WEAVING the Dreams of a Nation

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WEAVING the Dreams of a Nation WEAVING The Dreams of a Nation Ceylinco Insurance PLC Annual Report 2011 WEAVING The Dreams of a Nation As one of the country’s oldest and most trusted insurance companies, the principles we value at Ceylinco Insurance are woven into our nation’s pride. We are proud to be so deeply intertwined with so many Sri Lankan hopes and dreams as we continue to offer security and confidence to every citizen we serve, whoever they, wherever they come from. As always, it is our belief in Sri Lanka that will help keep the Lion flag flying high and drive the nation’s prosperity ever forward. Weaving the dreams of a nation. Because, Ceylinco Insurance PLC 1 Annual Report 2011 Mission Our Mission is to provide protection and financial security of the highest quality to society, whilst adding to shareholders’ wealth and recognising, rewarding and valuing the dignity of our staff. Corporate Goals To provide an attractive return on investment to the shareholders, whilst retaining adequate funds for growth and to achieve a high degree of stability which would enable us to hold true to our mission in all business conditions. To be a leading provider of protection and financial security in Sri Lanka and selected international markets. To develop highly satisfied and motivated employees at all levels, who will contribute effectively and efficiently towards achieving the overall objectives of the Company. To contribute to the economic development of Sri Lanka and enhance the quality of life of its people. Contents Notice of Meeting 5 Reinsurance Arrangements 85 Corporate Information 6-7 Board of Directors 86-93 Financial Highlights 8-9 Corporate Governance 94-98 Our Journey 1987 – 2011 10-11 Report of the Board Audit Committee 99 Chairman’s Review 12-17 Report of the Remuneration Committee 100 Review of the Managing Director / Investment Committee Report - General 101 Chief Executive Officer (General Insurance) 18-23 Investment Committee Report - Life 102-103 Review of the Managing Director / Corporate Management - General 104-105 Chief Executive Officer (Life Insurance) 24-29 Corporate Management – Life 106-107 Customer Testimonials 30-31 Senior Sales Management – General 108-109 Management Discussion & Analysis 34-39 Management Staff - Life 110 Sustainability Report 42-59 Senior Sales Management - Life 111 Corporate Social Responsibility 60-61 Management Staff 112-117 Awards Won 62-63 Financial Calendar 2012 119 Enterprise Risk Management 64-71 Financial Statements 120-201 Branch Network – General 72-73 Quarterly Analysis 2011 202 Branch Network – Life 74-75 Quarterly Analysis 2010 203 The Year’s Events – General 76-79 Ten Year Summary 204-205 The Year’s Events – Life 80-83 Glossary of Financial & Insurance Terms 206-209 Tangible Values, Powerful Brands 84 Notes 210 Ceylinco Insurance PLC 2 Annual Report 2011 ‘Weaving the Dreams of our Nation’ because ‘In Sri Lanka We Believe’ - Our continous commitment to align our corporate strenght with every effort by the Government to promote economic development. When in May 2009 after a 30 year war which sapped our national strength and stifled our economic growth, the LTTE was annihilated by our security forces, it marked the celebration of a second independence. Therefore the chosen theme for the 2010 Annual Report was ‘In Sri Lanka We Believe.’ It expressed our confidence that Sri Lanka will be on the fast track towards unprecedented economic development which would lead to prosperity reaching down to grass root levels. Following up on that theme and expressing our resolve to serve this country through our innovative products and the excellence of our service is this year’s theme ‘Weaving the Dreams of Our Nation’. The performance of our country in 2011 has to be viewed against the background of the prevailing turbulent global macro - economic scenario. It was a year during which the world economy grew by 4.0% and the advanced economies grew by a dismal 1.6%. In contrast Sri Lanka achieved an impressive 8.3% growth. Contributing to this remarkable growth was the performance of the services sector which grew by 8.7% over the previous year . This accounted for 58% of the GDP. Furthermore inflation was pegged down to 4.9% and unemployment was only 4.3%. Showing confidence in the potential of the tourism industry which increased earnings by 47% to reach US$ 736 million more up market hotel chains such as Shangri La, Hyatt and Sun City are expected to invest in Sri Lanka. Infrastructure development projects covering road development, power development, port development were on schedule. Highlights were the completion of - Stage I of Southern Highway. Stage I of Hambantota Port. Stage I of Norochcholai Coal Power Plant Commissioning of Upper Kotmale Hydro Power Plant As a truly Sri Lankan company whose roots are deeply embedded in the national ethos Ceylinco Insurance will be ‘Weaving the Dreams of our Nation’ by playing a very positive, in fact a pivotal role, in promoting economic development. Economic development requires