MARKET
The insurance industry in Sri Lanka has undergone numerous structural changes over the years, including nationalisation in 1961 and liberalisation in 1988. Today, insurance is essentially a private-sector business. The privatisation of Sri Lanka Insurance Corporation (SLIC) in 2003 marked the end of the Sri Lankan government’s direct involvement in the sector. Privatisation, as it usually does, created a level playing field in which all players have an equal opportunity to compete for business.
At present, there are 15 insurance companies in Sri Lanka, 12 of them carrying out both life and non-life business. Despite increasing competition and narrowing margins, both life and non-life markets have tremendous potential for future growth. Gross written premiums of Rs. 29,555 million from long-term and general insurance business in 2004 represented a growth in excess of 22% compared to the previous year’s increment of some 19%. And the contribution of 1.5% in 2004 to national GDP by the insurance sector is a reflection of its heightened level of activity since 2000.
In addition, regulation of the sector has improved in leaps and bounds in recent years, with the Insurance Board of Sri Lanka (IBSL) now in place to supervise the conduct and performance of participants in the marketplace.
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ACHIEVEMENTS
Sri Lanka Insurance has successfully transformed its operations from a former state-owned entity to a fully fledged private-sector enterprise. The company consolidated its processes and resources whilst, at the same time, successfully relaunching and repositioning the Sri Lanka Insurance brand to compete in what has become an aggressive market. The company’s vision has not been a case of merely matching service standards in the industry, but also surpassing these standards by offering service excellence. Its goal is to stretch the boundaries of performance and change the paradigms of the insurance industry in Sri Lanka.
As part of its infrastructure development, Sri Lanka Insurance networked all its branches, including its head office, and updated its communications system. It automated many processes to streamline its operations and make them more efficient.
Sri Lanka Insurance is the only insurance company in Sri Lanka to be assigned a global rating, for financial strength and stability, by an international rating agency – FitchRatings (London). The company obtained a key rating of AA-(sri) for National Insurer Financial Strength and an A+ rating for National Long Term Credit for the third consecutive year from FitchRatings (London). National Insurer Financial Strength denotes significant financial strength relative to all other insurance entities in the market. The National Long Term Rating (NLTR) denotes Sri Lanka Insurance’s high creditworthiness and low expectations of credit risks pertaining to long-term debt.
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HISTORY
The company was incorporated by a special Act of Parliament in 1961. In 1988, the insurance field was liberalised, thereby ending a virtual monopoly enjoyed by the corporation. In 1993, SLIC was converted to a state-owned limited liability corporate entity with the objective of providing greater autonomy. It was subsequently sold to the Distilleries-Spence Consortium under the government’s privatisation programme in April 2003.
The company has strong re-insurance arrangements with highly rated international re-insurers. Sri Lanka Insurance has also entered into a technical partnership with ING (IGA) Netherlands to provide further expertise and direction.
Sri Lanka Insurance has a highly experienced technical knowledge base and the widest network across the country, with over 100 branches and customer-service centres. The company has over 40 years experience in fulfilling the insurance needs of the Sri Lankan people.
Sri Lanka Insurance’s Corporate Business Division was formed in January 2004 to service high-end corporate clientele. A highly qualified sales force and service-oriented back office staff are behind the success of this division. Sri Lanka Insurance has a 60% to 70% share of the corporate insurance market in Sri Lanka.
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PRODUCT
As a composite insurance-solutions provider, Sri Lanka Insurance is engaged in both life and non-life insurance business. It offers a wide portfolio of life and non-life products, with unique tailor-made solutions for individual and corporate customers. And it has earned a reputation for its ability to provide value-for-money solutions.
Sri Lanka Insurance’s life insurance product portfolio comprises the following.
Mini Muthu is a child-insurance plan which covers both parents under one policy. This plan guarantees a fund for the child at maturity. Following an untimely demise of a parent, this fund will be available to the child. It provides life cover for both parents, thereby making it a joint life plan.
Freedom offers retirement benefits prior to retirement. A guaranteed additional income, coupled with health-care benefits which do not require supporting medical bills are amongst the unique features of this product. With Freedom, policyholders don’t have to wait until they are 55 to receive benefits, since the product can mature at any age between 45 and 70. Policyholders are therefore entitled to incremental income, in addition to their monthly salaries. Freedom provides a steadily increasing guaranteed monthly income for a selected term.
