Sri Lanka Insurance gets AA- rating from RAM

Standing left to right – Mr. Dinesh Jebamani (Chief Manager Liability Product Management and New Age Media – Seylan Bank), Mr.Sudesh Peiris (Senior Manager – Digital Banking Channels – Seylan Bank), Ms. S.Senevirathne (Representative of the Revenue Department – Western Province), Mr. Tilan Wijeyesekera (Deputy General Manager – Retail Banking – Seylan Bank) and Mr. Malik Wickremanayaka (Deputy General Manager – Operations – Seylan Bank)

Sept 19, 2008 (LBO) – Sri Lanka Insurance Corporation Ltd (SLIC) has been rated ‘AA-‘ by RAM Ratings, with a ‘stable’ outlook, saying the firm is well capitalized, has kept full required reserves but disclosures could improve.

“The rating is supported by the company’s strong competitive position and unparalleled capitalisation as well as the size and strength of its balance sheet,” RAM Ratings said in a statement.

“As the oldest player in the industry, SLIC has amassed unmatched strength in its capitalisation through retained profits.”

The previously state-run SLIC was privatized in 2003. It is the largest insurer in balance sheet terms and the company accounted for 45.19 percent of industry assets at the end of December 2006.

RAM Ratings said that SLIC had ample financial flexibility due to its robust balance sheet.

But RAM said disclosure and corporate governance had room to improve and as the company implemented new procedures and sought a stock exchange listing, there could be improvements.

At the end of 2006, the firm had shareholder funds of 8.4 billion rupees which was half of the industry shareholder funds.

Though it had lost its earlier monopoly status, after privatization it was