Insurance costs will go up by one third for Sri Lankan hotels, as insurance companies factor tsunami risk into future insurance coverage. Insurance costs will go up by one third for Sri Lankan hotels, as insurance companies factor tsunami risk into future insurance coverage. “Premiums went up a little this year because tsunami cover was introduced. Insurance cover didn’t extend to tsunami risk before,” said Upul Wijesinghe, head of non-life insurance at Eagle Insurance.
The tsunami cover will increase cost of insurance from 0.1 percent of the value of assets to around 0.13 percent.
According to a research by the Institute of Policy Studies (IPS), this would put up premium payments by US$ 900 for a medium sized hotel, worth about US$ 3 mn.
For a larger hotel worth around US$ 15 mn, the increase in premium would come to around US$ 4,500.
Since tsunami cover was not available in Sri Lanka before last year’s tsunami, the insurance industry agreed to honour tsunami claims under earthquake cover and in some cases, even under flood cover.
As a result, this year, Sri Lanka’s insurance industry forked out an estimated US