Ceylinco Life Insurance Limited
INTEGRATED ANNUAL REPORT 2016

MANAGEMENT DISCUSSION AND ANALYSIS

Value creation and internal capital formation

Financial Capital

2016 has been another strong year for Ceylinco Life with excellent financial performance whilst maintaining its position as the biggest life insurer in Sri Lanka.

Our performance is assessed against selected financial indicators linked to our long term strategy. We constantly aim to achieve a strong financial performance to meet the diverse expectations of our stakeholders. These include higher profits and dividends for our shareholders, increased remuneration and benefits for our employees, timely claim settlement and attractive benefits for our policyholders and more social welfare for the communities around us. In the ensuing pages, you will find how we achieved the above objectives effectively and efficiently during the year.

It should be noted that wherever comparative information for year 2015 or preceding years are presented in this review of Financial Capital, statistics of life insurance business are taken into account with a view of improving relevance and comparability.

Financial Performance

Description 2016
Rs. Mn
2015
Rs. Mn
Change
%
Gross Written Premiums 15,028 13,457 12
Premiums Ceded to Reinsurers (374) (310) 21
Investment and Other Income 8,781 6,741 30
Net Benefits and Claims Paid (6,652) (5,957) 12
Acquisition Cost (1,694) (1,610) 5
Expenses (2,947) (3,004) 2
Income Tax Expense (665) (121) 449
Profit after Tax 3,079 2,060 49

Underwriting Results

For the Year ended 31 December 2016
Rs. Mn
2015
Rs. Mn
Change
%
Gross Written Premiums 15,028 13,457 12
Premiums Ceded to Reinsurers (374) (310) 21
Net Written Premiums 14,654 13,147 11
Investment and Other Income Attributable to Policyholders 7,975 6,508 23
Net Benefits and Claims Paid (6,652) (5,957) 12
Increase in Long Term Insurance Fund (8,398) (7,135) 18
Acquisition Cost (1,694) (1,610) 5
Operating and Administrative Expenses Attributable to Policyholders (2,969) (2,971) 0
Interest Expense (9) (10) (12)
Tax Expense (607) (171) 254
Surplus from Life Insurance Business/Underwriting Result 2,300 1,800 28

Gross Written Premium (GWP)

Gross Written Premium is the total premium paid by the policyholders to the insurance company, before deducting premium ceded to reinsurers. GWP of our Company reached Rs. 15,028 Mn in FY 2016 reflecting an increase of 11.6% YoY. This is a commendable performance considering the non-conducive market conditions and the shrinking disposable incomes which made life insurance a vulnerable segment. Our affordable product offerings, increased geographical reach and stringent focus on the fundamentals of the business enabled us to achieve this impressive performance.

Composition of GWP

Description 2016
(Rs. Mn)
2015
(Rs. Mn)
Change
%
New Business 3,538 3,546 0
Single Premium 2,659 1,608 65
Renewal Premium 8,634 8,135 6
Group Life Premium 196 167 17
Total 15,027 13,456 12

Description 2016 2015 Change (%)
Annualised New Business Premium – (Rs. Mn) 3,821 2,204 73
Number of New Policies Issued During the Period 143,622 170,007 (15)
Average Premium Per Policy – (Rs.) 104,633 79,155 32

The life insurance industry grew by 18.6%, from Rs. 53.5 Bn in 2015 to Rs. 63.5 Bn in 2016. The Company maintained its market leadership for the 13th consecutive year, recording a 11.67% growth in gross written premium in 2016.

  Industry Company
GWP 63.5 Bn (estimated) 15 Bn
GWP growth 18.6% 11.67%

Investment Income

Investment income in 2016 increased by 26.37% compared to prior year and amounted to Rs. 8,181 Mn. This performance in investment income is a result of the prudent investment strategies set by the Investment Committee, the details of which are given in the Investment Committee Report.

Main contributor to the rise in investment income was the income generated from held-to-maturity financial assets, which soared by an impressive 68.64% from Rs. 3,855 Mn in 2015 to Rs. 6,501 Mn in 2016.

Matching the long term nature of the Company’s insurance liabilities, investments are heavily made in held-to-maturity assets, which mainly comprise long term Treasury Bonds and corporate debentures.

Highest Gross Written Premium income of Rs. 15 Bn in the life insurance industry

Net Benefits and Claims

Net benefits and claims from life insurance business, excluding the gross change in contract liabilities, increased by 11.82% to
Rs. 6.6 Bn in 2016. The largest component was policy maturities which amounted to Rs. 4,220 Mn, recording a 14% increase YoY. Except for annuities, the rest of the constituents recorded an increase over the preceding year. These include policy surrenders (7%), interim payments on anticipated endowment plans (1%), claims – death, disability and hospitalisation (6%) and encashment of bonuses to policyholders (28%).

Given below is the breakdown of net benefits and claims.

Description 2016
Rs. Mn
2015
Rs. Mn
Change
%
Gross Claims and Benefits (Excluding Gross Change in Contract Liabilities)      
Claims – Death, Disability and Hospitalisation 648 609 6
Policy Maturities 4,220 3,692 14
Interim Payments on Anticipated Endowment Plans 750 739 1
Policy Surrenders 907 846 7
Encashment of Bonus to Policyholders – Cash and Loyalty Bonus 261 204 28
Annuities 14 19 (28)
Life Insurance Gross Claims and Benefits 6,800 6,109 11
Reinsurance Recoveries (148) (152) (3)
Life Insurance Net Benefits and Claims 6,652 5,957 12

During 2016, the Company transferred Rs. 8,398 Mn to the Long Term Insurance Fund, whereas the transfer was Rs. 7,135 Mn in 2015. This reflects an increase of 18% from 2015.

Such an increase in the Long Term Insurance Fund was permitted by the growth in gross written premium and the higher investment income generated from prudent investments made out of the policyholders’ funds, which was more than sufficient to absorb the escalation in acquisition cost, higher value of customer benefits and claims and the increase in tax expense. Adding to this was the capability of the management to keep operating expenses in tight control that actually dropped during the year. Operating expenses attributable to policyholders were Rs. 2,969 Mn in 2016, while they were Rs. 2,971 Mn in 2015.

Acquisition Cost

Acquisition cost is a direct cost incurred by the Company to ‘acquire’ the premium. This mainly represents the commission expense. Our independent sales officers take life insurance to every family in Sri Lanka. The increase in acquisition cost to Rs. 1,694 Mn in 2016 from Rs. 1,610 Mn in 2015 correlates to the increase in GWP in the year under review.

Operating and Administrative Expenses

Operating and administrative expenses dropped by 1.89% from Rs. 2,994 Mn in 2015 to Rs. 2,937 Mn in 2016. Although premium income increased by a commendable 11.67%, the Company managed to keep rising operating and administrative costs at a rate as low as 1.89%, which proves the effectiveness in the management of overhead costs.

Component 2016
Rs. Mn
2015
Rs. Mn
Administrative Expenses 1,203 1,300
Selling Expenses 370 360
Employee Benefit Expenses 1,364 1,334
Total 2,937 2,994

Administrative expenses dropped due to the effect of measures taken by the Company to reduce expenses such as electricity, stationery etc. Such measures encouraged the staff to reduce expenses related to their day-to-day jobs. The Company also recognised branches that had achieved cost savings during the year.

The Company spent on advertising and business promotion to win new business and defend its market share in an intensely competitive market. However, this did not cause selling expenses to increase. In fact, the selling expenses dropped marginally by 3% during 2016.

Employee benefit expenses rose as the Company provided higher benefits to reward those exceptional staff members who contributed to the Company’s value creation during the year. Employee benefits are discussed in detail under Employee Capital.

Profitability

Profit before tax of the Company improved by a staggering 71.65% to hit Rs. 3.7 Bn in 2016 from Rs. 2.1 Bn in 2015. The 17.83% increase in net income and the 30.26% increase in investment and other income strengthened the profits of the Company.

This profit was recorded after transferring Rs. 2.3 Bn from the Long term Insurance Fund to shareholders’ retained earnings in 2016, as determined by the Consulting Actuary subsequent to the actuarial valuation of the Long term Insurance Fund. The shareholder transfer reflected an increase of 27.78% from the transfer of Rs. 1.8 Bn made in 2015.

The income tax expense of the Company escalated in 2016, recording a massive 449% increase over 2015. The income tax expense of the Company in 2016 was Rs. 665 Mn, up from Rs. 121 Mn in 2015. The income tax expense for 2016 comprised a provision of Rs. 503 Mn recognised for 2016 and an under-provision of Rs. 27 Mn recognised in respect of the previous year. Another factor for the increase in income tax expense was the deferred tax expense of Rs. 131 Mn recognised for 2016.

