Press Release

JCR-VIS Reaffirms IFS Rating of The Pakistan General Insurance Company Limited at BBB+

Karachi, December 31, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of The Pakistan General Insurance Company Limited (PGI) at ‘BBB+’ (Triple B Plus). Outlook on the assigned rating is ‘Stable’.

Business volumes depicted steady growth in FY11 and 9M12. Fire and marine segments continue to drive growth in premium base; share of motor has remained small. Marked improvement was posted in the combined ratio in 2011 and 9M12 on the back of which, profitability position of the company depicted improving trend.

Operating cash flows of the company improved in the on-going year as the company was able to recover a sizeable amount of outstanding receivables. There is room to bring down the level of insurance debt further. Liquidity profile has nevertheless witnessed improvement as the company has partially divested from investment properties and channeled funds into more liquid investment avenues. Over time, the company plans to completely off-load its investment property.

IFS profile of reinsurers has experienced weakening in 2012, with the exit of Al-Fajer Re, Kuwait, which was replaced with Arab Union Re, Syria. The reinsurance panel is led by Labuan Re. While treaty capacities remained unchanged, reduced participation in treaties by some of the reinsurers enhanced retention of risks on the company’s net account.

The Board members largely comprise members of the sponsoring family. Changes in Board composition may be required to ensure compliance with the revised Code of Corporate Governance. Furthermore, the presentation of quarterly financials may need to be improved.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA at 021-35311861-70 or Mr. Maimoon Rasheed at 042-36610681-84 or fax to 021-35311873.



Jamal Abbas Zaidi
Deputy CEO

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 2012 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .