Renaissance Reinsurance Singapore, a division of the Bermudian reinsurance firm RenaissanceRe (RenRe), is the lead reinsurer on a 15 billion rupee (around $100m) renewal of the Sri Lanka governments natural disaster program.
The program, which covers the entire country of Sri Lanka for natural disaster losses, is now entering in its second year. RenRe lead the renewal, alongside other global reinsurers including Lloyd’s of London syndicates, a report from LBO states.
The program sees an expanded range of perils covered, with the reinsurance provided by the global players backing the insurance policies sold under the Sri Lankan government’s national natural disaster and emergency relief scheme.
According to the reports, the decision to reinsure the natural disaster facility was taken after a technical review recommended it to ensure the facility could payout in the event of major disaster events, with only ‘A’ rated or better reinsurers participating.
According to Economy Next, RenRe submitted the lead terms under a bid from Strategic Insurance Brokers (Pvt) Ltd. alongside Crescent Global South Asia (Pvt) Ltd., with the annual premium cost said to be Rs816,750,000 (around $5.3 million).
Recent flooding in Sri Lanka provides an example of the level of impact severe weather and natural catastrophes can have in the country, making insurance and reinsurance coverage an important factor in its ability to recover from such events.
The underlying insurance scheme covers property and life risks across homeowners and small business operations, covering losses caused by tropical cyclones, storms, flooding, landslides, earthquakes, tsunamis and other similar natural perils, but excluding droughts.
Businesses are covered if their turnover is below a pre-defined threshold, while households are automatically included, with limits applied to possible payouts.
Global reinsurance markets again prove their worth as a provider of disaster risk capital, enabling a government to better protect its citizens against natural perils.