RAM Ratings said the rating is premised on the firm's growing franchise in the life-insurance business, adequate life underwriting standards, moderate performance, and conservative investments.
"However, these positives are tempered by the company’s miniscule size," it said in a statement.
"In addition, its deteriorating underwriting vis-a-vis general insurance, stemming from its delicate competitive position, continues to pressure its rating."
RAM said AAI remains a small player, accounting for about 2.46 percent of the composite insurance premiums for the financial year ending 31 December 2007.
Even though the company’s competitive position in general insurance is weak, it has been successful in establishing its franchise in the life-insurance segment, the rating agency said.
"However, short-term prospects will be somewhat challenging, given the highl