July 22, 2014 (LBO) – Fitch Ratings said it was confirming a ‘B’ issuer financial strength rating of Sri Lanka’s Asian Alliance Insurance Plc (AAIP). It also confirmed a National Insurer Financial Strength Rating and National Long-Term Rating of ‘BBB+(lka)’ with a stable outlook.
Fitch said the rating reflected benefit that could come from being part of Softlogic Holdings Plc group which was in healthcare, retail and financial services and with a country-wide branch network.
In 2013 gross written premium in life had grown 24 percent backed by new business and non-life 31 percent, slowing from 90 percent in 2012.
“AAIP’s investment portfolio remains heavily exposed to equity at 25.7% of total invested assets,” Fitch said.
“The non-life combined ratio was very high at 129 percent and compares with an industry average of 105 percent.
“Management intends to improve this ratio through a more disciplined approach to pricing and by concentrating on profitable business lines.
“Fitch expects any improvement to the combined ratio to be slow given the intense price competition in the non-life business.”
AAIP’s regulatory s