Despite an increasing number of natural disasters in recent years, Sri Lanka suffers from a limited uptake of natural disaster insurance coverage. Sri Lanka’s small and medium enterprises (SMEs) are especially vulnerable to the impact 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 primary causes.
Our findings revealed that information on natural disaster insurance is provided almost exclusively in English by private insurance companies as well as state 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.