Ulips may help life cos eclipse MFs as top investors on Dalal Street
With Rs 6.1 lakh crore of total assets under management, Life Insurance Corpn has already topped those of the entire mutual fund industry.
By Debjoy Sengupta, TNN |
The life insurance industry is close to eclipsing the mutual fund (MF) sector in terms of its total investment in equities, courtesy the success of unit-linked products. Interestingly, Life Insurance Corporation’s total assets under management (AUM) have already topped that of the entire MF space.
The MF industry registered a total AUM of Rs 4.86 lakh crore till July 2007, while the investment in equities stood at Rs 1.59 lakh crore. As per figures compiled by the Life Insurance Council, life insurers’ total investment in equities was close to Rs 1.5 lakh crore as of March 2007, while total AUM stood at about Rs 6.1 lakh crore. The council is a representative body of life insurers in India and had for the first time compiled these figures for the industry.
Although the break-up of investment in equities or AUM for individual insurers is not available, Life Insurance Council secretary general SV Mony said: “Bulk of this has been contributed by Life Insurance Corporation of India. We received figures from LIC just as the 2006-07 fiscal had ended, and these were subject to revision as and when the final data would be available.”
Executives from LIC said: “Total assets under management as of March 2007 stood at Rs 6.5 lakh crore, while the current value of investments in equities made till date is about Rs 1.65 lakh crore.”
LIC alone has invested about Rs 24,000 crore in the stock markets in 2006-07, which was again 62% higher than the previous year’s Rs 14,800 crore. Unit-Linked products (Ulips) contributed about 70% of LIC’s premium income in 2006-07. The trend has more or less the same till now for the insurer. The AUM at ICICI Prudential Life Insurance, the largest private sector insurer, on the other hand, stood at Rs 20,000 crore as of August 2007, while their investment in equities were about Rs 12,200 crore. “Bulk of the investment in equities was from Ulips and ICICI Prudential’s investment in equities has increased due to the success of Ulips,” said a senior ICICI Prudential official.
Bajaj Allianz Life Insurance’s (BALI) total AUM was about half that of ICICI Prudential at Rs 9,900 crore, while their investment in equities till date stood at Rs 6,025 crore. HDFC Life Insurance’s total AUM is about Rs 6,500 crore, while they invested close to Rs 3,300 crore in equities. Close to HDFC Life Insurance’s was SBI Life’s total AUM at Rs 5,750 crore, while their investment in the stock market was about Rs 2,600 crore.
“As much as 75% of investments made in Ulips gets routed to the stock markets at SBI Life,” said a senior SBI Life official. “At least 60% of the funds from unit-linked products are invested in the equity market. With the growth in Ulips, the total investment in equities rose sharply over the last few years,” an life insurance analysts told ET.
Ulip contributes about 90% of Kotak Mahindra Old Mutual Life Insurance’s total product portfolio. “Our investment in equities stands at Rs 1,460 crore, while AUM is about Rs 2,050 crore,” said
Mr Pankaj Desai, executive director at Kotak Mahindra Old Mutual told ET. Birla Sun Life Insurance’s investment in equities stood at Rs 1,914 crore, while their total assets under management was about Rs 4,453 crore. The respective numbers for Max New York Life stood at Rs 575 crore and Rs 2,300 crore.
The MF industry registered a total AUM of Rs 4.86 lakh crore till July 2007, while the investment in equities stood at Rs 1.59 lakh crore. As per figures compiled by the Life Insurance Council, life insurers’ total investment in equities was close to Rs 1.5 lakh crore as of March 2007, while total AUM stood at about Rs 6.1 lakh crore. The council is a representative body of life insurers in India and had for the first time compiled these figures for the industry.
Although the break-up of investment in equities or AUM for individual insurers is not available, Life Insurance Council secretary general SV Mony said: “Bulk of this has been contributed by Life Insurance Corporation of India. We received figures from LIC just as the 2006-07 fiscal had ended, and these were subject to revision as and when the final data would be available.”
Executives from LIC said: “Total assets under management as of March 2007 stood at Rs 6.5 lakh crore, while the current value of investments in equities made till date is about Rs 1.65 lakh crore.”
LIC alone has invested about Rs 24,000 crore in the stock markets in 2006-07, which was again 62% higher than the previous year’s Rs 14,800 crore. Unit-Linked products (Ulips) contributed about 70% of LIC’s premium income in 2006-07. The trend has more or less the same till now for the insurer. The AUM at ICICI Prudential Life Insurance, the largest private sector insurer, on the other hand, stood at Rs 20,000 crore as of August 2007, while their investment in equities were about Rs 12,200 crore. “Bulk of the investment in equities was from Ulips and ICICI Prudential’s investment in equities has increased due to the success of Ulips,” said a senior ICICI Prudential official.
Bajaj Allianz Life Insurance’s (BALI) total AUM was about half that of ICICI Prudential at Rs 9,900 crore, while their investment in equities till date stood at Rs 6,025 crore. HDFC Life Insurance’s total AUM is about Rs 6,500 crore, while they invested close to Rs 3,300 crore in equities. Close to HDFC Life Insurance’s was SBI Life’s total AUM at Rs 5,750 crore, while their investment in the stock market was about Rs 2,600 crore.
ADVERTISEMENT
“As much as 75% of investments made in Ulips gets routed to the stock markets at SBI Life,” said a senior SBI Life official. “At least 60% of the funds from unit-linked products are invested in the equity market. With the growth in Ulips, the total investment in equities rose sharply over the last few years,” an life insurance analysts told ET.
Ulip contributes about 90% of Kotak Mahindra Old Mutual Life Insurance’s total product portfolio. “Our investment in equities stands at Rs 1,460 crore, while AUM is about Rs 2,050 crore,” said
Mr Pankaj Desai, executive director at Kotak Mahindra Old Mutual told ET. Birla Sun Life Insurance’s investment in equities stood at Rs 1,914 crore, while their total assets under management was about Rs 4,453 crore. The respective numbers for Max New York Life stood at Rs 575 crore and Rs 2,300 crore.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
