ON
“BIRLA SUN LIFE INSURANCE”
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TITLE Page
No
1. INTRODUCTION 3
2. ORGANISATION STRUCTURE 17
4. DISTRIBUTION NETWORK 29
7. SWOT ANALYSIS 39
8. CONCLUSION 43
9. BIBLOGRAPHY 45
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1. INTRODUCTION:
The credit of introducing the first unit linked plan goes to UTI when
they brought out the Unit linked life insurance (ULIP) in 1971,In 1989
LIC Mutual Fund introduced the ‘DhanRaksha’ Plan identified to the
ULIP. The term of the policy in either 10 or 15 years. With the effect
from 1-7-02 the target amount under these two schemes has been
introduced to Rs. 2 lakhs from Rs.75, 000.it works like this: from the
uniform contribution for each year (for example @Rs.20,000 for ten
years) a small portion is used to buy term death cover for Rs.2 lakhs
and the balance is invested in units and at the end of ten years the
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accumulations made in your account is given as the maturity benefit
along with a 5 or7.5% bonus. There is some restriction in full death
cover in the first two years. After two years the full death benefit will
be paid equal to the target amount. a free accident cover is also given
for Rs.50,000. From April 2000 this plan is made NAV driven and UTI
has made several beneficial changes. In fact, these plans are considered
to be the cheapest insurance with good returns! As life insurance people
are not making these plans, they are not very popular in large numbers.
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companies could not follow this method to extend the benefit to the
general public due to legal obstacles and funding problems till 1964. In
1959 the US supreme court ruled that such insures will be subject to the
regulation of securities and exchange commission (SEC) only in 1964
the SEC permitted insurance companies to introduce such annuities.
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Basically, in USA, it offers the life insurance coverage combined with a
tax- differed investment feature. Your premium payment are spent on
three things:
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example, any sales presentation or illustration must be preceded by or
accompanied by a prospectus approved by the SEC. all materials used
in selling and the SEC must also approve promoting these product prior
to use.
In our country, however, only the IRDA regulates this policy and the
investment of the premiums collected under the policies. Also it is
enough if the selling agent has passed the basic IRDA insurance license
examination. No special qualifications are need by the agent and SEBI
does not have any control over the designing of or illustration prepared
by the insurance companies in selling such policies.
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BRIEF HISTORY OF BIRLA SUN LIFE INSURANCE
COMPANY LTD.:
A joint venture between the Aditya Birla Group and Sun life Financial,
Birla sun life insurance forayed into the life insurance and retirement
planning business by pioneering the unique unit-linked solutions in
India. In just over 2 years of its launch, the company has catapulted to
second position in new business premium in the highly competitive
private life insurance industry based on its strategy of unit-linked plans.
In operation for over 50 years now, the Aditya Birla Group is one of
India’s largest business houses. A highly respected and admired group,
rooted in performance ethics based on value creation for its multiple
stakeholders. The Aditya Birla Group’s operations span over 40 units
across 18 countries, anchored by a 72,000 strong committed workforce,
a group turnover exceeding Rs.27, 000 crore, an asset base which
exceeds Rs.20, 000 crore and a market capitalization of over Rs.13, 000
crore spread over 7 lac shareholders. Known for its rack solid
fundamentals it nurtures a culture where success does not come in the
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way of the need to keep learning afresh to continue innovating and to
carry on experimenting.
Being one of the largest corporate houses in India, and Aditya Birla
Group enjoys a dominant position in all the sectors in which it operates.
It is the world’s largest producer of viscose staple fibre, largest single
location aluminum plant and the largest single location refiner of palm
oil. What’s more, it is the second largest producer of insulators and the
fifth largest producer of carbon black in the world.
The flagship companies of the Aditya Birla Group include some of the
largest and most respected companies in India such as grasim industries
limited, Hindalco industries limited, Indian Aluminum Company
limited, Indian Rayan Industries Limited, Indo Gulf Corporation
Limited. The Group has larged power relationship with large
corporations like Hindustan Petroleum, Tata, Powergen Plc and AT&T.
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The group fosters a culture that promotes excellence and rewards
entrepreneurship. It endeavors to make the workplace a source of
creativity, innovation and self-fulfillment for its employees. Nurturing a
corporate culture imbedded with a high level of commitment and a
sense of shared destiny.
The mission of the Aditya Birla Group is creation of value for its
customers, shareholders, employees and the society at large.
In March of 2000, Sun life financial services of Canada, inc, Sun life
financier’s parent company, listed its shares on stock markets in
Toronto, New York, London, and Philippines. This new access to
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shareholders equity provides Sun life financial with even greater
opportunities to grow around the world.
The Sun life financial group of companies around the world, offer
innovative and practical financial solutions to individuals and
corporations:
Life, Health and Disability
Pension Funds and Plans
Investment Management
Annuities and Savings
Trust, Brokerage and Banking
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MISSION: To be the first preference of our customers by providing
innovative need based life insurance and retirement solutions to
individual as well as corporate. Well –trained professionals through a
multi channel distribution network and superior technology will make
these solutions available.
