Sri Lanka’s population is ageing faster than any other in South Asia. According to the most recent Sri Lanka Population and Housing Census, the number of over-60s in the country has more than doubled since 1953, comprising 12.4 percent of the population in 2012. The World Bank estimates that one in four Sri Lankans will be older than 60 by 2041.
According to a 2012 World Bank report on demographic transition, for every 100 working-age people in Sri Lanka in 2001, there were 41 child dependants and 14 elderly dependants. The number of child dependants is predicted to decrease to 25 by 2036, while elderly dependants will increase to 36. As such, there will be fewer people to look after Sri Lanka’s elderly population in the years to come.
The challenges that will emerge as Sri Lanka’s population gets older are vast. World Finance spoke with Rajkumar Renganathan, Chair of Ceylinco Life Insurance, about how the country can adapt to the coming demographic changes.
What is causing Sri Lanka’s current demographic shift?
Declining fertility, falling mortality rates, increasing life expectancy and emigration have become major causes of the country’s growing elderly population. The World Bank reports that the fertility rate in Sri Lanka has steadily decreased over the decades, from 5.54 in 1960 to 2.2 in 2017 (see Fig 1). Life expectancy for Sri Lankans was 76 years in 2019, compared with 59 in 1960. These factors all contribute to a swelling elderly population.
As Sri Lanka’s population gets older, what challenges will arise?
One of the biggest challenges of an ageing population can be quantified by a life cycle deficit, which measures the difference between consumption and labour income for a certain age group. With Sri Lanka’s demographic shift, the proportion of the population that is consuming more than it earns will increase, putting pressure on the working-age population to finance this upward transfer. As the costs of medical care increase, supporting elderly dependants is only going to become more burdensome, especially if there is more than one person to provide for.
Although Sri Lanka is traditionally a culture that cares for its elders, factors such as globalisation, industrialisation, better access to education and emigration have widened the gap between the elderly and the youth populations. The usual family unit has also shifted from extended to nuclear. This could pose a problem to those who become elderly dependants in the future as they have limited access to caregivers.
How should individuals plan for retirement to ensure a good quality of life in their later years?
The alarming statistics already quoted tell us that early retirement planning is of critical importance. Besides the factors outlined, another thing to consider is that the Sri Lankan private sector does not pay pensions after the retirement age of 55. Therefore, it is essential that individuals – especially those working in the private sector – make decisions about their retirement savings early in life. To ensure the whole population has access to advice about their pension, Ceylinco Life has more than 275 branches spread across the country.
What does the company’s La Serena subsidiary offer retirees?
Ceylinco La Serena is a first-of-its-kind retirement resort in Sri Lanka, catering to newly retired or semi-retired individuals who are looking to maintain their independence, be reasonably active and enjoy a hotel-like environment. It comprises 44 self-contained, fully furnished, well-equipped and regularly serviced living units, and is located on beachfront land in the Uswetakeiyawa fishing village, a few kilometres from the capital, Colombo. It is designed to give a sense of community to its elderly residents and bring like-minded people together.
With Sri Lanka’s demographic shift, the proportion of the population that is consuming more than it earns will increase, putting pressure on the working-age population to finance this upward transfer
What makes Ceylinco Life Insurance stand out from other insurance firms in the country?
Ceylinco Life has been in the business of insuring lives in Sri Lanka for more than 30 years. During that time, it was the market leader in the industry for 15 consecutive years. To date, the company has provided cover for nearly one million people and is committed to the principle that life insurance providers should have a relationship with their clients for life.
The company has introduced ‘life insurance week’ and ‘retirement planning month’ to Sri Lanka in order to improve the public’s awareness and understanding of the benefits that preparing for retirement brings. We have consistently focused on the importance of educating people about how they can benefit from doing so. For example, in 2018, the company ran a retirement campaign titled ‘the 30 day plan for 30 years of serenity’. The scheme highlighted how people could prepare for a fruitful retirement in just one month. Some 4,000 members of the Ceylinco Life sales team were deployed in door-to-door visits across Sri Lanka to take this message to the masses.
Ceylinco Life also recently launched an innovative life insurance product, the likes of which had not been seen in Sri Lanka before. Named ‘smart protection’, it offers a payout that is eight times the sum assured and guarantees a refund of the sum assured plus total premiums paid at maturity. Products of this nature help drive penetration of life insurance and retirement planning in the country, setting the company apart from its competition.
Could you go into detail about some of the company’s corporate social responsibility (CSR) programmes?
Ceylinco Life’s CSR projects are mainly focused on education and healthcare. In the area of education, the company has donated 80 purpose-built classrooms to disadvantaged schools over the past 15 years and continues to monitor and maintain each one to this day. Ceylinco Life has invested nearly LKR 50m ($278,500) in this initiative to improve facilities and the learning environment for students.
In the sphere of healthcare, the company is well known for its ‘waidya hamuwa’, or ‘meet the doctor’, programme. In 2018 alone, more than 4,400 Sri Lankans – most of them from rural areas – were provided with access to doctors through the scheme. To date, Ceylinco Life has reached approximately 142,000 people through free medical camps held in 375 locations across the country. These medical camps are overseen by qualified and experienced doctors and nursing staff attached to the state health sector and private laboratories. Medical check-ups and health screenings, including blood sugar, blood pressure, vision, ECG scans and kidney scans, are offered at these medical camps.
The company has also donated high-dependency units (HDUs) to five hospitals since 2012. Clinics that have benefitted are the Kandy Teaching Hospital, Lady Ridgeway Hospital for Children, the National Hospital of Sri Lanka, the Jaffna Teaching Hospital and the Colombo South Teaching Hospital. HDUs are used as a space for patients being upgraded from normal care or as a transition down from intensive care. They can be used for post-surgery care before transferring patients to other wards, or to treat intensive diseases such as dengue fever.
What are Ceylinco Life Insurance’s plans for the next five years?
As the market leader in Sri Lanka, Ceylinco Life Insurance will continue to set the benchmark in the industry by introducing new products and upgrading its existing offering, including attractive retirement plans to suit any client. The company will further drive awareness of life insurance and retirement planning to improve citizens’ later years.