Mon, 27 Sep 2021 Today's Paper

New life insurer to open shop; US-based PE firm among promoters

7 January 2016 03:11 am - 0     - {{hitsCtrl.values.hits}}

A A A

The Sri Lankan insurance industry will soon see the entry of a long-term (life) insurer backed by one of the largest US-based emerging market private equity (PE) investors among its promoters. 

The company under the brand ‘Capitallife’ is awaiting the life insurance licence from the regulator as it has made an application to start commercial operations. 

“They have applied for licence but we are still evaluating their application. They can soon start operations no sooner they receive our clearance,” said Insurance Board of Sri Lanka (IBSL) Chairperson Indrani Sugathadasa. 
The key management personnel have already been recruited from the industry, led by the ex-Asian Alliance Insurance PLC insurance professional David Senaratne as the Managing Director of the company, who is also among the promoters of the new entity.  
A location for the new entity has already been finalized at No: 610, Galle Road, Colombo 3, the company’s corporate website showed. 
Capitallife will be the 13th life insurance company to start operations in Sri Lanka. 
Sri Lanka’s insurance market is overcrowded with 30 companies operating at present—12 life insurers, 15 non-life insurers and three composite insurers. 

The IBSL rules required all composite insurers to split their life and non-life businesses before January 1, 2016 and to list them on the Colombo Stock Exchange as separate entities. 
State-owned insurer Sri Lanka Insurance Corporation, MBSL Insurance (Pvt.) Limited and Sanasa Insurance Company Limited are yet to comply with the segregation rule. 
It is in the grapevine that MBSL Insurance (Pvt.) Limited is up for sale now but has been unable to find a buyer so far.  The rules also required the entities to shift to risk-based capital (RBC) from the current solvency regime, which will require higher capital levels for the insurers.
The IBSL rules required all composite insurers to split their life and non-life businesses before January 1, 2016 and to list them on the Colombo Stock Exchange as separate entities. 
State-owned insurer Sri Lanka Insurance Corporation, MBSL Insurance (Pvt.) Limited and Sanasa Insurance Company Limited are yet to comply with the segregation rule. 
It is in the grapevine that MBSL Insurance (Pvt.) Limited is up for sale now but has been unable to find a buyer so far.  The rules also required the entities to shift to risk-based capital (RBC) from the current solvency regime, which will require higher capital levels for the insurers.The minimum capital requirement under RBC is Rs.500 million.   Except for a few players, others already have met this minimum requirement.  Meanwhile, the US-based emerging market PE firm - Creation Investments Capital Management LLC - is among the leading investors in Capitallife but the details of other investors are not yet known. 
Creation Investments, being among the initial promoters of the new insurance firm, is believed to have eased off most of the pressure for the company in meeting the new minimum regulatory capital requirements.
This is the second such investment in a Sri Lankan firm by Creation Investments after they invested a record Rs.1.68 billion (US $ 12.4 million) in the licensed finance company, Commercial Credit and Finance PLC, in February 2014. 
Sri Lanka’s life insurance penetration, which is woefully low at 0.5 percent of gross domestic product, looked to be a promising segment until rising inflation erased the people’s incomes making the affordability of a life insurance policy a distant need.   The life insurance sector was once set to grow at 16 percent compound annual growth rate through five years to 2018 supported by the rising per capita incomes. 
It is expected that the primary and secondary deal activities in the insurance industry to further increase this year with merger and acquisition targets being Allianz Insurance Lanka Limited, Co-operative Insurance Company Limited, LOLC Insurance Company Limited, Arpico Insurance PLC, Sanasa and MBSL. 
 
See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 


Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 


A state-sponsored elephant racket in the works

A controversial new gazette has been issued seeking to employ elephants for w

Waiver of registration questioned: Import of covid related drugs, products shrouded in controversy

The National Medicines Regulatory Authority- the independent authority that r

Mysterious disease killing pups!

A mysterious respiratory disease affecting puppies in the Central Province is

Jacqueline Fernandez; Lankan Star Shining in Indian Film Sky

Sri Lanka’s Jacqueline Fernandez who has made a name for herself in India