Asian Alliance Insurance ratings continue to be pressured by the company’s small size and weak underwriting results from its general business, according to RAM Ratings Lanka which reaffirmed the company’s claims paying ability rating of BB+ with a stable outlook this week. In a press release, RAM Ratings noted that the company’s rating is supported by its life-insurance franchise and its conservative investment strategy.
The press release further stated that Asian Alliance retained its position as the seventh largest composite insurance player but owing to the harsh macroeconomic conditions witnessed in fiscal year 2008, the company’s life segment expanded at a slower pace. However, its general business recorded a spike in growth boosted by an expanding branch network and sales force.
However, RAM stated that without a clear strategy, Asian Alliance’s branch expansion and rapid growth in the general segment, took its toll on the company’s claims and expense ratio. The management has also begun to address the overheads and high claims in the general segment. Low performing staff are being axed and recruitment halted. RAM stated that the company has reduced staff allowances and has tightened the screening process to improve its underwriting results. |
E-mail