AM Best Affirms Credit Ratings of EFU General Insurance Limited
AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” (Fair) of EFU General Insurance Limited (EFUG) (Pakistan). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect EFUG’s balance sheet strength, which AM Best assesses as adequate, as well as its strong operating performance, neutral business profile and marginal enterprise risk management (ERM).
EFUG’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which fell marginally below the threshold for the very strong assessment at year-end 2025. Increased holdings of listed equities in addition to the excellent performance of the Pakistan Stock Exchange in 2025 led to an increase in the weighting of listed equities on the company’s balance sheet. EFUG’s capital requirements in BCAR are weighted significantly toward asset risk, and therefore, its risk-adjusted capitalisation is highly sensitive to changes in asset allocation. Further offsetting factors include the company’s high dependence on reinsurance and exposure to a non-rated reinsurance entity, through mandatory cessions to the state-owned reinsurer in Pakistan.
