The local insurance industry premium income grows by about 20 percent a year but as a percentage of GDP, the premium revenue account for less than 1.5 percent. The local insurance industry premium income grows by about 20 percent a year but as a percentage of GDP, the premium revenue account for less than 1.5 percent. The penetration rate of both non-life insurance and life insurance is also low.
“The premiums have grown by 19 – 20 percent in the last two years. If you compare premiums to the GDP they had been about 1.18 to 1.37 percent, relatively, an insignificant movement,” Palitha Gunawardene, DG, Securities and Exchange Commission said at the conference.
“Doesn’t this clearly show that there is potential for growth? Then how must we focus on this evolutionary process? Of course, increase penetration, wider geographic reach, wider product range,” he said.
Industry players say creating a vibrant reinsurance market can be done with regional cooperation.
Reinsurance, an agreement between insurance companies where one company takes over the risk of another, helps insurance companies to manage risks on their policies.
Developed countries n