As Sri Lanka navigates economic recovery and digital transformation, the insurance industry faces a critical moment of reinvention. While traditional life, motor, and health policies remain essential, evolving consumer behaviors, climate realities, and new work models are demanding smarter, more relevant insurance solutions.
The need for insurance innovation has never been greater, and brokers are uniquely positioned to drive this change.
Why Sri Lanka Needs More Innovative Insurance Products
Sri Lanka’s insurance penetration remains under 2% of GDP—a figure that underscores not only awareness issues but also product-market misalignment. The current range of offerings doesn’t fully address the needs of gig workers, SMEs, digital nomads, or climate-vulnerable communities.
Here are the types of products that could fill these gaps:
1. Gig Economy Protection Plans
With the rise of freelance professionals, delivery partners, and online service providers, there’s a growing need for:
- Income protection insurance
- Micro health policies with flexible premiums
- Accident cover for riders and drivers
Why it matters: Freelancers often fall outside formal employer-based insurance schemes. Customised, low-cost products can protect this growing workforce.
2. Climate Risk Insurance / Parametric Products
Sri Lanka is increasingly vulnerable to floods, droughts, and landslides. Traditional indemnity models are slow to pay out and often inaccessible to rural communities.
- Parametric insurance, which pays out based on a predefined trigger (such as rainfall data), offers speed, transparency, and scalability.
Use case: Crop insurance for farmers, disaster coverage for small coastal businesses.
3. Cyber Insurance for SMEs
With digital adoption on the rise, cyberattacks are no longer a big-business problem.
- Cyber liability products can offer coverage for data breaches, ransomware attacks, and legal exposure for SMEs and startups.
Gap: Many existing cyber policies are too complex or expensive for local small businesses.
4. Wellness-Linked Health Insurance
Consumers today want more than just hospital coverage—they want preventive care, fitness incentives, mental health coverage, and access to telemedicine.
- Insurers can link premiums to health data from wearables.
- Brokers can collaborate with insurers to introduce modular, lifestyle-oriented insurance products.
5. Subscription-Based Insurance
Traditional annual premiums can be a financial burden, especially in uncertain times.
- Subscription or “on-demand” insurance (such as per-day travel, gadget, or vehicle usage coverage) introduces flexibility and affordability.
Opportunity: Ideal for low-commitment customers and younger demographics accustomed to services like Netflix and Uber.
The Broker’s Role in Driving Product Innovation
While insurers design products, brokers are the voice of the market. Here’s how they can influence innovation:
🔹 Client Feedback as Product Data
Brokers should actively capture pain points, unmet needs, and objections in the sales process and pass that intelligence back to insurers.
🔹 Push for Customisation
Brokers who understand niche customer segments—like tech startups, agribusiness, or the tourism industry—can collaborate with insurers to create tailored group schemes or niche riders.
🔹 Educate and Advocate
Launching innovative products is only half the battle. Brokers must run education campaigns to build trust and explain the value of these new covers, especially in underserved regions.
🔹 Partner with Insurtechs
Collaborating with insurtech firms can help brokers access tools such as AI-driven underwriting, usage-based pricing, or chatbot support, thereby enhancing service and scaling more innovative offerings.
Overcoming the Challenges
The road to innovation isn’t without obstacles. Regulatory compliance, risk pricing, lack of data, and low awareness can hinder product evolution. But that’s precisely where brokers can lead:
- By working with regulators to pilot sandbox-tested solutions
- By educating customers on value, not just price
- And by proving that there is demand for solutions beyond the conventional
Final Thoughts
Sri Lanka doesn’t need more of the same—it needs smarter, simpler, and more relevant insurance. Brokers are not just intermediaries; they are architects of a better, more inclusive insurance future.
It’s time to move from passive selling to active shaping. Let’s champion innovation, serve emerging needs, and ensure the insurance industry evolves with the people it’s meant to protect.
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