Insurance industry picking up now
Prakash Schaffter during his lunch break.
Picture by Shirajiv Sirimane
Personal profile of Prakash Anand Schaffter
* Address: 15 M Ekanayake Avenue, Nugegoda
* Telephone: 2824798 - Mobile: 0772797979 - email:
* Date of Birth: June 19, 1967
* Bachelor's Degree in Political Science,
University of London. 1989-1992
* Master's in Business Administration, University of Cambridge
* Fellow of the Chartered Insurance Institute,
* Managing Director, Janashakthi Insurance PLC
- 2006 todate
* Director and General Manager, Janashakthi Insurance Company
Limited - 1996 to 2006
* Director, Acland Insurance Brokers - 1992 to 1995
* Insurance Officer - General Accident Insurance Corporation, UK
- 1989 to 1990
Extra Curricular Activities
* Member of the Cricket Team at Cambridge
University and University of London
* Member - Winning Team - The British University Sports
Federation Cup - 1992 (University of London)
* Hony General Secretary, Tamil Union - 1994 to 1998 and 2000 to
2003 Member, Royal Colombo Golf Club
* Member, Bishop's Trust Advisory Committee, Church of Ceylon,
Diocese of Colombo
* Member, Property Development Committee Keen sportsman playing
squach, table tennis, badminton and golf
The insurance industry too went through a lean stretch during the
last three years where there was a somewhat economic downturn in Sri
Janashakthi Insurance Managing Director Prakash Schaffter the third
largest general insurance company in Sri Lanka during his lunch break
recalled that people were forced to tighten their belts and insurance
was a commodity that was not a priority in the people's day to day
With the economy bouncing back and people having more money to spend
insurance was something they wanted to have. "Hence the industry started
catching up and showing growth. However this would not be at a very
He said Sri Lanka's insurance penetration is very low in comparison
to the region. It is about 1.29 percent of the GDP which is
unimpressive. "This has given us a huge window of opportunity to grow,"
Prakash's definition for this low penetration of insurance is Sri
Lanka's culture. "Well I think Sri Lanka has a laid back island culture
which is "easy going."
He said it is very difficult to lure people in to life insurance
despite it being a heavily advertised industry. "Convincing a person
into taking an insurance policy is really a difficult task."
He said even after the tsunami there was a lot of life and property
damage. "However it still did not have a positive impact on the
However there was a contrast during the LTTE violence period as the
demand for insurance grew and naturally the premiums were.
"However this once again zeroed with normalcy coming back to the
Schaffter said with the interest rates being lowered a sharp increase
was seen in the motor segment. "With a low interest environment, lending
rates dropped and it became affordable."
With the lowering of duty on motor vehicle imports to Sri Lanka saw a
sharp rise and this too helped the industry. Commenting on the
Janashakthi Insurance portfolio he said there was a growth in the last
Janashakthi recorded an impressive 17 percent growth in net
profit-after-tax reaching Rs 770 million and revenue of Rs 6.8 billion
with a growth of 13 percent during 2010 while the Life sector also
showed a significant growth of 18 percent over the previous year.
Their Motor Insurance sector also performed upto expectations with a
revenue growth 11 per cent, the highest among the three top insurers.
"We have been there through tough times. Nevertheless we managed to
maintain our bottom line."
He said the top line growth was not healthy as expected this is a
natural consequence of our emphasis on bottom line growth."
Asked to comment on their North East operations he said they had
their foot print firmly planted in Jaffna since 2000. "We saw business
potential in this area and we also wanted to expand our service to the
region as we want to make available "insurance" to the population in the
area. Today they have 10 offices in North and East. He said life
insurance is their number one "seller" in Jaffna as there is a saving
mentality in the "Northerner" a different culture."
"They have acquired Orient Leasing and they want the company to
continue separately. Commenting on the competition in the industry he
said it is very intense especially in the General insurance segment.
"The market is very price sensitive and customers don't seem to value
services and standards."
Commenting on some of the issues in the industry he said that
legislature which spilt Life and General insurance was not very
impressive. "We like a composite situation."
The spilt would result in high overheads and even the capital has to
be divided among the two. "This will definitely create a negative impact
on the bottom line."