Life insurance companies pump crores into equity

INVESTING BIG MONEY: LIC has invested Rs 17,000 crore in equities as against Rs 24,000 crore last year.

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New Delhi: The rising equity market has attracted the fancy of life insurance companies. Having pumped in over Rs 1,50,000 crore into the equity markets till now, life insurance companies are inching their way up to becoming the largest institutional investors.

LIC the largest life insurer contributed about 75% of this investment which amounts to Rs 1,24,000 crores. LIC has already invested Rs 17,000 crore in equities as against Rs 24,000 crore last year.

Private insurers too are not lagging behind. Over the last one year their equity portfolio has swelled immensely.

“About two-years back we had one third of our total investments into equity today its about two thirds. Of the total money coming in about 80 per cent is going into equity,” said Puneet Nanda Executives VP and CIO, ICICI Prudential Life Insurance.

I CICI Prudential Life insurance doubled its equity exposure

From Rs 5,900 crores last August to Rs 12,200 crores in August this year, equity exposure of Bajaj Allianz too has more than doubled from Rs 2,150 crores last August to Rs 5,850 crores this year. SBI Life insurance has trebled its equity investments from Rs 633 crores in August 2006 to Rs 2,600 crores in 2007.

Insurers say the increased equity exposure is driven by ULIPs, which now constitute upto 80 percent of their total portfolio. And with equity markets on the roll, insurers feel their equity exposure will only grow with time.