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

Gayan Wedawatta, Nadeeshani Wanigarathna*, P. A. Vijekumara, Maheshi Tennakoon

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


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.
Original languageEnglish
Pages (from-to)13-28
Number of pages16
JournalClimate Economics and Finance
Issue number1
Publication statusPublished - 2 Nov 2023

Bibliographical note

This is an open-access article distributed under a CC BY license (Creative Commons Attribution 4.0 International), license summary available at:

Funding Statement: The support provided by the National Building Research Organisation (NBRO), National Disaster Relief Services Centre (NDRSC), Disaster Management Centre (DMC), and the National Insurance Trust Fund (NITF) in obtaining relevant data is much acknowledged.


  • Cost-benefit analysis
  • Insurance
  • Disaster preparedness
  • Disaster resilience
  • Disaster recovery
  • Post disaster re-construction
  • Flood risk management
  • AHP
  • Cost benefit analysis
  • CBA


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