Press Release

VIS Reaffirms IFS Rating of The Co-operative Insurance Society of Pakistan Limited

Karachi, December 31, 2020: VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength rating of The Co-operative Insurance Society of Pakistan Limited (CISPL) at ‘BB’ (Double B). The IFS rating of ‘BB’ denotes obligations deemed likely to be met; the protection factors are likely to weaken if changes occur in the economy. Moreover, overall risk factors may vary frequently within this rating category. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on December 31, 2019.

The rating assigned to CISPL takes into account limited business volume reflecting restricted capacity of the society to meet policyholder and contractual obligations. Some improvement in underwriting performance has been witnessed in FY19 and 1HY20 mainly on account of higher business underwritten in miscellaneous sector. With increase in net revenue, operating expenses were rationalized, resulting in considerably lower expense ratio. The rating takes into account support available from investment and rental income. Credit risk emanating from reinsurance panel selection remains sound with the reinsurer rated in category ‘AA’. Liquid assets in relation to net technical reserves have remained sound. Insurance debt as proportion of gross written premium remained minimal. Both operating and financial leverages have also remained low and provide considerable room for growth. The ratings incorporate meagre organic growth emanating from society’s branch network; Punjab Provincial Cooperative Bank Limited, society’s largest shareholder, contributes major proportion of business. Hence, the market presence of the society remains restricted. The rating remains dependent on growth in business while maintaining liquidity position, lower loss ratio along with optimization of capitalization indicators.


For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 301) or email at info@vis.com.pk



Faheem Ahmad
President & CEO


Applicable Rating Criteria: General Insurance (November 2019)
http://www.vis.com.pk/kc-meth.aspx

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