Kathmandu. Rating agency Infomerics Credit Rating Nepal has reaffirmed the share issuer rating of Prabhu Insurance.
Infomerics Nepal has continued its IRN Triple B+ rating. In the Nepalese financial market, such a rated company guarantees a moderate level of security when it comes to fulfilling financial liabilities within the stipulated time frame. Such a rating also indicates that the company concerned carries a moderate level of debt or borrowing risk.
Infomerics has continued the rating evaluation considering prabhu insurance’s long business journey, citizen investment fund, prabhu bank and investment diversity as a strong factor.
According to Infomerics, fiscal year 2077. 78 to 2080. By 1981, its investment had grown at an annual rate of 19 percent. Fiscal year 2080. In 1981, investment in short-term deposits was converted as long-term fixed deposits matured. The reinsurance commission was also a source of income. The company last fiscal year 2081. Investment has been further diversified in 82.
The company’s solvency margin is three times higher than the regulatory standards. According to the rating agency, its solvency margic is 4.67 percent in the ratio of 1.3 percent. This ratio refers to the amount of assets available to repay financial liability.
In the previous fiscal year, its claim payment ratio was only 38 percent, which was in the last fiscal year 2081. By the third quarter of 1982, it was 34 percent.
During the review period, the company’s risk savings and profit after tax also increased.
Infomerics has pointed to low net insurance revenue, relatively high management expenses, limited risk bearing, low net holding ratio, and unstable regulatory provisions as the company’s challenges and weaknesses.
Due to low net insurance income, management expenses have reached 63 percent of such income. Due to increasing home rent expenses, employee expenses, regulatory expenses, the proportion of managerial expenses compared to net insurance income has increased tremendously.
The previous fiscal year 2080. At 81, its net worth dropped to 36 percent. Fiscal year 2079. The net worth was 40 per cent in 80. The net holding ratio in air insurance is only 2 percent.
Its business growth ratio is also very low. Infomerics has also pointed out that the risk management committee’s strictness and low paid-up capital are the reasons behind this.
