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Inclusive Insurance Sector: An Innovation business model for Microinsurance Delivery in Sri Lanka


  • Heenkenda, Shirantha


The main objective of this study is to explore the feasibility of farmers’ organizations (FOs) as a vehicle for microinsurance delivery for paddy crop cultivated by small-scale (peasant) farmers in Sri Lanka. Ampara district, on Sri Lanka’s eastern plain was selected to conduct the field survey. Factor Analysis is used to elicit the group dynamic and capacity of FOs as a stakeholder of the insurance supply chain. The results show that the farmers’ organization is most widespread and very close institutional setup for paddy farmers. FOs are capable of handling financial activities with transparency, and have healthy financial habits and those farmers participate actively in farmers’ organization activities. This study provided clear policy insights into the design of institutions channel that foster cooperation, and of the characteristics of FOs. To assist in the FOs financial activities, the postal network can act as financial intermediaries in circumstances where the commercial insurers do not have an outlet or branch networks in their target area. For developing the linkages between farmers and insurers, the public-private partnership model can be used for microinsurance supply to paddy farmers in Sri Lanka. In this context, multi-stakeholder partnerships should be made imperative for paddy farmers’ insurance delivery aimed at widespread coverage or large-scale implementation.

Suggested Citation

  • Heenkenda, Shirantha, 2016. "Inclusive Insurance Sector: An Innovation business model for Microinsurance Delivery in Sri Lanka," MPRA Paper 72480, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:72480

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    References listed on IDEAS

    1. Paul Mosley, 2009. "Assessing the success of microinsurance programmes in meeting the insurance needs of the poor," Working Papers 84, United Nations, Department of Economics and Social Affairs.
    2. Skees, Jerry & Varangis, Panos & Larson, Donald & Siegel, Paul, 2002. "Can financial markets be tapped to help poor people cope with weather risks ?," Policy Research Working Paper Series 2812, The World Bank.
    3. Olivier Mahul & Charles J. Stutley, 2010. "Government Support to Agricultural Insurance : Challenges and Options for Developing Countries," World Bank Publications - Books, The World Bank Group, number 2432, December.
    4. Merry, Alice. & Prashad, Pranav. & Hoffarth, Tobias., 2014. "Microinsurance distribution channels insights for insurers," ILO Working Papers 995186991702676, International Labour Organization.
    5. Heenkenda, Shirantha, 2011. "Prospective Demand for an Index-Based Microinsurance in Sri Lanka," MPRA Paper 54420, University Library of Munich, Germany, revised Jul 2011.
    6. Craig Churchill, 2007. "Insuring the Low-Income Market: Challenges and Solutions for Commercial Insurers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 32(3), pages 401-412, July.
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    More about this item


    Farmers’ Organizations; Financial Intermediaries; Insurance Delivery; Microinsurance;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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