A.M. Best Affirms Ratings of Adamjee Insurance Company Limited

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of Adamjee Insurance Company Limited (Adamjee) (Pakistan). The outlook for both ratings remains stable.

The ratings of Adamjee reflect the company’s adequate level of risk-adjusted capitalisation, robust albeit volatile operating results and its strong business profile in Pakistan. Offsetting rating factors remain Adamjee’s concentrated investment portfolio and the high level of economic and political risk associated with operating in Pakistan.

Adamjee’s risk-adjusted capitalisation remained adequate and stable during 2014, with growth in underwriting and investment risks sufficiently absorbed by capital and surplus rising by 8.0% to PKR 13.8 billion (USD 137.4 million) driven by retention of earnings. A.M. Best anticipates Adamjee’s prospective risk-adjusted capitalisation to remain commensurate with the current rating level, supported by internal capital generation and controlled underwriting growth.

Adamjee generated robust operating results during 2014 and the first nine months of 2015, reporting pre-tax profits of PKR 2.0 billion (USD 20.5 million) and PKR 2.4 billion (USD 24.0 million), respectively. However, Adamjee’s concentrated investment portfolio, which is weighted toward domestic equities, and in particular, affiliated companies, has resulted in somewhat volatile operating performance over the past five years (2010-2014).

Adamjee maintains a strong business profile in its domestic market of Pakistan, leveraging its position as one of the oldest insurers in the country. The company maintains a leading position in the non-life segment, as well as a growing presence in the life market through its joint venture subsidiary, Adamjee Life Assurance Company Limited.

An offsetting rating factor remains the high level of economic and political risk associated with operating in Pakistan. Whilst Adamjee has achieved some diversification through their operations in the United Arab Emirates, the company’s portfolio remains focused in Pakistan. Adamjee’s management has successfully navigated the company through a challenging operating environment; however, the business remains susceptible to the country’s future economic and political conditions.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151105006029/en/

A.M. Best Company, Inc.
Myles Gould, +(44) 20 7397 0267
Senior Financial Analyst
[email protected]
or
Mahesh Mistry, +(44) 20 7397 0325
Director, Analytics
[email protected]
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company, Inc.

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