CEYLINCO LIFE
Q: What is the role of the investment function in a life insurance company?
A: The investment function in a life insurance company plays a pivotal role as both steward and enabler of policyholder promises. Since life insurance is a long-term commitment with an uncertain but inevitable payout, investments must generate steady, sustainable returns while ensuring liquidity to meet obligations at any time.
At Ceylinco Life, this function transforms premium inflows into enduring value – delivering policyholder benefits, de-risking their ambitions and safeguarding peace of mind. In essence, it is the engine that sustains promises while building wealth and long-term security.
Q: Why is investment management central to product design and pricing, revenue generation and profitability, as well as managing risks and ensuring capital adequacy?
A: Investment management is central to the long-term sustainability of a life insurer as it influences product economics, financial performance and capital adequacy – three pillars that determine the ability to honour policyholder promises.
Pricing relies on projecting future investment yields as these returns directly affect the affordability and competitiveness of benefits. Prudent yield assumptions enable insurers to offer attractive yet affordable solutions that create long-term value.
Investment income forms a major share of life insurers’ revenue. A disciplined strategy generates stable, sustainable earnings – enhancing policyholder benefits while delivering returns to shareholders.
Investment strategy shapes the company’s risk profile and regulatory capital adequacy. A diligent approach ensures that risks are well managed, the Capital Adequacy Ratio is maintained comfortably above regulatory thresholds and capital is deployed efficiently while preserving stability.
Q: How does your investment strategy create value for policyholders, shareholders and other stakeholders?
A: Ceylinco Life’s investment strategy is built on prudence, probity and a steadfast focus on long-term value creation for policyholders, shareholders and other stakeholders.
The Life Fund, which stood at Rs. 194 billion as of 30 June, is regarded as a safe haven by our policyholders. Over 92 percent is invested in fixed income securities of high quality including government securities, term deposits and debentures of leading licensed commercial banks.
And the remainder is allocated mostly towards real estate, which provides a hedge against inflation and a select pool of strategic investments. Exposure to volatile asset classes such as equities is kept minimal, following a strict screening process.
This disciplined approach ensures stable and sustainable returns to policyholders – even amid market volatility – while enhancing earnings, strengthening capital adequacy and improving return on equity for shareholders.
Ceylinco Life goes beyond regulatory requirements by adopting global best practices and maintaining a transparent governance framework with strategic direction from the Board, oversight from the Board Investment Committee and continuous monitoring by the Operational Investment Committee.
Q: How does Ceylinco Life’s investment philosophy and strategy stand apart from those of other insurers?
A: In the words of our Managing Director: “We are not the best because we are the biggest. We are the biggest because we are the best.”
Ceylinco Life has been the market leader in life insurance for 21 consecutive years – not by chance but through an uncompromising commitment to excellence across every aspect of our business including investment management.
The cornerstone of our investment philosophy is the investment committee led by our Chairman with guidance from our senior leadership and an external consultant. With members representing investments, actuarial finance, risk management and compliance, the committee brings together more than 360 years of collective expertise. To further strengthen our views, we also engage independent macroeconomic research.
All funds are managed entirely in-house – reflecting our confidence in the capabilities, professionalism and proven track record of our investment team built over three decades.
While many committees meet monthly or quarterly, ours convenes weekly, ensuring proactive oversight and responsiveness to dynamic global and local market developments.
Our governance framework spans three tiers: Operational Investment Committee, Board Investment Committee and Board of Directors. We leverage a dedicated Bloomberg terminal for real-time market insights, entrust portfolio custody to an independent custodian bank and were the first corporate in Sri Lanka to fully automate custody transactions in 2019.
Additionally, we maintain strict segregation of front, middle and back office functions, backed by dedicated risk management and rigorous audit practices.
This disciplined, forward-looking approach sets Ceylinco Life apart in the industry.
Q: How do you see the economy and markets evolving, and how is Ceylinco Life prepared to face the challenges ahead?
A: Over the past decade, financial markets have faced repeated headwinds, highlighting a new normal where rare but severe events occur more frequently. Ceylinco Life’s prudent investment strategy has consistently proven its resilience during such periods.
Today, Sri Lanka enters a promising phase with complementary monetary and fiscal policies fostering growth, investor confidence and prospects for sovereign rating upgrades. While challenges will inevitably evolve, our commitment remains unchanged: to uphold a diligent, prudent, investment philosophy that safeguards policyholder interests and de-risks their ambitions while fulfilling the promises we made.
– Compiled by Indrajit Lankeshwara
COMPANY DETAILS
Telephone 2461461 | Email care@ceylife.lk | Website www.ceylincolife.com
