Fitch Ratings has affirmed Sri Lanka Insurance Corporation General Limited’s (SLIC General) Insurer Financial Strength (IFS) Rating at ‘CCC+’ and its National IFS Rating at ‘A+(lka)’. The Outlook on the National IFS Rating is Stable. Fitch does not assign Outlooks to issuers rated ‘CCC+’ or below.

The agency said the affirmation reflects SLIC General’s ‘Favourable’ company profile and its high investment and asset risk arising from heavy exposure to sovereign-related securities. Fitch also noted the insurer’s adequate capital position and weak underwriting performance in recent years.

SLIC General’s company profile is assessed as ‘Favourable’, supported by a strong domestic franchise, broad distribution, and rising market share. The insurer’s share increased to 19.4 percent in 2024 from 18.9 percent in 2023, making it the largest non-life insurer in Sri Lanka.

Fitch expects flood-related losses from cyclone Ditwah to have a limited effect on the company’s credit profile due to low retention levels and strong reinsurance protection. Catastrophe exposure remains contained under excess-of-loss arrangements. The agency said higher motor claims and reinsurance reinstatement premiums could pressure underwriting profitability in 2025 but remain manageable within existing buffers.

Underwriting performance is expected to improve gradually, supported by growth in lower-claim segments such as motor and fire/engineering. However, near-term pressure will persist from flood losses and the government directive requiring 100% of motor insurance SRCCT premiums to be remitted to the National Insurance Trust Fund Board.