PGI is a publicly listed non-life insurance company incorporated in Pakistan. It operates as a public limited company under the Companies Act, 2017, and is regulated by the Securities and Exchange Commission of Pakistan (SECP) in accordance with the Insurance Ordinance, 2000 and the Insurance Rules, 2017. The Company is listed on the Pakistan Stock Exchange (PSX) and has also received authorization from the SECP to operate Window Takaful Operations (WTO).

PGI was incorporated as a public limited company on July 26, 1947, and was listed on the Pakistan Stock Exchange (PSX) on July 25, 1995. In CY17, the Company was prohibited by the SECP from undertaking insurance operations due to undercapitalization, weak governance, and non-compliance with the applicable regulatory framework. Following a change in sponsors and management, PGI was successfully revived in CY24 and resumed its underwriting operations. Building on this turnaround, the Company progressed from its initial stabilization phase into a more structured growth trajectory during CY25, supported by the expansion of its underwriting activities and operational capabilities.

In CY25, the Company continued to underwrite a diversified portfolio across the fire and property, marine, motor, health, engineering, liability, micro, and miscellaneous segments, further strengthening its business mix beyond the predominantly motor-led portfolio observed in CY24. During the year, the Company also received authorization from the SECP to commence its Window Takaful Operations (WTO), supported by the establishment of the requisite Shariah governance framework. The commencement of WTO is expected to diversify the Company's product offering and create an additional avenue for business growth.

The existing sponsors acquired ~60.94% of the total stake; later in Oct-24 and the sponsors further acquired ~23.77% stake in the Company. This ownership position remained unchanged during CY25, with ~84.71% held by Mr. M. Shahzad Habib and his family, including Mr. Ali Shahzad, Mr. Babar Shahzad, Bushra Shahzad, and Nimra Shahzad. The remaining ~15.29% stake is the free float.

The Company's ownership is expected to remain stable going forward.

Mr. Shahzad began his career at EFU General in the early 90s and holds over 03 decades of experience, having left EFU General as the Head of South Punjab. The expertise and financial strength of the shareholders continue to underpin the Company's stability.

The sponsors maintain a strong portfolio of properties, reflecting financial muscle to support the Company. This support has translated into concrete action during the period under review: the sponsors have offered a commercial/industrial property, independently valued by an SECP/PBA-approved valuer, as non-cash consideration toward a proposed further issue of shares, for which regulatory approval has been sought from the SECP. This reflects continued sponsor commitment toward strengthening the Company's capital base.

Overall control of the Company vests with a seven-member Board (BoD) comprising 2 Non-Executive Directors, 2 Executive Directors, and 3 Independent Directors. The composition is intended to ensure independence in the decision-making process.

During CY25, board leadership transitioned: Mr. Muhammad Shahzad Habib, the Company's principal sponsor, now chairs the BoD, having previously served as a Director; Mr. Abrar Ahmed Cheema, who previously chaired the Board and brings over 03 decades of experience in the banking and financial sector, continues to serve as a Director. Mr. M. Asad Jaweed, an Independent Director, continues to bring over 03 decades of expertise related to the insurance and reinsurance sector, and other BoD members continue to diversify the Board's overall experience base. The shift of the Chairmanship to the principal sponsor narrows the separation between ownership and board leadership; the continued presence of 3 Independent Directors is expected to provide a degree of countervailing oversight, though this remains an area PACRA will continue to monitor.

The BoD has constituted Audit, Investment, and Human Resource & Remuneration Committees, chaired by Independent Directors. Formally drafting the Terms of Reference (ToRs) for each committee remains outstanding and would enhance overall effectiveness.

M/s. Mushtaq & Co., the external auditor, issued an unqualified opinion on the Company's CY25 financial statements, a marked improvement from the qualified opinion issued for CY24, which had flagged material uncertainty related to going concern on account of negative operating cash flows of PKR 11.29mln. This resolution reflects improved financial discipline and stabilized cash flow generation as the underwriting book has scaled. The auditor remains QCR-rated and holds a "B" category SBP panel status.

