The Pakistan Credit Rating Agency Limited
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Faraan Taimoor

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PACRA Maintains IFS Rating of Takaful Pakistan Limited

Rating Type IFS
(27-Feb-19 )
(27-Dec-18 )
Action Maintain Initial
IFS Rating A- A-
Outlook Stable Stable
Rating Watch - -

Takaful Pakistan Limited, a dedicated Takaful company, has witnessed signs of revival in its business and financial profile after the acquisition by new owners. The group of new sponsors reflect a balanced mix of business acumen - needed to grow insurance business in the tough landscape of the insurance industry - and a strong backing of financial support - to take off the company from its current position. Compliance with SECP’s minimum capital requirement has been ensured. The equity position is expected to be enhanced. Sponsors have pledged an explicit undertaking to enhance the equity by internal growth and/or capital injection. The business has picked up steam; momentum is expected to continue in the foreseeable future as a result of sustained effort to improve underwriting business. The company envisages a diverse segmental mix though it is currently following a motor-centric approach in the beginning to build up business volumes, a testimonial of the strength of the new sponsors. Takaful Pakistan will be undertaking banking enlistment to achieve diverse segmental mix while focusing on Health, Fire and Marine Takaful. Reinsurance arrangements have been augmented in line with increased growth of the company.
The rating is dependent on the management's ability to capitalize on the group's well-built platform for business expansion. At the same time, the equity level must improve and segmental income stream should likewise go up. Liquidity needs to be upheld. Upgradation of I.T infrastructure is essential.

About the Entity
Takaful Pakistan Limited (TP) is an unlisted public limited company incorporated in June-06, with its registered head-office in Karachi. Mr. Salim Godil is one of the major shareholders, he also owns significant business interests including Toyota Central Motors, one of the largest Toyota auto dealerships in Pakistan. He and Mr. Rizwan Hussain own 34% each shareholding along with their families. Other shareholders include, Al Baraka Bank Pakistan Limited Mal Al Khaleej Investment LLC and Sitara Chemical Industries Limited.

Takaful Pakistan has a seven-member board. Mr. Rizwan Hussain is the CEO of Takaful Pakistan. He brings more than 30 years of experience as a seasoned Insurance/Takaful industry professional. He is assisted by a team of qualified 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.