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ANNUAL REPORT 2011
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Vision, Mission & Values
4 Financial Highlights8 Chairman’s Review10 Board of Directors12 Executive Committee14 Managing Director’s Review18 Management Team 20 Management Discussion and Analysis27 Risk Management29 Sustainability Report
31 Annual Report of the Directors on the affairs of the Company 35 Audit Committee Report 36 Certification of Incurred But Not Reported (IBNR) and Incurred But Not Enough Reported (IBNER) 37 Report of the Life Actuary 39 Independent Auditor’s Report 40 Balance Sheet 41 Statement of Income 42 Statement of Changes in Equity 43 Cash Flow Statement 44 Balance Sheet of The Life Insurance Fund 45 Industry Segment Data - Statement of Income 2011 46 Industry Segment Data - Statement of Income 2010 47 Industry Segment Data - Cash Flow Statement 2011 48 Industry Segment Data - Cash Flow Statement 2010 49 Significant Accounting Policies and Notes to the Financial Statements 67 Five Year Summery 68 Branch Network 69 Branch Management 71 Corporate Information 72 Contact@mbsl insurance 76 Our Products 77 Glossary
Contents
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600
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0
2011 2010 2011 2010
Revenue GWP
24% 46% 46%
Rs. Mn. Rs. Mn.
Growth Growth Growth900
800
700
600
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400
300
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100
0
400
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100
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2011 2010 2011 2010
Shareholders’ Fund Funds under Management
Rs.255mn
Rs. Mn. Rs. Mn.
Growth 600
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100
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5
120
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80
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40
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2011 2010
Life Fund
60%
Rs. Mn.
Growth
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clarityClarity is vital, both in crafting of well designed risk coverages, and balancing of the services and security we offer our clients. We position this against maximising returns for the stakeholders.
Many clients count on MBSL Insurance to cover risks they simply cannot afford themselves, and to pay claims whenever and wherever they occur. We manage our business to pay all our client’s losses. At the same time, we are mindful of Investment management and maximising shareholders’ return. Our Balance Sheet reflects our strength for clients and total assets over Rs. 1,000 million and shareholder equity at Rs. 395 million, whilst our Net Income of Rs. 3.9 million shows our return for shareholders.
our core business spins around...
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Chairman’s Review
My dear Shareholder,
It is with immense pleasure we meet you again to present our stellar results of 2011.
If, relentless perseverance, aggressive marketing and spirited execution were rolled in to one, the sum total is MBSL Insurance. From a position of no conse-quence to break even, and a post a profit within one year was no easy task. But with wise counsel from the Board of Directors and led from the front by pushy management that was supplemented by indomitable courage and drive of the staff made it possible for the second year as well. This has opened many doors for business to grow. Recent private placement that yielded over Rs. 200 million also have strengthened our Capital Adequacy status and we are looking at the ways and means to consolidate and move ahead. The economy, from macro to micro gaining momentum at a steady rate, and the future looks rosy.
Despite the entry of a state bank with a large volume of inherent business port-folio, we still recorded astounding third highest growth of the entire Sri Lankan Insurance industry and we still retain our rank of thirteenth amongst 20 con-tenders of the entire industry. This was a ground breaking performance of a company that was written off a few years back as nonviable.
Regardless of severe depression and weaker Balance Sheet, our personnel performed a backbreaking task to elevate the Company to what it is today. Our Managing Director, Mr. Sydney Gajanayake’s incessant thrust propelled the foot soldiers to charge ahead with vigour to increase the slice of the pie and make the Company solvent.
The year 2011 was extremely good as we increased business volume whilst consolidating our hard earned positions in all areas.
During 2011, we grossed a turnover of Rs. 823 million and we were able to increase the combined GWP by 46%. General Insurance recorded 43% growth and 59% in Life Insurance. Further, MBSL Insurance was able to record the highest growth among the competitors while the industry growth recorded only 17%.
We posted a profit of Rs. 3.9 million before tax in 2011.
For a Company that had just started becoming solvent to post a consecutive profit, although lower than previous year is the indication that we are in the right path of making profit and most importantly, for the investors that we are back with a black balance. The profit is low compared to last year’s, as we had to allocate a mandatory reserve. Good governance, improved standards, sheer determination and high quality customer service stood in good stead for us to achieve these results. HenceI have no doubt that we will add more value to our products and services since we want to excel in the insurance industry
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The Government’s development program has become a reality as the public has started taking active role, thus the economic development is trickling down to the needy. Many industries have jump started their activities and no doubt they all will need their investment underwritten by a trusted insurer. Last year’s as-tounding growth sufficiently emphasize that they take MBSL Insurance seriously.
They did it…!
In that context I am failing in my duty if I do not make a special note of ap-preciation of the experienced hands we inherited who had suffered badly for miscalculated moves of the previous administration. Their commitment was in-adequate as their future prospects were uncertain. But, when their future was assured they mustered their true grit and unleashed all their knowledge and experience under very trying circumstances. The only cohesive tool they had was the MBSL name as a selling proposition. Only they know how they did it, but they took the sales curve up and up until we saw us break-even. This effort has given a new lease of life to the Company and the new staffs also have taken the cue and are making inroads to the untapped areas.
In retrospect, I am enthralled of their triumph and wish to state that we will do our utmost to make their stay as pleasant as possible, as I always fight their cor-ner, as they are the most valuable assets we have.
Now, that we have stabilized the ship the sails are set and we are looking for fair wind. But as you know that sailing will not easy and cannot be taken for granted. Hard work lies ahead; storm clouds can gather unannounced and seas can become choppy. There is only one solution for that. Be Prepared and all stations to action!
We have trained, motivated and deployed our trusty troops to meet any con-tingency that may come. Irrespective shape or shade of it, we are ready with confidence and we shall prevail. Please allow me to assure you that in the years to come MBSL Insurance will be a name to reckon with trust and respect: the core hallmark of a true insurance company.
I also would like thank my esteemed colleagues of the Board for their consistent involvement in making policy that changed the destiny of the Company, build shareholder confidence and improve staff welfare. We have just reentered the race and started covering lost ground. I am confident that with the support of my Board and the unflinching management and staff, we shall meet you next year in a position closer the flag.
M.R. ShahChairman.
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M R Shah Sydney Gajanayake Gamini Karunathilake Prof. Ranjith Bandara P G Rupasinghe Lakshman Perera Shashika Senerath Chairman Managing Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Independent Director
Shah was appointed to the board in June 2010. Prior to the joining the company, he had served Commercial Bank of Ceylon PLC for 33 years and at the time of retirement, he had the position of executive officer. Mr. Shah has a diploma in Diplomatic and International Affairs.
While serving the Commercial Bank, he having been in-volved in trade union activities was elected to the Secretary of the Commercial Bank Branch Union of the Ceylon Bank Employees union in 1986 and President in 1988. In the year 1994, he was elected as the General Secretary of the apex body of the prestigious organization of the Ceylon Bank Employees union and elected the president in 2000 which position he held until retirement in February 2010.
In 2009 he was elected as the Secretary General of the Asian Regional Organization of Banks, Insurance and Finance unions and he continuous to hold such position to date.
M R Shah is also the Chairman of Merchant Bank of Sri Lanka PLC, and MBSL Savings Bank Ltd. He was the former Chairman of City Housing and Real Estate Company PLC and Trillium Residencies Ltd. He is a Director of Merchant Credit of Sri Lanka Ltd and Lanka Securities (Pvt) Ltd.
Gajanayake possesses over 25 years experi-ence in the Corporate Sector. Venturing into the apparel sector over two decades ago, he founded and managed five apparel factories in Sri Lanka and in Kenya. He has also held the positions of Chairman - Apparel Exporters As-sociation (2005 - 2007), Dep. Chairman - JAAF (2006 - 2008), Director - Textile Quota Board (2003 - 2005). He was a Visiting Lecturer in Post-graduate Studies at the University of Colombo.
He possesses a B.Com (Sp) from the University of Sri Jayawardenapura – Sri Lanka, MSc. (IT) from the University of Keelle - UK and he is currently reading for a PhD in Entrepreneurship Management.
During his career span, he has been proac-tively involved in numerous local and interna-tional forums of the government on behalf of the private sector, towards the development of apparel exports in the country.
He is a Member of the National Council for Economic Development in General Treasury.
Karunathilake is a professional banker having more than 33 years of experience in both Com-mercial Banking and Merchant Banking. He obtained his first degree of B.Com (Hons) with 2nd class upper division pass from University of Sri Jayawardenapura and MBA from the Post Graduate Institute of Management (PIM) of Sri Lanka. He is a fellow member of Institute of Bankers of Sri Lanka, and was a visiting lecture on Law and Practice of Banking for Bachelor of Commerce and Economic Degree Programs and on Banking and Financing for MSc. Man-agement programs at Sri Jayawardenapura. He also served as a lecture and Chief Examiner on Law and Practice of Banking and Practice of Banking at the institute of Bankers of Sri Lanka. He is the CEO of Merchant Bank of Sri Lanka PLC, Director of MBSL Savings Bank Ltd, Lanka Securi-ties Ltd and a Director of Hotel Nallur.
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M R Shah Sydney Gajanayake Gamini Karunathilake Prof. Ranjith Bandara P G Rupasinghe Lakshman Perera Shashika Senerath Chairman Managing Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Independent Director
Prof. Bandara is currently working as Chairman of Sri Lanka Foundation while serving as Senior Executive Adviser and Director of the Financial Service Cluster at the Strategic Enterprise Agency which comes under the President’s Office. Prof. Banda is also a senior academic staff member attached to the Department of Economics of University of Colombo. He serves as Director in the Board of Direc-tors of Merchant Bank of Sri Lanka PLC, MBSL Insurance Company Ltd, Merchant Credit Sri Lanka ltd and MBSL Savings Bank Ltd.
