State Life Insurance Corporation (SLIC) has been a household name in the country for the past 50 years and a leader in the insurance industry. Over the years, the corporation has introduced individual and corporate health insurance, established window takaful operations, and formed strategic partnerships which, have not only reduced disparities and financial barriers but have also positioned State Life as an industry leader in innovation.
Past Performance During 2019, the corporation’s financial performance remained satisfactory overall. Total Income of State Life increased by 14 percent year-on-year that included the unrealized capital gain. This was because the acquisition expenses for the year 2019 showed a decrease of 31 percent year-on-year, while the marketing and administrative expenses declined by 11 percent year-on-year. Overall, the management expense ratio to total premium income for 2019 was around 24 percent as compared to 32 percent in 2018. Payments to policyholders witnessed a growth of 14 percent year-on-year as well in 2019.
2020 was a year of challenges due to COVID pandemic that adversely affected the economy including the insurance sector. The growth in State Life Insurance Corporation’s income during the year was around 8 percent year-on-year where the acquisition cost remained flat, and marketing and administrative expenses declined by 21 percent year-on-year. Overall, the management expense ratio to total premium income for 2020 was around 21 percent as compared to 24 percent in 2019. Insurance benefits paid to the policy holders grew by 13.4 percent in 2020.
In 2021, the economy moved toward revival in the post the pandemic times, especially in the latter half of the year. SLIC’s financial performance in terms of its income also improved as the corporation’s income grew by 21 percent year-on-year. Acquisition expense also increased due to revival of activity by around 21 percent year-on-year in 2021, and so did the marketing and administrative expenses (up by 23 percent year-on-year). The corporation’s overall management expense ratio to total premium income for 2021 dropped to 18 percent versus 21 percent in 2020. Insurance benefits paid to the policyholders registered a massive jump of over 50 percent year-on-year during the year.
According to the data published by the Insurance Association of Pakistan’s (IAP), SLIC grew across both its individual and group life business in its conventional and takaful product line in 2021 versus 2020 and also outperformed industry growth. This helped the corporation witness growth in overall market share to 55 percent.
2022 Performance
In the face of economic turmoil and challenging times, State Life Insurance Corporation of Pakistan has remained resilient in the insurance industry. During 2022, the corporation achieved remarkable growth surpassing all previous business records.Despite a slight decline in the cumulative results of the insurance industry in 2022 (excluding State Life's Gross Written Premium), State Life achieved close to a 69 percent growth compared to the previous year, resulting in all-time high revenue. The corporation’s Gross Written Premium (GWP) of over Rs286 billion surpassed the combined GWP of all other insurance companies in Pakistan, which stood at approximately Rs128 billion. Total premium sales witnessed a growth of 67 percent year-on-year in 2022, while the new business sales incurred a staggering growth of 143 percent.
State Life's growth played a significant role in driving the industry's overall progress, contributing to a nearly 43 percent. State Life Insurance Corporation's market share in 2022 increased to 70 percent compared to 55 percent plus in the 2021, which is close to 24 percent growth in the market share as well.
The corporation also accounted for an impressive 73 percent of the total claims paid by the entire industry, which bodes well for it financial standing and in meeting the needs and obligations of its customers.
Outlook
The corporation has been focusing on building a differentiated and profitable organization, which is driving not only its own growth but also the entire insurance landscape in the country.The corporation has been understanding the evolving needs of different segments to develop tailored products for Gen Z, youth, and tech freelancers, demonstrating its commitment to meeting the diverse financial needs of its customers as well as corporate clients. Over 2021 and 2022, the corporation has made significant strides in the digital landscape and plans to make innovation and insure tech a key component of growth in the coming years as well.
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