Press Release

JCR-VIS Reaffirms IFS Rating of Century Insurance Company Limited
 

Karachi, August 23, 2016: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) rating of Century Insurance Company Limited (CICL) at ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on June 28, 2015.

The assigned rating incorporates strong profile of sponsors having presence in diversified sectors, healthy capitalization levels and adequate reinsurance arrangements.

Gross Premium growth of 37% during 2015 was mainly led by health and motor segments, low cession in the same has resulted in higher incidence of claims. Related parties business though following a declining trend was significant at 35%. The company’s projected growth is mainly driven from fire and motor segments, risk allocation and management would be important here to translate premiums into profits.

Despite growth in gross premium, CICL underwriting profit stagnated in 2015 on the back of subdued performance of health segment; however, marine and motor segments remained profitable. Though underwriting expense ratio has declined, its impact has been offset by the higher reported claims.

Investment income continued to be the major contributor to overall profitability. However, considerable investment in equities in relation to company’s equity is indicative of presence of market risk on books. Going forward, the change in taxation regime and decreasing market risk in the portfolio may develop as rating drivers.

Though, Insurance debt in relation to gross premium has witnessed growth; it remains on the lower side as compared to peers. Liquidity profile draws comfort from sizeable liquid assets carried on balance sheet. Capitalization levels are healthy and indicative of future growth.

For further information on this rating announcement, please contact the undersigned (Ext: 241) or Mr. Javed Callea (Ext: 234) at 021-35311861-71 or fax to 021-35311872-3.





Mohammad Khalid Ali
Advisor

Applicable Rating Criteria: General Insurance (November 2003)
http://www.jcrvis.com.pk/images/methodology.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 2016 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