PACRA Maintains IFS Rating of Atlas Insurance Limited
|IFS Rating||AA+ (ifs)||AA+ (ifs)|
Atlas Insurance has demonstrated renewal vibrance and resilience over the couple of years. This is a direct outcome of a documented vision to act as dynamic player in the market. Atlas Insurance has built and sustained its relative positioning in the peer universe. Atlas stands at a very high level in terms of its profitability. The Company has a very high amount of contribution from its core business, as against other companies which garner less support from core business. The Company has gradually enhanced its non-group business over the years. Envisaged strategy is to expand the business size while retaining core profitability. Association with Atlas group provides benefits in terms of sustained low-risk captive business, while ensuring sound governance framework. The Company has a strong panel of reinsurers with favorable treaty terms and prudent risk retention policies. Robust equity and investment book provides ample cushion to Atlas Insurance in terms of fulfilling its claim obligations without affecting its liquidity base adversely.
During CY21, the sector experienced ~7% growth YoY basis rising to PKR~703bln (CY20: PKR~656bln). Equity of the sector grew as well by ~5%. Underwriting grew up by ~75% YoY in CY21 as compared to CY20. During CY21, upsurge in auto sales and health products remained pivotal for growth. Underwriting profitability has been maintained through reduced management expenses while innovative products are being envisaged. However, current political instability and worsening economic condition could adversely impact insurance industry. The rating is dependent upon sustained improvement in relative position of the Company, augmenting its sustainability, as envisaged by the board and the management. Meanwhile, continued improvement in the business and financial profile of the Company is also imperative for the rating.
The rating is dependent on sustained improvement in business and financial metrics of the Company in line with its relative positioning within the industry. At the same time, the liquidity profile should continue to cushion the liabilities.
Atlas Insurance Limited - listed on Pakistan Stock Exchange - started operations in 1935. The Company provides all major types of conventional and non-conventional general insurance services and has a network of 26 branches across the country. Atlas Group - having 78% stake in AIL - is a leading conglomerate of the country with interests in Auto, Engineering, Power, Financial sectors and Trading.
The Board includes two independent members (one of them is female) and one executive director - CEO. Rest are non-executive directors from various group affiliates. Mr. Babar Mehmood Mirza has been appointed the CEO of the Company w.e.f. April, 2018. He is an experienced Insurance Professional and has two decades of work experience in Insurance Industry.