Press Release

JCR-VIS Reaffirms IFS Rating of National Insurance Company Limited

Karachi, January 06, 2011: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of National Insurance Company Limited (NICL) at ‘AA+’ (Double A Plus) with a ‘Stable’ outlook.

NICL is a state owned enterprise, having been set up with the mandate to write public sector risks. With a captive clientele, insurance business experienced growth in 2009 and premium amounted to Rs. 6b. In addition to higher premium base in traditional lines of business i.e. fire and marine, new business was also written under crop loan insurance which was launched in 2009. Reinsurance treaties are in place for risks in the fire, engineering, marine and transport segments while risks in other areas are retained on net account. Traditionally, the underwriting performance of the company has been strong. In 2009 also, underwriting performance has remained robust as overall claims ratio was maintained at 33%; although, the same has experienced a rise in the first half of 2010. Given the recent floods in the country, underwriting results may experience some weakening in the second half of 2010.

The company had entered into real-estate transactions to the tune of around Rs. 3.8b in 2009 and 1H10. These transactions are currently under judicial review. Apart from the real estate investment, the company had a large investment portfolio at the end of June 2010, comprising mostly government securities and income funds. Investment income provides considerable support to the company’s profitability. The rating takes into account the large capital base and liquidity reserves of the company.

Recently, Mr. Tariq Iqbal Puri, Chief Executive Officer of Trade Development Authority of Pakistan, has been assigned additional charge of NICL. Mr. Puri has held various positions at the federal government level for the last 37 years. As Acting Chairman at NICL, he is endeavoring to tap un-insured public interests and enhance return on investments.

For further information on this rating announcement, please contact the undersigned (Ext: 510) or Syed Ziauddin Ahmed (Ext: 508) at 021-35311861-70 (10 lines) or fax to 021-35311872-3.



Sabeen Saleem, CFA
Chief Rating Officer

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2011 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .