Pak-Qatar Family Takaful Limited

RATING REPORT | Dec-25

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

Pak Qatar Family Takaful Limited (‘Pak Qatar’ or ‘the Company’), a dedicated family takaful provider, began operations in 2007 as an unlisted public company and operates through a network of more than 160 branches. Lately, the Company went into an IPO process, which is expected to complete within Dec-25. Accordingly, major ownership vests with Pak Qatar Investment Ltd. (~34.78%), Qatar Islamic Insurance Group (~6.22%), Qatar International Islamic Bank (~5.64%), alongside H.E. Sheikh Ali Bin Abdullah (~5.77%). Directors and their related families hold (~ 14.39%). The remaining stake is distributed among various individual investors (~11.54%). ~21.67% stake is floated for public offering. The Board is chaired by H.E. Sheikh Ali Bin Abdullah, a member of the Qatar Royal Family. While Mr. Waqas Ahmad head the Company as the CEO with key strength of an experienced team to support smooth operations.

Rating Rationale

Pak Qatar Family Takaful Limited (“Pak Qatar” or “the Company”) benefits from strong sponsor support, reflected in its robust governance structure and growing market presence in the life insurance sector. The sector is primarily dominated by the public sector (~58% market share), while the private sector accounts for ~42%. Overall, the sector booked a GPW of ~PKR 196bln during 6MCY25 (6MCY24: ~PKR 169bln), reflecting a YoY growth of ~16%. Robust investment income, generated from a portfolio of ~PKR 2,419bln as of 6MCY25, supported the bottom line. The overall outlook remains stable, underpinned by favorable underwriting metrics and continued strength in investment returns. Pak Qatar's market share grew from 4.4%, and stood at ~6.3% as of 9MCY25. The Company has achieved YoY growth (~3% during 9MCY25 and ~77% during CY24) in its GPW, which is largely driven by single-premium business. Though both first-year and renewal persistency remain low, the Company holds substantial ability to manage its claims backed by a strong liquid profile. Pak Qatar's underwriting results recorded a robust increase due to disciplined risk selection and operational efficiency. In CY24, the claims outstanding were led by higher maturities and surrenders, which created pressure on the cash flows. However, as of 9MCY25, the claims outstanding have also stabilized. Investment income, predominantly from gains on investment revaluation and disposals, supports the profitability. Furthermore, the Company maintains ample liquidity, providing confidence in its ability to meet policyholder obligations. Going forward, improvement in the persistency and expanding market share, diversifying beyond bancassurance, and further strengthening financial metrics remain imperative to rating. The Company holds a stable equity base and has applied for listing at PSX, which further enhances compliance, risk mitigation, and reporting guidelines while simultaneously emphasizing the viability of the business model as well as growth visibility. Prudent business management and consistent investment portfolio returns guided by robust risk mitigation underscore safety for policyholder. PACRA upgrades Pak-Qatar Family Takaful's IFS rating, backed by substantial growth in the Company's GPW, along with holding strong liquidity and a better-quality investment book. This strengthens the Company's ability to manage risk and seize new opportunities. The Company is well positioned to comply with SECP’s enhanced equity requirement of PKR 3bln within the stipulated time limit.

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. Maintaining the surplus in the takaful fund and liquidity position is essential. while continuing to focus on improving profitability. 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

Pak-Qatar Family Takaful Limited

rating analysis

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Profile
Legal Structure

Pak-Qatar Family Takaful Limited (“Pak Qatar” or the “Company”) is a public unlisted company incorporated in Mar’06


Background

Pak-Qatar is the first and largest dedicated Family Takaful Company in Pakistan. Pak Qatar is a progressive and technology-driven Shari’ah-compliant company providing innovative Takaful solutions since 2007.


Operations

The Company's business is categorised under three statutory funds: (i) Individual Family plans, sold through Direct Sales Force and Banka-Takaful, including unit-linked plans and Decreasing Term Assurance (DTA) as non-linked plans, (ii) Group Family, and (iii) Group Health.


