The Harshad Patil, Chief Investment Officer, Tata AIA Life Insurance said, “In terms of the new areas of investments, we are looking at real estate investments and are at the final stages of closure and will have it by end of this year.”
The insurance regulator had earlier allowed insurance companies to also invest in real-estate investment trusts (REITs). However, large life insurance companies including Life Insurance Corporation of India (LIC) are already big players in the real estate investment space.
In terms of the rate cut scenario in the country, the Chief Investment Officer said that overall, we don’t see much room for rate cuts anymore and there could be a prolonged pause except probably one 25 bps cut in this fiscal.
“Being a life insurer, we have a conservative portfolio and stick to high-rated papers and government securities. While investments are long-term in the traditional book, in Unit Linked Insurance Plan (Ulips) there is some flexibility,” Patil added.
In life insurance space the insurance players have seen some twists in their duration. It has been cut to around 4.5 years from 6-7 years earlier, Patil said.
On the equity side, there has been an increase of initial public offerings (IPOs) from the insurance side. Patil said that when it comes to the equity market, any correction will be taken as an opportunity by the retail sector.
“Though there has also been a flurry of insurance IPOs, we haven’t directly participated though we have some secondary market investments in them,” Patil added.