How to interpret gains on Investment Income AND impairment on financial assets

Water Cooler Investing
#1

I am going over some annual reports of a Chinese insurance company (LFC). This company had a large holding in the equities market, so they took a pretty significant write-off on their financial assets when the market dipped.

However the part I’m having trouble understanding is they had a significant YOY increase in their investment income. But during the same time period, they also had a significant financial impairments. I always imagined these two would be positively correlated. How would you guys interpret these two information?

They also have a significant increase in “Life insurance death and other benefits” while the written premiums have stayed steady. What would cause this drastic change?

Thank you for your time and help.

#2

They must have bought more external equity on the dip, enough so that the income exceeded impairments.

#3

Got it. Thanks lockheed!

#4

With a follow up question, if anyone can answer this: What would cause a big difference between Fair Value Losses and Impairment losses?

#5

Impairment losses are permanent (aka not likely to reverse) in nature and cannot be reversed under US GAAP. Fair value losses come from mark to market securities and can be reversed if te value goes back up.