September was declared the Insurance Month in Sri Lanka. The Insurance Association of Sri Lanka (IASL), will continue to focus on advancing the industry, as it has done for the past four years through a series of initiatives within this month.
Since its inception, the insurance day and insurance month have been coordinated and conducted as an initiative of IASL with the participation of its member companies. However, current President of IASL and CEO – Life Insurance of Amana Takaful PLC, Gehan Rajapaksa observes that the events will be on a much more scaled down level due to the impact of COVID-19.
The government declared September 1 as the National Insurance Day in 2017, which was a significant milestone for the industry. Since then the day has been marked each year with a series of events across the country organized by the Marketing and Sales Forum (MSF) of IASL. Activations in the past years took place in Colombo, Kandy, Kurunegala, Jaffna, Ratnapura, Anuradhapura and Matara hosted by the insurance industry players. The day’s events were marked also with the presence of insurance advisors of companies who helped in raising awareness. However, as a responsible industry, a decision has been made to not conduct such activities that require social gathering and has been limited to a media based awareness campaign.
According to Rajapaksa, this years’ Insurance Day, which was held for the fourth consecutive year was a virtual event to raise insurance awareness. However, each company will have its own activities that will be carried out throughout the month of September. Public Relations and digital tools will be used to create awareness.
The national insurance day declaration is expected to help increase the sector’s contribution to the GDP of the country, and has helped reduce dependency on the Government to provide relief and compensation to victims of natural catastrophes.
Commenting on the impact of the COVID lockdown on the insurance industry, he added, “Both the Life and General insurance businesses were adversely impacted with no turnover. Needless to say that in such circumstances it is obvious that the impact was very significant, particularly on the cash flow of the companies. With regard to the life business, the companies had to sustain the advisors with income support since they were unable to go out and collect premiums or generate new sales. Cash flow of the general insurance sector too was impacted negatively. However, from a claims perspective there was a positive outcome as the number of accidents reported and resulting claims were minimal”.
In such an environment, the member companies of IASL, together with the regulators office – the Insurance Regulatory Commission of Sri Lanka (IRCSL) played its part in coming forward to grant relief to policy holders with offering 3 month’s grace period to pay premiums keeping all those policies live and liable to pay any claims that arose. “The insurance industry has always been a rock solid one that has come forward to shoulder the responsibility of protecting the insured public. This time was no different and the industry continued to offer the level of protection that was offered under normal circumstances with no difference”.
Explaining further about the situation at present, Rajapaksa stated, “The months of June and July have seen a reasonable recovery in the industry. However, the negative economic outlook resulting from the lockdown will have a negative impact on disposable income, thus putting strain in the level of new business growth that can be generated”. He foresees lapsation as an issue for the life industry as customers are unable to continue premium payments. Since the overall industry is closely linked to the expansion of the economy, its growth will depend on it too.
At the same time, Insurance sector representatives have been emphasizing the need to provide comprehensive protection for all lives and assets. Industry experts note that the current increase in life expectancy shows us that people are becoming more health conscious, which is also being advocated by the insurance industry.
“The level of disposable income and negative perceptions on insurance and social security benefits have negatively impacted the growth of the insurance sector over the years. This is the key concern that we as IASL continuously want to address, and show the general public the importance as well as the benefits that they gain when they are insured,” Rajapaksa concluded.