Improving the life insurer performance measure
A key regulatory development determining the next phase of the industry is IFRS 17, which will critically change how life insurers measure performance.
Historically, many Sri Lankans have viewed insurance mainly as a short‑term expense or a discretionary purchase, but rising healthcare costs and longer life expectancy stress the need for long‑term financial protection, especially for health‑related risks. “In the light of IFRS 17, well‑designed protection products will matter more than low premiums alone and selecting insurers with strong claims management and long‑term stability will be critical,” Iftikar Ahamed Managing Director Softlogic Life Insurance PLC told the Sunday Times Business.
Under IFRS 17, greater emphasis is placed on sustainable margins, risk selection, and long‑term profitability, rather than top-line premium growth alone, he added, noting that this shift is expected to highlight insurers with strong protection‑led strategies, disciplined underwriting, and effective claims management.
Medical inflation and rising healthcare utilisation are structural realities, and as insurers operate under IFRS 17, pricing will increasingly show true risk and long‑term claims experience, rather than being subsidised by rapid premium growth. “This means fewer under‑priced products, greater differentiation based on age, health status, and lifestyle, stronger incentives for preventive care and responsible utilization. Consumers should therefore expect greater transparency but less cross‑subsidisation, and plan household finances, accordingly, recognising insurance as a necessity,” Mr. Ahamed said.
Noting that these structural forces strengthen the importance of strong linkages between insurance and healthcare delivery, he pointed out that with limited alternative investment opportunities of similar scale and strategic relevance in the Sri Lankan healthcare sector, well‑positioned insurers with long‑term commitment and scale will play an increasingly important role in buoying the healthcare ecosystem’s sustainability.
He said that Softlogic Life’s strategic focus on protection‑oriented products, particularly health insurance, positions the company strongly as the industry transitions to this new reporting and performance framework. The company’s scale, data depth, and experience in managing health risk provide a meaningful advantage as margins, rather than volumes, become the primary measure of success, he said.
Insurers with scale, data depth, and experience in managing health risk are better positioned in the coming environment. From a consumer perspective, this matters because health insurance is not just about paying claims, but about managing provider networks, controlling unnecessary cost escalation, and ensuring continuity of care. As healthcare becomes more complex and expensive, policyholders will increasingly benefit from insurers that understand healthcare utilisation patterns and can actively manage outcomes, rather than simply reimbursing expenses.
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