Insurers are biggest investor in stocks

Riding on the huge popularity of Unit Linked Insurance Products (ULIP), insurance industry emerged as the largest investor in the stock market during 2007-08 surpassing the foreign institutional investors , according to Life Insurance Council.

The council, in a briefing to the media in Mumbai on Thursday said the net investment by life insurance companies in the equity markets during 2007-08 was Rs 55,000 crore against an investment of Rs 53,400 crore by foreign institutional investors.

The investment by mutual funds in the same period was estimated at Rs 16,300 crore.

S B Mathur, secretary general of Life Insurance Council, an apex organisation of all life insurance companies in the country, said the investment by insurance industry in the stock market in the first four months of this financial year was about Rs 25,000 crore. During 2006-07, investment by insurance companies in equities was only Rs 20,000 rore.

U S Roy, managing director and CEO of SBI Life Insurance Company said it was for the first time that the investment by insurance companies in the stock market was higher than the foreign funds.

He said the large investment made by the industry has helped the market to stabilise. The volatility in the market could have been much more but for the large investment by the insurance companies, he said.

According to the Council, 80 percent of life insurance business during last financial year was received by way of ULIP.