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CHAPTER-1 1.1 INTRODUCTION: In the world social economy every person needs a safe atmosphere for his incomes.

After fudding all desires, they save certain amount of their income for future purpose. Not only they save their funds but also the worlds. There are various such types of organizations and financial institutions who spread their supportive hands to those pupils. There are life ICICI insurance, SBI Insurance, Bajaj Alliance, Reliance, LIC, Sahara Insurance, SMS Insurance Ltd. Etc in between such financial institution. In modern Indian economy Birla Sun Life Insurance plays a vital role. It competes successfully with its competitors and boosts t he deposits of its customers. So it is my interest to do this project work as Financial Analysis of Birla Sun Life Insurance to know its financial position and capacity in the light of its current and past performance. Birla sun Life Insurance Company limited is a joint venture between The Aditya Birla Group, one of the largest business houses

In India and Sun Life Financial Insurance of Canada a leading international financial organizational. The Aditya Birla group is an Indian multinational conglomerate with presence in India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China. 1.2 OBJECTIVES: I had made some extensive objectives for my study which are as listed as followings: To determine the current status of the Birla Sun Life Insurance Company. To find out the customers response towards Birla Sun Life Insurance Company. To know the financial position of the respected company in the light of financial Statement Analysis 1.3 SCOPE OF THE PROJECT: The work is confined to study the preference of Birla Sun Life

Insurance in the light of their benefits and services to society for the betterment of the public. 1.4 METHODOLOGY: The project work is totally based on secondary Sources. These are like Companys Annual Report, Business Review. The Commercial News Papers like The Economic Times, Business Standard etc with other news papers, Magazines and Internet. 1.5 SIGNIFICANT: In the society people need secured investment schemes to invest their valuable fund. They also need a fixed return on their investment. So, here we take the topic Financial Analysis of Birla Sun Life Insurance. 1.6 LIMITATION OF THE STUDY: There also some limitations or problems which are faced by me during completion of work. Firstly the study is based on historical data and therefore it is

historical in nature. The data is limited for 2 years due to lack of time and cost constraints. 1.7 CHAPTER PLAN: My project work is divided into 4 chapters which are explained in next page: Chapter-1(Introduction) Which consists introduction, objectives, scope, methodology, significance, limitation and chapterisation of the work? Chapter-2(Overview on Birla Sun Life Insurance) It consists the Indian major Insurance companies and brief study on Aviva Insurance Company. Chapter-3(Financial Analysis of Birla Sun Life Insurance) In which I interpreted the 2 yrs data. Chapter-4(Suggestion & conclusion) It is my last chapter, which namely known as conclusion part.

CHAPTER-2 Birla Sun Life at Glance

2.1 Role and importance of Insurance The role and importance of insurance, here has been discussed in three phases. i. ii. iii. Uses to Individual Uses to business or Industry Uses to Society

Uses to Individual a. Insurance provides security and safety Insurance provides security and safety against the loss of a particular event. In case of fire insurance payment is made when death occurs. In other words security against premature death and old age suffering are provides by fire insurance. Similarly the property of insured is secured against loss in fire din fire insurance.

b. Insurance affords peace or mind.

The security wish is the prime motivating factor. This is the wish which tends to stimulate more words if this wishes are unsatisfied, it with create a tension which manifests it self to individual in the form of an unpleasant reaction causing reduction in work. The insurance by giving security and safety to individual affords peace of mind to them. c. Insurance protects mortgaged property At the death of owner, Owner of the mortgage property, the property is taken over by the lender of money and the family will be deprived of the uses of the property. But the insurance will provides adequate amount to the dependents at the early death of the property owner to pay off the unpaid loans similarly the mortgage gets adequate amount at the destruction of the property. d. Insurance eliminates dependency At the time of death of husband or father, the destruction of family need no elaboration similarly, of

Destruction of property and goods, the family would suffer a lot. It brings reduced standards of living and the suffering may go to any extent of begging from the relatives, neighbors or friends. e. Life Insurance encourages savings The elements of protection and investment are present only in case of Life Insurance in most of the life policies combine the programmed of insurance and savings. The savings with insurance has certain extra advantages that are (i) Systematic saving is possible because regular premiums are required to be compulsory paid. (ii) In Insurance the deposited premium cannot be withdrawn easily before the expiry of the term of the policy. (iii) The Insurance will pay the policy money irrespective of the premium deposited while in case of bank deposit only the deposited amount along with interest is paid. f. Life Insurance provides profitable investment Individuals willing to handle their own funds have been

Pleased to find on outlet for their investment in life insurance policies, endowment policies, multipurpose policies, differed annuities are certain better form of investment in India the insurance policies carry a spend exemption from IncomeTax, Health Tax, Excise Duty. An Individual from his own capacity cannot invest regularly with enough of security and profitability. The Life Insurance facilities all these requirements with a lower cost.

g. Life Insurance facilitates the needs of person

The needs of a person are divided into i. ii. iii. iv. v. Family Needs Old Age Needs Re-adjustment Needs Special Needs Clean-up Needs

Family Needs

Death is certain, but the time is uncertain. So there is uncertainty of the time when the suffering and financial stringencies may be fall on the family. Moreover every person is responsible to provides for the family.

Therefore the provision for children up to their reaching earning period and for widow up to long life should be made. Any other provision except life insurance will not adequately meet this financial requirement of the family. Old Age Needs

The premium for old age is required where the person is serving more than his earning period. The reduction or income in old age is serious to the person and his family. Thus the life insurance provides old age fund along with t he protection of the family by issuing various policies. Re-adjustment Needs

At the time of reduction in income whether by loss of unemployment, disability or death, adjustment in the standard of living of family is required. Before coming down to the lower standard and to be satisfied with that, they require certain adjustment income so that the primary obstacles may be reduced to minimum.

The fire insurance helps to accumulate adequate funds. Special Needs

There are certain special requirements of the family which is fulfilled by the earning member of the family. If the member becomes disables to earn the income due to old age or death needs may remain unfulfilled and the family will suffer.

Clean-up Needs
After death, ritual ceremonies, payment of wealth taxes and income taxes are certain requirements which decrease the amount of funds of the family member. Insurance comes to help for meeting these requirements. 2.2 History of Birla Sun Life Insurance From the writing of Manu, Yajnavalkya that the carrier in India was also an insure in a restricted sense, yet it is not certain if the ancient Hindus also had a system of life insurance and practiced.

It, through it seems highly problem at real as legal codes do not reveal traces of any such system. Insurance against death was regarded fill very recently as want of belief in God which was not a very fertility soil for the growth of the insurance. Up to the end of the ninetieth century the insurance was in the inception stage. Therefore no legislation was regarded till that time usually the Indian company Act 1833 was applicable in business concern banking and insurance companies. New Indian Insurance companies and provident societies starting at the time of national movement, but most of them were financially unsound. It was asserted that the Indian companies Act 1833 was inadequate for the purpose. Therefore, two acts were passed in 1912 namely provident insurance societies Act v of 1912 and Indian life Insurance companies Act VI of 1912.These two Acts were in pursuit of the English Insurance companies Act of 1909with the difference that the Indian life insurance companies related to life insurance only and excluded the non life Business from its fold. The Act put the fire insurance business in India it sounder footing and resulted in creating a healthier atmosphere than before it was also

Instrument desolation of some unsound Indian as veil as non-Indian fife offices or in the merging of some of them with the others. The legislation in India was confirming to life business because here were few very general insurance companies and did not call for any legislation. To prevent financial weakness the insurance were required to keep certain started deposits. In insurance industry required a high degree of regulation. The Insurance Act, 1938 provides for the institution of the controller of Insurance to act as a strong and powerful supervisor and regulatory authority with power to direct, advice, caution, prohibit, investigate,inspect,prosecute,search,seize fine, amalgamate authorize, register and liquidate insurance companies. In April 1993 the Government set up a high powered committee headed by Shri R.N.Malhotra former governor of Reserve Bank of India, to examine the structure of the insurance industry. The committee which submitted the report on the 7th January 1944 felt that insurance regulatory apparatus should be activated even in the present setup of nationalized insurance sector.

The recommendations of the committee were discussed of different forums including the consultative committee of the parliamentary attached to the ministry of finance, management of the life insurance corporation, the general insurance corporation and its subsidiary companies, trade unions chambers of commerce and consumer interest groups. The recommendation to setup on autonomous insurance regularly authority found wide support. In view of general support received the then government decided to bring in legislation to establish an independent Regulatory Authority for the insurance industry. The chairman insurance regulatory authority has been notified as controller of insurance under the insurance Act, 1938. In pursuance of budget speech in July 1996, the then Government introduced on the 10th December 1996 the insurance regulatory authority bill, 1996 for establishment of authority to protect the internet of holders of insurance orderly growth of the insurance industry and for the matters connected therewith or incidental related standing committee on the ministry of finance. The committee submitted its report on 7th May 1997.

In order to provide better insurance coverage to our citizens and also to augment the flow of long term resources for financing infrastructure in the Budget speech 1998, the policy of the Govt.was announced to open up the insurance sector and also to established to statutory regulatory authority. According to the insurance regulatory authority bill 1998 was introduced in the previous loksabha on 15th December 1998 providing for setting a statutory insurance regulatory authority and containing three schedules incorporating amendments to be the insurance Act, 1938 the life insurance corporation Act 1956 and the General insurance Business Act 1972 to permit the entry of private Indian companies into the Insurance Act 1938. The bill was referred to the standing committee on finance on the 4th January 1999 for examination and report. The standing committee while recommending the bill suggested some amendments.

It is now proposed to re-introduce a fresh bill by incorporating the provisions of the Insurance regulatory Authority Bill 1998 and the amendments suggested by the standing committee on finance. The bill will be fitted Insurance regulatory and development

Authority bill on basis of the recommendation of standing committee. 2.3 Birla Sun life Insurance Birla Sun Life Insurance Company limited is a joint venture between The Aditya Birla Group, one of the largest business houses in India and Sun Life Financial Insurance of Canada a leading international financial organizational. The Aditya Birla Group is an Indian multinational conglomerate with presence in India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China. Sun Life financial primary insurance business is one of the leading insurance largest international financial services organization countries such as Canada, US, Philippines, Japan, Indonesia, India, Bermuda. The local knowledge of Aditya Birla Group combines with the expertise of Sun Life Financial insurance offers a formidable protection for your future. The Aditya Birla Group has a turnover close to Rs. 33000 Crores as 3 1st March 2009. It has over 72000 employees across all its units worldwide. It is led by its chairman Mr. Kumar Mangalam

Birla. Some of the key organization with the group are Hindale, Grasim, Aditya Birla Navo etc. Sun Life financial Insurance and its partners today have operation in key Markets worldwide, had assets under management over USS 343 billion as 3 1st March 2006.Sun Life financial insurance is a leading performance in the life insurance market in Canada. Birla Sun Life Insurance in its 5 successful years of operations has contributed significantly to the growth and development of the life insurance industry in India. It pioneered the launch of unit linked life insurance plans amongst the private players in India. It was the first player in the industry to sell its policies through the Bank assurance route and through the internet. It was the private sector player to introduce a pure term plan in the Indian market. This was supported by sales practices which brought a degree of transparency that was entirely sales illustrations signed by customers offering a free look period as on all policies which are now industry standards were introduced by BSNL.Being a customer centric company BSW has invested heavily in technology to build

World class processing capabilities.BSW has covered more than a million lives since inception and its customer base is spread across more than 100 towns and cities in India. All this has assisted the company in cementing its place amongst the leaders in the industry in terms of new business premium income. The company has capital base of Rs.520 crores as on 3 1st July 2009. Unit Linked life insurance solution Birla Sun Life Insurance was the first private life Insurance in India to introduce unit linked life insurance plans. A unit linked plan is coming together of security from life insurance and earning from investments. Which means apart from securing your future they offer efficient returns, what is more they are transport, flexible and simple to understand. Which is better Unit Linked or With Profits The two strong arrangements in the favor of unit linked plans are that the investor knows exactly what is happening to his money and two it allows the investor to choose the assets into which he wants his fund invested.

A traditional with profits on the other hand is a blank box and a policyholder has little knowledge of what is happening. An investor in will knows how much he is paying towards mortality and administration changes. He also knows where the insurance company has invested the money. The investor gets exactly the same returns that the fund earns but the transparency makes the product more competitive, so if you are willing to bear investment risks in order to generate a higher return on your retirement funds ULIP are for you. ULIP also offers flexibility for instance a policy holder can ask the insurance company to liquidate units in his account to meet the mortality charges if he is unable to pay and premium install me. Why do insure prefer ULIP? Insurance love for several reason most important of all, insures can sell these policies with less capital or their on than would be required if they sold traditional policies. It traditional with profits policies the insurance company bears the investment risk to extent of the assured amount in ULIP,

The policy holder bears most of the investment risk. Since ULIP are devised to mobilize savings they give insurance companies an opportunity to get a large chunk of the asset management business which has been traditionally dominated by mutual funds. That is why Birla Life Insurance Company is the only private players which are all the plans are under ULIP based. Flexi cash flow plan Every Sun rise marks a new beginning every dawn bring with it a new hope new joys new promises and every ray of light illuminates the ahead. Much like Birla Sun Life Insurance where every product is designed with the promise of peace of mind for you and your family income discover the joy of having the flexi cash flow plan. What makes his plan attractive is the lump sum tax free, benefit amounts which you have the option to receive at regular intervals to meet your various financial obligations at crucial junction such as education of your child or marriage. Flexi cash flow plan have unique feature, they are as follows:

The plan is a very linked no participating plan to give efficient returns. Tax free lamps sum pay-outs to take care of recurring needs.

