JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of EFU General Insurance Limited (EFU) at 'AA+' (Double A Plus). Outlook on the assigned rating is 'Stable'. The previous rating action was announced on November 25, 2014.
EFU is the largest general insurance company in Pakistan. The company has more than 80 years of experience in the general insurance industry and enjoys largest market share, geographical diversification and strong franchise. The rating incorporates reinsurance arrangements in place, liquidity profile and improved underwriting performance of the company. Moreover, profile and stability in senior management team is also considered positively in the rating assessment.
The company has depicted steady growth in business volumes over the years though growth was lower than industry in 2014. Business mix largely comprises fire and property related risks while the proportion of other business lines has been restricted over time. Following the receipt of necessary regulatory approvals, the company has initiated takaful operations in May 2015.
Underwriting performance has improved on the back of notable improvement in claims incidence. The company incurred large marine claims in 2014; however, impact of the same was absorbed on the back of adequate reinsurance arrangements. Average risk profile of reinsurers on the company's panel is in the A category with Swiss Re and Scor Re enjoying lead share in major business segments. Underwriting profit depicted improvement in 2014 while investment income continues to augment the bottom line of the company, with net operating ratio also improving during the year.-PR
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