While FIIs pumped in nearly USD 30 billion into Indian market, domestic participation was pretty paltry, especially from the insurance sector. Reports suggest that the net inflows from insurance companies into equities were only around USD 1.5 billion in 2010. 

In an exclusive chat with CNBC-TV18, Puneet Nanda, Executive Director at ICICI Prudential Life Insurance and Kamesh Goyal of Bajaj Allianz said why the inflows have been so low and how they see 2011 panning out.

Though Nanda agrees that the net flows into equity from the insurance companies was low last year, he expects the flows to pick up in 2011. Investments of Rs 8,000-10,000 crore in equities is likely in the fourth quarter of the year, he added.

Goyal, meanwhile, said that regular premium unit-linked insurance plans (ULIPs) are likely to see a slowdown of almost 50%. "This could be attributed to Sebi’s mandate that upset the sale of ULIPs," he informed. Goyal added that insurance companies have large cash holdings currently with cash position at 25% for pure equity funds.

Going forward, Nanda said, he sees significant redemptions in life insurance companies.
Source :- Source : CNBC-TV18