Press Release

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

Karachi, December 18, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of EFU General Insurance Limited (EFU) at ‘AA’ (Double A). Outlook on the assigned rating is ‘Stable’.

Having a share of over one-fourth in gross premium written by the industry, EFU is the largest private sector general insurance company in Pakistan. Growth in business volumes of the company in the outgoing year was higher than the growth in overall industry, and has mainly been realized in property and marine segments. With decline in car financing, share of motor business in gross premium has declined.

Lower incidence of claims in fire and miscellaneous business lines has resulted in improvement in overall net claims ratio. Improvement in income from underwriting operations coupled with recovery in the stock market has eased pressure on the company’s liquidity profile. Leverage indicators of the company have improved on account of internal capital generation.

The assigned rating takes into account the reinsurance arrangements in place. Reinsurance treaty terms in most cases have remained unchanged; the company has enhanced proportional cover for fire related risks with the addition of a surplus treaty. Downward revision in net loss retention for fire & engineering business may also reduce the impact of smaller claims on the company’s net account.

EFU’s exposure to price risk is sizable given that a large proportion of investment portfolio comprises listed equity securities. Return on equities portfolio has showcased considerable variation on year-on-year basis due to stock market fluctuation.

For further information on this rating announcement, please contact Mr. Abdur Rahim, ACII (Ext: 508) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-70 (10 lines) or fax to 35311872-73.



Jamal Abbas Zaidi
Deputy 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 2012 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .