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August 26, 2009

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China Life profit rises 15% in 1st half

CHINA Life Insurance Co yesterday posted a rise in net profit of 15 percent in the first half of this year from a year earlier on higher investment margins amid a rising stock market.

The company's net profit rose to 18.23 billion yuan (US$2.67 billion) in the first half, up from 15.84 billion yuan a year earlier, under international accounting standards, the world's biggest insurer in terms of market value said in a filing to the Hong Kong stock exchange yesterday.

"In the first half, the company actively responded to changes in the capital market and timely adjusted its investment portfolio by reducing the proportion of fixed income investments and increasing equity investments," the Beijing-based insurer said in the filing.

The booming stock market in the first half helped improve the insurer's bottom line with better investment returns.

China Life's net realized gains on financial assets, which reflect the company's stock market gains, surged 16 times to 11.9 billion yuan.

China Life's gross investment yield rose to 3.27 percent in the first half, up 0.96 percentage points from a year ago. It increased its equity investment proportion to 13.43 percent as of the end of June, up from 8 percent at the beginning of the year.

The benchmark Shanghai Composite Index gained 63 percent in the first half of this year.

The company's gross written premium and policy fees increased 11 percent on year to 87.86 billion yuan.

First-year regular premiums, an indicator of higher profitability, accounted for 97.63 percent of total premiums in the first half, up from 92.23 percent a year ago.

China Life is the country's biggest insurer by market share, accounting for 39.2 percent of the market.


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