"These insurance products, designed in collaboration with SANASA, will improve the livelihoods of small farmers in Sri Lanka by reducing the impact of adverse weather conditions," Adam Sack, IFC country manager for Sri Lanka said in a statement.
The pilot project will help up to 15,000 small farmers get access to insurance against natural disaster and raise awareness among 50,000 others about index-based agricultural insurance.
The statement quoted SANASA co-operative movement founder P A Kiriwandeniya as saying that the products will provide farmers with affordable and flexible cover against natural disasters.
"Index-based insurance products pay out benefits calculated using a pre-assigned value for losses arising from weather or catastrophic events," IFC said.
"Such products eliminate the need for insurance companies to individually verify claims, reducing transaction costs and making it easier and faster for products and payouts to be offered to rural communities."IFC had established a Global Index Insurance Facility in 2009 to help devise index-based insurance against natural disasters in developing countries, particularly in agricultural communities where insurance is not available.