1. Success Story Of Sanasa
in Micro Insurance.
SANASA INSURANCE COMPANY LIMITED
- SRI LANKA -
Presentation to the FAIR International Seminar, Bangladesh on
Agriculture and Micro insurance : Experience in Afro- Asian
Region
by
Dr. P.A. Kiriwandeniya

2. Introducing - Sanasa Insurance
Company Ltd (SICL)
 SICL is an insurance company established to serve members
of Sanasa societies and clients of Sanasa subsidiary companies
and also members of other CBOs such as Funeral Aid Societies
established to serve low income households.
 The term “Sanasa” is an acronym for a Thrift, Credit &
Cooperative Society. It also signifies the entire movement of
Sanasa societies along with the group of Sanasa subsidiary
companies.

3. Milestones of SICL
SICL is an insurance provider emerged from a long and outstanding
experience in microinsurance activities conducted by an organization
called “All Lanka Mutual Assurance Organization”(Almao) which was the
insurance arm of SANASA prior to its incorporation under Companies Act.
1989
1991
1993
1996
2002
2005
Formation of ALMAO with Society Leaders of Funeral Aid Societies.
Pioneer in introducing Life Cover with Maturity Benefits , Accident and Health Cover
Declared as a Specially Authorized Society in the
government gazette by the Ministry of Trade and Commerce
Amalgamation with Micro-Insurance Unit of Sanasa
Federation
Establishment of Sanasa Insurance
Company Ltd. (SICL) and ALMAO
becomes the major shareholder
SICL begins operations in
General Insurance as well.
Community Development survey by Forum of Development established by Dr. P.A. Kiriwandeniya.
Starting point of the formation of the SICL

4. Vision of SICL
To establish a new society based on Co-operative
principles.
Mission of SICL
To strengthen the society through adequate Risk
coverage and developing the community Through
comprehensive risk cover.

5. Objectives of SICL
01. To popularize insurance among the low income
householders.
02. To introduce simple and affordable insurance
products for benefit of the poor.
03. To design less expensive insurance schemes which
provide benefits promptly.
04. To increase learning and dissemination of best
practice for delivering micro insurance services to
the low income families.
05. To explore ways and means to strengthen capital
reserves so as to ensure solvency and sustainability.
SANASA Insurance Company Limited

6. Target Market of SICL
Customers of SICL are mostly from the BPO market
consisting of:
• Members and customers of Sanasa Primary societies &
non members.
• Members of Funeral Aid societies and other Community
Based Organizations.
• Customers of Sanasa Development Bank and other
Sanasa subsidiary organizations.
SANASA Insurance Company Limited

7. BOP Market in Sri Lanka
(As per survey conducted in 2006 under the sponsorship of ADB)
Non poor 20% over 9000
44% between 6001-9000
25% between 3001-6000
11% Less than 3000
Monthly income in Rupees
Not so poor
Poor
Extremely
poor
BOP
Market
SANASA Insurance Company Limited

8. Strategies adopted to serve customers at
different income levels of BoP Market
 Insurance for Funeral Expenses:
This insurance has been designed mainly for the “extremely poor” with
provisions to cover other income sectors as well.
It is an insurance product for the whole family of a society member for a
premium of Rs.360 (equivalent to about 3 US Dollars). Cover is provided
to all society members under a group policy issued to the society.
 Life Insurance:
SICL offers life insurance product of various types including Pension policy
to suit needs of low income groups with premiums affordable to them.
# Insurance for Life Credit: To enhance borrowing capacity of Sanasa
society members and account holders of MFIs & Development Banks. We
have developed this product to cover loans of high values and also to
ensure obtaining reinsurance support from “Hannover Re.”
Dr. Kiri’s Presentation -3- SANASA Insurance Company Limited

