News
Fitch downgrades seven Sri Lankan Insurers’ National IFS Ratings;maintains Watch Negative
Fitch Ratings downgraded the National Insurer Financial Strength (IFS) Ratings of seven Sri Lankan insurers following the recent sovereign downgrade and recalibration of the agency’s Sri Lankan National Rating scale. The seven insurers’ ratings have been maintained on Rating Watch Negative (RWN).
The recalibration is to reflect changes in the relative creditworthiness among Sri Lankan issuers following Fitch’s downgrade of Sri Lanka’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’ on 1 December 2022. Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC+’ or below.
National rating scales are a risk ranking of issuers in a particular market designed to help local investors differentiate risk. Sri Lanka’s national rating scale is denoted by the unique identifier ‘(lka)’.
Fitch adds this identifier to reflect the unique nature of the Sri Lankan national scale. National rating scales are not comparable with Fitch’s international rating scales or with other countries’ national rating scales. For details, see Fitch Ratings Recalibrates Sri Lanka’s National Rating Scale, dated 19 December 2022.
The National IFS Ratings of the Sri Lankan insurers take into consideration their creditworthiness relative to other issuers in the country. The recalibration of the Sri Lankan National Rating scale has resulted in downgrades of the National IFS Ratings of the following insurers:Sri Lanka Insurance Corporation Limited to ‘A(lka)’/RWN from ‘AA(lka)’/RWN; National Insurance Trust Fund Board to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN;
People’s Insurance PLC to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN; HNB Assurance PLC to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN; HNB General Insurance Limited to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN; Continental Insurance Lanka Limited to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN; and Construction Guarantee Fund to ‘BB(lka)’/RWN from ‘BBB-(lka)’/RWN.
KEY RATING DRIVERS
The downgrades of the National IFS Ratings of the seven insurers are driven by the downgrade of the sovereign’s Long-Term Local-Currency IDR and the recalibration of the national rating scale while also reflecting the relative creditworthiness among Sri Lankan issuers.
We believe that the investment and liquidity risks of insurers have increased due to the weaker credit profile of the sovereign and the subsequent rating action on various financial institutions; see Fitch Downgrades 10 Sri Lankan Banks’ Ratings, dated 12 January 2023.
The rated insurers’ investment portfolios, similar to that of other insurers in the country, are dominated by fixed-income securities issued or guaranteed by the government, deposits and securities issued by local banks, non-bank financial institutions and corporations. Fitch maintains the ratings of all domestic Sri Lankan banks on RWN amid the likelihood of capital and funding stress as the default risk on domestic debt increases while access to foreign-currency funding remains constrained.
We have maintained the insurers’ ratings on RWN to reflect the potential for these insurers’ creditworthiness relative to other entities on the Sri Lankan National Rating scale to further deteriorate amid high investment and liquidity risks, pressure on regulatory capital positions and a weaker financial performance outlook. The heightened investment risks and earnings pressure amid the weak operating environment could affect insurers’ regulatory capital profiles.
Latest News
Prime Minister Dr Harini Amarasuriya meets Foreign Secretary of the United Kingdom
Prime Minister Dr Harini Amarasuriya currently undertaking an official visit to London, United Kingdom, to participate in the 43rd Commonwealth of Learning (COL) Board of Governors Meeting 2026 held a bilateral meeting with the Yvette Cooper MP, Foreign Secretary of the United Kingdom ON Wednesday [20]. The Prime Minister was accompanied by Sri Lanka’s High Commissioner to the United Kingdom, Nimal Senadheera, along with officials from the Sri Lankan High Commission.
During the meeting, the Prime Minister conveyed Sri Lanka’s appreciation to the United Kingdom for the support extended in the aftermath of Cyclone Ditwa, including ongoing rebuilding and recovery assistance. The Prime Minister also commended the United Kingdom’s support in facilitating increased bilateral trade and exports for Sri Lanka.
The Prime Minister briefed the UK delegation on Sri Lanka’s recent economic developments and policy priorities, the Government’s commitment to advancing human rights and reconciliation, as well as Sri Lanka’s positive growth trajectory.
The two sides also exchanged views on current global geopolitical developments, challenges in the energy sector, and the importance of enhancing regional connectivity and long-term energy security.
Both sides also emphasised the importance of strengthening structured academic mobility frameworks while ensuring fairness, clarity, and integrity within migration systems.
They also reaffirmed their commitment to further strengthening bilateral cooperation between the two countries in areas of mutual interest.
[Prime Minister’s Media Division]
News
Suspects involved in sureties controversy granted bail
Airbus bribe case:
Colombo Additional Magistrate Lahiru Silva yesterday (20) granted bail to Mohamed Riswan and Mohamed Irshan, who allegedly received money to stand as sureties for the late former SriLankan Airlines CEO, Kapila Chandrasena. They were identified as residents of Sanchi Arachchi Watta, situated next to the Hulftsdorp court complex.
Chandrasena was found dead at his brother-in-law, Aravinda De Silva’s residence, at No. 38, Pedris Road, Kollupitiya, on 8 May.
The Magistrate also granted bail to B. A. Tissa and Perumal Ganesh, who arranged for Riswan and Irshan to stand as sureties for Chandrasena, who is under investigation for allegedly receiving a USD 2 million bribe through his wife to facilitate an Airbus deal. They, too, residents of Sanchi Arachchi Watta, were granted bail on two personal bail of Rs. 500,000 each.
