Can you give us a brief overview of your business in Sri Lanka?
Allianz entered the Sri Lankan market in 2005 as a greenfield operation. We were the fastest growing insurer from inception, and achieved underwriting profits from our second year of operations: this was just one of the many ‘firsts’ we notched up within a short time span. Our success with property and casualty insurance prompted us to set up the life insurance operation in 2009.
We started up with just five people. Today, our staff strength has expanded to 650 people and an additional 852 active life insurance agents.
So what’s the environment like now in Sri Lanka?
We entered the market as the long civil war there was coming to an end and peace talks were in progress. Four years later, when peace finally came, the positive sentiments that followed generated tremendous growth in the former war-torn areas of the country.
GDP rose to its present annual growth rate of 6.5 percent, underpinned by low unemployment, higher personal disposable income and increased consumer credit extended by the banking sector. These factors resulted in healthy domestic demand and consumption, and per capita income is expected to grow from 2,866 US dollars today to 4,000 US dollars by 2016.
The government also focused on infrastructure development, especially in upgrading the road network in the country including building expressways – Allianz was happy to partner in insuring construction of the Southern expressway, the first highway project in Sri Lanka. The development of the road infrastructure has substantially improved land connectivity, which in turn, contributed towards reviving economic activity and also improved people’s mobility.
Continued economic recovery has resulted in the rapid growth of the middle income segment, creating huge potential for the insurance business.
What are the challenges you face in Sri Lanka?
First of all, insurance penetration remains low. Only 13 percent of the entire population has a life insurance policy.
There is also the added task of convincing people of the need to insure themselves against future calamities. Many people in this country distrust insurance sales personnel, because they have had negative experiences when doing business with some of them and also find it difficult to understand the complicated legal jargon they used.
So what are you doing to change perceptions?
Allianz Lanka rigorously follows the Allianz sales code of conduct and ethical business practices. As a result, our customers find doing business with us a refreshing change. We are confident that the ethics we follow when approaching a customer, gaining his confidence, obtaining his business, and being there for him at his moment of truth, has helped to improve the image of the insurance sales professional in Sri Lanka. Our ethical business practices have also ensured that our return business is high, which has resulted in continuous expansion of our customer base.
What is it like as a relative newcomer to the market?
It has been a challenge for Allianz that, as one of the newest insurers in the market, many of the big players have established bases dating back over a quarter century in time, with captive business that has kept them in the lead. But although they may have had the advantage over us in terms of base and business, we have been successful in making significant inroads into the large captive business of our competitors.