Birla Sun Life plans to double capital base

Birla Sun Life Insurance Company is planning to double its capital base to arrest the company's depleting market share and attain 100 per cent business growth in 2007-08.

S K Mitra, director-financial services, Aditya Birla Group, said, the company was targeting over Rs 2,000 crore in first premium income during the current fiscal from Rs 953 crore recorded last year.

The company is also aiming at doubling the total premium revenue from Rs 1,746 crore recorded on March 31, 2007. This requires doubling the company's capital base of Rs 672 crore as on March 31, 2007.

The company was planning to infuse another Rs 700 crore as capital within the current fiscal, Fabien Jeudy, vice-president, chief and appointed actuary, Birla Sun Life Insurance, said.

Mitra said, as part of its aggressive growth plans, the company would set up 210 additional branches within the first half of the current fiscal. Birla Sun Life has 137 branches now.

The company will raise the number of its agent advisors to one lakh in the current fiscal from 58,000 now. These steps would help the company recover its market share from the current five per cent, Mitra said. Three years ago, the company enjoyed a market share of 12 per cent.

As part of its growth strategy, the company is also planning to introduce new products. The company today launched the "Gold Plus Plan" - a unit linked insurance plan.

Under the plan, the policy holder can pay a premium of Rs 10,000 for a duration of three years. The plan offers 100 per cent equity exposure. People between the age groups of 18 to 70 years can invest their money in the plan.

The fund will predominantly invest in bluechip and select mid-cap stocks that have the potential for higher returns. The total term of the policy is eight years.

Jeudy said the product was designed based on consumer research that showed a preference for short pays.

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