Press Release

VIS Reaffirms IFS Rating of Century Insurance Company Limited

Lahore, December 31, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Century Insurance Company Limited (CENI or ‘the Company’) at ‘AA (IFS)’ (Double A IFS). IFS rating of ‘AA (IFS)’ denotes very strong capacity to meet policyholders 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 27, 2023.

The rating assigned to CENI derives strength from its association with Lakson Group of Companies, an industrial conglomerate with a prominent and diverse presence in several industries. Despite increase in the business volumes as evidenced by growth in gross written premium (GWP) during the rating review period on account of inflation adjustments, forex impact and onboarding of few new clients, the Company has been losing its market share; the said trend needs to be controlled in view of assigned ratings. Additionally, significant increase in investment income, largely emanating from higher returns on government securities, supported the bottom line. In terms of composition of investment mix, credit risk is considered manageable as about two-thirds of the portfolio entails government securities. However, the portfolio is exposed to interest rate risk as half of the PIBs are on fixed rate with duration of over 5 years. Moreover, equity and mutual fund portfolio are also exposed to market risk. The management is poised to invest in blue chips and high dividend yielding stocks to manage the associated risk.

Assigned rating also factors in reinsurance arrangements largely with counterparties having sound credit risk profiles with appropriate risk retention on net account to maintain risk appetite of the Company. Moreover, CENI is considered sound from solvency risk point of view as the Company has adequate cushion in terms of admissible assets over its liabilities. Going forward, maintaining underwriting quality through rationalization of loss ratios, adequate mitigation of market risk and sustenance of momentum in profitability while sustaining its market share would remain important rating drivers.

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

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .