Press Release
VIS Reaffirms IFS Rating of UBL Insurers Limited
Lahore, January 21, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of UBL Insurers Limited (UIL or “the Company) at ‘AA+’ (Double A Plus). The rating signifies a very strong capacity to meet policy holders and contract obligations. Risk factors are very low, and the impact of any adverse business and economic factors is expected to be very small. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on December 19, 2023.
UIL has been operating for more than a decade in the general (non-life) insurance segment and has an established franchise in the local market, offering conventional insurance products as well as takaful products through Window Takaful Operations (WTO). The assigned rating derives strength from the sponsorship backing of UBL, the third largest private commercial bank in Pakistan, and the Bestway Group having business interests in commercial banking and cement sector in Pakistan along with wholesale, pharmacy and real estate sectors in the UK.
The rating also reflects the Company’s positioning as the fifth largest general insurance company in the industry with a market share of 4.5% at end-June’24 (CY23: 4.5%; CY22: 4.3%). Growth in the gross written premium remained subdued during the ongoing year owing to the Company’s cautious underwriting approach that resulted in slight improvement in conventional loss ratios over the rating review period which were comparatively better than industry benchmarks. Additionally underwriting profits were registered in the ongoing and outgoing year, largely on account of rationalized underwriting expense ratio due to partial recovery of a one-time provisioning of claim receivable from the local reinsurer. The overall risk profile is further supported by sound reinsurance arrangements with reputed international reinsurers. The rating reflects comfortable liquidity position as depicted by improvement in liquid assets relative to net technical reserves and insurance debt relative to gross premium. Aging of claims is considered sound with no claim overdue for more than a year at end of outgoing year. Underpinned by growth in the equity base, the operating leverage also improved during the review period.
For further information on this ratings announcement, please contact 042-35723411-13 or email at info@vis.com.pk
Applicable Rating Criteria: General Insurance
https://docs.vis.com.pk/docs/GeneralInsurance-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf