Around the world: China Life says profit down 32 percent due to stock market slump, rise in expenses

China Life Insurance Ltd, the country’s biggest life insurer has seen a plunge in its stocks as it fell 32 percent from the year-earlier period last Tuesday.

The company said its revenues slipped 2 percent compared with the first half of 2007. Profit for the first six months of this year was 15.8 billion Yuan or $2.3 billion.

Its insurance business and investments for the rest of 2008 could be affected by uncertainty in the financial market and stiff competition. The Beijing-based company said it would not pay a dividend for the first half of the year.

"In the first half of 2008, the deep downturn of capital market put huge pressure on the company's investment," China Life chairman Yang Chao said in a statement.

Stocks plunged

China Life blamed a slowdown in Chinese capital market for the plunged of their stocks. The country’s main stock market index fall more than 60 percent since October. Net realized gains from stocks and financial assets were down 67 percent in the first half.

It increased its bond holdings from 52.1 percent to 58.6 percent of its portfolio, with the rest of its money in term deposits. China Life had 23 percent of its assets in stocks at the start of the year, but cut that to 13.3 percent as of June 30 due to falling markets, the company said.

China Life, whose business has boomed in recent years due to a rising economy and demand for insurance for Chinese families, is experiencing a rare setback in their profit decline.