Prof. Bandara is also a member of the National Economic Council of Sri Lanka. He serves as a senior business adviser/consultant to a number of business or-ganizations of the country. Prof. Bandara is also managing partner of the Co-lombo School Business Management.
He earned his B.A. in Economics Honours in 1990 from University of Paradeniya and subsequently completed two Masters Degrees M.A in Economics in 1992 from the University of Colombo and MSc in Management of Natural Resources and Sustainable in Agriculture in 1995 from the Agricultural University of Norway. He earned his PhD in Economics in 2003 from University of Queensland in Australia.
Prof. Bandara has contributed to number of national and international Journals and is the author of a few books written under various themes in Economics and related subjects.
Prof. Bandara is the founder coordinator of two postgraduate degree programs, Master in Economics (M Econ) at the Department of Economics, Master in Business Studies (MBS) and an Executive Diploma in Marketing (EDM) at the Faculty of Graduate Studies University of Colombo.
Rupasinghe holds a special Degree in Economic, a Post Graduate Diploma in Advanced Social Statistics from the University of Sri Jayewardenapura and a Master Degree in Business Administration (MBA) from Post Graduate Institute of management (PIM). Mr. Rupasinghe was a former Chairman of National Institute of Business management (NIBM) and a consultant to the Industrial Development Authority of Western Province. He has also functioned as a Senior Research Officer at DFCC bank and has over 23 years experience in project appraisal, monitoring and follow up, economic research, consultancy, planning and branch banking.
He has seven years of post graduate teaching experience in Economics, Accounting, Human Resource manage-ment and Organizational Behavior at the Open University of Sri Lanka. Mr. Rupasinghe served as a member of Provincial Public Service Commission (WP) and a Director and Trustee of the National Development Trust Fund under the Ministry of Finance. He also served as member of the National Sport Council of Sri lanka and member of Gov-ernment Wages Board in rubber related industries.
He has participated in several Interna-tional professional training programs organized by the EDI of World Bank UNIDO, UNDP, and ADB, ADFIAP, PDCP, & AIM of Philippines, Manila. He also participated in a work shop on Macro Economic Management and Policy Analysis organized by the EDI of World Bank in collaboration with the Central Bank of Sri Lanka.
Perera is a graduate of the University of Peradeniya and holds a Post Graduate Di-ploma in International Affairs and Masters Degree in Business administration. He played a pivotal role in partnering the progress and development of the Institute of Chartered Accountant of Sri Lanka as the secretary and the CEO for a period of over two and half decades, the position it holds today.
He also served the South Asian Federation of Accounts (SAFA) an apex body of SAARC comprising of National Professional Accountancy Bodies in Bangaladesh, Pakistan, India, Sri Lanka and Maidives as Executive Secretary for two terms and was responsible for networking the activities of SAFA during this period. He was a member of the Graduate Faculty Board of the Uni-versity of Colombo and also functioned as a member of the Committee appointed by the Securities and Exchange Commis-sion of Sri Lanka to formulate Corporate Governance Rule for listed companies. He was a key player in establishing the Masters Degree Programme at the Institute of Chartered Accountants in col-laboration with the University of Southern Queensland, Australia. He served as a Director of MBSL Savings Bank until May 2010 and at present serves as a member of the Board of Merchant Bank of Sri Lanka.
Shashika is an information com-munication technology professional with over seven years of experience, broad based knowledge and skills in implementing large scale and highly technologically complex projects in both government, multinational and national organizations in Sri Lanka and abroad.He is currently leading the Project Man-agement, Service Desk and Customer Activation Teams for Enterprise level large scale projects at Dialog Telekom, Working with large scale ICT projects, in both government, public and private sector organizations Shashika has ex-perience in managing hybrid projects. Prior to joining the Enterprise Solutions division at Dialog he was involved with the ‘Biggest and Fastest SAP implemen-tation in Sri Lanka’. This was a flagship project carried out by Dialog, and was awarded the above title by SAP (the largest ERP solution provider in the world), SHASHIKA was responsible for the largest amount of implementations in this project. The recommendation provided by him, was instrumental in setting up the SAP business excellence center in Sri Lanka, for all SAP imple-mentations for Telekom Malaysia (TM), and to date, all SAP implementations of subsidiary companies of TM, have been carried out by Sri Lanka. Previous to joining Dialog, Shashika worked at Microimage Pvt Ltd. Where, he was involved in marketing, design-ing, developing and implementing some of the largest Human Resource Management solutions in the country. He brings to the table a sound knowl-edge of information and communica-tion technology, immense experience in communications industry in Sri Lanka and a highly successful background in managing large and complex projects. He has implemented HR solu-tions, E-learning systems, Sales System, Inventory Management Systems, Performance Management Systems, Corporate VPNs, Satellite based com-munication solutions, Internet and Data leased line solutions, Point to Point communication solutions, SME and Home based communication solutions, Hosted Pbx solutions, CDMA communi-cation solutions etc.
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Nadeeth De Alwis Neil De Silva Chandrasiri Kewitiyagala Sydney GajanayakeB.Sc, Finance Sp. (Hons.) University of Sri Ja’pura FCII (London), M.B.I.M. B.Dev. University of Colombo, ACII (London) B.Com. Sp. University of Sri Ja’pura, ACA MSc. (IT) University of Keele, UK
Head of Finance General Manager - General Manager - Managing Director General Insurance Life Insurance
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Nadeeth De Alwis Neil De Silva Chandrasiri Kewitiyagala Sydney GajanayakeB.Sc, Finance Sp. (Hons.) University of Sri Ja’pura FCII (London), M.B.I.M. B.Dev. University of Colombo, ACII (London) B.Com. Sp. University of Sri Ja’pura, ACA MSc. (IT) University of Keele, UK
Head of Finance General Manager - General Manager - Managing Director General Insurance Life Insurance
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Managing Director’s Review
Despite the volatile situation that prevails in the international finance market, especially in Euro Zone debt crisis, Sri Lanka was able to maintain an 8% growth rate continuously for the second year and that growth momentum was well received by the insurance industry showing growth figures of 21% General Insurance Business and 13% in Life Insurance Business for year 2011 Further, low inflation, high credit growth coupled with low interest rates boosted 244% increase of motor vehicles imports into the country giving a top line increase of premium in motor classes and contributed high GWP growth in insurance industry where 60% of total GWP is represented by motor classes.
Regardless of favourable economic indicators, investment from private sector was sluggish but we have seen investment from government taking a leading role especially in infrastructure development. With the infrastructure improvement we do believe private sector investment from foreign and local sources will take upward trend especially in hospitality industry in year 2012. Hence, the growth momentum for the insurance industry remains very promising for year 2012 provided that government main-tain consistency in monitory and fiscal policies in order to improve overall macroeconomic level of the country. Due to low inflation, increasing per capita income led the growth of life insurance enjoying 13% industry growth in 2011 compared to 2010. Also people in the newly liberated North and East contributed a sizable portion of the life gross written premium growth that was recorded during 2011.
Even though the industry achieved sizable growth in General and Life businesses, major drop in investment income due to low interest regime and declining stock market somewhat eroded high profitability, if not the insurance industry could have achieved high growth of their top lines.
Despite favourable outlook that prevailed in 2011, we anticipate a challenging environment in 2012, but long term growth prospects for the insurance industry remain promising only if the country’s growth do not fall below 7% in the year 2012 and onwards.
Financial ResultsIt is noteworthy that our both lines of business recorded high growth rates, which are very significantly higher than the industry growth rate in Life and General Businesses. During the year ended 31st December 2011, we were able to enjoy Gross Written Premium in general insurance business of Rs. 680 million and life gross written premium of Rs. 143.1 million recording growth of 43% in general business and 59% in life business respectively. The total top line achieved by the company was Rs. 823 million compared Rs 565 million achieved in 2011, which is 46% growth year to year.
Performance in General Insurance.Team general pushed the Company’s general GWP up from Rs.475 million in 2010 to Rs.680 million in year 2011, which I believe is a very strong indicator of the future direction of the general insurance business towards achieving Rs.1 billion markin year 2012. Motor class achieved growth of 36% rallying with Non Motor Growthof 59%. Within Non Motor miscellaneous classes recorded 32% and fire andmarine classes recorded growth of 262% and 40%
During the year under review the combined ratio was 113% compared to 111% of previous year is a marginal increase mainly due to increase in administrative expenditure. This was a resultant of the expansion of branch network and more recruitments in underwriting and sales personnel.General profit before tax was Rs.7.7 million which is commendable achievement after second year of acquisition of a failed insurance company by providing provisions for previous years mismanaged business transactions.
Performance in Life InsuranceLife Division was not second to General Division and recorded GWPof Rs. 143.1 million compared to Rs. 90 million in 2010. Company’s flagship product Vinvida contributed the highest among other products which are very unique with the combination of investment,protection and retirement benefits contributing 85% of the total GWP and rest was contributed by Sisumina, Uththunga, Naya Sahana and Group life.
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Financial Strength and StabilityThe Company took a bold step to increase its Share Capital by way of Private Placement in order to meet its proposed mini-mum capital requirement and to divest the shareholding of MBSL Bank as single shareholder. The Private Placement was fully subscribed demonstrating the vote of confidence of the business community towards Company’s future prospects despite negative investment sentiment that prevailed during the last quarter of 2011.
The strength and the stability is further evident that close to 10% of the shareholding was purchased by MAS Holdings which is one of the largest apparel manufacturing companies in the world and one of the privately owned blue chip companies in Sri Lanka. It is vitally important that insurance companies must have strong capital base and strong reinsurance panel to demon-strate ability to underwrite larger risks while MBSL Insurance qualifying both criteria over and above regulatory requirements. We are modestly proud to boast ourselves, that we are the only privately held insurance company of which the shareholder’s assets exceed Rs. 1 trillion.
