VIS Reaffirms IFS Rating of Jubilee General Insurance Company Limited

Karachi, December 29, 2020 (PPI-OT): VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Jubilee General Insurance Company Limited (‘JGI’ or ‘the Company’) at ‘AA+’ (Double A Plus). The rating signifies very high capacity to meet policyholder and contract obligations. Risk is considered modest but may vary slightly over time due to business /economic conditions. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 31, 2019.

The rating assigned to JGI takes into account JGI’s market positioning as the third largest private sector insurance company in Pakistan. Furthermore, the rating is strengthened by an element of sponsor support, given presence of Aga Khan Foundation for Economic Development, and related entities, as the majority shareholders. JGI’s rating also takes into account JGI’s reinsurance panel, which constitutes counterparties with sound credit quality (as reflected by their IFS ratings) and modest internal retention.

JGI’s underwriting performance depicted improvement in 2019, on the back of favourable claims performance. Albeit, given an uptick in Fire segment claims in 9M’20, the combined ratio for 9M’20 increased above the historical 3-year average.

Investment performance has depicted improvement in 2019 and 9M’20, translating in much improved net operating ratio for JGI. Given improvement in profitability and adequate retention, capital buffers have been reinforced. The company’s operating and financial leverage remain range-bound and aligned with the peer median. The company’s liquid assets to net technical reserves have depicted improvement, and comfortably comply with the threshold.

The assigned rating remains dependent on maintenance of the company’s market positioning, and capitalization liquidity indicators in line with the peer median and assigned threshold. The insurance industry remains in the process of IFRS 17 adoption, which will require additional provisions. However, given that the industry-wide impact of the same is yet to be ascertained, these will be incorporated as and when full impact can be determined.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873

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