Could you elaborate on the key governance principles and policies that have been instrumental in ensuring transparency and accountability within the organization?
We operate as a subsidiary of John Keells Holdings Group, which holds a 90% stake in Union Assurance. Therefore, our governance structure is deeply aligned with the Group’s core values, driving international best practices wherein we place significant emphasis on the governance framework, which we have integrated into our business operations.
Our governance framework is robust and encompasses several key components. These include an effective board and sub-committees, risk monitoring and management systems, alongside rigorous internal audit structures and processes. These combined efforts contribute to our holistic approach, which serves as a testament to the thoroughness of our processes.
In the face of economic challenges and uncertainties, how has Union Assurance managed risks to protect the financial interests of the company?
Indeed, the economic landscape of our country has been marked by challenges, spanning from the events of Easter in 2019 up to the present day. Amidst this backdrop, our journey within the assurance realm has remained resolute, undeterred by the upheavals. We have firmly embarked on a robust digital transformation, recognizing that while our people are paramount, their capabilities are enhanced by robust digital platforms.
Accordingly, strategic investments have been made, aligning human potential with digital technology which has allowed us to demonstrate resilience in the face of economic trials. A striking example of this preparedness was when the onset of the COVID pandemic necessitated a swift shift to remote work. Within 24 hours, our workforce seamlessly transitioned to working from home, showcasing our system’s readiness.
This adaptability is rooted in our forward-looking stance, reflected in the mindset of our shareholders and board members who champion and encourage future-ready initiatives. Their prudent investments have proven instrumental in mitigating the adverse impacts of prevailing economic dynamics. This multifaceted approach has enabled us to navigate and curtail the repercussions posed by the complex challenges that have emerged along our path.
How do you ensure that Union Assurance remains compliant with relevant regulations and industry standards?
Compliance is ingrained in the very fabric of Union Assurance. Our policies and practices are built upon a foundation of pertinent regulations, industry benchmarks, and our core values. We are steadfast in our commitment to upholding these regulations and standards, ensuring that Union Assurance remains in full compliance at all times. Regardless of a product’s potential profitability, we stand by the principle that its viability hinges on its alignment with the applicable regulations and industry standards.
Our approach extends to partnerships as well. We meticulously select partners who share our values and ethos. In the realm of bancassurance, our strong alliances with leading banks in the nation exemplify this approach. Our partnerships are underpinned by shared mindsets, aligned visions, and meticulous standards. This principle-driven stance extends to supplier selection as well. We are steadfast in avoiding partnerships that compromise ethical standards. By adhering to these principles, we fortify our foundation, ensuring that every facet of our operations, from training and investments to collaborations, adheres to the same standards.
Given the ever-changing landscape of the insurance industry, how does Union Assurance approach financial planning?
Our investments in people, digital technology, and various other facets grant us a high degree of flexibility. This adaptability proved vital during the COVID when we formulated about four flexible budgets. Recognizing the swiftly shifting landscape, we understood that maintaining rigidity in our plans could render us obsolete. Therefore, embracing nimbleness and flexibility emerged as a strategic imperative, preventing us from becoming outdated. These investments, further fostering flexibility, offer a symbiotic advantage, facilitating a win-win scenario for all parties involved.
Our commitment to flexibility extends beyond mere contingency planning. It is integral to our ethos, ensuring responsiveness in the face of unforeseen events. As a collective group, we swiftly recalibrate, with systems and personnel primed for such exigencies. Their knowledge and adaptability empower them to seamlessly embrace change, reinforcing the win-win principle. This stands in contrast to rigidly adhering to pre-COVID plans while disregarding prevailing challenges.
We firmly believe that people are our most valuable asset, particularly in a serviceoriented industry. This belief fuels our dedication to their well-being. Stemming from this, our strategic investments have engendered the flexibility needed to thrive in an ever-evolving landscape. This cultivated adaptability positions us for a sustainable future, where readiness and resilience remain key pillars of our approach.
How do you envision the implementation of SLFRS 17 impacting the company’s financial reporting and overall performance in the Sri Lankan insurance market?
Regarding SLFRS 17, it is worth noting that its implementation in Sri Lanka is scheduled for January 2025. While there have been discussions about potential delays, the present timeline is set. This transition to SLFRS 17 holds the promise of delivering greater transparency to all stakeholders involved in the Insurance Industry. Departing from conventional revenue-based accounting, this standard will offer a more detailed breakdown of company-specific data, leading to heightened clarity and reinforcing the importance and relevance of key industry metrics such as Value of New Business (VONB) and Embedded Value (EV). This shift is expected to provide a comprehensive view, not only benefiting our customers but also our valued shareholders.
Looking ahead to post-2025, the adoption of SLFRS 17 is poised to trigger a transformative change. The resulting financial reports are projected to provide a valuable tool for comparing both local and global insurance companies. This benchmarking opportunity holds immense potential for self-improvement within the industry.
Yet, on a national level, this journey presents certain challenges. The phenomenon of brain drain has led to a scarcity of technical finance experts, complicating the implementation process for many insurance companies, including ours. Moreover, currency devaluation has escalated software costs, straining our resources at a time when local expertise is limited. While our proactive front-end transformation places us in a favourable position, numerous companies face the dual task of transitioning their front-end systems while also procuring SLFRS software, leading to significant financial strain compounded by currency devaluation.
The impending integration of SLFRS 17 translates into a substantial financial commitment. This poses critical questions about its feasibility for both the industry and the broader economy. The juxtaposition of costs and available human resources emerges as a formidable challenge, underscoring the gravity of this endeavour.
In this context, our approach stands out as a beacon of progress. Having charted a clear implementation roadmap a year and a half ago, we remain resolutely on course. We perceive SLFRS 17 as more than a compliance exercise – it’s an opportunity to strategically align and fortify our growth trajectory. This distinctive perspective underscores our commitment to leverage the power of SLFRS 17 to enhance our journey forward.