BackgroundBritish American Tobacco (BAT), was engaged in the insurance sector. CTC owned 63% of CTC Eagle shares while the rest was owned by the Eagle Star Insurance Co. Ltd, the BAT owned insurance company in UK. The name “CTC Eagle” and the logo (Image 1) were combinations of names and logos of the two companies. CTC Eagle started operations in Sri Lanka in 1988.
Based on the BAT’s policy on divesting in insurance, CTC divested from CTC Eagle in 1999, handing it over to Zurich Financial Services Group. The name was changed to Eagle Insurance Company Ltd. In 2003 Zurich Financial group moved out and National Development Bank (NDB), the major local shareholder, took over the control. The company was later transferred to AVIVA International Holdings Limited (UK) as NDB became a subsidiary of AVIVA. The ownership was subsequently transferred to American Insurance Association (AIA), Asian Alliance Insurance and later to Softlogic Group in 2016 (Softlogic Life Insurance). 
CTC faced criticism for investing in insurance sector and using CTC Eagle to generate a sense of positivity towards an unhealthy industry. It was also criticized for linking a sense of security to the CTC name, especially targeting vulnerable groups such as children (Image 2).
There were internal criticisms as well. Vijaya Malalasekara, then Public Affairs Manager of CTC, complaint to BAT regarding CTC Eagle’s plan to offer reduced premium to non-smokers on the basis of “non-smoking persons will live longer”. CTC Eagle’s plan was in response to a similar offer by a competing insurance company Union Assurance Ltd. According to Malalasekara;
“CTC is a monopoly cigarette manufacturer in Sri Lanka and is the holding Company of CTC Eagle Insurance. In this connection, even if we are to compete in the insurance industry it makes it difficult for us to offer life policies to non-smokers on reduced premiums should we desire to do so. It would appear as if we are "cutting our nose to spite our face"”.
BAT’s response to the complaint was:
“There is, in principle, no difference between BAT owning Eagle Star/Allied Dunbar and the Ceylon Tobacco Company owning CTC Eagle. CTC Eagle should, however satisfy itself that any decision to offer non-smoker discounts is based on proper actuarial calculations rather than simply matching the competition”.
Tobacco Unmasked Resources
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