JCR-VIS keeps rating of Universal Insurance

10 May 2010 - Pakistani credit rating agency JCR-VIS kept Friday at A- with a "negative" outlook the IFS rating of home-based The Universal Insurance Co Ltd (KSE:UVIC).

With the down slide in macroeconomic indicators, insurance companies have posted lower growth and falling profitability levels over recent periods. Business growth at UVIC has remained compromised during 2009 amidst stiff competition. While the management has made material efforts to curtail the proportion of motor business, the segment continues to post a high loss ratio.

Furthermore, underwriting results have deteriorated on account of continued exposure in the health business, featuring high loss norms. Support from investment avenues however has improved. The agency may revise the ratings if support is not believed to be forthcoming as capitalisation requires further strengthening.

The ongoing implementation of the new IT system is in final stages and is expected to improve control levels within the organisation. The level of internal supervision leaves room for further effort.