Karachi, January 31, 2022 (PPI-OT): VIS Credit Rating Company Limited VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Security General Insurance Company Limited (SGICL) at ‘AA’ (Double A). The IFS rating of ‘AA’ denotes very high capacity of meeting policyholder and contractual obligations. Moreover, the risk is modest, though may vary slightly with possible changes in economic conditions. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on December 31, 2020.
The rating assigned to SGICL takes into account its association with a large diversified conglomerate “Nishat Group” having business interests in banking, textile, cement, power generation, real estate, hospitality, automobile, dairy and paper products. The gross premium exhibited robust growth on account of major business underwritten in marine segment during Dec’2020 while exhibiting steady growth during 9MCY21 vis-à-vis corresponding period last year.
However, the same has not translated into higher growth in net premium owing to higher cession. Financial and operating leverage have remained low on a timeline basis and reflects strong loss absorption capacity. The liquidity position is considered adequate in terms of sizeable liquid assets in relation to technical reserves and borrowings. However, insurance debt in relation to gross premium needs to remain within the peer group parameters.
The assigned rating is also supported by a sound reinsurance panel; all reinsurers, except one, are rated in category ‘A’ or higher. The conservative approach towards underwriting insurance policies, effective pre-screening of market-based clients for their past track record, and adequate reinsurance coverage led to consistently good claim performance. The rating also derives strength from recurring investment income from blue chip companies. The management expects growth in business in tandem with economic expansion and enhanced marketing efforts.
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/