VIS Reaffirms IFS Rating of UBL Insurers Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- November 17, 2020 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

Quote

VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of UBL Insurers Limited (UIL) at 'AA' (Double A). Outlook on the assigned rating is 'Stable'. Previous rating action was announced on September 27, 2019.

Reaffirmation of rating continues to draw comfort from UIL's established market position (as sixth largest player in non-life insurance segment), strong franchise value and sponsor profile (UBL and its ultimate sponsor group). While the company has posted double-digit annual growth for over a half decade, new business generation in the ongoing year has been a challenge given the slowdown in economic activity due to Covid-19 outbreak. Leverage has depicted considerable improvement on timeline basis while liquidity profile is satisfactory and has room for improvement. Rating also take note of reinsurance arrangements largely being with counterparties having sound credit risk profiles while net retention remains lower than peers.

In 2019, business volumes (GPW) grew by ~18% (vis-a-vis ~9% of industry growth) and thus, market share improved to 4.8% (2018: 4.4%). Fire and Property (F and P) and Motor segment continue to remain the key growth drivers while contributing to more than three-fifth of topline. However, GPW witnessed no growth in HY20 and stood at similar level vis-a-vis corresponding period last year.

...