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The Pakistan Credit Rating Agency Limited
Press Release

Date
26-Aug-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 upgrades IFS Rating of Asia Insurance Company Limited

Rating Type IFS
Current
(26-Aug-21)
Previous
(26-Aug-20)
Action Upgrade Maintain
Long Term A+ A
Short Term - -
Outlook Stable Positive
Rating Watch - -

The rating reflects augmented governance framework and strengthened financial position of the Company. This was realized post equity injection and stake taken by InsuResilience Investment Fund, funded by the German Developed Bank KFW and controlled by the Swiss-based Impact Investment Director BlueOrchard Finance, providing added support. The translation of efforts towards improvement in governance framework have taken place over the period since positive outlook was assigned to the rating of the Company. The financial position was supplemented by that time and continues to reflect in its liquidity. The representation of the InsuResilience Investment Funds’s direction on the Board for quite some time is comforting to the rating. The change in leadership position is indeed building of succession in the Company. The incumbent management is directing concerted efforts towards growth and diversification. Results of the Company are getting reflected in the recent period. There is enduring focus on IT integration and development of new profits.
In terms of Gross Premium Written (GPW), Pakistan’s general insurance industry had a total size of PKR ~108,322mln in CY20, (less than ~1% of its GDP), with a growth of ~3.7% from the previous year (CY19: PKR ~104,453mln). The insurance industry in Pakistan is relatively small compared to its peers in the region. The insurance penetration and density remain very modest as compared to other jurisdictions while the insurance sector remains underdeveloped relative to its potential. Gross premiums written of non-life insurers in India reached USD ~26.5bln in FY21, from USD ~26.4bln in FY20.
The rating is dependent on continued growth in core business of Asia Insurance as well as support from the Investment side to enhance profitability. Sustaining underwriting profitability will be crucial going forward.

About the Entity
Asia Insurance Company Limited (ASIC), established in 1979 as a General Insurance Company, is listed on the Pakistan Stock Exchange. The Company is majority owned by Mr. Ihtsham ul Haq Qureshi and family.
ASIC, with its Head Office in Lahore, operates a network of 28 branches across the country. ASIC's Board of Directors comprises seven members. Mr. Ihtsham ul Haq Qureshi is the Chairman of the Board while Mr. Zain ul Haq Qureshi is the new CEO of Asia Insurance and brings with him over thirteen years of combined experience.

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.