The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA assigns initial IFS Rating of ‘AA++’ with ‘Stable’ Outlook to Jubilee Life Insurance Company Limited

Rating Type IFS
(07-Mar-23 )
Action Initial
IFS Rating AA++ (ifs)
Outlook Stable
Rating Watch -

The rating reflects the distinguished position of Jubilee Life Insurance Company Limited (JLI or the Company) within the life insurance industry, established over a long period of time. The Company offers a wide range of standard and bespoke products to its customers; prominence is noted in the segment of Individual Life Unit Linked policies; lately conventional product and corporate health segment has picked up pace. This is aligned to the changing dynamic of the life insurance sector amidst myriad challenges surrounding retail customers. The health portfolio would require vigilance. Going forward, growth would remain a challenging affair due to aforementioned reasons. Herein, the company intends to leverage its digital footprints to harness efficiency and growth. The underwriting performance for the period remained under stress due to an abnormal increase in claims, mostly surrenders and others. Investment income, which has historically been good support, demonstrated lackluster results due to equity related losses. Cognizant of this, the portfolio was recomposed and it is expected that this would supplement future profits. The rating takes comfort from the strong risk absorption capacity of the Company, duly reflected in its liquidity profile. The robust solvency profile is depicted through its reported solvency margin of 172.95% for Sep’22 (CY21: 170.0%; CY20: 165.81%). Strong sponsor profile of the Aga Khan Fund for Economic Development, combined with a sound governance structure and robust internal control environment, augment to the Company’s positioning amongst market leaders in the industry. This is a key consideration in the assigned rating.
The rating is dependent on the sustained competitive positioning of JLI within the life insurance industry. Improvement in core operational profitability and in investment performance remain crucial. Strong solvency profile of the Company, indicated through its ample reserves, place comfort in the rating.

About the Entity
Jubilee Life Insurance Company is a public listed company, incorporated on June 29th, 1995. The Company is operating through a network of more than 180 branches, spread across 11 cities throughout Pakistan. Jubilee Life Insurance Company has a nine-member board of directors, chaired by Mr. Kamal A. Chinoy. Mr. Javed Ahmed holds the position of Chief Executive Officer of the Company. He has been part of Jubilee Life Insurance Company since 1997 and has served at various senior management level positions within the Company. A robust internal control environment has been established through a tiered management structure comprising of head of departments for each functional area reporting to its group heads, whom ultimately report to the Chief Executive Officer.

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.