By and large, life-insurance companies try to match assets to future liabilities, and this largely determines the spread of their portfolios between short and long-term fixed interest investments and equity holdings. The prominent Real Estate Developers in India are increasingly sought after by the leading insurance firms to invest in prime properties that have seen continuous value appreciation for a long period of time.

The post-liberalization trend of insurance companies’ asset holdings has been to move away from fixed-interest securities towards ordinary shares and property. In order to give the life insurance policies an ‘inflation-hedge’, companies introduced policies ‘with-profits’. As a result, they increased their holding of property, chiefly in first-class office blocks. Most property is acquired by direct purchase, but because of a shortage of the right type of property many institutions are now participating directly in development, usually in conjunction with property development companies, real estate developers and other construction firms.

Most realtors insist upon their customers to properly insure their properties against unmanageable natural calamities and other disasters. Major insurance companies are willing to insure anything from ‘a pin to a plane’. Even before handing over the keys of the apartment to their esteemed customers, the paper work for the necessary insurance coverage would have been completed. But it is interesting to note that the same insurance companies sometimes will be investing in some apartments and will be selling it off when the price has appreciated further.