Sri Lanka is facing plummeting disposable income levels due to the prevailing economic crisis and the insurance sector seems to be taking a hit as a result.

“When people struggle to meet their day-to-day essential needs, they try to prioritise those ahead of any other payments they have to make. And unfortunately, insurance premiums are among the payments that people put on the back burner,” said Managing Director of Amana Takaful Insurance Hassan Kassim, on a recent LMDtv interview.

Even pre-crisis, the situation was not too rosy for the local insurance sector with the country recording meagre penetration rates compared to others in the region. Kassim attributes this to several factors including a lack of sophistication in the product portfolio.

“Even within the region, you see countries like India, Malaysia and Singapore being far ahead in terms of product sophistication and innovation,” he asserted.

Kassim noted that “the insurance sector needs to start customising policies to consumers’ specific needs; we can’t continue with this one-size-fits-all approach. We have no choice but to offer them what they want or else they’ll look elsewhere.”

In addition to product innovation, he cited the need for innovation in the insurance process – especially the customer journey. “We [as a sector] should look at how we could uplift the entire customer experience as that is going to be a crucial aspect in the coming years,” he stated.

When it comes to increasing insurance penetration, there’s also a need to change customer perceptions. Kassim highlighted the importance of customer interaction and the need to make people feel important when they make a claim: “Customers are at their most vulnerable and we have to provide an experience that makes them feel as comfortable as possible.”

He stressed the need to educate customers so that they “understand the benefits of insurance and how it can impact them in their times of need.”

“By looking at the current penetration rates in the country and the large gap in the number of people who are insured versus those who aren’t, you can say that this message hasn’t really come across,” he observed.

Working in tandem with the government is another area that Kassim deems important. He explained: “We see in other countries that governments or regulators have made it mandatory to have certain types of insurance.”

Offering examples, he continued: “For instance, in countries like the UAE, no employer can employ someone without him or her being covered under a medical insurance scheme. We see it over here as well in terms of the third party insurance requirement for motor vehicles.”

According to Kassim, another area of significance is insurance ethics. “If insurers don’t keep ethics at the heart of everything they do, the entire system will crumble,” he cautioned, emphasising that insurance is about taking care of people’s lives.

“However, ethics works both ways – while insurance companies need to act ethically, consumers too must act in good faith,” he explained, noting that “it takes two to tango so while insurers must keep ethics at the heart of their products, consumers should be cognisant of the fact that they also need to act well.”

While congratulating LMD on its Refresh Sri Lanka campaign, and commending it for the awareness created in combatting bribery and corruption, Kassim emphasised the importance of civic-mindedness in the sphere of insurance.

He elaborated: “What insurance companies are supposed to do is protect individuals, communities and corporates – especially in their time of need. So it’s almost like civic duty is part of what we do. Our fate is integrally tied to a well-functioning and law-abiding society.”

“So firstly, civic-mindedness is at the heart of insurance principles. And secondly, our fate is tied to it so we have no choice but to act in a manner that promotes civic-mindedness,” Kassim concluded.