Airbus had to pay USD 4 billion in penalties after admitting it had paid huge bribes to secure contracts in 20 countries. Sri Lanka is among them.
The Magistrate directed that the Grama Niladhari should certify their residence and the relevant certificates submitted to court and to establish the financial status of those who stood as sureties for the four persons.
The court was told that Mohamed Riswan and Mohamed Irshan obtained 17 Grama Niladhari certificates from January till May 2026. On the basis of a statement recorded from Keselwatta Grama Niladhari S. Nilantha Silva police informed court that the first suspect had obtained 10 certificates and the second person seven.
Fourth suspect Ganesh had first met those who stood as sureties, on 05 May, in the court premises and struck the deal. Crime OIC of Keselwatta Police, Sub Inspector K.W.D. Anuruddha, told court that Mohamed Riswan, Mohamed Irshan and B. A. Tissa hadn’t even known who Chandrasena was and were not related to him in anyway, according to investigations. Police requested that the four persons be further remanded.
The Magistrate granted them bail and set the next hearing for 25 June.
Legal sources said that such illegal practices were rampant, and in this particular case the Court Registrar should have been able to see that the sureties were very much unlikely to be relatives of Chandrasena.
By Shamindra Ferdinando
News
Steps underway to safeguard Sri Lanka’s maritime heritage
The government has initiated a major conservation drive to protect its fragile northern marine ecosystems, with top government officials pledging stronger action against environmental degradation, destructive fishing practices, and Illegal, Unreported and Unregulated (IUU) fishing in the country’s northern seas and adjacent islands.
A high-level discussion chaired jointly by Deputy Minister of Environment Anton Jayakody and Deputy Minister of Defence Aruna Jayasekara was held on Tuesday (19) at the Ministry of Environment to formulate an integrated strategy aimed at safeguarding Sri Lanka’s maritime heritage and accelerating marine conservation initiatives.
Senior naval officers, top environment officials, conservation experts, and representatives from several state agencies attended the meeting, which focused heavily on the declaration of new Marine Protected Areas (MPAs) in the Northern Province.
Among those present were Secretary to the Ministry of Environment K.R. Uduwawala, Chairman of the Marine Environment Protection Authority Samantha Gunasekara, Director General of the Coast Conservation and Coastal Resource Management Department Prof. Turny Pradeep Kumara, Conservator General of Forests Palamakumbura, officials of the Department of Wildlife Conservation, and senior ecologists from International Union for Conservation of Nature.
Officials stressed that the protection of Sri Lanka’s northern marine zone was essential not only for biodiversity conservation but also for sustaining the livelihoods of fishing communities and strengthening the country’s maritime standing internationally.
A major concern raised during the meeting was the increasing ecological destruction caused by IUU fishing activities. Ministers warned that such unlawful practices posed a severe threat to marine biodiversity and the economic stability of local fishermen.
The discussion also focused on intensifying surveillance operations and strengthening law enforcement mechanisms to combat destructive fishing methods, including dynamite fishing, unauthorized spearfishing, and the use of banned fishing gear that continue to devastate coral reef ecosystems and endangered marine species.
Attention was also drawn to governance and infrastructure shortcomings within fishing harbours, with officials identifying the lack of proper management systems and formal regulatory mechanisms as major vulnerabilities contributing to environmental degradation.
As part of the proposed conservation strategy, several islands and surrounding marine zones in the Northern Province have now been identified for official declaration as Marine Protected Areas.
Authorities clarified that the establishment of MPAs would not undermine the livelihoods of local communities but instead promote sustainable fishing practices while opening new opportunities for eco-tourism development.
Officials said these protected marine zones could eventually be developed into internationally recognised eco-tourism destinations, generating fresh economic opportunities for the Northern Province while enhancing Sri Lanka’s environmental credentials globally.
The meeting further highlighted that the declaration of new MPAs would reinforce Sri Lanka’s commitment to international biodiversity conservation obligations and demonstrate the country’s role as a responsible custodian of the Indian Ocean’s marine resources.
A proposal was also made to establish a multi-sectoral working group comprising representatives from the Ministries of Tourism, Fisheries, Defence, Environment, and Justice to implement a coordinated mechanism for the protection of coastal and marine resources under the leadership of the Ministry of Environment.
Officials described the initiative as another significant milestone in Sri Lanka’s broader journey towards building a sustainable biosphere and ensuring long-term environmental security for future generations.
By Ifham Nizam
-
Features5 days agoSri Lankan Airlines Airbus Scandal and the Death of Kapila Chandrasena and my Brother Rajeewa
-
News6 days agoLanka’s eligibility to draw next IMF tranche of USD 700 mn hinges on ‘restoration of cost-recovery pricing for electricity and fuel’
-
News5 days agoKapila Chandrasena case: GN phone records under court scrutiny
-
News5 days agoRupee slide rekindles 2022 crisis fears as inflation risks mount
-
Features2 days agoOctopus, Leech, and Snake: How Sri Lanka’s banks feast while the nation starves
-
Business5 days agoExpansion of PayPal services in Sri Lanka officially announced
-
Features7 days agoMysterious Death of United Nations Secretary General Hammarskjöld
-
News5 days agoCourt orders further arrests in alleged USD 42 Mn NDB fraud case
