Sri Lanka’s insurance industry continued its growth momentum in the first half of 2014 with industry Gross Written Premium (GWP) growing 3.07 percent year-onyear (yoy) to Rs.49.21 billion, the country’s insurance regulator, Insurance Board of Sri Lanka (IBSL) said.The life insurance GWP during the first half grew 4.57 percent yoy to Rs.20.45 billion while the general insurance GWP rose 2.03 percent yoy to Rs.28.76 billion.
The total industry assets during the period under consideration improved 13 percent yoy to Rs.390.9 billion.The assets of the life insurance business grew 12.94 percent yoy to Rs.237.7 billion while assets of the general insurance business rose 13.10 percent yoy to Rs.153.2 billion.
At the end of the first six months of 2014, Rs.106.19 billion representing 44.67 percent of the total assets of the life insurance business was invested in government securities, while such investment of the total assets of general insurance business amounted to Rs.28.49 billion representing 18.60 percent.
IBSL regulates 22 insurance companies; 12 composite (both life and general) insurers, 7 general insurers and 3 life insurers. General insurer AIG Insurance Limited withdrew its operations from Sri Lanka a couple of months back and is currently on a runoff plan.
Meanwhile, the total commission income generated through the 57 insurance brokering companies registeed with IBSL for the first six months amounted to Rs.796 million compared to Rs.762 million of the same period of the pervious year. The insurance brokering business is mainly focused on the general insurance business. Therefore, the commission income generated through general insurance during the period under review was Rs.788 million.
Meanwhile, IBSL said, out of the 268 matters referred to it as the regulator, 118 were settled/closed during the period under review.
Out of the matters settled/closed, 95 were disputes relating to claims under insurance policies. Out of this amount, 13 claims were honoured with IBSL intervention. According to CAL Research, an independent research body, Sri Lanka’s insurance sector is expected to be driven by life insurance business.
They forecast life insurance GWP to hit US $ 663 million by 2018, which reflects a 16 percent compound annual growth rate (CAGR).Sri Lanka’s life insurance penetration remains woefully low at 0.5 percent. The research firm also expects US $ 57 million worth of mergers and acquisitions in the sector with the regulatory requirements mainly pertaining to minimum capital requirements.
The research firm further forecast a US $ 550-733 million IPO drive in the post-split environment.All composite insurers are required to split their life and general businesses by January 2015 and list them as separate entities in theColombo Stock Exchange by January 2016.