Press Release

JCR-VIS Assigns IFS Rating to Pakistan Reinsurance Company Limited

Karachi, April 28, 2011: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned an Insurer Financial Strength (IFS) rating of ‘AA’ (Double A) to Pakistan Reinsurance Company Limited (PRCL). Outlook on the rating is ‘Stable’.

The rating incorporates strong sponsorship with the sovereign having 44.9% direct and 24.4% indirect shareholding through State Life Insurance Corporation of Pakistan. PRCL is the sole local re-insurer in the country enjoying a significant market share by virtue of having the first right of acceptance upto 35% of the treaty business. Subsequent to the abolition of compulsory cession in 2005, the company emerged as an independent re-insurer getting the discretion to underwrite selective business. Its underwriting capability is manifested in facultative business where the claims ratio has historically remained low. Moreover, it has a strong re-insurer panel having eminent international players with adequate IFS ratings.

The rating also reflects PRCL’s strong capitalization built over a period of time through internal profit generation. Liquidity is adequately supported by a sizable investment portfolio largely having exposure in listed equities. Given the recent crisis in stock market, the management has adopted a conservative stance while focusing towards fixed income avenues. Investment management function maybe strengthened to optimize returns, while continuing to maintain low risk. The existing IT system is sufficiently catering to operations; however, the rapidly changing dynamics of the financial sector requires an integrated business application. Cognizant of the fact, the management is in the process of developing a state of the art ERP, timely installation of which, would improve data handling and MIS reporting in the company. The relevant SOPs and manuals, though developed, may be revised to further elaborate procedures in line with the contemporary standards. The senior management has remained associated with the company for a number of years; stability in top cadres has been noted positively.

For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Ms. Sabeen Saleem, CFA (Ext: 510) at 35311861-71 or fax to 35311872-3.





Faheem Ahmad
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 2011 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .