The Pakistan Credit Rating Agency Limited
Press Release


Waqas Ahmad

Applicable Criteria

Related Research

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 Alfalah Insurance Company Limited

Rating Type IFS
(17-Jun-22 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating AA+ (ifs) AA+ (ifs)
Outlook Stable Stable
Rating Watch - -

The rating takes into account Alfalah Insurance's healthy financial profile, emanating from i) healthy business volumes arising from health, fire and motor segments ii) consistent profitability providing support to equity base and ii) investment book that contributes a sizeable income stream hence providing cushion to the bottom-line.
Alfalah Insurance capitalizes on its unique portfolio in the health segment in collaboration with a renowned telecom operator. This has yielded noteworthy results, leading to business expansion and branding of the Company. The inherent practice of retaining risk in the motor segment has yielded higher underwriting profitability. Synergies with Bank Alfalah Ltd. (BAFL) have provided positive momentum in volumes in the motor segment and improved business volumes via the health product post-COVID. Non-captive business volumes have augmented over the years, and diversification into minuscule segments provides comfort to the topline. A healthy investment income lends support to the bottom line. Enhanced liquidity and sound cash flow generation ability, provide strength to the rating. The Company has paid dividends for the first time. The rating also draws comfort from association with the group bank – Bank Alfalah. Further, the rating takes into account a series of reinsurance treaties signed with internationally rated reinsurance companies.
The general insurance industry witnessed a growth of ~10% YoY in CY21. This year has been the road to recovery from these setbacks of the previous year. The industry has managed to sustain the business volumes and profitability through improvement in investment income as of December 2021.
The rating is dependent on the Company's ability to augment its market position in the competitive landscape while upholding the underwriting performance. Strengthening of liquid profile is vital along with prudent management of claims and receivables.

About the Entity
Alfalah Insurance Company Limited, commencing business in Sep'06, is engaged in providing non-life insurance services. Alfalah Insurance, with its head office in Lahore, operates through two business Hubs North and South with a total of 10 branches. The sponsoring family, consisting of members of UAE's ruling family and leading businesses, owns Alfalah insurance through key sponsoring individuals and group companies including Bank Alfalah Limited.

The Company’s seven-member board, including the CEO, is chaired by H.H. Sheikh Nahayan Mabarak Al Nahayan. Three board members come from the sponsoring family; two members represent Bank Alfalah Limited, while one member holds an executive position in Dhabi Group. The CEO, Mr. Abdul Haye, is assisted by a team of professionals and possesses around three decades of related 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.