RAM Ratings Lanka has upgraded Janashakthi Insurance PLC's long- and short-term claims-paying ability ratings to A and P2, respectively from A- and P2. The outlook on the long term rating is stable. The upgrade reflects the continued improvement in the Company's life segment where it now compares well against its higher rated peers.
The Company's ratings are supported by its good competitive position, underwriting performance in the life segment and above-average capitalisation levels. On the other hand, the ratings are tempered by its average, albeit improving, underwriting performance in the highly competitive general segment.
"We acknowledge that Janashakthi has been successful in managing its claims in both segments whilst also implementing tight cost controls that have aided its overall performance.
The improvement in Janashakthi's claims experience is reflected in its easing claims ratio in both general and life segments over the recent years. Resultantly, its life segment has charted an uptrend in underwriting performance, the net underwriting losses in Janashakthi's general segment has contracted over the years."
The Company's general segment net underwriting loss during 1H FY Dec 2013 of LKR 129.00 million also remained similar to that of last year amidst the competitive climate.
In addition, Janashakthi's cost controls are also reflected in the expense ratio which stood at around 42% in the last 3 years despite expansion of operations.
As such, the net underwriting margin improved to negative 4.59% as at end-March 2013 compared to negative 8.00% as at end-December 2009 (end-Dec 2012: -4.93%). In the meantime, its life net underwriting margin had broadened to 30.61% as at 31 FYE December 2012 ("FY Dec 2012"), marginally weakening to 27.34% by 1H FY Dec 2013.
Although the Company commenced its operations focusing on life insurance, it has, over the years, achieved strong growth in the general segment.
The Company's ratings are supported by its good competitive position, underwriting performance in the life segment and above-average capitalisation levels. On the other hand, the ratings are tempered by its average, albeit improving, underwriting performance in the highly competitive general segment.
"We acknowledge that Janashakthi has been successful in managing its claims in both segments whilst also implementing tight cost controls that have aided its overall performance.
The improvement in Janashakthi's claims experience is reflected in its easing claims ratio in both general and life segments over the recent years. Resultantly, its life segment has charted an uptrend in underwriting performance, the net underwriting losses in Janashakthi's general segment has contracted over the years."
The Company's general segment net underwriting loss during 1H FY Dec 2013 of LKR 129.00 million also remained similar to that of last year amidst the competitive climate.
In addition, Janashakthi's cost controls are also reflected in the expense ratio which stood at around 42% in the last 3 years despite expansion of operations.
As such, the net underwriting margin improved to negative 4.59% as at end-March 2013 compared to negative 8.00% as at end-December 2009 (end-Dec 2012: -4.93%). In the meantime, its life net underwriting margin had broadened to 30.61% as at 31 FYE December 2012 ("FY Dec 2012"), marginally weakening to 27.34% by 1H FY Dec 2013.
Although the Company commenced its operations focusing on life insurance, it has, over the years, achieved strong growth in the general segment.
