AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of Life Insurance Corporation (International) B.S.C. (c)
The rating action follows the improvement of LICI’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), primarily driven by unrealised investment gains during the first six months of 2019.
The ratings reflect LICI’s balance sheet strength, which AM Best categorises as adequate, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM). The negative outlooks reflect the pressures on the balance sheet strength and ERM assessments, primarily stemming from the ongoing breach of the company’s regulatory solvency requirement in the
LICI’s shareholders’ equity increased considerably in the first half of 2019 to
LICI has had adequate operating performance historically as demonstrated by a five-year average return on equity of 2.4% (2014-2018). Whilst the company reported an after tax loss of
LICI benefits from a niche market position, targeting the Indian expatriate community in the
LICI’s ERM framework is developing but weaknesses persist, with the company appearing to have a reactive rather than proactive approach to managing its risks, particularly evidenced in the area of capital management.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry. Visit www.ambest.com for more information.
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Source: AM Best
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