Profit after tax of the Company soared by a remarkable 50% and reached Rs. 3 Bn in 2016, from Rs. 2 Bn recorded in 2015.

Life Insurance Ratios

Description 2016 % 2015 % Description
Claims and Benefits Ratio 45 45 Claims and Other Benefits Paid as a Percentage of
Premium Income
Claims Ratio (Without Maturities
and Surrenders)
4 5 Claims Paid as a Percentage of Premium Income
Reinsurance Ratio 2 2 Percentage of the Risk Transferred to Reinsurers
Acquisition Cost 12 12 Acquisition Cost as a Percentage of Premium Income
Capital Adequacy Ratio (CAR) 335 Total Available Capital (TAC) as a percentage of Risk based Capital required (RCR)
Solvency Ratio 8.25 Available Solvency margin divided by required solvency margin

Performance Dashboard 2016 and Targets for 2016

  2016 2017
Performance Indicator Actual Rs. ’000 Target Rs. ’000 Achievement % Target Rs. ’000 Expected Growth %
Gross Written Premiums 15,027,600 15,816,326 95 18,780,271 25
Investment and Other Income 8,780,689 6,492,079 135 9,038,153 3
Net Benefits and Claims (6,651,682) (6,365,514) 104 (7,064,639) 6
Acquisition Cost (1,693,985) (1,644,542) 103 (1,880,419) 11
Expenses (2,947,177) (3,146,014) 94 (3,162,225) 7
Profit after Tax 3,079,041 2,652,335 116 3,711,114 21

Financial Position

This review of the financial position of our Company should be read in conjunction with the Company information in the Consolidated Statement of Financial Position as at 31 December 2016 and the related notes.

Year ended 31 December 2016 2015 2014 2013 2012
Total Assets (Rs. Mn) 96,458 80,235 71,068 63,946 52,891
Assets Growth (%) 20.22 12.90 11.14 20.90 8.62

Total assets of the Company crossed the Rs. 96 Bn mark in December 2016, while achieving 20.22% growth over 2015. This increase was fuelled mainly by the investments in new software, additional investments made in the subsidiaries, growth in held-to-maturity financial assets and increase in accrued investment income.

The total assets of the life insurance industry in 2016 were Rs. 332 Bn as at 30 September 2016, which reflected an YoY increase of 12.5%. Ceylinco Life achieved a growth of 20.22% YoY, with total assets as at 31 December 2016 amounting to Rs. 96 Bn.

  Industry Company
Total Assets 332 Bn (as at end 3 quarter 2016, IBSL press release) 96 Bn (as at 31 December 2016)
Asset Growth 12.5% (as at end 3 quarter 2016, IBSL press release) 20.22% (as at 31 December 2016)

Property, Plant and Equipment

Property, plant and equipment boosted by 32.28% from Rs. 5,343 Mn in 2015 to Rs. 7,069 Mn in 2016. Freehold land and buildings are considered as an admissible asset in capital adequacy calculations and they account for 59% of the value of property, plant and equipment. During the year, the Company acquired land and buildings with a value of Rs. 197 Mn, which includes new branches constructed at Horana and Panadura, During the year, a revaluation gain of Rs. 1.7 Bn was recognised. Additional details on additions, disposals, transfers and depreciation are given on page 218.

Investment Property

Investment property includes land and buildings held by the Company for investment purposes. Such property generates rental income for the Company and gains from capital appreciation. During the year, a fair value gain of Rs. 397 Mn was recognised on the investment property of the Company. Additional details on investment property are given on page 222.

Investments in Subsidiaries

Investments in subsidiaries increased from Rs. 521 Mn in 2015 to Rs. 1,021 Mn in 2016.

During the fiscal year 2016, an additional Rs. 500 Mn (Rs. 250 Mn each) was invested in our two subsidiaries; Ceylinco Healthcare Services Limited and Serene Resorts Limited with the approval of the Insurance Board of Sri Lanka. Ceylinco Healthcare Services Limited is the only private sector ‘Radiation Treatment Centre’ in Sri Lanka. In 2013, Ceylinco Healthcare expanded its services by installing and operating the first and only ‘Tomo’ therapy HI-ART machine. This expansion cost Rs. 496 Mn and depleted the working capital of our Company. The additional investment of Rs. 250 Mn was to replenish this working capital.

