Motor insurance premium to be made ‘cash before cover’
While Sri Lanka’s life and general insurance premiums in 2025 stood at Rs. 380 billion across 29 insurers, the industry has an ambitious growth target to reach more than Rs. 700 billion by 2030, according to Insurance Regulatory Commission of Sri Lanka (IRCSL), Director General, Damayanthi Fernando.
“In the last 25 years since IRCSL was established in March 2001, today its asset value stands at Rs. 1.4 trillion and has supported more than 69,000 jobs including agents and sales advisors. Rs. 172 billion has been paid off as annual claims across life and general insurance while premiums in 2025 stood at Rs. 380 billion in life and general insurance across 29 insurers. The industry has an ambitious growth target to reach more than Rs. 700 billion by 2030 (14 per cent compound annual growth rate target),” said Ms. Fernando during the ‘Unveiling of Insurance Industry Development Roadmap’ held at the Kingsbury Hotel in Colombo on Tuesday.
She elaborated, “The roadmap is ambitious but time-bound – specific planning steps are to be produced within months and execution will follow. The approach balances market growth of premiums and coverages with system stability on capital, solvency, data and governance. The roadmap’s central theme being ‘inclusion’ it aims to make insurance accessible across income levels and employment types. Measurable targets such as premium growth and penetration and disciplined execution are emphasised as necessary to convert vision into results.”
Sri Lanka’s insurance penetration is just above one per cent of GDP while India stands at 3.7 per cent, Thailand – 5 per cent and Malaysia – 4.8 per cent which indicates a large protection gap and opportunity. Historic catastrophes such as the Tsunami in 2004, floods in 2017 and Cyclone Ditwa in 2025 show only 5-6 per cent of total losses were insured, noted Mrs. Fernando.
Insurance Association of Sri Lanka, President, Lasitha Wimalarathne said the roadmap is organised around seven pillars themed around digitalisation, discipline in credit and collections, data integration with Credit Information Bureau, increased public awareness and expanded role supporting government safety nets.
Revised credit terms will be implemented for motor insurance – reduce credit period from 90 days to 30 days starting 1 May 2026, with a plan to move toward zero credit (cash before cover) gradually, added Mr. Wimalarathne.
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