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News & Views

Wednesday, Dec 15, 2010

Insurers’ investment portfolios up 30% in ’09-10 at over Rs 12 lakh cr

[Source : Financial Express]

The accumulated investments of the insurance sector in various segments of economy increased by 30.38% to Rs 12,71,527 crore on March 31, 2010 against Rs 9,75,258 crore on March 31, 2009.

Life insurers contributed 95% of total investments (93.96% in 2008-09), according to the insurance regulator’s annual report for 2009-10. The contribution of public sector companies stood at 82% of the total investments held by the sector, although with the stabilisation of the operations of the private sector insurers, their portfolio of investments has been growing at a fast pace in recent years. The various sources of funds available for investment by life insurers can be broadly classified as funds from traditional products and Ulip products.

The total funds invested by life insurers as on March 31, 2010 was Rs 12,05,155 crore (Rs 9,16,365 crore in 2008-09), of these Rs 3,31,619 crore (27.52 %of total funds) represented Ulip funds and the remaining Rs 8,73,536 crore (72.48 %) is the contribution by traditional products.

The share of Ulip funds in total investments has continued to grow in recent years reflecting the public preference for these products.

During the reporting year, Ulip funds contributed 55% of the incremental investments (26.39 % in 2008-09). While Ulip funds contributed Rs 1,58,856 crore (Rs 39,686 crore in 2008-09) of the incremental investments, the contribution by the traditional products was Rs 1,29,934 crore (‘Rs ,10,710 crore in 2008-09).The central government securities and approved investments are two major avenues for parking of funds by the life insurers.

Based on a further segregation of funds under the traditional products and Ulips, Life Fund contributed Rs 7,32,613 crore (60.79 %), Pension and General Annuity & Group Fund contributed Rs 1,40,923 crore (11.69 %) and Ulip fund share was Rs 3,31,619 crore. During 2009-10, the share of Ulip in total investment has gone up from 18.85% in 2008-09 to 27.52%.

Non-Life insurers contributed 5% of total investments made by the insurance industry. The total amount of investments made by the sector as on March 31, 2010 was Rs 66,372 crore. During 2009-10 while the net increase in investments stood at Rs 7,479 crore (12.70% growth over previous year).

Life insurers lose Rs 20k cr

The cumulative losses of the life insurance industry on March 31, 2010 stood at Rs 20,143 crore against Rs 17,304 crore on March 31, 2009, said insurance regulator Irda in its annual report for 2009-10. Out of the 23 life insurers in operations during 2009-10, 8 companies have reported profits, including LIC, ICICI Prudential, Kotak Mahindra, SBI, MetLife, Bajaj Allianz, Sahara India and Aegon Religare. Life Insurance Corporation of India had reported net profit of Rs 1,061 crore— an increase of 10.80 % over Rs 957 crore in 2008-09. ICICI Prudential reported a net profit of Rs 258 crore after incurring losses for eight consecutive years, after setting up operations. Kotak Mahindra had reported a profit of Rs 69.22 crore for the second year in a row. SBI Life reported profit of Rs 276 crore.

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