PACRA maintains IFS Rating of PakQatar Family Takaful Limited
The rating reflects improved market position of the company, garnering a decent foothold in the takaful industry. PakQatar has been able to sustain its system share gradually while registering 6% growth in the form of sustainable persistency. The company has benefited from its association with FWU, a Germany based firm, in the form of technical partnership whereas the sponsors add impetus in the form of synergic benefits. The growth in topline is healthy as the company envisages greater business volumes. This has driven up the management and commission expenses. The liquidity is adequate; though on the rise. Going forward, the new management aims to penetrate into untapped segments while focusing on improved profitability.
Prior to COIVD-19, the life insurance industry witnessed miniscule growth of 1% YoY as single premium declined due to the underperformance of equity markets, which made the unit-linked investment funds unattractive to policy holders for investment purposes. The current pandemic has further affected the life insurance industry, with the growth expected to plummet. Additional reduction in investment linked policies and heightened claims are expected. Moreover, increase in surrenders is likely as a result of economic stagnation. The large investment book is however likely to cushion any impact. The industry intends to sustain its existing position while aiming to launch innovative products.
The rating denotes the ability of the company to capitalize on the market share whilst sustaining the persistence. Maintaining the surplus in takaful fund and liquidity position is essential.
PakQatar Family, commencing operations in 2007 as unlisted public company and operates through a network of over 100 branches. Major shareholding is in the hands of (i) Mr. Said Gul & his associated company (4% via individual and 35% via Pak-Qatar Investment (Private) Limited), (ii) Two Qatar based Financial Institutions (21%), and (iii) H.E. Sheikh Ali Bin Abdullah Al-Thani - belongs to Qatar's Royal Family (10%). Technical partner is FWU AG (15%), a German based firm having operations in Europe and Middle East, maintains permanent establishment in Pakistan – by virtue of this technical arrangement stability.
PakQatar Family has a eight-member board including - Mr. Said Gul being the Director and has been associated with the company since inception. H.E. Sheikh Ali Bin Abdullah Al-Thani (H.E. Ali), royal family member, is chairman of the board, while Qatar based Financial Institutions and FWU-AG each have one nominee director, respectively, while Mr. Said Gul represents himself through Pak Qatar Investment (Private) Limited. Mr. Azeem Peerani, appointed in March 2020 , is the CEO of the company. He has been associated with the group for more than three years and is a takaful veteran with the experience of almost a decade.