We view life insurance as one of the most attractive industries in China, offering a structural growth story, underpinned by a low level of penetration and potential leverage to the rising interest rate environment. In this report, we also identify the sources of the insurers’ underlying earnings and show that the industry is actually one of the most profitable among global financial services, thanks to solid earnings composition, and offers a secure earnings growth story. Although valuations are not inexpensive, we believe the level of premium can be justified by the industry’s attractive fundamentals. We therefore assume coverage of the
China insurance industry with an Attractive view. Our top picks, in order of preference, are China Life, China Taiping, and China Pacific Insurance.