Business Model

Operating Environment

Despite many initiatives taken in the past, market penetration of life insurance in Sri Lanka remains low at 12% of the total population. This is approximately 29% of the working population of the country, while life insurance penetration (in terms of premium) is only 0.5% of Sri Lanka’s GDP.

(Source: IBSL Annual Report, 2014)

In 2015, the industry launched a ’Life Insurance Awareness Month' as a step forward to address the low penetration rate. Ceylinco Life will continue to lead the industry in this endeavour by educating people on the ‘need for protection’. It will be supported by our large sales force, branch network and range of products to reach out to the untapped life insurance market.

Opportunities and Threats

Aspect Implications
Political Government policies towards infrastructure development and stability will create opportunities for employment and more disposable income, which in turn would create opportunities to promote life insurance to different market segments
Economic Rise in healthcare costs and medical expenses creates a need for medical insurance and health insurance products
Social With an aging population retirement planning will be of utmost importance throughout the industry
Technological Increasing penetration of smart phones creates opportunities to develop convenience-driven mobile applications for after sales services and alternative premium collection methods, while the use of internet will create effective opportunities for selling insurance online
Environmental Changing climatic conditions will affect many industries, and any significant impact on the agriculture sector will decrease income levels and affordability of life insurance among lower income groups
Legal Regulatory frameworks may increase the barriers for new insurers to enter the market due to the minimum capital requirements and compliance requirements

Sector Overview

Premium income and penetration

Year ended 31 December 2010 2011 2012 2013 (a) 2014 (b)
Long term insurance (Rs. Mn) 31,152 35,162 37,477 41,676 44,610
Growth rate in total premium (%) 15.12 18.47 11.06 8.97 5.14
Gross domestic product (Rs. Bn)* 5,604 6,544 7,579 8,674 9,785
GDP growth rate (%)* 8.0 8.2 6.3 7.2 7.4
Penetration (%) (Total industry premium as a % of GDP) 1.18 1.20 1.15 1.10 1.02
Penetration (%) (Premium of long term insurance business as a % of GDP) 0.56 0.54 0.49 0.48 0.46
Insurance density (Total premium income/population) (Rs.) 3,208 3,761 4,288 4,637 4,831
Population '000 (Mid year)* 20,653 20,869 20,328 20,483 20,675

*Source – Central Bank of Sri Lanka and Department of Census and Statistics.
(a) Reinstated audited figures
(b) Provisional figures
Note: The above analysis does not include information of NITF since required complete information was not submitted to the Board.


The Sri Lankan insurance industry recorded a growth of 5.14% in 2014 by generating a total Gross Written Premium (GWP) amounting to Rs. 99,872 Mn. This is a relatively lower growth rate compared to 8.97% experienced in 2013.

Although the GWP generated from long term and general insurance businesses have continued to grow, they have shown a decline in growth rates year on year.

Gross written premiums

Long term insurance business generated Rs. 44,610 Mn in GWP in 2014 compared to Rs. 41,676 Mn in 2013. This represents a growth rate of 7.04%, down from 11.20% achieved in 2013.

Ceylinco Life continued to maintain its dominance in the long term insurance market by generating GWP of Rs. 12,003 Mn in 2014 (2013: Rs. 11,123 Mn) and accounted for 26.91% of the total GWP.

Source: Insurance Board Sri Lanka Annual Report, 2014

Ceylinco Life continued to maintain its dominance in the long term insurance market by generating GWP of Rs. 12,003 Mn in 2014


The Gross Domestic Product (GDP) of the Sri Lankan economy increased by 7.40% in 2014 compared to 7.20% recorded in 2013, mainly due to growth in the industrial and services sectors. Supporting the GDP growth were the monetary policy exercised by the Central Bank of Sri Lanka which resulted in a decline in interest rates and inflation, as well as the overall improvement in macroeconomic factors. Further, the gradual improvement of the global economy following the 2008-2012 financial crisis and the decline in oil prices from the latter part of 2014 had favourable impacts on the Sri Lankan economy.


The penetration of long term insurance declined from 0.48% in 2013 to 0.46% in 2014.

Insurance density

Insurance density (life insurance), which represents the life insurance premium income per person of the total population, increased from Rs. 2,035 in 2013 to Rs. 2,158 in 2014, reflecting a growth of 6%. This is mainly due to increased life insurance premium income against an insignificant increase in the population.

Ceylinco Life continued to maintain its dominance in the long term insurance market by generating GWP of Rs. 12,003 Mn in 2014