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Sanasa Insurance Company Ltd (SICL)

About the Project
Project Name: 
Index based crop insurance project
Type of Facility Project: 
Innovation Grant
Pays d’opération: 
Sri Lanka
Asia and the Pacific
Project Thematic Focus: 
Product design
Agriculture and livestock - index crop
Type of Risk Carrier: 
regulated insurance company
Type of Distribution Channel: 
Credit union, cooperative or other member-based financial institution
Project Description: 

The project aims at making available to Sri Lankan farmers an innovative agricultural insurance product which will minimize the risk of an income loss resulting from unfavourable weather conditions. It is centred on the experimentation of a weather-based crop insurance model used in India and on its successful adaptation to the Sri Lankan environment. It entails the development and testing of new methodologies to streamline the overall processes, improve delivery mechanisms, and raise the awareness of rural Sri Lankans about insurance.

Eventually, the project should support the development of a grassroots cooperative insurance model and strengthen Sanasa’s capacity to fully understand and safely manage weather-based insurance.

Consortium Members: 

Development International Desjardins (DID) is part of the Desjardins group, a Canadian network of cooperatives created in 1900 and offering a complete range of financial services to its 6 millions members throughout its 600 financial cooperatives located mostly in the rural areas of the province of Quebec. DID was created in 1970 to share the cumulated expertise of the group with developing countries and support them in the setting up of similar structures to deliver high-value and cost-adapted financial products and services. DID specializes in providing technical support – such as introducing new products, modernizing operations or developing local capacity – and investment for the community finance sector.

BASIX is a group of companies based in India that promote sustainable livelihoods for the rural poor and women through the provision of financial services and technical assistance. The group introduced rainfall insurance - a pioneering initiative in India and in the developing world – in to explore the feasibility of weather insurance for Indian farmers . Basix piloted in 2003, with ICICI Lombard and the Commodity Risk Management Group (CRMG) of the World Bank, a weather insurance product and scaled it up in 2005 in six states, demonstrating the sustainability of the model and a high demand from the farmers.


About 400,000 members of the SANASA network are engaged in agricultural activities and could benefit from this project.  About 47% of members of SANASA live on less than Rs. 5,000 (about 50$ US) a month. Farmers tend either not to own their own land or are small scale farmers (less than five acres). The main risks affecting crops are linked to drought, flooding and insects. Thirteen thousand farmers are expected to subscribe to the index insurance product during the life of the project.

Lessons from the Project
Learning Agenda: 
  • To what extent will farmers be interested to insure their crops? What elements might inhibit them from buying the product?
  • Which communication medium (video, print promotional material) is most effective to increase enrolment and penetration rate?
  • What is the impact of mandatory versus voluntary enrolment on customers' overall product perception and acceptability?
  • What distribution channel (cooperative versus bank branches) is more effective in convincing customers to purchase the product? Which delivery channel is efficient in terms of communication of product proposition and cost of delivery?
Emerging Lessons: 
  • It was decided to not bundle the insurance product with existing credit services because of cost considerations.         
  • The first round of sales highlighted the need to equip sales agents and marketing executives with knowledge of agricultural practices in order to convince clients.
  • Product configuration needs to be finalized well in advance of the commencement date of crop cultivation to allow for sufficient time for the educational drive to be conducted and the concept of index insurance to be “sold”.
About the Organization
Relationship with the Facility: 
Innovation grantee
Country of Head Office: 
Sri Lanka
Region : 
Asia and the Pacific
Type of institution : 
Insurance industry
Participation in Microinsurance: 
Risk carrier
Organizational Overview: 

Sanasa Insurance Company Ltd (SICL) is the insurance company of the SANASA savings and credit societies, which are committed to uplifting the standard of living for low-income Sri Lankan families, particularly in rural areas. The term "Sanasa" is the Sinhala acronym for a Thrift, Credit and Cooperative Society (TCCS). It is also used to denote the entire movement of 8000 TCCSs covering about three million beneficiaries (members and their families) representing about 17% of the total population in the country. Sanasa Insurance Company operates mainly as a service support organization to serve members of Sanasa societies and other community-based organizations and transacts insurance products in most areas in Sri Lanka.

More about the Organization