The local insurance sector has been weathering the many storms that Sri Lanka has navigated in recent times. Commenting on this, the Chief Executive Officer of Allianz Insurance Lanka Alan Smee underlined how the sector as a whole is a fundamental part of a country’s financial system.

“The continuation of insurance is essential,” he stressed, in a recent LMDtv interview with Ruwandi Perera.

He’s optimistic about the sector’s future and commended its perseverance in making it through the various challenges Sri Lanka has faced over the last few years.

Smee elaborated: “We’re seeing the economy beginning to perk up; construction is restarting and tourism is increasing. Things are starting to change. We’re still experiencing difficult times – incomes are not strong, which continues to impact many industries – but I believe the future is looking bright.”

Commenting on why insurance penetration in Sri Lanka is still very low despite the domestic sector being operational for a considerable period of time, he explained that this is mainly an issue of awareness.

Smee pointed to how people might insure their vehicles but not their homes, despite the latter being “one of their largest assets.” In his view, “merely being aware of the devastating consequences of a loss will help people be more aware of what is important.”

Innovation is a necessary strategy for product sophistication and subsequent improvements in insurance penetration. For Smee however, the need for process innovation surpasses all else.

Regarding innovations using automation, he asserted that “it is not only the technology; it’s about using tech in a human way. The key is to understand customers’ needs and exploit that understanding to make it straightforward for them.”

He believes that many undersold insurance products – such as housing and travel insurance, and more savings-oriented products in the sphere of life insurance – have a great deal of potential for the local sector to increase insurance penetration.

Smee also stressed that insurance companies must pay attention to emerging customer segments like Gen Z: “There are different needs such as digitising products, maybe miniaturising [existing products] or developing smaller products that suit individual circumstances.”

“How you present these products, sell them, take customers through the claims process and enable ease of sale are all very key for Generation Z,” he explained.

Highlighting trends in insurance offerings that local firms can leverage, he observed that motor insurance is maturing while health insurance is becoming much more significant: “So having products that are both affordable but provide the cover that people need is very critical.”

Another trend he underscored is automation, where the entire insurance sector should look at moving to cashless transactions and providing online services.

He said: “It’s about maintaining that human element but automating and optimising to make it as easy as possible.”

Adding to this, the Chief Executive Officer of Allianz Insurance Lanka warned that automation is not in itself a magic wand. “You’ve got to have the right process and then automate the main parts of it,” he cautioned.

Having said that, he noted that the human element remains because insurance often requires a partner or an officer to brief customers so that what’s been presented is clear.

He continued: “People want to talk to a ‘real person’ when they have a claim; people need advice. You need to think about how you develop your products. It should involve automation in certain areas – and it has to be applied the right way.”

In terms of talent, Smee expressed his views on how impressive the talent here in Sri Lanka is even though many industries are taking a significant hit due to the prevailing migration of workers.

“It is a challenge; but this means that we need to always look at retaining key staff,” he concluded.