Industry Analysis

About the Industry and subparts of the Industry

Overview
Insurance industry of India grew at the rate of 22.5% during 2015-2016,
posing premium income of Rs. 1.38 trillion. It consists of 53 insurance companies
subdivided into life insurance and non-life insurance. LIC is the only public sector
player in life insurance along with 23 private players, while among the non-life
insurance companies there are six public sector players and the rest 22 are private
players, there is also a reinsurance public sector company. It is regulated by IRDA
(insurance Regulatory and Development Authority) which was established under the
IRDA Act in 1999.
India’s insurance sector is biggest in the world with about 360 million policies
and is expected to increase at a CAGR of 12-15% over next five years. Also, the
market size is expected to quadruple in size from currently at $60 billion to over
$160 billion over a period of 10 years from now. Still it accounts for less than 1.5% of
world’s total insurance premiums and 2% of world’s life insurance premiums, thus
growth opportunities in the sector is huge and has a potential to grow exponentially.

Insurance

Life Non-life
Reinsurance
Insurance Insurance

Public Private Public Private

While comparing with the global premium increase of 3.3% annually in 2015-
2016, growth prospects are quite high in India.

Growth Drivers and Sector Risk Factors

Growth Drivers
i. Government initiatives like Jan Dhan Yojana
ii. Other regulations which makes it mandatory for companies and institutions
to insure their employees with certain policies.
 iii. High population of uninsured people.
iv. Transparency in system
Risk Factors
i. Government regulations
ii. Cases of fraud
iii. Interest rate fluctuations

Insurance growth drivers in India

The demand for insurance products is likely to increase due to the exponential growth of
household savings, purchasing power, the middle class and the country’s working
population. Listed below, are the various underlying growth drivers for India’s insurance
industry:
 Growing of the financial industry as a whole
 Growth of life and non-life industry
 Promoting innovation and removing inefficiency
 Competition and orderly growth
 Growth of specific insurance segments such as motor insurance

Economic Factors:

Interest Rate Fluctuations: Insurance companies invest much of the collected premiums, so
the income generated through investing activities is highly dependent on interest rates.
Declining interest rates usually equate to slower investment income growth. Another
downside to interest rate fluctuations (not exclusive to insurance companies) is the cost of
borrowing. Find out when the company's debt matures and how high the interest rates are.
If the company is about to borrow or reprice its debt, there could be a big shock to cash
flows as interest expense arises.

Demographics: It plays one of the largest roles in affecting sales for insurance, particularly
life insurance. As people age, they tend to rely more and more on life insurance products for
their retirement. Death benefit policies ensure that beneficiaries are financially secure once
the insured dies, but in more recent years, the insurance industry has made great headway
in offering investment/savings type insurance products. Because baby boomers are quickly
approaching retirement age, take a close look at the suite of insurance products that the
company is offering and, from that, see if it stands to benefit from this large portion of the
population getting older.
Performance matrices of the industry
i. No. of premiums sold;

ii. Number of new prospects contacted;

iii. Closing ratio;
iv. Average size of sale;
v. Number of referrals;
vi. Connections with clients;
vii. Customer satisfaction;
viii. Retention of business rates; and.
ix. Percentage of cross-sold accounts.

Macroeconomic Factors which affect the industry

Insurance companies have other sources of revenue besides collecting premiums, and as
such they depend on several macroeconomic factors for their growth and survival. When
certain things happen in the economy, they have a direct impact on the financial health of
insurers worldwide. It's important to pay attention to these indicators when planning for the
financial future of your insurance company.

Unemployment

 Traditionally, unemployment doesn't affect the insurance industry as much as it does

the broader economy, but there are some correlations. In January 2009, the national
unemployment rate was 7.6 percent, while unemployment in the insurance industry
stood at only 3.5 percent, according to the U.S. Bureau of Labor Statistics (BLS).
While this is good news to those working in the industry, it still reflects an increase
over the 3.0 percent rate at the same point in 2008. High unemployment is a bad
indicator for insurers.

Consumer Confidence

 When consumers aren't confident spending money, they cut back on expenses.
Because most insurance isn't mandatory, and many people go for long periods of
time, sometimes their whole lives, without filing an insurance claim, insurance can
feel like an unnecessary expense when money gets tight. Andrew Frye of Bloomberg
 reports that insurance sales in 2009 were in the midst of the worst decline since the
1930s. Consumer confidence has a direct impact on insurer health.