The Company's organizational structure remains hierarchical. Following a leadership transition during the period, department heads (except the Internal Audit Head) now report to Mr. Ali Shahzad (COO) and other senior executives, who in turn report to the CEO. The Head of Internal Audit continues to report to the respective BoD committee functionally, and to the CEO administratively.

The position of Chief Executive Officer (CEO) remains vacant. The timely appointment of a permanent CEO is critical to ensure effective execution of the Company's restructuring initiatives, particularly those aimed at achieving and sustaining regulatory compliance. Mr. Ali Shahzad continues in his role as Chief Operating Officer. The transition reflects the Company's move from a compliance-restoration mandate toward a growth-execution mandate; continuity of institutional knowledge through the CEO transition will be vital to monitor going forward.

Anticipating the need for enhanced management efficacy remains imperative as the Company implements and utilizes its management committees at a materially larger scale of underwriting activity than in CY24.

The Company utilizes a web-based insurance management system developed by ANZ Global Software (Pvt.) Ltd. to support operational efficiency, strengthen internal controls, facilitate informed decision-making, and enhance customer service.

Development of the Company's claims management system continues, intended to generate the requisite reports necessary for an effective and efficient claims process, an area of growing relevance.

The Company's investment policy provides a well-defined governance framework, with oversight vested in the Board Investment Committee (BIC) and Management Investment Committee (MIC), and is aligned with the Insurance Rules, 2017. The policy adopts a conservative investment strategy and limiting equity exposure. It further prescribes clear investment eligibility criteria, thereby supporting capital preservation and liquidity. The policy also incorporates annual reviews and defined exit triggers for underperforming investments, reflecting a disciplined risk management approach.

The Company's Risk Management and Contingency Plan demonstrates a structured approach to operational risk management and business continuity, with oversight provided through the Board's Risk and Compliance/Internal Control Committee (RCIC). The framework identifies key operational risks based on probability and impact, while outlining mitigation measures. The policy also emphasizes asset protection through adequate insurance coverage, and bi-annual review of the contingency plan, reflecting management's focus on operational resilience and continuity of critical business functions. However, the policy could be strengthened by incorporating a formal Enterprise Risk Management (ERM) framework with clearly defined risk appetite and tolerance limits.

Pakistan’s general insurance industry recorded total Gross Premium Written (GPW) of PKR 245.2bln during CY25, compared to PKR 214.4bln in CY24, reflecting a robust year-on-year growth of 14.3%. The industry’s underwriting performance improved significantly, with underwriting profit increasing to PKR 12.1bln in CY25 (CY24: PKR 9.5bln), representing a year-on-year growth of 27.3%. Concurrently, total investment income rose to PKR 43.5bln (CY24: PKR 41.3bln), registering an increase of 5.2%, supported by higher investment balances despite the prevailing lower interest rate environment. Consequently, the industry's profit before tax strengthened to PKR 57.5bln in CY25, compared to PKR 47.9bln in CY24, reflecting an increase of 20.1%, indicating an overall improvement in the sector's profitability.

The Company continued to hold a miniscule share of the overall market; however, its business mix diversified materially during CY25, moving beyond the motor-only base of CY24 into fire, marine, health, engineering, and miscellaneous segments, reducing single-line concentration risk.

GPW increased to PKR 237.6mln in CY25 (CY24: PKR 24.0mln), while Net Insurance Premium rose to PKR 135.4mln (CY24: PKR 7.5mln). Motor remains a key contributor, but the broadened segmental base has diluted its share of the overall book relative to CY24. Management continues to target further expansion of the revenue base while managing concentration risk.

Underwriting results turned positive at PKR 49.7mln in CY25, against a loss of PKR 16.6mln in CY24—a swing driven by the sharply larger premium base absorbing what had previously been a largely fixed cost structure. Per management's disclosure, the claims ratio stood at 20%, the management expense ratio at 24%, and the resultant combined ratio at 44% for CY25, reflecting materially improved underwriting economics compared to CY24, when a thin premium base relative to fixed operating costs had strained underwriting profitability. Investment income rose to PKR 7.1mln (CY24: PKR 5.8mln) and rental income to PKR 4.3mln (CY24: PKR 3.4mln). Other income fell sharply to PKR 3.6mln (CY24: PKR 50.6mln), as CY24's profitability had been materially supported by a one-off other-income item; CY25's Profit After Tax of PKR 28.4mln (CY24: PKR 31.8mln) is therefore considered a higher-quality result, being driven predominantly by core underwriting and investment performance rather than one-off items. Management of the combined ratio, while much improved, continues to warrant monitoring as the book scales further.