Key Areas of Strategic FocusMBSL Insurance is aiming beyond local boundaries and expects to be a global insurance player by year 2020. Therefore, in order to strengthen the mission towards the vision, the Company is firstly planning to increase the present branch network of 50 to 100. With the regional level decentralized operation.
Since the Company has identified Life Insurance as a potential contributor to the company’s growth and also with the vision of giving risk transfer mechanism to rural masses of less privilege at affordable cost, the rest of the branches will be established in the rural areas of the island.
With addition of further 25 branches in 2012, we will continuously consolidate into a higher rank in the industry whilst focusing on capturing a sizable percentage of the market shares of both Life and General Insurance as a composite insurance company. Further the Western Province operations will be strengthened by introducing a fully - fledged City Office in addition to the existing Corporate Business Development Unit.
We will perpetually focus on our top line of business in the coming years in order to capture sizable market share while main- taining a positive bottom line. Therefore regardless of severe competition and the pressure in the short term on the underwriting results we will continuously engage in improving of risk and pricing functions in order to achieve our objective without compen- sating bottom line to top line.
Our distribution strategy will continuously align to focus on expanding our service operations to provide excellent and better service to our customers. Therefore while adding further 25 branches to existing network, selective Broker offices will be facilitated by opening MBSL I counter in their premises in order to give speedy insurance solutions as the broker community is playing key role in providing insurance advice to corporate businesses.
To achieve all above we need to further strengthen the human capital, which is a vital cog in our growth. We will engage in recruiting technically qualified personnel and sales personnel in both Life and General Insurance while giving more opportu- nities to youngsters in the rural areas and unemployed graduates. Hence, in order to train and keep them ‘up to speed’ with knowledge required of the industry, we have plans to establish a fully fledged Campus which will be open by end April 2012.
Therefore, we will align all processes of underwriting, administration and claim management towards customer oriented, hence present IT infrastructure and software will be replaced with an enterprise wise customer centric software solutions which will empowered the Company in order to take the leading edge among the competitors.
Developing the products that suit the exact need of customers is very much important to win the customers and build confi- dence on insurance. After much research and development, two new products are in the pipeline that will be introduced one for general and one for life mainly to enhance the market share. New product in general is focusing on motor class and we hope to revolutionize the concept of utmost good faith really into motor product by way of entrusting customer. The new life product will take care the people who are willing to buy the life insurance but find the existing products in the market unaffordable.
Of course, we are very young to the Sri Lankan insurance industry and building the brand of MBSL insurance is one of our priori-ties. We need to evolve as a bigger player in the industry by competing with well established players where most of them com-menced their businesses with the privatization of insurance industry in Sri Lanka.
Since BOC and MBSL brands, are well respected among Sri Lankans as some of the biggest state own financial conglomerates. We are proud to be a member of the biggest financial service group in the country backing MBSL Insurance with 78% share holding. Therefore we are well aware of the fact that we are not sitting at the grown up table yet, but do not consider them as a threat to us. We are very unique in providing solutions to customers on risk transferring and risk minimizing as well as on claim service management. Therefore message of our uniqueness has to be taken across to the insurance - needy people of the country and extend the benefit our services to general public at large. Therefore cost effective advertising campaigns, promo- tional campaigns, corporate image building activities will be implemented throughout the year 2012.
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Acknowledgement Mr. Gamini Karunatillake has resigned from the Board with effective from 1st January 2012 having served as a Director and Chair-man of the Audit Committee from the inception of MBSL Insurance. Mr. Karunatillake was primarily instrumental in acquiring the Company and played a pivotal role in the MBSL Insurance. I am deeply indebted to his valuable contribution made to the Company and on a personal note, for advice and support extended to me.
Appreciation I wish to convey my special appreciations to Mr. M R Shah – Group Chairman of MBSL Group for his visionary guidance, support and encouragement given to me during the period under review. Also I would like to thank the Board of Directors and the Board Secretary for the valuable contributions made for betterment of the Company.
I am very grateful to my Senior Management Team and all other members of the staff, Field Management and Insurance Advi- sors for their valuable contribution and commitment towards achieving higher growth momentum that exceeded the industry growth. Also, I would like to thank all our Insurance Brokers, Intermediaries, Reinsurers, and Reinsurance Brokers for their valuable contribution towards high growth of the Company. To our customers I would like to say “Many thanks indeed” for your vote of confidence in us, to secure your immeasurable life and properties. Also my big thank goes to our shareholders for their unwaver- ing faith in our philosophy and business strategy.
A Bright FutureInsurance industry will undergo significant changes within the next 4 years due to the requirement of segregating composite insurance companies separately into life and general. Compulsory requirement of listing in SEC and introduction of risk base capital regime against present rule base capital requirement will be a challenge and will create both threats and opportunities to insurance companies.
We at MBSL Insurance will convert all above challenges and threats in to opportunities since we were born to overcome chal- lenges and threats.
MBSL Insurance has set a momentum as a dynamic and fast growing player in the insurance industry by improving market share under MBSL Brand. We are confident that MBSL Insurance will surpass Rs. 1 billion top line in year 2012 with healthy bottom line with the support of highly motivated, proud and dedicated MBSL Insurance team ..
Sydney Gajanayake.Managing Director.
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Management Discussion & Analysis
Overview The aim of this report is to provide the information and an understanding about the Company’s affairs in management point of view. In this report, we try to integrate historical and prospective information useful to the stakeholders.
The Economic Environment in Sri Lanka Sri Lanka economy changed with macroeconomic variables during 2010 continued during 2011 as well. Growth outlook remains positive with the sustained growth in industry and service sectors and the recovery of the agriculture sector after floods, contributed to achieve the estimated real Gross Domestic Product (GDP) growth for 2011.
A significant contribution to the growth created from service and industry sectors expected to growth by 8.6% and 10.1% respectively in 2011, whilst the agriculture sector is estimated to grow by 2.0%. Unemployment remained around low level of below 5% due to employment enhance through infrastructure development, reconstruction and expansion of economic activities.
A considerable increase in export earnings and rapid increase in import expenditure in 2011 resulted in recording the highest trade deficit. During the same period, export earnings increased by 22.2% and import expenditure jumped by 53.2% widening the deficit of the trade account by 111.3%.
As a precautionary action to avoid future external imbalances, rupee was devalued by 3% by budget 2012. As a result, rupee depreciated against US$, Sterling Pound and Japanese Yen by 3.2%, 2.4% and 7.8% respectively by end 2011.
The fiscal policy in 2011 was to maintain the budget deficit below 7% of GDP. A substantial improvement in government revenue with the high economic activities helped to improve the overall fiscal situation. Revenue deficit to GDP from 2.1% recorded in 2010 while the debt to GDP ratio to fall to an estimated 78.2 % in 2011. The policy interest rates remained at low levels and unchanged after one downward adjustment in January. Following the policy market interest rates adjusted to maintain the low interest regime until the rupee depreciation in November. This upward pressure was immediately reflected in market interest rates as monthly Average Weighted Prime Lending Rate, which serves as a benchmark for selected lending rates, touched 10.8%. The Company Performance against Insurance IndustryMBSL Insurance Company Ltd recognized as the fastest growing insurance company in the country in the year 2011. As shown in table below, the Company has performed well above industry level throughout the last year. Thereby the Com-pany has been improving its market share and became the 13th player out of twenty players as at 31st December 2011. The overall gross written premium of the Company grew by 46% from Rs 565 million in 2010 to Rs 823 million in 2011 which is a remarkably higher than the overall gross written premium growth rate of the industry.
Premium Income Rs. MnDescription 2006 2007 2008 2009 2010 2011GWP - Company 94 278 347 327 565 823GWP – Industry 43,035 51,885 58,166 57,344 68,498 80,200As a % GDP 1.46% 1.45% 1.32% 1.19% 1.14% 1.22%Growth - Company 623% 66% 25% -5% 73% 46%Growth – Industry 16% 21% 12% -1% 19% 17%
General insurance business of MBSL insurance increased by 43% from Rs 475 million in 2010 to Rs. 680 million in 2011 ac-cording to the available information the industry was expected to record 21% growth during the year. In 2010 the general insurance industry recorded 11% growth increasing from Rs. 33.4 billion in 2009 to Rs. 37.3 billion in 2010. Motor insurance remained the main contributor to general insurance premium, accounting for 60% of total premium.
General Insurance Rs. MnDescription 2006 2007 2008 2009 2010 2011GWP - Company 70 231 294 271 475 680GWP – Industry 25,931 31,156 34,553 33,485 37,332 45,072Growth - Company 536% 230% 27% -7% 75% 43%Growth – Industry 16% 20% 11% -3% 11% 21%
Class Wise Distribution of Business %Description 2006 2007 2008 2009 2010 2011Fire 18 18 19 20 18 15Marine 6 5 5 5 4 4Motor 54 55 54 53 57 60Miscellaneous 22 22 22 22 21 21 100 100 100 100 100 100
The life insurance industry grew by 31% in 2010, increasing from Rs. 23.7 billion in 2009 to Rs. 31.1 billion in 2010. MBSL Insur-ance reported a 61% growth in life premiums during the same period.
In 2011, the life insurance industry was expected to record a 13 % growth rate which is also the highest rate recorded in the recent past. Improving of economic conditions and stability of financial system could be attributed as the reason for this significant performance.
MBSL Insurance reported a 59% growth in premium income, and enabling the company to increase its market share and become 13th player.
