The existing listed Janashakthi Insurance will be a holding company with general insurance to spun-off as a subsidiary. It will also be later listed in the stock market through a sell-down.
Sri Lanka's insurance regulation will move into a risk based capital regime from the current solvency based rules by 2016. Janashakthi had already voluntarily participated in a 'road test' by the Insurance Board of Sri Lanka.
"We are more than confident that we will be able to meet the required standards when the RBC regime is implemented 2016," Schaffter told reporters in Colombo.
Sri Lanka's composite insurers are required to split their businesses and list under a regulatory direction.
Janashakthi itself started as 20 years ago with separate life and general unit and grew rapidly, also acquiring a smaller state insurer that was privatized to become a composite unit.
In 2013 the firm posted gross written premiums of 8.7 billion rupees, up from 7.9 billion rupees a year earlier, amid weak economic environment paid 4.4 billion rupees in claims to customers.
Schaffter said the firm was able to grow revenues in 2013 by focusing its sales and distribution network."Market conditions are tough. It has got more competitive," he said. "Especially on the general insurance side it is very much price driven.
So our desire to grow market share is tempered by the profitability of the business that we underwrite. And that is the tight-rope that we walk."
The firm posted a billion rupees in profits in 2013, partly helped by 1.5 billion rupees of investment income and 594 million rupees of realized gains.
Deputy Chairman C T A Schaffter said the company was launched in September 1994 with a staff of 40 about 7 or 8 years after others firms had started.
Economic analysts say Sri Lanka's elected rulers expropriated insurance companies from the people soon after gaining self-determination from the British and kept it as a monopoly run by them for decades.
The freedom to start insurance firms was given back to people as part of a broader restoration of economic liberties in the 1980s.
Meanwhile Schaffter said Janashakthi's general business was started for 'entirely the wrong reason' of several other general insurers starting up and a delay would leave them.
In September 1995, Janashakthi General Insurance was started despite attempts by competitors to prevent a license being awarded he said. In 2000 it became a composite insurer.