The Gross Written Premium (GWP) of Sri Lanka’s insurance sector rose 18.5 percent Year-onYear (YoY) to Rs.66.2 billion in 2011 with both General and Life Insurance segments recording substantial growths, country’s insurance regulator, the Insurance Board of Sri Lanka (IBSL) said.
According to IBSL, the General Insurance business during the year grew 23.45 percent YoY to Rs.43.3 billion while the GWP of Life Insurance business grew 13 percent to Rs.31.1 billion.
IBSL as the prudential regulation of the country’s insurance industry regulates 21 insurance companies. Twelve of them are dealing in both General and Life businesses and another seven are registered to carry out only General Insurance businesses. Three companies are registered to carry on only Life Insurance Business.
In 2009, IBSL suspended the operations of Ceylinco Takaful Limited, which during 2011 remained as a registered insurance company with the regulator.
Meanwhile, the IBSL said that the investments by insurance companies in government securities, as per the regulations, were in excess of the required amount stipulated in the Regulation of Insurance Industry Act.
“The investment in Government Securities represents 50.67% (Rs. 83,944 million) of the total assets of Long Term Insurance Business and 24.87% (Rs. 24,804 million) of the total assets of General Insurance Business at the end of year 2011,” the IBSL noted.
In terms of Section 25 of the said Act, 20 percent of assets of the technical reserves of General Insurance business should be invested in government securities. Similarly, 30 percent of the assets of long term insurance fund should also be invested in government Securities.
This is a mandatory requirement that all insurance companies have to comply with, which is monitored by the IBSL.
Meanwhile, total GWP generated by insurance brokering companies rose 9.72 percent YoY to Rs.10.4 billion during the year 2011.
As of 2011, forty six insurance brokering companies, mainly concentrated on General Insurance business, were registered under IBSL. Recently IBSL temporarily halted entertaining new applications from parties seeking to register as insurance brokers.