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The total combined gross premium recorded during the year 2003 on long-term insurance business and general insurance business was Rs. 24,147 million for the year ended December 2003 which corresponds to a growth rate of 19.06% compared to the previous year's growth rate of 20.29% with a premium income of Rs. 20,281 million.

IBSL Insurance Board of Sri Lanka's annual report said that general insurance business with a premium income of Rs. 13,534 million accounted for 56.05% (2002: 57.19% with a premium income of Rs. 11,599 million) while long-term insurance business accounted for 43.95% with a premium income of Rs. 10,613 million (2002: 42.81% with a premium income of Rs. 8,682 million).

"It is observed that the contribution from insurance business to the Gross Domestic Product (GDP) during the year was 1.37 per cent which shows a gradual increase in the penetration rate as a percentage of GDP from 1.18% in 2000 to 1.37% in 2003," it said.

The report said that long-term insurance business with a gross written premium of Rs. 10,613 million during the year shows a growth rate of 22.23% which is an improvement in this class of business when compared with the growth rate of 15.85% with a premium income Rs. 8,682 million during the previous year.

During this year too Sri Lanka Insurance Corporation Ltd continued as the market leader accounting for 30.52% (2002:32.12%) of the market share with a premium income of Rs. 3,238 million (2002: Rs. 2,360 million) for long-term insurance business.

Ceylinco Insurance Company Ltd has been gradually increasing its market share year by year and almost come closer to the market leader with a market share of 28.67% with a premium income of Rs. 3,043 million.

Eagle Insurance Company Ltd with a premium income of Rs. 2,170 million accounted for 20.45% of the market share which is more or less at the same level as in the previous years.

Union Assurance Ltd with a premium income of Rs. 1,096 million accounted for 10.33% of the market share and all the other nine insurance companies accounted for the balance market share of 10.03% with a premium income of Rs. 1,063 million.

Motor insurance with a premium income of Rs. 6,224 million (2002: Rs. 4,498 million) accounted for 45.99% of the total premium income of Rs. 13,534 million (2002: Rs. 11,599 million) during the year when compared with the previous year's contribution of 38.78%.

Further it is observed that there has been a significant growth rate of 38.36% when compared with the growth rate of 19.18% during the previous year.

This increase in premium income from motor insurance during the year may be as a result of the increased premium rates charged by the insurance companies after the de-tariffing of motor insurance in the year 2002.

Miscellaneous insurance with a premium income of Rs. 3,628 million and Marine insurance with the premium income of Rs. 921 million accounted for 26.88% and 6.82% of the total general insurance premium income respectively and also both classes show a marginal decline in the growth rate when compared with the previous year.

Fire insurance with the premium income of Rs. 2,725 million shows a 10.05% growth rate during the year when compared with the previous growth rate of 5.82% with the premium income of Rs. 2,476 million and accounted for 20.19% of total general insurance premium income, it said.

Commenting on the performance of insurance brokers the report said that forty-five insurance brokers operated during the year contributing 15.11% (2002:13.87%) with a premium income of Rs. 3,649 million (2002: Rs. 2,815 million) to the total premium income of Rs. 24,147 million (2002: Rs. 20,282 million) for the industry.

Of the total premium income of Rs. 10,613 million (2002: Rs. 8,682 million) in respect of long insurance business, insurance brokers accounted only for 0.72% (0.56%) with a premium income of Rs. 76 million (Rs. 50 million).

Whereas in respect of general insurance business, they accounted for 26.40% (2002: 23.80%) with a premium income of Rs. 3,573 million (2002: Rs. 2,765 million).

This shows that the insurance brokers have increased their contribution but it is observed that they are concentrating in general insurance business than in long-term insurance business.

Further it is noted that 10 insurance brokers with the total premium income of Rs. 2,814 million accounted for 77.12% million whereas the other 35 insurance brokers with the premium income of Rs. 835 million accounted only for 22.88% of the total premium earned by them. (SP)

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