Ceylinco Insurance PLC, which runs Sri Lanka’s market-leading life insurance business based on gross written premiums (GWPs), saw its September quarter (3Q16) net profits falling by 20 percent to Rs.850.9 million or Rs.32.21 a share from a year ago, the interim results released to the Colombo Stock Exchange showed. 
However, the GWPs from both life and non-life businesses rose by 17 percent year-on-year (YoY) to Rs.8.13 billion during the quarter. 
The investment and other incomes grew by 37 percent to Rs.2.87 billion from a year ago as the interest rates increased during the period. According to industry regulations, it is mandated for the insurers to invest a section of their assets in government securities.
In line with the regulator’s call, Ceylinco Insurance, which ran both life and non-life businesses as a composite insurer, segregated its business in June 2015 by creating fully-owned subsidiaries for each business segment, Ceylinco Insurance PLC becoming only the holding company. 
Based on the Insurance Board of Sri Lanka (IBSL) data, up to 2015, Ceylinco’s life insurance business had a little over 25 percent market share. This was followed by 19.35 percent share held by the state-owned Sri Lanka Insurance Corporation and 15.74 percent share by AIA Life Insurance.     
Meanwhile, both life and non-life companies of the group paid a total claims and benefits of Rs.3.43 billion, an increase of 16 percent from the same period last year. 
The total claims and benefits paid during the first nine months was as high as Rs.10.0 billion. 
“The sharp increase in claim settlement is a result of the large number of flood claims we paid,” said Ceylinco General Insurance Limited Managing Director Patrick Alwis in a statement. 
Many parts of the country were badly affected by the floods that took place this May.  Meanwhile, during the nine months ended September 30, 2016, the company made a net profit of Rs.2.22 billion or Rs.84.09 a share, up 21 percent from the same period last year. 
The total GWP rose by 15 percent YoY to Rs.23.5 billion. 
The non-life business GWP grew by 23.2 percent on year to Rs.12.0 billion while the life business GWP rose by 11.1 percent on year to Rs.11.0 billion. 
Investment and other incomes during the period rose by a healthy 23 percent YoY to Rs.7.5 billion. 
By the end of September 30, 2016, Global Rubber Industries (Private) Limited held 22.25 percent stake in Ceylinco, followed by Banque Pictet & Cie SA with a 12.73 percent stake. Sri Lanka’s overcrowded insurance industry is now ripe for consolidation and during the last two years, the industry saw some of the companies shedding their less profitable non-life businesses to focus on the life business.