The Pakistan Credit Rating Agency Limited
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Rohail Amjad

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PACRA Maintains IFS Rating of Sindh Insurance Limited

Rating Type IFS
Action Maintain Maintain
Long Term A+ A+
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects SIL's strong parentage - the Government of Sindh (GoS) and its ability to leverage on the same. "Universal Accidental Insurance Scheme(UAIS)", initiated by GoS, provided impetus to the company's business volume. The scheme has undergone a new regime, by virtue of which the premium size has squeezed though the cash balance has stayed with the company. It is enriching the company's alternative investment. The company has created reserve against IBNR on account of UAIS.
Meanwhile, the Sindh government related business also provides slight comfort. The company needs to develop market related business in order to preserve its relative positioning.

The rating is dependent on management's ability to capitalize on its brand and group's platform for business expansion. Meanwhile, risk absorption capacity in terms of liquidity needs to be preserved. It is vital to fill in all key executive positions.

About the Entity
Sindh Insurance Limited (SIL), incorporated as an unlisted public company in Dec13, is a wholly owned entity of Government of Sindh (GoS). GoS has presence in most dimensions of financial market through Sindh Bank Limited, Sindh Leasing Company Limited, Sindh Modaraba, Sindh Insurance Limited and Sindh Microfinance Bank. SIL has a seven member board, chaired by Mr. Muhammad Bilal Sheikh, Executive Director of Sindh Bank, CEO Sindh Leasing Company Limited and Chairman of Sindh Modaraba Management Limited. Mr. Sheikh is a seasoned banker with over 45 years of diversified experience in banking. The CEO of the company, Mr. Muhammad Faisal Siddiqui, brings with him diversified experience of more than a decade in life and general Insurance. He is supported by core management team comprising qualified and experienced professionals.

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.