China Life Insurance Co. moved up 20 spots to become the world's second-biggest insurer in terms of market value after its yuan-denominated shares more than doubled in their trading debut yesterday.

The Beijing-based insurer's A-shares closed at 38.93 yuan (4.95 U.S. dollars) on the Shanghai Stock Exchange after climbing to an intraday high of 40.2 yuan. The insurer's Hong Kong shares ended 4.7 percent lower at 25.6 HK dollars (3.28 USD) yesterday. The company is also listed on the New York Stock Exchange.

After yesterday's close on the Chinese bourses, China Life's market capitalization totaled 128 billion dollars, putting it behind only American International Group Inc. in the insurance industry. AIG is valued at about 185 billion dollars.

China Life's Shanghai A-shares opened at a better-than-expected 37.00 yuan, almost twice their IPO price of 18.88 yuan.

The company raised 28.32 billion yuan by selling 1.5 billion worth of A-shares in December to boost capital so it could offer more insurance and investment products.

China Life's debut trading price was cheered by fund managers, company executives and stock exchange officials who gathered to toast the listing with champagne yesterday morning at the local bourse.

"This is a dream come true. We have long awaited the opportunity to list in the motherland," China Life President Wu Yan said, adding that the opening price was appropriate given the firm's potential for growth.

Investors were betting on a bright future for China Life as the country dismantles its cradle-to-grave welfare system and promotes commercial insurance and alternative investment channels for the nation's 2 trillion dollars in household savings.

"China Life has good fundamentals as the country's biggest insurance company in a market with huge growth potential," said Wu Yonggang, a Guotai Jun'an Securities Co analyst.

China Life has captured almost half of the domestic insurance market. Premiums for Chinese insurers are expected to double to one trillion yuan in the five-year period to 2010.

China's total premiums topped 430 billion yuan in the first three quarters of last year, accounting for a mere three percent of the economy. The figure in mature Western economies is about 10 percent.

Despite all the talk about the company's growth potential, analysts noted that China Life is overvalued at present.

"More fluctuation and adjustment are expected," Wu said. "We expect a high for the year of 45 yuan a share. With the shares already near 40 yuan, there's not much room left."

The insurer's price-to-earnings ratio is about 100, while other blue chips are in the 30 to 40 range.

Zhang Qi, a retail investor, sold his 1,000 shares of China Life on the first trading day over fears of a future price drop.

"It was a good profit," the investor said. "Where else could I get a 100 percent return in just a week?"