The insurance penetration in the North and the East will only pick up in time and not immediately, according to insurance industry experts. “It will take time. One should not expect a steep increase at once,” Manjula de Silva, CEO HNB Assurance told the Business Times. He said that in terms of life insurance, the people in these areas have other investment options open to them at present such as property, gold, stocks etc with which life insurance has to compete. “But earlier the only choices available were banks and insurance companies in these areas,” he said.
He noted that for general insurance, the stock of assets must grow. “More buildings should get constructed. More hotels and factories needs setting up and also more vehicles bought. When all these happen, general insurance business will pick up,” he said, adding that insurance penetration will increase in the North and the East, but not as rapidly as many people expect.
Dirk Pereira, CEO Union Assurance PLC noted that the penetration numbers are difficult to estimate. “But on the basis that most insurance companies are increasing distribution presence in the North and East we should expect to see these regions contributing to a growing share of turnover and profits,” he added.
Prakash Schaffter, Managing Director Janashakthi Insurance PLC said there is only 1% to 2% insurable public in those areas but the potential is there in time to come.