Insurance Industry sustains growth

The insurance industry sustained its growth during the year 2012. The Overall Gross Written Premium (GWP) grew by 11.03% and total assets increased by 15.49% when compared to 2011.

Out of twenty two (22) Insurance Companies (Insurers) registered with the Insurance Board of Sri Lanka (IBSL) at the end of year 2012, twelve (12) are composite companies (dealing in both General and Long Term Insurance businesses), seven (07) are registered to carry on General Insurance business and three (03) companies are registered to carry on only Long Term (Life) Insurance business. Ceylon Takaful Limited is prohibited from engaging in insurance business since 5th August 2009.

The overall Gross Written Premium (GWP) Income for Long Term Insurance and General Insurance businesses was Rs 87,152 million compared with the previous year amount of Rs 78,491 million which reflected a growth of 11.03%.

The GWP Income of General Insurance Business amounted to Rs 49,683 million (2011: Rs 43,329 million) while the GWP Income of Long Term Insurance Business amounted to Rs 37,469 million (2011: Rs 35,162 million) during 2012. Thus, General Insurance Business and Long Term Insurance Business witnessed a growth of 14.67% and 6.56% respectively in GWP Income during the 2012 when compared to the previous year.

The Total Assets of the insurance companies have increased to Rs 307,035 million at the end of year 2012.

Total Assets valued at the end of year 2011 was Rs 265,419 million.

In terms of Section 25 of the Act, 20% of assets of the Technical Reserve of General Insurance Business and 30% of the assets of Long Term Insurance Fund of the Life Insurance Business 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 53.54% (Rs. 97,876 million) of the total assets of Long Term Insurance Business.

And 23.17% (Rs 28,776 million) of the total assets of General Insurance Business at the end of year 1012. This is in excess of the required amount of investment in Government Security by the Act.

Insurance Brokering Companies, registered with the IBSL in terms of Section 82 of the Act, are mainly concentrating on General Insurance Business.

During 2012, fifty five (55) insurance brokering companies engaged in insurance brokering business. However, at the end of the year the number of companies reduced to fifty four (54). The total premium income from both General Insurance Business and Long Term Insurance Business generated through insurance brokering companies amounted to Rs 12,727 million during the year 2012, compared with the previous year amount of Rs 10,489 million, which reflected a growth of 21.34% (2011 - Growth Rate 9.72%).