Life Insurance Corporation Of India

Life Insurance Corporation Of India

The ratings of LICI continue to reflect its strong risk-adjusted capitalisation, sound track record of profit generation and niche market position. However, the ratings also take into account LICI's high reliance on its parent, Life Insurance Corporation of India, for expertise and the lack of any internal enterprise risk management (ERM) framework.

LICI enjoys a niche market position targeting the Indian expatriate community in the Gulf Cooperation Council. Leveraging off of the group's brand, LICI enjoys an excellent market share of life insurance amongst this growing Indian community in the region.

LICI's current and prospective risk-adjusted capitalisation is considered to be strong, having demonstrated a sound resilience to market movements during the financial crisis. The company's ability to generate capital internally is supported by its long track record of delivering technical profits, which is expected to continue going forward.

A.M. Best remains concerned over the lack of any in-house ERM, with LICI continuing to rely heavily on its parent. In A.M. Best's opinion, should the expansion plans into previously unexplored markets and types of customers materialize, it will become necessary for LICI to develop stronger internal ERM, actuarial and product engineering capabilities.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilised include: "Understanding Universal BCAR"; "BCAR for Life and Health Insurers"; "Assessing Country Risk"; and "Risk Management and the Rating Process for Insurance Companies". Methodologies can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

A.M. Best Europe - Rating Services Limited is a subsidiary of A.M. Best Company. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.