Ceylinco Insurance profits top Rs 1 billion in 2007

Retains market leadership in Life and General Insurance for 4th consecutive year

Ceylinco Insurance PLC has created history once again, becoming the first listed insurance company in Sri Lanka to record an after tax profit of over Rs 1 Billion, a feat it achieved in the year ending December 31, 2007.

The company has also retained its position as Sri Lanka’s insurance industry leader in the concluded financial year, with market-leading performances from its Life and General Insurance Divisions, which this week reported a consolidated Gross Written Premium Income of Rs 17.2 billion as at 31st December 2007.

General Insurance reported premium income of Rs 10.35 billion, comprising of Rs 6.2 billion from Motor Insurance and Rs 4.1 billion from Non-motor insurance. This represented an increase of over Rs 800 million in General Insurance over 2006 and gave Ceylinco Insurance a robust 37.1 per cent share of the General Insurance Market.

The company’s Life Insurance Division Ceylinco Life grew by an impressive 20 per cent in the year reviewed to achieve premium income of Rs 6.8 billion, an increase of Rs 1.1 billion over the previous year. This performance enabled the Division to increase its share of the Life Insurance market to 34 per cent according to available industry figures.

Ceylinco Insurance also had its share value peak during last year, with the per share value reaching Rs 232 in March 2007.

This is the fourth successive year of industry-wide leadership in both the Life and General segments for Ceylinco Insurance.

Contributing to this record profit were several new strategies adopted by the company in the period under review. Commenting on the General Division’s performance, its Chief Executive Director Ajith Gunawardena said: “We performed beyond expectations in 2007 in terms of market share. We believe that the innovation and courage embodied in the revolutionary changes Ceylinco Insurance introduced in the year under review were catalytic in generating unprecedented trust in insurance, and combined with the visionary leadership of our Chairman Deshamanya Dr Lalith Kotelawela, together with the un-stinted support of Lady (Dr) Sicille Kotelawala, the Board of Directors and the unfailing commitment of our staff to help us to climb to the zenith of the insurance pinnacle.”

He disclosed that despite the eruption of intense competition in the Motor Insurance segment, Ceylinco Insurance had seized an unbeatable 41.2 per cent share of that market in 2007, while in Non-Motor the company accounted for a hefty 34.5 per cent chunk of the entire market. Profit for the 12 months reviewed exceeded Rs 1 billion, a growth of 24 per cent.

Ceylinco Life Chief Executive Director R. Renganathan said the Life Division had sold 165,796 new policies in the year under review, achieving an average of more than 13,800 new policies a month. Its Life Fund grew by a noteworthy 21 per cent to reach Rs 16.83 billion as at December 31, 2007, following a transfer of more than Rs 2.9 billion in the year. Investments increased by 14 per cent to Rs 14.8 billion, while assets grew by 19 per cent to Rs 19.38 billion, he said.

“These are creditable results in any circumstances,” Mr. Renganathan said. “Ceylinco Life’s market share, computed on the basis of premium income, continues to grow, and the gap between Ceylinco Life and its closest competitor has widened further, despite the tough market conditions that prevailed in the year concluded.”

He attributed the company’s success to the far-sighted leadership of its Chairman Deshamanya Dr Lalith Kotelawala, Deputy Chairperson Lady (Dr) Sicille Kotelawala, its dedicated sales force and loyal policyholders. The company’s efforts in 2007 to push the penetration of life insurance beyond the 10 per cent level and the resultant high profile media and interactive campaigns, the spectacular Ceylinco Life Family Sawari promotions, and the continued focus on innovative and market-responsive new products also contributed to growth. “But above all, it comes down to building trust and confidence among people in all segments of the population and in all walks of life,” Mr. Renganathan said.

Elaborating on the highlights of the General Insurance Division’s year, Mr. Gunawardena said the introduction of On-The-Spot claim settlement in all categories of insurance offered by the Division had revolutionised the insurance industry the world over, achieving yet another ‘global first’ for Ceylinco Insurance. “Moreover, with the introduction of the On-The- Spot claim settlement method to cover all our insurance solutions in January 2007, a distinct change took hold in the home front -- Sri Lanka. People suddenly developed a deep-rooted trust in insurance, as a concept that will always work to their benefit.”

Another major strategy implemented last year was the introduction of the ‘Three-In-One’ concept to VIP On-The-Spot in November 2007. This ensures that customers do not lose their ‘No Claim Bonus’ regardless of the number of claims they make during the year, the increase of the insured value of the vehicle by 10 per cent year on year, with no further burden on the customer, and the payment of up to two lease instalments on leased vehicles, in the event of a repair lasting more than 30 days.
Ceylinco Life, meanwhile, introduced three new products to the market in the year under review, Ceylinco Double Growth, a policy that could triple in value over time, while premium payments remain constant; Ceylinco Major Surgery, an enhanced insurance plan that covers 525 different surgical procedures and Ceylinco Family Digasiri, an expanded and upgraded critical illness policy to cover five new critical illnesses.

A highlight of the year was the Ceylinco Life Family Sawari, a six-month mega promotion for existing and new policyholders which culminated with 58 Sri Lankan families winning an all-expenses paid holiday in Singapore, and 400 other families winning a full-day package to the Leisure World theme park in Avissawella.