Press Release

JCR-VIS Reaffirms IFS Rating of Pakistan Reinsurance Company Limited at AA

Karachi, June 5, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) Rating of Pakistan Reinsurance Company Limited at ‘AA’ (Double A). Outlook on the rating is Stable.

The assigned rating takes into account the strong sponsorship with the sovereign directly and indirectly having a shareholding of 75% in the company. PRCL is the sole local reinsurer in Pakistan and enjoys confirmed business from insurance companies, for which it is compulsory to cede 35% of their surplus business. Moreover, the first right of refusal has enabled PRCL to underwrite selective business. While some of the larger exposures that have manifested into claims in 2011 have been written by the company under both treaty and facultative arrangements, overall gross claims ratio of facultative business still compares favorably to results from the treaty business. Retrocession arrangement is mostly with sound counterparties.

In 2011, claims ratio was maintained at the preceding year’s level. Underwriting profit however increased on account of lower retrocession while overall profitability also received support from earnings on investment portfolio. Liquidity profile of the institution is considered strong while capitalization is adequate even after adjusting for the impact of un-reconciled balances. The rise in outstanding level of claims needs to be arrested.

For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Ms. Sobia Maqbool, CFA (Ext: 506) at (+92-21) 35311861-70 or fax to (+92-21) 35311873.




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 .