Leading Sri Lankan insurer Co-operative Insurance, recently announced the date of their Initial Public Offering (IPO), which is set to take place on the 20th of December, 2021. The IPO will be managed by the Merchant Bank of Sri Lanka.
Affirming its financial strength, the company, which secured a strong financial performance for the past year, was able to grow their Net Earned Premium (NEP) 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 the year before. This enabled it to make an indelible mark as one among the top 10 insurance companies in the country, affirming the success of the company’s vision of delivering unparalleled insurance solutions and services to all Sri Lankans across the island.
“This IPO is an important milestone for Co-operative Insurance, and is a firm testament to the continued dedication and passion of our staff and the firm loyalty of our clientele. Our steady, undeterred performance continued to demonstrate stability and resilience during a period that was characterized by numerous restrictions forced into play by the global pandemic. Right now, we are bullish of what Co-operative Insurance can achieve during our IPO, and in turn how it will help elevate our portfolio in 2022,” Co-operative Insurance Chairman Susil Weerasekera said.
The past year, Co-operative Insurance’s (general) market share has increased to 4.42%, in comparison to 4.27% as in 2019.[ CITATION irc20 \l 1033 ] Compared to the general insurance industry GWP growth, which was -2.24% during the past year, the company recorded GWP growth of 2%. The company reported a 05-year Average Annual GWP Growth Rate of 21% of GWP, while the general insurance industry 05-year GWP Average Annual growth was at 8.95%. Co-operative Insurance also notes that its contribution to increasing general insurance penetration in the country has increased during 2020 with 945,743 policies issued by CICL. Profit after tax (PAT) for 2020 rose to Rs. 695 million, an increase of 155% YoY. Profit before tax (PBT) grew by 120 % compared to previous year to stand at Rs. 940 million.
“We are delighted to announce that our Initial Public Offering will take place on the 20th of December, 2021 following a strong financial performance this past year. Our robust cost management initiatives, proactive drive to innovate, digital-first process re-engineering efforts, and most importantly the strength of our passionate and deeply dedicated team have helped propel Co-operative Insurance to an elite league of top insurance providers within the country. I believe these traits have helped prepare us for this IPO and continue to offer unparalleled standards of insurance to people from all different backgrounds across Sri Lanka,” remarked Co-operative Insurance Managing Director Wasantha Ranasinghe.
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 company 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.
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.
One of the major factors influencing the company’s resilience since 2015, was its significant investment in technology to both upgrade and streamline processes to better equip its employees and customers to access the Co-operative Insurance’s diverse portfolio. As a result, customers were afforded the convenient opportunity to obtain motor insurance policies by visiting our www.ci.lk website. This not only fortified the company’s service portfolio to outperform its competitors but strengthened its positioning as an insurance company of the people.
Co-operative Insurance also lead the establishment of the country’s first training academy installed by an insurance company for its over 1500 employees, naming it the Coopinsu Training Academy. Through this, the company’s employees are given access to powerful local and foreign training programmers and high quality educational facilities to fortify their skillset and further their horizons on a regular basis, a strategy that directly impacts the quality of service provided to its customers. Also this academy is registered institute for Chartered Insurance Institute in UK (CII) Exam in Sri Lanka.
As one of the foremost insurers in the country and one of the biggest claims provider, Cooperative Insurance works to offer affordable premiums to match the requirements of a wider proportion of customers across the nation. With this ethos, Co-operative Insurance forges ahead to continue to change the viewpoint of rural and urban communities on insurance, while providing affordable solutions to customers by working hard to understand and cater to their rapidly evolving needs.
StrEdge calls for SMART restructuring of businesses
In a climate of unprecedented economic challenges, restructuring of businesses, from public enterprises to SMEs is critical, says the leadership of the StrEdge Group of Companies. In a press statement, StrEdge Group, which is a cluster of home-grown enterprises covering consultancy in Processes, People, Finance and Technology, notes that Business Process Reengineering (BPR), Human Resource Restructuring, Financial Restructuring and Automation are crucial not merely to support rebuilding the country but also from a long-term sustainability perspective.
“Multi-dimensional restructuring is a prudent and a tested method to come out of the difficult circumstances the entire country is facing right now. This will create results in national interest if all can adopt SMART methodologies, from entrepreneurs to government hierarchy,” Group Director /CEO StrEdge Advisory, Sumedha Wijesekera notes in the press statement.
StrEdge which brings hands-on experience restructuring multiple businesses from corporates to SMEs, believes that a proper analysis of the existing banking finance structures of a business cannot be undermined. “The rising finance costs and all the macroeconomic constraints coupled with prevailing uncertainties have warranted restructures from both the business perspective as well as that of the bankers’,” observes Wijesekera. From a business perspective, such restructuring would enable solutions for cash flow constraints, save bank interest cost, promote sustainable growth and more importantly, businesses to be future-ready to capture the market potential in the next upward curve of the economy, he says.
From the bank’s perspective, restructuring helps to offer better structures with effective monitoring to match the business requirements, prevent NPLs and build up strong and more profitable relationships by being able to act as an advisor in this setting.
Furthermore, it is very important to revisit the costing of goods and services in any organisation in view of increased raw materials prices, exchange rates, finance cost, loss of sales, diminishing margins and loss of capacity. Introductions of dynamic price mechanisms for each product and service channel of today’s businesses, will give a lot of clarity for the leadership to manage them successfully.
