Insurance industry records 17% GWP growth in 1Q

The insurance industry recorded a growth of 17.10 percent, in terms of gross written premium (GWP), during the first quarter of year 2017 when compared to the same period in the year 2016. 

The GWP for long-term insurance and general insurance businesses for the first quarter ending March 31, 2017 was Rs.38,987 million compared to the first quarter of 2016 amounting to Rs.33,293 million.  The GWP of long-term insurance business amounted to Rs.16,490 million (1Q, 2016: Rs.14,729 million) while the GWP of general insurance business amounted to Rs.22,498 million (1Q, 2016: Rs.18,564 million) during the first quarter of 2017. 

Thus, long-term insurance business and general insurance business witnessed a GWP growth of 11.95 percent and 21.19 percent, respectively when compared to the corresponding period of the year 2016.

Total assets
The total assets of insurance companies have increased to Rs.509,971 million as at March 31, 2017, when compared to Rs.457,695 million recorded as at March 31, 2016, reflecting a growth of 11.42 percent. 

The assets of long-term insurance business amounted to Rs.354,390 million (1Q, 2016: Rs.307,578 million) indicating a growth rate of 15.22 percent year-on-year. The assets of general insurance business amounted to Rs.155,581 million (1Q, 2016: Rs.150,117 million) depicting a growth rate of 3.64 percent, at the end of the first three months of 2017.

Investment in government securities
At the end of the first quarter of 2017, investment in government debt securities amounted to Rs.166,740 million representing 47.05 percent (1Q, 2016: Rs.128,971; 41.93 percent) of the total assets of long-term insurance business, while such investment of the total assets of general insurance business amounted to Rs.30,146 million representing 19.38 percent (1Q, 2016: Rs.29,034; 19.34 percent).

Accordingly, the total investment of both long-term insurance business and general insurance business in government debt securities amounted to Rs.196,885 million (1Q, 2016: Rs.158,005 million) as at March 31, 2017. 

The investment in government debt securities for both long-term insurance business and general insurance business has increased by 29.28 percent and 3.83 percent, respectively.

Claims incurred by insurance companies 
The claims incurred by insurance companies in both long-term insurance business and general insurance business was Rs.16,095 million (1Q, 2016: Rs.14,438 million) showing an increase in total claims amount by 11.47 percent during the first quarter of 2017. The long-term insurance claims, including maturity and death benefits, amounted to Rs.6,135 million (1Q, 2016: Rs.5,617 million).  The claims incurred in general insurance business, including motor, fire, marine and other categories, amounted to Rs.9,959 million (1Q, 2016: Rs.8,821 million). Hence, during the first three months of 2017, there is an increase in claims incurred by 9.22 percent and 12.90 percent for long-term insurance and general insurance businesses, respectively, when compared to same period in 2016.

Profit (before tax) of insurance companies
The profit (before tax) of insurance companies in both long-term insurance business and general insurance business has increased to Rs.3,496 million (1Q, 2016: Rs.2,713 million) showing a growth in profits by 28.83 percent. The profit (before tax) of long-term insurance business amounted to Rs.1,738 million (1Q, 2016: Rs.2,067 million) while the profit (before tax) of general insurance business amounted to Rs.1,758 million (1Q, 2016: Rs.646 million) during the first quarter of 2017.  Thus, profit (before tax) of long-term insurance business has decreased by 15.93 percent and profit (before tax) of general insurance business has grown by 172.05 percent, when compared to the corresponding period of year 2016.

Insurers
Out of the 28 insurance companies (insurers) in operation as at March 31, 2017, 12 are engaged in long-term (life) insurance business, 13 companies are carrying out only general insurance business and three are composite companies (dealing in both long-term and general insurance businesses). 

Insurance brokers
Sixty insurance brokering companies, registered with the board, mainly concentrate in general insurance business. The total assets of insurance brokering companies have increased to Rs.4,211 million as at the end of first quarter of 2017 when compared to Rs.3,670 million recorded as at March 31, 2016, reflecting a growth of 14.73 percent year-on-year.