Sri Lanka Insurance rating raised to ‘AA(lka)’

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

June 06, 2011 (LBO) – Fitch Ratings Lanka has upgraded Sri Lanka Insurance Corporation’s (SLIC) National Long-Term rating and National Insurer Financial Strength (IFS) rating to ‘AA(lka)’ from ‘AA-(lka)’ with stable outlooks. “The ratings reflect SLIC’s improved risk-based capital position over the last two years, benefited by the improved operating and macro-economic environment as well as its improved profitability in 2010,” the rating agency said.

The ratings further reflect SLIC’s large asset base, strong presence in life and non-life markets and expected future equity gains, it said in a statement.

The ratings factor in Fitch’s expectations of continued support from the Sri Lankan government, specifically in the event of capital requirement, given its 99.9 percent ownership in SLIC and SLIC’s perceived strategic importance.

“The Stable Outlook reflects Fitch’s expectation that SLIC will maintain its strong operational and financial performance with emphasis on profitability, as well as the company’s ability to gradually crystallise the unrealised equity gains on its balance sheet over the medium term while maintaining market share.”

Fitch said the government’s directive to all state-owned entities to