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The Pakistan Credit Rating Agency Limited
Press Release

Date
30-Jun-21

Analyst
Muhammad Noor Ul Haq
noorulhaq@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 Pak-Qatar Family Takaful Limited

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

The rating reflects the maintained market position of the Company, garnering a strong foothold in the takaful industry. Pak-Qatar has been able to sustain its system share gradually while controlling costs among the pandemic and simultaneously benefiting from the large investment book leading to improved investment income. The Company has benefited from its association with FWU, a Germany based firm, in the form of technical partnership whereas the sponsors add impetus in the form of synergic benefits. The growth in profit despite slight YoY decline in net contribution is healthy as the Company envisages greater operational efficiency bolstered by investment income. This has driven down the management and commission expenses when comparing results CY20 and CY19. The liquidity is adequate; though steadily rising. Going forward, the management aims to penetrate into untapped segments while continuing to focus on improving profitability.
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 denotes the ability of the Company to capitalize on the market share whilst sustaining the performance. Maintaining the surplus in takaful fund and liquidity position is essential.

About the Entity
Pak-Qatar Family, commencing operations in 2007 as unlisted public Company and operates through a network of over 100 branches. Major shareholding is in the hands of (i) Mr. Said Gul & his associated Company (4% via individual and 35% via Pak-Qatar Investment (Private) Limited), (ii) Two Qatar based Financial Institutions (21%), and (iii) H.E. Sheikh Ali Bin Abdullah Al-Thani - belongs to Qatar's Royal Family (10%). Technical partner is FWU AG (15%), a German based firm having operations in Europe and Middle East, maintains permanent establishment in Pakistan – by virtue of this technical arrangement stability.
Pak-Qatar Family has an eight-member board including - Mr. Said Gul being the Director and has been associated with the Company since inception. H.E. Sheikh Ali Bin Abdullah Al-Thani (H.E. Ali), royal family member, is chairman of the board, while Qatar based Financial Institutions and FWU-AG each have one nominee director, respectively, while Mr. Said Gul represents himself through Pak Qatar Investment (Private) Limited. Mr. Azeem Peerani, appointed in March 2020, is the CEO of the Company. He has been associated with the group for more than four years and is a takaful veteran with the experience of almost a decade.

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.