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The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Aug-20

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

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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 Insurance Limited

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

The rating reflects established position of the company in its niche market. TPL has been augmenting its market positioning as it holds a substantial share in motor segment in the industry. Advanced technology infrastructure has continued providing an edge to the company. The third largest player in the motor segment, TPL continues to witness increased business volumes in Window takaful. The company is making concerted efforts to diversify its business composition as it captures non-motor segment, enhancing product slate of TPL Insurance Limited. The company profile is expected to be bolstered through the induction of a foreign partner; the transaction is expected to be completed in due course of time. This would provide further impetus to the growth of non-motor segment of the company alongwith adding synergic benefits. The financial risk profile is equipped with adequate liquidity, however it needs to be monitored carefully as the company takes the trajectory of growth.
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 upon the company's ability to diversify its revenue stream. The inclusion of the foreign partner should provide oversight and impetus to the business and financial risk profile while aiding growth trajectory of the company. This would have positive implication for rating.

About the Entity
TPL Insurance Limited (TIL), formed in 1992 and listed on Pakistan Stock Exchange, a majority-owned (~73%) subsidiary of TPL Corp. TPL Corp – close to three and a half billion rupee corporate conglomerate in turnover terms – has expanded its footings in diversified business avenues with a sizable portfolio of strategic investments.
TPL has seven member Board of directors. The Chairman of the board is Mr. Jameel Yousuf. The CEO, Mr. Mr Aminuddin, carries significant experience in the insurance industry. He is supported 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.