The Pakistan Credit Rating Agency Limited
Press Release


Rohail Amjad

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PACRA maintains IFS Rating of Premier Insurance Limited

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

The rating reflects sustained efforts of the incumbent leadership to steer the company out of prevalent challenges. The company is envisaged to cautiously underwrite insurance business; the market share has gone down. The results are depicted in the fall of GPW but with greater decrease in the amount of underwriting losses. The support to profitability has emanated from investment income, thought largely contributed by relatively high risk equity investments. The company has accumulated a high quantum of liabilities, cushioned by reinsurance receivables and liquid investments; some dilution therein is seen. Liquidity is essential and must be maintained at high levels.
The rating is dependent on fast ascend to positive performance matrix. Meanwhile, the management has to carefully manage its insurance asset liability structure wherein timely realization of outstanding premium along with smooth settlement of claims is critical. Any further dilution in the risk profile of the company may impact the rating.

About the Entity
Premier Insurance was incorporated in 1952 and is listed on Pakistan Stock Exchange. It holds
0.9% market share at end Dec' 17 and operates through two business Hubs South and North.
Crescent Group and its associated companies hold 70% shareholding. State Life Insurance Company is another major shareholder (11%). The Crescent Group (CG) operates in diversified sectors of textile, steel, sugar, and power. The end Dec' 17 accounts of the company were reviewed by M/s Deloitte Yousuf Adil, issuing a qualified opinion. The eight-member board, including CEO, includes five representations of Crescent Group and one of State Life Insurance. Mr. Asad ullah Khawaja has joined the Board as an independent Director since June 2017. Mr. Zahid Bashir took over the charge of the company as CEO from June 2017.

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.