Sri Lanka Union Assurance profit up amid price war

March 11, 2008 (LBO) – Sri Lanka’s Union Assurance group net profit for 2007 rose 63 percent to 254 million rupees from 156 million rupees the year before but the firm said it was concerned about price competition and high motor claims. General and life insurance premiums grew by 23 percent to five billon rupees from 4.1 billion rupees in 2006, according to the company’s annual report for the financial year ended December 31, 2007.

“The general insurance industry is at a watershed with intense price competition, possible changes to the existing strike, riot and civil commotion fund arrangements and proposed regulatory changes,” Union Assurance chairman Ajit Gunewardene told shareholders.

The company said its general insurance gross written premiums rose 18 percent to 2.8 billion rupees.

Overall general insurance profits increased to 108 million rupees in 2007 from 83 million rupees in 2006, mainly owing to increased investment income.

Income from investments rose 24 percent to 880 million rupees with the firm also reporting a sharp increase in other income which went up 33 percent to 49 million mainly owing to interest income from government and corporate bonds.

The firm’s chief executive Marina Tharmaratnam sai