Natural Disaster Insurance Coverage

Despite an increasing number of natural disasters in Sri Lanka in recent years, the country suffers from a limited uptake of natural disaster insurance coverage. This is especially the case for small and medium enterprises (SMEs), which are particularly vulnerable to the impacts of such disasters. While there are many factors that contribute to the limited use of natural disaster insurance in Sri Lanka, our policy note identifies the lack of accessible information especially in the vernacular to be one of the causes for the low uptake of natural disaster insurance among SMEs.

Our findings revealed that information on insurance is provided almost exclusively in English by private insurance companies as well as stated provided welfare schemes. Given that the areas affected by natural disasters outside Colombo have an English literacy rate below 30%, provisions of such information in the vernacular can significantly help SMEs tap into the benefits of natural disaster insurance.


Click to enlarge