The Pakistan Credit Rating Agency Limited
Press Release


Behrooz Fareed

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains IFS Rating of Jubilee General Insurance Company Limited

Rating Type IFS
(03-Nov-22 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating AA++ (ifs) AA++ (ifs)
Outlook Stable Stable
Rating Watch - -

The core sponsorship of Jubilee General Insurance Limited (JGICL or the Company) is held by the Agha Khan Development Network (AKDN). The strong presence of AKDN in the financial industry allows JGICL to unlock synergistic benefits through group financial institutions i.e., Habib Bank Limited and Jubilee Life Insurance Company Limited. The rating takes comfort from the group business potential of the Company. The sound board structure aligned with experienced management personnel places confidence in the sustainable operations of JGICL. Further, the rating reflects the robust risk management framework, facilitating the Company to achieve adequate profitability. A diversified revenue strategy is pursued by JGICL, with focal business derived through fire segment at ~37% GPW concentration, whereas, a balanced GPW mix of 18% is acquired through motor, 17% through health, and 18% through miscellaneous segments, being prominent, in CY21. The total segmental mix converged into Gross Premium Revenue of PKR~12,005mln (CY20: PKR~10,311mln) depicting a growth of ~16% YoY through the period. Through adaptation of a secure return strategy, channeled through government securities and a mix of equity securities, JGICL managed to generate investment income of PKR~1,637mln as at end-CY21. The enhanced GPW profile, combined with strong operating performance and investment results seeded profitability growth. Jubilee General has sound equity base and sufficient liquidity engendering strong risk absorption capacity. The business strategy, going forward, is focused on improving its market position and consequent profitability from core business.
Sustainability of motor business, progress in fire segment and efficient expense management remained critical to the financial performance, with further progression being envisaged. The liquid investment book is almost two third diverted towards fixed term avenues, while the rest is deployed in equities. The rating is dependent upon sustained competitiveness of the Company while upholding the profitability.

About the Entity
Jubilee General, incorporated in 1953, is the third largest general insurance company in Pakistan and is listed on Pakistan Stock Exchange. Significant shareholders of Jubilee General consist of Aga Khan Development Network including Habib Bank Limited and Hashoo Group. 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 ten members including the CEO. The Chairman of the board, Mr. R. Zakir Mahmood, is a distinguished banker with over 35 years of experience. Mr. Hassan Khan, the Company's MD since Jan-2020, is a graduate engineer, MBA, with extensive experience in the field of insurance and investments. A team of qualified professionals assist the MD.

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.