Sri Lanka’s HNB Assurance launches new core platform

⦿ Executive Snapshot

• What: HNB Assurance launched a new digital core system to transform its operations and enhance market competitiveness.
• Who: HNB Assurance, CEO Lasitha Wimalaratne, and the insurance industry in Sri Lanka.
• Why it matters: This transformation aims to double the size of Sri Lanka's insurance industry and position the country as a regional service hub.

⦿ Key Developments

• HNB Assurance invested Rs1 billion (approximately $3 million) in technology and data to support the new digital core system.
• The company achieved a compound annual growth rate (CAGR) of revenues of 27 percent over the past four years due to its digital-first strategy.
• HNB Assurance's new platform automates up to 90 percent of underwriting and 75 percent of claims payouts by 2026, with 80 percent automated processing already in place.

⦿ Strategic Context

• The digital overhaul began as a survival strategy during the Covid pandemic, which forced a rapid shift to online sales and premium collection.
• Sri Lanka's insurance market is underdeveloped with only 1 percent penetration of GDP, making it a ripe environment for digital transformation and disruption.

⦿ Strategic Implications

• The immediate consequence is enhanced competitiveness in an evolving insurance market, allowing HNB Assurance to capture market share.
• Long-term implications include the potential for overall industry growth and the establishment of Sri Lanka as a regional service hub for insurance.

⦿ Risks & Constraints

• Potential risks include regulatory challenges related to new data protection rules and the need for compliance with risk-based capital frameworks.
• Competition from established global players and the dependency on digital infrastructure could pose execution challenges.

⦿ Watchlist / Forward Signals

• Upcoming milestones include achieving 40% growth by 2025 and the full realization of the 100 percent digital customer journey.
• Future developments in government policy that support digital infrastructure investment will signal the continued viability of HNB Assurance's growth strategy.