War-risk rating of Sri Lanka for insurance down graded

The Sri Lankan insurance market has received a boost with the Joint Cargo Committee (JCC) London lowering the risk rating from 3.4 to 3.0, following a reassessment of the war risk level currently pertaining in Sri Lanka.

The JCC risk levels are in five categories; 'severe', 'high', 'elevated', 'caution' and 'low risk'; as per the Country Risks Evaluation and Assessment Model (CREAM).

Sri Lanka has also been taken off the 'Air-war/Strikes risk list by the JSS. The currently applicable risks are 'Marine War'. 'Marine Strikes' and 'Ground War Strikes'.

The removal of war risk rating by the JCC follows negotiations initiated by the Insurance Board of Sri Lanka and is in keeping with the prevailing situation following the defeat of the LTTE and terrorism of the country.

Sri Lanka is listed in the Global Cargo Watch List (GCWL) issued by the JCC. Foreign underwriters covering cargo into Colombo use their own discretion in determining risk rates and levying surcharge on goods imported to Sri Lanka, resulting in higher prices for imported goods.

The Joint War Committee has listed Sri Lanka as a 'high risk country' and this too prompts ships carrying cargo to Sri Lanka to be surcharged.

The Insurance Board of Sri Lanka has appointed a committee including representatives of the Insurance Industry to work towards the removal of war risk surcharges as per the war-risk status determinations by the JCC and JWC.