there is reliance there is TATA why should birla be behind in general insurance

Aditya Birla group plans foray into general insurance
june 14th economic times
The Aditya Birla group is weighing a foray into general insurance. “We are now considering entering the general insurance sector. While companies from the US, UK and Canada have been approaching us for sometime, it is only now that we are thinking about it,” SK Mitra, director at Aditya Birla Management Corporation said. He was here to launch Birla Sun Life Insurance Co’s (BSLI) new unit-linked policy — Gold-Plus Plan. Mr Mitra, however, clarified that general insurance currently remains at a very preliminary stage, although a proposal for entering into the non-life sector has recently been sent to board of directors of the group. Nevertheless, the group has launched a general insurance broking outfit. The present proposal, however, involves floating a company that will design and sell non-life policies possibly in joint venture with a foreign insurer. “The decision to get into general insurance will be based on the overall plans and programmes of the entire group. The Aditya Birla Group has entered into a few large ventures. The non-life venture will be considered in light of these developments,” Mr Mitra said. Aditya Birla Group’s life insurance venture BSLI is now gearing up to regain some market share it lost to other players in the sector. It is targeting a Rs 2,000-crore first premium income in 2007-08 against Rs 950 crore achieved in the previous fiscal. “Our market share declined from 12% three years ago to 5% now. We are gearing up to get the lost share back,” said Mr Mitra. “The promoters will have to double the equity base of the company. They will be required to infuse fresh equity of about Rs 700 crore into BSLI’s capital in 2007-08,” said Fabien Jeudy, vice-president, chief and appointed actuary at BSLI. Meanwhile, speaking to newspersons in Mumbai, Birla Sun Life Insurance CEO Vikram Mehmi said that Birla Sun Life Insurance has changed its strategy and has decided to pursue aggressive growth even at the cost of delaying its breakeven targets. The company, which has a paid-up capital of Rs 672 crore expects to need further investments from shareholders for two more years. Mr Mehmi said that the insurance industry growth rate has turned out to be higher than expected. “Analysts are now estimating that the industry will record a compounded annual growth rate of 45% for the next three years and we want to grow in line if not faster than the industry,” said Mr Mehmi. To increase its share of the market, BSLI would target the second- and third-rung of customers of its bancassurance partners, including Citibank and Deutsche Bank. The bank was also changing its strategy of seeling to subscribers of Idea telecom — an Aditya Birla Group company. After finding that the pilot not very successful BSLI is coming out with tailor made products which can be sold to telcom subscribers. BSLI is a 74:26 joint venture between the Rs 49,440-crore Aditya Birla group and Canadian major Sun Life Financial. “In order to achieve this growth, BSLI has decided to increase its branch network a few fold — by at least 400 in the current fiscal. Currently, the company has 137 branches. Agency force will simultaneously be enhanced to 1 lakh from 58,000 now,” EN Goveia, senior vice-president, direct sales force, told reporters.