Diversification is the important trend for the development of China’s insurance industry, but whether it could benefit the insurance company’s performance is a question worth exploring. The paper analyzes effects of corporate diversification on its performance using from Chinese forty insurance companies’ panel data during the period 2007-2012. The analysis shows that China’s property insurance company’s product diversification has a negative impact on performance, while geographic diversification’s impact on firm performance is not significant. The industry concentration effect on corporate earnings is not significant, but has a certain impact on the earnings volatility. The company size and investment ratio of insurance funds have positive impact on performance, while the equity capital ratio has significantly negative effects on earnings.