Analyst
Waqas Ahmad
waqas.ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains IFS Rating of Asia Insurance Company Limited
Rating Type | IFS | |
Current (26-Aug-22 ) |
Previous (31-Mar-22 ) |
|
Action | Maintain | Harmonize |
IFS Rating | A++ (ifs) | A++ (ifs) |
Outlook | Stable | Stable |
Rating Watch | - | - |
The rating reflects augmented governance framework and strengthened financial position of “Asia Insurance Company Limited” (Asia Insurance). This was realized post equity injection and stake taken by InsuResilience Investment Fund, funded by the German Developed Bank KFW and controlled by the Swiss-based Impact Investment Director BlueOrchard Finance Ltd., providing added support. The financial position was supplemented by that time and continues to reflect in its liquidity. The representation of the InsuResilience Investment Funds on the Board of Asia Insurance, for quite some time is comforting to the rating. The incumbent management is directing concerted efforts towards growth and diversification. Results of the Company are getting reflected in the recent period. There is enduring focus on IT integration and development of new products. Asia Insurance has shown a significant growth in GPW and achieved a milestone of PKR 1bln during CY21.
The insurance industry in Pakistan is relatively small compared to its peers in the region. The insurance penetration and density remain very modest as compared to other jurisdictions while the insurance sector remains underdeveloped relative to its potential. CY20 was full of challenges and unprecedented pressures, locally as well as in the global economy. However, CY21 has been the road to recovery from these setbacks of the previous year. In terms of GPW, Pakistan’s general insurance industry have a total size of PKR ~34.1bln for 1QCY22 (CY21: PKR~112.8bln), have shown a growth of ~19% YoY basis. Investment income has also been a support to the bottom-line performances of the Companies during the period. Overall industry has earned profit after tax of PKR 3.5bln for 1QCY22 (CY21: PKR 13.4bln), owing to lower profitability and lower underwriting profits for period ended Mar'22.
The rating is dependent on continued growth in core business of Asia Insurance as well as support from the Investment side to enhance profitability. Sustaining underwriting profitability will be crucial going forward.
About
the Entity
Asia Insurance Company Limited (ASIC), established in 1979 as a General Insurance Company, is listed on the Pakistan Stock Exchange, with trading symbol – ASIC. Mr. Ihtsham ul Haq Qureshi and family holds majority (67%) of the shareholding in the Company. Whereas, InsuResilience Investment Fund (IIF) holds 25% of the shareholding in Asia Insurance.
Asia Insurance, with its Head Office in Lahore, operates a network of 28 branches across the country. The Company’s Board of Directors comprises seven members. Mr. Ihtsham ul Haq Qureshi, the driving force behind the business, is the Chairman of the Board. While, Mr. Zain ul Haq Qureshi is the CEO of Asia Insurance.