PACRA Maintains IFS Rating of Alfalah Insurance Company Limited
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.
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.