Affordable Insurance Package(s) for Micro, Small and Medium-sized Enterprises in Sri Lanka Covering Flood Disaster Damages

Flooding is currently the largest contributor to Sri Lanka’s average annual losses from disasters, amounting to approximately USD 200 million per year. However, Micro Small and Medium Enterprises (MSMEs) in Sri Lanka are not well covered by risk transfer measures such as insurance. While there are some existing insurance products related to flooding, they are neither specific to MSMEs (especially micro enterprises), nor do they specifically focus on damage by floods – which leads to a relatively high premium (as the insurance products usually cover more than floods risk, it often has a higher premium than an insurance cover for a single peril). To provide a more detailed market investigation on the demand for new insurance products and the willingness to pay premiums, this feasibility study analyses the need for such an intervention.