Insurance industry bounces back
Increase in disposable income:
Retention of existing policies:
The insurance industry has bounced back from its stagnant position
and is expected to record a double-digit growth this year.
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
“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,”