Press Release

JCR-VIS upgrades IFS rating of Security General Insurance Company Limited

Karachi, February 04, 2014: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the Insurer Financial Strength (IFS) rating of Security General Insurance Company Limited (SGI) to ‘AA-’ (Double A Minus) from ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’.

The rating assigned to SGI takes into account significant increase in business volumes over the last two years. Given conservative risk retention strategy, net account of the company remains protected. While there has been growth in net premium as well, its level as a proportion of gross premium has remained low as most of the fresh power sector business has been placed onwards on facultative basis. The management expects to sustain the business volume in the foreseeable future. Going forward, the management plans to cautiously increase retention while aiming to further capture market based premium.

Due to increase in business volume and conservative risk retention underwriting profitability of the company has increased during the outgoing year. Growth in business volumes also led to improvement in expense ratio. Meanwhile, investment portfolio of the company continues to bolster profitability and cash flows. Maintaining strong underwriting quality while pursuing growth would be critical for future underwriting profitability.

Risk adjusted capital level of the company is considered strong and improving on a timeline basis, on the back of profit retention. In addition to this, investments carry significant unrealized gain. Reinsurance panel of SGI has remained diversified and, barring one; all reinsurers are in the ‘A’ or ‘AA’ rating bands. Given adequate treaty arrangements in place, net claims ratio continues to be lower in comparison to peers.

Senior management team of SGI comprises qualified and experienced resources, having long association with the company. Over the years, management has focused on improving the IT infrastructure of the company.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA at 021-35311861-70 (Ext. 604) or Mr. Maimoon Rasheed at 042-36610681-84 or fax to 021-35311873.

Jamal Abbas Zaidi
Deputy CEO

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 2014 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