Life fund grows 20.3% to Rs 25.6 billion; premium income tops Rs 7.5 billion
Ceylinco Life retained its position as the market leader in Sri Lanka’s long term insurance sector in 2009, with Gross Written Premium exceeding Rs 7.5 billion.
Releasing its unaudited figures for the 12 months ending 31st December, the company said its Life Fund grew 20.3 per cent to Rs 25.6 billion, an increase of Rs 4,321 million during the year, while Investment Income grew 28.4 per cent to Rs 3,350 million.
The company sold more than 159,000 new life policies in the year reviewed at an average of 13,250 per month, despite the adverse socioeconomic environment, and paid Rs 2,756 million in customer benefits (up 24.8 per cent), inclusive of Rs 485 million paid as claims, all positive indicators of growth and financial strength.
“Our performance in what was undoubtedly the most difficult year in the company’s history is most encouraging and illuminating,” Ceylinco Life Deputy Chairman R. Renganathan said. “Adversity is the best test of a company’s mettle, and our figures show that we have ended the year with flying colours.”
He said the company’s solvency margin, another key indicator of financial health, had improved further in the year under review, and stood at six times the statutory requirement as at 30th November 2009.
Identifying shrinking disposable incomes in target customer segments as one of the challenges to the growth of insurance, Mr. Renganathan said the company had responded by developing innovative products that made insurance more affordable and invested in initiatives to improve awareness of the need for life insurance.
A key feature of the company’s performance in 2009, he said, was the fact that Ceylinco Life had not scaled down on any of its customer benefits and community programmes during the year. “Insurance is about promises, and Ceylinco Life fulfilled its promises,” Mr. Renganathan said.
The company had focused on enhancing efficiency and becoming leaner in the face of testing market conditions, and had reduced its expenses on staff, administration, selling and finance by a noteworthy 19.1 per cent, he disclosed.
Investments had grown 20 per cent to Rs 23.3 billion in the year reviewed, while total assets increased 19.5 per cent to Rs 29.9 billion.
Investments pertaining to the Life Fund are made in conformity with the investment guidelines stipulated under the Regulation of the Insurance Industry Act No 43 of 2000. These investments are subject to regular monitoring by the Insurance Board of Sri Lanka (IBSL).
Ceylinco Life’s investment portfolio at the end of 2009 comprised of Government Securities (38 per cent); Licensed Private Banks (15 per cent); State Banks (21 per cent); Real Estate (14 per cent); Corporate Debt (6 per cent) and Others (6 per cent).
“Overall, our performance in 2009 provides a solid platform for growth, although premium income declined marginally as expected during the year. The fact that the company maintained a substantial lead over the competition despite this decline, is the best indicator of our potential,” Mr. Renganathan added.
One of the highlights of the year was the recognition Ceylinco Life received on the global stage for brand excellence when the company was presented with the Overall Brand Leadership Award at the 2009 Global Awards of the World Brand Congress. The company also won the Bronze award in the Service Brand of the Year category at the Brand Excellence Awards of the Sri Lanka Institute of Marketing (SLIM).
Ceylinco Life has more than 750,000 lives covered by active policies. According to the 2008 annual report of the Insurance Board of Sri Lanka, the company’s share of the local life insurance market at the end of that year, was nearly 35 per cent.