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"Birla Sun Life overtakes foreign parent in sales"
The Economic Times, Our Mumbai Bureau, July 16, 2005
Birla Sun Life Insurance has turned out to be the first domestic insurance company in India to have surpassed sales of its foreign parent in its home country. The Indian subsidiary generates more new business in India than Sun Life does in Canada.
Speaking to ET, Thomas Reid, head investor relations, Sun Life Financial, said Sun Life is harvesting business from policies sold in the past in Europe, while in Canada it was experiencing slow growth rate. The company also has operation in the US, which is growing at a slightly faster rate. But when it comes to growth no country looms as large as India. While China was a very large market, regulations restrict foreign companies from doing business all over the country, he said.
Media reports have quoted Sun Life’s chief executive, Donald Stewart, saying the company had set aside half a billion dollars for acquisition in Asia, US and elsewhere. Last year,
Birla Sun Life Asset Management had acquired the management off assets earlier managed by Alliance Capital.
According to Gary M Comerford, vice president, international and general manager, India, the company expects the consolidated results of Birla Sun Life Insurance and Birla Sun Life Asset Management to report a break-even this year.
Last year, Birla Sun Life generated new business premium of Rs 621.28 crore. The stand-alone life insurance business (Birla Sun Life) is expected to break-even in Canadian accounting terms in 2006-07. Mr Comerford says
Birla Sun Life policy sales are expected to cross one million during the current fiscal.
Interestingly, despite the disparity in income levels, the average premium per policy generated by Birla Sun Life in India was almost close to the average premium per policy in Canada. The growth opportunities in Asia is pushing Sun Life to look at inorganic growth as well. Last week, Sun Life acquired Bank of Australia’s Hong Kong life insurance
unit for 560 million Canadian dollars. The acquisition pushes up Sun Life’s ranking in Hong Kong to number 7 from number 19.
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