China Life Insurance Co, the country's top life insurer, said it is studying possible investments involving IPO candidates Agricultural Bank of China and AIA, aiming to improve its returns.

One of the potential deals could see China Life invest in AIA, the Asia insurance unit of bailed-out U.S. insurance giant American International Group.

China Life has met to discuss the possibility with underwriters for AIA, which is in the process of seeking a Hong Kong initial public offering, Chairman Yang Chao told reporters at a media briefing on Wednesday.

We're definitely interested in any influential, branded financial institutions with sound results, Yang said.

AIG has chosen Deutsche Bank and Morgan Stanley as its joint global coordinators for a more than $4 billion IPO for AIA.

Earlier this year, sources said China Life was among the bidders vying to buy AIA, a 90-year-old business with more than $60 billion of assets under management and regarded as AIG's Asia crown jewel. That attempt to sell the company ultimately failed.

In the other potential deal, China Life is considering an equity tie-up with Agricultural Bank of China, the only one of China's top four banks that has yet to make a public offering.

Agricultural Bank of China is in talks with strategic investors, as it steps up preparation work for a dual listing in Hong Kong and Shanghai as early as the end of this year, according to previous reports.

Agricultural Bank of China is a good partner with us, said Yang. It contributes a big portion to our bank assurance business.

PREMIUMS TO RISE Y/Y

China Life, which leads rival Ping An Insurance (Group) Co in the mainland market, said late on Tuesday it earned 18.2 billion yuan ($2.7 billion) in the first half, up 15 percent from the previous year but lagging a market consensus for a 22.8 billion yuan profit.

At the briefing, China Life President Wan Feng said it would see a rise in full-year premiums.

Under Chinese accounting standards, China Life's premiums started falling in March on a year-on-year basis, and have been dropping since, though the rate of decline has been slowing.

In the first seven months, its premiums were 191.1 billion yuan, down from 203.0 bln in same period of 2008.

Yang added that China Life has no intention to sell its 5.1 percent stake in Minsheng Banking Corp, one of its major investments.

China Life owns about 960 million Minsheng shares, and can sell 97 pct of those starting from August 23, according to Minsheng's interim results report.

(Additional reporting by Alan Wheatley in Beijing and Alison Leung and Doug Young in Hong Kong; Editing by Jacqueline Wong and Lincoln Feast)

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