Sindh Insurance Limited

RATING REPORT | Jan-26

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

Sindh Insurance Limited (“Sindh Insurance” or “the Company”) was incorporated as a non-listed public limited Company on 20-Dec-13. The Company operates in the general insurance sector in fire & property, motor, accident & health, and marine & transport segments. Government of Sindh (GoS) owns a 100% stake in the Company through the Ministry of Finance (MoF). The Company has a seven-member Board chaired by Mr. Saleem Zamindar. Mr. M. Faisal Siddiqui heads the Company as the Chief Executive Officer and is supported by an experienced team of professionals.

Rating Rationale

The rating of Sindh Insurance Limited (“Sindh Insurance” or “the Company”) derives its inherent strength from the Government of Sindh as its sponsor. The company’s parentage underpins its market positioning and institutional credibility, along with the recently visible surge in its premium base. The Company was established under the Sindh Insurance of Public Property Act, 2015, enacted by the Sindh Provincial Assembly, and primarily addresses the insurance requirements of assets owned or financed by the Government of Sindh.

Sindh Insurance operates across both conventional and takaful segments, with conventional insurance contributing approximately 14% of gross premium written (GPW), while window takaful operations account for the remaining 86%. The Company continues to benefit from a stable, captive business base, largely sourced from the Government of Sindh–related entities. Of late, the Company consummated a long-term contractual arrangement with the Sindh Workers Welfare Board, providing PKR 700,000 annual cashless accidental hospitalization coverage to industrial workers. While supporting premium stability and business continuity through the "Digital Worker Welfare Card", this scheme intends to benefit 3.4mln industrial workers across Sindh. This is the second major initiative of the Government of Sindh, after the Universal Accident Insurance Scheme.

The Company’s GPW is expected to increase to above PKR 8.0bln through the same scheme as of CY25 (CY24: PKR 1.7bln), reflecting nearly fivefold growth on a year-on-year basis. The bottom line is supplemented by moderate investment income and prudent underwriting practices. The Company witnessed improvement in both the loss ratio (decreased by 58.0%) and the combined ratio (decreased by 41.6%). On the financial risk front, the upgrade in rating finds comfort from an elevated investment book, primarily invested in government securities, including PIBs, T-Bills, and TFCs and a notable improvement in liquidity profile. Capital adequacy provides added comfort for the rating’s upgrade, underpinned by an uptick in overall funds and the liquidity base. The efficiency profile also witnessed an improvement through diminished claims outstanding and premiums outstanding days. Alongside, the Company also elevated its commercial efficiency mainly on the back of a higher rise in insurance-related assets vs the insurance-related liabilities. Additionally, Sindh Insurance intends to establish a life insurance company to expand its presence in the life insurance market. However, timely and successful materialization of the initiative, without impacting the Company's liquidity, remains imperative to rating.

Key Rating Drivers

The rating is dependent on the Company’s ability to sustain its market position with improved profitability. The liquidity position/financial risk profile should remain afloat with growth. Growth in underwriting profits, along with equity enhancement as per SECP's requirement, remains crucial, going forward.

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

METHODOLOGY

RATING ANALYST

  • Muhammad Azmat Shaheen
  • azmat.shaheen@pacra.com
  • +92-42-35869504
  • www.pacra.com

Sindh Insurance Limited


Rating Analysis

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Profile
Legal Structure

Sindh Insurance Limited ("Sindh Insurance" or "the Company") was incorporated under the repealed Companies Ordinance, 1984 (now Companies Act, 2017) as an unlisted public company on 20-Dec-13.


Background

Sindh Insurance was primarily set up to fulfill insurance needs for the Government of Sindh (GoS) as per the Sindh Insurance of Public Property Act, 2015. The Securities and Exchange Commission of Pakistan (SECP) authorized the Company to undertake Takaful Window Operations in Sept-16.


Operations

The Company is engaged in non-life insurance, in both, conventional and takaful businesses, relating to fire, marine, motor, aviation, engineering, transportation, accidental & health segments etc. The Company's registered office is located in Karachi


Ownership
Ownership Structure

All shares of the Company are held by the GoS, directly and through nominee Directors


Stability

Sindh Insurance has a smooth and sound shareholding, patronizing parentage from the GoS, ensuring stability.


Business Acumen

The GoS entered in the financial market by launching Sindh Bank in 2010, Sindh Leasing in 2014, Sindh Modaraba Management Ltd. in 2014 and Sindh Microfinance Bank in 2015. Sindh Insurance reaps synergistic benefits through these associations


Financial Strength

The Company is backed by the GoS, through stable financial institutions managing the financial strength at an adequate level


Governance
Board Structure

The Board (BoD) consists seven members, including four Independent Directors, two Non-Executive Directors, and one Executive Director, and holds considerable gender diversity. One Non-Executive Director represents the GoS, emphasizing collaboration of policy formation.


Members’ Profile

Mr. Saleem Zamindar chairs the BoD with over three decades of experience in investment management, international banking, and corporate governance. Mr. M. Omar Arshid, an Independent Director, holds extensive experience in bsusiness and project management. The profile of other BoD members is satisfactory, with a mix of investement and legal experts.


Board Effectiveness

The BoD is assissted by six sub-committees - Audit, Risk Management, Human Resources, Procurement & Information Technology, Nomination, and Investment - headed by Independent Direcotrs. Only the Investment and Audit Committee meets quarterly with adequately documented minutes.


Transparency

The Company appointed M/s BDO Ebrahim & Co. as the external auditor that issued an unqualified opinion on the financial statements for the year ended Dec-23. For CY24, the Company has appointed M/s Crowe Hussain Chaudury & Co. as the external auditor. The audit is still in process. Both firms are QCR rated and in category 'A' of SBPs panel.


Management
Organizational Structure

The operations of the Company are divided into four departments: Operations, Finance, Human Resource & Admin, and Internal Audit. All departmental heads directly report to the CEO, who then reports to the BoD. However, the head of Internal Audit and HR reports functionally to the respective BoD committee and adminsitratively to the CEO.


Management Team

Mr. M. Faisal Siddiqui heads the Company as the CEO. He holds diversified experience in life and general insurance sectors for more than two decades. Mr. Nadeem Akhter, the CFO, has more than a decade of experience in the insurance industry. They are assisted by a competent team.


Effectiveness

The management's decision making process is assissted by four management level committees - Underwriting, Claim, Reinsurance, and Risk Management & Compliance. Only the Underwriting, Claim, and Reinsurance Committee meetings are convened quarterly with adequately documented minutes.


MIS

To facilitate the management, the Company has deployed a customized Oracle based ERP system, to generate key MIS reports like monthly business summary report, segment-wise and branch wise premium written and collected report and many others.


Claim Management System

The claims process initiates with client intimation via email, letter or phone call, recorded directly in the claims register. For validation, the Company uses external surveyors with the CEOs approval; while the Company is working on digitizing the claim process


Investment Management Function

Investment management is overseen by an Investment Committee - including the Chairman, CEO, CFO, and two BoD members. However, a formal investment policy statement (IPS), approved by BoD, providing fundamental guidelines and execution structure, needs to be developed and deployed.


Risk Management framework

The treaty capacities are optimal with surplus arrangements. The Company has diversified its panel of reinsurers, boding well for its financial Risk.


Business Risk
Industry Dynamics

The Pakistani general insurance industry delivered strong performance in CY24, with Gross Premium Written (GPW) rising by ~18% to PKR 215bln (CY23: PKR 182bln). This growth was complemented by a significant improvement in profitability, as underwriting results nearly doubled to PKR 14bln (CY23: PKR 7bln), while investment income surged by ~95% to PKR 39bln. However, performance moderated during 9MCY25 amid challenging macroeconomic conditions, with GPW growth slowing to a marginal ~0.4% (PKR 171bln vs. PKR 170bln in 9MCY24), underscoring the strong influence of the prevailing economic environment on the industry’s outlook.


Relative Position

The Company is a small player in the conventional insurance segment, holding a market share of less than ~1% in terms of GPW as of 9MCY25, while in Window Takaful operations, it commands a 21.1% market share as of 9MCY25.


Revenue

The Company generated revenue from Conventional (14%) and Window Takaful (86%). During CY24, GPW posted a decline of 1.1% to PKR 1.6bln (CY23: PKR 1.8bln). During 9MCY25, GPW decreased to PKR 1.1bln (9MCY24; PKR 1.3bln). The GPW is expected to elevate above PKR 8.0bln due to long term contract with the Sindh Workers Welfare Board. The segment mix is led by Accidental and Health (86%), Fire & Property damage (2%), Motor (2%), Marine (1%), and Miscellaneous (9%). Going forward the Company is expected to follow the same trajectory


Profitability

The Company reported an underwriting profit of PKR 99mln during CY24 (CY23: PKR 27mln), a significant incresae due to an incresae in Premium earned. At the net level, the Company reported a profit of PKR 525mln (CY23: PKR 621mln), due to the decline the investment income. During 9MCY25, underwriting profit stood at PKR 298mln (9MCY24: PKR 120mln) due to an increase in net insurance premium earned. On the net level, the Company reported profit of PKR 634mln (PKR 451mln), due to improved underwriting results.


Investment Performance

During CY24, the investment income decreased to ~PKR 832mln (CY23: ~PKR 993mln) due to decreased returns from govt. securities. During 9MCY25, the investment portfolio comprises debt securities (91%) and Equity Securities (9%). Investment income was reported at ~PKR 536mln (9MCY24: ~PKR 597mln), a decline due to decreased returns from govt. securities.


