September 14, 2018 (MLN): JCR-VIS Credit Rating Agency (JCR-VIS) assigned Insurer Financial Strength (IFS) rating of ‘AA’ (Double A) to IGI General Insurance Ltd (IGI General), on September 13th, 2018, with a stable outlook forecasted.
According to the agency, the rating signifies very high capacity to meet policyholder and contract obligations. “Risk is considered modest but may vary slightly over time due to business /economic conditions,” said JCR –VIS in a press release.
The assigned rating incorporates strong sponsor profile with IGI being a wholly owned subsidiary of IGI Holdings Limited (IGIHL – formerly, IGI Insurance Limited).
As per the press release, the rating takes into account the competitive environment in which the company operates. IGI General has grown its premium base by more than 20% in the last two years.
“In view of its growth orientated strategy, IGI General plans to launch new insurance products; impact of these developments will need to be monitored over time,” said the credit rating agency.
Along with a steady growth in business volumes, IGI General also maintained an adequate risk profile. “The rating also draws comfort from its sound reinsurance panel and treaty structure,” revealed the agency.
Despite a higher claims ratio, on net basis, IGI General posted an increased underwriting profit. However, combined ratio was reported higher than the industry average. The agency believes that the company’s profitability indicators will need to be maintained to be commensurate with the assigned rating.
“Given the restructuring of IGIHL, capitalization levels allocated to IGI General is placed at Rs. 2.09b at end-December 2017 (2016: Rs. 13.6b),” said JCR – VIS.
IGIHL belongs to a prominent business conglomerate, Packages Group, which began operations as a paper and paperboard manufacturer in 1957. As part of a strategic restructuring, the general insurance and investment segments of IGIHL were transferred into two distinct entities
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