Press Release
JCR-VIS Reaffirms IFS Rating of Alpha Insurance Company Limited
Karachi, December 10, 2014: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Alpha Insurance Company Limited (AICL) at ‘A’ (Single A). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on September, 30, 2013.
The assigned rating incorporates the strength of the parent institution, The State Life Insurance Corporation of Pakistan (SLIC), the largest life insurance company in the country & owned by the Government of Pakistan. SLIC has provided financial support in the past; in more recent years, capitalization levels have continued to strengthen on the back of profits which have been entirely retained by the company. Profitability has been derived from investment activities while underwriting operations continue to report losses on account of expenses being higher in relation to the volume of business.
Over the years, the company has built a sizeable investment portfolio, a major portion of which is deployed in government paper, providing both a stable source of earnings and liquidity. Given the quantum of liquid assets on books, overall liquidity profile is considered sound. The weakening in cash flows, also manifested in a high level of insurance debt, may nevertheless need to be arrested.
The company depicted growth in business volumes in 2013; however business has slowed down subsequently due to turnover at a key marketing position. In the given circumstances, business target for 2014 is unlikely to be met. Stability in management is considered essential for effective implementation of business strategy.
For further information on this rating announcement, please contact Mr. Abdur Rahim, ACII (Ext: 508) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-71 or fax to 021-35311872-3.
Jamal Abbas Zaidi
Deputy CEO
Applicable Rating Criteria: General Insurance (Nov 2003)