The Board of Directors of AIA Insurance Lanka PLC last week announced the financial results of the Company and its subsidiaries for the year ended 31 December 2015. As announced previously, the Company decided to fully focus on realising the exciting growth opportunities in the life insurance market, and therefore divested its wholly owned subsidiary AIA General Insurance Lanka Limited on 23 October 2015.
In this context, Gross Written Premium (GWP) of the continuing operations, the main life insurance business, grew by 16 percent to Rs.8,433 million, driven by strong growth in regular premium new business. Revenue of the continuing operations grew by Rs.415 million to Rs.12,218 million, with increase in net earned premiums partially offset by unrealised investment losses in unit-linked funds due to movements in the equity market.
Profit after tax on continuing operations increased by 15 percent to Rs.303 million from Rs.263 million due to increase in interest income from fixed income investment.
Consolidated profit after tax, including operating results and realised gain from divestment of the discontinued general insurance operations, was Rs.1,491 million.
Chief Executive Officer of AIA Sri Lanka Shah Rouf said: “The year was a key milestone in our Company’s journey as we implemented our strategic decision to fully focus on realising the exciting opportunities in the life insurance market, one in which we recorded significant growth. I am particularly pleased to say that growth came from meeting customer needs through new products as well as improving our distribution reach and capabilities in both our Agency and Bancassurance channels.”
Brisk bancassurance growth may take time: AIA CEO
AIA Sri Lanka CEO Shah Rouf speaking at the Fintelekt-LIMRA Insurance Summit 2016 last week provided a thoughtful perspective on the region’s market journey and how AIA’s unparalleled experience across Asia provides an insight to what the Sri Lankan industry and most importantly policyholders can expect.
“Asia is being shaped by growth in population and rapid urbanization. Increased disposable incomes bringing households new spending power, combined with low social welfare and a substantial protection gap, means Sri Lankans like all Asians need protection and long-term savings,” he said.
He further added: “The insurance agent would remain the main way to reach the customer with a growing contribution from other channels such as bancassurance as has been the case in other Asian markets. However, to be accepted and successful in a growing tech savvy market, the modern agent would have to demonstrate and have access to advice tools comparable to the most developed markets. The pace of bancassurance growth across Asia has strong correlations to decreasing interest rates and thus core banking margins. Hence it might be some time before bancassurance becomes a significant channel for the Life insurance industry as a whole in Sri Lanka”.