Press Release

JCR-VIS Upgrades IFS Rating of UBL Insurers Limited to AA-
 

Karachi, May 29, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the Insurer Financial Strength (IFS) rating of UBL Insurers Limited (UIL) to ‘AA-’ (Double A Minus) from ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 30, 2016.

The assigned rating of UIL takes into consideration continued performance of the company reflected by prudent reinsurance treaties and improved underwriting results. The rating also draws strength from the strong profile and demonstrated financial support of its sponsors.

Going forward, continuation of prudent underwriting policies would be amongst the key rating drivers; ability to demonstrate a consistent and improving track record in underwriting performance and a strengthening trend in capital on both absolute and risk-adjusted basis will continue to be tracked by JCR-VIS.

Improved core underwriting performance reflected positively on the bottom line of the company while income from investment portfolio continues to support the bottom line. The company’s investment portfolio comprises more than half of exposure in government papers while the remaining is deployed in income funds, debt instruments and listed equities at end-December 2016. Since inception, UIL had a conservative stance towards investments. The ability of investments to generate a steady stream of income and contribute to the bottom line would support the assigned rating.

While liquidity profile of the company is considered adequate; trend in growing insurance debt in respect to total gross premium is expected to be reduced over time. In order to arrest the increasing trend in receivables, a collection team has been formed and a recovery strategy is in process of being drafted by management. Ageing profile of insurance debt is also considered satisfactory. Going forward, strengthening of liquidity management is considered crucial.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at (021)-35311861-71 or fax to (021)-35311872-3.


Javed Callea
Advisor

Applicable rating criterion: Methodology - General Insurance (September 2016)
http://www.jcrvis.com.pk/docs/Meth-GenInsurance201609.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-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. JCR-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. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-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 2017 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited