Comments /3857 Views / Thursday, 12 January 2012 00:30
By Cheranka Mendis
The Richard Pieris Group yesterday added another service to its portfolio launching its own insurance company under the brand ‘Arpico’ with an investment close to Rs. 700 million.
Running with a tagline of ‘Insurance for the Living,’ the new venture is part of the Group’s diversification plan and will extend the financial services offered by the group from the current stock broking and financial asset management. The launch comes at a time when the group is celebrating its 80th anniversary.
Partnering with world’s number one reinsurer, Munich Re for risk preclusion along with global entities such as Life Insurance and Market Research Association (LIMRA) and Million Dollar Round Table (MDRT), Arpico Insurance will present a wide range of services to the community.
The service portfolio is made up of education plan, hospitalisation plan, income replacement plan, retirement plan, health plan, group assessment plan, critical illness plan, investment plan, loan protection plan and lifetime surgery plan.
“Even though we developed and controlled another insurance company for eight years, we wanted to venture into the insurance industry under our own name, our brand and logo. It is in many ways a fresh start,” said Group Chairman Dr. Sena Yaddehige yesterday, adding, “We want to create a new market space.”
He noted that the insurance company will offer benefits which the customers can enjoy while living while continuing to provide for those who live after. “The general perception is that a death should occur to reap benefit of a life insurance. Here we create a new space for insurance for life,” he said, “Live today; do not postpone life and here we present a chance to do just that.” There has been a 30% premium growth in the local life insurance industry, Group Director Operations Ravi Liyanage said.
“It is believed that less than 11% of the population is insured in the country and only 27% of the workforce is insured. As such the scope for life insurance in the country is great. This venture would enable us to maximise shareholder value while contributing to the growth of the country.”
“We will offer life insurance initially before venturing into other classes of insurance. As we move forward you may see the launch of several innovative products in the life space,” Liyanage added.
Plans are also underway for the Group to enter the leasing and finance sectors in the coming financial year to be a major force in the country’s financial services market.
The Group posted an all time high profit from operations during last financial year with Rs. 3.4 billion and a post tax profit of Rs.2.2 billion in 2010/2011. An estimated group turnover reaching Rs. 32 billion is expected in 2011/2012 with over Rs. 3 billion in profits.
When asked why life insurance over other segments, Liyanage noted that the motor insurance business is a loss-leader in the country. “Only two companies in the industry is making money. It is a loss-leader. But there is great scope overall in insurance industry. When it comes to general insurance the infrastructure needed is much more.”
The initial distribution thrust will be focused on the Western Zone, he said. Plans are underway to extend services to Arpico retail customers where footfall is said to exceed 650,000 on a monthly basis. “The company has a unique approach mapped out with key result areas for measurement with its optimum frequency.”
In 2012, Arpico Insurance hopes to start ten branches while the ambitious plans list 50 branches within five years. By end 2012, the direct and indirect sales force should come close to 500 persons. Currently the sales force numbers 125 and back office having some 20-25 employees.
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