In a time of crisis, insurance has over a period of time proven to be crucial in helping people get back on their feet. It is this advantage among others that the insurance industry has collectively sought to promote through an island wide awareness campaign, which was launched on May 5.
Speaking to The Sunday Leader, Insurance Association of Sri Lanka (IASL) President, Ramal Jasinghe (Director/CEO – Asian Alliance Insurance PLC) stated that 18 insurance companies have come together to spread the word of insurance, and it is a ‘giant leap’ for the industry.
The concept of creating insurance awareness through an outreach programme among the public was the brainchild of Jasinghe’s immediate predecessor, HNB Assurance Managing Director, Manjula de Silva. The present campaign is a continuation of that concept.
The initial step of the campaign will focus on building awareness and credibility. The distribution of 200,000 leaflets communicating the concept of insurance, which was carried out at Lipton Circus, has been met with open acceptance. This effort will be extended to grassroots level in later stages. According to Jasinghe, the cost of the project is shared by the island’s insurance companies by pooling out their marketing budget resources.
Jasinghe stated that with insurance being a risk transfer mechanism, it can never be equated to a bank deposit and it is these fundamentals in understanding insurance along with its benefits that will be made clear to the general public.
However, the industry still faces many a hurdle; low penetration in life insurance (current figure stands at 10.9%) coupled with negativity among lay men (caused by overly aggressive marketing tactics) and little emphasis placed on educating the public on realities of insurance, that has left the industry with an uphill climb, but one that Jasinghe is confident in overcoming.
He said, “either people don’t understand life insurance fully, or they have had a bad experience. With this campaign we want to address these two issues and show them the benefits and realities that come with a life insurance policy.”
Among the milestones targeted by Jasinghe in his stint as IASL head (he was elected in March), is to increase Life penetration whilst improving the contribution of insurance towards the GDP of the nation’s economy.
The era of unrealistic promises made by few insurance advisors simply to bring in business, which promises are naturally not met at the time of making a claim, are now almost a thing of the past. Stricter regulations have been set in place; all insurance advisors require a license to practice which is gained through acquiring professional qualifications. Additionally the penalties implemented have proven to do the trick in weeding out the ‘bad eggs’ in the lot, which has in turn given the profession a much better image.
Jasinghe said, “statistics show that contribution of insurance premiums to GDP is less than 2% but if we can take that number to a 2% through this promotional and educational effort, then we’ll consider that the first victory. The signs of encouragement are visible; over the last quarter the penetration level rose to 10.9% and this shows that there is clearly room for growth.”
Creating awareness and education on the importance of insurance aside, the question of affordability by the middle class still remains. On this topic Jasinghe stated, “I do believe that insurance is very affordable for most income levels. The trend just needs to change so that life insurance is given priority for any family or individual. Perhaps more attention needs to be placed on innovative packaging since insurance is unseen unlike most other financial services and encouraging group life insurance. There is also a new wave of micro insurance – which the industry needs to study and gain more experience in.”
The insurance industry, which currently employs around 37,000 personnel, too is on the curve of more positive change with the scope of employment prospects growing larger everyday. “The insurance profession for the next generation looks brighter as chartered insurance professionals are now in demand with the changing laws. I would encourage those looking for a career in insurance to opt for chartered insurance studies as local standards are set to rise over the next four years with best international practices being implemented already. It’s a challenging but interesting time ahead for both the industry and its customers,” Jasinghe said.
He further added that the main focus of the industry remains in reminding the general public that times change and in a time of struggle, insurance can be the safety net that protects a family and even a nation.
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