PACRA Maintains IFS Rating of Salaam Takaful Limited

Pakistan's general insurance industry holds a total size of ~PKR 99bln during 6MCY24 (6MCY23: ~PKR 84bln), exhibiting a growth of ~18% in Gross Premium Written (GPW). The industry reported an increase of ~130% in underwriting results (6MCY24: ~PKR 6bln, 6MCY23: ~PKR 2.6bln). Overall, the investment income experienced an increase of ~52% to ~PKR 11.7bln during 6MCY24 (6MCY23: ~PKR 7.7bln). However, current economic conditions remain imperative for the insurance industry's overall performance.
Salaam Takaful Limited (“Salaam Takaful” or the “Company”) is a dedicated takaful operator. The Company's assigned IFS rating is supported by financially sound and experienced sponsors and a robust governance structure. Over the years, the Company's GPW has posted persistent value-driven growth, mainly trickling from fire & property, motor, and health segments. Concentration risk seems to have been minimally reduced in the segmental mix owing to a major expansion in the fire & property segment. However, underwriting results bear an impact mainly due to a higher claim ratio from the health segment along with increased reinsurance premiums. Investment income, attributed to revaluation gain on investment properties, requires discipline to support the bottom line. Financial risk is marginally managed with a static investment book, primarily comprising investments in Subsidiaries/Associates (Salaam Family Takaful and Salaam Properties) and Investment Properties. Salaam Takaful holds adequate equity base. While, the Company requires attention to manage the overall liquidity untill life insurance and property business become cash generating investments. The management is eyeing on an equity injection, going forward; however, timely and successful materialization the same along with other expansionary plans remains imperative to sustain the financial health of the Company.
The rating is dependent on the management's ability to capitalize on the Group's well-built platform for business expansion. Moreover, successful materialization of envisioned strategies - diversifying the revenue stream and stregthening the investment income - remains imperative. This along with upholding the liquidity profile and improved equity levels are important to the IFS rating.

About the Entity
Salaam Takaful Limited (“Salaam Takaful” or the “Company”) is an unlisted public limited company incorporated in Jun-06. The Company is a sole takaful operator in the non-life segments. Major shareholding (~78.6%) of the Company resides with Mr. Salim Habib Godil, Mr. Shahzad Salim Godil, Mr. Rizwan Hussain, and Mr. Salman Hussain. ~21.4% stake in the Company is held by House Building Finance Company Limited, Al Baraka Bank Limited, Mal Al Khaleej Investment LLC, and Sitara Chemical Industries. Mr. Salim Habib Godil chairs the Board; while, Mr. Rizwan Hussain heads the Company as the CEO. They are supported by a team of experienced professionals.