Task 01

The Company:

Sri Lanka Insurance Corporation Ltd.

Sri Lanka Insurance Corporation Limited is one of most reputed government owned company
in Sri Lanka. The company started in 1962 according to the Insurance Act No. 02 and the
motion was moved to the parliament by the former Minister of Finance, the late Hon. T.B.
Ilangaratne.

The Sri Lanka Insurance Corporation Ltd. manage over Rs. 235 billion asset base and this is
the largest in insurance industry of Sri Lanka.

The company invests in other major businesses in the country. They are:

The Lanka Hospitals PLC (51.34%)

Litro Gas Lanka Ltd. (99.94%)
Litro Gas Terminal Lanka (Pvt.) Ltd. (100%)
Canowin Hotels & Spas (Pvt.) Ltd. (100%)
Canwil Holdings (Pvt.) Ltd. (45.95%)
Management Services Rakshana Private Ltd. (100%)

What is Insurance?

In the event of a loss to the insured, the insurer will reimburse the loss for a small price.

Task : Marketing Audit

Purpose : To identify the internal situation of the company

Main Competitors:

Ceylinco Insurance

Allianz Insurance

Fairfirst Insurance

Market Share

Sri Lanka
Other Insurance
Companies 18%
Ceylinco
35% Insurance Political Factors
FairfirstAllianz 18%
InsuranceInsurance
11% 18% This is a description of how the
political situation of Sri Lanka is
effect to the Insurance Business and
the company.

The insurance business is one of major business in Sri Lanka because there are 28 private and
government owned insurance companies established in the country and these institutions are
regulated by the Insurance Regulatory Commission of Sri Lanka.

The insurance business receives a huge amount of money to the state treasury of Sri Lanka
every year and this money is used for the development of the country. The government has
also made motor insurance compulsory and the Government of Sri Lanka extends maximum
support to expand the insurance business.

Sri Lanka Insurance Corporation Limited is a fully government organization and the
Chairman, the board of Directors and the Chief Executive Officer are appointed by the
government. Therefore, the market share of the organization depends on the decisions made
by officers who are appointed to these posts. At present the active officers who are appointed
to those key posts in the organization have minimal knowledge on the subject of insurance.
They also do not seek the assistance of government-appointed insurance experts for the
development of the organization.
Economic Factors

Sri Lanka Insurance Corporation Ltd. is a one of market leader in Sri Lanka and one of main
reason is because the company is fully government owned company. So the people who are
invest in Sri Lanka Insurance is much more safe. There are 158 branches operating in the
island which can fulfill any insurance requirement of the customers very quickly.

Sri Lanka Insurance provide Life and General Insurance products and most popular general
insurance product is “Motor Plus”. So this product is very popular island wide. The market
share of General Insurance of the company is 18%.

Sociocultural Factors

There are less cultural issues in Insurance Market in Sri Lanka because most of the
population are Sinhalese. Majority of the others are Tamils and Muslims but there is a
tendency for Muslims to be drawn to other insurance companies that have takaful insurance
because still Sri Lanka Insurance Corporation did not start takaful insurance.

Technological Factors

Sri Lanka Insurance is using modern technology. So the company uses modern computer
technology and communication technology and they can be contacted branches in a very little
time and can be easily solve issues. The computer network is developed and an insurance
policy can be issued in a little time. The customers can get a motor insurance using the
mobile app without wasting time and also they can easily make the payments through this
mobile app.

To identify where we are in the market used SWOT analysis

Strength:

According to the reports if 2018 there are 158 branches across in the country. There are 2,500
internal staff working in the company and also about 10,000 external staff (Insurance
Advisors, Insurance Organisers and Team Leaders) are attached island wide to Sri Lanka
Insurance Corporation Ltd. The brand name of SLIC is proper recognized in Sri Lanka
because it is fully government owned company and provide more security. As a result of this
the company holds 17% of the total insurance market in the country. It is currently the second
largest car insurance company in the country. The Institute makes a significant contribution
to the development of the country and contributes around Rs. 2,000 million annually to the
State Treasury. Sri Lanka uses modern network system so any insurance requirement of the
customer can be obtained from any branch in the country in a very short period of time. In
addition, the SLIC mobile app allows you to renew your car or life insurance from where you
are, such as paying insurance premiums in the shortest possible time.

