Press Release

JCR-VIS Reaffirms IFS Rating of Century Insurance Company Limited

Karachi, June 24, 2014: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) rating of Century Insurance Company Limited (CICL) at ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’.

CICL is part of the Lakson Group of Companies, an industrial group, having prominent presence across several sectors. On a standalone basis, the rating incorporates the sound capitalization indicators of the company. Liquidity profile also depicts strength in terms of the liquid assets carried on balance sheet in relation to outstanding liabilities in addition to which, internal cash generation is also adequately positive.

CICL incurred an underwriting loss of Rs. 3.9m in 2013 as compared to a profit of Rs. 5.1m in the preceding year. The weakening in underwriting results is attributable to increase in net claims ratio while expense ratio has improved in 2013. Expense ratio however still remains relatively on the higher side vis-à-vis peers.

Apart from the health segment, reinsurance coverage for other business segments has been obtained from reputed reinsurance companies. Per exposure claim retained on net account is on the lower side, providing resilience to the company’s underwriting capacity. The proportion of health business is increasing, which is retained on net account and where claims ratio generally tends to be on the higher side. The impact of changing business mix on underwriting results will continue to be tracked by JCR-VIS.

The company’s investment portfolio comprises one-third exposure in equities while the remaining is deployed in cash/income funds and debt instruments. In recent years, the portfolio has generated steady stream of income and supported the bottom line of the company.

For further information on this rating announcement, please contact Mr. Abdur Rahim, ACII (Ext: 508) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-71 or fax to 021-35311872-3.

Javed Callea
Advisor

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 2014 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .