The Insurance Board of Sri Lanka (IBSL) has prepared the first draft to be presented to Lloyds Register of London seeking for further relaxations, ideally a removal, of the country’s war-risk ratings.
A special committee comprising representatives of the Ministry of Defence, Sri Lanka Ports Authority, Strategic Enterprises Management Agency (SEMA) and IBSL met last week and decided the IBSL would spearhead the operation and prepare a report for Lloyds in consultation with other stakeholders.
"The IBSL has prepared the first draft and disseminated it to the other members of the committee," IBSL Chairman Udayasri Kariyawasam told the Island Financial Review.
The committee was to sit again last afternoon and present their recommendations to the draft.
"Once we get their recommendations, if things go well, we should be able to come up with a final draft in two week’s time," Kariyawasam said.
He said the committee hoped to present the country’s case to officials of Lloyds in London sometime next month.
"The Ministry of Defence has been especially helpful in providing us details of how security has improved after the war. This is crucial when stating our case to Lloyds. We need to show what the government is doing to further strengthen the security situation in the country’s territorial waters and land," Kariyawasam said.
In June, a month after the war, London-based Joint Cargo Committee of Lloyds Registry had rated Sri Lanka as a ‘high risk country’ in its Global Cargo Watch List.
It had reduced the war risk rating on Sri Lanka from 3.4 to 3, changing the status by one notch from ‘severe’ to ‘high’.
It took Sri Lanka off the ‘air war and strikes’ risk list but maintained the ‘marine war and strikes and ‘ground war and strikes’ risks.
The war risk ratings are categorised into five levels ‘severe’, ‘high’, ‘elevated’, ‘caution’ and ‘low risk’. The Insurance Board believes none of these applied to Sri Lanka.
"The current ratings are an improvement but it is not good enough," said Rohan Masakorala, Senior Consultant to the Strategic Enterprises Management Agency on ports and airports.
"We would be in a better position to assure Lloyds if we engage them directly and invite them to visit Sri Lanka. They need to see for themselves the improvements in the environment," he told the Island Financial Review.
Dr. P. Bandu Wickrama, Chairman, Sri Lanka Ports Authority was reported in the Island Financial Review saying a formal request to Lloyds to visit the island would soon be made.
However, Kariyawasam said a lot will have to go into Sri Lanka’s initial report and subsequent ‘face-to-face’ presentation to Lloyds.
"This (the dialogue with Lloyds) is something the country is initiating so we will have to come up with a solid performance. We will need the Sri Lankan Embassy in London to help us get across to Lloyds once the report is completed," Kariyawasam said.
"The IBSL has been entrusted with leading this project so we will take our time and ensure the country has a solid case," he said.
Shippers say the existing ratings affect freight costs and the Insurance Industry says it has to pay higher premiums on re-insurance.