Yasa Isuru is a unique plan which offers special pay-outs before maturity, with its subjects enjoying the option of utilising these advance payments to meet their funding needs.
Divi Thilina is a plan which is designed to provide life insurance cover for an affordable premium, whilst rewarding the life assured with a maturity exceeding what has been invested. This policy can mature between five to 40 years, allowing policyholders greater flexibility. At maturity, policyholders receive the total policy value together with an attractive bonus.
Praguna provides life cover which is twice that of the sum assured, with an additional compensation for the reduction in the value of money due to inflation. Policy values are automatically increased by 5% annually, without the burden of having to pay additional premiums.
General insurance products offered by Sri Lanka Insurance comprise the following.
Formula Plus is a policy that fulfils all insurance needs and provides maximum protection and service to vehicle owners. Some of the key benefits offered to all vehicle owners include an accurate assessment of damages and repair approvals islandwide, 75% of claims being paid within three days, claims being paid in full within three days, a police report not being required, 24-hour call centre support and free roadside assistance islandwide.
The home insurance policy Sirivimana protects homes and their contents against every conceivable disaster – including fire, burglary, riots, lightning and explosions – and all natural catastrophes such as tsunamis. At a time when there is much debate surrounding the geographical uncertainties of Sri Lanka, this householder’s policy is an ideal solution that offers peace of mind to customers.
Globe Trotter is a travel insurance policy that provides comprehensive cover for business travellers, students and holidaymakers, from embarkation to disembarkation and back. It covers medical expenses, hospital allowances, loss of checked baggage, loss of passports, hijack-distress allowances, financial emergencies, personal accident and liability.
The Business Club is a trade insurance policy that provides comprehensive and flexible insurance solutions to the business community. The product can be tailor-made on the basis of the cover required. The product has two parts, whereby eighteen perils are covered under the base policy and many others such as money (in transit, drawers and safes), accidental breakages of glass, sign-boards, electronic equipment, goods in transit, fidelity guarantees, funeral expenses, damage to deeds and deterioration of food as optional covers.
Sri Lanka Insurance’s Risk Management Division offers innovative risk-management techniques. Thus, a corporate client can exercise optimum control over its risk exposure. Sri Lanka Insurance helps companies to manage the risks associated with natural disasters by analysing how an event can affect a single facility and its operations, and by accurately quantifying and qualifying potential risks. Sri Lanka Insurance develops comprehensive plans to mitigate corporate exposure. Consultants from ING (IGA) Netherlands head the risk-management team.
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RECENT DEVELOPMENT
The company recently launched the country’s first state-of-the-art collision repair centre, Formula World. The services of this high-tech centre are available free of charge to all Sri Lanka Insurance’s ‘Formula Plus’ motor-insurance policyholders. This 8,100 square foot building space, sprawling over two acres of land, can accommodate over 300 vehicles and is equipped with the latest technology – not found in most collision repair centres in Asia today – in the automotive repair industry. Formula World is one of the first collision repair centres in the world to be owned and managed by an insurance company.
Sri Lanka Insurance was also the first insurer to introduce services such as bancassurance, which entails the marketing of insurance services through the distribution networks of banks. The company has also invested in a number of new training and development initiatives, internally, to harness the knowledge base within the company and instil professionalism in delivering its brand promise.
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PROMOTION
Sri Lanka Insurance’s marketing strategy revolved around the high-profile corporate campaign that re-launched the Sri Lanka Insurance brand, communicating the company’s core brand values of trust, continuity, financial strength and stability. A fully integrated marketing strategy was adopted to project the new brand to all its stakeholders. As part of this strategy, the company invested heavily in brand management and product development, to support the change within the company and be competitive in the market.
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BRAND VALUES
Today, the Sri Lanka Insurance brand is established as the leader in the field of insurance in the island. This positioning is reflected in the company’s pay-off line, ‘You are always secure with the leader’.
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THINGS YOU DONT KNOW ABOUT Sri Lanka Insurance
♥ Sri Lanka Insurance has the largest life-insurance fund in Sri Lanka.
♥ Sri Lanka Insurance has the most matured life fund and has had surpluses in it for over 30 years.
♥ The company has over Rs. 50 billion in assets under its management and over one million policies in force.
♥ It settles, on average, Rs. 18 million worth of claims every day.
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www.srilankinsurance.lk
