Press Release

JCR-VIS reaffirms IFS rating of Askari General Insurance Company at A
 

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Karachi, January 2, 2012: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Askari General Insurance Company Limited (AGICO) at ‘A’ (Single A). The Outlook on the rating is ‘Stable’.

The rating takes into account overall growth in underwriting business over the last five years. During the ongoing year, the management’s focus remained on improving business quality by restricting exposure in relatively riskier segments that along with enhanced reinsurance treaties helped in posting underwriting profits. At the same time, motor tracking system integrated with the ERP has helped in enhancing recovery of theft vehicles to a great extent. Net claims ratio depicted an overall improvement during FY10 and subsequently. At the same time, management’s focus towards building a fixed income investment portfolio will help in generating consistent support to the bottom line.

The liquidity profile of the company has also remained adequate on the back of concentration of investments largely in money market funds. AGICO has attained the minimum capital requirement of Rs. 300m through a combination of rights and bonus issue, thereby improving leverage indicators to some extent. Leverage indicators nevertheless remain high. Moreover, rising trend in insurance debt has resulted in higher non-earning assets, while also putting pressure on operating cash flows.

For further information on this rating announcement, please contact the undersigned (Ext: 508) or Sabeen Saleem (Ext: 510) at 35311861-71 or fax to 35311872-3.



Syed Ziauddin Ahmed
Advisor

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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 not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2011 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited