Shaheen Insurance Company Limited

CREDIT RATING REPORT | Aug-25

Logo
Rating History
Dissemination Date IFS Rating Outlook Action Rating Watch
22-Aug-25 A++ (ifs) Stable Upgrade -
23-Aug-24 A+ (ifs) Stable Maintain -
25-Aug-23 A+ (ifs) Stable Maintain -
25-Aug-22 A+ (ifs) Positive Maintain -
31-Mar-22 A+ (ifs) Positive Harmonize -
About the Entity

Shaheen Insurance Company Ltd. ('Shaheen Insurance' or' the Company') a group Company of Shaheen Foundation was incorporated in 1995 as a public listed company. The Company operates as a non-life insurance provider, offering both conventional and takaful insurance through a network of 13 branches operating nationwide. Shaheen Foundation a conglomerate with interests in real state aviation, textile, trade, insurance, health and education sectors holds majority of the stake (~69.9%), followed by Foreign & Joint Stock Companies (~17.7%), Central Non Public Fund PAF (~4.0%) and General Public (~8.2%). The Company's Board is chaired by AVM Junaid Ahmed Siddiqui(Retd.). While, Mr. Syed Rizwan Akhtar serves as the Company' CEO. He is assisted by a team experienced professionals.

Rating Rationale

Pakistan's General Insurance industry grew in CY24, reaching a total size of PKR 214bln, a ~14% increase from PKR 188bln in CY23. This expansion was driven by significantly improved financial performance, with underwriting profits surging by ~70% (PKR 12.2bln in CY24 compared to PKR 7.2bln in CY23). Combined with better investment returns, the industry's overall earnings rose to PKR 24bln from PKR 18bln in the previous year. Despite this positive momentum, the prevailing economic conditions will continue to be a crucial factor for the industry's sustained performance.
Shaheen Insurance Company Ltd. ('Shaheen Insurance' or 'the Company'), a stable player in non-life insurance, generates ~93% of its business from the conventional side, while the remaining (~7%) is booked through window takaful operations. The Company's Gross Premium Written (GPW) soared by ~76%, supported largely by fire & property (~27%) and motor (~25%) segments. This growth was a combination of both volume- and value-driven growth, stemming from both inflationary effects and the success of new businesses. This has favored the underwriting results. A notable advantage comes from its captive business, which provides a consistent ~11% of total GPW, offering a valuable cushion. The Company's net profits are on an upward trajectory, reflecting a broader improvement in financial performance. This is further underscored by a reduced combined ratio, achieved through disciplined expense control and a smart pivot from less profitable areas to higher-margin segments. Shaheen Insurance has improved its investment portfolio, which generates considerable income, benefitting the bottom line. On the financial risk front, the Company stands strong with robust risk absorption capacity and adequate liquidity. Coupled with a dependable reinsurance panel, these factors collectively enhance Shaheen Insurance's credit ratings. PACRA upgrades Shaheen Insurance's IFS rating backed by improvement in the equity base. Moreover, a formal equity injection plan has been undertaken by the management; adherence to which remains important. Demonstrated support from the sponsor, i.e., Shaheen Foundation, along with disciplined financial management, adds the requisite cushion. This, along with a sound governance framework and better managerial practices, bodes well for the Company.

Key Rating Drivers

The rating is dependent upon sustained improvement in business profile of the Company. Growth in revenue streams are crucial. Sustaining equity levels and improvement in liquidity is core to the rating. This along with better investment income and corporate governance framework remains imperative for sustaining the rating.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Shaheen Insurance Company Limited

rating analysis

Logo
Profile
Legal Structure

Shaheen Insurance Company Limited ('Shaheen Insurance' or 'the Company') is incorporated as a public listed company, listed on PSX, since Mar-95.


