China Life Insurance Co Ltd, the nation's biggest life insurer, plans to cut its stock holdings this year due to financial market turmoil.

"We will try to reduce the percentage of stocks and stock-related assets in our portfolio because we think the Chinese and global stock markets will be choppy this year," Liu Lefei, China Life's chief investment officer, said yesterday.

The insurer said that given the financial market climate, it will invest more in bonds this year, which account for half of its total assets.

China Life's profit soared 94.8 percent in 2007 from a year earlier to 38.88 billion yuan, while net investment income was 44.02 billion yuan, up 76.5 percent from a year earlier.

Earnings per share were 1.38 yuan, up 0.63 yuan on the previous year, with a proposed annual dividend of 0.42 yuan per share.

China Life profit up 42%

HONG KONG (Reuters)�China Life Insurance Co., China 's largest life underwriter, posted a 42% gain in second-half profit on strong investment returns, topping analysts' expectations, but said it faces a more turbulent market environment in 2008.

Investment returns at China Life, which leads rival Ping An Insurance (Group) Co., benefited from a near doubling in China's benchmark domestic share index last year, but stock markets have tumbled since peaking in October.

"In 2008, the company will face further challenges in view of the keen competition in the insurance industry and the uncertainty of the capital markets," Chairman Yang Chao said in a statement.

Shanghai's stock market, on which China Life depends for a sizeable portion of its investment income, has dived more than 30% since the start of the year on expectations of slowing income growth and rising interest rates to combat inflation.

Life Insurance Settlement Industry Thriving Amid Controversy

For a market that was nonexistent 10 years ago, the idea of life settlements has turned into a booming billion-dollar industry as well as a controversial issue that has seen pending state legislation and warnings from the insurance commissioner�s office.

Life insurance policy owners, either in need or want of money, can sell their policy to a third party for cash. Others choose to sell because they cannot afford the premiums.

Life Settlement Solutions Inc., a San Diego-based and institutionally funded life settlement company, has purchased $1 billion worth of life insurance policy mortality benefits in 47 states since it was founded five years ago.

�We kind of created the market,� said Larry Simon, chief executive officer, sole shareholder and founder of Life Settlement Solutions.