Insurance sector sets sights on Rs. 700bn premium target with new seven-pillar strategy and state backing

Dr. Raveendra De Mel

Ananda Wijepala

Damayanthi Fernando

• Aggressive 14% growth targeted to push premiums past Rs. 700 billion by 2030
• State-backed seven-pillar strategy designed to triple market penetration and bridge national protection gap
• New digital motor cards and centralised data systems launched to enforce financial discipline

By Nishel Fernando 

The Insurance Regulatory Commission of Sri Lanka has launched a comprehensive seven-pillar strategy designed to double the country’s insurance penetration by 2030 and triple it by 2035. 

The Insurance Industry Roadmap 2030-2035, unveiled yesterday in Colombo, sets an aggressive 14 percent year-on-year growth target, aiming to propel the sector’s premium income beyond Rs. 700 billion by the end of the decade.

The strategic overhaul comes as the domestic market remains vastly underpenetrated. Sri Lanka’s total insurance premium pool stood at Rs. 380 billion for 2025, with market penetration hovering just above 1 percent of gross domestic product, lagging significantly behind regional peers. Yet, the sector remains a quiet economic engine, managing over Rs. 1.4 trillion in assets, supporting more than 69,000 jobs, and paying out approximately Rs. 172 billion in annual claims. Insurance Regulatory Commission of Sri Lanka Director General Damayanthi Fernando framed this low penetration as a growth catalyst. 

“This protection gap is actually not a weakness; it’s an extraordinary opportunity for the insurance industry,” she stated, adding that the roadmap will strengthen the nation’s financial foundation.

The sweeping regulatory agenda has secured high-level state endorsement. Speaking at the launch event, Minister of Public Security and Parliamentary Affairs Ananda Wijepala affirmed the government’s firm commitment to the sector’s progressive initiatives. 

“We are taking this forward in accordance with our government’s policy, especially regarding digitalization,” the minister noted. 

He highlighted the critical macroeconomic role of a highly penetrated insurance market, observing that the state frequently bears the heavy financial burden of national disasters without broad private coverage.

To execute this vision, the seven-pillar framework targets widespread systemic reform. The strategy mandates expanding coverage through standardised affordable products, mandatory home and motor insurance, and targeted health schemes designed to ease the burden on public healthcare infrastructure. It also seeks to rewire distribution models by integrating digital onboarding, bancassurance reforms, and alternative networks such as telecommunication platforms and cooperatives. On the fiscal and capital front, the roadmap advocates modernising the regulatory environment to permit income tax relief on protection products and strategically elevating the National Insurance Trust Fund into a stronger national reinsurer to retain critical risk capital onshore. The framework further envisions creating over 17,000 new jobs and scaling the sector’s tax contribution to over Rs. 108 billion.

Governance of the roadmap will be tightly monitored by a tripartite task force comprising the Finance Ministry, the regulatory commission, and industry stakeholders, utilising a monthly working cadence and quarterly key performance indicators. Parallel to the strategic launch, the Commission immediately rolled out practical technological advancements to enforce market discipline. Commission Chairman Dr. Raveendra De Mel introduced a new centralised digital data system and a motor insurance digital card, developed in collaboration with the Credit Information Bureau and Mobitel. 

Dr. De Mel explained that law enforcement officers can now instantly verify the active status of motor policies via SMS or QR code. This move is expected to restore financial discipline, recover substantial uncollected industry revenues, and seamlessly integrate with the government’s broader digitalisation drive.