Background

The Company obtained the certificate for commencement of business in Jul-95. It was registered with the Controller of Insurance in Nov-95. Shaheen Insurance, historically, was a largely equal joint venture of Hollard Insurance (South African based company), First Capital Group (FCG) and Shaheen Foundation PAF


Operations

The Company operates as in conventional insurance along with providing window takaful insurance services. Within both, Shaheen Insurance is mainly engaged in underwriting of fire, marine and aviation, motor and accident/health segments; While engineering, travel, personal line, bond and crop insurance are clubbed under miscellaneous segment. The Company operates through a network of thirteen (13) branches across Pakistan.


Ownership
Ownership Structure

The Company is majorly owned by Shaheen Foundation (~69.9%), followed by Foreign & Joint Stock Companies (17.7%), Central Non-Public Fund PAF (4.0%) and General Public (8.2%).


Stability

Ownership of the Company seems to remain stable; as majority of the holding lies with the Foundation.


Business Acumen

Shaheen Foundation PAF, established in 1977, promotes welfare activities for serving & retired PAF personnel and Martyrs through the creation of income and employment-generating activities. The sponsors of the Company has diversified interests in aviation, textile, trade, real estate and insurance sectors.


Financial Strength

The Company's strength is attributed to its sponsorship by Shaheen Foundation, providing strong backing.


Governance
Board Structure

Overall control of the Company vests in eight-member Board, comprises of two Independent Directors, one Executive and five Non-Executive Directors.


Members’ Profile

Chairman of the Board, AVM Junaid Ahmed Siddiqui (Rtd.) has served the PAF for more than 35 years and has held various Command and Staff appointments. Ms. Farah Azeem and Mr. Jehangir Shah has been associated with the Company for three years and serves as an Independent Director. Other Members on the Board carry diversified experience. The Board houses retired PAF personnel and business professionals who have served at leading positions.


Board Effectiveness

The Board met four times during the year. The Board is assisted by three committees namely: i) Audit Committee, ii) Investment Committee and iii) Ethics, Human Resource & Remuneration Committee. Attendance during BoD and Committee meetings remain substantial with minutes being adequately maintained


Transparency

The External Auditors of the Company M/s BDO Ebrahim & Co., Chartered Accountants expressed an unqualified audit report on the financial statements of CY24. The firm is QCR rated and on SBP's panel in category "A"


Management
Organizational Structure

The Company operates through six departments: Operations- Underwriting and Reinsurance, Claims, Sales and marketing, Finance and Accounts, I.T, and Human Resource (HR&R) and Administration. Each department's Head reports to the CEO, who then reports to the BoD. However, the Head of Internal Audit and HR&R reports functionally to the respective BoD committees and administratively to the CEO.


Management Team

The Company has a qualified and experienced management team. Mr. Syed Rizwan Akhtar serves as the CEO of the Company since Oct-21. Mr. Rizwan Akhtar has been involved in the insurance sector for more than two decade. Mr. Nisar Ahmad Almani serves as the CFO. Mr. Nisar is an FCA and holds an experience of more than 22 years and he is associated with the Company since 2014. The CEO along with CFO, makes pertinent decisions at a strategic level.


Effectiveness

The management is facilitated by four management committees, namely: Underwriting, Re-Insurance & Co- insurance, Claim Settlement, and Risk Management & Compliance Committees. These committees meet on quarterly basis or whenever need arise.


MIS

The system comprises a centralized database and web based front-end for development and reporting. The system assigns authority levels to its users and enforces strict compliance with internal procedures. IT system supports Head Office operations as well as remote users provide real-time updates.


Claim Management System

Claims processing is centralized for better control and efficiency, with branches sending daily claim intimation reports to the Head Office, where all claims are paid. Intimation can be done via mail or telephone.


Investment Management Function

The Company has a documented Investment Policy Statement (IPS) approved by BoD that provides guidelines, execution structure and sets benchmarks for each type of investment. Investment performance is evaluated by the Investment Committee every quarter.


Risk Management framework

The management, in line with efforts to standardize processes and improve controls, has developed detailed underwriting manual that has been implemented in all branches. All specialized risks are defined separately for various classes of risks, are referred to the Head Office for approval.


