Top Japanese insurer takes 6% stake in Ceylinco Insurance

  TOKYO, Thursday -- Mitsui Sumitomo Insurance has purchased a stake in Sri Lanka's Ceylinco Insurance, becoming the first Japanese insurer to make a foray into the island nation with a growing economy, according to Nikkei Asian Review. The casualty insurance arm of MS&AD Insurance Group Holdings acquired 6 per cent of outstanding shares for a little under 1.8 billion yen ($14.4 million). Ceylinco Insurance last year posted Rs. 25.2 billion (US$188 million) in premium income -- equivalent to sales for ordinary businesses -- and Rs. 3.96 billion in consolidated pretax profit. Ceylinco, established in 1987, also runs nonlife insurance operations in Nepal and the Maldives through affiliates. The country's insurance market totals about Rs. 95 billion. Sri Lanka's insurance penetration rate as a share of gross domestic product is 1.1 per cent, lower than Thailand's 5.8 per cent and India's 3.3 per cent. But Sri Lanka's central location in the Indian Ocean has attracted the world's leading companies in recent years, including those in logistics. In addition to rising demand for corporate fire insurance, Mitsui expects growth in auto and life insurance for individuals as the country's economy booms, the report said.