SLI records Rs. 20 billion in premiums last year; to go public by 2016
View(s):By Duruthu Edirimuni Chandrasekera
On the back of recording Rs. 20 billion in Gross Written Premium (GWP) last year, Sri Lanka Insurance (SLI) is gearing to penetrate new growth sectors this year, officials say, adding that the state-owned company plans to list in the Colombo stock market by 2016, a fact that was reported earlier by the Business Times.
“Last year we posted Rs. 20 billion (which is unaudited) against the Rs. 18.3 billion in 2011. This was amongst many challenges. This year we’re expecting more focus on penetrating new growth areas,” Mohan de Alwis, Managing Director/CEO SLI told the Business Times. He noted that during 2007 to 2009, SLI recorded sales of Rs. 13 billion. “This growth was stagnant. In 2010 when the new board of directors took office, the sales jumped by Rs. 2 billion more to Rs. 15 billion. This was because we changed SLI’s systems, processes and way of doing things,” he explained.
The growth momentum continued in 2011 with SLI posting Rs. 18 billion and then last year it was Rs 2 billion more at Rs. 20 billion. Mr. De Alwis pointed out that since 2009 the company has achieved 53 per cent growth in sales. “In 2010 we identified areas which hadn’t been tapped.
We went into strategic alliances with motor, leasing and finance companies. Sales personnel had to be realigned in terms of being customer centric.” He added that SLI while forging ahead in new alliances in both motor for the general sector, the life sector partnerships were forged with large state sector entities such as Bank of Ceylon and National Saving Bank. “Arrangements with those entities meant that our cost base was low. We used their data base and their premises. We also arranged a similar bancassurance partnership with Seylan,” Mr. De Alwis noted. While acknowledging that such arrangements take time, he stressed that SLI needs alternate distribution channels to increase sales.
“We teamed with SLT on a similar arrangement to offer life policies.” He said that for the motor sector the increase in exchange rate and the duty rate, etc was tough last year. “This is the reason that we are trying to identify niche markets and design policies. We designed policies for the migrant workers, which covers personal accidents.” SLI in collaboration with the Department of Motor Traffic also launched an insurance scheme “Drivers’ Protect Insurance Cover” on the 1st of this month.
He added that while the past six months saw a large motor imports, affecting their sales in the general sector. “But it’s important to retain the clientele which we are focusing on.” He said that with 22 insurers in the market, pricing will be a challenge.
Mr. De Alwis said that SLI is gearing to go public. “Before going public we need to split the company into life and general sections (as required by the Insurance Industry Act) by 2015. By 2016 we need to go public. The splitting process will start this year.” SLI also will start decentralizing operations in their regional branches. “We’re gearing to finalizing decentralization process on claims settlement.”
SLI has the largest asset base in the industry amounting to Rs. 109 billion, the largest life insurance fund of Rs. 57 billion and a strong capitalization of Rs. 6 billion.
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