Ownership
Ownership Structure

Major ownership is vested with Pak Qatar Investment Ltd. (~34.78%), Qatar Islamic Insurance Group (~6.22%), Qatar International Islamic Bank (~5.64%), alongside H.E. Sheikh Ali Bin Abdullah (~5.77%). Directors and their related families hold (~ 14.39%). The remaining stake is distributed among various individual investors (~11.54%). ~21.67% stake is floated for public offering.


Stability

The Company's shareholding structure has remained unchanged, contributing to stability and continuity. Additionally, the sponsoring groups of the Company provide further stability, ensuring a strong foundation for its operations.


Business Acumen

The Company benefits from the strategic backing of Qatar Royal family-linked institutions—Qatar International Islamic Bank (~9.95%) and Qatar Islamic Insurance Company (~10.97%), enhancing the Company's business strength, credibility, and governance.


Financial Strength

Pak-Qatar benefits from a strategic partnership with FWU AG, gaining access to customized Banca products, the Sales & Administration System (SIS) platform, and distribution support. FWU operates locally with a 26-member sales team. Backed by strong sponsors like the Qatar Royal family and Qatar International Islamic Bank, Pak-Qatar’s market position is further reinforced.


Governance
Board Structure

The overall control of the Company lies with a nine-member Board (BoD). Seven members, including one female Director, are Non-Executive Directors, while there is one Independent Director and one Executive Director. The BoD includes representatives from FWU AG and Mr. Said Gul.


Members’ Profile

Since its inception, the Board has been chaired by His Excellency Sheikh Ali Bin Abdullah Al-Thani, who brings strong business acumen and also leads Umm-Haish International and Al-Jazeera Trading. Mr. Farrukh Viqaruddin Junaidy, an Independent Director, brings over 30 years of diverse experience, while other BoD members also possess broad industry expertise.


Board Effectiveness

During CY24, the BoD met seven times and is supported by three committees: Audit, HR & Remuneration, and Investment, all chaired by Non-Executive Directors. The committees meet quarterly, except HR & Remuneration, which convenes twice a year. Meeting minutes are adequately documented.


Financial Transparency

The External Auditors of the Company, Yousaf Adil, Chartered Accountants, issued an unqualified audit opinion pertaining to the annual financial statements for CY24.


Management
Organizational Structure

The Company has a well-defined organizational structure. As an Executive Director, Mr. Muhammad Kamran Saleem acts as a liaison between the Board and key individuals, including the Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Internal Auditor (CIA).


Management Team

Mr. Waqas Ahmed was appointed as CEO by the Board in Jun’24. With over three decades of expertise in the insurance industry, Mr. Waqas previously served as the Company's COO. Mr. M. Ahsan Qureshi, CFO, has diversified experience of more than two decades. He is assisted by a team of qualified and experienced professionals


Effectiveness

The management is assisted by three committees: Underwriting & Re-Takaful, Claims Settlement, and Risk Management & Compliance. These committees are headed by a Non-Executive Director and meet quarterly. Meeting minutes are documented adequately.


Claim Management System

Policyholders' claims on the Waqf are recorded upon customer notification. Three standardized forms—Claimant's Statement, Physician's Statement, and Employer's Statement (for Group Takaful)—must be completed and signed. The Waqf covers claims for Death, Critical Illness, and Disability.


Investment Management Function

The Company has an approved annual investment policy document covering three separate funds: PTF, PIF, and SHF. Investment strategies for unit-linked funds within PIF—such as BT Growth, BT Conservative, Aggressive, Balanced, Conservative, and Secure Wealth Fund—are outlined in the IPS


Risk Management Framework

The Company maintains a comprehensive underwriting manual, regularly updated and distributed to branches. Underwriters are assigned authority limits based on their qualifications and experience, as approved by the CEO or COO.


