* 2016 profit up 15 pct on-year
* Annual profit hits 62.4 bln yuan vs year-ago 54.2 bln yuan
* Life insurance premiums up 25 pct (Adds background and earnings details)
SHANGHAI/BEIJING, March 22 (Reuters) - Ping An Insurance Group Co of China Ltd , China's second-largest insurer by market value, on Wednesday posted its biggest annual profit in more than a decade on strong sales.
Robust growth in its life insurance business helped Ping An deliver strong results in a year when Beijing tightened its regulatory grip on the sector to reduce risks from aggressive insurers using short-term funds to invest in stocks and long-term assets.
Ping An posted a 15 percent rise in its annual net profit, in line with analysts' expectations.
The insurer made a net profit of 62.4 billion yuan ($9.06 billion) in the year ended December 2016, versus an average estimate of 62.3 billion yuan from 18 analysts polled by Thomson Reuters. It was the company's highest profit since 2003.
Written premiums for life insurance jumped 25 percent to 373.78 billion yuan at Ping An, from 299.8 billion yuan, while net investment yield for property and casualty insurance increased to 6.8 percent last year from 6.3 percent in 2015.
Last year, Chinese insurers pulled in a total of 3 trillion yuan of premiums, up about 28 percent from 2015, according to data from China's insurance regulator.
Ping An's "revenue sources are more diverse than other insurers," said Dayton Wang, an analyst at Guotai Junan International. "It's not simply an insurance company, it's a financial conglomerate built on insurance."
However, the insurer is likely to face headwinds in 2017 as its Ping An Bank unit struggles against a regulatory clampdown on off-balance-sheet instruments and lower core capital, according to a March note from Daiwa Capital Markets.
Shares of Ping An Insurance closed down 0.72 percent in Shanghai on Wednesday ahead of the results, against a 0.46 percent decline for the broader market.
$1 = 6.5129 Chinese yuan renminbi Reporting by Engen Tham in Shanghai and Shu Zhang in Beijing; Editing by Himani Sarkar and Keith Weir