This presentation was delivered by Dr Pody Appuhamy Kiriwandeniya (Chairman at SANASA Insurance Company Ltd, Sri Lanka) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines)

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SANASA INSURANCE COMPANY LIMITED
- SRI LANKA -
Presentation to the ICMIF-AOA Development (Micro insurance)
Network Seminar
by
Dr. P.A. Kiriwandeniya

2. "Sanasa" is the English transliteration of the Sinhala acronym for a
Thrift and Credit Co-Operative society at primary level.
The term Sanasa is also used to signify the entire movement
covering nearly 8424 primary societies and the associated network
of subsidiary organizations.
Total Membership of Sanasa Societies…805,000
Total number of Beneficiaries from the Sanasa Network...3,100,000
Covering 15% of total population in the country.
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3. Progress of Sanasa from the status of
informal to formal.
Transition of Credit Co‐operative Societies to Consumer
Cooperative Societies to involve in procurement of inputs and
distribution of products.
1940
1950
Role of Consumer Co-operative Societies was taken
over by Multi Purpose Co‐operative Societies
(MPCSs).
1970 Decline in network and scope of activities
of TCCSs.
1906 Establishment of Thrift and Credit Cooperative Societies (TCCSs) under the
Cooperative Societies Ordinance to relieve peasants from the grip of village
money lender.
1978
Resurgence of TCCSs under the brand
name of SANASA and establishment of
Sanasa Federation and other
organizations under the Companies Act.
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4. Progress of Sanasa Group - to meet common
man’s different aspirations in the open economy.
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5. Background story of SICL
SICL is an insurance provider emerged from a long and outstanding experience in microinsurance
activities conducted by an organization called “All Lanka Mutual Assurance Organization”(ALMAO)
which was the insurance arm of SANASA prior to its incorporation under Companies Act.
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1989
1991
1993
1996
2002
2005
Formation of ALMAO with Society Leaders of Funeral Aid Societies.
Pioneer in introducing Life Cover with Maturity Benefits , Accident and Health Cover
Declared as a Specially Authorized Society in the
government gazette by the Ministry of Trade and Commerce
Amalgamation with Micro-Insurance Unit of Sanasa
Federation
Establishment of Sanasa Insurance
Company Ltd. (SICL) and ALMAO
becomes the major shareholder
SICL begins operations in
General Insurance as well.
Community Development survey by Forum of Development established by Dr. P.A. Kiriwandeniya.
Starting point of the formation of the SICL

