Press Release

JCR-VIS Reaffirms IFS Rating of Allianz EFU Health Insurance Limited

Karachi, April 26, 2018: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed Insurer Financial Strength (IFS) rating of Allianz EFU Health Insurance Limited (Allianz EFU) at ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on September 19, 2017.

Current rating of Allianz EFU Health Insurance Limited (Allianz EFU) derives strength from financial profile of its sponsors including Allianz SE and EFU Services (Pvt.) Limited. Assigned rating signifies high capacity to meet policyholder and contract obligations. Nonetheless, it continues to be constrained by trend in low capitalization levels and high leverage ratios in comparison to peers.

The rating is dependent on the company’s ability to grow business volumes while maintaining profitability. In order to do so, efforts were concerted towards improvement of its control environment during 2017. However, underwriting performance of the company deteriorated on account of a higher expense base. Going forward, Allianz EFU anticipates higher business volumes with a prudent underwriting practice; premium is targeted to be close to Rs. 2.5b in 2018.

Rating is underpinned by the competitive environment in which the company operates yielding low profit retention levels observed on a timeline basis. Given the future growth plans of the company, risk adjusted capitalization levels are expected to increase and improve leverage indicators. Management of liquidity indicators, which declined during the outgoing year, would be important going forward.

For further information on this rating announcement, please contact Mr. Jamal Abbas Zaidi (Ext: 207) or the undersigned (Ext: 201) at 021-35311861-71.

Javed Callea
Advisor

Applicable Rating Criteria: General Insurance (March 2017)
http://www.jcrvis.com.pk/kc-meth.aspx

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 April 26, 2018 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.