China's Batna: Life Insurance Negotiation Power Move

China Life Insurance Company, headquartered in Beijing, is the largest life insurer in China by market share as of April 2023. The company has made headlines for its continued operations in Russia despite international sanctions imposed after the country's invasion of Ukraine. This presence has raised ethical concerns, given the widespread condemnation of Russia's actions, including civilian casualties and infrastructure destruction. With this context in mind, the discussion now turns to China Life Insurance's BATNA, or Best Alternative to a Negotiated Agreement, in life insurance negotiations. This concept is a crucial aspect of any negotiation process, empowering parties with alternatives if talks break down.

China Life Insurance Company Limited's continued presence in Russia

China Life Insurance Company Limited, headquartered in Beijing, is the largest life insurer in China by market share as of April 2023. The company offers a wide range of life, accident, and health insurance products and services. In addition to its domestic operations, China Life has expanded its presence internationally, including in Hong Kong, where it has operated for over 40 years.

Despite international sanctions imposed on Russia following its invasion of Ukraine, China Life Insurance Company Limited has continued its operations in the country as of 2025. The company's Russian offices remain active, and it has even advertised for new employees in the region. This decision to maintain a presence in Russia has raised ethical concerns due to the widespread condemnation of Russia's actions and reported war crimes in Ukraine, which include civilian casualties and infrastructure destruction.

Furthermore, the company may have existing assets, investments, or partnerships in Russia that it aims to protect. Withdrawing from the Russian market could result in financial losses or complications regarding the disposition of assets. Additionally, the company may be considering the well-being of its local employees, as discontinuing operations would impact their livelihoods.

While the decision to stay in Russia has ethical implications, China Life Insurance Company Limited must also weigh the potential reputational risks associated with withdrawing from the market. The company must navigate a complex situation, taking into account its business interests, relationships with stakeholders, and the dynamic geopolitical landscape.

China Life's de-listing of American Depository Shares

China Life Insurance Company, a Beijing-headquartered company traded on the Shanghai and Hong Kong stock exchanges, was one of several large state-owned enterprises that chose to voluntarily delist from the NYSE in 2022. This decision was influenced by uncertainty around US regulatory requirements and the desire to maintain primary listing on a non-US exchange. The delisting allowed China Life to access US investors through alternative avenues like OTC Markets, which offers the benefit of lower cost and complexity compared to a US exchange listing.

The delisting of China Life and other Chinese firms reflects China's interest in attracting foreign investment for its public firms under its rules and regulations. By delisting from US exchanges, these companies can grow their North American shareholder base without surrendering their primary market status to a major US exchange. This dynamic also helps China maintain well-populated home markets, offering opportunities for local investors and building a more robust secondary market.

The appeal of OTC Markets for these firms lies largely in retail investment, as institutional money can easily operate in markets like Hong Kong or Shanghai. The American Depository Receipts (ADRs) issued by China Life and four other SOEs that delisted from the NYSE raised $7.1 billion, a small fraction of their combined market capitalization of $414 billion. This highlights the limited impact of delisting on liquidity, as the number of Chinese ADRs traded on US exchanges is relatively small compared to the volume of shares traded in China or Hong Kong.

While the US regulatory environment played a role in the decision to delist, it is important to note that China has also taken steps to liberalize inward capital movements. Programs like Bond Connect and Stock Connect have facilitated international investment in Chinese stock and bond markets, and China has improved the workings of its qualified institutional investor programs. As a result, foreign ownership of Chinese financial assets has increased significantly in recent years.

In summary, the de-listing of American Depository Shares by China Life Insurance Company is part of a broader trend of Chinese companies voluntarily delisting from US exchanges. This move allows these firms to access US investors through alternative avenues while maintaining greater control over their market status and attracting foreign investment under China's rules and regulations. While the US regulatory environment is a factor, China's efforts to liberalize inward capital movements and the limited impact on liquidity also play a role in these decisions.

China Life's investment in Honghu Private Securities Investment Fund

China Life Insurance Company Limited is a Beijing-headquartered, China-incorporated company that provides life insurance and annuity products. In 2023, China Life Insurance invested $3.5 billion in Honghu Private Securities Investment Fund, with the same amount contributed by New China Life Insurance. The fund, managed by a joint venture, was established to increase longer-term investment assets that suit the company's strategy and improve capital utilization efficiency.

The Honghu Private Securities Investment Fund is a significant initiative, totalling 50 billion yuan or $7 billion. It was formed in response to Beijing's call for insurance funds to help stabilise the volatile market. The fund will primarily invest in China's onshore listed companies with good corporate governance and stable business operations. This move by China Life and New China Life Insurance demonstrates their commitment to supporting the struggling stock market and improving the efficiency of capital use.

The establishment of the Honghu Private Securities Investment Fund is a joint effort by two state-backed Chinese insurance firms, China Life and New China Life Insurance. Central Huijin Investment, a unit of China's sovereign wealth fund, holds a 31% stake in New China Life Insurance, while China Life is controlled by the finance ministry. The fund aims to optimise the structure of assets and liabilities while also increasing long-term investment assets.

China Life Insurance's involvement in the Honghu Private Securities Investment Fund is part of its broader strategy to enhance its investment portfolio and support the Chinese market. By investing in publicly traded stocks, the company can diversify its holdings and potentially generate higher returns. Additionally, China Life Insurance's net profit had dropped 99% year-on-year in the third quarter of 2023, making this investment a strategic move to boost profits.

The Honghu Private Securities Investment Fund is a significant development in China's insurance industry, demonstrating the sector's active role in supporting the country's economy. By investing in onshore shares, the fund contributes to the stability of the market while also providing long-term benefits to the insurance companies involved. This collaboration between China Life and New China Life Insurance showcases their combined efforts to optimise their investment strategies and strengthen their financial positions.

China Life's ranking on the Forbes Global 2000 list

In 2022, China Life Insurance was ranked 71st on the Forbes Global 2000 list, down from 49th the previous year. The company's ranking decline was influenced by the international environment, domestic policies, and capital market turmoil. Forbes' Global 2000 list analyses corporate sales, profits, assets, and market value to select and rank the world's largest, most influential, and most valuable companies.

In 2024, China Life Insurance was still among the companies on the Forbes Global 2000 list, but its specific ranking was not mentioned. The list that year was more U.S-centric than it had been since before the 2008 financial crisis due to the struggling markets in China and Hong Kong.

China Life's market share in China

China Life Insurance (Group) Co is one of the major players in the life and non-life insurance market in China. The market is expected to register a CAGR of more than 3% during the forecast period of 2025-2030. China is the world's second-largest insurance market, and the China Banking and Insurance Regulatory Commission has allowed foreign investors to raise their stakes in life insurance companies, enhancing their business strategy capabilities.

China Life Insurance (Group) Co is one of the top companies in the Chinese market, along with China Ping An Insurance (Group) Co, China Pacific Insurance, China People's Insurance Group Co, and Xinhua Insurance. The market is consolidated, with a few major companies holding the majority of the market share.

In 2021, Guohua Life Insurance had an 8.7% market share in the Chinese online personal insurance market, with premiums of almost 26 billion yuan. Guohua Life is one of the largest online personal insurers in China, along with China Post Life Insurance and ICBC Axa Life.

The impact of COVID-19 on the life insurance market has been mixed. While the economic slowdown and containment measures have hindered agent sales, the demand for protection products has increased due to rising risk awareness.

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