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By Chamitha Kuruppu

The Sri Lanka Insurance Corporation Limited (SLIC) which is heading towards privatisation has recorded a gross premium income of Rs.7.9 billion on both life and non-life business for the financial year ended December 31, 2002 as against Rs.6.5 billion the previous year.

According to unaudited annual accounts, the growth in the premium income is around 21.% over the previous year, Chairman of the SLIC Chrishantha Perera told the media in Colombo on Wednesday.

The SLIC achieved a net profit of Rs. 1.1 billion before tax in the year under review. The institution made a profit of Rs. 753 million after making provision for income tax of Rs. 350 million.

Perera said that the institution has performed 'reasonably well' in the last year and is poised for growth in the coming year.

The total underwriting profits on all classes of business was Rs. 99.6 million. "Underwriting profits are encouraging and we are able to do better than Rs. 99 million. This will grow even further in 2003," Perera said.

He said that SLIC which has the best re-insuring had to pay more money last year and as a result a significant amount of the higher income had to be transferred abroad resulting in a total outflow of Rs. 2,038 million over the Rs. 1,290 million in 2001. This was due to the LTTE attack on the Katunayake International Airport and terrorist attacks in the USA on September 11.

Gross premium underwritten under Life Business amounted to Rs. 2,789 million recording a growth of 10.4% over the previous year. The underwriting surplus and the investment income during the year resulted in increasing the life fund by 17.6% to Rs. 19,209 million at the end of the year.

The prudent policy followed by SLIC in managing investments of the Life Fund enabled it to earn an income of Rs. 2,898 million against Rs. 2,517 million the previous year, a growth of 15.1%. This achievement is remarkable particularly when the market rates of interest continued to fall throughout the year recording a single digit at the end of the year.

Perera said that the bonus declared by the SLIC to its Life policy holders have been far ahead of what have been declared by their competitors and confident that they will have the highest bonus in 2003 as well. The value of total investments including Fixed Assets exceed Rs. 31 billion which the SLIC claims as unmatchable even if the total investments of all other insurers in the country are put together. The SLIC re-valued its land and building last year.

With the cessation of hostilities and commencement of the peace process, the total death claims paid during the year had declined to Rs. 160.9 million, which was Rs.188.4 in 2001. " There was less armed force pay off last year and death claims reduced," Perera said.

A study carried out by the SLIC had recorded that the institution has generated new business worth Rs. 26 million on January 1, 2003 compared with the Rs. 16 million in January 1, 2002. This is 66% growth compared to the previous year.

At the end of last year the SLIC had spent Rs. 185 million on restructuring. The provision for restructural expenses of the SLIC is Rs. 192 billion.

When questioned about privatisation, Perera said that the evaluation proposal is well under way and will be submitted to the Cabinet by the end of this month.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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