The Hindu Business Line : Birla Sun Life into health cover with unit-linked plans

Mumbai, Feb 14 Birla Sun Life Insurance plans to launch a unit-linked health insurance plan by the first quarter of the next financial year. The Life Insurance Corporation of India was the first to launch a unit-linked health insurance policy last week, followed by Reliance Life Insurance.

Mr Vikram Mehmi, President and CEO, Birla Sun Life Insurance, said the company had been working on a product for the past five months.

Designing a unit-linked health insurance policy would increase the ticket size of the policy since the investment proportion of the premium would be significant in comparison to the health insurance premium. Unit-linked health insurance policies offer investment returns as well as health insurance.

“Health policies otherwise do not have a significant value proposition. The health insurance market is valued at just around Rs 3,000 crore,” Mr Mehmi said.

Birla Sun Life Insurance has registered significant growth in new business premium this fiscal. According to IRDA’s figures, the company has reported a 114 per cent growth in new business premium at Rs 1,097 crore, against Rs 512 crore in the corresponding quarter of the previous year.

The average ticket size of a policy has moved up to Rs 39,000 from Rs 26,000 last year.

Mr Mehmi said that the high growth could be attributed to better products, strong investment performance and improvement in distribution this year. “We are growing faster than the industry which has grown at 98 per cent,” he said.

Birla Sun Life has significantly expanded its distribution network this year. The branches have grown from 137 to 600 while the agency force has doubled from 45,000 to 90,000.

“We plan to increase our agency force to 2 lakh by the next fiscal. In terms of branches, we want to get to the 1,000 mark as soon as possible,” Mr Mehmi said.

For all of this significant expansion in distribution, the company has been continuously infusing capital. The capital base has increased from Rs 677 crore to Rs 1,100 crore this fiscal.

The company’s high growth also implies that there will be a further delay in break-even. “We plan to continue growing faster than the industry. So, we may not break even in the next three years,” he said.

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