OUR VALUES:
• INTEGRITY
• TRANSPERENCY
• CUSTOMER FOCUS
• EXCELLENCE
• INNOVATION
• MERITOCRACY
• RESPECT FOR THE INDIVIDUAL
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OUR FEATURES: Our unit-linked flexi products are based on
universal life platform, catering to the customer’s twin needs of
insurance and investment. Our customers have appreciated these
products, which have the beneficial features of life insurance, mutual
funds and banks. Some of these features are described below:
According to their risk appetite, the customers can choose out of three
investment options, viz, protector (Representing a low risk portfolio),
Builder (Medium risk portfolio) or Enhancer (High risk portfolio) with
guaranteed returns fund, at present ranging from 3%-6%. The flexibility
of changing the investment option initially availed by them is also
available.
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a policy year) irrespective of the mode. Traditional products available
in the market do not offer such a facility.
5. RISK COVER DOES NOT DECRESE DURING THE TERM OF THE POLICY:
Unlike traditional life insurance policies, where the sum at risk (Sum
assured –paid up value) actually goes on decreasing, in our flexi
policies, death benefit is sacrosanct and and remains uniform
throughout the tenure of the policy. In case of death, the face amount as
well as the policy fund representing the saving portion in the premium
is payable.
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7. LIQUIDITY ON TAP: Traditionally, insurance products have been know
to be illiquid. Policy loans are at a cost and surrenders defeat the very
purpose of insurance. In such an environment, the facility of
withdrawals without affecting the risk cover is one of our unique
features.
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d. Detailed illustration at the point of sale
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2. ORGANISATION STRUCTURE: two guides Biral sun life
insurance business operations if its core values, namely integrity and
transparency. BSLI complies with a all regulations governing the life
insurance business. A high degree of transparency is followed in al the
business practiced and procedures and all employees are governed by
an internal code of conduct.
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• Hish Highless Maharaja G.Singh
• Mr. S.N. Talwar
• Mr. G.P. Gupta
AUDIT COMMITEE
INVESTMENT COMMITEE
EXECUTIVE COMMITTEE
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• Mr. S.K.Mitra
• Mr. B.N. Puranmalka
•
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Mr. K.H. Venkatachalam (chief manager-human
resource)
development)
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3. BRIEF PROFILE OF SEVICES OF ORGANISATION:
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Pioneered by Birla sun life insurance, Unit- linked solutions bring
together the best of life insurance and investment, together. A unique
combination of security from life insurance and returns from
investment. Introduced in line with the latest global trends, the unit-
linked plans put you in total control of your money. They are simple
transparent and flexible. What’s more, they offer 3% minimum
guaranteed overall returns on the premium.
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.FLEXI LIFE LINE PLAN: This plan offers a life insurance cover till
the age of 100 years thus providing you with a lifetime of security. It is
an investment for your future in which you accumulate large savings
through the benefits of compounding. The plan gives you the flexibility
of making tax-free withdrawals and can be customized as tax efficient
pension during your working years while the plan continues for a
lifetime.
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amounts and continuing it in the plan to take advantage of the benefits
of compounding.
BIRLA SUN LIFE TERM PLAN: The plan offers large life insurance
cover for very low costs for a specified term. It is a low premium, pure
risk coverage plan, which takes care of one’s financial commitments
toward his/her depending should anything unfortunate happen to line
policyholder.
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GROUP SUPERANNUATION PLAN: Retire in comfort- Birla sun
life insurance offers group superannuating plan as a retirement solution
for employees. The plan has benefits that empower both the employer
and employee. The contribution is invested in unit-linked funds
yielding market-linked returns to meet your future needs efficiently.
Additionally original / principal contribution is guaranteed against
market fluctuation.
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plans in one of the fastest growing life insurance markets in the
world.
The company is a p pioneer in introducing unique product features
like a ‘free look period’ and best sales practices such as the use of
“sales illustrations”. The regulator has now introduced the ‘free look
period’ as an industry norm. The mandatory use of a sales
illustration within BSLI set up a standard of transparency in the
industry.
A high persistency ratio of 95.46% by premium.
BSLI has consistently recorded the highest average sum assured of
Rs.3, 26,000 and average premium of Rs.19,500 per policy in the
industry with a unit-linked product range.
A very efficient utilization of capital.
Low claims ratio of 0.06% of total policies.
The first advisor to qualify to the “top of the table” (TOT) amongst
all private life insurance companies.
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GROWTH OF BIRALA SUN LIFE IN UNIT-LINKED LIFE
INSURANCE: Another successful financial year came to an end. The
company reported an annualized new business income of Rs.478 crore
during the year 2003-04 an increase of 222% over the premium income
lat year. The company of the year-end had an agency force of around
10,250 agents, and 89 ban assurance & corporate partners. All three sales
channels came out with flying colors. During the year 2003-04 the
company has launched two new groups and one individual fund.
