By Abdul Qadir Qureshi
The JCR-VIS Credit Rating Co. Ltd. (JCR-VIS), approved by the Securities & Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP), has reaffirmed the Insurer Financial Strength (IFS) rating of Pakistan Reinsurance Company Limited (PRCL) at "AA" (Double A) for the year 2012. The outlook on the rating is stable.
The JCR-VIS rating agency, a joint venture between Japan Credit Rating Agency, Ltd. (JCR) - Japan's premier rating agency, Vital Information Services (Pvt.) Limited (VIS) is acclaimed as Pakistan’s only independent financial research organization.
The rating derives strength from the significant holding of Government of Pakistan in the company. Moreover, given that all insurance companies of Pakistan are mandated to offer 35% of their surplus business to PRCL in the form of cession, the company is expected to maintain a sizeable market share in premium ceded by the insurance industry.
The JCR-VIS have taken into account the improvement in underwriting profit of the company on a timeline basis in 2011 on account of lower retrocession.
While overall claims ratio has remained at prior year's level, claims performance in facultative business continues to be superior relative to that of treaty business. In view of this, further growth in the share of treaty business in overall business may result in upward pressure on net claims ratio, going forward. It observed that overall profitability of the Company receives strong impetus from recurring earnings on investment portfolio.
Even though insurance debt represented more than one-third of gross premium, JCR-VIS have noted that outstanding liabilities are adequately covered by liquid assets. This is the second year running that PakRe has earned this distinction in 2012.
Besides, PakRe has been acclaimed the best Non-Life Reinsurance Company by Management Association of Pakistan (MAP) for 2011 for Corporate Governance Excellence Award-2011 which the Chairman PakRe, Munawwar Opel, received from the Federal Minister, Dr Abdul Hafeez Shaikh, who was the chief guest on the occasion.
PakRe, the lone reinsurer in Pakistan is a public sector enterprise, has earned Rs.900.00 Million after tax profit announced and distributed 30% dividend to its shareholders (51% - Federal Government, 24% -SLIC and rest minority including staff of PakRe) amounting to Rs.900 Million, and six bonuses to its employees.
Its role in the economic development of Pakistan has been significant. The progress so far made signifies consolidation of our position, both at home and abroad and encourages further expansion.
Munawwar Opel was elevated as Federal Secretary in BS-22 and appointed as Chairman, Pakistan Reinsurance Company Limited in April 2012. He has had the distinction of being the Acting Chief Secretary Sindh twice. He also served as KPT’s General Manager, Administration, for almost a year.
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The SECP’s Enforcement Department— while enforcing compliance of corporate and allied laws— initiated 86 show-cause proceedings and concluded 54 proceedings against chief executives, directors and auditors of companies in February and March. While facilitating companies to strengthen their capital base, the department allowed three listed companies to issue shares by way of otherwise than right at a discount and at par. In order to strengthen the existing regime of Corporate Social Responsibility (CSR) reporting, the SECP has joined hands with the ICAP for the external assurances of the CSR reports. CSR reports assist organizations in understanding and communicating their vision of combining a company’s profitability with social responsibility and environmental care. Both the SECP and the ICAP have reaffirmed their commitment to developing a framework for external assurance in accordance with prominent international assurance standards, and within a mutually agreed time f
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