Life insurers cut fresh exposure to equities by 57% in FY17

The life insurance industry, led by state-run LIC, drastically cut down its fresh exposure in equities by 57 per cent during the fiscal 2016-17 to Rs 16,793 crore from Rs 39,535 crore a year ago, data collated by the Life Insurance Council said.

This reduction was despite the fact that key market indices went up remarkably during the year with the BSE Sensex alone rising to 29,620 on March 31 this year from 25,342 a year ago.

The private sector life insurers, numbering 23, too, have been a net seller in the equity market as they sold Rs 438 crore during this period.

Accordingly, the market value of equity portfolios held by the life insurers ballooned from Rs 5.95 trillion in FY16 to Rs 7.56 trillion in FY17.

In contrast, the life insurers' investment in fixed income, where government securities are major components, grew 15 per cent to Rs 21,67,143 crore from Rs 18,81,361 crore a year ago.

Similarly, the sector's investment in core segment projects increased from Rs 30,649.5 crore to Rs 34,407.5 crore, a growth of 12 per cent.

As a result, total assets held by the life insurance industry grew 18 per cent to Rs 29.81 trillion from Rs 25.29 trillion in the previous year.

"Sale of equity was more than that of buying during the fiscal 2016-17. In spite of the fact that the industry sold heavily during the year, the market value of equity rose by 25.5 per cent, or Rs 1.61 trillion, to Rs 7.56 trillion from Rs 5.95 trillion in the previous fiscal, thus its growth story continued during the year," secretary, Life Insurance Council, V Manickam, told

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