Ping An Insurance (Group), the mainland's second-largest life insurer, yesterday reported net profit fell 44.96 per cent in the first half owing to higher costs and a lower profit contribution from realised equity investment gains. Net profit declined to 5.22 billion yuan (HK$5.92 billion) from 9.49 billion a year ago, the insurer said in a statement to the Hong Kong stock exchange. However, second-quarter earnings rebounded 62.94 per cent to 3.24 billion yuan, based on its reported first-quarter figures. Chairman and chief executive Peter Ma Mingzhe (right) said the mainland economy had shown signs of recovery in the first half despite a challenging global economic outlook. 'We believe the long-term growth trend enjoyed by China's economy continues to represent an exciting opportunity,' he said. 'The potential for the financial and insurance industries remains attractive.' Net earned premiums rose 18.03 per cent to 56.79 billion, while investment income jumped 58.3 per cent to 14.68 billion. However, the Shenzhen-based company said direct profit contribution from realised equity investment gains and dividend income decreased compared with last year, and this was one of the factors that dragged down profit. Net investment income fell 13.87 per cent to 8.84 billion yuan. The realised gains fell 59.45 per cent to 4.27 billion yuan from 10.52 billion yuan. Net investment yield decreased to 3.7 per cent from 3.8 per cent. The insurer said it increased its equity investment amid the A-share market rally and lowered the proportion of its fixed-income asset holdings during the period. The company said both life and general insurance saw their market share increase, but a sharp rise in the life insurance business affected near-term profitability, as costs for life insurance, especially commissions, are higher in the first year. Commission expenses for insurance operations surged 35.63 per cent to 9.84 billion yuan, while general and administrative expenses jumped 55.61 per cent to 13.31 billion yuan. The net profit of the life insurance business fell 44.24 per cent to 4.64 billion yuan during the period. General insurance profit fell to 4 million yuan from 339 million yuan. Banking earnings declined 27.4 per cent to 577 million yuan, and securities profit fell 8.48 per cent to 367 million yuan. The insurer also said 3 billion yuan in taxes recorded during the period, compared with 625 million yuan a year ago, was another factor that affected its earnings for the first half. The company declared an interim dividend of 15 fen.