High confidence on insurance among public – IASL Chief

In response to a news published in media recently on the insurance industry, Insurance Association of Sri Lanka (IASL) President Ramal Jasinghe representing the industry stated, “The growth figures of insurance premiums of all the Insurance Companies for the half year as at June 2012, is 22% for General Insurance (Non Life) and 25% in Life.

These figures represent confidence of the public with regard to Insurance, and member companies have shown double and in some cases, triple digit growth rates in terms of premium growth, within this time period. This is a significant improvement from the year over year figures of 2011!

The industry has disbursed a total of over Rs. 15.6 billion in claims in the year 2010, and the figures in 2011, would show a significant growth keeping in line with the positive growth of the Industry.  Claims that have reached the stage of legal action, has proved that in over 99% of the decisions the Courts have held with the Insurance Company.

Claims reaching litigation are very small as most claims are amicably settled outside court. There is however an increasing trend in the detection of fraudulent claims being made on insurance companies. The Insurance Ombudsman scheme, and initiatives taken by the Ombudsman such as developing an alternative compensation scheme to settle 3rd party motor claims out of courts, to avoid the delays taking place presently at courts which is beyond our control is a positive step towards efficiently disbursing claims.

Furthermore the Insurance Board of Sri Lanka (IBSL) also will have a larger role to play after the amendments to the Act regarding claims settlement. (Their purview was extended to Non-life claims as well).  We as an Industry have welcomed those changes.

The efficiency of Claims disbursement is a very vital area of competition within the very competitive insurance industry. Therefore whilst each individual company may adopt their own claims management philosophy, the industry players are keenly aware of this factor of competition, within 22 companies, in a limited market space.  Our advisors and intermediaries (Insurance brokers) too, provide professional services to all stakeholders keeping these competitive forces in mind.

 Therefore with all the positive action being taken by the industry, and stakeholders, there cannot be an erosion of confidence within the public, but there could always be space for improvement with regard to service and most importantly educating the public on the terms and conditions of an insurance policy, to inform the conditions and circumstances upon which one could make a claim on such a policy. It must be stressed however that the industry is keen to maintain a clean and fraud free environment, and hence will maintain high standards of integrity to safeguard the interests of policyholders who make genuine claims, from fraudulent claims.”