The Sri Lankan insurance industry has continued its growth during the year 2016.
The industry recorded growth in Gross Written Premium (GWP) of both Long Term and General Insurance business sectors. The total GWP income for both sectors in 2016 was Rs. 142,969 million compared to Rs. 122,962 million in 2015 reflecting a growth of 16.27%.
The long term insurance sector generated GWP amounting to Rs. 63,495 million in 2016, up by 18.26% against the GWP of Rs. 53,691 million generated in 2015. This significant growth was attributable to factors such as increased awareness on life insurance, introduction of new life insurance products to cater dynamic customer requirements such as retirement solutions and investment products, enhanced customer service, etc.
The general insurance sector recorded GWP amounting to Rs79,474 million in 2016, posting a growth of 14.73% compared to Rs. 69,271 million recorded in 2015. General insurers were able to increase their premiums steadily year on year amid strong competition prevailing in the general insurance market by means such as focus on niche markets, introduction of innovative general insurance products, implementing Enterprise Risk Management strategies, focusing on risk selection and pricing, etc.
The reinsurance premium income generated by the National Insurance Trust Fund (NITF) from the compulsory reinsurance cession of general insurance business amounted to Rs. 2,357 million during 2016, recording a significant increase of 35.62% against the reinsurance premium of Rs. 1,738 million generated in 2015.
NITF’s reinsurance premium has risen substantially in 2016 mainly due to acceptance of reinsurance business from a wider range of different classes of general insurance business.
Insurance penetration which reflects the insurance premium as a percentage of GDP amounted to 1.21% in 2016.
Although insurance penetration had increased in 2016 compared to 2015 which was recorded as 1.12%, it is still low compared to most of the other countries in the Asian region. Penetration of the long term insurance business in 2016 stood at 0.54% (2015: 0.49%) and the penetration of the general insurance business was 0.67% (2015:0.63%), both classes recording slight increases compared to the penetration ratios recorded in 2015.
Insurance density reflects the insurance premium income per person of the population and has increased to Rs. 6,743 million in 2016 compared to Rs. 5,865 million recorded in 2015, growing by 14.97% mainly due to increased premium income against lower increase in population.
Total assets of the insurance industry (after eliminating inter segment transactions) which comprise of the assets belonging to long term and general insurers and the national reinsurer, NITF have amounted to Rs. 527,228 million as at December 31, 2016.
This was an increase of 12.97% compared to the assets amounted to Rs. 466,707 million recorded as at December1, 2015.
Long term insurers held the majority of total industry assets which amounted to Rs. 345,675 million as at December 31, 2016 (2015: Rs. 312,713 million).
Assets of long term insurance business recorded a growth of 10.54% in 2016 compared to 2015.
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