Much scope for insurance growth - WB Country Director
by Surekha Galagoda
Less than 10 percent of the population in Sri Lanka has any form of
insurance, therefore there is considerable opportunity for growth said
World Bank Country Director, Naoko Iishi, the Chief Guest at the opening
ceremony of the National Insurance Congress 2007 organised by the Sri
Lanka Insurance Institute.
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Naoko Iishi |
The Insurance sector in Sri Lanka is small in size when compared
globally but it contributes to 1.5 percent of the GDP with potential for
growth. At present the country has 15 insurance companies which includes
12 composite insurance companies, two general insurance companies and
one life insurance company.
She said that among the many reasons for the low penetration of
insurance is the good healthcare system in the country as well as the
extended family system.
Ms. Iishi said that the changing social fabric, limited understanding
of insurance products, and lack of understanding/trust about insurance
in customers' minds about insurance are the other reasons for the low
penetration.
She said that the Insurance Board of Sri Lanka has introduced a
number of initiatives to increase the transparency of insurance
companies which includes making rating mandatory. All these measures
will help the insurance companies to service the customers better.
The President of the Sri Lanka Insurance Institute Nimmi Gunaratne
said that in an economy where everything is increasing the only thing
that is reducing are insurance premia.
Insurance is a people's business but since we remind them of bad
things we are not popular. We show them gross reality and how to protect
themselves against such disasters. It is our duty.
Ms. Gunaratne said that Insurance as an Industry gained momentum and
it has recognition as never before with the ever changing world. Rapid
changes in climate to changes in lifestyles and changes in the attitudes
and perspectives of people required a factor to underpin the confidence
of society to embrace these changes.
This role played by the Insurance Industry is being increasingly
appreciated and recognised.
Why does the industry find it so hard to win the respect of the
customer it generally serves well? The 2004 tsunami is a classic example
for Insurers/Re-insurers who honoured claims promptly. Mis-selling has
not helped, and professionally tearing each other into shreds in the
name of competition doesn't help either.
Insurance is one of the most complex professions requiring the input
of a plethora of disciplines from Actuarial, Architectural, Engineering,
Geological to Legal, Accounting, Marketing, Medicine and Economists to
make the end result simple.
It is a fascinating process of relieving the burden of economies and
giving it the impetus to face the future with confidence in an ever
changing world, she said.
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