PACRA Maintains IFS Rating of Crescent Star Insurance Limited; Remains on Rating Watch

Lahore, December 06, 2017 (PPI-OT):The rating reflects CSInsurance’s strategy to focus on direct line personal insurance in motor and health segments, targeting small ticket clients. The company has shredded its corporate health portfolio – amid high losses. This enabled the company to improve underwriting performance, though expense ratio is still alarmingly high. The company’s liquidity profile matches the risk parameters for current size of business operations, however, going forward with rising business, improvement in liquidity profile is essential. CSInsurance is fast moving towards a holding company structure through building its non-insurance strategic book.

The company has completed deployment of sizeable funds in Dost Steels Limited (DSL), funded through internal sources and fresh equity injection; herein, management of associated risks will be important. Moreover, it has entered FMCG sector – CSFoods and CSLuxury. While, CSTechnologies is aimed at providing group support. To further expand its footprint in the retail business, CSInsurance plans to intake fresh equity through way of right issue.

The rating remains on watch with developing status due to acquisition of major stake in DSL, herein, successful operations (revised expected CoD end-Nov17) is critical and other significant developments including merger of CSFoods with and into PICIC. The rating requires desirable outcome from above factors. Meanwhile, risk absorption capacity needs to be kept intact.

For more information, contact:
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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