China Life sees opportunity in falling market

HONG KONG (Reuters) - China Life Insurance (2628.HK) said on Tuesday it expects China's domestic-A share market to decline further in the second half, adding it would seek investments in domestic infrastructure projects including energy, power and transportation.

The country's top life insurer also said it would watch for potential investments in the domestic financial services industry.

"The recent downturn in the international and Chinese market is creating many investment opportunities now. China Life will cautiously make investments," Liu Lefei, chief investment officer, told reporters in Hong Kong.

China Life's vice president Liu Jiade told reporters in Beijing that the U.S. subprime crisis was not yet over, and would further affect the domestic A-share market.

Due to fluctuations in the capital markets, China Life increased its debt securities and time deposits to 79.5 percent of total investment assets at the end of June, from 72 percent at the end of December, while equity investments decreased to 13.3 percent from 23 percent over the same period.

Liu Lefei said equity securities accounted for 37 percent of investment revenue, while fixed securities and term deposits accounted for 40 percent and 20 percent, respectively.

China Life invested $300 million in an initial public offering in credit card giant Visa Inc (V.N) in March. At Visa's closing share price on Monday of $73.32, China Life was enjoying paper gains of about 67 percent from Visa's IPO price of $44.

The insurer said it would continuously seek pre-IPO equity investment opportunities.

The company also said it expects renewable premiums -- or those from existing policyholders -- next year to reach 100 billion yuan, from an expected 80 billion yuan this year.

China Life expected total claims related to the earthquake in Sichuan would reach 400 million yuan ($58.44 million), less than its original estimates.

China Life (601628.SS) on Monday posted a 32 percent fall in first-half profit on Monday, as a drop in China's equity market hurt the company's investment income, but the result beat forecasts.

The Shanghai Composite Index .SSEC has lost 55 percent this year.

(Reporting by Kennix Chim; Writing by Tony Munroe; Editing by Ken Wills and Jonathan Hopfner)

(tony.munroe@reuters.com; Reuters Messaging: tony.munroe.reuters.com@reuters.net; +852 2843 6358, Fax +852 2845 0636))

($1=6.844 Yuan) Keywords: CHINALIFE