A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an issuer credit rating of
"bbb+" to Adamjee Insurance Company Limited (AICL) (Pakistan) |
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A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an issuer credit rating of "bbb+" to Adamjee Insurance Company Limited (AICL) (Pakistan). The outlook for both ratings is stable.
The ratings of AICL reflect its strong risk-adjusted capitalisation, robust underwriting performance, established business profile in the Pakistan insurance market and developing risk management framework. An offsetting factor is its concentration of invested assets in equities, particularly in affiliated companies.
In A.M. Best's opinion, AICL's level of risk-adjusted capitalisation is strong, supported by good retained earnings and sufficient to absorb projected growth of up to 15% in each of the next two years. Moreover, AICL's capital position benefits from very good reinsurance support, despite having to cede cessions of up to 35% of treaty business to Pakistan Reinsurance Company Limited, the national reinsurer.
A.M. Best believes AICL has a strong management team, adopting prudent strategies to serve the requirements of the local market and establishing a leading market position in Pakistan, with a 29% share of gross premiums written. AICL has a well diversified non-life portfolio, with gross premiums in excess of PKR 10.3 billion (USD 125 million) in 2009, supported by good retention levels above 65%.
In A.M. Best's view, AICL has experienced robust underwriting results across all lines of business, with technical profits of approximately PKR 679 million (USD 8.1 million) in 2009 and a combined ratio below 90%. Investment performance tends to be volatile, dictated by market movements in equities, and benefitting from significant realised gains in the past three years.
| Financial Strength Ratings |
Issuer Credit Ratings |
| Rating |
B++ (Good) |
Long-Term |
bbb+ |
| Financial Size Category |
VIII ($100 Million to $250 Million) |
Outlook |
Stable |
| Outlook |
Stable |
Action |
Assigned |
| Action |
First |
Date |
July 06, 2010 |
| Effective Date |
July 06, 2010 |
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