JCR-VIS Reaffirms IFS Rating of Chubb Insurance Pakistan Limited
Karachi, December 29, 2017 (PPI-OT):JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Insurer Financial Strength rating of Chubb Insurance Pakistan Limited (CIPL) at ‘AA’ (Double A). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on 30th December, 2016.
The assigned rating takes note of CIPL’s robust risk-adjusted capitalization as evident from low net risk retention, conservative investment profile and adequate liquidity indicators. The rating also factors in prudent underwriting criteria, well-developed risk management infrastructure and solid reinsurance program placed with Chubb Tempest Re. Leverage indicators are low and indicative of significant room for growth.
Since declining in 2016, gross premiums have witnessed slight recovery in the ongoing year. Nevertheless, business volumes remain significantly below historical levels. Going forward, management expects gross premiums to depict growth within Accident and Health (A and H) along with construction and marine sectors while product diversification is being pursued through launch of new products. Increase in business booked by A and H and Liability segments, curtailment of power sector exposure and rationalization of treaty arrangement have enabled CIPL to post positive underwriting results during 9M2017. However given current business volumes expense ratios continue to be on the higher side. Resultantly, combined ratios are currently not commensurate with benchmarks for the assigned rating. JCR-VIS expects profitability indicators to comply with benchmarks for the assigned rating over the rating horizon.
The rating recognizes the sound profile of the company’s ultimate sponsor, Chubb Group, representing the world’s largest property and casualty insurers. The rating also reflects the support provided to CIPL by the sponsor, in the form of capital injections and sizeable treaty capacities, largest in the domestic context, providing CIPL significant advantage in terms of business generation while allowing the company to manage risk on net account.
For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi