Press Release

JCR-VIS Reaffirms IFS Rating of UBL Insurers Limited

Karachi, December 30, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of UBL Insurers Limited (UIL) at ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 23, 2015.

The assigned rating of UBL Insurers Limited (UIL) derives strength from its strong sponsors’ profile, stability of senior management and improvement in combined ratio driven by a controlled expense base. Majority shareholding is vested with Bestway (Holding) Limited, a multinational conglomerate operating in the United Kingdom and Pakistan - and United Bank Limited, one of the largest banks in the country.

Growth momentum in business volumes continued during CY15 led by higher business booked in fire and motor segments. In 9M16, gross premium demonstrated further growth largely due to initiation of health underwriting; underwriting loss from this segment was sizeable. Moreover, the company commenced Window Takaful Operations in the ongoing year; management does not intend to pursue significant growth in this avenue. UIL has an adequate reinsurer panel featuring ‘A-’ and above rated reinsurers for both proportional and non-proportional treaties. Adequate set of treaty arrangements has kept the net account protected.

Insurance debt has increased in view of business growth. While the company has showcased sound premium growth, its effect on lower liquid assets and operating cash flow is also seen. Rating also takes into account rising trend observed in leverage indicators of the company. Capitalization indicators may need to be strengthened.

In continuation of preceding year’s trend, UIL posted improved underwriting results during 9M16 largely due to enhanced profitability in motor segment, where concentration levels may need to be addressed. Investment avenues of the company include listed equities, mutual funds, government paper and term finance certificates with funds being largely invested in fixed income securities. With limited investment in equities, exposure to market risk is considered limited.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at (021)-35311861-71 or fax to (021)-35311872-3.

Jamal Abbas Zaidi

Applicable rating criterion: Methodology - General Insurance (September 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2016 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited