Premier Insurance Limited

CREDIT RATING REPORT | Aug-25

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

Premier Insurance Limited ('Premier Insurance' or 'the Company') was incorporated as a listed concern, on PSX, in 1952. The Company operates through two business hubs: South and North. The Crescent Group (the Group) and its associated companies hold ~70% shareholding of the Company, followed by State Life Insurance Corporation holding ~11% stake. The Group operates in diversified sectors of textile, steel, sugar, and power. The Board is chaired by Mr. Khalid Bashir. While, the Company is headed by Mr. Nadeem Maqbool, as the CEO. He is aided by a team of experienced professionals.

Rating Rationale

Pakistan's General Insurance industry has shown strong growth, with its total size reaching PKR 214bln in CY24, up from PKR 188bln in CY23. This represents a ~14% growth in terms of GWP. The industry's profitability also saw slight improvement. Underwriting profits surged by ~70%, from PKR 7.2bln in CY23 to PKR 12.2bln in CY24. Net income increased by ~33%, climbing to PKR 24bln in CY24 from PKR 18bln the previous year. The overall outlook for the industry remains stable, supported by substantial liquidity across its key players.
Premier Insurance Ltd.'s ('Premier Insurance' or 'the Company') rating is largely influenced by its affiliation with the Crescent Group, a major conglomerate with significant interests in Pakistan's textile, sugar, steel, and power sectors. The Company also benefits from its long-standing history within the insurance industry. In CY24, the Company's performance showed some positive developments. GWP grew by ~4% to PKR 731mln. A reduction in net insurance claims expenses led to an underwriting profit. Net income saw a jump to PKR 68mln, driven by an increase in investment income. However, challenges persist as the Company has not been able to attract substantial volume of new business. While the GWP has increased, the growth remains modest, and the expansion in captive business has also been limited. Although the combined ratio slightly improved, it remains elevated due to higher legacy claims, particularly from the accident and health segment. Management is aware of this and must adopt a more cautious approach to risk management. Although the Company has strong coverages, stretched claims efficiency continues to strain its financial risk profile. To address these issues, a stringent strategy to enhance the Company's equity base in line with SECP's guidelines will be crucial. This is a pivotal step for the Company's future stability.

Key Rating Drivers

The rating's trajectory depends on the Company's performance metrics. It's crucial for management to prudently manage the insurance asset-liability structure, which includes ensuring timely premium collection and efficient claims settlement. A sustained improvement in financial performance, alongside effective risk mitigation strategies, is essential for maintaining the rating. The Company's risk profile will require diligent and continuous monitoring.

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

Premier Insurance Limited

rating analysis

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Profile
Legal Structure

Premier Insurance Limited (“Premier Insurance” or “the Company”) was incorporated in 1952 as a public listed company, listed on the PSX.


Background

In 1952, Mr. Zahid Hussain - the first Governor of the SBP brought together leading industrialists and founded Premier Insurance with a vision to serve the insurance needs in the young, growing economy of Pakistan.


Operations

Premier Insurance offers general insurance solutions under two categories: Commercial Line and Personal Line. It provides coverage for fire, marine, motor, health, travel risk, personal accident, homeowners, and other specialized segments. The Company's head office is in Karachi and operates through two hubs - South and North - with 12 branches as of CY24.


Ownership
Ownership Structure

Premier Insurance is part of Crescent Group. The sponsoring family owns a major stake of( ~70%) in the Company at of CY24. State Life Insurance Corporation of Pakistan is another prominent shareholder (~11%). The Shareholding of the Company is diverse; held by a large number of family members.


Stability

The Crescent Group's presence provides stability to the Company's ownership structure, and there have been no significant changes in the shareholding. The majority of the shares are closely held, contributing to the stability of the shareholding.


Business Acumen

Among Crescent Group, Bashir family is single majority stakeholder (~45%). The Group has experienced many business cycles. Currently, the Group has interests in various sectors. A strong track record bodes well.


Financial Strength

Crescent Group, holds a significant presence in the textile, sugar, steel and power segments of Pakistan.


Governance
Board Structure

Premier Insurance's Board consists of seven members: one Executive, two Independent Directors (one of whom is a female director), and four Non-Executive Directors. The Board is dominated by the presence of a sponsoring family. The presence of independent directors who provide objective oversight, ensures that governance is aligned with best practices.


Members’ Profile

Mr. Khalid Bashir, an experienced entrepreneur, has been the Chairman of the Board since Apr-15. He also served as the CEO from Feb-13 to Mar-14.


Board Effectiveness

The Board's strong oversight is evident through committee formations. The Board is supported by three committees: Investment, Audit, and HR & Remuneration, ensuring effective monitoring of operations. Minutes are diligently maintained, reflecting transparency.


