| Free hold |
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| MBSL Insurance moves towards better horizons |
By Gayani Perera |
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| Mr. Sydney Gajanayake - MD |
MBSL Insurance Co. Ltd. which was previously known as ABC Insurance was taken over by the MBSL in May this year as a precautionary measure to save the Insurance Industry, which at that time was experiencing very challenging and turbulent times.
The Sunday Times Free Hold Supplement spoke to Mr. Sydney Gajanayake, the company's Managing Director who assumed responsibilities recently to find out more about their future plans. Mr. Gajanayake who was the former Chairman of the Apparel Exporters Association is a graduate from the University of Sri Jayawardanapura and holds a Masters Degree in Information Technology from the University of Keele UK.
He also provides services as a Visiting Lecturer in Post Graduate Studies.
"Since the takeover, the company has been restructured where we are currently working alongside our restructured plan. MBSL Insurance today is a very stable institution, where in the month of November we have achieved a profit which is a very outstanding achievement when taking into consideration the difficulties and challenges faced by the company prior to the takeover. Currently we see a very positive response from the market and our revenue in improving gradually. We are hoping the company would achieve a turnover of Rs. 400 million this financial year", says Mr. Gajanayake.
The company underwrites both life and general insurances and currently has 17 branches operating islandwide. In two months time the company is hoping to open a branch in Jaffna and after this has been done the company plans to expand to the areas of Batticaloa and Trincomalee and by doing so penetrate even further into the Sri Lankan insurance market.
The main responsibility entrusted to MBSL Insurance at the time of the takeover was to maintain and protect the existing policyholders, which has been done to the maximum since the takeover took place.
Earlier the economic environment was more favourable towards privatization, however now the concept is a little different. The current trend as we have seen is one where failed private organizations are being taken over by highly successful government sector enterprises in order to infuse public trust and their continuity .
When asked if MBSL Insurance will be introducing new products and concepts in addition to that of those previously introduced by ABC Insurance Mr. Gajanayake said, "At present we are continuing with the existing products for this year, and we will be introducing a new policy targeting children's higher education. The objective is to facilitate an unhindered University education for every policyholder once they enter the University. We will pay greater emphasis to improve our Life Insurance business portfolio which will complement our already strong General Insurance business portfolio. We are also seriously considering introducing a unique motor insurance policy which will further enhance our portfolio and service to our customers."
According to Mr. Gajanayake with the interest rates coming down the insurance companies will have to re think their rating policy especially on General Insurance business. To date a majority of the companies were able to offer very low rates and continue to show positive results mainly because their profitability was boosted by the investment income. This he says will no longer be the same due to the dramatic decrease in the interest rates seen this year. "Therefore, in future the companies will have to re look at their strategies if their operational viability has to be sustained" he added. "The decline in interest rates has a negative impact on the insurance industry, where their main source of funds is invested in treasury bills. So therefore the insurance industry is compelled to look for new market opportunities. The opening up of the North and East areas of the country has automatically paved the way for this. This allows the insurance industry to concentrate on its core business and make use of the newly opened markets", further stated Mr. Gajanayake.
MBSL Insurance has re-insurance treaties with a panel of internationally reputed "A" rated re- insurers and these arrangements are regularly reviewed to ensure the most prudent terms are negotiated.
When it comes to a special events specialized re-insurers are engaged to underwrite these policies. With regards to insuring an organization against natural disasters customers are encouraged to take up a comprehensive policy by paying an additional price, which covers natural disasters such as Tsunami devastations, floods, earthquakes and much more.
Armed with its new leadership as well as the developments deemed to take place in the future, MBSL Insurance is steadily moving towards achieving new horizons in the insurance industry. |
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