People’s Insurance, one of the most profitable non-life insurance companies with constant underwriting profits in Sri Lanka is gearing up for more innovation-led growth with fresh vigor

A flagship subsidiary of state giant People’s Leasing & Finance PLC and People’s Bank, and with over 150,000 customer relationships, People’s Insurance is set to take on the non-life segment leveraging trending technology across all its growth initiatives. Having seen rapid growth year-on-year and being the first insurer to embrace technology at the onset of the tech buzz, People’s Insurance is now in a strategic move to rebrand and reinforce its market position to reach and capture the new-age customer.

Chairman Jehan P. Amaratunga, Chief Executive Deepal Abeysekera and Technical Consultant Nimal Perera of People’s Insurance spoke with Echelon about the competitive insurance industry and re-branding strategies that the firm is initiating to grow its presence in an otherwise crowded market.

Jehan P. Amaratunga, Chairman of People’s Insurance

Non-life insurance is a competitive business, and has resulted in consolidation. People’s Insurance has strong organic growth since founding. What’s the value proposition that makes it possible?
Amaratunga: The entire insurance industry, including life and non-life, is extremely competitive. In the past, the non-life segment has been neglected due to competition, poor awareness and low penetration. The public perception on insurance needs to be changed, as right now, insurance is connected to disaster or loss. It’s connected with negativity.

In reality, there is a huge market opportunity. Insurance is something that can make life better and certainly hassle-free, but competition has zeroed the market down to motor insurance only. Motor insurance policies form just more than 60% of the product portfolio of the local insurance industry today. Since this is an easy win for insurers, the focus is mainly on motor insurance for many firms engaged in the non-life segment.

People’s Insurance will be taking a different approach to others in the industry. Most of the initiatives will be focused on capturing a broader base within non-motor insurance, and this strategy will continue to be developed in the coming years. We see huge potential in this segment, which remains untapped to-date. The value proposition for People’s Insurance is to capture this untapped opportunity and market to grow the business. We are not looking to consolidate, but to be an innovative and cost-effective insurance service provider. At present, this model works well for us and has continued to yield results.

People’s Insurance has consistently achieved underwriting profits year-on-year, which is a rare thing. What’s the strategy that makes this possible?
Perera: Our cost-efficient business model and processes, coupled with strong customer relationships, have helped us steer the business in the right direction. Our costs are lower than the market average, and we ensure efficiency across all business processes, regardless of whether we are handling underwriting or claims. We are consistently mindful of delivering quality insurance and achieving underwriting profits. As a firm, our Board and senior management team are focused on achieving healthy underwriting profits, as we believe this is an important element for success. Whenever this is challenged, we ensure that we probe deeper to understand the reasons behind it. This approach has helped us grow profitability year-on-year, which is something uncommon in the industry.

People’s Bank is a trusted brand. Have you managed to leverage this?
Abeysekera: People’s Bank is one of the most popular and trusted financial service providers in Sri Lanka, and People’s Leasing & Finance PLC is the industry leader. That’s a given, but we haven’t really leveraged these tremendous strengths. However, going forward, we will capitalize on these strengths to further grow and reinforce the People’s Insurance brand. We are optimistic that this approach will help attract and grow a more loyal and larger customer base for People’s Insurance in the future.

People’s Bank and People’s Leasing & Finance have a strong rural franchise. Is this reflected in People’s Insurance business and customer base too?
Amaratunga: We have access to a large network of around 860 bank and leasing branches. So, reaching customers is much easier; on the same note, customers also have easy access to our services. Primarily, growth for People’s Insurance comes from the urban/suburban sector. Our market potential lies in regions outside the Western Province, especially within cities. Leveraging this opportunity is what we are continuing to focus on.

Deepal Abeysekera, Chief Executive of People’s Insurance

How would you like to see the customer base evolve in the future, by attracting younger and urban customers?
Abeysekera: Our focus would be on building unique lifestyle product offerings for households, small and mediumenterprises, and corporates. We are increasingly moving into digitization as the younger generation needs to be targeted through integrated and multi-channel delivery systems. People’s Bank was a pioneer in adopting digital banking, so we got a head start in terms of offering online digital solutions. As a result, we don’t have to reinvent the wheel. Our innovative products are designed by listening to customers, and we are focused on providing easy avenues to access information and purchase insurance online. We are in a fast-changing technology era, so we have to either be ahead of the game or perish in isolation if we fail to recognize this change and adapt.

Are you planning a re-positioning initiative or simply a new look and feel for the brand?
Abeysekera: We are restructuring our entire brand image in line with the needs and desires of the new-age customer. It’s a shift to a more contemporary brand image that will resonate with the customer of tomorrow. Generally, insurance companies are known to be cold and fear inspiring, and people don’t want to connect with things that create a negative mindset. As an insurer that wants to make life better, People’s Insurance will differentiate itself by working towards enhancing and protecting people’s lives. Customers can hand over their worries to People’s Insurance and live life to the fullest, while we give them the assurance of safety and security. Our aim is to be the most trusted and revered insurance company in Sri Lanka in time to come.

We are clear about the future and will continue to work towards it, building trust and satisfying thediverse insurance needs of all Sri Lankans.

Do you think it’s possible to grow underwriting profits from current levels, while also investing in growth?
Perera: As you improve the topline, there will be organic growth on underwriting profits. Driving the percentage of underwriting profits can be achieved by introducing new products and innovative ways of doing business. People’s Insurance strives towards growing both numbers and service quality. Even though there have been challenging times in the past, we have always delivered on our promises, and will keep on improving our efficiency levels to ensure customer satisfaction.

Investment returns on fixed income are falling. How do you plan to grow profitability under such conditions?
Amaratunga: This issue affects everyone across any fixed income securities. In our case, we are not worried as long as underwriting profits are guaranteed. However, we are continuously examining ways and possibilities to invest money more smartly. So far, we have been able to maximize our returns regardless of market conditions. This has been mainly due to our access to shared resources. Our skilled staff has also consistently played a reliable role in shaping our success.

How do you see the overall market growing over the next two years?
Perera: The insurance industry is yet to realize its full potential. Overall penetration levels are still within 1.1% of GDP, which is well below the global average of 6.2%. Current market growth is at around 15%, and we predict it would grow at 8-10%. We certainly want to grow faster than that. People’s Insurance has tactically grown over the years, and at this point, we are exploring ways to expand our reach.

In an aggressive market, what plans does People’s Insurance have for the future?
Perera: Efficiency improves in an aggressive market as everyone is motivated, and that’s definitely good. A competitive and aggressive market has its own set of problems, where continuous underwriting losses have led to an increase in mergers and acquisitions. We firmly believe the solution lies in providing value addition rather than undercutting. Our vision is to be a financial service provider that enhances the public’s economic capacity and contributes to Sri Lanka’s economy. We are developing diverse innovative channels and product offerings.

People’s Insurance also aims to introduce a mix of non-life insurance policies including home and fire policies, which otherwise has been slow to connect with the market. Our professional and experienced teams are involved in developing the appropriate technology to meet the demands of the age of the Internet of things.

We believe innovation is not merely about bundling and unbundling products, but rather about instilling innovation within our processes, especially on how we serve our clients with convenient, trustworthy and speedy services.

We are confident about the future as we have the support of trusted clientele and competent staff. Our biggest assets are our people and customers, who have played a significant role in helping People’s Insurance move forward as one of the most profitable insurance companies in the country.

How would People’s Insurance capture a completely new audience that is not engaged or does not believe in insurance?

Nimal Perera, Technical Consultant of People’s Insurance

Abeysekera: It’s the duty of any progressive insurance company to educate and create awareness among the public. We are working towards expanding the household and small & medium enterprise segments. We have a sound understanding on the business and customer requirements, especially regarding lifestyle- and business-related products. Some non-traditional products that have demand, like healthcare and travel insurance, have also been added to the product basket.

Can you maintain topline growth rates without the non-group business growing strongly in the future?
Amaratunga: Group clients will come and we will be growing our topline definitely, so that wouldn’t be an issue. There is a base of 16 million customer relationships being maintained by People’s Bank and over a million with People’s Leasing at present, so we have access to this large clientele. We merely have to focus on convincing our group clients and develop meaningful relationships with them. That is something we as a firm have to be good at if we are to grow. We also have access to a huge reservoir of a variety of skills and information, especially regarding market movements and risks. Despite the access to these shared services, People’s Insurance functions independently.

How would global partnerships within the local insurance industry affect the dynamics?
Amaratunga: Global insurance companies will enter the market as business volumes keep increasing. We cannot prevent that, and it is not something to be concerned about. I believe that all we do needs to be on par with global best practices. Locals would be much more confident and comfortable to obtain insurance from a popular household brand like People’s Insurance.

Global insurance companies can definitely bring some advantages to the table, especially in terms of R&D and better capacity to negotiate re-insurance deals because of their global networks and processes. That said, as an insurance provider that has not only seen growth over the years, but been extremely profitable amid the competition, we are ready to take on the next phase of growth.