Lasitha Wimalaratne

How the successive vicissitudes of life are making the uninsured vulnerable

Progress of the insurance sector
Both the life and general insurance sectors have seen growth despite the recent sociopolitical and economic upheavals.

The road ahead
Keeping the sectors growing even as people become more receptive to the concept of insurance and the value it provides in empowering one’s lifestyle.

Core strengths of the sector
Its asset base and the data therein.

Importance of insurance in an economic recovery
After being hit by the economic crisis, it has become extremely difficult for households and businesses to revive, if and when some unforeseen event takes place.

How to bounce back
Providing financial protection to people becomes necessary so that they can promptly bounce back.

Sectoral economic contribution
Cumulative insurance sector premiums stood at around 1.4 percent of GDP in 2021.

Strength of the workforce
There are approximately 65,000 people directly engaged in the sector as permanent staff and agents.

Asset base
Total assets stood at around Rs. 888 billion at the end of 2021 after paying out almost 95 billion rupees in claims during the year.

Obstacles to growth
Contraction of the economy, reduced disposable incomes and the new tax regime.

Like the silver lining skirting every dark cloud, COVID-19 instilled in most people a sense of appreciation for the value of and need for insurance.

Heightened competition among players driving business acquisition costs upwards.

Evolving consumer behaviour patterns
They’re becoming more accustomed to adopting digital channels of transaction.

Sector trends
Insurance is adopting technology such as AI and robotics, as well as big data and blockchain, to enhance its processes and improve efficiency.

New vistas
More partnerships with both banks and non-banking financial institutions (NBFIs).

The pursuit of penetration
Certain players have also embarked on partnerships with telcos to enable mass insurance penetration.

Impact of digitalisation
Sector players have readily adopted digitalisation as it enables greater efficiencies, and provides a better and more convenient service experience.

Ensuing benefits
Digitalisation will help the sector drive down costs.

Digital security in business insurance
As technology improves and becomes more sophisticated, so does the potency of the tools used by malicious elements.

Investing in security
As much as the focus is placed on setting up and maintaining the necessary security infrastructure, enterprises would be prudent to invest wisely.

Sources of cyber security
In products such as cyber insurance, in case all else fails.

Impact of the economic crisis on the insurance sector
In the context of the top line, a reduction in disposable incomes and contraction of the economy are affecting long-term insurance.

Impediments to growth in general insurance
The imposition of import restrictions has had a profound impact on all categories of general insurance.

Cost perspectives
There has been a considerable increase in costs, affecting both claims and expense ratios.

Sector projections
A slightly improved growth trajectory for the combined operating ratio (COR) by the end of this year.

Areas for improvement by insurance professionals
They need to be adequately qualified, and able to communicate policy terms and conditions efficiently to customers.

Gains from professionalism
This would avert misunderstanding and many inconveniences.

Qualities needed to pursue an insurance career
Honesty, integrity, a sense of caring and an analytical mind.

Competition drives innovation…?
Yes, by pushing players to be at least abreast – if not ahead – of others in the sector.

Insurance sector in five years’ time
A tech driven personalised sector that enables both self and in-person service.

The future of insurance agents
One cannot disengage an agent from the sales process – this has not been possible in developed markets either.

The digital perspective
Customers will want to be able to transact with the business concern occasionally, using apps and other digital interventions.

Mantra for success
Work smart, think big and do what is right by all.

Compiled by Dona Senara

Lasitha Wimalaratne is the Chief Executive Officer of HNB Assurance.