Interest Rates

 Insurers earn money by collecting premiums and also by investing the capital they
have on hand, usually in short-term investments. When interest rates fall, their
revenue falls as well. Of course, insurers have the power to change their investment
strategy as needed to mitigate against investment losses, but overall interest rates
serve as a good economic indicator for the health of insurance companies. When
investment revenue falls, insurers must raise premiums to compensate, or cut costs

Major players in the industry

i. Life Insurance Corporation of India.
ii. Tata AIG General Insurance.
iii. Bajaj Allianz General Insurance.
iv. New India Assurance.
v. ICICI Prudential Life Insurance.
vi. IFFCO TOKIO General Insurance.
vii. ICICI Lombard General Insurance.
viii. Oriental Insurance.

Recent developments in the industry

The following are some of the major investments and developments in the Indian
insurance sector.

i. Max Life Insurance Co Ltd and HDFC Life Insurance Co Ltd have signed a merger
agreement, which is expected to create India's largest private sector life
insurance company once the transaction is completed.
ii. Lloyd’s, a UK-based reinsurer, plans to make its entry in Indian markets by early
2017, after receiving the approval from Insurance Regulatory and Development
Authority (IRDA) to operate in India through its market model wherein a set of
members collectively come together to underwrite and provide reinsurance.
iii. The Insurance Regulatory and Development Authority of India (IRDAI) plans to
issue redesigned initial public offering (IPO) guidelines for insurance companies
in India, which are to looking to divest equity through the IPO route.
iv. Aviva Plc, the UK-based Insurance company, has acquired an additional 23 per
cent stake in Aviva Life Insurance Company India from the joint venture (JV)
partner Dabur Invest Corporation for Rs 940 crore (US$ 141.3 million), thereby
increasing their stake to 49 per cent in the company.
 v. The Insurance sector in India is expected to attract over Rs 12,000 crore (US$
1.76 billion) in 2016# as many foreign companies are expected to raise their stake
in private sector insurance joint ventures.
vi. QuEST Global, a pure-play engineering and Research and Development (R&D)
services provider, has raised investment of around Rs 2,396 crore (US$ 351.54
million) from leading global investors Bain Capital, GIC and Advent International
for a minority stake in the company.
vii. Insurance firm AIA Group Ltd has decided to increase its stake in Tata AIA Life
Insurance Co Ltd, a joint venture owned by Tata Sons Ltd and AIA Group from 26
per cent to 49 per cent.
viii. Canada-based Sun Life Financial Inc plans to increase its stake from 26 per cent
to 49 per cent in Birla Sun Life Insurance Co Ltd, a joint venture with Aditya Birla
Nuvo Ltd, through buying of shares worth Rs 1,664 crore (US$ 244.14 million).
ix. Nippon Life Insurance, Japan’s second largest life insurance company, has signed
definitive agreements to invest Rs 2,265 crore (US$ 332.32 million) in order to
increase its stake in Reliance Life Insurance from 26 per cent to 49 per cent.

Major government policies for the industry

The Government of India has taken a number of initiatives to boost the insurance
industry. Some of them are as follows:

The Union Budget of 2016-17 has made the following provisions for the Insurance
Sector:

i. Foreign investment will be allowed through automatic route for up to 49 per cent
subject to the guidelines on Indian management and control, to be verified by
the regulators.
ii. Service tax on single premium annuity policies has been reduced from 3.5 per
cent to 1.4 per cent of the premium paid in certain cases.
iii. Government insurance companies to be listed on the exchanges
iv. Service tax on service of life insurance business provided by way of annuity under
the National Pension System regulated by Pension Fund Regulatory and
Development Authority (PFRDA) being exempted, with effect from April 01,
2016.
v. The Insurance Regulatory and Development Authority (IRDA) of India has formed
two committees to explore and suggest ways to promote e-commerce in the
sector in order to increase insurance penetration and bring financial inclusion.
vi. IRDA has formulated a draft regulation, IRDAI (Obligations of Insures to Rural and
Social Sectors) Regulations, 2015, in pursuance of the amendments brought
about under section 32 B of the Insurance Laws (Amendment) Act, 2015. These
regulations impose obligations on insurers towards providing insurance cover to
the rural and economically weaker sections of the population.
vii. The Government of India has launched two insurance schemes as announced in
Union Budget 2015-16. The first is Pradhan Mantri Suraksha Bima Yojana
(PMSBY), which is a Personal Accident Insurance Scheme. The second is Pradhan
 Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which is the government’s Life
Insurance Scheme. Both the schemes offer basic insurance at minimal rates and
can be easily availed of through various government agencies and private sector
outlets.
viii. The Uttar Pradesh government has launched a first of its kind banking and
insurance services helpline for farmers where individuals can lodge their
complaints on a toll free number.

