Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Increased Access to
Insurance
A Sri Lankan perspective
Manila, Philippines
18 -20 September 2013
Damayanthi Fernando
Direc...
Agenda
 Key Social Indicators
 Relevant Insurance Industry data
 How are others covered from shocks?
 Challenges to de...
Key Social Indicators
 Mid year population (‘000) in 2012 – 20,328
 Age distribution 2011
 0-14 yrs – 5,488
 15-64 yrs...
Relevant Insurance Industry
Data
2008 2009 2010 2011 2012
Total Premium Income
(US$ millions)
447 443 510 604 670
GDP (US$...
 Number of Branches
 Number of Employees
 Number of Agents
Branch Network, Employees and Agents of
Insurance Companies ...
How are others
covered from
shocks?
 Public Sector
 Private Sector
 Self Employed
 Unemployed
 Pensions, EPF’s,
ETF’s...
Section 12 of the Insurance
Law in Sri Lanka
 No person shall carry on insurance
business in Sri Lanka unless such
person...
Challenges to develop an
inclusive insurance market
Inclusive
Insurance
Market
Downscale
?
Up scale
?
Insurer
partner
mode...
 Downscaling: Commercial Insurers
serving the Low-income Market
 Up scaling: Formalising informal
insurance schemes
Downscaling - issues
1) Is it the responsibility of insurance
supervisors to promote MI?
2) Should functional regulation b...
Up scaling – issues
1) Can a tiered approach to MI regulations work?
2) What aspects of insurance regulations would need
t...
Scope of MI Regulation
 Prudential Regulation
 Market Conduct Regulation
 Product Regulation
 Institutional and corpor...
Challenges in Regulation and
Supervision of MI
 Creating an appropriate regulatory
framework is a complex task - despite
...
What have previous studies
shown ?
 Large insures are very active in the
market – even at village level
 Awareness of in...
What have previous studies
shown ?
 There is a need and demand for MI
 A substantial segment of low income
households is...
What have previous studies
shown ?
 Products offered are not suitable
 Premiums not affordable
 Delivery mechanism and ...
What have previous studies
shown ?
 Demand for life, health and funeral
insurance but not property
 A low cost delivery ...
What have previous studies
shown ?
 An ideal combination would be an
insurer-agent partnership between
commercial insurer...
What steps next ?
 Assessment of Sri Lanka’s MI market,
i.e. what is in place in the entire island;
MI products issued by...
 Thank you.
Upcoming SlideShare
Loading in …5
×

Increased access to insurance - a Sri Lankan perspective

724 views

Published on

This presentation was delivered by Ms Damayanthi Fernando (Director Legal at Insurance Board of Sri Lanka) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines).

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

Increased access to insurance - a Sri Lankan perspective

  1. 1. Increased Access to Insurance A Sri Lankan perspective Manila, Philippines 18 -20 September 2013 Damayanthi Fernando Director Legal Insurance Board of Sri Lanka
  2. 2. Agenda  Key Social Indicators  Relevant Insurance Industry data  How are others covered from shocks?  Challenges to develop an inclusive insurance market  Scope of MI Regulation  Challenges in regulation and supervision of MI  What have previous studies shown?  What steps next?
  3. 3. Key Social Indicators  Mid year population (‘000) in 2012 – 20,328  Age distribution 2011  0-14 yrs – 5,488  15-64 yrs – 14,065  65 years and over – 1,316  Literacy rate (2011) – Average 92.2%  Poverty Head Count Index (2002) 22.7 (2006/2007) 15.2 (2009/2010) 8.9  GDP Per Capita @ market prices – US$ 2,836 Source – Central Bank A/R 2012
  4. 4. Relevant Insurance Industry Data 2008 2009 2010 2011 2012 Total Premium Income (US$ millions) 447 443 510 604 670 GDP (US$ billions) 34 37 43 50 58 Penetration % (Total Industry Premium as % of GDP) 1.32 1.19 1.18 1.20 1.15 Insurance Density (Total Industry Premium Income/Population) US$ 22 22 25 29 33 Mid Year Population (‘000) 1US$ = Rs 130.00 20,217 20,450 20,653 20,869 20,328
  5. 5.  Number of Branches  Number of Employees  Number of Agents Branch Network, Employees and Agents of Insurance Companies operated in the Island as at 31st December 2012
  6. 6. How are others covered from shocks?  Public Sector  Private Sector  Self Employed  Unemployed  Pensions, EPF’s, ETF’s  Govt. welfare systems  Cooperatives and self helped groups  Conventional insurers offering MI products  MI providers, MFI’s  Savings , family support
  7. 7. Section 12 of the Insurance Law in Sri Lanka  No person shall carry on insurance business in Sri Lanka unless such person is for the time being registered to carry on such business.
  8. 8. Challenges to develop an inclusive insurance market Inclusive Insurance Market Downscale ? Up scale ? Insurer partner model ?
  9. 9.  Downscaling: Commercial Insurers serving the Low-income Market  Up scaling: Formalising informal insurance schemes
  10. 10. Downscaling - issues 1) Is it the responsibility of insurance supervisors to promote MI? 2) Should functional regulation be considered? 3) Can the corporate culture in commercial insurers be conducive to serving the poor? 4) Will Policyholders be protected?
  11. 11. Up scaling – issues 1) Can a tiered approach to MI regulations work? 2) What aspects of insurance regulations would need to be adjusted to formalise informal schemes? 3) Can a market orientation develop in an institution that has had a social orientation? 4) Can MI organisations truly play by the rules of the game? 5) Do they have the staff and systems capacity?
  12. 12. Scope of MI Regulation  Prudential Regulation  Market Conduct Regulation  Product Regulation  Institutional and corporate governance regulation
  13. 13. Challenges in Regulation and Supervision of MI  Creating an appropriate regulatory framework is a complex task - despite increasing experience with MI, there are still a host of unanswered questions about appropriate steps for overcoming regulatory barriers and achieving greater inclusiveness  Who should supervise?  Direct, Self or Delegated  What degree of supervision?
  14. 14. What have previous studies shown ?  Large insures are very active in the market – even at village level  Awareness of insurance products and names of insurers high  Low usage of insurance amongst low income households is not due to lack of access to insurers and therefore, marketing new MI products can be even more difficult
  15. 15. What have previous studies shown ?  There is a need and demand for MI  A substantial segment of low income households is uneducated and skeptical about insurance  A fixed mind-set about insurance and insurers  To penetrate – a balanced combination of the right product and the right strategic marketing
  16. 16. What have previous studies shown ?  Products offered are not suitable  Premiums not affordable  Delivery mechanism and premium collection mechanism are not pro-poor  A low cost and easy to understand MI products should be developed  Mind-set should be changed by series of re-orientation programmes and marketing campaigns
  17. 17. What have previous studies shown ?  Demand for life, health and funeral insurance but not property  A low cost delivery mechanism needs to be identified  Tradition of bringing financial services to the rural people through diverse setting of government, private and grass root level initiatives
  18. 18. What have previous studies shown ?  An ideal combination would be an insurer-agent partnership between commercial insurers and grass root level financial intermediaries
  19. 19. What steps next ?  Assessment of Sri Lanka’s MI market, i.e. what is in place in the entire island; MI products issued by registered insurers and unregistered providers, including identifying insurance needs of low income groups  Identify best practices, methods and guidelines in MI in emerging markets and recommend the best suited model for Sri Lanka.
  20. 20.  Thank you.

×