The Pakistan Credit Rating Agency Limited
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Behrooz Fareed

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PACRA maintains IFS Rating of State Life Insurance Corporation of Pakistan

Rating Type IFS
(19-Jul-22 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating AAA (ifs) AAA (ifs)
Outlook Stable Stable
Rating Watch - -

The rating takes into account State Life Insurance Corporation of Pakistan’s (SLIC) sound market position within the Life Insurance industry emanating from extensive and well-penetrated distribution network, experienced management team and robust financial profile. The rating reflects State Life Insurance Corporation's robust risk absorption capacity on the back of Government of Pakistan's (GoP) guarantee for policyholders' liabilities. Sum insured including bonuses (if any) declared by State Life Insurance Corporation are guaranteed as to payment in cash by GoP under article 35 of the Life Insurance (Nationalization) Order, 1972. During CY21, the Corporation’s Gross Premium Written grew by ~36% to PKR ~162bln as compared to PKR ~119bln) in CY20. It has posted a profit after tax of PKR~6.6bln. Expense ratio also showed improvement, decreasing to ~18% from ~21%. With an emphasis on existing business lines, the organization pursues a growth strategy that seeks to broaden its product offerings. – Health Insurance, Bancassurance, and Window Takaful. Regarding Health Insurance, the Corporation is implementing mega health insurance program i.e. Federal Sehat Sahulat program & KP Sehat Sahulat program. These programs are projected to cover ~80million population of Pakistan. This scheme has worth of around PKR 87+ billion in the next five years. State Life's ability to maintain its leadership in the life insurance sector is important. In this regard, successful execution of the envisaged business strategy including diversification and continued growth is essential.
During CY21, total GPW of the industry grew by ~25% to PKR ~291bln as against increase of ~4.6% to PKR ~233bln in CY20. Post pandemic situation, the demand for Life Insurance products has increased, however, inflation is an ongoing challenge for growth of the industry.

About the Entity
State Life Insurance Corporation of Pakistan was incorporated in March 1972 when the Life Insurance business in Pakistan was nationalized. Currently, the Corporation operates through a widespread sales network throughout Pakistan and also has presence in the Middle East. State Life Insurance Corporation is the largest Life Insurer in Pakistan with ~56% market share.
The Chairman of the Corporation, Mr. Shoaib Javed Hussain has ~20 years’ experience of successful careers in senior management of global insurance groups and consultancies in the United Kingdom (UK) and Asia. He brings with him breadth of strategic executive perspective and technical acumen gained through global engagements across Europe, North America and Asia. Mr. Hussain holds an MSc in Actuarial Management from CASS Business School, City University, London and is a Fellow of the Institute of Actuaries (UK).
The Corporation has a six-member board including the Chairman. Other board members are a good mix of individuals belonging to public sector, private financial and corporate sectors. Management team comprises Executive Directors, who are assisted by a team of professionals, associated with the Corporation since long.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.