Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
PACRA Maintains IFS Ratings of Pak Qatar General Takaful Limited
Rating Type | IFS | |
Current (29-Sep-17 ) |
Previous (28-Feb-17 ) |
|
Action | Maintain | Maintain |
IFS Rating | A | A |
Outlook | Stable | Stable |
Rating Watch | - | - |
PakQatar being an early entrant in Islamic insurance (takaful); both general and life has achieved good brand recognition. The rating reflects adequate risk absorption capacity – strengthened by capital injections in the past – of the company. However, in more recent years intense competition has resulted in reduced profitability which warrants management attention. Furthermore, the management follows a conservative stance (high liquidity, low risk philosophy) for its investment book. Hence, stable, though relatively low, investment income supplements profits. The management need to continue its efforts to fortify business profile in the wake of intensive competition from window takaful. The business plan is gradual penetration into nonmotor avenues, after shedding off health to group’s family takaful company. Recent engagements in the top management, having exposure to the insurance industry, has benefitted PQTL. The ratings incorporates the effect of association of the company with Qatarbased investors.<p>The rating is dependent on the management’s ability to cohesively execute the business plan. Furthermore, improvement in market share and underwriting profitability are considered vital. Meanwhile, prudent management of premium receivables from corporate customers is essential. Also, implementation of real time IT infrastructure along with recently upgraded MIS should, among others, strengthen the claims management system.
About
the Entity
PQTL, incorporated in 2006, started operations in 2007. H.E. Sheikh Ali bin Abdullah AlThani member of Qatar's Royal Family is the key sponsor of the company. He, directly and through his different Qatarbased Financial Institutions (mainly Qatar International Islamic Bank, Qatar Islamic Insurance Company, Masraf AlRayan) control around 54% stake in PQTL. The other major sponsor is Mr. Said Gul, who controls around 37% stake. Mr. Gul, a Pakistani origin businessman settled in Qatar, has main interest in construction business. These sponsors also own majority stake in PakQatar Family Takaful.<p>The company has a seven member board; chaired by H.E. Sheikh AlThani. Majority of board members are executives of sponsoring financial institutions and associated with the company since inception. Mr. Said Gul had been Managing Director. Mr. Zahid Hussain joined the company as CEO in Apr-17. Mr. Altaf Ahmed, with experience of above 25 years, has joined as the Head of Operations (HOO), in Jul-15. The management team comprises qualified and experienced professionals.