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Premium Income General Insurance
Life Insurance
Classwise Distribution of Business
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Life Insurance Rs. MnDescription 2006 2007 2008 2009 2010 2011GWP - Company 24 47 53 56 90 143GWP – Industry 17,104 20,729 23,613 23,767 31,166 35,128Growth - Company 1,100% 96% 13% 5% 61% 59%Growth – Industry 15% 21% 14% 1% 31% 13%
Financial ReviewThe year 2011 was a successful year for us with a number of remarkable achieve-ments in both top and bottom line targets within competitive and challenging envi-ronment. This is the first time in the Company history that we passed Rs. 1,000 million mark in total assets and earned profit for our share holders in consecutive year.
Revenue Total revenue increased by 24% from Rs.474 million in 2010 to Rs. 587 million in 2011. All contributors of revenue such as general insurance premium, life insurance premium, investment income and other income contributed to this growth.
Company Revenue 2006 2007 2008 2009 2010 2011Revenue 53 174 313 255 474 587
Gross Written Premium The Company recorded a growth of 46% in GWP to reach Rs. 823 million as against the GWP of Rs. 565 million in 2010. The gen-eral insurance business increased by 43% while life insurance business improved by 59% during the year. General insurance re-corded a GWP amounting to Rs. 680 million this year. The reasons for this impressive grow was mainly due to significant increase in miscellaneous and motor insurance classes.
Premium ceded to reinsurers Premium ceded to reinsurers amounted to 198.8 million of combined life and general insurance GWP in 2011, compared with 114.9 million reported in 2010. This was mainly due to increase in premium from general insurance business classes where a higher proportion of the premium is ceded, vis-à-vis increases in classes where reinsurance outgo is lower.
Unearned premium reserveRs. 104.6 million was transferred to the unearned premium reserve to be credited as income in 2012, compared with Rs. 31.4 mil-lion transferred in 2010. This is an accounting adjustment required to match general insurance premiums over the period that insurance cover is provided. Subject to this adjustment, general insurance net earned premium increased by Rs. 51.3 million. This increase, combined with the growth of Rs. 49.7 million in life insurance net written premium, boosted net earned premium by 24%, from Rs. 419 million in 2010 to Rs.520 million in 2011.
Insurance claims and benefitsThe insurance claims and benefits, which are the main cost headings of the Company increased by 28% during the year. Net claims incurred in general insurance grew by 26% while net claims incurred in life insurance increase by Rs. 3.8 million. A high claim experience in motor and miscellaneous classes is the reasons for this unfavorable increase in claims. Claims incurred in other classes were reasonably high due to the environmental hazards during later part of the year.
Underwriting and net acquisition costCommission underwriting and net acquisition cost increased by 97% in 2011 mainly due to the increasing of life insurance com-mission expenses on life insurance new business.
Investment IncomeInvestment income of both life and general insurance segments grew by 0.4% from Rs. 46.6 million in 2010 to Rs. 46.8 million in 2011 as the interest rates for government securities and other financial instruments issued by the companies are very low during the year.
Operating and administrative expensesOperating and administrative expenses increased by 14% and the reason is that the Company opened several branches in the latter part of the year 2011. As a result the staff cost and administrative cost have increased by 33% and 10% respectively.
ProfitabilityThe Company was able to achieve a Profit before Tax of Rs. 7.1 million in 2011. General Insurance solely contributed to this achievement meanwhile surplus generated from Life Insurance was fully transferred to Life Fund to build strong Life Fund. This is the second consecutive year that the company recorded a profit during its six years of operation. During the year the claim ratio of general insurance increase to 63% compared to 57% in the last year. Profit on general insurance was recorded mainly through the expense management actions taken by the Company. Hence expense ratio of general insurance came down to 50% in 2011 from 54% recorded in 2010. Ultimately the combined ratio has shown a 113%, compared to 111% in 2010. The investment income generated from general insurance business also assisted to push the company in profitable situation.
Financial Position Investment The investment portfolio including government securities, equity investments, debenture, fixed deposits and unit trust increased by 46%, from Rs. 402 million in 2010 to Rs. 588 million in 2011. The composition of the investment portfolio is provided below.
Composition of Investment Treasury Treasury Repos Listed Debentures Fixed Unit Bills Bonds Share Deposits Trust 2011 5% 61% 17% 6% 4% 6% 1%
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Investment under the Life Insurance business stood at Rs.143 million as at 31st December 2011 recording a significant growth of 44% over the previous year. This amount at the beginning of the year was Rs. 99 million. The investment un-der general insurance also recorded a growth of 47% for the year ended 31st December 2011. The investment amount had stood at Rs. 303 million at the beginning of the year, escalated to Rs. 445 million at the end of the year.
Assets Allocation – General Insurance Assets Allocation – Life Insurance
Treasury Bond 64% Treasury Bond 53% Treasury Bill 3% Treasury Bill 12%Repos 15% Repos 24%Listed Share 7% Debentures 4%Debentures 4% Fixed Deposits 7%Fixed Deposits 6%Unit Trust 1%
Life Insurance FundThe Life Insurance Fund also increased to Rs. 106 million at the end of 2011 compared to Rs. 66 million at the end of 2010, which is a 61 % growth. As in previous years, the Company arranged for a Consultant Actuary to value the Life Fund and the report of the Consultant Actuary is given on page 37. Adequate provisions have been made in respect of Solvency and other contingen-cies out of the current year’s surplus as per the Actuary’s Report.
2006 2007 2008 2009 2010 2011Life Insurance Fund 7 16 29 41 66 106
General Insurance FundThe General Insurance Fund liability also increased by Rs.76 million during the year to reach Rs. 328 million by the end of 2011. Net Unearned Premium, Claims Outstanding, Reserves for Incurred But Not Reported (IBNR) and Incurred But Not Enough Re-ported (IBNER) claims, Net Deferred Acquisition Costs are the components of the General Insurance Fund Liability. The Manage-ment has taken all reasonable steps to ensure adequate provisioning for Net Unearned Premium, Net Deferred Acquisition Costs and Claims Outstanding including provisions for IBNR and IBNER reserves. The Management has also consulted an Independent Actuary in the process of valuing IBNR and IBNER reserves and his report is given on page 36.
2006 2007 2008 2009 2010 2011General insurance Fund 49 108 109 181 253 328
Solvency MarginThe statement of solvency for General Insurance and Life Insurance has been prepared in accordance with the Solvency Margin (General Insurance) Rules – 2004 and Solvency Margin (Life Insurance) Rules – 2002 respectively and is in line with the formats stipulated by the Insurance Board of Sri Lanka (IBSL). The admissible assets in general insurance were Rs. 593.1 million at the year ended 2011 while the total liabilities were Rs. 440.3 million resulting in an available solvency margin of Rs. 152.7 million. The required solvency margin for the period was Rs. 99.2 million. Hence the company exceeded the required solvency margin by 1.54 times In life insurance business admissible assets recorded Rs. 144.9 million while total liability was amounting to Rs. 130.6 million. The Company maintained 2.64 times over the required solvency margin, which was amounting to Rs. 5.4 million.
Total Assets and Shareholders Fund The aim of the Company is to be the stable-growth company and is trying to build and maintain a strong balance sheet through growth in the total assets as well share holders fund. The focus of the Company is to improve in-come generating assets included in total assets.
During the year total assets of the company increased by 59% from 632 million compared to 1,004 million in 2011. Income gener-ating assets consisted of 59% from the total assets in 2011 and it was 63% in 2010. The share holders fund recorded Rs. 395 million in 2011 with a growth of 182% compared to Rs. 140 million in 2010.
Total Assets & Share Holders FundDescription 2006 2007 2008 2009 2010 2011Total Assets 218 287 358 449 632 1,004Shareholders Fund 130 111 104 86 140 395
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General Insurance Review The growth momentum of the General Insurance business was maintained through 2011, with a 43 % growth in GWP. The GWP recorded for the year was Rs. 680 million against Rs. 474 million in 2010. According to the available information, this is well above the industry growth rate for 2011 in General Insurance, which is expected to be 21%. The highly committed, motivated and passionate workforce at MBSL Insurance has shown its capability by recording such a high growth in GWP in a relatively high completion market.
Description 2006 2007 2008 2009 2010 2011GWP – General 70 231 294 271 475 680
GWP in ClassesAs shown in the table below, the biggest contributor to General GWP is the Motor Class, which accounted for 68% approximately in the year 2011 out of the total GWP. The contribution from the Miscellaneous Class to the General GWP was next, amounting to around 20%. Fire and Marine classes contributed to the General GWP by 9% and 3% respectively. Significant change in the class mix was that contribution from fire class grew to 9% in 2011 compared to 4% in 2010. However, the contribution from the Motor Class is relatively high in MBSL Insurance compared to the industry (2011 - 60%) a situation we intend to change in the future, gradually.
Class of Insurance 2011 2010Fire 9% 4%Marine 3% 3%Motor 68% 71%Miscellaneous 20% 22%Total 100% 100%
The highest growth rate of 262% in General Insurance was recorded in the fire classes whilst motor class grew by 36%. Miscel-laneous and marine class also recorded growth rates of 32% and 40% respectively. The motor class still dominated with 68% but it could be seen that a change in the contribution of the fire class increased from 4% to 9%.
Growth in Class wise GWP Rs. Mn Fire Marine Motor Miscellaneous Total2011 58 20 463 139 6802010 16 14 339 105 475Growth 262% 40% 36% 32% 43%
Business in Channel A remarkable change in this year’s performance is the increase in contributions of the Broker Channel towards General GWP, thereby reducing our reliance on group of companies to 33% of the total GWP in the year 2011. Whilst appreciating the signifi-cant contribution from the group companies and providing the best possible service to their clientele, we strive to increase the contributions from other channels competing with other players in the industry. However, our group of companies still remains the main contributor towards our GWP and the senior management and staff of those group companies liaise closely in order to improve the relationship and deliver improved results every year through this channel. During the year, the group channel recorded a premium income of Rs. 224 million that is a 17% negative growth over the last year Rs.271 million. Reduction in inter-est rates would be more opportunities for business growth, especially in the areas of leasing and other lending by the group of companies. In turn this is also opportunity for us. Hence there are reasons for increasing business growth via this channel over next few years as well.
