Ujjal K Basu Roy

Mumbai, June 14: Birla Sun Life Insurance Company has decided to follow a three-pronged strategy of product differentiation, transparency and flexibility to penetrate and make inroads into the domestic life insurance sector.

The first part of the strategy is to follow a policy of product differentiation. The company intends to make its products different from and more transparent than the market leader Life Insurance Company (LIC) as well as other entrants. Its products will have unit-linked investment structures and low, medium and high-risk profiles. The equity components will differ accordingly to the risk profiles. For instance, a low-risk product would comprise of only 5 per cent equity.

The portfolio will be transparent and the policy holder will be able to know the surplus value and surrender value at any point of time. If a holder defaults on premium payments, then the company can draw the premium from the investment portfolio and pay it.

The second part of the strategy is to follow a careful policy while selecting insurance agents whom the company calls ‘insurance advisors.’ Out of the 2,000 candidates that Birla Sun Life interviewed, only 200 were selected and subsequently, the mandatory as well as additional training were provided to them.

The company will be investing in call-centres and Internet-technology to provide the customer with additional means. At the moment, the site is not transactional. But it would be transactional soon after the normal systems and firewalls are in place. But one-to-one reaction being an integral part of insurance, the transaction site will take its own time to materialise.

Said Birla Sun Life’s director SK Mitra: “The company will capitalise on its pockets of influence like the Birla group base and locations. The Birla group would be a good place to start with for group insurance. It will use its entire network from shareholders to employees to sell its products. The company wants to make its mandatory requirements like the social and rural sectors into a profitable venture”. It has already tied up with Citibank and Deutsche Bank and is also going to join hands with non-banks in the local and regional level.