Hannover Re and Swiss Re have taken a 90% share in Sri Lanka’s state-owned National Insurance Trust Fund (NITF) agricultural insurance scheme; accepting a respective 50% and 40% of the placement, which was made through reinsurance broker J.B. Boda & Co.
Three other global reinsurers, which includes Munich Re, share the remaining 10% balance.
The reinsurance programme has been set up to give support to agricultural insurance schemes funded by NITF including the recently launched National Agricultural Loan Protection Scheme.
The programme will run on a stop-loss basis, providing cover for extreme agriculture losses when a certain threshold has been exceeded, explains the NITF.
NITF Chairman, Manjula de Silva, said; “NITF is delighted to welcome Hannover Re and Swiss Re to its network of reinsurers which already includes the likes of Munich Re and Allianz SE.”
NITF Chief Executive Officer (CEO), Sanath de Silva added: “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 is rated AA-(lka) by global rating agency Fitch Rating and is the fourth largest contributor to the Government Treasury among State-Owned Enterprises.
According to reports, Sri Lanka currently produces around 2.7 million tonnes of rough rice annually, providing for around 95% of its domestic requirement.
With the global demand for rice increasing, the tradable volume of Sri Lankan produced rice is expected to have doubled in 20 years time, and the Sri Lankan government’s agricultural insurance scheme aims to further protect this growing resource as threats of more extreme weather from climate change loom on the horizon.