AM Best Revises Outlooks to Stable and Affirms Credit Ratings of EFU General Insurance Limited

30-Oct-2020 Intellasia | BusinessWire | 10:32 PM Print This Post

LONDON--(BUSINESS WIRE)--AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of EFU General Insurance Limited (EFUG) (Pakistan).

The Credit Ratings (ratings) reflect EFUG’s balance sheet strength, which AM Best categorises as strong, as well as its strong operating performance, neutral business profile and marginal enterprise risk management (ERM).

The revision of the outlooks to stable reflects AM Best’s expectation that EFUG’s rating fundamentals will remain commensurate with its current assessment over the near to medium term.

EFUG’s balance sheet strength is underpinned by very strong risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). Offsetting factors include EFUG’s concentrated investment portfolio, which is restricted by regulation to Pakistan and includes a single strategic holding in an affiliated company accounting for 33% of total invested assets at year-end 2019, and its exposure to non-rated reinsurance recoverables through mandatory cessions to the state-owned reinsurer.

EFUG has a track record of strong operating performance, with a five-year weighted average return on equity of 15.3% (2015-2019), supported by positive underwriting and investment results. The company has generated robust technical profits, with an average combined ratio of 84.3% over the same period. Results are underpinned by a healthy five-year average loss ratio of 43.2% -despite an elevated expense ratio- indicative of EFUG’s underwriting discipline.

EFUG maintains a leading position domestically, with a market share, as measured by gross written premium (GWP), of 23% in 2019. The company has a diversified underwriting portfolio across non-life business segments. Combining conventional and takaful business, EFUG wrote consolidated GWP of PKR 22.1 billion (USD 143.2 million) in 2019. EFUG leverages its long-standing client relationships to maintain a defendable competitive advantage, demonstrating its ability to navigate its challenging business environment.

Over recent years, EFUG has demonstrated formalisation and on-going strengthening of its ERM framework and capabilities; however, in AM Best’s view, the company continues to face challenges from operating in an elevated risk environment.

This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Emily Thompson
Financial Analyst
+44 20 7397 0291
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Alex Rafferty, ACA
Associate Director, Analytics
+44 20 7397 0312
[email protected]

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
[email protected]


Category: BusinessWire, PRAsia

Print This Post

Comments are closed.