Micro insurance could wipe out poverty in Sri Lanka
Sri Lanka is looking at opportunities to increase its chances of giving micro insurance a push to ensure that more people living in poverty would be protected and that they do not slip back to it in the event of a disaster.
This was brought to the fore this year at the meeting of international insurance companies from around the world as Colombo hosted the 12th International Microinsurance Conference 2016 together with Munich Re Foundation and Micro Insurance Network and Insurance Association of Sri Lanka this week.
The conference held in Colombo had over 400 participants from 50 countries which is considered an increase of 25 per cent compared to last year, Organising Committee Chairman Dr. Jagath Alwis said.
Munich Re Foundation Vice Chairman Dirk Reinhard said at a pre-event news conference that the conference was aimed at looking at aspects like micro credit and micro loans that help people out of poverty but specifically focus is on how the micro insurance could help people from falling back into poverty after disaster strikes.
Currently there are about 40 million people that have insurance penetration through their mobile operators, he stated adding that today technology is driving the market.
Mobile payments and insurance is getting increasingly linked up and with the growth of the mobile technology insurance is looking at growing with it, Mr.Reinhard noted.
Insurance Association of Sri Lanka President Dirk Perera told media that the insurance regulator was keenly looking at establishing a micro insurance industry due to the importance of the growing sector.
In this regard, however, more regulations need to be worked out for the micro finance and micro insurance sectors, he explained.
Risk management is being addressed in budget 2017, Mr. Perera said, adding that there is capacity to grow in this industry.
Sri Lanka currently has 21 insurance companies with 58 insurance brokers and over 45, 000 agents and the micro insurance cover in the country has seen a steep growth over the years, Micro Insurance Network Interim Executive Director Henk Van Oosterhout said.
There are two mobile operators involved in micro insurance in the country but statistics on these are currently unavailable.
In the meantime it was noted that according to a study carried out by the Micro Insurance Network there are eight mobile operators involved in micro insurance in the Asian region.
Mr. Van Oosterhout explained that Public Private Partnership (PPP) should be the avenue for growth in this industry.
Micro insurance aims at closing the gaps on retirement protection cover in addition to help protect people from slipping to poverty.
A World Bank study has found that almost 24 per cent of the population is living on less than US$2 per day due to the tsunami that hit the country in 2004.
Micro insurance growth figures in Sri Lanka indicate a sharp rise from 0.35 million in 2013 to 1.4 million in 2015 excluding informal overage.
High administrative costs and high cost of premiums have made micro insurance less attractive to low income households and less focus is carried out by institutions to promote this industry.