Sanasa Annual Report

Dear Stakeholder

The insurance industry has not only expanded over the past several years but has undergone some key regulatory changes aimed at becoming a vibrant and competitive sector in its own right. Some of these changes posed severe challenges, in particular to smaller insurers, but I am pleased to state that our Company has had the capacity and resilience to rise to the challenge and emerge stronger and more stable. It is in this context that I am privileged, on behalf of the Board, to present to you our Annual Report along with the relevant statements pertaining to the financial year ended December 31, 2016

Economic Trends

The year under review saw stagnant global trade, subdued investment and greater policy uncertainty. The World Bank predicts a moderate recovery for 2017: Weak investment is weighing on medium-term prospects across many emerging markets and developing economies. Although fiscal stimulus in major economies, if implemented, may boost global growth above expectations, risks to growth forecasts remain tilted to the downside. Important downside risks stem from heightened policy uncertainty in major economies.”Accordingly, the overall picture does not look very promising, globally

Industry Trends

Despite changes in the regulatory regime, insurance penetration remains abysmally low, with total premiums as a percentage of GDB at just over 1%. The objective of new regulation, among other things, has been to improve penetration and encourage further development of the industry. The segregation of life and non-life business, as well as the requirement for all insurers to be listed on the Colombo Stock Exchange and improve risk management regimes with regard to capital supervision are part of this process. The overall outlook remains strong, but it must be cautioned that part of the reason for this is the low base as well as strong GDP growth since the end of the war in 2009.

Regulatory Challenges and Responses

There have been four key elements in the IBSL’s efforts to improve the industry. In addition to market segregation, the regulator has envisaged increased market stability and long-term development by increasing the minimum regulatory capital from Rs 100 million to Rs 500 million. Third, the insurers were required to institute risk-based capital regimes and finally to list on the CSE. As you are aware ours is a unique model that brings together a viable business proposition with a social mission and one which is based on cooperative principles. Naturally, for all the good intentions for the overall development of the industry, the new rules went counter to our stakeholder-expectations. While the regulator provided opportunity for us to make representations, there was intransigence with respect to the request that considerations on account of the uniqueness of our organization. During the year under review we worked hard to comply with the new rules set by the regulator without compromising our social ideals. We are confident that we have the resilience, the innovative edge and the energy to retain our identity even as we adapt to the new framework. I would like to reiterate my gratitude to the Sanasa Movement as a whole for appreciating these challenges and continuing to have confidence in the Company to sail these troubled regulatory waters.


Despite industry turbulence the Company posted creditable results in many of the key operational and financial indicators. The life segment, as in previous years, maintained its position among the top insurers and maintained momentum, as evidenced by the recorded GWP growth of 35% The non-life segment also posted a GWP growth of 17% in 2016

Corporate Stewardship

What has set apart our Company over the competition is that it was built on internationally acclaimed cooperative principles that fostered true integrity, equality, responsibility and transparency at all levels. I believe that it is this sense of responsibility itself that has allowed us to comply with the best practices regimes of the industry as well as adhere to the latest good governance guidelines. They are an extension of the cooperative ethos which gives us identity and positions us as a respected and trusted micro insurer.

The future

We have always stood for and prided ourselves for standing for inclusivity. In an economic environment marked by dynamism and even occasional collapse, the management of risk is of utmost importance. Invariably, when things go wrong, it is those at the margins that get hit worst and they unfortunately are the large sections of the population that the industry has not reached. While some may consider them untapped markets, we consider them partners in the effort to raise the overall wellbeing of a community and a nation. We moreover consider them our principal strength and they’ve proven this time and again. We do recognize that while we have come far, there’s so much more territory to cover. I assure you on behalf of the Board that we will not falter