(Source: Associated Press/AP Online)
BEIJING - China Life Insurance Ltd., the country's largest insurer, said Thursday that its 2008 profit plunged 45 percent on weaker investment returns and warned the coming year could be more difficult.
Profit for the year ending Dec. 31 fell to 21.3 billion yuan ($3.1 billion) or 0.75 yuan per share, from 38.9 billion yuan or 1.38 yuan per share in 2007, the Beijing-based insurer said.
Total premiums rose nearly 17 percent to 121.6 billion yuan ($17.8 billion), the company said. But net investment income rose just 0.1 percent to 44 billion yuan ($6.4 billion) due to slumping financial markets.
"The company's operating and development environment has become very challenging" due to the financial crisis and China's devastating earthquake last year, chairman Yang Chao said in a statement.
Yang cautioned that "2009 is expected to be a more difficult year full of uncertainties."
The company said the "harsh external environment" will make sales and operations more difficult.
Operating expenses rose 14.5 percent from 2007, due partly to 658 million yuan ($96 million) in foreign exchange losses caused by the rise in China's currency, the yuan, against the U.S. dollar.
The company cautioned that it might face further foreign exchange losses this year because Chinese government regulations limit its ability to use financial derivative products to manage risk.
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