JCR-VIS Reaffirms IFS Rating of Askari General Insurance Company Limited

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JCR-VIS Reaffirms IFS Rating of Askari General Insurance Company Limited

December 27, 2017

Karachi, December 27, 2017 (PPI-OT):JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Askari General Insurance Company Limited (AGICO) at ‘AA-’ (Double A Minus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on August 31, 2017. The rating of AGICO draws strength from sound underwriting performance, strong liquidity profile and sustainable investment income. The company’s association with Army Welfare Trust is also a key rating factor. Synergies with the primary sponsor is expected to be more pronounced with higher business expected from group entities, going forward.

During FY16, growth in company’s business volumes outperformed industry growth leading to improved market share. For FY17, the management has embarked upon exceeding FY16 figures and expects growth in business volumes mainly on the back of CPEC related infrastructure projects. Overall claims performance has also remained satisfactory over time. Over the years, the company has depicted an improving trend in income from core underwriting operations while bottom line also gets impetus from investment income.

AGICO’s reinsurance panel is diversified; risk profile of the panel is considered sound. Risk profile of the investment portfolio is considered low as quantum of equity related portfolio is not sizeable in relation to the company’s balance sheet size. The composition of the investment portfolio is expected to largely remain unchanged with investment to be concentrated in liquid avenues.

With enhanced equity base, leverage indicators have improved, though remained higher vis-à-vis peers. JCR-VIS expects further improvement in leverage indicators. Liquidity profile is considered sound reflected by sizeable liquid assets maintained in relation to total liabilities and technical reserves. However, insurance debt in relation to gross premium increased on a timeline basis. JCR-VIS expects the company to keep insurance debt within certain limits, in line with the outstanding rating.

For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

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