April 30, 2012 (LBO) — Fitch Ratings Lanka on Monday affirmed HNB Assurance PLC’s national insurer financial strength rating and national long-term rating at ‘A(lka)’. The Outlook is Stable. A unit of the privately-held Hatton National Bank (HNB), HNB Assurance’s ratings reflects its capitalisation in terms of regulatory solvency and Fitch’s risk-based capital computations. The rating also reflects the company’s sustained profitability and modest market share.
The insurance firm’s rating also takes into account Fitch’s expectation of support from Hatton National Bank PLC (‘AA-(lka)’/Stable), if required.
HNB Assurance is 60.0 percent owned by HNB and is strategically important to its parent in providing additional product range to its customer base and expanding its bancassurance channel.
Regulatory solvency ratios improved to 2.89x and 3.15x for life and non-life businesses, respectively, in 2011 (2010: 1.13x and 2.01x) following a rights issue during the year.
These ratios are in line with peers and supported by the company’s healthy profitability and conservative investment policies, Fitch said in a release.
Although the solvency ratios are likely t