The Pakistan Credit Rating Agency Limited
Press Release


Ayesha Qasim

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PACRA Maintains IFS Rating of The Universal Insurance Company Limited

Rating Type IFS
(29-Sep-17 )
(09-Jun-17 )
Action Maintain Upgrade
IFS Rating A- A-
Outlook Stable Stable
Rating Watch - -

The rating of Universal reflects strong parentage of the company – Bibojee group. The parentage has provided multi-faceted support to the company: a) injection of capital (PKR 167mln), three times, to date from the time of the crisis, b) sustenance in the cleansing period spanning over a couple of years, c) captive business and d) further equity injection, as approved by the board. With additional equity injection, the liquidity of the company is expected to improve further. The business strategy envisages tapping captive business with gradual entry into the market business. The road ahead is long, as the company would be building the marketing force after enlistment with the banks. The ratings also incorporate significant market value of the strategic investment book; which also yields benefit in the form of dividends.

The rating is dependent upon enhancement of liquidity position of the company, augmenting its risk absorption capacity, as envisaged by the board and the management. Meanwhile, continued improvement in the business profile of the company, is also imperative for the rating.

About the Entity
Universal Insurance Company Limited, incorporated in 1958, is listed on Pakistan Stock Exchange (PSX). Majority ownership of the company is held by Bibojee Group (87%), through holding company “Bibojee Services Private Limited” (BSL). Bibojee group is well established in having various industrial sectors including Textile, Auto, Tyres & Rubber and Engineering.

Nine members BoD constitutes six members from sponsoring family- including the CEO. One member is an employee of the group along with an independent director lately inducted. The CEO, Mr. Gohar Ayub Khan, replaced in succession to Begum Zeb Gohar Khan (Late), in Jan16. Managing Director – Mr. Amir Raza, is an experienced insurance professional long associated with the company

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.