IPO put on hold; Public Enterprises Ministry to decide fate of SLIC
View(s):State-owned Sri Lanka Insurance (SLIC) has been exempted from going public by the insurance regulator since it’s under the Ministry of Public Enterprises and Development which handles the restructuring of state assets, officials said. ”SLIC’s Initial Public Offering (IPO) – which was due to be concluded by next year after splitting its life and general businesses under rules governing insurance companies – has been put on hold since it comes under a new ministry which will decide on the future course of action,” an official told the Business Times. Insurance Board of Sri Lanka (IBSL) regulations required insurers to split their life and nonlife businesses by February 2015 but some firms including SLIC were granted time.
Now SLIC is being exempted by the IBSL because it’s a state agency, the ruling of which has become a contentious issue amongst the rest of the industry. SLIC’s growth for calendar year 2015 was at 18.65 per cent and the total revenue of the organisation grew to Rs. 31 billion in 2015 from Rs. 29 billion in the previous year, the company said. The Gross Written Premium (GWP) increased to Rs. 24.5 billion from Rs. 20.6 billion while Net Earned Premium increased to Rs. 20 billion from Rs. 17.8 billion the previous year. The GWP for Life insurance grew by 29 per cent to Rs. 10.5 billion from Rs. 8 billion in 2014, resulting in notable gains in market share, while the General Insurance GWP increased by 12 per cent to Rs. 14 billion from Rs. 12.5 billion.
As a percentage of the total market share, SLIC’s GWP for Life and Non-life stood at 23 and 21 per cent respectively, a company statement said. “It’s Profit Before Tax grow to Rs. 4.8 billion last year from Rs. 4.3 billion over the previous year while Profit After Tax grew to Rs. 3.4 billion from Rs. 3.2 billion in 2014. The company reported one of the largest asset bases in the industry, at Rs. 167 billion which had grown steadily over the Rs. 162 billion asset base in 2014,” the statement said. The company said that only 12 per cent of the local population and 29 per cent of the employed population have obtained life policies. “The company strives to promote the concept of ‘Insurance for all’ by making insurance more reachable, flexible and affordable. Lack of awareness about insurance is believed to be the main cause of this phenomenon and SLIC hopes to utilise its extensive branch network (115 strong as at end December 2015) to take the message on the importance of insurance.”