Member Country

Sri Lanka

General background

Microinsurance in Sri Lanka started as a service to support the microfinance sector, initially focusing on providing loan protection insurance and life savings. Eventually, these products were further developed, and a more comprehensive range of insurance services was offered extending to welfare and health products. Recently, commercial insurance companies started to operate microinsurance businesses.

Insurance in Sri Lanka

Ceylinco General Insurance is considered the favored general insurance provider in Sri Lanka, which shows in being awarded the 'People's Insurance Brand of The Year' of 2017 - for the 11 th consecutive time. This award is significantly associated with the company's reputation for settling all claims "On The Spot". This "On the Spot" claim-settlement is managed through internal processes where clients make claims through the company's 24/7 call center. After the call, the assessors and engineers based throughout the country promise to reach the location within 30 minutes to assess the claim. In case of small and medium-sized claims, the assessor offers a specific amount payable, and if agreed, this is credited to the electronic purse of the client. In 2016, Ceylinco General Insurance paid claims amounting to Rs 10.5 billion, which amounts to an increase of 59 % compared to the previous year. The company also recorded a premium income of Rs 16.1 billion, which amounts to a rise of 18.9 % compared to the 2015.

Country background

The island country of Sri Lanka, then known as Ceylon, gained independence from British rule in early 1948. Located just south of India, the country has a tropical climate and occupies an area of 66,000 square kilo meters. Though still classified as a developing country, Sri Lanka's 19 million inhabitants, have achieved a high literacy rate (92.5%) and educational level, above average longevity (77.9 years on average), and a low rate of population growth (0.73%). A quarter of Sri Lanka's 21.2 M million inhabitants lives on less than USO 2 a day (World Bank Statistics, 2015). Sri Lanka's Gini ratio, the coefficient that measures the inequality among income distribution, lies at 39.8 and the HDI at 0.780, ranking the country 71st. Although health expenditures are relatively low (only EUR 26 per person annually, or 3.5% of Gross Domestic Product (GDP), health indicators are among the best in South Asia and prove good when taking an international perspective.


One of the Ceylinco General Insurance's goals is to expand to selected international markets. As of now, the company has expanded to the Middle East, which includes the United Arab Emirates, Bahrain, Kuwait, Oman, and Qatar through strategic alliances and to Nepal and the Maldives through an associate company and a subsidiary, respectively. Insurance Market

Insurance Market

The insurance industry is regulated and supervised by the Insurance Board of Sri Lanka (IBSL) under the regulation of the Insurance Industry Act No. 43 of 2,000 (RII Act). There are no special regulatory provisions in Sri Lanka for microinsurance. However, informal microinsurance schemes are operating outside the insurance law. The RII Act does not include any provision on the regulation and supervision of mutual insurance companies. While several insurers registered under the RII Act are offering microinsurance products, these products do not include any survival benefits to policyholders. A few NGOs provide microinsurance services to poor households at affordable prices but operate outside the insurance law.

The market in Sri Lanka is almost entirely commercially driven, and claims ratios across product lines have an average of about 34%. The claims ratio was calculated as the value of claims paid/total premium in a particular period. Administrative costs in Sri Lanka across all product lines accounted for about 17.76% of the premiums on an average basis.

Microinsurance in Sri Lanka

In Sri Lanka, there are 30 licensed insurance companies in operation: 12 companies carrying long term insurance business, 15 companies in the general insurance business, and three composite insurers.

The products offered by microinsurance institutions are mainly limited to life, health, property, agriculture, personal benefit, and funeral benefit insurance, with coverage of a few other risks. They mostly cover death, funeral expenses, hospitalization, permanent disability, and crop loss, while coverage on surgery, medicines, education, income loss are negligible or none. The agriculture weather insurance that covers crop damage is credit-linked. Life insurance is the most preferred policy and is designed as an all-inclusive package, with a cover on health and other related risks. Only one insurance provider in the study has a separate product on health insurance.


From 1983 to 2009, an armed conflict between the Government of Sri Lanka (GOSL) and the Liberation Tigers of Tamil Eelam (L TTE) took place. In 2004, the country was significantly affected by the Indian Ocean earthquake, resulting in a deadly tsunami. These two (2) events became the most significant constraints to the country's economic development in the past years. The end of the 30-year civil war roused a new era of economic development, inspiring substantial opportunities for the insurance sector to grow.