December 10, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained IFS rating of Premier Insurance Company Limited at ‘A’ for Long-term, with a negative outlook forecast.
The rating reflects sustained efforts of the incumbent leadership to steer the company out of prevalent challenges. The company is envisaged to cautiously underwrite insurance business; the market share has gone down. The results are depicted in the fall of GPW but with greater decrease in the amount of underwriting losses.
The support to profitability has exuded from investment income, though largely contributed by relatively high risk equity investments. The company has accumulated a high quantum of liabilities, protected by reinsurance receivables and liquid investments; some evasion therein is seen. High level of equity maintenance is imperative.
The rating is dependent on fast scale towards indicators. Meanwhile, the management has to carefully manage its insurance asset liability structure wherein timely realization of outstanding premium along with smooth settlement of claims is vital. Any further infusion of the risk capacity of the company may impact the rating.
