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The Pakistan Credit Rating Agency Limited
Press Release

Date
09-Mar-23

Analyst
Muhammad Noor Ul Haq
noorulhaq@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA assigns initial IFS Rating to 5th Pillar Family Takaful Limited

Rating Type IFS
Current
(09-Mar-23 )
Action Initial
IFS Rating A+ (ifs)
Outlook Stable
Rating Watch -

5th Pillar Family Takaful is an initiative taken by eminent Kuwaiti and Pakistani business houses to offer Hajj and Umrah takaful saving plans to middle and low middle income Muslims especially from Pakistan supported with an end to end value chain to facilitate the customers in Pakistan and in Saudi Arabia throughout pilgrimage. The company aspires to become the leading Takaful player in the country through innovative Takaful products for its customers while complying with Shari’ah guidelines and globally accepted best practices. A few renowned groups; Kuwait International Investment Company (KIIC), 5th Pillar Holdings representing IFA group of Kuwait, Muhammadi family and associates are shareholders. The shareholders have a strong commitment towards the company, as reflected by their upfront equity injections. IFA Group is leading a consortium of 10 listed Kuwaiti companies with total market capitalization peaked at USD 6.6bln. The largest shareholder of Kuwait International Investment Company (KIIC) is Kuwait Investment Authority (KIA) which is a Government of Kuwait owned sovereigns investment entity having AUMs of USD 800bln. The sponsors consider Pakistan to be a strategic market for its business and sees growth opportunities. A strong governance structure has been put in place and a professional management team has been assembled. The team will also strive to develop innovative saving products that will be tailored to meet the needs of its customers and may include: children education plans, marriage savings plans, retirement and pension plans, group life and pay continuation. The Company will be focusing on cutting-edge technology and digital marketing to reach out to customers, resulting in increased customer engagement and loyalty. The performance of the company will be unfolding in future, which is essential for future ratings.
The ratings are dependent on the continued tangible support and guidance from the key sponsors. The successful unfolding of the model is of absolute necessity. The equity of the company needs to be kept liquid and in safe investment avenues.

About the Entity
5th Pillar was incorporated in 2020 under the Companies Act, 2017. The Company is jointly owned by international and local professional groups. The major stake (41.75%) of the Company is held by Kuwait International Investment Company. While (26.25%) of the stake is owned by 5th Pillar Holdings Limited (a Dubai International Financial Centre (DIFC)) followed by Mr. Muhammad Ali Muhammadi and associates (32%). The Company has an eight-member Board of Directors (BoD). All board members are non-executive directors except the Chief Executive Officer (CEO). Mr. Nasar us Samad Qureshi is the CEO of the Company. He is assisted by a team of professionals.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.