Co-Operative Insurance to list via IPO to cap off commanding annual performance

Co-Operative Insurance has announced its plans to go for an Initial Public Offering (IPO) in 2021, following a commanding financial performance for the past year. 

The IPO will be managed by the Merchant Bank of Sri Lanka.

Co-Operative Insurance was able to grow by an impressive 5% in a challenging, economically crippling environment impacted by the COVID-19 pandemic to post a profit of Rs. 695 million for the fiscal year 2020, up by a commendable 155% from last year. 

“Co-Operative Insurance has yet again delivered a strong year of financial performance the past year with a revenue (Gross Written Premium) of Rs. 5.2 billion. The company’s steady, undeterred performance continued to demonstrate stability during a period that was characterised by numerous restrictions forced into play by the global pandemic,” Co-Operative Insurance Managing Director Wasantha Ranasinghe said. 

“Our robust cost management initiatives, proactive drive to innovate, commitment to process re-engineering efforts backed by digital technologies, and most importantly the strength of our passionate and deeply dedicated team has helped Co-Operative Insurance move from strength to strength. As a truly Sri Lankan company, these traits have helped prepare ourselves for the upcoming IPO that will enable us to further offer unparalleled standards of insurance to people from all different backgrounds across Sri Lanka,” he added.

Co-Operative Insurance’s market share has increased to 4.06%, in comparison to 3.89% as in 2019. (ircsl.gov.lk, 2020). Compared to the Industry GWP growth, which was -2.24% during the past year, the company recorded GWP growth of 2%. The company reported a five-year Average Annual Growth Rate of 21% of GWP, while the industry five-year GWP Average Annual growth was at 8.95%. Co-Operative Insurance also noted that its contribution to increasing insurance penetration in the country has increased during the period in review with 916,682 policies issued by CICL. 

Profit After Tax (PAT) for 2020 rose to Rs. 695 million, an increase of 155% year-on-year (YOY). Profit Before Tax (PBT) grew by 120% compared to the previous year’s amount of Rs. 940 million. 

Established in 1999 with the aim of taking the concept of insurance beyond the borders of urban and suburban Sri Lanka, Co-Operative Insurance operates the third largest branch network amongst all local insurance companies today. Rooted in a strong foundation of excellence in customer service, progressive work culture, enriched experience, consistent commitment to innovation and an equal measure of heart, the company was the first in the country to introduce flexible insurance solutions to suit the large portion of motorcycle and three-wheeler owners located across rural Sri Lanka.

According to general insurance policy, there was a need to grow the company’s capital to Rs. 1 billion in 2015, an undertaking Co-Operative Insurance led with the creation of its subsidiaries Co-Operative Insurance Company and Cooplife Insurance – a historic benchmark within the organisation. Of this, 99.99% of the total investment of Rs. 1 billion were investments from co-operative societies across the country.  Together, they provide diversified general and life insurance solutions to customers from both rural and urban backdrops, with solutions that serve individuals, SMEs, Cooperative Society members and corporates.

Co-Operative Insurance was also able to grow its share capital of Rs. 1 billion in 2015 to Rs. 1.6 billion, and its assets to Rs. 11 billion. The company grew from strength to strength, posting a staggering 44% growth in 2016 by competing side-by-side with multinational companies around the world, enabling it to become the fastest growing insurance company in the local insurance industry that year. 

Further affirming its financial strength, the company was awarded a Fitch Rating of BBB+ Positive outlook over the past few years. The strategic expertise of its management and its proven financial stability has enabled the company to continue to deliver dividends higher than the general Weighed Average Treasure Bill Rate.