Budget: A growth path for key thrust sectors - Insurance expert | Sunday Observer

Budget: A growth path for key thrust sectors - Insurance expert

29 November, 2020

The overall Budget is a balanced one which  takes the country towards a defined growth path with the identification of key thrust sectors.

Its objectives are to generate investment and employment, Amana Takaful Life PLC, CEO Gehan Rajapaksa said.

 “I also see as positive the bold commitment to ensure policy consistency which has been a point of concern expressed by the private sector in many a forum,” Rajapaksa said.

 He said  the government has begun to appreciate the economic ramifications of an ageing population that we see in Sri Lanka that will become apparent in the next 10 years. This will lead to huge financial commitments for retirement funding and associated expenses.

Even though we do not see anything specific in the budget this time I see this recognition as a very positive one as the insurance industry can become a key contributor towards ensuring financial stability of a ageing population with a wide diversity of products offerings already in place. 

“I am sure the government will take meaningful steps towards encouraging people to secure their retirements financial security in the next few years. It is something the industry can contribute and will contribute towards,” Rajapaksa said.

The 2021 Budget proposes companies with over50 workers must create an insurance policy for their employees. The employer’s contribution would be 0.25%.

Going forward under the new normal and facing fresh  challenges  Rajapaksa said insurance has faced similar challenges in the past and has withstood them well as a very resilient sector that contributes to the economy.

“The industry is well regulated and functions within a highly regulated framework which enables it to steer the course well. Besides the presence of the government through the NITF helps the sector to withstand tough times by diversifying risks.The insurance sector recorded a growth rate of 8.64 percent in  Gross Written Premium  (GWP) for long term and general insurance sectors in 2019. The  GWP income for both sectors was Rs. 196,513 million compared to Rs. 180,880 million in 2018, recording an increase of Rs. 15,633 million.The insurance sector in Sri Lanka consisted of 27 insurance companies, 67 insurance broking companies and 16 loss adjusters at end 2019 and  of the 27 insurers, 13 operated as life insurers carrying on long term insurance business, 12 in general insurance  and two as composite insurers.