Insurers to invest $10 bn in equities

Insurance companies, which accounted for a bulk of the total Rs 13,400 crore ($3.35 billion) invested by domestic institutional investors (DIIs) in the secondary market this financial year, appear to be bullish on the stock markets even as the Sensex hit the 17,000 level yesterday.

They were expected to pump in at least $10 billion into the equity markets during the financial year, industry officials said.

Leading insurers such as Life Insurance Corporation of India (LIC) and ICICI Prudential said they would continue to be major buyers on the market, not worrying about a possible short-term correction.

LIC has bought stocks worth Rs 14,000 crore in the April-September period and plans to invest another Rs 14,000-15,000 crore by the year-end. With these plans, LIC's investment alone would amount to about Rs 30,000 crore ($7.5 billion).

"We are long-term investors and are looking at a span of 6-8 years. The Sensex at 17,000 or 18,000 is not an influencing factor for us," said a senior LIC executive.

Puneet Nanda, executive vice-president and chief investment officer of ICICI Prudential Life Insurance, said the company would continue to be bullish on the equity markets as the economy was expanding in the range of 9 per cent.

The life insurance company's assets under management are $5.5 billion, of which equity alone accounts for over $3.5 billion (Ulips account for about 90 per cent of the insurer's business).

"The Indian life insurance sector would be investing up to $10 billion in the Indian equity market during this financial year," Nanda said. It is estimated that ICICI Prudential has invested over Rs 2,000 crore during April-August in the domestic equity markets.