Birla Sun Life aims to double rural revenue earnings

Birla Sun Life Insurance, the fifth largest life insurer in the country, is set to double the share of its rural revenue to its total earning in the next six months.

Talking to Business Standard, S K Mitra, director of financial services, Aditya Birla Group (ABG), said,"We expect to increase our rural premium collection by another 10 per cent in the next six months".

The current rural premium accounts for hardly five to ten percent of the total premium collection. The total premium collected till August 2006 was Rs 275 crore, according to him.

The company is planning to increase its presence in the rural belt throughout the length and breath of the country. "We will be using the channel networks of the companies that are under the flagship ABG", said Mitra.

He further said, "We have a large network of cement and fertiliser dealers whose services will be utilised for selling our insurance products to rural people." The company has formed a team for the rural market development. The current team has conducted studies to develop marketing strategy for rural segment. It will be mainly using the marketing channel of cement and fertilisers business of ABG.

"There is good opportunity in the rural insurance sector and we are working in that direction", said Mitra. The company is also exploring the concept of micro insurance, which might soon hit the market.

Mitra admitted that the company was weaker in generating business from its corporate agency network. "We have given more weightage to Bancassurance which has hit the growth on the corporate agency front."

Commenting on the IRDA's chairman's suggestion to insurance company to increase its sale in long term products, Mitra claimed, "We are one of the life insurance companies whose 85 percent premium is generated from 15-year plus maturity policies".

However, looking at the current 90 percent growth rate of the insurance industry, the company expects to infuse another Rs 200 crore of additional capital.

Recently, Rs 30 crore was injected that brought its equity base to RS 520 crore.