Insurance Awareness Day to enhance penetration

Life and General insurance will operate under two sections in the future as the government has proposed to segregate the two insurance sectors, said a top official of the Insurance Association of Sri Lanka (IASL) at the launch of the insurance awareness campaign on Wednesday.

As any proposal has its plus and minuses the move to split Life and non Life claims has its benefits in its own way. The move will not affect policyholders.

IASL, President Ramal Jaysinghe addressing the media at a ceremony to launch Insurance Awareness Day.

Insurance penetration in the country is low compared to many industries, due to lack of awareness of its importance and benefits. Insurance penetration is currently around 10 percent. Unlike in the banking sector, insurance products are sold through agents who need to convince people to buy a product. Insurance agents should be honest and skilled to market the products authentically.

Sri Lanka has a long history in insurance which could be traced back to the colonial era. The insurance industry was a monopoly of the state for over 40 years and today the industry comprises 18 companies. The insurance industry was privatised in the mid 1980's and since then a large number of companies were formed offering either Life or General insurance products.

President IASL, Ramal Jayasinghe said that the insurance premium is less than two percent of the country's GDP and added that the industry should spearhead growth through insurance education.

He said insurance products are sold, not bought. Awareness on the need for insurance will generate interest and move people to buy products.

"Life insurance penetration is low compared to General insurance due to the absence of tangible benefits. A larger percentage of the population is aware of the benefits of General insurance, particularly motor insurance", he said.

"We expect that the insurance awareness campaign will lay the foundation for a solid growth in the industry through proper education", Jaysinghe said.

The Insurance Awareness Day was held on Thursday.

Insurance Ombudsman, Dr. Wickrema Weerasooria said creating insurance awareness is a dire need to enhance penetration and develop the industry.

He said that there was a large number of bogus insurance claims and added that he will not leave room for fraudulent claims.

"People resort to various means such as setting fire to their own houses or causing damage to property to claim insurance", Dr. Weerasooria said. LF