Insurance industry sitting pretty
The insurance industry is well placed to enhance its performance with
the continued growth trend achieved during the first quarter of this
We expect the industry to perform well despite the challenging
environment at present.
There is a lack of awareness among the people about the importance of
an insurance policy. This has resulted in low penetration to persist,
HNB Assurance Managing Director Manjula de Silva told Daily News
During the year 2010 the Sri Lankan economy recorded a strong and
robust growth in all vital sectors as expected in the first full year of
The long awaited bill to amend the Regulation of Insurance Industry
Act No 43 of 2000 was finally passed in the Parliament at the turn of
the year 2011. It contains some progressive steps to boost the insurance
industry, he said.
The performance by the HNB Assurance for the year ended 2010 saw the
company achieving the targeted volumes of turnover in respect of both
its major lines of business.
The Gross Written Premium (GWP) from general insurance business grew
by 19 percent to reach Rs 1.344 million while the Gross Written Premium
(GWP) from life insurance business reached Rs 1,084 million recording a
growth of 10 percent.
This is the first time that both GWP measures crossed the Rs 1
billion mark resulting in a combined turn over of Rs 2,428 million.
As in every single year since 2004, the company was able to record
commendable growth rates in both profit before tax (PBT) and profit
after tax (PAT). PBT grew by 17 percent to record Rs 270 million and PAT
grew by 20 percent to reach Rs 242 million.
The market capitalization surpassed Rs 3 billion mark for the first
time on September 14, 2010 when the share price crossed Rs 80.
It dipped slightly towards the end of the year to record Rs 2,925
million. The company was able to deliver a return on equity (ROE) of 24
percent maintaining it above 20 percent for the fifth successful year.
The year 2010 posed numerous challenges to the insurance industry.
The main challenges were the declining interest rates, sharp
contraction in the income from terrorism covers, erosion of the
level-playing filed and the unfavourable interpretation of tax rules to
the detriment of the industry, he said.
In the area of life insurance, the company placed greater emphasis on
regular premium endowment business. Numerous sales competitions and
incentive schemes were targeted at both to generate new business as well
as premium retention.
These efforts were well supported by training and development
activities carried out in a structured manner for the agency force.
During this year, HNB Assurance will aim to cross traditional
boundaries in search of innovation that could provide superior customer
value to enhance its position in the insurance market, he said.