PACRA Maintains IFS Rating of Habib Insurance Company Limited

In terms of Gross Premium Written (GPW), the general insurance industry has a total size of ~PKR 84bln during 6MCY23 (6MCY22: ~PKR 66bln), exhibiting a growth of ~28%. However, the underwriting performance of the industry witnessed a dip of ~72% and reported at ~PKR 863mln during 6MCY23 (6MCY22: ~PKR 2.9bln). Investment income contributed to the industry's earnings reported at ~PKR 7.7bln during 6MCY23 (6MCY22: ~PKR 5.1bln). However, current economic conditions remain imperative for the overall performance of insurance industry.
The rating drives comfort from the stable standing of Habib Insurance Company Limited ("Habib Insurance" or "the Company") in the general insurance industry, gathering support from the House of Habib ("the Sponsors"). Well framed governance structure and prominent position of the Sponsors in various business generates captive business for the Company; however, the share remains minimal in the overall GPW. Habib Insurance manages conventional and window takaful businesses and has shown stable trajectory in GPW over years; mainly emanating from motor along with fire and property, followed by health and miscellaneous segments. The recent growth of ~20% in GPW reflects inflationary trend with minimal volumes coming in; mainly from the Motor segment. This led to stressed underwriting results with a high combined ratio. However, adequate investment income, emanating mainly from government securities, supports the Company’s bottom-line. 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. However, strong rated reinsurer panel supports the Company. The equity base remains stable.
The rating is based on Sponsor's profile and relative position of Habib Insurance in the general insurance industry. A cautious approach to improve the business volumes that supports the underwriting results remains critical. Growth in the investment income, along with enhanced liquid profile is imperative for the rating.

About the Entity
Habib Insurance Company Limited ("Habib Insurance" or "the Company") was incorporated in 1942 as a public listed company. 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.
Major stake of the Company lies with the House of Habib (~63%), mainly though associated companies and individuals of the family. The Company's Board is chaired by Mr. Rafiq M. Habib, while Syed Ather Abbas serves as the Company's CEO. He is assisted by a team of professionals.