Press Release

VIS Reaffirms IFS Rating of Jubilee General Insurance Company Limited

Karachi, December 30, 2022: VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Jubilee General Insurance Company Limited (‘JGI’ or ‘the Company’) at ‘AA++(IFS)’ (Double A Plus Plus (IFS)). The rating signifies very high capacity to meet policyholder and contract obligations; however, risk is modest, but may vary slightly over time due to business /economic conditions. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on March 31, 2022.

The rating assigned to JGI takes into account JGI’s market positioning as the third largest private sector insurance company in Pakistan. Furthermore, the rating is strengthened by an element of sponsor support, given presence of Aga Khan Foundation for Economic Development, and related entities, as the majority shareholders. JGI’s rating also takes into account JGI’s reinsurance panel, which constitutes counterparties with sound credit quality (as reflected by their IFS ratings) and modest internal retention.

During 2021, JGI’s insurance underwriting (inclusive of takaful contributions) posted growth of 16.4% emanating mainly from ‘Fire & Property Damage’ and ‘Marine, Aviation & Transport’ segments. In line with management efforts, the business mix depicts a higher tilt towards ‘Fire & Property Damage. The Company gross claim ratio had depicted improvement in 2021, though, an uptick in gross claims has been noted in 9M’2022 that is mainly associated with higher claims across the industry stemming from ‘Fire & Property Damage’ segment. JGI’s combined ratio improved in 2021, as a result of lower net claims and underwriting expense ratio. Investment performance has deteriorated in 2021 given the underperformance in the equities market, though it has improved during 9M’2022 given higher exposure to debt instruments and higher benchmark rates.

JGI's capital buffers have improved during the period under review given improved profitability performance and adequate retention. An uptick in both financial and operating leverage has been observed, though, the same remains favorable compared to peers. Furthermore, sizable liquid assets on the balance sheet provide adequate coverage of net technical reserves. The assigned rating remains dependent on maintenance of the company’s market positioning, and capitalization liquidity indicators in line with the peer median and assigned threshold.

For further information on this rating announcement, please contact Mr. Arsal Ayub, CFA (Ext: 216) or the undersigned (Ext: 207) at 35311861-66 or email at info@vis.com.pk.


Sara Ahmed
Director

Applicable Rating Criteria: General Insurance (March 2022)
https://docs.vis.com.pk/docs/VIS%20General%20Insurance%20-%2020220331%20-%20FinalFinal.pdf

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