Climate or disaster risk can be understood as the interaction of hazards, exposure, and vulnerability. A comprehensive risk management framework – through measures connected to risk awareness, risk prevention, risk reduction, risk transfer, and risk retention – has the potential to address climate and disaster risks in a holistic way.
In the risk transfer category, insurance is one tool to transfer risk from the insured to the insurer, helping the insured cope with disaster situations through financial assistance, which serves as a safety net. With climate vulnerability in Sri Lanka being a key issue faced by many sectors, addressing the need for a comprehensive risk management framework inclusive of risk finance instruments and risk transfer mechanisms established in the country is of great importance.
To identify existing mechanisms which could facilitate this process, the Media Centre for National Development under the Ministry of Mass Media in collaboration with SLYCAN Trust organised a National Dialogue on Climate Action, Risk Management and Financial Instruments related to Risk Transfer and Resilience at Hilton Colombo on 24 March 2021.
The workshop’s objectives were as follows:
The participants of the workshop focused on different aspects of climate and disaster risk transfer in Sri Lanka, as well as avenues for scaling up action and addressing existing gaps and needs. Some of the key areas focused on included:
The participants also provided recommendations to address the key issues identified. Among these were suggestions to educate Small and Medium Enterprises (SMEs) and homeowners to insure assets against climate and disaster risks, which would transfer the risk borne to be equally shared between State and private entities. They also highlighted the need for consistently and continually updating data in order to digitalise the processes connected to insurance and loans. Another recommendation from the workshop was the need to ensure strong policies are in place to enable long-term resilience building.
This multi-stakeholder event was presided over by the Honourable Minister of Mass Media of Sri Lanka Dr. Keheliya Rambukwella. Speakers included Mr. R. P. Samarakkody (Additional Director General, Disaster Management Centre), Ms. Dakshini Perera (Climate Change Secretariat), Mr. Daniel Stadtmüller (Team Lead, InsuResilience Secretariat), Ms. Vositha Wijenayake (Executive Director, SLYCAN), and Dr. Thusitha Sugathapala (Senior Technical Expert, SLYCAN Trust).
Participants of the workshop included representatives of Government departments working on finance, agriculture, sustainable development, climate change, and disaster management, as well as from the banking and insurance industry, the private sector, civil society, academia, and other entities.
The dialogue builds on previous multi-stakeholder consultations, workshops, and research conducted by SLYCAN Trust under the project ‘Multi-Actor Partnership on Climate and Disaster Risk Financing and Preparedness in the Context of the InsuResilience Global Partnership’. This project is supported by the German Federal Ministry for Economic Cooperation and Development and implemented by SLYCAN Trust in collaboration with Chrysalis as a local partner in Sri Lanka.