PACRA Maintains IFS Rating of Atlas Insurance Limited
Atlas Insurance is a mid-sized insurance company with a constantly growing underwriting performance as a result of quality insurance business and a stable business mix. The rating takes into account the robust liquidity profile, providing strong coverage to the company's obligations. The association with Atlas group provides benefits in terms of sustained low-risk captive business, while ensuring sound governance framework, remains a key rating factor. The company is leveraging on this relationship to enrich it's product-mix, also reaching out directly to customers independent of the banking channels. The company has a strong panel of reinsurers with favorable treaty terms and prudent risk retention policies. The robust equity provides ample cushion to Atlas Insurance in terms of fulfilling its claim obligations without affecting its liquidity base adversely.
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 interest rate regime would impact the fixed income stream but the equity market is improving though requiring a prudent approach.
The rating is dependent on sustained improvement in business and financial metrics of the company in line with its relative positioning within the industry. At the same time, the liquidity profile should continue to cushion the liabilities.
Atlas Insurance Limited - listed on Pakistan Stock Exchange - started operations in 1935. The company provides all major types of conventional and non-conventional general insurance services and has a network of 25 branches across the country. Atlas Group - having 78% stake in AIL - is a leading conglomerate of the country with interests in Auto, Engineering, Power, Financial sectors and Trading.
The board includes two independent members and one executive director - CEO. The rest are non-executive directors from various group affiliates. Mr. Babar Mehmood Mirza has been appointed the CEO of the company w.e.f. April, 2018. He is an experienced Insurance Professional and has two decades of work experience in Insurance Industry.