Press Release

JCR-VIS reaffirms IFS rating of Askari General Insurance Company at A

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Karachi, January 2, 2012: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Askari General Insurance Company Limited (AGICO) at ‘A’ (Single A). The Outlook on the rating is ‘Stable’.

The rating takes into account overall growth in underwriting business over the last five years. During the ongoing year, the management’s focus remained on improving business quality by restricting exposure in relatively riskier segments that along with enhanced reinsurance treaties helped in posting underwriting profits. At the same time, motor tracking system integrated with the ERP has helped in enhancing recovery of theft vehicles to a great extent. Net claims ratio depicted an overall improvement during FY10 and subsequently. At the same time, management’s focus towards building a fixed income investment portfolio will help in generating consistent support to the bottom line.

The liquidity profile of the company has also remained adequate on the back of concentration of investments largely in money market funds. AGICO has attained the minimum capital requirement of Rs. 300m through a combination of rights and bonus issue, thereby improving leverage indicators to some extent. Leverage indicators nevertheless remain high. Moreover, rising trend in insurance debt has resulted in higher non-earning assets, while also putting pressure on operating cash flows.

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



Syed Ziauddin Ahmed
Advisor

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