Press Release

VIS Reaffirms IFS Rating of Alpha Insurance Company Limited

Lahore, February 1, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Alpha Insurance Company Limited (AICL) at ‘A+ (IFS)’ (Single A Plus). The rating signifies strong capacity to meet policyholders and contractual obligations. Risk factors are low, and the impact of any adverse business and economic factors is expected to be small. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on Nov 16, 2022.
The rating assigned to AICL is underpinned by financial and sponsor profile of its primary shareholder, State Life Insurance Corporation of Pakistan (SLIC). SLIC is the largest life insurance company in the country and is owned by the Government of Pakistan; the same has been assigned a rating of AAA by a local rating agency. 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, and heightened inflation levels coupled with expected rate hardening by international reinsures. The rating factors in growth in the business volumes observed during the rating review period on account of inflation adjustments, forex impact and onboarding of few new clients. Nonetheless, the rating is constrained by persistent underwriting losses and low business volumes as compared to peers. On the other hand, with the materialization of plans to improve profitability and operations, the Company was able to reverse their losses in the ongoing year as opposed to losses reported in the previous year. In addition, total investment portfolio remains stagnant. In terms of composition of investment mix, given the sizable investments in government securities coupled with remaining majority constituting of stable and high rated equity securities, the credit risk emanating from the same is manageable.
The rating 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. In addition, the aging profile of the claim’s payable was satisfactory with no claim due for more than a year at end of the outgoing year. AICL is considered sound from solvency risk point of view as the Company has adequate cushion in terms of admissible assets over its liabilities. On the other hand, operating and financial leverages scaled up on a timeline in line with enhancement of operations however; the same remains below the peer median. With significant uptick expected in business volumes, the leverage indicators are projected to change during the rating horizon. Going forward, reversal of underwriting losses through rationalization of loss ratios, adequate mitigation of market risk and improvement of momentum in profitability would remain important rating drivers.
For further information on this rating 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

VIS Issue/Issuer Rating Scale

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