Shaheen Insurance Company Limited ('Shaheen Insurance' or 'the Company') is incorporated as a public listed company and has been listed on the Pakistan Stock Exchange (PSX) since Mar-95.

Shaheen Insurance operates as a conventional non-life insurer alongside Window Takaful Operations. Its core underwriting activities span fire, marine, aviation, motor, and accident & health, while engineering, travel, personal lines, bond, and crop insurance are grouped under miscellaneous business. The Company operates through a network of thirteen branches across Pakistan.

Shaheen Insurance operates as a conventional non-life insurer alongside Window Takaful Operations. Its core underwriting activities span fire, marine, aviation, motor, and accident & health, while engineering, travel, personal lines, bond, and crop insurance are grouped under miscellaneous business. The Company operates through a network of thirteen branches across Pakistan.

Shaheen Foundation PAF remains the majority shareholder with 69.3% of the Company's share capital as at Dec-25, followed by The Hollard Company Limited (CDC) at 10.1%, General Public at 10.3%, Joint Stock Companies at 6.3%, and Central Non-Public Fund PAF at 4.0%, with the balance held by individual shareholders.

The ownership structure remains anchored by Shaheen Foundation PAF, whose holding increased marginally to 69.3% at Dec-25 from 69.3% at Dec-24, maintaining clear majority control. The continued dominant ownership provides stability to the Company's governance and strategic direction.

Shaheen Foundation PAF, established in 1977, undertakes welfare activities for serving and retired PAF personnel and martyrs through income- and employment-generating ventures. The sponsor has diversified interests across aviation, textile, trade, real estate, and insurance, providing broad institutional experience and an established operating base.

The Company's financial strength is supported by its association with Shaheen Foundation PAF, which provides an important institutional anchor and a demonstrated source of sponsor support.

The Board comprises seven members, with representation from Shaheen Foundation PAF and two Independent Directors. The Board combines senior retired PAF personnel with members having business and professional experience, providing a mix of institutional and commercial perspectives.

The Board is chaired by Air Vice Marshal (Retd.) Junaid Ahmed Siddiqui, who brings around 40 years of service experience and has been associated with the Company for one year. Other members include senior retired PAF officers with extensive service backgrounds, while the two Independent Directors, Ms. Farrah Azeem Khan and Mr. Jahangir Shah, bring 24 and 40 years of professional experience, respectively. The Board's composition thus combines sponsor representation, institutional knowledge, and independent oversight.

The Board met four times during 2025, with participation remaining substantial. Board oversight is supported through dedicated Investment, Audit, and Human Resource/Remuneration committees, with committee participation broadly maintained during the year. Minutes of Board and committee meetings are adequately maintained.

The Company's external auditors, M/s BDO Ebrahim & Co., Chartered Accountants, issued an unqualified audit opinion on the CY25 financial statements. The firm is QCR-rated and falls within category "A" of the relevant SBP panel.

The Company's key functions are organized across underwriting and reinsurance, claims, sales and marketing, finance and accounts, IT, human resources and administration, with functional heads reporting to the CEO. The Head of Internal Audit and relevant control functions maintain functional reporting to the respective Board committees, supporting oversight and independence.

The Company is supported by an experienced management team with substantial sector and institutional experience. Mr. Syed Rizwan Akhtar continues to serve as CEO and has around 32 years of overall experience, including four years with the Company and in his current position. Mr. Syed Kamran Ali serves as CFO, bringing around 25 years of experience and extensive association with the Company. Key operating functions are headed by experienced professionals, including the Heads of Underwriting & Reinsurance, Window Takaful Operations, Health, Claims and Grievance, as well as the Country Head of Business and Chief Marketing Officer.

Management is supported by dedicated committees covering underwriting, reinsurance and co-insurance, claims settlement, and risk management and compliance. The structure provides functional oversight across the Company's core insurance and control activities.

The Company's information system comprises a centralized database with a web-based front-end for operational development and reporting. User-level authority controls are embedded within the system, while IT infrastructure supports Head Office and remote operations and facilitates timely access to operational information.

Claims processing remains centralized, with branches providing claim intimation to Head Office for processing and settlement. The centralized arrangement provides management with oversight of claims activity and supports consistency in claims handling across the branch network.

The Company operates under a Board-approved Investment Policy Statement (IPS), which establishes investment guidelines, execution parameters, and benchmarks for different asset classes. Investment performance is reviewed by the Investment Committee on a quarterly basis.

The Company has established underwriting guidelines through a detailed underwriting manual implemented across its branches. Specialized risks are separately defined by class and referred to Head Office for approval, providing centralized oversight over risks requiring enhanced underwriting assessment.

Pakistan's General Insurance Sector continues to exhibit steady premium growth, underpinned by improving economic activity, higher vehicle sales, expanding commercial exposures, and increasing adoption of Shariah compliant insurance solutions. During CY25, the Sector's Gross Premium Written (GPW) grew by ~11.5% YoY to PKR ~245.2bln, while Net Premium Written increased by ~17.5%, reflecting stronger business retention. However, underwriting profitability remained under pressure as elevated claims and higher acquisition and operating expenses pushed the Sector's combined ratio marginally above 100%, increasing reliance on investment income as the primary earnings stabilizer. Regulatory initiatives, including the phased implementation of IFRS 17, the Risk Based Capital (RBC) framework, and mandatory Motor Third-Party Liability insurance, are expected to enhance market depth, transparency, and insurance penetration over the medium term. Meanwhile, continued expansion of digital distribution channels and the growing General Takaful segment are likely to support sustainable premium growth despite a still-low non-life insurance penetration of approximately ~0.2% of GDP.

