Birla Sun Life insurance venture unveiled
Kumarmangalam Birla, chairman, Aditya Birla group, on Monday, announced the Birla Sun Life Insurance Company- a joint venture between Aditya Birla Group and Sun Life Financial Services of USA.
The R2 formalities have been completed and the company expects to receive R3 clearnace from IRDA shortly.
Briefing mediapersons, Birla said, "The insurance sector, which is a knowledge based industry is to be one of our core business. Our vision is to be among the top five insurance companies in India and in this regard, we have aligned with one of the best companies-the Sun Life financial group.
The partnership is based on values, mutual respect, integrity and customer focus. Sun life financial is indeed delighted to be back in India in the insurance sector after almost 40 years."
"Our group holding is 74 per cent, with Indian Rayon and Birla Global Finance Ltd having a stake of 69 per cent and 5 per cent respectively, while Sun Life financial holds 26 per cent.The current capitalisation of this venture stands at Rs 120 crore."
He informed the gathering that the current funding for the insurance business "in no way affects Indian Rayon's existing cap". "Considering the immense growth potential of the life insurance business, this venture will definitely create value for our three lakh shareholders. Our group's extensive presence in India as well as our network of employees, shareholders and distributors are a great advantage, which our insurance business will leverage. We have a receptive population of over a million stakeholders," Birla added.
He also said that the new team for the insurance company was declared and that Don Steward, chairman & CEO of Sun Life financial services, takes over as the chairman of the Birla Sun Life insurance board of directors. Kumarmanagalam Birla continues as a director on the board.The total 12 directors have been nominated consisting of six directors each from Aditya Birla group and Birla Sun Life insurance company.
The company is also in the process of enlisting independent directors on its board. Peter Akers from Sun Life financial services has been named as the CFO and the appointed actuary, Vijay Singh, as a new director of Birla Sun Life insurance, the company said.
Meanwhile, Don Steward also stated that in the first phase Birla Sun Life insurance would be concentrating on setting up fully networked branches in Bombay on Tuesday and in Delhi on January 31. About 1000 branches are expected to be set up across the country by December-end 2001.
By mid-February, the first batch of 150 insurance advisors will be in place and ready to enter the market.
Birla Sun life insurance plans to harness the power of the internet to further its business. Over the next 12 months, dedicated call centers to service customers across the nation and a customer website will enable a 24 x 7 contract. Its multi-channel distribution set up comprises of insurance advisors for life and an expert marketing team for group products.
An area of focus for Birla Sun life insurance is the rural segment. The company will leverage the network of the Aditya Birla center for community initiative and rural development set up in rural areas, Steward added. He further stated that the Sun Life financial group partner in the joint venture has a long history dating back to 1871.
It has evolved from a single mutual life insurance company into one of the most highly rated insurance and wealth management institutions in the world. The Sun Life financial services' primary insurance business enjoys excellent ratings with the world's top rating agencies like Standard and Poor, Fitch and AM Best amongst others.
Sun Life financial services has a presence in USA, Hongkong, Philippines, Japan, Indonesia and Bermuda.
Meanwhile, a company official also said that with Aditya Birla group's extensive knowledge of the Indian market, its existing presence in a wider range of financial services and Sun Life financial's global expertise in areas of protection and wealth management, the Indian life insurance seekers will be provided with excellent services and flexible product options.