Insurance uncovered: How risk, protection and trust shape growth and resilience

In markets marked by volatility and demographic change, insurance is more than a balance-sheet exercise. When properly understood, it operates as a disciplined social contract – allocating risk, preserving capital and underpinning confidence. In that sense, its quiet role in economic resilience may be now more important than ever.

Interview with Senaratne Insurance Brokers Ltd. Deputy Chairman Ainsley J. Alles on the occasion of the launch of his book “Insurance Mastery”.

By Renuka Jeya Raj

How did you first enter the insurance industry, and looking back now, what has changed the most – and what has remained surprisingly constant?

My entry into insurance was largely accidental. In the early 1980s, career paths offering structured professional advancement with growth opportunities were limited, and the National Insurance Corporation (NIC) was one of the few establishments that combined employment with formal qualifications.

I joined NIC in 1982 as a trainee. It offered a program leading to the examinations of the Chartered Insurance Institute, London. This appealed to me, as I was keen to pursue professional credentials while gainfully employed. I was placed in the Fire Insurance department under experienced mentors who had spent decades in the field. Underwriting, in those days, was learned through rigorous apprenticeship and practical exposure, including risk inspections. It instilled in us discipline, responsibility, and a deep respect for the role. Senior management ensured that trainees received sufficient exposure to take on higher responsibilities within the organisation. By the time privatisation loomed a few years later, trainees were well-equipped with part qualifications and practical experience.

That foundation of disciplined underwriting, in my view, has changed most. Today, underwriters often face pressure to match competitors’ pricing and accept any and every business presented without fully evaluating the underlying exposure, management expenses, or reinsurance implications. Following privatisation in the late 1980s, the industry’s focus shifted toward growth. Top-line expansion became a dominant objective, sometimes at the expense of technical risk evaluation. If risk is misjudged at the outset, the consequences eventually surface. Sri Lanka is a relatively small market. Competition for the same business intensifies pricing pressures and, if not managed carefully, dilutes underwriting results.

The nature of risk itself has evolved. Renewable energy, cyber exposure, and complex infrastructure projects were scarcely discussed when I began. Today they are central. With technological advancements in all spheres of life, the fundamentals of insurance remain constant, but underwriters must upgrade their knowledge continuously to stay conversant with emerging risks.

I recall a case involving a client where we underestimated the exposure. Claims escalated, rendering the portfolio unsustainable. We ultimately withdrew from it. The experience reinforced the lesson that disciplined underwriting protects the company and its stakeholders.

You’ve worked across underwriting, reinsurance, and marketing – areas often treated as silos. How has that shaped your understanding of risk and protection?

Working across underwriting, reinsurance, and marketing gave me a panoramic view of operations. Insurance functions may be organised into departments with individual goals and strategies, but in reality, they are deeply interconnected. A decision in underwriting affects reinsurance; reinsurance pricing affects competitiveness; competitiveness influences growth strategy. Seeing these dynamics from multiple vantage points deepened my understanding of acceptable risks – what should be taken on board and what should not. At times, companies make a profit by refusing certain risks. No function operates in isolation.

A useful analogy is a cricket team. All units should function as one cohesive team. The underwriter sets the foundation by assessing and accepting risks. The claims handler safeguards the company’s integrity by ensuring claims are properly managed. Sales and marketing generate business, but that business must align with underwriting philosophy. Support functions such as HR and IT enable the system to operate effectively. If one role weakens, the entire team feels the strain.

Working across these areas reinforced a simple principle: insurance is not merely about selling policies. It is a future promise that must be delivered at the appropriate time. It is about managing risk collectively and sustainably. Not all risks are insurable; selection is the key to sustainable growth. Aggressive growth without underwriting discipline ultimately affects claims experience, reinsurance negotiations, and long-term stability. The functions operate in parallel but are interdependent, much like railway tracks: individual tracks do not meet, yet they carry the train to its destination. All departments must remain aligned for the system to move forward safely.

What moment made you realise your experience needed to be written down?

As trainees, we were thrown into the deep end. With privatisation came rapid expansion and an influx of recruits. Competition intensified, and the market became increasingly supply-driven. In that environment, I was called on to share what I had learned with others – from learner to doer, and then to teacher. Later, I had the opportunity to lecture on risk management and insurance to students and members of various institutions, associations, universities, and insurance companies.

I lectured agents, broker staff, underwriting and claims teams, and sales personnel on insurance fundamentals and policy coverages. While professional qualifications provided technical grounding, practical field experience gave context and judgment. Theory explains how insurance works; experience teaches how risk behaves.

