The profits of long term insurance business in Sri Lanka last year amounted to LKR39,268 million (2016: LKR13,616 million) while those of general insurance business reached LKR8,543 million (2016: LKR13,236 million), according to the Insurance Regulatory Commission of Sri Lanka.
The figures show that profits of long term insurance increased by 188.41% while profits of general insurance business showed a significant decline of 35.46% when compared to the previous year.
The total profits of the Sri Lankan insurance industry increased to LKR47,812 million (2016: LKR26,852 million) showing growth of 78.05%,
The Sri Lankan insurance industry grew by 15.07% in terms of overall GWP for both long term and general insurance business sectors in 2017. The total GWP for both sectors was LKR164,623 million ($1,039 million) compared to INR 143,067 million in 2016, recording an increase of INR21,556 million.
The long term insurance sector generated GWP amounting to LKR71,504 million in 2017, up by 12.65% against the GWP of INR63,477 million generated in 2016. The general insurance sector recorded GWP amounting to LKR93,119 million in 2017, posting a growth of 17% compared to LKR79,590 million in 2016.
The reinsurance premium income generated by the National Insurance Trust Fund (NITF) from the compulsory reinsurance cession of general insurance business amounted to LKR3,683 million during 2017, recording a significant increase of 53.65% against the reinsurance premium of LKR2,397 million generated in 2016. NITF’s reinsurance premium has risen substantially in 2017 mainly due to acceptance of reinsurance business from a wider range of different classes of general insurance business.
Insurance penetration reached 1.24% in 2017. Although insurance penetration had slightly increased in 2017 compared to 2016, which was recorded at 1.20%, it is still low compared to most of the other countries in Asia. Penetration of long term insurance business in 2017 stood at 0.54% (2016: 0.53%) while that of general insurance business was 0.70% (2016:0.67%).
The total value of claims incurred by insurance companies (both long term insurance business and general insurance business) was LKR73,877 million (2016: LKR62,962 million) showing an increase of 17.34%. Long term insurance claims, including maturity and death benefits, amounted to LKR25,967 million (2016: LKR22,485 million). The claims incurred in general insurance business, including motor, fire, marine and other categories, amounted to LKR47,910 million (2016: LKR40,477 million). Hence, when compared to 2016, claims incurred in long term insurance and general insurance businesses in 2017 increased by 15.49% and 18.36% respectively.
The value of total assets of insurance companies increased to LKR582,417 million at the end of 2017, when compared to LKR525,190 million at end-2016, reflecting growth of 10.89%.
Out of 26 insurance companies in operation at 31 December 2017, 12 were engaged in life insurance, 12 carried out only general insurance business and two were composite companies.