Janashakthi Insurance back on track

Janashakthi Insurance has strengthened its investment portfolio and regained a stable rating outlook, since the insurance sector regulator suspended its licence in May this year.

Janashakthi Insurance was put on a ‘Rating Watch’ by rating agency RAM Ratings Lanka, in May 2009, after the insurance company’s licence was suspended by the Insurance Board of Sri Lanka.

The licence was suspended because the insurer’s solvency margins fell below the regulatory minimum.

But now, RAM Ratings Lanka says that it has lifted the Rating Watch (with a negative outlook) on Janashakthi Insurance, and has also reaffirmed its claims-paying ability of BBB+, with a stable outlook.

“The reaffirmation of the Company’s rating is reflective of its strong competitive position, improving underwriting results and enhanced investment portfolio,” said RAM Ratings.

After its suspension, Janashakthi has revamped its investment portfolio.

By end-June 2009, most of the company’s corporate debt securities were either listed or bank-guaranteed and Janashakthi also went in for more low risk investments, like government securities and fixed deposits with banks.

“Going forward, the company expects to further increase its investments in low-risk treasury assets and bank deposits,” said Ram Ratings.

“Janashakthi has also concentrated on improving its underwriting results,” said the rating agency.

Janashakthi has maintained its position as the 5-largest insurance company in Sri Lanka, accounting for 9.22% of the industry’s composite premiums by the end of 2008 ( Sri Lanka’s 2 biggest insurers account for around 60% of the market).

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