“Customers the key beneficiaries of Ceylinco Life’s financial strength”

Wednesday, 6 November 2013 00:00 - - {{hitsCtrl.values.hits}}

The Life Fund of Ceylinco Life, Sri Lanka’s market leader in the field of life insurance, surpassed Rs. 50 billion in August this year, on the back of strong operational performance and the company’s investment strategies. In this interview, the company’s Managing Director/CEO R. Renganathan speaks on what this means for policyholders. Following are excerpts: Q: Ceylinco Life recently announced that its Life Fund had topped Rs. 50 billion. What is the significance of this? A: The size of an insurance company’s Life Fund signifies its financial strength. Surpassing Rs 50 billion is an important milestone for Ceylinco Life, especially in the context that this was achieved in the company’s 25th year of operation. These are policyholders’ funds, invested prudently by the company targeting equitable growth with minimal risk. Q: What is the growth recorded by your Life Fund this year?

A: Our Life Fund stood at Rs. 45.11 billion at the end of 2012, achieving 18% growth in the last financial year. For the first eight months of 2013, Ceylinco Life has transferred Rs. 5.439 billion to the Life Fund, taking it to Rs. 50.549 billion by the end of August, which is a 12% growth even before the end of the third quarter. Given the prevailing rates of return on investments in Sri Lanka, this is a very healthy rate of growth. Q: What does the financial strength of the company mean to policyholders? A: Firstly, it means that they and their loved ones are protected by a financially strong and stable insurance company, one that is capable of meeting all its obligations, when the need arises. This is a particularly important consideration when one sees the number of financial companies that are failing not only in Sri Lanka but around the world. Additionally, and this is something that is unique to Ceylinco Life, it means that the company is able and happy to provide its policyholders many benefits, in addition to what they are entitled to.

Q: What are these special benefits that Ceylinco Life provides its policyholders? A: There are many. If I may list a few, we annually pay cash bonuses computed on the period a policy has been active, in addition to the annual bonuses paid to policyholders; there is the Ceylinco Life Pranama scholarships scheme for the children of policyholders, an annual program that has to date awarded 1,614 scholarships totalling Rs. 83 million; there is the annual ‘Family Sawari’ program, which rewards policyholders and their families with all-expenses-paid overseas holidays, luxury cruises and excursions within Sri Lanka, and many community projects such as ‘Waidya Hamuwa’ and the donation of classroom buildings to rural schools, which benefit society in general. All of this is done after fulfilling all obligations to policyholders, including the speedy settlement of claims. Q: Do these activities and programs benefit a significant number of policyholders and needy people? A: They most certainly do. As I said, the Pranama scheme has helped 1,614 students and young people to date. Many of them are already playing valuable roles in society as doctors, engineers, lawyers, accountants and so on. Under the Family Savari program, more than 13,000 people have benefitted. Some of them have travelled to Paris, to China, and to Singapore, and for 2014, a holiday in Japan has been added to the program. Under the Waidya Hamuwa program, we have to date conducted 346 free medical clinics all over Sri Lanka, with an emphasis on rural areas. According to our records, 121,237 people have seen and been treated by doctors under this program, which is ongoing. Under our schools development program, we have built classroom buildings for more than 50 rural schools. Q: You mentioned bonus payments and claims settlement as well?

A: Yes. We paid cash bonuses for the 10th consecutive year in April 2013. The number of policyholders benefitted was nearly 10,000, and the value of the cash bonuses was Rs. 31.7 million. The cumulative value of cash bonuses paid over the past 10 years is Rs. 256.6 million. These payments are in addition to the regular bonuses our policyholders receive annually. In respect of 2012, the total value of annual bonuses paid by Ceylinco Life in 2013 was Rs. 2.4 billion, and the number of policyholders that benefitted was more than 340,000. In terms of claims and policy-related payments, we have paid out Rs. 3.2 billion in the first eight months of 2013 in respect of 11,124 claims. Q: How has Ceylinco Life performed financially, during this period? A: Our performance has been characteristically robust, and above the industry average. According to our figures up to 31 August 2013, gross written premium income grew by more than 9% to Rs. 7.372 billion, and investment and other income improved by 45.5% to Rs. 4.088 billion, taking our total income to Rs. 11.3 billion. Our investments portfolio increased by a healthy 16.4% in value to Rs. 51.4 billion, and total assets exceeded Rs. 62.3 billion with a year-to-date growth of 17.4%. Q: Are you satisfied with this performance? A: In the context of the prevailing conditions, this performance is quite creditworthy. We could do even better, however, if the pressure on disposable incomes eases. Right now, buying life insurance is a low priority item for many people because of the burden of inflation.