In the past 20 years of market leadership, Ceylinco Life insurencec omany has achieved the highest premium income every year since 2004. This is no mean feat by local or international standards., Ceylinfo Life Chairman R. Renganathan claimed.
However,the company believes that in determining the market leader in life insurance, there are other factors that must also be considered.
These are capital adequacy, profitability, and Life Fund and Reinsurance arrangements. It would also be good if factors like claim settlement, gender equality in employment and good citizenship are assessed.
Capital adequacy in life insurance refers to the sufficiency of an insurer’s capital to cover its risks and obligations effectively.
Life insurance companies hold capital to ensure they can pay policyholders’ claims, meet regulatory requirements, and remain solvent in adverse situations.
The capital adequacy ratio compares an insurer’s available capital to its required capital, based on the risks inherent in its business. The risks include market risk, credit risk, concentration risk, liability risk, operational risk and reinsurance risk.
The minimum capital adequacy required by the regulator is 120% while the regulator has the right to intervene when the capital adequacy is 160% or less.
Notably, Ceylinco Life’s Risk-based Capital Adequacy Ratio improved to 344% at the end of 2023, well above the minimum requirement of 120%.
The size of a life insurance company’s Life Fund combined with Capital Adequacy is an indicator of the ability of the company to meet future obligations. Ceylinco Life’s Life Fund stood at Rs 157.5 billion as at 31st December 2023, after a transfer of Rs 1.97 billion to the Shareholders Fund in respect of the year.
The profitability of a life insurance company is important because it is possible for companies to sell some products in their portfolios at breakeven levels or at a loss, to show premium growth.
Finally, any life insurance company should have reinsurance arrangements with a rated insurer. This is the process of sharing its risk and enables transfer of knowledge.
Success in life insurance can be equated with trust. Life insurance is a product that is far more intangible than a straightforward investment in an interest-earning bank deposit where the dynamic between the management of risk and return is clear, CEO of the company Thushara Ranasinghesaid The significance of our market leadership, in that context, is that it affirms that Ceylinco Life is the most trusted life insurance company in the country, and has been the most trusted company for the past 20 years, he added
