JCR-VIS Reaffirms Insurer Financial Strength Rating of Jubilee General Insurance Company Limited

Karachi, December 31, 2015 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Jubilee General Insurance Company Limited (JGI) at ‘AA+’ (Double A Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 30, 2014.

JGI’s rating derives strength from its sizeable market share, strong capitalization and liquidity profile and improving operational indicators. Management team of the company comprises highly experienced individuals that have been associated with JGI for several years. The assigned rating indicates a very high capacity to meet policy holder/contractual obligations; risk is considered modest.

The company continued to focus on expansion of its retail portfolio. Moreover, JGI successfully launched its Takaful operations in the ongoing year. While growth in premium base has been slower than the industry in 2014; business volumes are expected to be supported by these initiatives, going forward. Gross premium of the company amounted to Rs. 7.0b in 9M15 vis-à-vis Rs. 6.1b in 9M14. Moreover, the company continues to maintain a balanced business mix with fire and property being the lead contributor to revenues.

Underwriting result of JGI has improved on the back of positive claims experience across major business segments. JGI has strong reinsurance arrangements with a diversified panel of reinsurers. Lead reinsurers in major business segments are companies with sound risk profile. Treaty limits have enhanced over time to provide room for growth. Size of maximum per risk claim falling on net account is considered manageable in relation to the company’s loss absorption capacity.

Investment portfolio has grown over the years, translating into healthy investment income for the company. Proportion of investment in listed equities has been increasing, representing around one-third of total investments while remaining exposure is deployed in mutual funds, real estate, government securities and term finance certificates (TFCs). Increase in value of investments has largely been a function of uptick in stock prices during the period. Both credit and market risk arising from the portfolio is considered manageable.

JGI has established an internal audit function; previously the department was outsourced to a renowned chartered accountancy firm. Moreover, the company has also appointed a Chief Risk Officer (CRO) to strengthen its risk management processes. Centralization of various departments has been completed to a large extent; improvement in operational efficiency is expected from these efforts going forward.

For more information, contact:
Ms. Sobia Maqbool
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk