Sri Lanka has selected Renaissance Reinsurance Singapore as the lead reinsurer of the national natural disaster and emergency relief insurance scheme for the year 2017/18.
This cover was introduced in 2016 for natural disasters covering the whole country, and payments of claims have been expanded to include a range of accidents due to natural disasters. The policy will be renewed with a cover of 15 billion rupees, and to prevent any abnormal losses to this policy, it has been reinsured under global reinsurance firms. The policy is backed by other reinsurers including Lloyds of London. The decision was made after it was recommended by the technical evaluation committee and cabinet appointed procurement committee. ‘A’ rated reinsurers have been selected based on financial ratings provided by S&P, Moody’s and A.M. Best.
Minister of National Policies and Economic Affairs, Prime Minister Ranil Wickremesinghe, said that 500 million rupees has also been allocated for further improvement of this scheme. The scheme covers lives and properties, specifically all households and small business establishments and damage caused to their property and contents due to cyclones, storm, tempest, flood, land slide, hurricane, earthquake, tsunami and any other similar natural peril, excluding drought.
Any business for which annual turnover does not exceed 10 million rupees is covered up to 2.5 million rupees each in respect of damages per event. Under this scheme, compensation for death other than for fishermen is 100,000 rupees, property damage (House and SME) maximum is 2.5 million rupees.
Within the last few years Sri Lanka has faced natural disasters and as a result loss of human life and damages to property has been significant. To overcome such situations, the natural disaster insurance scheme was implemented through National Insurance Trust Fund in April 2016. The 2016 reinsurance premium paid was 336 million rupees and National Insurance Trust Fund is expected to recover 2.7 billion rupees from the overseas reinsurers. The first quarterly installment of the annual net premium of 816 million rupees is now due and cabinet approval has been granted to pay it in four installments.