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Insurance penetration insufficient in Lankan society – IASL

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Though Sri Lanka has 5.1 million households as at 2021, only very few houses were insured, said Secretary of the Insurance Association of Sri Lanka (IASL) Tanuj Edward.

In most instances, the insurance for homes are taken only when there is a mortgage from the bank and at the end of the loan period if insuring the property is not continued ignoring the benefits of insurance. Most commercial properties are amply covered currently, but corporate have downsized insurance requirements while incurring losses due to various natural perils and other omissions.

“We as an industry should explore avenues to increase the penetration of General Insurance amongst the public. SMEs and individuals should be educated of the benefits of insurance and how it would assist them in the unlikely event of a loss which could affect their businesses and livelihoods.”

There is also a big void in SMEs opting for insurance requirements to mitigate their losses due to natural perils or other causes because of preconceived notions that insurance is costly.

“If stocks are not covered by insurance, it could hinder operations leading to greater financial losses. Also taking into consideration the reduction in disposable income, the industry should strive to find a suitable middle ground by introducing simple and affordable policies”.

Moreover, corporates and SMEs both have neglected their own employees who contribute to the company operations as they are not being provided with Medical Insurance. Companies take care to insure a motorcycle but have failed to provide a Personal Accident cover or a Workers Compensation Insurance to their employees of which the costs are negligible. Further, Liability Insurance is not considered by most corporate and SME businesses.

Additional covers for marine and aviation insurance when transporting goods is compulsory to guard against any losses. In today’s world, general insurance for businesses has become imperative.

“General insurance has grown in demand in the light of the inflation and high cost of living which makes any sudden financial loss difficult to bear, not to mention the mental and emotional trauma that follows.”

“The Insurance Association of Sri Lanka urges the public to reflect on the role of insurance and to prioritize the quality of insurance coverage. Today, buying insurance online is a paperless, easy, and quick process, which means there are no excuses to stop every Sri Lankan from protecting themselves,” said Chandana L. Aluthgama, IASL.

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