Insurance cos. becoming big market playersThe large demand for equity/market-linked insurance products is ensuring that insurance companies are becoming big investors in the stock market.
Apnainsurance.com Research Bureau
09 Feb 2008
The popularity of equity/market-linked insurance products is ensuring that life insurance companies are becoming big investors in the stock market.
Life insurers, public sector and private, collected a total of Rs. 44,695 crore as first premium in the April-November period in 2007, an increase of 27 per cent over the same period the previous year. With the last fiscal quarter accounting for a surge in premium collection, industry sources estimate total premium collected at around Rs. 1,50,000 crore. About 40 per cent of this amount, or Rs. 65,000 crore, can be invested in the equity markets.
Private insurers and Life Insurance Corporation of India (LIC) had increased their collections by 72 per cent and 48 per cent respectively, until November-end 2007. If industry growth were to be at these current levels, collections could touch Rs. 5,00,000 crore in 2012, which would mean about 2,25,000 crore invested in the equity market.