Press Release

JCR-VIS upgrades IFS rating of The Pakistan General Insurance Company Limited to BB+ with Positive outlook

Karachi, October 24, 2007: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the Insurer Financial Strength (IFS) rating of PGICL from ‘B+’ (Single B Plus) to ‘BB+’ (Double B Plus).

The upgrade takes into account the increase in paid-up capital of PGICL owing to injection of additional equity by sponsors and merger of Pakistan Equity Insurance Company Limited (PEICL) with and into PGICL. Quality of re-insurers on the company’s panel has also improved.

Increase in business volumes has translated into higher underwriting profitability as both claims ratio and underwriting expense ratio were contained by the company. However, the company’s large branch network remains underutilized and its benefits in terms of size and outreach are yet to be realized. A ‘Positive’ outlook has been assigned in view of the projected continuation in growth trends. Furthermore, we have also taken into account the management’s resolve to enhance focus on institution building, particularly as regards the control infrastructure. The internal audit department may also need to be strengthened in terms of manpower available, both as regards number and skills.

While performance of underwriting operations has improved, profitability derives little support from investment activity. PGICL has formalized an investment policy during 2006 as opposed to carrying excess liquidity as cash; the results of these are however yet to be seen.

For further information on this rating announcement, please contact the undersigned (Ext: 508) or Ms. Sobia Maqbool (Ext: 506) at 5311861-71 or fax to 5311872-3.





Syed Ziauddin Ahmed
Advisor

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 2007 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .