Sri Lanka Insurance Corporation, one of the country’s leading insurers, is broadening the scope of its portfolio to include areas such as healthcare and hospitality
It is 50 years since Sri Lanka Insurance Corporation (SLIC) began its journey on the island nation as a pioneer in the domestic insurance sector. Then, the company’s main aim was taking the concept of insurance to the rural masses of the country, and today it has established a strong reputation for leadership in both general and life insurance. The company’s financial stability and strong reinsurance arrangements, coupled with a successful, viable business model aligned to private sector flexibility, governance and ethics, has seen it achieve new heights both qualitatively and quantitatively.
SLIC was launched as a state-owned corporation in 1962, but was converted to a private limited liability company for six years and then ultimately reinstated as a nationalised entity in 2009. Managing Director and CEO Mohan De Alvis observes the return to state ownership as a strengthening turn of events, as it has given SLIC leeway to become the largest government-owned insurer, collate an asset base of €594.84m, and reach a strong capitalisation of €36.42m. Gross written premiums have seen impressive growth in both 2010 and 2011 to 36 percent. SLIC is also the largest insurer in the country in terms of total assets, which accounts for 39 percent of Sri Lanka’s insurance industry asset base. The company also made history by paying the largest Sri Lankan claim ever (€239m) and the largest declared bonus to life policy holders (€24.28m). In the context of Sri Lanka’s insurance industry, these figures are an outstanding achievement.
To De Alwis, however, being profitable alone isn’t enough to earn the respect of stakeholders. “While quantitative performance denotes the stability and strength of an organisation, the fundamentals of openness, honesty, transparency, integrity and accountability must be within the culture,” he says. “We make our financial performance available for public scrutiny and are aware that the ethos of a strong and reliable insurance provider must be backed by products and services that are true to the delivery promise.
This means that we have to constantly improve our service levels, because being a very competitive industry, in order to gain market share, we must make service excellence our competitive edge.”
Aiming for the top
SLIC offers a wide portfolio of life and non-life insurance solutions, with unique tailor-made options for both individual and corporate customers. Commenting on the life insurance portfolio, De Alwis stated that SLIC is setting its sights on regaining leadership in the segment, and believed that the new policies the company is planning to launch will enable it to reach the top of the Sri Lankan life insurance sector by the end of 2012.
“Even though life insurance penetration still remains low in Sri Lanka, there is tremendous market potential,” says De Alwis. “Therefore, high growth rates are feasible and could be optimised through better reach and accessibility. There’s also the emergence of a more educated workforce and larger disposable incomes. But there is a need for more awareness and education; a process we have already begun. Using the strengths of our 130 fully networked branches and the strategic partnerships we have linked with banking and telecommunication providers, for instance, we are able to reach a larger segment of the population. We also have one of the best human resource pools in the industry, as is demonstrated by the fact that many private insurance teams currently have SLIC alumni working as their best performers. Given that we promote a knowledge-based culture within SLIC, our 2,500-strong workforce, together with 4,000 advisors and team leaders, are well equipped to convert that knowledge into a quantitative policy base.”
SLIC continues to stretch its values and principles by pushing to gain rankings, ratings and standards that are firsts for the country’s insurance industry
According to De Alwis, SLIC recently recorded an unprecedented level of growth, with a lead of €6.07m over the second-largest player in the Sri Lankan market, maintaining its status as the undisputed leader in the market. De Alwis also stated that growth has a direct impact due to the strategic alliances the company has been able to establish with financial organisations, motor vehicle sole agents and other leading companies. He also revealed that the company is developing innovative surgical and hospitalisation policies, as it sees health insurance as a growing market. Many corporations are showing keen interest in facilitating health covers.
Speaking further on the company’s financial achievement, as well as the diversification of its investment portfolio into other sectors, Piyadasa Kudabalage, Executive Director at SLIC, stresses that the company has built a strong brand equity and high liquidity base, allowing it to embark on strategic diversification over the last few years.
Kudabalage explains: “Since 2008, SLIC has diversified its portfolio into investments into healthcare, hospitality, manufacturing, construction and trading. In 2010, the company made further inroads into Sri Lanka’s consumer market thanks to its acquisition of Litro Gas Terminal Lanka, formerly known as Shell Terminal Lanka. As part of the diversification process, a five-star hotel – Hyatt Regency Colombo – is in the process of being constructed, with management being outsourced to the world-renowned hotel management chain Hyatt Regencies Worldwide. The project marks an investment of LKR3-4bn and is scheduled for completion in 2014.”
SLIC continues to stretch its values and principles by pushing to gain rankings, ratings and standards that are firsts for the country’s insurance industry. It is the first insurance company in Sri Lanka to gain an AAA rating from RAM Ratings (Lanka) and the first to attain a global rating of BB- and domestic rating AA-(lka) from Fitch Ratings. Encouraging the permeation of best practices and international standards, SLIC is also the first insurer in the country to gain ISO 9001:2008 certification. Kudabalage is also proud of the Best Insurance Company in Sri Lanka, 2012 award conferred by World Finance.
SLIC’s sustainability philosophy revolves around a deep-rooted commitment to develop cultural, religious and educational facets within the larger community. “Being a household name and a brand that has been built over half a century, our stakeholders expect us to ‘walk the talk’ of our vision,” says Kudabalage. “This means trust, integrity, honesty, strength and stability all form the bedrock upon which we retain the respect we have earned, and which we use to maintain our market leadership.”