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The Pakistan Credit Rating Agency Limited
Press Release

Date
29-Jun-21

Analyst
Faraan Taimoor
faraan.taimoor@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 Life Insurance Company Limited

Rating Type IFS
Current
(29-Jun-21)
Previous
(29-Jun-20)
Action Maintain Maintain
Long Term A- A-
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating of TPL Life Insurance Company Limited (TPL Life) derives comfort from the strong group support that has been witnessed over the past years by way of equity injections. TPL Corp – the Parent Company, is a rising conglomerate having foothold in insurance, real estate, transport, technology and financial sectors. TPL Life has continued with their strategy since 2016 of expanding the business by focusing primarily on group clients which has resulted in strong growth, however in spite of volume increases the margins remain miniscule. Management expenses have traditionally been on the higher side as the Company envisages aggressive growth target and to attain this the acquisition expenses have also risen. This has led to a high deficit, which is a growing concern. The accumulated losses having eroded the equity has resulted in parent company approving injection of PKR 200mln while also deliberating the entrant of foreign partner. Going forward, the Company envisages improved topline while simultaneously increasing profitability. An equity injection from the parent is also on the horizon.
During CY20, the total GPW of the industry grew by 4.6% to PKR 233bln in CY20 as against a decline of 1.2% to PKR 223bln in CY19. COVID-19 is an ongoing challenge. While it has taken a toll on many businesses, its ramifications are still unfolding. However, due to present pandemic situation, the demand for Life Insurance products is expected to increase over near term which in-turn is expected to result in new business growth for the industry.
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 while the addition of foreign partner will provide added strength.

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 Insurance shareholding consists of 85.28% held by TPL Corp Ltd whereas the remaining 14.72% is shared by Sindh Bank Ltd and few 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.