Business Risk
Industry Dynamics

The life insurance sector is primarily dominated by the public sector, holding ~58% market share as of Jun-25, while the private sector accounts for ~42%. The industry’s Gross Premium Written (GPW) stood at ~PKR 196bln during 6MCY25 (6MCY24: ~PKR 169bln), reflecting a YoY growth of ~16%. On the claims side, Net Claims stood at ~PKR 174bln in 6MCY25 (6MCY24: ~PKR 164bln). The industry's bottom line was supported by robust investment income of ~PKR 132bln during 6MCY25 (6MCY24: ~PKR 182bln), representing a YoY decline of ~27%, which contributed to a decline in Profit After Tax (PAT) of ~PKR 9.9bln in 6MCY25 (6MCY24: ~PKR 14.3bln). The total investment portfolio of the insurance industry stood at ~PKR 2,419bln as of 6MCY25. Going forward, the industry outlook remains stable.


Relative Position

Pak Qatar is Pakistan's largest Family Takaful company, with ~6.6% market share in terms of Gross Premium Written (GPW) as of CY24


Persistency

During CY24, the Company reported declining persistency performance, with the first-year persistency ratio at ~43% (CY23: ~58%) and renewal persistency at ~66% (CY23: ~80%), indicating a challenge faced by the Company to retain policyholders. During 9MCY25, first-year persistency stood at ~105% whereas second-year persistency clocked at ~70%. Going forward, as the volumes are expected to grow, the Company's ability to streamline its persistency will become pertinent.


Revenue

During CY24, the total gross contribution written (GCW) reported at ~PKR 28.8bln (CY23: ~PKR 16.3bln), reflecting a significant growth of ~77%, was significantly supported by an uptick in single premium (CY24: ~PKR 21.9bln, CY23: ~PKR 7.7bln). During 9MCY25, the Company reported GPW of ~PKR 19.7bln. The Company plans to further enhance its portfolio with unique product offerings. This is expected to bring visible improvement in the Company's topline, going forward.


Profitability

During CY24, the Company witnessed a substantial uptick in underwriting profit reported at ~PKR 9.5bln (CY23: ~PKR 3.7bln), an uptick of ~153%, resulting from the trickle-down impact of increased GCW, and a controlled combined ratio of ~73.5% (CY23: 85.5%). Strong investment income supplemented overall profitability with net profit reported at ~PKR 278mln. (CY23: ~PKR 94mln). During 9MCY25, the Company reported an underwriting loss of ~PKR 892mln, whereas the investment income supported the bottomline reported at ~149mln. Profitability is expected to remain limited when compared to the peers as the Company is a dedicated takaful player, and considers the impact of participant profit only. This may remain limited, however, wil incorporate the impact of volumetric growth, going forward.


Investment Performance

During CY24, the investment income witnessed an uptick of ~37% reported at ~PKR 10bln (CY23: ~PKR 7.3bln), attributed to revaluation and disposal gains on Company investments. During 9MCY25, the Company reported investment income of ~PKR 5.9bln primarily from surplus on revaluation. Going forward, effective investment book management is essential to yield a consistent level of investment income. As interest rates are down, the impact of investment income would remain limited on the Company's bottom-line.


Sustainability

The Company aims for sustained business growth and gradual profitability improvement by focusing on small-ticket policies and targeting the micro-level segment of the industry. The Company plans for an IPO. This will improve the Company's corporate structure, along will enabling it to enhance the equity footing as per SECPs MCR requirement of PKR 3bln by 2030.


Financial Risk
Claim Efficiency

As of CY24, outstanding claims increased by ~22%, reported at ~PKR 1.9bln (CY23: ~PKR 1.5bln). Net claims were reported at ~PKR 17.5bln (CY23: ~PKR 10.7bln). 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. As of 9MCY25, the Company reported outstanding  claims at ~PKR 1.5bln, while the net claims stand at ~PKR 19bln. Going forward, as the business volumes grows, the footing of outstsnding claims would remain high; however, the Company's ability to manage the claim would remains robust and consistent.


