Sri Lanka commits 2% insurance penetration rate by 2035

Sri Lanka and other industry bodies introduced the “Vision 2035” roadmap.

Sri Lanka’s insurance regulator and industry stakeholders have launched a national roadmap to expand insurance coverage after Cyclone Ditwah exposed a large protection gap across the country.

In a statement, the Insurance Regulatory Commission of Sri Lanka (IRCSL) said the storm in November 2025 caused an estimated $4.1b in economic losses, equivalent to nearly 4% of the country’s 2024 GDP. 

However, insurance claims totalled only about $190m (LKR58.5b), covering around 6% of total losses, whilst more than 94% remained uninsured. 

The regulator said this gap has forced the government to act as an “insurer of last resort”, diverting public funds from areas such as healthcare and education to cover disaster-related losses. 

In response, the IRCSL, together with industry bodies including the Insurance Association of Sri Lanka, Sri Lanka Insurance Brokers Association, Actuarial Association, and Sri Lanka Insurance Institute, has introduced the “Vision 2035” national insurance roadmap covering the period 2026 to 2035. 

The roadmap focuses on expanding coverage through product innovation, improving distribution using digital channels, and strengthening regulatory and tax frameworks. 

It also aims to build sector capacity by enhancing capital and investment flexibility, improving data systems and consumer protection, and developing talent and financial literacy. 

A key target is to increase insurance penetration from about 1% of GDP to over 2% by 2035. 

The plan also aims to grow the industry’s premium pool to $3.2b (LKR1t) and expand employment, with the current workforce of more than 20,000 employees and 49,000 agents expected to increase by 25%.