Banking
HNB Assurance positive on market potential – Manjula de Silva
Q -Can you brief us about HNB Assurance?
Manjula – HNB Assurance PLCis a public limited liability company incorporated in Sri Lanka on 23rd August 2001 under the Companies Act, No 17 of 1982. The company which was known as HNB Assurance Ltd., changed its name to HNB Assurance PLC during the year 2007 as required by the Companies Act, No 7 of 2007. We are a subsidiary of Hatton National Bank, and 60% of the share capital of the company is held by the Bank, a leading commercial bank in the private sector. The company is registered under the Regulation of Insurance Industry Act No. 43 of 2000 and it has obtained license from the Insurance Board of Sri Lanka to undertake both Life and General Insurance business.
Q – How did the company perform during the last financial year?
Manjula – During the last financial year we generated a turnover of Rs.3 billion, which is a growth of 24 per cent compared with the previous year. The general insurance premium income contributed Rs.1.71 billion while achieving a growth of 27 per cent and the life insurance premium grew by 19 per cent to reach Rs.1.29 billion. It is noteworthy that both these sectors attained a growth rate, which is significantly higher that the rates achieved over the last two years indicating a noteworthy acceleration in business growth. As a company, we were able to post a PBT of Rs.300 million and an after tax profit of Rs.275 million.
Q – How would you rate this growth with the past 11 years of operations?
Manjula – From the inception we have been setting records. Now we are in the 11th year and have overtaken many competitors reaching the sixth place as listed by the Insurance Board of Sri Lanka. We have progressed rapidly during the past few years.We recorded an annual turnover of Rs.1 billion on the fifth year in operation.
Manjula de Silva - Managing Director of HNB Assurance
This was in 2006. It was the first time ever that any insurance company in Sri Lankarecorded one billion in its fifth year. Moving on, by 2009 we recorded Rs.2 billion. In 2011 we concluded our 10th year in operation reaching Rs.3 billion. We anticipate a continuation of this growth momentum with the available opportunities in the market. So, we have introduced three new products to the market – My home, My Health, and Motor Guard Xtra.
Q – So, what do you expect from the market in the years to come?
Manjula – We see lot of potential in the retail side in the market. HNB Assurance sets itself compared to others, by being a company which is not concentrating mainly on Colombo. Our regional presence is very high compared to many of our competitors. Even some of these new products are not confined to Colombo but simultaneously introduced to the rural areasas well. We have over 50 branches supported by 250 branches of the Hatton National Bank PLC. All in all we have over 140 dedicated staffers in these HNB branches to assist the customers of the Bank.
In addition, we have over 1,400 Insurance Advisors, who are working for us on freelance basis. All these measures help us to enhance the presence especially on the retail base. Our market share is 4 per cent. But most importantly we are not thinking only about increasing the volume but also to create some value to our stakeholders. We are very particular to grow with our customers as well as the shareholders. We have been declaring annual dividends due to the growth rate, which is reported this year in three digits. In a way when you try to balance all the stakeholders it holds you back from aiming for a dizzy level of growth.
If you talk about the potential, some 11 per cent of the entire population has life insurance policies. There are certainly more people who can afford such a policy. People need to understand that there will be a time that their regular income will stop and issues will come up. This is the time a life insurance policy will come in handy, especially in the old age. Average life expectancy is close to 80 years and you can’t go on working till that time. When it comes to competition customers should be concerned about the product they receive and especially the background of the insurer. Serious price variances should create doubts in the minds of the consumer. Rating matters a lot when an average person is unable to find out about the financial strength of a company. The ratings give you an independentassessment about thestability of an institution.
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