🚀 Softlogic Life Insurance PLC (AAIC) – Strong Buy Recommendation
Softlogic Life (AAIC) is a classic Fast Grower in Sri Lanka’s underpenetrated life insurance market.
📈 Gross Written Premiums (GWP) have grown 10x in the last decade, with a 29% YoY increase in 1H 2025, far outpacing the industry. The company has climbed from the 5th → 2nd largest insurer in just six years, powered by technology-led innovation and customer-focused products.
💰 At the current price of LKR 76.10, AAIC trades at a TTM P/E of ~ 6.5, while sustaining 20%+ growth—giving a PEG ratio of just 0.33. That’s deep value for a company with expanding margins, ROE above 20% most of the last decade, and strong cash flows.
📊 Compounding Growth Profile (2016–2025):
- 🏦 NAVPS: LKR 6.2 → 37.7
- 💵 Total dividends paid: LKR 22.84
- 🎯 Total benefit to shareholders: LKR 60.56
- 📈 CAGR (NAVPS only): 19.8%
- 🔄 CAGR (with dividends reinvested): 25.6%
- ✨ Growth multiple: 9.8x
🔥 Operational Strength:
- 🧮 ROE Track Record (10Y): Mostly 20–60%, peaking at 59.8%
- 📊 Net Written Premiums: 3,589m (2015) → 33,136m (2025 TTM)
- 🚀 10Y CAGR: 20.8%
💡 Valuation Upside is Compelling:
- 🎯 12-Month Target: LKR 140 (+80%)
- 🚀 2–3 Year Target: LKR 244 (+220%)
⚠️ Risks remain (Sri Lankan macro, competition, investment portfolio concentration), but the risk/reward is highly attractive.
🏆 Rating: ⭐⭐⭐⭐⭐ Strong Buy
✅ Conviction: High
How well do narratives help inform your perspective?
Disclaimer
The user kalindu has a position in COSE:AAIC.N0000. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.