The ratings of LICI reflect its good, albeit declining, risk-adjusted capitalisation, track record of profit generation and niche market position. Offsetting factors include the lack of an integrated enterprise risk management (ERM) framework and the financial profile of LICI’s ultimate parent,
LICI’s strong level of growth during 2015 eroded the company’s risk-adjusted capitalisation; however, it remains at a good level. Nonetheless, the effectiveness of LICI’s capital management strategy is an area of concern, owing to the extent to which the company’s risk-adjusted capitalisation has diminished in recent years as business expanded.
LICI maintains a sound level of profitability, with the company reporting a pre-tax profit of
LICI also benefits from a niche market position, targeting the Indian expatriate community in the
An offsetting rating factor is LICI’s internal ERM capability, which remains at a developing level. As the company expands, it will become increasingly important to evolve its ERM practices, as well as actuarial and product engineering capabilities.
LICI’s financial strength is not considered to be currently affected by the financial profile of its parent, LIC of
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