Fitch Ratings – Colombo: Fitch Ratings has affirmed Sri Lanka Insurance Corporation Life Limited’s (SLICLL) ‘CCC+’ Insurer Financial Strength (IFS) Rating. Fitch has simultaneously withdrawn the IFS Rating.
The affirmation reflects SLIC Life’s ‘Favourable’ company profile and adequate capital position offset by its high investment and asset risk, which is driven by exposure to sovereign-related investments. Fitch typically does not assign Outlooks to issuers with a rating of ‘CCC+’ or below.
Fitch has withdrawn the IFS Rating for commercial reasons. SLIC Life’s ‘A+(lka)’/Stable National IFS Rating is not part of this review and is unaffected by the withdrawal of the IFS Rating.
Key Rating Drivers
‘Favourable’ Company Profile: Fitch ranks SLIC Life’s company profile as ‘Favourable’, reflecting a ‘Favourable’ business profile and ‘Neutral’ corporate governance relative to other Sri Lankan insurers. Its business profile is supported by a long operating history, substantive franchise and wide distribution network. SLIC Life remained the third-largest life insurer in Sri Lanka in 2025, with a gross written premium (GWP) market share of around 14%.
High Exposure to Sovereign Assets: Sri Lanka’s weak sovereign credit quality (Long-Term Issuer Default Rating: CCC+) exacerbates the investment and liquidity risks of domestic insurers such as SLIC Life. Its Fitch-calculated risky-asset ratio was high at 512% at end-2025 (2024: 549%), with investments mostly in fixed-income securities including government securities and corporate debt. Fitch scores SLIC Life’s investment and asset risks at ‘ccc’ on the international scale, reflecting high exposure to sovereign and sovereign-related assets. As a result, its final IFS Rating is below its implied IFS Rating of ‘b’.
Satisfactory Regulatory Capital Position: SLIC Life’s regulatory capital adequacy ratio reduced to 523% by end-2025 (2024: 581%) but remained well above the 120% regulatory minimum and the industry average of 327%. The year-on-year decline reflected a higher market risk charge, primarily from increased interest and equity risk charges. We estimate SLIC Life’s Fitch Prism Global score remained ‘Weak’ in 2025, similar to the 2024 result, reflecting high investment risk.
Continued Growth: SLIC Life recorded GWP growth of 24% in 2025, slightly above the industry average of 23%, supported by new business generation and strong renewals across key product segments. Growth has also been supported by the insurer’s agency expansion, bancassurance partnerships and digital channel enhancements. Despite the strong top-line growth, net profit was down 11% to LKR2.3 billion, reflecting higher underwriting and acquisition costs and claims and benefits.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
No longer applicable as the IFS Rating has been withdrawn
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
No longer applicable as the IFS Rating has been withdrawn