Postal Life Insurance Company Limited ('Postal Life' or 'the Company') was incorporated in 2020 as a public limited company under the repealed Companies Act, 2017.

Postal Life was a part of the government department that rendered insurance-related services through the General Post Office (GPO), serving postal mail runners since 1884. Later, the services were extended to other govt. employees. In 1947, the GPO started offering its services to the general public. In Mar-20, a separate legal entity was formed and named Postal Life Insurance Company Limited.

Postal Life provides a comprehensive range of individual life, group life, and savings solutions through an extensive nationwide network of General Post Offices (GPOs) and field offices across Pakistan. The Company manages two distinct funds: the Post Office Business Fund (POBF) for legacy liabilities and the Pakistan Business Fund (PBF) for new business obligations. The Company's principal office is located in Islamabad.

The Government of Pakistan (GoP), through the Ministry of Communications holds complete stake in the Company.

Postal Life remains a wholly Government-owned enterprise, with its ownership structure expected to remain unchanged over the foreseeable future, providing continuity in strategic oversight and support.

Through Ministry of Communications, the GoP appoints relevant individuals with requisite experience to run the operations of the Company. Thus, the acumen remain adequate.

As a wholly Government-owned entity, Postal Life benefits from a strong sovereign affiliation, which enhances stakeholder confidence and provides financial flexibility. If required, the Company is expected to have access to timely financial and strategic support from the GoP, reinforcing its ability to meet its obligations and sustain its operations.

Postal Life's Board composition is approved by the Federal Cabinet. The Board comprises of three Independent Directors and two Ex-Officio Directors. However, the positions of both the Chairperson and the Chief Executive Officer remain vacant as of the date of this report — a governance void that persists across successive rating periods and materially undermines institutional leadership and strategic direction.

The Chairman will be appointed by the Federal Cabinet. The four nominated members of the BoD are experienced professionals. Mr. Ali Sher Mahsud – Ex-Officio Director serves as Secretary, Ministry of Communications and has been associated with the Company since December 2023. With over two decades of experience in public administration and policy formulation, he brings extensive expertise in strategic governance, institutional oversight, and public sector management to the Board. Ms. Saima Saeed – Ex-Officio Director serves as Additional Secretary, Finance Division and joined the Board in July 2025. He is possessing more than 20 years of experience in public finance, fiscal management, and economic policymaking. She contributes valuable financial oversight and governance expertise to the Company's strategic decision-making. Ms. Farzin Khan – Independent Director holds a Master's degree in Financial Management and an MBA. She is a seasoned professional in programme management and donor coordination, currently associated with the United Nations Office on Drugs and Crime (UNODC), Country Office Pakistan. With over 15 years of experience, she also serves as an Independent Director on the boards of several organizations, bringing expertise in governance, strategy, financial management, and institutional development. Mr. Naeem Akhtar Sheikh – Independent Director is a Chartered Accountant and Senior Partner at UHY Hassan Naeem & Co. He is having more than 30 years of professional experience in audit, assurance, taxation, corporate advisory, and financial governance, he provides strong financial stewardship and risk management oversight to the Board. He also serves as a Member of the Board of Governance at the University of Health Sciences. Mr. Muhammad Jamil Anwar Goheer – Independent Director holds a Master's degree in Computer Science and is the Co-Founder, Director, and Chief Executive Officer of Kualitatem Inc., in addition to being the Co-Founder of Virtual Force X+. With over 20 years of experience in information technology, digital transformation, and entrepreneurship, he contributes significant expertise in technology-driven innovation, corporate strategy, and digital governance. He also serves on the boards of the Asia Pacific ICT Alliance (APICTA) and PASHA, reflecting his active role in advancing Pakistan's technology sector.

To ensure effective governance, the BoD constitutes four committees: i) Ethics, Human Resource, Remuneration and Nomination Committee, ii) Claim Settelement Committee iii) Investment Committee and iv) Audit Committee. The committees assist the Board in overseeing key operational, risk management, governance, investment, and human resource matters.

The external auditor's, M/S BDO Ebrahim & Co., provided an qualified opinion with emphasis of matter on financial statements for CY23. Whereas the audits of  CY24 and CY25 are still in process. The timely finalization of these audits is expected to reinforce the Company's financial reporting discipline and governance practices.

The Company operates through Finance, Operations, Compliance, and Internal Audit functions. Each department is managed by a dedicated Head, reporting to the Executive Committee including Company Secretary and the Head of Finance. The Executive Committee, responsible for overseeing expenses, has recently been restructured and now comprises the CIO, CFO, and Company Secretary. However, with the Company Secretary position now also vacant, the governance framework has become further weakened, increasing dependence on a limited number of individuals for critical decision-making. Other functions like Actuarial & Strategic Planning, IT, Sales & Marketing, and Investments are managed by Finance and Operations Heads.

Previously, M. Salman was acting CEO of Postal Life. His tenure ended in Oct 2024. Currently, the Company is managed through an Executive Committee as the Company's CEO is yet to be appointed. M. Rizwan Saleem – Acting Chief Financial Officer serves as acting Chief Financial Officer and Senior Manager Finance & Accounts. With over 18 years of professional experience, including five years with Postal Life, he oversees the Company's financial management, accounting, budgeting, and reporting functions, contributing to prudent financial oversight and regulatory compliance. Mr. Kamran Gul – Acting Chief Investment Officer performs multiple key responsibilities as Acting Chief Investment Officer, Company Secretary, and Manager Accounts. Having over 20 years of professional experience, including five years with the Company, he plays a pivotal role in investment management, corporate governance, statutory compliance, and financial administration. Mr. Khayam Nasim – Acting Chief Technology Officer leads the Company's application development function. With more than 10 years of experience in information technology, including five years with Postal Life, he is responsible for driving digital transformation initiatives, technology infrastructure, and the development of technology-enabled business solutions.

The management is planned to be assisted through Underwriting & Reinsurance, Claim Settlement, and Risk Management & a Compliance Committee. Currently, discussions related all the relevant areas are convened by the Executive Committee.

The claims settlement process is initiated by the Company's field offices, where the relevant documentation is compiled and the claim file is prepared before being forwarded to the Claims Department for review and processing. Claims of higher amounts require Executive Committee's approval from relevant authoritative person. Upon obtaining the requisite approvals, a consolidated payment schedule is prepared and forwarded to the Finance Department, which is responsible for processing and disbursing claim payments in a timely manner.

The BoD has approved an Investment Policy specifying guidelines for investment in each assets class of each fund. The Investment Committee monitors performance according to those guidelines.

The Risk Management & Compliance Committee evaluates, manages and monitors organizational risk at the management level. Ongoing efforts are being made to strengthen the implementation of the Committee's framework.

The life insurance sector in Pakistan recorded Gross Premium Written (GPW) of PKR ~496.9bn in CY25, up ~13.8% YoY, driven by strong growth across both public and private segments. The public segment remained dominant with a ~58.6% share (PKR ~291.2bn, +8.8% YoY), while the private segment outpaced growth at ~21.7% YoY to PKR ~205.7bn, increasing its share to ~41.4%. Despite sustained expansion, the sector remains underpenetrated versus regional peers, though growth is supported by improving macroeconomic conditions, rising bancassurance penetration, and regulatory reforms including IFRS 17 and risk-based capital framework enhancements. The premium mix continued to shift toward quality, with individual regular premiums rising to ~52.8% (CY24: ~47.7%) amid lower inflation and improved purchasing power, while group business moderated to ~38.1% and single premiums declined to ~9.1%. On the claims side, gross claims increased ~7.3% to PKR ~412.7bn, with a decline in surrender claims to ~40.5% reflecting improved retention, while maturity and death claims increased with a growing in-force portfolio. The sector’s investment portfolio remains predominantly concentrated in government securities, mainly Treasury Bills, Pakistan Investment Bonds (PIBs), and Sukuks. This allocation reflects a regulatory-driven and risk-averse investment strategy focused on capital preservation, liquidity management, and stable long-term returns. Sector profitability remained broadly stable at PKR ~23.7bn (-0.8% YoY), as strong premium growth was offset by a ~13.5% decline in investment income due to monetary easing and a sharp reduction in policy rates.  (Source: PACRA Sector Study)

Postal Life has a market share of ~0.4% in terms of GPW at the end of CY25 (CY24: 0.6%)

Policy persistency remains a key performance indicator for life insurers, as it reflects customer retention, the sustainability of premium inflows, and the long-term quality of the insurance portfolio. The Company's first-year persistency ratio improved significantly to ~86% in CY25 (CY24: 49%), indicating stronger policyholder retention and improved stability of premium collections during the initial policy year. Conversely, the subsequent-year persistency ratio declined to approximately 78% in CY25 (CY24: 111%). While the reduction suggests comparatively weaker renewal performance beyond the first policy year, the ratio remains at a satisfactory level and indicates that a significant proportion of policyholders continue to maintain their coverage. Going forward, sustained focus on customer engagement, after-sales service, and policyholder retention initiatives will be important to preserve persistency levels and support stable premium growth.

During CY25, the Company's premium revenue declined by approximately 20% to PKR 1,976mln (CY24: PKR 2,470mln). The reduction reflects slower business generation and weaker premium inflows during the year, which also contributed to a decline in the Company's market share within the life insurance industry. The contraction in premium revenue was broad-based across all business segments. First-year premiums decreased to PKR 52mln (CY24: PKR 58mln), while second-year premiums increased to PKR 50mln (CY24: PKR 29mln). However, subsequent-year renewal premiums—the largest contributor to the Company's premium income—declined to PKR 1,874mln from PKR 2,384mln in CY24. The decline in the renewal portfolio is of particular concern, as it may indicate increasing policyholder attrition and weaker retention of the existing customer base.

The Company's underwriting performance remained under pressure during CY25, with underwriting losses widening to ~PKR 6,299mln in CY25 (CY24: ~PKR 3,036mln). These consistent underwriting losses are attributed to weak GPW performance and high claims incurred. The Company is reporting a net profit of approximately PKR 738mln in CY25 (CY24: PKR 614mln). Overall profitability continued to be supported by investment income and grants received from the Government of Pakistan (GoP), highlighting the Company's reliance on non-underwriting income to offset operational losses. Sustained improvement in underwriting discipline, premium growth, and claims management will be important to strengthen the quality and sustainability of earnings over the medium term.

 As of CY25, Postal life holds an investment book of PKR 7,176mln (CY24: ~PKR 6,567mln). The investment book remained predominantly concentrated in Government Securities, which constituted approximately 89% of the total portfolio. This allocation underscores the Company's conservative investment strategy, emphasizing capital preservation, liquidity, and credit quality while limiting exposure to market risk. Whereas, investment income of the Company stood at ~PKR 795mln in CY25 (CY24: ~PKR 988mln).

A significant qualitative concern is the absence of Board-approved business plan due to vacant positions of Chairman and CEO.. Without a structured strategic framework, the Company lacks a documented roadmap for market expansion, product development, distribution enhancement, digital transformation, and portfolio diversification. This gap creates material uncertainty regarding the Company's ability to reverse the ongoing premium contraction and reduce structural dependence on GoP transfers. Without formal Board endorsement and executive leadership, these aspirations lack institutional backing and implementation accountability.

The Company's claims portfolio continued to be predominantly driven by policy maturity claims during CY25. Underwriting performance remained under pressure, with underwriting losses widening to approximately PKR 6,299mln, compared to PKR 3,036mln in CY24. The deterioration was primarily attributable to the substantial increase in maturity claims, which outweighed the improvement observed in other claim categories. During CY25, the Company's claims profile exhibited mixed trends across the major claim categories. Death claims declined significantly to approximately PKR 127mln (CY24: PKR 231mln), reflecting a lower mortality claims burden during the year. Conversely, maturity claims—the largest component of total claims—increased substantially to PKR 7,050mln (CY24: PKR 3,515mln) primarily driven by a higher volume of policies reaching contractual maturity. Meanwhile, surrender claims decreased to  PKR 791mln (CY24: PKR 1,375mln), indicating lower policy lapse and surrender activity. Overall, while the reduction in death and surrender claims provided some relief to the claims portfolio, the sharp increase in maturity claims remained the principal driver of the Company's overall claims outgo. Going forward, effective management of policy maturities, coupled with sustained policy retention and prudent underwriting practices, will remain important in supporting the Company's underwriting performance and financial stability

Postal Life has reinsurance treaties with "Swiss Re" Rated “AA-(Very Strong)” by S&P, “Aa3(Excellent)” by Moody’s & “A+(Superior)” by A.M. Best. The Company's reinsurance program is designed to cap large individual risk exposures while retaining a significant portion of premium income. Net reinsurance premiums ceded amounted to~PKR 4mln in CY25 (CY24: ~PKR 0.8mln).

During CY25, Postal Life's liquidity position remained adequate, with the investment portfolio predominantly anchored in liquid government securities. Liquid investments — comprising government securities and cash and bank balances — stood at ~PKR 7,176mln (CY24: ~PKR 6,567mln). — comprising government securities and cash and bank balances — stood at ~PKR 99.2bln (CY24: ~PKR 85.8bln). The Company's liquid investments to outstanding claims coverage ratio improved marginally to approximately 44.14x at end of CY25, compared to 43.03x at end of CY24. The robust coverage ratio reflects the Company's strong liquidity position and its substantial stock of liquid investments relative to outstanding claims obligations. This provides a comfortable liquidity buffer, enhancing the Company's capacity to meet policyholder claims in a timely manner while supporting overall financial resilience. 

At the end of CY25, Postal Life has a total equity base of ~PKR 6,765mln (CY23: ~PKR 6,391mln), owing to an increase in reserves coupled with unappropriated profits.