Karachi, October 2, 2015: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Premier Insurance Limited (PIL) at ‘A’ (Single A) with a ‘Stable’ Outlook. Previous rating action was announced on December 11, 2013.
The rating incorporates sound capitalization level of the company that has strengthened over time on the back of higher retained earnings. Moreover, leverage indicators have remained low indicating significant room for growth. The assigned rating also reflects adequate liquidity profile and improved claims performance of the company. Over the years, the company has built a sizeable investment portfolio, a major portion of which is deployed in blue chip listed equities, providing a source of earnings and liquidity. Insurance debt in relation to gross premium has remained on the higher side; rising trend in un-paid premiums may need to be arrested.
While claims performance has showcased improvement, trend in underwriting losses has persisted on account of a high expense structure. Further growth in business volumes and rationalization of expense base may be needed for improvement in underwriting performance. Despite underwriting losses, overall profitability of the company has depicted significant improvement owing to favorable investment performance. Ability to demonstrate an improving underwriting performance will continue to be tracked by JCR-VIS.
Progress towards implementation of sound IT infrastructure is being accelerated to improve the control environment and resolve issues related to reconciliation of outstanding balances. Key positions, vacant for more than two years, were also filled during 2014. In the on-going year, PIL has experienced a change at the helm, with Mr. Asif Arif assuming the office of Chief Executive Officer. Prior to this assignment, Mr. Arif served as an Insurance Commissioner at Securities and Exchange Commission of Pakistan.
For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) at 021-35311861-71 or Mr. Maimoon Rasheed at 042-35723411-3 or fax to 021-35311872-3.
Jamal Abbas Zaidi
Applicable Rating Criteria: General Insurance (November 2003) http://www.jcrvis.com.pk/images/methodology.pdf
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