PACRA Maintains IFS Rating of East West Insurance Company Limited
The rating takes into account the sustained fundamentals of the company. The sound business profile has enabled the company to sustain its market share. Prudent underwriting practices along with a focus on diversified products helped the company to demonstrate continued healthy underwriting profitability. The implementation of advanced IT infrastructure and real time insurance solution in the key offices is considered positive. However, complete rollout countrywide is targeted by end-Mar18. The adequate liquidity position and strong financial risk profile of the company lend support to rating. The rating incorporates the effective working capital management, though with growing volumes, this will be a challenge. Going forward, the company envisages to strengthen its footprints with plans to launch window takaful operations with enduring focus on the crop and livestock insurance.
The rating is dependent in 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. Effective utilization of upgraded IT infrastructure and MIS should benefit in bringing sophistication in structure and reporting. Succession of key roles is essential.
EWI 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 (~63%) in the company. The family also controls majority stake (~72%) in East West Life Assurance Company Limited. However, the company has been sold to AWT, pending regulatory approval.
EWI's eight member board of directors is equally split between the sponsors - four members (including the CEO - Mr. Naved Yunus) belonging to Yunus family and independent directors - four members. In addition to CEO, two other family board members are 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.