Lahore, August 24, 2020 (PPI-OT): The rating reflects the leading position of the EFU General in the general insurance sector. The company’s performance matrix provides comfort. The profitability has a healthy contribution from both underwriting and investment functions. Increasing emphasis on customer service including concerted efforts to bring efficacy in claims settlement process with support from technology helps in sustaining market share. Strong liquidity and sound cash flow generation ability provide strength to the rating.
EFU Group continues to enjoy leadership in insurance industry – General and Health while securing second position in Life Insurance. The company’s strength is reflected in its sizeable underwriting profitability. In window takaful, EFU General Insurance remained leader, with Participant’s Takaful Fund and Operator’s Fund both in surplus. This furnishes strength to the brand and ability to serve diverse client needs. The company is well positioned to sustain the large client base in these distressed times.
Prior to COVID-19, the general insurance industry witnessed a growth of 11% YoY. The current pandemic affected the volumes, which led to a contraction in the growth. However, volumes have picked up post-June 2020 amidst increase in economic activities throughout the country.
The volumes need to sustain, indeed, improve in tandem with the longer historical trend. The interest rate regime would impact the fixed income stream but the equity market is improving though requiring a prudent approach. The rating is dependent on sustained competitiveness of the company. High growth in business volume, the industry leaders are expected to enhance their risk retention appetite with the emphases on risk management practices.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com