Recent Developments in the industry

 Multi-distribution i.e. increasing penetration through new modes of distribution such

as the internet, direct and telemarketing and NGOs
 Product innovation i.e. increased levels of customization through product innovation
 Claims management i.e. timely and efficient management of claims to prevent delays
which can increase the claims cost
 Profitable growth i.e. expanding product range, developing innovative products and
expanding distribution channels
 Regulatory trends i.e. mandated regulatory changes by the IRDA to promote a
competitive environment in both the life and non-life insurance sectors

Major Government Policies for the Industry

The Government of India has taken a number of initiatives to boost the insurance industry.
Some of them are as follows:

 The Union Budget of 2016-17 has made the following provisions for the Insurance
Sector:

 Foreign investment will be allowed through automatic route for up to 49 per cent
subject to the guidelines on Indian management and control, to be verified by the
regulators.
 Service tax on single premium annuity policies has been reduced from 3.5 per cent
to 1.4 per cent of the premium paid in certain cases.
 Government insurance companies to be listed on the exchanges
 Service tax on service of life insurance business provided by way of annuity under
the National Pension System regulated by Pension Fund Regulatory and
Development Authority (PFRDA) being exempted, with effect from April 01, 2016.

 The Insurance Regulatory and Development Authority (IRDA) of India has formed
two committees to explore and suggest ways to promote e-commerce in the sector
in order to increase insurance penetration and bring financial inclusion.
  IRDA has formulated a draft regulation, IRDAI (Obligations of Insures to Rural and
Social Sectors) Regulations, 2015, in pursuance of the amendments brought about
under section 32 B of the Insurance Laws (Amendment) Act, 2015. These regulations
impose obligations on insurers towards providing insurance cover to the rural and
economically weaker sections of the population.
 The Government of India has launched two insurance schemes as announced in
Union Budget 2015-16. The first is Pradhan Mantri Suraksha Bima Yojana (PMSBY),
which is a Personal Accident Insurance Scheme. The second is Pradhan Mantri
Jeevan Jyoti Bima Yojana (PMJJBY), which is the government’s Life Insurance
Scheme. Both the schemes offer basic insurance at minimal rates and can be easily
availed of through various government agencies and private sector outlets.
 The Uttar Pradesh government has launched a first of its kind banking and insurance
services helpline for farmers where individuals can lodge their complaints on a toll
free number.
 The select committee of the Rajya Sabha gave its approval to increase stake of
foreign investors to 49 per cent equity investment in insurance companies.
 Government of India has launched an insurance pool to the tune of Rs 1,500 crore
(US$ 220.08 million) which is mandatory under the Civil Liability for Nuclear Damage
Act (CLND) in a bid to offset financial burden of foreign nuclear suppliers.
 Foreign Investment Promotion Board (FIPB) has cleared 15 Foreign Direct Investment
(FDI) proposals including large investments in the insurance sector by Nippon Life
Insurance, AIA International, Sun Life and Aviva Life leading to a cumulative
investment of Rs 7,262 crore (US$ 1.09 billion).
 The Insurance Regulatory and Development Authority of India (IRDAI) has given
initial approval to open branches in India to Switzerland-based Swiss Re, French-
based Score SE, and two Germany-based reinsurers namely, Hannover Re and
Munich Re.

Major Cost Heads for the Industry

1. Product Development, marketing and sales support

2. Operations
3. IT
4. Support Functions
5. Management
6. Business Complexity

Job Profiles

1. Direct Sales
2. Agency Manager
 3. Sales Manager
4. Insurance Advisor
5. Branch Manager
6. Business Development Manager
7. Marketing Manager

Major Players in the Industry


 About Company:

 Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya
Birla Group, a well-known Indian conglomerate and Sun Life Financial Inc., one of the
leading international financial services organisation from Canada. With an
experience of over a decade, BSLI has contributed significantly to the growth and
development of the Indian life insurance industry and currently is one of the leading
life insurance companies in the country.
 2.1 Vision: To be a leader and role model in a broad based and integrated financial
services business.
 Values: Integrity, Commitment, Passion, Seamlessness, Speed
 2.5 Strategic Alliances:
 Two Aditya Birla Group Companies, Birla Sun Life Insurance., a leading private life
insurer and Idea Cellular Ltd., a leading cellular operator, today announced the
creation of a strategic alliance, which encompasses various multiple joint activities,
and promotions to provide value added services to their individual customer bases.
Innovation & value added services are the key drivers for the strategic alliance.
 Birla Sun Life Insurance Company has entered into a strategic alliance with Dewan
Housing Finance Corporation (DHFL) for the distribution of the company's insurance
products. Birla Sun Life offers mortgage-protection insurance products to Dewan
Housing. The latter has formed a subsidiary company - DHFL Insurance Services - for
the purpose.

