Even as markets are trying hard to come out of the bear grip, insurance companies have lost nearly Rs 39,786 crore in last one year on the bourses. The market capitalisation of shares held by insurance companies decreased 24% to Rs 1.25 lakh crore as on March 17, from Rs 1.65 lakh crore a year ago.
Of the total number shares held by 17 insurance companies studied by FE, Life Insurance Corporation of India had the highest share of 79.3%, followed by GIC Of India (6.3%) and ICICI Prudential Life Insurance (4.3%). An analyst from a MF house said, ? LIC and other insurance companies are long-term investors in equity as an asset class since in the long run, equities have outperformed all other asset classes including real estate and gold. Naturally, they would invest in such sectors that are a proxy or which participate in the blistering growth of the Indian economy and these sectors are representative of the economy as a whole.?
Among the 17 insurance companies, the M-Cap of shares held by LIC decreased 26.6% to Rs 1.04 lakh crore as on March 17 from Rs 1.42 lakh crore as on March 17, 2008. Next comes ICICI Prudential Life Insurance Company. The M-Cap of shares held by this insurance company increased 58.3% to Rs 8,302 crore. Lowest M-Cap was seen in the case of Max New York Life Insurance (Rs 2.67 crore) and ING Vysys Life Insurance (Rs 3.95 crore).
Among the 31 industries studied, the top five industries, in terms of market cap preferred by 17 insurance companies are refineries, banks, cigarettes, telecom and automobiles. The market capitalisation of refineries stocks held by insurance companies decreased 22% to Rs 15,847 crore on March 17, 2009 from Rs 20,322 crore a year ago.
Only four industries market capitalisation of shares held by insurance companies increased during the study period. Mention may be made of jems & jewellery, electronics, food & products and paper.
On the other hand, less preferred stocks by insurance companies are petrochemicals, jems & jewellery, chemical, paper and tyres. The market capitalisation of tyre companies stocks held by insurance companies decreased 39.4% to Rs 113 crore on March 17 from Rs 186 crore on March 17, 2008.
Maximum number of industries invested by insurance companies are construction (10 insurance companies) followed by automobile ancillaries (9), cement (8), steel (8), textile (8), IT (7) and automobiles (6).
In banking industry, LIC has the highest number of stocks followed by GIC Of India.
