BEIJING (Bloomberg) — China Life Insurance Co., the nation's biggest insurer, said third-quarter profit rose 3.4 percent as a rally in the nation's stock market lifted investment returns and premiums expanded.

Net income climbed to 6.91 billion yuan ($1.03 billion) from a restated 6.68 billion yuan, a year earlier, the Beijing- based company said in a statement to the Shanghai stock exchange. Earnings per share were unchanged at 0.24 yuan.

A rebound in the Shanghai Composite Index helped China Life and rivals boost investment yields after the value in their equity holdings shrank in a market rout in the first half. Chairman Yang Chao's efforts to curb lower-margin single-premium products to focus on long-term, regular-premium policies also bolstered underwriting profitability.

Investment income, mainly dividends and bond yields, for the three months ended September was 15 billion, the statement said.

China Life gained one percent to HK$35 in Hong Kong trading yesterday, before the earnings announcement, paring its decline this year to 8.7 percent. The benchmark Hang Seng Index has gained 6.1 percent in 2010.