The Company's investment book stood at PKR 457.2mln in CY25 (CY24: PKR 468.9mln), continuing to be dominated by Investment Property (PKR 411.4mln, CY24: PKR 418.1mln), with a smaller allocation to debt securities (PKR 45.4mln, CY24: PKR 50.6mln) and equity securities (PKR 0.4mln, CY24: PKR 0.2mln). The liquid component of the investment book remains modest at 10% of the total, broadly in line with CY24. Redrafting the investment book toward more liquid avenues remains important going forward, particularly as the underwriting book — and the associated claims-paying requirement — continues to scale.

During CY25, PGI has taken concrete steps under its previously drafted capital-enhancement strategy, including regulatory approvals sought for a rights issue worth PKR 250mln and an increase in authorized capital, positioning the Company toward the regulatory paid-up capital requirement applicable to the sector over the medium term and boosting its liquidity. The Company has also materially improved its reinsurance panel (discussed below) and its financial reporting transparency. The overall quantum of risk, while reduced from CY24, remains considerable given the Company's still-limited operating history at scale. The Company had one of the prime assets of the sponsors revalued: M/s Ali Cotton Industries. It is an industrial/commercial property located at Jalalpur Shujabad Road, Multan (October 17, 2025). The property is valued at PKR 936mln by Al-Hadi Financial & Legal Consultants. The objective of this exercise was to boost the capital of the Company.

Outstanding claims (including IBNR) rose to PKR 7.9mln in CY25 (CY24: PKR 2.9mln), and net insurance claims expense rose to PKR 15.9mln (CY24: PKR 2.9mln), both consistent with the substantially larger underwriting book. As the book continues to scale, building out claims-handling capacity and infrastructure in line with premium growth will be important to sustain claims-handling efficiency.

The Company's reinsurance panel improved materially during CY25. Treaty capacity for the Nov-25 to Oct-26 period is led by Saudi Re (rated A- by S&P, 30%) and Singapore Re (rated AA- by S&P, 30%), together with PVI obo Mekong Re (rated A- by AM Best, 20%), Oman Re (rated BBB by Fitch, 15%), and Tunis Re (rated B-Fair by AM Best, 5%), placing 95% of treaty capacity with investment-grade-rated reinsurers, a notable improvement over the CY24 panel, which included several sub-investment-grade and unrated names (SOPAC, CICA Re, Uzbekistan Re, and Global Re). Post year-end, the Company has further renewed its treaty arrangements for the Nov-26 to Oct-27 period, again led by Saudi Re and Singapore Re, indicating continuity of these relationships.

The liquidity ratio (liquid assets, comprising cash & bank plus debt and equity securities, relative to outstanding claims including IBNR) moderated to 8.9x in CY25 from 27.9x in CY24. While coverage remains adequate, the decline reflects the normalization expected as outstanding claims grow in line with a materially larger underwriting book, following the unusually low-claims environment of the initial revival phase in CY24. Enhancing the liquidity position in absolute terms, in line with the scaling claims profile, remains important going forward.

The Company continues to meet the earlier MCR of PKR 500mln through its existing paid-up capital. With the SECP's enhanced capital requirement of PKR 2bln by 2030, the Company has taken initial concrete steps during CY25—including an increase in authorized capital and an application for a further issue of shares against non-cash consideration—toward closing this gap and achieving PKR 2000mln by end of 2030. PGI is also in the process of undertaking a rights issue amounting to PKR 250mln, which is expected to strengthen the Company's capital base and enhance its financial flexibility. Execution of this plan, and the pace at which further capital is raised, remains a key monitorable for the Company's capital adequacy profile going forward.