Adamjee Life Assurance Company Limited

CREDIT RATING REPORT | Aug-25

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Rating History
Dissemination Date IFS Rating Outlook Action Rating Watch
13-Aug-25 AA (ifs) Stable Upgrade -
26-Jun-25 A++ (ifs) Positive Maintain -
26-Jun-24 A++ (ifs) Positive Maintain -
26-Jun-23 A++ (ifs) Stable Maintain -
29-Jun-22 A++ (ifs) Stable Maintain -
About the Entity

Adamjee Life Assurance Company Ltd. ('Adamjee Life' or 'the Company') is a public listed company and has floated its shares with a trade symbol of “ALIFE” on the PSX. The Company was initially incorporated as a public unlisted company in Aug-08. The Company commenced its business in Apr-09 and became a listed concern in Mar-22. Adamjee Life operates in both conventional and takaful businesses, offering a number of life insurance schemes.
The Company is a subsidiary of Adamjee Insurance, with ~83.5% shareholding. The rest of the shareholding resides between associated companies, modarabas, and the general public. Recently, Mr. Umer Mansha has been appointed as the Board's Chairman effective 30-Apr-25. While Mr. Manzar Mushtaq heads the Company as the CEO. They are assisted by an experienced team of professionals.

Rating Rationale

The life insurance sector in Pakistan remains largely dominated by public-sector insurers, accounting for ~61% of the market as of Dec-24, with private companies covering the remaining ~39%. During CY24, the industry recorded a Gross Premium Written (GPW) of ~PKR 434 bln, marking a healthy ~7% YoY increase from ~PKR 404bln in CY23. Net claims edged up slightly to ~PKR 374bln (from ~PKR 366bln), reflecting sustained claims activity. The sector’s profitability gathered support from a robust investment income of ~PKR 467bln, up ~60% from ~PKR 292bln, driving Profit After Tax (PAT) to ~PKR 23bln, up from ~PKR 20bln in the previous year. The industry's total investment portfolio also expanded, reaching ~PKR 2,518bln from ~PKR 2,027bln YoY. The overall outlook remains stable, underpinned by favorable underwriting metrics and continued strength in investment returns.
Adamjee Life Assurance Company ('Adamjee Life' or 'the Company') has secured ~7.1% of the market share in CY24, emerging as a mid-sized player. This success is the direct result of a strategic bancassurance partnership, since the early years of the Company's operation, with MCB Bank, which is one of the largest private sector bank in the country, and steady progress towards maturity of the Company's direct sales force distribution model. The Company's bancassurance business with MCB Bank & other banks generated ~55% of the new regular premium business for the Company, and has significantly improved the Company’s distribution efficiency and reach. The increase in renewal premiums also indicates stronger client retention and persistency. As a result, GPW grew by ~33% largely driven by single premium products, which now account for ~55% of GPW. Disciplined underwriting practices have led to a healthy underwriting surplus, and this, combined with strong investment income, led to net profit after tax of ~PKR 1.55 bln, a significant jump from ~PKR 908 mln in CY23. Consequently, Earnings per share (EPS) climbed sharply to PKR 6.22 per share, up from PKR 3.63 per share. With active oversight from the Nishat Group via Board representation, the Company's governance and strategic direction remain strong. Looking forward, the Company is well-positioned for continued profitability. Prudent management of the investment portfolio and the steady, recurring business from its bancassurance channel has added the requisite cushion. PACRA upgrades Adamjee Life's IFS rating, backed by solid liquidity and a high-quality investment book that strengthens the Company's ability to manage risk and seize new opportunities. This, along with the Company's ability to enhance its equity base as per SECP's regulation of PKR 3bln, remains pivotal.

Key Rating Drivers

The rating primarily depends on the Company's enhanced competitive positioning. Alongside this, sustained improvement in core and operational profitability is essential to maintaining the rating. Additionally, the Company's solvency profile, as reflected by its reserves, must remain robust at all times. Prudence in risk management, particularly when expanding through the agency model, remains a key consideration.

