Karachi, December 29, 2021 (PPI-OT):VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Jubilee General Insurance Company Limited (‘JGI’ or ‘the Company’) at ‘AA+’ (Double A Plus). The rating signifies very high capacity to meet policyholder and contract obligations. Risk is considered modest but may vary slightly over time due to business /economic conditions. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 29, 2020.

The rating assigned to JGI takes into account JGI’s market positioning as the third largest private sector insurance company in Pakistan. Furthermore, the rating is strengthened by an element of sponsor support, given presence of Aga Khan Foundation for Economic Development, and related entities, as the majority shareholders. JGI’s rating also takes into account JGI’s reinsurance panel, which constitutes counterparties with sound credit quality (as reflected by their IFS ratings) and modest internal retention.

During 2020, JGI’s insurance underwriting posted contraction of 1.6%. Given flat growth being posted by most private insurers in the period, the trend was in line with other market participants. Nevertheless, attrition in market share was posted by most market participants, as a public sector aviation segment policy was underwritten by a single private sector company. With the account envisaged to return to public sector in 2021, market shares are expected to normalize in 2021. VIS will continue to monitor changes in JGI’s market share on an ongoing basis.

In line with management efforts, the business mix depicts a higher tilt towards ‘Fire and Property Damage’ segment, while proportion of ‘Accident and Health’ segment has been reduced on account of profitability concerns. From a profitability perspective, business mix has depicted improvement on a timeline. The combined ratio was affected in 2020, as a result of higher claims ratios, particularly emanating from the ‘Fire and Property Damage’ segment. The claims ratio in 9M’21 has remained contained and management expects the same to be below 60%, which should allow the Company to post healthy underwriting profit in 2021. Investment performance has been noteworthy in 2020, as reflected by net operating ratio, which was superior to preceding year, despite the lower underwriting results.

JGI’s capital buffers have improved during the period under review, give improved profitability performance, mainly driven by investment gains. In the absence of any growth both operating and financial leverage remain range bound and on the lower side. Furthermore, investment portfolio is largely liquid providing sizable coverage to net technical reserves. The assigned rating remains dependent on maintenance of the company’s market positioning, and capitalization liquidity indicators in line with the peer median and assigned threshold.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/