Steady progress in insurance income

The Sri Lankan Insurance Industry has demonstrated a steady progress of its Overall Gross Written Premium Income for the year 2008.

According to the Insurance Board of Sri Lanka (IBSL), the overall Gross Written Premium Income for long term insurance business and general insurance business was Rs. 58,166 million compared with the previous year's amount of Rs. 51,885 million which reflected a growth of 12.11 percent. However, there was a decline in the growth rate which is 12.11 percent in the year 2008 compared with the year 2007 growth rate of 20.56 percent.

There were 16 insurance companies registered with the IBSl during 2008. Out of which 11 were engaged in long term and general insurance business, two in long term insurance business and three in general insurance business.

The total assets of the 16 insurance companies have increased at the year end of 2008 which is valued at Rs. 154,752 million when compared with year 2007 value of Rs. 134,876 million, a media release from the IBSL said.

In terms of Section (25) of the said Act, 20 percent of assets of the technical reserves of the general insurance business should be invested in Government Securities.

In the same manner 30 percent of the assets of long term insurance fund should invest in Government Securities.

This is a mandatory requirement that all insurance companies have to comply with which is monitored by the IBSL.

It is witnessed that 49.53 percent of the total assets of life insurance business is invested in Government Securities and 28.26 percent of the total assets of general insurance business is invested in Government Securities which shows that the insurance companies have invested in the Government Securities even at a higher percentage than the statutory minimum requirement.

During 2008, a total number of 55,886 life insurance policies have been issued, giving a penetration rate of 10.4 percent. This shows an improvement when compared with the 2007 rate of penetration which was 9.6 percent with 527,385 life insurance policies issued during 2007.

In 2008, motor insurance has made the highest contribution of 54.17 percent to the gross written premium income.

Miscellaneous insurance accounted for 21.79 percent of the total premium, whilst fire insurance contributed 18.75 percent and marine insurance accounted for 5.28 percent of the gross written premium.

Insurance broking companies which are registered with IBSL and insurance agents as intermediaries have made a significant contribution to the industry.