Fitch Downgrades Co-Insurer’s IFS to ‘BBB(lka)’; Stay Evil Watch | MarketScreen

Fitch Ratings downgraded Co-operative Insurance Company PLC’s (CICPL) National Insurer Financial Strength (IFS) Rating to ‘BBB(lka)’ from ‘A-(lka)’ and maintained Rating Watch Negative (RWN) following the downgrade and restoration of the rating of the country Sri Lanka. .

The restructuring reflects changes in the creditworthiness of Sri Lankan public companies following Fitch’s downgrade of Sri Lankans Internal Revenue Service (IDR) to ‘CC’ from ‘CCC’ to 1 December 2022. Fitch Outlooks generally do not assign or apply changes to countries with a rating of ‘CCC+’ or below.

Country metrics are a rough classification of providers in a specific market designed to help local business owners rank. risks. Sri Lankans The national scale is denoted by the unique symbol ‘(lka)’. Fitch adds this rating to reflect the unique nature of Sri Lanka’s national rating. National ratings are not comparable to Fitch’s international ratings or other countries’ ratings. For details, see Fitch Ratings Recalibrates Sri Lanka’s National Rating Scale, dated 19 December 2022.

The National IFS Ratings of Sri Lankan insurers assess their creditworthiness against other insurers in the country.

Driver Signage Important

The second downgrade of CICPL’s National IFS Rating reflects the downgrade of the long-term sovereign IDR, the re-rating of the country’s rating. u and his credit towards the Sri Lankan media.

We believe that CICPL’s investment risks have increased due to the deterioration of the government’s credit profile and the subsequent trend in rating agencies. money. For details, see Fitch Downgrades 10 Sri Lanka Banks’ Ratings, published 12 January 2023.

CICPL’s investments, similar to other insurance companies in the country, are dominated by fixed income issued or guaranteed by the government, and deposits and securities issued by banks in the country. countries, non-banking organizations and institutions. Fitch maintains the ratings of all Sri Lankan banks in the RWN amid capital and funding shortfalls due to rising debt national debt crisis but access to foreign capital is still restricted.

We have maintained CICPL’s rating on RWN to reflect the insurer’s creditworthiness relative to other categories on the Sri Lanka National Rating scale to further deteriorate amid the high investment and financial risk, pressure on its regulatory capital and a weak fiscal outlook. The increase in investment risk and the pressure on income in the midst of a weak environment can affect the capital profile of the insurance company.

The rating reflects CICPL’s ‘Moderate’ company profile compared to other local insurance companies. Sri Lanka, which is powered by its ownership of cooperative societies, competitive operations with average passion. The insurer’s risk-based capital ratio (RBC) has historically been lower than many of Fitch’s peers. Sri Lanka. The rate fell to 207% at the end of 1H22 due to the increase in market risks and the management of emergency situations after improving to 292% at the end of 2021 (2020: 249 %) because of a LKR600 million IPO c December 2021.


We hope to solve the RWN when it comes to the effect of Sri Lankans Economic downturns on the insurer’s credit report have become more apparent. It may take longer than six months.

Symptoms that can, individually or in combination, lead to negative/downgrading results:

the inability to obtain foreign or domestic assets to pay CICPL’s liabilities, including any government bonds;

increased risk of investments and assets, including downgrades of financial institutions or governments;

abnormal RBC count below 190% for a sustained period;

persistent deterioration in financial performance, including a combined outstanding balance of over 110%, or weak financial performance;

material failure in CICPL’s business information, for example, due to a failure of freedom, operational measures or business information.

Symptoms that can, individually or collectively, lead to positive/improved symptoms:

there is limited scope for generating signals on the surface due to RWN.


The main sources of data used in the analysis are described in the Reference Guide.

Issuer’s Claim Report

The issuer appealed the decision of the original organizing committee.

In accordance with Fitch Ratings’ policies, the appeal committee reviewed the person’s request, and it was determined that an appeal committee could not be formed due to the lack of new information.

Therefore, the result of the original committee, as detailed in this action statement, was not affected.





Co-operative Insurance Company PLC

Natl Ins Fin Str





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