IFS rating of EFU General Insurance reaffirmed as 'AA'

JCR-VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength (IFS) rating of EFU General Insurance Limited (EFUG) at 'AA' (Double A). Outlook on the assigned rating is 'Stable'. The assigned rating recognises EFUG's leading position amongst property and casualty insurance companies in the local market, even after slight decline in business volumes of the company during 2009 as compared to around two percent growth in overall industry premiums.
The assigned rating also takes into account the quality of reinsurers on the company's panel and adequacy of treaty arrangements. During 2009, EFUG shifted to non-proportional treaty arrangements in the property segment, which comprises the largest proportion of the business mix. While there has been improvement in underwriting quality of property risks, this did not translate into underwriting profitability on account of high level of priority under the Excess of Loss (XOL) reinsurance arrangement.-PR