Ceylinco Insurance (CIL) will not change its name despite pressure from many quarters after the catastrophe at Ceylinco firm Golden Key (GK), a senior CIL official said.
"After the GK debacle, many said to change our name a number of times. They said the Ceylinco name is below zero, but the answer of the CIL board was that if the father is a drunkard, that does not mean the son changes his name. We needed to be true to ourselves. This is the reason why we did not change our name," Ajith Gunawardena, Joint Deputy Chairman CIL told The Sunday Times FT.
He said Ceylinco Insurance brand is valued at Rs. 6.5 billion. Mr. Gunawardena noted that Ceylinco firms are going though a bad patch. "It is important to note that 'Ceylinco Consolidated' does not hold shares of any Ceylinco firm. It is just a shell company and was formed to facilitate as a forum where all 15 Ceylinco clusters meet," he explained.
He further said that there is no entity called 'Ceylinco Group'.
He said both himself and Rajendra Renganathan were appointed a month ago as joint deputy chairmen of CIL. ("We were both CEO/Director - I in the CIL General while Mr.Renganathan was in CIL Life.")
Responding to a query about the staff morale of CIL, Mr. Gunawardena said, "With everything happening around, the employee morale was declining. I could not expect it to be otherwise, because they were being ridiculed by people, but I discussed it with the staff and told them that they cannot crumble, which they took very well," he said.
About the bottom-line figures of CIL, he said as at March, it has lost about 10% of the renewals compared to the first three months of last year. "Other market players have lost about 7%. We are about 3% higher than the rest, which is remarkable after what we went through since December," he added. He assured that CIL is a public listed firm and, contrary to popular belief, its assets cannot be sold along with the other Ceylinco firms' assets to raise Rs. 26 billion to pay off GK depositors. "Mr. Kotelawala cannot sell the assets or anything for that matter at CIL as it is held by the public."
He said business has slowed mainly due to the public losing confidence in the financial markets. "This coupled with their economic downturns has slowed business. We were expecting a double digit growth, but we do not expect it anymore." He said last year the underwritten premium at CIL was Rs. 20 billion, while Rs. 11.8 billon was generated by the CIL general arm. "The increase of over 2007 for CIL General is Rs. 1.4 billion.
Today we have more than 35% market share," he added. Mr. Gunawardena said the Insurance Board (the insurance regulator) called CIL for a discussion about two months ago with regard to the GK crisis and whether it has affected CIL. "They did an audit and found CIL to be sound," he added.
Meanwhile the company has appointed Kolitha Dharmawardena, an eminent lawyer, as an independent director to its board with effect from March 2009.
He is a former Deputy Solicitor General at the Attorney General's Office and currently is involved as a Legal Consultant in ICT and Business Law. |
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