Press Release

VIS Reaffirms IFS Rating of Askari General Insurance Company Limited

Karachi, December 31, 2020: VIS Credit Rating Company Limited VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Askari General Insurance Company Limited (AGICO) at ‘AA’ (Double A). The IFS rating of ‘AA’ denotes very high capacity of meeting policyholder and contractual obligations. Moreover, the risk is modest, though may vary slightly with possible changes in economic conditions. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on December 27, 2019.

The rating assigned to AGICO derives strength from its association with its primary shareholder Army Welfare Trust which has presence in various sectors of the economy. Growth momentum was disrupted in 9MFY20 mainly due to the outbreak of COVID-19. The impact of growth in fire, marine, and accident & health segments was offset by lower gross premium written in miscellaneous and motor segments owing to relatively lower demand for vehicles and initiation of price war by industry players to maintained market share. Going forward, the management expects business expansion from the launch of new health and motor insurance products, recovery in auto sector, new projects in the pipeline in miscellaneous segment, and some increase in fire and marine segments.

The rating also incorporates reinsurance arrangements largely with counterparties having sound credit risk profiles. Despite one of the highest net retention amongst the peers, the company is managing risks given largely consistent loss ratio over the years. Liquidity, in terms of liquid assets in relation to technical reserves have remained adequate. Investment income has supported underwriting profitability on a timeline basis. However, the rating is constrained by high operating and financial leverages; capitalization support to retain risk profile is needed as the company continues to grow its business volumes. Going forward, the rating would remain sensitive to projected growth in business volumes while maintaining sound underwriting quality and adequate liquidity indicators.

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or email at

Faryal Faheem Ahmed
Deputy CEO

Applicable Rating Criteria: General Insurance (November 2019)

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