IFC, a member of the World Bank Group, is working with micro-insurance company SANASA Insurance to develop flexible, affordable, weather-based agricultural insurance products in Sri Lanka to minimize the impact of crop losses due to floods or droughts, the agency said this week.
It said IFC is helping SANASA Insurance expand access to insurance for up to 15,000 small farmers by offering protection against weather-related risks and natural disasters for their food crops. The project will also raise awareness among 50,000 farmers on the availability and benefits of these index-based insurance products.
“IFC is an invaluable partner in our commitment to empower the Sri Lankan farmer through flexible and affordable insurance to help mitigate weather-related risks,” Dr P. A. Kiriwandeniya, founder of the SANASA movement, was quoted as saying in the IFC media release.
Index-based insurance products pay out benefits calculated using a pre-assigned value for losses arising from weather or catastrophic events. Such products eliminate the need for insurance companies to individually verify claims, reducing transaction costs and making it easier and faster for products and payouts to be offered to rural communities.
“These insurance products, designed in collaboration with SANASA, will improve the livelihoods of small farmers in Sri Lanka by reducing the impact of adverse weather conditions,” noted Adam Sack, IFC Country Manager for Sri Lanka and Maldives.
IFC established its Global Index Insurance Facility in 2009 to assist the development of index-based insurance for natural disasters and weather risks in developing countries, particularly in agricultural communities where insurance is rarely available. The GIIF Global Trust Fund is also supported by Japan’s Ministry of Finance, with an initial grant of $2 million, and by the Dutch Ministry of Foreign Affairs, which provided $500,000 to establish the facility. |
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