Fitch ups Sri Lanka Insurance to AA-(lka)

Fitch Ratings said it upgraded Sri Lanka Insurance Corp. Ltd.'s national long-term issuer default rating to AA-(lka) from A+(lka) and affirmed its national insurer financial strength rating at AA-(lka).

The outlook is stable.

The upgrade reflects the company's recent nationalization, which indicates potential for government support should this be required, Fitch said.

The company's systematic importance to the Sri Lankan economy is underpinned by its position as the largest insurer in the market by total assets, the agency said.

Nevertheless, the agency said that the Sri Lankan insurance industry is faced with a myriad of cyclical and structural challenges, including a slowing economy, falling interest rates, price competition and a lack of breadth and depth in the capital markets.

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