RAM Ratings Lanka has upgraded Janashakthi PLC’s claims-paying ability rating to A- from BBB+; the outlook is stable.
The rating upgrade is premised on Janashakthi’s strong performance since the previous review, underpinned by its ability to improve its expense ratio and maintain a better claims ratio than most peers in the general segment.
Janashakthi’s rating continues to be supported by the Company’s strong competitive position in the general segment and its underwriting standards. RAM Ratings Lanka also viewed the introduction of a formalised investment framework positively.
Janashakthi is Sri Lanka’s third largest general insurer, accounting for 12.76% of the general insurance industry’s premium in FYE 31 December 2009. The Company, which started in 1992, was able to achieve strong growth through its focus on the general segment.
Premiums from this segment at present account for roughly 70% of the Company’s income. Janashakthi’s strong competitive position is underpinned by its wide geographical reach, having a branch network only surpassed by the two largest insurance companies.
In terms of life insurance, the Company is the fifth largest taking up 5.87% of the industry’s premiums.
Janashakthi’s Managing Director Prakash Schaffter said that Company was delighted with the RAM Ratings upgrade. “This is indicative of the strong position we’re consolidating in Sri Lanka’s insurance industry and the credibility we enjoy with the public of Sri Lanka.”
“We recently introduced a formalised investment management framework. Our combined ratio in the general business charted an improving trend, backed by tight overhead controls. In terms of investments, the Company has shifted to a more liquid stance with fixed deposits and government securities taking up 60.51% of total investments.
In fact our insurance liability to shareholders’ funds ratio stood at 3.35 times as at end-June 2010; healthier than similar-sized peers,” he added.
Janashakthi Insurance PLC became the most profitable insurer among all quoted insurance companies by recording a Profit after Tax of Rs. 145.4 m for the first half 2010. This is a remarkable achievement, given the nature of the industry which has 19 players competing.
As the third largest general insurer in Sri Lanka, Janashakthi Insurance goes on record as having paid over Rs. 16 billion in claims paid in the past six years. It paid in excess of Rs. 14 b over the last five years reflecting a steady increase in claim payments.
Figures reveal Rs. 5 b in 2005, Rs. 2.23 b in 2006, Rs. 2.67 in 2007, Rs. 2.52 b in 2008, Rs. 2.82 b in 2009 and Rs. 1.56 b as of the first half 2010.
Having acquired Rs. 11 billion in assets in a short period of time, the Company holds over Rs.
3.8 billion in Government Securities and is also the only insurance company to acquire a state owned insurance company. It was also the fastest to reach the Rs. 5 billion mark in annual revenue and enjoys the highest stated capital of Rs. 1.49 billion among quoted insurance companies.
Janashakthi’s large haul of awards this year has been quite remarkable. It clinched dual honours for two consecutive years at the glittering 19th World Brand Excellence Awards Ceremony. It was bestowed with the prestigious ‘Award for Banking and Financial Services’ and the ‘Award for Overall Brand Leadership’.
Winning triple honours at the glittering SLIM Awards 2010, it became the only insurance company in Sri Lanka to win the highest number of awards in the service category at this event.
Janashakthi Insurance also clinched a Silver Award in the Insurance Category for the third consecutive year at the recent National Business Excellence Awards 2010
Janashakthi’s commitment to sports is seen in its programme which sponsors talented and promising rural athletes. It is also active in other areas of social responsibility such as installing signage at the National Eye Hospital, supporting sailing, squash and its other special interest sport, namely hockey. Janashakthi has, over the years, funded programmes for the safety of people at pedestrian crossings, tsunami-aid programmes, safe bottle lamp projects and Dengue awareness projects. Good corporate governance has established the image of the company as a socially responsible entity delivering greater and consistent value to customers, employees, shareholders and the country at large during the 16 years of its service to the nation.