Private life insurance company Tata AIA Life is looking to enter real estate investments as a category. The insurance company which was absent from this space may enter this segment soon.
In an interaction with Moneycontrol, 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.”
Large life insurance companies including Life Insurance Corporation of India (LIC) are already big players in the real estate investment space. The insurance regulator had earlier allowed insurance companies to also invest in real-estate investment trusts (REITS).
In terms of the rate cut scenario in the country, Patil 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 Ulips there is some flexibility," he added.
The insurance players in the life insurance space have seen some tweaks in their duration. Patil said that it has been cut to around 4.5 years from 6-7 years earlier.
On the equity side, there have been a slew 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 have also been a flurry of insurance IPOs, we haven’t directly participated though we have some secondary market investments in them,” he added.