Industry unites to promote insurance

By Uditha Jayasinghe

The insurance industry in gearing up to increase market penetration through a new countrywide awareness campaign.

The Insurance Association of Sri Lanka (IASL) told the media yesterday that they have designated 5 May as the “Insurance Awareness Creation Day” and will target the masses to emphasise the importance of insurance. Currently there is very low insurance penetration in Sri Lanka, around 10%-12%, but the scope is far greater.

“We have to change the mindset of the people so that they understand that insurance is something that will protect them,” stressed IASL President Ramal Jasinghe pointing out that the lapse rate for insurance policies is around 50%. “This is because most people don’t understand how insurance can protect them against the uncertainties in life and therefore dismiss the premium payments the moment income constraints are faced.”

In a fast aging population insurance can provide the best option for pension and welfare plans, he observed. Understandably Western Province has the largest level of insurance penetration but despite the establishment of many branches island-wide the popularity of insurance remains nominal. “This has resulted in the 18 insurance companies undercutting each other to increase their market share.”

However the Insurance Ombudsman Dr. Wickrama Weerasooria pointed out that this can change easily if more people are brought into the fold. “At the moment a massive amount of advertising revenue is spent by insurance companies to popularise there brands but that can change if more people are aware of the benefits of insurance,” he said. The industry is also stressing on the need for people to understand the policies that they are purchasing and admitted that there needs to be changes in terms of returns since banks can provide more returns. “However insurance guards against risk. A bank can give you higher interest but if you die suddenly the bank is not going to take care of your dependents,” Dr. Weerasooria added.