Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains IFS Rating of The Universal Insurance Company Limited
Rating Type | IFS | |
Current (29-Sep-17 ) |
Previous (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