Life insurance penetration as a percentage of GDP still stands low
View(s):Although there’s a growth trend seen in life insurance penetration of nearly 4.3 per cent year on year to Rs 26 billion in the first six months of last year (based on total population), the life insurance penetration as a percentage of GDP stands at as low as 0.5 per cent for the same period, a TKS Securities (Pvt) Ltd, said.
However with the prevailing mid digit inflation environment the outlook for life insurance remains positive with the growth in per capita GDP, rapid urbanization, aging population and improving education levels, the report said.
It added that informative life insurance products offered to consumers coupled with sound consumer education in financial matters remains as a key to the growth in the sector.
General insurance segment accounts for a greater share of the industry mix with over 52 per cent of the Gross Written Premium (GWP) coming from General Insurance sector (motor, fire, marine and other non life insurance), according to the report. “Among these sectors motor insurance has performed well than the rest of the categories in the recent period. However general insurance sector has seen aggressive competition in the recent past year with a strong price war leading to a drop in overall profitability of the segment.” It noted that further expansion in the segment is possible as the economy continues to expand and as the public become more conscious on obtaining insurance policy.
Reporting on Ceylinco Insurance results, it said that for quarter ended December 2012, the company’s GWP has grown by 13 per cent year on year to Rs 6.1 billion and by 12 per cent year on year to Rs 22.6 billion on the back of improved General Insurance business. “In the quarter ended December 2012 General Insurance segment contributed for nearly a 48 per cent of the total GWP with a growth of 9 per cent year on year to Rs 2.9 billion in the fourth quarter of last year. also an increase of 14 per cent year on year in GWP to Rs 11.8 billion was recorded in 2012.”
The report attributed this to the increase in number of Motor Insurance policies during that period.
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