Press Release
JCR-VIS assigns IFS Rating to The Cooperative Insurance Society of Pakistan Limited
Karachi, September 23, 2015: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned Insurer Financial Strength (IFS) rating of ‘BB-’ (Double B Minus) to The Cooperative Insurance Society of Pakistan Limited (CISPL). Outlook on the assigned rating is ‘Stable’. The previous action was withdrawal of rating; announced on May 16, 2014.
Ratings assigned to CISPL reflect its marginal capacity to meet policyholder and contract obligations. Underwriting business has remained limited owing to lower business from Provincial Co-operative Bank Limited (PPCBL), also CISPL’s major shareholder.
The society has not seen any major claims on account of low business volumes. Combined ratio remained weak as business is insufficient to cover management expenses. While underwriting operations of CISPL continues to report losses, investment income supported the bottom line with CISPL posting net profit of Rs. 1.4m during FY14 (FY13: Rs. 0.8m).
CISPL has a paid-up capital of Rs. 300m which mainly includes impact of capitalization of revaluation surplus to meet regulatory capital requirement. The rate of internal capital generation has remained low over the years on account of CISPL’s weak profitability. Moreover, support infrastructure needs improvement.
For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) at 021-35311861-71 or Mr. Maimoon Rasheed at 042-35723411-3 or fax to 021-35311872-3.
Mohammed Khalid Ali
Advisor
Applicable Rating Criteria: Methodology: General Insurance (Nov 2003)