Janashakthi Insurance achieves best ever results

Janashakthi Insurance PLC (JIPLC) has recorded an impressive 17% growth in net profit-after-tax reaching Rs. 770 million and revenue of Rs. 6.8 Billion with a growth of 13% during the financial year 2010.

Janashakthi Insurance Chairman W.T Ellawala said, “Rising above the challenges, Janashakthi achieved a total gross premium of Rs. 6.158 Billion which is an eight per cent increase over 2009. The contribution of the General Insurance business was Rs. 4.5 Billion and from Life Insurance Rs. 1.68 Billion. I see this as a very positive trend amidst the challenges of an excessively competitive industry.”

  “A substantial part of our financial success came from the prudent and efficient management of our investment portfolio. We invested in a range of long and short-term instruments including gilt-edge securities and equity. This was as a result of our investment committee taking advantage of the bullish sentiment that prevailed at the Colombo Stock Exchange during 2010. During the year, we disposed of some of our strategic quoted equity investments, booking substantial profits that contributed significantly to the result for the year.”

Our strength was endorsed by RAM Ratings which upgraded our claims-paying ability rating to A- : the outlook is stable. The rating upgrade was premised on our strong performance since the previous review, underpinned by our ability to improve our expense ratio and maintain a better claims ratio than most peers in the general segment.

The expansion of Life business during 2010 was most encouraging, with a significant growth of 18% over the previous year. The introduction of our new investment linked policies and availability of new business in the North and East have contributed to this beneficial result.

The General sector growth in 2010 fell below our expectations and failed to match the previous year’s increase of nine per cent. This may be ascribed to a variety of reasons the most important being the entry of several new players offering very low premium rates albeit unviable and unsustainable in the longer term. Another reason was the strategic decision to discontinue certain accounts which have consistently proved to be unremunerative.

Janashakthi’s Motor Insurance business especially the star performer the Full Option Policy - further reinforced by our innovative Motor Vehicle Emergency Policy - continued to be the popular choice, with revenue growth 11 per cent, the highest among the three top insurers.

The company’s Gross Written Premium (GWP) reached Rs. 6.2 b at 8% growth and the revenue was Rs. 6.8 Billion at 13% growth. The total assets of the company stood at Rs. 11.8 Billion while the company life fund grew by approximately 18% to reach Rs.3.8 b. The Company paid claims amounting to Rs. 3. Billion, which was 13% higher than 2009.

“2011 ushers in a time of renewed hope and encouragement, flowing from the resilience that Janashakthi Insurance has reflected on all aspects of our business,” Chairman Ellawala concluded.            

Janashakthi Insurance Managing Director Prakash Schaffter said, “We will focus our sights on growing our top line in the year 2011, whilst ensuring that business written adds to the bottom line. The current and projected rates of growth for the country’s economy portend significant expansion in the insurance sector. Janashakthi is well poised with its extensive branch network and focused distribution strategy to capitalise on this. Claims control will continue, as in the past, to pose a major challenge”.     

He went on to say that the Company’s enhanced Management Information Systems and fully fledged Data Ware house System will give an edge to concentrate on the more profitable customer segments and to weed out the less beneficial business. “The control of expenses during the year under review gives us cause for satisfaction. This is a continuation of the virtually zero rate of expenses growth in the previous two financial years. We are confident that we will be able to contain expense growth rates to single digit figures during the year 2011 as well. We also succeeded in curtailing headcount increase of office staff to almost zero level.

 “We will continue to look at the development of selected new policies both in Life Insurance and General Insurance, after a comprehensive market study of customer needs and the identification of specific target segments. Our New Products Development process has been strengthened and the teams formed to develop the various new products launched have proved to be innovative,” Schaffter added.

With its inherent financial strength and stability, Janashakthi currently enjoys an enviable reputation decorated with many significant achievements and industry records created within a very short span of time. It was the first and only insurer to acquire a State-owned insurance company and swiftly went on to become Sri Lanka’s third largest General insurer within just one decade of operation.

Janashakthi was also Sri Lanka’s first private insurer to venture into the South Asian market. The Company has also gone on record as having made the highest pay out in relation to Tsunami claims, in excess of Rs. 5 Billion.

Janashakthi Insurance has the highest stated capital among quoted insurance companies amounting to over Rs.1.49 Billion, which is over 7.5 times the statutory requirement. The company is also backed by an asset base of over Rs.11.8 Billion, of which Rs. 4.7 Billion is in Government Securities. Janashakthi Insurance PLC has reached the Rs. six Billion annual revenue mark in the quickest time among all Insurance Companies and has an extensive branch network of over 98 locations islandwide. Last year Janashakthi Insurance clinched dual honours for two consecutive years at the glittering 19th World Brand Excellence Awards. It was bestowed with the prestigious “Award for Banking and Financial Services” and the “Award for Overall Brand Leadership” which was as a total endorsement of its endeavours in brand building and brand management efforts.

Clinching triple honours at the glittering SLIM Awards 2010, Janashakthi became Sri Lanka’s only insurance company to win the highest number of awards in the service category at this event. Adding yet another to its haul was a Silver Award in the Insurance Category for the third consecutive year at the National Business Excellence Awards 2010. With its growing array of local and global awards, Janashakthi continued to create value for customers. It created yet another revolution in Sri Lanka’s insurance industry with the launch of the country’s first-ever 24-hour vehicle breakdown policy. This much acclaimed industry first – “Full Option Vehicle Emergency Policy” is operative 24 hours a day and 365 days of the year.

Its ‘Janashakthi Life Unlimited’ policy goes on record as being the only life insurance policy in Sri Lanka or perhaps in the world, which gives customers a lifetime hospitalisation cover even after the policy matured, thus challenging the world and norms of life insurance. Janashakthi Golden Bond was an investment lead policy which gave customers unmatched returns when compared with similar Life Investment products available in the market.

Janashakthi’s commitment to supporting sports continued with its unique Rural Athlete Sponsorship Programme for the third consecutive year. The results can be seen from the surge of outstanding performances by all athletes being supported by Janashakthi. It parallely supports sailing, squash, cricket and hockey, among other sports.

It is also active in a wide range of areas of social responsibility such as installing signage at the National Eye Hospital, Point Pedro Base Hospital and Anuradhapura General Hospital, the 24-hour Vehicle Breakdown Assistance Service in Anuradhapura and Kandy during the Esala Perahera season and at Mihintale during Poson Poya. Added to this is street signage across the country including Jaffna, programmes for the safety of people at pedestrian crossings, Tsunami-aid programmes, safe bottle lamp projects, AN1H1 and Dengue awareness projects, etc.

Good corporate governance has established the image of the company as a socially responsible entity delivering greater and consistent value to customers, employees, shareholders and the country at large during the 16 years of its service to the nation.

Janashakthi’s Board of Directors consists of eminent professionals, with proven track records in the business world including W.T.Ellawala (Chairman), C.T.A. Schaffter (Deputy Chairman) & Prakash Schaffter (Managing Director). The rest of the board comprises L.C.R. de Wijetunga, Deshmanya Dr. Nihal Jinasena, Eardly Perera, Anushya Koomaraswamy, Ramesh Schaffter and Manjula Mathews.