Pakistan Credit Rating Agency Limited assigns IFS rating to The Universal Insurance Company Limited

Lahore, April 11, 2014 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned IFS rating of “BBB+” (Triple B plus) to The Universal Insurance Company Limited (Universal Insurance). The rating denotes good capacity to meet policyholder and contract obligations.

The rating reflects improved financial risk profile of Universal Insurance enabled by fresh capital injection and liquidity generation through sale of property. This has supplemented earning ability of the company from the book of investments. Bibojee group – the sponsors – are demonstrating serious interest in the company.

This is reflected in recent organizational restructuring along with strengthening of human resource base and development of focused business strategy. Since most of the group companies are performing well, they are expected to continue lending attention to Universal Insurance.

Business volumes are improving, the challenge is to achieve break -even, which due to high capacity building expenses, requires a decent business size and a check on loss ratio. At the same time, the company needs to rationalize its insurance related assets and liabilities. Here a portion of receivables is subject to impairment, while a high level of liabilities are outstanding.

The rating is dependent upon the company’s success in fostering market position. This should gradually transpire in bringing core profitability in the company. The mismatch in the current ratio should be handled carefully without creating pressure on the available liquidity.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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