Sri Lankan insurers will most likely see fewer risks in investment and liquidity post-debt restructuring plans of the Sri Lankan government, Fitch Ratings observed.<\/p>\n\n\n\n
This plan is expected to have no direct impact on the local-currency government debt holdings of insurers, banks, and non-banking financial institutions, easing pressure on their investment and capital profiles, the rating agency said.<\/p>\n\n\n\n
Sri Lankan insurers’ investment and liquidity risk profiles are closely linked to the sovereign, banks, and non-bank financial institutions. <\/p>\n\n\n\n
Their investment portfolios are predominantly composed of fixed-income securities issued or guaranteed by the government, corporate debt, and deposits with local banks and non-banking financial institutions.<\/p>\n\n\n\n
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Foreign-currency liquidity in the local banking system remains limited, impacting insurers’ ability to meet foreign-currency obligations such as reinsurance payments and claim obligations from foreign currency-denominated policies. <\/p>\n\n\n\n
However, Fitch-rated insurers have foreign-currency deposits with local banks to support their foreign-currency obligations, and their foreign-currency insurance contract obligations are mostly reinsured.<\/p>\n\n\n\n
Additionally, Fitch maintains a Rating Watch Negative (RWN) on Sri Lankan insurers due to high investment and liquidity risks, pressure on regulatory capital positions, and a weak financial performance outlook. <\/p>\n\n\n\n
While the proposed debt restructuring may not directly affect local-currency government debt holdings, it will impact insurers’ holdings of foreign-currency-denominated Sri Lanka Development Bonds (SLDBs).<\/p>\n","protected":false},"excerpt":{"rendered":"
Sri Lankan insurers will most likely see fewer risks in investment and liquidity post-debt restructuring…<\/p>\n","protected":false},"author":1,"featured_media":3198,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[4,5],"tags":[638,946,14],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/posts\/3197"}],"collection":[{"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/comments?post=3197"}],"version-history":[{"count":0,"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/posts\/3197\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/media\/3198"}],"wp:attachment":[{"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/media?parent=3197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/categories?post=3197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/economictimes.lk\/index.php\/wp-json\/wp\/v2\/tags?post=3197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}