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

METHODOLOGY

RATING ANALYST

  • Faiqa Qamar
  • faiqa.qamar@pacra.com
  • +92-42-35869504
  • www.pacra.com

Adamjee Life Assurance Company Limited

rating analysis

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Profile
Legal Structure

Adamjee Life Assurance Company Limited ("Adamjee Life" or “ the Company”) was incorporated as a public unlisted company on 04-Aug-08. The Company got listed on PSX on 04-Mar-22


Background

Adamjee Life is a part of Nishat Group that holds expertise in various sectors in the local and international markets. Adamjee Insurance Company Ltd. (Adamjee Insurance), a Group company, and Holland Insurance Pty. Ltd., operating in Australia and New Zealand, formed Adamjee Life. The Company became operational in Apr-09. In May-16, SECP authorized the Company to operate window takaful in respect to family takaful products. However, takaful operations began in Jul-16.


Operations

The Company operates in both conventional and takaful businesses, offering a number of life insurance schemes, including Individual Life, Group Life, Credit Life, Saving /Investment solutions, and Health Covers. With the adoption of the agency model, the Company has expanded its branch network to 68 branches across Pakistan.


Ownership
Ownership Structure

The major stake (~83.5%) of the Company is held by Adamjee Insurance, while ~1.45% is held by associated companies. Modaraba holds ~2.06% stake. The remaining stake is held by the general public (~2.53%) and others (~10.46%).


Stability

Ownership of the Company seems to remain stable as the majority of the stake is held by Adamjee Insurance.


Business Acumen

The Sponsors possess robust expertise and a diversified business portfolio offering substantial support to the Company.


Financial Strength

The Company gathers its financial strengths from the Group, if needs be.


Governance
Board Structure

The overall control of the Company lies with an eight-member Board (BoD). Five members, including one female Director, are Non-Executive Directors, while there are two Independent Directors and one Executive Director. Two of the BoD members represent the Mansha family.


Members’ Profile

Mr. Umer Mansha has been appointed as the BoD chairman from 30-Apr-25. He has diversified experience of more than two decades. Mr. Ismail Arif Rafi,an Independent Director, has a diversified experience of more than two decades. All other BoD members have diversified experience.


Board Effectiveness

During CY24, the Board met five times. It gathers assistance from three committees: Investment, Audit, and Ethics, HR, Remuneration & Nominations, which are headed by Non-Executive Directors. Ethics & HR meeting twice a year, while others meet on a quarterly basis. Meeting minutes are documented adequately.


Financial Transparency

External Auditors, KPMG Taseer Hadi & Co. Chartered Accountants, have issued an unqualified opinion on the financial statements as of CY24. For CY25, the Company has appointed Riaz Ahmad & Company Chartered Accountants. Both firms have an adequate quality control rating and are on SBPs panel of auditors in catergory 'A'.


Management
Organizational Structure

The Company operates through Sales and Marketing, HR, Window Takaful, Legal Services, Investment, Risk Management, IT, Compliance & Claims, Actuarial Services, and Finance. All the Heads report to the CEO, who then reports to the BoD. However, the Head of Internal Audit, Investment, and HR functionally reports to the respective BoD committee and administratively to the CEO.


Management Team

Mr. Manzar Mushtaq, the CEO, holds over two decades of diversified leadership experience. Mr. Jalal Meghani, the CFO, holds an overall experience of over 3 decades. They are assisted by a team of professionals.


Effectiveness

The management is assisted by three committees: Underwriting, Re-insurance & Co-insurance, Claims Settlement, and Risk Management & Compliance. All of these are headed by Non-Executive Directors and meet on a quarterly basis. Minutes are adequately maintained.


Claim Management System

The Company has an automated claims management system. The manual identifies the claims requirements under different policies. The items are clearly outlined, and in case of irregularities, alternate requirements and powers of individuals have been stated. The manual covers all eventualities and processes to be followed to tackle them.


