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The Pakistan Credit Rating Agency Limited
Press Release

Date
25-Nov-22

Analyst
Muhammad Noor Ul Haq
noorulhaq@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of East West Insurance Company Limited

Rating Type IFS
Current
(25-Nov-22 )
Previous
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating AA (ifs) AA (ifs)
Outlook Stable Stable
Rating Watch - -

The assigned rating of East West Insurance Company Limited takes into account the sustained fundamentals of the Company. Over the year, all segments of the Company have performed admirably and contributed to a better top line with a lean toward Fire and Engineering segments. Conservative strategy involving prudent underwriting practices along with a focus on diversified products helped to demonstrate continued healthy underwriting profitability, supplementing the top line. Augmentation in equity and liquid assets owing to healthier cashflows offers strength to the capital structure which in turn has lent support to the rating. A significant spike in investment performance in close supervision of key management personnel has been observed. Resultantly, an increased investment income supplements the bottom line of the Company on a consistent basis. As an element of continued succession planning, sponsors are nurturing future leaders of the Company.
In terms of Gross Written Premium (GWP), the general insurance industry has a total size of PKR 113bln in CY21 compared to PKR 102bln in CY20, exhibiting a growth of 11.1%. The industry reported a significant increase of 57% in underwriting results to PKR 7bln in CY21 (CY20: PKR 4bln). The net income of the industry grew by 30% to PKR 13bln in CY21 (CY20: PKR 10bln). However, recent floods have caused significant losses to the economy. This will affect the insurance industry’s performance during the ongoing quarters.
The rating is dependent in the company’s ability to improve its market position with continued profitability. The liquidity position and, hence, financial risk profile should remain afloat along with growth. Sustaining underwriting profitability will be crucial going forward.

About the Entity
East West Insurance Company (EWIC) commenced commercial operations as a general insurance company in 1983 and is listed on the Pakistan Stock Exchange. Yunus family effectively holds the majority shareholding in the company. EWIC board consists of nine members, including one female director and one executive director. Five members are of Yunus Family and the remaining four are independent directors. Four family board members are also part of the management team. Mr. Naved, well-qualified from the US and UK, has been associated with the company for the last three decades as CEO. He is assisted by a professional team.

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.