Where insurance companies like hdfc life,ICICI life insurance investing our money?
Stocks and bonds.
Insurance companies are actually biggest investors in equity markets take for example LIC it is the biggest domestic institutional investor, also they don’t only invest in equity markets, they are also active in bonds market, so their portfolios are well diversified.
there are also IRDA guidelines on where insurance companies can invest.
Not less than 50% is invested in government securities or other approved Investments.
Not less than 15% is invested in infrastructural and social sector Investments,
Not exceeding 20% in others to be governed by exposure prudential norms.
Not exceeding 15% is invested in investments other than approved investments.
Their latest annual reports contain a detailed breakdown of how the policyholder’s money is invested -
Also, there was a recent Finshots article which explained how LIC manages our money
What happens inside an insurance company is a smart investment of the crores of rupees that are collected through small premiums by millions of investors. For example, thousands of people invest in with a coverage of Rs. 10,00,000 for a period of 15 years. Now, the investment experts in the insurance company will calculate the probability of insurance claims every year and the long-term returns from a pool of low risk and diverse financial investment instruments such as government bonds, stocks, debentures, bonds and others as approved in the IRDA investment guidelines.