and 33 health insurance products; and 107 short-term insurance products consisting of two accident insurance products and 105 health insurance products.
With respect to long-term insurance products, the company developed and introduced, among others:
For the individual insurance distribution channel, products, including China Life Xinyu Jinsheng Endowment Insurance, China Life Xinyu Niannian Annuity Insurance, China Life Xinyu Zhenxiang Annuity Insurance, China Life Xinyu Zunxiang Annuity Insurance, China Life Fu Whole Life Critical Illness Insurance (Ceremony Edition, Type A) and China Life Fu Whole Life Critical Illness Insurance (Ceremony Edition, Type B); and
For the bancassurance distribution channel, products, including China Life Le Ying Yi Sheng Whole Life Insurance (Exclusive Edition), China Life Le Hui Bao Endowment Insurance and China Life Fu You Xiang Ban Endowment Insurance.
Distribution Channels
The company’s distribution network reaches almost every county in China. Throughout China, the company has approximately 820,000 exclusive agents operating in approximately 15,000 field offices for its individual products and approximately 45,000 direct sales representatives for group products. The company has a multi-channel distribution network selling individual and group insurance products through intermediaries, primarily non-dedicated agencies located in over 49,000 outlets of commercial banks as of the end of 2021. The company supports its agents and representatives through training programs, sales materials and information technology systems.
Exclusive Agent Force
The company’s exclusive agent force of approximately 820,000 agents is the primary distribution channel for its individual life, annuity, health, and accident insurance products. The company has also developed a special sales force targeting ‘orphan policies’ to improve its service for these policies.
Group Distribution Channel
The company’s group distribution channel includes its direct sales force and intermediaries.
Direct Sales Force
The company’s direct sales force, which consists of approximately 45,000 direct sales representatives, is its primary distribution system for its group life insurance and annuities, group accident insurance and group health insurance products, as well as its individual accident insurance and individual short-term health insurance products. As of the end of 2021, the number of its direct sales representatives was 45,000.
Intermediaries
The company also offers individual and group products through intermediaries.
The company markets group products through insurance agencies and insurance brokerage companies. Dedicated insurance agencies and insurance brokerage companies work with companies primarily to select group insurance providers and group products and services in return for commission fees.
The company also sells short-term insurance products through other non-dedicated agencies. It has non-dedicated agencies operating at outlets of commercial banks, travel agencies, credit cooperatives, small loan companies and airline sales counters.
Bancassurance Channel
The company has bancassurance arrangements with major commercial banks in China, and generates a significant portion of its total sales through bancassurance. The company’s distribution channels primarily include non-dedicated agencies located in approximately 52,000 outlets of commercial banks.
Other Distribution Channels
During 2021, the company participated in various government-sponsored health insurance businesses, including undertaking supplementary major medical insurance programs and health care entrusted programs, and providing supplementary medical insurance and long-term care insurance. It also continued to improve its Internet-based sales channel and increase the variety of products sold online.
Regulatory and Related Matters
As a Chinese life insurance company, the company is subject to restrictions under the PRC Insurance Law, the Measures for the Administration of the Utilization of Insurance Funds and other related rules and regulations on the asset categories and percentages in which the company is permitted to invest.
Competition
The company’s nearest competitors are Ping An Life Insurance Company of China, Ltd. (Ping An Life); China Pacific Life Insurance Co., Ltd. (China Pacific Life); New China Life Insurance Company Ltd (New China Life); and Taiping Life Insurance Company Limited (Taiping Life).
History
China Life Insurance Company Limited was founded in 1949. The company was incorporated in 2003.
