Sri Lanka’s insurance market is amongst one of the most competitive and dynamic industries in the country. With the pandemic and subsequent state policies fuelling a need for better healthcare, awareness about insurance increased considerably over the last two years.
Since its inception, Ceylinco General Insurance has been an innovator and trend-setter in the insurance industry. Being the market leader in the general and life insurance industries, the Company reported a premium income of Rs 20.2 billion in general insurance alone in 2021, a reasonable growth of 0.6% against 2020 premium income, despite multiple challenges. Enjoying approximately over 20 % of the insurance market share and having 554 branches spread across the island, Ceylinco Insurance General’s Chairman, CEO Patrick Alwis, sat down with the Daily News to share his perceptions on the industry and his Company’s strategies.
What is the secret to your growth during the COVID-19 pandemic?
I am pleased to share that we recorded Rs.20.2 billion in revenue in the last financial year,of which 60 % was derived from motor insurance and the balance from non-motor insurance segments such as property, liability and general accident. One of the key contributors to our success is our large branch network.
We are the only insurance service provider with a network of over 500 branches. During the pandemic, these branches provided uninterrupted services to our customers, including on the spot claim settlements. Even during the lockdown, the branches remained operational since insurance was declared an essential service. This extends to our call centers that operated undisturbed throughout the lockdowns. So all in all, being able to provide all our services even at branch level continuously was a key reason for our growth during the year.
How did the COVID-19 pandemic impact the insurance sector?
Compared to other industries, the insurance sector was impacted indirectly, in that our clients were affected, particularly in the retail, tourism and travel sectors. Other than the health sector, most of the other sectors were badly affected. We had other personal lines that we have developed over the years which kept us going during the pandemic.
Many hotels did not renew their insurance policies and vehicles used for tourism did not renew their vehicle insurance because they were badly affected. A major area of concern during 2021 was that we found it difficult to collect premiums on time.
There was a sizeable clientele which could not afford to pay their premiums and wanted an additional grace period. Motor insurance showed a decline due to import restrictions coming in during the same time. Only the vehicles that were already in the country could be insured, as no new vehicles including motorcycles, three-wheelers and other four wheelers were entering the market. Therefore, the motor insurance sector was very badly affected.
What initiatives were taken to mitigate these impacts?
We had a different strategy: we appointed a special team, used various digital platforms and virtual pay systems to collect premiums, kept our sales force active, and our payment gateways alive. Our teams called each customer and facilitated premium payments and renewal of policies, and even extended credit to loyal customers. Customers were kept notified and happy by attending to their needs as usual. As a result, our customers remained loyal even during the pandemic, and when their economic situation improved, they continued their policies with Ceylinco. Even during curfew, we provided our emergency services uninterrupted, providing valuable assistance. For example, we had a lot of requests to revive dead batteries as many vehicles were idling with the owners. Throughout the period, the existing prospective customer base was contacted by staff to enquire about their well-being. The aim was to remain close to customers despite the inability to visit customers in person.
Where the staff was concerned, what was your strategy?
Our main objective was to keep the staff healthy and safe. As a first step there was a business continuity plan in place which was instituted almost three years ago. Only less than 20 % of staff was allowed to be in office at one time. During the peak of lockdown we brought in only 10 – 12 % of our staff. Moreover, only the key people were called in while the rest of the teams worked from home.
Cohesive policy decisions were taken on how to care for staff and their dependents. We negotiated with hospitals and intermediate care centers and spent over Rs. 50 million for hospitalizations of staff and their dependents during 2021. Those who had complications were kept in private hospitals and those with a mild case of the infection were kept at intermediate care centers. When the entire family was affected, they were kept at intermediate care centers. There was a very clear plan to look after staff financially and health-wise. The strategy was firstly to keep everyone healthy and safe. Secondly, we provided job security so that not a single staff member was retrenched, and nor was their fixed income deducted during the pandemic, a policy we followed right through. As a result, we have a very motivated and loyal team, and together Ceylinco General Insurance was able to mitigate the situation.
