(Bloomberg) -- China Life Insurance Co. shares fell the most in five months after the nation’s largest life insurer posted a drop in full-year profit due to Covid lockdowns and a slumping stock market. 

Net income dropped 37% to 32.1 billion yuan ($4.7 billion), the Beijing-based company said in a filing Wednesday. The result capped a tough first year for Chairman Bai Tao, as he sought to prevent a probe into predecessor Wang Bin from disrupting a shift to higher-margin, long-term products just as the pandemic hampered demand. 

At a briefing Thursday, Bai gave an optimistic outlook for this year, saying the industry’s recovery is “accelerating” after the biggest uncertainty — the pandemic — has been removed. Premium income resumed growth in the first two months, and the numbers for March as of today were “much better” than February, he added, without elaborating. 

His optimism wasn’t shared by investors. China Life fell as much 6.8% in Hong Kong trading, and is down 7.5% this year. 

Bai said in China Life’s filing that 2022 “was a truly remarkable year of great importance. The external environment was complex and challenging, and the task of transforming the life insurance industry for development was quite hard and arduous.” 

While the economy’s reopening has bolstered prospects for insurers, a surge in Covid cases hampered the fourth quarter, also dragging down profit at competitor Ping An Insurance (Group) Co. But net income increased at People’s Insurance Co. Group of China Ltd. as margins recovered, beating estimates. 

New business value, which gauges the profitability of new life policies sold, fell 20% in the year, widening from a 15.4% decline in the first nine months, China Life said.

Investment income rose 4.6%, while net realized gains on financial assets dropped 38%. The company also booked 12 billion yuan in fair value losses, following 4.9 billion yuan of gains in 2021. 

China Life will seek to add long-term bond holdings this year, Vice President Liu Hui told the briefing. It also plans to boost allocation to stocks with high dividends, including Hong Kong-traded companies as their valuations have come to “reasonable” levels.  

(Updates with shares in first and fourth paragraphs)

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