...Fundamentals to Remain Steady: Fitch Ratings sees the outlook on Sri Lanka's insurance sector as stable even though the split of composite insurers into life and non-life companies, as mandated by the regulator effective February 2015, may create industry uncertainty. This is based on the view that most insurers will maintain stable financial fundamentals in 2016, supported by moderate sector growth. Regulatory Reforms Positive: Fitch views the many regulatory changes as positive for the industry as they will promote efficient capital allocation, corporate governance, and better risk management. Minimum regulatory capital has been increased to LKR500m from LKR100m, risk-based capital (RBC) will replace the current rules-based solvency regime by 2016, and insurance companies ¡ with few exceptions ¡ are required to list by 2016. Challenging Non-life Profitability Outlook: Intense pricing competition in the motor segment is likely to hold the combined ratios (sum of loss ratio and expense...
