The Pakistan Credit Rating Agency Limited
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Rohail Amjad

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PACRA Maintains IFS Rating of Sindh Insurance Limited

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

The rating reflects SIL's strong parentage - the Government of Sindh (GoS) and its ability to leverage on the same. "Universal Accidental Insurance Scheme(UAIS)", initiated by GoS,
provided impetus to the company's business volume. The scheme has undergone a new regime, by virtue of which the premium size has squeezed though the cash balance has stayed with the company. It is enriching the company's alternative investment. The business from this segment is reduced though still adding value to the company operations. Sindh Insurance has built market business via its linkage with Sindh Bank. To have a profitable growth in the market business is also important; the company has recently underwritten Sindh Engro Coal Mining (Phase-2), generating a good quantum of business annually. The company has created a reserve against IBNR on account of UAIS.
Sindh government-related business provides slight comfort. Although the company is trying to develop a market-related business but it needs further impetus in order to preserve company's relative positioning. The risk absorption capacity needs to be upheld, while good governance practices are the key to the sustained business profile.

About the Entity
Sindh Insurance Limited (SIL), incorporated as an unlisted public listed company in Dec13, is a wholly-owned entity of Government of Sindh (GoS). GoS has presence in most dimensions of
financial market through Sindh Bank Limited, Sindh Leasing Company Limited, Sindh Modaraba, Sindh Insurance Limited and Sindh Microfinance Bank. SIL has a seven-member
board, chaired by Mr. Muhammad Bilal Sheikh, non-Executive Director of Sindh Bank, CEO Sindh Leasing Company Limited and Chairman of Sindh Modaraba Management Limited. Mr.
Sheikh is a seasoned banker with over 45 years of diversified experience in banking. Mr. Mushtaq Malik has joined the board of directors replacing Mr. Ahmad Salahuddin as a non-executive independent director. The CEO of the company, Mr. Muhammad Faisal Siddiqui, brings with him a diversified experience of more than a decade in life and general Insurance. He is supported by core management team comprising qualified and experienced professionals.

BDO Ebrahim & Co. Chartered Accountants has been appointed as new auditors in place of Riaz Ahmed & Co. Chartered Accountants who completed five years as statutory auditors of the company.

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.