CHINA Life Insurance Co, the nation's biggest insurer, said yesterday that third-quarter profit fell 70 percent as a plunge in the nation's stock market crimped investment returns.

Net income dropped to 2.34 billion yuan (US$341 million), or 0.08 yuan a share, from 7.82 billion yuan, or 0.27 yuan a share, a year earlier, the Beijing-based insurer told Shanghai's stock exchange after the market closed.

A more prudent investment strategy has protected China Life from risks that have mired smaller peer Ping An Insurance (Group) Co, which made a loss due to a 15.7-billion-yuan impairment charge on its investment in Fortis, bailed out by BNP Paribas and three governments.

The relatively good third-quarter performance of financial stocks that China Life owned and increased fixed-income holdings bolstered returns.

"China Life's performance has been more stable than peers as it's not expanding as aggressively," Peng Yulong, a Shanghai-based analyst at Guotai Jun'an Securities Co, told Bloomberg News. "But the stock market is weak, so profit won't be too good."

Investment income fell 44 percent to 11.1 billion yuan, the statement said without providing year-earlier figures.

First-half net investment income rose 5.1 percent to 25.3 billion yuan after the insurer increased bond holdings to 58.6 percent and trimmed equities by almost 10 percentage points, the company said. China's government bonds gained 2.7 percent in the three months to September.