Analyst
Faraan Taimoor
faraan.taimoor@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 (27-Feb-19 ) |
Previous (07-Dec-18 ) |
|
Action | Maintain | Maintain |
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 from different times of the crisis, b) sustenance in the cleansing period spanning over a couple of years, c) captive business. Underwriting resulted in loss while the bottom-line was cushioned from profits of associates. This is also supporting the liquidity of the company. The business strategy envisages tapping captive business with gradual entry into the market business. The road ahead is long, as the company is envisaging new market strategy. Enlistments with some of the leading banks have been completed.
The rating is dependent upon sustained improvement in relative position of the company, augmenting its sustainability, as envisaged by the board and the management. Meanwhile, continued improvement in the financial 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 a well established in having its presence in various industrial sectors including Textile, Auto, Tyres & Rubber and Engineering.
Eight members BoD constitutes six members from sponsoring family- including the CEO. One member is an employee of the group along with an independent director. The CEO, Mr. Gohar Ayub Khan, replaced in succession to Begum Zeb Gohar Khan (Late), was appointed in January 2016. Managing Director – Mr. Amir Raza, is an experienced insurance professional long associated with the company.