Birla Sun Life premium income up 70% in FY05

Birla Sun Life Insurance Company has clocked a growth of 70 per cent in premium income to Rs 915.5 crore for the year ended March 31, 2005.

Had the budget not announced a fringe benefit tax, which would tax contributions made to superannuation funds, Birla Sun Life could well have clocked additional premium income. The company has targeted a premium income of Rs 1,500 crore in fiscal 2005-06.

"Fringe benefit tax has disturbed the market. Though we are not sure what it may entail, corporate have deferred their decisons," said Nani Jhaveri, CEO Birla Sun Life.

The company estimates business to the tune of Rs 80-100 crore has been held in abeyance till the government takes a final decision.

Further, at a time when some insurance companies are holding onto funds in expectation of hardening interest rates, Birla Sun Life believes in matching liabilities to assets, said Jhaveri.

Similarly, even as the stock market went vibrant investing in mid-cap stocks, Birla Sun Life continued to invest in blue chip companies.

"We believe in investing long term and not taking positions in the market. We are not traders as we do not believe in mismatching assets and liabilities," said Anil Jhala, chief financial officer, Birla Sun Life.

Some private insurance players have chosen to invest in mid-cap stocks, which were seen to rally some time back.

Meanwhile, average premium income per policy has registered a growth of nearly 50 per cent at Rs 34,550, while the average sum assured has risen to Rs 3.86 lakhs in fiscal 2005 from Rs 2.98 lakh in the preceding fiscal.