A.M. BEST AFFIRMS RATINGS OF JUBILEE GENERAL INSURANCE COMPANY LIMITED JGICL- BSW

A.M. BEST AFFIRMS RATINGS OF JUBILEE GENERAL INSURANCE COMPANY LIMITED – BSW

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 both ratings remains stable.

The ratings reflect Jubilee`s strong risk-adjusted capitalisation, good track record of operating profitability and solid business profile within Pakistan. Offsetting factors are the high levels of economic, political and financial system risk associated with Pakistan.

Jubilee`s risk-adjusted capitalisation remains strong with a high level of internal capital generation supporting the company`s expanding domestic franchise. Capital and surplus reached PKR 4.8 billion (USD 45.3 million) at year-end 2013. Jubilee`s capital position benefits from material hidden reserves within its equity and real estate portfolios, with fair values of these assets significantly higher than reported statement values. Prospective risk-adjusted capitalisation is expected to remain strong and sufficient to absorb Jubilee`s projected annual growth of up to 22% over the next two years, assisted by its high level of profit retention.

Jubilee has demonstrated a good track record of profitability, with a five-year average combined ratio below 95%. Operating performance over the same period is enhanced by steady investment yields between 12-13%. The company achieved a profit-before-tax of PKR 1.2 billion (USD 11.6 million) in 2013, with a return on equity of 22%.

Jubilee is a well-established company in the Pakistani market, ranked third by gross written premiums (GWP). Its strong position has enabled it to achieve premiums in excess of PKR 6.5 billion (USD 62 million) in 2013. The company has developed innovative new products and pursued distribution partnerships in the country, which are expected to enable Jubilee to successfully grow faster than the market.

Upward rating movement is unlikely at present. Downward rating pressures may arise from a prolonged deterioration of the key fundamentals of Jubilee or from a heightened level of the economic and/or political risks associated with operating in Pakistan.

The methodology used in determining these ratings is Best`s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best`s rating process and contains the different rating criteria employed in the rating process. Best`s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe – Rating Services Limited Supplementary Disclosure.

This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visitwww.ambest.com.