Press Release

VIS Assigns ‘AA-’ IFS Rating to The United Insurance Company of Pakistan Limited

Karachi, March 22, 2019: VIS Credit Rating Company Limited (VIS) has assigned Insurer Financial Strength (IFS) rating of ‘AA-’ (Double A Minus) to The United Insurance Company of Pakistan Limited (UICPL). The IFS rating of ‘AA-’ denotes very high capacity of meeting policy holder and contractual obligations. Moreover, the risk is modest, but may vary slightly with possible changes in economic conditions. Outlook on the assigned ratings is ‘Stable’.

The assigned rating takes into account the sound business profile of the United Group. The group has business interests in insurance, microfinance, information technology, dairy and vehicle tracking.

UICPL being the flagship company of the group is a significant player among the lead general insurers, it also has an established and growing takaful segment of the business. Rating derive strength from growth in business volumes and improvement in underwriting performance. Credit risk emanating from reinsurance panel selection remains sound with majority reinsurers rated in category ‘A’ or higher. The rating takes into consideration the planned growth in topline and profitablity to harness the relatively high leverage indicators and increasing trend in outstanding claims on a timeline basis. There is need to focus on supporting the sound underwriting results with commensurate investment income which is thin on account of stragetic investment in a microfinance bank wherein turnaround is expected in the rating horizon. Meanwhile, liquidity management would be important.

Rating is dependent upon continued strength in underwriting risk management, planned growth of business volume with sound management of profitability and liquidity giving further strength to the capitalization position.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70.


Jamal Abbas Zaidi
Advisor
Applicable rating criterion: General Insurance (March 2017)
http://jcrvis.com.pk/docs/Meth-GenInsurance201702.pdf

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 March 22, 2019 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.