The StrEdge Group which has in depth experience in BPR covering multiple industries including both banks and non-banking financial institutions, believes that SMART restructuring will help organisations re-align their processes with present and future demands, says StrEdge Group Director, Janaka Epasinghe. The current demand to achieve more with less resources, has triggered this as a need, he adds. “Eliminating waste, increasing the service levels, reduction in costs, increased visibility, internal and external customer satisfaction and future-readiness are few of the results that can be derived with this activity. Furthermore, this will strengthen the sustainability of any organisation,” Epasinghe remarks.
Current economic constraints have taken a huge toll on the human resource which is the heart of any organisation, compelling to revisit the HR pillar for sustainability and growth, observes Epasinghe who notes that if organisations are not in a position to compensate with economic benefits, it’s always important to bring other interventions to maintain productivity.
“The biggest bonus here is that even the workforce is ready to embrace changes despite the current challenging environment with a resilient mindset, which the leadership needs to capitalise on,” says the StrEdge Director.
The foreign currency constraints and the lack of resources due to the brain drain in the IT industry have pushed certain organisations to successfully opt for less expensive technology solutions with the help from external and internal experts. “These interventions will give results within a shorter period of time with a very low budget. Empowering the staff, cost reductions, visualisation, better service standards and increased profitability are some of the major benefits of these SMART technology interventions within a company,” observes StrEdge Tech Solutions Director/CEO, Udaya Samaradivakara. It will also help them to address multiple urgent needs from a people-process-finance and technology perspective, without waiting until times get better and this certainly will be a SMART option, notes Samaradivakara.
Oil demand forecasts aren’t as bullish as they seem
Oil has become an attractive alternative fuel because gas prices have soared. But Europe is rapidly replenishing its natural gas stockpiles.Recent revisions to oil demand forecasts aren’t as bullish as they might appear. Don’t get too excited about prices going up just yet.
The International Energy Agency, the US Energy Information Administration and the Organization of Petroleum Exporting Countries all updated their short-term outlooks in the past week. Two of them cut their demand estimates for both this year and next, with only the IEA breaking ranks to increase its forecasts. And it wasn’t just a minor tweak from the Paris-based agency. It revised oil demand higher for this year by a whopping 520,000 barrels a day, with most of that rolled forward into 2023 as well. On the face of it, that’s very bullish for oil.
But there are plenty of reasons to be cautious. First, let’s compare the actual outlooks from the three sets of analysts and put them in their historical context. The IEA’s revision sets its new demand number for 2022 roughly halfway between those of the other two agencies. It also brings its outlook pretty much back to where it saw things in March. So, although the IEA’s revision was big, it’s not out of line with others.
The other noticeable feature in the forecasts is that oil demand growth is disappearing fast, as the chart below illustrates. Global oil demand grew year on year by about 5 million barrels a day in the first quarter of the year — all three sources agree on that — but that increase is now evaporating.
That’s not entirely unexpected when you consider year on year comparisons. Oil demand at the start of 2021 was still adversely affected by the Covid pandemic, so a rebound at the beginning of this year was entirely reasonable. Then economic activity and travel eventually picked up later in 2021, so we would expect demand growth in the corresponding quarters of 2022 to ease.
Digital Marketing Association of Sri Lanka hosts its 1st AGM
The Digital Marketing Association of Sri Lanka (DMASL), Sri Lanka’s national body of digital marketers hosted its 1st Annual General Meeting on the 4th of August 2022. Umair Wolid was ceremoniously inducted as the new President of DMASL for the year 2022/2023 at the event. Additionally, a new Executive Committee was also appointed during the course of the event.
The DMASL was formed in 2021 in an effort to drive the growth of the digital marketing industry. The association plays a pivotal role in recognizing, representing, and supporting Sri Lanka’s digital marketing professionals. Since its inception, the DMASL has implemented professional standards, ethical guidelines and ensured best practices for Sri Lanka’s digital marketing industry.
The newly elected President of the DMASL commented on the event: “I am truly honoured and grateful to have been selected as President of the DMASL. I look forward to working with the entire digital marketing fraternity to help uplift the digital marketing industry in Sri Lanka. The DMASL was created as a platform for individuals to expand their knowledge and provide guidance on running digital businesses in an ethical manner. I look forward to the upcoming year and all the opportunities and challenges it will bring”.
The newly elected EXCO committee for the year 2022/23 includes; Kabeer Rafaideen, Muhammed Gazzaly, Niranka Perera, Rajitha Dahanayake, Jaque Perera, Prasad Perera, Udara Dharmasena, Lalinda Ariyaratna, Infas Iqbal, Amitha Amarasinghe, Sanjini Munaweera, Umair Wolid, Gayathri Seneviratne, Arjun Jeger, Shalendra Mendis and Shehan Selvanayagam.
Over the next year, the DMASL is looking to improve upon its previous efforts and continue implementing training sessions, knowledge sharing, and networking activities which will bring together different sectors in the industry.. The association will also be looking into integration of digital marketing into businesses, as it is an important element in Sri Lanka’s economic recovery. Another key area of focus for the DMASL is working in tandem with selected Government Organisations to help strategize Digital firsts and Digital marketing driven projects.
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