Releasing a report on the insurance industry, First Capital Research noted that among Asian countries, Sri Lanka is expected to record industry growth of 20% in 2021, as Sri Lanka’s insurance market is still one of the least developed in the region.
It added that growth in the Asian region is expected to be a further sweetener for SL’s growth trajectory.
“Sri Lanka, being a country largely characterised by collectivisms and dependency, where the need for life insurance is yet to be realised, industry still remains underpenetrated compared to regional peers,” the report added.
It added that an increase in the earnings of life insurers is expected to improve risk-based capital adequacy of companies, enabling them to combat against future risks. Further, the transfer to life insurance funds due to the higher discount factor used to value the fund, is expected to boost the profitability of life insurers in the period ahead.
The report noted that government securities represent the industry’s main investment due to the regulatory requirement to invest a minimum of 30% of life fund assets in such instruments.