that existing business enterprises need to expand and diversify. It means the use of Hi – Tec inputs by which much needed value addition can be achieved to make products and services more competitive in the local and more importantly in the global market. But there is always an element of risk in business expansion, diversification or innovation. Therefore by offering the safety net of risk transfer Ceylinco Insurance creates the right conditions for expansion, diversification and innovation without the need for business enterprises to set aside significant capital in liquid contingency funds. This also encourages new entrepreneurs to start new industries and businesses. At the same time any type of business , specially those with a high investment ratio must have long term sustainability. This is where the risk management instruments of Ceylinco Insurance as reflected by its premiums and policies offers indicators of risk levels. Business enterprises can then take steps to reduce Ceylinco Insurance PLC 3 Annual Report 2011 their risk profile. For instance this can be done by taking steps to reduce exposure to possible natural disasters or to ensure hazard free work environments or the reduction or even avoidance of pollution causing technology. The other significant contribution which Ceylinco Insurance has been making and will continue to make with greater intensity is in the area of Consumption. An analysis of the GDP will reveal that over 70% of GDP constitutes Consumption thus making it one of the main drivers of the economy. However individuals and families face the risk of an inability to sustain their Consumption patterns due to unexpected and heavy expenses or a substantial decrease in incomes due to accidents, illness, total and permanent disablement, death, losses due to fire, theft or natural disasters. But these reversals in life style can be prevented through the protection offered by the wide variety of Ceylinco Insurance products. These are life insurance, motor insurance, health insurance, accident insurance, household insurance and several other types of personal policies. This financial protection enables individuals and families to have uninterrupted consumption patterns which in turn will act positively on GDP growth. Another role which Ceylinco Insurance plays is that it complements banks and other financial institutions by facilitating credit transactions regarding the purchase of land, vehicles, houses, plant and machinery and even businesses. These are all contributors to GDP growth. Finally there is the very high investment capacity of Ceylinco Insurance. As an institutional investor this company has played and will continue to play a vital role in economic growth by providing capital for infrastructural and other long term projects. With its wide portfolio of insurance products capable of meeting the insurance needs of individuals and businesses ranging from sole proprietorships to conglomerates and having the most extensive island wide branch net work backed by trained and dedicated professionals, Ceylinco Insurance PLC is in the best position in the industry, to fulfill its role in Weaving the Dreams of our Nation. (Key economic indicators have been taken from the ‘Road Map’ of the Central Bank of Sri Lanka’ released on 03.01.12) Ceylinco Insurance PLC 4 Annual Report 2011 Notice of Meeting Notice is hereby given that the Twenty Fifth Annual s 4OAUTHORISETHE$IRECTORSTODETERMINEPAYMENTS General Meeting of the Shareholders of the Company for charitable purposes for the year 2012. will be held on Tuesday, 3rd. April, 2012 at 10.30 a.m. at the “Raja Bojun” Restaurant, Seylan Towers, No. 90, s 4ORE APPOINT!UDITORSANDAUTHORISETHE"OARDOF Galle Road, Colombo 3 and the business to be brought Directors to determine their remuneration. before the meeting will be : s 4OTRANSACTANYOTHERBUSINESSOFWHICHDUENOTICE s 4OREADTHE.OTICECONVENINGTHE-EETING shall be given. s #HAIRMANS!DDRESS s !DDRESSBYTHE*OINT-ANAGING$IRECTORS By Order of the Board s 4ORECEIVE CONSIDERANDADOPTTHE2EPORTOFTHE Directors and the Financial Statements for the year ended 31st. December, 2011 and the Report of the Auditors thereon. (Mrs.) Thushara N. Jasenthuliyana Company Secretary/Senior Assistant General Manager s 4ODECLAREA$IVIDENDFORTHEYEARENDED 31st. December, 2011. 24th. February, 2012 s 4ORE ELECT-R+OLITHA)NDRAJITH$HARMAWARDENA who retires by rotation at the Annual General Note : Meeting in terms of Article 95, as a Director. Any shareholder unable to attend the Meeting may s 4ORE ELECT-R0ORUTOTAGE-ARK"ONAVENTURE appoint another to attend and vote for him and such Fernando, who retires by rotation at the Annual proxy need not be a shareholder of the Company. A General Meeting in terms of Article 95, as a Director. Form of Proxy is attached in the Report. The completed Form of Proxy should be deposited at the Head Office s 4ORE ELECT-R.UGENT$UNCAN.UGAWELA WHO of the Company at 5th. Floor - “Ceylinco House”, 69, retires by rotation at the Annual General Meeting in Janadhipathi Mawatha, Colombo 1, before 10.30 a.m.
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