Fitch Ratings has affirmed the ‘CCC+’ Insurer Financial Strength (IFS) ratings of both arms of Sri Lanka Insurance Corporation and simultaneously withdrawn them, the agency said in two rating actions published on Friday.

The withdrawals apply only to the international-scale IFS ratings and were made “for commercial reasons,” Fitch said. Both companies keep their ‘A+(lka)’ National IFS ratings on Stable outlook, which were not part of the review and are unaffected.

Fitch does not usually assign outlooks to issuers rated ‘CCC+’ or below.

Sovereign exposure caps both ratings

In each case the agency said a “favourable” company profile and adequate capital were offset by high investment and asset risk driven by exposure to sovereign-related investments. Sri Lanka’s own Long-Term Issuer Default Rating stands at ‘CCC+’ despite the sovereign upgrade in December 2024.

That exposure pulled both final ratings below their implied level of ‘b’. SLIC General’s Fitch-calculated risky-asset ratio fell to 296 percent at end-2025 from 371 percent a year earlier, while SLIC Life’s eased to 512 percent from 549 percent.

Underwriting and growth

SLIC General was Sri Lanka’s largest primary non-life insurer in 2025 by gross written premiums. Its combined ratio rose to 105 percent from 100 percent, reflecting a higher net loss ratio after claims arising from Cyclone Ditwah. Net profit was broadly stable at Rs. 2.5 billion, against Rs. 2.7 billion in 2024, as investment income offset the weaker underwriting result. Premiums grew 20 percent, driven by 30 percent growth in motor insurance after vehicle import restrictions were relaxed in 2025 — leaving the book concentrated in motor, which management wants to dilute with fire and engineering lines.

SLIC Life remained the third-largest life insurer with around 14 percent of premiums. Its premiums grew 24 percent, slightly above the industry’s 23 percent, but net profit fell 11 percent to Rs. 2.3 billion on higher underwriting, acquisition and claims costs.

Both companies hold regulatory capital well above the 120 percent minimum — 269 percent for SLIC General and 523 percent for SLIC Life — though Fitch scored both at ‘Weak’ on its Prism Global capital model.

Sources: EconomyNext — SLIC General, EconomyNext — SLIC Life.