Macro-level insurance for financing post-disaster recovery: The case of National Disaster Insurance Policy in Sri Lanka

This  paper evaluates the use of macro-level insurance to finance  post-disaster recovery and reinstatement by investigating the case of  the National Disaster Insurance policy implemented by Sri Lanka. The  national scheme provided cover for all properties in the country against  hazards such as flooding and provided compensation for those affected.  Analysis of secondary data obtained from the organisations that managed  the scheme showed that the scheme has delivered a much higher return  compared to the total insurance premium paid, suggesting that the scheme  has delivered a net positive benefit compared to the cost of the  premium and can be considered a viable option. However, the existing  secondary data did not reveal the values of other costs and indirect  benefits associated with the scheme to compute a meaningful  benefit-to-cost ratio. Further rigorous, evidence-based cost-benefit  analysis is required to assess the cost-effectiveness of a scheme of  this nature. A cost-benefit analysis approach based on an analytical  hierarchy process is proposed as a possible solution to assess the  cost-effectiveness of the scheme, which could be used by government  organisations as an alternative, where analytical and research resources  may be limited, to evaluate a range of disaster recovery financing  options using stakeholder opinion.