Press Release

VIS Reaffirms IFS Rating of EFU General Insurance Limited

Lahore, January 03, 2024: VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) Rating of EFU General Insurance Limited (EFUG or ‘the Company’) at ‘AA++ (IFS)’ (Double A Plus Plus (IFS)). The 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’. The previous rating action was announced on November 23, 2022.

The rating assigned to EFUG takes into account the Company’s prominent market position as the leading general insurance firm in the country. The rating derives strength from the overall sound profile of the EFU Group along with sponsorship backing of the Bhimjee family and Jahangir Siddiqui & Co. Ltd. The business risk profile of the insurance industry is currently elevated owing to projected slowdown in the domestic economic activity due to high interest rates, rupee devaluation, heightened inflation levels, destruction caused by floods coupled with expected rate hardening by international reinsurers. However, the gross written premium witnessed an uptick over the rating review period driven mainly by upward revision in premium prices in line with rising inflation. On the other hand, weakening in loss ratios in the outgoing year owing to flood-related claims resulted in underwriting loss in HY2023. However, recovery was witnessed in underwriting performance in the ongoing year owing to decline in net claims ratio. Nonetheless, the bottom-line was supported by uptick in investment income and healthy profit from takaful operations.

In addition, the rating reflects the overall risk profile being supported by sound reinsurance arrangements from reputed international reinsurers. The liquidity profile is considered satisfactory as exhibited by liquid asset coverage of net technical reserves and insurance debt relative to gross premium. Given reasonable returns on equity, generous payouts have stalled equity growth; nevertheless, the same remained commensurate with the assigned rating. Moreover, the aging of claims is healthy with no claim overdue for more than year at end of the outgoing year. Going forward, improvement in profitability metrics, particularly underwriting performance, amidst the difficult business environment will be vital from a rating’s perspective.

For further information on this ratings announcement, please contact Ms. Maham Qasim at 042-35723411-13 (Ext: 8010) or the undersigned at 042-35723411-13 (Ext: 8008) or email at

Maimoon Rasheed

Applicable Rating Criteria: General Insurance (October 2023)

VIS Issue/Issuer Rating Scale

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