Fitch Ratings Lanka has affirmed Sri Lanka Insurance Corporation Limited's (SLIC) Insurer Financial Strength rating (IFS) at ‘BB-’ with a stable outlook. The agency has also affirmed the National Insurer Financial Strength Rating and National Long-Term Rating at ‘AA(lka)’ with a Stable Outlook.
SLIC's ratings reflect the company's well-established franchise and market position, 99.9% state ownership, and its importance to the government as the largest state-owned insurer.
SLIC's capitalisation, which is supported by sustained profits and satisfactory earnings retention, is commensurate with the rating. These strengths are balanced by its significant investments in non-core subsidiaries that have been made in line with government policy and a high proportion of equities in its investment portfolio, which weaken SLIC's risk-based capital.
The company is also exposed to high interest rate risk due to the asset and liability mismatches in the life business, which stem from the limited availability of long-term investments in the market. The company is in discussions with the regulator on separating its life and non-life businesses to comply with new regulatory requirements.
www.dailynews.lk
SLIC's ratings reflect the company's well-established franchise and market position, 99.9% state ownership, and its importance to the government as the largest state-owned insurer.
SLIC's capitalisation, which is supported by sustained profits and satisfactory earnings retention, is commensurate with the rating. These strengths are balanced by its significant investments in non-core subsidiaries that have been made in line with government policy and a high proportion of equities in its investment portfolio, which weaken SLIC's risk-based capital.
The company is also exposed to high interest rate risk due to the asset and liability mismatches in the life business, which stem from the limited availability of long-term investments in the market. The company is in discussions with the regulator on separating its life and non-life businesses to comply with new regulatory requirements.
www.dailynews.lk
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