JCR-VIS Upgrades IFS Rating of Jubilee Life Insurance Company Limited to AA

Karachi, March 20, 2013 (PPI-OT): JCR-VIS Credit Rating Company Limited has upgraded the Insurer Financial Strength (IFS) Rating of Jubilee Life Insurance Company Ltd. (JLI) to ‘AA’ (Double A) from ‘AA-’ (Double A Minus). Outlook on the assigned rating is ‘Stable’.

With strong growth in premium base relative to other players in the private life insurance sector, JLI now enjoys sizeable market share. This growth has been driven largely by individual life unit linked regular premium policies. Investment risk in such policies is borne by the policyholders, particularly for policies with cash values higher than sum risk assured.

As a growing company, there are increasing number of policies with cash values less than sum risk assured; however, in view of low historic crude death rate along with coverage by highly rated reinsurers, this risk is considered manageable. Moreover, a growing equity base also provides protection against losses from short tailed policies.

Ratings also incorporate the strength of the company’s sponsors that include reputed institutions part of the Aga Khan group including the largest private sector commercial bank of Pakistan, Habib Bank Limited (HBL).

JLI’s distribution network comprises both direct sales force setup and bancassurance distribution through leading commercial banks of the country including HBL. Business generated through the bancassurance channel, particularly HBL, has led the growth in recent periods and features high persistency.

Overall persistency ratio in individual life business has been maintained at an acceptable level. In line with industry trends, turnover in the sales force remained high. There is room for improvement in agent retention and productivity levels. There has also been growth in group business with continued focus on underwriting performance. Improvement was also witnessed in JLI’s profitability.

The rating takes into account JLI’s strong capitalization vis-a-vis nature of risks underwritten. Liquidity profile is also sound and liquid assets, largely comprising government securities, provide adequate coverage against the company’s liabilities. Steps are being taken to further improve systems and controls that provide comfort to assigned rating. Investment mix has been maintained on relatively conservative lines. Returns of funds managed by the company have remained competitive in relation to peers and benchmarks.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

Leave a Reply