AM Best Affirms Jubilee General Insurance Company’s Ratings as Balance Sheet Strength Remains Strong
AM Best has affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bb” (Fair) for Jubilee General Insurance Company Limited (Jubilee) of Pakistan. The ratings highlight the insurer’s strong balance sheet fundamentals, resilient long-term operating performance and established position in Pakistan’s private non-life insurance market.
AM Best has assigned a stable outlook to Jubilee’s Financial Strength Rating, while the outlook for the company’s Long-Term Issuer Credit Rating is positive. The combination of these assessments reflects AM Best’s view of Jubilee’s financial capacity, operating track record and ongoing efforts to improve its risk profile, while also acknowledging the challenges associated with operating in Pakistan’s economic and financial environment.
The ratings are primarily supported by Jubilee’s strong balance sheet strength, which AM Best considers a key foundation of the company’s overall credit profile. The assessment also takes into account Jubilee’s strong operating performance and solid domestic market position. These strengths are partially offset by the company’s limited business profile and what AM Best describes as a marginal enterprise risk management (ERM) assessment.
Strong Risk-Adjusted Capitalisation Supports Balance Sheet Strength
A major factor supporting Jubilee’s ratings is its risk-adjusted capitalisation. AM Best assesses the company’s balance sheet strength as strong, with risk-adjusted capitalisation reaching the strongest level as measured by Best’s Capital Adequacy Ratio (BCAR) at year-end 2025.
BCAR is an important measure used by AM Best to evaluate the capital adequacy of an insurer in relation to the risks it assumes. Strong capitalisation provides insurers with a financial cushion against unexpected losses and can support their ability to maintain operations during periods of market or underwriting stress.
For Jubilee, the strength of its capital position is particularly significant because its BCAR requirements are heavily influenced by asset risk. This means that changes in the composition of the company’s investment portfolio can have a meaningful impact on its risk-adjusted capitalisation.
AM Best expects Jubilee’s BCAR position to improve during 2026 as the company continues to reduce the risk associated with its investment portfolio. Jubilee has been pursuing a strategy to lower its exposure to equities, with management targeting a reduction in the equity portion of total investments to approximately 30%, compared with 43% at year-end 2025.
The company plans to reinvest the proceeds from equity sales into fixed-income securities. This shift is expected to reduce the overall level of asset risk and strengthen the company’s capital position under AM Best’s capital adequacy assessment.
The planned reallocation of investments demonstrates the importance of asset management to Jubilee’s overall financial profile. By reducing its exposure to more volatile equity investments and increasing its allocation to fixed-income assets, the insurer could achieve greater stability in its investment portfolio while improving its capital efficiency.
Reinsurance Exposure Remains a Consideration
Although Jubilee’s capitalisation is a significant strength, AM Best has identified certain factors that partially offset the positive assessment of its balance sheet strength.
One of these factors is the company’s high dependence on reinsurance. Reinsurance allows insurers to transfer portions of their underwriting risk to other insurance companies, helping them manage exposures from large or catastrophic claims. However, significant reliance on reinsurance can also introduce counterparty and credit risks.
Jubilee also has exposure to a non-rated reinsurance counterparty through mandatory cessions to Pakistan’s state-owned reinsurer. This exposure is an additional consideration in AM Best’s assessment because the financial strength and credit quality of reinsurance counterparties can influence an insurer’s overall risk profile.
Despite these factors, Jubilee’s strongest-level risk-adjusted capitalisation provides an important buffer. The company’s capital resources remain a key supporting factor behind AM Best’s assessment of its balance sheet strength.
Strong Long-Term Earnings Track Record
Jubilee has also demonstrated a strong history of earnings, another factor supporting its credit ratings. Between 2021 and 2025, the company recorded a five-year weighted average return on equity of 19.5%.
The figure demonstrates the insurer’s ability to generate attractive returns for shareholders over an extended period. Strong profitability can help insurers strengthen their capital base, support business growth and absorb periods of weaker underwriting performance.
Jubilee’s underwriting results have also been resilient over the five-year period. The company recorded a five-year weighted average combined ratio of 95.4%.
The combined ratio is a key measure of underwriting profitability in the insurance industry. A ratio below 100% generally indicates that an insurer is generating an underwriting profit, while a ratio above 100% indicates an underwriting loss.
However, Jubilee experienced a weaker underwriting result in 2025. Its combined ratio increased to 101.3%, reflecting an underwriting loss during the year. The deterioration was largely attributed to significant flood losses and fire events, which placed pressure on the company’s claims performance.
Natural catastrophes and major insured-loss events can have a substantial effect on property and casualty insurers, particularly when claims become concentrated over a relatively short period. For Jubilee, the impact of floods and fires resulted in underwriting performance falling below the company’s longer-term average.
Nevertheless, AM Best expects Jubilee’s prospective underwriting performance to improve as a result of corrective measures implemented by management. These actions are expected to help the insurer strengthen its underwriting discipline and improve profitability over time.
Investment Income Continues to Support Performance
While underwriting remains an important component of Jubilee’s business model, investment income has historically played a major role in supporting the company’s overall operating performance.
