logo
The Pakistan Credit Rating Agency Limited
Press Release

Date
06-Dec-18

Analyst
Faraan Taimoor
faraan.taimoor@pacra.com
+92-42-35869504
www.pacra.com

Applicable Criteria

Related Research

Disclaimer
This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Positive Outlook to East West Insurance Company Limited

Rating Type IFS
Current
(06-Dec-18)
Previous
(04-May-18)
Action Maintain Maintain
Long Term A+ A+
Short Term - -
Outlook Positive Stable
Rating Watch - -

The rating takes into account the improved fundamentals of the company. The sound business profile has enabled the company to improve 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. The sustainability of the company has been augmented with the creation of independent structure for the ownership, identification and induction of future leadership of the company. The strength of liquidity position and strong financial risk profile of the company lend support to rating. Future plans are expected to add to the liquidity, while enhancing the governance framework of the company. The rating incorporates the effective working capital management, though with growing volumes, this will be a challenge.
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

About the Entity
East West Insurance 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 (~64%) in the company.

The 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.

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.