Press Release

JCR-VIS Reaffirms IFS rating of Alpha Insurance Company Limited

Karachi, November 14, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Alpha Insurance Company Limited (AICL) at ‘A’ (Single A) with ‘Negative’ Outlook.

Rating derives strength from strong support of parent company, State Life Insurance Corporation of Pakistan (SLIC). Fresh equity injection of Rs. 100m during 2012 has further enhanced the capitalization level of the company. Leverage indicators depict strength and reflect room for further growth. Liquid assets provide adequate coverage against outstanding liabilities. Solvency margin was well above the minimum requirement to be met at end-Dec’12.

Even with decline in motor business, business target of Rs. 200m for 2012 is expected to be met comfortably through growth in other segments. In 1HFY12, reinsurance cover has not been arranged for business representing sizable proportion of gross premium. There has been improvement in net claims ratio in 1H12; though combined ratio remains above 100% on account of high expense ratio. Bottom-line results of the company witnessed significant uptick in 1H12 on account of improvement in investment income.

Liquidity generation from underwriting operations remains stressed. While some provisioning has been made against insurance debt, it still comprises a sizeable proportion of gross premium. Claims outstanding for more than two years represented a significant proportion of total outstanding claims.

For further information on this rating announcement, please contact Mr. Abdur Rahim, (Ext. 508) and Ms. Sobia Maqbool, CFA (Ext. 604) at 021-35311861-70 (10 lines) 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 .