Birla Sun Life Insurance all set to leverage on its strong rural distribution infrastructure

8 March 2005

Birla Sun Life Insurance (BSLI) the second largest private life insurer is gearing itself to take advantage of the vast rural opportunity that has opened up as a result of the revised definition of rural areas by the IRDA. Over the last 3 years BSLI has painstakingly built its rural infrastructure to c;reate a cost-effective distribution network across the country. With the IRDA poised to revise the definition of rural area to align it with that of the census definition, there is a vast opportunity in rural areas.

Says Mr. Nani Javeri, CEO, Birla Sun Life Insurance, "It has been our endeavour to build a strong distribution setup for our rural business right from the beginning. With the IRDA revising the definition of rural areas the total population falling into the category of rural has increased from 42 to 72 per cent of the total population and BSLI is best-placed amongst all the private players to reap the benefits"

In the first year BSLI launched its rural operations from the Hindalco unit at Renukoot, which was chosen as a "model setup". Hindalco's well-developed rural network and its well-trained Village Extension Workers (VEW) were an ideal launchpad for the rural business. The VEWs were the facilitators and the primary underwriters in the sales process since they knew most of the people in the villages. Additionally seven more units of the Aditya Birla Group (ABG) were added to the network in the states of U.P., Jharkhand, Orissa, Rajasthan and M.P.

To further increase its reach BSLI entered into tie-ups with several NGOs across India, which are doing excellent, work in the rural areas. The table below gives BSLI's presence in the various states.

The company has a team of nearly 160 rural sales executives and village extension workers facilitating the sales of its policies in all the locations across India. The six member rural team in the BSLI headquarters at Mumbai coordinates the entire process centrally. With its robust rural infrastructure in place BSLI is gearing up to leverage the opportunities and challenges that the revised definition of rural has thrown open. The new definition also means that newer products need to be introduced to increase penetration.

BSLI has been consistently exceeding its rural targets since the first year of its operations. In the last fiscal the company sold close to 26,000 policies in the rural areas, which constituted nearly 17 per cent of the total individual policies sold by the company. The table below illustrates the rural performance of BSLI since inception.

The erstwhile definition of rural areas by IRDA included all areas which had:

• A population of less than 5000
• A density of population less than 400/sq.km. and
• At least 25 per cent of the male working population was engaged in agriculture pursuits

The above definition meant that only the remote villages of the country could be tapped. A large proportion of the people in these villages live below the subsistence level and insurance is lowest among their priorities. These villagers don't have access to regular health facilities and the literacy levels are also very low. The revised definition is thus a great opportunity for BSLI to tap.

About the Aditya Birla Group

The Aditya Birla Group has a turnover exceeding Rs. 28000 crore (as on 31 March 2004) 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 seven lakh shareholders, with an asset base of over Rs.23000 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 March 2004, the Sun Life Financial group of companies had total assets under management of USD 282 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.
E-mail: anjana@birlasunlife.com