Lahore, November 08, 2021 (PPI-OT):The core sponsorship of Jubilee General Insurance Limited (JGICL or the Company) is held by the Agha Khan Development Network (AKDN). The strong presence of AKDN in the financial industry allows JGICL to unlock synergistic benefits through group financial institutions i.e., Habib Bank Limited and Jubilee Life Insurance Company Limited. The rating takes comfort from the group business potential of the Company. The sound board structure aligned with experienced management personnel places confidence in the sustainable operations of JGICL.

Further, the rating reflects the robust risk management framework, facilitating the Company to achieve adequate profitability. Positive growth witnessed in the macroeconomic indicators boded well for the insurance industry, however, the ongoing pandemic may have negative implications prospectively. A diversified revenue strategy is pursued by JGICL, with focal business derived through fire segment at ~38% GPW concentration, whereas, a balanced GPW mix of 17% is acquired through motor, health and miscellaneous segments in 6MCY21. The total segmental mix converged into Gross Premium Revenue of PKR 6,288mln (CY20: PKR 10,311mln; CY19: PKR 10,477mln) depicting a stable revenue progression through the period.

Through adaptation of a secure return strategy, channeled through government securities and a healthy mix of equity securities, JGICL managed to generate boosted investment income results. The investment income stands at PKR 1,107mln at 6MCY21 and is expected to follow suit, given the ongoing trend. The enhanced GPW profile, combined with effective expense management and investment results seeded profitability growth. Jubilee General has sound equity base and sufficient liquidity engendering strong risk absorption capacity. The business strategy, going forward, is focused on improving its market position and consequent profitability from core business.

Sustainability of motor business, progress in fire segment and efficient expense management remained critical to the financial performance, with further progression being envisaged. The liquid investment book is almost two third diverted towards fixed term avenues, while the rest is deployed in equities. The rating is dependent upon sustained competitiveness of the company while upholding the profitability.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com