Continental Insurance’s health segment better than peers despite pressures

The segment contributed 32% of total GWP last year.

Sri Lanka-based Continental Insurance Lanka (CILL) has seen notable growth in its business profile, with a diversified mix that extends beyond motor insurance into other non-motor lines, according to Fitch Ratings. 

The company's gross premium growth outpaced the industry between 2022 and 2023, driving its market share up to 9% in the first half of 2024, from 5% in 2020. 

Its entry into life insurance through its subsidiary, Continental Insurance Life Lanka Limited, further enhances its market franchise and earnings diversification.

CILL has reduced its reliance on the motor insurance sector, which has faced slow growth due to import restrictions. In 2023, 68% of its gross written premiums (GWP) came from the non-motor sector, up from 40% in 2020. 

The health insurance segment contributed significantly to this growth, making up 32% of total GWP by the end of 2023.

Despite pressures on underwriting, particularly in the health segment, CILL's performance continues to be better than most of its peers. From 2021 to 2023, its average combined ratio was 94%. 

The combined ratio for the first half of 2024 was 98%, in line with its 2023 figure of 97%, reflecting disciplined cost management and claims handling.

CILL maintained a robust risk-based capital (RBC) ratio of 275% at the end of the first half of 2024, well above the regulatory minimum of 120%. 

The company consistently maintained an RBC ratio above 250% from 2019 through 2023, underscoring its strong capital position.