The investment of Rs. 250 Mn in Serene Resorts Limited was for the refurbishment of the retirement resort.

Financial Instruments

2016
Rs. Mn
2015
Rs. Mn
2014
Rs. Mn
Financial Assets Held-to-Maturity 64,553 46,856 31,913
Loans and Receivables 11,581 16,730 16,026
Financial Assets Available-for-Sale 1,204 1,051 6,352
Financial Assets at Fair Value Through Profit or Loss 158 214 219
Total Financial Instruments 77,496 64,851 54,510

Company’s investments in financial instruments grew by 19.5% YoY, to Rs. 77 Bn in 2016. Financial instruments account for 80% of our total assets. Bulk of the life insurance fund is invested in Government Securities and other fixed income securities such as quoted debentures and term deposits, as per the Guidelines of the Insurance Board of Sri Lanka.

We are compliant with the Sri Lanka Accounting Standards (SLFRS/LKAS) which have classified financial instruments into four categories; Held-to-Maturity (HTM), Loans and Receivables (L&R), Available for Sale (AFS) and Fair Value through Profit or Loss (FVtPL).

HTM financial assets have fixed or determinable payments and fixed maturities. Being a prudent life insurer, we hold long term assets to match our long term liabilities. Hence, 83% of our financial instruments comprise HTM assets. Approximately, 65% of the HTM financial assets are held in ‘risk-free’ Treasury Bonds and the remaining assets are held in quoted debentures.

We mainly invest in corporate debentures with credit ratings ranging from AAA to A-. This paves the way to earn steady returns from relatively lower-risk investments, whilst adhering to the stringent regulatory and internal investment guidelines.

Loans and receivables are non-derivative financial assets with fixed or determinable payments, not quoted in the stock exchange. Loans and receivables category accounts for 15% of our investment portfolio. Approximately, 61% of loans and receivables account for term deposits, of which 97% is term deposits with Licensed Commercial Banks and the balance is deposits with Licensed Finance Companies. Repo investments account for 26% of loans and receivables.

Available-for-Sale (AFS) financial assets designated as available-for-sale and are not classified in any other category. Only 2% of our investments are AFS financial instruments. 59% of the AFS financial assets are held in quoted debentures and 19% is held in quoted shares. Approximately, 11% of each category is held in Treasury Bonds and preference shares.

Fair Value through Profit or Loss (FVtPL) financial assets are assets held for trading. The proportion of the FVtPL assets in Company’s investment portfolio is relatively insignificant. Government Securities account for 89% and short term quoted share investments account for 11% of the FVtPL financial assets of the Company.

Shareholders’ Equity

The shareholders’ equity increased from Rs. 9,446 Mn in 2015 to Rs. 11,912 Mn in 2016, which indicates a 26.10% growth from 2015. The stated capital of the Company remained unchanged at Rs. 500 Mn, whereas the impressive financial performance of the Company in 2016 added Rs. 2,270 Mn to retained earnings. Retained earnings as at the end 2016 stood at Rs. 4,004 Mn. Shareholders’ equity also includes the special reserve, which represents the value of net assets transferred to Ceylinco Life Insurance Limited from Ceylinco Insurance PLC on 1 June 2015 as an effect of the regulatory segregation of the life insurance business from Ceylinco Insurance PLC.

Insurance Contract Liabilities – Life

Insurance Contract Liabilities – Life (or simply the ‘Life Fund’) reached Rs. 77.9 Bn as at end 2016, recording a 14.58% growth over Rs. 68 Bn as at end 2015. This is the net growth in the Life Fund after a surplus transfer of Rs. 2.3 Bn to the shareholders’ funds in 2016.

The actuarial valuation of the Life Fund as at 31 December 2016 was carried out by the Independent Consulting Actuary, Willis Towers Watson, whose report is given on page 185.

As recommended by the Independent Consulting Actuary, adequate provisions, including those for bonuses to policyholders have been made.

Solvency Ratio/Capital Adequacy Ratio (CAR)

Solvency margin measures a Company’s ability to meet its long term financial obligations. This is an important indicator to assess the financial strength and stability of a company.

