World Finance interviews Mohan De Alwis, MD and CEO of Sri Lanka Insurance Corporation, on the impact that Sri Lanka’s new Insurance Industry Act will have on business, and how as Sri Lanka’s national insurer
Sri Lanka’s insurance market is about to undergo wide-reaching changes. Mohan De Alwis, MD and CEO of Sri Lanka Insurance Corporation, talks about the impact that Sri Lanka’s new Insurance Industry Act will have on business, and how as Sri Lanka’s national insurer, SLIC offers more varied products for the Sri Lanka’s mass market.
World Finance: So tell us about the history of Sri Lanka Insurance Corporation – you have gone through some changes yourself?
Mohan De Alwis: Sri Lanka Insurance Corporation was brought in as a government organisation in 1962, January 1st 1962. And since then it has been coming through and facing a few changes.
In 1988, the industry was liberalised. There were lots of competitors that came into the market.
In 2002 the company went through a change when it was privatised; and back again in 2009, the ownership reverted back to the government.
“The Insurance Industry Act requires that life and general industries be separated, and separate companies be incorporated”
World Finance: How is the industry about to change, and how will this affect your clients?
Mohan De Alwis: The insurance industry is having the Insurance Industry Act. Which requires that both life and general industries be separated, and separate companies be incorporated.
A composite company like SLIC will have to go through this change. We would look at separating these two companies, forming two companies, and this has to be done by February 2015.
The second requirement that comes with the Insurance Industry Act in Sri Lanka is that by February 2016, these companies need to be listed in the Colombo Stock Exchange.
World Finance: What types of products and services do you offer your clients?
Mohan De Alwis: It’s a mixed bag of products. We’ve got endowment life policies, and you can couple that with the critical illness covers, surgical and hospitalisation, family protection, and that can be mixed together.
Then we have children’s products, investment products, and retirement products. That’s on the life side.
On the general industry, general insurance we have fire, engineering, personal accident, marine, bankers’ indemnity, workmen’s compensation, a whole host of products that we have.
“By February 2016, these companies need to be listed in the Colombo Stock Exchange”
World Finance: How does this offering differ from that of your competitors?
Mohan De Alwis: Being the national insurer, we always look at the mass market. I’ll give you an example: with regard to the migrant employees, Sri Lanka has a huge migrant employee population, which is incidentally the highest income earner, in terms of foreign exchange. So we’ve come up with a product for personal accident while they’re away.
Another factor that is very salient with us is that we’ve been able to pay the highest bonus for our life policy holders. Now, that is possible because we’ve got the highest life fund in Sri Lanka; at the moment it’s running at LKR 16bn.
World Finance: How important is staff training in delivering top quality products and services?
Mohan De Alwis: The insurance industry is a knowledge industry, and it requires qualified staff and also they need to be updated in the latest changes in the industry. There are very scarce insurance related professionals. Insurance professionals per se also are not freely available. Then you’ve got the actuaries, who are very scarce in Sri Lanka, so you need to train a good workforce, and sometimes train them even overseas.
“We’re looking forward to the listing, which will bring in many strategic partners”
World Finance: Tell us about some of the challenges you help your customers to overcome.
Mohan De Alwis: You need to understand the need of the customer, because there’s no common answer to all insurance problems, or insurance requirements. So what we do is, we have a good sitting with the client, understand their needs. The important thing is to do a good risk assessment and a survey, and make sure that we understand each other. And then we tailor the product to suit the client’s needs.
World Finance: And how do you give back to the community? What CSR projects do you have in place?
We take pride in preserving the culture and religion of our country. And also we do get involved in developing sports. Because we believe sports is important factor to develop people.
World Finance: And what does the future hold for Sri Lanka Insurance Corporation?
Mohan De Alwis: We have come a long way since 1962. We are a $1bn asset-based company now. We’re also a leader in insurance, and we are also already diversified into many other areas, such as hospitals, gas in energy sector, and now the latest is in the hotel sector.
We’re also putting up a hotel which is 475 rooms, and this is going to be operating in Sri Lanka with international operators. And so, we’re looking forward to the listing, which will bring in many strategic partners.
World Finance: Mohan, thank you very much for your time.
Mohan De Alwis: Thanks a lot.
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