Press Release

VIS Reaffirms IFS Rating of UBL Insurers Limited

Karachi, December 19, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of UBL Insurers Limited (UIL) at ‘AA+’ (Double A Plus). IFS rating of AA+ 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 December 29, 2022.

The assigned rating derives strength from the sponsorship backing of UBL, the third largest private commercial bank in Pakistan, and the Bestway Group having business interests in commercial banking and cement sector in Pakistan along with wholesale, pharmacy and real estate sectors in the UK. The rating also reflects the Company’s positioning as the fifth largest general insurance company in the industry with a market share of 4.9% at end-June’23 (CY22: 4.3%, CY21: 4.2%). The business risk profile of the insurance industry is currently elevated owing to projected macroeconomic weakening.

However, the topline augmented during the rating review period, driven largely by inflation adjustments to premium prices. The Company’s cautious underwriting approach resulted in slight improvement in loss ratios over the rating review period which were comparatively better than industry benchmarks. However, underwriting losses were registered in the outgoing year, largely on account of higher underwriting expense ratio due to a one-time provisioning of claim receivable from the local reinsurer. The overall risk profile is supported by sound reinsurance arrangements with reputed international reinsurers. The rating reflects comfortable liquidity position as depicted by improvement in liquid assets relative to net technical reserves and insurance debt relative to gross premium. Underpinned by growth in equity base, the operating leverage also improved during the review period. On the other hand, despite increase in financial leverage, the leverage indicators remain adequate for the assigned ratings. Moreover, the aging of claims is healthy with no claim overdue for more than a year at end of the outgoing year. Going forward, the rating remains sensitive to the Company’s ability to uplift its profitability metrics, particularly underwriting performance, amidst the challenging business environment.

For further information on this ratings announcement, please contact Ms. Maham Qasim at 042-35723411-13 (Ext: 8010) or the undersigned (Ext: 207) on 021-35311861-64 or email at

Sara Ahmed

Applicable Rating Criteria: General Insurance (October 2023)

VIS Issue/Issuer Rating Scale

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