Press Release

JCR-VIS Assigns ‘AA’ IFS Rating to IGI General Insurance Limited
 

Karachi, September 13, 2018: JCR-VIS Credit Rating Company Limited has assigned Insurer Financial Strength (IFS) rating of ‘AA’ (Double A) to IGI General Insurance Ltd. (IGI General). The rating signifies very high capacity to meet policyholder and contract obligations. Risk is considered modest but may vary slightly over time due to business /economic conditions. Outlook on the assigned rating is ‘Stable’.

The assigned rating incorporates strong sponsor profile with IGI being a wholly owned subsidiary of IGI Holdings Limited (IGIHL - formerly, IGI Insurance Limited). IGIHL belongs to a prominent business conglomerate, Packages Group, which began operations as a paper and paperboard manufacturer in 1957. As part of a strategic restructuring, the general insurance and investment segments of IGIHL were transferred into two distinct entities. The rating also takes into account positive results from underwriting operations and liquidity profile of IGI General.

Rating takes into account the competitive environment in which the company operates. IGI General has grown its premium base by more than 20% in the last two years. In view of its growth orientated strategy, IGI General plans to launch new insurance products; impact of these developments will need to be monitored over time. Along with a steady growth in business volumes, IGI General also maintained an adequate risk profile. The rating also draws comfort from its sound reinsurance panel and treaty structure. Enhanced focus on underwriting quality has allowed the company to report a healthy bottom line over the three-year horizon. Despite a higher claims ratio, on net basis, IGI General posted an increased underwriting profit. However, combined ratio was reported higher than the industry average. Profitability indicators will need to be maintained to be commensurate with the assigned rating.

Given the restructuring of IGIHL, capitalization levels allocated to IGI General is placed at Rs. 2.09b at end-December 2017 (2016: Rs. 13.6b). Rating is underpinned with growth in business volumes to support equity levels. Leverage indicators may need to be further strengthened over time.

IGI General has a structured investment management and oversight mechanism in place and also utilizes the expertise of group investment management function to manage its investments. Investment portfolio of IGI General is mostly tilted towards fixed income avenues. There has been stability in senior management team. IT infrastructure in place includes an Oracle based ERP system.

For further information on this rating announcement, please contact Mr. Atiq Anwar Mahmudi (Ext: 208) or the undersigned (Ext: 201) at 35311861-71 (10 lines) or fax to 35311873.


Javed Callea
Advisor

Applicable Rating Criteria: General Insurance (September 2016)
http://www.jcrvis.com.pk/kc-meth.aspx

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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 2018 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