* H1 profit 43.43 bln yuan vs 40.78 bln yuan year-ago
* Premium income 341.39 bln yuan vs 256.87 bln yuan last year
* Profit growth at banking arm slows from a year ago (Adds banking arm profit, comment from research note, background)
SHANGHAI, Aug 17 (Reuters) - Ping An Insurance Group Co of China , the country's second-largest insurer by market value, on Thursday reported its biggest half-yearly profit in at least a decade on robust growth in life insurance premiums.
The strength in Ping An's life insurance business comes at a time when the broader industry is facing a tough government crackdown on leverage, that has led to the country's chief insurance regulator being investigated for graft and others being reprimanded for overseas acquisitions.
However, with diverse revenue sources, Ping An has been able to consistently deliver stand-out results - its biggest annual profit in more than a decade in 2016 being a case in point. But there are concerns the firm may face headwinds this year as its banking arm struggles against a regulatory clamp down on off-balance-sheet instruments.
Ping An posted a net profit of 43.43 billion yuan ($6.51 billion) for the first half, highest 6-month earnings since at least 2007 and above 40.78 billion yuan it reported a year ago.
Its total premium income came in at 341.39 billion yuan, versus 256.87 billion yuan a year ago. Net profit for Ping An's life and health business rose 36.3 percent to 23.8 billion yuan.
Ping An is the only Asian insurer named along with nine others as systemically important insurers globally by the Financial Stability Board, a regulatory task force for the G20 leading economies. The failure of any one on this list could trigger a financial crisis.
Profit from its Ping An's banking arm came in at 12.55 billion yuan in the first half, up 2 percent - slower than the 6 percent growth seen a year ago.
"The banking segment has become a valuation drag due to worsening credit quality, higher capital requirements, and uncertainties during the business transformation," Morningstar said in a research note.
Ping An Bank, like others in the industry, has been shifting to retail banking in an attempt to bolster returns as corporate loans become more risky.
Beijing's crackdown on riskier lending has already driven up financing costs. Policymakers have said the government will continue to lower overall leverage and that slower growth in broad M2 money supply, which includes demand deposits and monies held in easily accessible accounts, could be a "new normal."
China's insurance industry saw its overall first-half earnings rise 10 percent to 116.8 billion yuan, on strong return on investments, the country's insurance regulator said in July. ($1 = 6.6721 Chinese yuan renminbi) (Reporting By Engen Tham and Matthew Miller in Beijing; Editing by Himani Sarkar)