Prakash Schaffter, Managing Director, Janashakthi Insurance

Industry still to attract insurable population

Hiran H. Senewiratne

The strength of the insurance industry was the privatisation of the sector, which was able to lift its services by offering quality products to the public, Managing Director Janashakthi Insurance Prakash Schaffter said.

He said excessive price competition has resulted in too many players, which was mainly confined to life and general insurance sectors only, but was not able to attract the insurable population in the country.

Schaffter said the number of insurable population in the country is comparatively small once they exclude retired people, children/ students, housewives and the people who live below the poverty line out of the total population in the country.

To identify the real number, no one has done an adequate research on this area. Schaffter said the company's financial strength and the balance sheet is very strong and that had made them to go for an Initial Public Offering next month to broadbase shareholding and provide an opportunity to the people to invest in it.

"In the last two years not a single company has gone for an IPO in the country," he said.

The company will issue 33 million new shares worth Rs. 400 million to the public and with the completion of the issue, the company's performance will grow remarkably, he said.

Q: As a person who holds a key position in a leading insurance company how do you look at the insurance sector in Sri Lanka?

Our market is small, which is like the drop in the ocean when compared to other countries despite high growth trends in the country. Our insurance culture is a laid-back culture as most of the people look at it from the view that it is not necessary to get insured.

The industry should take steps to educate the people as 80 per cent of the country's population do not have any kind of insurance policy.

In the life insurance area some kind of training is required for insurance agents to improve the service. As we know Sri Lanka is now going through a tough period due to high interest rates and inflation, therefore every company has to tighten their belts now.

Q: What do you think about the debatable Solvency Margin ratio stipulated by the Insurance Board of Sri Lanka?

As we know that 20 per cent of net earning earned premium is known as the solvency margin which is a good concept.

Because insurance companies are the custodians of policyholders and therefore we have to have and show some financial stability to operate in the sector.

Q: You became the MD recently. How do you feel and what are your plans?

I became MD in 2006.I feel happy to give livelihood for 2500 people and 2000 people working outside as agents. Now my plan is to make the company a vibrant organisation in the country and to drive it to the top of the ladder. I will also expand the branch network covering all strategic locations in the country.

Q: What is the best solution for the country's crisis?

For Sri Lanka to progress, this crisis should be resolved as quickly as possible. Solution involves all views of the community. If the Government helps all communities, then the conflict can be resolved.

The Northern and Eastern part of the country is less developed when compared to other parts of the country. Therefore, the corporate sector must look at the Return on Investment (ROI) while looking at political stability to invest in those areas.

Q: You are interested in cricket, have you played cricket either in school or university?

My favourite sport is cricket where I played for the University of London and Cambridge teams. Famous cricketer Derrick Randell was my coach at the Cambridge University. I was also the past member of the Interim Committee of Sri Lanka Cricket and like to spend time with my wife.

Q: What are the countries you like to visit most?

I like to visit Middle-Eastern countries like Israel, Egypt and Lebanon. Because I have studied and read a lot of books on Middle-Eastern countries which has rich histories.

Q: You had your education in India and afterwards you went to the UK for higher studies. How would you see the education in Sri Lanka?

I would say that Sri Lanka's State schools are better than in other countries in the world. Free education is very good and creates equality among everybody in the country. Studying overseas is a great experience, which helps one to think liberally in my day to day work.

Q: What is your advice to the younger generation?

My advice to the younger generation is to work hard. They should understand nothing comes easily.

They should also educate themselves for a rounded life. Education and sports goes together and it will help one to become a balanced person.

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Bio-data

Name: Prakash Anand Schaffter

School Attended: Madras Christian College in India

Qualification: Academic - Bachelor's degree in Political Science, University of London UK

- Master of Business Administration (MBA) University of Cambridge, UK

Professional - Fellow of the Chartered Insurance Institute, UK

Career: Insurance Officer General Accidental Insurance Corporation, UK FROM 89-1990

Director Acland Insurance Brokers 1992-1995

Deputy General Manager Janashakthi Insurance Company 1994-1996.

Director / General Manager Janashakthi Insurance Company 1996-2006.

Current Position: Managing Director from 2006