financial strength rating far Adamjee Insurance Company Limited (AICL),

A.M. Best Co. has assigned a financial strength rating of 'B++' (Good) and an issuer credit rating of "bbb+" to Pakistan's Adamjee Insurance Company Limited (AICL), both with stable outlooks. The ratings of AICL "reflect its strong risk-adjusted capitalization, robust underwriting performance, established business profile in the Pakistan insurance market and developing risk management framework," said Best. "An offsetting factor is its concentration of invested assets in equities, particularly in affiliated companies." Best added that in its opinion, AICL's "level of risk-adjusted capitalization is strong, supported by good retained earnings and sufficient to absorb projected growth of up to 15 percent in each of the next two years. Moreover, AICL's capital position benefits from very good reinsurance support, despite having to cede cessions of up to 35 percent of treaty business to Pakistan Reinsurance Company Limited, the national reinsurer." Best added that it believes AICL has a "strong management team, adopting prudent strategies to serve the requirements of the local market and establishing a leading market position in Pakistan, with a 29 percent share of gross premiums written. AICL has a well diversified non-life portfolio, with gross premiums in excess of PKR 10.3 billion ($125 million) in 2009, supported by good retention levels above 65 percent." In Best's view, AICL has "experienced robust underwriting results across all lines of business, with technical profits of approximately PKR 679 million ($8.1 million) in 2009 and a combined ratio below 90 percent. Investment performance tends to be volatile, dictated by market movements in equities, and benefitting from significant realized gains in the past three years." However best also indicated that it has concerns regarding AICL's "concentration in quoted equities, particularly in affiliated companies, which account for approximately 45 percent of invested assets. This can give rise to volatility in both AICL's risk-adjusted capitalization and operating performance, which would need to be managed