Over the period from 2019, Sri Lanka's insurance industry displayed resilience, navigating through the economic downturn caused by the COVID-19 pandemic and the unprecedented economic crisis in 2022, according to a press release from the Insurance Regulatory Commission of Sri Lanka (IRCSL).
Despite these challenges, the sector managed to maintain stability, demonstrating a strong commitment to protecting policyholders and ensuring business continuity.
In 2023, there were gradual improvements in both the life and general insurance sectors, supported by the proactive regulatory measures implemented by the IRCSL. The third quarter of 2024 further reflected the trajectory, with a steady increase in gross written premium (GWP).
These advancements underscore the critical role of the insurance industry in supporting the country’s broader economic recovery, while highlighting the need for continued innovation and regulatory support to address challenges and to further expand insurance inclusiveness across all segments of society.
Increase in gross written premiums
The total GWP increased to SLR280.1bn ($943.9m) in 2023, compared to SLR200.6bn in 2019. Life insurance GWP rose from SLR88.8bn in 2019 to SLR152.7bn in 2023.
This steady rise reflected the sector’s strengthening appeal and demand for long-term financial security.
The general insurance sector also experienced growth over this period, with GWP rising from SLR107.7bn in 2019 to SLR124.8bn in 2023.
The upward trend underscored a growing acceptance of insurance products across Sri Lanka, indicating greater public awareness in both life and general insurance offerings.
The GWP for 3Q2024 stood at SLR237.4bn, compared to SLR203.7bn 3Q2023.
Long-term insurance business reported a GWP of SLR131.2bn, from SLR109.9bn in 3Q2023. Meanwhile, the general insurance business recorded a GWP of SLR106.2bn, compared to SLR93.8bn in the same period in 2023.
Claims incurred
From 2019 to 2023, in the life insurance segment, claims incurred have steadily increased each year, rising from SLR35.1bn in 2019 to SLR76.2bn 2023. This growth reflected a substantial 117% increase over the five-year period, indicating an increasing reliance on life insurance products and a corresponding rise in policyholder claims.
General insurance claims incurred displayed notable fluctuations, with a decline to SLR42.5bn in 2020, followed by an increase to SLR48.3bn in 2021 and a further rise to SLR61.4bn in 2022. In 2023, general insurance claims incurred experienced a marginal increase, reaching SLR62.3bn.
Overall, total claims incurred by the insurance sector increased from SLR93.3bn in 2019 to SLR138.5bn in 2023.
Claims incurred by the long-term insurance business, including maturity and death benefits, rose by 11.2% to SLR62.2bn, up from SLR55.9bn in the same period in 2023. Meanwhile, claims incurred in the general insurance business, covering motor, fire, marine and other categories, saw a marginal increase to SLR46.8bn compared to SLR46.7bn in 3Q2023.