Investment Management Function

The Company has outsourced its investment management function to MCB funds and maintains a comprehensive, well-documented IPS, documenting clearly defined investment rules, trading, and broker selection. The executive investment committee makes investment decisions as per IPS.


Risk Management Framework

The risk management manual has been developed by the Company. It contains guidelines for handling the general reassurance treaties, along with policies and procedures to handle the facultative reassurance, allocation, and validation, in addition to management and control.


Business Risk
Industry Dynamics

The life insurance sector is primarily dominated by the public sector, holding ~61% market share as of CY24, while the private sector accounts for ~39%. The industry’s GPW stood at ~PKR 434bln during CY24 (CY23: ~PKR 404bln), reflecting a YoY growth of ~7%. On the claims side, net claims stood at ~PKR 374bln in CY24 (CY23: ~PKR 366bln), mainly trickling in from policy maturity, and lately, a considerable uptick is observed in policy surrenders. The industry's bottom line was supported by robust investment income of ~PKR 467bln during CY24 (CY23: ~PKR 292bln), representing a YoY increase of ~60%, which contributed to improved Profit After Tax (PAT) of ~PKR 23bln in CY24 (CY23: ~PKR 20bln). The total investment portfolio of the insurance industry stood at ~PKR 2,518bln as of CY24 (CY23: ~PKR 2,027bln). Going forward, the overall outlook for the industry remains stable


Relative Position

The Company is classified as a mid-sized player with a market share of ~7.1% during CY24.


Persistency

During CY24, the first year, persistency clocked at ~74% (CY23: ~77%), whereas the renewal persistency clocked at ~77% (CY23: ~81%), indicating a slight challenge for the Company to retain the policyholders. During 3MCY25, the Company reported an improvement in first-year persistency reported at ~90% (3MCY24: ~83%), whereas second-year persistency was reported at ~76% (3MCY24: ~74%). An increase in persistency indicates the Company's ability to retain policyholders.


Revenue

The Company generates revenue from the sale of both conventional and takaful plans. The Company recorded GPW of ~PKR 30.9bln during CY24 (CY23: ~PKR 23.3bln), an uptick of ~33% mainly from single premium. During 3MCY25, the Company reported GPW of ~PKR 9.5bln (3MCY24: ~PKR 6.5bln), an uptick of ~46%, mainly from an increase in single premium. Going forward, revenue is expected to follow the same trajectory.


Profitability

During CY24, the Company reported underwriting profit of ~PKR 2.5bln (CY23: ~PKR 515mln) due to controlled underwriting expenses. The Company reported net profit of ~PKR 1.5bln (CY23: ~PKR 908mln) supported by increased investment income. During 3MCY25, the Company reported underwriting profit of ~PKR 1bln (3MCY24: ~PKR 509mln-loss), due to a decrease in claims expense. However, at the net level, the Company witnessed a decrease in profit by ~60%, reported at ~PKR 123mln (3MCY24: ~PKR 303mln), due to a decrease in investment income. Going forward, sustained investment income will continue to support the bottom line.


Investment Performance

During CY24, the Company reported investment income of ~PKR 25.9bln (CY23: ~PKR 17bln) primarily from return on government securities, followed by gain on sale of investments. During 3MCY25, the Company reported investment income of ~PKR ~2.7bln (3MCY24: ~PKR 3.9bln), a decline of ~31% due to decreased returns on government securities. Going forward, effective investment book management is essential to yield consistent investment income


Sustainability

The Company envisages an expansion in branch networks on the back of the agency model. The Company will continue its expansion plan for its Direct Distribution Sales force. The significant uptick in business performance, along with a sustained financial risk profile, led to a rating upgrade.


Financial Risk
Claim Efficiency

As of CY24, the Company reported outstanding claims of ~PKR 4.8bln (CY23: ~PKR 3.4bln). As of 3MCY25, the Company reported outstanding claims of ~PKR 5.1bln (3MCY24: ~PKR 3.9bln). This increase is mainly due to claims from the maturity of previously sold policies and the low purchasing power of policyholders, leading to surrender claims.


