The Pakistan Credit Rating Agency Limited
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Faraan Taimoor

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PACRA Upgrades IFS Rating of Dawood Family Takaful Limited

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

The rating denotes strong capacity of the company to meet policyholder and contractual obligations. The rating reflects DFTL's ability to continue capturing takaful volumes. The company has achieved net profitability position, though sustainability is required. The company is also eyeing bancassurance as an additional source of contribution. A sound IT infrastructure provides support to the operational efficacy of DFTL. The company has adequate risk absorption capacity. The management aims to establish strong footprints in the South region in order to garner increased business. The company needs to further strengthen its market position. The rating captures the resilience of the company over the years; the company has gradually expanded it's wings.
The rating is dependent upon continued improvement in the company's system share, surplus in takaful fund and sustained liquidity position. At the same time, upholding strong governance practices is critical. The sponsors' financial profile was relatively stretched, which is now improving.

About the Entity
Dawood Family Takaful Limited (DFTL) is an unlisted Shariah-compliant Life Insurer which came into existence in May 2007 and commenced operations beginning 2009. It operates through a branch network of 44 branches, with the Head Office in Karachi. DFTL is majorly owned by First Dawood Group (FDG) holding 51% stake, followed by the Bank of Khyber (15%), and the GulfCap (8%).

DFTL has a seven-member BoD, which includes CEO, three representatives of Dawood Group, one of BoK, and two independent directors. Mr. Ghazanfar-ul-Islam, who had been associated with the company for eight years as CFO, was appointed as CEO in Mar’18. He possess vast Takaful industry and Islamic finance experience. A team of professionals assists the CEO.

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.