Allianz Insurance to breathe life in to Sri Lankans

SE Executive Vice President in town personally to present application to Insurance Regulator

Heinz Dollberg, Executive Vice President of Allianz SE, Munich, for Asia; the Middle East, and the North Africa Division, was in Colombo this week, to present his Company’s application to Insurance Regulator IBSL (Insurance Board of Sri Lanka) for its local subsidiary Allianz Insurance Co. Lanka, to commence Life insurance business in Sri Lanka. Approval of the application enables the setting up of a separate operational entity to manage Life business in Sri Lanka, which conforms with proposed IBSL regulations that support the setting up of separate corporate entities to manage Life and Non Life business. At present, all insurance companies in Sri Lanka are composite, handling both Life and General business.

Explaining the Munich-based Insurance conglomerate’s decision to venture into the Life arena in Sri Lanka, Dollberg said, “Our young Sri Lankan subsidiary is developing extremely well, and we are very satisfied with its progress, premium-wise as well as the bottom line. It is not always the case that a barely three year old company can develop this fast. This confirms that we have got the right people.”

Allianz Insurance Co. Lanka, the fully owned subsidiary of Allianz SE, recently recorded a phenomenal increase of 258% in profitability, posting a Profit Before Tax of Rs 53.2 million for 2007.

“The prevailing non tariff market in Sri Lanka is an interesting one for Allianz. It is not overcrowded. Also, Sri Lanka has a very favourable environment for foreign investment because foreigners are allowed 100% ownership of businesses, unlike in several other countries in the region. We intend developing the market. We will observe the rules of the market and want to be treated like other local market insurers. We will be growing the business in Sri Lanka, and will be building a direct sales force., since one can’t rely only on brokers to sell Life business, so this will mean more people and more branches very soon, and we will be going into other areas of Sri Lanka to grow the business.“

Speaking on Allianz SE’s business strategy, Dollberg said, “When we enter a new market, our usual strategy has been to start up with General business, as it is much easier to learn the conditions in the market. It is usually not a question of whether a market is big or small, but whether it is profitable. We want to sell the right products but also look at the profitability of the company, and take particular care to ensure that the interests of our shareholders are met. We are concentrating here on corporate business.

We go after other companies that insure with Allianz around the world. These are not only German, but are US, UK, European and Asian businesses as well. Most of the large corporates worldwide, insure with Allianz. ”

According to him, the importance of insurance cannot be overemphasised ”People are usually of the opinion that insurance benefits only the insurer, but this is not so. Currently Life insurance has a bigger potential because it has a direct impact on the lives of the people. Life insurance is also important for the security of a government and for the economic health of the country.. The money invested in insurance is usually reinvested in Government bonds and other instruments, in development of the economy. All insurance is important. Take for instance, the person who is building a house and needs a loan. Insurance covers him if a disaster strikes. The disaster of the tsunami could have been mitigated if more people had taken insurance, and more policies had been sold. This means closer involvement in the community. If one carried out one’s business right, it is usually a win win situation for both the insurer as well as the insured.“

Mr Dollberg has many decades of experience in diverse areas of Life and Non Life business, having served within the Allianz group throughout his career. He is especially experienced in setting up Allianz operational entities in countries around the world, especially in the Asia Pacific, with responsibility for mergers and acquisitions. Earlier, as Regional Director, he was responsible for the operations of the Allianz entities in Hong Kong, Thailand, Korea, Taiwan, Mainland China and Australia.

At present, Allianz commands about 2 per cent of the General insurance business in Sri Lanka, but intends to expand market share to 10 per cent in the next ten years. “Allianz is known in Germany by 99.9% of the people. We are confident that we will achieve the same recognition in Sri Lanka as well,“ declared Mr Dollberg.