Shaheen Insurance remains a small-sized player within Pakistan's general insurance industry, with a market share of around 1%. The Company's business profile is supported by diversification across multiple insurance lines and a growing contribution from Window Takaful Operations.

Shaheen Insurance operates through conventional insurance and Window Takaful Operations. On a consolidated basis, including conventional and Takaful operations, GPW/Gross Contribution Written increased substantially to PKR 1,578mln in CY25 from PKR 899mln in CY24. Conventional business continued to constitute the majority of the portfolio at around 93%, with Window Takaful contributing around 7%. The CY25 consolidated business mix was led by Fire (~27%), followed by Motor (~24%), Marine (~22%), Accident & Health (~15%), and Miscellaneous (~11%). Consolidated GPW/Gross Contribution Written stood at PKR 521mln during 1QCY26, compared with PKR 413mln in 1QCY25.

On a consolidated basis, underwriting results improved to PKR 119mln in CY25 from PKR 94mln in CY24, supported by stronger premium generation and improved underwriting performance. In 1QCY26, underwriting results further increased to PKR 46mln from PKR 29mln in the corresponding period. The consolidated PAT remained broadly stable at PKR 191mln in CY25 (CY24: PKR 190mln), while 1QCY26 PAT stood at PKR 55mln (1QCY25: PKR 57mln). The improvement in underwriting performance has become increasingly relevant to earnings resilience as investment yields moderated. The consolidated loss ratio improved to 45.4% in 1QCY26 from 51.4% in 1QCY25, while the CY25 loss ratio stood at 50.1% compared with 47.2% in CY24. The combined ratio remained broadly stable at 90.7% in CY25 (CY24: 90.6%) and stood at 86.2% in 1QCY26 (1QCY25: 83.3%).

The Company's investment portfolio increased to PKR 1,325mln at CY25 from PKR 1,187mln at CY24. The portfolio remained diversified across equity instruments, government securities, cash and bank balances, and investment properties. Investment income amounted to PKR 109mln in CY25, compared with PKR 123mln in CY24, while the investment yield moderated to 7.1% from 11.6%. As at 1QCY26, the investment portfolio stood at PKR 1,344mln, generating investment income of PKR 13mln, with investment yield declining to 2.7% from 3.8% in 1QCY25. The moderation in investment returns places greater importance on sustained underwriting performance for earnings generation.

The Company's IFS rating is supported by its strengthening capital base, demonstrated sponsor linkage, and improving underwriting performance. Equity increased to PKR 1,271mln at CY25 from PKR 1,036mln at CY24, while the Company remains compliant with the applicable minimum paid-up capital requirement. Going forward, adherence to the phased capital enhancement plan to meet the revised minimum capital requirement remains important. Continued sponsor support, disciplined financial management, and the Company's established governance framework provide additional support to its financial strength and claims-paying capacity.

The Company's outstanding claims amounted to PKR 221mln at CY25, compared with PKR 180mln at CY24. The claims liquidity ratio, measured as claims outstanding relative to liquid investments, moderated to 45.6% from 52.1%, while the commercial efficiency ratio improved to 1.8x from 1.2x. On a consolidated basis, the liquidity coverage of outstanding claims, measured as (liquid assets – borrowings) / outstanding claims including IBNR, stood at 5.4x at CY25 and 4.6x at 1QCY26, providing a meaningful liquid resource cushion against policyholder obligations.

The Company maintains reinsurance arrangements on an excess-of-loss (XOL) basis with a panel of established reinsurers, including Trust Re, Labuan Re, Pak Re, Saudi Re, Kenya Re, and Tunis Re, among others. The reinsurance programme provides protection against severity-driven losses and supports the Company's capacity to underwrite risks beyond its standalone retention capacity.

The Company maintains a sizeable liquid investment base to support policyholder obligations. Liquid investments amounted to PKR 1,156mln at CY25, compared with PKR 1,020mln at CY24. The consolidated liquidity coverage ratio, measured as liquid assets net of borrowings relative to outstanding claims including IBNR, stood at 5.4x at CY25 and 4.6x at 1QCY26. While the coverage moderated during 1QCY26, the level continues to provide a meaningful cushion against outstanding claims.

The Company's paid-up capital stood at PKR 645mln at CY25, meeting the existing minimum capital requirement prescribed by SECP. However, the revised minimum capital requirement of approximately PKR 2bln by 2030 necessitates a phased strengthening of the paid-up capital base. The Company has formulated a phased capital enhancement plan towards the revised requirement, with continued execution remaining important from a regulatory and financial-strength perspective. The equity base increased to PKR 1,271mln at CY25 from PKR 1,036mln at CY24, while standing at PKR 1,087mln at 1QCY26. The liquid investments-to-equity ratio remained strong at 130.5% at CY25 and 127.4% at 1QCY26, providing substantial liquid backing relative to the Company's capital base. Continued capital generation and timely execution of the planned capital enhancement remain important to maintaining regulatory compliance and supporting claims-paying capacity.