CICL's CPA rating of BB reaffirmed
RAM Ratings Lanka has reaffirmed the BB Claims-Paying Ability (CPA)
rating of Co-operative Insurance Company Limited ("CICL" or "the
Company"), with a stable outlook, a media release from the company said.
The rating is premised on the Company's moderate competitive
position, extensive distribution network and moderate underwriting
standards. The rating is pressured by hefty overheads and inadequate
reserving in the general-insurance business. CICL is a small composite
insurer in an industry where the two largest players command about 57
per cent of the sector's Gross Written Premiums ("GWPs"). Leveraging on
the distribution networks of other co-operative societies, the Company
sustained its above-average premium growth in FYE 31 December 2008 ("FY
Dec 2008").
CICL's overall premiums augmented 67.52 per cent to Rs. 653.45
million, resulting in a 1.12 per cent share of the market as at the same
date (end-FY Dec 2007: 0.75 per cent). The growth was mainly driven by
the motor insurance sub-class, which charted an unprecedented 97.97 per
cent year-on-year ("y-o-y") expansion in 2008.
CICL's overall claims ratio for general insurance increased from
46.80 per cent to 58.98 per cent in FY Dec 2008, owing to the high
claims experience in the motor sub-class. |