, China
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China Life's capital model benefits from diversification

Thanks to its solid position and earnings, it will remain stable in the next 2 years.

China Life's capital and earnings are rated as satisfactory, with an improved capital buffer under the revised capital model criteria, S&P Global Ratings affirmed.

This improvement is due to better recognition of diversification benefits and increased total adjusted capital (TAC), despite higher risk charges and recalibrated capital requirements.

The stable outlook reflects China Life's strong competitive position and satisfactory capital and earnings over the next two years. 

The insurer is expected to continue receiving substantial support from the Chinese government through China Life Group.

Potential downgrades could occur if the likelihood of government support decreases or if sovereign ratings on China are lowered. Conversely, ratings may rise if China's sovereign ratings improve.

China Life's commitment to long-term protection policies and enhanced channel efficiency is expected to support value generation, even amid low interest rates. 

The insurer's large portion of sovereign-related investments mitigates credit risks, although investment in high-risk assets remains significant.

Despite notable losses on equity investments in 2023, China Life's flexibility to adjust policyholder dividends helps manage capital and earnings volatility.

The insurer's strong brand and distribution network continue to support its competitive advantage and government-backed role in providing affordable insurance.

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