Thirty-two percent of Sri Lanka’s labor force is in the agricultural sector, and it accounts for 10 percent of GDP. The sector grew by 5.5 percent during 2015, compared to 4.9 percent in 2014. The majority of farmland in the country is in smallholdings. Agricultural productivity is low by global standards, and most farmers have not been able to transition toward value-added agricultural products, which are in demand by the growing middle class, and are also needed for export. Insurance penetration remains low, with the penetration ratio (measured as the ratio of gross written premium to GDP) being only 1.09 percent overall in 2015. Sri Lanka’s geographic and climatic diversity exposes it to a number of weather-related risks, most prominently flood, drought, and cyclone. Among available strategies for risk management in agriculture, insurance plays an important role. Mitigating weather-related risks is important in providing access to credit, stimulating investment in farming, and increasing productivity among smallholder farmers.