Press Release

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

Karachi, December 31, 2021: 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, 2020.


The rating assigned to CISPL takes into account limited business volume with restricted capacity of the society to meet policyholder and contractual obligations. During the ongoing year and CY20, business remained depressed on account of lower business from Punjab Provincial Cooperative Bank Limited (PPCBL), which is Society’s largest shareholder. Overall market presence of the Society has remained restricted owing to meager organic growth from its branch network on a timeline basis. While claims ratio was very low in the ongoing year, consistently high expense ratio resulted in underwriting losses. Investment and rental income have provided enough support to the bottomline which has more than offset underwriting losses during the ongoing year. Liquid assets in relation to net technical reserves have remained sound. Insurance debt as proportion of gross written premium remained minimal amidst limited business volume. Both operating and financial leverages have also remained low and provide considerable room for growth. Credit risk emanating from reinsurance selection remains sound with the reinsurer rated in ‘AA’ category. The rating remains dependent on growth in business and profitability while maintaining liquidity position and optimizing 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. 306) or email at info@vis.com.pk


Faryal Ahmad Faheem
Deputy CEO


Applicable rating criterion: Methodology General Insurance (November 2019)
https://www.vis.com.pk/kc-meth.aspx

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