Transparency

The external auditor’s BDO Ebrahim & Co. gave an unqualified opinion on the financial statements for the year ended CY24. The firm is QCR rated and is on SBPs panel of auditors in the category 'A'.


Management
Organizational Structure

The Company has clear reporting lines: Sales and Operations are separate. Sales is divided into North and South Zones, each overseen by an executive director. Operations include six departments: Underwriting and Risk Management, Claims, Corporate Services, Finance, IT, and HR. 


Management Team

Mr. Nadeem Maqbool, the CEO since Jan-20, and Mr. Sharik Bashir, appointed as Executive Director in Mar-20, oversee operations. The management team comprises qualified professionals supporting the CEO.


Effectiveness

Premier Insurance has established four management committees: Claim Settlement, Underwriting, Risk Management & Compliance, and Reinsurance & Coinsurance. These committees consist of departmental heads and convene monthly to review performance, address operational matters and provide support for ongoing re-organization efforts.


MIS

The management relies on MIS reports to monitor zone-wise contributions and real-time claims position. However, the current MIS reports are basic, focusing on comparing budgeted and actual financial results to identify variances.


Claim Management System

The claim processing process requires approval from the Head Office/Zonal Office, while the reporting of claims is handled by the respective branches attending to the claim.


Investment Management Function

Premier Insurance has established an Investment Committee consisting of Independent Directors, the CEO, and the CFO. The committee is responsible for approving new investment strategies and policy frameworks.


Risk Management framework

The management has put in place a detailed Risk Management Framework to create a strong risk environment. This framework includes guidelines for underwriting and reinsurance and clearly defines the roles and responsibilities of everyone involved, from the Board to the support staff.


Business Risk
Industry Dynamics

Pakistan's general insurance industry has a total size of ~PKR 214bln during CY24 (CY23: ~PKR 188bln), exhibiting a growth of ~14% in Gross Premium Written (GPW). The industry reported an increase of ~70% in underwriting results (CY24: ~PKR 12bln, CY23: ~PKR 7bln). Overall, the investment income experienced an increase of ~34% to ~PKR 25.bln during CY24 (CY23: ~PKR 19.1bln). However, current economic conditions remain imperative for the overall performance of the insurance industry.


Relative Position

Premier Insurance is categorized among small players with a market share of less than ~1% in terms of GPW as of CY24. 


Revenue

During CY24, the GPW of the Company reported a ~4% increase reflecting the strategic revamp towards a better risk profile of the portfolio. During CY24, GPW reported at PKR 731mln (CY23: PKR 700mln). The GPW is ~68% driven from the conventional business. During CY24, Health (~39%) and Fire & Motor (~24% each) stood as the most performing segments. During 1QCY25, the GPW of the Company reported at PKR 162mln reflecting an increase of ~51%(1QCY24: PKR 107mln). Going forward, the GPW is expected to remain stable.


Profitability

The underwriting performance of the Company improved and still was able to generate profits. During CY24, the Company reported an underwriting loss, of PKR 172mln (CY23: loss of PKR 68mln). This was attributed to an increase in the claim expense. The underwriting performance was supplemented by a healthy investment income due to which the Company was able to report net profitability (CY24: PKR 68mln, CY23:  PKR 19mln). During 1QCY25, the underwriting results reported a loss of PKR 27mln (1QCY24: loss of PKR 15mln). During 1QCY25, the Company reported a loss at net level of PKR 14mln (1QCY24: loss of PKR 4mln). Going forward, the Company's profitability is expected to stabilize, supported by continued investment income.


Investment Performance

The Company’s investment book reported at PKR 1,762mln as of CY24, primarily invested in Equity Instruments (~38%) and Subsidiaries/Associates (~34%). During CY24, the investment income of the Company grew by ~162% reporting at PKR 228mln (CY23: PKR 87mln). The Company was able to report a healthy investment income due to overall growth in the equity market. During 1QCY25, the Company reported an investment book remained stable and generated a return of PKR 41mln. The outlook for the Company's investment performance appears stable.


Sustainability

Going forward, the management envisages sustaining the ongoing strategy whilst being prudent in its approach when underwriting the business. They plan to raise capital to meet the new Minimum Capital Requirement (MCR), an initiative that will require significant support from the group to ensure successful compliance and reinforce the company's financial stability. The assigned rating is contingent on the successful implementation of these strategic projections and the Company's ability to meet its MCR target.



Financial Risk
Claim Efficiency

In CY24, the net claims expense reported at PKR 270mln reflecting an incline of ~18% (CY23: PKR 229mln). This impacted the claims outstanding days which increased (CY24: 741 days, CY23: 666 days). During 1QCY25 the net claims expense reported at PKR 76mln (1QCY24: PKR 54mln). During 1QCY25, the claims outstanding days were 563 days. Going forward, the Company's claims expenses are expected to normalize.


Re-Insurance

Premier Insurance's reinsurance partners for CY25  include Saudi Reinsurance Asia-Pacific Pte. Ltd (rated "A-" by AM Best), Korean Reinsurance Company (rated "A-" by AM Best), Labuan Re (rated "A-" by AM Best), Ocean Re (rated "A-" by AM Best), Tunis Re (rated "B+" by AM Best), Oman Re (rated "BB+" by Fitch), and Kenya Re (rated "B" by AM Best).



Cashflows & Coverages

The liquidity coverage for provisions of outstanding claims (including IBNR) improved to 1.5x as of CY24 from 0.8x in CY23. As at 1QCY25, the liquidity coverage stood at 1.5x (1QCY24: 0.8x). Going forward, the Company's liquidity position is expected to remain stable and sufficient to meet its short-term obligations.


Capital Adequacy

The Company's equity base reflected an uptake of ~26% in CY24; owing to increase in the reserves. During CY24, the equity base reported at PKR 1,241mln (CY23: PKR 986mln). During 1QCY25, the equity base reduced to PKR 1,194mln (1QCY24: 996mln). The Company's capital adequacy going forward is dependent on the successful execution of its planned capital raise to meet the new Minimum Capital Requirement.
 
 

Aug-25

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Premier Insurance Limited

financial summary

(PKR mln)

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Mar-25
3M		 Dec-24
12M		 Dec-23
12M		 Dec-22
12M
A. BALANCE SHEET
1. Investments 1,787 1,762 1,423 1,317
2. Insurance Related Assets 801 906 917 1,239
3. Other Assets 480 437 313 271
4. Fixed Assets 205 207 197 206
5. Window Takaful Operations 0 0 0 0
Total Assets 3,272 3,312 2,850 3,034
1. Underwriting Provisions 395 429 378 448
2. Insurance Related Liabilities 1,268 1,269 1,315 1,576
3. Other Liabilities 405 368 168 143
4. Borrowings 11 5 4 8
5. Window Takaful Operations 0 0 0 0
Total Liabilities 2,079 2,071 1,864 2,174
Equity/Fund 1,194 1,241 986 859
B. INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENT
1. Gross Premium Written/Gross Contribution Written 162 731 700 775
2. Net Insurance Premium/Net Takaful Contribution 118 445 467 440
3. Underwriting Expenses (145) (617) (535) (719)
Underwriting Results (27) (172) (68) (280)
4. Investment Income 41 228 87 28
5. Other Income / (Expense) 0 16 8 47
Profit Before Tax 14 73 27 (204)
6. Taxes (1) (5) (8) (7)
Profit After Tax 14 68 19 (211)
PARTICIPANTS' TAKAFUL FUND - PTF
1. Gross Contribution Written 100 234 184 168
2. Net Takaful Contribution 32 104 89 90
3. Net Takaful Claims (42) (115) (85) (113)
4. Direct Expenses Including Re-Takaful Rebate Earned (1) (2) (0) (5)
Surplus Before Investment & Other Income/(Expense) (11) (12) 4 (29)
5. Investment Income (1) (3) (4) (2)
6. Other Income/(Expense) 2 11 11 7
Surplus for the Period (10) (4) 11 (24)
OPERATOR'S TAKAFUL FUND - OTF
1. Wakala Fee Income 23 71 63 61
2. Management, Commission & Other Acquisition Costs (44) (95) (78) (68)
Underwriting Income/(Loss) (22) (24) (15) (6)
3. Investment Income 1 4 4 2
4. Other Income/(Expense) (1) (4) (3) (0)
Profit Before tax (22) (23) (14) (4)
5. Taxes (1) (3) 0 0
Profit After tax (23) (26) (14) (4)
C. RATIO ANALYSIS
1. Profitability
Loss Ratio - Net Insurance & Takaful Claims / Net Insurance Premium or Takaful Contribution 64.5% 60.7% 49.0% 96.2%
Combined Ratio (Loss Ratio + Expense Ratio) 122.9% 138.8% 115.0% 163.8%
2. Investment Performance
Investment Yield 9.3% 14.3% 6.4% 1.9%
3. Liquidity
(Liquid Assets - Borrowings) / Outstanding Claims Including IBNR 1.5 1.5 0.8 0.5
4. Capital Adequacy
Liquid Investments / Equity (Funds) 94.3% 88.8% 82.7% 86.8%

Aug-25

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Premier Insurance Limited

rating scale

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Aug-25

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Premier Insurance Limited

regulatory disclosure

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  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

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