Old GA system much better for grassroots

Hiran H.Senewiratne

The future of industry is going to be tough with the introduction of the Capital Adequacy Ratio by the Insurance Board of Sri Lanka (IBSL), because, new and prospective players to the industry will have to invest heavily to enter the sector. By 2010 the Capital Adequacy Ratio is Rs. 500 million for each sector of insurance. By 2012, it would be Rs. one billion, which is Rs 500 million for each sector.

Sri Lanka should go back to old Village Committee (VC) and the Government Agent systems to resolve grass root level problems at regional level, Managing Director ABC Insurance Company Limited Vinnie Gunaratne said.

He said most of the problems in the country at village level have not been addressed due to the absence of a proper mechanism in the country. When the VC system was prevailing in Sri Lanka, most of the grassroot level problems were addressed at village level.

Gunaratne said the old GA system needs to be introduced which was also an efficient system during the past. If these systems are established most of the basic economic problems could be resolved, he said.

“If we address all these problems, we could achieve a rapid economic growth in the country, because, every Sri Lankan should be free from economic hardships in the country. Therefore, by addressing small issues it will be helpful to achieve all goals, he said.

Q: The insurance industry is very competitive and a few established insurance companies dominating the sector. As a young company, how would you rate ABC Insurance?.

Our company is now more than three years old and is growing well slowly but steadily. Now we are in the break-even point now. We are a composite insurance with life and general both.

Our vision statement indicates that we want to be trend- setters for the insurance industry and how we want others to emulate the company.

We being the newest innovative insurance company, we have portrayed stability and innovativeness. We also want to be a company, which is recognised as having an innate drive to seek new ways to enhance customer well being while creating an entrepreneurial and friendly working environment.

We also stress on the fact that the solutions we provide to our clients are to be optimal and at the same time sustainable.

Q: What do you think of the future of the insurance sector?

I think the future of industry is going to be tough with the introduction of the Capital Adequacy Ratio by the Insurance Board of Sri Lanka (IBSL), because, new and prospective players to the industry will have to invest heavily to enter the sector.

By 2010 the Capital Adequacy Ratio is Rs. 500 million for each sector of insurance. By 2012, it would be Rs. one billion, which is Rs 500 million for each sector. Therefore, it will be tough market in time to come. We have 20 branches islandwide covering the country except Jaffna. Our life insurance sector is doing well which we are offering a brilliant product with attractive features. Our general insurance sector is also doing well.

To face future challenges, we have invested Rs. 380 million. The General insurance sector is our concern. It is very competitive and in the life insurance we are quite happy with its performance.

Q: As a decision-maker in a leading company how would you advice the decision-makers in the country?

Every year, we all discuss matters but noting is practically happening. The reason being that our implementation part is very poor.

To get down any work one has to go before politicians which is a seasoned culture in Sri Lanka, one of the reasons that we don’t have a clear and consistent policy or national policy. Where the ethnic issue is concerned we have to go into the root of the problem to find concrete solutions for it. We also have to have a strong leadership above party politics to move the country’s economy forward.

When we consider the implementation part it changes when political parties change. Corruption is also rampant and there is no law and order in the country. Therefore, we have to establish the rule of law to address many issues.

Q: How would the world financial crisis impact the insurance sector?

The insurance industry thrives when there is a growth in the economy. In another five to six months time we might feel the impact from the financial crisis. At present the tea industry is affected.

Therefore exports will come down and the marine insurance sector may lose in the future. If the global financial crisis continues it will impact on all industries not only in Sri Lanka but also in the whole world.

Q: How would high interest rates, inflation and currency fluctuations impact the insurance industry?

When there is a currency fluctuation, it impacts on the re-insurance sector. But high interest rates will help the life insurance industry not the general industry.

Q: Since you travel overseas and worked in many countries how would you see the culture in Sri Lanka when compared to other countries?

I worked in many countries including Papua New Guinea and many Middle Eastern countries. I have noticed that those countries are doing well because they train them from school itself. Those people are well deciplined. In Japan for instance they teach the Japanese 5 S model at school level.

I have travelled to a many European Union countries where I have noticed people are law abiding and respect people.

Q: What is your philosophy in life?

Hard work and smart working and also be flexible to each and every person who is working under me. I do a lot of charity work and is involved in a lot of religious activities, which rewards my life spiritually.

Q: What is your retirement plan in the future?

I am looking for a peaceful retirement without working much. I want to get involved in charitable work and also like to travel overseas.

Profile

Name - Vinnie Gunaratne

School attended - St. Benedict’s College, Colombo

Education - Academic - Bachelor of Science (Management)

Professional - Institute of Chartered Accountants - Intermediate Level

Civil Status - Married, has a son

Other involvements - Director of the ABC subsidiary companies.