AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, VIS Credit Rating Company Limited (VIS) has reaffirmed the Insurer Financial Strength (IFS) rating of Chubb Insurance Pakistan Limited (CIPL) at ‘AA+’, indicating a very strong capacity to meet policyholder and contract obligations with minimal risk factors. The outlook on this rating is ‘Stable’, following the previous rating action announced on December 27, 2022.
According to VIS Credit Rating Company Limited, CIPL, a wholly-owned subsidiary of Chubb INA International Holdings Limited (U.S.A), employs a highly selective underwriting strategy. A key competitive advantage of CIPL is its sizable treaty capacities arranged with an associate group company. This arrangement, involving a highly rated international counterparty, enables CIPL to underwrite complex and specialized risks, particularly in the property line.
The ‘AA+’ rating is strengthened by the sponsor profile of the Chubb Group, the world’s largest property and casualty insurer with operations in 54 countries. CIPL benefits from both technical and financial support from its parent company, which positively impacts its rating.
VIS’s rating also takes into account CIPL’s positive business volume trajectory, improvements in underwriting results despite a higher loss ratio, and sustainable, growing investment income. The company’s liquidity profile is supported by an increase in liquid assets relative to technical reserves and a comfortable aging of receivables. Additionally, CIPL has maintained adequate reserves, exceeding the regulatory solvency margin requirements.
The review period saw an increase in CIPL’s operating leverage ratio, aligned with the expansion of operations. However, the company’s reinsurance coverage effectively manages any significant risk accumulation on the net account. Furthermore, the aging profile of the company’s claims payable is satisfactory, with no claim outstanding for more than a year as of the end of the fiscal year 2022.
In the context of the current economic slowdown, marked by high interest rates, rupee devaluation, and elevated inflation levels, CIPL’s management is focusing on fire and accident & health sectors while maintaining a balanced mix in power and property sectors. This approach is crucial for underwriting risk management. Going forward, growth in market share, maintenance of underwriting quality and profitability, along with rationalization of claims ratios, are identified as vital factors for the company’s rating.
The post VIS Maintains ‘AA+’ IFS Rating for Chubb Insurance Pakistan with Stable Outlook appeared first on Pakistan Business News.