Fitch Ratings has upgraded Sri Lanka Insurance Corporation Limited’s (SLIC) National Insurer Financial Strength (IFS) rating and National Long-Term Rating to ‘AA+(lka)’ from ‘AA(lka)’ and assigned a Stable Outlook The agency has also affirmed SLIC’s international IFS rating at ‘B+’ with a Stable Outlook.
The one-notch upgrade of SLIC’s National Long-Term Rating and National IFS rating reflects Fitch’s more positive view of the state’s 99.9% ownership in the company following a recent proposal to exempt SLIC from the regulatory requirement that all insurers must be listed. As a result, there will be no dilution of the state’s ownership.
The ratings are also supported by its sound profitability and healthy capitalisation.
SLIC’s ratings also reflect its established franchise and market position in Sri Lanka. Offsetting these strengths are significant investments in non-core subsidiaries and a high equity exposure, which weighs on its risk-based capital. The IFS rating was affirmed as the rating remains constrained by Sri Lanka’s sovereign rating (B+/Stable). (GWP).