Press Release

JCR-VIS Reaffirms IFS Rating of Century Insurance Company Limited

Karachi, November 15, 2017: 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’. Previous rating action was announced on August 23, 2016.

The assigned ratings incorporate robust profile of sponsors which have presence in diverse sectors, improvement in the underwriting performance, adequate reinsurance arrangements and healthy capitalization indicators of CICL.

The company continues to maintain a diversified portfolio mix. Management has adopted a cautious approach in relation to health portfolio due to high incidence of claims in this segment. Future growth is envisaged in the motor and fire segments, the former of which is ceded minimally. Hence, underwriting quality is also important in this regard. Business acquired from related parties was higher in comparison to last year; however, claims incurred were also lower.

Underwriting profitability of CICL improved during 2016 and 9M’17 on the back of lower combined ratio. The same has translated into higher profit before tax in 9M’17. Rating is constrained by sizeable exposure to market risk in the form of equity investments; a downward trajectory in the equity market may have unfavorable impact on profitability and capitalization indicators.

Liquidity profile of the company is supported by presence of sizeable liquid assets on balance sheets and low insurance debt in relation to gross premiums. At present, capitalization indicators are considered healthy and indicate further room for growth in business. The same is also reiterated by a low operating leverage ratio.

For further information on this rating announcement, please contact the undersigned (Ext: 207) at 021-35311861-71 or fax to 021-35311872-3.



Jamal Abbas Zaidi
Advisor


Applicable Rating Criteria: General Insurance (March 2017)
http://jcrvis.com.pk/docs/Meth-GenInsurance201702.pdf

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