Recent Major Events

- ABNL completes 23% stake sale in Birla Sun Life for Rs 1,664 crore 

Birla Sun Life Insurance launches Cancer Shield Plan 

Product Portfolio
Protection Solutions

Plan Benefit Plan Name

A plan that assures financial security for your family while keeping
pace with your growing needs, and rewards you for a healthy BSLI Protector Plus Plan
lifestyle
BSLI Future Guard Plan provides complete financial freedom even
BSLI Future Guard Plan
when you're not around, so that your loved ones live comfortably.
This plan helps you ride the highs of life while overriding the lows.
So, give your family the benefit they deserve with a plan customized BSLI Protect@Ease
by you.

Savings with Protection

Plan Benefit Plan Name

In our life when there is so much uncertainty around us, there's nothing BSLI Vision
more reassuring than knowing that not only is your money safe, but also MoneyBack Plus
that you will get more than what you have invested. Plan
Introducing the BSLI Vision LifeIncome Plan, a traditional participating whole
life plan that helps you to not only plan your financial goals but also realize
your dreams by providing you with a steady income and whole life
BSLI Vision
cover.With survival benefits payable every year from the end of the
LifeIncome Plan
premium paying term till maturity and a life insurance benefit, this plan
offers a perfect blend of income and financial protection for you and your
family.
Since nothing in life is guaranteed, it is great to find some things that are.
Presenting the BSLI Vision Endowment Plan that offers you the best of both
worlds since some things bring with its promise the reassurance that you BSLI Vision
get back more than what you have invested. This plan assures growth in Endowment Plan
your savings and return of your money so you can build a safe and
financially sound future for your family.
Life is full of uncertainties and seldom turns out the way one expects it to
be. We all look for security; whether it is for our family’s future or for our
BSLI Savings Plan
savings. Given a choice, we would leave nothing to chance when it comes to
fulfilling goals and securing family’s well-being.
If your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers BSLI Vision
variable returns then the illustrations on this page will show two different LifeSecure Plan
rates of assumed futureINVESTMENT RETURNS .
The BSLI Income Assured Plan is suitable for you if your key objective is
BSLI Income
secured savings, regular income and comprehensive financial protection for
Assured Plan
your family.
With survival benefits payable every year from 5th policy anniversary till BSLI Vision
maturity and life insurance benefit, this plan offers a perfect combination of Regular Returns
liquidity, savings and financial protection of your family. Plan
So by investing in BSLI Vision Endowment Plus Plan, your investment can go BSLI Vision
a long way in building a safe and financially sound future for your family, Endowment Plus
today as well as in the years to come. Plan
The Guaranteed Maturity Benefit is the Maturity Sum Assured and will
BSLI Guaranteed
depend on the chosen Death Benefit option, premium paying frequency,
Future Plan
amount of premium chosen and the gender of the life insured.
BSLI SecurePlus Plan offers you a backup income opportunity that BSLI Secureplus
guarantees more than just income, it offers peace of mind. In time of crisis,
neither you nor your family will have to sacrifice their needs and plan
aspirations.

Children’s Future

Plan Benefit Plan Name

Some benefits are guaranteed and some benefits are variable with
bonuses based on the future performance of the participating business BSLI Vision Star Plan
and economic conditions.

Retirement

Plan Benefit Plan Name

Presenting the BSLI Empower Pension Plan, a plan designed especially to
ensure that you remain in control of your destiny even during the second
innings of life. A unit linked, non-participating pension plan it is simple, BSLI Empower
hassle-free and helps you accumulate your premiums and the investment Pension Plan
returns into a corpus for your retirement; so that you can focus on your
goals, and enhance your savings for a secure future.
It enables you to convert your savings or lump sum amounts into an instantly
BSLI Immediate
guaranteed lifetime income source for retirement, which you can avail
Annuity Plan
anytime you choose to have it.
Your retirement years are your second innings, a new life where you leave
behind your working life and responsibilities and find time for yourself. BSLI Empower
Presenting, BSLI Empower Pension – SP Plan – this plan will help you gain Pension - SP
financial freedom during your second innings. Helps you focus on your goals Plan
and enhances your savings for a future free from worries.

Health and Wellness

Plan Benefit Plan Name

Hospital Plus Plan, acts as a supplement to your Health Insurance Policy BSLI Hospital Plus
and helps you financially to mitigate additional expenses. Plan
Like all the uncertainties in life now you can plan for cancer at every
BSLI Cancer Shield
stage with Birla Sun Life Cancer Shield Plan. It’s a promise that we will
Plan
always be by your side.

Wealth with Protection

Plan Benefit Plan Name

A single pay unit linked plan that allows you to choose how your money is BSLI Wealth Max
invested in 13 different funds Plan
A life insurance plan that ensures you meet your family’s dreams by picking
BSLI Wealth
out an investment option that best suits your requirement and also
Secure Plan
financially secures your family with Whole Life Cover.
Birla Sun Life Insurance Wealth Assure Plan, a protection and savings plan,
that enables your wealth to grow steadily over time, providing you and your BSLI Wealth
family with a secure financial future to meet your needs at different stages Assure Plan
of life.
Under BSLI Fortune Elite Plan, you decide how to invest your premiums in
one of the three investment options - Systematic Transfer Option, Return BSLI Fortune
Optimiser Option or the Self-Managed Option.More details in the product Elite Plan
brochure.
Guaranteed Additions - You are rewarded for policy continuance in the form BSLI Wealth
of additional units will be added to your policy. Aspire Plan

Company Culture
We are a young and vibrant organization that takes pride in being one of the fastest growing
private Life Insurance companies in India. We take satisfaction that our employee group
comprises of a set of passionate professionals. As Birla Sun Life Insurance, we firmly
acknowledge that our employees are the primary architects of our success. Hence we
provide opportunities that align individual capabilities to roles and an environment that
elicits the best from an employee. We provide a platform for building your career with
opportunities of growth. 

Our philosophy on performance is - pay for performance. Our work culture is - while hard
work is fun; fun at work is not hard! While we have a formal work structure, the
environment is open, and we encourage dialogue to ensure work is smooth and fun. 

In a recently conducted internal survey, we found that 89% of our employees rated the
organisation high on "equal opportunity". Irrespective of gender, nationality, religion etc.
and we strongly would like to continue to hold that rating higher. People from different
cultures and background all juggled together from Aditya Birla family. 

If you are a self driven professional with the right attitude, we have the right opportunity for
you. Browse through our Job Openings and apply for a position that suits your profile; or
feel free to send us your resume and we will get in touch with you. 
Company Structure
Mr. Pankaj Razdan

MD & Chief Executive Officer, Birla Sun Life Insurance

 Dy. Chief Executive – Financial Services, Aditya Birla Group
Mr. Pankaj Razdan is the MD & Chief Executive Officer at Birla Sun Life Insurance (BSLI). He
has rich experience in the financial services business, across various functions and multiple
lines of business. He has been with the Aditya Birla Financial Services Group (ABFSG) since
2007, as a co-owner of the ABFSG Vision and the Deputy Chief Executive – Financial
Services, a position he continues to hold. At ABFSG, Pankaj has steered some of the key
financial services verticals successfully despite the challenging times. The organization is
divisional in structure.
The key people in the organisation are:

Mr. Amit Jain

Chief Financial Officer (CFO)

Mr. Rajesh Nambiar

Chief Marketing Officer (CMO)

Ms. Shobha Ratna

Head – Human Resource & Training

Mr. Lalit Vermani

Chief Legal, Compliance & Risk Officer

Mr. Vikas Seth

Chief Distribution Officer (CDO)

Mr. Anil Singh

Chief Actuarial Officer

Mr. Rajesh Varrier

Chief Technology and Digital

Mr. Parag Raja

Deputy Chief Distribution Officer (Dy. CDO)

Mr. Deven Sangoi

Chief Investment Officer – Equity
Mr. Devendra Singhvi
Chief Investment Officer – Debt

Birla Sun Life Insurance

Company Culture:
BSLI’s philosophy on performance is - pay for performance. BSLI’s work culture is - while
hard work is fun; fun at work is not hard! While BSLI has a formal work structure, the
environment is open, and they encourage dialogue to ensure work is smooth and fun.
In a recently conducted internal survey, they found that 89% of our employees rated the
organisation high on "equal opportunity". Irrespective of gender, nationality, religion etc.
and they strongly would like to continue to hold that rating higher. People from different
cultures and background all juggled together from Aditya Birla family.
If they find you a self-driven professional with the right attitude, they have the right
opportunity for you.