6. Insurance Environment in Sri Lanka
Regulation & Organizational Structure
 Insurance Law – Regulation of Insurance industry Act No.43 of 2000 and
Amendments by Act No. 3 of 2011
 Total number of insurance companies:
Long term and General – 13
Long Term – 06
General – 03
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 Provision in insurance law for micro insurance providers – No
 Status of micro insurance providers – Not legalized
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7. Company profile of SICL
 Registered Name of the Company
Seemasahitha Sanasa Rakshana Samagama.
 Legal Form
A public limited liability company incorporated in Sri Lanka under Companies Act No 17 of 1982
and re- registered under the companies Act No 07 of 2007.
Licensed as a company authorized to carry on Insurance business, under the Regulation of
Insurance Industry Act No.43 of 2000.
 Company Registration Number
N (PB) 379
 Stated Capital
Stated Capital Rs. Mn 332.69 ( as at 31st December 2012 )
 Contact Details
Tele: +94(0)11 2002021 E-mail : info@sicl.lk
Fax: +94(0) 112002023
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8. Company profile of- SICL
…...Contd
 Auditors
B R De Silva & Company (External)
Ernst & Young Advisory Services (Pvt) Ltd. (Internal)
 Consultant Actuaries
Actuarial & management Consultants (Pvt) limited,
Sri Lanka.
K.A. Pandit & Com, India
 Bankers
Sanasa Development Bank Ltd.
People’s Bank.
Bank of Ceylon.
Commercial Bank of Ceylon Ltd.
 Reinsurer
Hanover Re
GIC (India)
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9. Vision of SICL
To establish a new society based on
Co-operative principles.
Mission of SICL
To strengthen the society through adequate
Risk coverage and developing the community
Through comprehensive risk cover.
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10. Objectives of SICL
Incorporated as any other Commercial Insurance Company to
promote micro insurance with following objectives:
• To popularize insurance among the low income householders.
• To introduce simple and affordable insurance products for benefit
of the poor.
• To design less expensive insurance schemes which provide
benefits promptly.
• To increase learning and dissemination of best practice for
delivering micro insurance services to the low income families.
• To explore ways and means to strengthen capital reserves so as to
ensure solvency and sustainability.
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11. Strategies adopted to serve the Target Market as a
formal insurance company.
1. Adaptation of informal insurance Products to suit the features of
formal insurance products as follows:
- Loan Protection Insurances for high values(over Rs. 500,000) were developed to
suit actuarial and reinsurance requirements.
- Insurance for Funeral Expenses: Modified to limit the number of beneficiaries to
six.
- Life Insurance: Pricing and product development of new policies by an actuary, at an
affordable premium.
- Personal Accident & Health Insurance: Developed to broaden the scope of cover to
reimburse all expenses of indoor and outdoor treatments. Insures are issued health cards
to ensure facility of obtaining immediate treatment from hospitals approved by the
company.
2. Adjusting the distribution channels to procure business from the open
market.
- Expansion of Insurance Agency Force to procure business from the open market.
3. Introduction of innovative insurance products for agricultural sector.
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12. Innovative Insurance Products Introduced
Recently by SICL
- Weather Index Based Crop Insurance For Paddy (Rice)
Farmers.
- Weather Index Based Crop Insurance for Tea growers.
- Livestock Insurance For Low Income earners.
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13. Weather Index Insurance (WII) for
Paddy(Rice) farmers
 WII came into operation for the first time in Sri Lanka by Sanasa Insurance
company in collaboration with following partners;
-International Labour Organization (ILO)
-Canadian International Development Agency (CIDA)
-Développement international Desjardins (DID)
-Basix (India)
-Financiere Agricole du Quebec – Developpement international (FADQDI)
 WII for Paddy commenced on experimental basis in 2010 and the number of
insurance policies increased from 570 in Yala season 2010 to 4815 policies in Maha
season 2012/2013.
 Modifications to the WII product for Paddy is in progress with the objective of
expanding further to reach a new target of 10,000 farmers.
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14. Weather Index Insurance (WII)
for Tea Growers
Commencement
 WII for Tea came into operation under the sponsorship of International
Finance Cooperation (IFC), the private sector arm of the World Bank Group to
advance economic development by investing in strictly for profit and
commercial projects which reduce poverty and promote development.
Objectives
 To develop weather index –based insurance products that are climate
responsive and cater to diverse food crops in Sri Lanka.
 To promote institutional capacities of SANASA Insurance Company Ltd
(SICL) in order to make it possible to develop weather index-based insurance
products and do under-writing efficiently.
 Raise awareness amongst 50,000 Sri Lankan farmers on the availability of the
developed weather index-based insurance products and their benefits.
Current Status
 Business of WII for Tea commenced in 2012 and is progressing well.

15. Challenges faced by SICL as a formal
micro insurance provider.
 Insurance business is operated under server competition from other 21
companies which are more developed and at the same time making efforts
to penetrate into the rural sector.
 Necessity of significant amount of investment for enhancing the awareness
of insurance among the low income householders.
 Lack of qualified and trained staff.
 Inadequacy of share capital in according with the required level imposed
by the regulator (IBSL)
 Regulatory requirements to split the present company into two companies
to operate Long Term Insurance Business (Life) and General Insurance
Business separately.
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16. Advantages of formalization
1. Security of Policy holders are well secured
2. More strength through reinsurance support .
3. Formal insurance companies are geared to make significant
contributions to capital formation in the country.
4. Better confidence towards the risk management through
insurance.
5. Insurance penetration in the economy tends to increase.
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17. SANASA Insurance Company Limited