For 14 of the 30 years it has been in operation, Ceylinco Life has been the marker leader in Sri Lanka’s life insurance industry. In this interview, the company’s Managing Director/CEO Mr R. Renganathan emphasises that a steadfast focus on fundamentals, an innovative approach to market development, a high degree of engagement with customers, empathy with the community and commitment to employees are the secrets to Ceylinco Life’s “Relationship for Life.”
Excerpts:
Q: Ceylinco Life completed 30 years of operation earlier this year. In your opinion, what has been the company’s biggest contribution to the industry?
A: We have been the pioneer of many firsts over the past three decades, but overall, our biggest contribution to life insurance would be our unwavering commitment to the fundamental precept that life insurance is a “Relationship for Life.” This underpins everything we do, and has resulted in nearly a million lives being entrusted to our protection. We have shown the industry that success in life insurance is driven by the depth of the engagement with one’s policyholders, and the degree of care that a life insurance company demonstrates. This cannot be limited to slogans, but must be evident in the products, the service, and actions of the life insurer. The fact that Ceylinco Life has been the undisputed market leader in life insurance for 14 years – almost half of the company’s existence – makes us an excellent case study for others. In short, we have proved that gimmicks and short term money-making tactics have no place in life insurance.
Q: How did this all begin? “A relationship for life” must be hard to establish when a company is new?
A: While that is true, Ceylinco Life did have the advantage of being the successor to Ceylon Insurance Company, the first Sri Lankan company to be registered in 1939 under the Companies Ordinance introduced that year. We therefore inherited the legacy of a trailblazing predecessor. We commenced operations on 14th January 1988, with the concept of the “Miracle of Life Insurance” — a life insurance company mobilises the small savings of people which are then invested in the government and the private sector; the government uses this money to invest in the country’s infrastructure while the private sector uses this money to lend to businessmen to develop their businesses; both these activities generate employment thereby providing further prospects for our business.
This was only an illustration at the beginning. It is now a reality as we have seen this work over the past 30 years, and Ceylinco Life has played a major role in the economy of our country.
Q: What are some of Ceylinco Life’s “firsts” that you can recall?
A: Our three-tiered structure for the sales operation comprising of a Branch Head, Unit Head and Sales Consultants was introduced by Ceylinco Life at the inception of the company and is now a standard in the industry. We pioneered Tele underwriting, the procedure of calling the customer and confirming details before policy issuance in order to ensure accuracy of information and to avoid issues relating to non-disclosure at the point of making a claim. Ceylinco Life also gets the credit for initiatives such as Life Insurance Week and Retirement Planning Month, annual country-wide programmes that have been copied by others; Family Savari – by far the largest interactive customer promotion cum engagement in the industry; and the Pranama Scholarships programme through which we have rewarded academic and extracurricular achievements of more than 2,400 students and young Sri Lankans over the past 17 years.
Q: All of this requires substantial financial strength. Where does Ceylinco Life stand after 30 years of operation?
A: In terms of financial strength and stability, Ceylinco Life is in an unassailable position that is remarkable in the context that it has been achieved in just 30 years. In 2017, we were the most profitable life insurance company in Sri Lanka with a net profit of Rs 9.46 billion. Our Life Fund exceeded Rs 81.7 billion at the end of 2017 and is the fastest growing in the industry. Our Risk-Based Capital Adequacy Ratio is 375% of the statutory minimum Capital Requirement for the industry. This ratio measures the amount of available capital relative to the risks inherent in the company’s liabilities and the assets backing those liabilities. Our premium income for 2017 was Rs 15.7 billion, the highest in the sector. Total income, comprising of premium income and investment and other income was Rs 25.9 billion and the value of Ceylinco Life’s investment portfolio totalled Rs 92.2 billion as at 31st December 2017.
Q: How does the company’s financial strength benefit its policyholders?
A: First and foremost, it means that our policyholders can rest easy in the knowledge that their life insurance partner will always be able to fulfil its promises and obligations. In fact, Ceylinco Life has paid out nearly Rs 29 billion in claims to policyholders during the past five years alone, at an average of almost Rs 6 billion a year. On average, we settle 125 death claims and 1,540 medical claims per month. Additionally, our policyholders have received Rs 24 billion in annual bonuses over the past 10 years, and the pay-out increases annually – Rs 2.9 billion in 2015, Rs 3.8 billion in 2016 and Rs 4.4 billion in 2017. Ceylinco Life has also paid nearly Rs 600 million in cash bonuses to policyholders as a reward for loyalty, and is the only life insurer in Sri Lanka to pay such cash bonuses. Policyholders also benefit from the Family Savari promotion I already referred to. To date, more than 24,000 Ceylinco Life policyholders have enjoyed all-expenses-paid overseas tours to Singapore, China, Dubai, Paris, Germany, Japan, Switzerland, England and Rome as well as day-long visits to the Leisure World theme park. On top of all this, as I already mentioned, some 2,400 children of policyholders have received Rs 131 million in scholarships through the Pranama scholarships programme.
Q: What about the community? Does Ceylinco Life support any important causes?
A: We have always been attuned to the importance of understanding and fulfilling the pressing needs of the community. The company has an extensive portfolio of corporate social responsibility commitments that are principally focussed on health and education. One of our flagship initiatives in the sphere of health is the ‘Waidya Hamuwa’ programme under which a team of doctors and medical technicians funded by Ceylinco Life carries out a series of free medical camps in rural areas of the country. This programme has to date helped more than 138,000 people. The company has also built, equipped and donated High Dependency Units to four hospitals to date, the Colombo South Teaching Hospital, Kalubowila, the National Hospital, Colombo, the Lady Ridgeway Children’s Hospital and the Jaffna Teaching Hospital. In the sphere of education, Ceylinco Life has built 70 classrooms for rural schools to facilitate the education of children in under-served areas.
Q: An operation of such size must require a large base of employees. How has Ceylinco Life rewarded them for its success?
A: Ceylinco Life is made up of nearly 5,000 people, including permanent employees and sales officers. We have always acknowledged that our people are one of the pillars of our success, and we generously reward performance. Over the past 30 years we have seen a significant increase in income levels of our sales force, and over the past five years alone, Ceylinco Life has paid out Rs 7.5 billion in commissions to the company’s sales consultants. They have also been rewarded through numerous sales competitions which in 2017 alone presented close to Rs 50 million in cash prizes in addition to providing foreign tours to the United Kingdom, China, Dubai, Singapore, Malaysia and other countries. Ceylinco Life also emphasises the importance of professional development and provides its employees and sales consultants numerous opportunities to obtain internationally-recognised qualifications.
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