Channel wise GWP – General Insurance Direct Broker Agent Group 2011 4% 32% 31% 33%2010 13% 20% 10% 57%
GWP from the Broker Channel has increased by a staggering 123% from Rs.96 million in 2010 to Rs.215 million by 2011. We highly appreciate the support given by brokering and this shows the confidence they have placed in us. This evidenced that there was a significant growth in 2011 in this channel. Sales from the Direct Channel also have shown a negative growth in its share during 2011 in comparison to 2010. The contribution from the Advisor Channel has grown remarkably by 339% compared to the previous year.
Profitability on General Insurance Profits from General Insurance have decreased to Rs. 3.9 million in 2011, from 4.4 million in 2010. This was recorded despite the company making an underwriting loss of Rs. 51 million in 2011 compared to Rs. 38 million in the last year. Recording a lower underwriting loss in a highly competitive and declining market is a creditable achievement.
General Insurance Ratios 2006 2007 2008 2009 2010 2011Net Claims Ratio 44 35 77 60 57 63Expense Ratio 258 131 80 146 54 50Combined Ratio 302 166 157 206 111 113
During the year, we managed to increase the Combined Ratio marginally by 2%, from 111% recorded last year to 113%. Mainly the Net Expense Ratio contributed 4% on this reduction in the Combined Ratio whereas net claim ratio contributed 6% nega-tively. This was possible due to the continuous attention paid by employees at all levels throughout the year to bring down these ratios. Despite the combine ration over 100%, The Company was able to earn Rs. 7.1 million as profit before tax from General Insurance business. This profit in General Insurance was mainly due to the investment income generated Rs. 37 million and other income Rs. 20.3 million. .
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Life Insurance Review Growth in Life Insurance of the company has significant increase during the year under review. When compared with such growth rates of the GWP, the current year’s growth rate is considerably high. We are very pleased to note that the 59% growth in Life Insurance this year is also a satisfactory growth rate because it is well above the overall industry growth, which is 13%.
Life Insurance Rs. MnDescription 2007 2008 2009 2010 2011GWP 47 53 56 90 143Growth 96% 13% 5% 61% 59%
The GWP on traditional endowment policies contributed to this growth by recording a growth rate of 68%. The growth in endow-ment policies came from ‘First Premium’ (new business premium), which recorded an outstanding growth rate of 50%, the ‘First Year Premium’ and ‘Renewal Premium’ growth rate of 66%. The GWP recorded through single premium Mortgage Reducing Poli-cies (MRP) grew at a rate of 17%.
Description First Premium Renewal Single Premium Group Life Premium 2010 19.6 60.2 10.2 0.032011 29.4 100.1 11.9 2.1Growth 50% 66% 17% 6900%
As depicted in the table below, over 6,700 new policies were issued during the year 2011. As a percentage it was a 6% growth rate compared to year 2010. This growth rate shows that the trust that the people keep with MBSL Insurance after acquisition by the Merchant Bank of Sri Lanka.
Life Insurance Details-2010 1st Quarter 2nd Quarter 3rd Quarter 4th QuarterNumber of New Business 1,768 1,390 1,877 1,666Number of In force Policies 6,999 7,035 7,736 8,193Increment of New Business - -21% 35% -11%
According to the number of ‘in force policies’ during the 4th quarter, a 6% of growth could be observed compared to the 3rd quarter. During 2nd and 3rd quarter of the year, an upward trend in number of ‘in force policies’ were observed. The main reasons for the improvement are motivation of the field sales force as a result of high retention level and the high productivity of the sales personnel. After developing the customer’s trust about the Company, a significant increment was recorded at the latter part of the year.
Business in Channel Channel wise GWP – Life Insurance Direct Broker Agent Group 2011 2% 1% 94% 2%2010 1% 1% 89% 9%
The trend from 2010 was maintained with marginal increases in Direct and Agent channels. Broker channel broke even as per2010 but group performance was not as desired.
Future OutlookDuring the following years a highly quality and focused approach will continue to be applied in all streams of our services as we surge ahead against challenging economic conditions.
Possessing the financial stability of both Bank of Ceylon (BOC) and Merchant Bank of Sri Lanka (MBSL) in the shadow of our operations, it will be intrinsic in the future as we were able to turn the Company around last year into a profitable and competi-tive player in the industry.
While we strive to add several new products into our portfolio during the next year, we have maintained an extremely customer focused approach during the past twelve months. With the advent of peace in the northern and eastern regions, we have ex-panded our horizons,and carried out crucial training programmes for staff who will be placed in the branches in these areas, in order to ensure that the same level of quality is provided uninterrupted throughout our entire network of branches.
With much optimism and belief in our ability as a professional insurance service provider, we are confident that within the next few years we have the capacity and resolve to rise towards the topmost rung of insurance service providers in Sri Lanka.
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to grow...
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Risk ManagementRisk is an integral part of any business especially being an insurance company our business is taking risk faced by others. Gener-ally risk can be defined as “the effect of uncertainty on the objectives” the primary objective of any organization is to maximize its shareholder wealth through accepting level of risk appropriate to the company.
No one can even in personal life avoid accepting some level of risk in day to day activities. The only remedy is to manage it properly. Hence sound risk management strategy is required for any organization to compete in dynamic environment today. Risk management is a process of identification, assessment and handling of risks enacted through corporate actions to moni-tor, control and minimize the adverse effect of unfortunate events or maximize the realization of opportunities.
“A Risk Neglected is a Risk Retained”
Risks are managed via effective risk response strategies. One of the main strategies for managing the risk is introducing effec-tive systems and procedures. For the effective risk management, the company has categorized the risk into four types such as strategic risk, insurance risk, investment risk, and finally operational risk. The effective risk management helps a company to be successful in both financial and non-financial objectives. The objectives of risk management are given below.
• Identifyingtherisksfacedbythecompanyviariskidentificationmethod.• Creatingthevaluefortheorganization.• Supportthedecisionmakingprocess.• Maintainingthecompanyreputation.• Addressinguncertaintyinthebusinessprocesses.• Besystematicandstructured.• Obtainingbetterinformationintimelymanner.• Continuousimprovementandenhancementofmitigatingrisks.• Creatingawarenessamongthestaffmembersandeducatingthemaboutriskmanagement.
The board has the overall responsibility for the management of risk and for reviewing the effectiveness of the system of internal controls, internal audits which play a key role in the risk management process of the company, are carried out frequently to identify effectiveness and efficiency of the controls. The company reports on risk related matters and the findings of the internal audit reports to the audit committee and the board.The risks that we regard as most relevant to our business along with the control measures and action plans implemented to mitigate them are set out below.
Setting company’s risk management goals and implementation on corporate govern-ance structure.
Risk Assessment• RiskAnalysis o Risk Identification o Risk Estimation• RiskEvaluation
Risk Treatment• RiskAvoid• RiskTransfer• RiskRetained
Risk Monitoring • RiskManagementpoliciesand procedures being used.• Re-analyzeexistingrisks• ReviewPerformance
Types of RiskStrategic Risk1. Business Risk Relates to the risk of achieving company future business plans. This risk arises due to failure of future business plans, inadequate expansion of service levels and infrastructure.
2. Regulatory Risk Refers to capital, earnings, reputation and penalty payments associated with a failure to comply with the regulation and statutory requirements.
Control Measures and Action Plans
1. The company prepares a company plan every year addressing potential risks and future plans.2. Objectives and time plans are given to each division as per the corporate plan.3. The EXCO members review the achievement of set targets of the company periodically and action are taken to manage unfavorable deviations.4. Separate budget review report including branch wise is forwarded to audit committee and board on monthly basis.5. Performance appraisals are done at the end of each year for deciding on salary increment, promotion and bonus payments.
1. The company has employed the services of a separate Compliance Officer, an Attorney at Law by profession, who is responsible for the company’s compliance with applicable laws and regulations. 2. Regular checking to ensure that all necessary laws, regulations and internal controls have been complied.3. The company has successfully achieved throughout the year by complying with all deadlines set by the Insurance Board of Sri Lanka, Central bank of Sri Lanka, Department of Inland Revenue and other authorities.
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Insurance Risk3. Underwriting Risk This refers to the risk of accepting insurance busi ness that carries an unacceptably high exposure to the risk of claims and accepting risks at rates that do not contain an adequate risk premium.
4. Reinsurance Risk This refers to that the company retains risk which exceeds the net retention capacity of the company and inability to meet the commitments due to inadequate financial strength of the reinsurer.
5. Claim Settlement Risk This refers to the risk of potential disputes arising when settling claims.
6. Credit Risk This arise due to non-settling dues by policyholders or intermediaries
Investment Risk7. Concentration Risk This refers to the lack of diversification of the investment portfolio.
8. Liquidity Risk This refers the insufficient availability of cash to meet the day to day expenses including claims.
9. Market Risk The risk of change in the value of investments due to volatility of stock prices.
Operational Risk 10. Fraud Risk Fraudulent act or misappropriation of assets due to weak internal controls.
11. Human Resource Risk The main human resource risks are the shortage of qualified personnel in the industry and retain motivated and right people in the company.
1. Clearly defined procedure manuals are distributed with the adequate segregation of duties in respect of underwriters within formally documented limits of authority. 2. Providing adequate training to underwriting staff regularly to enhance their skills, knowledge and capabilities in underwriting. 3. Post underwriting inspections are carried out to ensure that underwriting has been done as per the procedure manual. 4. The company obtains consultation from Actuary in deciding terms and conditions for new products of life insurance and subsequently approval from the IBSL.5. The company ensures that no insurance cover is issued without obtain ing adequate cover from the reinsurer.
1. Reinsurance agreements are signed with companies who have high credit rating, financial strength and well known to the industry. 2. The reinsurance panel is formally approved by board of directors on annually. 3. The company reviews the outstanding reinsurance receivable in a timely manner and make sure that receivable are collected. 4. The company has complied with regulatory requirement under the Regulation of Insurance Industry Act, No 43 of 2000 in relation to the Reinsurance.
1. Clear segregation of duties in respect of claims is in place.2. Clearly defined claims settlement procedures are available. 3. Adequate provision is provided for intimated claims and subsequently provision is reviewed and revised with the inputs from professional lost adjustors and assessors. 4. Service of qualified independent actuary is obtained to assess the adequacy of reserves for IBNR/IBNER.5. Any claim in the nature of fraudulent may be rejected or litigated if necessary. 6. Employees are expected to cross check the information gathered from various sources and verify policy conditions, and sum insured when settling claims.
1. Credit facility is granted as per the credit policy approved by board. 2. Regular meetings are held with sales team in order to collect due on time.3. Adequate provision is made for long outstanding premium receivable.4. Policy is cancelled if premium is not received within the approved credit period.
1. Funds are invested according to the investment policy approved by the board.2. Investment portfolio is diversified based on regulatory requirements, investment opportunities and liquidity position of the company.
1. Majority of the investments are in government securities and liquid listed shares. 2. Preparation of weekly estimated cash flow helps for the working capital management and short term investments such as Repo.3. Investments are made with different tenor period to meet unexpected liquidity needs.
1. Risk is reduced by diversifying investment portfolios in different level of asset classes. 2. Investments are made in selective basis having considered the micro and macro environments.
1. MOFA (Manual of Financial Authority) is in place with delegated authority to employees at each level. 2. Internal Auditors are appointed to monitor key processes continually and report any weakness in internal controls to the Audit Committee.3. Investigation Team appointed by the management investigates the branch operation time to time to ensure that branches follow the laid down procedures. 4. If a discrepancy is found, investigation is immediate, followed by corrective action to prevent any recurrence of fraud or malpractice.
1. Providing appropriate working environment with career development. 2. Continuous training and education of staff is further encouraged through the provision of financial assistance and other support.3. Remuneration package and benefits of permanent staff are held in line with industry standards to retain, attract and motivate the staff.
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Customer relations.With a rapid and aggressively driven branch expansion program we added branches at Horana, Kalutara, Kaduwela, Kegalle, Kiribathgoda, Kilinochchi and Valachchenai to our existing network of branches during year 2011. The focus is to be closer to customer with fast response for their insurance needs. Our long term strategic aims and tactical deployments is to be the most reliable insurer that customers trust.
Employee relations.We have been encouraging staff to participate at various local and foreign Workshops/ Sem-inars to gain more insight and expert knowledge of the industry in order to be more effective in our services. As a result our Managing Director Mr. Sydney Gajanayake parcipated at the ‘Hannover Life Re Asia Seminar 2011’ which was organized by our Life Reinsurer M/s. Han-nover Re, Malaysia from 4th to 7th of July 2011 at “The Westin Bayshore Vancouver, Canada”.
Ms. Chamari Rodrigo – Assistant Manager Reinsurance - General Insurance Division, par-ticipated at the ‘5th GIC Re International Training Program on Reinsurance Fundamentals, Practice and Trends’ which was organized by our General Reinsurer M/s. General Insurance Corporation of India (GIC RE) from 19th to 23rd September, 2011 in Mumbai, India.
Mr. Sydney Gajanayake – Managing Director, participated at the ‘British Insurance Summit’ from 28th to 29th September 2011 at the Grange Tower Bridge Hotel, London.
Mr. Mahendra Willegoda – Senior Manager Life Underwriting – Life Insurance Division, partici-pated at the ‘Product Development Strategy Course” which was organized by The Founda-tion of The Advancement of Life and Insurance Around the World (FALIA) from 7th to 11th November 2011 at Dai-ichi Life Higashi-Totsuka Training Centre, Yokohama-shi, Kanagawa, Japan.
Mr. Rasika Nillanka – Manager Life Operations – Life Insurance Division, participated at the ‘Senior Underwriting Seminar’ which was organized by our Life Reinsurer M/s. Hannover Re, Malaysia from 13th to 16th November 2011 at Pullman Bali Legian Nirwana Hotel, Bali, Indo-nesia.
Employee welfareThe Company honoured the 20 best performers by sponsoring a ‘Foreign Tour’ to Bangkok / Malaysia.
The ‘MBSL Insurance Welfare Society’ organized a Gala Dinner Dance 2011 for the staff mem-bers at the Rainbow Room, Grand Oriental Hotel, Colombo–01.
Sustainability Report
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Sales conventionThe Company held the Annual Sales Convention to recog-nise and facilitate the real performers of year 2010. Eight members won Super Gold Award and several of them were from as far as Matara and Vauniya indicating that the Com-pany is respected in these parts as well. Seven members won Gold Awards and 14 members from diverse sectors won the Silver Award.
22 of them were selected as Bronze Award winners and 28 members were awarded Certificates for their contribution towards sterling results of the Company. This ceremony was held at Sri Lanka Foundation on 18th June 2011 which was fully participated by the staff to rejoice their triumphs and shared the experience with their colleagues. It is no doubt that this event gave sufficient inspiration for others also to perform well and we will be seeing results during 2012.
Community relationsTo mark the occasion of the Birthday of Mr. M R Shah – Group Chairman Merchant Bank of Sri Lanka PLC, The Company made a donation to the Elders Home ‘Gamini Matha’ at Colombo – 02 with substantial quantity of dry rations.
The Company also sponsored the “Avurudu Uthsavaya 2011” organized by “Kandewatte Sports Club” Battaramulla in a grand scale at the Buddadasa Stadium, Battaramulla. The event had many sporting events followed by evening Musical Show.
The Company donated Rs. 100,000/- each, for three fishing families who lost their bread winners while fishing in the deep seas, whose boats were insured with he Company
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The Board of Directors of MBSL Insurance Company Ltd has pleasure in presenting to the members their Annual Report on the affairs of the Company. The audited financial statements of the Company for the Financial year ended 31 December 2011 and the Report of the Auditors thereon are also included in this report. The financial statements were accepted and approved by the Board of Directors on 10 February 2012. The details contained in this Report provide the relevant information required by the Companies Act No. 07 of 2007, the rules of the Regulation of Insurance Industry Act, No.43 of 2000 and are guided by recom-mended best accounting practices.
Principal Activities and StructureThe principal activity of the Company continued to be carrying on General Insurance and Life Insurance businesses. There were no significant changes in the nature of the principal activities of the Company during the financial year under review. The company commenced Non Life Insurance business on 2nd August 2005 & Life Insurance business on 1st April 2005. The major share holder of the Company is Merchant Bank of Sri Lanka. The Company has not engaged in any activities, which contravene laws and regulations of the country.
Directors’ Responsibility for Financial ReportingThe Directors are responsible for the preparation of the financial statements of the company to reflect a true and fair view of the state of its affairs. The Directors are of the view that these financial statements have been prepared in conformity with the require-ments of the Sri Lanka Accounting Standards, Companies Act No. 7 of 2007, Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995, Regulation of Insurance Industry Act No. 43 of 2000. Financial statement of the company are given on pages 39 to 66.
Review of Performance and Future DevelopmentsA review of the financial and operational performance during the year and future business developments of the company is contained in the Chairman’s and Managing Director’s Reviews and the Management Discussion and Analysis of the annual report. These reports form an integral part of the report of the Directors and together with the audited financial statements reflect the state of the affairs of the company. The segmental contribution of gross written premium, profits, assets and liabilities is pro-vided on pages 44 to 48 in the financial statements.
Vision, Mission and Corporate Values The company’s vision, mission and corporate values are provided on page 02 of this report. In achieving its vision and mission, all Directors and employees conduct their activities with the highest level of ethical standards and integrity.
Accounting PoliciesThe accounting policies adopted in preparation of the financial statements are given on pages 49 to 54. There have been no changes in the accounting policies adopted by the company during the year under review.
Going ConcernThe directors have made necessary reviews and inquiries including review of the Company’s budget and Corporate Plan for ensuing years, future prospects and risks, capital expenditure requirements, cash flows, etc. the Directors have a reasonable ex-pectation that the company possesses adequate resources to continue in operation for the foreseeable future and continues to adopt the going concern basis in preparing these Financial Statements.
AuditorsThe Financial Statements for the year ended 31st December 2011 have been audited by BDO Partners (Chartered Accountants) and their report on those statements which forms an integral part of the Report of the Board of Directors is given on page 39 of this Annual Report. The retiring Auditors, BDO Partners have expressed their willingness to continue in office as the Company auditor. In accordance with the Companies Act, No. 7 of 2007, a resolution relating to their re-appointment and authorizing the Directors to determine their remuneration will be proposed at the forthcoming Annual General Meeting.
Turnover / Gross Written Premium (GWP)The total turnover as measured by Gross Written Premium (GWP) of the Company for the financial year under review amounted to Rs. 823 million (2010 - Rs. 565 million). The above GWP is made up of General and Life Insurance premium income amounting to Rs. 680 million (2010 - Rs. 475 million) and Rs. 143 million (2010 - Rs. 90 million) respectively. A detailed analysis of the total GWP achieved by the Company is given in Note 21 to the Financial Statements on pages 61 to 62.
Financial Results and Appropriations
Description 2011 2010 Rs. ‘000 Rs. ‘000
Profit/(Loss) Before Taxation (PBT) 7,160 9,979Income Tax Expense (3,255) (5,516)Profit After Taxation (PAT) 3,905 4,463Profit /(Loss)brought forward (390,002) (394,465)Profit /(Loss)carried forward (386,097) (390,002)
Financial Statements and Auditors’ ReportThe financial statements duly signed by the directors is provided on page 40 and Auditors’ Report on the Financial Statements is provided on page 39 of this annual report.
Board of DirectorsAs at 31st December 2011 the Board of Directors of MBSL Insurance Company Ltd consisted of seven Directors with financial knowledge and experience. The qualifications and experience of the Directors is given on pages 10 to 11 of this report. The fol-lowing persons were Directors of the company during the year.
Annual Report of the Directors on the Affairs of the Company
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Name of the Director Status
Mr. M. R. Shah (Chairman) Non-Executive Director Mr. Sydney Gajanayaka (MD) Executive Director Mr. A.P.G. Karunathilake Non-Executive Director** Prof. R.W.T.M. R. Bandara Non-Executive Director Mr. P.G. Rupasinghe Non-Executive Director Mr. Lakshman Perera Non-Executive Director Mr. Sashika Senarath Non-Executive Independent Director **Mr. A.P.G. Karunathilake resigned from the Board as a Director on 01.01.2012.
Board Sub CommitteesThe Board while assuming the overall responsibility and accountability in the management of the company has also appointed Board Committees to ensure control over certain affairs of the Company. Accordingly, the following Committees have been constituted by the Board.•AuditCommittee•RemunerationCommittee•InvestmentCommitteeThe number of Directors’ meetings which comprise Board meetings, Audit Committee meetings, Remuneration Committee meet-ings, and Investment Committee meetings together with the attendance of each Director at these meetings during the year are tabulated below.
Name of the Director Board Meetings Audit Committee Remuneration Meetings Committee Meetings A B A B A B
M. R. Shah (Chairman) 15 14 2 2Sydney Gajanayaka (MD) 15 14 A.P.G. Karunathilake 15 14 12 12 Prof. R.W.T.M. R. Bandara 15 15 P.G. Rupasinghe 15 15 12 12 2 2Lakshman Perera 15 15 12 11 Sashika Senarath 15 12 2 2
A = Number of meetings held during the periodB = Number of meetings attended
Directors Interests RegisterThe company, in compliance with the Companies Act No. 7 of 2007, maintains an Interests Register. In compliance with the requirements of the Companies Act, this annual report also contains particulars of any entries made in the Interests Register as detailed below.
a) Directors’ Interests in Transactions The Directors of the company have made general declarations as provided for in section 192 (2) of the Companies Act No. 7 of 2007. Arising from this details of contracts in which they have an interest are found in note 34 of the financial statements, under related party transactions.
b) Directors’ Interests in SharesThe Directors of the company who have relevant interests in the shares of the company have disclosed their shareholding and any acquisitions or disposals to the Board, in compliance with Section 200 of the Companies Act.
The Directors’ individual shareholdings in the company as at 31st December 2011 and 31st December 2010 were as follows.
Name of the Director No. of shares as at No. of shares as at 31st Dec 2011 31st Dec 2010
M. R. Shah (Chairman) Nil NilSydney Gajanayaka (MD) 1,670,000 NilA.P.G. Karunathilake 300,000 NilProf. R.W.T.M. R. Bandara Nil NilP.G. Rupasinghe Nil NilLakshman Perera Nil NilSashika Senarath Nil Nil
c) Directors’ Remuneration Managing Director’s remuneration is decided by the Board with the recommendation of the Remuneration Committee consid-ering the individual and Company performance. No remuneration is paid to Non-Executive Directors other than the nominal fees paid in line with the attendance of each Director to Board and Sub Committee meetings.
Total Directors’ emoluments including post employment benefits to Directors for the financial year ended 31st December 2011 is Rs. 5.6 million (2010 - Rs. 3.6 million). Directors are not allowed to obtain loans of any kind from the Company.
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Share Information
a) The Share Issued and Fully Paid - Rs. 779,487,020/- i.e. 304,848,702 sharesClass of Share - Ordinary SharesVoting Rights - One vote per Ordinary Share
b) ShareholdingsThe number of registered shareholders of the Company as at 31st December 2011 was 157 (2010 -1). The distribution and analy-sis of shareholdings are given below.
Shares No. of Shareholders No. of Shares % on Total No. of Shares
1,001 - 10,000 73 730,000 0.2410,001 - 100,000 65 2,606,000 0.85100,001 - 1,000,000 8 3,686,000 1.21Over - 1,000,000 11 297,826,702 97.70Total 157 304,848,702 100.00
c) Analysis of Shareholders 31st December 2011 31st December 2010 No. of Shareholders No. of Shares % on Total No. of No. of Shares % on Total No. of Shares Shareholders No. of Shares Individual 148 14,692,000 4.82 Institutional 9 290,156,702 95.18 1 187,848,702 100.00Total 157 304,848,702 100.00 1 187,848,702 100.00
d) Top 20 ShareholdersThe 20 largest shareholders as at 31st December 2011 together with their Shareholding as at 31st December 2010 are given below.
Name of the shareholder 2011 2010 No. of Shares % on Total No. of Shares No. of Shares % on Total No. of Shares
Merchant Bank of Sri Lanka PLC 237,848,702 78.02 187,848,702 100MAS Capital (Pvt) Ltd 28,285,000 9.28 Lanka Corrugated Industries (Pvt) Ltd 10,000,000 3.28 W D N H Perera 6,000,000 1.97 Timex Garments (Pvt) Ltd 3,350,000 1.10 Jinadasa Capital (Pvt) Ltd 3,333,000 1.09 Royal Ceramics Lanka Plc 2,000,000 0.66 Rose Wood (Pvt) Ltd 2,000,000 0.66 Orit Apparels Lanka (Pvt) Ltd 1,670,000 0.55 Lanka Corrugated Investments (Pvt) Ltd 1,670,000 0.55 P S K L Gajanayake 1,670,000 0.55 M H M Nazeer 1,000,000 0.33 D B Gamalath 1,000,000 0.33 C J Botejue 666,000 0.22 G M Fonseka 400,000 0.13 A P G Karunatillake 300,000 0.10 S N E T De Silva 200,000 0.07 M S S Paramananda 136,000 0.04 M Nimal 120,000 0.04 H M S A Herath 100,000 0.03 S R Botejue 100,000 0.03 Lakshmi Perera 100,000 0.03 D C Kevitiyagala 100,000 0.03 J M W Wickrama 100,000 0.03 A Pandipperuma 100,000 0.03 S W Hettiarachchige 100,000 0.03 Total 302,348,702 99.18
Equitable Treatment to all ShareholdersThe Company has at all times ensured that all shareholders are treated equitably.
Corporate GovernanceThe Board of Directors is committed to maintain an effective Corporate Governance structure and process and to be in compli-ance with all possible rules, regulations and best practices on Corporate Governance.
System of Internal ControlsThe Board considers that strong internal controls are integral to the sound management of the Company and is committed to maintain strict financial, operational and risk management controls over all its activities. The Directors are ultimately responsible for the Company’s system of internal controls and for reviewing its effectiveness. Such a system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss. There is an ongoing process for identifying, evaluating and managing the risks that are faced by the Company, and the Directors have reviewed this process, through the Audit Committee.
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DonationsThere were no donations granted during the year.
Income TaxationIncome Taxes are computed on rates enacted or substantively enacted as at the Balance Sheet date. The Income Tax rate appli-cable to Company’s operations is 28% (2010-35%). The income tax expense of the Company is given in Note 26 to the Financial Statements. As further explained in Note 26b to the Financial Statements, no Deferred Tax asset is recognized since it is not prob-able that future taxable profits will be adequate to utilize the available tax losses fully in the foreseeable future.
Statutory PaymentsThe Directors, to the best of their knowledge and belief are satisfied that all statutory payments due to the government, other regulatory institutions and in relation to the employees have been made on time.
InvestmentsDetails of investments held by the company are disclosed in note 3 to the financial statements.
Property, Plant and Equipment (PPE)As at the Balance Sheet date the net book value of Property, Plant and Equipment amounted to Rs. 30.2 million (2010 - Rs. 19.6 Million). An analysis of the Property, Plant and Equipment of the Company, additions and disposals made during the year to-gether with the depreciation charge for the year are set out in Note 4 to the Financial Statements.
ProvisionsThe Directors have taken all responsible steps to ensure adequate provisioning has been made for unearned premiums, and outstanding claims, including claims incurred but not reported and not enough reported.
The Directors have arranged external actuaries to value the life fund and the general claims incurred but not reported and not enough reported and the gratuity liability. The basis adopted for provisioning is disclosed in Accounting Policy No 2.4 & 2.5 to the Financial Statements.
Gratuity liability was also valued by an independent Actuary as required by the Sri Lanka Accounting Standard No 16 Employee Benefits (Revised 2006).
As at the date of the Report, the Directors are not aware of any circumstances, which would render inadequate the amounts provided for in the Financial Statements.
Stated Capital and Shareholders’ FundsIn compliance with the Companies Act No. 7 of 2007, the financial statements reflect the stated capital of the company. The stated capital is the total of all amounts received by the company in respect of the issued share capital.
The total capital and reserves stood at Rs. 395.3 million as at 31st December 2011 (Rs. 140.4 million as at 31st December 2010), details of which are provided in the financial statements.
