‘Players should focus on innovation, product quality’
 

 Local Insurance industry :

Sanjeevi Jayasuriya

The insurance industry players should focus on innovation and better quality products and solutions to capture the potential market as Sri Lanka’s insurance industry penetration is low.

The players competing on price is not a healthy situation, Sri Lanka Insurance Managing Director, Dr. Nalaka Godahewa told Daily News Business.

The Sri Lanka Insurance Company (SLIC) was taken over by the Government in June this year with the objective to make insurance available to everybody and to make the products appealing to the masses.

The company’s marketing strategy will focus on securing people’s confidence in a Government insurance institution and to increase the level of penetration across the country, he said.

“The SLIC is having a positive outlook to meet the expectations of the customers, employees and the Government. We need to make sure that the Government gets due returns to carry out infrastructure development, providing free education and healthcare facilities. As a Government owned insurance company we have a huge social responsibility.

The vision of the President is to make insurance available to every Sri Lankan citizen. To achieve this objective, we have to make our product portfolio more affordable and at the same time improve our distribution.

We will keep this objective in mind in developing our marketing strategies. We will look for more innovative distribution channels and simplify our products to make them easy to understand.

We will also look at the possibility of introducing more national level products,” Dr. Godahewa said.

“The opportunity the SLIC has is the trust that individuals and businesses will have on us as a State-owned insurance company. We already have seen a positive trend in our business activities since the Government takeover.

The challenge is giving the confidence to the customers that despite the Government ownership we can continue to offer the best services to the customers.

Given the clear directions from the President, the SLIC should be a benchmark for the rest of the industry in terms of productivity, profitability and services, the new Board of Directors is confident that the entire organization can be aligned for better performance,” he said.

“The first six months performance of the insurance industry is probably not the best indication because country circumstances have changed since the end of the war in May 2008.

According to the IBSL’s published data, the overall performance of the insurance industry is low compared to 2008.

The three main product categories, Life, Motor and Non-motor general, there is a drop in growth rates.

During the first six months of 2009, the growth of life business has been only 1 percent compared to 13 percent in 2008.

The motor business is showing negative 5 percent growth as opposed to positive 12 percent growth in 2008. Non-motor business is showing only 4 percent growth against 12 percent growth in 2008. Since the end of the war, the situation has changed and we are noticing a clear improvement,” he said.

“We launched our first advertising campaign after the Government takeover in October 2009. In this campaign we are trying to remind the people about the benefit a customer would get by being with the SLIC.

A customer of the SLIC could enjoy best of both worlds.

On one hand, the customer gets protection from a Government owned insurance company. On the other hand, they will continue to enjoy the caring service that they are used to in the private sector.

In the advertising campaign we compared this to the protection that a family gets from the father and the love and care a family gets from the mother. This is summarized in our campaign tagline, Sri Lanka Insurance - like father, like mother he said.