Year ended 31 December 2016 2015 2014 2013 2012
Solvency Margin          
Available Solvency
Margin (Rs. Mn)
19,509 21,163 20,933 15,627
Required Solvency
Margin (Rs. Mn)
2,365 2,016 1,630 1,458
Solvency Ratio (Times) 8.25 10.5 12.85 10.72
Risk based Capital (RBC)          
Total Available Capital (TAC) (Rs. Mn) 43 ,094
Risk based Capital Requirement (RCR) 12,848
Capital Adequacy Ratio 335%

Risk-Based Capital

Risk-Based Capital (RBC) is the new capital regulation mandated by the Insurance Board of Sri Lanka (IBSL) which replaced the rule-based solvency regime. This framework has been tested and refined since 2011 and was fully implemented from early 2016.

The new RBC policy is a flexible framework for maintenance of minimum capital requirements based on riskiness of the insurance company. It is focused on managing the risks rather than complying with rules. RBC includes quantified capital charges for those risk factors and valuation methodology for assets and liabilities of insurance companies.

Accordingly, the major categories of risks that are measured to arrive at the overall risk-based capital required include, credit risk, reinsurance risk, concentration risk, market risk, operational risk and liability risk.

Taking these risks into consideration, a company is said to be solvent if the Total Available Capital (TAC) is greater than the Risk Based Capital Required. The ratio between these two factors is termed, the Capital Adequacy Ratio and is calculated as follows:

The IBSL requires all insurers to maintain a minimum TAC of Rs. 500 Mn and a CAR exceeding 120%.

Challenges Faced

Achieving premium growth in an intensely competitive market was a key challenge we faced in 2016. Moreover, we needed to ensure high investment income in a financial market with volatile interest rates so as to provide higher bonuses and returns to our policyholders. Implementation of Risk-Based Capital (RBC) regime by the IBSL in 2016, required the Company to develop IT facilities and train staff to support RBC compliance reporting.

Future Outlook

2016 also witnessed many changes proposed to tax laws in Sri Lanka, particularly the proposal to raise notional tax rate from 10% to 14% and the removal of notional tax credits. As per IBSL regulations, life insurers are required to invest a minimum of 30% of the Long term Insurance Fund in Government Securities. Government Securities are the main source of income of a life insurer. For instance, income from Treasury Bonds was Rs. 12,063 Mn and represented 48.5% of total investment income of the life insurance industry in 2015 (source: IBSL Annual Report 2015). The proposed changes to notional tax would reduce the net investment income recognised in the income statement and drastically increase tax expenses.

According to the Budget Proposals for 2016, the Government intends to redefine management expenses for the purpose of income tax computation of life insurers. This might further increase the tax expenses in the future.

Financial Value Added and distributed

For the period ended 31 December 2016
Rs. ’000
2015
Rs. ’000
Value Added    
Net Written Premium 14,653,771 13,146,773
Investment and Other Income 8,780,689 6,740,775
  23,434,460 19,887,549
Net Claims Incurred (6,651,682) (5,956,745)
Cost of External Services (824,664) (663,710)
Value Added 15,958,114 13,267,094
For the period ended 31 December 2016
Rs. ’000
2015
Rs. ’000

%
Value Distributed
To Employees as Remuneration 1,364,300 1,454,260 (6.19)
To Intermediaries as Commission 1,693,985 1,609,936 5.22
To the Government as Tax 533,729 545,350 (2.13)
To Shareholders as Dividend 687,500 241,000 185.27
Transfer to Life Fund 8,397,889 7,135,305 17.69
Retained as Depreciation 201,669 221,197 (8.83)
Retained as Reserves 3,079,041 2,060,046 49.46
Value Distributed 15,958,114 13,267,094 20.28


Institutional Capital

Institutional capital resides within our business. It encompasses intangible aspects such as organisational knowledge, corporate culture, ethics and values, brand equity, systems and processes and the like. We have a well-recognised brand, solid values, strong governance, diligent risk management and a culture which encourages innovation and is performance driven.

