On LMDtv recently, the Director Legal and Operations of AIA Insurance Chathuri Munaweera explained how the insurance sector has performed: “I do believe the sector as a whole has performed very well, collecting more than Rs. 200 billion in premiums in 2020. The value of assets specific to my forte – life insurance – is estimated to be over 700 billion rupees.”

Revenue from premiums has grown by 16 and 21 percent in 2020 and 2021 respectively, she noted: “These are pretty impressive performance figures – especially against the backdrop of the challenging external environment we are faced with – and it goes to show that the insurance sector is an important constituent of the country’s economy.”

“I think it would be correct to say that the challenges during this period, particularly with COVID-19, gave the impetus that was long needed for the insurance sector to rethink its operating model. The traditional face-to-face sales conversions, physical and paperbased communication methods and customer service models we had adopted were no longer possible,” Munaweera noted.

She elaborated: “Introducing digital tools and platforms, and personalising our reach to customers, were hot priorities. We still have a long way to go as a sector but I believe most insurers were quite quick to embrace the changes that were necessary.”

Airing her views on the most relevant laws that insurers need to stay abreast of in supporting ‘Digital Sri Lanka,’ she explained that “the Electronic Transactions Act, which has brought in significant changes to digitally enable the sector, and the Personal Data Protection Act – which has been approved in parliament – are the key legislations to be studied.”

Providing further context, she emphasised: “Insurers had no choice but to enhance the customer experience through digital transformation initiatives. At AIA, we had already recognised these trends and invested in infrastructure to digitalise, automate, use artificial intelligence and transform the entire customer journey with us from end to end.”

“In my experience at AIA, it helped us with fraud detection and control because there was a good digital footprint of all activities – having a legal framework already in place really helped insurers to accelerate their digital adoption throughout all touchpoints of the value chain with the onset of COVID-19,” Munaweera explained.

She continued: “The other important piece of legislation – the Personal Data Protection Act – has stopped organisations from wrongfully monetising personal data without customers’ consent as insurers do hold a lot of private and confidential information. Therefore, this act is essential to make sure that the right protection is available for us to make this digital transformation.”

Discussing insurance penetration in Sri Lanka, she acknowledged that “levels are low here; they’re measured through what we call the gross reading premiums collected as a percentage of the country’s GDP. In 2020, total penetration was around 1.4 percent for all forms of insurance collectively. This data is publicly available, and our percentages are well below those of our Asian counterparts.”

“Consequently, there is immense potential out there for us to explore and penetrate. However, we must understand the various socioeconomic forces that have led to low penetration levels in order to improve them. In fact, promoting and understanding women and the insurance market in Sri Lanka is something AIA is particularly focussed on,” she enthused.

Finally, on policies and procedures in place to ensure preparedness, and resilience to crises and systemic shocks, Munaweera concluded: “We have always maintained a solid governance structure. AIA maintains high capital adequacy ratios – our solvency capital is 4.5 times more than the required regulatory minimum – and policy owners are well protected on the obligations that we have taken on for them.”