Insurance regulator calls service providers to up their game in innovation department

Sri Lanka’s insurance regulator yesterday called on service providers to up their game in the innovation space across diverse facets of the industry to help increase penetration rate that has remained at almost stagnant levels in recent times. Stressing the need to improve insurance services to the public, Insurance Board of Sri Lanka (IBSL) Chairperson Indrani Sugathadasa urged the industry players to revamp service delivery avenues.

“We know that the business cannot overlook innovation and that should be supported. Otherwise the outcome will be rather negative. The business is complex and to progress the industry players are required to invest considerably to understand the business while taking into account the selling complexity,” said Sugathadasa yesterday, while addressing the industry at the inaugural edition of the General Insurance Sales Congress (GISCO) held under the theme ‘Growth through Innovation’. With insurance yet to be recognised as a risk mitigation tool by majority of the population, she asserted that the low penetration of approximately 1.2 percent is mainly due to lack of consumer awareness and trust on the product, which in turn continues to derail the industry.

According to the insurance board chief, the low penetration indicates there is a disconnect between the consumer and the service providers. “There is a need to bridge this gap and this is the role of the sales force. It is necessary to continue to enhance the skills and professional standards of the sales force for the sustained growth of the industry,” she told industry players. Pointing out general insurance is heavily reliant on motor insurance, which accounts for 60 percent of the business, she asserted it is time to focus on other classes to achieve the desired growth rate. While it may look like it is only the local sector that is struggling to achieve fast paced growth, insurance expert Dr. Christian Bartsch of Munich Re pointed out that on a global scale, the insurance industry is under pressure. “Sri Lanka is lucky to have a double digit growth rate. On a global scale the industry is faced with fierce completion, diminishing premiums, and is confronted with low interest environment, all which exerts a lot of pressure,” noted Bartsch at the congress. Reduced consumer loyalty is another upcoming challenge which according to him requires innovating measures to ensure maximum retention. (SAA)