Insurance companies led by HDFC Life and SBI Life plan to raise their investments in sectors such as information technology and oil & gas to catch the rally in these segments and maximise their returns.
Although this may raise the risk profile of their portfolios, insurance companies are ready to approach their boards to seek an increase in the sector exposure limit to 20% from the current 15%. "Irda has given us permission to increase exposure in one sector, so we might as well consider raising our stake in IT or oil & gas," said AK Sridhar, chief investment officer, IndiaFirst Life Insurance.
Last month, the insurance regulator had allowed companies to raise exposure limit in one sector from 15% to 20%, after the approval of their respective boards. In banks, for instance, insurers are allowed to have an exposure of 25%.
Recently, weightages of several sectors have gone up in the Sensex: banks and financial services have increased to 26.5%, IT to 16%, and oil and gas to 13.5%.
"We have taken approval from the board to increase stake in information technology," said Nirakar Pradhan, chief investment officer, Future Generali Life Insurance.
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