Insurance industry bounces back

Increase in disposable income:

Retention of existing policies:

Sanjeevi JAYASURIYA

The insurance industry has bounced back from its stagnant position and is expected to record a double-digit growth this year.

Manjula de Silva

The overall industry showed clear signs of recovery in the previous year from its stagnant position in 2009.

“This growth momentum is seen both in the life and general insurance sectors and augurs well for the insurance industry,” Insurance Association of Sri Lanka President and HNB Assurance Managing Director Manjula de Silva told Daily News Business.

“Growth can be seen in all the classes of the general sector particularly in the motor business. The contributory factors for the growth are in the reduction of motor vehicle import duties and bank interest rates.”

“This positive impact has spurred further growth,” he said.

Leasing has become a popular financing tool and this has generated motor business. Due to this a significant flow of business comes from financial institutions. The marine insurance also recorded a slight growth with the external trade activities picking up. These trends will strengthen this year consolidating industrial growth,” he said.

The life sector could see a recovery in two ways. There is greater willingness on the part of people to purchase insurance policies and there is a significant growth in new policies.

This could be attributed to the increase in the level of disposable income. The stable economic and political environment has also helped in new business growth.

“We see an improvement in the retention of existing policies. The clients are more inclined to pay their insurance premium on time. The lapse in policies due to non-payment is on the decline. This trend could be seen across the industry and this will ensure continuity in growth and strengthening this year. The insurance industry will return to strong growth levels by the end of the year as witnessed during 2008,” he said.