This paper aims to investigate the relationship between product diversification and firm performance using the panel data from 2005 to 2008 of life insurers in China. The results indicated that product diversification have negative influence on the financial performance for the life insurers. This implied that product focus may be a superior operating strategy for insurers. In other words, China's life insurance business the higher the concentration, the greater professional interest, the better the company's financial performance. Moreover, the results also indicated that three major geographic diversification have negative influence on the financial performance for the life insurers. This shows that the Chinese life insurance companies operating more dispersed in eastern, central and western three areas, the worse the company's financial performance.