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

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.