Insurance industry enjoys double digit growth in 2012

Thursday, 13 June 2013 00:26 - - {{hitsCtrl.values.hits}}

n Gross Written Premium income for longer terminsurance andgeneral insurance up 11% to Rs. 78.5 b; assets up by 15.5%

n Broker-driven business up 21.3% to Rs. 12.7 b in 2012The insurance industry sustained its growth during the year 2012. Overall Gross Written Premium (GWP) grew by 11.03% and total assets increased by 15.49% when compared to 2011.

The Insurance Board of Sri Lanka (IBSL) said yesterday, 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.

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.

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 2012. This is in excess of the required amount of investment in Government Securities 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, 55 insurance brokering companies engaged in insurance brokering business.

However, at the end of the year the number of companies reduced to 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%).

IBSL, as the prudential regulator, provides guidance and direction to the Sri Lankan insurance industry, in terms of the Regulation of Insurance Industry Act, No. 43 of 2000.

Out of 22 insurance companies registered with IBSL at the end of year 2012, 12 are composite companies (dealing in both general and long term insurance businesses), 07 are registered to carry on general insurance business and three companies are registered to carry on only long term (life) insurance business. Ceylinco Takaful Limited is prohibited from engaging in insurance business since 5 August 2009.