The insurance industry has the potential to be a key driver in Sri Lanka’s economic recovery and stability, reducing the country’s dependence on taxation for national development, according to Kunj Behari Maheshwari, Head of Life Insurance for India & Sri Lanka at Willis Towers Watson (WTW). Speaking at the 4th South Asian Actuarial Conference in Colombo, Maheshwari urged actuaries to play a central role in building a more resilient economy.
Maheshwari emphasized the often-overlooked importance of the insurance sector in national financial systems. He highlighted that the industry’s ability to gather small savings from a large number of individuals—through premiums rather than taxes—creates a pool of long-term, illiquid capital. This capital, he argued, can be strategically invested in key areas such as infrastructure and government projects, fueling economic growth.
“Insurance companies play an alternative role in economic development, not through taxes but through the collection of premiums,” Maheshwari explained. “These premiums can fund infrastructure projects and large corporate initiatives that drive economic growth.”
He stressed that the insurance sector’s role in building a resilient financial ecosystem is vital for economic stability. By creating a virtuous cycle, insurance not only contributes to national development but also provides direct benefits to policyholders through the returns on their investments. “This function creates economic stability, and it’s essential for Sri Lanka’s future,” Maheshwari added.
Deputy Minister of Finance and Planning, Harshana Suriyapperuma, echoed Maheshwari’s sentiments, noting that increasing accessibility to insurance could significantly boost the country’s GDP.
Maheshwari also underscored the insurance sector’s stabilizing influence during periods of economic volatility, such as those Sri Lanka has experienced in recent years. Due to their long-term investment horizon, insurance companies can absorb economic shocks, providing a counterbalance to market instability.
He challenged the actuaries present at the conference—whom he humorously described as transitioning from “superheroes” to “master blenders”—to focus on building reserves and advocating for capital regulations that ensure insurance companies can weather economic crises. “By maintaining prudent reserves, we build a more resilient Sri Lanka,” Maheshwari said. “We won’t need to rely on external loans during the next crisis—we’ll have the strength to support our own economy.”
Through these efforts, Maheshwari emphasized, Sri Lanka can develop an insurance sector that not only stabilizes the economy but also ensures long-term sustainable growth.
