The global financial crisis might have created an upheaval in the local stock markets, but domestic insurance companies gained a whopping Rs 40,942 crore in the bourses during the one-year period between August 21, 2008 and August 21 this year. During the period, the market capitalisation of bank stocks held by insurance companies increased 103.2% to Rs 43,097 crore on August 21, 2009, from Rs 21,212 crore recorded in the year-ago period.

Life Insurance Corporation (LIC) had the highest holding of 81.2% among the 17 insurance companies. It was followed by ICICI Prudential Life Insurance Co (7.5%) and GIC Re (4.6%).

The market capitalisation of shares held by insurance companies increased 21.1% to Rs 2.35 lakh crore from Rs 1.94 lakh crore during the study period.

Among the insurance companies, the M-cap of shares held by LIC increased 19.4% to Rs 1.91 lakh crore on August 21, 2009 from Rs 1.60 lakh crore on August 21, 2008. On the other hand, ICICI Prudential Life Insurance?s M-cap of shares increased 62.4% to Rs 17,598 crore.

Kishor P Ostwal, chairman & managing director, CNI Research, said, ?Private insurance companies? rise in market cap is due to rise in the Sensex as well as incremental investment due to lower insurance growth.

?As far as LIC is concerned, it is acting as a market balancer. As per LIC rule, they have to invest 10% in capital market out of their incremental insurance premium. On the other hand, the M-cap of GIC has not risen much because it is unable to invest in capital market as they have exceeded their maximum limit.?

Among the insurance companies, the lowest M-cap was seen in case of Cholamandalam MS General Insurance Co (Rs 9.12 crore) and ING Vysya Life Insurance (Rs 10.92 crore), as on August 21, 2009.

Among the 31 industries studied, the top five industries preferred by the insurance companies for their portfolios are banks, refineries, engineering, cigarettes and automobiles.

The market capitalisation of shares of only seven industries held by insurance companies decreased during the study period. Mention may be made of paper, personal care, refineries and textiles.

On the other hand, insurance companies showed less preference to stocks of sectors like petrochemicals, gems & jewellery, chemical, trading and tyres.

Automobile firms were the most preferred by the insurance sector, with 12 firms investing in auto stocks. This was followed by electric equipment (10), banks (9), cement (8) and IT (8).