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ICRA downgrades National Insurance Company's rating to AA from AA+

Report said NIC is likely to report a solvency ratio below the minimum regulatory requirement in FY19 as the company has no headroom to raise additional subordinated debt

Subrata Panda 

Insurance, funds, Mutual funds
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has downgraded the long-term rating for (NIC) from AA+ to AA. Also, the outlook on the long- term rating has been revised to “negative” from “stable”.

According to the report on National Insurance Company, “The rating downgrade was based on the continued weak underwriting performance driven by a high combined ratio, resulting in pressure on profitability, and the high portfolio concentration in the motor and health segments, leading to a weak solvency ratio below the regulatory minimum”.

The report also said is likely to report a solvency ratio below the minimum regulatory requirement in FY19 as the company has no headroom to raise additional subordinated debt, and there are no signs of any capital infusion by the government in the near term.


First Published: Fri, December 28 2018. 01:21 IST
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