Co-operative Insurance rating upgraded

RAM Ratings Lanka recently recognized Co-operative Insurance Company’s emphasis on supporting its policyholders in their time of need by upgrading its claims-paying ability (CPA) from BB to BB+, with a stable outlook.

Reflecting the company’s commitment to continual improvement and its desire to deliver the best service possible, the upgraded rating takes into account the insurer’s strong capitalization and successful financial performance.

The new BB+ CPA rating given by RAM Ratings Lanka is a truly independent measure of an insurer’s risk profile, using a number of quantitative and qualitative factors to sum up an insurer’s financial strength and its ability to meet its obligations to policyholders. These factors include criteria such as regulatory environment, industry characteristics and trends, investment portfolio, capital strength, underwriting quality and risk exposure, profitability, competitive position, ownership quality, and overall management.

Powered by the strength of islandwide co-operative societies, the company is built on a ‘mutual insurance’ concept, where its owners and policyholders are the societies themselves.

This innovative and fiscally prudent approach to pooling policyholders’ risks has driven Co-operative Insurance Company’s growth in both life and general insurance and allowed it to carve out a significant share of the rural market. It is no surprise then that, in spite of difficult economic conditions, Co-operative Insurance Company has thrived relative to the rest of the industry. For example, while industry composite premiums actually shrank in the financial year ending December 2009, Co-operative Insurance Company’s composite premiums increased by 14.24 percent, a stunning achievement that reflects the market’s confidence in the Company.

This trend has continued in the first 9 months of the financial year 2010, with overall gross written premiums increasing by 33.33 percent year-on-year.