Press Release

VIS Reaffirms IFS Rating of Jubilee General Insurance Company Limited

Karachi, December 31, 2019: VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Jubilee General Insurance Company Limited (‘JGI’ or ‘the Company’) 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 December 31, 2018.

The rating assigned to JGI takes into account JGI’s market positioning as the third largest private sector insurance company in Pakistan. Furthermore, the rating is strengthened by an element of sponsor support, given presence of Aga Khan Foundation for Economic Development, and related entities, as the majority shareholders. JGI’s rating also takes into account JGI’s reinsurance panel, which constitutes counterparties with sound credit quality (as reflected by their IFS ratings) and modest internal retention.

In terms of business volumes, JGI posted strong growth in 2018, as a result of which, the Company’s market share increased from 10.9% to 11.8%. Overall business mix has also depicted improvement. Business growth in 9M’2019 has been relatively muted, at 3.9%, notably lower than industry growth rate of 12% and growth posted by other large-sized insurers as well.

JGI’s underwriting performance weakened during the period, as reflected by the increase in combined ratio. Nevertheless, overall combined ratio remains aligned with peers. On the other hand, the Company’s profitability has been affected by adverse equity market trend observed during the period under review. Nevertheless, JGI’s investment portfolio yield remained in excess of weighted average expected return on the portfolio.

Given depressed profitability and a stable dividend pattern (Rs.3.5-4 per share), the Company’s equity has been falling (Sep’19: Rs. 7.6b; Dec’17: Rs. 8.3b); this, in combination with business growth, is translating in an uptick in leverage. JGI’s ratings are supported by sufficient liquid assets and quantum of insurance debt to gross premium, which is lower than peer median. Aging profile of insurance debt is also considered sound.

For further information on this rating announcement, please contact Mr. Arsal Ayub (Ext: 214) or the undersigned (Ext: 201) at 35311861-66 or email at

Javed Callea

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 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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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