Press Release
JCR-VIS Reaffirms IFS Rating of Security General Insurance Company Limited at A
Karachi, October 31, 2008: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Security General Insurance Company Limited (SGI) at ‘A’ (Single A) with a ‘Stable’ outlook.
During 2007, SGI was able to arrest the declining trend in business volume, with growth having continued in the current financial year. The management however expects a relative slow down in the coming year, given the recent developments on the economic front. Selective underwriting and adequate reinsurance coverage has resulted in improved claims ratio. The company was able to post a marginal underwriting profit for 2007 vis-à-vis loss from underwriting operations in 2006.
Revenues had previously received considerable impetus from investment activity. The company holds a sizeable investment portfolio, which is invested in a few scrips. A decline of nearly 38% in the KSE-100 index till the imposition of a floor of 9,144pts in late August 2008 and consistently low trading volumes have reduced the market value of securities, while also affecting the liquidity of equity holdings and reducing opportunities for capital gains.
Economic conditions and state of unrest will continue to bear significant impact on insurance activities and its effect, if any, on re-insurance treaties for the coming year will be monitored by JCR-VIS.
For further information on this rating announcement, please contact the undersigned (Ext: 508) or Ms. Sobia Maqbool (Ext: 506) at 5311861-71 or fax to 5311872-3.
Faheem Ahmed
President & CEO