July 4, 2019 (MLN): VIS Credit Rating Company Limited has revised Insurer Financial Strength (IFS) rating of Allianz EFU Health Insurance Limited from ‘A+’ to ‘A’. Outlook on the assigned rating is ‘Stable’.
The rating signifies high capacity to meet policyholder and contractual obligations. Risk factors may vary over time due to business/economic conditions.
Current rating of Allianz EFU derives strength from financial profile of its sponsors including Allianz SE and EFU Services (Pvt.) Limited. Assigned rating signifies high capacity to meet policyholder and contract obligations. However, it is constrained by trend in low capitalization levels and high leverage ratios in comparison to peers.
With increasing competition in the health segment, business volumes of the company remained stagnant at Rs. 2.0b. However, in order to grow its top line, management anticipates undertaking an aggressive stance towards underwriting business.
The rating is dependent on the company’s ability to grow business volumes while maintaining profitability. While top line of the company remained marginally stable, underwriting profit of the company, though declining, supported the bottom line.
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