A choice of three investment funds, Protector Builder and Enhancer, with the freedom to switch between the investment funds option any time during the policy tenure. Flexibility to make additional lump sum investment to increase the saving portion of your policy. Minimum guaranteed returns of 3% P.A. on your premium and any top up amounts net of all policy changes. Option to make tax free withdrawal from your value any time after 3 years. Surrender the policy without penalty after 4 policy years. Increase the sum assured during the premium paying period any time depending on your needs. Convenient premium payment options short or regular premium payment period.


13 to 65 years of age

Maturity Age Maximum sum Assured Duration

75 years Rs. 1,00,000

10,15,20,25 years

Premium Paying period

10,15,20 years of regular premium payment period in case of 25 years term the premium payment period will be 20 years of regular or15 years. Cash (UP to Rs. 20,000) cheque credit card salary Deduction ECS, Direct debit.

Premium payment frequently

You can top up the fund therefore you have additional Saving during the ensure of the policy. The minimum amount Top UP Premium of top-ups will be Rs. 5,000 and the maximum amount of the top-up Rs. 50,000 or the annual premium which ever is Higher. Guaranteed Returns A minimum guaranteed returns of 3% P.A. applies or premium net of policy charges and survival benefits. This total will constitutes the guaranteed fund value.

These benefits are payable at the end of every 5 policy years. The amount that will be available is the minimum of the Guaranteed fund at the Survival time or the percentage of the sum assured Benefits applicable for your policy. The percentage are Regular under 30% for policy with duration of 15 years Payments

20% for policy with duration of 25 years 15% for policy.

Maturity Benefits Amount due to nominee in event of death of the live insured Partial Withdrawals

The higher of the fund value or the guaranteed fund value.

Higher of fund value or the sum assured less all applicable partial withdrawal in the 24 months preceding the death of the life insured. Where the policy is brought on or prior to the 1st birthday of the life insurance higher of the fund value or guarantees fund value is payable for to the policy owner in the event of death of life insured within the first policy year. In a years partial withdrawal are free of charge. Partial withdrawal is allowed after three policy years or on attaining the age of 18 years whichever is later.

Surrender The policy can be surrender any time during the tenure of the Benefits policy the surrender charges will be zero after the 4th policy years.

Free Lookout period

You have a period of 15 days from the date of receipt of the policy document to review the terms and conditions of the policy. If you disagree to any of these terms and conditions, you have the option to return the policy stating the reasons for your objection.

Tax Benefits

Under section 80c and 10 (10D) of the income tax Act 1961.

Increase your plan sum assured Depending on your charging needs for live assured insurance during your lifetime, you have the option of increasing the life insurance cover under your policy once in every five years.

The minimum amount of increase will be Rs.50, 000 and will be subject to underwriting and other routes of Birla Sun Life insurance prevailing at the time of increase. Keep track of your fund value BSNL send you and annual statement fund value giving details of the number of units and the NAV of the units held by you under the various investment funds as of the last policy anniversary. Electron clearing service (ECS) The ECS is a convenient and hassle free method of paying your premiums through an electronic debits to your bank account. You can further customize your BSL1 plan by adding refers to the base plan at a marginal extra cost. Accidental death and dismemberment Benefit rider. It provides 100% of coverage in case of death due to accident

Loss of more than one limb or sight in both the eyes of in case of loss one
limb and loss of sight in one eye 50% coverage in case of loss of one limb or sight in one eyes.

Term Rider it provides additional amount to coverage in the event of death of the life insured. Critical illness rider, it provides a cover in the event of life insured being diagnosed as suffering from any of four illness.

Critical illness plus rider, it provides a cover in the event of life insured
being diagnosed as suffering from any seventeen illness.

