Brisk business for insurance companies, brokers

Harshini Perera

There is a positive sign for insurance companies and brokers to record healthy increases in the industry. There is a healthy level of competition between insurance companies. But the competition between insurance brokers and insurance companies has become severe.

The business has been virtually static for the last few months as a result of which there is a marginal decline in profits of the insurance companies, Sri Lanka Insurance Broker’s Association President Joachim Caspersz told Daily News Business.

Insurance companies will be in a difficult situation if they do not have sufficient margins in their business.

“Three new insurance brokers have entered the industry and the economy should develop to overcome insufficient business in the market,” he said.

The contribution of insurance brokers to the industry in general insurance is around 25 percent while the contribution to the life insurance is less than one percent.

The insurance companies and agents dominate the rest of the life insurance business.

Many insurance companies have ventured in to the Northern and Eastern areas and they mainly focus on the life insurance where there is a high demand.

Caspersz said the removal of the war risk surcharge has encouraged many imports to Sri Lanka.

“This surcharge will remove the insurance coverage on vessels while it will indirectly benefit imported cargo,” he said.