The insurance industry was able to achieve a growth of 14.36% in terms of overall Gross Written Premium (GWP), during the first quarter of 2021, recording an increase of Rs. 7,211 million when compared to the same period in 2020. Thus, Long Term Insurance Business witnessed a growth of 34.18% and General Insurance Business showed a decline of 0.77% when compared to the corresponding period of 2020.
As per the industry highlights for the first quarter of 2021, the profit (before tax) of Long Term Insurance Business amounted to Rs. 4,038 million (Q1, 2020: Rs. 3,580 million) while the profit (before tax) of General Insurance Business amounted to Rs. 3,210 million (Q1, 2020: Rs. 3,952 million). Thus, profit (before tax) of Long Term Insurance Business has increased by 12.79% and profit (before tax) of General Insurance Business has decreased by 18.78% when compared to the same period in 2020.
The Sri Lankan economy has also faced its share of fluctuations and due to this, the demand for most general insurance products has declined, particularly in the insurance classes of motor, marine, travel and aviation, compared to previous years. “Accordingly, the general insurance business exhibited a negative premium growth of 2.24% in 2020 against the 7.06% growth reported in 2019.” The value of total assets of insurance companies has increased to Rs. 798,092 million as of March 31, 2021, when compared to Rs. 713,734 million recorded as of March 31, 2020, reflecting a growth of 11.82% mainly due to an increase in corporate debts, government securities and equity. The industry has highlighted its adaptability to functioning during the pandemic, including the adoption of digital and virtual platforms for an added efficiency in customer service.
Companies across the globe seized the opportunity to reinvent themselves and promote the importance of health and wellbeing. Industries’ noble attempts to protect individuals and businesses have not gone unnoticed. The development of technology in leaps and bounds has facilitated the movement of insurers into a well-equipped digital sphere.
Claim experience relating to COVID-19 impacts have fluctuated from country to country. Hospital and medical benefits have increased in many developed markets, along with enlarged claim exposure from business lines such as event cancellation, business interruption, travel insurance, credit insurance, workmen compensation etc. In contrast, claims payments for motor insurance reported a widespread decline resulting from reduced vehicle accidents due to restricted mobility.