When people are hit with an economic crisis, they’re forced to rethink their priorities and products such as insurance are often pushed to the background.

“Sri Lanka is a resilient nation – nothing puts us down; and the same applies to the life insurance sector,” the Non-Executive Chairman of Arpico Insurance Ramal Jasinghe explained, in a recent LMDtv interview.

He noted that despite the economic crisis and spending power of individuals declining, insurance companies have survived – and in most cases, they have done well.

Jasinghe elaborated: “Given the compounded problems that we’ve faced economically, we will see a decline in insurance penetration; but if you look at the annual reports [of insurance companies] from last year in the post-COVID period, we’ve done well.”

“There’s excitement in the insurance sector. People have done well and this is a good springboard for better things to come,” he added. Nevertheless, Jasinghe noted that a lack of insurance awareness and education in Sri Lanka results in different perceptions of what insurance is… for better or worse.

He observed: “For the longest time, life insurance has been viewed as an investment whereas my take is there are other instruments that you can use as investments.”

Even though there is an investment element in life insurance, Jasinghe explained that it’s not the primary reason to obtain such a policy. He stressed that a life insurance policy provides protection – especially now, with health insurance products flooding the market.

He stated: “Both life and health are intertwined very closely, and the concept on people’s minds should be about obtaining a health insurance policy through life cover – i.e. where your life is protected and at the same time, medical requirements are met.”

Adding to this, he pointed out that life insurance companies have “come very aggressively into the medical insurance field” and “contributed to the growth of life insurance.”

Regarding the future of the insurance sector, Jasinghe expressed faith in Gen Z consumers but noted that they’re very different to other generations.

He elaborated: “Gen Z is a very informal and information driven generation. You cannot sell insurance to Gen Z with the conventional agency driven method. In addition, conventional products will not hold so you have to change.”

“One suggestion is to offer quick and instant products,” he recommended, noting that strenuous and drawn-out insurance underwriting processes will not be attractive to the younger generation.

Jasinghe described another characteristic of the demographic: “Gen Z is financially independent and very protective [of their earnings] because it’s hard-earned money. So the insurance sector and companies should be aware of this – and be open to their needs.”

He observed that unlike previous generations, Generation Z doesn’t “depend on a salary” and is more entrepreneurial. Jasinghe expects Sri Lanka to be a more entrepreneurial nation in the future and insurance companies must be geared to serve such needs.

“I have hope in Gen Z because their incomes are flexible; and I can see an upward rather than a downward trend in their career cycle,” he said, adding that “enhanced targeting should focus on Gen Z as they’re the future of life insurance.”

Serving Gen Z requires innovation, he averred, emphasising that the economic crisis should be looked at as an opportunity to innovate.

Jasinghe continued: “The term ‘crisis’ comes from a Greek word that means ‘judgement’ or ‘time of change’ so I would view it as an opportunity. If the financial services industry remains conventional, it will be closer to death. The industry will have to change.”

“I believe that this is the time for emerging businesses to rise,” he noted, adding that “those who get on the innovation bandwagon faster will be the leaders of tomorrow and the day after.”

“There is no better time than now to innovate,” Jasinghe concluded.