The Pakistan Credit Rating Agency Limited
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Waqas Ahmad

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PACRA Maintains IFS Rating of Adamjee Insurance Company Limited

Rating Type IFS
(02-Mar-22 )
(02-Mar-21 )
Action Maintain Maintain
IFS Rating AA+ AA+
Outlook Stable Stable
Rating Watch - -

The rating captures the solid fundamentals of the company. Adamjee Insurance Company Limited has exhibited sustained growth in the business profile while maintaining operational efficiency, reflecting positively in the core profitability. The stability in the management team and concerted efforts are laudable. Adamjee Insurance Company Limited continues to enjoy the perk of being the only general insurance company with operations outside Pakistan. Overall business took a dip as a result of COVID-19; however, it has witnessed strong recovery and it is anticipated that it will get back to historic levels. The combined ratio continues to witness stability. The company's sizeable investment portfolio, albeit concentrated in few group companies, continues to supplement its profitability through stable dividend stream and financial strength. The business strategy, going forward, is focused on increasing its market share through expansion of branch network - home and abroad - along with product innovation; retail and micro insurance. Furthermore, Adamjee Insurance Company Limited keeps an eye on opportunities, geographical diversification in other regions. The rating reflects association of Adamjee Insurance Company Limited with the Nishat Group.
Management expenditure rationalization and product innovation shall remain crucial for the industry participants for the solidification of market position.
The rating depends on the profitability from the core business and investment income. The continuous strengthening of its market positioning along with its growing underwriting profits remains fundamental for the ratings.

About the Entity
Adamjee Insurance Company Limited (AICL) is one of the largest general insurance companies of Pakistan, and only general insurance company having operations outside Pakistan. It was incorporated in 1960 and is listed on Pakistan Stock Exchange. The company operates a network of 91 branches in Pakistan, in addition to the 20 Specialized Agriculture field offices, three in UAE (Dubai, Abu Dhabi & Sharjah), and one branch in Export Processing Zone (EPZ). The operations are divided into 10 divisions; five in south, four in north, and one in UAE.

The overall governance of the Company vests in the eight-member BoD (including the CEO). Board has a majority of the Nishat Group representatives. Before rejoining in June 2013, Mr. Muhammad Ali Zeb had served as the CEO of the company from 2008 until 2011. He has a long association with the Nishat Group. Since 2013, there has been no change in the top management of the Company.

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.