Jubilee generated a five-year weighted average net investment yield, including capital gains, of 15.8% between 2021 and 2025. This strong investment performance has contributed significantly to the company’s earnings profile.
The investment portfolio therefore remains an important source of profitability for Jubilee. At the same time, the company’s substantial exposure to equities means that investment performance can be sensitive to movements in financial markets.
The planned reduction in the equity allocation during 2026 could therefore have implications for both investment returns and risk. Although fixed-income investments may provide a more stable risk profile, the resulting investment mix will remain an important factor in determining Jubilee’s future earnings.
AM Best’s expectation that the company’s BCAR position will improve as the portfolio becomes less equity-heavy indicates that capital resilience is an important objective of Jubilee’s current investment strategy.
Jubilee Maintains a Solid Position in Pakistan
Jubilee is the third-largest private non-life insurer in Pakistan, giving it a solid competitive position within the country’s domestic insurance market.
The company’s premium income increased by 15.2% in 2025, demonstrating continued growth despite the challenging operating environment. The increase was supported by inflation-driven rate increases as well as higher sums insured.
Growth in premiums can strengthen an insurer’s market position and provide opportunities to expand its customer base and revenue. However, premium growth also needs to be supported by appropriate pricing and underwriting controls to ensure that additional business does not lead to disproportionate increases in claims or capital requirements.
Jubilee generated PKR 26.6 billion (USD 95.0 million) in gross premium during 2025. Although this represents a meaningful position in Pakistan’s domestic insurance sector, AM Best notes that the company remains relatively small when viewed on a global scale.
Its limited international scale is therefore reflected in the assessment of Jubilee’s business profile. The company’s concentration in Pakistan provides it with a recognizable domestic franchise, but also exposes it to the economic and financial conditions of a single country.
Country Risk Remains an Important Challenge
One of the key challenges facing Jubilee is its exposure to Pakistan’s broader economic, political and financial system risks.
As an insurer whose business and assets are concentrated in Pakistan, Jubilee is naturally exposed to developments affecting the country’s economy and financial markets. Changes in economic conditions, inflation, interest rates, currency conditions, regulatory requirements and political stability can influence insurance demand, claims costs, investment performance and capital requirements.
AM Best recognizes that Jubilee has demonstrated operational resilience in dealing with country-specific challenges over its history. Nevertheless, the concentration of the company’s business and assets within Pakistan continues to present risk management challenges.
This country concentration is particularly relevant when assessing the company’s enterprise risk management framework. An insurer operating primarily within one market may have fewer opportunities to diversify geographic risks compared with larger international insurance groups.
Enterprise Risk Management Assessment
AM Best assesses Jubilee’s enterprise risk management as marginal, taking into consideration the size and complexity of the company’s operations.
ERM is an important component of an insurer’s overall financial strength because it evaluates how effectively a company identifies, measures, manages and monitors the risks associated with its business.
For Jubilee, its risk profile is influenced by its concentration in Pakistan, investment exposures and reliance on reinsurance. These factors require effective risk controls to ensure that the company can withstand adverse changes in underwriting, investments and economic conditions.
The company’s ability to manage these risks will remain important as it continues to grow its premium base and adjust its investment portfolio.
The stable outlook for Jubilee’s Financial Strength Rating indicates that AM Best currently expects the company’s underlying financial strength to remain broadly stable.
The positive outlook on the Long-Term Issuer Credit Rating, meanwhile, points to potential upward momentum in Jubilee’s credit profile if the company continues to strengthen its financial and operating fundamentals.
Future developments in capitalisation, underwriting performance, investment risk and enterprise risk management could therefore play an important role in the evolution of Jubilee’s ratings.
The planned reduction in equity investments is particularly noteworthy because it could improve the company’s risk-adjusted capitalisation. Similarly, successful implementation of corrective underwriting measures could help restore underwriting profitability following the weaker 2025 result.
Jubilee enters the coming period with several important strengths, including strong risk-adjusted capitalisation, a history of profitable operations, a well-established domestic market position and substantial investment income generation.
At the same time, the company continues to face challenges from catastrophe-related losses, reinsurance dependence, investment risk and Pakistan’s broader economic and financial environment.
The insurer’s ability to successfully execute its investment de-risking strategy and improve underwriting performance will be important in determining its future financial profile. A more conservative investment allocation could reduce capital volatility, while stronger underwriting results could provide additional support to earnings and capital generation.
Overall, AM Best’s latest assessment indicates that Jubilee General Insurance Company continues to maintain a strong balance sheet foundation and resilient operating profile, despite the pressures associated with its domestic market and recent underwriting challenges.
The affirmation of the B (Fair) Financial Strength Rating and “bb” (Fair) Long-Term Issuer Credit Rating underscores the insurer’s continued financial capacity, while the stable and positive outlooks reflect the different factors influencing its future credit profile.
As Jubilee moves forward, maintaining capital strength, improving underwriting discipline, managing catastrophe exposures, optimizing its investment portfolio and strengthening enterprise risk management will remain central to its ability to sustain and potentially improve its credit standing.
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