Tuesday, 1 October 2013 01:24
By Shabiya Ali Ahlam
Local insurance companies were urged yesterday to go rural to achieve higher industry penetration.
Delivering the keynote at the 17th Insurance Congress for Developing Countries, which kicked off yesterday in Colombo, Insurance Board of Sri Lanka (IBSL) Chariperson Indrani Sugathadasa asserted that the local insurance industry has yet to reach rural areas where 75% of the population resides.
Pointing out that the current penetration is 1.2%, she said: “The industry should note that it is extremely fatal to ignore this segment. Insurance companies will cite the low income for the lack of penetration rate. This cannot be the case since the incomes in the rural areas are noted to be increasing.”
Identifying reasons for slow insurance penetration as the lack of appropriate products, expensive policies, complicated procedures, and poor distribution channels, Sugathadasa opined that micro-insurance is an avenue that will help develop the industry.