Press Release
JCR-VIS Reaffirms Rating of Pak-Kuwait Takaful Company Limited at A-
Karachi, December 17, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the financial strength rating of Pak-Kuwait Takaful Company Limited (PKTCL) at ‘A-’ (Single A Minus). Outlook on the assigned rating is ‘Stable’.
The outgoing year, 2011, was the first profitable year for PKTCL on an aggregate basis; profit in Shareholders’ Fund exceeded the deficit reported in Participants’ Takaful Fund. Improvement in performance has been facilitated by considerable growth in business volumes; moreover, net claims ratio for the period has also been lower compared to 2010. With fire and marine segments driving the growth in contribution base, share of motor has reduced in the business mix; further reduction is envisaged in the same, going forward. The company has yet to achieve break-even in underwriting operations; though improving business mix is likely to have a positive impact on the same. Re-takaful terms arranged for major business segments have low priority limits.
While equity base of the company has witnessed an increase on a year on year basis on account of profit retention, growth in underwriting operations has been much higher. Hence, leverage indicators of the company have trended upwards. Improvement in equity base in line with pace of increase in business volumes is required to contain leverage indicators within prudent limits. Liquid assets in relation to total liabilities have also depicted a decline on a timeline basis. Trends in capitalization and liquidity indicators of the company will be keenly tracked by JCR-VIS.
For further information on this rating announcement, please contact Mr. Abdur Rahim (Ext: 508) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-70 or fax to 021-35311873.
Jamal Abbas Zaidi
Deputy CEO