NITF evaluates bids to link up with a foreign re-insurer
View(s):Sri Lanka’s sole re-insurance agency, the National Insurance Trust Fund (NITF) will soon be linking up with a foreign re-insurer to get appropriate re-insurance protection in the event of a major natural disaster.“The NITF has called for expressions of interest from world renowned re-insurers and the response for it was highly positive”, Manjula de Silva, Chairman of the state agency told the Business Times.
“At least 20 re-insurance companies have sent their bids and we are in the process of selecting one of them,” he said.
Interlink Insurance & Reinsurance Brokers, Worldwide Insurance Brokering Ltd, Guy Carpenter, UIB Asia Reinsurance Brokers, J.B. Boda and Co(s) Pte Ltd, Life and General Insurance & Reinsurance Brokers Pvt. Ltd and JLT are among the 20 re-insurers who have already submitted their expressions of interest, he disclosed.
Mr. de Silva added that linking up with a key international re-insurer will help deal with concerns of the industry that it does not have any retrocession cover (reinsured by a foreign party), at a time of a major natural catastrophe.The retrocession cover of a foreign insurer would minimise the financial burden on the government in the event of a major natural disaster like tsunami or earthquake when settling all claims of local insurance companies and policy holders, he pointed out.
The NITF will have to provide re-insurance facility of 30 per cent without delay to settle claims and it is going to seek the balance 70 per cent after linking up with a foreign re-insurer. Sri Lanka’s 22 insurance companies are now required to pay 30 per cent of the premium, up 10 per cent from 20 per cent earlier, of its re-insurance arrangements to NITF which itself is not reinsured, industry sources said.
Linking up with a foreign re- insurance firm will be a major initiative of the NITF’s transformation process aimed at improving facilities for over 750,000 public sector employees and their dependents protecting from the problems they face such as health, private, accident, death, and unexpected property disaster, Mr de Silva opined.