Over time, I realised that much of the knowledge I had acquired, particularly regarding policy interpretations, claims processes, and risk evaluation, was not being systematically passed on from the learned to the learner. I am approached by many for second opinions and interpretations, which suggests a gap in technical depth.

There came a moment when I realised my experience was no longer merely personal; it had become collective insights worth sharing. The industry had given me perspective, and I felt a responsibility to capture it before it was lost. The book is my attempt to preserve four decades of practical insights for practitioners, students, brokers, corporate leaders, and clients alike. It explains what policies cover, claim documentation, and the loss adjuster’s role, along with legal aspects, providing practical knowledge beyond what AI or the internet can supply.

From your perspective, what do people most misunderstand about the role insurance plays in society and the economy?

Insurance plays a deeper role than many appreciate. It is an invisible yet invaluable tool for society and the economy. It enables businesses to take risks, grow, and progress, families to plan for their futures, and communities to recover from shocks. Without insurance, progress would stall under uncertainty. Many people see insurance as a mere transaction – a policy bought and filed away – which is a limited view. My book seeks to illuminate its broader relevance, showing that insurance enables growth and resilience.

Many misunderstand insurance as a guarantee of payment rather than a contract governed by defined terms and conditions. Insurance does not cover all eventualities. When expectations are shaped by overpromising or inadequate explanation, dissatisfaction follows. When properly structured and understood, insurance is a great risk transfer tool. Businesses expand with the knowledge that certain risks are transferred and that they are protected against defined contingencies.

Underwriting is a sacred and serious responsibility. Poor underwriting has led to company failures. It requires technical knowledge and judgment developed over time. In many ways, an underwriter must use “three brains”: mind, heart, and guts, formed by experience, historical lessons, and grounded in formal knowledge and training. These prevent costly misjudgements. I have witnessed several instances where such judgment proved more decisive than theory.

The book clarifies these realities for practitioners and clients alike.

Insurance is often criticised as fear-based or unnecessarily complex. What should ethical insurance marketing do?

It is because expectations are not always aligned with contractual realities. Ethical marketing must bridge that gap. Sales and intermediaries have a duty to explain clearly what is covered, what is excluded, and the obligations of the policyholder. Overpromising to secure business may deliver short-term results, but it damages trust in the long term.

Policy language can be legalistic and complex. Insurers should strive for clarity and simplicity wherever possible. When clients understand the scope and limitations, insurance becomes not a fear-driven purchase, but a rational financial decision. Sustainable growth in the industry depends on transparent communication and disciplined selling practices.

Insurers, too, play a vital role in dispelling public fear by honouring their contracts and settling claims promptly and accurately. Attempts to delay, reduce, or repudiate legitimate claims may serve short-term interests, but they erode trust. Unfortunately, some insurers have perfected this art. Such behaviour damages the industry’s reputation and reinforces negative public perceptions.

Why is this book particularly relevant now, when global risks feel increasingly interconnected?

Insurance has become more relevant than ever because risk itself has become more interconnected and less predictable. Geopolitical tensions, trade embargoes, sanctions, and sudden conflicts can disrupt supply chains, marine exposures, investments, and cross-border transactions almost overnight. Climate volatility has increased the frequency and severity of events once considered rare.

At the same time, healthcare has undergone significant transformations. Medical costs have risen sharply. Hospitals and healthcare providers operate within business models that require financial sustainability, which affects pricing. For individuals and families, a serious illness can carry substantial financial consequences. In such an environment, structured health insurance becomes less optional and more essential.

The pandemic further reinforced how systemic risk can affect entire populations simultaneously. Health, climate, and geopolitics are no longer isolated domains; they interact in complex ways that amplify uncertainty. Insurance cannot eliminate these risks, but it provides structured financial resilience. Understanding precisely what is covered, what is excluded, and how indemnity functions is critical. In a world of interconnected uncertainty, clarity about risk transfer is a necessity.

If readers take away one shift in thinking from your book, what would you hope it is?

I hope readers understand that insurance is the final link in a broader risk management process. Insurance is not a substitute for irresponsible behaviour. For example, motor insurance cannot compensate for consistently reckless driving.

My aim is to provide clarity on principles, classes of insurance, and claims processes so that practitioners, intermediaries, corporates, and individuals make informed decisions. When properly understood, insurance becomes what it was always meant to be: a partner in progress, allowing confidence in financial protection. A structured promise that underwrites economic stability, protects progress, and reinforces resilience in uncertain events.