Sri Lanka Equity Analytics Markets 10 March 2010 371 views No Comment  Print This Post  Email This Post

The insurance industry has performed well despite the global recession recording growth in the long term and general insurance sectors.

The first quarter of 2010 looks promising for the insurance industry with more investments generating economic activities due to establishment of peace. The country’s risk management is in a good shape where insurance companies are part of the financial market, Sri Lanka Insurance Board Chairman Udaya Sri Kariyawasam said.

Investment in Government Securities by insurance companies has recorded a growth in 2009 compared to 2008. In 2009, the long term insurance contributed for Rs. 62,078,117 million and general insurance Rs. 15,441,944 million.In comparison in 2008 long term insurance contributed for Rs. 48,405,115 million and general insurance Rs. 15,955,553 million.

The National Insurance Trust Fund has decided to reduce premium pertaining to terrorism cover by 75 percent from April 1 this year. This will be a boost to the insurance industry.

A Policy Holders Protection Fund has been created with the cess collected from the insurance companies.

The accumulated fund as at end December 2009 was Rs. 755 million.

There are 18 private insurance companies and a rating system will be introduced shortly based on a checklist to increase credibility. The overall gross written premium on insurance has not increased according to the growth in the per capita income.

The gross written premium from long term (life) and general insurance business in 2009 is added up to Rs. 57,919 million as compared to Rs 58,166 million in 2008 due to global recession.

The Insurance Board of Sri Lanka (IBSL) will carry out a modernization process to its supervisory system from rule based supervision to risk sensitive capital model.

With the implementation of this model it will enhance the ability of insurance companies and the supervisory authority processes to focus on risk rather than rules. “This will provide a more flexible framework for maintenance of the regulatory minimum capital regime,” the IBSL report said.

The risk sensitive capital model will contribute to strengthen the risk management system of insurance companies and to have a supervisory system in line with international standards which supports a risk oriented management of insurers, the report said.

The insurance industry penetration is 10 percent.

There is a thriving market in the North and the East. With the peaceful environment, nine insurance companies have set up 42 branches in these provinces and the insurance industry is making steady progress.

Auto sourced from Sri Lanka Equity Analytics. Go to source

Related posts:

1. Sri Lanka removed from war risk insurance list
2. Ceylinco Insurance P.A.T. Up 35%
3. Removal of War Risk Insurance by Lloyds will bring down import cost further
4. Asian Alliance Insurance offers “on line” travel insurance
5. Janashakthi Insurance, the most profitable insurer in 1st half 2010