JCR-VIS reaffirms IFS Rating of Jubilee General Insurance Company Limited at ‘AA+’

Karachi, December 12, 2013 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Jubilee General Insurance Company Limited (JGI) at ‘AA+’ (Double A Plus) with a ‘Stable’ Outlook.

The rating incorporates JGI’s position as the third largest private sector insurance company in Pakistan. The rating also takes into account strong capitalization and robust liquidity profile emanating from profitable underwriting operations and stable investment income support. Amidst a challenging business environment, JGI posted notable growth in business volumes while maintaining a balanced business mix. The growth trajectory continues to be in line with business plan for 2013.

The company has adequate reinsurance arrangements in place with a diverse panel of reinsurers in the ‘A’ to ‘AA’ rating bands. Some increase in priority limits has been noted over time; however, JGI has adequate capacity to absorb claims falling on net account.

JGI was able to curtail losses in some of the previously loss making product lines such as financial lines and engineering while results of motor segment also posted notable improvement; however, the positive impact was off-set by depressed results in fire and medical business lines. Cognizant of this, the management is strengthening internal controls further while revision in rates is also being considered. Future trend in this respect will continue to be closely tracked by JCR-VIS.

More than half of JGI’s investment portfolio comprises mutual funds; in addition to this, about one-fifth each is invested in real estate and listed equities on the basis of market value. Both credit and market risk arising from the portfolio is considered manageable in relation to the company’s loss absorption capacity.

Given the portfolio composition, the company’s investment income has depicted stability. Lately, JGI has also benefited from the upward rally in the stock market. In a rising interest rate scenario, return on the fixed income portfolio is also expected to improve.

There is stability at senior management level while internal control systems have been strengthened by way of implementation of comprehensive ERP system and centralization of the claims settlement department.

For more information, contact:
Ms. Sobia Maqbool
JCR-VIS Credit Rating Company Limited
Tel: at 021-35311861-70
Fax: +9221 35311872-3

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