The security of insurance

Following the declaration of 1 September as National Insurance Day and with Insurance Awareness Month well underway, Insurance Association of Sri Lanka President Deepthi Lokuarachchi and Marketing and Sales Forum Chairman Hashra Weerawardena were keen to express their ideas and opinions on certain aspects of the industry that will play a crucial role in ensuring that one day every citizen of the country will enjoy the security of insurance. Following are excerpts of an interview: 

Q: How important is it to analyse the need of the policyholder when it comes to selling insurance?

Lokuarachchi: It is an imperative requirement as it ensures that the plan that is proposed to the prospective customer will match the needs and requirements of his/her life.  

Q: When it comes to the issue of lapses in policies, how can insurance advisors convince policyholders to keep their policies active?

Lokuarachchi: Once the need is met, insurance companies must continue to emphasise the value of maintaining a policy and paying premium so that in the case of an eventuality the desired purpose of the policy can be achieved. The payment of the premium will also enable the dependents to benefit from the life policy in case of an unfortunate event in the life of the assured. The continuation of the way of life even in this eventuality is the reason why a person would get a life insurance policy in the first place.

Q: What is the difference between life insurance premium payment and savings?

Lokuarachchi: Premium payments and savings are synonymous in insurance. 

The life insurance premium includes the premium charged for the risk element and savings the component of the life policy. 

Q: Can the payment of premiums be considered as a means of compulsory savings in a life insurance policy? 

Lokuarachchi: To some extent, yes. There are charges associated in the provision of life cover, which do not necessarily form part of the direct savings.

Q: Why is there a low level of insurance awareness in Sri Lanka when compared with the awareness of banking services? 

Lokuarachchi: It’s not a question of awareness. But the reason for the low level of penetration is the reluctance of the people to part with their cash, as they don’t like to accept the fact that death and misfortune may come upon them at any unforeseeable time. 

Q: Can you describe the efforts of the MSF over the month (Insurance Awareness Month) and the campaign’s current progress?

Weerawardena: As you are aware the activities for Insurance Month commenced at the launch of the first-ever National Insurance Day on 1 September at the Independence Arcade where a special stamp and first day cover were introduced in commemoration of the event.

Sixteen main locations across the island were selected for regional activations with the fullest support of the many life and non-life insurance companies, which are sponsoring and organising these events. 

Up to now we have completed regional activations in the following cities – Negombo, Kurunegala, Gampaha, Ratnapura, Kiribathgoda, Ampara, Batticaloa, Jaffna, Anuradhapura, Bandarawela, Embilipitiya, Kandy and Matara – we have also lined up programs in Galle and Maharagama during the next couple of days.

Q: How have the insurance companies of Sri Lanka contributed to this campaign? 

Weerawardena: Even though leadership was taken on by certain companies in selecting the venues, program, etc., the entire industry has rallied around them as one to espouse the importance of insurance to the entire population of Sri Lanka, and as a result of this effort all the regional activations held so far has been a tremendous success 

Q: What kind of role has the Insurance Board of Sri Lanka taken on in these proceedings?

Weerawardena: The regulatory body, the Insurance Board of Sri Lanka (IBSL), has provided the necessary guidance and support for these events by participating at several locations island wide, thus providing the momentum for the life and non-life insurance advisors and sales staff members to meet and explain the true value of insurance. 

Q: What post-event results does the IASL hope to see following the conclusion of the campaign?

Weerawardena: The IASL hopes to raise much needed awareness of the importance of insurance to more than one million people across Sri Lanka during September, which will thus enable the insurance industry to capitalise on the momentum gained during the month throughout the rest of the year.

This momentum will also help the insurance industry in a major way to achieve the vision of a day all Sri Lankans are insured.