Tariq Khattak
Islamabad: The United Insurance Company (UIC) continues to enjoy a stable outlook despite the overall decline in economic conditions in the country, which is an achievement.
Pakistan Credit Rating Agency (PACRA) has maintained, while VIS Credit Rating Company has reaffirmed the Insurer Financial Strength (IFS) rating of United Insurance Company (UIC) at “AA+ (Double A Plus).
The rating signifies the strong capacity of the company to meet policyholders and contract obligations. Risk factors are very low, and the impact of any adverse business and economic factors is expected to be very small.
UIC, being the group’s flagship company, is a major player among the leading general insurers in the country and has an established and growing takaful segment of the business.
Ratings derive comfort from growth and improvement in underwriting performance during the review period, despite a stressed global and domestic economic environment, it said.
The business risk profile of the insurance industry is elevated owing to the projected slowdown in domestic economic activity due to high-interest rates, rupee devaluation, runaway inflation, high energy prices, and destruction caused by floods.
Reacting to the development, the CEO of the UIC, Mian M A Shahid said that the overall economic downturn and natural disasters have brought the economy to its knees, and many businesses are struggling to survive.
He said that natural disaster losses have escalated over the last several years due both to construction and other factors in high-risk areas.
As climate change continues to influence extreme events, the role of insurance in adapting to these changes is becoming increasingly important, he added.
Mian M A Shahid said that insurance has a critical role to play in promoting disaster resilience. It can provide financial protection, preventing negative economic hardship after a disaster.
The insurance industry can help speed up rebuilding and recovery by providing post-disaster funding and liquidity.
Insurance could also promote risk reduction before a disaster through financial incentives, he said, adding that that the continued growth of UIC is the outcome of good management and a brilliant and dedicated team.