Ceylinco Life March profits surge on higher premiums and low benefits and expenses
The profits at Ceylinco Life Insurance company more than quadrupled during the three months ended in March 2018, as the life premiums rose and benefits and claims paid, expenses and losses came down drastically.
Ceylinco Life Insurance company, Sri Lanka’s largest life insurer by gross written premiums (GWP), reported an after tax profit of Rs.2.8 billion for the January-march period, significantly up from Rs.673.3 million reported in the year earlier period.
The markedly divergent results are due to the difference between the claims and benefits, losses and other expenses paid across the two different periods.
The benefits, expenses and losses during the most recent quarter amounted to Rs.2.4 billion compared to the Rs.4.1 billion in the same period last year.
During the financial year ended in December 2017, the company paid net benefits amounted to a whopping Rs.6.7 billion.
According to the company data, Ceylinco Life has sold 127,000 new policies for the year ended in December 2017, at average 10,570 policies a month.
However, the data shows that Sri Lanka remains a least life insurancepenetrated country in the region by any measure.
Substantially higher monthly premiums compared to the disposable incomes remains a deterrent to expand the life insurance penetration in Sri Lanka.
However, compared to the general insurance business, the life insurance business remains highly profitable.
In recent times, Sri Lanka’s insurance industry is experiencing a consolidation – mainly among the general insurers – to gain scale benefits as the non-life business remains extremely tough with low volumes.
By end-march 2018, Ceylinco Insurance had a Rs.81 billion life fund – biggest in any insurance company operating currently in Sri Lanka.
Meanwhile, life business GWP rose by 12 percent or Rs.430 million during the quarter to Rs.3.9 billion against the same quarter in 2017.
Life business revenues, which include GWPS and investment incomes, rose by Rs.600 million to Rs.6.4 billion for the quarter.