By Hiran H.Senewiratne
"We are are expecting more than Rs one billion in claims from our clients, which we could recover from our re-insurers,among whom are several of the world's leading insurance companies. Therefore, it is not a big deal for us, Managing Director, Sri Lanka Insurance T. M. R. Bangsa Jayah said.
He told The island Financial Review that SLI is now waiting until claims are made by their customers for settlement.
Rs.7 billion in insurance payments for compensation and reconstruction, following destruction caused by the recent floods, will be borne by foreign reinsurers due to appropriate transfer of risks, some local insurance industry officials said.
Jayah said that the bottom lines of insurance companies are of no concern and that the insurance companies are currently focused on processing all insurance claims, evaluating them, and paying back the right amounts to their customers.
"However, it is too early to forecast the value of claims that would be paid by the industry, which implies the importance of insuring properties to minimize the loss, he said.
"The economic losses are quite high and there would be a significant impact on insurance companies, because they have re-insured their risks with international re-insurers, Insurance Association of Sri Lanka chairman Dirk Pereira said.
Finance Minister Ravi Karunanayake on Monday said the post flooding reconstruction costs would likely be between Rs.150 and 250 billion.
About 30 percent of the liabilities of insurance companies are required to be reinsured with the National Insurance Trust Fund (NITF) by law. "We still haven’t got adequate information, but the losses are heavy. We’re predicting it to be Rs. 4-5 billion or more. In a worse case situation, the claims could run up to Rs. 10 billion, NITF chairman Manjula Silva said.
"A lot of people are not insured. Some have insurance policies, but we have to look at the little man. We will have to evaluate if the houses are fully damaged or partially damaged. In some instances, we just have to clean and reframe. It’s difficult to give a number but it may run into a couple of million rupees, he said.
Silva said the NITF, which is worth Rs. 10 billion, has to only pay for 30 percent of the reinsurance of private sector claims, which would run up to about Rs. 1.5 billion. For government claims, NITF has to pay Rs.500 million, plus an additional 20 percent of the remainder. "The rest, we have reinsured with top weighted insurance companies around the world, he said.
Fitch assigns Sampath Bank’s subordinated debt final ‘A(lka)
Fitch Ratings-Colombo-24 May 2016: Fitch Ratings has assigned Sampath Bank PLC's (A+(lka)/Stable) Basel II-compliant subordinated debentures of up to LKR6bn a final National Long-Term Rating of 'A(lka)'.
The final rating is the same as the expected rating assigned on April 26 and follows the receipt of documents conforming to information already received.
The debentures will mature in five years and carry fixed and floating coupons. Sampath Bank plans to use the proceeds to strengthen its Tier 2 capital base. The debentures are to be listed on the Colombo Stock Exchange.
The issue is rated one notch below Sampath Bank's National Long-Term Rating to reflect the subordination to senior unsecured creditors.
Sampath Bank's rating reflects its lower capitalisation relative to that of its peers and relatively higher risk appetite, which offset benefits from the growth of its franchise. The Outlook is Stable.
The rating on the proposed debentures will move in tandem with Sampath Bank's National Long-Term Ratings.
Fitch views the upside potential of Sampath Bank's ratings as limited as long as the trend of higher risktaking and declining capitalisation persists. A sharp decline in its asset quality could result in a rating downgrade.
"We are are expecting more than Rs one billion in claims from our clients, which we could recover from our re-insurers,among whom are several of the world's leading insurance companies. Therefore, it is not a big deal for us, Managing Director, Sri Lanka Insurance T. M. R. Bangsa Jayah said.
He told The island Financial Review that SLI is now waiting until claims are made by their customers for settlement.
Rs.7 billion in insurance payments for compensation and reconstruction, following destruction caused by the recent floods, will be borne by foreign reinsurers due to appropriate transfer of risks, some local insurance industry officials said.
Jayah said that the bottom lines of insurance companies are of no concern and that the insurance companies are currently focused on processing all insurance claims, evaluating them, and paying back the right amounts to their customers.
"However, it is too early to forecast the value of claims that would be paid by the industry, which implies the importance of insuring properties to minimize the loss, he said.
"The economic losses are quite high and there would be a significant impact on insurance companies, because they have re-insured their risks with international re-insurers, Insurance Association of Sri Lanka chairman Dirk Pereira said.
Finance Minister Ravi Karunanayake on Monday said the post flooding reconstruction costs would likely be between Rs.150 and 250 billion.
About 30 percent of the liabilities of insurance companies are required to be reinsured with the National Insurance Trust Fund (NITF) by law. "We still haven’t got adequate information, but the losses are heavy. We’re predicting it to be Rs. 4-5 billion or more. In a worse case situation, the claims could run up to Rs. 10 billion, NITF chairman Manjula Silva said.
"A lot of people are not insured. Some have insurance policies, but we have to look at the little man. We will have to evaluate if the houses are fully damaged or partially damaged. In some instances, we just have to clean and reframe. It’s difficult to give a number but it may run into a couple of million rupees, he said.
Silva said the NITF, which is worth Rs. 10 billion, has to only pay for 30 percent of the reinsurance of private sector claims, which would run up to about Rs. 1.5 billion. For government claims, NITF has to pay Rs.500 million, plus an additional 20 percent of the remainder. "The rest, we have reinsured with top weighted insurance companies around the world, he said.
Fitch assigns Sampath Bank’s subordinated debt final ‘A(lka)
Fitch Ratings-Colombo-24 May 2016: Fitch Ratings has assigned Sampath Bank PLC's (A+(lka)/Stable) Basel II-compliant subordinated debentures of up to LKR6bn a final National Long-Term Rating of 'A(lka)'.
The final rating is the same as the expected rating assigned on April 26 and follows the receipt of documents conforming to information already received.
The debentures will mature in five years and carry fixed and floating coupons. Sampath Bank plans to use the proceeds to strengthen its Tier 2 capital base. The debentures are to be listed on the Colombo Stock Exchange.
The issue is rated one notch below Sampath Bank's National Long-Term Rating to reflect the subordination to senior unsecured creditors.
Sampath Bank's rating reflects its lower capitalisation relative to that of its peers and relatively higher risk appetite, which offset benefits from the growth of its franchise. The Outlook is Stable.
The rating on the proposed debentures will move in tandem with Sampath Bank's National Long-Term Ratings.
Fitch views the upside potential of Sampath Bank's ratings as limited as long as the trend of higher risktaking and declining capitalisation persists. A sharp decline in its asset quality could result in a rating downgrade.
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