China Life Profit Rises as Market Rally Boosts Investment Return

China Life Insurance Co., the nation’s largest insurer, said profit rose 22 percent in the third quarter as a rally in the stock market bolstered investment returns.

Net income climbed to 9.15 billion yuan ($1.5 billion), or 0.32 yuan a share, from 7.49 billion yuan, or 0.27 yuan a share, a year earlier, the company said in a statement to the Hong Kong stock exchange today.

A 15 percent jump in the benchmark Shanghai Composite Index in the three months ended Sept. 30 helped China Life offset the impact from slower policy sales as the insurer focused on higher-margin products to improve business quality. The Beijing-based company’s gross premiums recorded no growth in the third quarter from a year earlier, compared to a 12 percent jump by the industry as a whole, according to figures derived from government data.

The Shanghai Composite has gained 10 percent this year as the government stepped up stimulus to contain a slide in economic growth.

Smaller rival New China Life Insurance Co. reported a 46 percent jump in third-quarter profit last week, as investment income surged 44 percent.

China’s six listed life insurers’ premiums fell 2.8 percent from a year earlier in the last quarter, the second consecutive decline, as tighter bancassurance rules since April dented policy sales over bank counters, according to Steven Lam, a Hong Kong-based analyst at Bloomberg Intelligence.

China Life rose 2.5 percent to HK$22.35 in Hong Kong, trimming this year’s loss to 7.8 percent.

— With assistance by Dingmin Zhang

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