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The Pakistan Credit Rating Agency Limited
Press Release

Date
04-Mar-20

Analyst
Muhammad Harris Ghaffar
harris.ghaffar@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains IFS Rating of Adamjee Insurance Company Limited

Rating Type IFS
Current
(04-Mar-20 )
Previous
(02-Sep-19 )
Action Maintain Maintain
IFS Rating AA+ AA+
Outlook Stable Stable
Rating Watch - -

The rating reflects the sustained fundamentals of the company. Adamjee Insurance Company Limited has been growing the business profile along with keeping costs under check, hence resulting positive for the core profitability. The stability in the management team and concerted efforts are the positives. Adamjee Insurance Company Limited continues to enjoy the perk of being only company with operations outside Pakistan. The company's size able investment portfolio, albeit concentrated in few group companies, continues to supplement its profitability and financial strength. The business strategy, going forward, is focused on increasing its market share through expansion of branch network - home and abroad - along with product innovation; retail and micro insurance. The group has also consolidated its stake in the Life Assurance company. Furthermore, Adamjee Insurance Company Limited is eyeing geographical diversification in other regions, as well. The rating incorporates the effect of association of Adamjee Insurance Company Limited with Nishat Group. The company has taken over the remaining 26% stakes of IVM Intersurer from Adamjee Life to make it a wholly owned subsidiary.
The rating depends on the stability and continuous efforts of the management team to execute the business plan. Adamjee Insurance Company Limited should continue to strengthen its market position along with sustained underwriting profits. With a strengthened claims management system in place, maintaining lower claims turnaround time (TAT) remains vital. The added efficiency in the MIS setup must result into improved proficiency in claims settlement.

About the Entity
Adamjee Insurance Company Limited (AICL) is the largest general insurance company of Pakistan, and only company having operations outside Pakistan as well. It was incorporated in 1960 and is listed on Pakistan Stock Exchange. The company operates a network of 27 branches in Pakistan, two in UAE (Dubai and Abu Dhabi), and one branch in Export Processing Zone (EPZ). The operations are divided in 10 divisions; five in south, four in north, and one in UAE.

The overall control of the company vests in the eight-member BoD (including the CEO). Board has a majority of Nishat Group representatives. Mr. Muhammad Ali Zeb, the CEO of the company since Jun-13, has a long association with Nishat Group. Previously, he was CEO of the company from 2008 till 2011. Many of the old associates at executive management level also rejoined the company along with Mr. Zeb in Jun-13 and the management has remained stable since then.

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.