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Tuesday, 26 September 2023 00:30 - - {{hitsCtrl.values.hits}}
By Darshana Abayasingha
The country’s pioneering insurer, Sri Lanka Insurance, broke its own record when it declared over Rs. 10.4 billion in bonus payments to customers recently, and is looking towards digitalisation to enhance its offering and reach. Speaking to the Daily FT, Sri Lanka Insurance (SLIC) CEO, Chandana Aluthgama, said this achievement is a clear indication to all stakeholders of the strength of the country›s largest insurer, and its ability to deliver on its promise despite the challenges that have engulfed the country.
“For over six decades, we have constantly stood by our customers and delivered on our promise despite relentless challenges from conflict, natural disasters, pandemics and other man-made crises. We have given protection to persons not covered by others. Even during the pandemic, the SLIC was the first to offer protection for state sector employees. From 2006 up to date, we have disbursed over Rs. 92 billion in bonus payments, and this is a remarkable achievement. As we have done in the past, we keep pushing our own benchmark,” said Aluthgama.
The SLIC CEO, described Sri Lankans as resilient people given the multiple shocks that afflicted the nation over the past few years. Despite the severity of the challenges, the people and industry have bounced back, even though the threats posed by the economic crisis still cast a shadow. Aluthgama noted that the SLIC has also reviewed its portfolio in light of these developments and scaled down some products that don’t offer value amid prevailing conditions. He said the company’s unmatched efforts at reaching out to the grassroots offer a great deal of strength to the organisation, and the company will nurture these advantages as part of its strategy for growth. Aluthgama pointed out that despite hardships, many continue to meet insurance payments, though there has also been some policy lapses, while some have opted to downgrade their commitment. He acknowledged the commitment and performance of his team, who have managed to impress upon the people the importance of insurance despite the difficult times.
“For over six decades, we have constantly stood by our customers and delivered on our promise despite relentless challenges from conflict, natural disasters, pandemics and other man-made crises. We have given protection to persons not covered by others. Even during the pandemic, the SLIC was the first to offer protection for state sector employees. From 2006 up to date, we have disbursed over Rs. 92 billion in bonus payments, and this is a remarkable achievement. As we have done in the past, we keep pushing our own benchmark,” said Aluthgama
“In this situation, I wouldn’t say we are completely out of danger, but we see a small light at the end of the tunnel. However, there’s a long way to go. This is a challenge the entire country faces today. Amid the challenges, we have observed that people also try to pay for insurance. You need insurance the most when you are at the bottom, because one never really knows when you would get hit and need a hand to help you. Our agents carry that message to all segments and as a prudent organisation, we try to ensure that we retain our strength and grow on that rather than saying we are number one on all fronts. This is the time we need to look inwards and bring in prudent management policies in order to overcome the crisis. At the same time, I see a lot of opportunities,” Aluthagama said.
SLIC’s CEO underscored the strength and confidence in his team to maintain their number one position, and praised their capacity to turn challenges into opportunities. He noted that the SLIC has moved toward a performance-driven customer-centric organisation, and is looking to embrace digital technologies to unleash the phase of growth. Aluthgama said digitalisation has been slowed due to considerations of compatibility and affordability.
“Before anyone says we are slow, we need to see why it has been slow. When it comes to embracing technology, there are many factors to consider. It could be compatibility and even people’s acceptance and readiness. We have embraced technology on various fronts, and advocate doing what we can immediately. Sometimes we tend to hold on and by that time the said technology becomes obsolete. If we cannot get a complete solution, we need to start somewhere and work out how to realise our objectives. For example, we couldn’t always communicate the bonus campaign digitally, because people felt a paper certificate was the only legitimate thing. So, we had to demonstrate the legality of a digital certificate and explain the current position in the country. We started in 2021, and by 2022 we achieved about 50% coverage. As a result, this year everything went digital. We provide a printed certificate only in instances where one doesn’t have a Smartphone. It takes time and understanding. If you don’t have a perfect fit, you could even run into a breakdown of operations”.
"Amid the challenges, we have observed that people also try to pay for insurance. You need insur-ance the most when you are at the bottom, because one never really knows when you would get hit and need a hand to help you. Our agents carry that message to all segments and as a prudent organisation, we try to ensure that we retain our strength and grow on that rather than saying we are number one on all fronts. This is the time we need to look inwards and bring in prudent management policies in order to overcome the crisis. At the same time,
I see a lot of opportunities"
Aluthgama attributed the continued success of the company to prudent management practices, delivering sustained profits and revenue to the exchequer except during Covid, which was an exceptional period. He noted that extraordinary profits should be channeled back to customers, with the claim ratio also coming down.
“Sometimes people say the state sector is inefficient, but it’s not all of the private sector that is efficient and it’s not all the government sectors that are inefficient. If you consider the SLIC staff today they are on a fixed income with about 6% increase of annual salaries, and the balance based on the company’s key performance indexes. So, every quarter they get paid and I don’t think even some of the private companies have such mechanisms. We have always maintained that we have a good team, if not for them the company will not be able to clock in this much of a premium on a monthly basis. So, moving forward I think the way our policies are structured, the SLIC will become stronger,” Atluthgama added.
In terms of the future, Aluthagama pointed to developed markets where the entire process takes place digitally, noting that Sri Lanka has a lot to do and will take some time to get there. He said it is important that insurance is connected with the Department of Motor Vehicles and other institutions in order to provide a seamless and more efficient service, and enthused that this infrastructure is beginning to come in. Until such time, the industry must do with “innovative home-grown solutions”, but as a company the SLIC is keen to embark on a digital journey, and are already investing in the right personnel and resources.
In terms of the future, Aluthagama pointed to developed markets where the entire process takes place digitally, noting that Sri Lanka has a lot to do and will take some time to get there. He said it is important that insurance is connected with the Department of Motor Vehicles and other institutions in order to provide a seamless and more efficient service, and enthused that this infrastructure is beginning to come in. Until such time, the industry must do with “innovative home-grown solutions”, but as a company the SLIC is keen to embark on a digital journey, and are already investing in the right personnel and resources
Commenting on how he thinks the industry could expand coverage across the country, Aluthgama noted that one of the drawbacks to promoting insurance in Sri Lanka is that it is not a tangible product, and very few people are willing to cut corners to obtain necessary cover. He said insurance is often mandatory if not popular in most developed markets, and there is a significant increase in younger customers. Aluthgama added that the SLIC would continue its efforts to reach out and extend the benefits of insurance to all segments, and once again expressed confidence in his team to take the company to greater heights.
