Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Upgrades IFS Rating of Shaheen Insurance Company Limited
Rating Type | IFS | |
Current (10-Mar-17 ) |
Previous (17-Nov-16 ) |
|
Action | Upgrade | Maintain |
IFS Rating | A | A- |
Outlook | Stable | Stable |
Rating Watch | - | - |
Shaheen Insurance rating reflects significant improvement in its liquidity profile. This emanates from expected flow of fresh equity from lately announced issue of shares otherwise than right and conversion of previously illiquid investment property into stable yielding assets. Shaheen Insurance has sustained market share keeping pace with the industry's growth. Dominating portfolio motor is depicting good underwriting results, enabling the company to nourish other segments. However, while expanding into other segments, the company needs to strengthen its reinsurance panel. Accumulated losses have reduced significantly, strengthening equity base. The company envisages to continue expanding in motor segment, while exploring opportunities in other sectors. Major focus is being directed towards tapping potential of captive business - Shaheen Foundation and related. Enhanced equity (and liquidity) base, while improving investment income, should enable the company to invest in its marketing capabilities and technology infrastructure.
The rating is dependent upon sustained improvement in business profile of the company. This requires enduring emphasis on profitability, underwriting and building requisite human resource. Given increasing size of investment book, investment policy statement needs elaboration and performance tracking mechanism. The company has adequate balance between insurance assets and liabilities that should be kept intact.
About
the Entity
Shaheen Insurance commenced commercial operations as a general insurance company in 1995, and is currently listed on the Pakistan Stock Exchange. With its head office in Karachi, the company has a nationwide network of 12 branches. It is majority owned by Shaheen Foundation Group with its shareholding increasing after the issue of shares to 69% (previous: 59 %).
The overall control of the company vests in the sevenmember BoD. All directors represent SF, resulting in SF having complete dominance on the board. The company is in the process of bringing an independent director on the board. Chairman of the board, Air Marshal Muhammad Jamshed Khan (Retd.), is MD of SF. DMD of SF, Air Vice Marshal Syed Razi Ul Hassan Nawab (Retd.), is a non executive director of the company while Mr. Sohail Najam Kidwai, CEO of the company since Jan14, was associated with the company at a senior position in the past; and possesses over two decades of insurance experience. He is assisted by a team of professionals.