LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of Jubilee General Insurance Company Limited (Jubilee) (Pakistan). The outlook for each rating remains stable.
The ratings reflect Jubilee’s solid risk-adjusted capitalisation, track record of good operating performance and well-established business profile in Pakistan. An offsetting rating factor is the elevated economic and political risks associated with operating in Pakistan.
Jubilee’s risk-adjusted capitalisation is assessed as solid and remains supportive of the rating level, with investment risk remaining the main driver of capital consumption. The company continues to increase its capital position through robust internal capital generation, with shareholders’ equity rising 8.9% during 2015 to PKR 5.9 billion (USD 56.8 million). A.M. Best expects prospective risk-adjusted capitalisation to remain at a solid level, with projected underwriting growth over the medium term supported by continued internal capital generation.
Jubilee has a track record of good operating performance, with a five-year average (2011-2015) return on equity of 21.5%. The company saw improved performance on the technical and investment accounts in 2015, which drove an increase in pre-tax profits to PKR 1.7 billion (USD 16.5 million) from PKR 1.3 billion (USD 12.7 million) in 2014, with a reported return on equity for 2015 of 24.0%. Despite robust underwriting performance, evidenced by a five-year average (2011-2015) combined ratio of 91.7%, the company’s operating earnings continue to be driven by investment returns.
Jubilee has a well-established business profile in the Pakistan non-life insurance market, and benefits from a diversified underwriting portfolio by line of business. The company ranks as the third-largest player in the market with an approximate market share of 13% by gross written premium in 2015.
A negative rating factor continues to be Jubilee’s concentrated exposure to Pakistan, where the company’s investment and underwriting portfolios are located. Pakistan is assessed by A.M. Best as having heightened levels of economic and political risks, and despite Jubilee’s track record of resilient operating performance in challenging market conditions, the potential for significant business disruption remains elevated. Additionally, Pakistan is prone to significant levels of catastrophe risk. A.M. Best will continue to monitor developments in Pakistan and assess any impact on the company.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.