60 years in insurance, Nihal Senaratne shares some lessonsView(s):
By Jagdish Hathiramani
Any industry is bound to become unrecognisable over 60 years. In fact, it has been scarcely 30 years since the advent of the Internet, and we are now so inextricably interconnected with it that we cannot remember how we got by before.
Likewise, the Sri Lankan insurance industry has also seen remarkable changes in the past 60 years, from its early role as one of the most important regional hubs, for the British insurance industry, when over 50 principal agents had offices in then Ceylon, to nationalisation of the industry, followed by its later privatisation, the latter two events happening over just two decades.
However, it is only through a first person account of these 60 years that this journey takes on new life as a narrative, as opposed to being just history. And, with the recent diamond jubilee (60-year) celebration of the career of insurance veteran Nihal Senaratne, it seemed appropriate for the Business Times to bring to light events that, over the last 60 years, served to shape the modern Sri Lankan insurance sector.
Joining Ceylon’s insurance industry in 1953, Mr. Senaratne was at that time a 19-year old just having graduated from Colombo’s Royal College. In fact, a copy of his school record shows the Principal serving at that time writing that Mr. Senaratne’s ‘character is good’, showing a ‘spirit of cooperation’ and the ability to ‘discipline himself’. These sentiments were frequently echoed by others over the course of his insurance career to date.
Recalling his first job in insurance with British- based principal agent Bosanquet & Skrine Ltd., later taken over by plantations manager Whittals, Mr. Senaratne notes that even the interview process for jobs has drastically changed over the years. At the time, he was interviewed by a panel of no less than six directors of the company for the post of Trainee Assistant Manager.
He also remembers his excitement when he got the job, which was mainly due to it involving training in England. Nonetheless, while his trip to England was delayed for a few months, he was advised by his superior at the time to enroll in the Chartered Institute of Insurance qualification programme. This, according to Mr. Senaratne, started his fascination with insurance, what would, to him, become a diverse and challenging field which would require a lifetime of learning on his part. In fact, it was his first stage of his Chartered Institute of Insurance qualification, which he found out he had passed during his long sea voyage to England, which helped him the most during his two year stint at the Royal / Globe head office in Liverpool, England.
If Mr. Senaratne’s love for insurance was sparked during his initial foray into the field, his tenure at the vast Royal / Globe offices cemented this sentiment. Here, he was exposed to many different aspects and areas of the insurance discipline and, thanks to his preliminary Chartered Insurance Broker training; he was in a better position to meet the goals of his apprenticeship. As such, to this day, his advice to professionals in the local insurance industry is to take advantage of the opportunities afforded by their employers and enroll in professional insurance qualifications, first the local qualifications followed by the Chartered Insurance Institute programmes at a later date.
Returning to the then Ceylon in 1956, Mr. Senaratne carried with him the added distinctions of having completed his Chartered Insurance Broker qualification and being elected as an Associate of the Chartered Insurance Institute. At this point, he also returned to work at Bosanquet & Skrine Ltd., resisting the lure of finding a job in England, and instead returning to his motherland. But, most important, he also brought to the table a great deal more experience having worked with a number of international product portfolios while in Liverpool.
And in insurance he stayed. It was only when the local insurance industry was nationalised in the mid-1960s that Mr. Senaratne departed his insurance roots, working in plantation management for a time. However, he eventually returned to his beloved insurance sector and started his own enterprise, Senaratne Associates, in 1979.
Having become an increasingly prominent, veteran insurance professional, it fell to a committee he chaired, the insurance advisory committee of the Ceylon Chamber of Commerce, to actively lobby the government to privatise the insurance industry once again. And despite much opposition, this was accomplished in the mid-1980s.
Commenting on the circumstances surrounding the nationalisation and, subsequent, de-nationalisation of the local insurance field, he said that, prior to 1964; there were over 50 principal agents of British companies operating in Sri Lanka, which were all foreign except for two local companies. The government of the day felt that nationalising this industry would stop money exiting the country and turn the profits inwards, towards development. Another reason was also to increase local life insurance penetration. However, he added that this only served to create, first, a monopoly and, then, an oligopoly, which ultimately drove down service quality.
Continuing, Mr. Senaratne also noted that it was following the unrest of 1983 that the insurance industry really stepped up its privatisation initiative. When reinsurers refused to pay, citing the cause for the unrest as terrorism, which was not covered, instead of riot, which was, it was the local insurance industry that negotiated with the reinsurers and got them to settle claims. Interestingly, legal counsel for the chamber’s insurance advisory team went so far as to cite case law indicating interest could be charged on delayed settlement of claims.
Further, Mr. Senaratne noted that, following this successful negotiation with reinsurers, support was put together to de-nationalise the local industry. Eventually a number of government bureaucrats and politicians were convinced to part with the significant power they held, all for the betterment of consumers.
Concluding his trip down memory lane, Mr. Senaratne had an important piece of advice for today’s insurance industry leaders. Recalling that, following the unrest of 1983, the government created a strike, riot and terrorism fund, he recommended a similar fund be opened today with the aim to alleviate the suffering of flood victims. This was one disaster, he opined, which would likely continue, and even grow, in the future.
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