The asset base of the Sri Lanka Insurance is over R. 235 Billion.

Weaknesses

Around 10,000 field staff and internal sales staff can be utilized to promote the business of
the organization. For this, the management should take action to formulate a long-term and
short-term plan to increase the business by the strength of huge sales staff. There seems to be
a setback in introducing the company’s products to the customer. They are also ahead of us in
maintaining their name in the market with other competing companies. Other competing
companies maintain their position in the market with their limited staff but we can use this
sales staff of around 10,000 to take the company's products to the customer.

There should be a strong and continuous training and development programs to develop the
skills of the internal and external employees and it help to the development of their attitudes
also. This can be done with the help of top executives who are skilled in the subject working
in the organization and the cost can be minimized. This is also effects to minimize the of
claim delaying issue.
Minimize unnecessary expenses is essential because it is not advisable to go for expensive
projects during this period. For example, changing the brand of an organization by spending a
lot of money, project of “Great Place to Work”.

The support of Human Resources Department for this is minimal. For example, if an
employee comes to the human resources department to solve his or her problem, the problem
is less likely to be solved. For this reason, his or her working capacity is reduced. This is
common in the organization.

Opportunities

Many people nowadays use smart phones and their social media usage is very
high. Therefore, it is best to use social media to bring the company's products to
the masses. Also the cost for this is minimal. By far the most benefitted
insurance plans in the insurance market are in the Sri Lanka Insurance
corporation. But the consumer seems to be less aware of this insurance plan. At
present the interest of the company in this regard has waned. Other competing
companies have easily taken their products to market but despite the high cost
of their products, prompt service can be a factor, it may be because they carry
their brand name to the consumer.

Threats

Due to the current epidemic situation, the vehicle insurance market is relatively
lower because this is due to the government restricting the import of vehicles.
As a result, every insurance company receives very little new vehicle policies.
Priority should be given to protecting the existing businesses of the company
and taking action to prevent the business information of the organization from
being leaked. So it is essential to monitor the system and also need to increase
the system restrictions. Meanwhile, there is a delay in the settling the motor
vehicle claims and it should be minimized because other competing companies
can use this as an opportunity to increase their business volume.

Analysis Using Porter’s Five Forces

Threats of New Entrants:

In the insurance industry, this issue is not greatly affected. The probability of starting a new
insurance company is very low and starting a new company requires a lot of capital.

Threats of Substitutes:

Insurances products introduced by other insurance companies in the existing insurance

market have an impact on our insurance market. Therefore, their weaknesses and strengths
need to be identified separately. It should also minimize the time to finalize a claim,
streamline customer service, and in the event of an accident, the officer should be able to
reach the location within a short period of time.

Bargaining Power of Buyers:

This is an issue that seriously affects the sales of the company's products. Other insurance
companies are tempted to offer lower prices to increase their market share, and the existing
customers are also expecting the same lower prices. Therefore, it is important to bring the
brand name to the consumer. For this, advertisements, billboards need to be put forward and
it is important to properly manage the external and internal sales staff scattered throughout
the island and the service level also should be increased.

Bargaining power of suppliers

The suppliers of insurance market are the Reinsurers. In the other hand the insurance
companies are customers of reinsurer. So they are not harmful to the insurance company.

Rivalry among existing companies

There is a huge competition in insurance market. Customers are expecting better service for
lower price. Therefore, fair compensation should be made and the claim should be settled
within a minimum period of time. This will minimize the lure of customers who are already
dealing with the company to other insurance companies.

Competitor Analysis
SLIC (Own
CEYLINCO ALLIANZ FAIRFIRST
Business)
Product Benefit General 3 Good 4 General 3 General 3
Service Low 2 Good 4 Good 4 Good 4
Profitability General 3 General 3 General 3 General 3
Financial Resources Good 4 Low 2 General 3 General 3
Market Share General 3 General 3 General 3 General 3
Growth Low 2 Low 2 Low 2 Low 2
Marketing Strategies Low 2 General 4 General 3 General 3
Strengths Good 4 Low 2 Low 2 Low 2
Weaknesses Good 2 Good 4 General 3 General 3
Business Model Low 2 Low 2 Low 2 Low 2
Call Centre Low 2 General 3 General 3 General 3
2 3
     Market Leader   31   31
9 3

5-Best 4-Good 3-General 2-Low 1-Below

According to the chart above the product benefits of proposed company is mostly good to the
customer but the service is much lower than the other competitors. Currently the marketing
strategies that used by us should be changed to compete with other companies. The service of
the call center is also should be improved and I suggest to arrange training plan for them to
improve the knowledge of the products and services.

