The Pakistan Credit Rating Agency (Pacra) has assigned the Insurance Financial Strength (IFS) rating of "A-" (single A minus) to Alfalah Insurance Company Limited (AFIC). The rating denotes a strong capacity to meet policyholder and contract obligations.
At the same time, risk factors are moderate, and the impact of adverse business and economic factors is expected to be modest. The rating reflects AFIC's association with a strong group - the Abu Dhabi group - having key interests in Pakistan's financial sector. Moreover, the management, while pursuing aggressive growth, intends to have a conservative risk appetite that results in lower risk retention.
At the same time, the rating recognises the company's well-conceived business strategy to fast establish itself in a competitive insurance industry, with relatively high reliance on group support mainly in the form of captive and referred business in the initial period.
The rating is dependent on successful execution of the management's plans about establishing a robust operating platform, including human resource base, in. tandem with the growth momentum.
Meanwhile, any significant increase in the loss pattern impacting the risk absorption capacity would have negative implications for the rating.-PR
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