Janashakthi Insurance turns 2013 into a “milestone” year

Wednesday, 26 March 2014 00:01 - - {{hitsCtrl.values.hits}}

By Cheranka Mendis Janashakthi Insurance yesterday announced its highest ever consolidated revenue of Rs. 9.9 billion, reflecting a 20% growth stemming from attractive returns generated from their solid investment. Addressing the media, the company noted that it was able to deliver 22% Return on Equity to its shareholders as well as a 34% YoY growth of net asset per share of Rs.12.48. Acknowledging that 2013 was a “historic, milestone year”, Janashakthi General Manager – Finance and Planning Bertal Pinto-Jayawardena noted that this was the first time company surpassed the billion rupee mark recording highest Profit After Tax of Rs. 1 billion. “We want to sustain this level and grow. We have been very happy with our revenues over the years and today we strand just under Rs.10 billion in this 20 year journey.” In its 20th year of operation, Janashakthi Insurance is today the third largest general insurer in the country as well as the sixth largest life insurer and has a customer base in excess of 700,000 and 112 branches island-wide. The company’s results were achieved while honouring Rs. 4.4 billion in claims over the past year alone. Janashakthi Insurance Managing Director Prakash Schaffter added that the company has settled in excess of 100,000 claims a year, making a difference in the lives of individuals and corporates. The company also reported a total asset base of Rs. 8.7 billion GWP, which in 2009 was at Rs. 5.7 billion. Of the former over 75% of is made up of non-life premiums, reflecting the company’s renewed focus on diversification. It was recorded that the life segment increased by 8.3% to reach Rs. 2.19 billion, while non-life business contributed Rs. 6.5 billion to revenue – an increase of 10% compared to the previous year. The solvency margin of Janashakthi Life Insurance has also increased from 440% of the required margin level to 710% by year end 2013. Schaffter assured that the total assets of the company have reached Rs. 18.65 billion in 2013 from that of Rs. 15.84 billion in 2012. The non-motor segment in particular was said to have posted a laudable growth of 15% – well above the industry standards for growth during the year. Fore, marine and miscellaneous sub categories also ser a benchmark for the entire industry in 2013. “The Rs. 1 billion profit after tax, together with our impressive consolidated revenue is most creditable given the intensely competitive nature of Sri Lanka’s insurance industry,” Schaffter noted. “It is also significant that the non-motor segment performed well within the industry, which is proof of our positive strength in this segment.” “In managing this growth, our expenses (management and operational) has taken us from Rs. 1.2 billion to Rs. 1.9 billion – a growth of Rs. 700 million matched against a revenue growth of Rs. 3 billion,” Jayawardena said. “We have grown our revenue and the costs are managed growth of costs.” Their claims are effectively risk managed in order that all shareholders are protected and revenue streams are protected, he expressed adding: “The net profit we finally produce is a steady profit protected through a good sound system of risk management.” Acknowledging that the company is bracing itself for growth, Schaffter commented that the stellar performance of Janashakthi despite all challenges faced is a classic case of local entrepreneurship with humble beginnings dating back to 1994. “We started Life with just under 40 staff at No. 24, Staple Street. Our first year of operations yielded a revenue of Rs.40 million – a very small number indeed. Nevertheless we had dreams, great dreams – dreams of who we wanted to be, whom we wanted to serve and the direction we wanted to take. “Today, 20 years on, we are a national company which spans the length and breadth of Sri Lanka. We are a truly Sri Lankan company – Sri Lankan owned, Sri Lankan managed and most importantly with Sri Lankan know-how,” he said. Schaffter also remarked that there are many challenges ahead noting the industry’s current transition from the solvency based system of monitoring insurance companies to the risks based capital regime. “I am happy to inform that Janashakthi voluntarily participated in the road test of Insurance Board of Sri Lanka. We are more than confident that we are ready to meet the required standards when the RBC regime is implemented in 2016.” Commenting on the announcement of insurance companies having to segregate their life and general businesses by February 2015, he added: “I am also happy to state we will do this well in advance of the deadline and more importantly, we will be well placed to exploit new business opportunities which I am sure will arise with the segregation of insurance.” Pix by Daminda Harsha Perera