Press Release

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

Karachi, January 23, 2018: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Jubilee General Insurance Company Limited (JGI) at ‘AA+’ (Double A Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on November 08, 2016.
The rating assigned to the company draws strength from JGI’s extensive experience history and being amongst the largest private general insurance companies in Pakistan. JGI’s association with a strong primary sponsor is also a key rating factor. Rating also takes into account company’s sound capitalization indicators, strong liquidity profile and solid underwriting performance on a timeline basis. JGI’s senior management team comprises qualified and experienced resources; majority of them having long association with the company that has been instrumental in effective implementation of the business strategy.

JGI’s gross premium remained largely stagnant against the industry’s growth of 5.7% during FY16. Business mix remained diversified with fire, motor, and miscellaneous as major business segments. Takaful window operations continued to show improvement in terms of business volumes. Given the prevailing price competition in Takaful business, JGI plans to focus small & medium sized businesses and retail clientele.

During FY16, gross claims ratio increased on account of higher claims experienced in the fire segment, however as a result of adequate reinsurance coverage, impact on net account remained muted. The company has adequate reinsurance arrangements with a diversified panel of reinsures having sound risk profiles. Given the anticipated growth in infrastructure projects, treaty capacities of bond, engineering, motor and fire segments were enhanced for FY17.
In line with past trends, profitability derived strength from sound underwriting performance of the company coupled with sizeable contribution from the investment income. On account of higher management expenses, underwriting expense ratio increased, while combined ratio remained stable. However, net profit decreased on account of change in tax regime regarding capital gains during FY16.

Given the increase in capital base on account of profit retention, leverage indicators improved. Liquidity profile is also considered sound in view of presence of sizeable liquid assets in relation to total liabilities. With largely volatile capital market during FY17, market value of investment portfolio witnessed some decline in 9MFY17. Insurance debt of the company, net of business from CPEC project, remained largely stable.

For further information on this rating announcement, please contact undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.

Jamal Abbas Zaidi

JCR-VIS Entity Rating Criteria Methodology - 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 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 2018 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