Birla Sun Life Insurance Annual Results

Birla Sun Life Insurance (BSLI) today announced its annual results for the year ended 31 March 2005 at a press conference in Mumbai. The company has delivered strong results for its shareholders in an extremely challenging and competitive environment.

Remarked Mr. Kumar Mangalam Birla, chairman, BSLI, "It is very encouraging to see that Birla Sun Life Insurance continues to show consistent value-based growth. The company is set to become one of the most efficient life insurance companies in India and is on track in achieving its breakeven."

Key highlights

• Premium income of Rs. 915.5 crore, registering a growth of 70 per cent.
• Annualised premium of Rs. 627.4 crore, recording a year-on-year growth of 32 per cent.
• Total sum assured of Rs.22,715 crore since inception.
• Maintained leadership position among private insurers in alternate channel segment.
• Has the highest premium persistency levels at 95.5 per cent as against industry range of 75 to 85 per cent.
• Has one of the highest average annualized premium size (Rs.34,550 per policy) in the industry.
• Ranked as the best private life insurer in India for 2004 by Outlook Money

Leadership status

BSLI completed a successful fourth year of operations. The premium income at Rs.915.5 crore has registered a robust growth of 70 per cent powered by a 75 per cent growth in the individual life business. The annualized sales for the year stood at Rs. 627.4 crore recording a growth of 32 per cent. The total number of policies sold in the current financial year was close to 200,000.

The company has cornered a market share of 3.3 per cent (YTD February 2005 based on annualized premium with 10 per cent credit for single premium) in the industry, a growth in market share of 32 per cent.

BSLI has single-mindedly pursued a strategy of product innovation and multi distribution channels. The company bolstered its product portfolio during the year with the launch of the 'Woman First' plan and 'Flexi SecureLife II- Retirement Plan' in the individual life segment and the 'Credit Guard' plan in the group business. In the individual life segment the proportion of 'Women' policyholders (life insured) increased to 30 per cent of the total, during the year.

The multi distribution strategy pursued by BSLI has been a major success. In the individual life business the direct sales force and the alternate channels contributed almost in equal measure to the total sales. The company has achieved leadership status in the industry in the alternate channels of distribution where it has a tie-up with 114 corporate agents (10 banks, 50 corporate agents and 54 brokers). BSLI increased its branch strength from 33 to 44, which will be significantly enhanced during the current year. Through its branch network, outstation centres, corporate agents and bancassurance partners, the company has a presence in over 300 locations across the country.

The quality of BSLI's field force and its training processes is reflected in the fact that 242 of its insurance advisors qualified for the Million Dollar Round Table (MDRT). Eighteen of the company's advisors qualified for the Top of the Table (TOT), with another 38 qualifying for the Court of the Table (COT).

BSLI continued to make considerable inroads in the rural segment with the total sales of rural policies crossing 48,000, which was 24.3 per cent of the total policy sales as against 16 per cent as specified by IRDA. Similarly BSLI covered 22,020 social lives as against 20,000 lives specified by the regulations.

An extremely pleased Mr. Nani Javeri, CEO, BSLI, said, "BSLI has always believed in setting benchmarks in the industry in terms of transparency, innovation and customer benefits. Our endeavour has been to show strong and consistent growth with particular emphasis on the quality of business."

BSLI's focus on the quality of business is reflected in the increase in the average premium per policy to Rs.34, 550 - a growth of almost 50 per cent over that of the previous year (Rs.23,120), despite an increase in the policy base. The average sum assured jumped to Rs.3,86,000 (previous year Rs.2,98,000). A first year premium persistency ratio of 95.5 per cent was well over the industry range of 75 to 85 per cent. The operating expenses as a percentage of the premium declined to 19.4 per cent from the previous year's 26.9 per cent.

BSLI continues to manage its capital very effectively with a Cumulative New Premium / Capital Ratio of 2.93, which is one of the best in the industry. During the year the capital of the company increased by Rs. 60 crore. The company had a paid up capital of Rs. 350 crore as on 31 March 2005. The capital of the company has increased by another Rs. 20 crore today.

Commented Mr. Anil J. Jhala, CFO, BSLI, "The consistently high growth coupled with judicious expense management has led BSLI to manage its capital efficiently".

BSLI derives its success from its over 1700 strong highly motivated employee force, which has acknowledged the company's commitment to the development of its people. The company was among the top three contenders in the category of 'Strategy to execution' at the 5th Aditya Birla Awards for outstanding achievement, 2004. BSLI has been ranked in the top 20 'Best Places to Work' in the Grow Talent survey in association with the Best Places to Work Institute.

The company is the only insurance company to feature in the top 25 in the Hewitt 'Best Employers' survey. The company was adjudged the best private life insurer in the Outlook Money awards for 2004. The Asia Insurance Industry Awards 2004 ranked BSLI amongst the top 5 life insurers in all of Asia. BSLI was ranked number one amongst all private players on the parameters of image and visibility in PR coverage in the Cirrus rankings for the financial year 2004 -05.

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.23,000 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