INSURANCE SECTOR
Compiled by Yamini Sequeira
SETTING BENCHMARKS
Sasith Bambaradeniya highlights the role of bancassurance and hybrid models
Q: How would you describe the state of Sri Lanka’s insurance sector and its evolution over the past few years?
A: The insurance sector is undergoing a meaningful transformation. While growth has been steady, the real shift lies in how insurers are rethinking innovative distribution and customer engagement.
One of the most impactful models gaining traction is bancassurance. It’s proving to be a powerful channel – not only for expanding reach but also for deepening financial inclusion. By collaborating with trusted banking institutions that possess farreaching infrastructure, insurers can access broader customer bases, tap into emerging segments and gain deeper insights into evolving customer needs.
This synergy between banks and insurers is more than transactional; it’s strategic. It strengthens the financial sector by integrating protection solutions into everyday banking experiences, making insurance more accessible and relevant.
Insurance sector leaders are investing heavily in this model, aligning with global best practices while tailoring them to cater to local market dynamics.
It’s refreshing to witness insurers with global exposure setting benchmarks by focussing on long-term protection and wellness, supported by exclusive bancassurance partnerships. Their approach moves beyond traditional insurance, shifting from product push to purpose driven engagement.
As digital adoption accelerates and customer expectations evolve, bancassurance – combined with a superior agency model and hybrid distribution strategies – will be key to shaping the next phase of growth in insurance.
Q: How do you view the ongoing economic recovery influencing insurance demand, especially in the life and health segments?
A: Sri Lanka’s economic recovery is gradually restoring consumer confidence, and beginning to reflect in growing demand for life and health insurance. As disposable incomes improve, more individuals are prioritising long-term financial protection and access to healthcare.
A key driver in the health segment is inflation driven by rising costs, and the increasing quality and sophistication of medical technology and services. While this enhances overall care, it also makes healthcare more expensive, prompting more people to seek insurance as a buffer against unforeseen medical expenses.
This shift presents an opportunity for insurers to move beyond traditional coverage.
A proactive approach is essential to engage customers in wellness initiatives, preventive care and digital health solutions that promote healthier lifestyles – helping people live healthier, longer and better lives – while also managing claims more sustainably.
Life insurance is likewise gaining traction as families seek financial security, stability and effective savings tools during uncertain times. Overall, the recovery is both economic and behavioural with insurance increasingly being seen as a vital part of personal, financial and mental wellbeing.
Q: What new insurance products or customisations are being introduced in response to evolving customer needs?
A: The insurance sector is gradually responding to evolving customer needs with more targeted and holistic propositions.
With an ageing population and the rise in professionals – especially in the private sector – there is growing demand for retirement focussed life insurance solutions. Indeed, there’s a clear absence of a structured national level mechanism to help individuals plan for their retirement income.
These products aim to provide income security and financial independence in later years, coupled with health and protection benefits.
In the health segment, the rise in non-communicable diseases (NCDs) has made critical illness covers increasingly relevant. Customers are seeking protection not merely for hospitalisation but also for long-term recovery and the impact of illness on their lifestyles.
However, beyond products the transformation should be about building meaningful ecosystems and engagement platforms. Insurers should move towards integrated wellness platforms that promote proactive health management.
These may include digital tools, preventive care programmes and lifestyle coaching, to help customers live healthier, longer and better lives – and reducing the likelihood of illness and improving overall wellbeing.
This approach reflects a broader transformation at both the micro and macro levels, shifting from reactive insurance cover to proactive engagement.
Q: How is the sector addressing the protection gap, especially among informal sector workers and low income groups?
A: The insurance sector is still at a nascent stage when it comes to addressing the protection gap, particularly among informal sector workers and low income groups.
To accelerate this process, insurers can introduce low ticket segment specific programmes that offer affordable coverage tailored to the realities of these communities.
Pre-underwritten propositions and affinity based solutions can also simplify access, and build trust. Additionally, bancassurance partnerships can help expand reach to rural and semi-rural areas, by leveraging the credibility and infrastructure of banks.
But to truly close the gap, new distribution channels have to be developed, and national agency and strategic partnership models must evolve. These models should be guided by a strong vision to insure more lives while empowering individuals to become more progressive and financially resilient through a ‘partnership for life’ approach.
Importantly, every insurer has a national responsibility to contribute to this mission. It isn’t only about selling policies but about building inclusive ecosystems that promote proactive health, financial literacy and long-term wellbeing.
