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Thursday, Feb 28, 2002

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Money & Banking - Life Insurance

Differing takes on same business

M. Ramesh

CHENNAI, Feb. 27

ICICI Prudential Life told Business Line on Tuesday that its sum assured had crossed Rs 1,000 crore, its premium income had exceeded Rs 100 crore and that it would close the year with sales of around 90,000 policies.

On the other hand, Birla Sun Life, at a press conference here the same day said it was meaningless to disclose the `total sum assured' because it did not give an idea of how profitable the policies sold were.

These statements bring out the contrasting styles of functioning adopted by two private sector life insurance companies that have been in business for a year now.

The Chief Executive Officer of Birla Sun Life, Mr Nani Javeri, said at the press conference that it was also meaningless to disclose the number of policies sold because "polices could lapse."

He also did not want to mention the premium income earned by Birla Sun Life until the end of the year, but said it would be thrice the target for the year.

In response to a question, Mr Javeri disagreed that the company was being defensive.

ICICI Prudential's Managing Director, Ms Shikha Sharma, said the company was able to meet its annual target owing to the efforts of its 8000-strong force of insurance advisors (agents). This team was probably the largest after LIC.

Mr Javeri, on the other hand, said the number of direct insurance sellers was not the best way to go about building business. Birla Sun Life had 1,800 "exceptionally good" agents who are "our USP".

Incidentally, Dabur CGU, another life insurance company which is yet to begin operations, also feels that selling through agents is not the best way to go.

Ms Shikha Sharma said that by and large, the policies brought in by insurance companies were similar, but customer service made the difference.

Mr Javeri said at the press conference that all the new entrants into the life insurance sector, except Birla Sun Life, had launched only "me too" policies similar to LIC's.

However, Birla Sun Life's unit-linked policies were different, he said, adding that they gave "three investment options, with a different mix of equity and fixed-income investments, with flexibility to change options over the life of the individual's policy."

Mr Javeri also said Birla Sun Life's policies would tell the policy holder what part of the premium income went towards risk protection, how much was channelled towards investments and what portion was the charge towards costs.

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