Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains IFS Rating of SPI Insurance Company Limited
Rating Type | IFS | |
Current (07-Jun-17 ) |
Previous (10-Jun-16 ) |
|
Action | Maintain | Maintain |
IFS Rating | A- | A- |
Outlook | Positive | Stable |
Rating Watch | - | - |
The SPI’s rating reflects sustained improvement in the business profile of the company. The company continues to demonstrate sizeable growth in its topline. The portfolio mix is well-balanced. With reported loss ratio, the company demonstrates underwriting profitability. The contribution from alternative income stream – investment book – is miniscule; needs to improve. The size of investment book must improve in tandem with the rising topline. Attention needs to be paid to working capital: receivables.
The positive outlook captures the management's ability to capitalize on its brand and group's well-built platform for business expansion. At the same time, the liquidity level and consequent income stream should be upgraded; herein attrition beyond a requisite threshold would negatively impact. Recovery of overdue receivables remain critical.
About
the Entity
SPI Insurance Company Limited (SPI), an unquoted public limited company,was established in 2005. The company is majority-owned by UIG (69%),followed by Silkbank (23%) and Saudi Pak Leasing (8%). The overall control of the company vests in a BoD comprising eight members; six members represent UIG, whereas two members represent Silkbank. UIG is a diversified group having interests in insurance, tracking business, IT, agriculture,insurance brokerage and microfinance-banking. UIG, by capitalizing on the platform of two insurance companies - UIC and SPI - has achieved a sizeable market share of 7% at end-Dec16.
Mr. M. A. Shahid, CEO/MD since beginning Jun-11, is a law graduate having extensive insurance industry experience, especially with The United Insurance Company of Pakistan - a flagship company of UIG. He is assisted by a team of experienced professionals.