R Renganathan, Executive Chairman, and Thushara Ranasinghe, Managing Director and Chief Executive Officer of Ceylinco Life, share insights into gaining and maintaining market leadership in the life insurance market and its goals for the future.
Ceylinco Life achieved 20 consecutive years of market leadership at the end of 2023. How is this leadership defined in the life insurance industry?
Renganathan: A crucial metric measures market leadership in life insurance: premium income. Essentially, the insurer boasting the highest gross written premium income for a given year holds the title of the largest life insurer in the market. This yardstick offers a clear and objective measure that resonates with all stakeholders. When we tout our 20-year streak of market leadership, it signifies that Ceylinco Life has consistently clinched the top spot in premium income every year since 2004—an achievement commanding respect locally and internationally.
Yet, the determination of market leadership is not solely contingent on premium income; several other factors come into play, notably capital adequacy, profitability, the life fund, and reinsurance arrangements.
Firstly, capital adequacy is paramount in the life insurance domain, denoting the sufficiency of capital to cover risks and obligations. Insurers maintain capital reserves to ensure prompt settlement to policyholders, meet regulatory compliance and mandates, and remain solvent even in adverse scenarios. The capital adequacy ratio is critical for gauging and comparing available capital to the required capital based on inherent business risks. This ratio, a vital regulatory benchmark, dictates interventions when capital adequacy falls below prescribed thresholds.
Secondly, profitability hinges on the suite of products of a life insurance company. Offering insurance products and solutions at breakeven or even at a loss can drive premium growth but must be accompanied by stringent business plans to ensure overall profitability remains intact. The third aspect is the size of the life fund. Coupled with robust capital adequacy, the size of the life fund signals the capacity to meet future obligations, underlining financial stability and security for policyholders. Finally, reinsurance arrangements are essential for any life insurer, enabling risk-sharing and knowledge transfer by collaborating with rated insurers to mitigate exposure and fortify resilience against unforeseen events.
Besides being a barometer of success, what is the significance of market leadership to Ceylinco Life?
Ranasinghe: Success in the life insurance industry hinges upon trust, a quality far more intangible than the straightforward dynamics of traditional investments like interest-earning bank deposits. Unlike simple financial transactions, life insurance entails a long-term commitment wherein the primary objective extends beyond financial returns to encompass protection against unforeseen events such as death or disability.
In this context, customers place immense trust in their life insurance provider, relying on them to navigate financial complexities and remain financially robust throughout the policy duration. Market leadership assumes paramount importance, as it signifies that Ceylinco Life has earned the distinction of being the most trusted life insurance company in Sri Lanka for over two decades.
This trust, however, cannot be bought. We earn trust through consistent actions and unwavering dedication. It is a testament to our steadfast commitment to its customers and their well-being, establishing a legacy of reliability and dependability that transcends monetary value.
It is no secret that Ceylinco Life has had its share of challenges. How do you view your leadership in that context?
Renganathan: While every company encounters challenges, Ceylinco Life has faced obstacles beyond typical operational hurdles. These were formidable challenges with the potential to disrupt any organization. However, rather than succumbing to adversity, Ceylinco Life not only navigated through these challenges but emerged stronger, retaining its market leadership position and the unwavering trust of its customers.
Throughout these trials, Ceylinco Life has continued to flourish, expanding in size and reputation. We have garnered recognition on both global and local stages, earning accolades for our innovative approaches and commitment to digitalization. Simultaneously, we have remained steadfast in our dedication to sustainability, upholding our responsibility as good corporate citizens.
Our enduring connection with customers and communities has remained a cornerstone of our success. Despite the many challenges, we maintained our commitment to customer engagement and community involvement through various initiatives. In essence, our leadership amidst adversity is not merely about growing despite challenges but also about leveraging them as opportunities to reinforce our core values and demonstrate our unwavering commitment to excellence.
How is Ceylinco Life maintaining its market leadership, a status it attained soon after its inception?
Ranasinghe: Ceylinco Life began its journey in 1988, swiftly achieving its first milestone by becoming the leading private insurance provider by 1991. Subsequently, our focus shifted towards attaining market leadership, challenging the long-standing monopoly of state-run organizations in the insurance sector. This goal was realized in 2004, thanks to strategic product development, extensive market outreach in rural regions, particularly in the north and east, and the tireless efforts of our dedicated sales force, who tirelessly took the message of life insurance to every household.
Throughout our journey, specific initiatives remained cornerstones of our commitment to society. These included the Pranama scholarships, Family Savari events, the annual launch of Life Insurance Week, and the observance of Retirement Planning Month, all aimed at empowering individuals and families to secure their futures.
