There was a reasonable recovery in the insurance industry in June and July, however, the negative economic outlook resulting from the lockdown will have a negative impact on disposable income, thus putting strain in the level of new business growth that can be generated.
President of The Insurance Association of Sri Lanka (IASL) and CEO – Life Insurance of Amana Takaful PLC, Gehan Rajapaksa, said this in view of September being declared the Insurance Month in Sri Lanka.
He foresees lapsation as an issue for the life industry as customers are unable to continue premium payments. “Since the overall industry is closely linked to the expansion of the economy, its growth will depend on it too.
At the same time, Insurance sector representatives have been emphasizing the need to provide comprehensive protection for all lives and assets. Industry experts note that the current increase in life expectancy shows us that people are becoming more health conscious, which is also being advocated by the insurance industry.
“The levels of disposable income and negative perceptions on insurance and social security benefits have negatively impacted the growth of the insurance sector over the years.
This is the key concern that we as IASL continuously want to address, and show the general public the importance as well as the benefits that they gain when they are insured,” Rajapaksa added.
Commenting on the impact of the COVID lockdown on the insurance industry, he added, “Both the Life and General insurance businesses were adversely impacted with no turnover. Needless to say that in such circumstances it is obvious that the impact was very significant, particularly on the cash flow of the companies. With regard to the life business, the companies had to sustain the advisors with income support since they were unable to go out and collect premiums or generate new sales.”
Cash flow of the general insurance sector too was impacted negatively. However, from a claims perspective there was a positive outcome as the number of accidents reported and resulting claims were minimal”.
In such an environment, the member companies of IASL, together with the regulators office – the Insurance Regulatory Commission (IRCSL) came forward to grant relief to policyholders with offering 3 month’s grace period to pay premiums keeping all those policies live and liable to pay any claims that arose. “The insurance industry has always been a rock solid one that has come forward to shoulder the responsibility of protecting the insured public. This time was no different and the industry continued to offer the level of protection that was offered under normal circumstances with no difference”.
According to Rajapaksa, this years’ Insurance Day, which was held for the fourth consecutive year, was a virtual event to raise insurance awareness.
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