Re-Insurance

The Company has multiple re-insurance arrangements, including Hannover RE (rated "AA-" by S&P), Munich RE (rated "A+" by A.M. Best), Swiss RE (rated "A+" by A.M. Best), and HCC Tokio Marine (rated "A++" by A.M. Best).


Cashflows & Coverages

As of CY24, the liquidity of the Company stood at ~3.1x (CY23: ~3.2x). Liquid investment to outstanding claims stood at ~22.1x (CY23: ~23.7x) due to an increase in outstanding claims. Liquid investments of the Company were reported at ~PKR 108bln (CY23: ~PKR 80bln) due to an increase in government securities. As of 3MCY25, the Company reported liquidity cover of ~2.9x (3MCY24: ~3.2x). Liquid investments to outstanding claims stood at ~21.4x (3MCY25: ~20.8x) due to an increase in liquid investments reported at ~PKR 110bln (3MCY24: ~PKR 82.7bln), due to an increase in government securities.


Capital Adequacy

As of CY24, the equity increased by ~23% and was reported at ~PKR 5.4bln (CY23: PKR 4.4bln). The increase in equity is due to an increase in both reserves and unappropriated profit. As of 3MCY25, the Company reported shareholders' equity of ~PKR 5.3bln (3MCY24: ~PKR 4.7bln), due to an increase in reserves. 
 
 

Aug-25

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Adamjee Life Assurance Company Limited

financial summary

(PKR mln)

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Mar-25
3M		 Dec-24
12M		 Dec-23
12M		 Dec-22
12M
Management Audited Audited Audited
A. BALANCE SHEET
1. Investments 114,895 113,152 83,600 67,031
2. Insurance Related Assets 108 61 94 62
3. Other Assets 3,000 2,291 2,077 1,706
4. Fixed Assets 889 924 319 367
Total Assets 118,892 116,428 86,090 69,166
5. Underwriting Provisions 0 0 0 0
6. Insurance Related Liabilities 110,896 108,481 80,257 64,193
7. Other Liabilities 2,048 1,853 1,311 1,065
8. Borrowings 640 661 103 160
Total Liabilities 113,583 110,996 81,672 65,418
Equity 5,309 5,433 4,418 3,748
B. INCOME STATEMENT
1. Gross Premium Written 9,467 30,969 23,351 20,949
2. Net Insurance Premium 9,287 30,285 22,686 20,315
3. Underwriting Expenses (8,268) (27,784) (22,171) (17,076)
4. Management Expenses (341) (1,347) (1,117) (1,201)
5. Investment Income 2,694 25,963 17,057 3,723
6. Other Income / (Expense) 94 712 984 (14)
7. Net Change in Reserve for Policyholders' Liabilities (3,265) (25,293) (15,897) (4,937)
Profit Before Tax 201 2,536 1,541 810
8. Taxes (78) (982) (633) (313)
Profit After Tax 123 1,554 908 498
C. RATIO ANALYSIS
1. Profitability
Loss Ratio (Net Insurance Claims / Net Insurance Premium ) 79.5% 80.4% 83.7% 70.1%
Combined Ratio (Loss Ratio + Expense Ratio) 92.7% 96.2% 102.7% 90.0%
2. Investment Performance
Investment Income / Operating Profit 79.9% 95.7% 103.7% 64.6%
3. Liquidity
(Liquid Assets - Borrowings) / Outstanding Claims 21.41 22.11 23.76 20.81
4. Capital Adequacy
Liquid Investments / Equity 21.43 20.62 18.68 17.63

Aug-25

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Adamjee Life Assurance Company Limited

rating scale

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Aug-25

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Adamjee Life Assurance Company 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))
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  4. Independence & Conflict of Interest
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    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))
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  5. Monitoring and Review
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  6. Probability of Default
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