Lanka war-risk rating down-graded:

Insurance market gets boost

The Sri Lankan insurance market has received a boost when the Joint Cargo Committee (JCC) London lowered the risk rating from 3.4 to 3.0, in effect changing the status from 'severe' to 'high', subsequent to negotiations initiated by the Insurance Board of Sri Lanka.

The scale consists of 4 risk levels, 'severe', 'high', 'elevated', 'caution' and 'low risk', as per the Country Risks Evaluation and Assessment Model (CREAM).

The change of status was determined after the JCC reassessed the war risk level pertaining to Sri Lanka this month.

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

Since 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 too 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.