Fitch revises SLIC’s outlook to Stable

Fitch Ratings has revised the outlook on Sri Lanka Insurance Corporation’s (SLIC) Insurer Financial Strength (IFS) rating to Stable from Negative and affirmed the IFS rating at ‘B+’. 
The rating action follows the revision of the outlook on Sri Lanka’s Long-Term Local-Currency Issuer Default Rating (IDR) to Stable from Negative and the affirmation of the rating at ‘B+’ on February 9, 2017. SLIC’s IFS rating is constrained by Sri Lanka’s Long-Term Local-Currency IDR and the Negative outlook reflects the Negative outlook on Sri Lanka’s IDR. This rating review does not include SLIC’s ‘AA(lka)’ National Long-Term Rating and ‘AA(lka)’ National IFS rating.
SLIC’s ratings reflect its established franchise and market position in Sri Lanka, 99.9 percent state ownership and importance to the government as the largest state-owned insurer. 
Offsetting these strengths are significant investments in non-core subsidiaries and a high equity exposure, which weighs on its risk-based capital. If the sovereign ratings are upgraded in the future and the constraints on SLIC’s IFS rating are relieved, Fitch would take similar rating action on SLIC’s IFS rating. Conversely, a downgrade of Sri Lanka’s ratings will lead to downgrade of SLIC’s IFS rating.