Even during economic downturns, we remained steadfast, raising awareness and promoting our products through various media channels. As a result, the Ceylinco Life brand, meticulously built over the years, now enjoys top-of-mind awareness (or TOMA) of 49%, reflecting the enduring impact of our initiatives and the trust placed in our brand by the community.
How did the early years shape the strength and spirit of Ceylinco Life?
Renganathan: The company strategically focused on several key areas to strengthen its position and expand its reach within the market. These included significant investments in training and technology to enhance operational efficiency and service quality. Additionally, the company prioritized building a unique organizational culture that fostered innovation and collaboration among its employees.
Merit-based rewards and a commitment to gender equality were also integral to our ethos, ensuring that all employees, regardless of gender, had equal opportunities for advancement and recognition within the organization. Furthermore, the company upheld conservative investment policies to safeguard its assets and maintain financial stability.
Central to our operations was a customer-centric approach, where customer satisfaction and service excellence were paramount and included the prompt settlement of insurance claims and a dedication to meeting customer needs and preferences.
To effectively communicate the importance of life insurance to households across the nation, we enlisted the expertise of an international consultant, building a unique three-tiered sales structure to reach every household with the life insurance message. This initiative also involved the creation of a family-oriented teledrama script titled “Doo Daruwo,” which resonated strongly with mainstream Sri Lankan families. Through this innovative approach, our dedicated, well-trained sales force effectively conveyed the importance of life insurance to a broad audience, ultimately contributing to our growth and market dominance.
Sustainability is now one of the biggest concerns for any business. What is your approach to this?
Ranasinghe: Our ESG strategy encompasses the following key pillars.
On the environmental front, our goal is to reduce our carbon footprint by 5% annually. In 2023, we achieved a remarkable 9% reduction through various initiatives. These include investments in green buildings, with 28 out of our 127 branches being eco-friendly, and the adoption of innovative construction technologies like precast materials. We also prioritized digital literacy among our sales force and digitized our processes from customer onboarding to offboarding, including a dedicated customer app to minimize paper usage. Additionally, we have implemented solar power and natural lighting solutions to decrease reliance on grid electricity, along with rainwater harvesting and wastewater recycling practices. We remain steadfastly committed to responsible e-waste disposal and have initiated a reforestation project at the Balangoda Rajawaka Forest. Furthermore, our Ceylinco Life Green Club spearheads community projects and employee awareness initiatives.
On governance, our board comprises experienced professionals from diverse backgrounds, such as CEOs, engineers, chartered accountants, lawyers, and architects, serving as independent/non-executive directors. They lead key committees like Audit and Risk Management, providing invaluable insights and ensuring robust governance practices. As a long-term life insurer, we maintain sufficient reserves to navigate economic uncertainties and unforeseen challenges.
Social commitments run deep at Ceylinco Life. As a life insurance provider, we aim to contribute directly to poverty alleviation by supporting families losing their breadwinners to sustain living standards. This objective aligns with UN sustainability goals, including poverty eradication, promoting good health and well-being, and ensuring quality education. We give back to the community by focusing on healthcare and education. Through our health initiatives, we support high-dependency units in state hospitals, conduct health camps for non-communicable diseases in rural areas, and install oxygen supply systems in district hospitals. Also, in education, we construct classrooms in rural and underprivileged schools, with 87 classrooms built to date.
Looking to the future, how does Ceylinco Life see its growth and evolution, especially in the context of retaining its leadership?
Renganathan: We have implemented a succession plan to ensure seamless continuity, identifying successors among professionals renowned for their leadership prowess and adeptness at seamlessly navigating evolving environments and exceeding customer demands.
We have become more agile in confronting the challenges of a VUCA (Volatile, Uncertain, Complex, and Ambiguous) world, introducing fresh perspectives, launching new initiatives, and implementing dynamic systems. These efforts are positioning Ceylinco Life to overcome future challenges and continue its growth trajectory.
How will all this benefit the policyholders of Ceylinco Life?
Ranasinghe: Ensuring the continuity and stability of our company entails fulfilling all obligations to our customers and serving their best interests. Customer-centricity remains ingrained in our operational framework. We are taking a step further by establishing a dedicated Customer Experience team. This team will expand beyond traditional customer service boundaries to explore new avenues for creating personalized and customized experiences. We aim to adopt a more positive approach that benefits our customers and the company in the long run.
At our core, we believe that being the best drives our success, not simply being the biggest. Therefore, we continuously strive to enhance our services to policyholders and generate value for all stakeholders.