Ceylinco Life retained its position as the market leader in Sri Lanka’s life insurance industry in 2014, posting yet another strong performance despite challenging conditions. In this interview, the company’s Managing Director/CEO Rajkumar Renganathan elaborates on this performance, as well as the benefits that accrue to multiple communities from the company’s success.
QHow did Ceylinco Life fare in 2014 in terms of business performance?
Our performance in 2014 met our expectations, which means that we retained our position as the market leader for the 11th consecutive year. Total income for the year ending 31st December 2014 was Rs.18.54 billion. Of this, premium income amounted to Rs.11.7 billion, and investment income was Rs.6.83 billion.
QDoes this performance reflect an improvement in the conditions for life insurance?
On the contrary, selling life insurance continues to be challenging. Disposable incomes were under pressure, despite indications that inflation is on the decline. This factor, combined with inadequate awareness in the market about the value of life insurance, results in a situation where many people consider life insurance a low priority, and it takes a determined and professional approach to convince the uninsured to buy a policy.
QTo what then, do you attribute Ceylinco Life’s successful performance?
I believe it is our unwavering focus on business fundamentals and prudent investment strategies that have enabled the company to post an impressive performance year on year. We do not allow ourselves to be distracted by challenges or extraneous matters. We ensure that nothing derails our program of work, including our commitments to the community. This was evident even in times of crisis for the Ceylinco Group, and our policyholders know that Ceylinco Life emerged stronger with each challenge it faced. Our 2014 results are an irrefutable indication that Ceylinco Life continues to enjoy the trust and confidence of policyholders and prospective customers.
QHow does the company’s continued success benefit the community?
Our success and growth impacts many different segments. Our policyholders are the most important of these. It is their monies that we invest in order to be able to offer them and their loved ones the long-term protection of life insurance. Therefore, our success means that they can rest easy, and that they receive bonuses and numerous other benefits. Another important segment is our staff and sales team.
We employ about 4,000 people in sales. Our success means that they contribute productively to the economy. Our shareholders are another obviously important segment that benefits from our success. Another important segment consists of the different sectors of the economy that we invest our funds in. And finally, the community at large benefits from our extensive portfolio of CSR initiatives, particularly in the area of schools infrastructure and healthcare, which would not be possible if the company was not successful.
QCould you quantify in some way, the benefits to these segments in financial terms?
Benefits to policyholders, in the form of bonuses, claims, maturity and other benefits exceeded Rs.4,800 million in 2014 alone. Commissions to the sales force totalled Rs.1.3 billion for the year. Our community projects such as the donation of classroom buildings to schools, the donation of ICU facilities to hospitals and the free medical camps island-wide represent a commitment of about Rs.16 million in 2014. The dividend pay out to shareholders in respect of 2014 amounted to Rs.528 million, in addition to the capital gains shareholders enjoy from a share that is currently trading in the region of Rs.1,600.
Our investment portfolio stood at Rs.57.2 billion at the end of 2014. And in terms of rewards to policyholders we presented scholarships worth more than Rs.8 million to their children, organized a Family Savari promotion that presented overseas holidays and a local excursion to more than 2,200 people from policyholder families.
QWhat sectors of the economy has Ceylinco Life invested in?
At the end of 2014, Ceylinco Life’s investment portfolio comprised of Government Securities (50 percent); Licensed Private Banks (15 percent); State Banks (9 percent); Real Estate (9 percent); Corporate Debt (14 percent) and Others (3 percent). These investments are made in conformity with the investment guidelines stipulated under the Regulation of the Insurance Industry Act No. 43 of 2000 and are subject to regular monitoring by the Insurance Board of Sri Lanka (IBSL).
QIn terms of new business, how did Ceylinco Life perform in 2014?
We sold a total of 139,777 new policies in 2014 at an average of 11,648 per month. One noteworthy aspect was the improved sales of retirement plans which contributed to the growth in premium income. This is encouraging because there is a need to promote pension plans in Sri Lanka, given the ageing population and the absence of social security for retired people.