Life insurance companies witnessed a 30 percent growth in their equity assets for the nine-month period ended December 31, 2017, compared to the April-December period of 2016. Data sourced from the Life Insurance Council showed that equity (at market value) assets stood at Rs 8.7 lakh crore compared to Rs 6.7 lakh crore a year ago.
This is the highest growth in equity assets since 2009, when these assets saw a 76 percent jump. However, following the infamous market crash, there was a downside in assets held.
Fixed income assets, on the other hand, saw a rise of 14.4 percent and stood at Rs 24 lakh crore. This took the total assets held by life insurers to Rs 33.2 lakh crore.
The growth in equity assets was on the back of a rise in key market indices between December 2016 and 2017. The BSE Sensex rose to 34,056.83 points at end of December 2017 compared to 26,626.46 points a year ago.
Large equity investors including Life Insurance Corporation of India (LIC) are said to have gained the most from the market run. A senior official had told Moneycontrol in January that the company had booked Rs 20,000 crore profit from the equity market.
Up to the end of the third quarter, LIC had invested Rs 3 lakh crore in equity and debt. Of this, Rs 2 lakh crore was invested in government securities, while about Rs 40,000 crore was invested in equity markets. The rest went into disinvestment offers by the government.
In terms of infra, buoyed by the government’s push on the sector, investments in infrastructure rose by 12.6 percent to Rs 3.7 lakh crore at the end of December 31, 2017.
Despite being a capital-intensive sector, the capital deployed saw a 3.7 percent rise on year-on-year basis to Rs 36,428 crore. In the same period, there was an addition of 104 branches by life insurance companies.moneycontrol