Local Insurance industry :

Asset base tops Rs 196 billion

The General Insurance Business and the Long Term Insurance Business have shown growth in overall Gross Written Premium (GWP) Incomes during the first half of 2010 when compared to the same period of 2009.

The overall Gross Written Premium Income of General Insurance Business amounted to Rs 18.18 billion (2009 - Rs 16.88 billion) while the overall Gross Written Premium Income of Long Term Insurance Business amounted to Rs 13.12 billion (2009 - Rs 11.31 billion) during the first six months of 2010, the Insurance Board of Sri Lanka (IBSL) said.

The Total Assets of the insurance companies have increased to Rs 196.67 billion at the end of the first six months of 2010. Total Assets valued at the end of 2009 was Rs 181.04 billion.

In terms of Section 25 of the Act, 20 percent of assets of the Technical Reserves of General Insurance Business should be invested in Government Securities. Similarly, 30 percent of the assets of Long Term Insurance Fund should be invested in Government Securities.

This is a mandatory requirement that all insurance companies have to comply with. The investment in Government Securities represents 50.96 percent of the total assets of Long Term Insurance Business and 24.65 percent of the total assets of General Insurance Business at the end of second quarter of 2010.

This is in excess of the required amount of investment in Government Securities by the Act.

IBSL said the Insurance Brokering Companies, as intermediaries, make significant contribution to the insurance industry. Insurance Broking Companies mainly concentrate on General Insurance Business and their Total Gross Written Premium Income from both General Insurance Business and Long Term Insurance Business amounted to Rs 5 billion during the first half of 2010.

The insurance industry is expected to achieve a significant growth during 2010 with the removal of War Risk Level applicable to Sri Lanka in the “Country Risks Evaluation and Assessment Model” (CREAM) performed by the Joint Cargo Committee (JCC) London.

There are 19 Insurance Companies (Insurers) registered with the IBSL.

Twelve of them are composite companies (dealing in both General and Long Term Insurance businesses), five of them engage in General Insurance business and two companies engage only in Long Term (Life) Insurance business.