December 07, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained IFS rating of Sindh Insurance Limited at ‘A+‘ for long-term, with a stable outlook forecast.
According to the rating agency, the rating reflects SIL's strong parentage – the Government of Sindh (GoS) and its ability to leverage on the same. “Universal Accidental Insurance Scheme (UAIS)”, initiated by GoS, provided impetus to the company's business volume. The scheme has undergone a new regime, by virtue of which the premium size has squeezed though the cash balance has stayed with the company. It is enriching the company's alternative investment. The company has created reserve against IBNR on account of UAIS.
Meanwhile, the Sindh government related business also provides slight comfort. The company needs to develop market related business in order to preserve its relative positioning.
The rating is dependent on management's ability to capitalize on its brand and group's platform for business expansion. Meanwhile, risk absorption capacity in terms of liquidity needs to be preserved. It is vital to fill in all key executive positions.
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