The objective is to increase the coverage of assets and reduce the mortality protection gap in the region.
"SAARC governments are keen to have a common platform to cover their assets against natural disasters," GIC Re Acting Chairman and Managing Director K Sanath Kumar told PTI.
He also said with a right product and institutional mechanism for distribution, the insurance industry can reach out to a large number of people who can buy protection.
Reeling out numbers, Kumar said while some developed countries have 77 per cent coverage against natural disasters, it is merely seven per cent in India and a paltry one per cent in Nepal. Similarly, mortality protection gap has grown with a ten per cent CAGR growth during the past ten years.
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Similarly, in a recent report, the world's largest reinsurer Swiss Re had noted that while there was an increase in insurance coverage in the country, it had not been adequate to fill the protection gap.
Some of the natural disasters that hit the country and the SAARC region last year include the earthquake in Nepal, the devastating Jammu & Kashmir floods and the Hudhud cyclone in the coastal parts of Andhra Pradesh and Odisha.
Across the region, be it in India, Bangladesh, Nepal or Sri Lanka, the frequency of natural disasters is on the rise, Kumar said, and pointed out that there are also many man-made reasons behind them. "We have to find ways to tackle all these problems in a holistic manner", he said.
Calling for government support to make people buy insurance products against natural disasters, GIC Re General Manager Alice Vaidyan said the main reasons for low penetration is affordability issue, coupled with low awareness and lack of government support.
Vaidyan hoped that the proposal to create a common institutional platform to insure natural disaster risks in the SAARC region, mooted way back in 2005, can be revived and executed soon.