Business Risk
Industry Dynamics

The General Insurance industry had a total size of PKR 214bln during CY24 (CY23: PKR 188bln), exhibiting a growth of ~14%, in terms of GWP. The industry reported a growth of ~70% in underwriting profits (CY24: PKR 12.2bln, CY23: PKR 7.2bln). The net income of the industry also experienced an increase of ~33% to PKR 24bln during CY24 (CY23: PKR 18bln). The industry's overall outlook remains stable with substantial liquidity available with players.


Relative Position

Shaheen Insurance falls among small sized players in the general insurance industry with ~1% market share.


Revenue

Shaheen Insurance operates in conventional (~93%) and window takaful (~7%). During CY24, the Company underwrote GPW (conventional + takaful) of ~PKR 1,578mln (CY23: ~PKR 899mln), witnessing a substantial increase mainly triggered from the conventional side. On the segment level, Fire holds the highest share of ~27%, followed by Motor (~24%), Marine (~22%), Accident and Health (~15%) and Misc (~11%). During 1QCY25, the Company reported GPW of PKR 521mln. 


Profitability

During CY24, the Company's underwriting performance witnessed significant improvement and reported underwriting results of ~PKR 94mln (CY23: ~PKR 40mln). Improvement in underwriting performance is primarily owing to improved topline performance. Whereas, the Company's bottom line was supported by healthy investment income and it reported a PAT of ~PKR 190mln during CY24 (CY23: ~PKR 134mln). The underwriting results during 1QCY25 were reported at PKR 37mln, with a bottomline of ~PKR 44mln.


Investment Performance

The Company has maintained a healthy investment book, clocking in at ~PKR 1,325mln as at CY24 (CY23: ~PKR 1,187mln) and generated investment income of ~PKR 109mln during CY24 (CY23: ~PKR 123mln). Investment book is majorly concentrated with risk-free Equity Instruments (~32%), followed by Government Securities (~31%), Cash & Bank Balance (~25%), and Investment Properties (~13%). As at 1QCY25, the investment book stands at PKR 1,344mln generating an income of PKR 13mln.


Sustainability

Shaheen Insurance's IFS rating is backed by improvement in the equity base. Moreover, a formal equity injection plan has been undertaken by the management; adherence to which remains important. Demonstrated support from the sponsor, i.e., Shaheen Foundation, along with disciplined financial management, adds the requisite cushion. This, along with a sound governance framework and better managerial practices, bodes well for the Company.


Financial Risk
Claim Efficiency

As of CY24, the Company's claims outstanding days increased to ~162 days (CY23: ~141 days) due to increased outstanding claims (CY24: ~PKR 221mln, CY23: ~PKR 180mln). The claims liquidity ratio (claims to liquid investments) fell to ~45.6% as of CY24 (CY23: ~52.1%). Additionally, the commercial efficiency ratio improved to ~1.8x as at CY24 (CY23: ~1.2x). The claims liquidity ratio for 1QCY25 is 71.4%. 


Re-Insurance

On the basis of excess of loss (XOL), the Company has secured reinsurance arrangements with reputed re-insurers including Trust Re, Labuan Re, Pak Re, Saudi Re, Kenya Re, and Tunis Re, etc.


Cashflows & Coverages

The Company witnessed a strained liquidity profile, with its liquidity coverage ratio (liquid assets/ net insurance & takaful claims) falling to ~2.3x as of CY24 (CY23: ~5.4x) due to increased pressure from claims. The Company has maintained a robust investment book with liquid assets of ~PKR 1,156mln as of CY24 (CY23: ~PKR 1,020mln) with increased investment in equity instruments and government securities. As of 1QCY25, the liquidity coverage ratio stands at ~1.5x.


Capital Adequacy

The Company has a paid-up capital amounting to PKR 645mln as at CY24, meeting the existing MCR as per SECP. However, the Company will need to increase its paid-up capital to meet the new MCR of ~PKR 2bln by 2030. The Company possesses an equity base of ~PKR 1,036mln as of CY24 (CY23: ~PKR 860mln). As at 1QCY25, the equty base in ~PKR 1.087mln and the Company has an equity injection plan of ~PKR 161mln, making the capital ~PKR 806mln by CY25. Additionally it has devised a phase wise plan to meet the new MCR requirement of PKR 2bln by 2030. 
 
