AXA China Region recorded 43 per cent year-on-year profit growth for the six months to the end of March as a result of strong investment returns during the period. The insurer recorded a profit after tax of HK$713 million for the six months. Mark Pearson, chief executive of the French-based insurer, said it had invested in the stock market again about five months ago and now had about 20 per cent of its portfolio invested in global equities. The insurer withdrew from the equities market after the financial turmoil in 1998. Mr Pearson said the insurer had gone back to the market at the right time, as its stock portfolio value had risen about 22.9 per cent during the six months under review. The remaining 80 per cent of the insurer's portfolio is invested in the US bond market. Mr Pearson expects a difficult investment environment ahead. 'The warning bell is ringing. US interest rates may rise again, which would lead to some stock markets falling,' he said. 'An interest rate rise would also lead to the decline of the bond price.' Mr Pearson said new life premium income dropped during the six months under review, but he did not release the figure. 'The drop of new business is due to the local economic downturn, which reduces the sales of new life insurance policies,' he said. Mr Pearson believed sales of new life insurance policies would be better in the second half of the year. The insurer now has about 2,953 agents, which is slightly lower than the same time last year. Mr Pearson said this was because the Insurance Authority had introduced an examination system for insurance agents as an entry requirement, which made recruiting more difficult. Its life insurance joint venture in Shanghai has hired 700 agents. Mr Pearson believed that the insurer would be able to operate in more mainland cities after the mainland entered the World Trade Organisation this year. The insurer said assets under its management had grown to HK$26.16 million, up 18.5 per cent from the same period a year ago. Life premium income for the six months reached HK$2.34 billion and life income including investment returns stood at HK$3.15 billion.