Co-operative Insurance Company’s claims-paying ability upgraded
RAM Ratings Lanka recently recognised Co-operative Insurance
Company’s emphasis on supporting its policyholders in their time of need
by upgrading its claims-paying ability (CPA) from BB to BB+, with a
stable outlook. Reflecting the Company’s commitment to continual
improvement and its desire to deliver the best service possible, the
upgraded rating takes into account the insurer’s strong capitalisation
and successful financial performance.
The new BB+ CPA rating given by RAM Ratings Lanka is a truly
independent measure of an insurer’s risk profile, using a number of
quantitative and qualitative factors to sum up an insurer’s financial
strength and its ability to meet its obligations to policyholders. These
factors include criteria such as regulatory environment, industry
characteristics and trends, investment portfolio, capital strength,
underwriting quality and risk exposure, profitability, competitive
position, ownership quality, and overall management.
Powered by the strength of island-wide co-operative societies, the
Company is built on a ‘mutual insurance’ concept, where its owners and
policyholders are the societies themselves. This innovative and fiscally
prudent approach to pooling policyholders’ risks has driven Co-operative
Insurance Company’s growth in both life and general insurance and
allowed it to carve out a significant share of the rural market.
In spite of difficult economic conditions, Co-operative Insurance
Company has thrived relative to the rest of the industry. While industry
composite premiums actually shrank in the financial year ending December
2009, Co-operative Insurance Company’s composite premiums increased by
14.24 percent, a stunning achievement that reflects the market’s
confidence in the Company. This trend has continued in the first nine
months of the financial year 2010, with overall gross written premiums
increasing by 33.33 percent year-on-year.
In making its assessment RAM Ratings Lanka noted that “the Company
has good potential for expansion” in the life insurance segment, given
its “improving financial performance” and “the low penetration rate” in
the area. The ratings agency also cited the Company’s “improved claims
and cost control” which has led to strong profits in both the General
and Life insurance businesses.
While profit before tax for the General and Life insurance units in
the 2009 financial year was Rs. 65.39 million and Rs. 56.72 million,
those numbers have increased dramatically to Rs. 82.14 million and Rs.
76.77 million in the first three quarters of the 2010 financial year
Begun in 1999, Co-operative Insurance Company’s founding principles
have driven it to great heights, while inspiring the quality service it
has become known for. Equipped with its new BB+ CPA rating, Co-operative
Insurance Company will continue to leverage the strength of its ethical
approach to insurance in order to satisfy its policyholders.