Ceylinco Life pays bonus to its policy holders
Life Insurance leader Ceylinco Life recently declared a record Rs. 1.4 billion as annual bonuses to more than 300,000 policyholders. In this interview, the company’s Deputy Chairman R. Renganathan elaborates on this payout and what it signifies.
This year’s bonus payout, based on the actuarial valuation
of our Life Fund as at 31st December 2008, is
nearly 17 per cent more than the bonus payments made in 2008. But there is something new this year.
Q: Although many companies are finding it difficult to deliver benefits to stakeholders due to the economic downturn, Ceylinco Life has declared a record bonus payout. How do you explain this?
It would be incorrect if we are to claim that we are not affected by the economic downturn, As a company that is in a long-term relationship with its clients Ceylinco Life is committed to passing on every possible benefit to its policyholders. we achieved a 15.48 per cent Return on Investment from its yielding portfolio in 2008. We ended 2008 as the market leader for the fifth successive year with premium income of Rs.8.2 billion.
Q: How does this year’s bonus payout compare with last year’s?
This year’s bonus payout, based on the actuarial valuation as at 31st December 2008, is nearly 17 per cent more . But there is something new this year, as recipients of bonus certificates will also have a chance to win attractive prizes, including a trip to Singapore, a TV set, DVD players, camera phones, blenders and consolation prizes, by updating their personal details when they meet our representatives bearing bonus certificates.
Q: Who is eligible to receive these bonuses and how would they receive them?
All Ceylinco life, (with profits) policyholders, whose policies were active as at 31st December 2008, are eligible to receive these bonuses.
This year, we plan to deploy our 5,000-strong sales force in door-to-door personalized delivery of bonus certificates, commencing mid March. Usually, bonus certificates are posted to policyholders.
Q: You mentioned return on investment. Can you elaborate on the investments made by the company’s Life Fund of 21 billion?
The investment portfolio of our Life Fund is made up of Government Securities (42%), Licensed Private Banks (17%), State Banks (15%), Real Estate (13%), Corporate Debt (7%) and Others (6%). Investments pertaining to our Life Fund are made in conformity with the investment guidelines stipulated under the Regulation of the Insurance Industry Act No 43 of 2000 and are subject to regular monitoring by the Insurance Board of Sri Lanka (IBSL).
Q: What growth has Ceylinco Life recorded in business?
Ceylinco Life’s Gross Written Premium income grew by 20.6 per cent to Rs 8.25 billion in 2008, an increase of more than Rs 1.41 billion over the previous year, giving us a market share of nearly 34 per cent in the life insurance segment.
Q: What are the other strengths of Ceylinco Life?
Our solvency margin which is the difference between the value of admissible assets and liabilities was five times the minimum solvency margin stipulated by statute in 2008. The prevailing insurance regulations require all insurance companies to maintain a solvency margin not less than 5 per cent of their statutory liabilities at all times. Exceeding the requirement by five times illustrates our financial strength and ability to honor all claims. The actuarial valuation was certified by an independent actuarial firm M/s.Watson Wyatt Worldwide
Q: What other initiatives has your company recently undertaken to benefit policyholders?
We conducted a promotion called the Ceylinco Life Family Savari, under which we have already taken 20 people from five families to Singapore for an all-expenses-paid cruise on a luxury liner. We expect to take 2400 people from 600 families for a full-dayouting to Leisure World in the near future. This is one of the largest interactive promotions ever undertaken by a corporate entity in Sri Lanka, and is the biggest promotion in the local insurance industry.