HNB General Insurance (HNBGI) is executing a technology strategy to elevate customer experiences, open new market opportunities, and create innovative insurance solutions that serve the evolving needs of the economy. Also, by deploying a tech strategy that includes AI, machine learning, and robotics, the company seeks to achieve growth without significantly increasing operational costs, improve bottom lines, and drive value for shareholders while building fulfilling careers for its staff.
Amid challenging conditions in the general insurance market, HNBGI has consistently outperformed industry growth rates by focusing on a tech-driven approach to enhance efficiency, adapt to changing consumer behaviours, and explore emerging market opportunities.
The general insurance industry in Sri Lanka remains deeply connected to the macroeconomic environment, facing challenges since the 2019 Easter Bombings, COVID-19, the debt default crisis and the prevailing political uncertainty, rising interest rates, and inflationary pressures. These conditions have constrained motor insurance growth, the largest segment of the general insurance industry, by limiting new vehicle imports and reducing consumer spending.
Despite these hurdles, HNBGI has outpaced the industry in business growth, led by its technology strategy to drive efficiency and improve customer service. “We have maintained business growth well above the industry average for the last few years,” says Sithumina Jayasundara, Chief Executive of HNBGI.
According to an October 2024 Fitch Ratings report, HNBGI reported strong business growth in the 2023 financial year and the first half of 2024, outpacing industry benchmarks. Its gross written premiums (GWP) rose by 14% in 1H24 (2023: 18%), while the industry grew at 5% in 1H24 (2023: 6%). Non-life GWP growth came from a 22% rise in the non-motor segment in 1H24 (2023: 35%), such as the medical and fire lines.
At the core of the transformation engineered by Jayasundara and his team is a digital claims management system that leverages new tools like Claimee. This platform enables customers to submit accident details through the online portal, reducing claims processing times and costs. HNBGI applies a similar approach to medical insurance through Claimee Health, which digitizes medical claims processing. These solutions offer more than cost efficiencies for HNBGI by enhancing customer satisfaction through faster, more convenient services.
The HNBGI technology strategy includes a significant investment in a new core insurance system. This system enables dynamic pricing based on real-time data, allowing more accurate risk assessments and customer-centric pricing.
The company also adopted Lean Six Sigma principles, deploying specialists to refine processes and support its growth objectives. Lean Six Sigma minimizes the waste of physical resources, time, effort, and talent while maintaining quality across production and organizational processes. “We are probably the only general insurer to deploy this concept used by large-scale manufacturing,” Jayasundara says.
HNBGI is deploying AI and data analytics to detect fraud and inform innovative product design. Analysing data patterns enables the company to proactively identify fraudulent claims, reducing costs and preserving the integrity of operations. AI also refines its actuarial functions, which involve assessing and managing financial risks associated with insurance policies. Actuaries use statistical models to calculate premium rates, estimate the likelihood of future claims, and evaluate the health of the insurance business. By integrating AI, HNBGI strengthens its pricing models and develops innovative solutions tailored to emerging risks.
HNBGI has also introduced indexed insurance products, such as parametric insurance, which link payouts to predetermined indexes like weather patterns or commodity prices. This approach provides businesses with coverage against specific risks without the need for traditional claims assessments. For instance, HNBGI offers parametric coverage for agricultural risks. Here, deviations like excessive rainfall or drought trigger adjusted premium payments to avoid burdening farmers. HNBGI is exploring similar solutions for sectors such as exports and energy that often deal with externalities beyond their control.
Driving the tech strategy further is the establishment of the HNBGI Idea Hub, an incubator for young tech talent to collaborate with experienced professionals to explore and develop tech-driven solutions. This hub operates without strict directives, encouraging innovation and enabling HNBGI to identify and implement improvements in operations and customer offerings.
HNBGI investments in AI, machine learning, and robotics also enhance operational efficiency and customer service. AI-powered analytics can detect fraud patterns, while robotic process automation (RPA) streamlines claims processing and internal workflows. These technologies support growth, maintain lean operations, and improve bottom lines without significantly increasing expansion costs.
In addition to digital investments, HNBGI has aligned its operations with upcoming regulatory requirements. It has committed a significant investment to update its systems to comply with new IFRS standards, ensuring compliance and operational efficiency.
But this is not a cost related to compliance, Jayasundara is emphatic.
“We could have tweaked the existing system at no cost, but we are investing in the state-of-the-art system to unlock new growth opportunities arising from the new standards and future changes that may occur,” he explains.
This transformation strategy is laying the foundation for future growth. With an average growth rate of around 20% in recent years, driven by technology investments, HNBGI is exploring regional expansion in South Asia and emerging markets. “Technology will allow us to be lean and deliver world-class insurance solutions that will add value to clients, and that is the thrust of our technology strategy, moving beyond a mobile app or online services,” Jayasundara notes.
He explains that HNBGI is not attempting to be a tech company but will invest in resources and tech professionals to help the company make the most of the rapid technological advancements constantly changing the world.
“It is about driving shareholder value, creating fulfilling career paths for employees, and continue growing in a competitive and evolving industry, establishing HNB General Insurance as one of the leading innovative insurers in the region”.