Dec 15, 2010 (LBO) – The claims paying ability of Sri Lanka’s Asian Alliance Insurance, the island’s sixth largest insurer has been upgraded to ‘BBB-‘ from ‘BB+’ following the injection of new capital, RAM Ratings Lanka said. “The corporate exercise has strengthened AAI’s capitalisation and is expected to enhance its financial performance through greater investment income,” RAM Ratings said.
“The rating is also upheld by AAI’s franchise in the life-insurance segment and improving financial performance in the general-insurance segment.”
The rating has a ‘stable’ outlook.
AAI is the sixth-largest life insurer in Sri Lanka in terms of gross written premiums, accounting for 4.25 percent of the industry’s premiums in 2009.
Life business brought 67 percent of the firm’s premiums.
RAM said AAI’s general insurance business turned around by end-September 2010, helped by strong investment income and lower claims.
“Previously, claims from the general segment had been impinging on overall financial performance due to few portfolios incurring high claims,” RAM said.
“With the discontinuation of such contracts, AAI’s financial performance is expected to
continue improving and maintaining pro