Profit rose 17 percent at Industrial Alliance Insurance and Financial Services (IAG.TO) in the third quarter as the stock market upswing boosted earnings at Canadas fourth-largest life insurer.

The company said on Wednesday that net income was C$60.1 million ($56.7 million), or 74 Canadian cents a share, in the three months ended Sept. 30. That was up from C$51.2 million, or 63 Canadian cents a share, in the same 2008 period.

The result beat the average analyst profit estimate of 65 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Industrial Alliance shares were up 1.0 percent at C$29.62 on the Toronto Stock Exchange on Wednesday morning, while the S&P/TSX financial index of banks, insurance companies and asset managers was also up 1.0 percent.

Profit was boosted by a C$1.1 million gain as the difference between the market value of the companys debt instruments and that of underlying assets changed in the companys favor.

The profit was also affected by a C$1.2 million after-tax shortfall due to lower sales in the creditor insurance sector.

Industrial Alliance said it did not post any credit losses during the quarter and did not have to strengthen its provisions for future policy benefits.

"Our strict management during the crisis and the general improvement in market conditions are paying off," Chief Executive Yvon Charest said in a statement.

"Assets reached a new high. Sales growth has resumed in the retail sectors and even jumped considerably in the individual insurance sector."

The balance sheet at the Quebec City-based company was boosted by a C$100 million preferred share issue.

"The leeway that weve developed in the last year to absorb significant potential market downturns remains very good," Charest said.

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