Re-Insurance

Pak Qatar has strengthened by its Re-Takaful arrangements with Munich Re (AA by S&P), and Hannover Re-Takaful Bahrain (A+ by S&P). This is expected to provide the Company greater cushion against unforeseen risks.  


Cashflows & Coverages

As of CY24, the liquidity of the Company stood at ~1.7x (CY23: ~2.2x) due to an increase in net insurance premiums. Liquid investment to outstanding claims stood at ~31x (CY23: ~25.6x) due to an increase in liquid investments. Liquid investments of the Company were reported at ~PKR 58.1bln (CY23: ~PKR 39.6bln) due to an increase in equity securities. As of 9MCY25, the liquidity of the Company stood at ~2.3x, whereas liquid investments to outstanding claims stood at 42x. The Company reported liquid assets of ~PKR 62bln as of 9MCY25. The Company liquid cover is expected to remain strong.


Capital Adequacy

As of CY24, the equity increased by ~7.8% and was reported at ~PKR 2.8bln (CY23: ~PKR 2.6bln). The increase in equity is due to an increase in unappropriated profit. As of 9MCY24, equity was reported at ~PKR 3.3bln. As the Company for an IPO, its equity footing will grow. Going forward, the Company ability to manage and enhance its capital as per the risk apetitte remains adequate. This bodes well for the Company.
 
 

Dec-25

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Pak-Qatar Family Takaful Limited

financial summary

(PKR mln)

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Sep-24
9M		 Dec-23
12M		 Dec-22
12M		 Dec-21
12M
A. BALANCE SHEET
1. Investments 52,982 40,871 30,266 29,134
2. Insurance Related Assets 1,077 1,110 966 1,199
3. Other Assets 1,372 1,249 1,202 978
4. Fixed Assets 528 560 576 530
Total Assets 55,958 43,789 33,009 31,841
5. Underwriting Provisions 0 0 0 0
6. Insurance Related Liabilities 51,852 40,606 30,000 29,166
7. Other Liabilities 405 386 268 224
8. Borrowings 185 185 224 196
Total Liabilities 52,441 41,177 30,492 29,585
Equity 3,517 2,612 2,517 2,257
B. INCOME STATEMENT
1. Gross Premium Written 18,695 16,297 10,236 9,986
2. Net Insurance Premium 18,315 15,847 9,772 9,555
3. Underwriting Expenses (13,778) (12,103) (8,483) (7,812)
Underwriting Results 4,537 3,744 1,289 1,743
4. Management Expenses (1,900) (1,439) (1,235) (1,076)
5. Investment Income 5,532 7,336 566 211
6. Other Income / (Expense) 1,816 551 513 399
7. Net Change in Reserve for Policyholders' Liabilities (10,375) (10,062) (800) (1,090)
Profit Before Tax (390) 130 332 187
8. Taxes 0 (36) (36) (49)
Profit After Tax (390) 94 297 137
C. RATIO ANALYSIS
1. Profitability
Loss Ratio (Net Insurance Claims / Net Insurance Premium ) 67.8% 67.2% 67.7% 60.6%
Combined Ratio (Loss Ratio + Expense Ratio) 85.6% 85.5% 99.5% 93.0%
2. Investment Performance
Investment Income / Operating Profit 67.7% 76.1% 91.4% 24.0%
3. Liquidity
(Liquid Assets - Borrowings) / Outstanding Claims 30.00 25.62 24.42 26.58
4. Capital Adequacy
Liquid Investments / Equity 14.71 15.17 11.58 12.64

Dec-25

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Pak-Qatar Family Takaful Limited

rating scale

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Dec-25

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Pak-Qatar Family Takaful 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.
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Dec-25

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