Sri Lanka Asian Alliance Insurance BB+ rating confirmed

Oct 16, 2009 (LBO) – RAM Ratings Lanka said it has confirmed Asian Alliance Insurance’s (AAI) claims paying ability rating of BB+ with a stable outlook. “The rating is supported by the company’s life-insurance franchise and its conservative investment strategy,” the rating agency said in a statement.

“However, the rating continues to be pressured by AAI’s small size and weak underwriting results from its general business.”

AAI retained its position as the seventh largest composite insurance player, accounting for 2.46 percent of industry composite premiums as at the financial year ended 31 December 2008.

“Owing to the harsh macroeconomic conditions witnessed in fiscal 2008, the company’s life segment expanded at a slower pace. It maintained its focus on a niche market of professionals, recording an average premium value of 36,639 rupees, the highest in the industry.”

However, RAM Ratings said AAI’s general business increased, boosted by an expanding branch network and sales force.

The company widened its branch network from 14 as at end he end of the 2007 financial year to 21 as at the end of the December 2008 financial