[ET Net News Agency, 20 April 2018] China Life Insurance (02628) said it expects the
net profit attributable to equity holders for the first quarter of 2018 will increase by a
range between about Rmb6,764 million and Rmb7,994 million as compared to the same period
of 2017 (representing an increase of about 110% to 130%).
The estimated increase in the results for the first quarter of 2018 is mainly
attributable to the impact of the update of discount rate assumption of reserves of the
company's traditional insurance contracts. China Life determines the assumption in
relation to the reserves of insurance contracts based on the current information available
as at the date of balance sheet. For the traditional insurance, China Life determines the
assumption of discount rate based on the "Yield curve of reserve computation benchmark for
insurance contracts" published on the "China Bond" website. The update of discount rate
assumption of reserves of traditional insurance contracts caused an increase in the
reserves of insurance contracts in the first quarter of 2017 while the update of such
assumption led to a decrease in the reserves of insurance contracts in the first quarter
of 2018. (HL)