The Pakistan Credit Rating Agency Limited
23-Feb-24
Analyst
Nabia Rauf
nabia.rauf@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains IFS Ratings of IGI General Insurance Limited
| Rating Type | IFS | |
|
Current (23-Feb-24 ) |
Previous (23-Feb-23 ) |
|
| Action | Maintain | Maintain |
| IFS Rating | AA+ (ifs) | AA+ (ifs) |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Pakistan's general insurance industry has a total size of PKR 166bln during 9MCY23 (9MCY22: PKR 113bln), exhibiting a growth of ~47%, in terms of Gross Written Premium (GWP). The industry reported a growth of ~266% in underwriting results (9MCY23: PKR 9.9bln, 9MCY22: PKR 2.7bln). The net income of the industry also experienced an increase of ~170% to PKR 20bln during 9MCY22 (9MCY22: PKR 7.4bln). Overall, the industry overall outlook remains stable with substantial liquidity available with players.
The ratings derive comfort from the strong backing and governance instituted by the Sponsors - the Packages Group through IGI Holdings. Moreover, a prudent approach of management to sustain the overall quality and control environment remains imperative for the ratings. IGI General Insurance Limited holds a stable risk profile. The topline of the Company is mainly inflationary driven with slightly increased business volumes. During 9MCY23, the Company generated consolidated GPW of ~PKR 11bln (9MCY22: ~PKR 8bln), witnessing a growth of ~39%. Fire and property segment contributed ~41%, followed by motor ~19%, miscellaneous ~18%, accident & health ~13% and marine & transport ~8% of the total GPW. Underwriting performance witnessed a surge and the Company secured a profitable bottom-line, gaining support from the investment income. Going forward, an increased inclusion of digitization may support the overall business volumes. On the financial risk front, the Company holds adequate liquidity; however, considerably higher claims further stress the efficiency. The equity base remains stable.
The rating is dependent on sustained improvement in business and financial metrics of the Company in line with its relative positioning within the industry. At the same time, the liquidity profile should continue to offset the liabilities.
About
the Entity
IGI General Insurance Limited ('IGI General' or 'the Company') was incorporated on 18-Nov-16, as a public unlisted concern. The principal activity includes managing non-life insurance through Conventional and Window Takaful in Fire and Property, Marine, Accident and Health, Motor and Miscellaneous segments
The Packages Group through IGI Holdings holds ~100% stake in the Company. The Board is chaired by Mr. Shamim Ahmad Khan, while Mr. Faisal Khan serves as the Company's CEO. He is assisted by a team of experienced professionals.