VIS Reaffirms IFS Rating of IGI General Insurance Limited
Karachi, December 30, 2020 (PPI-OT):VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) rating of ‘AA’ (Double A) to IGI General Insurance Ltd. (IGI General). The rating signifies very high capacity to meet policyholders’ and contractual obligations. Risk is considered modest but may vary slightly over time due to business /economic conditions. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 06, 2019.
Rating assigned to IGI derives strength from association with its primary shareholder, growth in business volumes, improved underwriting performance, conservative investment mix and sound liquidity profile. The rating further incorporates reinsurance arrangements largely with counterparties having sound credit risk profiles with appropriate risk retention on net account to maintain risk appetite of the company. Assigned rating also factors in the stability and experience of the management team.
The rating remains sensitive to high operating and financial leverages; the same remain higher than the rating benchmark. Insurance debt in relation to gross premium has also increased; however, aging of receivables is considered satisfactory. Given the prevailing competition in the insurance market, the company continues to face significant pressure on pricing. Further, current uncertainty in sector dynamics due to coronavirus outbreak, overall contraction in demand and challenging economic environment may pose as constraints for growth in the insurance industry during the coming years. Going forward, achieving growth in market share while maintaining underwriting quality and profitability metrics would be an important rating driver.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
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