The Pakistan Credit Rating Agency Limited
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Behrooz Fareed

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PACRA Maintains IFS Rating of Askari Life Assurance Company Limited

Rating Type IFS
(07-Jul-22 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating A (ifs) A (ifs)
Outlook Stable Stable
Rating Watch - -

Rating of Askari Life Assurance Company Limited (the Company) is based on its core sponsorship from the Army Welfare Trust, unlocking synergistic benefits as well as providing explicit commitment in times of financial crisis. The Army Welfare Trust has an established presence in the insurance industry through Askari General Insurance. A deficit for the year has occurred due to its initial year of operations, however improvement in the profitability through growth in single premium revenue and regular premium revenue along-with increased exposure in bancassurance provides comfort to the rating. During CY21, the Company’s GPW grew by ~86% to PKR ~835mln as compared to PKR ~449mln in CY20. Loss ratio of the Company improved to ~26% in CY21 (CY20: ~45%). Contribution of captive business in GPW of Askari life is ~3% which is expected to grow in future. Group business yielded profit of PKR ~1.5mln. Currently, Askari Life is only focusing on life business. Risk absorption capacity and capitalization levels are moderate. Any dilution therein has the comfort backing of the sponsors. Increase in market share along with converting underwriting losses into profitability remains crucial. Moreover, maintenance of adequate capital in wake of increasing business volumes and consequent support from sponsors would remain important.
During CY21, total GPW of the industry grew by ~25% to PKR ~291bln as against increase of ~4.6% to PKR ~223bln in CY20. Post pandemic situation, the demand for Life Insurance products has increased, however, inflation is an ongoing challenge for growth of the industry.
Sustained improvement in the business and financial risk profile of the company in line with their relative positioning in the industry remain vital to the rating. Concurrently, the liquidity profile of the Company should continue to cushion the policyholder's liabilities. Growth in topline and underwriting profits remain essential

About the Entity
Askari Life Assurance Company Limited, formerly known as East West Life Assurance Company Limited, a quoted public company, listed on the Pakistan Stock Exchange, commenced operations in Feb1993. With its head office in Karachi, the Company operates in main cities with branches in Lahore, Islamabad and Karachi. It is majority owned by Army Welfare Trust (AWT) with a stake of 66.6%.
Askari Life’s board comprises of eight members including the CEO. The board comprises of five non- executive, two independent and an executive director. The CEO of the Company, Mr. Jehanzeb Zafar has a significant experience of life insurance industry.

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