April 30, 2020 (PPI-OT)
Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)
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United Insurance Company is a large size player in the insurance industry. The company has held its position from the past couple of years - showing sustainability, however, the current economic meltdown may impact the business volumes of the industry, which are yet to be ascertained. The company has a balanced portfolio representing all segment of the insurance industry. The diversity reflects in the fact that all segments contribute to business and misc segment constitute of different business line.
This has added to the equity base of the company over the year. The company has a strong reinsurance panel led by Swiss Re (rated AA- by S and P), all other reinsurers are in the A category. The reinsurance coverage provides strength to risk absorption. The company has significant investment in Apna Bank, one of its group associates. The bank booked profits in CY18 after booking losses in the previous years and the momentum was carried through 9MCY19, however, it may have to face a challenging environment in the prevailing conditions.
The CAR of the bank has improved, though it is less than the regulatory benchmark for which management has to plan to recoup. The liquidity of the company without considering APNA BANK investment is lower but taking into account the performance of APNA Bank we can drive comfort from the total investment book. The management also plans to generate liquidity through divestment of some stake from its investment book. The management is committed to achieving higher benchmarks in transparency and control environment as the system review is underway.
The ratings are dependent upon the envisaged plan of sustaining its relative positioning and its control environment. Continued generation of internal capital and enhancement of liquidity is considered essential. Meanwhile, all governance standards must be upheld.
For more information, contact:AnalystThe Pakistan Credit Rating Agency Limited (PACRA)Awami Complex, FB1, Usman Block New Garden Town,Lahore - PakistanTel: +9242 586 9504 -6Fax: +9242 583 0425Email: hammad.rashid@pacra.comWeb: www.pacra.com
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© Pakistan Press International, source Asianet-Pakistan