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| Sunday, 30 October 2005 |
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Tremendous scope for insurance industry by Surekha Galagoda Continuing growth and the increasing difficulties in funding social welfare programs will provide opportunities for the insurance industry to introduce new dependable and economical products to the market, said Central Bank Director, Economic Research Department Dr. H. N. Thenuwara. He was speaking on the macro economic outlook for Sri Lanka with particular emphasis on the Insurance Industry. Addressing the gathering at the International Insurance Congress on future direction of the Sri Lankan Insurance market, he said that there is tremendous scope for insurance but the customer should feel what he is getting is worth the premium. Also as we are living in a world of uncertainties the insurance industry can thrive, he said. He said the main challenges faced by the country are high oil prices, widening trade gap and a low export base. The strategies that should be adopted include developing a sound energy policy, adjusting the exchange rate to encourage exports and domestic production and encouraging the export sector to diversify further. Speaking on demand management policies, Dr Thenuwara said that the government attempted to maintain fiscal consolidation while taking measures to raise revenue and rationalise expenditure. The medium term developments are guided by the fiscal management responsibility act. The Central Bank attempts to maintain price stability while facilitating growth prospects while policy objectives are guided by the Monetary Law Act. Speaking on the December 26 tsunami experience from an insurance and reinsurance perspective Gallagher Re, Asia Managing Director, Treaty Division, Jonathan Wilton said that this tsunami was not the first and it will not be the last. In many countries natural hazards are insurable but as Sri Lanka was not thought to be heavily exposed to earthquake and typhoons suffered massive damage. Therefore as an industry the insurance sector can advise the government and provide finances, creating safety zones and warning infrastructure, building safety structures, creating natural protection such as keeping mangrove forests and educating the masses are some of the measures that can be taken by the government. The Moderator of session two Ceylinco Insurance Director Technical Jagath Alwis said that though the tsunami claimed over 40,000 lives there were less than 650 life insurance claims due to the low penetration of life insurance in the Sri Lankan market. In the aftermath of the tsunami the challenges faced by the industry relate to wording, assessment and settlement of claims and the underwriting strategy. |
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