Sri Lanka has selected Renaissance Reinsurance as the lead reinsurer of the national natural disaster and emergency relief insurance scheme for the fiscal year 2017-18.
This cover was introduced last year 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 LKR15 billion (US$98.2 million), and to prevent any abnormal losses, it has been reinsured with global reinsurance firms. The policy is backed by other reinsurers including Lloyd's of London, reported Lanka Business Online.
The decision to select Renaissance Re 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 LKR500 million 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 cyclone, storm, tempest, flood, land slide, hurricane, earthquake, tsunami and any other similar natural peril, excluding drought.
Any business with an annual turnover which does not exceed LKR10 million is covered up to LKR2.5 million each in respect of damages per event.
Under this scheme, compensation for death other than for fishermen is LKR100,000, and for property damage (house and SME) the amount is up to LKR2.5 million.
In the last few years, Sri Lanka has faced several natural disasters, and as a result, the loss of human life and damages to property have been significant.
To overcome such issues, the natural disaster insurance scheme was implemented through National Insurance Trust Fund in April 2016.