Press Release

JCR-VIS Reaffirms IFS Rating of EFU Life Assurance Ltd

Karachi, December 4, 2017: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) Rating of EFU Life Assurance Ltd (EFUL) at ‘AA+’ (Double A Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on May 24, 2016.

Assigned ratings derive strength from EFUL’s position as a significant player in the life insurance sector of Pakistan. Regular business growth has picked up pace significantly in the last decade. Unit linked insurance products continue to be the largest contributor to EFUL’s premium base featuring a combination of life insurance and savings. During the period under review, regular premium and group life businesses cumulatively depicted a growth of 14%. Nonetheless, a substantial decline in single premium business translated into a lower gross premium base. Overall persistency of policies has largely improved as a result of recent management initiatives.

Returns on investments/savings are linked to performance of funds under management. Performance of the largest fund under management was competitive in relation to peers. However, with significant exposure in equities, returns of these funds may be adversely impacted. Given the nature of the company’s business, generating consistent investment results and ability to cater to varying investor risk appetites may be key differentiating factors over the long term.

The company has registered strong profitability in the last few years which is expected to improve further given the growth prospects of the industry. EFUL anticipates growing its business volumes through a comprehensive product range, sizeable agency force and emphasis on persistency and productivity measures. During the period under review, the company introduced some new products in line with its business strategy.

The assigned rating incorporates EFUL’s strong capacity to meet policyholder liabilities as evident from adequate capitalization level and sound liquidity profile. The rating also takes into account the quality and stability of the company’s senior management as well as the team comprising of experienced and qualified professionals which includes actuaries, accountants and underwriters. The company’s strength also emanates from the strong franchise of its major sponsors and re-insurers that have been associated with the company for a long period of time.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at 021-35311861 - 70 or fax to 021-35311873.

Jamal Abbas Zaidi

Applicable Rating Criteria: Life Insurance & Family Takaful Rating (October 2017)

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 2017 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