UNION ASSURANCE: FUSING BUSINESS STRATEGY AND SUSTAINABILITY FOR IMPACT

Union Assurance’s Deputy CEO Senath Jayatilake and CFO Asha Perera discuss the company’s sustainability agenda, which goes above and beyond traditional practices. As one of Sri Lanka’s largest Life Insurers, Union Assurance adheres to strict protocols governing the management of plastic, paper, food, and hazardous waste. It uses LED bulbs across its extensive country-wide branch network and runs a fully digital, paperless value chain. Jayatilake and Perera also explain how sustainability is helping the business grow, securing and improving the long-term lifestyles of its customers.

Can you give us an overview of the insurance industry and why sustainability is crucial to Union Assurance?

Senath: Union Assurance is a dominant player in the Rs. 136 billion Life Insurance industry of Sri Lanka. Despite the challenges faced by the country in recent years, the industry has continued to demonstrate impressive growth, with Union Assurance at the forefront of this progress as the second largest new business producer, generating a remarkable Rs. 16.7 billion in GWP.

The core objective of Life Insurance is to ensure the long-term financial security of families and safeguard lifestyles, making sustainability a vital and indispensable component of Union Assurance’s business model. We have integrated sustainability into our operations, utilizing a comprehensive sustainability management framework that includes matrices on financial performance, environmental considerations, and social responsibilities. The commitment to sustainability is evident in our sustainability goals to be achieved by 2023, which include reducing energy and water consumption and adopting renewable energy wherever feasible. Additionally, the company has aligned its targets with the United Nations Sustainable Development Goals (SDGs) to achieve relevant business objectives.

Our sharp focus on energy efficiency and digitalizing customer service features allows us to make vast strides in our sustainability journey. The company recognizes the importance of sustainability, particularly with the adverse effects of climate change on the planet. As such, it has made sustainability a top priority, contributing to a more sustainable future for all.

How does your sustainability policy guide the business model, objectives, and values of Union Assurance?

Senath: Our commitment to sustainability extends beyond traditional concerns. While we certainly prioritise emission and waste management, energy conservation, and other related aspects, our approach encompasses much more.

For instance, we implement stringent processes to manage hazardous waste, including the disposal of IT equipment and similar materials. Similarly, our plastic, paper, and food waste management adhere to the strictest of protocols.

Regarding energy use, our methods range from LED bulb usage across our branch network to hybrid work models and digital platforms for everyday business operations. Critically, our business model – encapsulating everything from customer acquisition to backend operations – is entirely digital, minimising our usage of paper and energy and reducing waste throughout the value chain.

As such, we stand out as one of the few, if not the only, insurance company to boast a fully digital, paperless end-to-end value chain. Our commitment to sustainability runs deep, informing every aspect of our operations and ensuring our environmental impact is as minimal as possible.

Can you take us through some of your sustainability initiatives and their impacts?

Senath: Our commitment to energy management extends across our extensive branch network of approximately 80 branches throughout the island, including two large buildings in Colombo and Kurunegala. We prioritise efficiency in all our business operations and facilities, utilising energy-efficient equipment and carefully designed infrastructure to minimise our carbon footprint.

Waste management remains a critical focus, with comprehensive processes and systems to ensure efficient waste separation and disposal across all our branches. We take a conscious approach to managing direct and indirect emissions and conduct quarterly reviews of branch energy expenses, including water and electricity usage, to ensure the smallest possible footprint.

As part of our sustainability model, we recognise paper usage as a significant concern in financial processes. To this end, we have achieved one of our most significant wins by adopting a paperless approach to operations. Our digital ecosystem facilitates national meetings, reducing the need for travel and associated vehicle usage. Everything is conducted digitally, significantly reducing our carbon footprint. In every aspect of our operations, from energy to waste to paper usage, we remain steadfast in our commitment to sustainability and minimising our environmental footprint.

Union Assurance won big at the 2022 ACCA Sustainability Reporting Awards. Why is this significant?

Asha: Our sustainability agenda aligns with the John Keells Group, of which Union Assurance is a member. Sustainability and governance form the backbone of John Keells’ values and operations. It is ingrained in our ethos and influences everything we do. Thus, receiving recognition for our operations is particularly gratifying, as it validates our unwavering commitment to these principles. It is not merely a matter of lip service or token gestures; we strive to embody these values in our day-to-day operations. Therefore, being acknowledged for these efforts is an honour and a testament to our commitment to these ideals.

How has that sustainability focus, amidst a crisis, benefitted Union Assurance and its stakeholders?

Asha: In 2022, the Life Insurance industry and the country faced numerous challenges, including high inflationary pressure, economic instability, and significant increases in dollar exchange rates, affecting disposable income. Despite these headwinds, UA’s AI platform enables us to better manage high inflationary pressures on certain expenses such as printing, stationery, and postage, while our investment in digital infrastructure facilitating a working home model for back-office staff ensured seamless service to our customers during fuel shortages.

Our strong employer brand built on talent development, staff engagement, and a conducive working environment serves to retain our valuable employees in the company despite the sharp increase in migration levels of the country.

Moreover, despite significant tariff increases due to administrative price adjustments, our energy and resource conservation initiatives resulted in the reduction and optimisation of utility costs such as electricity, water, and telephone.

Also, despite current challenging macroeconomic factors, we continue to operate a spend control steering committee to rationalise expenses, make recommendations on effective resource utilisation, and so on, thereby assisting in overall cost management.

These factors contributed to an outstanding financial performance in 2022, demonstrating our efforts to deliver a sustainable bottom line to our shareholders, as well as stability for long-term business operations to our customers, employees, suppliers, and other stakeholders.