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The Pakistan Credit Rating Agency Limited

Date
30-Dec-2016
Analysts
Amara Gondal
amara.gondal@pacra.com

Mahina Majid
mahina.majid@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • General Insurance and Takaful Operator (Jun 16) [View]
  • Rating Modifiers | Outlook and Rating Watch (Jun 16) [View]

Related Research

  • Sector Study | General Insurance (Nov 16) [View]
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PACRA Maintains IFS Rating of Jubilee General Insurance Company Limited
 Rating Type Insurer Financial Strength(IFS)
Current
(30-Dec-2016)
Previous
(31-Dec-2015)
 Action Maintain Maintain
 IFS Rating AA+ AA+
 Outlook Stable Stable
 Rating Watch - -

The rating reflects Jubilee General's robust risk management framework facilitating the company in sustaining sound underwriting performance. The rating recognizes the management's persistent efforts of penetrating relatively untapped segments, also reflected in its diverse premium mix compared to peers. Jubilee General has sound equity base and sufficient liquidity engendering strong risk absorption capacity. The company's efforts for improving the overall quality of control environment are bearing fruits. The ability of key sponsor, Aga Khan Development Network (AKDN), to foster synergies amongst its financial institutions operating in Pakistan - HBL, Jubilee General, and Jubilee Life - and in the group's different insurance companies across the globe, is also a consideration. The business strategy, going forward, is focused on improving its market position through increasing retail penetration and focusing motor insurance; benefiting from synergies with HBL. Jubilee is eyeing high business opportunities for future with the advent of CPEC projects and improved economic dynamics of the country.
The rating is dependent upon sustained competitiveness of the company with improvement in underwriting profitability. Recently upgraded claims handling system should be reflected in improved Turnaround Time (TAT) of claims.
About the Entity
Jubilee General, incorporated in 1953, is the third largest general insurance company in Pakistan and is listed on Pakistan Stock Exchanges. Significant shareholders of Jubilee include Aga Khan Development Network (57%) including Habib Bank Limited (18%), and Hashoo Group (16%). AKDN represents a group of development agencies having ownership stake in commercial ventures operating in sectors like insurance, banking, hotels, education, and tourism. HBL is the country's largest private sector bank and is rated 'AAA'.
Jubilee General's BoD comprises nine members including the CEO. The Chairman of the board, Mr. Towfiq H. Chinoy, is a distinguished industrialist. Mr. Tahir Ahmed, the company's MD since Jul-05, is a graduate engineer, MBA and a Chartered Insurer, with extensive experience in the field of insurance. He is supported by a team of experienced professionals, long associated with the company.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.
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