The current strengths in Finance and Employee are good. But we should manage the strength
of employees to improve the business.
Task 02.

Vision:

To be the nation’s first choice for the risk protection and life investment optimization.

Mission:

We provide risk protection and life investment optimization, that will deliver value to our
customers through a team of committed professionals, whose contribution we recognize and
value leading to superior shareholder value, whilst being a responsible corporate citizen.

Quality Policy:

Sri Lanka Insurance is committed to satisfy customers & interested parties through continual
improvement in indemnifying the insured.

We provide a framework for establishing quality objectives and to review them periodically
through effective communication, training, motivation and understanding of all employees
within the organization.

According to the reports of 2020 the market shares as at 31.12.2020 is 20.3%. and the gross
written premium was Rs. 20,163 million.

Market Segmentation

Third Party
Insurance Users
 Comprehensive
Insurance Users

Targeting

Third Party Insurance Users

Income of the third party insurance is quote low and it is 49% from the whole insurance
users. But the profit to the company from third party income is higher as a percentage.
Therefore, the competing insurance companies are striving to promote third party insurance.

The business promotions in third party insurance are seems to be low due to high cost.

Motor cycle population - 4,000,000

Third party insurance users - 1,960,000 (x 600.00)
Third Party Premium Income yearly - 1,176,000,000

But it is good to get necessary actions to improve the third party insurance business. So we
have go to ground level and approach this business opportunities.

Comprehensive Insurance users

Individual: Most of the time this customer expects a lower premium and more efficient
service. It is also important to reach out to the customer through advertising and other media.
Also, the external sales staff of around 10,000 connected with branches across the country
can make use to promote the brand.

Corporate Customers

These customers are handling bulks of businesses and they are Insurance Brokers, Banks and
Leasing Companies. Most of the time the corporate customer decide which insurance
company should be selected and proposed to insured. There are different ways to handle
corporate customers because they are expecting more incentives for the business that they
have been offered and also are expecting better service.
Therefore, it is recommended to allocate specialized marketing staff to improve the service
for corporate customers. They should have to identify what the requirements are and what
should be improved to increase the business volume.

Using 7P’s,

Product:
The current product in the company is more reliable to the customers.
It is recommended promote the brand in the country. We should convey what the existing
products are and what the services are.

Price:
Actually the price of the product should not be changed and it is recommended to continue
the previous practice. As our practice we have facilities to match the quotations and renewals
notices of competitors.

Place:
It is recommended to expand the branch network island wide for the minimal cost. Should be
identified which place have more business opportunities so the propose to open mini
branches in identified places.
Promotion:
Recommended to arrange promotional campaigns in a proper plan. This plan should be
included short term plan and long term plan. It is recommended to use social media
campaigns along with them.

People:
We need to approach third party insurance customers. As we identified the third party
customers are always reached to existing company to renew the policy. Therefore, we need
to create a formal system to attract these customers to Our Company.

Other than the above it is essential to approach the individual comprehensive policy holders.
Due to high competition we need use the media to attract these customers. It is recommended
to develop a system to match the competitor quotations and competitor renewal notices.

It is essential to approach the corporate customers with a proper plan. The business potential
of corporate institutes is higher in the market. So it should be assigned marketing staff to each
and every leasing company, broker company and bank. Along with that the service should be
improved to streamline the business flow.

Process:
The current incentive scheme for third party insurance is low. So it is recommended to
increase the incentives for third party insurance.
It is essential to motivate external sales staff and internal marketing staff to improve
individual and corporate comprehensive business. Should be arrange training programs to get
the maximum benefit of the sales staff.

In the current situation the staff should be motivated. Actions must be taken to increase the
efficiency and attitudes of employees should be improved. Should be organized training
sessions for external and internal staff and this will have a long term impact on development
of the company.

Physical Evidence:
Consistent branding across media are essential. Proper plan should be implemented by the
Marketing Department of the company. It also important to use social media for branding
campaign.