The Pakistan Credit Rating Agency Limited
27-Dec-19
Analyst
Faraan Taimoor
faraan.taimoor@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains IFS Rating of State Life Insurance Corporation of Pakistan
| Rating Type | IFS | |
|
Current (27-Dec-19 ) |
Previous (27-Jun-19 ) |
|
| Action | Maintain | Maintain |
| IFS Rating | AAA | AAA |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating takes into account State Life Insurance Corporation’s sound market position in life insurance industry emanating from extensive and well-penetrated distribution network, experienced management team and robust financial profile. State Life Insurance Company is thus the single biggest entity to capture the largest share in the insurance market. The rating reflects State Life Insurance Corporation's robust risk absorption capacity on the back of Government of Pakistan's (GoP) guarantee for policyholders' liabilities. The sum insured including bonuses (if any) declared by State Life Insurance Corporation are guaranteed as to payment in cash by GoP under article 35 of the Life Insurance (Nationalization) Order, 1972. With an emphasis on existing business lines, the organization pursues a growth strategy that seeks to broaden its product offerings. – Health Insurance, Bancassurance, Window Takaful and Microinsurance. State Life Insurance Corporation's ability to maintain its leadership in the life insurance sector is important.
State Life Insurance Corporation of Pakistan (SLIC) was incorporated in March 1972 when the life insurance business in Pakistan was nationalized. Currently, the Corporation operates through a widespread sales network throughout Pakistan and also has presence in the Middle East. State Life Insurance Corporation is the largest life insurer in Pakistan with ~ 47% market share that it aims to maintain.
About
the Entity
Mr. Farrukh Ahmed Hamidi - the Chairman of State Life Insurance Corporation was transferred in December 2019. In the absence of Chairman, the Executive Directors and the Divisional heads are looking into the strategic decisions of the company. The Government of Pakistan is expected to appoint the new Chairman in due course of time.
The Corporation has an seven member board including the Chairman. Board members are a good mix of individuals belonging to public sector, private financial and corporate sectors. The management team comprises Executive Directors nominated by Federal Government on deputation, who are assisted by a team of professionals, associated with the Corporation since long.