Pakistan Credit Rating Agency maintains IFS rating of Shaheen Insurance Company Limited

Lahore, December 06, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the IFS rating of Shaheen Insurance Company Limited (SIC) at “A” (A Minus). The rating denotes that insurers possess strong capacity to meet policyholder and contract obligations.

The rating reflects planned increase of liquidity in the company through sale of real estate investments that the company possesses. This plan is underwritten by the sponsors of the company. The company’s stressed operational performance has dented the core underwriting profitability as the contribution of investment income remains limited. With new head of the company assuming the role and filling of key management positions, the company is keen to enhance its business volumes to provide cushion for absorbing expenses.

There is a continued focus on strengthening technology platform for enhancing the quality of business performance and customer service. At the same time, sponsors’ (in particular Shaheen Foundation) enhanced focus towards redressing the business and financial constraint is a key rating factor.

The outlook on the rating is “Negative”, capturing the challenge in executing the company’s plan to improve its financial profile especially the liquidity aspect. At the same time, it is critical to develop a coherent management team to address the business and financial constraints of the company in a timely manner. Meanwhile, any inordinate delay in building up the liquidity or further dent on risk absorption capacity of the company would have negative implication for the rating.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com