Kathmandu: The total investment of life insurance companies has increased by 31 percent during last financial year 2078-79. In the last FY, life insurance companies have invested Rs.4.73 trillion while the investment was only Rs. 3.59 trillion in previous FY.
Out of the total investment of the 19 life insurance companies, Rs. 3.16 trillion has been invested in the fixed deposits of commercial banks. Nepal Life alone has made investment of Rs.1.43 trillion. Similarly, LIC Nepal has the second largest investment is Rs.76 billion 30 million r. The third largest National Life has total investment of Rs. 47 billion 12 billion. National Life Insurance alone has an investment of Rs. 360 million 24 million in real estate.
Although the Insurance Board has paved the way to invest in real estate through Investment Guidelines, the investment in this sector is very low. The trend of insurance companies investing in real estate for office purposes rather than for commercial purposes is higher.
Rs. 8.6 billion has been invested in the ordinary shares of listed public limited companies while it was Rs. 12.85 billion previous FY. As the stock market is in bearish trend, insurance companies have withdrawn most of their investments from the stock market. Rs.30.97 billion are invested in preference shares and bonds of bank financial institutions. Rs. 21.87 billion is invested in secured debentures of listed public limited companies.
The Insurance Board has always said that there is an investment of Rs.7.14 billion in the infrastructure sector including agriculture, tourism and water resources. In the previous FY, such investment was only Rs. 3.17 billion. Insurance companies can invest up to 20 percent in such sector. But investing in such a field is considered highly risky.
Insurance companies are taking maximum advantage of the lack of liquidity in the bank financial sector. Insurance companies don’t want to venture into other risk areas if they can get good returns from fixed deposits of bank financial institutions safely.
