logo
The Pakistan Credit Rating Agency Limited
Press Release

Date
29-Jun-20

Analyst
Rohail Amjad
rohail.amjad@pacra.com
+92-42-35869504
www.pacra.com

Applicable Criteria

Related Research

Disclaimer
This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA maintains IFS Rating of TPL Life Insurance Company Limited

Rating Type IFS
Current
(29-Jun-20)
Previous
(27-Dec-19)
Action Maintain Maintain
Long Term A- A-
Short Term - -
Outlook Stable Stable
Rating Watch - -

The company has been witnessing increased business volumes though the margin is minuscule. Management expenses have traditionally been on a higher side as the company envisages aggressive growth target. This has led to a high deficit, a concern. The Loss Ratio is high in group health business. Support has been received from the sponsor in the form of equity injection through a right issue. Further liquidity is expected to be acquired; the sponsor is exploring different avenues in this regard. Going forward, the company envisages improved topline while simultaneously increasing profitability. Reduction of the loss-making segment while underwriting prudential business is vital.
Prior to COVID-19, the life insurance industry witnessed miniscule growth of 1% YoY as single premium declined due to multiple factors. 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 is dependent on the company’s ability to execute its existing business plan in an efficient manner; herein, consistent growth in top-line and underwriting profits are essential. Maintenance of liquidity levels are pivotal for rating.

About the Entity
TPL Life Insurance Limited was incorporated in 2008 and obtained license to carry on life and related line of business in 2009. TPL Life allotted 10mln Right shares at PKR 10/ share to TPL Corpo Limited, increasing its holding to 82.27% whereas the remaining 17.73%% is shared by Sindh Bank and two individuals.
Mr. Faisal Abbasi, the CEO of the company, is an experienced professional with over 23 years in Life Insurance and banking sector. He is assisted by a team of experienced professionals

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.