Janashakthi outperforms the Insurance industry

Records an impressive Rs. 525 mn profit; Says Full Option product has forced loss of market share of others

Janashakthi Insurance Co. Ltd last week announced an impressive Rs. 525.77 million Net Profit After Tax for the year ended 31 December 2007, recording the highest net profit margin from among the five leading insurance companies in the country.

“This is a remarkable achievement considering the competitive nature of the industry and the prevailing economic conditions,” the Company said. Managing Director of Janashakthi Insurance Co. Ltd. Prakash Schaffter said that the Company’s strong and stable financial position as a key player in the Sri Lankan insurance industry, contributed to significant progress in 2007 with its highest ever total revenue reaching Rs. 5.2 billion.

“Despite the prevailing business climate and intense competition among the industry players, this performance is indicative of the strength and stability with which we have been able to exceed budgeted profitability objectives by a significant percentage. It is also indicative of the measure of confidence our customers have in Janashakthi. We are pleased about the gain in market share by our flagship brand Janashakthi Full Option for the period under review, whereas some of the insurance companies have lost market share in the same period,” he said.

Schaffter said that he was also confident that the company will receive healthy financial ratings through a leading financial rating company, through a currently on-going evaluation. “Our performance was led by growth in the General Insurance sector  largely through our  flagship brand  Janashakthi Full Option which contributed to over half the Company’s business.

The Motor Insurance segment achieved a 22% growth over last year recording Rs. 2.76 bn as premium income. Janashakthi Full Option has also recorded the highest absolute premium growth in the Motor Insurance category with an increase of Rs. 500mn.

There has also been considerable headway in the Life Insurance business achieving total premiums of Rs. 1.2 billion, an increase of 18%, with an increasingly steady retention of business,” Schaffter added.Janashakthi achieved 17% growth in Gross Written Premiums in the General Insurance segment, to reach Rs. 3.68 bn, thus maintaining its position as the third largest general insurer in the country with only 13 years of operation, surpassing insurance companies which have been in operation for over 20 years in the market. Fire insurance premium rose by 8% to Rs. 369mn while the other noteworthy performance in General Insurance was from Marine Insurance which grew by 69% to Rs. 137mn, while other miscellaneous sectors continued to maintain their position,“The Life Insurance business has performed beyond expectations recording the highest ever surplus transfer amounting to Rs. 278 mn which is a 340% growth over the corresponding period. Gross written premium of Life business increased to Rs. 1.2bn with a growth of 18%. First year premium of the company reached Rs. 528mn with an impressive growth of 33% in renewals. Rationalisation of Life distribution attributed to the above outstanding performance,” Schaffter added. He further said that the restructuring process which began in 2006 continued with the same momentum.

“The most significant change is the recognition and assessment of each of our 112 branches as distinct ‘profit centres’, thereby inculcating in all staff across the company, the cardinal business principle that increased sales needs to generate a commensurate rise in profits, as well as excellence in service standards”.Chairman of Janashakthi Insurance Co. Ltd. W.T. Ellawala said, “Janashakthi has begun a process of change, of transformation across all areas of our business, to serve our customers better. We are redeveloping our products, improving our internal processes, upgrading our information technology systems and investing in our human resources. As a socially responsible company, Janashakthi will also continue to strengthen its commitment and support to the community we live in.” Superior service delivery is a significant aspect that the Company has focused on during the said period. As a result, insurance products and services were made available in every nook and corner of the country with the extension of the branch network to 112. During the year, Janashakthi also invested on hi-tech software for call centre operations and developped superior response time for inquiries. Being the revolutionary trend setter in the industry, Janashakthi expanded its service excellence through internet based services where many projects were initiated during the period under review to enhance customer satisfaction. Recognising the efforts of the company, the Sri Lanka Institute of Marketing conferred three awards for Janashakthi for the 2nd successive year, making Janashakthi the only insurer to be rewarded at the SLIM Brand Excellence Awards 2007.Janashakthi’s continues to invest in state-of-the-art IT solutions in pursuit of service excellence and innovative product offerings to policy holders throughout the country.

The company constantly invests in new technology to establish itself as the most technologically superior insurer in the Sri Lankan market. Janashakthi is the first and only insurer to be awarded ISO 9001:2000 international quality accreditation from the International Standards Organisation for both life and general lines of operations, adapting its operational procedures and systems for the continuous improvement of its quality management system. Janashakthi Insurance Company exercises its social responsibilities as a corporate entity by becoming involved in several social projects.

Among them was a massive programme for the safety of people at pedestrian crossings, and other social responsibility projects such as Tsunami aid programmes, sports sponsorship including sports such as Cricket, Hockey, Sailing, Golf, Squash, etc. Good corporate governance has established the image of the company as a socially responsible entity delivering greater and consistent value to customers, employees, shareholders and the country at large during the thirteen years of its service to the nation.