Press Release

JCR-VIS Reaffirms IFS Rating of Askari General Insurance Company Limited

Karachi, December 27, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Askari General Insurance Company Limited (AGICO) at ‘AA-’ (Double A Minus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on August 31, 2017.

The rating of AGICO draws strength from sound underwriting performance, strong liquidity profile and sustainable investment income. The company’s association with Army Welfare Trust is also a key rating factor. Synergies with the primary sponsor is expected to be more pronounced with higher business expected from group entities, going forward.

During FY16, growth in company’s business volumes outperformed industry growth leading to improved market share. For FY17, the management has embarked upon exceeding FY16 figures and expects growth in business volumes mainly on the back of CPEC related infrastructure projects. Overall claims performance has also remained satisfactory over time. Over the years, the company has depicted an improving trend in income from core underwriting operations while bottom line also gets impetus from investment income.

AGICO’s reinsurance panel is diversified; risk profile of the panel is considered sound. Risk profile of the investment portfolio is considered low as quantum of equity related portfolio is not sizeable in relation to the company’s balance sheet size. The composition of the investment portfolio is expected to largely remain unchanged with investment to be concentrated in liquid avenues.

With enhanced equity base, leverage indicators have improved, though remained higher vis-à-vis peers. JCR-VIS expects further improvement in leverage indicators. Liquidity profile is considered sound reflected by sizeable liquid assets maintained in relation to total liabilities and technical reserves. However, insurance debt in relation to gross premium increased on a timeline basis. JCR-VIS expects the company to keep insurance debt within certain limits, in line with the outstanding rating.

For further information on this rating announcement, please contact the undersigned (Ext: 501) at 92-21-35311861 or fax at 92-42-35311872 or Mr. Maimoon Rasheed at 92-42-35723411-13.

Jamal A. Zaidi

Applicable Rating Criteria: General Insurance (March 2017)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited 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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited