The landscape of microinsurance in Sri Lanka 2016

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This report provides an analysis of the microinsurance sector in Sri Lanka with related data to the years 2013 till 2015.



Microinsurance in Sri Lanka initially started as a service to support the microfinance sector, focusing on providing loan protection, insurance and life savings. The insurance business extended their services to provide welfare and health products to low-income people. With almost 24% of the population living on less than USD 2 a day (World Bank Statistics, 2015), it was found that health is the largest risk faced by poor households, followed by property risk, which came as a consequence of the tsunami that hit the country in 2004.

Microinsurance policies issued (1.46 million) reached 6.9% of the total population in 2015. There are also a number of social security services in the country, including those provided by the government and the informal sector. The majority of these are however fragmented and provide inadequate benefits. The increase in microinsurance policies in 2015 can be attributed to personal accident cover, where life and personal accident both accounted for almost 98% of the microinsurance covers. The reported negligible proportion of health covers is primarily because it is provided as a secondary, add-on cover to other products.
 
There are no special regulatory provisions in Sri Lanka for microinsurance and a number of informal microinsurance schemes operate outside the insurance law. Furthermore, the Regulation of the Industry Act does not include any provision on the regulation and supervision of mutual insurance companies. A few NGOs provide microinsurance services to poor households at affordable prices but operate outside the insurance law.
 
Date of publication:   2016
Language:   English

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