Insurance Industry records 15.5-pct growth in 3Q of 2017

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Feb 16, 2018 (LBO) – Sri Lanka’s insurance industry was able to report a growth of 15.53 percent (3Q, 2016: 16.97 percent ) in terms of overall Gross Written Premium (GWP), at the end of third quarter of 2017, recording an increase of 15,862 million rupees when compared to the same period in 2016.

The GWP for Long Term Insurance and General Insurance Businesses for the nine months ended September 30, 2017 was 118,016 million rupees compared with the same period in 2016 amounting to 102,155 million rupees.

The GWP of Long Term Insurance Business amounted to 51,893 million rupees (3Q, 2016: Rs. 46,540 million) while the GWP of General Insurance Business amounted to 66,123 million rupees (3Q, 2016: Rs. 55,615million). Thus, Long Term Insurance Business and General Insurance Business witnessed a GWP growth of 11.50% and 18.89% respectively, when compared to the corresponding period of 2016.

The value of total assets of insurance companies has increased to Rs 548,361million as at September 30, 2017, when compared to Rs 497,868 million recorded as at September 30, 2016, reflecting a growth of 10.14% (3Q, 2016: 13.41%). The assets of Long Term Insurance Business amounted to Rs. 387,461 million (3Q, 2016: Rs 342,072 million) indicating a growth rate of 13.27% year-on-year. The assets of General Insurance Business amounted to Rs160,900 million (3Q, 2016: Rs 155,796 million) depicting a growth rate of 3.28%.

The investment in Government Securities for the period of nine months amounted to Rs 181,791 million representing 46.92% (3Q, 2016: Rs162,084;47.38%) of the total assets of Long Term Insurance Business, while such investment of the total assets of General Insurance Business amounted to Rs. 29,598 million representing 18.40% (3Q, 2016: Rs. 33,503;21.50%). Accordingly, the total investment of both Long Term Insurance Business and General Insurance Business in Government Securities amounted to Rs 211,389 million (3Q, 2016: Rs. 195,587million). Thus, the investment in Government Securities of Long Term Insurance Business has increased by 12.16% and the investment in Government Securities of General Insurance Business has declined by 11.66%.

The profit (before tax) of insurance companies in both Long Term Insurance Business and General Insurance Business for the nine months ended September 30, 2017amounted to Rs. 10,854 million (Q3, 2016: Rs. 14,721 million) showing a decline in profit by 26.27%.

The profit (before tax) of Long Term Insurance Business amounted to Rs. 5,110 million (3Q, 2016: Rs. 5,159 million) while the profit (before tax) of General Insurance Business amounted to Rs. 5,743 million (3Q, 2016: Rs. 9,562 million).

Thus, profit (before tax) of General Insurance Business showed a significant decrease of Rs. 3,819 million (39.94%) when compared to the period ended September 30, 2016.

This is mainly due to receipt of significant dividend income of an insurer during the year 2016. However, there was no significant declaration of dividend income for the period ended September 30, 2017. Apart from the General Insurance Business, no material deviation noted in respect of the profit (before tax) of Long Term Insurance Business for the period ended September 30, 2017.

Out of 27 Insurance Companies (Insurers) in operation as at September 30, 2017, 12 are engaged in Long Term (Life) Insurance Business,13 companies are carrying out only General Insurance Business and two are composite companies (dealing in both Long Term and General Insurance Businesses).

Sixty insurance brokering companies, registered with the Board as at September 30 2017, mainly concentrate in General Insurance Business. Total Assets of insurance brokering companies as at September 30, 2017 have increased to Rs. 4,148million when compared to Rs. 3,961millionrecorded as at September 30, 2016, reflecting a growth of 4.70% year-on-year.