During the year 2003-04, the BSE sensex has gone up by 81% but the
first quarter of year 2004 was not very exciting for the market except for
a huge supply of PSU IPOs. In March 2004, the markets have been
choppy and combined with the upcoming elections. This has caused
some amount of investor uncertainty. After a continuous rise between
may 2003 and January 2004, the quarter saw a correction in the market.
The BSE sensex went up to an all time high in January 2004 and the
quarter closed at 5590.60 down almost 4% from December 2003 level.
There was a large supply of IPOs by PSUs, which met with a good
response. The fundamentals remained good and foreign institutional
investors (FIIS) continued buying even though the markets declined. The
GDP growth numbers has also been encouraging at 10.4% in October –
December 2003 quarter.
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The interest rates remained range bound in the quarter with some amount
of volatility. The 10- year benchmark G-sec closed at 5.15% at the end of
the quarter.
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4. DISTRIBUTION NETWORK
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use of the call center and the internet will continue to be part of the
direct marketing initiatives .with a winning multi-channel distribution
system in place ,BSLI alternate channels are frontrunners in
bancassurance business, in partnership with Citibank ,Deutsche
bank,Bankof Rajasthan,BankMuscat,Catholic Syrian Bank, Development
credit bank and IDBI Bank.
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services. The systems are web enabled and equipped to provide
consistent information across all touch points (branches, callcenters
website etc.). A high quality wide area network (WAN) was set up to
interconnect all branches and the headquarters at mumbai.
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5. PRICING POLICY OF THE COMPANY:
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KEEP TRACK OF YOUR POLICY FUND: Birla sun life insurance
sends you an annual policy statement on every policy anniversary to
keep you completely informed on the performance of our various funds
based on the unit price will be available on our website.
CHARGES:
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surrender. During the first 24 months of the policy, the charge will be
an amount equal to the annulled premium payable for this policy .for
the purpose of surrender charge only, annualilsed premium is defined
as the amount that is payable if the coverage paying period is equal to
the coverage benefit period. In the 25th month, the surrender charge is
24 percent of the annualized premium. The surrender charge percent
reduces by one for e very month thereafter. If the policy is
surrendered at any time after the 49th month, the surrender charge is
zero.
WITHDRAWAL CHARGES:
• In a year tow withdrawals are free of charge
• For every additional withdrawal, a charge of Rs.100 will be levied.
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Birla Sun Life Insurance Company Ltd. (BSLI) won the prestigious ‘Good
Corporate Citizen Award’ from Bombay Chamber of Commerce and Industry
for the year 2009-10 under the category of ‘Banking and Financial
Institutions.
Outlook Money Awards 2004 BSLI - Best Life Insurer (Runner Up) 2004
TROPHY.
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Outlook Money Awards 2004 BSLI - Best Life Insurer (Runner Up) 2004
CERTIFICATE.
The 8th Asia Insurance Industry Awards 2004 - Birla Sun Life Insurance was
among the top five nominees in the category.
Birla Sun Life Insurance was presented 'The Hewitt Best Employers In India
Awards 2004' Trophy.
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7 SWOT ANALYSIS:
SWOT analysis of this company is given below-
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7.1.9 The option of with or without profits is also available in some plans.
Actually some companies give a guaranteed bonus as a percentage of
the sum assured as bonus
7.1.10The normal riders such as accident benefit, disability benefit critical
illness or major surgical assistance covers are also available.
7.1.11The policies are issued with the usual “free-look” provision.
7.1.12One company has floated a unit-linked policy for women with a critical
rider benefit specifically covering some gynecological illnesses.
7.1.13You can buy the policy with a single premium like a bond or pay
premium by the usual yearly, half-yearly or quarterly mode.
7.1.14Some companies offer even “premium holiday option”. If after paying
premiums for three years you are not able to pay the premium, the
policy will be continued adjusting the overdue premiums from your
unit fund.
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7.3OPPORTUNITIES: Opportunities of this company is given below-
7.4.1 This is company is also suffered by the great market competition. There
are number of competitors of this company.
7.4.2 Another threat of this company is that the changing environment.
Changing environment means change in government, change in
government policy, change is competitor’s policy.
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8. CONCLUSION:
Unit – linked policies are a very valuable addition to the existing array
of insurance producers. But, when sold to a wrong prospect or brought
a wrong agent it will become useless. IRDA and the companies should
take care that well- trained and professional agents market these
product.
In view of what was discussed above, the buyer if they need such plans
according to their risk appetite should select a known, well- informed
agent who is reliable. Agents who are already dealing with investment
or saving instrument or mutual funds, if they sell life insurance also
would be a good choice. In case they hence doubts about the
availability of such agents, it would be more advisable to go to
corporate agent with a background in financial instruments or still
better, to a good broker who are likely to be better equipped than an
ordinary agent. Continued advice and guidance will be available with
the corporate agent and the broker as they are corporate entities.
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9. BIBLIOGRAPHY
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