ECONOMYNEXT - Sri Lanka's National Insurance Trust Fund (NITF) said it had re-insured its agricultural insurance internationally with Hannover Re taking 50 percent and Swiss Re taking 40 percent.
Three other global re-insures have taken up the balance 10 percent.
"This reinsurance programme will provide support to agricultural insurance schemes funded by NITF including the recently launched National Agricultural Loan Protection Scheme," NITF said in a statement. "The cover has been arranged on a stop loss basis, which is typically the method adopted to obtain reinsurance for agricultural insurance."
NITF is rated AA – (lka) by Fitch Rating and is the fourth-largest contributor to government treasury among state-owned enterprises.
NITF Chairman Manjula de Silva commented, “NITF said Hannover Re and Swiss Re had joined its network of reinsurers that already included Munich Re and Allianz SE."
"Having the backing of strong reinsurers will supplement the financial strength and stability of NITF to withstand external shocks we have to deal with due to volatile climatic conditions," NITF CEO Sanath de Silva said.
Expanding agricultural insurance has been a long-felt need in Sri Lanka, analysts say, but a combination of farmer ignorance and lack of data was holding back wider usage.