Aug 06, 2019 (LBO) - The insurance industry reported a growth of 5.70 percent in terms of overall gross written premium (GWP), during the first quarter of 2019, recording an increase of 2,504 million rupees when compared to the same period in the year 2018, the Insurance Regulatory Commission of Sri Lanka said in a statement.
The GWP for long term insurance and general insurance businesses for the period ending March 31 2019 was 46,429 million rupees compared with the same period in 2018 amounting to 43,925 million rupees.
The GWP of long term insurance business amounted to 20,414 million rupees (Q1, 2018:18,618 million rupees) while the GWP of general insurance business amounted to 26,015 million rupees (Q1, 2018: Rs. 25,307 million).
Thus, long term insurance business and general insurance business witnessed a GWP growth of 9.64 percent and 2.80 percent respectively, when compared to the corresponding period of year 2018.
The value of total assets of insurance companies has increased to 628,430 million rupees as at March 31, 2019, when compared to 574,112 million rupees recorded as at March 31, 2018, reflecting a growth of 9.46 percent mainly due to increase in corporate debts, deposits and reinsurance receivables.
The assets of long term insurance business amounted to 442,853 million rupees (Q1, 2018: Rs. 400,717 million) indicating a growth rate of 10.52 percent year-on-year.
The assets of general insurance business amounted to 185,577 million rupees (Q1, 2018: Rs. 173,395 million) depicting a growth rate of 7.03
percent.
At the end of first quarter of 2019, investment in Government Debt Securities amounted to 178,624 million representing 45.25% (Q1, 2018: Rs. 180,469 million; 48.85%) of the total assets of Long Term Insurance Business, while such investment of the total assets of General Insurance Business amounted to Rs. 42,010 million representing 37.07% (Q1, 2018: Rs. 39,521 million; 35.99%).
Accordingly, the total investment of both Long Term Insurance Business and General Insurance Business in Government Debt Securities amounted to Rs. 220,634 million (Q1, 2018: Rs. 219,990 million) as at March 31. Thus, the investment in Government Debt Securities of Long Term Insurance Business has decreased by 1.02% and such investment of General Insurance Business has increased by 6.30%.
Claims incurred by insurance companies in both Long Term Insurance Business and General Insurance Business was Rs. 21,528 million (Q1, 2018:Rs. 18,492 million) showing an increase in total claims amount by 16.41% year-on-year. The Long Term Insurance claims, including maturity and death benefits, amounted to Rs. 9,522 million (Q1 2018: Rs. 7,668 million).
The claims incurred in General Insurance Business, including Motor, Fire, Marine and other categories, amounted to Rs. 12,006 million (Q1 2018:Rs. 10,824 million). Hence, during the first quarter of 2019, there had been an increase in claims incurred by 24.17% and 10.92% for Long Term Insurance and General Insurance Businesses respectively, when compared to the same period in 2018.
The profit (before tax) of Long Term Insurance Business amounted to Rs. 4,113 million (Q1, 2018: Rs. 15,515 million) while the profit (before tax) of General Insurance Business amounted to Rs. 1,671 million (Q1, 2018: Rs. 2,338 million) at the end of first quarter of 2019. Thus, profit (before tax) of Long Term Insurance Business and General Insurance Business has decreased by73.49% and 28.53% respectively. The Profit before tax of Life Insurance Business shows a significant decrease (Rs. 11,402 million) in the first quarter of 2019. This is mainly due to profit recorded by an insurer from a sale of its subsidiary in the first quarter of 2018. Further, two life insurers showed a considerable drop in profits due to decrease in other operating revenue.(Refer chart 4)
Out of twenty-five (25) Insurance Companies (Insurers) in operation as at March 31, twelve (12) are engaged in Long Term (Life) Insurance Business, eleven (11) companies engaged in General Insurance Business and two (02) are composite companies (dealing in both Long Term and General Insurance Businesses).
Sixty-three (63) insurance brokering companies, registered with the Commission as at March 31, mainly concentrate in General Insurance Business. Total Assets of insurance brokering companies have increased to Rs. 4,849million as at the end of first quarter of 2019 when compared to Rs. 4,092 million recorded as at March 31, indicating a growth of 18.49%.