Birla Sun Life Insurance Company has topped in the group insurance business among private players with a market share of 34.94 per cent.

The Birla group company has collected total group premium income of Rs 18.5 crore (Rs 185 million) in the first six months of fiscal 2004.

Seen as a major thrust area for the company, Birla Sun Life envisages group insurance premium to contribute about 35-40 per cent of total first year premium in this fiscal against 26 per cent last year.

While Birla Sun Life ranks number one in group sales in terms of premium collection, SBI Life Insurance Company has covered the maximum lives at over 800,000 through group sales. Birla Sun Life has insured just about 100,000 to date.

According to Insurance Regulatory and Development Authority's latest figures (August 2003), SBI Life with a premium collection of Rs 12.24 crore (Rs 122.4 million) under group business, ranks number 2.

Among the top five in group sales are Tata AIG Life in third position (Rs 10.61 crore), OM Kotak Mahindra Life at fourth (Rs 4.33 crore) and HDFC Standard Life at fifth (Rs 2.12 crore).

Private insurance players are making strong beelines to capture market share in group corporate business.

"Group term business is very competitive and price-driven. However, as this business is very sensitive to claims, we need to stay within the competitive band-width or find ourselves out of business the next year," said Birla Sun Life vice president (group life and pension) Jaskirat Kaur.

In financial year 2002-03, Birla Sun Life was the market leader in group sales with a share of 35.7 per cent among private players, and accounted for over one per cent of the total market.

Nevertheless, the 12 private insurance players have been able to capture less than five per cent of the total group insurance business in the country, with the Life Insurance Corporation of India continuing to hold over 95 per cent market share.

"We have sold group insurance to 100 corporates, some of which have switched from LIC to Birla Sun Life as they seek greater transparency and better returns," said Kaur.

Birla Sun Life offers unit-linked group plans, which have seen net of charges returns in the region of 26 per cent plus in the last 12 months as on September 30, 2003.

"With falling interest rates, corporates are realising that it makes better sense to invest gratuity and superannuation funds in debt and equity. This is possible through unit-linked schemes. What works for unit-linked funds is volatility and the aspect of rupee-cost averaging," said Kaur.

While unit-linked plans will offer all the upside, in the event of an individual retiring when the market has slumped and net asset value of the fund becomes negative, Birla Sun Life offers a safety feature.

"If the market experiences a downward trend when employees retire, we guarantee to pay all the contributions made by the individual towards his superannuation, so that he does not suffer," said Kaur.