Chinese, public reinsurer China Reinsurance Corporation (China Re) has announced that it expects its net profit attributable to its equity shareholders to decline by between 30% to 35% in 2016, when compared with the previous year, in response to low investment income.
According to a note issued by the company on the Hong Kong Exchange (HKEX), a year-on-year investment income decline is expected to dent the firm’s full-year 2016 profits by up to 35%, although the company does stress that this is a preliminary announcement and the estimation has not been audited by China Re’s auditors.
In 2015 the reinsurer reported an audited net profit of 7.579 billion Yuan (roughly US$1.18 billion), so a decline of 35% would see the firm’s net profit fall to around 5.3 billion Yuan (roughly US$771 million).
“The decrease in results of the Company for the year 2016 was mainly due to a year-on-year decrease in investment income,” said China Re.
