Press Release

JCR-VIS Reaffirms IFS rating of Reliance Insurance Company Limited

citalopram alcohol reddit

citalopram and alcohol
Karachi, November 12, 2009 JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Reliance Insurance Company Limited (RICL) at ‘A-’ (Single A Minus). Outlook on the rating is ‘Stable’.

In view of the strategic decision taken by the company to undertake selective exposures in the motor segment, on account of high incidence of claims, gross premiums recorded a marginal decline in 2008. The decline in motor business was largely off-set by growth in fire and marine segments. The company’s lead re-insurer is Mitsui Sumitomo Re, enjoying 45% share in treaty terms. With fire reporting a considerably higher gross claims ratio attributable to a single client, overall gross claim ratio of RICL weakened in 2008. However, in contrast to industry trends, the company has been able to consistently report underwriting profits, albeit at a declining trend.

Results from the investment management function were adversely affected by the stock market decline in 2008. Current year’s earnings are however expected to be better as the company has already recognized all impairment losses. Market value of holdings was higher than the book value, after accounting for provisions created thereon, at the end of June 2009.

Senior management of the company is seasoned and has remained stable over the years. However, successors at par with competence of senior incumbents have yet to be developed. While the company has initiated the process of migration to a new IT platform, the process may need to be accelerated. In addition to this, greater focus on improving internal audit framework may also be required.

Lately, the insurance industry has been characterized by increasing competition. To attract business, premium rates have reduced translating into lower margins; additionally, credit policy terms have relaxed resulting in growth in insurance debt and stress on cash flows. In view of these challenges, capturing limited business opportunities may require certain tradeoffs, which may dampen the profitability of industry participants, going forward.

For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Ms. Sobia Maqbool (Ext: 506) at 35311861-70 (10 lines) or fax to 35311872-73.


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 2009 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .