Press Release

VIS Reaffirms IFS Rating of Century Insurance Company Limited

Karachi, December 15, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Century Insurance Company Limited (CICL) at ‘AA (IFS)’ (Double A IFS). IFS rating of ‘AA (IFS)’ denotes 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 March 31, 2022.

Rating reaffirmation draws support from strong group strength, Lakson Group of Companies, which is an industrial conglomerate with a prominent and diverse presence in several industries, including paper and packaging, media, fast moving consumer goods, and financial services. Ratings further incorporate healthy business growth and improvement in investment income over the review period, steady underwriting profits on a timeline, and sound liquidity and capitalization profile. Ratings also take note of diversified panel of reinsurance arrangements that include 'A-' and higher rated reinsurers.

Gross premiums noted healthy growth in 2021 and 9M’22, owing to economic recovery following the pandemic. Marine contributed the most new business, followed by Health and Motor, while Fire & Property Damage remains the highest revenue contribution segment. The overall business mix is considered balanced and well diverse. Net claim ratio though remained in line with industry average depicted weakening, which impacted underwriting profit in 9M’22. Nonetheless, significant increase in investment income (primarily due to higher returns on government securities, dividend income, and gain on sale of equity securities) supported the bottom line.

Highest claims emanated from Health segment followed by Motor while overall claim expenses raised considerably given high inflation over the review period, which mirrors the industry trend. In addition, Fire segment gross loss ratio scaled up during 9M’22 due to fire breakout in one of the packaging sector clients; nonetheless, high cession provided comfort. As per management, no significant claims have resulted from the recent floods situation in rural areas of Sindh & Punjab. In line with uptick in benchmark rates, investments increased in debt instruments and fixed income/money market funds with majority investment in equity-based funds being divested over the review period. Liquidity profile remains sound on account of exposure in government instruments and adequate coverage of liabilities. Capitalization levels are satisfactory to facilitate future growth plans.

For further information on this rating announcement, please contact Mr. Muhammad Tabish (Ext: 206) or the undersigned (Ext: 207) at (021) 35311861-66 or email at

Sara Ahmed

Applicable rating criterion: General Insurance (March 2022)

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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .