2009-10 - Aditya Birla Nuvo, Ltd

BIRLA SUN LIFE INSURANCE COMPANY LIMITED
• The Company has been proactive in maintaining the culture of compliance in order to minimize
the market conduct risks and to meet regulatory demands. The Company continues to comply
with all existing and new regulations which came in during the year, the primary ones being
the regulations on capping of charges and corporate governance.
• The Company got its results, assumptions and methodology for preparing Embedded Value
(EV) and VNB for FY09 peer reviewed by a international actuarial firm. It will continue to set
standards going forward by improving the disclosure standards around reporting EV and
VNB.
OUTLOOK FOR THE INDUSTRY & COMPANY
• In an uncertain and volatile economic environment, the last two years have been quite challenging
for the industry in terms of new business growth. However, this has given an opportunity to
existing players to review their operating models to drive higher efficiencies and focus on more
balanced growth objectives.
• The outlook for the Life Insurance industry though continues to be robust. The future growth
will be driven by factors like long-term economic growth, high savings rate, regulatory reforms
and rising awareness amongst the population about the need for insurance. While there can be
some short term aberrations, long term growth remain attractive.
• The Company will continue its journey of focusing on maximizing its inforce book through
superior investment performance and customer service. To balance its portfolio the Company
is in advanced stages of expanding its non ULIP portfolio in the next financial year. The
Company has initiated several measures in the year under review to drive higher efficiencies in
areas of operations, distribution and productivity and will continue on its path to achieve
profitable growth.
RESERVES
Since the financial operations of the Company have resulted in a loss during the year owing to the
continuous growth in new business and reasons stated above, the Company has not carried any
amount to the reserves in the Balance Sheet.
DIVIDEND
In view of the loss incurred, the Directors are unable to recommend any dividend.
CLAIMS
In the insurance industry, ‘Claims’ is one of the most important yardsticks by which a company’s
performance is measured. BSLI continues to build faith amongst the public and the insured
population of being the preferred life Insurance provider and this reinforces its ‘Customer first’
approach.
The objective of the Company in the critical area of claim processing is to carry out prompt and
speedy settlement of claims, keeping the interest of both-policyholders and the Company in
perspective, whilst also safeguarding the Company from potential losses by minimizing the risk of
fraud associated with claims. The minimal litigations in claim related matters and the success ratio
at various judicial forums, displays the sound decision making policy of the Company in settlement
of claims.
The Company’s claims outstanding ratio has been reducing year-on-year and has been one of the
best in the industry [FY 03-04 - 3.14%, FY 04-05 - 2.52%, FY 05-06 - 1.72%, FY06 -07 - 0.41%, FY 07
-08 - 0.32%, FY 08-09 – 0.00% (excluding admitted claims pending for disbursement for want of rightful
nomination details)]. The Company has once again achieved the unique distinction of having
claims outstanding ratio of 0.00% which means that 100% of claims raised during the year stood
processed (excluding admitted claims pending for disbursement for want of rightful nomination details). In
keeping with our customer first approach, we had delivered cheques to the claimants on the same
day of the claim intimation after the horrific Pune terror attack in February 2010.
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