Asset Manager Rating Life Insurance Companies

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Credit Rating Company Ltd. vis.com.pk 1 VIS Credit Rating Company Limited Asset Manager Rating - Life Insurance Companies DECEMBER 2025 ASSET MANAGER RATING – LIFE INSURANCE COMPANIES VIS Credit Rating Company Limited.

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Credit Rating Company Ltd. vis.com.pk 2 VIS Credit Rating Company Limited Asset Manager Rating - Life Insurance Companies DECEMBER 2025
Table of Contents
MANAGEMENT QUALITY RATING METHODOLOGY – LIFE INSURANCE COMPANIES ...................................3
RATINGS FRAMEWORK ..................................................................................................................................................................3
OWNERSHIP, GOVERNANCE, MANAGEMENT & FINANCIAL CONDITION............................................................3
MARKET POSITION............................................................................................................................................................................3
INVESTMENT ADMINISTRATION ...............................................................................................................................................4
PORTFOLIO MANAGEMENT ACTIVITIES................................................................................................................................4
TRACK RECORD..................................................................................................................................................................................4
CLIENT SERVICING ............................................................................................................................................................................4

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Credit Rating Company Ltd. vis.com.pk 3 VIS Credit Rating Company Limited Asset Manager Rating - Life Insurance Companies DECEMBER 2025 MANAGEMENT QUALITY RATING METHODOLOGY – LIFE INSURANCE COMPANIES Life insurance companies are assessed differently when evaluating management quality, as their business model, risk profile, and operational responsibilities are distinct from those of asset managers and investment advisors. Life insurers assume long-duration contractual obligations, bear underwriting and actuarial risks, and manage complex asset liability structures. RATINGS FRAMEWORK The life insurance management quality assessment draws conceptually from VIS’s Asset Management Company (AMC) methodology, while incorporating life insurance specific operational dimensions. For life insurance companies, VIS applies a suffix “p” to the assigned rating on the Management Quality Ratings Scale (https://docs.vis.com.pk/docs/VISRatingScales.pdf) OWNERSHIP, GOVERNANCE, MANAGEMENT & FINANCIAL CONDITION The assessment begins with ownership, focusing on structure, stability, and strategic expertise. VIS reviews whether ownership is concentrated or dispersed, local or foreign, standalone or part of a group, and evaluates succession planning and the ability of owners to provide long-term guidance and support. The owners’ business expertise, including industry knowledge and decision-making capability, is also considered to gauge their effectiveness in steering the company’s growth and sustainability. VIS assessment covers the strength of the corporate governance framework, including the presence and functioning of board committees, internal policies, conflict-of-interest management, and the overall compliance culture, including Shariah governance where applicable. Management depth, organizational stability, and the availability of technical expertise across actuarial, underwriting, investment, and operations functions are also key considerations to ensure continuity and resilience of the institution. The Company’s financial condition is assessed through capital adequacy, earnings quality and sustainability, including business margins, persistency ratios, and cost efficiency, along with management’s ability to balance growth with risk appetite. Liquidity management is reviewed to ensure sufficient liquid assets to meet policyholder obligations and operational requirements. MARKET POSITION The market position of a life insurance company is assessed relative to its peers within the sector. Key factors include the company’s market share, stability and size of its funds, and the breadth and diversity of its product portfolio. VIS also considers the stickiness and granularity of the policyholder base, distribution reach, and the company’s ability to sustain growth and retain business under varying market conditions.

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Credit Rating Company Ltd. vis.com.pk 4 VIS Credit Rating Company Limited Asset Manager Rating - Life Insurance Companies DECEMBER 2025 INVESTMENT ADMINISTRATION The strength of risk governance and internal control systems is evaluated, with particular focus on enterprise risk management, actuarial oversight, reserving discipline, reinsurance arrangements, and the effectiveness of internal audit and compliance functions. VIS evaluates the efficiency and reliability of core insurance operations, including underwriting controls, claims management, policy administration, IT systems, business continuity, and customer service standards. The company’s ability to scale operations, manage distribution networks, and maintain service quality is considered a key indicator of management depth and process maturity. PORTFOLIO MANAGEMENT ACTIVITIES For life insurance companies, the assessment of fund management centers on the structure and effectiveness of the investment committee, including the composition of its members, their experience, and the decision-making processes employed to oversee the company’s investment portfolio. The review also evaluates the clarity, comprehensiveness, and enforcement of the investment policy, ensuring that investment strategies are aligned with policyholder obligations, regulatory requirements, and the company’s risk appetite. Additionally, the depth and quality of in-house research capabilities are assessed, including the ability to generate independent analysis for equities, fixed income, and alternative investments. TRACK RECORD Fund performance in life insurance companies is evaluated over a long-term horizon, reflecting the nature of their liabilities. Historical returns of investment portfolios are assessed relative to internal benchmarks and industry peers, with a focus on consistency across different market cycles. Peer comparisons are limited to life insurance universe, operating under similar business models and facing comparable operational and market risks, rather than broader asset management entities. CLIENT SERVICING VIS evaluates the effectiveness of policyholder communication, distribution oversight, and service quality, including transparency in fund reporting and responsiveness to claims and enquiries. For life insurance companies, the focus is on fair treatment of policyholders, clarity of disclosures, complaint management, and service consistency across tied agents, bancassurance, and digital channels.

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Credit Rating Company Ltd. vis.com.pk 5 VIS Credit Rating Company Limited Asset Manager Rating - Life Insurance Companies DECEMBER 2025 Information herein was obtained from sources believed to be accurate and reliable; however, VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Rating is an opinion on credit quality only and is not a recommendation to buy or sell any securities. Copyright VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS. Islamic International Rating Agency – Bahrain – iira.com Credit Rating Information & Services Ltd. – Bangladesh – crislbd.com Japan Credit Rating Agency, Ltd. - Japan China Chengxin International Credit Rating Company Limited - China 128/C, 25th Lane off Khayaban-e-Ittehad, Phase VII, DHA, Karachi Tel: (92-21) 35311861-64 431, Block-Q, Commercial Area, Phase-II, D.H.A. Lahore - Cantt. Tel: (92-42) 35723411-13 www.vis.com.pk info@vis.com.pk VIS Credit Rating Company Ltd. DISCLAIMER