Ceylinco Life on Sri Lanka’s burgeoning insurance industry
World Finance speaks to Rajkumar Renganathan, CEO of Ceylinco Life, about Sri Lanka’s flourishing insurance sector and how his company has successfully adapted to the country’s specific challenges
The insurance sector is burgeoning in Sri Lanka, especially life insurance, which became its largest segment in 2010. World Finance speaks to Rajkumar Renganathan, CEO of Ceylinco Life, about how his company has embraced the country’s specific challenges to maintain their position as market leaders for the past decade.
World Finance: Well Mr Renganathan, maybe you can start by telling me how developed is the insurance sector in Sri Lanka and how much coverage does your company have in the country?
Rajkumar Renganathan: The insurance industry was nationalised in 1962. Then in 1988 the industry was once again liberalised. Over the past 26 years all 15 players have received their licenses. These companies have had to establish themselves, build trust and design products to compete indeed to the state monopolies. We at Ceylinco Life achieved market leadership 17 years after we entered the industry, and we have been market leaders for the past 10 years.
World Finance: Sri Lanka has been plagued by severe weather against a backdrop of social unrest. This must have created a lot of challenges within the insurance sector – so how have you dealt with these?
Foreign investment is welcome, especially in the areas of infrastructure and hospitality
Rajkumar Renganathan: We have extremes of drought and flood but we have trained our sales force in the area of new business and collections. We have advised them to adopt different modes of collection and we have trained them in how to change into a new market. Sri Lanka did have an internal ethnic conflict over the past 30 years, this ceased in the year 2009. Since then the government of Sri Lanka has embarked on an accelerated investment programme. Foreign investment is welcome, especially in the areas of infrastructure and hospitality. The Northern and Eastern provinces were the most effected areas during the conflict. These areas have now opened up and there is a new market for life insurance.
World Finance: And how safe is Sri Lanka for conducting business today? And, as a result, what funds do you invest in?
Rajkumar Renganathan: Subsequent to the cessation of the internal ethnic conflict, Sri Lanka is a good place to invest in. As a life insurance company we would invest our funds in gilded securities such as government securities and rated banks. We also invest a part of our money in real estate.
World Finance: Why has demand for life insurance increased so much over the past years?
Rajkumar Renganathan: 26 years ago the insurance industry was liberalised, this has resulted in almost 15 new companies coming into the insurance industry. All of them have adopted their advertising programmes, thereby creating a greater awareness for the need, not only for protection, but for retirement planning as well.
World Finance: Ceylinco Life has subsidiary companies in the healthcare services. How do these companies compliment each other and what are the benefits for your clients?
Rajkumar Renganathan: When we analysed our claims we found that the largest number of claims was in the area of diabetes and cancer. We therefore thought it was right to diversify into the healthcare industry. We set up a subsidiary, it’s called Ceylinco Healthcare Services Ltd. It was set up over 10 years ago. We now operate two centres of excellence – one for diabetes and one for the treatment of cancer.
We now operate two centres of excellence – one for diabetes and one for the treatment of cancer
We were the first to install a Linear Accelerator in Sri Lanka and in December last year we installed a thermo therapy heat unit – the only unit that is available in South-east Asia today. The centre is based on Colombo, so most of the medicals necessary is carried out at this centre. And as far as pour policyholders are concerned, they are entitled to special discounts if they seek treatments at these centres.
World Finance: How is technology revolutionising the insurance sector?
Rajkumar Renganathan: We are equipping ourselves first, both the salesmen and our supervisors, with android tablets and laptops, to provide a better service to our customers. We also have a sophisticated core insurance system, which provides us with a lot of data, which we use effectively for our marketing.
World Finance: Finally, what are you targeting for future growth?
Rajkumar Renganathan: Ageing is a problem all over the world. But this is most specific in South-East Asia, specifically in Sri Lanka – we have a rapidly ageing population. However awareness about retirement planning is at a very low level. As part of our awareness campaign, we have declared the month of May as the retirement planning month. Our entire sales force is mobilised and they will go from house to house talking to the occupants about the need for retirement planning.
We are hopeful of introducing annuity plans for the rising population in the near future.
World Finance: Mr Renganathan, thank you.