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The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Dec-18

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

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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 Dawood Family Takaful Limited

Rating Type IFS
Current
(27-Dec-18)
Previous
(12-Jun-18)
Action Maintain Maintain
Long Term A- A-
Short Term - -
Outlook Positive Stable
Rating Watch - -

The rating denotes strong capacity of the company to meet policyholder and contractual obligations. The rating reflects DFTL's ability to continue capturing takaful volumes. The company has achieved operational break-even however it requires continued business expansion and maintained efficiency. Herein, the company is eyeing bancassurance as an additional source of contribution. A sound IT infrastructure provides support to the operational efficacy of DFTL. The company has adequate risk absorption capacity. The management aims to establish strong footprints in the South region in order to garner increased business. Positive outlook captures the resilience of the company over the years; the company has gradually expanded it's wings.
The rating is dependent upon continued improvement in the company's system share,surplus in takaful fund and sustained liquidity position. At the same time, upholding strong governance practices is critical. The sponsors' financial profile was relatively stretched, which is now improving.

About the Entity
Dawood Family Takaful Limited (DFTL) is an unlisted Shariah-compliant Life Insurer which came into existence in May 2007 and commenced operations beginning 2009. It operates through a branch network of 44 branches, with the Head Office in Karachi. DFTL is majorly owned by First Dawood Group (FDG) holding 51% stake, followed by the Bank of Khyber (15%), and the GulfCap (8%).

DFTL has a seven-member BoD, which includes CEO, three representatives of Dawood Group, including one executive director, one of BoK, and two independent directors. Mr. Ghazanfar-ul-Islam, who had been associated with the company for eight years as CFO, was appointed as CEO in Mar’18. He possess vast insurance industry experience and Islamic finance experience. A team of professionals assists the CEO.

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.