Saturday Nov 16, 2024
Saturday Nov 16, 2024
Thursday, 21 July 2016 00:00 - - {{hitsCtrl.values.hits}}
NITF Chairman Manjula Silva and CEO Sanath De Silva with representatives of Munich Re, Colombo Re and Afro Asian during the flood claims assessment meetings
Last week the National Insurance Trust Fund received an advance of Rs. 750 million from international reinsurers as an advance for the flood claims. The advance was paid based on an estimate provided by NITF as the insurance industry is yet to finalise the total cost.
During May 2016 Sri Lanka was hit by a severe tropical storm that caused worst ever rainfall in 50 years resulting in widespread flooding and landslides in 22 districts of the country destroying homes and submerging entire villages.
Hundreds of people died or went missing and more than quarter million people were displaced during this natural disaster. Many of the affected population, particularly in the rural areas, were already amongst the most vulnerable in the country and lost everything, including their homes, possessions, agricultural land and means of making a living. The damage to the businesses was in billions.
A silver line in the disaster was the preparedness of the insurance industry to face the challenge. The insurance industry which had to pay nearly Rs. 15 billion claims was backed by the National Insurance Trust, which was well prepared to face such a national disaster with adequate reinsurance programs in place. NITF the state owned local reinsurer which covers 30% of industry reinsurance requirements has estimated its share of loss to be around Rs. 4.25 billion.
NITF had prudently purchased its retrocession protection in January 2016 after a gap of five years, considering its increase in exposure and accumulation of risk over the past few years.
Responding to the requirement immediately, the lead reinsurer Munich Re visited NITF in June 2016 along with the local reinsurance broker Colombo Re and the Lloyds reinsurance broker Afro –Asian to assess the damage and have already advanced an on account payment of Rs. 750 million to NITF.
The reinsurance program of NITF is led by global giant Munich Re and other prominent reinsurers include Cathedral, SCOR, Amlin, Trust & Emisco. The international brokers for the program are Locton plc of London Lloyds and Afro Asian another Lloyds broker.
The local representative of the retrocession program is Colombo Re insurance Brokers. The timely payment of insured losses during such a big calamity demonstrates NITF’s commitment to the market and their vision of being a reliable partner in times of need.
