March 18, 2019 (MLN): VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) Rating of EFU Life Assurance Ltd (EFUL) at ‘AA+’ (Double A Plus). Outlook on the assigned rating is ‘Stable’.
The assigned rating takes into account EFUL’s existing market position, diversified premium mix, very high capacity to meet policyholder liabilities, strong capitalization levels and sound liquidity profile.
Business profile of the company is supported by favorable persistency levels and healthy growth in regular premium and group life business; however, business generated through single premium policies was lower since last review.
EFUL plans to consolidate market position through faster growth in bancassurance and direct sales force (DSF) premium vis-à-vis peers. Size of DSF team and business generated through the same remains a competitive advantage. Productivity indicators have improved on a timeline basis.
Ratings remain dependent on further strengthening of investment management function given the significant size of funds under management. Given the nature of the company’s business, generating consistent investment results and ability to cater to varying investor risk appetites may be key differentiating factors over the long term.
Going forward, improvement in market share and a demonstrated ability to scale up business volume with a diversified and profitable product mix would remain key rating sensitivities.
