Pakistan Credit Rating Agency Maintains Insurer Financial Strength Rating of Adamjee Insurance Company Limited
Lahore: The Pakistan Credit Rating Agency (PACRA) has maintained the IFS rating of Adamjee Insurance Company Limited (AICL) at “AA” (Double A). The rating denotes a very strong capacity of the company to meet policyholder and contract obligations. At the same time, risk factors are considered modest, and the impact of any adverse business and economic factors is expected to be very limited.
The rating reflects AICL’s leading market position in the insurance industry in Pakistan. The management’s focus on consolidation of business, while reinvigorating its underwriting practices and rationalizing its cost structure, is expected to reflect positively on AICL’s performance, which is currently relatively strained.
Nevertheless, the company’s sizable and superior investment portfolio continues to supplement its profitability and financial strength. The centralization of the risk management department, augmented by quality human resource and robust IT infrastructure would improve the company’s risk profile. Meanwhile, the rating takes into account the synergic benefits that AICL derives from its association with the Nishat Group.
The management’s ability to maintain its leading market position, while achieving improved translation of GPW into underwriting profitability remains critical. Moreover, strengthening systems and controls in conjunction with business size is important.
Substantial erosion in the risk absorption capacity resulting from depressed underwriting performance and/or material impairment in investment portfolio could have negative rating implications.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town, Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425