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Mining for diamonds

Elizabeth Diffin

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Advisors in Sri Lanka see great potential for the future.

On September 1, insurance agents across the country of Sri Lanka will reaffirm the importance of life insurance on the fourth annual National Insurance Day. It’s just one small sign of what MDRT members in the South Asian country already know: Sri Lanka is primed for growth in the insurance and financial services profession.

Currently, only about 14% of Sri Lankans have life insurance, according to 11-year MDRT member Warnakulasooriya Sujith Roshan Fernando, of Colombo. The country’s total population is nearly 23 million.

“The insurance industry is one of the most competitive and rapidly developing industries in Sri Lanka,” he said. “A huge market exists.”

Fernando says in recent years, the government has made efforts to increase knowledge of life insurance through initiatives like National Insurance Day and Insurance Awareness Month. In addition, the Insurance Regulatory Commission of Sri Lanka (IRCSL), which oversees the insurance industry, appointed the country’s first ombudsman in 2005 to handle any insurance-related grievances. Further developments include exams for new advisors, the division of life and general insurance, and a new focus on ethical behavior for insurance agents.

“These decisions are very important to clients, insurance agents and the companies, which increases the trust and integrity of the industry,” Fernando said.

In the three decades he has been in the insurance industry, Fernando has seen many other changes, as well. Most notably, he’s seen the range of products grow. When he first began his career, he exclusively sold life insurance because it was the only product available. Nowadays, he’s able to offer a full range of insurance products, including critical illness and hospitalization coverage, pension plans, investment plans, and decreasing term insurance.

Plus, in the past 10 years, banks, finance companies, supermarket chains, mobile phone companies and even television channels have entered the insurance industry, opening up the possibilities for consumers.

“Clients will have the opportunity to compare quotations of many insurance companies and opt for the best solution for their insurance requirements,” Fernando said.

R. Sepalika Panagoda, MFA, a 13-year MDRT member from Colombo, has also observed this in her own practice.

“The market is highly competitive now, with many players coming up with innovative life insurance and financial solutions,” she said. “The clients are given ample options to select.”

Fernando also predicts that foreign insurance companies will soon enter the Sri Lankan market and increase the competition even more.

For that reason, as well as Sri Lanka’s vulnerability to political and economic fluctuations, he maintains a strong commitment to regular policy reviews and amendments, as well as appropriate fact-finding at the outset of a client relationship.

“It is our duty to carry out a proper needs analysis of the consumer and propose the most suitable insurance solution with an affordable income,” he said. “Overselling and underselling have to be carefully looked into, and a policy review is to be done after two years to make a proper assessment and changes to benefits or beneficiaries.”

Fernando chose businesspeople as his target market, with the thought that it would be easier to cross-sell to others in that circle. He also observes that many family-owned companies will pass to the next generation, allowing for prospecting with children and younger relatives of current clients.

Panagoda’s company also concentrates on businesspeople, although her particular interest is group life and individual retirement plans, with a focus on poor communities. According to a report Sri Lanka’s ministry of national policies and economic affairs published in 2016, only about 4% of the population lives below the poverty line.

The insurance industry is one of the most competitive and rapidly developing industries in Sri Lanka. A huge market exists.
— Warnakulasooriya Sujith Roshan Fernando

However, a significant portion of Sri Lanka’s population lives just above the poverty line, making them especially vulnerable to economic difficulties. Many of Panagoda’s clients — coconut peelers and pluckers, soldiers, seafarers (including fitters and oilers), home nursing aides, couriers and drivers — fall into this segment.

Panagoda notes that poorer populations are more concerned with their day-to-day survival than purchasing insurance for the future. She believes that in the future, group insurance policies that support these low-income communities, including life insurance, critical illness, accidental death benefit, disability insurance and retirement accumulation, will become significant needs. These low-premium policies offer substantial benefits; for instance, a 35-year-old can purchase life insurance for 660 rupees per year that pays out 1 million rupees.

Similarly, in 2019, Aon, in partnership with Oxfam, introduced micro-insurance for farmers in Sri Lanka to protect against the loss of crops to extreme weather. The same year, JBA Risk Management began providing protection for low-income households against flood losses.

“The poor communities always want to delay their decision,” Panagoda said. “I always relate my story to them. I explain how much I suffered in gaining financial security in my life by delaying decisions.”

In the past, rather than prioritizing her financial future, Panagoda focused on funding her two sons’ higher education.

“We had to utilize all the money in the family for their education, and I became penniless once I finished funding them,” she said. “I realized that I had not kept anything for me. My husband and I had to work very hard to build our retirement fund. I never want that to happen to my clients.”

She struggles with her own ability to meet with and advise all her clients on an individual basis. To that end, she recently has hired three assistant advisors who can fill that gap and provide personalized service that meets clients’ needs.

Fernando’s practice also has an eye on the future. His advice for fellow advisors is to think two or three generations ahead, because you never know what your current client base will become.

“The client you considered low and small today can be powerful in the future,” he said, pointing to a client who purchased life insurance coverage with a small premium. Twenty years later, that man’s son purchased a policy that allowed Fernando to reach Top of the Table.

“This is like mining for diamonds,” he said. “You never know when you will reach the diamond you are looking for. Therefore, it is our duty to protect the diamond pit.”


Warnakulasooriya Sujith Roshan Fernando

R. Sepalika Panagoda


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