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China Life Insurance profits rise 30 percent on investment gains

By Lawrence White HONG KONG (Reuters) - China Life Insurance Co Ltd <601628.SS> <2628.HK> reported a 30 percent rise in annual net profit, meeting analysts' estimates, lifted by gains on its investments in the country's booming stock markets. China's largest insurer by market value said net profit for the year ended Dec. 31 rose to 32.2 billion yuan (3.47 billion pounds) from 24.77 billion a year earlier. That was in line with the average forecast for 32.7 billion from analysts, according to Thomson Reuters data. The company had told investors on Jan. 30 that it expected its annual net profit to rise by around 30 percent compared with the previous year thanks to gains in its investment portfolio. Chinese insurers can book gains in their investment portfolios as profits, making their quarterly net profit figures volatile, and inaccurate, indicators of underlying growth. China's benchmark Shanghai Shenzhen CSI 300 index <.CSI300> has risen 75 percent in the last year. The country's insurance regulator said at its annual conference in January that the industry recorded an average yield on investments of 6.3 percent in 2014, compared with 5 percent a year earlier, leading to a doubling of sector profits. In addition to investment gains, China Life has been trying to build more sustainable earnings by focusing more on recruitment to increase the number of its sales staff, according to analysts covering the stock. The number of sales agents had dwindled every year from 2009 to 2013, according to research from Daiwa Capital Markets, as salaries for the job remained low and a boom in high-yielding wealth management products in the country made insurance products hard to sell. However the company reversed that trend in 2014, increasing its number of agents by 13 percent to a total of 743, 000 by the end of the year, China Life said in the earnings release. China Life rival Ping An Insurance Group last week reported a 39.5 percent rise in its annual profits. China Life shares closed down 2.5 percent in Shanghai on Tuesday, before the results announcement, underperforming the Shanghai Shenzhen CSI 300 Index which was flat. (Reporting By Lawrence White; Editing by Miral Fahmy and Pravin Char)