Sun Life wants FDI limit hiked

Sun Life Financial Inc is eager to increase its stake in its Indian joint venture, Birla Sun Life Insurance to become an equal partner with the Aditya Birla group in the life insurance business.

"If we can expand our stake (from the current 26 per cent), we would be happy to do so. Allowing higher foreign stakes in life insurance ventures will be positive for (insurance) business and also the country," said Donald A Stewart, CEO of Canada-based Sun Life Financial Inc.

He said the Canadian insurer understands the situation a minority government finds itself in. "We will raise our stake the moment permissible limit is raised. We, however, have patience. We are here for a long haul," Steward said.

A government decision is pending on the proposed increase in foreign direct investment limit in the insurance sector to 49 per cent.

Birla Sun Life director Gary Comerford said Sun Life Financial and the Aditya Birla group have a clear understanding that they would function as equal partners.

The partners act as equal partners in every aspect, even when it comes to board representation. Sun Life Financial has a 50:50 partnership in Birla Sun Life Mutual Fund, which had a total of Rs 8,982 crore of assets under management as on September 30, 2004.

Stewart said Sun Life Financial intends to build a "strong self-sustaining" life insurance operation in India in three to four years and be among the top three private sector players in the life market. Birla Sun Life's market share in the current year has increased to 2.9 per cent from 2.5 per cent in 2003-04.

Birla Sun Life Insurance's new business premium income in the first half of 2004-05 rose by a steep 186 per cent to Rs 238 crore over a year ago.

The total premium income for the period rose 207 per cent to Rs 310 crore. The insurance company has covered a total of over 6.5 lakh lives.