Life is full of ‘ifs’, and no one knows what will happen tomorrow. In case of any misfortunate incident, the life of the dependents come to a question mark. Hence, it is always better to get security cover for the near and dear ones by availing the best insurance plans benefits. There are numerous companies offering various insurance policies but only the most trusted names in the market are able to provide unwavering services to its customers. One of the leading names in the arena of insurance sector is Aditya Birla Sunlife. The company has won the hearts of the people by offering reliable and safe insurance services.
Aditya Birla Sun Life Asset Management Company Ltd. (ABSLAMC) was previously known as Birla Sun Life Asset Management Company Limited. It refers to an investment managing firm which is registered under the SEBI,i.e.Securities and Exchange Board of India. In fact, it is a joint venture between two leading brands that are the prestigious Aditya Birla Group of India and the renowned Canadian Company, Sun Life Financial Inc. Hence, Birla Sun Life is the most trusted name in the insurance field.
Aditya Birla Sun Life offers numerous equity schemes, hybrid funds and monthly income funds, fund of fund schemes, debt and other treasury products as well as offshore funds. However, the market position was not in good waves in the past few years. The Company has been experiencing a tough period some time back. However, the company reformed its business strategies and reshuffled its portfolio for making up for it.
A Difficult Phase for Aditya Birla Sun Life Insurance Co (ABSLI):
The reason for the bad period for the Company is that a few years back Aditya Birla Sun Life Insurance Co (ABSLI) was getting more than 90% of its premium income acquired through Unit-Linked Insurance Products (ULIP) which was not able to bring the desired level of success. Hence, following the regulatory reforms in ULIPs in 2010-11, it was forced to amend its plan as there was a constant drop in the gains and profit margins
Measures Taken By Aditya Birla Sun Life Insurance Co (ABSLI) For Dealing with the Setback:
The company also took some concrete steps in this direction for solving the prevalent issues. It decided to redesign its plans and also decided to introduce a new distribution model in the year 2014. However, bringing these changes was not easy as it required a lot of funds which also adversely affected the profit margins till the last few years. As a result, the profits dropped from as high as Rs. 541 crore in 2013 to as low AS Rs. 123 crore in FY 2017. However, the blue period has perhaps ended for Birla Sun Life as the profit margins rose again to Rs. 166 crore in the FY18.
The CEO and MD of ABSLI, Pankaj Razdan, remarked that it was sluggish and painful recovery process, yet gains were quite evident now. He also expressed his confidence in the bright future of the company after a tough recovery phase. During this period the company has acquired some vital quality gains also.
The portfolio which primarily focused on ULIPs has got a balanced outlook now. The traditional plans now share nearly 70% of the premiums, and the remaining 30% are with ULIPS. The persistency ratios which was previously as low as 50%, has come up to 75% in 2018.
Mr. Pankaj added that the claim ratio of the company is under control now and the productivity has increased by 25% over the last three years even though the branches offices have decreased by 10%.
Individual life premium has increased by 35% in FY17, and it was used prudently by the company by increasing its fiscal by 20%. Mr. Pankaj was asked to explain that how the company is using these mediums for the betterment. At this, he replied that the company had become customer focused instead of being product focused as in the past. Hence, the company is moving the agency force to ‘counseling’ from ‘selling’. Now the company endeavours to let the customer understand his/her circumstances and needs in a better way.
The trust deficit prevalent in the company was also realized by it and attempts were made to fix it. As a result, the entire recruitment process was reformed. Now the company instead of focusing on mass recruitment and facing a high rate of attrition is trying to recruit the right person at the very first stage. It has resulted in bringing down the attrition rate by 77% in FY16 to nearly 55% in FY18.
After recruiting the most suitable candidates, the next step followed by the company is to train the agents for improving their productivity level. This also included preparing the agents to conduct a clustering methodology where the agents will meet numerous clients at a place. The idea behind it is that it can help in improving the strike rate for raising the sales percentage. Mr. Pankaj further claimed that the productivity of the agency had increased considerably and hence further training will be offered to the agents for bringing about even better results.
Hence, Birla insurance can upkeep its commitment towards the customers by offering incredible services to them. No doubt, it has taken various strategic steps for eliminating its area of pitfalls. The secret of excellent of the Company goes to its endeavor for constantly striving for catering its clients with nothing but the best services.
It has also been tried to diversify the company’s channel mix and raise the premiums through bancassurance tie-ups as well as the direct channel. The agency channel still remains the key point as nearly 68% premiums are acquired through it, but it brought as high as 80% premium two years back.
Unbelievable Outcomes Due To Redesigning Of Strategies
There is growth in the company’s share by 4.7%, and it has now come to 7th position among more than 24 players. Similar, level of growth is also expected in the nearby future. No doubt, the company will keep on building the relationship of trust with its customers by offering matchless services to its customers. Based on its customer-centered approach company is surely going to become one of the most successful companies in the insurance sector.