Organisational knowledge

We have been in the life insurance industry for nearly 3 decades. This has helped us to understand market expectations accurately and better serve our stakeholders. Our industry knowledge and experience has enabled us to build a reputation of having the best and innovative insurance plans, of being the best in claim settlements, offering the best service and exceptional rewards to policyholders, whilst adding superior value to stakeholders. Our in-depth knowledge of the industry has helped us to:

  • Become the market leader in the life insurance industry for 13 consecutive years
  • Adopt effective strategies to sustain growth by adapting to the changing environment
  • Offer innovative products to catering to each stage of policyholders life offering protection and inspire them to progress in life.
  • Operate the largest branch network in the island to reach a wider customer base
  • Employ the industry’s largest active sales force of over 3,900 sales consultants
  • Add sustainable value to all stakeholders

Corporate culture

At Ceylinco Life, we foster an organisation culture with high performance and open communication. It is a culture where innovative thinking is not just expected but rewarded. There is close engagement with employees to foster innovation and give confidence to take responsibilities. Employees are performance driven and are rewarded based on merit. This is supported by continuous training and development and regular feedback. Taking into account our employees’ motivation to succeed, we have put in place an effective career progression plan, which is a key component of our Company’s attraction and retention strategy. Our employees not only understand there is room to grow, but that efforts have been made from top down to facilitate their career growth. Therefore, employees are empowered and provided logical steps to pursue advancement.

In addition, all our employees are encouraged to present themselves in a professional manner as prescribed in the HR policy on personal grooming. We also recognise the importance of work-family balance.

Our organisation is unified around the Organisation’s core values; PRIDE (Professionalism, Rewarding, Integrity, Dedication and Excellence) which are deeply entrenched in our corporate ethos. They drive the Organisation towards corporate objectives. We also have a deep and abiding commitment to integrity that guides us to do the right things every time. Hence, all our activities are reinforced with good governance and ethics, creating a work environment that is conducive and our people are proud of. In addition, several companywide initiatives are implemented to enhance service quality and strengthen customer service.

As per our tag line, we create and nurture ‘A Relationship for Life’ with all our stakeholders, including our employees and policyholders. This is the core purpose of our existence and is engraved holistically in everything we do. We encourage our employees to remain with the Organisation through pension schemes, retirement benefit schemes and other motivational tools. Employees have deep trust and loyalty towards the Organisation and many have been with Ceylinco Life for long years. Additionally, we support our policyholders in every stage
of their life to meet their varying and evolving life needs.

All these qualities enable us to gain the trust and confidence of our customers and generate increased value for all our stakeholders.

BRAND AND ITS DEVELOPMENT

Seen as the best life insurance provider in Sri Lanka, Ceylinco Life is a brand that is both well recognised and respected. Yet as the Company evolves, improving its offerings, venturing into new ground and strengthening its relationships in multiple ways, the brands’ evolution is also inevitable. Thus in 2016, the Ceylinco Life brand took on a new image and tagline. Both of these were designed to reflect the Company’s future goals and plans, but also its continued commitment to its customers and other stakeholders.

Brand Evolution

In the past, our logo, that of a father gazing down at his child and tagline ‘Life, Love, Protection’ served us well, emphasising the care and commitment a policy holder shows his loved ones when he chooses a Ceylinco Life policy; as well as the bond between us as service providers and our customers.

During the year under review it was decided that, in line with our future business goals and plans, it was time to take this relationship a step further.

The new logo still uses the powerful symbol of a father and child, yet, both now look outwards; the child lovingly cradled is happy, secure and cared for and looks forward to a bright future ahead of him. The Father holds his child tenderly, offering protection, yet he too, looks forward, a confident promise to his child of the progress that will be made. Ambition, Progress, Confidence, Protection, Care and Trust are the key features of this new logo, and of the promise Ceylinco Life makes its customers.

Our new tagline ‘A Relationship for Life’ also has multiple implications. It refers to the relationship not only between policyholders and their loved ones, but also between us, as service providers and our customers. Our relationship with each policyholder lasts approximately 15 to 20 years, making it indeed ‘A Relationship for Life’. This relationship is never static, we work on enriching it, in every way, based on the needs of our customers.

Several aspects influenced the development of our new brand positioning and identity. As a company, Ceylinco Life is moving forward into new markets and preparing to engage with new sources of growth, our product portfolio and the expertise of our people have been accordingly aligned, and we are preparing to proceed, confident in the progress we can make.

As always, our progress, development and success will in turn reap rich dividends for our policyholders and all other stakeholders.

BRAND PROMISE

Our brand is perceived to be trustworthy, innovative and easily accessible to all segments of the market. In line with our vision, our brand promise is to help our policyholders to progress in life by offering the best insurance solutions in the industry for protection. We also reach customers across all segments of the market through our extensive branch network.

In return, policyholders place their trust in us, as we support them in every stage of their life, delivering our promise of protection. The financial strength and stability of our brand demonstrates our ability to deliver beyond our promise in the life insurance contract, through our unique ‘Life Rewards’ scheme.

