Richard Pieris operations director Ravi Liyanage said the firm will set up 10 branches in the phase of expansion and also start insurance units at 30 'Arpico' supermarkets run by the group.
He said only 11 percent of the population had a life policy and only 27 percent of the employed had life insurance.
Liyanage said unlike general insurance where competition was stiff, life insurance still had room to grow.
Chairman Richard Peiris Sena Yaddehege said this was the best time to start an insurance business in the group's 80 year history as Sri Lanka emerged from war and was poised to grow.
The island emerged from a 30-year war in 2009.
The firm had tied up with Munich Re for re-insurance.Richard Pieris was also planning to expand its financial services sector by moving into leasing and finance, officials said. It was already involved in securities broking and asset management.