The growth strategies of Aditya Birla Financial Services Group (ABFSG), which spans life insurance, private equity, mutual funds and secured lending, have paid off in the last two years. The premium income of the life insurance arm, Birla Sun Life Insurance Company, in 2007-08 and 2008-09 was equal to the aggregate of six previous years’ premium income.
“Even though the life insurance space last year showed a negative growth, our business grew to gain a 9 per cent market share (in new business premium) from a 5.50 per cent share in the previous year. The combined sales of our life insurance business in 2007-08 and 2008-09 of Rs 5,145 crore is almost double of what we did in our first six years of Rs 2,897 crore,” said Ajay Srinivasan, chief executive of ABFSG.
The group posted a total consolidated revenue of Rs 4,750 crore in 2008-09. The group, which has a financial products distribution arm and a general insurance broking business, is now looking at new markets for expansion.
The company’s mutual fund business also grew, at 31 per cent in 2008-09. “This business grew despite a decline in the mutual funds industry last year,” said Srinivasan.
He said that the drivers for both the businesses were the same. “Distribution and presence which increased from 137 branches in 2007 to over 600 last year for our insurance business was one of the key drivers,” he said. “We added a significant number of new relationships through our alternative channel and this, and product innovation and a thrust on increasing operations and IT infrastructure, has helped us gain in a negative market,” he said.
The next step now is to a broader market-base. The company acquired Apollo Sindhoori last year, which gave ABFSG a presence in 700 locations across the country and an additional 1.75 lakh customers, and helped its foray into the retail broking space.