 

Aug-25

www.pacra.com

Shaheen Insurance Company Limited

financial summary

(PKR mln)

Logo

Mar-25
3M		 Dec-24
12M		 Dec-23
12M		 Dec-22
12M
Management Audited Audited Audited
A. BALANCE SHEET
1. Investments 1,344 1,325 1,187 902
2. Insurance Related Assets 728 560 332 198
3. Other Assets 150 183 107 112
4. Fixed Assets 121 116 76 56
5. Window Takaful Operations 0 0 0 0
Total Assets 2,342 2,185 1,701 1,268
1. Underwriting Provisions 529 528 281 175
2. Insurance Related Liabilities 388 309 284 211
3. Other Liabilities 317 296 256 126
4. Borrowings 21 16 19 19
5. Window Takaful Operations 0 0 0 0
Total Liabilities 1,256 1,149 840 530
Equity/Fund 1,087 1,036 860 738
B. INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENT
1. Gross Premium Written/Gross Contribution Written 521 1,578 899 178
2. Net Insurance Premium/Net Takaful Contribution 383 1,004 494 320
3. Underwriting Expenses (346) (910) (455) (357)
Underwriting Results 37 94 40 (38)
4. Investment Income 13 109 123 86
5. Other Income / (Expense) 5 61 19 29
Profit Before Tax 55 264 182 77
6. Taxes (12) (74) (48) (24)
Profit After Tax 43 190 134 52
PARTICIPANTS' TAKAFUL FUND - PTF
1. Gross Contribution Written 22 115 73 34
2. Net Takaful Contribution 17 51 30 9
3. Net Takaful Claims (3) (30) (16) (12)
4. Direct Expenses Including Re-Takaful Rebate Earned (0) (1) (0) 0
Surplus Before Investment & Other Income/(Expense) 14 20 14 (3)
5. Investment Income 0 2 3 2
6. Other Income/(Expense) 1 3 1 0
Surplus for the Period 14 25 18 (1)
OPERATOR'S TAKAFUL FUND - OTF
1. Wakala Fee Income 9 32 21 9
2. Management, Commission & Other Acquisition Costs (7) (24) (17) (9)
Underwriting Income/(Loss) 3 8 4 1
3. Investment Income 0 6 5 3
4. Other Income/(Expense) 0 (1) 1 (0)
Profit Before tax 4 13 10 4
5. Taxes (1) (4) (3) (1)
Profit After tax 3 9 7 3
C. RATIO ANALYSIS
1. Profitability
Loss Ratio - Net Insurance & Takaful Claims / Net Insurance Premium or Takaful Contribution 51.4% 47.2% 33.5% 28.9%
Combined Ratio (Loss Ratio + Expense Ratio) 90.3% 90.6% 92.0% 111.8%
2. Investment Performance
Investment Yield 3.8% 8.7% 11.8% 9.8%
3. Liquidity
(Liquid Assets - Borrowings) / Outstanding Claims Including IBNR 4.4 5.2 4.5 5.4
4. Capital Adequacy
Liquid Investments / Equity (Funds) 108.2% 111.6% 118.5% 105.2%

Aug-25

www.pacra.com

Shaheen Insurance Company Limited

rating scale

Logo

Aug-25

www.pacra.com

Shaheen Insurance Company Limited

regulatory disclosure

Logo
  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
    5. PACRA ensures that the analysts or any of their family members shall not buy, sell, or engage in any transaction in any security which falls in the analyst’s area of primary analytical responsibility. This clause, however, does not apply to investments in securities through collective investment schemes. (Chapter III; 12-2-(l))
    6. PACRA has established policies and procedures governing investments and trading in securities by its employees and for monitoring the same to prevent insider trading, market manipulation, or any other market abuse. (Chapter III; 11-B-(g))
  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
  7. Proprietary Information
    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

Aug-25

www.pacra.com