Sustainability

The Company aims to enhance topline through captive underwriting and extensive efforts are being undertaken in this regard.



Financial Risk
Claim Efficiency

The Company’s risk absorption capacity is reflected by its liquid assets coverage to outstanding claims. The coverage stood at 4.5x as of CY24 (CY23: 3.7x) and 13.8x in 9MCY25 (9MCY24: 4.4x) due to increase in liquid assets.


Re-Insurance

Sindh Insurance has reinsurance arrangements with Hannover Re (AA- S&P), PRCL (AA by VIS), Labuan Re-Labuan (A- by A.M Best), Kenya Re (B+ by A.M Best), CICA Re (B+ by A.M Best) and Tunis Re (B+ by A.M Best)


Cashflows & Coverages

The investments are deployed entirely in liquid avenues dominated by T-Bills, PIBs, Listed Equity shares, mutual funds and TFCs. As of CY24, the liquid investments were reported at PKR 4.7bln (CY23: PKR 4.6bln), an uptick due to increased investment in govt. securities. The total investments of the Company stand at PKR 12.9bln in 9MCY25 (9MCY24: PKR 5bln), due to increase in Cash and Bank Balances.


Capital Adequacy

The Company is well equipped in capital adequacy as per the requirements of SECP with paid-up capital of PKR 1bln and shareholders’ equity of PKR 4.3bln as of 9MCY25 (9MCY24: ~PKR 3.8bln).
 
 

Jan-26

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Sindh Insurance Limited


Financial Summary

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(PKR mln)


 Sep-25
9M		 Dec-24
12M		 Dec-23
12M		 Dec-22
12M
A. BALANCE SHEET
1. Investments 12,984 4,851 4,737 4,468
2. Insurance Related Assets 3,084 1,234 1,389 993
3. Other Assets 2,105 388 344 90
4. Fixed Assets 55 65 25 25
5. Window Takaful Operations 0 0 0 0
Total Assets 18,228 6,538 6,495 5,576
1. Underwriting Provisions 7,819 922 936 636
2. Insurance Related Liabilities 2,684 1,456 2,115 2,037
3. Other Liabilities 3,890 181 138 68
4. Borrowings 16 18 1 1
5. Window Takaful Operations 0 0 0 0
Total Liabilities 14,409 2,576 3,191 2,743
Equity/Fund 4,680 3,966 3,298 2,816
B. INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENT
1. Gross Premium Written/Gross Contribution Written 8,071 1,663 1,804 1,069
2. Net Insurance Premium/Net Takaful Contribution 557 453 284 214
3. Underwriting Expenses (259) (354) (257) (173)
Underwriting Results 298 99 27 41
4. Investment Income 536 832 993 555
5. Other Income / (Expense) 23 (26) (10) (14)
Profit Before Tax 856 905 1,010 583
6. Taxes (222) (380) (389) (208)
Profit After Tax 634 525 621 375
PARTICIPANTS' TAKAFUL FUND - PTF
1. Gross Contribution Written 6,954 34 19 14
2. Net Takaful Contribution 258 18 7 7
3. Net Takaful Claims (9) (15) (6) (2)
4. Direct Expenses Including Re-Takaful Rebate Earned 0 0 0 1
Surplus Before Investment & Other Income/(Expense) 250 3 2 6
5. Investment Income 2 9 8 5
6. Other Income/(Expense) 31 1 1 0
Surplus for the Period 284 13 11 10
OPERATOR'S TAKAFUL FUND - OTF
1. Wakala Fee Income 47 10 5 5
2. Management, Commission & Other Acquisition Costs (43) (8) (5) (4)
Underwriting Income/(Loss) 4 2 0 1
3. Investment Income 6 12 9 6
4. Other Income/(Expense) 1 (0) (0) (0)
Profit Before tax 10 13 9 7
5. Taxes (2) (4) (3) (2)
Profit After tax 8 9 7 4
C. RATIO ANALYSIS
1. Profitability
Loss Ratio - Net Insurance & Takaful Claims / Net Insurance Premium or Takaful Contribution 20.8% 46.4% 42.2% 31.0%
Combined Ratio (Loss Ratio + Expense Ratio) 46.6% 78.2% 90.6% 80.7%
2. Investment Performance
Investment Yield 8.0% 17.4% 21.6% 13.4%
3. Liquidity
(Liquid Assets - Borrowings) / Outstanding Claims Including IBNR 13.8 4.5 3.7 3.0
4. Capital Adequacy
Liquid Investments / Equity (Funds) 277.0% 121.7% 143.0% 158.1%

Jan-26

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Sindh Insurance Limited


Rating Scale

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Jan-26

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Sindh 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
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    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
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