The Pakistan Credit Rating Agency Limited
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Ayesha Qasim

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PACRA Maintains IFS Rating of Habib Insurance Company Limited

Rating Type IFS
(24-May-18 )
(30-Dec-17 )
Action Maintain Maintain
IFS Rating A+ A+
Outlook Negative Positive
Rating Watch - -

The rating incorporates the Company's association with astute sponsors Habib Family. This, while providing stability to revenue stream in the form of captive business, establishes a sound governance framework. The rating takes note of HIC’s business strategy that encompasses enhancing its market presence with innovative products while diversifying revenue stream. Product innovation and extended market outreach, capitalizing on Habib group banks, boded well for HIC’s business profile. The company's conservatism, in the form of low risk retention, has continued yielding profitability. Profitable growth is a challenge, which is essential to the relative positioning of the company in future. HIC maintains a reasonable, fundamentally strong and diverse investment portfolio, which not only provides risk absorption capacity, but also supports profitability.
The rating is dependent on strengthening of company's relative position in the market. In addition, improvement in the underwriting profitability is important. The liquid profile is adequate for current level of operations, the strengthening is necessitated as the company grows. Improvement in claims monitoring system focusing on claims turnaround time (TAT) would also be key consideration for rating elevation.

About the Entity
Habib Insurance Company, part of Habib Group, was incorporated as a Public Limited Company in 1942. It is listed on Pakistan Stock Exchange, with a nationwide network of 15 branches. HIC is 68% owned by Habib Group, which is one of the renowned and well-established groups, having exposure in industrial and financial sectors.

The overall control of the company vests in the Board of Directors, comprising seven members, with six belonging to the Habib family. The board has observed significant change: Mr. Ali Raza D. Habib and his son Mr. Aun Mohammad A. Habib are no more Board members. Mr. Qumail R.Habib, Mr. Munawwar Ali Habib and Mr. Shahid Ghaffar have replaced Mr. Ali Raza D. Habib, Mr. Aun Mohammad A. Habib and Mr. Ali Fadoo. Mr. Shabbir Gulamali, having over three decades of total experience and of that 18 years in insurance industry all of which is with HIC, is CEO of the company.

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.