Apart from the pandemic, what other challenges does the sector face?
The biggest challenge the insurance sector faced was the import restrictions of vehicles, and certain other goods and services. As a result of the import restrictions, vehicle imports came to a standstill and this impacted the industry. Restrictions on import of goods whether they be luxury goods, essential goods or non-essential goods impacted our marine insurance portfolio during the early phase. Despite this our marine portfolio grew as we re-strategized to increase our customer base. In fact, we recorded a growth of approximately 30-35 % in our marine insurance portfolio during the year.
How do you see the insurance sector evolving in the future?
Like any other business, the insurance sector too should adapt to changing habits, wants, and needs and lifestyles of the customer. We have to be innovative and delight our customers in order to evolve with them. On a daily basis we hold discussions on how to make the claims process easy and customer-friendly. In fact, with the escalating prices of spare parts, opening LCs has become an uphill task for most spare parts dealers.
However, we were proactive and purchased in bulk brand new original spare parts for most of the popular vehicle models. Though we had to block our capital, at any given time we have a stock of over Rs. 500 million worth in spare parts. On one hand this helped to keep our costs down because we don’t have to face the escalating prices to provide spare parts to our customers. For added convenience, spare parts are couriered across the country within 24 hours irrespective of the nature of the spare part.
Similarly, as a Company we kept on innovating not only products but even delivery systems such as ‘on the spot’ claim settlements and direct cash transfers to customer’s accounts, and uninterrupted vehicle inspection even during lockdowns. All these aspects reflect the way we are gearing up to evolve the industry to new heights. These are some of the tactical things we do apart from the more strategic moves in an evolving industry.
Where do you see Ceylinco insurance heading in the next 2-5 years?
Our Company, staff and our customers are the 3 main pillars of our business. Our business depends on the stability of the company, employee well-being and customer loyalty. We look after all these 3 main pillars very closely. Our main external focus is the customer. Everything we do, every action of the company, every plan of the company is a customer centric decision. We are a 100 % customer centric organization. Our philosophy is to support, and financially assist at the time of a claim. We strongly believe that these are the key areas of customer expectations or customer wants. We will continue to innovate in these areas – that is the only way forward under the present circumstances. Customer focused delivery systems and products are how our Company will move ahead.
Any key milestones or achievements you’d like to mention?
Ceylinco General Insurance has many firsts to its credits – as the first to introduce its own sales force to sell insurance. During the early days, the insurance industry was completely dependent on agents and brokers. Ceylinco introduced the idea of having its own sales force. That was a key milestone of our success. We started with about 50 sales people and now we have almost 1,900 sales people placed in branches around the country and in the city office.
Ceylinco General Insurance was the first to introduce the packaged policy concept. Earlier, retail shop owners and home owners bought separate insurance policies to cover different risks such as fire, burglary, accident, and so on. We wanted to combine all this and introduce something for retail shop owners and homeowners which would cover most areas required by them through a single policy. So we designed a policy for retail traders: a combined policy which covers all potential risks faced by the retail shop owners including cash hold-up or burglary.
The Company also pioneered different policies for each segment, for example, for hardware shops, garment shops, grocery stores, farmers etc. We expanded this and designed these products to suit each and every sector with a unique selling proposition unique to them such as for pharmacy, restaurants, retail shops, and extended the same concept for hotels, industries and homes.
We are the only Sri Lankan insurance company to venture into the overseas market. Our first joint venture operation was in Nepal. Then we established our own company in Maldives and now manage a company in Mauritius through a strategic alliance partnership. These companies have made strong progress under our strategic leadership. We also came up with a new strategy to sell retail insurance products to migrant workers in the Middle East under strategic partnerships with companies in UAE, Bahrain, Oman, Qatar and Saudi Arabia. In addition, Ceylinco General Insurance is the only insurance company in Sri Lanka that settles claims with cash on the spot – a groundbreaking innovation for which we won the Innovation of the Year award in 2003 at the Asia Insurance Awards. Our legacy is one of innovation, leadership and customer service.
by Daily News Sri Lanka
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