Ceylinco Life posts sector-leading Premium Income of Rs 8.8 b in 2010

Ceylinco Life has announced that it ended FY 2010 with total income of Rs 12.2 billion and Gross Written Premium income of Rs 8.786 billion, consolidating its position as Sri Lanka’s largest life insurer for the seventh successive year.

Noteworthy improvements in all key performance indicators pertaining to long term insurance generated solid overall business growth for the company, notwithstanding the fact that disposable incomes in most target segments remained flat during the year, the company said.

Ceylinco Life’s Life Fund grew by a healthy 20.5 per cent to Rs 31.868 billion, following a net transfer of Rs 5.418 billion during the year, while Investments grew by 25.7 per cent to Rs 29.376 billion. Total assets increased by 20.6 per cent to Rs 36.956 billion as at 31st December 2010.

Commenting on the company’s results, Ceylinco Life Managing Director and CEO R. Renganathan said: “One of the most noteworthy aspects of our performance in the year reviewed is the fact that we substantially further increased our solvency ratio, which at the end of 2010 was an extraordinary 9 times more than the minimum stipulated by law.”

The valuation of the Life Insurance Fund as at 31st December 2010 was done by M/s Towers Watson Risk Consulting (Pvt) Ltd., according to which a sum of Rs. 600 million was recommended to be transferred from the surplus on Life Insurance business to the Shareholders’ Fund for the year 2010. Consequently, a net of Rs. 591 million was contributed to the Rs 939 million consolidated net profit of the company after deducting expenses attributable to shareholders, Renganathan said.

A computation of the excess of admissible assets over statutory liabilities, the Solvency Margin is the best indicator of an insurance company’s ability to meet the obligations arising from its insurance contracts at any time, he explained.

In other key indicators, the company’s premium income recorded a growth of 17 per cent over 2009, while total income increased by 12.5 per cent. Investment and Other income improved by 3 per cent to Rs 3,454 million.

The company sold 157,682 new life policies in the year reviewed despite the non-conducive socioeconomic environment, and had paid Rs 2,757 million in customer benefits.

Ceylinco Life’s investment portfolio, valued at more than Rs 29 billion as at 31st December 2010, comprised of Government Securities (38 per cent); Licensed Private Banks (17 per cent); State Banks (22 per cent); Real Estate (12 per cent); Corporate Debt (7 per cent) and Others (4 per cent), the company disclosed.

 “We conform strictly with the investment guidelines stipulated under the Regulation of the Insurance Industry Act No 43 of 2000 for investments pertaining to Life Funds,” Renganathan said. “These investments are subject to regular monitoring by the Insurance Board of Sri Lanka (IBSL), the government appointed regulator for the industry.”

Describing the company’s performance in 2010 as “characteristically consistent,” he noted: “There have been no shortcuts or cutting corners for Ceylinco Life in the period reviewed. No expedient quick-fixes or gimmicks to stay ahead of the competition. We have simply moved forward with our tried and tested approach to business, and overcome our challenges by working harder.”

One of the highlights of the year was the opening of Ceylinco Life’s purpose-designed 10-storey new head office building at Havelock Road, Colombo 5.  “The Ceylinco Life Tower stands as a monument to the strength, stability and aspirations of our company, Renganathan said. “The fact that it was built in 2009, the most difficult year in the history of Ceylinco Life, will not be forgotten for many years to come, and will always be a testament to the determination and grit of the company.”

Ceylinco Life also opened new branches at Atchuvely in Jaffna, Sooriyawewa in Hambantota, Middeniya Moratuwa and Mannar in 2010, to end the year with a network of 182 branches, the largest branch network in the local life insurance industry.

Another highlight of the year was the recognition accorded to Ceylinco Life at the global level with the top award for Social Marketing at the 2010 Global Awards for Brand Excellence presented by the World Brand Congress in Mumbai. This was the second consecutive Brand Excellence Award won by Ceylinco Life at this event since 2009.

The company was also adjudged ‘Peoples Brand of the Year’ in the insurance category on 15th March 2011 for the 5th consecutive time, continuing its award-winning performance in the current year.

Looking ahead, Renganathan said: “We see 2011 as a year of expansion. We will build on what we have achieved, doing what we do best. Growth will be achieved without compromising the fundamentals of prudence and probity.”  

Independently rated as one of the country’s most valuable brands, Ceylinco Life has maintained its leadership of the country’s long term insurance sector from 2004 onwards through an uncompromising adherence to fundamentals and best practice.