Press Release

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

Karachi, August 24, 2009: JCR-VIS Credit Rating Company Limited 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 one of the largest insurance company in the general insurance sector, recording the highest market share of business underwritten for 2008. The company is managed by a team of seasoned professionals which has remained stable over the years. While there has been a gradual reduction in the claim prone motor segment over the last three years, exceptionally large losses in the fire segment have continued to undermine results from underwriting operations. The management is cognizant of these trends and has taken measures to improve the quality of business, the impact of which has yet to be reflected in underwriting profitability.

With the exit of Munich Re, Swiss Re has assumed the role of lead re-insurer in principal business lines. This was also accompanied by a change in treaty terms negotiated for 2009 from proportional to non-proportional treaty arrangements for fire segment coupled with increase in underwriting capacity and limits for maximum loss retention. JCR-VIS will closely monitor the impact of these changes on results from underwriting operations.

As also experienced by other industry participants, liquidity indicators had come under pressure during 2008 on account of heavy claim payouts pertaining to prior year-end riots, while liquidity of equity holdings had also been impaired by the stock market freeze.

For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Ms. Sobia Maqbool (Ext: 506) at 35311861-70 (10 lines) or fax to 35311872-73.


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 .