"There is much potential for growth. With all our resources and our 45-years of experience in business we think the next area to move into is insurance.

"EAP brand is a household name. The infrastructure is there, and we need a new product and vehicle to go to the market."

EAP is a diversified group with interests in financial services, gold trading, media, entertainment and leisure.

Risk Management Services LLC is a 32-year old insurance broker in Oman, jointly owned by Royal Oman Police Pensions Trust and Al Marjan Financial Services.

EAP Holdings and RMS signed a memorandum of understanding Tuesday to form a joint venture with the Omani partner holding a 49 percent stake.

"There is low penetration, but we hope to bring our expertise and knowledge and improve the penetration of insurance, it will benefit the consumer and insurance companies."

A 30-year war ended in 2009 and Sri Lanka's economy grew 8.3 percent last year. This year the economy is expected to grow at 7.2 percent.

Murthi said the firm conducted business worth 70 million dollars a year making it the largest insurance broker in Oman.

The joint venture firm expects to be running in two months after regulatory clearances are obtained.

RMS is already present in Pakistan through a subsidiary formed four years ago and it has also signed up a partner in India, which is expected to begin operations later this year.

Sri Lanka's insurance regulator said this week that it will stop entertaining applications for new insurance brokers from April 27 following a flood of new firms.