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AM Best Downgrades Credit Ratings of Jubilee General Insurance Company Limited

AM Best has downgraded the Financial Strength Rating (FSR) to B (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” (Fair) from “bbb-” (Good) of Jubilee General Insurance Company Limited (Jubilee) (Pakistan). The outlook of the FSR has been revised to stable from negative, while the outlook of the Long-Term ICR is negative.

These Credit Ratings (ratings) reflect Jubilee’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

The rating downgrades reflect a weakening of Jubilee’s balance sheet strength following the downgrade of Pakistan’s sovereign rating, resulting in higher charges being applied to the company's fixed income portfolio (which accounts for close to 60% of total investments in 2022) when considered under Best’s Capital Adequacy Ratio (BCAR). As a result, Jubilee’s 2022 risk-adjusted capitalisation, as measured by BCAR, deteriorated to the very strong level from the strongest level. Investment risk remains the primary driver of required capital, with the company’s investment portfolio concentrated in Pakistan, in line with domestic regulatory requirements. In AM Best’s view, Jubilee remains exposed to potential capital volatility, especially in light of heightened economic, political and financial system risks in Pakistan. The negative outlook on the Long-Term ICR reflects the elevated country risk in Pakistan and its potential impact on Jubilee’s credit rating fundamentals.

Jubilee has a history of robust earnings, with a five-year (2018-2022) weighted average return on equity of 15.0%. Underwriting performance has remained resilient over this period, with a weighted average combined ratio of 94.2%. Investment returns remain a core driver of operating earnings, with Jubilee generating a weighted average net investment yield, including capital gains, of 10.5% between 2018 and 2022, representing over 80% of the company’s profit before taxes over this period.

As Pakistan’s third-largest non-life insurer, Jubilee maintains a good competitive position in its domestic market. The company writes a diversified portfolio, offering conventional and takaful products, principally to commercial customers. Despite difficult market conditions, premium income increased by 23.3% in 2022 driven predominantly by rate increases and higher sums insured following strong inflation during the year. However, at approximately PKR 14.8 billion (USD 65.5 million) of gross written premium, Jubilee remains small on a global basis.

AM Best views Jubilee’s ERM as appropriate given the size and complexity of its operations. The company's risk profile has increased recently as a result of Pakistan’s deteriorating risk environment. Whilst AM Best notes the company’s historical operational resilience to country risk factors, risk management challenges are presented by its concentration of business and assets in Pakistan.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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