PACRA Maintains IFS Rating of Adamjee Insurance Company Limited

The IFS rating of Adamjee Insurance Company Limited ('Adamjee Insurance' or 'the Company') drives strength from the strong backing of the Nishat Group (‘the Group’), majorly through MCB. Strong business acumen, combined with the requisite representation of the Group on the Board, strengthens the governance framework. The Company holds the dominant position in the general insurance industry. It underwrites conventional and window takaful business in Pakistan and UAE, where the conventional segment constitutes the majority (~94%) of the Company’s business. At present, UAE region accounts for ~34% of the Company's total business, as an impact of gradual increase over the years, while the remaining ~66% of the business is generated from Pakistan. Fire & Property remains the top-performing segment, contributing ~61% to the GPW, followed by Accident & Health (~15%), Motor (~11%), Marine (~8%), and Miscellaneous (~5%) segments within Pakistan. However, Motor dominates the portfolio composition in UAE market. During 9MCY24, overall GPW witnessed a value-driven growth of ~34%. Additionally, the Company has managed its operations which led to an overall underwriting profit of ~PKR 315mln (9MCY23: ~PKR 622mln - loss). However, business in UAE region continues to book losses at the underwriting level (PKR ~508mln), primarily trickling in from the Motor segment. Thus, further enhancement of profits from the core business through prudent underwriting practices remains crucial, going forward. The Company's performance has been strengthened through effective management of investment income flowing mainly from an investment book comprising Group companies. This led to an improved profitability. Despite being a leader in Pakistan’s general insurance, managing the combined ratio remains crucial. The financial risk gathers strength from substantial liquid investments and equity base. However, effective management of claims remains a challenge for the Company. Reinsurance arrangements with international partners provide additional protection, instilling confidence in the Company's ability to navigate uncertainties effectively. Overall, Adamjee Insurance is well-positioned and digitally mechanized for sustained growth in the dynamic insurance sector. Its market leadership, robust financial standing, strategic investments, and strong governance underscore its resilience and ability to deliver long-term value. Going forward, enhancing claims management efficiency will be critical to sustaining disciplined underwriting performance.
The rating depends on the profitability of the core business and investment income. Sustaining strong market position, along with growth in the underwriting profits, remains fundamental to the rating. A sustainable segment mix and efficient expense management remains critical to the financial performance, with further progress envisioned

About the Entity
Adamjee Insurance Company Limited ('Adamjee Insurance' or 'the Company') was incorporated in 1960 as a public listed concern. The principal activity includes managing non-life insurance through Conventional and Window Takaful in Fire and Property, Marine and Transport, Accident and Health, Motor, and Miscellaneous segments.
The Nishat Group holds ~40.5% stake in the Company. The Board is chaired by Mr. Umar Mansha, while Mr. M. Ali Zeb is the CEO. They are assisted by a team of experienced professionals.