Lahore, June 13, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has maintained the Insurer Financial Strength (IFS) rating of The Pakistan General Insurance Company Limited (PGI) at ‘A-‘ (Single A Minus). The rating denotes a strong capacity to meet policyholder and contract obligations.
The rating reflects PGI’s ability to demonstrate a reasonable volumetric growth amidst challenges facing the company. Though GPW mix is skewed towards conventional segments – fire and marine – the incidence of loss has remained low. Recently there has been sizeable increase in outstanding premiums. This while giving rise to credit risk has put significant pressure on PGI’s liquidity profile.
Higher working capital requirements are being met through in-house liquid resources; which have, consequently seen a decline. This has exerted a pressure on the company’s risk profile – hence rating. Management is actively pursuing the recovery; a strategy is chalked out for normalizing the working capital needs by end Sep-16. Meanwhile, PGI is eyeing to hold its growth trend line. It intends to expand in motor insurance, while focusing on enhancing productivity of existing business lines and branch network.
The rating is dependent upon company’s ability to recover premiums as per plan, thereby recouping its cash reserves. At the same time upholding of market position in the form of GPW growth and profitability is critical. Smooth induction of new CEO, and consequent changes in organization structure remains important.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425