BRAND EQUITY

Brand equity refers to a brand’s power derived from the goodwill and name recognition that it has earned over time. In our 28-year long history, we have built a brand that is unique, well recognised and trusted. Having a well-established brand with strong brand loyalty helps us to consolidate our leadership position in the industry and achieve a sustainable growth.

Our brand mission is to become the most trusted, acclaimed and progressive Life Insurance Company in Sri Lanka, by providing need-based Life Insurance solutions to our customers, recognising and rewarding our employees, creating successful partnerships with stakeholders and ensuring sustainable business practices for sustainable growth, both profitably and responsibly, while leaving a smaller footprint on the planet.

In keeping with the above mission, we continue to provide protection and financial security of highest level.

Brand Recognition

World Finance, UK has recognised Ceylinco Life as the best Life Insurance Company in Sri Lanka for the third consecutive year. Additionally, we were adjudged the people’s insurer for the tenth consecutive year at the SLIM-Nielsen People’s Awards 2016.

These are strong testaments that our brand is loved and respected by all Sri Lankans.

Additionally, several brand tracking studies conducted over a period of time, have established that the Ceylinco Life brand is well recognised in the industry with a high brand equity index, high top of mind brand recall and strong brand leverage. According to a brand tracking study conducted over a period of time, our brand gained a high top of the mind brand recall of 53%, high brand equity index of 4.1 and a strong brand leverage.

High top of the mindrecall of 53%
High brand equityindex of 4.1

Brand Health Study

A brand tracking survey was conducted through a reputed market research company to ascertain our Company’s brand health.

The survey enabled us to understand trends in requirements among current and potential life policyholders, monitor changes in usage patterns and understand the key drivers contributing to our Company’s brand health in the life insurance category. It also helped to assess and track the brand health of our Company when face-to-face with competition, as well as to track the effectiveness of selected brand communications.

The survey results indicated Ceylinco Life to be a socially responsible company, offering attractive benefits and promotions and innovative insurance products. The Company was also known to have reliable insurance officers, offering a friendly and effective customer service.

In terms of brand personality, Ceylinco Life was performing above competition in all brand personality attributes.

The awards and accolades won during the year can be found on pages 118 and 119.

Ethics and Code of Conduct

Ceylinco Life’s Code of Conduct is a list of stringent guidelines with which all staff voluntarily comply. We have in place an effective process of communication of policies and guidelines of the Company’s Code of Conduct throughout the Organisation.

The basics of the Company’s Code of Conduct, values and ethical principles are explained to the new recruits at the time of offering employment. Further, the Code of Conduct is hosted in the Company’s HR Portal on the Intranet for easy reference of staff members. At the quarterly employee induction programmes, the Company’s culture, values and ethics are clearly explained in an interactive manner. Also the Heads of Departments are empowered to guide their associates on ethical compliances in operational activities as well.

CHALLENGES FACED

With two very distinctive markets in our sights, 2016 was a year in which our key challenges were based on developing products that catered to those markets. Our target groups were very different from one another; on the one hand retirement plans for Sri Lanka’s aging population, and on the other, long term insurance products suitable for the young, affluent, urban market.

Other challenges came in the form of the need to expand the reach of our products on the ground, while also exploiting the phenomenal potential of the on line market.

With our new brand positioning in place, it was also vital to ensure that we were ready, at every customer touch point, to demonstrate that we were giving life to our new brand promise.

FUTURE OUTLOOK

For us, creating ‘win win’ situations is vital. Upgrades to policies, as well as Retirement, Investment-Oriented Life and Medical plans, have all been designed to cater to our customers changing needs at every stage in their lives. In 2017, we look forward to the launch of many new products and services that will capture and reward our target markets.

We have always been strong believers in the power of both diversification and community service. These qualities resulted in the renowned Ceylinco Healthcare Centre which provides some of the best Diabetes and Cancer testing and treatment in Sri Lanka. In the same vein, 2017 will see the opening of ‘La Serena’- a retirement resort. The resort was designed to cater to the needs of Sri Lanka’s aging and often impoverished population, and will be another sterling example of our commitment to forming ‘A Relationship for Life’.

The prompt settlement of claims, and the guarantee that payments on policies are made at the exact time of Maturity, are promises we will continue to keep, as per the values we have always championed as Sri Lanka’s leading life insurance provider.