9. Strategies adopted to serve customers at different
income levels of BoP Market Contd…
 Non-life Insurance:
Under this portfolio SICL offers following insurances at
minimum premium rates, affordable to the low income
groups and MFIs:
- Personal Accident & Health Insurance: To provide benefits mainly to
directors, office staff members & society members.
- Property Insurance: Mainly to provide fire & other perils including cover
for natural disasters to Sanasa buildings and also to private properties of
Sanasa members.
- Motor Insurance: Exclusively to provide insurance cover at concessionary
rates for poor men’s vehicles such as Three Wheelers & Motorcycles.
- Agricultural Insurance: To provide all risk benefits of crop insurance as
required by banks for crops such as maize, onions, sugar canes, and
various other food crops so as to enhance borrowing capacity of farmers.
Dr. Kiri’s Presentation -4- SANASA Insurance Company Limited

10. Innovative Insurance Products
Introduced Recently by SICL
- Weather Index Based Crop Insurance For Paddy (Rice) Farmers.
- Weather Index Based Crop Insurance for Tea growers.
- Livestock Insurance For Low Income earners.
SANASA Insurance Company Limited

11. Weather Index Insurance (WII)
for Paddy(Rice) farmers
 WII came into operation for the first time in Sri Lanka by Sanasa Insurance
company in collaboration with following partners;
-International Labour Organization (ILO)
-Canadian International Development Agency (CIDA)
-Développement international Desjardins (DID)
-Basix (India)
-Financiere Agricole du Quebec – Developpement international (FADQDI)
 WII for Paddy commenced on experimental basis in 2010 and the number of
insurance policies increased from 570 in Yala season 2010 to 4815 policies in
Maha season 2012/2013.
 Modifications to the WII product for Paddy is in progress with the objective
of expanding further to reach a new target of 10,000 farmers.
Dr. Kiri’s Presentation -07- SANASA Insurance Company Limited

12. Weather Index Insurance (WII)
for Tea Growers
Commencement
 WII for Tea came into operation under the sponsorship of
International Finance Cooperation (IFC), the private sector arm of
the World Bank Group to advance economic development by
investing in strictly for profit and commercial projects which reduce
poverty and promote development.
Objectives
 To develop weather index –based insurance products that are
climate responsive and cater to diverse food crops in Sri Lanka.
 To promote institutional capacities of SANASA Insurance Company
Ltd (SICL) in order to make it possible to develop weather index-
based insurance products and do under-writing efficiently.
 Raise awareness amongst 50,000 Sri Lankan farmers on the
availability of the developed weather index-based insurance products
and their benefits.
Current Status
 Business of WII for Tea commenced in 2012 and is progressing well.
Dr. Kiri’s Presentation -08- SANASA Insurance Company Limited

13. Livestock Insurance for
low income farmers.
 Livestock Insurance is a protection mechanism available
to livestock farmers against any eventual losses due to
theft and burglary and also losses due to death and
permanent disability of cattle.
 In the field of Livestock Insurance too, Sanasa Insurance
Company is the first organization to introduce a micro chip
having Radio Frequency Identification Device (RFID)
technology to be implanted under the cattle’s ear so as to
trace and identify the insured animal and to pay claims in
the event of happening an insured peril.
 SICL is planning to solve many challenges faced by milk
farmers by adopting various strategies under its
“Insurance Plus” program.
Dr. Kiri’s Presentation -06- SANASA Insurance Company Limited

14. Challenges in developing Weather
Index Insurance.
Scaling up weather index insurance depends on :
-Availability of reliable meteorological data.
-Availability of weather stations in close proximity to cultivating areas.
-Awareness in weather index insurance among potential farmers.
-Farmers, willingness to pay insurance premium.
Dr. Kiri’s Presentation -10- SANASA Insurance Company Limited

15. Lessons learned in operating Weather
Index Insurance.
 Weather index insurance is not a sole solution for all risks faced by the farmer . It can
not be operated in all areas. Yet, it shows great promise as a tool to reduce the sever
effects from weather related phenomena.
 It is an easily-operated strategy, free from defects of delays, lack of transparency,
presence of human error, bureaucracy and complexity in claims settlement
procedures.
 Weather insurance seems more effective when it is linked to a large package of risk
management strategies and services.
 Unwillingness of farmers to pay premium may be overcome by premium subsidy
support program overcome by introducing premium subsidy scheme. ( at least for
the initial period to get them familiarized with Weather Index Insurance )
Dr. Kiri’s Presentation -11- SANASA Insurance Company Limited

16. SANASA Insurance Company Limited