Press Release

VIS Reaffirms IFS Rating of EFU Life Assurance Limited

Lahore, December 29, 2023: VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of EFU Life Assurance Limited (EFUL) at ‘AA++ (IFS)’ (Double A Plus Plus (IFS)). The rating signifies very strong capacity to meet policyholder and contractual 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 December 30, 2022.

The rating assigned to EFUL takes into consideration the Company’s dominant market position in the private life insurance industry. Moreover, the rating derives support from strong sponsorship profile comprising of the EFU Group, Pakistan’s largest insurance conglomerate, and also considers the quality and stability of the Company’s senior management. In addition to this, EFUL has a dedicated and independent enterprise risk management (ERM) function that ensures sound risk recognition, assessment and development of controls in respective areas of operation. However, the business risk profile of the life insurance sector is currently heightened owing to surge in policy surrenders stemming from contraction in disposal income of policyholders amid weak macroeconomic environment coupled with existing issue of low insurance penetration.
EFUL, over the years, has built sizable capital buffers to overcome the decline in the business activity due to weak macro-economic conditions, particularly in the individual life first-year business, over the rating review period. Additionally, the persistency levels, in line with industry trends, have also depicted a downtrend in the ongoing year.

However, despite higher surrender claims, the bottom-line performance was supported by sizeable uptick in investment income generated from debt instruments as the overall investment portfolio is largely tilted towards the same amidst the high policy rate scenario. The rating also incorporates sound reinsurance arrangements with renowned international reinsurers with appropriate risk retention on net account to maintain risk appetite of the Company. Moreover, with sufficient available liquid assets along with adequate capital coverage of claims, liquidity and capitalization levels remained satisfactory. Going forward, improvement in the underwriting performance, particularly by restricting policy surrenders and uplifting business volumes in the individual segment, will be important 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: Life Insurance Family Takaful (October 2023)

VIS Issue/Issuer Rating Scale

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