Birla Sun Life to raise Rs 30-crore equity

Chennai: Like many of its competitors, the Rs 120-crore equity-based Birla Sun Life Insurance will be increasing its capital-base by Rs 30 crore. "This is done to meet the solvency norms as laid down by the Insurance Regulatory and Development Authority, and not for bonus declaration," says Birla Sun Life CEO Nani B Javeri.

Javeri was inaugurating the companys twelfth branch in Chennai. Birla Sun Lifes average premium per policy, it is learned, is around Rs 15,000 per annum and the average sum assured per policy is around Rs 3 lakh, though Javeri does not want to discuss it. The company is expected close this fiscal with a premium income that should not be less than Rs 20 crore.

This, according to an industry source, is very impressive for a one-year-old life insurance company. Javeri says his company is very careful in selecting its agents. "That is one reason why our agents call ratio is high." Birla Sun Life has around 1, 800 agents, and Javeri sincerely believes that the company will break even in six years time.

Starting its operations in March 2001, Birla Sun Life closed the year with a premium income of Rs 32.35 lakh, selling 286 policies, translating into an average premium of around Rs 11, 300. For individuals the company has three basic unit-linked insurance plans. The company also has a group product and is wooing the Aditya Birla group companies with a special premium rate.

The Aditya Birla group has an employee-strength of 72,000. The other product for which Birla Sun Life is leveraging the groups human resources is in selling its Bima Kavach Yojana, a three-year endowment policy, targeting the rural community. The company has sold 2,000 such policies till date. And now it has a policy exclusively for lady tailors.