Press Release

JCR-VIS Upgrades IFS Rating of The Co-operative Insurance Society of Pakistan Limited

Karachi, November 08, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the Insurer Financial Strength (IFS) rating of The Co-operative Insurance Society of Pakistan Limited (CISPL) to ‘BB’ (Double B) from ‘BB-’ (Double B - minus). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on September 23, 2015.

The ratings assigned to CISPL take into account adequate liquidity profile of the company in relation to the business volumes written. The claims ratio has remained negligible in the recent years while higher management expenses in relation to business generated has led to continued underwriting losses. The ratings remained constrained on account of limited scale of business of the company.

The majority of insurance business is routed through CSIPL’s largest shareholder; Provincial Cooperative Bank Limited (PPCBL) reflecting high concentration. While underwriting operations continues to report losses, investment and rental income supported the bottom line with CSIPL posting profit during the outgoing year. Reinsurance panel and treaty terms remained unchanged with reinsurance coverage arranged through Pakistan Reinsurance Company Limited.

Liquid asset on balance sheet comprises listed equities carrying sizeable unrealized revaluation surplus. The paid up capital of the CSIPL increased to Rs. 500m (FY14: Rs. 300m) through transfer of revaluation surplus on land and building amounting to Rs. 200m. Given depressed business volumes, operating and financial leverage remains low.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 (Ext: 234) or Mr. Waqas Munir, FRM at 042-35723411-13 (Ext: 8010).

Javed Callea

Applicable Rating Criteria: General Insurance (September 2016)

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