Sri Lanka Insurance rating outlook lifted by Fitch

Dec 18, 2007 (LBO) – Fitch Ratings has lifted the outlooks on the AA-(lka) national insurer financial strength rating and A+(lka) credit rating of Sri Lanka Insurance Corporation (SLIC) to positive from stable. “The Positive Outlooks reflect SLIC’s progress in reforming the company since privatisation in 2003,” the rating agency said.

“Fitch believes that the changes made to the company’s systems, products, controls and management during this time have allowed SLIC to better exploit its good market position in Sri Lanka.”

The rating agency said underlying ratings could also be upgraded if present trends continue.

“Should SLIC leverage this improvement to revive its market share while maintaining profitability, a ratings upgrade could be considered in 2008 or 2009,” the agency said.

Fitch has been tracking the management’s attempts to improve SLIC’s internal systems and efficiency since March 2004.

“The agency considers that premiums and claims processes and management have improved over this period, as have accounting systems and controls, management structures and corporate efficiency.”

But Fitch said the impact of these improvements on results was mixed.

Recent profitabi