Press Release

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

Karachi, December 31, 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). 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 previous rating action was announced on January 23, 2018.

Current rating of JGI takes into consideration strong capitalization and robust liquidity profile emanating from profitable underwriting operations and stable investment income support. Leverage indicators of the company also remain within manageable levels. The rating also incorporates JGI’s position as the third largest private sector insurance company in Pakistan and its association with one of the largest business conglomerates in the country.

Given the prevailing dynamics of the insurance industry, growth in JGI’s gross premium has been largely stagnant vis-à-vis industry growth rate of 8.1% in 2017. Nevertheless, premium base of the company picked up pace on the back of new retail initiatives taken up during 9M18. JGI continues to maintain a balanced business mix with fire and miscellaneous as major business segments. Moreover, Takaful window operations of JGI depicted improvement in terms of business volumes.

The company has adequate reinsurance arrangements in place with a diverse panel of reinsurers. Some increase in priority limits has been noted over time; however, JGI has adequate capacity to absorb claims falling on net account. During the ongoing year, loss ratios of the company increased on account of a few large losses in the fire segment. Cognizant of this, management is strengthening its underwriting policy. Developments in this regard will be monitored over time.

Profitability levels of JGI have remained a function of both sound underwriting performance and investment management. On account of losses incurred in 9M18, underwriting profit of the company was reported lower vis-à-vis corresponding period last year. Nonetheless, combined ratio remained below 100% mark. During the outgoing year, investment income has increased significantly vis-à-vis corresponding period last year. Ability to maintain these performance metrics will be a key rating factor.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Ms. Muniba Khan (Ext: 215) at (021)35311861-71 or fax to (021)35311872-3.


Jamal Abbas Zaidi
Advisor

JCR-VIS Entity Rating Criteria Methodology - General Insurance (March 2017)
http://jcrvis.com.pk/docs/Meth-GenInsurance201702.pdf

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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