Press Release
JCR-VIS reaffirms IFS rating of Security General Insurance Company Limited at A+
Karachi, December 26, 2012: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Security General Insurance Company Limited (SGI) at ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’.
During FY11 and in the ongoing year, growth was reported in business volumes. Incidence of loss has increased, attributable to higher claims in the motor segment though claims ratio remains within acceptable limits. Meanwhile cession continues to be high. SGI is expected to continue operating with conservative retention policy keeping in view the weak economic fundamentals.
The rating takes into account SGI’s sizeable investment portfolio which comprises strategic investments in group companies. Stable and sizeable dividend income is generated from the portfolio which continues to augment cash flows. Liquidity indicators have improved on a timeline basis. However insurance debt in relation to gross premium continues to be higher compared to peers.
Allied Bank Limited (ABL) assumed 18.2% stake in the company during FY11 whereas major shareholding continues to be vested with individuals and group companies of Nishat Group. SGI enjoys strong ownership support which is a key rating factor. Support is reflected in retention of profits which has improved the risk absorption capacity of the company over time.
For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA at 021-35311861-70 (Ext: 604) or Mr. Maimoon Rasheed at 042-36610681-84 or fax to 021-35311873.
Jamal Abbas Zaidi
Deputy CEO