Events occurring after the Balance Sheet DateThere have not been any material events that occurred subsequent to the Balance Sheet date which requires adjustments to or disclosure in the Financial Statements.
Outstanding LitigationIn the opinion of the Directors, and in consultation with the Company Lawyers, litigation currently pending against the Company would not have a material impact on the reported financial results of the Company. All pending litigations for claims have been evaluated and adequate provisions have been made in these Financial Statements where necessary.
EnvironmentThe company has not engaged in any activity that is harmful to the environment.
Compliance with Laws and RegulationsThe Company has complied with the regulations set out by the Insurance Board of Sri Lanka (IBSL) and other regulations and has submitted all returns and other required details to the relevant parties on or before the due dates. In addition, we comply with Financial Transactions Reporting Act, No. 6 of 2006 and the Convention on the Suppression of Terrorist Financing Act, No. 25 of 2005, by sending a monthly report to the Financial Intelligence Unit (FIU) of Central Bank of Sri Lanka (CBSL).The company has complied with all applicable laws and regulations.
Annual General MeetingThe Annual General Meeting will be held at MBSL Campus E H Coory Building, Galle Road, Colombo 03 on 29th June 2012 at 10.00 a.m. The notice of the Meeting relating to the seventh Annual General Meeting is given herewith.
By order of the Board of Directors
M. R. Shah Sydney Gajanayaka Merchant Bank of Sri Lanka PLCChairman Managing Director Secretaries
Colombo, Sri Lanka28th May 2012
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Audit Committee Report
Composition
The Audit Committee consists of three non executive directors, namely Mr. Gamini Karunathilake(retied w.e.f 1st Jan 2012), Mr. P.G. Rupasinghe and Mr. Lakshman Perera. Mr. Gamini Karunathilake, acted as the chairperson of the audit committee. The committee is made up of members who bring their varied experience and knowledge in the areas of banking, accounting and finance to effectively carry out their duties. The Company Secretary functions as the Secretary to the Audit Committee.
Meeting
The Committee met twelve times during the financial year under review. Agendas of the Meetings were prepared and distrib-uted sufficiently in advance to members, along with appropriate briefing material. Minutes of the Audit Committee meetings along with the observation and recommendation of the committee are submitted to the Board on regularly for their updating. The Managing Director and Head of Finance attend the meetings by invitation. Executive Committee Members and other mem-bers of the Management are also invited to attend these meetings when necessary.
Objectives and Authority
The primary objective of the Audit Committee is to assist the Board of Directors of the Company that a good financial report-ing system is in place in order to present accurate and timely financial information to the Board of Directors, regulators and shareholders and to make sure that these are prepared in accordance with Sri Lanka Accounting Standards (SLAS) and other relevant laws and regulations.
Other functions of the Audit Committee include: • Reviewofinternalandexternalauditreportsandfollowuponrecommendations. • Reviewthedesignandimplementationoftheinternalcontrolsystemsandtakestepstostrengthenthemasnecessary. • Reviewtheefficiencyofriskmanagementprocedures. • Ensurethattheconductofthebusinessisincompliancewiththeapplicablelawsandregulationsofthecountryand policies and procedures of the Company. • Monitorprocessesforcompliancewithlawsandregulations. • ToassesstheindependenceoftheExternalAuditorsandmonitortheperformanceofInternalandExternalAuditors.
Internal Audit
The Internal Audit function of the company is carried out by the Group Internal Audit Department of immediate Parent Com-pany. On the recommendation of the Audit Committee, the company has adopted the Audit Committee Charter and Internal Auditor’s Charter. The Committee reviewed and approved the Internal Audit plan for the year 2012 of the Company.
External Audit
The Committee perused the Report of the Auditors and the Management Letters issued by them. The Committee followed up on recommendations made in those reports. The External Auditors were given adequate access to the Audit Committee and all relevant information required.
Further the Committee is of the view that the External Auditors are independent and do not have any interest in contract with the company and recommended to the Board of Directors that M/s BDO Partners, Chartered Accountants, be reappointed as Audi-tors for the financial year ending 31st December 2012 subject to the approval of Shareholders at the Annual General Meeting.
Conclusion
The committee is satisfied that the company’s internal controls are implemented as designed, and the company’s assets are adequately safeguarded. The company’ internal and external auditors have been effective and independent throughout the year. The committee is also satisfied that the operational controls and the application of appropriate of accounting policies provide reasonable assurance that the financial statements of the company are true and fair.
Mr. P.G. RupasingheActing Chairperson - Audit Committee
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Certification of Incurred but Not Reported (IBNR) andIncurred but Not Enough Reported (IBNER) Claims Reserved
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Report of the Life Actuary
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Independent Auditors Report
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Significant Accounting Policies and Notes to the Financial Statements
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Company Assets 2011 2010 2009 2008 2007 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000
Investments 588,133 401,896 258,210 139,448 171,578 Property Plant and Equipment 30,193 19,644 22,075 29,882 32,123 Loans to Life Policy Holder 1,455 Current tax Receivable 11,330 2,957 4,801 79 - Reinsurance Receivable 44,688 35,222 4,983 734 450 Premium Receivable from Policyholders 174,550 138,682 132,420 151,289 58,644 Other Assets 61,094 29,609 27,792 28,731 20,053 Cash and Cash Equivalents 92,127 4,402 3,806 8,051 3,985 Total Assets 1,003,570 632,413 449,367 358,214 286,833 Liabilities and Shareholders’ Equity Liabilities Insurance Provision 434,934 319,711 224,314 137,442 123,418 Other Liabilities 71,795 70,897 65,283 55,164 37,877 Reinsurance Creditors 76,637 87,521 65,053 58,493 10,227 Retirement Benefit Obligation 5,168 2,537 2,013 1,257 1,389 Borrowing 19,685 11,301 6,717 506 Total Liabilities 608,219 491,967 363,380 252,356 173,417 Shareholders’ Equity Stated Capital 779,487 528,487 478,487 378,487 299,887 Revenue Reserves (386,097) (390,002) (394,465) (274,590) (188,432) Life Insurance Fund Reserve 1,961 1,961 1,961 1,961 1,961 Total Shareholders’ Equity 395,351 140,446 85,983 105,858 113,416 Total Liabilities and Shareholders’ Equity 1,003,570 632,413 449,367 358,214 286,833 LIFE INSURANCE Assets Investments 142,782 99,161 80,936 55,297 21,503 Property, Plant and Equipment 274 426 692 944 1,056 Loans to life policy holders 1,455 Reinsurance Receivable 3,255 220 450 734 61 Tax Receivable 915 Other Assets 3,839 3,719 3,017 3,084 1,364 Cash and Cash Equivalents 1,159 3,981 3,420 2,739 1,444 Total Assets 153,679 107,507 88,515 62,798 25,428 Liabilities Insurance Provision - Life 106,682 66,937 41,336 28,842 15,800 Other Liabilities 13,329 12,801 23,357 8,351 5,498 Reinsurance Creditors 5,873 4,835 1,218 3,472 3,745 Retirement Benefit Obligation 2,039 933 604 133 385 Payable to General Insurance 3,168 Borrowing 588 Total Liabilities 131,679 85,507 66,515 40,798 25,428
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Ambalanthota
Ampara
Anuradhapura
Avissawella
Baddulla
Batticaloa
Chilaw
Dambulla
Embilipitiya
Galle
Gampaha
Horana
Jaffna
Kaduwela
Kalutara
KandyKegalle
Kiribathgoda
Kurunegala
Mahiyanganaya
Mannar
Matara
Monaragala
Negombo
Nuwara Eliya
Padaviya
Panadura
Ratnapura
Thambutthegama
Trincomalee
Vauniya
Welimada
BalangodaKahawatta
Kalpitiya
Kilinochchi
Valachchenai
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Name of the CompanyMBSL Insurance Company Limited
Legal FormA Public limited liability Company incorporated on 24th September 2004 under the Companies Act, No. 17 of 1982 in Sri Lanka. The Company was re-registered under the Companies Act, No. 7 of 2007.MBSL Insurance Company Limited is a composite insur-ance Company licensed by the Insurance Board of Sri Lanka (IBSL).
Company Registration No.PB 900 (Previous registration number – N (PBS) 1197)
Tax Payer Identification (TIN) No.134119764
VAT Registration No.134119764 -7000
Fiscal Year-End31st December
Principal ActivitiesCarrying on General and Life Insurance business.
Registered OfficeBOC Merchant Tower, No 28, St Michael’s Road, Colombo 03 Sri Lanka.
Head Office122 Kew RoadColombo 02, Sri Lanka.Telephone: (+94)1 1 2304500Facsimile: (+94)1 1 2300499E-mail - [email protected] Web: www.mbslinsurance.lk
Board of DirectorsMr. M. R. Shah (Chairman)Mr. Sydney Gajanayake (Managing Director)Mr. Gamini KarunathilakeProf. Ranjith BandaraMr. P.G. RupasingheMr. Lakshman PereraMr. Shashika Senerath
Board SecretariesMerchant Bank of Sri Lanka PLC
Audit Committee MembersMr. Gamini Karunathilake (Chairman)Mr. P.G. RupasingheMr. Lakshman Perera
Executive Committee MembersMr. Sydney Gajanayake - Managing DirectorMr. D. C. Kevitiyagala - General Manager - LifeMr. Neil De Silva - General Manager - GeneralMr. Nadeeth De Alwis - Head of Finance
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23004992304500
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Design and concept: VIRTUSO INC ASSOCIATES Printed by: CANNAN PRINTERS
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Head Office122 Kew Road, Colombo 02, Sri Lanka.
Telephone: (+94)11 2304500 Facsimile: (+94)112300499E-mail - [email protected] Web: www.mbslinsurance.lk
