Birla Sun Life Insurance develops its growth trajectory in group insurance
1st December, 2005
Birla Sun Life Insurance (BSLI) is all set to redouble its thrust on its group business in India, leveraging on the expertise of its Canadian joint venture partner Sun Financial Inc. (SLF). BSLI has been a leader in the group business in the first four years of its operations. SLF is a leader in the group business in north America. In Canada SLF is a leading provider of group life and health insurance products with a market share of close to 21 per cent. SLF's group retirement services business is the number one provider of defined contribution plans in Canada with a huge market share of 32 per cent.
One of the key success factors for SLF's success in the Canadian market has been the unique strategy of providing total benefits, in which the group retirement services and group life and health services are provided to customers on the same platform. SLF is a significant player in the group business in several markets of its presence like the U.S. where its growth rates have been higher than that of the market. In Asia, SLF is in a strong position in this business segment. It has achieved the number four position in the group life business in Hong Kong and has recently signed up its first group business client in China.
Says Mr. Jim Prieur, President and COO, Sun Life Financial, "There is a tremendous opportunity for BSLI to continue its leadership in the group business in India. For SLF the group business is a core competency and has strategic focus in all markets in which it operates. In Canada the key differentiator is the superior technology platform and SLF's leadership in the large case market. With the knowledge transfer from SLF, along with a high quality team in India, BSLI is well positioned to becoming a world class provider of these services."
As a leader in the group business in Canada, SLF has been setting the benchmarks for the industry through its innovative approach and the use of superior technology. Its key strategy of providing 'Total Benefits' to its clients through a single point access for group benefits and group retirement services is a unique benefit to both employees and employer companies. Thus it is no surprise that 32 of the top 100 corporations in Canada are SLF clients. The group business in the U.S. has been growing at a faster rate than the market consistently for the last five years and SLF currently ranks amongst the top 10 players in the market.
BSLI was the first private life insurer to adopt a multi channel distribution strategy in India. The group business has been a significant contributor to BSLI's new business premiums. The group business in India has seen lot of developments in recent times. The intensifying competition within the industry has resulted in players resorting to extremely fine pricing. Additionally the levying of the fringe benefit tax (FBT) has compelled corporates to have a rethink on their policies on employee benefits.
Continued Mr. Prieur, "The changes in regulations and competitive pricing of services are a phase, which every growing and newly opened economy like India will witness. However the fact remains that employers can ill afford to withdraw employee benefits since it is an effective way to attract and retain talent. Given this imperative, one would expect a definite shift from defined benefits to defined contribution plans as these plans help corporates manage costs and empower employees to manage their retirement savings better."
The defined benefit v/s defined contribution plans is a debate which has recently gathered momentum in the Indian context. Canada, in line with most other mature markets, has witnessed a robust growth in defined contribution retirement planning. In India too this trend is evident.
The concept of defined contribution is at the core of the unit-linked plans offered by BSLI. These plans offer customers several superior benefits such as flexibility in terms of investment choices and transparency, which is absent in other kinds of plans. Investment performance plays an important role in the choice of life insurer for offering fund management and retirement services. Recently BSLI has received the mandate to manage the group funds of some of the leading corporates in the FMCG and banking sector with total corpus of over Rs. 350 crore, which will be transferred to BSLI in phases. Some of the key Aditya Birla Group companies have also opted for BSLI's plans to manage their employee benefit funds.
Says Mr. S. K. Mitra, Director, Group Financial Services, Aditya Birla Group, "The joint venture partners stand committed to growing the group business of BSLI. The recent mandates received by the company are an indication of the respect for the brand name and fund management expertise of the Birla Sun Life group in the market place."
Equipped with the know how and knowledge from SLF, BSLI is sharpening its focus in the group business by devising special sales strategies, for large clients segment and SME segment. The needful customization to meet the requirements of clients in India should result in greater customer satisfaction. BSLI is aiming to achieve differentiation through its superior member level customer service and fund management expertise. The company is proposing to launch a slew of products to meet the needs of all customer segments.
The key drivers of BSLI's group business in India can be summarized as:
- Investment philosophy of providing optimal returns at a minimal level of risk
- Use of state-of-art technology to provide member level data and web-enabled online transactions such as balance enquiry, switching of funds, change of contact details, etc.
- Superior pre and post sale customer services
About the Aditya Birla Group
The Aditya Birla Group has a turnover close to Rs. 33,000 crore (as on 31 March 2005) and is one of the largest business houses in India. It enjoys a leadership position in all the sectors in which it operates. With over 75 business units, spanning the south east Asian belt, Africa, Canada and the UK, among others, it is reckoned as India's first multinational corporation. The group is anchored by 72,000 employees and has 7 lakh shareholders, with a market capitalization of Rs.30,500 crore.
Additional information is available at www.adityabirla.com
About Sun Life Financial Inc.
Sun Life Financial Inc. is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Tracing its roots back to 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of 31 December 2004, the Sun Life Financial group of companies had total assets under management of USD 298 billion.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol "SLF".
Additional information can be found at: www.sunlife.com
For further information kindly contact:
Ms. Anjana Grewal, Vice President - Marketing & Communication,
Birla Sun Life Insurance Company Limited,
Tel: 022-5678 3333.