PACRA Maintains IFS Rating of Askari General Insurance Company Limited

Askari General Insurance Company Limited has a solid risk profile. This is reflected in the assigned rating of the company. Askari General has exhibited sustained business volumes and underwriting performance in recent times through its underwriting strategy, with a focus to augment the bottom-line profitability. This has led to an improved combined ratio; a testament to sustained profitability in recent times. The management efforts for sustaining the overall quality of the control environment are supported by the real-time operating software. This provides tools for holistic oversight and efficient decision-making. A subsidiary, AskTech, a venture focused on vehicle tracking solutions, has been set up to yield technological synergies; this is expected to create diversification by enhancing customer experience. The continued improvement of Information Technology systems is of prime importance to capture business, with the COVID-19 persistence and changes in business trends. The Company’s fully functional android and IOS-based mobile app - Ask Health enhanced communication and coordination, facilitated through a 24/7 immaculate call center and brought reduction in Turn Around Time (TAT) in claims processing; therefore attracting a customer base. The sustained liquidity profile provides a cushion to the risk absorption capacity. Askari Insurance continues to have a sound panel of reinsurers with favorable treaty terms. Going forward, it intends to fortify its position in non-conventional segments, while using alternative distribution channels. The rating, likewise, takes into account Askari General’s association with Army Welfare Trust (AWT). During CY21, bank financing and automotive sector growth facilitated the industry's progression. A conservative investment approach was undertaken by the industry participants, with the investment mix majorly construing fixed income securities along with minor equity exposure. As COVID re-emerged through its “Omicron” variant, its potential implications are yet to unfold in the coming year. Reduction in management expenditure and product innovation shall remain crucial for the industry participants for the solidification of market position.
The rating is dependent upon the company's ability to sustain its market share and its profitability from the core business and investment income. At the same time, the proportional improvement must be recorded in its liquidity.

About the Entity
Askari General Insurance Company Limited, listed at Pakistan Stock Exchange, commenced commercial operations in 1995. The company operates a nationwide network of 20 branches with a head office in Rawalpindi. The controlling stake is with AWT (59%). AWT was set up in 1971 by Pakistan Army for promoting the welfare of retired personnel of the Army and their families through the creation of income and employment generating activities. AWT is currently engaged in real estate, security services, sugar, and lubricants. It manages a sizable book of strategic investment, which yields a significant amount of dividend every year to the fund.

AGICO board comprises eight members excluding the CEO. The board includes retired army officials, senior executives of AWT, and three independent members. Mr. Abdul Waheed, CPA (USA) - a seasoned professional having a deep understanding of the insurance business - is the CEO of AGICO since July 2010. A team of professionals assists him.