PACRA Maintains IFS Rating of SPI Insurance
The rating reflects the stable business profile of the company. The company has witnessed reduced premiums thereby demonstrating decreasing profitability. The company faced a reduction in a specific niche (crop & livestock). The management is confident that they will build the volumes in the ongoing year and going forward, as will. A business support is expected from United Insurance, of which the IFS rating has lately been upgraded to 'AA'. The organisation takes benefit from synergistic approach at group level - United International Group (UIG) - and replicate the group's established practices. The contribution from alternative income stream – investment book – is small; needs to improve. Improved equity size and hence liquidity provide cushion to the risk absorption capacity however they need to demonstrate improvement.
The rating is dependent on the management's ability to capitalize on its brand and group's well-built platform for business expansion. At the same time, the liquidity level must improve and consequent income stream should likewise go up; herein attrition beyond a requisite threshold would negatively impact.
SPI Insurance Company Limited (SPI), an unquoted public limited company, was established in 2005. The company is majority-owned by UIG (70%), followed by Silkbank (23%) and Saudi Pak Leasing (7%). The overall control of the company vests in a BoD comprising seven members; five members represent UIG, whereas two members represent Silkbank. UIG is a diversified group having interests in insurance, tracking business, IT, agriculture, insurance brokerage and microfinance-banking.
Mr. M. A. Shahid, CEO/MD since beginning June 2011, is a law graduate having extensive insurance industry experience, especially with The United Insurance Company of Pakistan - a flagship company of UIG. He is assisted by a team of experienced professionals.