Muhammad Noor Ul Haq
PACRA maintains IFS Rating of Pak-Qatar Family Takaful Limited
|IFS Rating||A++ (ifs)||A++ (ifs)|
The rating reflects the maintained market position of the Company, garnering a strong foothold in the takaful industry. Pak-Qatar Takaful has demonstrated steady market share retention, ensuring stability in premium income, while also capitalizing on its substantial investment portfolio to enhance its performance. The ratings affirmations reflect PQFTL's stable risk-adjusted capitalization levels, balanced business profile, and strong operating performance. These factors are attributed to the company's robust underwriting fundamentals and its consistent outperformance compared to industry standards. Company’s profitability stands out among its competitors, reflecting its strong business profile and effective underwriting strategies. The consistent track record of delivering strong financial results demonstrates its ability to navigate market challenges and capitalize on opportunities. PQFTL maintains a sound financial risk profile, supported by ample liquidity coverage for policyholders' liabilities. Company's well-diversified investment portfolio, comprising mainly of equity investments and Government securities, enhances its balance sheet strength and ensures sufficient liquidity to meet obligations. The Company's strong operating results in CY22 can be attributed to its robust reinsurance program and disciplined underwriting practices. Despite a challenging business environment, PQFTL maintained its performance, ensuring stability in gross premium written. The Company has benefited from its association with FWU, a Germany based firm, in the form of technical partnership, as the sponsors provide impetus in the form of synergic benefits. Going forward, the management aims to penetrate into untapped segments.
During FY23, Pakistan's Life Insurance sector faced challenges due to an unexpected rise in inflation which led to a decrease in disposable incomes. To adapt, sector players shifted their focus from first-year persistency to second year, prioritizing top-line growth. During the said period, unit-linked products remained attractive, offering fixed-rate investment opportunities amidst high policy rates. The sector's outlook is expected to remain Stable, supported by investment income in the next financial year. However, muted economic growth could adversely impact the sector if not timely mitigated.
The rating takes comfort from 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. while continuing to focus on improving profitability.
Pak-Qatar Family, commencing operations in 2007 as an unlisted public Company, operates through a network of over 160 branches. Major shareholding rests with (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 a nine-member board including Mr. Said Gul serving as the Director. Mr. Said 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. Further, Mr. Said Gul represents himself through Pak Qatar Investment (Private) Limited.