Press Release

JCR-VIS reaffirms IFS rating of EFU General Insurance Limited at ‘AA’

Karachi, January 20, 2009: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength Rating of EFU General Insurance Limited (EFUG) at ‘AA’ (Double A). Outlook on the assigned rating is Stable.

EFUG is positioned as one of the largest private sector insurers operating in the country. The company holds more than 30% of the market share and expects to maintain its stature inspite of a difficult macroeconomic environment. The management of the company comprises competent executives from the industry, who have been associated with EFUG for an extensive time period. Over the last two years, the company has registered a reduction in the proportion of motor portfolio which is expected to continue in 2009. The management, however, expects this to be offset by growth in other principal business lines.
Furthermore, the management does not plan to take any fresh exposures in the equity market and will largely be deploying excess liquidity over ensuing months in alternative channels. Also forming a significant portion of the investment portfolio is the company’s holding in EFU Life Assurance Limited, which is a long term strategic investment.
As per management, trends in underwriting performance have shown improvement over 2008. Furthermore, premium collection efforts are also expected to enable the company to maintain insurance debt vis-à-vis gross premium at a level commensurate with assigned ratings.
In previous years, the lead reinsurer with EFUG was Munich Re. Recently the reinsurer made a strategic decision to discontinue its operations from the country. Consequently, Swiss Re has now assumed the lead position on EFUG’s panel of reinsurers. Reinsurance treaties have also seen a change towards excess of loss from surplus treaties previously available.
JCR-VIS understands that the existing macroeconomic environment continues to pose significant challenges for the insurance industry and will continue to monitor trends in performance over ensuing quarters, as the impact of changes in management strategy materialize.
For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Ms. Sobia Maqbool (Ext: 506) at 5311861-70 (10 lines) or fax to 5311872-73.



Faheem Ahmed
President & CEO

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 2009 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .