The Pakistan Credit Rating Agency Limited
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Mahina Majid

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PACRA Upgrades IFS Rating of Askari General Insurance Company Limited

Rating Type IFS
Action Upgrade Maintain
Long Term AA- A+
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating captures strong risk profile of the company along with sustained profitability. The company's strategy has led in volumetric growth and improved core underwriting performance. Askari Insurance has been able to keep expenses under check while pursuing growth. The strong liquidity profile, also supported by recent right issue, provides cushion to the risk absorption capacity. Askari Insurance continues to have a sound panel of reinsurers with favourable treaty terms. The management's efforts for improving the overall quality of control environment, supported by real time operating software providing tools for holistic oversight and efficient decision making, are bearing fruits. Going forward, it intends to fortify its position in non-conventional segments, while using alternative distribution channels. The rating incorporates ensuing synergistic and oversight benefits from its association with army institutions. This is also reflected in gradually increasing insurance volumes from these institutions.

The rating is dependent on the company's ability to hold its enhanced system share in the competitive landscape, while boosting the underwriting profitability. The risk absorption capacity should be kept aligned to expanding insurance book.

About the Entity
Askari General Insurance Company Limited, listed at Pakistan Stock Exchange, commenced commercial operations in 1995. The company operates a nationwide network of 20 branches with head office in Rawalpindi. The controlling stake is with AWT (59%). AWT was set up in 1971 by Pakistan Army for promoting the welfare of retired personnel of the Army and their families through the creation of income and employment generating activities. AWT is currently engaged in real estate, security services, sugar, and lubricants. The group is eyeing entry in life insurance and asset management business.

AGICO's eight-member BoD, excluding the CEO, is led by Lt. Gen. (Retd.) Khalid Rabbani. The board includes retired army officials, senior executives of AWT, and two independent members. Mr. Abdul Waheed, CPA (USA) - a seasoned and experienced professional - is CEO of AGICO since July 2010. A team of professionals assists him.

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.