JCR-VIS Reaffirms IFS rating of Alpha Insurance Company Limited

Karachi, November 15, 2012 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Alpha Insurance Company Limited (AICL) at ‘A’ (Single A) with ‘Negative’ Outlook.

Rating derives strength from strong support of parent company, State Life Insurance Corporation of Pakistan (SLIC). Fresh equity injection of Rs. 100m during 2012 has further enhanced the capitalization level of the company. Leverage indicators depict strength and reflect room for further growth. Liquid assets provide adequate coverage against outstanding liabilities. Solvency margin was well above the minimum requirement to be met at end-Dec’12.

Even with decline in motor business, business target of Rs. 200m for 2012 is expected to be met comfortably through growth in other segments. In 1HFY12, reinsurance cover has not been arranged for business representing sizable proportion of gross premium. There has been improvement in net claims ratio in 1H12; though combined ratio remains above 100% on account of high expense ratio. Bottom-line results of the company witnessed significant uptick in 1H12 on account of improvement in investment income.

Liquidity generation from underwriting operations remains stressed. While some provisioning has been made against insurance debt, it still comprises a sizeable proportion of gross premium. Claims outstanding for more than two years represented a significant proportion of total outstanding claims.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

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