Govt. could help boost life insurance penetration: AIA

From left: AIA Insurance Lanka PLC CEO Pankaj Banerjee, AIA Group Regional CEO Bill Lislie and AIA Insurance Lanka PLC Chief Marketing Officer Nikhil Advani 
Pic by Damith Wickramasinghe

The government could provide support to the insurance industry to help increase the level of life insurance penetration in Sri Lanka, AIA Group officials said yesterday during a media briefing held to announce their latest product. “It should be made, in my opinion, compulsory, some level of insurance,” AIA Group Regional CEO Bill Lislie said.
Lislie noted that insurance for a car, which is a piece of metal, is mandatory, but for a life which is more valuable, insurance is not. He stressed that this change should happen not only in Sri Lanka, but in all markets. “It benefits the government to get people insured, because then people will be less dependent on the government,” he said. AIA Insurance Lanka PLC CEO Pankaj Banerjee noted that although Sri Lanka has a penetration of 23-24 percent in terms of policies per household, calculating in terms of premiums to gross domestic product (GDP), the penetration is just 0.5 percent, which shows that the amount insured is lower.

“If the government and society can promote the benefits of insurance, it will reduce the people’s dependence on the government on the longer term, so there is a genuine benefit for the government to educate and incentivize voluntary conversion,” he said. Banerjee added that the government could also support the industry by lowering taxation on insurance products.
  “In countries will similar sizes of GDP, it’s twice or thrice the penetration of premiums to GDP,” he said.
 The need for life insurance in Sri Lanka is likely to increase due to the ageing population, as well as the increasing frequency of extreme weather events experienced in the past year due to global warming.
Further, Banerjee noted that 1 million Sri Lankans are obese, 1 million suffer from diabetes, and 26 percent of the population is overweight, increasing the likelihood of non-communicable diseases.
Lislie said that if the main income earners of a household insure for at least 10 times their annual income, this would likely create enough of a buffer for their dependents for at least 10 years, in case of some mishap. In this context, AIA’s latest product, ‘Vitality’ is aimed at improving the awareness of life insurance products, while also improving the health of Sri Lankans by rewarding them for fitness achievements.
“This is a unique product, because it’s not talking about insurance’s normal aspect of death, but another aspect of living healthier and longer. Once people download it and use it, they will get the rewards, and see the changes in their lives, and they might say, ‘Hey I’m thinking of getting a life insurance’,” Banerjee said. 
Sri Lankans—even those who are not AIA customers—can participate in the programme by downloading the mobile app, which sets participants weekly or even daily targets to achieve on how many steps they walk, which could be tracked either using the phone or a fitness tracker. 
A fitness tracker also lets a participant engage in other exercises and contribute towards their progress on Vitality, according to AIA Insurance Lanka PLC Chief Marketing Officer Nikhil Advani.
“People get healthier, and they get lifestyle rewards,” Lislie said.
Currently, PickMe, zMessenger, Takas.lk and EAP movies have partnered with AIA Vitality to provide vouchers and free movie tickets, Advani said. Lislie added that AIA is working on increasing their rewards partners to hotels, restaurants, gyms, pharmacies, airlines etc.
Banerjee said that as the second phase of the product, AIA will be offering integrated life insurance policies for Vitality participants, where the higher their Vitality rank, more discounts are offered on insurance premiums, while personalized rewards are also planned for later implementation.
Lislie said that many corporate clients are now showing interest in having their employees participate on the programme, which has registered 3,500 participants over the course of 10 days. 
“This product will open, in my opinion, a larger market,” Lislie said, and added that digital outreach is likely to have more of an impact even in rural Sri Lanka, where many are still wary of insurance agents.
The AIA Group is the world’s second largest insurance group, the largest in Asia, and has been in operation for nearly 100 years. AIA entered Sri Lanka in 2012 by acquiring AVIVA NDB Insurance PLC, and is now Sri Lanka’s 3rd largest life insurance company. (CW)