The Pakistan Credit Rating Agency Limited
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PACRA Maintains Entity Ratings of IGI Holdings Limited

Rating Type Entity
(18-Dec-20 )
(20-Dec-19 )
Action Maintain Maintain
Long Term AA AA
Short Term A1+ A1+
Outlook Stable Stable
Rating Watch - -

IGI Holdings Limited ("IGI Holdings" or "the Company") emerged as a new entrant in the growing holding companies sector post restructuring of IGI Insurance Limited in 2017, consolidating Packages Group investments in financial sector i.e. Life and Non-life Insurance, Brokerage and investment holding company. The ratings reflect IGI Holdings strong standing as a HoldCo. with its key underlying businesses performing well in their respective sectors, providing a steady stream of dividends. IGI Investments, the investment arm of the group, has a sizable investment portfolio comprising strong players mainly financed through equity. IGI General Insurance has shown growth in business volumes as well as profitability, while IGI Life is pursuing it's growth strategy through market penetration and new products. The dividend flow from IGI Investments, a dominant contributor, remained low in 3QCY20 owing to general economic conditions on the underlying investments. This impacted the revenue of IGI Holdings. Meanwhile, the Company's subsidiary i.e IGI Investments - completed its equity injection for acquiring 45% stake in S.C Johnson & Sons of Pakistan (Pvt.) Limited during the last quarter of 2020. The financial profile of the Company remains robust with low leveraged capital structure, strong coverage and adequate cushion in financing facilities. Going forward, dividend income from the subsidiaries is expected to remain sustained in the current economic environment. The Company has a strong governance framework. The system and controls to monitor investments and making key strategic investments are evolving.
Ratings depend upon sustained performance of existing strategic investments. Formalizing a strong and effective mechanism for monitoring performance and providing holistic direction to it's subsidiaries would bode well for the ratings.

About the Entity
IGI Holdings Limited, incorporated as a public limited company in 1953, is an Investment Holding Company for financial services business of Packages Group. The Company completed its corporate restructuring during 2017 involving amalgamation of IGI Investment Bank into IGI Insurance Limited and demerger of Insurance segment and Investment segment resulting into into wholly owned subsidiaries i.e. IGI General Insurance Limited and IGI Investments (Private) Limited. As a result IGI Insurance was renamed to IGI Holdings Limited. The investment portfolio comprises four subsidiaries in financial sector; IGI General Insurance, IGI Life Insurance, IGI Investments and IGI Finex Securities. As at Sept 30, 2020, IGI Holdings majority ownership (72%) lies with Packages Group through Sponsors (32%) and associated entities (40%). Syed Babar Ali serves as the Chairman of the Board while Mr. Tahir Masaud is the CEO 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.