JCR-VIS upgrades Insurer Financial Strength rating of Pakistan General Insurance Company Limited

Karachi, November 25, 2013 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the Insurer Financial Strength (IFS) rating of The Pakistan General Insurance Company Limited (PGI) from ‘BBB +’ (Triple B Plus) to ‘A-’ (Single A Minus). Outlook on the assigned rating is ‘Stable’.

The upgrade takes into account strengthening of risk absorption capacity of the institution emanating from internal capital generation. Leverage indicators of the company reflect room for future growth.

Gross premium of the company witnessed modest decline in FY12 as the management pursued selective underwriting; business level is projected to be maintained in the on-going year. Business mix of the company is led by fire and marine segments. Underwriting profitability of the company depicted notable growth on a timeline basis on account of improved combined ratio.

Liquidity profile of the company has improved since additional liquidity generated from net operating cash flows and disposal of investment properties has been largely parked in bank placements. Risk arising out of investment portfolio is considered manageable. Partial divestment from investment properties has rationalized yield on assets.

Reinsurance panel of the company depicted few changes. Labuan Re continued as the lead re-insurer in most of the treaties having an IFS rating of ‘A-’ from A.M Best. PGI negotiated capacity enhancement in treaty limits of fire and marine segments during 2013; simultaneously, the company was also able to reduce retention of risks on its net account. The risk arising from business underwritten by the company, in context of the reinsurance arrangements in place will continue to be tracked by JCR-VIS.

Senior management team of the company has largely remained stable. Existing CEO is expected to retire in April, 2014; subsequently, the position is likely to be filled by Mr. Nasir Ali, currently the Chief Risk officer and director. Induction of another independent director on the board, having sound credentials, has enhanced the governance framework of the company.

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

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