Press Release

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

Karachi, October 28, 2010: 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’.

The assigned rating recognizes EFUG’s leading position amongst property & casualty insurance companies in the local market, even after slight decline in business volumes of the company during 2009 as compared to around 2% growth in overall industry premiums. The assigned rating also takes into account the quality of reinsurers on the company’s panel and adequacy of treaty arrangements. During 2009, EFUG shifted to non-proportional treaty arrangements in the property segment, which comprises the largest proportion of the business mix. While there has been improvement in underwriting quality of property risks, this did not translate into underwriting profitability on account of high level of priority under the Excess of Loss (XOL) reinsurance arrangement.

There has also been improvement in the business mix with reduction in proportion of the motor segment and improvement in claims ratio of the same. However, overall claims ratio has remained high leading to declining underwriting results in FY09 and HY10.

There has also been a sharp fall in market value of investments and shareholders’ equity of EFUG, adjusted for deficit on investments, over the last two and a half years. A major proportion of investments comprises investment in EFU Life Assurance Limited; an associate concern. JCR-VIS will continue to monitor trends in overall performance of EFUG and the impact of its revised reinsurance arrangements on its risk profile.

For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Mr. Zia Usmani (Ext: 507) 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 2010 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .