Contribution of Microinsurance towards Sustainable Development Goals in Sri Lanka

Abstract

Microinsurance supposes to reduce not only the risk of poverty from negative consequences, but also to improve the overall quality of life. 7 types of Millennium Development Goals (MDG) have been extended to 17 wide ranges of goals under the newly introduced mechanism of SDGs by United Nations Rio+20 Summit covering the wellbeing of the people and prosperity. Sri Lanka has been ranked on 73rd position in the progress of Human Development Index (HDI) in 2015 while recording 53% achievement according to the MDG tracks analysis. Sri Lanka has been allocating substantial amount of funds on free education, free health and social welfare and subsidies to improve the wellbeing of the people and consequently budget deficit has increased to 7.4% while government debt ratio was 74% continuously. If Sri Lankan government had been able to use tool like MI with the private sector partnership, burden on public expenditure would been less. Evidence found that countries like India, Pakistan, and Nigeria experienced that SDG can be achieved through MI. The objective of this study is to explore the possibility of improving the SDG through MI. A mixed research method has been carried out in this study using exploratory sequential design which qualitative results can help and inform the second quantitative method. Primary data was gathered conducting indepth interviews with 20 market specialist from MI providers. The results showed that if proper MI mechanism was implemented, it would contribute to improve the SDG towards the prosperity of the country. Further quantitative results supported mainly direct relationship of MI with poverty reduction and life wellbeing while other indicators show indirect relationship. If a public-private partnership focused on long term sustainability with suitable policy amendments, the country would be able to achieve the SDG. Further, these results would immensely help to find out vital information for the development strategies of the MI as well as SDG.