The Pakistan Credit Rating Agency Limited
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Maryam Ijaz

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PACRA Maintains IFS Rating of Habib Insurance Company Limited

Rating Type IFS
(09-Dec-20 )
(13-Dec-19 )
Action Maintain Maintain
IFS Rating A+ A+
Outlook Stable Stable
Rating Watch - -

The rating incorporates the Company's association with astute sponsors Habib Family. This provides a sound basis for governance while providing stability through group business. The rating acknowledges HIC's corporate strategy to increase its position on the market by prudent underwriting practices while focusing on bottom-line growth. The company's GPW remains steady, reflecting market penetration despite Covid-19. Product innovation and elongated market outreach, capitalizing on the Habib group, bodes well for HIC’s business profile. HIC maintains a multi-faceted investment portfolio that supports risk absorption.
Prior to COVID-19, the general insurance industry witnessed a growth of 11% YoY. The current pandemic affected the volumes, which led to a contraction in the growth. However, volumes have picked up post-June 2020 amidst increase in economic activities throughout the country. Upsurge in auto sales and health products has been pivotal. Underwriting profitability i.e. core business has been maintained through reduced management expenses while innovative products are being envisaged. Investment income is being routed through equities, amid upsurge in PSX and diminished interest rates.
The rating relies upon improving the relative position of the product on the sector. In addition, the future perspectives of the company will require further improvements in business size, underwriting profitability and investment income. As the company grows, the liquid profile must be enhanced.

About the Entity
Habib Insurance Company, part of Habib Group, was incorporated as a Public Limited Company in 1942. It is listed on Pakistan Stock Exchange, with a nationwide network of 17 branches. HIC is 68% owned by Habib Group, which is one of the renowned and well-established groups, having exposure in industrial and financial sectors.

The overall control of the company vests in the Board of Directors, comprising of nine members. It includes five non-executive directors, one executive director and three independent directors. Mr. Shabbir Gulamali, re-elected in April 2020, is the CEO of the company. He possesses over two decades of experience in insurance industry, all of which is with HIC.

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.