PACRA Maintans IFS Rating of Adamjee Life Assurance Company Limited
The rating reflects Adamjee Life's strengthening market position. This has been possible through a relatively aggressive volume growth that mainly relied on bancassurance. Herein, synergies with group bank (MCB) benefited the most. It has achieved better persistency in subsequent years renewal. The company registered a deficit in CY17 but achieved higher than break-even in CY18. The company's statutory funds are now self-subsistent. Consequently, Adamjee Life has improved equity base. Start of window takaful operations has boded well for the company, adding significant volumes. Lately, Adamjee General Insurance has taken over 100% stakes in the company. Management has expanded its branch network and also has built a sales force around agency model as well to add to its growth momentum. Meanwhile, comfort is drawn from Adamjee Life's strong risk absorption capacity, represented by sufficient liquidity and overall quality of its investment portfolio.
The continued self-subsistence of statutory funds, ability to improve its market position and strengthening of core profitability are integral for the rating. Moreover, prudent management of risk in wake of increasing business volumes and agency model remain important.
Adamjee Life Assurance Company Limited (ALAC) was incorporated in Pakistan on 4 August 2008 as a public unlisted company and started its operations from 24 April 2009. Recently, Adamjee General Insurance acquired the full control of this subsidiary. Adamjee Life is currently offering a number of life insurance schemes including Group Life, Credit Life, Saving / Investment, and Health covers. With adoption of agency model, the company has expanded its branch network to total 14 branches; two branches in Karachi, two in Hyderabad, two in Lahore, two in Multan and each in Islamabad, Sialkot, Faisalabad, Gujranwala, Sargodha and Sukkur.
The company’s BoD comprises seven members, including the CEO – Mr. Umer Mansha. AICL has majority representation (four members) on the board. Board had two members from IVM Intersurer and one member from Hollard Brokers Market South Africa at Dec-18, however, after Board elections held in April-19, all Board members are representative of Adamjee General Insurance.