Insurance
CITIC-Prudential Life is a 50-50 joint venture between CITIC Financial Holdings Limited and Prudential Corporation Holdings Limited, which offers life, health and accident insurance and reinsurance services. By the end of 2023, CITIC-Prudential Life operated a total of 23 branches in 102 cities across China. The credit rating of CITIC-Prudential Life continued to be AAA in 2023 with a stable outlook. The fifth shareholders’ meeting of the company taking place in the year approved a resolution, whereby China CITIC Financial Holdings Limited and Prudential Group Limited from the UK will contribute increased capital totaling RMB2.5 billion in equal proportions of RMB1.25 billion each. After the increase, the registered capital of the company will increase from RMB2.36 billion to RMB4.86 billion, with the shareholding proportions of each shareholder remaining unchanged. This matter was approved by the China Banking and Insurance Regulatory Commission on 2 February 2024 (as indicated in the official document with reference number Jin Fu (2024) No. 58.)
Year in Review
In 2023, the Chinese life insurance industry entered a phase of high-quality transformation in a challenging environment characterised by low interest rates, high market volatility, and scarcity of high-quality assets. Regulatory authorities actively guided the industry to reduce the cost of liabilities and implement new regulations such as lowering the target interest rate and integrated written premium transformation. These initiatives aimed to facilitate the high-quality development of the banking and insurance industry.Faced with a complex and ever-changing external environment, CITIC-Prudential Life consistently adhered to the fundamental operational principles of the life insurance industry and regulatory policy guidance. It is committed to achieving long-term stable operations and high-quality development by focusing on the principles of capital saving, risk preference and structural optimisation. As of the end of 2023, it maintained a comprehensive solvency adequacy ratio of 188% and a core solvency adequacy ratio of 94%.
Risk Management
CITIC-Prudential Life steadfastly aligns its operations with the guiding principle of “seeking progress while maintaining stability.” It diligently implemented the decisions and directives of the Party Central Committee, regulatory authorities, and shareholders, while continuously strengthening solvency and capital management. Additionally, the company further strengthened the development of a comprehensive risk management system. It targeted key areas for enhanced risk monitoring through analysis of early warning signals and risk preference indicator threshold breaches. Adopting a problem-oriented approach, it implemented robust specialised systems and long-term management mechanisms in areas such as asset-liability management, product portfolio management, interest rate risk management, equity price risk management, credit risk management, comprehensive budget management, expense management, and individual account liquidity risk management. In 2023, its regulatory indicators complied with regulatory requirements, and showed a full commitment to striking a balance between risk management and business growth.Products
CITIC-Prudential Life is committed to continuously enhancing its expertise and leveraging the insurance industry’s role as both an economic and social stabiliser. It focuses on meeting the health, retirement, and personal wealth management needs of customers by establishing a diversified product portfolio with a focus on health insurance, life insurance, pension insurance, and annuities. It continuously optimises its business structure, balances sources of profit, and achieves sustainable growth in value and quality. During the year, it launched its first individual pension insurance product and service, with a particular emphasis on developing comprehensive retirement solutions for the elderly. In 2023, CITIC-Prudential Life achieved a 1% year-on-year growth in premium income.| By product type (RMB million) | 2023 | 2023 proportion | 2022 | Change |
|---|---|---|---|---|
| Life insurance | 25,132 | 80% | 25,094 | 0.2% |
| Health insurance and accident insurance | 6,450 | 20% | 6,096 | 6% |
| Total premium income | 31,582 | 100% | 31,189 | 1% |
Notes
The product types listed follow the classification of the Statistics and Risk Monitoring Department of National Financial Regulatory Administration (formerly the Banking and Insurance Regulatory Commission), and the data are based on the standards of “Enterprise Accounting Standard No. 25 – Primary Insurance Contracts” (Caihui [2006] No. 3) and “Enterprise Accounting Standard No. 26 – Reinsurance Contracts” (Caihui [2006] No. 3).
Distribution
CITIC-Prudential Life follows a strategy of diversified and differentiated channel development. With a focus on customer-centricity, it employs a dual approach of optimisation and innovation in its Agency Channel. By prioritising channel transformation of key projects, it has achieved an 8% year-on-year growth in premium income. Within the Bancassurance Channel, adherence to regulatory principles is paramount while the Agency Channel primarily focuses on optimising product structures and implementing tailored customer management with its strong commitment to achieving high-quality development goal of “effectively improving quality and attaining reasonable growth”. Strengthening and implementation of the five-fold “channelscustomerstalenttechnologyproduct” strategy has led to significantly improvement of the quality of business development, and a steady increase the new business value.| By distribution channel (RMB million) | 2023 | 2023 proportion | 2022 | Change |
|---|---|---|---|---|
| Agency | 14,069 | 45% | 13,038 | 8% |
| Bancassurance | 15,787 | 50% | 16,942 | -7% |
| Others | 1,725 | 5% | 1,209 | 43% |
| Total premium income | 31,582 | 100% | 31,189 | 1% |
Notes
The listed channels follow the classification of the Statistics and Risk Monitoring Department of National Financial Regulatory Administration (formerly the Banking and Insurance Regulatory Commission). “Others” include professional agents, other multi-agency agents, direct sales, online sales, and insurance brokers. Group insurance products are primarily sold through the company’s direct sales. The data are calculated on the standards of “Enterprise Accounting Standard No. 25 – Primary Insurance Contracts” (Caihui [2006] No. 3) and “Enterprise Accounting Standard No. 26 - Reinsurance Contracts” (Caihui [2006] No. 3).
Investment of Insurance Funds
CITIC-Prudential Life centres its operations around three key objectives: “serving the real economy, controlling financial risks, and deepening financial reforms”. It adheres to the principles of insurance fund utilisation while maintaining compliance and risk control, offering strong support to aid and facilitate the company’s overall operational goals and channel transformation. On one hand, it continues to strengthen its strategic core holdings, with a rising proportion of long-term government bonds/local bonds. On the other hand, it implements rational tactical operations to actively respond to market changes. Meanwhile, financial income declined due to downward-trending market interest rates and stock market turbulence, which imposed pressure on investment income and returns. Nevertheless, CITIC-Prudential Life leveraged its advantages in insurance funds, actively pursued national strategies and invested in infrastructure, high-end manufacturing and other real economic sectors through bond financing and equity investments, successfully driving positive synergies between insurance funds and the real economy.