Press Release

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

Karachi, June 16, 2016: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Security General Insurance Company Limited (SGI) at ‘AA-’ (Double A Minus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on September 23, 2015.
Ratings assigned to SGICL take into account its association with Nishat Group, a large conglomerate operating across diversified sectors of the country. Ratings also take into account conservative risk appetite of the company along with robust capitalization related indicators depicting strong loss absorption capacity.
Growth in gross premium, mainly dependent on group business, during the last three years has remained largely stagnant; management has projected healthy growth in premium for the ongoing year. In addition to group related business which is expected to be recurring, the management aims to gradually increase the proportion of market based business by increasing SGICL share of business with clients carrying satisfactory track record. Moreover, retention is projected to increase in case of such clients leading to lower cession ratio which has remained on the higher side in comparison to the industry. Initiation of window takaful operation is also planned for the ongoing year. The impact of these measures would be seen over time.
Reinsurer panel of SGICL is diversified with reinsurers having sound financial strength ratings. Overall claims performance remained satisfactory; the company’s loss ratio compares favorably to the industry. Underwriting results have also remained strong. Investment portfolio continues to support profitability and cashflows of the company. Insurance debt as a proportion of gross premium is on the higher side.
For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Mohammed Khalid Ali (Ext: 508) at 35311861-70 (10 lines) or fax to 35311873.

Javed Callea

Applicable Rating Criteria: Methodology: General Insurance (Nov 2003)

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 2016 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