Sri Lanka Eagle Insurance says competition eroding profitability

Apr 14, 2009 (LBO) – Sri Lanka’s Eagle Insurance, whose 2008 profits fell 12.0 percent to 463.7 million rupees, says it faces tough competition in motor insurance, higher claims and increasing lapse rates. Eagle Insurance Group’s holdings of government securities have increased by 17.1 percent or 1.65 billion rupees, to 11.6 billion.

Interest income from government securities have shot up 72.1 percent to 1.62 billion rupees.

Long term insurance provisions have increased 15.9 percent to 13.9 billion rupees.

Eagle Insurance group’s gross written premium had increased by 12.9 percent or 732.2 million rupees to 6.38 billion from the corresponding period of 2007.

The group’s gross premium income from the general insurance division went up 9.5 percent to 2.04 billion, while the life insurance arm of the company had contributed 4.32 billion rupees as gross premium income.

But re-insurance costs fell 2.87 percent to 1.06 billion, increasing the net written premium by 16.7 percent or 763.6 million rupees, to 5.32 billion from the same period last year.

“The general insurance market experienced intense price competition especially in the motor sector,” chairman Craig Brackenrig told