The Pakistan Credit Rating Agency Limited
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Muhammad Harris Ghaffar

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PACRA Maintains IFS Rating of IGI General Insurance Limited

Rating Type IFS
(26-Feb-21 )
(28-Feb-20 )
Action Maintain Maintain
IFS Rating AA AA
Outlook Stable Stable
Rating Watch - -

The rating draws comfort from rising business volumes, an impressive feat during the challenging times of COVID-19 global pandemic . IGI General Insurance Limited under the stewardship of an able team has continued to sustain high growth signifying its improving position in the industry. Largest growth has been witnessed in the Engineering and Marine sector, as the company seeks to make inroads in non-traditional segments. In this, the business relationships of the group also play a pivotal role, whereby a number of multi-national companies obtain insurance coverage from IGI. Underwriting profits improved with contributions from both premiums side as well as claims. The profitability is further supported by sound investment income. Up gradation of IT infrastructure has yielded improved efficiency - notably in claims management. The rating takes comfort from IGI’s association with its parent, IGI Holdings, which has injected a sizeable capital into the company, post de-merger. This is preserved mostly as in the form of liquid investments. The Hold Co has an express mandate to proactively support the company in times of need. The top group resources provide strategic direction and oversight. The assigned rating also takes into account its association with Packages Group and comfort is drawn from its sound governance practices of the group. The company continues to enjoy a sound re-insurance panel which provides extensive risk absorption coverage.

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. The volumes need to sustain, indeed, improve in tandem with the longer historical trend. The new interest rate regime has added momentum to auto-financing, which is a good sign for the insurance industry.
The rating remains dependent on the management's ability to strengthen its market position in a competitive landscape while ensuring underwriting profitability. The liquid investment book need to be preserved and indeed improved in line with the growing business volumes.

About the Entity
IGI Holdings holds 100% stake in the company. IGI Holdings is owned by Packages Group, which is ranked amongst the renowned industrial groups of the country, having diversified interests in packaging, dairy, pharmaceutical, and financial sectors. The overall control of the company vests in six-member Board of Directors comprises two executive directors and four non-executive directors representing the main sponsoring family.

A.F. Ferguson & Co. Chartered Accountants issued an unqualified audit report pertaining to financial statements for CY19. The company has a comprehensive organizational structure with
clearly demarcated reporting lines, ensuring segregation of duties. Mr. Tahir Masaud, CEO, is an ACII and MBA from LUMS, having diversified national and international insurance related
experience of over 20 years.

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.