SL’s only reinsurer gets ‘AA-’ rating from Fitch

Fitch Ratings has affirmed National Insurance Trust Fund Board’s (NITF) National Insurer Financial Strength (IFS) Rating and National Long-Term Rating at ‘AA-(lka)’. The Outlook is Stable.  

The affirmation reflects the company’s strong domestic business profile, conservative investment mix as well as strong financial performance and capitalisation. 
This is partly offset by volatility in profitability and capitalisation over the previous 15 months due to back-to-back natural disasters and high claims. 

 
Fitch believes NITF has a strong domestic business profile, which is underpinned by its role as the country’s only reinsurer, its well-established exclusive product lines, its function as an arm of the state in implementing policies, its full government ownership and a mandate requiring all domestic non-life operators to cede 30 percent of their reinsurance to NITF.  

NITF’s strong capitalisation is reflected in its risked-based capital (RBC) ratio of 314 percent as at end-June 2018 (2017: 255 percent, 2016: 385 percent), which is well above the 120 percent regulatory minimum. 

However, capitalisation has been highly volatile since mid-2017 due to natural disaster-related losses and large dividend payments to the State. 

“We believe the insurer’s capital position may come under pressure if it continues to pay high dividends during periods of increasing frequency of large natural catastrophes,” Fitch said. 

Salahuddin noted that five Sri Lankan exhibitors are expected to participate in Ambiente next year to showcase their products.

Ambiente is scheduled to be held from 8 – 12 February 2019 in Frankfurt am Main, Germany. 

Addressing the press briefing, Messe Frankfurt Group Senior Vice President Consumer Goods and Board Member, Stephan Kurzawski noted that Ambiente 2018 featured around 4,441 exhibitors and attracted 134,600 trade visitors from 168 countries, presenting classic and innovative products over five days. 
He highlighted that Ambiente offers a wide range of events, programmes for newcomers, trend presentations and award ceremonies, all at the same time.
The top 10 visitor nations (excluding Germany) include Italy, China, France, United Kingdom, United States, Netherlands, Spain, Turkey, South Korea and Switzerland.

Kurzawski emphasised that Sri Lankan designs are in demand at the trade fair while noting that Sri Lanka is rich in handicrafts, ceramic and other decorative items.
According to organisers, the flow of Sri Lankan buyers going to Ambiente fair to buy high-end lifestyle products have been increasing every year.
“As the demand of Sri Lankan household keeps changing, retailers will need to response quickly to the changing trends. At Ambiente this can be seen at the various halls, events and presentations,” Kurzawski said.

He pointed out that the trade fair would also be a good opportunity for Sri Lankan manufactures to get inspired by various designs and innovations displayed .
Kurzawski affirmed that Frankfurt is thus the number one trading location for volume business outside China. 

“Fascinating presentations and valuable tips running on all five days of the trade fair will provide insights to current market developments. Experts will present how to compile attractive product ranges and how to position products in the best possible way,” he elaborated. 

Meanwhile, Salahuddin revealed that  seven Sri Lankan firms and two designers are signed up to participate for  Messe Frankfurt’s Texworld Paris, the international fair for fashion fabrics, trims and accessories, which would be held during 17-20th of September, this year. 

The biannual event will feature 15, 000 visitors and 1, 700 exhibitors. 

Sri Lankan designers are also expected to hold their own fashion show ‘Sri Lanka on Stage’ on September 20 as part of the event. 

Salahuddin said the Sri Lankan fashion show will be one of the most eye-catching events at the Texworld. 

He said that overall there are nearly 40 exhibitors from Sri Lanka who will take part in Messe Frankfurt’s exhibitions all year around. 

Speaking of Sri Lanka’s prospects, Kurzawski noted that the country’s product portfolio remains very attractive to the European consumer as the products are tailored to meet the tastes of the European consumer, which Sri Lanka should capitalise on. 

When queried if Messe Frankfurt plans to make Sri Lanka a partner country at Ambiente similar to India, Kurzawski said, “We need a certain volume, as well as willingness of associations and the government”.

Messe Frankfurt also plans to open its local outbound sales office in Colombo this year. 

Messe Frankfurt is the world’s biggest trade fair, convention and event organiser with its own premises. It holds 146 trade fairs and exhibitions worldwide attracting 4.4 million visitors and 95,000 exhibitors annually. 

Messe Frankfurt employs a workforce of 2,400 in around 30 sites and generates annual sales of around 669 million euros. The group based in Frankfurt am Main is owned partly by the City of Frankfurt (60 percent) and State of Hesse (40 percent).