Critical illness women rider, it provides a cover against several critical illness
including women specified illness. Pregnancy complication and congenital on moralities in new born child. Investment fund particulars You can choose from 3 investment fund options to match your risk profile and help you earn efficiently return on your investment funds. The particular and the risk profile of the different investment funds are given below. Min/Max limit of% of Assets in Risk Profile Protector Builder Enhancer

Govt. and govt. approved securities





Corporate bonds





Money market & other liquid Asset

Very Low




Infrastructure Sector as defined by IRDA Listed Equities









The investment funds have a varying amount of debt and equity. You can select funds based on your risk preference and switch between them based on your needs. POICY CHARGERS Policy 1 2 3 4+ Payment Period 10 pay 54.6% 7.5% 7.5% 5.0% 15 pay of 65% 7.5% 7.5% 5.0%

The premium allocation charge for the top up and on underwriting extra will be 2.0% there is no premium allocation charge on rider coverage premium. The premium allocation charge is guaranteed fir the duration of the contract. Mortality changes for life insurance coverage will be deducted by can collation of units at the prevailing NAV on a monthly basis. The annual mortality charges per thousand sum of risk for sample ages are as follow: Sex/Age Female Male 20 0.896 1.016 30 1.163 1.171 40 1.657 2.150 50 4.030 5.532 60 10.660 13.732

The mortality charges are guaranteed for the entire period of contract. A fund management charge not exceeding 1.5p.a of the fund value will be changes by adjustment of daily NAW currently this charge is 1% p.a for protector builder and enhances.

A policy administration changes will be recording by counseling units on a monthly basis at the prevailing VAY. The annual policy administration charge per 1000 of the life insurance coverage sum assured is given in the table other side. Policy Administration Charge Policy Life Insurance for first Year Rs.1,00,000 Coverage sum assured On amount in excess of Rs.1,00,000

1 2 3+

5.52 17.88 5.52

2.88 15.24 2.88

The annual charge cannot exceed Rs.20 per thousand of the life insurance coverage sum assured. A rider premium charge will be recovered monthly by cancellation of units. The rider coverage charge will be the equivalent monthly rider coverage premium payable when the rider payment period equals the rider coverage benefit period.

Will you have saved enough for your sons higher education for your will? You have the money to renovate your house during a festival & will you to be provide for your wife even when you are not around in our life companion money back plan it is the not only that it also act as a cushion by giving you regular income at regular intervals in life. So that you can sit back and enjoy the joys of life now family benefited budget. Who can apply for the life companion money back plan? Any person, male or female in the age group of 30days to 59 years is eligible to apply for the life companion money back plan. Why should buy the Plan? The plan is ideally suited for any person looking for a life insurance protection and regular savings for meeting the millstone needs. The plan protects those who depend on your earnings such as your spouse, children and quite possibly your parents. If any unfortunate event where to take place prematurely, the plan can provide emergency support for their lifes needs such as education marriage and medical costs.


Mortgage loans of the company are 11,373 in 2009 which is increased in 2010 to 12,462 i.e.9.57% from previous year. Long term investment is 4,822 in 2009 and 6,061 in 2010 which is increased by 25.69% in 2010. This reflects the well annual performance of the company. Cash and other cash equivalent which is (8.59%) 4,425 in financial year 2010 but in the year 2009 it is 4,841 which is more. This reflects that the company invests its funds besides keep ideal with them. It is a good managing policy of the company. It is because the companys investment is more than previous year in current accounting period. In analysis of other assets which is 3,532 in 2009 but in 2010 it also decreases to 3,210 (9.11%). It reflects that the companys dont keep any thing ideal it invest them quickly. If we see the total assets of the company it finds that in 2009 it is 168.901 but in 2010 it is 182.143 which are more than the previous year. From this it concludes that the company converts all assets to investment. So beside decrease in other

Assets the current years total assets increase than previous year. If we analysis the liabilities part of the company we see that the companys deposits is increase from the previous year which is other wise accounted as policy holder account balance is find that the companys policy holders account balance is more in current year which is 69,170 than the year 2009 (64,451). So here it reveals that company increase its policy deposits. As companys income is more so it increase the dividend payable to share holder by 1,280 that previous year. It is well capital management of company.

CHAPTER-4 Conclusion At last we can say that Insurance Sector in India is necessary to provide the financial requirement of a family, after the death or injury of this family person. Now in India many Insurance Companies tries to make insure to people, but still it was a survey that among total India there only 10% to 14% peoples are insured. Still there are 86% to 90% people who have not yet insure. It is not good sign for India like developing country. But it shows good hopes to the Insurance Companies. Many of people of rural area unaware about Birla Sun Life Insurance Company and about its plans and policy. So a simply suggestion to Birla Sun Life Insurance Company should find sum of channels like print media, TV, Radio. At last but not the least, it can be said that insurance which makes a man carefree, and shows way to him for achieving success have to play major role for growth of Indian Economy in coming future.