Press Release

JCR-VIS Upgrades IFS Rating of Askari General Insurance Company Limited

Karachi, February 6, 2017: JCR-VIS Credit Rating Company Limited has upgraded the Insurer Financial Strength (IFS) Rating of Askari General Insurance Company Limited (AGICO) to ‘AA-’ (Double A Minus) from ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on April 15, 2015.
The ratings assigned to AGICO take into account sustained performance of the company reflected by sound reinsurance treaties, improved underwriting results, adequate capitalization and strong liquidity profile. Ratings also draw comfort from sponsorship of the company by Army Welfare Trust (AWT).
Growth in business volumes of the company have outperformed industry growth leading to improved market share. Underwriting performance of the company exhibited improvement with claims and expense ratios of AGICO comparing favorably to its peers. Positive momentum in volumes is expected to continue on the back of new infrastructure projects under CPEC and a recently launched health segment with international affiliation. Performance of the same will be tracked over time.
Improved core underwriting performance reflected positively on the bottom line of the company while income from investment portfolio continues to support the bottom line. Rating takes into account continuation of existing low risk profile of reinsurance treaties having predominant proportionate nature. AGICO’s reinsurance panel is diversified with risk profile of the panel considered sound. Moreover, continuation of existing prudent underwriting policies with low risk limits is also a key rating driver.
Market risk of investment portfolio is low given the small proportion of equity investments. According to management, composition of investments is expected to remain dominated in sound fixed income investment avenues. Insurance debt in relation to gross premiums remains within acceptable limits.
For further information on this rating announcement, please contact the undersigned at 021-35311861-70 (Ext: 207) or Mr. Waqas Munir, FRM at 042-35723411-13 (Ext: 8010).
Jamal Abbas Zaidi
Advisor
Applicable Rating Criteria: General Insurance (September 2016)
http://www.jcrvis.com.pk/kc-meth.aspx

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